Advances Growth: 11%-13% YoY
Management maintained full-year guidance despite Q1 being a slack season with muted growth due to elections and staff transfers.
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Deposits Growth: 9%-11% YoY
Bank targeting deposit growth to match advances growth and maintain CD ratio in 73%-76% range; premium branches and customer acquisition initiatives underway.
Credit Cost: Below 1%
Q1 credit cost was 0.73%; management expects to maintain sub-1% credit cost for FY25 with continued focus on asset quality.
Capital Raise: INR 10,000 crore
Board approved raising INR 6,000 crore equity and INR 4,000 crore AT1/Tier II instruments; capital adequacy at 17% provides comfort but raise supports future growth.
Full-Year NIM Moderation: 20-25bps vs March 2025
NIM expected to decline 20-25 basis points over the full year from March 2025 levels, with Q2 seeing an additional 10-15bps sequential decline before potential recovery.
RAM Growth: Double-Digit Trajectory
RAM segment (Retail, Agriculture, MSME) expected to maintain double-digit growth trajectory over next few quarters, supported by INR 51,000 crore sanctioned pipeline.
NIM Floor: 260-265bps
Management indicated NIM could potentially hit 260-265 basis points as the minimum level before bouncing back by 20-25 basis points for the year.
Digital/Tech Spend: INR 1,500 crore
Technology and digital transformation budget set at INR 1,500 crore for FY26, up from INR 1,000 crore utilization in FY25.
Credit Growth: 11%-13% for FY25
Despite Q2 miss, management reaffirmed 13% credit growth target citing INR 76,000 crore sanctions pipeline and INR 73,600 crore pending disbursements, with focus on infrastructure, renewable energy, and sunrise sectors.
NIM Guidance: 2.8%-3.0% for FY25
NIM stood at 2.97% for H1 FY25. Management expects to maintain guidance range citing favorable MCLR book mix (47% MCLR, 43% EBLR, 10% others).
Slippages Guidance: INR 11,500 Crore for FY25
H1 slippages already at INR 7,537 crore, primarily driven by one large PSU account slippage. Excluding that, underlying slippages were ~INR 1,604 crore, suggesting better control.
Credit Cost: Sub-1% Target
Credit cost spiked to 1.09% due to the large PSU slippage but management expects it to remain at or below 1% in subsequent quarters as the one-time impact normalizes.
System-Level Loan Growth by Q4 FY26
Management targets achieving loan growth at par with industry levels (~11-12%) on a cumulative basis by March 2026, with quarter-on-quarter growth expected to match system levels going forward.
RAM Portfolio Mix Target 58%
Bank aims to increase Retail, Agriculture, MSME (RAM) share of loan book from current 55% to 58% over the next 1-2 years to improve portfolio quality and cross-selling opportunities.
NIM Stabilization and Recovery from Q3
Management indicated NIM decline is nearing bottom given sequential decline is decelerating. Full impact of bulk deposit reduction (INR 21.85 billion) will be visible this quarter, with NIM expected to stabilize and improve from Q3 FY26 onwards.
CD Ratio Target 78.5%-80%
Bank targets maintaining credit-to-deposit ratio between 78.5% to 80% levels, with plans to increase CASA ratio by 1-1.5 percentage points going forward to reduce cost of funds.
FY25 Recovery Target: INR 16,000 crore
INR 10,800 crore already achieved in 9M FY25; balance INR 5,500 crore expected in Q4. Recovery from written-off accounts at INR 1,738 crore vs INR 2,223 crore last year.
FY25 NIM Guidance: 2.823%
Q3 NIM at 2.91%, improved 1bp QoQ. Management reaffirms 2.823% full-year target and expects further NIM improvement in Q4.
Advances Growth: Lower-end of 11-13%
Terminal growth at 5.9% YTD; average growth strong at 10.9%. With INR 75,000 crore pipeline and INR 36,000 crore pending disbursement, Q4 push expected.
Deposit Growth: Lower-end of 9-11%
Terminal deposit growth moderated to 3.8% due to intentional bulk deposit reduction. Retail term deposit grew INR 22,000 crore in 9M vs INR 6,500 crore last year.
Q4 loan growth expected to exceed Q3 levels
Management indicated pipeline of INR 24,000-26,000 crore in corporate sanctions pending disbursement plus good pipeline in various stages; expects better than 4% QoQ loan growth in Q4
NIM to improve going forward
Executive Director Amresh stated NIM will further improve because deposit repricing lags asset repricing by a few quarters; MCLR-linked book is only 32% while rest is external benchmark-linked
Credit cost to remain in 20-40bps range
9M FY26 credit cost at 26bps; management expects similar run rate going forward given 95% PCR, low SMA-2, 95% AAA/A-rated corporate book, and strengthened recovery mechanisms
Branch expansion with cost control
Plan to open 75 branches in FY26 plus 200 more in subsequent years; Project Muskaan targeting 300+ process simplifications to offset operational cost increase from expansion
No formal FY26 guidance provided
Management explicitly declined to provide business growth guidance, stating they will evaluate the situation as the year progresses and provide calibrated guidance at an appropriate juncture given prevailing market volatility and macroeconomic uncertainty.
Pipeline visibility: ₹67,000 crore sanctions and pipeline
Bank has a sanction book of approximately ₹37,000 crore and additional pipeline of ₹30,000 crore, providing near-term visibility on credit flow. Management expects similar growth trends in Q4 to continue into coming quarters.
NIM to be managed within 2.8%-3% range
Despite 50 bps repo rate cut, management aims to sustain NIM within guided range by selectively exiting low-yielding advances and allowing high-cost deposits to mature. 50% of term deposits come up for repricing in next 6 months.
FY27 Credit Growth Target: 13-14%
Management guided for 13-14% credit growth in FY27, aligning with industry growth trajectory while maintaining quality and profitability focus. A pipeline of INR 50,000-60,000 crore in SME and large corporate deals supports this outlook.
NIM Has Bottomed at 2.64%, Targeting Defense/Improvement
Q4 NIM of 2.64% represents the trough according to management. With CASA ratio improvement (35.21%), bulk deposit to retail RTD migration, and quality loan repricing, NIM is expected to be defended and potentially improved from current levels.
NII Growth to Track Advances Growth
Management confirmed that NII growth, which lagged credit growth in Q4 due to December rate cut impact and high-cost deposit repricing, should grow in line with advances going forward given stable rate environment and improved liability mix.
Annual Credit Cost Guidance: ~1%
Management maintained annual credit cost guidance of approximately 1% based on comfortable asset quality metrics, SMA levels at 3.8%, and high-quality portfolio composition (99% of retail at CIBIL 700+).