Exim Bank FY21 net profit jumps to Rs 254 crore as NPAs drop

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Mumbai: Export Import (Exim) Bank of India on Friday reported more than doubling of its FY21 net profit to Rs 254 crore as bad loans dipped and said it is “cautiously optimistic” about growth this fiscal.

The Mumbai-headquartered bank, a development finance institution run by the central government to support its diplomacy efforts, had reported a profit of Rs 124 crore in the year-ago period.

Its Managing Director David Rasquinha said that on a currency-neutral basis, it witnessed a loan growth of 7% in the last financial year but the Rs 2.51 appreciation in the rupee against the dollar resulted in the reported number being lower at 3.5%. This was because a bulk of the bank’s Rs 1.03 lakh crore book is linked to the greenback.

The bank is “cautiously optimistic” about growth in FY22, and is aspiring to grow its book by 7-12% on a currency neutral perspective.

Rasquinha said major markets for Indian exporters like the US and Europe have already recovered which will lead to greater role to be played by the bank for supporting domestic exporters.

While the funded exposure rose 3.5%, the non-fund exposure in the form of guarantees given to projects declined by 10.34% to Rs 14,229 crore, which was attributed to a general slowdown in new projects because of the pandemic.

The slippage ratio improved by 0.42% to 1.52%, and Rasquinha sounded satisfied on the asset quality front, saying the bank has made considerable progress on it and will continue to improve.

He said 97% of the stock of NPAs (Non-Performing Assets) is from legacy dud assets, which had resulted in a rise in NPA ratio in the past and only 3% of the stock are loans given after April 2017.

The net NPA ratio came at 0.51% in the last fiscal, down 1.26% from the year-ago period’s 1.77%. The provision coverage ratio improved by nearly 8 percentage points to 96.74%.

Outlining the bank’s strategy, Rasquinha admitted that in the last few years, a bulk of its growth has been fuelled by well-rated state-run companies and large corporates, and going ahead, it intends to support more small and medium enterprises for their global ambitions.

The bank will take a calibrated call on borrowings during the new fiscal and is looking at raising up to Rs 36,000 crore in FY22, its Deputy Managing Director Harsha Bangari said.

She said the foreign currency borrowings will go up by $1 billion when compared with $2 billion raised in FY21. Rasquinha also welcomed Finance Minister Nirmala Sitharaman’s announcement to infuse an additional Rs 1,500 crore into the bank in the new fiscal year on top of the Rs 1,300 crore in FY21.