Excerpts of CNBC-TV18’s exclusive interview with OP Bhatt:

Q:  Your PAT has grown significantly at 78.5% over last year, what is this mainly due to?

A: Actually it is not one thing, but several things. We have been trying to do a lot of things in the bank during this past one year. There are several business initiatives put in place, including employee energization.

So our interest income and advances have gown quiet significantly. In fact, while the advances have grown by about less than 29%, the interest income in advances has grown more than 46%, that is one. The other reason is our non-interest income has grown quiet significantly and in fact, has grown by about 18.74%, which is much higher than earlier.

So that means, on both the broad major streams of income, that is the interest income and the non-interest income, there has been a considerable upside.

The third leg of course, is that we have been able to contain expenses. Our staff expenses have been contained at 5.3%. The overhead expenses have been contained at 6.95% and operating expenses have been contained at 5.82% that is the sum of the two.

So it’s difficult to pin point at one single reason. There are several small things incrementally put together, this is what has happened.

Q: But your margins also have risen considerably from 3.2 to 3.5%. Where do you see them going forward. Are you going to see a further squeeze on margins now that interest rates are going to start coming down or do you think the margin scenario will be better considering that interest rates will be coming down?

A: I don’t think the margin scenario will be better, I think there is going to be some pressure on margins. It depends on how we are able to play this game further.

A significant portion of our focus will have to be on retail both in retail liabilities and in retail assets. So if we are able to get the balance right, I think we should be able to maintain the margins. Our effort and our strategy would be to maintain margins. But you are quite right, there is going to be some pressure on margins.