Financial Services Sector — Q3 FY24 Earnings Overview

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.

Deposit growth of 1.9% QoQ lagged loan growth of 4.9%, forcing reliance on borrowings and investment sales.

NIM declined 22bps YoY to 4.43% and may compress further in Q4 as deposit costs continue to rise, albeit at a slower pace.