Major Performance Highlights
· Bank recorded operating Profit of ` 70.32 crore during the Q4 20 as against the Operating Loss of ` 19.85 crore during the Q3-20
· Bank earned the Net Profit of ` 92.86 crore .during the Q4 20 as against the Net Loss of ` 334.48 crore during the Q3-20
· Total Business mix stood at `. 38116 crore
· CASA increased to 26.63 % of Total Deposit as on 31.3.2020 as against 25.67 % as on 31.3.2019. and 25.88% as on 31st Dec 2019
· Bulk Term Deposit was around 4.86% of Total Deposits.
· Liquidity Coverage Ratio 273.21%
LVB
posts net profit of Rs 92 crs in the fourth quarter ending March 31; ontrack
with investors for capital raising
Major Performance Highlights
ü
Bank recorded
operating Profit of ` 70.32
crore
during the Q4
20 as against the Operating Loss of ` 19.85 crore during the Q3-20
ü
Bank earned the Net Profit of `
92.86 crore during the Q4 20 as
against the Net Loss of ` 334.48 crore during the Q3-20
ü
Total
Business mix stood at `. 38116 crore
ü CASA increased to 26.63 % of Total Deposit
as on 31.3.2020 as against 25.67 % 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%.
|
- 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.
- 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.
- 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 to 5.51
% 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
have simultaneously 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 renegotiated for 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.
- 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 declared its results for the Final Quarter ended 31.3.2020.
± Total Business of the bank was ` 38,116. crore
as of 31/03/2020 as against ` 51.235.
crore as on 31st March 2019.
± CASA as a percentage to total deposits stood
higher at 26.63 % as on 31/3/2020 as against 25.67% as on 31.3.2019.
± Gross Advances stood at ` 16,673 Crore 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 Profit of the bank stood at ` 70.32 crore for the quarter ended 31st Mar
2020 as against the operating loss
of `.19.85
crore for the quarter ended 31/12/2019 and Operating Loss of ` 21.18 crore
for the quarter ended 31/3/2019.
± Cost to Income
ratio for the Q4 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 of FY 2019 stood at 110.72 %. (Y-o-Y)
± Loss before tax provision was at `.233.15 crore, for the quarter ended
31/3/2020 as against the Loss of ` 334.48 for the quarter ended
31/12/2019 and the Net loss Before Tax was
` 499.96 crore for the QE ended 31/3/2019 (Y-o-Y).
± Net Profit after
Tax is ` 92.86 Crore for the quarter ended March 20 as against
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 ` 996.14 crore.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, and 7.72 % 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
as against the Net NPA of 9.81 %, as on 30-Dec 2019.
Net NPA of 7.49 %, as on 31-March 2019.
The provision coverage ratio increased
to 71.25 % (68.70% as on 30-Dec 2019 and 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 further been 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 had already
shifted its 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 rationalize the 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 of 566 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 LVB Serves. 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 Quarter ended 31/3/2020 at their meeting held in Chennai on 10th
July 2020.
