However, excluding coronavirus-related provisions, the bank’s profit after tax would have been Rs 3,260 crore.
The lender made provisions of Rs 2,725 crore for Covid-19, the disease caused by the novel coronavirus, well above the regulatory requirement of Rs 600 crore. “The bank’s business is expected to be impacted by lower lending opportunities and revenues in the short to medium term,” it said.
“The impact of Covid-19 on the bank’s results, including credit quality and provisions, remains uncertain and is dependent on the spread of Covid-19, steps taken by the government and the central bank to mitigate the economic impact, steps taken by the bank, and the time it takes for economic activities to resume at normal levels,” it added.
About 32 per cent of the bank’s customers by value, both retail and corporate, have opted for the moratorium announced by the Reserve Bank of India.
Net interest income rose 17 per cent to Rs 8,927 crore compared to Rs 7,620 crore in Q4FY19. Net interest margin stood at 3.87 per cent in Q4FY20 compared to 3.77 per cent in Q3FY20 and 3.72 per cent in Q4FY19. Operating profit grew 18 per cent to Rs 7,148 crore in Q4FY20 from Rs 6,077 crore in Q4FY19, while it got tax refunds of Rs 27 crore against Rs 414 crore in the same period last year.
For bad loans and coronavirus-related disruptions, the bank made provisions of Rs 5,967 crore, up 9 per cent from Rs 5,451 crore in Q4FY19. Compared to the previous quarter’s figure of Rs 2,083 crore, provisions were up almost 186 per cent.
The bank reported slippages of Rs 5,300 crore, higher than Q3FY20’s figure of Rs 4,300 crore. “The increase in Q4 is predominantly due to two accounts — one health care and an oil trading company — which are now NPAs... made adequate provisions for these two accounts,” the management said.
Gross non-performing assets (NPAs) declined to 5.53 per cent in Q4FY20 from 6.70 per cent in Q4FY19 and 5.95 per cent in Q3FY20. Similarly, net NPAs declined to 1.41 per cent in the reporting quarter from 2.06 per cent in Q4FY19 and 1.49 per cent in Q3FY20. The provision coverage on NPAs, excluding cumulative technical write-offs, increased to 75.7 per cent, from 70.6 per cent in Q4FY19.
“It is going to be difficult to give an outlook on asset quality,” the bank management said.
Capital adequacy ratio was 16.11 per cent and tier 1 capital at 14.72 per cent. “(There is) no immediate plan to raise capital as CAR is much above the regulatory requirement,” the management said.
The deposit base grew 18 per cent to Rs 7.7 trillion while domestic advances grew 13 per cent as the bank continued to leverage its strong retail franchise, resulting in a 16 per cent YoY growth in the retail loan portfolio as of March 31, 2020. The corporate portfolio grew at 9 per cent.
The board has approved a plan to raise Rs 25,000 crore through non-convertible debentures and Rs 300 crore by way of certificate of deposits in overseas markets. The board has also approved the plan to move the bank’s registered office from Gujarat to Maharashtra.