NIM bottoming, growth intact — retail momentum offsets margin pressure

NIM down 34 bps YoY due to 125 bps repo cut, mix shift 16 bps; Q1 at 3.46%, lowest in cycle

Total deposits grew 18% YoY (QAB), CASA 13% YoY, corporate salary +30% YoY NTB; gained ~20 bps market share

Wholesale growth 38% YoY; call confirmed 91% A- and above, no credit spectrum slip over 5 quarters

Retail disbursements up 18% YoY (home +24%, vehicle +21%, personal +23%); retail book growth still only 8% YoY but improving trajectory

Delivered 2.20%, confirmed 21 bps YoY improvement; technology 11% of opex, staff costs -6% YoY

Reported 1.28% GNPA (down 29 bps YoY), NNPA 0.39% (down 6 bps YoY), slippage ratio down 134 bps gross YoY

Management emphasized normal wholesale mix, no specific quarter-end bunching; across energy, RE, infra, metals sectors with longer tenors expected to stay

Prior call (FY26): 3.80% structural NIM target. Current Q1: Same, no change. Called 3.46% cycle bottom. Expected to move up as liabilities reprice, retail mix improves, FCNR deployed.

Advances 19% YoY (industry ~16%); reaffirmed industry +300 bps for medium term despite NIM compression. No walkback on growth ambition.

Wholesale +38% YoY; analysts probed if temporary—management clarified it's normal wholesale mix (WC, project finance, term loans), sticky. No change in strategy, just tactical deployment of strong deposit franchise.

Home loans +24% YoY, vehicle +21%, personal +23% QoQ; this was expected but now confirmed. As this translates to book growth (with 2-quarter lag), should improve mix toward 58-60% retail target over 12-18 months.

2.20% this quarter, down 21 bps YoY. Management says productivity improving but declines guidance on 'where it lands.' No specific target, but trend is clear.

9 bps is pricing pressure from competitive intensity and mix shift. Corporate loans (across project finance, WC, term loans in energy, RE, infra) expected to remain sticky; no specific quarter-end bunching. RAROC meets thresholds.

Structural 3.8% unchanged; management calls Q1 cycle bottom. No specific terminal cost-to-assets ratio given, but productivity trends down and will continue. FCNR opportunity to deploy and improve margins.

16 bps from balance sheet mix change; 19 bps from repo rate cuts. Rest (18 bps unspecified) will come from various levers. One-time reversals in Q1 opex: ₹271 cr provident fund relief, gratuity, variable pay true-up. No exact itemized bridge given; management wants flexibility.

Industry +300 bps growth maintained. Corporate lending at positive spreads, high-quality (91% A-). FCNR quantum not disclosed yet; will report in Q2. Overseas book 98% A- and above, 64% to top 10 conglomerates.

No specific milestone targets given. Disbursement trend of 18% will gradually translate to book growth over multiple quarters. Over last 2 quarters, work on mix reversal underway. Retail product categories all showing YoY acceleration.

Q3 and Q1 credit costs similar due to seasonality. Technical slippages have meaningful recoveries. No economic loss expected from technical slippages. Comfort on trajectory from both cost and recovery sides.

Loans locked in on repo/T-Bill benchmark; can reprice at quarter-end on benchmark, not on spread. Only credit event allows spread repricing. Expect gradual transition as assets mature, not sudden.

Wholesale RAROC stands head-to-head with retail when considering balances, trade fees, FX revenue. Deposit franchise strength allows wholesale deployment at positive spreads. No drop in growth aspiration. Composite returns drive strategy.

ECL transition impact on net worth marginal. Go-forward: higher provisions to assets in first year post-transition given Stage 1 & 2 provisioning plus 40 bps standard asset floor. Industry-wide impact expected.

₹5,000 cr sanctioned, ₹2,400 cr disbursed to date. Primarily MSME space; manufacturing and trading sectors. Guardrails in place to select quality customers.

Advances 19% YoY (industry ~16% implied); reaffirmed multiple times by CFO. Target horizon: medium term (2-3 years), not near-term specific.

Reaffirmed from prior FY26 calls; current 3.46% deemed cycle bottom. Recovery pathway: mix rebalancing (16 bps potential), cost of funds normalization, retail growth.

AI transformation (AXIOM), digital platforms (Neo), productivity initiatives ongoing. No capex rupee guidance given; trend-based.

NIM down 34 bps YoY to 3.46% cycle bottom. Recovery to 3.8% structural target requires mix rebalancing (16 bps), cost normalization (9-18 bps), and deposit repricing gains—none guaranteed in near term. Repo cuts could resume.

Wholesale advanced 38% YoY, 2x retail 8% YoY growth. While management assures these are sticky (working capital, project finance, term loans across infra/energy/RE), bond market normalization could trigger repricing or runoff. Concentration in A- and above limits credit risk but pricing power is lower.

GNPA 1.28%, NNPA 0.39% trending down (GNPA -29 bps YoY). But corporates in energy, metals, RE sensitive to commodity prices and capex cycles. El Niño rainfall risk flagged by management as monitoring item; rural/agri segments exposed.

Management cites 2-quarter disbursement-to-book lag. If lag extends or retail demand softens, mix rebalancing toward 58-60% retail target will stall. Currently 54% retail; to reach 58-60% and recapture 16 bps NIM loss requires sustained 15%+ retail growth for 12+ months.

Management noted 9 bps QoQ pricing impact on loans due to competitive intensity and mix (incremental corporate loans priced lower). If this persists, NIM recovery trajectory extends. Wholesale/corporate loans more susceptible to price competition.