We have continuously built our capacity and for years we have been quite cautious about the credit quality. In an improving environment we will lead and in a declining environment we will fall the least. Considering India's immunization level and how the crisis is handled, I hope the worst is over.
Last quarter we had a much higher than normal execution rate with slippages of Rs 640 crore due to a month and a half of the first quarter which was not functional. With the opening of the economy, our efforts have doubled. We had a lot of recovery and upgrades that a gradual slip in the second quarter. The quality of our portfolio is becoming as impeccable as it should be.
What contributed to your profit this quarter?Everything in the P&L works. Our interest income is Rs 1,479 crore, other income is Rs 444 crore, slippages are Rs 320 crore and the provision is Rs 250 crore. We don't have a one-size-fits-all piece that makes things happen. It's a granular franchise.
What is your opinion on the restructured book?For our bank, the majority of the restructured portfolio, around 90%, is secure. If you have a secure book then I think the slips are low. These are mainly home loans and the probability of default is lower. Our slippage is lower than our recovery and despite this we have provided more on our standard assets, which include our restructured portfolio. We have created an additional provision.
The opportunities are quite strong and we believe the market is quite ready for growth. In the second half, we will see a higher execution rate than the first half.
Perspectives on the Gold Loan Portfolio?We remain very optimistic. In the first quarter, gold lending and gold prices fell, but have now started to stabilize. We have experienced 26% year-to-date (YTD) growth and forecast 25-30% growth in gold lending for the full year.
What is the share of the gold loan in the total advances and how much gold does the bank hold?The gold loan represents 11% of the total portfolio and the bank holds 49 to 50 tonnes of gold on deposit.
What's the update on credit card issuance?We had to stop issuing due to the Mastercard problem, but within a month we were able to get Visa and then Rupay on board. We also have a partnership with FPL and now we produce around 400 to 500 cards per day. We have a base of around 32,000 cards and an outstanding amount of around Rs 35 crore.
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