- Capital Adequacy Ratio stood at 17.38% with surplus liquidity of Rs. 40,000 Cr.
- Bank has a Credit to Deposit Ratio of below 85% with strong traction on the retail side.
- The Provision Coverage Ratio (PCR) of the company remained at 75%. Besides PCR, Bank has significant buffer provisions.
- Operating Profit Margin is at the best levels in the past few years- 6% of loans.
- GNPA has reduced to 2.67% from Proforma GNPAs of 2.93% last quarter and Net NPA was stable at 0.69%.
- Overall provisions for the full year FY21 were at 3.7% of the loan book.
- PAT of the bank continues to show a strong upward momentum growing 12% QoQ despite heavy provisioning.
- Deposits saw handsome growth of 7% QoQ and 27% YoY led by strong growth in CASA of 11% QoQ.
- Cost of Deposits fell by 31bps during the quarter and year to date cumulatively by 102bps.
- The bank is maintaining comfortable excess liquidity with an overall LCR of 145%.
Assets Growth & Asset Quality:
- All three domains – vehicles, diamonds, and microfinance – saw strong disbursements during the quarter.
- Vehicles disbursements grew 30% YoY & 8% QoQ driven by pick up in commercial vehicles.
- Diamonds demand globally saw a good recovery resulting in working capital drawdowns from us as well.
- Microfinance too resumed its growth journey with 15% QoQ growth.
- On the corporate book, Bank has been reducing exposures in line with our strategy of granularising the loan book.
- Collection efficiency improved to 98% from 97% during the quarter.
- Overall loan-related provisions are 3.3% of the loan book.
- The bank is positioned to participate in other retail assets provided we get good risk-adjusted returns
Franchise & Strong Profitability:
- NII grew by 9% YoY and 4% QoQ.
- Revenues have now settled comfortably above 5,000 crores per quarter. This has helped in improving our strong operating margin to 6% of loans despite lower corporate fees vs. the past.
- Our branch expansion adding 100 bank branches and 40 BFIL outlets during the quarter.
- Bank will continue to focus on network building for growth expansion.
Slippages and Restructured Book:
- Usual slippages were Rs 1,930 crores during the quarter which is lower than the Proforma slippages of Rs 2,508 crores in the Q3FY21.
- The technical slippages occurred due to a delay in closing the restructuring by the consortium and also temporary operational issues which were rectified in the same quarter.
- The Restructured book was at 3,737 crores and stayed stable at 1.8% of the loan as of Mar-2021.
- However, the mix of this book has improved towards long vintage vehicle finance customers.
- Segment-wise contribution of this 1.8% would be – Vehicles 65%, Non-Vehicle Retail 17%, and balance from Corporate Banking.
- Q4 saw strong traction on disbursements across the vehicle categories. Overall disbursements grew by 30% YoY and 8% QoQ.
- Other noticeable segments showing strong disbursements were cars (up 24% YoY), utility vehicles (up 29% YoY), tractors (up 44% YoY), and construction equipment (2x YoY).
- The bank is cautious on three-wheelers due to low passenger freight and disbursements are much lower than historical run rates.
- The overall loan book grew by 7% YoY and 1% QoQ.
- Bank have long vintage and strong collateral covers in this segment and eventual losses should be range-bound.
- Incremental slippages during the quarter were 298 crores or 1.2% of loans. Proforma slippages in the last quarter were 472 crores or 2% of loans. So overall slippages of around 3% are lower.
- The bank is concentrating on driving savings account and recurring deposit penetration into the microfinance customer base.
- Bank has crossed 51,000 Bharat Money Stores and will scale this up further during the year.
- Bank has onboarded 170,000 merchants through assisted digital route and is scaling this at 30,000 merchants per month.
- Bank seems comfortable with the Microfinance side.
- The top three states are Bihar, Orrisa, and West Bengal which contributes more towards this section i.e. around 32%-33%.
Other Retail Assets:
- This contributes 17% of the overall loan book and includes secured and unsecured retail assets.
- In Q4, the secured assets have maintained the traction while collections improved in the unsecured assets.
- Good Indication has been noticed on the quality improvement on spend of cards.
- Affordable housing disbursement grew 10% QoQ and loan book grew to 1,800 crores – up 36% YoY and 8% QoQ.
- The Bank is having an approach of fine-tuning the corporate underwriting towards granular, secured, annuity-based exposure.
- Restructuring trends in the Corporate book were quite positive. The corporate restructured number is about 654 crores. Another Rs. 300 Cr. is awaiting OTR Solutions.
- Deposits grew 7% QoQ driven by 11% QoQ growth in Current and Savings account.
- Retail Deposits as per LCR also grew by 8% and achieved over 9,900 cr per quarter run-rate.
- CD ratio further improved to 83% from 87% QoQ.
- Proparco – a French development financial institution supporting the microfinance business
- The registered user base on the mobile app increased by ~39% during the year and Bank is ahead of the industry in terms of transactions growth.
- The bank is steadily moving up on its digitally active user base and showed an improvement by 10% during the year on its percentage of the mobile active user base.
- The bank is also soon launching a few new initiatives including end-to-end digital personal and SME loans as also a unified merchant solution app.
- Continued focus on collections.
- Broad basing loan growth- Growth will be now broad-based into Corporate where realignment is almost over and secured retail products.
- Maintaining traction on liabilities- Bank believes that Deposits should lead the asset growth and will be driven by granular flows. The overall cost of deposits has been falling every quarter and will do further rate cuts in a calibrated manner.
- Improving profitability of the franchise- Provisions were ramped up because of prudent nature and half of them will not occur. Normalization in provisions in the coming period will lead to improvement in earnings.