Bank has maintained the business growth stable, while improving credit-deposit ratio. The bank has also maintained CASA deposit ratio flat at end June 2017. On advance front, the share of retail loans has declined to 51.6% at end June 2017.

Asset quality weakens: The bank has showed some deterioration in asset quality with the elevated fresh slippages of loans in Q1FY2018.

• Fresh slippages of advances was elevated at Rs 498 crore in Q1FY2018 compared with Rs 511 crore in the previous quarter. Meanwhile, the recoveries, upgradations and write-off stood at Rs 389 crore for the quarter.
• Outstanding standard restructured advances of the bank eased to Rs 968.00 crore (2.52% of advances) at end June 2017 compared to Rs 1037.10 crore (2.80% of advances) at end March 2017.
• Stressed assets (NNPA and restructured advances) declined to 5.71% of advances at end June 2017 from 5.44% at end March 2017 and 6.89% at end June 2016.
• RWA increased 12% to Rs 40032 crore at end of June 2017 from a year earlier.

Steady business growth: Business of the bank increased at nearly steady pace of 10% yoy to Rs 94711 crore at end June 2017. Deposits increased 9% to Rs 56227 crore, while advances also moved up 10% to Rs 38484 crore at end June 2017. Credit-deposit ratio improved to 68.4% at end June 2017 from 65.2% at end March 2017.

Stable CASA ratio: CASA deposits increased 20% to Rs 16271 crore. CASA ratio was steady 28.9% at end June 2017 compared with 29.0% at end March 2017, while improved from 26.2% at end June 2016. The bulk deposits of the bank stood at mere Rs 174 crore at end June 2017.

Retail loans share eases: Advances rose 10% at Rs 38484.00 crore at end June 2017. The corporate advance rose 11% to Rs 18626 crore, while the retail advance galloped 9% to Rs 19858 crore at end June 2017.

• Retail advances share eased to 51.6% at end June 2017 from 52.1% at end June 2016.
• Break-up of advances shows housing at 13.2% of the advances, agriculture - 14.2%, SME - 22.2%, medium enterprises - 3.1%, large enterprises - 11.8%, other personal loans - 6.0% and other - 29.7% at end June 2017.
• Priority sector loans (PSL) of the bank stood at 46.8% of advances at end June 2017, while consistently exceeding the regulatory PSL target of 40%.

Investment book of the bank increased 12% to Rs 18421 crore at end June 2017. SLR investment stood at Rs 13280 crore. Share of AFS book increased to 41.9% at end June 2017 from 42.5% a quarter ago and 35.5% a year ago.

The modified duration of AFS book stood at 1.66 years, while that of overall investment book was at 4.01 years at end June 2017.

Network expansion: Bank has opened 4 branches and 18 ATMs in the quarter ended June 2017. Bank has the network of 769 branches and 1398 ATMs at end June 2017.

Book value stood at Rs 171.7 per share at end June 2017. Adjusted Book value (excluding NNPA and 10% of restructured assets) was at Rs 124.7 per share at end June 2017.

Higher NIMs boost NII growth: For the quarter ended June 2017, the bank has posted 6% growth in interest income to Rs 1330.54 crore, while interest expenses rose mere 1% to Rs 906.12 crore. NII increased at healthy pace of 16% to Rs 424.42 crore, as net interest margin (NIM) improved to 2.64% in Q1FY2018 from 2.55% in Q1FY2017.

Strong non-interest income growth: The non-interest income of the bank increased 25% to Rs 217.39 crore in Q1FY2018. The core fee income of the bank increased 8% to Rs 142 crore, while trading income surged 79% to Rs 75 crore in Q1FY2018 over Q1FY2017.

Net Total income rose 19% to Rs 641.81 crore in quarter under review.

Stable expense ratio: Operating expenses increased 20% to Rs 332.11 crore. The employee cost rose 7% to Rs 137.41 crore in Q1FY2018, while the other operating expenses increased 31% to Rs 194.70 crore. Expense ratio was nearly steady at 51.7% in Q1FY2018 compared with 51.4% in Q1FY2017.

The operating profit moved up 18% to Rs 309.70 crore in the quarter ended June 2017.

Provisions jump: Bank has witnessed surge in provisions and contingencies to Rs 198.88 crore in Q1FY2018 as against Rs 136.31 crore in the corresponding quarter last year.

Thus, the Profit before tax (PBT) declined 12% to Rs 110.82 crore in Q1FY2018 over Q1FY2017.

Tax provision written back: The bank has written back tax provisions of Rs 23.03 crore in Q1FY2018 against provisions of Rs 4.07 crore in Q1FY2017. Net profit declined 10% to Rs 133.85 crore in Q1FY2018.

Annual Financial Performance:

For the year ended March 2017 (FY2017), the bank has posted 9% increase in net profit to Rs 452.26 crore. The net interest income improved 14% to Rs 1490.62 crore, while non-interest income surged 49% to Rs 809.34 crore in FY2017. The expense ratio jumped 300 bps to 56.7% in FY2017 compared to 53.7% in FY2016. The operating expenses increased 17% to Rs 995.80 crore, while provision and contingencies galloped 62% to Rs 527.85 crore. The profit before tax declined 11% to Rs 467.95 crore in FY2017. After considering 3% of effective tax rate, the net profit improved 9% to Rs 452.26 crore in FY2017.