- CASA Ratio: Improved sequentially by 158 bps to 32.77%.
- NIM (Net Interest Margin): Improved sequentially by 21 bps to 2.54%.
- Net Interest Income: Improved sequentially by 9.48% to INR 739 crores.
- Non-Interest Income: Grew by 35.07%.
- Gross NPA: Improved to 5.70%, a 53 bps improvement.
- Operating Profit: Improved sequentially to INR 277 crores.
- Yield on Advances: Improved to 8.91%, a sequential improvement of 29 bps.
- Total Business Growth (Y-o-Y): 7.84%, crossing INR 2 lakh crores.
- Deposits Growth: 8.09%.
- Retail Term Deposits Growth (Y-o-Y): Nearly 9%.
- Savings Deposits Growth: Over 6%.
- Current Account Deposits Growth: 9%.
- CASA Growth (Y-o-Y): 6.38%.
- Advances Growth: 7.48%.
- Retail Growth: 15.5%.
- Agriculture Growth: 6.12%.
- MSME Growth: 12.84%.
- RAM Percentage: Improved from 49.47% to 51.46% (Y-o-Y).
- Corporate Book Growth: 3.25%.
- Core Fee Income: Increased by 35.29%.
- Yield on Investment: 6.84%.
- Provision Coverage Ratio: 88.16%.
- Fresh Slippages: INR 228 crores, the lowest in the last 4 quarters.
- Slippage Ratio: 0.30.
- SMA 2 Book (above INR 5 crores): Reduced to INR 201 crores from INR 407 crores last quarter.
- Net Profit: Declined to INR 114 crores from INR 189 crores last quarter.
- Capital Adequacy: Reduced to 16.13%.
Release Date: February 01, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- CASA ratio improved sequentially by 158 bps to 32.77%.
- Net interest income increased sequentially by 9.48% to INR 739 crores.
- Non-interest income grew by 35.07%.
- Gross NPA improved to 5.70%, a 53 bps improvement.
- Operating profit increased sequentially to INR 277 crores.
Negative Points
- Net profit declined to INR 114 crores from INR 189 crores last quarter.
- Provision coverage ratio slightly dipped to 88.16%.
- CASA ratio declined by 33 bps year-over-year.
- Advances growth was muted at 7.48% due to strategic decisions.
- Capital adequacy reduced to 16.13% due to RBI circular impact.
Q & A Highlights
Q: During the current quarter, how much recovery do you foresee from NCLT or other bad debts written-off cases?
A: We expect around INR 350 crores to INR 400 crores to be recovered. - Swarup Saha, CEO
Q: How do you see demand picking up in terms of advances?
A: We are aiming for a credit growth of around 6% to 8% this quarter, focusing on rebalancing our portfolio to protect our NIMs and profitability ratios. - Swarup Saha, CEO
Q: What kind of growth are you looking forward to for NIM?
A: We aim to maintain NIM around 2.50 to 2.55. - Swarup Saha, CEO
Q: What are your plans in terms of capital raising and QIP?
A: We plan to raise capital but will wait for the opportune time. Our capital adequacy at 16.13% is still very healthy. - Swarup Saha, CEO
Q: Can you explain the NIM contraction of 8.20% Y-o-Y and if there will be any pressure on NIMs in the coming quarters?
A: The contraction is due to interest rate movements on retail term deposits and migration of funds from CASA. We aim to maintain NIM between 2.50 to 2.55. - Swarup Saha, CEO
Q: What is the rationale for the increase in unrated instruments from 7.2% to 10.1% and what is the yield?
A: The increase is due to normal fluctuations in our daily loan book. Our quality loan book is maintained, and the total rating in BBB and above has increased. - Swarup Saha, CEO
Q: What is the impact of the exceptional item of INR 150 crores on the cost-to-income ratio?
A: The cost-to-income ratio increased due to an exceptional item of INR 150 crores. Without this, the ratio would be around 65.20. - Swarup Saha, CEO
Q: What are your views on credit growth and resultant income going forward?
A: We aim for a credit growth of 6% to 8% this quarter and will focus on revenue-generating assets. We are leveraging upgraded technology for better services and expanding our geographical spread. - Swarup Saha, CEO
Q: How will the recent bond market movements and potential rate cuts impact your treasury and NIMs?
A: Positive yield movements will benefit our operating profits and cost-to-income ratio. We expect the bond market to positively impact our balance sheet. - Swarup Saha, CEO
Q: What are your plans for HR transformation and technology upgrades?
A: We are focusing on HR transformation, including succession planning and competency mapping. We have upgraded our core banking and treasury solutions and are training our staff for specialized roles. - Swarup Saha, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
