Provisions tripled to ₹1,732 crore from ₹528 crore a year ago, primarily as the bank increased its provisioning buffer for its microfinance business by ₹315 crore, covering about 99% of its loans due for more than 30 days but which are still not classified as NPA. This provision along with a ₹253 crore hit the bank took on a legacy toll account led to a spike in provisions, impacting profits.
“Bank has taken additional provision of ₹253 crore for one toll road related to Mumbai’s entry point, which was affected because of the state government waiving toll on LMV (light motor vehicle). Bank will recognise this back as profits depending on toll collections and the government’s compensation to the client,” CEO V Vaidyanathan said. Collection efficiency in microfinance reduced to 98.6% in September 2024 from 99% in June 2024.
Microfinance portfolio as percentage of overall loan book reduced to 5.6% in September from 6.3% in June 2024.The Maharashtra government has waived toll for cars at five entry points in Mumbai effective October 15. Toll collection at these entry points began in 2002 and was contracted to MEP Infrastructure Pvt Ltd in 2010 for a 16-year period, expiring in 2026. To cover the revenue loss, the government will compensate the concessionaire until the contract ends.
Asset quality remained stable with gross NPA at 1.92% in September 2024, down from 2.11% a year ago. Profitability remains strong with net interest income up 21% to ₹4,788 crore from ₹3,950 crore a year ago. Fee and other income also grew by 18% to ₹1,622 crore.
