We should expect ROA to rise every quarter from here. So, you can think of it like a core, core income. In fact, last quarter, there was no treasury profit also. What are the steps you are taking to expand it further from here on? How much time could that take in further improvement?Ī short answer is that you will see it improving every quarter from here on because one good thing about our bank is there is nothing one-time about our profits. Let us talk about the ROA front because your ROA crossing 1% is a landmark. Now, SMA is really at an all-time low for the bank. For example, so we track what is the quality of underwriting, what is the quality of cheque bounce, then we check SMA.
I am happy to see it has come back to 2% gross and 1% net this quarter and the short answer is we expect this to sustain and the reason is not just because we have done it before the reason is we track the input parameters that lead to the NPA. We have had a long track record of having NPA of 2% gross and 1% net on the retail side. Do you foresee any challenges or have things improved very drastically because of which provisioning has also fallen?įirst of all, for the whole Indian system, the credit quality is getting better because there are credit bureaus and data and cash flow and all that but specifically our bank can safely assure that we have had a ten-year track record and it is just not this quarter.
How are things looking on the credit quality front from here on. Your provisions have also fallen quite smartly this quarter. So like that, I am telling you today that in the long run, this bank is headed to be a compounding machine and on the loan book and on the deposit rates and on the profits. If someone at Infosys had told you that in 2020 they will be hiring 20,000 employees a quarter, a month, would you have believed them? I guess not. Infosys if 20 years ago when it had may be 20,000 employees. People think about our organisation in terms of corporate governance, which I truly believe is very important. We have 50% CASA now and last year, interest rates dropped, but our CASA stayed at 50% which means there is something sticky. It is not a joke that we were 10% CASA three years ago. Well I can understand your concern but even during these three years, the fundamental building blocks were coming strong. When we used to speak to a lot of institutional shareholders of yours, one always got a sense they were very happy with the quality of management, the efforts being taken and all the ingredients being putl but the numbers were not really coming, This is one quarter where everybody is sitting up and taking notice of the numbers. The fact it is coming from a zero base up to 1%, should tell you something about the trajectory. The length of the platform is very strong, our return on assets has crossed 1% which I think is a landmark moment. But more importantly, it is not about those things, it is about what we build on the strength of the basic platform.
All that is all sorted and you will see that in the next few quarters we will live up to that comment. Have all the legacy issues been settled finally?Īll legacy issues are settled, There is nothing like a bad corporate loan or a infrastructure loan etc.
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