Bank of Maharashtra Q2 profit up 13% on higher interest income, lower provisioning

 

Bank of Maharashtra on Monday reported 13.44 per cent growth in standalone net profit at Rs 130 crore for September quarter, helped by lower provisioning and higher interest income. “The bank logged a profit after tax of Rs 115 crore in the second quarter of 2019-20. On a consolidated basis, its profit stood at Rs 130.44 crore, compared to Rs 115.15 crore in the year-ago period.”

“Profit increase was mainly due to the net interest income (NII), which grew by around 5 per cent. There was considerable reduction in operating expenses by around Rs 75 crore. Provisions have also come down as asset quality improved,” Managing Director and CEO A S Rajeev told reporters.

He said the bank had an interest reversal of Rs 300 crore which it kept as provisions in the second quarter for COVID-19 and for some of the accounts that were not classified as NPA. Rajeev said had the bank not kept aside the interest reversal amount as provisions, NII growth would have been 14-15 per cent in the second quarter.

Net interest margin stood at 2.62 per cent for the quarter as against 2.77 per cent in the year-ago quarter. Rajeev said, “so far the bank has restructured 800 small accounts, including MSMEs, worth Rs 40 crore, under the Reserve Bank of India’s one-time restructuring scheme for accounts affected by COVID-19 related stress.” It has restructured 25 MSME accounts worth Rs 4-5 crore. For the corporate loans, the lender received two applications, of which one is not eligible.

“The other application of amount (bank’s exposure) Rs 200 crore is pending. It is a consortium account and a decision will be taken at the consortium level,” he said. “Gross NPA reduced to 8.81 per cent from 16.86 per cent. Net NPA declined to 3.30 per cent as against 5.48 per cent. Total provisions stood at Rs 676 crore as against Rs 637 crore. Provision for NPAs was Rs 43 crore as against Rs 404 crore.” Provision Coverage ratio improved to 87.15 per cent as compared to 82.71 per cent. The bank holds cumulative COVID-19 provision including interest of Rs 925 crore (out of which Rs 500 crore provision was made in the second quarter).

“In pursuance of the Supreme court order, the bank has not declared those accounts as NPA which were not declared NPA till August 31, 2020.” As a matter of prudence, the lender made additional provision of Rs 120 crore. Capital adequacy stood at 13.18 per cent with common equity tier 1 ratio of 10.31 per cent as at end-September. The bank’s total deposits grew 12.15 per cent year-on-year to Rs 1,58,626 crore. Gross advances rose 13.13 per cent to Rs 1,03,408 crore.

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Indian Overseas Bank(IOB) Q2 turns around to profits on lower provisioning

State-owned Indian Overseas Bank (IOB) on November 6 reported a net profit of Rs 148 crore for the second quarter of current fiscal as bad loans and provisions declined.

The Chennai-headquartered lender had registered a net loss of Rs 2,254 crore in July-September quarter a year ago. Sequentially, net profit grew 22.3 percent from Rs 121 crore in June quarter of this fiscal.

Total income rose 8.1 percent to Rs 5,431 crore during the quarter under review as against Rs 5,024 crore in the same quarter of 2019-20, Indian Overseas Bank (IOB) said in a regulatory filing. Interest income increased to Rs 4,363 crore from Rs 4,276 crore a year ago.

There was a substantial improvement in bank's asset quality as the gross non-performing assets (NPAs) plunged to 13.04 percent of the gross advances as of September 30, 2020 from 20 percent at the end of September 2019. In value terms, gross NPAs or bad loans fell to Rs 17,659.63 crore as against Rs 28,673.95 crore a year ago.

Net NPAs reduced to 4.30 percent (Rs 5,290.60 crore) from 9.84 percent (Rs 12,507.97 crore) a year ago. Total fresh slippages (other debits to existing NPA accounts) for September quarter were contained at Rs 292 crore, the lender said.

"Total cash recovery for September 2020 was Rs 513 crore (including cash recovery) as against Rs 172 crore in June 2020," it said.

Provisions for bad loans and contingencies fell to Rs 1,192.55 crore during the quarter under review from Rs 2,996.04 crore set aside in the year-ago quarter.

IOB said it has made required provisioning in advances in specific accounts so as to improve net NPAs. The bank's gross advances fell to Rs 1,35,469 crore as of September 30, 2020 from Rs 1,43,350 crore a year ago. However, it was slightly higher from Rs 1,31,565 crore at the end of June 2020.

"The bank has evolved a policy of not taking fresh exposures in stressed sectors, below hurdle rated accounts and BB and below rated accounts. The bank has also exited from accounts in the stressed sectors, wherever feasible," it said. The bank has grown under retail and agri sector and re-balanced the advance balance by consciously reducing the stressed sector in corporate segment, it added.

Provision coverage ratio improved to 89.36 percent at the end of September 2020 as against 75.85 percent at the end of September 2019. IOB's average cost of deposit reduced to 4.89 percent from 5.41 percent, while net interest margin improved to 2.18 percent for the quarter as against 1.86 percent in the year-ago period.

The bank said on relaxation of COVID-19 related lockdowns, it started mega e-auction process pan-India for sale of properties. The first such e-auction was conducted, fetching countable recovery by sale of properties and such e-auctions are planned to be conducted every month like in 2019-20, IOB said.

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Union Bank of India sees net profit jump 55%

 State owned Union Bank of India on Friday reported a 55.3 per cent jump in its net profit at Rs 517 crore in the second quarter ended September.

The bank had posted a net profit of Rs 333 crore in the same quarter a year ago.

Net interest income grew by 6.1 per cent to Rs 6,293 crore in the July-September period of 2020-21 from Rs 5,934 crore in the same period of 2019-20, it said in a release.

Gross Non-Performing Assets (NPAs) ratio improved to 14.71 per cent of the gross advances at the end of September this year from 15.75 per cent by September 2019.

Net NPAs fell to 4.13 per cent as of September from 6.40 per cent in the year-ago period.

Provision coverage ratio improved to 83.16 per cent as of September 30, 2020, compared to 74.26 per cent in the year-ago period.

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Central Bank of India Q2 Results: Net profit rises 20%

Central Bank of India on Friday reported over 20 per cent rise in its net profit at Rs 161 crore for the second quarter ended September 30. The bank had posted a net profit of Rs 134 crore in the corresponding quarter of the previous financial year.

Its total income grew nearly 2 per cent to Rs 6,833.94 crore during July-September 2020, against Rs 6,703.71 crore in the year-ago period, Central Bank of India said in a regulatory filing.

Operating profit improved to Rs 1,458 crore, registering a growth of 42.16 per cent from Rs 1,026 crore a year ago, it said.

The lender also improved on its bad assets ratio with the gross non-performing assets (NPAs) falling to 17.36 per cent of gross advances by the end of September 2020, from 19.89 per cent by the end of September 2019.

Net NPAs fell to 5.60 per cent, against 7.90 per cent in the year-ago quarter.

In value terms, the gross NPAs fell to Rs 30,785.43 crore from Rs 33,497.22 crore, while net NPAs stood at Rs 8,683.58 crore as against Rs 11,551.91 crore.

Provisions for bad loans and contingencies, however, rose to Rs 1,104.92 crore for the reported quarter of 2020-21, from Rs 791.33 crore in the year-ago period.

The bank's total business stands at Rs 5,00,737 crore as against Rs 4,73,080 crore, it added.

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Bank of India(BoI) Q2 results: Profit jumps over two-fold

Bank of India on Friday reported over two-fold jump in September quarter consolidated net profit at Rs 543.47 crore as bad assets came down. The bank posted a net profit of Rs 257.31 crore for the same quater a year ago.

Total income rose to Rs 12,477.79 crore in July-September 2020-21 from Rs 12,062.55 crore in the year-ago period, the state-owned lender said in a regulatory filing.

On standalone basis, the net profit in the quarter rose to Rs 525.78 crore as against Rs 266.37 crore a year ago.

Income grew to Rs 12,408.66 crore from Rs 11,985.50 crore.

The bank's gross non-performing assets (NPAs) fell to 13.79 per cent of gross advances as on September 30, 2020 from 16.31 per cent by the year-ago period.

In value terms, gross NPAs or bad loans stood at Rs 56,231.76 crore as against Rs 61,475.60 crore earlier.

Net NPAs came down to 2.89 per cent (Rs 10,443.71 crore) from 5.87 per cent (Rs 19,645.83 crore).

However, provisions for bad loans increased to Rs 2,133.87 crore during the quarter from Rs 1,452.09 crore parked aside for the year-ago same quarter.

Overall provisions and contingencies also rose to Rs 2,312.29 crore in the quarter under review from Rs 2,052.27 crore a year ago.

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Kotak Mahindra Bank Q2 net profit rises 26%

Private sector lender Kotak Mahindra Bank on Monday reported 26% jump in net profit for quarter ending 30 September, 2020 at Rs.2,184 crore. It was Rs. 1,724 crore a year ago.

Net interest income for Q2FY21 increased to Rs.3,913 crore, from Rs.3,350 crore in Q2FY20, up 17%. Net interest margin (NIM) for Q2FY21 was at 4.52%.The total income (standalone) rose to Rs.8,288.08 crore in the July-September period as against Rs.7,986.01 crore in the year-ago period.

CASA ratio as on 30 September, 2020 stood at 57.1% compared to 53.6% as on 30 September, 2019.Average savings deposits grew by 32% to Rs.1,06,442 crore for H1FY21 compared to Rs.80,425 crore for H1FY20.

Advances as on 30 September, 2020 were at Rs.2,04,845 crore as compared to Rs.2,13,299 crore as on 30 September, 2019).Covid-related provisions as of 30 September, 2020 stood at Rs.1,279 crore (0.62% of net advances).

The bank's asset quality improved on a net basis, with the non-performing assets (NPAs) falling to 0.64 per cent of the net advances as of September 30, 2020, from 0.85 per cent by September-end 2019.

In value terms, the net NPAs were down at Rs.1,303.78 crore compared to Rs.1,811.40 crore.However, the gross NPAs rose to 2.55 per cent ( Rs.5,335.95 crore) from 2.32 per cent ( Rs.5,033.55 crore).

Provisions for bad loans and contingencies came down to Rs.368.59 crore for the reported quarter, from Rs.407.93 crore parked aside for the year-ago period. "The Bank has not recognised any NPAs since 31 August, 2020, in line with the interim order of Supreme Court. If the said Order was not given effect to, the GNPA would have been 2. 70% and NNPA 0.74%. The Bank has, however, made provision for such advances," the bank said in a stock exchange filing.

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State Bank of India(SBI) Q2 result: Profit jumps 52% YoY

State Bank of India's (SBI's) September quarter (Q2FY21) standalone net profit jumped 52 per cent year-on-year to Rs 4,574.16 crore as the lender's provisions declined during the quarter. In comparison, it had clocked a net profit of Rs 3,011.7 crore during the corresponding quarter of FY20.

On a quarterly basis, the profit rose 9 per cent from Rs 4,189.3 crore-profit reported in Q1FY21.

Given the uncertainty amid the Covid-19 pandemic, analysts had varying estimates for the bank’s profit. Edelweiss Securities, for instance, had pegged the profit at Rs 2,117.2 crore, while those at ICICI Securities saw the PAT at Rs 4,676.5 crore. 

Profit before tax (PBT) for the bank came in at Rs 6,341.45 crore for the quarter under review, up 25.33 per cent from Rs 5,059.8 crore logged in the previous-year quarter. It advanced 14.3 per cent from Rs 5,546.1 crore QoQ.

The Mumbai-based bank’s operating profit increased nearly 12 per cent to Rs 16,460 crores in Q2FY21 from Rs 14,714 crores clocked in Q2FY20.

The lender’s net interest income (NII) – the difference between interest earned on loans and paid on deposits – came in at Rs 28,182 crore compared with Rs 24,600 crore earned in Q2FY20. Sequentially, it logged an improvement of 5.7 per cent from Rs 26,641 crore-income reported in June quarter of FY21.

Domestic Net Interest Margin (NIM) improved to 3.34 per cent in Q2FY21, registering an increase of 12 bps YoY.

Asset quality

The bank’s gross non-performing assets (GNPA) declined to Rs 1.25 trillion during the recently concluded quarter, as against Rs 1.29 trillion in Q1FY21.

In ratio terms, the GNPA ratio improved 16 bps to 5.28 per cent from 5.44 per cent in the June quarter.

Net NPA, meanwhile, declined to Rs 36,450.7 crore from Rs 42,703.6 crore sequentially. The ratio dipped to 1.59 per cent from 1.86 per cent.

During the September quarter, the bank earmarked provisions worth Rs 10,118 crore, down 23 per cent YoY from Rs 13,138.9 crore set aside in Q2FY20. Of this, provisions for NPA were at Rs 5,619.28 crore, down from Rs 11,040.72 crore YoY. Sequentially, provisions dipped 19.06 per cent from Rs 12,501.3 crore.

Provision Coverage Ratio (PCR) has improved to 88.19%, up 696 bps YoY and 187 bps QoQ.

The bank reported fresh slippages worth Rs 2,756 crore during the quarter, down from Rs 3,637 crore in Q1FY21 and Rs 8,805 crore in Q2FY20.

Moratorium and restructuring

According to the bank’s financial statement, the lender has extended moratorium to loans worth Rs 8.21 trillion as on August 31, 2020. Besides, it has reclassified loans worth Rs 11,357.78 crore as on September 30, 2020.

"Additional provisions made during the quarter stood at Rs 239 crore as against Rs 1,836 crore set aside in Q1FY21," it said in a statement.

The bank received applications for restructuring of loans worth Rs 6,495 crore in October, 2020. Provisions on such loans stand at Rs 650 crore.

Loan book

Credit growth for the bank logged an improvement of 6.02 per cent over the previous year, mainly driven by retail advances (14.55 per cent YoY), agri advances (4.19 per cent YoY) and corporate advances (2.82 per cent YoY). Total advances at the end of Q2 were at Rs 23.83 trillion, as against Rs 22.48 trillion in Q2FY20 and Rs 23.85 trillion in Q1FY21.

"With the YoY growth in Corporate Bonds / CPs at Rs 54,980 crores, the loan book has grown by 7.97 per cent YoY. That apart, home loan, which constitutes 23 per cent of bank’s domestic advances, has grown by 10.34 per cent YoY," it said.

Total Deposits, meanwhile, grew at 14.41 per cent on a yearly basis to Rs 34.70 trillion, out of which current account deposit grew by 8.55 per cent YoY, while saving bank deposits grew by 16.28 per cent YoY.

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Bank of Baroda(BoB) Q2 results: Net profit doubles

 State-owned Bank of Baroda on Thursday reported a standalone net profit of Rs 1,678.6 crore for July-September quarter (Q2FY21) on the back of lower provisons. In the previous quarter of the current fiscal (Q1FY21), the lender had incurred a loss worth Rs 864.26 crore. On a yearly basis, PAT grew 128 per cent from Rs 736.6 crore.

On a consolidated basis, profit was Rs 1,771.22 crore for Q2FY21, as against a net loss of Rs 678.71 crore in the June quarter. In the year-ago period, however, consolidated net profit stood at Rs 853.41 crore. 

The numbers beat Street expectations by a huge margin. Analysts at Motilal Oswal Financial Services, for instance, had pegged the net profit at Rs 139.4 crore, while those at Phillip Capital had expected the PAT to stand at Rs 541.7 crore. 

Profit before tax (PBT) for the quarter under review jumped 126.33 per cent YoY to Rs 2,50.23 crore in Q2 from Rs 1,126.76 crore in Q2FY20. In the June quarter, pre-tax loss was Rs 864.26 crore.

Net interest income (NII) came in at Rs 7,507.53 crore for the quarter under review, rising marginally from Rs 7,028 crore income earned in Q2FY20. Sequentially though, the income increased from Rs 6,816 crore. Analysts at Phillip Capital had expected the NII to come in at Rs 6,887.4 crore.

Provisions and asset quality

Provisions set aside in the September quarter declined sharply to Rs 3,001.59 crore on a QoQ basis from Rs 5,627.7 crore set aside in Q1FY21. Of these, provisions for NPA stood at Rs 2,277.25 crore. In Q2FY20, provisions stood at Rs 4,209.16 crore.

"In accordance with the RBI guidelines, the bank was required to make provisions of not less than 10 per cent of the outstanding advances in respect of borrower account where asset classification benefit has been granted. However, the Bank had made provision at 20 per cent in March 31, 2020 while w.e.f. April, 2020 provision at 10 per cent is made wherever the said benefit is extended to the borrowers," the management said in a statement.

As per the details provided by the bank, loan accounts worth Rs 85,898.55 crore are under moratorium as of September 30, 2020. Loan accounts worth Rs 14,022.5 crore were classified at the end of Q2FY21.

As per the RBI's June 7 circular, the bank has made additional provision of Rs 633 lakh during the quarter ended September 30, 2020 and holds total provision of Rs 3,615.50 crore as on September 30, 2020. 

The asset quality improved margianlly to 9.14 per cent in Q2FY21 from 9.39 per cent in Q1FY21. Net NPA, meanwhile, was at 2.5 per cent, down from 2.8 per cent. If the bank had declared those accounts as NPA, which it has not classified as bad loan due to the Supreme Court's ruling, the GNPA would have come in at 9.33 per cent and NNPA would have been 2.67 per cent.

Non-Performing Assets Provisioning Coverage Ratio (including floating provision) is 85.35 per cent as on September 30, 2020. In absolute terms, GNPA was Rs 65,698 crore in Q2FY21, down from Rs 69,132 crore in the June quarter of FY21. NNPA slipped from Rs 19,449.68 crore in Q1FY21 to Rs 16,794.93 crore.

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Canara Bank’s Q2 profit up 5.31%

 State-owned Canara Bank on Thursday reported a standalone net profit of Rs 444.41 crore for the three months to September. The lender had posted a net profit of Rs 364.92 crore during the same quarter of the previous fiscal year.

Total income (standalone) of the bank stood at Rs 20,836.71 crore in July-September period of 2020-21, as against Rs 14,461.73 crore in the same quarter of 2020-19, it said in a regulatory filing.

It further said the figures of September 2019 and March 2020 are related to standalone Canara Bank financials of pre-amalgamation period, and thus are not comparable with post-amalgamation financials of June 2020 and September 2020.

Canara Bank amalgamated Syndicate Bank with itself with effect from April 1, 2020.

Canara Bank's gross non-performing assets (NPAs) fell marginally to 8.23 per cent of the gross advances as of September 30, 2020, as against 8.68 per cent by end of September 2019.

In value terms, the gross NPAs or bad loans were at Rs 53,437.92 crore, up from Rs 38,711.33 crore.

Net NPAs fell substantially to 3.42 per cent (Rs 21,063.28 crore) from 5.15 per cent (Rs 22,090.04 crore).

Provisions for bad loans and contingencies for the reported quarter rose to Rs 4,016.81 crore as against Rs 2,037.97 crore.

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ICICI Bank Q2 net profit soars six-fold; asset quality improves

ICICI Bank reported a standalone net profit of ₹4,251 crore for the quarter ending 30 September, 2020. This is a six-fold jump when compared to the net profit of ₹655 crore reported in the year-ago period.

Net interest income (NII) increased by 16% year-on-year to ₹9,366 crore in Q2FY21 from ₹8,057 crore in Q2FY20.

Total deposits grew by 20% year-on-year to ₹8,32,936 crore at September 30, 2020 with 17% growth in average current and savings account (CASA) deposits. Term deposits grew by 26% year-on-year at September 30, 2020

Domestic loans grew by 10% year-on-year and 4% quarter-on-quarter at September 30, 2020. Retail loans grew by 13% year-on-year and 6% sequentially.

The Mumbai-headquartered lender said disbursements in mortgage, auto loans in the September quarter reached pre-Covid levels.

"Post the easing of restrictions, there has been a substantial month-on-month increase in disbursements across retail products. Mortgage disbursements during Q2-2021 crossed pre-Covid levels and reached an all-time monthly high in September 2020. Auto loan disbursements have continued to increase from June 2020 and have reached pre-Covid levels in September 2020 reflecting the rise in passenger car sales. Disbursements across the rural portfolio have crossed pre-Covid levels in the months of August and September 2020. Credit card spends recovered to about 85% of pre-Covid levels in September 2020 led by increased spends in categories such as health & wellness, electronics and e-commerce," the lender said in a statement.

Asset quality improved during the quarter with gross non-performing assets falling to ₹38,989 crore at the end of September quarter compared to ₹45,638 crore during the corresponding period a year ago. Gross NPA as a percentage of total assets stood at 5.17% at the end of September quarter compared to 6.37% in the previous quarter.

"Net non-performing asset (NPA) ratio decreased from 1.23% at June 30, 2020 to 1.00% at September 30, 2020; including loans not classified as NPA pursuant to the Supreme Court’s interim order, net NPA ratio would have been 1.12%," the bank said.

During the quarter, the bank added fresh bad loans worth ₹3,017 crore. Recoveries and upgrades, excluding write-offs, from NPA stood at ₹1,945 crore in Q2FY21.

Total provisions for bad loans and contingencies rose to ₹2,995.27 crore for September 2020 quarter against ₹2,506.87 crore a year ago.

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Punjab National Bank(PNB) Q2 net profit rises 22%; asset quality improves

 

State-owned Punjab National Bank on Monday reported 22% jump in standalone net profit at ₹621 crore for the quarter ending 30 September, 2020. It was ₹507 crore in the year-ago period.

Interest earned during the quarter rose 58% to ₹20,946 crore as against ₹13,292 crore in September 2019.4

The bank's total income during July-September rose to ₹23,438.56 crore as against ₹15,556.61 crore in the year-ago period, PNB said in a regulatory filing.

PNB's asset quality improved on a sequential basis. Gross non-performing assets (NPAs) during the quarter were at 13.43% of gross advances as against 14.11% in the June quarter. Net NPAs during the September quarter eased to 4.75% from 5.39% in the previous quarter.

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Indian Bank Q2 net profit rises 15%

State-owned Indian Bank on Thursday reported a 15 per cent rise in net profit at Rs 412.28 crore for the second quarter ended September, despite increase in provisions for bad loans. The bank's net profit in July-September quarter of 2019-20 stood at Rs 358.56 crore.

The results are not strictly comparable with that of previous year's as Kolkata-based Allahabad Bank merged with Indian Bank on April 1, 2020.

Indian Bank's total income rose to Rs 11,669.11 crore during September quarter this year from Rs 6,045.32 crore in the same period of the previous fiscal, it said in a regulatory filing.

On asset quality front, gross non-performing assets (NPA) rose to 9.89 per cent of gross advances at the end of September 2020 from 7.20 per cent a year ago.

However, net NPA declined to 2.96 per cent of the advances at the end of second quarter of this fiscal from 3.54 per cent a year ago.

The bank's provisioning for bad loans and contingencies rose to Rs 2,284.11 crore during July-September quarter from Rs 909.36 crore in the corresponding quarter a year ago.

Provisioning for bad loans alone doubled to Rs 1,880.19 crore at the end of September 2020 from Rs 720.90 crore a year ago.

Provision coverage ratio rose to 84.39 per cent as on September 30, 2020.

The Chennai-based lender said the extent to which the COVID-19 pandemic will impact the bank's results will depend on future developments, which are highly uncertain.

Indian Bank's capital and liquidity position is strong and would continue to be the focus area, it said.

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IndusInd Bank Q2 deposits grow 10.26%

Private lender IndusInd Bank registered a 10.26% year-on-year increase in its deposits and a 2% rise in its net advances during September quarter. However, the bank’s current account savings account (CASA) ratio in the September quarter declined 100 basis points year-on-year to 40.4%.

In a provisional data released on exchanges, the bank said that its deposits grew by 10.26% to Rs 2.28 lakh crore, compared to Rs 2.07 lakh crore in the same period last year.

Its deposits stood at Rs 2.11 lakh crore at the end of the first quarter of financial year 2020-21.

The bank also specified that deposits from retail and small business customers amounted to Rs 75,610 crore during September quarter, compared to Rs 67,318 crore as of June 30, 2020.

Net advances grew by 2% year-on-year to Rs 2 lakh crore, compared to Rs 1.97 lakh crore a year ago.

The advances stood at Rs 1.98 lakh crore as on June 30, 2020.

CASA ratio stood at 40.4% at the end of the second quarter, down 100 basis points compared to 41.4% as on September 30, 2019. CASA ratio remained at 40.1% at the end of June quarter.

Private lender HDFC Bank had earlier disclosed that its advances in September quarter grew 16% and deposits grew at 20% year-on-year.

Similarly current account savings account (CASA) ratio of the bank grew by 270 basis points year-on-year to 42% during September quarter.

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HDFC Bank reports 18.4% jump in Q2 profit

HDFC Bank, the country's largest private sector lender, reported a 18.4  percent year-on-year (y-o-y) growth in profit at Rs 7,513.11 crore for the September quarter, driven by PPoP, NII and lower tax rate.

The profit in the year-ago period was at Rs 6,345 crore.

Net interest income, the difference between interest earned and interest expended, increased by 16.7 percent y-o-y to Rs 15,776.4 crore in the September quarter, driven by asset growth of 21.5 percent and a core net interest margin for the quarter at 4.1 percent, HDFC Bank said in its BSE filing.

The continued focus on deposits helped in the maintenance of a healthy liquidity coverage ratio at 153 percent, well above the regulatory requirement.

On October 5, HDFC Bank said it registered a 15.8 percent y-o-y growth in advances approximately of Rs 10.37 lakh crore during the September quarter, while deposits aggregated to approximately Rs 12.29 lakh crore as increased around 20.3 percent y-o-y.

Asset quality has improved sequentially against expectations of marginal increase, due to the Supreme Court order on NPA classification.

Gross non-performing assets as a percentage of gross advances fell 28 bps q-o-q to 1.08 percent at the end of the September quarter, while net NPAs declined 16 bps q-o-q to 0.17 percent in Q2FY21.

However, "if the bank had classified borrower accounts as NPAs after August 31, 2020, and also adopted an early recognition of NPAs using its analytical models (proforma approach), the proforma gross NPA and net NPA ratio would have been 1.37 percent and 0.35 percent. Pending disposal of the case, the bank, as a matter of prudence, has made a contingent provision in respect of these accounts," HDFC Bank said.

Provisions and contingencies, as expected, increased to Rs 3,703.5 crore in Q2FY21, higher by 37.1 percent compared to Rs 2,700.68 crore, while the same fell 4.8 percent compared to the year-ago period.

"Total provisions include contingent provisions of approximately Rs 2,300 crore for proforma NPAs as well as additional contingent provisions to make the balance sheet more resilient," the bank said.

Non-interest income in Q2FY21 grew by 9 percent to Rs 6,092.45 crore, impacted by lower retail loan origination, use of debit and credit cards by customers, efficiency in collection efforts and waivers of certain fees, HDFC Bank said.

Pre-provision operating profit during the quarter increased 18.1 percent to Rs 13,813.78 crore, compared to the same period last year.

During the quarter ended September 2020, HDFC Bank said it purchased loans aggregating Rs 3,026 crore through the direct assignment route under the home loan arrangement with Housing Development Finance Corporation (HDFC).

Meanwhile, the bank has approved the appointment of Sashidhar Jagdishan as an Additional Director and as the Managing Director and Chief Executive Officer, subject to the approval of the shareholders of the bank, for a period of three years from October 27, 2020.

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Federal Bank Q2 results: Net profit falls 26%

Federal Bank's profit fell 26% year on year as the bank stepped up provisions to deal with likely rise in slippages due to the economic impact caused by the Covid 19 pandemic.

Net profit dropped to Rs 308 crore in the quarter ended September 2020 from Rs 417 crore a year ago as the bank more than doubled provisions in the period. Total provisions increased to Rs 592 crore from Rs 252 crore a year ago and up 50% compared to the quarter ended June.

CEO Shyam Srinivasan said the bank has made upfront provisions of 10% of its expected loans to be restructured according to Reserve Bank of India (RBI) norms.

"We expect 2.5% to 3% of our loan book to be restructured with RBI specified norms. This quarter we restructured loans worth Rs 26 crore and have got requests for Rs 360 crore worth of loans to be restructured," Srinivasan said.

Slippages were masked by the RBI directed moratorium on loans with a mere Rs 3 crore of loans slipping into NPAs. Srinivasan said if not for the moratorium about Rs 237 crore of loans would have slipped into NPAs. As a result of the moratorium the bank's gross NPA ratio dropped to 2.84% of total loans from 3.07% a year ago.

The bank's total loan book as of September was at Rs 1.22 lakh crore and 2.5% to 3% loans would mean Rs 3500 crore will be restructed out of which Rs 1000 crore will be corporate loans, Srinivasan said.

"The environment we are operating in will have a somewhat elevated impact on slippages," Srinivasan said.

On the business side Federal Bank's net interest income increased 23% to Rs 1380 crore while othe income rose 21% to Rs 509 crore.

Net interest margin or the difference the yield a bank earns on loans and that it pays on deposits improved to 3.13% in September versus 3.01% a year ago.

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South Indian Bank Q2 profit falls 23%

South Indian Bank (SIB) on Thursday reported a 23% year-on-year decline in its net profit for the second quarter at Rs 65.09, mainly on additional provisioning. The Kerala-based lender had reported a net profit of Rs 84.48 crore in the year-ago period.

SIB has increased its provisioning for bad loans to Rs 326 crore from Rs 320 crore as of September-end last year. Operating profit for the second quarter has grown from Rs 411.45 crore to Rs 413.97 crore.

Gross NPA of the bank stands at 4.87% as against 4.92% last year and net NPA improved to 2.59% as against 3.48% in the year-ago period.

Murali Ramakrishnan, who had recently taken charge as MD & CEO of the bank, while announcing the results, mentioned that despite reduction in profit from treasury segment, the bank could register a net profit of Rs 65.09 crore for the quarter, mainly on account of the higher net interest income due to reduction in the cost of deposits and improved recoveries.

The net interest income improved from Rs 584.30 crore to Rs 663.11 crore during the quarter, registering a growth of 13% year-on-year. Net interest margin improved from 2.61% to 2.78%.

Ramakrishnan said that despite the Covid-19 pandemic scenario in the country, the bank could register a reasonable growth. He added that the bank has also been able to meet the targeted levels of recovery which has helped in containing the GNPA level. The provision coverage ratio of the bank has improved markedly to 65.21% from 48.07% year-on-year.

The capital adequacy ratio of the bank stands at 13.94% as on September 30, 2020. The bank has also taken approval from the shareholders for raising the equity capital during the financial year for an amount not exceeding Rs 750 crore, bank sources said.

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