Full-year credit cost guidance of 110-130 bps
Management expects annualized credit cost to remain in the 110-130 bps range, including contingent reserve build-up.
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NIM to remain in 4.2%-4.3% range
Net interest margin expected to stay stable between 4.2% and 4.3% for the year.
Cost-to-income ratio to end FY24 at 45%
Management expects cost-to-income ratio to stabilize at 45% by year-end, improving to 41%-43% in year 2.
Retail loan mix to reach 55%-57% by year-end
Retail loan share expected to increase to 55%-57% by end of FY24, with corporate at 43%-45%.
Full-year loan growth of 18-22%
Management expects loan growth to recover in H2, driven by vehicle finance and microfinance, targeting 18-22% for FY25.
Full-year credit cost of 110-130 bps
Credit cost guidance maintained at 110-130 bps for FY25, with Q1 at 121 bps without using contingent provisions.
NIM to remain in 4.2-4.3% range
Net interest margin expected to stay within the 4.2-4.3% band, supported by stable yields and controlled deposit costs.
LCR impact of 4-5% from draft guidelines
Preliminary assessment suggests the RBI draft LCR guidelines could impact the bank by 4-5%.
Single-digit OpEx growth in foreseeable future
Management targets containing operating expense growth to single-digit YoY, down from 20%+ CAGR in last three years.
Microfinance slippages to stabilize by Q3/Q4 FY26
Expects legacy stress to subside and new disbursements to perform steadily, with normalization in 3-6 months.
Consistent quarterly improvement in financial metrics
Aims to show predictable improvement every quarter, but no specific targets for loan growth, NIM, or ROA provided.
Credit cost guidance of 110-130 bps for FY24
Management expects full-year credit cost to be between 110-130 bps, with H2 likely at the lower end due to seasonal improvement in retail asset quality.
NIM to remain in 4.2%-4.3% range
Net interest margin is expected to stay within 4.2-4.3%, supported by balance sheet optimization and lower borrowing costs.
Retail deposit share target of 45%-50% under PC6
The bank aims to increase retail deposit share (LCR) to 45-50% over the medium term, supported by digital and marketing initiatives.
Cost-to-income ratio to improve to 41-43% in 3 years
Management expects cost-to-income ratio to decline from current elevated levels to 41-43% as digital investments yield operating leverage.
Credit cost guidance maintained at 110-130 bps for FY25
Management expects core credit cost (excluding incremental contingent provisions) to remain within the stated range of 110-130 bps for the full year.
Microfinance disbursements expected to improve in H2
Disbursements in microfinance are expected to pick up in Q3 and Q4, supported by festive season and rural recovery, but may remain below full potential.
Vehicle finance disbursements to reach INR 12,000 crore in Q3
Management expects vehicle finance disbursements to increase by ~10-11% QoQ to around INR 12,000 crore in Q3, driven by festive demand.
ROA expected to normalize as microfinance growth resumes
Management believes the current ROA contraction to 1.0% is transitory and expects a return to normalized ROA once microfinance growth accelerates.
Medium-term ROA target of 1%
Management aims to achieve 1% ROA over the medium term through cost reduction, liability franchise improvement, and portfolio diversification.
Net NPA target of 50-60 bps
Management targets net NPA ratio in the vicinity of 50-60 bps in the medium term, down from current 1.04%.
Fee to assets target of ~1.5%
Management expects fee to assets to settle around 1.5% over time, driven by franchise fees.
Microfinance disbursements to pick up
Disbursements in microfinance are expected to be significantly higher in Q3 and Q4 as underwriting standards stabilize.
Vehicle finance disbursements of INR 14,000 crore in Q4
Management expects vehicle finance disbursements to reach INR 14,000 crore in Q4 FY24, driven by auto loans and used commercial vehicles.
Cost-to-income ratio of 41-43% in two years
Management guided cost-to-income to improve to 41-43% over the next two years as operating leverage from investments materializes.
Credit cost of 110-130 bps for FY24
Management reiterated credit cost guidance of 110-130 bps for FY24, despite higher slippages in Q3.
NIM to remain in 4.2-4.3% range
Management expects net interest margin to stay within 4.2-4.3% until the interest rate reduction cycle begins, likely in H2 FY25.
MFI share target of 8-10% of loan book
Management aims to reduce MFI exposure to 8-10% from current ~12% as part of diversification strategy.
LCR ratio target of 48-52% and LDR of 88-90%
Bank guided to maintain LCR ratio between 48-52% and loan-to-deposit ratio of 88-90% as it granularizes liabilities.
Vehicle finance disbursements expected ~₹13,500 crore in Q4
Vehicle finance disbursements expected to remain similar to Q3 levels at around ₹13,500 crore in Q4 FY25.
Industry-level loan growth by FY27
Management targets loan growth in line with the banking system by FY2026-27, implying ~12-13% growth.
1% ROA by end-FY27
The bank aims to achieve a return on assets of approximately 1% by the back end of FY2026-27.
Vehicle finance slippage improvement
Vehicle finance slippages are expected to be 20 bps lower in FY26 vs FY25, both in absolute and percentage terms.
MFI book to start growing from Q4
Disbursements in Q3 exceeded repayments from mid-October, so the microfinance book is expected to grow sequentially from Q4 FY26.
Loan growth guidance of 18-22% for FY25
Management reaffirmed PC6 loan growth target of 18-22%, supported by diversified portfolio and refinance options.
Vehicle finance growth of 18-20% in FY25
Expects vehicle finance to grow 18-20% driven by diversification across product categories and expected recovery in tractors.
NIM guidance of 4.2-4.3%
Net interest margin expected to remain in the 4.2-4.3% range, with potential upside when interest rate cycle turns.
ROA guidance of 1.8-2.2%
Return on assets expected to remain in the 1.8-2.2% range, with improvement as operating leverage plays out.
Microfinance normalcy expected in H2 FY26
Slippages will step down from Q4 levels but remain elevated in H1; normalcy expected in second half.
Corporate book growth to resume
After tactical reduction in Q4 for liquidity, corporate loan growth should reflect in coming quarters.
CEO appointment by June 30, 2025
Board at advanced stage; proposal to be submitted to RBI ahead of deadline.
Focus on secured retail and MSME assets
Bank will scale home loans, MSME, and affluent banking while being cautious on microfinance.
System-level loan growth in FY27
Management expects the bank to grow broadly in line with the market, which they estimate at 13-14% for FY27, subject to macro stability.
1% ROA target over medium term
The bank targets a 1% return on assets, with equal contributions from lower credit costs and higher operating profit (NIM, fees, expense control).
Calibrated growth in microfinance in FY27
Microfinance portfolio will see calibrated growth rather than contraction, with asset quality stabilizing and disbursements scaling up.
Vehicle branch co-location target of 600
The bank aims to co-locate or merge 600 vehicle branches with branch banking over the next six to nine months, up from 300 currently.