What are the bank’s plans post exiting the PCA?
After being in PCA for almost six years, we are now looking for a fresh start to grow more in the coming quarters and definitely the bank would be much stronger in future. Since the restrictions on branch opening, recruitment of human resources and CSR activities have been removed, we will look at taking actions on those fronts. There has been no recruitment in the past six years, and the bank’s staff strength came down to around 22,000 from 28,000. In a couple of months, we will be revamping our branch expansion and recruitment policies.
What were the factors that contributed to the good performance in the second quarter?
It has been an overall growth, I won’t say a particular segment has given growth. It has been equitably distributed among retail, agri, MSME and corporate segments. If you look at the performances of the past quarters, we have been steadily growing. Due to the Covid-19 impact, the economic growth of the country got muted and hence there was no scope for credit growth on the bank side. But post the vaccination drive, we are seeing positive outlook on the economic front.
Your net interest margin (NIM) declined during this quarter.
NIM, on a q-o-q basis has gone up, but yes, on a y-o-y basis, it has declined to 2.43% from 2.57. In the June quarter, our NIM was at 2.34%. If you look at the interest rates, almost all the bigger banks have reduced the interest rates.
What were the slippages during the second quarter? Any plans to raise capital?
We had a slippage of Rs 1,400 crore, contributed by two to three companies. Out of it, 60 to 70% was borne out of an NBFC. The bank had made around 80% provisions on these accounts. The bank is not anticipating any major slippages in the coming quarters, whatever slippages had happened were from the watch list. On the capital front, the bank would be raising up to Rs 1,000 crore during Q4 to meet tier-II capital norms.