The bank reported for the full fiscal year last fortnight and though it has improved its Cost Income ratio to 38% making it best in class, its Asset Book NIMs on improved Corporate Loan performance and control, scoring 3.33% from 2.9% a couple of quarters back, the bank still posted tepid topline increases in low double digits for the whole year. That also meant for the full year, Net income stopped at INR 110 Bln and that amounted to a huge 14.9% roE on one’s guessing a pretty low equity base static at INR 11.5 Bln
The Net NPA ratio, an important drag on earnings in the first two quarters, scorched a more than 25% increase instead of topline growth as fee income in Q4 barely made double digits. However overall Fee and Advisory Income included a INR 5.22 Bln jump in Treasury gains ( over 3.5 Bln booked in Q3 and the rest now) and FX gains from repatriation of earnings from Foreign branches allowing Q4 to report a 35% Non Interest Income increase while NII was hardly up 2% on linked quarter and operating profits flat on the December quarter
The total asset book has grown to INR 3.4 tln and the near 25% growth in retail assets has seen a more than 15% decrease in contribution (size of book) from Auto loans. The Deposits are also upward of INR 3.3 Tln with INR 1.3 Tln in CASA deposits, the bank again satisfied with a 39% CASA ratio.
One wonders if we can get an answer from the bank on how the bank’s Off balance sheetcapital/liabilities have reduced by a similar amount as the increase in Tier I capital eve an Indian Bank reporting a 17.7% Basel III Capital is unlikely to give them the same advantage as another European or US bank which has many more layers of Capital allocation and RWA classification for Borrowings, mostly to the detriment of predatory structures continuingly preferred in those markets by institutional investors and other banks including the new allowed contingent capital structures in Tier I
Net income for the consolidated entity including the dozen odd subsidiaries with INR 120 bln capital allocated was surprisingly down by almost 4-5% from December 2013 with a jump of INR 1200 Bln in Opex in Non compensation expenses bringing year on year increase in consolidated profit below 10%