Highlights:

The bank has posted 12% growth in the net profit, while the net interest income growth has been strong at 64% and operating profit growth at 74% in Q3FY2023.

The loan book of the bank has increased 16%, while the bank has strong focus on deposits to funds credit growth.

The share of high yielding loans – retail, agriculture and MSME has increased and remains key focus area of the bank.

The bank expects credit offtake to improve and hopes to register 11-12% loan growth for FY23. Loan growth is expected to accelerate to 14-15% for FY2024. The bank expects 10-12% loan growth in the foreign loan book.

The bank has continued to improve asset quality and the focus is on SMA account management, containing fresh slippages and maintaining high collection efficiency.

NIM improved 101 bps yoy to 3.28% in Q3FY2023 with 65 bps yoy jump in yield on advances. The bank expects to maintain NIM at 3.20-3.25% ahead. The margin would witness some pressure ahead on account of impact of liabilities repricing.

The CASA deposit ratio of the bank has remained stable at 44.56% end December 2022.

The bank has reduced GNPA and NNPA in absolute and percentage terms. The fresh slippage ratio declined to 0.27% in Q3FY23 from 0.3% in Q3FY22.

The aim is to reduce GNPA below 7% by March 2024. The credit cost is expected to be contained below 1% ahead.

The cost to income ratio has improved to 48.03% in Q3FY23

The bank was required to create provision of Rs 1419 crore for NPA divergence over last 3 quarters of FY23 in proportion of Rs 473 crore. The bank had created provision of Rs 473 crore in Q2FY23, while it has front loaded provision of Q4FY23 to Q3FY23 and created full provision of Rs 976 crore in Q3FY223 requiring no further provisions in Q4FY23. The bank has utilized strong operating profit pool to create accelerated provisions.

The bank expects to reverse major part of divergence related provisions in Q4FY23 and Q1FY24, while it is in touch with other banks having exposure to divergence related accounts.

The bank has identified 17 accounts for NARCL transfer of which 1 account will be transferred in Q4 with process in final stages.

The bank has recorded recoveries of Rs 310 crore from NCLT resolutions, while bank has expecting recoveries of Rs 600 crore in Q4FY2023.

The bank has provided Rs 85 crore for wage revision provision for November-December 2022 period.

The interest income on income tax refund amounted to Rs 251 crore in Q3FY23.

The bank has recorded recoveries from written off accounts of Rs 285 crore in Q3FY23.

The NPAs for exposure under RBI resolution framework 2 were at 6.9% or 826 crore, while 31% book is under moratorium.

The exposure to ECLGS stands at Rs 5100 crore of which NPA is 6.29%.

The bank is planning capital raising through QIP soon.

The bank expects to take CRAR to 17-17.5% by March 2023 supported by internal accruals.

The bank has reduced deferred tax asset level to Rs 7600 crore end December 2022 from Rs 8200 crore end September 2022. It aims to reduce deferred tax assets to 5000 crore by next March 2024, which will be comfortable position to shift to new tax rate regime.

The bank expects fresh slippages of Rs 1200 crore and recoveries and upgradations of Rs 2500 crore in Q4FY2023.

The bank expects to improve RoA to 1% by March 2024.

The bank is well prepared for shifting to IFRS.