What is your outlook on bad loans peaking out Could you also talk about NPAs in the CV/CE segment
Overall, the asset quality has shown stability for the last few quarters.Gross NPAs are below our historical averages. Incremental NPA formation has reduced. Specifically, as far as the CV/CE business is concerned, the portfolio growth has been negative, partly because of the demand conditions and also because of the caution most players, including us, have been exercising for the past few quarters. But even there, the NPA formation has tended to stabilise.
Could you comment on the increase in net interest margins in Q4
We normally have margins of 3.9-4.4%. In the September and December quarters, there was a reduction of about 20 bps in the margins. So, partly with the improved Casa in this quarter and, partly, with an increase in fixed deposits that have been raised in the last quarter through FCNR deposits, there has been a slight improvement in the margins.
Could you give a breakup of this quarters loan growth
A major portion of loan growth this quarter has come from the wholesale side on a year-on-year basis. The loan growth on the corporate side has been stable this quarter compared to last year when it was muted. Overall, the mix today between retail and wholesale has been 53:47. We see growth in the wholesale book primarily for working capital in the short and medium terms and some amount of term lending. But on the retail side, its been a mixed bag. Some products have continued to grow. But wholesale loans have outpaced retail loan growth.
Youve also tightened expenses Could you take us through that
The cost-to-income ratio tends to vary, but growth in expenses has been muted. This quarter we have added 67 branches and managed to keep operating expenses on a tight leash without compromising on investments. But if you keep the quarterly variations of cost-to-income ratio aside, on a full-year, basis we have reduced it from about 51% to about 45.7%, which is in line with what we have said.