State-owned Uco Bank reported a near seven-fold jump in net profit for the September quarter, riding on higher interest income and write-back of provisions made earlier.
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Net interest income (NII) for the bank rose 8 per cent YoY to Rs 7,900 crore compared with Rs 7,326 crore in the year-ago quarter. Net interest margin (NIM) for the recently concluded quarter came in at 3.39 per cent.
Specific loan loss provisions for the September quarter stood at Rs 927 crore compared with Rs 2,865 crore in the June quarter and Rs 724 crore in the year-ago quarter. Total Provisions & contingencies for the quarter fell to Rs 1,735 crore from Rs 3,302 crore in the preceding quarter and Rs 4,343 crore in the corresponding quarter last fiscal.
Gross NPA ratio fell to the lowest level in 20 quarters to 3.53 per cent for the July-September period. The figure stood at 3.85 per cent in the June quarter and 4.28 per cent in the year-ago quarter.
Gross slippages for the said quarter came in at Rs 5,464 crore, lower than Rs 6,518 crore in the June 2021 quarter but higher than Rs 1,751 crore (as per IRAC norms) in the same quarter last year.
"Slippages in Q2FY21 moderated due to regulatory forbearances that do not exist in the current quarter. Recoveries and upgrades from NPAs during the quarter were Rs 4,757 crore while write-offs were Rs 2,508 crore. Consequently, there were net slippages in NPAs (before write-offs) for the quarter of Rs 707 crore compared to Rs 3,976 crore in Q1FY22. Net slippages in NPAs (before write-offs) for retail loans stood at Rs 697 crore, and for SME there was a Rs 16 crore decrease in NPAs (before write-offs)," the bank said.
Fee income for the quarter rose 17 per cent YoY to Rs 3,231 crore. Retail fees jumped 19 per cent YoY and
constituted 63 per cent of the bank’s total fee income. The corporate & commercial banking fee grew 15 per cent, the bank said.
"The trading profits and miscellaneous income for the quarter stood at Rs 473 crore and Rs 95 crore, respectively. Overall, the non-interest income (comprising of fee, trading profit and miscellaneous income) for Q2FY22 stood at Rs 3,798 crore, up 6 per cent YoY," the bank said.
The bank’s provision coverage, as a proportion of Gross NPAs, stood at 70 per cent against 77 per cent as of September 2020 and 70 per cent as of June 30. Provisions prior to technical write-offs remained stable at 88 per cent.
Total income during the July-September quarter rose to Rs.9,488.06 crore from Rs.8,731.52 crore a year ago, IndusInd Bank said in a regulatory filing.
Interest income moved up at Rs.7,650.36 crore from Rs.7,177.21 crore.
On a standalone basis, the net profit increased by 72% to Rs.1,113.53 crore from Rs.647.04 crore. And the total income rose to Rs.9,487.56 crore against Rs.8,731.05 crore.
Bank's provisions for bad loans and contingencies fell to Rs.1,703.36 crore for the quarter from Rs.1,964.44 crore reserved for the year-ago period.
However, there was an uptick in the bank's gross bad loan proportion at 2.77 per cent of gross advances as of September 30, 2021, against 2.21 per cent a year earlier.
Net NPAs too increased to 0.80 per cent from 0.52 per cent.
The annualised return on asset (RoA) stood at 1.26 per cent compared with 1.12 per cent in the preceding quarter of this fiscal and 0.83 per cent in the same quarter last fiscal.
Standalone net interest income in Q2FY22 rose 3.2 percent year-on-year to Rs 4,020.6 crore - meeting street expectations - with healthy 15 percent YoY (8 percent QoQ) loan growth. Net interest margin contracted 5 bps year-on-year and 15 bps sequentially to 4.45 percent in Q2.
"Advances during the quarter increased by 14.7 percent to Rs 2,34,965 crore, and deposits grew by 11.5 percent to Rs 2,91,711 crore compared to year-ago period," said the bank in its BSE filing on Tuesday.
Profit was estimated at Rs 1,792.2 crore and net interest income was expected at Rs 4,008.1 crore for the quarter, according to average of estimates of analysts polled by CNBC-TV18.
Asset quality improved during the quarter ended September 2021 with gross non-performing assets as a percentage of gross advances falling 40 bps QoQ to 3.2 percent and the net NPA declined 20 bps to 1.1 percent on sequential basis. 10 basis points is 0.01 percent.
Provisions and contingencies declined sharply by 40 percent sequentially to Rs 424 crore in September 2021 quarter, but the same increased by 27.3 percent year-on-year which resulted into a drag in profitability.
Kotak Mahindra Bank said Covid related provisions as of September 2021 were maintained at Rs 1,279 crore and did not utilise in the first half of FY22. "The bank has implemented total restructuring of Rs 495 crore (0.21 percent of advances), and in addition, the bank has implemented total restructuring of Rs 767 crore (0.33 percent of advances) as on September 30, 2021."
"Total provisions (including specific, standard, COVID-19 related etc.) held as on September 2021 at Rs 7,637 crore, around 100 percent of gross NPA," the bank said.
The bank further said SMA-II (special mention account) outstanding at the end of September 2021 quarter was at Rs 388 crore, down compared to Rs 430 crore as of June quarter.
Non-interest income (other income) grew significantly to Rs 1,812.6 crore in the quarter ended September 2021 driven by fee and services business, up from Rs 1,432.4 crore in corresponding quarter of last fiscal. Fee and services included distribution & syndication income, and general banking fees.
On consolidated basis, the profit growth was significant, rising 65.5 percent year-on-year to Rs 2,989 crore and the year-on-year growth was 1.4 percent.
Subsidiaries - Kotak Securities recorded 22.1 percent year-on-year growth in profit at Rs 243 crore and Kotak Mahindra Prime clocked 80.5 percent growth in profit at Rs 240 crore in the quarter ended September 2021.
Kotak Asset Management and Trustee Company's bottomline grew by 15.5 percent year-on-year to Rs 97 crore and Kotak Mahindra Capital Company registered a massive 314.3 percent growth YoY at Rs 58 crore, but Kotak Mahindra Life Insurance's profit declined 9.4 percent YoY to Rs 155 crore during the quarter.
The bank said consolidated customer assets grew by 16 percent year-on-year to Rs 287,831 crore as of September 2021. "Total assets managed / advised by the Group as of September 2021 were Rs 3,81,058 crore, up 40 percent over the corresponding period last fiscal."
The lender's total income for the reporting quarter was down marginally by about 1 per cent to Rs 5,376 crore, from Rs 5,430 during the July to September quarter of 2020-21. The bank’s managing director and chief executive officer P P Sengupta said the reasons for the better financial numbers is owing to a better outlook in the economy due to higher rates of vaccination and better performance in retail, agriculture, MSME (RAM) and corporates.
The bank’s asset quality showed signs of improvement with its gross non-performing assets falling by 11.29 per cent from Rs 17,660 crore during the second quarter in 2020-21 to Rs 15,666 during the same quarter this fiscal. During the quarter GNPA reduced by Rs 286 crore. GNPA ratios improved to 10.66 per cent from 13.64 per cent on a quarter on quarter basis. The bank came out of RBI's Prompt Corrective Action (PCA) on September 29, 2021.
Reduction in NPA for the quarter ended September 2021 stood at Rs. 1798 crore as against Rs.1,616 crore achieved for quarter ended June 2021. Net NPA during the quarter was seen at Rs 3,741 crore with a ratio of 2.77 per cent as against Rs 3,998 crore with a ratio of 3.15 per cent during the previous quarter.
The bank's net interest margin was 2.43 per cent in Q2 FY22, as against 2.57 per cent a year ago. During the quarter under review, IOB’s operating profit zoomed by 5.42 per cent to Rs 1,419 crore, as compared to Rs 1,346 crore seen during the September quarter last fiscal. Total deposits were seen up by 9 per cent to Rs.2,50,890 crore as on September end as compared to Rs 2,42,941 crore as on the quarter ended in June 2021.
Gross advances stood at Rs 1,46,940 crore during the quarter compared to Rs 1,38,944 crore during the end of Q1. The bank said that it has grown its retail and agri segments and rebalanced the advance balance by consciously reducing the stressed sector in the corporate segment.
CASA of the bank improved to 42.57 per cent during the period under review compared to 40.26 per cent during the same time last financial year. Total CASA also increased to Rs 106,806 crore as against Rs 92,436 crore during the second quarter of 2020-21. Provision Coverage Ratio improved to 92 per cent as against 89.36 per cent in Q2FY21.
The lender had posted a net profit of Rs 161 crore during the same quarter of the previous fiscal.
However, total income of the bank during July-September period of 2021-22 was down at Rs 6,503.39 crore, as against Rs 6,762.36 crore in the year-ago period, it said in a regulatory filing.
Net interest income rose 5.99 percent to Rs 2,495 crore, as against Rs 2,354 crore earlier.
Net interest margin (NIM) improved from 3.21 percent to 3.36 percent on a year-on-year basis, registering an improvement of 15 basis points, it added.
On the asset quality front, net non-performing assets (NPAs or bad loans) reduced to 4.51 percent as of September 30, 2021, from 5.60 percent by end of the same month last year.
Gross NPAs moderated to 15.52 percent from 17.36 percent.
Also, the bank's cost of deposit declined to 3.84 percent from 4.45 percent for the reported quarter.
However, there was a slight uptick in provisions and contingencies for the quarter at Rs 1,048.52 crore, as against Rs 1,033.34 crore parked aside in the September 2020 quarter.
The state-owned lender said its slippage ratio stood at 1.45 percent as against 0.08 percent as there was a moratorium granted by RBI due to the COVID-19 pandemic. In the June 2021 quarter, it was 0.95 percent.
"Slippage ratio during the quarter increased due to slippage of two corporate accounts of Rs 1,150 crore. Had these accounts not slipped during the quarter then the slippage ratio for Q2FY22 would have been 0.67 percent," the bank said in a release.
Total business stood at Rs 5,12,094 crore as on September 30, 2021, compared to Rs 5,00,737 crore earlier, registering a growth of Rs 11,357 crore (2.27 percent) year-on-year.
Total deposits have increased by Rs 13,056 crore and stood at Rs 3,36,500 crore at the end of the quarter, from Rs 3,23,444 crore in the year-ago period, reflecting an increase of 4.04 percent, it added.
The bank’s net profit was Rs 444 crore in the year-ago period.
Its net interest margin (NIM), a key profitability parameter, however, dipped to 2.72% in the quarter under review from 2.82% in the same period last year. Net interest income (NII) was a shade lower at Rs 6,273 crore from Rs 6,305 crore while total income rose a slim 2.6% at Rs 21,331 crore.
Its operating profit grew 22% to Rs 5,604 crore as against Rs 4,597 crore. Treasury income jumped 95% to Rs 1,754 crore while non-interest Income rose 37.5% at Rs 4,268 crore. Provision to cover bad loans fell 24% at Rs 2678 crore with improvement in recovery of loans that were already covered.
Bank chief executive LV Prabhakar expects corporate loans to grow at 7.5% for the full year despite muted demand so far, raising hopes of pick up in industrial activities. He expects retail loans to continue to grow by over 10%.
The lender’s asset quality improved sequentially, with gross non-performing assets (NPA) ratio falling to 8.42% at the end of September from 8.5% three months back. Net NPA stood at 3.21% as against 3.46%.
Prabhakar said the bank with 14.37% capital adequacy is comfortably placed for growth and meeting regulations. The lender has just recently raised Rs 1,500 crore in AT-1 capital while the board has approved raising another 2500 crore each in AT-1 bonds and tier-2 bonds. It raised Rs 2500 crore through share sales during this quarter.
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