Good evening, everyone, and thank you for joining us today. I'm joined by our EDs, Jagdeep and Ganesh; our CFO, Viral; and our Head of Investor Relations and Strategy, Indrajit.

I'll start with the operating environment and then cover our progress on the bank's strategic priorities. During the quarter, global markets faced renewed geopolitical tensions and higher energy prices.

India's growth momentum, by contrast, stayed resilient, backed by strong economic activity and sound macroeconomic fundamentals. Banking system liquidity improved meaningfully, helped by FCNR(B) deposit flows, and credit demand continues to strengthen.

Together, these conditions have created a constructive environment for the banking industry. Against this backdrop, the bank has delivered a healthy operating performance.

Growth momentum picked up, and we kept a prudent approach to risk and liquidity. We also made further progress on our strategic priorities with better asset quality, a stronger balance sheet mix, and higher profitability.

These results show the benefits of the disciplined action we have taken over the last several quarters. I will now cover the key highlights of Q2 FY '27, followed by business-specific progress and financial performance.

Retail deposits grew sharply during the quarter, helped by FCNR(B) mobilization, and asset growth picked up across both retail and corporate segments. As a result, deposits and advances have returned to double-digit growth at 10% and 11% YoY, respectively, compared with a decline last year.

Under the RBI swap window, we mobilized $3.51 billion of FCNR(B) deposits. This implies a market share of 2.75%, well above our natural market share of about 1.

1.5% on overall deposits. It is also meaningful relative to our own size at 6.3% of our Q2 average deposit book, and was supported by a relatively higher share of retail and non-leveraged deposits, reinforcing the quality of our funding profile.

On the asset side, retail growth was robust at 12% QoQ overall and 4% QoQ excluding FCNR(B)-related lending. Disbursements accelerated across vehicle, rural, and traditional retail.

The wholesale book kept its momentum, growing 10% QoQ, while the portfolios under mid-market and SME segments also witnessed healthy 13% QoQ growth. Asset quality improved across all subsegments.

Annualized gross slippage fell to 1.8% from 2.1% QoQ and 3% YoY. Our continued focus on recoveries ensured a larger improvement in net slippages, which fell to 1.1% from 1.5% QoQ and 2.5% YoY.

The outstanding stress book has declined, with gross and net NPAs improving to 2.73% and 0.83%, respectively. Residual stress indicators remain negligible.

Net security receipts are at 0.03%, and SMA 1 and 2 combined is at 0.05%. We resumed expanding our physical distribution footprint, adding 124 outlets primarily within BFIL.

With business momentum picking up, we plan to add about 100 bank branches in H2, expanding into underpenetrated geographies and re-accelerating growth in select markets where expansion has previously moderated. In parallel, we strengthened our frontline capacity by adding around 4,300 employees at the overall bank level, largely in sourcing roles.

These investments in distribution reach and sales capacity position us well to support future growth. Our generative AI initiatives continue to see strong employee adoption.

More than 50% of our employees now use AI chatbots, and over half of the active users use them daily with satisfactory outcomes. AI-assisted productivity is steadily becoming a part of day-to-day work across the organization.

We've also expanded our conversational AI program, with six voice bot programs launched and a further 12 customer and employee journeys identified within the roadmap. These programs are helping validate use cases, user adoption patterns, and operational benefits while creating a pipeline for broader deployment.

We had set an ambition of a 1% exit ROA for this year, and we are making clear progress. Q2 ROA improved to 0.87% compared to a normalized 0.63% in Q1, despite temporary margin pressures from FCNR(B) mobilization.

Pre-provision operating profit rose to ₹2,874 crores, up 15% on the normalized previous quarter. Robust business growth and healthy fee income drove the increase, while disciplined balance sheet management contained the margin impact of FCNR(B)-related liquidity.

Provisions declined 12% QoQ and 54% YoY, reflecting sustained improvement in asset quality and lower fresh stress. As a result, profit after tax rose to 12 to ₹1,242 crores.

This is up 51% QoQ on a normalized previous quarter, against a loss a year ago. Capital adequacy remains healthy, with CET1 at 15.55% and overall capital at 16.59%, giving us ample capacity to support growth.

I will now take you through individual businesses starting with retail, followed by wholesale. Viral Viral will then cover the financial summary.

On the retail deposits, our deposit franchise is anchored by a wide distribution network, strong segment-led propositions, a comprehensive product suite, and a capable workforce. Over the last few quarters, we have further strengthened our liability franchise through targeted senior and middle-level leadership hires, greater integration across branches, affluent, and NRI banking teams, and enhancements to digital onboarding and acquisition journeys.

During the quarter, we mobilized $3.5 billion of FCNR(B) deposits under the RBI swap scheme. This shows the strength of our NRI franchise and our ability to seize market opportunities through sharp execution.

We have used the inflows prudently to improve the quality of our liabilities. Part of the proceeds replaced high-cost bulk funding, which brought CDs down to 3.3% of deposits from 5.9% QoQ.

Our deposit mix continues to improve. On an end-of-period basis, retail deposits, as defined under LCR, grew 11% QoQ and rose to 50% of total deposits.

Customer acquisition gained momentum, with nearly 3.6 lakh new-to-bank accounts opened during the quarter, up 12% QoQ, supported by a stronger customer proposition and a more productive distribution. Cost of deposits was 5.96% compared to 5.93% QoQ.

While both savings and term deposit costs repriced downwards, the marginal increase came from lower CASA mix due to the FCNR(B) mobilization. The FCNR(B) window gave a strong boost to our affluent and NRI banking.

These segments now hold around ₹1,05,000 crores of deposits, up 23% QoQ. We also added SIF offerings to our approved product suite, giving clients access to more sophisticated investment solutions and strengthening our wealth proposition.

We continue to strengthen our customer proposition through selective launches and partnerships: a partnership with Navi UPI to strengthen digital payments; a partnership with J.P. Morgan Payments to launch Xpedite, a cross-border remittance solution; new customer features, Secure Deposit and SafeBuddy on INDIE to enhance security and trust.

Going forward, we'll focus on improving CASA, increasing the retail deposit share, and optimizing the cost of deposits. We will do this through deeper engagement with retail, affluent, NRI, senior citizens, and SME customers, supported by digital, AI, and data capabilities.

Moving to retail assets, let me start with vehicle finance. Our vehicle finance portfolio crossed the ₹1 lakh crore milestone this quarter.

Book now stands at ₹1,00,651 crores, up 5% YoY and 1% QoQ. Disbursements picked up to ₹11,968 crores, up 17% YoY and 10% QoQ.

As we said on earlier calls, we had been cautious on tractors and two-wheelers. Excluding these two segments, vehicle disbursements grew even stronger at 24% YoY and 14% QoQ.

The disbursement growth was driven by commercial vehicles, which grew 32% YoY and 17% QoQ, and passenger vehicles at 13% YoY and 12% QoQ. Asset quality remains stable, backed by disciplined underwriting and collections.

Annualized net slippage fell to 1.67%, down 34 basis points QoQ and 30 basis points YoY, and the overdue book stayed within our operating range. Looking ahead, festive demand and seasonality should support growth in the second half.

We, however, remain watchful of macroeconomic trends, especially around fuel prices, affordability considerations, and monsoon-related developments across markets. Our focus remains on profitable growth, gaining market share in our chosen segments, and deepening customer relationships through cross-sell across the wider retail bank.

Our rural banking franchise continues to improve across the board in both disbursements and asset quality. The microloan business returned to growth after nearly eight quarters of decline.

The portfolio grew 8% QoQ to ₹17,571 crores on disbursements of ₹6,548 crores, up 25% QoQ. Asset quality improved further, reinforcing our confidence in the underwriting changes made last year.

Annualized net slippage on microfinance loans fell to 2.2% from 3.4% QoQ and 14.1% YoY. The 31 to 90 DPD fell to 0.4% from 0.6% QoQ and 3.2% YoY.

Around 89% of the portfolio is now covered under CGFMU guarantee scheme, including disbursements whose cover is currently being processed. Beyond microfinance, our diversification initiatives continue to scale.

The merchant finance portfolio grew 20% YoY and 7% QoQ to ₹8,694 crores, serving nano-retailers across more than 550 cities. Merchant finance now contributes 33% of loans originated by BFIL versus 25% YoY.

Affordable housing grew 18% YoY, while KCC and other rural loans remained stable QoQ. Rural banking remains an important franchise both for profitability and priority sector lending.

Having strengthened underwriting and operating processes in the microfinance, we have resumed growth in a calibrated manner and expect to build on this momentum as we enter the seasonally strong second half. At the same time, we continue to monitor potential risks from drought conditions in a few states, fuel and inflation trends across the next state elections, and we will calibrate our growth strategy accordingly.

Building on the momentum of the first quarter, traditional consumer banking assets witnessed further acceleration in growth during the quarter. Excluding FCNR(B)-related loans, the consumer loan book grew 7% QoQ to ₹59,776 crores, led by healthy traction in secured retail and MSME.

We continue to scale our secured retail and MSME franchises while maintaining a selective approach towards unsecured lending. Our home loan book grew 39% YoY and 12% QoQ to ₹7,733 crores.

Within SME, small business banking grew 10% QoQ to ₹10,523 crores. Loan against property grew 7% QoQ to ₹14,407 crores.

Both reflect encouraging traction in our focus segments. On the unsecured side, origination trends improved, but we continue to put portfolio quality and risk-adjusted returns ahead of volume.

As a result, the credit card portfolio declined 3% QoQ, and the PL portfolio declined 2% QoQ. With new originations improving, we expect both CC and PL books to return to growth in the next few quarters.

Asset quality improved further during the quarter, with annualized net slippage of 3.3% versus 3.7% YoY and 3.5% QoQ. Over the last several quarters, we have strengthened our leadership team and invested in distribution, analytics, and technology.

That work is now showing in better momentum across our focus businesses. Mortgages, gold loans, LAP, and small businesses are contributing a growing share of incremental growth and diversifying the loan portfolio.

These businesses are central to our strategy of building a more granular, balanced, and resilient universal bank. Coming to the wholesale bank, wholesale bank sustained last quarter's momentum with loan book growing 10% QoQ and YoY.

The commercial and mid-market group grew fastest at 13% QoQ. Large corporate and institutional banking both grew 8% QoQ.

Growth was well-diversified across sectors, including NBFCs, metals, transport, automobiles, digital services, and gems and jewelries. Customer acquisition strengthened, with new-to-bank credit relationships up 43% QoQ.

This was supported by continued expansion in commercial and mid-market, supply chain finance, and corporate banking. Fee momentum stayed healthy.

Wholesale bank fees rose to ₹446 crores, up 37% YoY and 9% QoQ, with transaction banking contributing 52% of the fees. Transaction banking continues to sustain and deepen client relationships.

We saw healthy momentum in trade finance, cash management, capital markets, and government banking businesses, which support growth both in fee and liabilities. The share of customers rated A and above in the wholesale portfolio was at 76%, remaining steady on a QoQ basis.

Asset quality remains robust. Annual gross slippage fell to 0.07%, and net slippage was negative because of recoveries and upgrades, which exceeded fresh slippages.

Going forward, we will focus on scaling commercial and mid-market, supply chain finance, and transaction banking, and deepening relationships across corporate, institutional, and government clients. We will drive higher penetration of trade and cash management and capital market solutions, strengthen our self-funding relationships, and stay disciplined on risk.

This will support sustainable growth and higher fee intensity. Let me now hand over to Viral to take you through the financial performance.

Sure. Thank you, Rajiv.

As usual, I will start with the balance sheet and then move to the profit and loss account. On the balance sheet, excluding FCNR(B)-related advances, the average advances book grew 6% quarter-on-quarter, driven by better momentum in both retail and wholesale.

Including the FCNR(B)-related loans, the average advances grew 9% sequentially. Average deposits grew 7% quarter-on-quarter, supported by FCNR(B) mobilization, while we continued to reduce certain wholesale deposit balances.

The average credit deposit ratio was 84% compared to 83% in Q1 FY '27. Average borrowings rose to 9% of total liabilities, up from 8% up from 8% QoQ, mainly because of the FCNR(B)-related foreign currency borrowings.

On P&L, net interest income was ₹4,569 crores, which is up 4% QoQ on a normalized basis. Net interest margin was 3.23% compared with a normalized 3.35% in the previous quarter.

The 12 basis moderation was mainly due to FCNR(B) mobilization. About half came from the FCNR(B) deposit-related balance sheet expansion, and then the rest from other changes in the balance sheet.

Non-interest income was ₹2,248 crores, up 26% quarter-on-quarter, supported by strong business momentum and healthy treasury income. Operating expenses were ₹3,943 crores, up 7% quarter-on-quarter.

This increase reflects higher business volumes, growth-related spend, and marketing and brand building initiatives. As a result, pre-provision operating profit was at ₹2,874 crores, up 15% quarter-on-quarter on the normalized previous quarter.

Provisions and contingencies were ₹1,223 crores, down 54% year-on-year and 12% QoQ. That was driven by lower net slippages.

In line with our policy, we wrote off loan of ₹1,671 crores during the quarter. Moving on to asset quality, GNPA and NNPA both improved QoQ to 2.73% and 0.83%, respectively, with the PCR at 70%.

Net slippages have improved sequentially with decline across segments. Segment-wise NPA movements are presented on slide 24 of the presentation.

The SMA 1 and 2 book was 5 basis, and that compares with 12 basis quarter-on-quarter. Net security receipts fell to 3 basis points from 7 basis points quarter-on-quarter.

Restructured advances have also fallen to 4 basis points from 5 basis points sequentially. On profitability and capital, our profit after tax was ₹1,242 crores, and that compared with a normalized ₹824 crores in the previous quarter.

The normalized ROA therefore improved to 0.87% from 0.63%, and that reflects continuing progress in profitability and asset quality. The bank's capital and liquidity remained healthy, with CET1 at 15.55% and CRAR at 16.59%, and the LCR at 127%.

Let me now hand back to Rajiv for his closing comments.

Q2 reflects the growing strength of the franchise and the progress we've made in rebuilding momentum across the bank. Growth has strengthened, profitability has improved, and asset quality trends remain encouraging, and our funding profile is becoming more granular and resilient.

These outcomes are underpinned by the work we have done over the past year to strengthen our leadership team, enhance governance and risk standards, and invest in technology and operating capabilities. It is particularly encouraging to see our retail growth engines gaining traction.

Secured retail, MSME, and microfinance are contributing to stronger business momentum, while our liability franchise continues to improve through a higher share of granular retail deposits and reduced reliance on wholesale funding. As we enter the second half, our priorities remain clear: accelerating high-quality growth, strengthening our deposit franchise, deepening transaction banking and fee incomes, and continuing the normalization of credit cost.

We will continue to leverage technology, data, and AI to enhance customer experience, productivity, and scalability. The work of strengthening the franchise is translating into results.

With stronger fundamentals, healthy capital and liquidity, and momentum building across the business, we're entering the second half with confidence and a clear focus on delivering sustainable growth, stronger profitability, and improved returns over time. With this, we can now open the line for questions.

Thank you, and over to you.

Hi. Good evening, and thanks for the opportunity.

I had six questions. We'll just pace them out.

First one, on the loan side, the average growth momentum has clearly improved, and so as the disbursement in vehicle, MFI loans. The question is that while you've mentioned to grow loans in line with the system in the past, it is still trailing the system loan growth which presumably is running ahead of your expectations.

Just wanted to get a sense on the growth outlook here on. That's my first question.

Six is a lot of questions, why don't we take it one at a time, otherwise I'll forget. Please understand that what you're looking at is YoY growth.

Here the two quarters in the year ended 31st March 2026, the book actually de-grew. Therefore, if you look at it on a YTD basis, Q1 the book grew about 4 4% or 5%, and you've seen the growth in this quarter.

I think there is a bit of a base effect that is playing out, and which should adjust itself in the second half of the year.

Got it. Fair.

I think as the momentum builds up, you feel confident that you can grow to end of the year or the next year largely in line or faster than the system, right?

I think we've been saying our expectation is that we will grow in line with market. I think the momentum that we've seen in the first half of the year gives us confidence that we should be able to meet those expectations.

Got it. Thanks.

The second one is on the certificate of deposits, you've clearly paid them down due to FCNR, but even the SA deposits have de-grew 5% QoQ. Was there some bulk component there which you have also let them run down, or is it some retail SA which has kind of run out?

One of the things that has happened there is that we have a very successful dollar savings account product in GIFT City, which is used by NRIs. Therefore, we did see some money move out of our savings accounts into the FCNR(B) for obvious reasons.

Therefore, to some degree, that drop is reflecting in that.

It's some cannibalization of your NRE deposits, I'm presuming, which would have come back as FCNR. Got it.

The third one is on short-term foreign currency loans have gone up presumably to fund the FCNR leverage. Was curious to know what's the cost duration of this loan, and was the interest rate on this loan hedged?

You're talking about the borrowing or you're talking about the lending leg?

The borrowings, short-term foreign currency borrowing to fund the FCNR leverage presumably.

Yeah. As of now, it's not fully hedged on a tenor basis, but that's typical treasury optimization which we will do over a period of time.

It's not absolutely match funded. Yes, that borrowing is towards funding the leverage loan book, yes.

Got it. The way the SOFR and the dollar rates have moved, should this result in some treasury losses down the road?

See, the entire portfolio is managed within our NOOP limits, etc. Therefore, any gaps that we are running on the FX side is well within the risk limits that we have approved by the board.

Got it. The only reason to ask this question is for most other banks, they wouldn't have taken any interest rate risk on providing this leverage.

Was just wondering whether this is something which may come and hurt us in the coming quarters or not really?

Not really.

Okay. Got it.

The fourth question is on bancassurance income. It was ₹960 crore in FY '26, almost 15% of total fee income.

Based on your early assessments, assuming there is no watering down, what do you think could be the eventual impact from this draft IRDAI norms?

I think, like the rest of the industry, the impact to us, given the fact that we have two pieces here, one is the policies that we sell through the branches and the credit life scheme, the impact, on an as-is-where-is condition, will be material. I think it's too early to talk about how much the impact, etc., is because we're not clear on what is the final commission structure, does it get passed on to the end consumer, will that have an impact on volumes.

Too early to make all these calls. Remember that as a bank, we are a multi-product player to serve our customers.

Therefore, there may be some leads and lags, but, given the very large distribution franchise that we have, we do have the ability to move efforts such that the overall impact on our P&L is minimized.

Okay. Got it.

The next one is on ECL. In the past, you've guided that the one-time transition impact is about 1.5% to 1.7% of loans pre-tax, so that's roughly ₹5,500 crore.

A, is that correct? Also, could you comment now how does the recurring credit cost impact look like for us from next year?

Firstly, that amount is not correct. It's more like 1.1% of assets.

On a recurring basis, it is not significant.

1.1% of loans.

Sorry, 1.1 of loans. On a recurring basis, between 5 to 6 basis points is what we've been saying.

This 1.1 is post-tax, right, or pre-tax of loans?

Pre-tax.

Pre-tax.

Pre-tax. Oh, okay.

Got it. And 5-6 on recurring.

Got it. The second last question is on CET1.

We have seen almost 40 basis points of consumption in this quarter. We are at 15.5% now.

How do you think about potential capital raise, whether that's something that can happen in FY '27, or it's still some time away?

There is an enabling provision in place. We will look at a capital raise at an appropriate time.

Rajiv. Just the last is data-keeping question.

If you could just spell out the loan book mix via different rates, EBLR, MCLR, on the total book. I see that you've given it for wholesale, but on the overall book, that would be helpful.

Let me spell that out. So 45% of the loan book is floating, of that 63% is repo-linked, and then remaining is across MCLR, T-bill, and other EBLR.

Okay. Got it.

Perfect. Thank you so much.

Yeah. Hi.

Firstly, overall in terms of margins, I think you indicated 6 basis points was the impact on account of FCNR. Was that correct overall when we look at it that 12 basis points decline which has been there adjusting for IT refund?

Slightly higher, it'll be between 7 to 8 basis. Again, look, the challenge with FCNR, it's a pool that's gone into the funding mix of the bank, right?

To fully isolate saying this is FCNR is a very complex calculation.

See, also, Kunal, before you get to the question, there are two parts to this, right? One is the absolute funding, the rate itself that we are paying to customers.

Then there is the swap cost to cover the interest component. Then the positive is the CRR, SLR impact that we don't have to maintain on these balances, and what PSL benefit that we will get on this next year.

Put it all together, I think, just looking at this, whether it is 6 or 7 is to my mind inappropriate.

Got it. When we look at it in terms of cost of deposits, no doubt the increase quarter-on-quarter would be on account of a lower CASA, but to look at it from here on, in fact, we have used FCNR to repay some of the bulk deposits.

There would have been the benefit, but maybe for a limited period in 2Q, and largely it will reflect in 3Q. Now I think CASA would also be there in a base, not on an average basis, but at least on a period-end basis.

Here on in terms of cost of deposits, assuming that there is no rate hike which is happening on the deposits side, how should we see the movement on the cost of deposits? Should it be now contained, or should we see it improving given that the bulk deposit repayment benefit will flow through?

I think if I look at it over the next 6 months, there are a couple of things that are already playing out there from a macro perspective. One has to keep in mind that it looks likely that we will get more rate hikes between now and end of March.

Second is to be able to manage liquidity, manage rupee, etc. We're already seeing, and anyway, currency leakage in the second half of the year, we are seeing liquidity tighter.

Therefore, to that extent, there are a lot of moving parts in this space, and so, therefore, the impact, we will have to wait and watch.

Okay. Got it.

Then in terms of on the fee side, this 1.35%, does it include any component of FCNR-related advances fee or processing fee out there? How much would be the core fee if we have to look at it for this quarter, because the jump is quite significant, or maybe any elements which are one-off in the fee income?

We don't have a fee component there. Yes, there was a collateral or sort of benefit from the whole FCNR scheme prevailing at that period, but that's ₹40-50 crores of higher FX sales income, but that's not a very large chunk.

No, there's no fee linked to the lending or anything of that sort. Yes, we do have a couple of smaller one-offs.

We had some AFS/HTM sale, ₹48-50 crores from there. Both put together is ₹100 crores.

A lot of the delta you are seeing is client-based fee income going up.

Okay. This trading also, it's quite high, maybe almost ₹360-odd crores, even in this environment wherein yields have hardened.

You said you have done some booking of the gains as well during the quarter. Is that leading to this treasury income?

It's only ₹48 crores, and when you say treasury income, you're including FX sales there most presumably.

Okay. Yeah.

That's not trading, right? That's pretty BAU.

We do that all the time. The only

What you said earlier for ₹48-50-odd crores on forex, that is still getting classified in trading and others?

It's FX sales, yeah. That's true.

So ₹100 crore delta is still Yeah, ₹100 crores component which you indicated is still there in trading and others.

Correct.

In that sense, I must say that our treasury teams have done a great job managing volatility at this point in time, both on the FX side as well as on the fixed income side. We do believe that as markets continue to remain volatile, it will give us opportunities to be able to create some of these incomes.

No, the only question was when we look at retail and wholesale and the core fee which is there at 1.35%, that is still sustainable. That's the core one.

There is no one-off element out there.

Your analysis is correct.

Sorry?

What you said is correct.

Okay. Got it.

Thanks. That answers all the question.

Thank you.

Hi. Thank you.

Can I come back on the fee income trends? Could you expand which areas are showing improvement and where can we get this sustainability?

That would be my first question.

Simple, it is across both retail and wholesale. On the retail side, we are seeing increased disbursements of traditional retail assets, so that is giving us processing fees, the distribution on the insurance side, including credit life, and simple things like locker fees and such like on the retail side.

We have done a lot of work in terms of optimizing some of the charges to our customers, and that is certainly benefiting us. On the wholesale side, there's work that has happened on the transaction banking, cash management, trade, some of the capital market transactions that we have done, in addition to similarly there as well, credit fees that we have received.

The improvement is across both retail and wholesale, and it is granular in nature.

That's heartening to hear. The second question would be on kind of NIMs from here on.

Even if we take your number about 7-8 basis points of FCNR adjustment impact on the NIM, there is underlying pressure on NIMs maybe because of the loan mix and also because of the kind of CASA mix. As you look forward to the next 6-12 months, how do you see the drivers?

There'll probably still be a little bit of FCNR impact next quarter as well. Then how should we think about NIMs, what will it be driven by predominantly, apart from rates?

There'll be both sides of the balance sheet. We would typically see higher retail growth happening in the second half, Q3, Q4.

We'll be higher on both vehicles and the retail asset book, so that gives us the kicker on yield on assets and loans, right? That helps us recoup some of that.

Of course, the optimization on the liability side, and it was mentioned earlier about the delta effect of the CD book, etc., that gives us the entire quarter. Across the balance sheet, but yes, we would look at recouping the drop that we've seen over the next two quarters.

It's mainly the loan mix shift that you are thinking about?

Obviously the deposit side, right? If we continue working on CASA, we're pushing hard on that, all of those.

Excellent. Thank you.

Yeah. Hi, team.

Thanks for taking my question, and congrats on the steady turnaround. Just firstly on our trajectory to 1% ROA, a couple of quarters back you had mentioned that when we were roughly 40-50 bps, you said half will come from credit cost, half from PPOP.

Now it seems like the credit cost part has played out, but is there more scope for further improvement coming from the credit cost front?

You're absolutely right. We've talked about the journey, and that's how it's played out.

The 80 basis improvement, almost 50 to 60 of that on an ROA basis has been credit cost, 15-20 on expenses, and then remaining on the income. Exactly how we had thought will happen, you're seeing the traction now on the income side.

Fee, as you saw, is already up, and hopefully we sustain that and get back now NIM and recoup that 12 basis that we've seen. Credit cost, yes, we do see further opportunity because across all our ratios, the absolute credit cost is still coming down.

We are growing balance sheet, and therefore, the cost to asset, right, the credit cost to asset will still further drop. Frankly, that's not the big driver that we're looking at from here on.

Yes, that delta will continue flowing through, but not the same scale and proportion that you've seen over the last two, three quarters.

Understood. Okay.

Secondly, going back to one of the earlier questions on SA, and you mentioned that SA is down 5%, SA is down mainly because of NRIs indirectly putting in FCNR. If I adjust for that, would the SA book still have grown meaningfully?

If not, what's really our sort of strategy on CASA, because it's been weak for a few quarters now?

I think if you probably take that piece out, your SA would have been flat. There is obviously work.

The number of accounts, you've seen some of the commentary that I just put out. The number of accounts that we are opening has significantly increased.

The number of accounts we are opening is now up 12% on a QoQ basis, and we think that that momentum will only grow as we go forward. Therefore, to that extent, I think building on the granular SA will take time, but it is certainly work in progress.

Okay. Then how do we explain this?

We're adding more customers to the franchise, it should still add an absolute value to SA, right? If I look at the last, say, four quarters, it's still sort of just at that ₹85-87,000 crore range.

Yeah. I think if you look at absolute retail, on the rupee side, it is growing to the point that both you and I are making of the new accounts, etc.

We saw some of the money going out, going into FCNR(B), and we have seen some outflows on the government side as well. I'm sure you know that the government is also getting a little more efficient, and so, therefore, we've seen some outflows on that side, but it is also relatively higher priced.

Therefore, has minimal impact on PPOP. Therefore, the focus really is in the second half of the year to grow SA on a much more granular basis.

Opening of these accounts, the first phase is to open the account, the second is to get funding into that, and third phase is to cross-sell into these. That's the journey that we are down.

Got it. Can I squeeze in a third question?

Please.

Okay. Just lastly on loan yields, now they're down 25 bps QoQ, in a quarter where retail share has increased, interest reversals should be lower because slippages are lower.

What's really happened here? Have we, I don't know, given discounts to corporate?

Take a cut on that, that the FCNR leverage is playing out there, so that obviously impacts the overall yield of the loan book. Yes, that

Uh-huh. Okay.

What you're comparing is not the like-to-like number. There was some 26 basis is including everything, otherwise adjusted is 19 basis point decline, Q1 versus Q2.

Then, Indrajit, 19 is also fairly large, right?

Yeah. No, I'm not refuting the answer, I'm just correcting the factual comparison.

Okay. Then, okay, why is it 19?

Let me then rephrase my question.

It was the same explanation. He was just correcting the math.

Adjusted for FCNR, you're saying that your loan yields are stable?

Marginally lower, yes, because of the mix. We've grown wholesale faster than some of the retail, but yes, the larger impact really that you're seeing is that FCNR leverage playing there.

Okay. Got it.

That answers my question. Thanks, and all the best.

Thank you.

Yeah. Hi.

Am I audible, right?

Yes.

Yeah. Hi.

Two questions. One is on your microfinance book, I can see that growth is now back, and second half is generally stronger.

Just wanted some idea about where are you finding this growth? How much is coming from customers who are entering for the first time?

How much is existing? Where do you see this going forward?

If you can separately talk about the traditional group loans and the other stuff that you're doing in rural.

Jagdeep here. Two quick points to that.

On the microcredit side, roughly 73% of our borrowers have been having a three-year vintage with us. Almost 51%, 52% borrowers have a single facility with BFIL or IndusInd Bank.

Growth is now consistent across the country. We are getting good growth.

However, like we pointed out a little earlier, there are certain pockets where we're seeing the impact of drought being announced, states like Karnataka, Maharashtra, and Andhra. We will continue to be focused on growth, but be very, very calibrated, and keep adjusting according to the situation on the ground.

As of now, the quality of the portfolio continues to be extremely strong, but we'll have to watch out on some of these which might play out in the next quarter or couple of quarters. We are very, very watchful, but we continue to remain optimistic that as long as the macros hold on, we should see consistent growth in this business.

Sorry, just to add one point, what is the share of new-to-credit now in the incremental disbursements? Has it gone up?

We'll come back to you, but I don't think that number has significantly gone up.

Okay. Sure.

The other parts, apart from group loan, any comments there? Are the same factors true in merchant banking and the other rural loan, that there also the drought could have an impact?

Merchant is slightly above the microcredit customers. They are more in the semi-urban and certain larger geographies that we operate in.

There again, as of now, we continue to see good credit performance, and we are watchful of that space. Even through the cycle last year, we continue to be within a range in terms of our credit performance there.

Sure. Got it.

Just very lastly on the segments in retail that are also high yield, for example, credit cards or maybe in tractors, much higher yield. They have also been declining for different reasons, some for you, some for the entire system.

If you have any comments on where we are in that cycle individually, because those are also important parts of the NIM journey when you talk about mix shift, right? The segments within retail and SME which are disproportionately higher yield, any outlook on that?

On our unsecured, like we said, we've been taking risk actions and being thoughtful in the way we grow our business, adjusted for risk-adjusted returns. In that segment, we have started seeing an uptick in our disbursements, and we're hopeful that that should start translating into book growth in the coming quarters.

Credit cards, like you're aware, the entire system itself is seeing very, very muted growth. We've had our own share of risk actions that we have taken.

Our new acquisition is meaningfully up in the quarter, and we continue to remain focused on finding pockets where we can onboard more low-risk customers. In terms of business SME, LAP, our small business banking, are all segments where we have started seeing the growth, and you will continue to see that hold on over the next few quarters.

Most of the high yield on the retail side, either the growth is continuing to sustain, or in some of the unsecured pockets, we're slowly pushing our disbursements up, and you will start seeing that translate into book growth in the coming quarters.

Sure. Thank you.

That's helpful.

Yeah. Hi.

Good evening, and thanks for the opportunity. Sir, we had shared that we want to exit FY '27 at 1% ROA.

We are on course to that hopefully. Do you want to share any let's say exit FY '28 or maybe for the full year FY '28 ROA ambition?

See, I think that this bank has historically delivered ROAs in the vicinity of between 175 to 180 basis points. Our medium-term ambition is to get there.

How soon we can get there is a matter of execution.

Right. Medium term, and I think the risk appetite has also changed, right, versus the previous trajectory.

If you have any let's say FY '28 exit or maybe full year FY '28, given that maybe interest rate cycle is favorable from NIM perspective, and asset quality, as you said, is now stabilizing, slippages, etc., would be really helpful if you have that FY '28 maybe exit or maybe full year.

Like I said, I think if our medium-term ambition is to get to 175-180, then and you are seeing our calibrated approach to building the business, you can break it up and figure it out, but I don't have any comment on next year.

Sure. Secondly, this treasury and forex and treasury, right, which is a decent part of the fee income, if I do the DuPont, it is roughly around 25 basis point of ROA.

It has been reasonably consistent, but is this sort of a core number? Is this a recurring number, or how to look at this trading and forex trading and other income in the fee line item?

A large chunk of that is really FX sales, which is not trading by nature, right? That's more flow in a sense because it's a client-based fee income pool, right?

The pure trading is actually much, much smaller of that component. The trading component, for example, this quarter was roughly ₹70 crores of trading income, so that hopefully gives you that perspective.

Right. Sure.

Lastly, just on cost of deposit, because there are a lot of moving part, and rate cycle has also hardened, do you suspect that cost of deposit, overall cost of deposit, should remain stable, or you think it has bottomed the cost of deposit only?

See, ultimately, banking is a marginal cost business, therefore, in an environment where if rate hikes happen, liquidity tightens, cost of deposits will go up, but then correspondingly, either through proportionality or in general, lending rates will go up as well. There may be some lead lags around it.

Right. Thank you so much, and all the very best.

Hi. Good evening, and congratulations for the quarter.

Just a few questions. Rajiv, how do you expect deposit rates to trend from here in SA and TD just from a system perspective and your own approach in the next say two or three quarters?

See, I think the first point I want to make is that the FCNR(B) inflows have not come proportionally to all banks, and so therefore, some banks have excess, let me use the word excess in the widest sense of the term, but excess liquidity, and some banks who have not got are already beginning to see liquidity begin to tighten for them. Macro environment is such that we do expect that rate hikes will happen and liquidity will tighten, either because of RBI actions or because of seasonal increases in currency in circulation, second half demand, etc.

Therefore, I think it is fair to expect that some uptick in deposit rates is likely in the second half of the year.

How much additional are you carrying today you can deploy? Abhishek, sorry to interrupt, your line is not clear.

You're breaking up in between. Request you to please check Am I audible?

Is it better? Now it's better.

Yes. Sorry about that.

I was asking, how much additional liquidity are you carrying today which can be deployed, even while meeting all the reserve requirements, etc.?

No, no. Don't look at it like that.

In the sense of we don't carry additional liquidity, right? For example, we have paid down some of our high-cost deposits, we've paid down CDs.

As and when we think that there is enough deployment opportunities, we can always go back to the market and replenish some of this stuff. Obviously, given the focus on granular growth, obviously, that will take time for you to build, meaning that you don't want to push growth just because you have liquidity.

Is it the right conclusion that you would have to respond to other market participants if they were to increase their CD rates or SA rates?

Maybe with some lead lag, but ultimately, we are a relatively smaller player, therefore, to that extent, ensuring our relative competitiveness from a pricing perspective is important.

Sure. Sure.

Got it. The second question is more just a data point.

The drop in Tier 1, it's because profits are not included in that, or it's something else? The 55 bps drop QoQ.

No, I think that's a factor of balance sheet growth, right? You've seen loan growth pretty sharp in this quarter.

Balance sheet growth is 5% to 6%, so that's obviously we will consume capital, right?

RWA growth was still much lower than loan growth, Viral Damania (CFO): The intensity or density is still that 73% of the assets. That has not changed.

It is proportionate to growth. We had some increase on market risk, and some increase roughly 13 basis or coming some other change, but yeah, otherwise, it's balance sheet growth.

Okay. All right.

I'll just maybe clarify that offline. No problem.

Thanks a lot, and all the best for the future.

Thanks, Abhishek.

Thank you for your interest in IndusInd Bank. Let me take this opportunity to wish you and your families a very, very Happy Diwali and season's greetings to all of you.

Thank you very much.