Highlights:

The bank has recorded flat net profit of Rs 152 crore in Q3FY25 with 13% growth in the operating profit to Rs 221 crore.

The bank has recorded strong 75% growth in the other income which accounted for a significant 19% of the total income.

The bank has exhibited an improvement in the cost to income ratio to 62.9% in Q3FY25 from 65% in Q2FY25.

The bank has sustained a net interest margin above 4% at 4.11% in Q3FY25 despite tight liquidity conditions and higher interest rate in the system. The NII growth has been impacted due to higher funding cost and penal interest income getting classified to other income.

The bank has maintained strong deposit growth of 22% at Rs 33407 crore with Casa deposit growth of 7%. Casa deposit ratio was at 24.1%.

The LCR was at a comfortable level of 115% with a higher average LCR of 119%.

The net advances have surged 26% to Rs 28639 crore which is 2x of the banking system credit growth.

The gold loan book was strong at 36% to Rs 13018 crore, other retail 32% and MSME 29%, while the corporate segment is also showing a pickup with 5% growth.

The fresh slippages of loans were under control and the bank has maintained stable asset quality in Q3FY25.

The bank aims to raise the provision coverage ratio without technical write-offs to 70% at some stage from existing 60.12% end December 2024.

The bank is holding an additional provision buffer of Rs 181 crore, which is above the regulatory requirement.

Capital adequacy ratio stood at 21.08% and it would improve at the end of the year with addition of the profits.

The bank has the lowest credit to risk weight density.

GNPA ratio improved to 1.58% and NNPA to 0.64% end December 2024.

The bank continues to hold its guidance for growth and asset quality.

The loan growth in Q4FY25 would depend upon the liabilities growth.

The yield on advances has been impacted due to slower growth in the high yield loan products such as two-wheelers, personal loans, unsecured loans and MFI loans, as the bank is focused on de-risking the portfolio. The bank has exited one corporate account with exposure of Rs 200 crore yielding 13%.

The yield on gold loans is less than 12%, while the yield on the corporate loan portfolio is in the range of 8-12%.

The LTV ratio for the retail gold loan has to be below 75% and for the agri gold loan the bank has board approved policy of keeping LTV ratio below 85%.

The ticket size for the retail gold loan book is at Rs 1-2 lakh, while the ticket size for agri gold loan has to be above Rs 2 lakh.

During the whole tenure of the retail gold loan, the LTV ratio has to be maintained below 75% and accordingly the bank is managing its gold loan portfolio.

The bank is fully compliant with the RBI regulations on the gold loan book and does not expect any impact going forward.

Tech spends stands at 8-9% of the overall opex of the bank. It will continue to remain in the range of 8-10% going forward.

Currently due to the challenging environment, the bank aims to maintain the ROA in the range of 1.5-1.6%.