Strong deposits & advances beat; NIM gains muted, one-time NSE boost masks normalizing earnings

Delivered revenue 19,149 Cr (~15.2% YoY); advances grew 16.39%, deposits 12.50% - mixed with strong advances beat.

Delivered 3,446.9 Cr (per result). Call figure includes ₹1,134 Cr NSE MTM gain. Excluding NSE, PAT growth ~8%, not 14.7%.

Includes NSE contribution. Excluding NSE, operating profit grew 18%. Core operating leverage modest.

Domestic NIM +1 bp, global NIM +2 bps QoQ. YoY improvement supported but magnitude subject to deposit repricing lag.

Retail 17.37%, agri 17.18%, MSME 19.06%, corporate 9.92% (lower). Mix is healthy, growth outpaced guidance 13-14%.

Delivered 1.61%, at upper end of 1.50-1.60% guidance. Slippage down 8 bps QoQ. Asset quality solid but NPA at ceiling.

Delivered 0.22%. Management now guiding 10-15 bps forward (new normal), not full 1% - a material downward calibration.

Q1 guided 9-11%, now 11-12%. Delivered 12.5% YoY, beating revised.

Q1 guided 11-13%, now 13-14%. Delivered 16.39% YoY, beating revised by 3%.

Was expecting upper-end 3.15-3.25%; MD now cautioning on deposit repricing lag, targeting 5-6 bps expansion (modest vs. prior optimism).

Prior 1% guidance; now normalizing to 10-15 bps forward. Not a miss, but recalibration signals lower provision income.

13.77% CASA growth achieved. FY27 target 40% already at hand; limited runway vs. prior years.

ECL provision ₹1,500 Cr this quarter, ₹3,500 Cr total impact expected. Treasury income muted going forward; we have not budgeted high treasury profits. Interest tax refund ₹271 Cr is non-recurring.

Deposits grew 12% last quarter, 3% this quarter due to FCNR(B). Expect 12% deposit growth forward. Advances growth 14-15% expected, comfortable with that pace; will not fall substantially.

Deposit repricing lags rate hikes. Bulk deposits will reprice later. We expect 5-6 bps expansion this quarter; beyond that depends on repo moves. We remain cautious on bulk deposit gathering.

Against ₹21,000 Cr deposits, loan book roughly USD 2 Bn (~₹16,500 Cr). Customers borrowing 90-96% of deposit value. No surplus liquidity post-deployment.

Not revising 10-15 bps guidance. ECL is function of default probability and loss given default. Hardening yields may raise defaults, but SMA book down from 7.35% to 4.19%—no increase expected. Models will stabilize in 1-2 years.

Very candidly, nothing is reflecting so far. No stress visible. Agri exposure in drought states is minimal, under ₹1,000 crore. We do not expect ECGLS to come back due to drought.

SMA-0 is ₹15,683 Cr, SMA-1 is ₹7,222 Cr, SMA-2 is ₹6,843 Cr. Improved only slightly. We continue 10% provision on SMA-1 and SMA-2.

Yes, HTM will transition April 1. If 10-yr yield stays 7.41%, every bank will face huge impact. Guidelines are not finalized; RBI may dilute requirements or phase them. Wait and watch.

One-time impact. Capital adequacy already 16.21%, CET1 15.18%. By March, profits will be ploughed back to 17-17.5%. No impact on capital planning. Tier 2 bonds maturing Jan 2027—may raise ₹1,000-2,000 Cr.

Competition is very high across segments. We are not pursuing growth aggressively. 16-17% growth is fine with us. 92% of retail book has CIBIL score above 750. We are not targeting 20-25%; we will stay 100-200 bps below industry.

WCDL book declined ₹1-2K Cr, cash-credit ₹1-2K Cr over last 2-3 quarters. Not from crisis; rather, we are not seeing drawdowns because of the crisis. Cannot give exact number; interpreting from broad trends.

LCR affected by borrowings from repo, TREPS. We are not purchasing additional SLR securities; LCR is comfortable. Borrowings ₹10K-11K Cr is good funding source at good rates.

Delivered 12.5% YoY; FCNR(B) window closed, bulk deposits down ₹10K Cr but offset by strong retail growth.

Delivered 16.39% YoY; all segments growing 17-19%, corporate ramp from capacity build. Targeting 14-15% forward to avoid aggression.

NIM improved 8 bps YoY but faces headwind: deposit repricing lag (cost up 9 bps sequentially), repo rate +25 bps, MCLR benefit accrues later.

Staff expenses flat at 14.56%, but one-time ECL provisions will depress CIR in near term.

Tier 2 bond maturity Jan 2027 (₹1,000 Cr); may raise ₹1,000-2,000 Cr depending on market conditions.

HTM book (60-74% of investments) will transition to marked valuation on April 1, 2027. If 10-yr GSec yield stays 7.41%, material reserves required; RBI guidance on requirement/phasing still pending.

ECL provision ₹1,500 Cr this quarter; ₹3,500 Cr total expected impact. Models will take 1-2 years to stabilize. Will depress net profit growth until normalization.

Repo rate up 25 bps, deposit cost up 9 bps sequentially. MCLR-linked book (43%) benefits with lag. Bulk deposit repricing still pending. NIM expansion limited to 5-6 bps, not 6-7+ bps despite rate hikes.

Competition high across retail (housing), corporate, and MSME. Housing yields below 7%, corporate below 8.36%. Bank defending quality over aggressive growth; targeting 16-17%, not 20-25%.

Corporate advances grew only 9.92% (vs retail 17.37%), lagging overall growth. Targeting 10-12% forward (vs 1-2% prior) via capacity building and credit training, but this is new initiative with unproven execution.

WCDL and cash-credit books have declined ₹1-2K Cr over 2-3 quarters. MD attributes this to corporate cash strength and lower working capital needs (not crisis-driven).

Raised USD 2.3 Bn FCNR(B) deposits (₹21K Cr); customers borrowing at 90-96% LTV, limiting surplus liquidity. Deployment tied to USD-denominated loans; currency risk on spread.