FINANCIAL
RESULTS FOR THE QUARTER/YEAR ENDED31st March 2020
LVB
posts net profit of Rs 92 crs in the fourth quarter ending March 31. 2020 ; ontrack
with investors for capital raising
Major Performance Highlights
ü Bank recorded
operating Profit of Rs.70.32 crore during
the Q4 20 as against the Operating Loss of Rs.19.85
crore during the Q3-20
ü Bank earned the Net Profit of Rs.92.86 crore during the Q4
20 as against the Net Loss of Rs. 334.48 crore during the Q3-20
ü Total
Business mix stood at Rs..38116 crore
ü CASA
increased to 26.63% of Total Deposit as on 31.3.2020 as against25.67 % as on 31.3.2019.
and 25.88% as on 31st Dec 2019
ü Bulk
Term Deposit was around 4.86% of Total Deposits.
ü Liquidity
Coverage Ratio 273.21%
ü Cost
Income ratio 71.10% Vs 110.38%
ü PCR
71.25%.
1.
Liquidity
position
The Bank’s
liquidity position is comfortable with LCR of about 273.21 % against minimum 100
% required by RBI. Bank also does not have any Asset-Liability mismatch and is
successfully fulfilling its commitments to deposit-holders, Bond holders
account-holders and creditors.
2.
Capital
raise
Ever since its
start in 1926, bank and its management have industriously worked, to uphold the
interests of its depositors and its minority shareholders, as supreme and
foremost. In the last 5 years, the Bank has raised equity capital of Rs 2002
crores in various forms as detailed below
Fiscal year ended
|
Method
|
Number of shares issued
|
Amount, INR crores
|
|
Aug-14,
FY2015
|
Rights
issue to shareholders
|
8,12,60,919
|
406.0
|
|
Jan-17,
FY2017
|
Qualified
institutional placement
|
1,19,85,138
|
167.8
|
|
Jan-18,
FY2018
|
Rights
issue to shareholders
|
6,39,87,006
|
780.6
|
|
Mar-19,
FY2019
|
Qualified
institutional placement
|
6,38,31,945
|
459.6
|
|
May-19,
FY2020
|
Preferential
allotment
|
1,68,00,000
|
188.2
|
|
Total
|
23,78,65,008
|
2,002.2
|
We are glad to inform you that, despite the current pandemic, our relentless pursuance, resulted in the bank receiving a non-binding letter of intent dated 12-June-2020 “LOI” from Clix Group for amalgamation of Clix Capital Services Private Limited and its subsidiary into the bank. The LOI was executed in board meeting of the bank held on 15th June2020 and was informed to RBI also.
As per the
LOI, the proposed amalgamation of Clix Capital Service Pvt Ltd and Clix
Finance India Pvt Ltd into the bank, is subject to completion of mutual
due-diligence in exclusive window
of 45 days and is subject to regulatory and other customary approvals. After the
45 days window, the binding commercial terms will be finalized and a regular
proposal will be submitted for consideration of RBI. Currently, the due
diligence process is underway. Upon amalgamation the entire shareholders’ fund
of Clix Capital of approximately INR 1,900 crores and total assets of
approximately INR 4,600 crores, will get amalgamated into bank. Therefore, as per current quick estimates of
the advisors, after amalgamation of Clix Capital, the CET-1 of bank might reach
to reasonable threshold level stipulated under extant regulatory norms based on
the present level of assets and capital.
In addition to the proposal from Clix Group, the Bank’s advisors, we
look for few large marquee long term investors as well in mutual consutation . We will share
information on the developments in public domain as and when they materialise.
3.
Steps taken
to improve profitability
We are glad
to inform you that, we have successfully embarked upon this efficiency
improvement plan and are on track to achieve the targeted efficiency in first
full year of impact of steps that are undertaken. The key steps already
implemented are:
i)
Deposit
cost – reduce interest rate on deposits to be comparable with peer banks and
this should substantially reduce cost of deposits. Our treasury’s nimbleness and hands on approach, enabled us to
successfully reduce overall, cost of
funds from 5.91% during Mar 19 to5.51 % for the year ended 31-Mar-20. The
reduction in cost of funds has primarily been due to –
a. Increase in share of CASA funds, which increased from 25.67% of total
deposit as on 31-Mar-19 to 26.63% as on 31-Mar-20.
b. Reduction in Bulk Deposit by around ` 2563 crore
from the level of `3606 crore as on 31st March 2019 to around ` 1043 crore as on 31st March 2020.
c. Rationalization of fixed deposit rates across maturities.
ii)
Establishment
costs –
We continue to
believe in long term relationships with all stakeholders, especially, our
customers, investors and employees. Bank would like to reward its
employees in acknowledgement to higher
productivity and better performance in business generation, recovery of bad
loans and higher fee income. We have taken several steps in this direction to
improve efficiency/business and profit per employee, such as –
a. we have started retraining, sections of employees, to do multiple roles
to rationalize ‘employee per branch’,
b. our ‘VRS plan received a good response. 69 eligible employees opted for
Voluntary Retirement Scheme.
c. besides, VRS and re-training employees, about 350 employees chose to
pursue their careers otherwise.
d. Bank has
also withdrawn the mandate given
to IBA to negotiate wage revision on its behalf for both its officers and
workmen staff.
iii)
Reduce
other operating costs
a. During the current fiscal year, a number of branches were exchanged with
either new location or reduced in floor space and many branches achieved
revision in rental agreement. In parallel, to continuing cost optimization, the
bank has also refocused branches along lines of use, viz., liability branch,
assets branch, mixed use branch.
b. We have
enhanced security of ATM sites and havesimultaneously achieved performance
efficiency, by implementing e- surveillance on ATM or optimizing in watchman count for on-site ATMs and reducing opening hours of low hit ATMs in the late
evenings.
c. AMC costs
are also being renegotiatedfor
reduction.
iv)
Improve fee
income
a. Bank is
moving all its ATMs to opex model whereby they will be owned and operated by
identified vendors. The vendors have agreed to specified uptime targets which helps
to improve the fee income therefrom
b. Bank is
aggressively pushing digital products for adoption by its customers and with
lockdown continuing, the use of such products is increasing to yield higher our
fee income.
c. In the
conducive market conditions, Bank is expects at trading profit through its
treasury to improve its profitability.
4.
Operations
during COVID
Bank continues to be responsible
to society and ensures safety and health of community. Under current
unprecedented pandemic situation, we carefully, sanitization and maintain
hygienic social distance standards at all our branches, offices and ATMs. We
also distributed face mask to our visiting customers free-of cost.
Bank continued
to exhibit operational resilience during the lockdown period. 99% of branches
remained operational, 90% ATMs remained operational and digital channel had an
uptime of more than 99.5%, during the lock down period.
Performance
Highlights:
Lakshmi Vilas Bank
(LVB), a south-based private sector Bank, has declaredits results for the
FinalQuarter ended31.3.2020.
± Total Business of the
bank was` 38,116.crore as of 31/03/2020as
against `51.235.crore as on 31stMarch 2019.
± CASA as a percentage
to total deposits stood higher at 26.63 % as on 31/3/2020as against 25.67% as
on 31.3.2019.
± Gross Advances stood
at`16,673Crore as of 31/03/2020 as against `21,956 crore as on 31/3/2019,
Y-O-Y decline of 24.06% , mainly due to hiving-off some low yielding bulk advances
and conservative approach of selective
security based low risk
fresh lending..
± The Bulk Deposits
were reduced by around ` 2563 crore to `
1043 crore from the level of ` 3606 crore as on 31st March 2019.
± Operating Profitof
the bankstood at `70.32 crore for the
quarter ended 31st Mar 2020
as against the operating loss of `.19.85crore
for the quarter ended 31/12/2019 andOperating Lossof`21.18crore for the quarter ended 31/3/2019.
± Cost to Income ratio for
theQ4 FY20 stood to 71.10% as against the same in Q3 FY20 stood to 110.38% (sequentially).The
Cost to Income Ratio for the Q4 ofFY 2019 stood at 110.72%. (Y-o-Y)
± Loss before tax provisionwas at `.233.15 crore,
for the quarter ended 31/3/2020 as
against the Loss of`334.48for the quarter ended 31/12/2019 and the Net loss Before Taxwas`499.96crore for the QE ended 31/3/2019 (Y-o-Y).
± Net Profitafter Tax
is ` 92.86 Crore for the quarter ended March 20 asagainst Net loss of ` 334 48
crore in the previous quarter ended Dec 2019.
± Net Interest Margin
(NIM) of the bank stood at 1.56 % for the year ended 31st March 2020
as against 1.65 % for the year ended 31st March 2019.
Capital
Adequacy:
Net
Worth of the Bank ( before DTA) stands
at `996.14crore.The Bank’s total
Capital Adequacy Ratio (CAR) as per Basel III guidelines, was at 1.12% as at 31st March 2020 as against 3.46% as at
31/12/2019, and7.72% as at 31/3/2019.
NPA
The Gross NPA stood 25.39 % as on 31/3/2020
as against The Gross NPA stood 23.27 % as on 30-Dec 2019 sequentially.The Gross
NPA stood 15.30% as on 31/03/2019
Net
NPA stood at 10.04 %, as on 31/3/2020 asagainst the Net NPA of 9.81 %, as on 30-Dec
2019.
Net
NPA of7.49%, as on 31-March 2019.
The
provision coverage ratio increased to 71.25% (68.70% as on 30-Dec 2019and 62.08
% as on 31-March 2019. PCR is higher
than the minimum of 70% prescribed under PCA
Other
Developments:
Bank has bagged an award as“Best Performing
Private Bank Award” for performance under “ Atal Pension Yojana” from Pension Fund Regulatory and
Development Authority. The Pension Fund Regulatory and Development Authority (PFRDA),
a statutory body, is the pension regulator of India which was established by
Government of India and was authorized by Ministry of Finance, Department of
Financial Services.
Our Bank has been featured among Top 10 Banks in
India on digital transactions by National Payment Corporation of India and MEIT
based on the increasing Debit and Digital transactions surpassing 100%
Achievements on budgets set by NPCI & MEIT.
RBI on March 27 had permitted all lending institutions to
allow a three-month moratorium relief to their borrowers from
March 1, 2020 up to May 31, 2020 to help ease any debt servicing for borrowers
impacted due to COVID-19. This has furtherbeen extended by another three months
up to August 31, 2020. As per the extant RBI guidelines, We continue to
concentrate in lending like Gold Loans, Deposit loans which carry nil risk
weights. Bank also sanctioned the Gold Loan of around Rs 190 Crore during the
quarter and the Bank also preapproved the Guarantee backed loan ( Lakshmi
Guaranteed Emergency Credit Line) to the existing customers around Rs 662 crore
and sanctioned Rs 143 crore .
Steps
Taken by the Bank and future Plan:-
1.
Bank
hadalready shiftedits lending focus from
Corporates to MRC (MSME,Rural,Commerial) and Retail Segments. Hence, the
restriction for lending to Corporates due to PCA did not have any impact on us.
2.
With
improvement in technology , Bank has started extensive usage of digital technologies
like Digital Customer on boarding and Digital Lending for servicing its customers and business
development .The Bank has full-fledged multi-channel digital banking services
offered via internet, mobile and other mean of new age technologies comparable
to best in industry. Hence, the Bank did not felt the need for opening new
branches during the year.
3.
Bank
had taken various measures including the centralization of the payment of
expenses at Head office to monitor and rationalizethe cost wherever feasible and
taken simultaneous steps to boost other income. We have rationalized the staff
in administrative office or redeployed them in branches to market to new
customers and engage in recovery measures. We expect that these measures
will result reduction in our Cost to Income Ratio.
Network
As on 31/3/2020, Bank has extensive bouquet
of digital products of566 branches, 5 Extension Counters, 918 ATMs in 19 states
and 1 union territory, the Bank offers various bouquets of products and
services. The Bank is committed to build a sustainable business over the long
term and upholding high standards of customer service - Life Smiles Where LVBServes.Tamil Nadu continues to be the
dominant contributor of business for the Bank.
The Board of Directors of The Lakshmi Vilas
Bank Limited approved the financial results for the Quarterended 31/3/2020at
their meeting held in Chennai on 10th July 2020.
(
S.Sundar )
MD
& CEO
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