Highlights (Standalone Basis)
Operating profit of INR 2,669 crore, the highest in the last 5 quarters
Profit after Tax of INR 424 crore moving from a loss position in the previous two quarters
Total Business of INR 9,24,940 crore as at June 30, 2016 was lower from INR 10,01,475 crore as at June 30, 2015 and INR 9,57,808 crore as at March 31, 2016 on account of planned and structured rundown of low yielding assets and high cost liabilities.
Improved deposit mix leading to reduction in the cost of domestic deposits from 6.93% as at June 30,2015 and 6.61% as at March 31,2016 to 6.21% as at June 30, 2016.
Domestic CASA grew on an average by 12.79% (on y-o-y basis) and 9.40% (on q-o-q basis) driven by Savings bank deposit growth of 14.08% and 9.85% (on y-o-y and q-o-q basis respectively).
Domestic CASA on average basis stood at 33.00% as compared to 29.09% as at June 30, 2015 and 29.43% as at March 31, 2016. On terminal basis, Domestic CASA stood at 33.83%.
Conscious rundown of certain unprofitable assets in the International business, leading to improvement in Net Interest Margin from 0.92% to 0.98% on y-o-y and q-o-q basis
Gross NPA at 11.15% & Net NPA stood at 5.73%.
Provision Coverage Ratio stood at 617%.
CRAR (Basel Ill) stood at 13.07% and CET 1stood at 10.19%.
Results at a Glance (Standalone Basis)
All figures in INR crore
Particulars
Quarterly Results
Q1FY 17
–
Q4 FY 16
Q1FY 16
Total Income
11,878
12,789
12,244
Interest Income
10,434
11,014
11,276
Interest Expenses
7,062
7,684
7,817
NetInterest Income
3,372
3,330
3,460
OtherIncome
1,444
1,775
967
Total Expenses
9,208
10,217
10,042
Operating Expenses
2,146
2,533
2,225
of which, Employee Cost
1,108
1,434
1,345
Operating Profit
2,669
2,572
2,202
Provision for NPA
1,986
4,880
568
Provision for Tax
242
(1,055)
550
Net Profit
424
(3,230)
1,052
The Bank’s Total Business stood at INR 9,24,940 crore as at June 30, 2016 down from INR 10,01,475 crore as at June 30, 2015 on account of planned and structured rundown of assets and liabilities.
Total Deposits stood at INR 5,62,174 crore as at June 30, 2016 as against INR 5,93,087 crore as at June 30, 2015. Corresponding figures for Average Deposits (based on daily averages) were INR 5,57,817 crore andINR 5,75,856 crore.
The Bank has rundown high cost liabilities to improve the deposit mix leading to reduction in cost of domestic deposits from 6.61% as at March 31, 2016 to 6.21% as at June 30, 2016 and also improvement in ratio of domestic CASA deposits on average basis at 33.00% as compared to an average of 29.09% as at June 30, 2015 and 29.43% as at March 31, 2016. On a terminal basis, Domestic CASA was at 33.83%. Domestic Savings bank deposit saw a robust growth of 14.08% y-o-y on an average basis.
Total Advances (Net) were INR 3,62,766 crore as at June 30, 2016 against INR 4,08,388 crore as at June 30, 2015. Average Advances (Gross – based on daily averages) were INR 3,96,123 crore and INR 4,05,533 crore respectively. The Bank has undertaken a conscious rundown of certain unprofitable assets resulting in improvement in yield on advances as well as Net Interest Margin.
The Bank’s International Business continues to occupy a significant position. As at June 30, 2016, the International Operations contributed 30.37% to the Bank’s Total Business. As a part of rebalancing of the International book, a portion of low yielding assets have been substituted with higher yielding local credit.
INCOME
The Bank’s Total Income stood at INR 11,878 crore in Q1 FY17. Net InterestIncome stood at INR 3,372 crore. Other Income increased by 49.33% (y-o-y basis) to INR 1,444 crore, driven by improved trading gains.
EXPENSES
The Bank’s Total Expenses declined by 8.30 % (y-o-y basis) to INR 9,208 crore in Q1 FY 17 driven primarily by reduction in cost of deposits. The interest expenses reduced by 9.66% (y-o-y basis) from INR 7,817 crore as at June 30, 2015 to INR 7,062 crore as at June 30,2016. Operating expenses were contained with a reduction of 3.55% during the corresponding period.
PROFIT
Prudent management of assets and liabilities as detailed above has led to improvement in profitability. The Bank’s Operating Profit was INR 2,669 crore in Q1 FY17 (as against INR 2,202 crore in Q1 FY 16), which is the highest in the last five quarters.
The Bank returned to profrtability and posted a Net Profit of INR 424 crore for Q1 FY 17.
NETINTEREST MARGIN
The Net Interest Margin (NIM) for Domestic operations has improved from 2.70% to 2.80% sequentially while the NIM for International operations has improved from 0.92% to 0.98%.
ASSET QUALITY
Gross NPA (GNPA) of the Bank stood atINR 42,991 crore as atn June 30, 2016 as compared to INR 40,521 crore as at March 31, 2016. The Gross NPA ratio stood at 11.15% as compared to 4.13% as at June 30, 2015 and 9.99% as at March 31, 2016. The corresponding figures of the Net NPA ratio stood at 5.73%, 2.07% and 5.06% respectively. The ratios have increased partly on account of the conscious reduction in the asset base during the year.
Total Restructured Standard Assets of the Bank were INR 14,164 crore as atn June 30, 2016. The total Stressed Assets (GNPA + Restructured Standard Assets) were 14.83% of the Gross Advances.
PROVISIONS AND CONTINGENCIES
Provisions and Contingencies (excluding tax provisions) made by the Bank stood at INR 2,004 crore in Q1 FY17. Provisions against NPAs/ Bad Debts written off stood at INR 1,986 crore in Q1 FY17. The Provision Coverage Ratio (PCR) was
60.17% as at June 30, 2016. Provision for tax was INR 242 crore.
CAPITAL ADEQUACY
The CRAR on standalone basis (Basel Ill) is 13.07% as at June 30, 2016. Out of this, the Tier 1capital was 10.70% and CET 1 Capital was 10.19%.
TRANSFORMATION OF THE BANK
The Bank has launched Project Navoday – a comprehensive transformation spanning business strategy, products and services, processes, digitization and capability enhancement of our people, delivering a differentiated world-class experience to our customers.
The transformation will enable the Bank to realize improved market share, quality growth of balance sheet, diversified portfolio, enhanced fee income, strengthened internal controls and compliance, enabled by cutting-edge digital technology. While this transformation exercise will be completed over a period of 18 months, the early benefits should start flowing from Q4 FY 17.
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