Loan growth of 17-18% for FY24
Management expects full-year loan growth in the 17-18% range, consistent with historical doubling every 4-5 years.
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ROA in 1.9-2.1% range
Management reiterated confidence in sustaining ROA between 1.9% and 2.1% on a merged basis.
Retail deposit accretion of ~INR 1 trillion per quarter
Management indicated that the capacity built should enable retail deposit accretion of around INR 1 trillion per quarter, though Q1 was seasonally lower.
Loan-deposit ratio to decline faster than anticipated
Management aims to reduce the loan-deposit ratio more quickly than previously planned, prioritizing profitable growth over volume.
Cost-to-income ratio to trend downwards over medium term
Management targets a lower cost-to-income ratio over the medium to long term, driven by efficiency gains and digitization.
Borrowing maturity profile of INR 650B for FY25
Scheduled borrowing maturities for the year are about INR 650 billion, with INR 250 billion already paid in Q1.
Loan growth in line with system in FY26, above system in FY27
Management expects advances growth to improve sequentially, reaching system growth rate this fiscal and exceeding it next fiscal.
Medium-term CD ratio target of 85-90%
The bank aims to bring the credit-deposit ratio down to pre-merger levels of 85-90% over the medium term through superior deposit growth.
NIM stabilization expected by end of FY26
Assuming no further rate cuts, margins should stabilize as liability repricing catches up with asset repricing over the next few quarters.
ROA maintained at 1.9%-2.1%
Management reiterated its ability to maintain return on assets in the 1.9%-2.1% range, consistent with historical performance.
Construction finance book to grow steadily
The bank plans to grow the construction finance portfolio, which will support top-line and margin recovery.
NIM recovery over time via better mix
Margins are expected to improve as the bank substitutes high-cost debt with deposits and shifts loan mix towards retail.
Credit growth glide path: FY25 below system, FY26 at system, FY27 above system
Management outlined a three-year plan to normalize the loan-to-deposit ratio, with credit growth slower than system in FY25, matching system in FY26, and exceeding system in FY27.
Target LDR of high-80s within 2-3 years
The bank aims to reduce its loan-to-deposit ratio from current ~110% to the high-80s over the next 2-3 years, faster than previously guided 4-5 years.
NIM to remain in 3.45%-3.5% range in near term
Management expects net interest margins to stay within the current tight range, with potential improvement once LCR normalizes and regulatory clarity emerges.
NIM improvement over 6-12 months
Management expects NIM to improve as deposit repricing tailwinds play out over the next 4-5 quarters, with cost of funds declining further.
LDR target below 90%
Strategic objective to bring loan-to-deposit ratio below 90% from current ~96%, with loan growth at market rate in FY26 and faster than system in FY27.
Home loan growth to match market in 18-24 months
Management expects home loan growth to align with industry over the next 18-24 months, without compromising on pricing discipline.
ROA to move towards upper end of 1.8%-2.2% range
ROA improvement expected from cost of funds tailwinds and operating leverage from technology investments over 3-5 years.
Deposit growth to outpace loan growth by 300-400 bps
Management expects deposit growth to exceed loan growth by 300-400 basis points to reduce the LDR over time.
Cost-to-income ratio to progressively decline to mid-30s
The bank aims to reduce cost-to-income from ~40% to mid-30% over the medium term through digital efficiencies and margin improvement.
Branch network to reach ~1,000 additions in FY24
Revised target from 1,500 to ~1,000 branches for FY24, with 570 branches in pipeline.
Cross-sell metrics to be disclosed from next quarter
Management will start reporting penetration of savings accounts, credit cards, and consumer durable loans among new mortgage customers.
FY25 loan growth below system, FY26 in line, FY27 above system
Management reiterated its glide path: loan growth will be slower than the system in FY25, in line in FY26, and faster in FY27, as the credit-deposit ratio normalizes.
Deposit growth to continue outpacing loan growth
The bank expects to maintain deposit growth ahead of loan growth to further reduce the credit-deposit ratio, supported by strong liability franchise.
Cost control with productivity gains
Management aims to keep cost growth tight through productivity improvements, while continuing investments in branches, people, and technology.
Loan growth 200 bps above system in FY27
Management expects system credit growth of 12-13% in FY27 and aims to grow 200 bps above that, driven by retail, MSME, and wholesale segments.
LDR glide path: 90-96% by FY26, 85-90% by FY27
Management reiterated commitment to lowering LDR, targeting 90-96% by end-FY26 and 85-90% by FY27, though quarter-to-quarter variability is expected.
Cost of funds to benefit from lagged repricing
Time deposit repricing (two-thirds of 125 bps policy cut passed on) will continue to lower cost of funds over next few quarters, with ~10-11 bps decline already seen in Q3.
Branch expansion to moderate; focus on vintage productivity
Management indicated branch additions will be lower than 500-700 per year, focusing on stabilizing the 4,800 branches added over last 5 years, which contribute ~20% of incremental deposits.
CD ratio to reach 85-90% by FY27
Management reiterated that the credit-deposit ratio will decline to pre-merger levels of 85-90% by FY27, with a less steep adjustment in FY26.
Loan growth at market rate in FY26
The bank expects to grow loans at the market rate in FY26, subject to appropriate pricing and credit quality.
Cost-to-assets to improve from ~1.9%
Management expects cost-to-assets to improve further as productivity gains from branch investments and technology materialize.
Loan growth momentum to continue
Management expects to sustain loan growth trajectory, though tempered by geopolitical uncertainties. No specific target given.
Focus on ROA and EPS over NIM
Management emphasized that return on assets and EPS growth are the key metrics, with NIM expected to remain range-bound.
AI platform to enhance efficiency
Five AI use cases in production, 14 more in development; expected to free up capacity and improve ROA over 1-3 years.