For the recently concluded quarter, the bank's standalone PAT plummeted 74 per cent year on year (YoY) at Rs 54 crore due to higher provisioning for bad loans.
Despite its net interest income (difference between income earned and expended) increasing by 47 per cent YoY to Rs 869 crore in Q2FY20, the profit before tax fell 67 per cent YoY. Provisioning cost, too, rose by 281 per cent or nearly three times YoY to Rs 533 crore from Rs 140 crore reported in the corresponding quarter of the previous fiscal.
That apart, asset quality of the bank worsened during the quarter with gross non-performing assets (NPA) ratio increasing from 1.4 per cent a year-ago to 2.6 per cent in Q2, and NNPA ratio jumping to 1.56 per cent versus 0.74 per cent last year. With this, the bank has already breached its full-year gross NPA guidance of 2 – 2.5 per cent provided after June quarter results.
"Given the difficult credit environment, the bank has faced challenges in a few corporate accounts. As matter of prudence, the bank has taken higher than required provisions on these accounts which have impacted bank’s bottom-line," the management said.