Karur Vysya Bank Q2 net interest margins (NIMs) are at a 5-quarter high and the loan book has also grown for first time in 3 quarters. Speaking to CNBC-TV18, B Ramesh Babu, MD & CEO of Karur Vysya Bank, said that this is a good quarter for the bank as all the ratios have improved.

“PCR is above 75 percent, GNPA and NPA also have come down drastically. Capital adequacy is 18.41 percent which is very good. Profit is also 83 percent up on account of reduction in cost of deposits which is one of the lowest amongst the private sector banks. NIMs have improved and CASA we have moved from 30 percent to 34 percent,” he said.

On the provisions, he said it is down by 25 percent. “The reasons are that up till last year we have been having a pain of the corporate and lot of pain has been recognized. That way if you look at this year provision, only on account of COVID what all we need to provide, that only was there. Otherwise majority of the corporate book is out,” he added.

Babu further added that post moratorium, the current collection efficiency is 94 percent of the total book. “The corporate as well as the commercial book, the demand raised in September, more than 95 percent has already been honored. Retail also, the personal segment where housing loans as well vehicles and personal loans are there, 94 percent has already been recovered,” he said.

Babu explained that until and unless they see future cash flows and ability to service, they will not opt restructuring. “Slippages we feel, it will be more or less in a limited extent. Earlier our aspirational number was around 1.75 percent to maintain the slippage ratio. I think we will be able to manage with that until and unless something crops up suddenly,” he added.

(Edited by : Bivekananda Biswas)