Financial Services Sector — Q3 FY24 Earnings Overview

Managing data for ~85% of Indian financial investors exposes KFin to significant cybersecurity and regulatory (DPDP Act) risks.

Tight liquidity and rising deposit costs could limit the bank's ability to grow loans at the desired pace, potentially compressing NIMs.

Rural B2C portfolio continues to show elevated delinquencies, with growth deliberately slowed to 10%. Management describes it as an 'inside-out problem' requiring ongoing risk actions.

Regulatory restrictions on two key products have temporarily impacted loan volumes and digital metrics. Full compliance submission is pending digital signature and vernacular KFS.

LDR above 110% and LCR at 110% limit balance sheet flexibility; system liquidity turned negative for the first time in 3.5 years.