The second reason for the crimped bottom line is the higher cost of funds wherein the bank paid more in interest to depositors than it earned form borrowers — which means its interest income rose 16.2% to Rs 1,11,526 crore, while the bank saw its interest expenses rising by a much higher rate of 23.36% to Rs 70,401 crore. Low margin means lower collection from borrowers, which is called the net interest income printed in a low 5.7% growth to Rs 41,125 crore. All this had the credit cost of the bank rising by 16 bps to 0.48%.
The fourth reason for the poor show is the lower income from the treasury.
The fifth reason for the poor show is the rise in slippages, which rose 10 bps to 0.84% YoY at Rs 7,900 crore, led by personal loans and agri loans but the management discounted any worries on this front saying this is seasonal as the bank has recovered Rs 1,600 crore since the closing the quarter. CFO Saloni Narayan said of the total fresh slippages of Rs 7,900 crore, Rs 3,000 crore came in from personal loans and housing loans; Rs 2,500 crore from agri book, Rs 2,200 crore came from SMEs, and Rs 200 crore came in from small corporates.
Both of them said there is no worry on this from as the personal loans are against salary accounts and the main reason for the non-payments has been that a few state government were delaying salaries in the quarter and since then it has been regularised.