Net profit was ₹4,574 crore in the September quarter last year.
Total advances climbed 6%, driven by personal loans that expanded 15%.
An 11% growth in home loans more than helped mask a 4% shrinkage in the corporate loan book. Home loans now constitute 24% of the bank’s domestic advances.
Chairman Dinesh Khara expressed confidence that the bank will match the broader growth momentum, which should also boost the corporate loan book. India’s largest lender by assets expects to expand its loan book by 10% this fiscal.
“Capacity utilisation is still low at about 60%. Our undisbursed term loan facilities are at about 27% while half of the working capital facilities are unutilised,” Khara said.
“We have got a pipeline of Rs 1.15 lakh crore and we expect that the unused term loans of Rs 2.25 lakh crore will also be utilised because there is very clear visibility of demand. Capacity augmentation is happening and I hope by the end of the current and next quarter, there will be a significant improvement in capacity utilisation, which will help corporate credit come back,” said Khara.
A sharp fall in provisions also helped the bank enhance its net profit. Provisions more than halved to Rs 2,699 crore, from Rs 5,619 crore a year ago due to improvement in loan collections, a fall in slippages and a write-back from the provisions made for Dewan Housing Finance Ltd (DHFL).
Slippages fell sharply to just Rs 4,176 crore in September 2021 from Rs 15,666 crore in the quarter ended June 2021 as collection efficiency in retail loans improved to 95% after an end to mobility curbs. Net NPA ratio fell to 1.52%, down from 1.59% a year ago, while the slippage ratio fell sharply to 0.66%, down from 2.47% in June 2021, resulting in a 51-basis point fall in credit costs year-on-year. One basis point is 0.01 percentage point. Khara did not give a clear guidance on asset quality but indicated that stress is on the decline. “There are no major concerns on asset quality. Our underwriting standards have improved and collection machinery has also improved,” he said, adding that the bank has made a 100% provision for its exposure to the bankrupt Srei Group.
