Highlights:

• The bank has exhibited strong operating performance in the quarter ended December 2017 with 20% growth in the net interest income and 18% improvement in the operating profit. The bank expects to continue to show strong operating performance, going forward.
• The bank has exhibited strong loan growth across all products, with 22% growth to Rs 85922 crore end December 2017 over December 2016.
• The deposit base of the bank has crossed Rs 1 lakh crore mark to touch Rs 100537 crore end December 2017. The bank has continued to maintain the CASA deposit ratio at 33% for third straight quarter, while aims to improve its CASA ratio to 35% by end FY2019.
• The bank did not add any branch for last two and half years with the focus on branch-light distribution model. Meanwhile, the bank has significantly strengthened its network of relationship managers and business correspondents. The bank has also boosted its digital distribution channel.
• The network of relationship managers has been strengthened to a strong level of above 330 at end December 2017.
• The bank expects to reduce cost to income ratio to 50% by Q4FY2018 and maintain at similar level in FY2019 and reduce to 48% in FY2020.
• The bank has exhibited higher level of fresh slippages of loans amounting to Rs 412 crore in Q3FY2018. The education sector segment was major contributor with the slippages of Rs 71 crore in Q3FY2018. The higher slippages in the education loan segment have been mainly on account of education loan waiver scheme of the government of Kerala that ends on 31 January 2018.
• The bank has exposure of Rs 500 crore to the education loan segment, of which mostly relates to Kerala. However, the bank expects the education segment slippages to decline to normal run rate of single digit level from Q4FY2018. The bank had made provision for stressed education loans in Q2FY2018 itself, so there was no provisioning pressure for Q3FY2018.
• The corporate segment slippages were contributed by three accounts with exposure of Rs 30-35 crore each in Q3FY2018. The average slippages rate for the corporate segment stands at Rs 50-60 crore for last eight quarters.
• The bank expects the higher slippages of Rs 350-400 crore each for next couple of quarters.
• The bank has showed strong recoveries and upgradations of Rs 220 crore in Q3FY2018.
• The provision of NPAs stood at Rs 120 crore in Q3FY2018, investment depreciation Rs 11 crore and securities receipts Rs 8 crore. The bank does not hold any excess SLR investment, which has protected itself from any higher provision for depreciation of investment. The duration of AFS investment book stands at 2-2.5 years.
• With regard to second list of accounts referred to NCLT, the bank has exposure to 2 accounts with the outstanding balance of Rs 55 crore and carries sufficient provision of 60%.
• The bank has further reduced the cost of deposits to 5.73% in Q3FY2018, while expects further trending down of cost of deposits, going forward.
• About 80% of the loan book of the bank has shifted to MCLR based lending rate system end December 2017.
• The segment wise incremental loan yields stands at 10% for agriculture, 10.4% retail, 11.4% business banking, 10.2% commercial banking and 9% for corporate segment.
• The bank has started making provision for wage revision and made provision of Rs 11-12 crore for November-December 2017 period.
• The standard restructured advance book of the bank has expanded to Rs 1425 crore end December 2017 from Rs 1343 crore end September 2017 with the addition of 2 accounts. Within the restructured advance book, the infrastructure sector has exposure of Rs 800 crore, aviation Rs 250 crore and others (iron & steel, textiles etc) Rs 250 crore end December 2017. As per the bank, about Rs 300 crore of restructured loans, mostly relating to aviation sector, are scheduled to complete moratorium period in Q4FY2018.
• The bank is yet to receive the RBI's risk based supervision report on NPA divergence, while it expects the NPA divergence for FY2017, if any, to be small similar to FY2016.
• The employee count of the bank stood at 11850 employees end December 2017.
• The borrowings of the bank have increased driven by refinance from NABARD, which are CRR and SLR exempt.