Highlights:

The quarter ended December 2020 was the first quarter without moratorium.

As per the bank, its normal slippage rate is 2.00-2.25%, while bank has been able register recovery of 50-60% in NPAs.

The non-declaration of NPAs is major hurdle in NPA recovery.

Banks is resorting to negotiation with customers for NPAs resolution.

The bank always wants to make higher than required provisions, while due to secured lending the loss given default has never exceeded more than 25% for the bank.

Less than 20% of the loan book of the bank is unsecured.

The bank is cautious in the corporate loan segment while it is also cautious in the MSME working capital and acquiring new MSME customers.

The bank expect its sales activity to pick up and loan growth to be decent for FY2022. The focus would be on business loans (LAP), home loans, gold loans, KCC, tractor loans and short-term corporate loans.

The bank has in-house collection team of 700 plus employees who are working very strongly on collections front.

For the next 12 months the bank would be focusing on dealing with the covid-19 challenges.

The bank is targeting cost to asset ratio of 2.2%, net interest margin of 3.65% to 3.70%, fee income of 110 bps, credit cost of 50-55 basis point and RoA of 110-120 bps which would help to improve RoE to 14-15% in less than next 5-6 quarters.

The bank is expecting restructuring of loans due to covid-19 stress at 3 to 5% of the loan book. The bank is witnessing higher number of restructuring request from LAP and commercial vehicle segment, while the request are less from home loans and MSME segment.

The restructured loan book stands at Rs 680 crore end December 2020.

The provisions stands at Rs 148 crore of which Rs 86 crore is for covid-19, NPA provision stands at Rs 20 crore, floating provision Rs 2 crore, standard asset provision at Rs 1 crore, restructuring Rs 22 crore and potential NPA Rs 16 crore.

The NPA standstill stands at Rs 448 crore, against which provision stands at Rs 230 crore.