Thanks, Danish. Thanks a lot for the call, and thanks everyone for joining the call.

We have today with us Vaidya, our MD and CEO, and Sudhanshu, our CFO. We'll start the call with a brief note about the financials for the period ending 31st March, 2026 by Sudhanshu.

Post that, we'll have some words from Vaidya, and then we can open the call for the participants for the questions. Okay?

Now I'll hand over the call to Sudhanshu. Sudhanshu?

Thanks, Sapta. Good evening, everyone.

Thank you for participating on a Saturday. What I will do is I will quickly outline some key financial numbers for the quarter, and my sequence would be to start with assets, then I'll talk about liabilities, and then asset quality, and finally some numbers around profitability and capital.

Let me go first with loans and advances. We saw a healthy growth in loans and advances, including credit substitutes, during the quarter.

It has grown by 20% on a YoY basis, and it has now reached about ₹2.9 lakh crores. We saw a healthy traction across mortgages, vehicle loans, consumer loans, wholesale loans, business banking loans.

Collectively, these segments accounted for almost about 87% of the total growth. MFI, we all have been talking, there the good part is after many quarters, we have seen that the decline has got arrested.

MFI book is about ₹6,662 crores at March '26, and now 89% of the book is covered through CGFMU. We saw also an increase in MFI loan disbursements that was higher by almost 27% on a sequential basis.

Even into the next year, we see MFI book now again starting contributing to the overall growth and P&L of the bank. Another, I think, milestone I would want to call out is credit cards have now crossed 4.5 million during the quarter, and that book has grown strongly at about 21% on a YoY basis.

On wealth management side, AUM continues to grow at a steady pace. It has increased by about 23% to about ₹57,000 crores.

Now, to call out few numbers on the deposits side, we saw an increase in total deposits by about 16.8% on a YoY basis to ₹2.94 lakh crores. Within that, if I talk of customer deposits, then that stood at about ₹2,84,000 crores, and there the growth was about 17%.

The growth was a modest of 1% during the quarter, but that is on account of various factors which played out during the quarter. If I have to call out the two, three factors, there we did reduce our interest on savings accounts in certain buckets.

There was also an impact of the one-off fraud incident which occurred during the quarter. There was also a tight liquidity which prevailed through the quarter.

There was also advance tax outflows, and also of course the West Asia crisis. These all, I think, in conjunction had some impact on the deposit flows.

Having said that, I want to again state that the start of Q1, we are seeing strong traction in deposit growth, and hence we feel that we will have a normalized growth or a better growth going forward. If I talk of the CASA ratio, the CASA ratio was at 49.8%, which itself is quite strong for the quarter.

On an EOP basis, we saw an outflow of about ₹3,700 crores for some factors which I just mentioned before. On an average basis, CASA ratio increased from 50.0% in the previous quarter to 50.4%.

Very quickly, if I move to the asset quality, we, I think, had a good set of numbers across various parameters. To start with, the gross NPA ratio of the bank improved by 8 basis points from 1.69% to 1.61%.

Similarly, the net NPA ratio of the bank improved from 0.53% to 0.48% in the current quarter. If I talk of the retail, rural, and the MSME segment, here also the gross NPA ratio improved by 8 basis points to 1.47%.

Similarly, net NPA improved by 7 basis points to 0.56%. Then if I talk about gross slippages, here the decline has been about 15% on a QoQ basis.

If you look at net slippages, that declined by about 27% on a sequential basis. Even for MFI slippages, that came down to, I would say, sub-₹100 crores.

It was at ₹96 crores from ₹153 crores in the previous quarter. The gross slippage ratio ex-MFI for the quarter was lower by 49 basis points at 2.6%.

Moving on, if I talk about collection efficiency, that for early buckets was quite strong, ex of MFI at 99.6%. Previous quarter, this was 99.5%.

For MFI, we saw a considerable improvement. Collection efficiency improved from 99.4% to 99.7%.

This is now almost touching the pre-crisis levels what we used to see. As a result of all of this, the SMA-1 and 2 across the retail, rural, and MSME portfolio that improved by 10 basis points from 0.88% to 0.78%.

We have given far more detail in the presentation, which sort of highlights that we have seen a stable to improving trend across all the key products. In microfinance portfolio itself, the SMA came down by 70 basis points, and it stood at 0.79%.

Now, if I move on to the profitability, for the quarter, we have reported profit after tax of ₹319 crores, which includes certain one-time items which we have called out in the presentation. Let me first tell what are few of these one line items which I meant.

One is we have taken an upfront impact of the fraud incident which has happened in Q4 and we have paid claims of about ₹646 crores of principal, and on a post-tax basis, that impact is about ₹480 crores. If I just gross up for the fraud impact, then the PAT for the quarter would be about ₹800 crores.

However, to further add, we had two more impacts which we are saying are one-time or not on a core basis. One is we had a trading loss of about ₹159 crores on a pre-tax basis, which on a post-tax translates to about ₹118 crores.

The loss here was largely because of the widening of yields which we saw during the current quarter. For instance, the 5-year G-Secs widened by about 40 basis points, the 10-year G-Secs also widened by about 32 basis points, and so on.

While for the full year, if you see, the treasury gains have been quite strong, this quarter of course we ended up having some loss. We also took a small loss on account of the guideline which came around the NOP policy.

Another one-time which I want to call out, which is in fact a positive to the P&L, is we got some income tax order which gave us a tax refund of about ₹173 crores, and so that has contributed to the positive side of the P&L. If we take into account all three aspects, which is the fraud incident, which is the treasury income or the loss which we posted, and third is this gain on income tax, then if you exclude all these three, then the normalized profit after tax was about ₹746 crores vis-à-vis the ₹319 crores which we have reported taking those impacts.

This ₹746 crores translates to about a 145% increase in PAT growth on a YoY basis. For the full year, taking into account all the impacts, which includes the fraud incident, the reported PAT is ₹1,636 crores.

If you adjust for the fraud incident, then on a post-tax basis, this went up by 39% to ₹2,119 crores. We saw an improvement across all operating metrics.

For example, NII growth further improved during the quarter to 15.7% on a YoY basis. This was about 12% in the previous quarter, and you would have noted that trend for last now many quarters where this has started inching up.

We had guided the market for a NIM of 5.85% for Q4, but happy to state that we have come with a NIM of 5.93% on an AUM basis. This of course includes some benefit because of a day convention largely because February has lesser number of days and also because we took some cautious approach on investments, and we brought down the average investment book, which also gave some lift.

NIM for the full year was at 5.75%, and that is expected to be stable into the next year. Fee and other income for the quarter again grew strongly by 21.3% compared to 15.5% in Q3.

Trading gains I already spoke about that there was a loss of about ₹159 crores. Opex for the quarter stood at ₹6,249 crores.

This includes the impact of the fraud incident of ₹646 crores on the principal side. If we adjust for this, then the opex for the quarter was ₹5,603 crores, and which was a modest increase of 0.3% sequentially and about 12.3% on a YoY basis.

For the full year, the opex growth was at 12.3% if we exclude the fraud incident. Moving on to provisions, this has reduced Q-on-Q by 18% from ₹1,398 crores to ₹1,143 crores.

Overall credit cost for the quarter came at 1.63%, which is an improvement about 42 basis points from the previous quarter. Excluding microfinance, the credit cost for the overall loan book was at 1.61% in the quarter, and roughly 38 bps better than Q3.

What this has meant is for the full year, the credit cost has come at 213 basis points. We had guided the market for 2.10%, but another data point to note here is that we have not fully utilized the contingency provision on MFI.

After usage of ₹35 crores in the current quarter, we are carrying forward ₹130 crores into the next year. If we were to adjust all of it including that ₹130 crores, then the credit cost would have been 2.08% instead of 2.13%, which are the reported numbers.

I'll quickly talk about my last section, which is on capital adequacy and liquidity. The capital adequacy ratio is at 15.60% with CET1 ratio at 13.73%.

This has been calculated after considering dividend of ₹0.25 per share. Of course, this is subject to approval of the shareholders.

Average LCR deposits we have maintained at 114% for the quarter. As you would have noted that we generally maintain this around the trajectory of 114% to 115%.

With this, I have broadly outlined the key financial numbers. Maybe I will refer it to Vaidya for his opening comments.

Good evening, everybody. Very happy to speak to all of you this Saturday evening.

Now in this presentation this time, we have actually shared with you the broad strategy of the bank, which becomes important, which eventually the strategy translates to the numbers. If you see the page nine, the first opening slide, we have actually shared with you that initially, this bank's strategy was to borrow money at maybe 12%, 13% and lend at maybe 20%, 22%.

Now, that is a very unique specialization the bank built over a long period of time. It's 15 years we've been in that business.

We have developed specialization in terms of within that, which segments to go after, what is the credit performance of each micro segment within segments. For example, we don't say MSME, it's too blunt a term.

We, for example, have a defined program for salons, for chemists, and so on and so forth, and kirana stores and all that. That is a unique model built by the bank, and that the lending is anywhere about maybe 20% to 22%, and that credit cost could be 4% or 5%.

That is where we started. Over a period of time, of course, our cost of funds came down, as the NBFC itself came down to about maybe 9.5%.

Then we started lending to more products which are medium yield, medium credit cost, where you lend at about maybe say 13%, 14%, and credit costs are say 2% or 3%. Now, over time, of course, now we are a bank.

Our cost of funds have further come down to 6%. We are now able to give prime home loan, prime car loan, and prime loan against property, prime business banking.

The transition of the bank has moved from the first category I talked about, lending at high yield and high credit cost, to medium yield, medium credit cost, to now low yield, low credit cost. The important thing is that the bank has not let go of these original capabilities.

It's very important because it's been honed and built over 15 years, and we have no intention of letting go of that. That is one of the reasons why our yield of the book at the bank level is 13% plus, that includes even corporate banking, 13% plus.

You'll be surprised to know that the credit cost of the book is only 2%. In fact, I don't exactly remember if Sudhanshu called out the number for fourth quarter of this year or not, it's come down to below 2%.

In fact, if you've taken a 5-year through-the-period 5-year '22, '23, '24, '25, '26, or maybe a block of 5 years, I think 1 year prior to that, you'll find that credit cost of the bank is only 1.95%. That includes COVID, that includes microfinance, everything.

This number when we say that we'll keep a credit cost less than 2% is not academic. We have been delivering it for the last 5 years.

Of course, last year was higher because of microfinance, but that is already talked about enough earlier. The point is that our ability to have a book that yields 13% plus and having credit cost less than 2%, which gives a risk-adjusted yield of 11% plus, is a very unique specialization.

By the way, you have to also add 2% as fee income. You can see how profitable that business is.

What the bank has been doing for the last 7 years, or 5 years, is that using this business which makes just a lot of money and then using it to invest in the deposit franchise of the bank, which is the technology, the people, the branches, the ATMs, many products on the corporate banking side, like cash management, products FASTag, wealth management, NRI businesses, maybe say even on the lending side, our product suite is not entirely complete. In the sense, we're still building a rural banking business because we started as a DFI, and we did not have any priority sector capability in this bank.

For the last 7 years, we've been building that, and as 40% of the book needs to be priority sector. We're building all that.

When it's a new bank, you got to build all that. The point I'm trying to just leave with you is that the lending machine makes all the money, the deposit side money is, as of today, it's loss-making, but it will come to profitability.

Therefore, we believe that the bank is coming along very, very, very strong. Most of you will probably add it all up and say, "Hey guys, Vaidya, end of the day, bank is making return on assets only 0.5%."

That's true, it's only 0.5%. But 0.5% is not 0.5%.

0.5% is something is making 1% plus, which is the asset side, and the deposit side is taking away 0.5%. The day you properly sit and disaggregate this, and then understand that the deposit side is not going to make a loss forever.

It takes 10 years to build the deposit side of a bank, get it to scale. You give it maybe 3 or 4 more or maybe I can't say 3 or 4, let me say 4 or 5, just to be safe.

You give that amount of time, and then that deposit side loss, it becomes zero. Asset, by that time, will keep compounding at 20% plus is our opinion, and profits should compound faster than that.

You can see where the PAT of the bank will head. Honestly, I feel that the bank is perfectly on track.

It's coming along very nicely. This microfinance incident, of course, disturbed the optics of the trajectory of the bank.

This quarter also we feel very good about the results, but for the incident that happened, but that they factored in the quarter's results. You will see, most of you will observe the result quarter two, quarter three, quarter four, you will get to see that the trajectory is back strong in this bank.

That's our broad belief. You can see it as it plays out.

Now the other thing about the bank is that we've been consistent with one story. We started with ₹94 crores in 2010.

Today, it's ₹2.32 lakh crores straight in 15 years straight. We speak consistent for one business model, which is the model we know lending side, 2.32.

I don't see any doubt why 3.2 should not become ₹5 lakh crores, should not become ₹10 lakh crores. It's a well-set machine by now.

We only have to get the deposit side right, and once you get that right, then the machine really move. The good thing is also in corporate banking side, frankly, the bank is doing well now.

After initial phase when we slowed down the book, now we started growing it again, not slowed down, actually we de-grew the book to be fair. We brought it down from ₹68,000 crores to bank to ₹36,000 crores, we de-grew it by ₹22,000 crores.

We took out all the project financing, infrastructure loans. Now all that is done.

There's no more reform to be done there, it's on a growth path. That will grow as well.

We find our own niche. Last 7 years, no meaningful credit loss.

In fact, if anything at all. We are quite happy with the way that book is coming along.

Now the overall loan book of the bank is now touched about ₹2.9 lakh crores, or ₹3 lakh crores, I think, ₹2.9 lakh crores. That story is also playing itself really quite well.

It's quite diversified across 25 lines of businesses, really no concern there. On the deposit side, if you notice the deposit growth of this quarter was flat.

Really, it's kind of mixed up with three or four signals that came together. Like Sudhanshu said, we dropped the rates, the incident happened.

It's hard to pick what affected what. In the end, I just want to say that when this incident happened, not that we wanted to happen to us, we want to make sure this never happens again to us.

I can just tell you that the positive of this is that the bank has also happened to identify the specific issues, has already implemented at very quick pace the necessary system changes to be done for fixing those issues so that they don't happen again. We kicked the tires around and figured out anywhere any other part of the system could have an issue.

For example, even in retail customers, and there's no issue, also we went and tightened some extra norms. We've done those things.

Maybe these kind of tightening and stitches we've done will certainly do us good in the longer run. Now and therefore, when we grow the deposit base, which is currently touching ₹2.9 lakh crores, when this goes to ₹5 lakh crores, ₹6 lakh crores, ₹10 lakh crores, we will feel that it will come on even stronger guardrails, and we just look forward to that.

Now, in fact, I remember in '21, '22, that time also we dropped the rates once. The first time when we dropped the rates from 7%.

For 1 year, it was a flat year if you see FY '22, it's a flat year in terms of deposits. Then it starts growing again.

Like that this quarter was flat. It'll come back.

We feel quite confident of that. I do want to finally say that the kind of goodwill we got during this crisis, there was just so much of bad news overnight in a flash across social media channels and YouTubers and Twitter and all over the place.

Really something amazing, and this point to all of you for all that happened as investors, you should really take note of this, that we have 7 to 8 million customers leaving deposits with us. In fact, we are also quite, let me say, happy to note, or pleased to note, that money did not leave the bank.

Some marginal customers with a very high ticket size who are with high interest rates, some of them left. Frankly, when we drop the rate from 7% to 6.5%, people with high interest rates were expected to leave.

Or who had come to us for high interest rates are expected to leave. Barring that, we got thousands of emails.

If you go and see LinkedIn and see either see my LinkedIn account or you go and see maybe IDFC FIRST Bank LinkedIn account, you will see the number of people who have posted their videos and reports saying that, "Look, we trust this bank, and we support this bank." I really think that some good brand the bank has built, good trust the bank has built in people's minds and hearts.

Somewhere it has helped us. We just want to take this opportunity of this investor call to say very, very sincerely to say thank you to every person who helped us, and said some good, motivating words to our employees.

It kept us happy and going. Of course, it is the culture of the bank to move very fast.

We moved very, very quick. This incident happened on Saturday.

Afternoon is when I happened to be in Delhi and someone called me and told me that, "This incident is this, and this is quite big." That night, we reported to the exchange straight on.

Monday morning, we took the investor call. Monday afternoon, we called up the other party and said we're going to pay you right now.

Then Monday night, we paid them. Tuesday morning, we met them in person.

Tuesday afternoon, we called up the newspapers and said we want a front page ad. That day, we prepared the ad.

Next morning, it was out. We just moved blinding fast with very quick, decisive way, saying that it's customer's money, customer should get it.

That's the end of the matter. We did not apply any of the principles to it.

We did not think of litigation, we didn't think of anything. We didn't even think that your employees are also involved, your responsibility, my responsibility.

We didn't think anything. We just said, "Customer's money, pay back."

I think that it's in our DNA to move in pro-customer, to be decisive, and just move. I think it did help us somewhere along the way.

Customers did trust us, and we want to thank them for that. Again, I want to close that point by saying I want to thank everybody for that and to all of you who helped us in that very crucial moment, and there are many.

Now, I want to just quickly move to cost of funds. I'm happy to share that cost of funds have come down to 6%.

In the last 1 year, cost of funds have come down by about 50 basis points, Sudhanshu?

Yeah,

50 basis points. 50 basis points.

We're now down to 6%, and honestly, I don't think any of you would have guessed when we took over this bank in 2019 at 7.8%, that we're going to cut it down by 180 basis points cost of funds and bring it down to the line of our peer banks. At that time, we were paying 150 basis points over mid-tier peer banks, 150 basis points.

We bridged that gap and brought it down and grew deposits despite this cut of rate. Just want to say that deposit franchise is coming well for the bank.

As I always say, I don't tell the market whether I will increase it, I will reduce it. I just say that it's unlikely we will touch the rates, but still, I keep all my options open depending on what the market conditions are.

Chances are that rates will probably be somewhere in this zone as the year progresses. Could be 10 basis points up also, I can't tell for sure.

Depends how the market plays out. Now, let me just say that on the asset quality front, I'm happy to share, all of you may remember that every single quarter for now 5 7 years, and particularly last 2 years when the microfinance crisis was raging, and credit cost numbers are going up, we kept insisting and sharing with you product by product, vintage by vintage, SMA-1 and 2, SMA, NPA, credit cost, everything.

We shared everything with you, and we always maintained to you that except microfinance, this book is super clean. I'm happy to say that it is turned out to be so, because when the microfinance crisis is gone, suddenly our credit cost has come down to 1.6% or 1.7% of the average loan book, which is probably the lowest we've seen in a long, long time.

Anyway, gross NPA is always less and net NPA is always low. I'm just happy to share that we give a lot of disclosure.

If you notice, we give the collection efficiency of the overall book, excluding microfinance, we give it including microfinance. Then we also show the SMA-1 and SMA-2 for the whole book.

We show the gross NPA and net NPA for the whole book. Frankly, every one of these numbers are stable.

Really, I can tell you as of now, it's been 7 years now as a bank avatar, and it's been 8 years before that as Capital First avatar, our gross NPA, net NPA, credit cost is just fine. It is behaving very stable, no issue at all.

Microfinance came, microfinance went, that did cause us trouble, but we have called it out openly all the time. Let me share with you, there was never an accusation against the bank that we ever touched the books, we ever greened anything.

We just played clean. If it was a delinquency, we took it, and that was the end of the matter, but that's only for microfinance.

Anyway, that stand stands righted. On the corporate side, of course, I'm happy to tell you that everything is cleaned out.

As I speak to you, I just stumbled upon this page where we talk about credit cost. I'm happy to tell you that credit cost for the full year what is the number here?

2.13. is 2.13 for FY '26, which is basically it's 1.5% of the average assets.

That 2.13 is broken up as follows: it's 2.69% for Q1 FY '26, 2.24% for Q2, 2.05% for Q3, and 1.63% for Q4. You can see that our credit costs are coming down, we are rather happy about that, and that actually gave us a space.

Frankly, the beginning of the quarter, we knew it's going to be low. Even when the crisis came, if you remember, I came out to the press and I gave public interviews, including to the leading channels like CNBC, and I came and said that we expect this to be a profitable quarter because we knew that credit cost of this quarter is going to be quite low because the book is turning out so well.

That's that. I'm happy to share that overall, the bank is doing well, we're expecting growth.

From now on, we're expecting deposits to grow, loans to grow, and Q1, you should expect the bank to report reasonably good numbers. Back to the opening point that I started, I must say that please always see this book.

All of you are investors, you might feel, "Look, why are they going to just total it up and say we have one number. That's what's your ROE, what's somebody else's ROE, and you want to compare."

You could do that, but I can tell you that a bank which is running for 30 years or 40 years, for them everything is amortized, and everything is built 15, 20 years ago, and they're only running on marginal costing. Our bank is not running on marginal costing, our bank is running on full costing.

That's a big difference. Therefore, when you look at this bank, think clearly that this bank is borrowing money at 6%, is lending money at 13%, so that gives a spread of 5%, and then you have a credit cost to only 2%, and then there's fees of 2%.

You can see for yourself it's profitable. Just split up the two.

See assets as assets, it's a growing machine. You see liabilities as something that is loss-making.

I don't deny. Credit card is being loss-making, I don't deny.

Gold loans is loss-making, I don't deny. Home loans prime book is loss-making, I don't deny.

These are things which are building for the future. Some of the rural book we're also building is also loss-making, I don't deny.

This is all truth of life, but frankly, anybody who's got to build a bank someday in life, someone has to sit and build these things. Eventually, when these all become profitable with scale, then you will see the true bloom of the bank's profitability come about, and you watch out.

You just watch '27, watch '28, watch '29. Many of you have doubts today, I'm 100% sure your doubts will blow away.

It's just a matter of time. Thanks so much, everybody, and we'll open to questions.

Danish, please open the forum for the questions.

Hi sir. Thanks for taking my question, and congrats on a resilient performance in what would have been a tough quarter.

Sir, if you could comment a bit about the monthly deposit accretion since it's been two months since we had that event, and of course, we've also cut down our SA rates. How are we looking in terms of our monthly deposit accretion, customer additions, etc.?

Are we back to a normal run rate? Do you think we will get back to our normal growth pace from say first half of next year on deposits?

Yeah.

See, we have generally seen that when people go through these kind of crisis, etc., it takes maybe about a year or so for for for things to stabilize. You might have seen seen it elsewhere.

We are quite confident that this matter is behind us. Q1 FY '27 itself, you will see a strong growth in the bank.

The the year that went by, we already described that it's been flat. Flat was also is good news, for the quarter that went by for because, like I said, we also cut the rates.

You should see, I mean we're already seeing last year, for example last quarter of last month, that's quite amazing. I already talked of goodwill of customers to us, and I don't know where we're getting such goodwill from, but thanks to everybody.

We If you see the if you see the last year also last month also, in the month of March, when crisis already when the news has broken out, Feb end the news broke, all of March the news was hot. Number of accounts opened was as high as the previous month of February, was equal to January.

New accounts opening is coming perfectly strong, and once customers who took out money because of the high interest rates, when we cut the rates, this quarter onwards, you should see growth right right now itself.

Sir, we should get back to our say normal 20% plus growth? 5%

5% yeah, 5% 5% 5% QoQ,

yeah.

Yeah, 5% QoQ, that kind of growth, yeah.

Sir. Fair enough.

On LCR, 114%, it's a bit low. From next year onwards, we will be looking at say matched loan and deposit growth, or in this zone?

No, we always maintain we're comfortable with that kind of numbers because then see, LCR of 100 itself is a conservative number. On top of it, we don't need to keep too much of margin on top of it.

It's a good number, it's quite stable.

Okay.

Frankly, even during the crisis, it stayed strong.

Yeah. Sir, and how to think about margins going into next year?

There is an uptick going into this quarter, but should it largely be steady at these levels?

Param, thanks for the question. Margin for the full year was at 5.75%, and going into the next year also, we expect it to be stable around these levels.

Okay, 5.93 is what we reported this quarter.

No. For the full year, I said, was 5.75%.

I also mentioned earlier that Q4 also had certain impact because of technical reasons like I spoke about the day convention logic and so on. For the full year, the margin was at 5.7% 75%, and into the next year, we feel we'll be broadly able to hold around those levels.

Thanks Sudhanshu. On opex, we are still holding on to what we've talked about, 13% to 14% for next year?

That stays in terms of guidance.

Though please note that Q1 could be a little higher, and then Q2, Q3 onwards, it should come down. For the full year is that, but Q1 could be a bit higher because of a couple of reasons.

Because we've put up some branches. You would have noted about 80 branches in Q4.

Q1 also has impact of increments and so on. These are some of those factors which could play out.

When you see Q1 compared to Q1 of last year, you'll see a little higher than 13, 14 that we're talking about, but by Q2, Q3, Q4, it should come down, and by year end, it should land the same way we landed this year.

Got it. Very useful.

Sudhanshu, I think I heard you mention initially that the profit for the quarter adjusted for the treasury loss and the fraud impact was 750 crore. That comes to about 75 basis point of ROA in this quarter.

Again, I want to check with you all, is there any say timeline one should look at for say broadly reaching 1% ROA? Because clearly, your core ROA is improving.

Definitely, the core performance is improving, as you rightly said, if we isolate some of these one-time impacts which seen in Q4. I don't want to sort of put out a number as such.

We all know, right, there is this West Asia crisis which is still going on, there is still some moving parts, right? I would not want to guide on a particular number at the moment, but definitely, from an operational parameter, you will have noted that the performance is improving quarter on quarter.

Even on the credit cost, we feel that the credit cost would be lower than the current year.

What credit cost should we broadly work with? That's my last question.

Thank you all. For next year.

I feel that it could be in the range of 170 to 180 basis points. This includes some benefit which we may get because of the CGFMU cover which we have taken for MFI.

Perfect. Very useful.

Thank you so much. Congratulations once again on the quarter.

Thanks, Param.

Thank you, sir, for the opportunity. Sir, I have three questions.

One on asset quality. What is driving the strength this quarter?

While you utilized contingent provisions, the write-offs are significantly lower. Any other factor you would like to highlight?

Again on write-offs, they are down to around 1,200 levels. What is the sustainability of these levels going ahead?

Related question on asset quality, it's been almost two months since the war started, and we keep getting news on supply chain disruptions, raw material cost increases. While March was still fine, how are you seeing trends playing in April, especially on the MSME front?

How are you thinking on growth and asset quality in the light of these disruptions? Maybe the last

Yeah. Sorry.

Go ahead.

Maybe the last question on SA rate. You've changed SA rates this week.

Can you let us know the impact on your cost of SA due to this change?

You meant the recent change?

The recent change, 25

basis points. See that change would not translate from the current levels, it is a few basis points.

That's on SA. Moving on to asset quality, in this quarter of course, many things have played out.

I have told that SMA-1 and 2 numbers improved by 10 basis points. Then the slippage, which also led to a lower translation to slippages.

Of course, MFI drag has been coming down. The slippages have been coming down there.

The collection efficiency was quite strong in Q4, which typically happens every year. The collection comes in quite strongly at the end of the year for some reason, I think, across the banking system.

All of these trends have been quite healthy. Finally, all of this has to translate into a credit cost which I just answered to the previous speaker.

Net net, we feel that the asset quality trends would be quite stable. Now, if I talk about the crisis, the West Asia crisis which is currently going on, what we have done is we have undertaken a comprehensive review of portfolio to assess exposure to potentially impacted sectors, including demand disruption, fuel-related risk, and supply chain challenges, and so on.

We have clearly identified some sectors where we could slightly be more conservative. We don't intend to stop anything, but we are adopting a cautious approach.

Accordingly, the immediate impact on the overall portfolio is expected to remain limited at current levels. However, if there is any escalation which could lead to further material supply disruptions, we will continue to monitor.

We need to see how this plays out.

Thank you, sir. Just a follow-up on the margin point.

Even if I adjust your margin for the Q4 seasonality, it is still around 5.85 odd levels. Why are you giving a guidance of 5.75 for the full year?

Why should margins come down from these levels?

See, we continue to grow certain portions of the portfolio at a faster pace, right? Like you have noted, wholesale banking book is growing at a faster pace, right?

The business banking is growing. Some of these are dilutive from a margin point of view, but we ultimately want to see what is the contribution to profitability.

Even a 5.75% for that matter is quite a healthy number, right? It's one of the highest in the banking system.

You can assume that it's quite range-bound in that sense.

Understood, sir. Thank you, sir.

Thank you for the detailed answer.

Hi team. Congrats on the quarter.

A couple of my questions have been asked and answered, but need some clarification. Firstly, this treasury impact, the loss of ₹160 crores, now if I adjust for the stake sale in that stressed power company, we would have actually made a profit of ₹115 crores.

Is that correct?

No, that's not the way. In fact, in the investor presentation, we have clarified that we have sold certain equity in a particular group that gave us a loss of ₹274 crores, but at the same time, we were holding provision against that.

When we reported the annual financials, we have reported a ₹274 crores loss on top of 150 ₹59 crores in treasury line item, we have also reported a lower provisions. However, for right comparison, what we have done in the investor presentation is we have grossed up this impact.

The actual loss for treasury for the quarter is about ₹159 crores. This is an old case, legacy case, where I said that this was fully provided, this has no impact to the P&L.

For a right comparison, we did this. Then

the real credit cost for the quarter is ₹870 crores or 870

plus this 270? Plus this ₹274 crores, and that's how when we have quoted credit cost numbers, it has been baked in.

This case, as I said, was a much older case, pre-merger, related to the pre-merger time, and this was fully provided. This was in fact one of the infra exposure which we had.

Okay. Fair enough.

I think I'll reach out separately.

Did this answer the question, or I will be happy to further clarify?

No, I'll get back to you separately. I was a bit confused on my numbers, but this clarifies it.

If you refer to the investor presentation, you'll get the clarity on that, on the P&L part.

Theek hai, fair enough. Just secondly on is there any further TD repricing left, or are we done with most of it?

We may get some residual impact in Q1, but it's largely done.

Got it. Just thirdly, in terms of CASA ratio, now we cut SA rates last quarter.

We've not seen any impact on CASA. In fact, our CASA ratio has improved 40 bps.

Do we take this as a more steady state CASA number, like CASA ratio number?

We'll wait and see because even term deposits are also coming strong. We'll wait and see because the SA rate cut is a bit raw, just 3 months.

Let's just wait it out.

Got it. That's it from my end.

Thanks, and all the best.

Thank you.

Thank you for the opportunity. My question is also similar to I think what Param was asking on the ROA for the next year.

If I understand correctly, at these NIM levels and at 1.8 credit cost, at 5.75 NIMs, it adds up to maybe around 75, 80 bps, correct me if I'm wrong, which means we are expecting almost 20 basis points of operating leverage translating to ROA through the next year. Also simultaneously that jaw is slightly slower with it seems that our growth is now going to be around 20, not 22 or 21.

Even if I keep stretching this beyond 1 or 2 years, if 20% is the growth range, are these numbers sounding correct, or am I off by anything, which means that we'll have to extract 20, 25 bps on operating leverage this year, Sudhanshu?

No, definitely operating leverage improves into the next year. I'm saying as we would have mentioned, I think, in the last call also, next year, we expect the top line to be much better than what we saw in this year.

Like this year, top line grew by just 11.2%, and now if you see Q4, the NII grew by about 16%, fee has grown at 21%. Into the next year, we feel that now the MFI drag is over, the MFI book is expected to grow and positively contribute to the top line.

On the top line itself, I see it growing at about 18% to 18.5%. Opex, as we have guided for 13% to 14%, still the jaw would sizably look better, right?

Which definitely contributes to the ROA. On top of it, I also sort of elucidated on that even credit cost is expected to come down from 213 basis points in this year to about 170 to 180 basis points.

All of this in conjunction is expected to positively contribute to the ROA. It's across all the parameters, I would say, we are expecting some improvement.

One important insight which many may have missed actually is the how the ROA of the asset side is and liability side is. It's I I made this point in my earlier talk, but I'll just say it again.

Now, by our own internal estimates, we feel that the ROA of the lending business for the next year will look quite strong. As Sudhanshu mentioned the reason, we expect credit cost to be lower than this year even in absolute terms, and NIM to grow naturally not NIM percentage, in absolute terms.

NII, sorry. NII to grow, and you see how it will come.

Now, this basically, we expect the profitability of the lending business to further improve next year. When we do our internal estimates, we look like it'll be like 1.5%, 1.6% of the loans.

That is the ROA of the lending business to be somewhere in the zone like 1.5%, 1.6% of the loans. Now, but of course, the liability side will still be a drag.

The good news is that the loan side is like rock solid. Even if you make 1.5% at this stage of the bank itself of loans, it's pretty good.

The and obviously, in the next 3, 4 years after that, we'll still get operating leverage. You should just watch out the liability drag to go away.

Liability drag, for your information, is come down to 1% now. Last year was how much, Sudhanshu?

1.2.

1.2 is come down to 1. You see prior year was even higher.

The trend line was clean, clear. That my 1% should become 0.8, 0.2, 0.8, 0.6, 0.4, 0.2, and that direction should play out properly.

We see no doubt in the liability drag coming down to zero in the next 2 years. It is just playing out exactly to plan.

Thank you for that, Vaidya. Actually, I was comparing with the 4Q numbers, Sudhanshu.

4Q credit cost and 4Q NIMs are better than what we are guiding for next full year credit cost and next full year NIMs, right?

4Q credit cost is at 1.63%, right? Our guidance is slightly higher for the full year into the next year on credit cost.

4Q NIM is also higher than what you're guiding for the next year. No,

Q4 NIM is higher, but I said for the full year, it's at 5.75%, and next year the NIM should stay put broadly, right? Q4 NIM is not the right comparison because of the day convention and some of these things which I mentioned earlier.

No, of course. I was just comparing 4Q.

From an ROA, you may assume NIM broadly stays stable. Fee, we could see some improvement because the traction has been there in terms of fee to average total assets.

Of course, the larger break is expected to come out from the operating leverage itself, and then on top of it, the credit cost improvement. All of this should come up as an improvement in ROA.

Actually,

I think you did not answer this specific question. Even the prior gentleman asked.

Saying that why your way currently running even adjusting for this quarter, you're 280 or something for this quarter?

Which one?

Sorry, 580. You reported 590.

5 580,

yeah, adjusted for

the I'm guiding for 575.

Exactly, and you should explain why. That's basically because you're coming to a little more safer segment.

Which I answered. I did answer.

Okay.

Maybe I'll take this offline, Sudhanshu. Just sort of to cover it, you guys are still confident on hitting 1% ROA by the end of this year?

Is that a takeaway we can work with?

As I said, Jayant, I don't want to guide to a particular number currently because there is a few moving parts, right? Definitely, the operating trajectory is improving quarter on quarter, and we expect that Q4 trend broadly to continue into the next year in terms of an improvement in top line.

Maybe in a kissing distance, if you were to call it so. We'll get to kissing We'll

try to be in the kissing distance.

Kissing distance of that. I can tell you that many people ask us about this ROA of 1%, and many have said that, "Look, this is a benchmark we must cross," and we must.

I can only say that our bank will not stop at one. Just watch it play out because from there on also, the full values yet to come out because operating leverage will improve over the next 4, 5 years at a stretch now.

It will not stop at one, that's what I can tell you, whenever it comes there.

Definitely. One last question, Vaidya sir, to you on the capital.

Given that clearly the liability side is not going to stop with this event and we are going to start growing again, how does the capital adequacy look like, and you think you will need more capital by the end of this year, starting next year?

Yes. We definitely think so, and we will raise it.

Great. All the best and congratulations for holding up during a very tough quarter.

Thank you very much.

Thank you.

Thanks, Jayant.

Hi. Thank you for the opportunity and congrats on the quarter.

Most of my questions have been answered. I just wanted to ask how do you see deposit competition playing out going ahead?

While we did cut our SA rates at the start of the fourth quarter, but we have raised our TD rates also around about by 25 odd bps, right, peak TD rates. Do we see the competition going ahead becoming more intense given that even PSU banks, even the large private banks would have to fight for deposits to sustain that credit growth momentum?

Yeah.

Maybe I'll ask Vaidya to answer that question.

I think I said that before, I'll not take much time. I think that our bank has developed good technology capabilities, good app, our branches have tails up, there's a lot of hyper-personalization is happening.

There's a lot of tech involved in raising deposits, which is a strength for us. Those strengths we really believe are invisible strengths.

You don't see them because what you see is rates and you see branches. This is a very conventional way of most people talk that.

There's a third factor which we're running behind the scene, which is culture and technology, which are invisibles, and we are strong on those invisibles. We think that not to worry much, our deposit will grow strong this quarter.

This quarter also, this year also, we'll be very strong. I can only tell you that this month has started off very well.

April has started off well, we are not disturbed.

Thank you.

Hi, good evening and thanks for taking my question. Sir, first a small clarification.

This you mentioned that 170, 180 credit cost is including the CGFMU recovery, if any. Would you have a number as to how much you are going to claim for this financial year?

No, we don't want to call out that number. As you noted, we have taken losses on MFI in last one or two years.

We expect a reasonable recovery to happen on that front in the next year.

Sure. Secondly on MFI book, now this quarter the book has been flattish.

If I were to maybe include the write-off, then it may have grown. How are you looking at this book incrementally?

When do you think it will hit double digit and maybe similar to overall bank, or how are you looking at this book? No,

definitely we want to grow this book. We like this book.

It contributes to PSL, comes with a good yield, and so on. Now with the MFIN guidelines coming in, I think some of those guardrails have also been put into place.

Of course, we are adopting a cautious approach. On the ground also, however that collection efficiency trends have improved, disbursements are picking up.

We would certainly, of course, it's coming from a lower base. We would certainly want to grow this by 15% to 20% into the next year.

We will see how sort of the trend sort of pans out. We want to grow this book.

Sure. Any thoughts on creating ECL transitional provisioning?

Far the asset quality has been holding up very well. It has been holding up very well for the last 5 years.

Any thoughts on we have small ₹130 crores of contingent provisions. Any rough working that you can share as to what could be the transitional provisioning required, if at all?

We still await the final guidelines, and this was expected to come in from April '27, but the final guidelines have not yet come, while most of the banks gave comments somewhere in November, December last year. As I had talked about it in my earlier calls, definitely as when the final guidance comes, this could mean that we need to park some more capital on the ECL front itself on transition, but we may also get some benefit on account of the EIR approach because today the sourcing opex is more than the processing fees.

Plus, there are also announcements around the change in the credit risk guidelines which come in from April 1, '27. There is also a guideline awaited in operational risk.

I think taking all of this together, of course contingent on the guideline itself which comes, we feel that transition capital should be largely taken care of. We'll see how this ECL guideline itself sort of comes out.

Sure. Last question, was there any impact of this CLM transition, co-lending model, RBI had introduced from January 1st?

The broad breakup does not suggest anything, but just wanted to check did you had any changes in your IT or the way you partner with partners for co-lending, or was it immaterial sort of an event?

I think we have a very small book here. In fact, if I recollect, we I think have this arrangement with only one counterparty, and the number is very insignificant.

Thanks, Sudhanshu, and all the very best. Thank you.

Thank you. Since we close shop exactly 1 hour, let me say that if anybody has a last question to sneak in, we just want to give a last opportunity.

Just in case.

Danish, we can take a last question.

In case, if there's none, then don't hold it up.

Let's take one or two more just to be fair to everybody. Yeah.

Hi, am I audible?

Yes, please.

I have just one, I think, data

Cut

Good evening, sir. I'm also a shareholder of the company and a long-time listener and a first-time speaker here.

Please pardon my nervousness. Sir, I just wanted to ask you a question which I've been wanting to ask for last few years maybe.

One is about this financialization of savings because of which a lot of money is going towards, let's say, mutual funds. In such a scenario, how does the bank plan to continue raising CASA?

This is my only question, sir.

Thanks, Vikas. I'll keep it.

Vikas, welcome to talk to any of us in the bank, feel comfortable. Now we understand the financial savings and people are moving to investments, that's a well-known theme.

We think that this is a very large market. We are relatively a younger bank, and our book is relatively small, and we have like I said to one of the earlier questions, bank has developed good capabilities, good digital capabilities, good brand, good culture, employees are very motivated.

You can go to any branch and talk to our staff, you'll get a sense. There are many things in our favor.

No doubt the markets are tight, end of the day, we are part of the system, we are not outside the system, anything any broad tightness in industry affects everybody, affects us also. Overall, we are confident, Vikas.

Things will be fine. We do strong on this front, we have no doubt on that.

If you're a individual shareholder, let me tell you that you should assume the bank will grow well on deposits YoY, bank will grow loans YoY, bank has good margin on an incremental basis. You have to only look out for one thing, that our cost-to-income ratio should come down because our liability side cost-to-income should come down.

Our liability side cost-to-income ratio is 145%. That is what is bringing up overall to 70 3 70 70 73, 74-ish types.

That will come down. You can take it from me, it will come down, 145 to 100 over the next few years.

When that comes down, bank cost-to-income will come down, bank cost-to-income down, PAT will go up. Things will all play out to plan.

It's playing out to plan even now. That's the thing to watch out for.

Don't worry too much about liabilities, it's coming well.

Sure, sir. I've been an investor since 2019, nothing can scare me.

Thank you, Vikas. Really really grateful to you for that kind of confidence in us.

We won't let you down.

Yes, sir. Thank you, sir.

Wish you all the best.

Thank you. Thank you, and everybody, and thanks to all the investors for participating in this call today.

From Sudhanshu, Sapta, myself, and everybody in the bank, thanks a lot for your help and support.

Thank you, everyone.

Thanks, everyone, for joining the call. Thanks.