The March quarter net loss of Rs 2,328 crore was the first loss it has reported in the previous 20 years, with the last instance of the fifth largest private sector lender reporting a loss coming in the March 2006 quarter when Bhaskar Ghosh was at the helm. The only other instance was in the March 2001 quarter.
However, the bank had better margins with the NIM pricing in at 3.46%, of which 11 bps was contributed by higher recoveries and income tax refunds.
For the June 2025 quarter, the bank said its net interest income fell 14% to Rs 4,640 crore on a standalone basis hurt by decline in loans and rise in provisions for potential bad loans. Fee and other income also fared badly at Rs 2,157 crore compared to Rs 2,442 crore, pulling down total income to Rs 14,421 crore from Rs 14,988 crore.
Advances fell 4% on-year to Rs 3.34 trillion but inched up sequentially by 6% led by retail. Of the total advances, its vehicle loans stood at Rs 96,357 crore, non-vehicle finance at Rs 76,508 crore, and micro loans at Rs 28,408 crore. All these segments are part of the consumer banking business. Corporate loans at Rs 1.33 trillion constitute 40% of total advances.
Deposits also inched down to Rs 3.97 trillion from Rs 3.98 trillion which Mehta said was due to the bank letting go of some high cost certificates of deposits issued in March and also some term deposits.
On the lingering pains in the microfinance book, which they described as an industry issue and not limited to them alone, they said it will at least take another three to six months to stabilize, until which they will be very cautious.
As part of the focus on profitability, Mehta also said the bank will be spending much less on opex going forward. From an annual growth spend of 25% each year in the past four years, it will fall to single digits, he said.
The management also ruled out fundraising, saying the bank is sitting on an excess liquidity amount of Rs 52,700 crore and loan growth remains weak.
