Managing director and CEO C VR Rajendran said higher profitability had come from increased income and reduction of expenses, even after higher provisions.
“Our yield on advances has gone up substantially and yield on treasury has also gone up by 40 bps, whereas the cost of deposit has come down by 30 bps and the net interest margin (NIM) has increased for the quarter. We could also keep all the expenses under control,” he added.
In Q2FY21, the net interest income stood at Rs 229.2 crore against Rs 147.0 crore in Q2FY20, registering 56% y-o-y growth. NIM for the second quarter is seen at 4.5 % from 4.06 % in the first quarter and 3.69 % in the year-ago period.
Provisions and contingencies increased significantly to Rs 80.72 crore in the quarter from Rs 24.57 crore in the year-ago quarter and Rs 53.56 crore in the first quarter of the current fiscal year.
Asset quality improved with gross non-performing assets (GNPAs) as a percentage of gross advances at 3.04% from 3.51% in the preceding quarter. While net NPA declined to 1.30% in the September quarter from 1.74 % in the June quarter and 1.96% in the year-ago quarter.
The provision coverage ratio improved to 84.24% as of September from 81.7% in the June quarter.
“We are happy to announce a half-yearly profit of over Rs 100 crore. Now, we are well entrenched on the growth track and have recorded growth of over 10% in both deposit and advances. We could post improvement in all key metrics. While the asset growth so far has been contributed mostly by gold loan growth, we are committed to diversify the asset base and product suite,” Rajendran said.