Thanks, Ryan. Good afternoon, everyone, and welcome to our earnings call.

We have announced our results. I'm hoping all of you have gone through it already.

We are pleased to share that the bank has delivered a strong performance this quarter. We have with us today our MD and CEO, Mr.

K.V.S. Manian, along with the entire senior leadership team, who will take you through the performance and the key developments that happened in the quarter that went by.

With that, I'll hand it over to Mr. Manian for his opening remarks.

Over to you, sir.

Thank you, Souvik. Good afternoon, everyone, and welcome to Federal Bank's quarterly results call.

Let me begin by briefing you on some changes to our board. Virat Diwanji, who has been our National Head of Consumer Banking, joins our board, and we look forward to his continued leadership.

I'm also pleased to welcome Rajesh Warrier to the board as an independent director. His strong technology background and experience will be valuable as we continue to strengthen our capabilities in the technology and AI areas.

I would also like to place on record our sincere appreciation for Ramanand Mundkur for his valuable contribution and service to the bank over the past five years. We thank him for his guidance and association with The Federal Bank and wish him the very best.

Coming to the quarter, we have delivered a strong performance underpinned by sustained momentum on the liability side, disciplined growth on the asset side, and continued focus on fees and operating efficiency. A significant milestone this quarter has been our average CASA deposits crossing 1 lakh crores.

This reflects the progress we have made in strengthening our liability franchise and improving the quality of our deposit mix. We have also garnered our meaningful share of FCNR(B) deposits under the special window, participating at a quantum and economics that we believe are appropriate for us.

On the asset side, we have continued to grow in a calibrated and disciplined manner with healthy momentum across our chosen segments. Our focus remains on pursuing quality growth while maintaining the discipline on risk-adjusted returns, which continues to improve each quarter.

As we have articulated in our annual report, sustained momentum and discipline remain central to our approach. The progress we are making on both sides of the balance sheet reflects this commitment.

A stronger liability franchise combined with disciplined asset growth is helping sustain our NIM trajectory, and we remain confident in its underlying resilience. The evolving interest rate cycle should provide an additional supportive factor as we move forward.

Beyond margins, we have delivered a strong performance on fee income. Fee income as a proportion of average assets has reached an all-time high with performance broad-based across various fee-generating businesses.

At the same time, we have maintained discipline on operating expenses and kept our cost-to-income trajectory under control. If we look at the guidance we provided about a year and a half ago, we have, by and large, tracked well against our stated objectives on NIM, ROA, and fee income, with certain parameters actually outperforming the anticipated metrics.

Our profitability trajectory and PAT growth reflect the underlying strength of the franchise and progress we are making towards our strategic objectives. Our reported profitability for the quarter also incorporates the impact of the change in accounting policy related to ESOP expenses.

Venkat will later explain on this call the accounting treatment and its implications in more detail. Looking ahead, we remain constructive about the balance quarters of the financial year.

We will continue to pursue growth with discipline, strengthen the quality of our earnings, and remain focused on delivering sustainable value for all our stakeholders. With that, I will hand it over to Venkat to take you through the financial performance and the key numbers in greater detail.

Venkat.

Thank you, Manian, and good afternoon, everyone, for joining this call. I'll focus on the key financial developments for the second quarter.

As usual, before that, a quick overview of the macro environment. In the last call, we flagged on the inflation trajectory, and you would have noticed that the headline CPI rose in each of the months -- July, August, and September -- from 4.45% in July to 4.83% in August and 5.54% in September.

It averages approximately 4.94% for the quarter. The September reading was the highest so far in 2026 under the revised series and the fourth consecutive month above RBI's 4% target.

Food inflation remained the main driver. It was 5.52% in July, 5.97% in August, and 7.74% in September.

Whilst in August, the MPC held the repo rate at 5.25% and retained its neutral stance, on October 7th, they unanimously raised the repo rate by 25 basis points to 5.5%, and it also changed the stance to calibrated tightening. RBI raised the FY '27 growth projection to 7.1% from 6.7%.

It also raised the FY '27 inflation projection to 5.2% from 5%. The growth base remained strong.

Real GDP grew at 7.8% in June quarter ahead of RBI's estimate of 7%, and the March quarter was revised up to 8.6%. Most of the benefits from the easing cycle has now passed through to our liability book.

From here, the margin mix will depend on improvement in asset and the strength of our liability franchise. Now coming to the performance overview for Q2.

Our net profit for the quarter was ₹1,386 crore, the highest in the bank's history. It's 45.1% up YoY and 17.77% QoQ.

Earnings per share stood at ₹22.26, up 44.34% YoY and 16.25% QoQ. Operating profit was ₹2,225.37 crore, up 35.35% YoY and 17.29% QoQ.

In fact, if you look at our OP, if not for the one-time impact of the income tax refund which we had in Q4 of last year, if we exclude that, OP also has been the highest ever for the bank at ₹2,225 crore. Total business crossed ₹6 lakh crore, and gross advances crossed ₹3 lakh crore.

Net interest income was ₹3,153.4 crore, up 7% QoQ and 26.38% YoY. NIM was 3.32%, down only 1 basis point QoQ and up 26 basis points YoY.

Our cost of deposit declined 3 basis points during the quarter and 39 basis points YoY. Last quarter, we said that the pace of decline in deposit cost would moderate.

It has. The cost of deposits fell 3 basis points QoQ against 22 basis points in Q1.

With the October rate increase, the externally benchmarked part of our loan book will reprice ahead of deposits, which will reprice as they mature. We also expect competition for deposits to intensify once the liquidity situation normalizes.

On the deposit and liability franchise, our total deposits closed at ₹3,42,693 crore, up 7% QoQ and 18.6% YoY. Our CASA balances stood at ₹1,09,803, up a very impressive 6.44% QoQ and 22.56% YoY, that is approximately 395 basis points faster than the deposits growth.

Our CASA ratio improved 103 basis points YoY. Another important milestone was the average CASA crossed ₹1 lakh crore during the quarter.

NRE and ONR deposits together reached ₹1,19,055 crore, up 13.25% QoQ and 26.6% YoY. Savings balances grew close to 4% QoQ and 19.6% YoY.

Last quarter, we addressed the sequential dip in current accounts, and we did say that traction would resume as the March quarter seasonality washed out. It has.

Demand deposits grew 14.4% -- 14.04% QoQ and 33% YoY. CASA itself grew by 6.4% QoQ.

There is no change to our guidance on CASA. The 103 basis point improvement in the ratio YoY reflects the trend in the growth.

On advances, our gross advances closed at ₹3,01,687 crore, up 7.27% QoQ and 21% YoY. We have grown on the chosen segments, and our stated focus remains on the higher-yielding granular assets that improve the risk-adjusted return profile of the book.

This granularity also feeds into our core fee lines. Gold loans grew 37.13% YoY and 6.67% QoQ.

LAP grew 32.21% YoY, and credit cards grew an impressive 28.27% YoY. Commercial banking continues with a strong growth trajectory over the years, and in this quarter, also grew 6.99%, almost 7% QoQ and 25.46% YoY.

CV/CE grew 21.74%. Corporate and institutional banking grew 17.19% YoY.

We continue to engage where pricing and counterparty qualities meet our threshold. Business banking grew 12.39% YoY and QoQ 7.48%.

We did mention in the last quarter that we would grow this book as risk-adjusted returns justified. We are seeing that directional change coming through now.

Retail banking grew by 17.92% YoY. The average CD ratio for the quarter was 86.22, and we continue to operate within the bandwidth which we have set for ourselves.

On fee income, our fee income was again ₹1,167 crore, up 22% QoQ and 31.86% YoY. Total other income at ₹1,490 crore is the highest in the bank's history.

Our fee income to assets is at an all-time high of 1.11%. Last quarter, fee income was seasonally lower against strong March base.

This quarter has been a very strong growth, and it is well-distributed, as Manian mentioned. Our cost-to-income ratio improved to 52%, down 196 basis points YoY and 42 basis points QoQ.

We'll continue to operate in the range of 52% on the CI ratio. As explained in the past as well, the focus will be on ensuring that the revenue growth is faster than cost growth.

We will be investing in technology, in new branch openings, and other initiatives which will position us well for the future. Manian also mentioned that I'll explain about the ESOP employee cost-related change.

Until last year, we followed the intrinsic value method for ESOPs granted to non-material risk-takers. For the material risk-takers, it was at fair value.

From 1st April '26, we have standardized this, and this is in line with best practices, and we are moving to fair value accounting for ESOPs across all employees. This change has resulted in an incremental employee cost of ₹32.7 crore and a consequent PAT impact of ₹24.5 crore.

When you are comparing year-on-year movement in employee costs and profitability, please keep this accounting change in mind. On asset quality, our GNPA improved to 1.32%, down 20 basis points QoQ and 51 basis points YoY.

Our NNPA continues to be the best-in-class in the industry at 0.17%. Both GNPA and NNPA are at decadal lows.

Our PCR, excluding technical write-offs, is at 86.78%, and including technical write-offs, the coverage is at 94.4%. Credit cost is at 0.31%, down sequentially by 10 basis points and 19 basis points YoY.

Our ROA improved to 1.32, up 10 basis points in this quarter and 23 basis points YoY. You will recollect that we had given a guidance of ROA of 3 to 4 bps per quarter, and we did mention that it will not be on a quarterly basis, but it won't be in every sequential quarter, but for the year, we have given the guidance.

Our ROE improved to 13.57%, up 126 basis points QoQ. Last quarter, we did explain the sequential dip in ROE reflected the share warrant subscription money received ahead of deployment, and we said that it is expected to reverse as the capital was deployed.

Our book value has grown to ₹166.32, and CRAR stands at a very healthy 16.84%. In closing, the bank has delivered its highest-ever profit and highest-ever other income.

Total business crossed ₹6 lakh crore, and advances crossed ₹3 lakh crore. Over the year, profit has grown 45%, margin expanded 25 bps, cost to income improved by 196 basis points, and credit cost declined by 20 basis points.

Our provision coverage ratio is improved by 1,300 basis points. GNPA and NNPA are at decadal lows.

The macro picture ahead carries higher inflation and tighter policy and also overhang of the geopolitical crisis. Competition for deposits will intensify as we go forward.

Our priorities are unchanged: deepen the liability franchise, grow in our chosen segments at the right risk-adjusted return, and hold the line on cost and credit quality. The granular and secured character of this balance sheet is what allows us to deliver consistently.

Thank you all, and we'll now open up for questions.

Ryan, one quick thing before we begin. A quick request to everybody: please limit yourself to one question per participant so that we can allow most people to participate in the discussion.

Please bear with me. Right.

Yes, please go ahead, Ryan, and open the lines.

Hi. Congratulations.

Actually, I had a few questions. My first question is on general asset quality, right?

Given inflation, drought, does that affect any of your segments, especially the high-yield segment? Have you seen any stress in any of these segments so far?

That's my first question. My second question is on your levered FCNR deposits.

The leverage seems to be lower than other banks, right? Any thought process behind it?

My third question is on talks about M&A. You've already clarified on exchanges.

What I want to understand is that why would the bank be keen on acquiring an MFI, given that the cycles may be too short, they are very volatile, and they are very steep and deep bad cycles? Just your thought process around it.

Your first question related to asset quality, we have not seen any impact on our asset quality of the environment that you were talking about yet. Having said that, we remain watchful, and As we have also been cautious about growing certain segments.

If you look at our agri book, we have not pushed the pedal on that. For example, our microfinance book, we have not pushed the pedal on that.

Therefore, we've been cautious about some of those segments, and we continue to watch the outcomes of El Niño, geopolitics, all of that, interest rate scenario, inflation, all of that. Just now, we don't see any impact on our portfolio.

That is your first question. The second question related to we have disclosed our leveraged FCNR, and I think what we focused on was the right quantum, right economics, and right granularity of that exercise was important for us, and I think we did what was appropriate in those context.

Rest of the questions, I just leave it they don't need an answer because there is nothing to discuss right now, we don't discuss that.

Sir. Thank you.

Thank you. Operator, next one, please.

hi, sir. Thank you for the opportunity, and congratulations on a great quarter.

My first question is again on FCNR. Given FCNR like Federal Bank's strong NR base, one would have expected it to have a much higher share of FCNR.

What is driving this slumber? If you can provide margins excluding the FCNR impact.

What is the FCNR funds which have been deployed in loans or bulk deposits which have been repaid, and what is still sitting in liquidity? That's my first question.

Right. Like I said, I think what we wanted to ensure was there was right granularity to it, right economics to it, and we think what we have done is appropriate given our size of the balance sheet, it's appropriate given our ALM, economics, granularity, all of that put together, and deployment opportunities, tenor, all of that.

I think we did what is appropriate from our point of view. Rest of the deployment into what and all is a matter of a lot of detail, Akshay, I will leave that to if you require a one-on-one discussion, we can do that, but a lot of that is not really value-additive.

Finally, all of that is reflected in the NIMs figure that we have reported, right? Finally, it bakes in all of that.

Fine. Second is on the loan growth.

Loan growth, if I remove the FCNR leverage, is now around 18%. How sustainable is this loan growth, and is there any revision in growth guidance?

We continue to maintain what we had guided as mid-teens as the growth rate guidance. We continue to maintain that guidance,

Akshay. Understood.

Sir, lastly, on the inorganic growth. I understand that you will not be able to comment on any specific deals, but what is the philosophy when you refer to any inorganic acquisitions, given the hard work you have put in strengthening the asset quality over the years?

Will you be comfortable in going into segments like MFI or similar segments?

From our point of view, I think I have stated this earlier on our inorganic philosophy, what we want to follow. One is we are quite clear that whatever we do, we must see it as accretive, and we are very disciplined about that.

There are instances where we have given up opportunities where we have found it not accretive enough, and some of them are known. Therefore, the first principle is that it should be accretive.

We remain focused on areas where we think we can acquire newer capabilities or scale remains the second area. Of course, our preference is core over a period of time, also the universal banking franchise that will determine the opportunities we evaluate and take forward.

That and I have earlier said that we also believe that a string of pearls strategy is probably better than a big bang strategy, and These are some of the guiding philosophies we'll follow as and when we look at an opportunity and close that.

Understood, sir. Thank you.

Those were my questions. Yeah.

Yeah. Hi.

Firstly, on opex, even if I adjust for the overall ESOP, opex appears to be quite high, both the overhead cost as well as the employee cost. I do understand we added almost 75-odd branches.

Would this be largely the infra-related spend which would have been there, which is leading to this kind of a rise in opex?

Kunal, first of all, you have to see it in the context of cost to income and our past guidance on that. We have always maintained that don't bake in advantages on cost to income, and therefore first of all, it is in line with our guidance, the cost to income guidance that we have given, number one.

Number two, this of course includes extra branches, extra people. As we have added a new sales channels.

We are investing in technology. There are several lines of expenses that we are and of course, there is some actuarial impact that has happened, it's a combination of things.

I would say that remains within the overall guidance that we issued.

The question was more in terms of ROA levers, looking at opex. We have seen this getting towards like 2.3 now, more than 2.3 on average assets.

Would this kind of investments continue, and would we see limited levers on the opex side towards the ROA or maybe a negative lever to the ROA? Yeah.

Not negative, but we had Kunal, you would recall all our calls over the last several quarters, we have maintained that please don't bake in benefits out of cost on ROA, and that guidance remains as of now. That was a two-year We had at that time indicated that for a couple of years we'd like to invest for a sustain for a sustainable future protection, and that guidance continues.

Sure. Second question is on fee side.

Does this include the fee on the leveraged book, which is leading to the higher fee income, or this is, I would say, more business as usual, and we should continue to see the traction? Because again, fee income was something wherein we were expecting a buildup out there.

Is there any one-off in the fee income, or it is all structural, yeah?

If you have seen the disclosures we have given you, it's almost every line of the fee income

Particularly processing fee and other service charges, if there is any component within that, yeah.

Yes, there is some component of the FCNR there, but if it was that significant to call out, we would have called out.

Okay. Any reason to book this treasury of ₹238-odd crore, even when yields have hardened, overall the other income, there is a good support coming in of ₹238 crore.

Any gains which have been booked even from maybe the investment portfolio?

It's a combination again of some investment that we encashed during the quarter. In treasury, I would say we had a good quarter.

I don't know what to call one-off, but clearly we gained out of IPOs, we gained out of one particular investment, and of course, there was an SR that was encashed during the quarter, which also contributed to it. More importantly, when you are looking at the numbers, please remember that you're looking at it from a very low base in the last two quarters.

Last two quarters were super suppressed because of MTM and other issues. Therefore, to some extent, it is also retracing back to normal.

If you go back to earlier quarters, our treasury incomes were not as low as the last two quarters, right? It's a combination, I would say.

To some extent, it is a good treasury quarter. Whether we can assume that the same will repeat, yes, it may not repeat.

Thank you. Thanks and all the best.

Yeah. Thank you.

Hi. Good evening, and thanks for the opportunity.

Hi, Nitin.

Hi, sir. Congratulations on a good quarter.

I have a couple of questions. One is on the lending yields.

If I see while our focus has been to grow the mix of high-yielding deposits, but given how the repricing has been playing out, the lending yield has been coming down bit by bit every quarter. Not counting in any rate hike-related gains from here, can we say that the lending yields now have bottomed and therefore, how do we expect the margins to play out now over the coming quarters?

Yes, you can say that. If you see last quarter, the lending yield was almost, there was an FCNR(B) impact on that, but if you adjust for that, it was more or less constant or slightly higher, I would say, compared to the last quarter.

We have already seen the bottom of that cycle last quarter, I would say. This quarter is more the FCNR impact.

I would say last quarter we saw the bottom of that cycle.

Okay. Sir, on the margins, now this quarter we have held essentially flat.

How should one look at the margins now over the coming quarters?

Broadly, Nitin, I would say, for the year we gave a broad guidance that it will be 5 to 6 basis per quarter improvement, and we had said that it will not be linear, it will vary from quarter to quarter, but on an average, we should get that. We are still striving to get that number.

Okay. Second just as a data point on the LCR ratio, if you can share that number.

Average LCR? 119.8, 120.

It has improved 3-odd percentages this quarter. Am I right?

Yes, that's right.

Okay. Great.

See, our desired band of 110 to 120, we are continuing to operate within that kind of a band as an intention. I don't see 117 to 119 as an improvement.

It is just that we are operating in that band, it is sometimes 117, sometimes 120, whatever, or 115. It could be anywhere between 110

to 120.

That's our targeted band at which we want to operate.

Got it. Thank you so much, and wish you all the best.

Thank you.

Hi, team. Congratulations on a good quarter.

Hi, Piran.

Hi, sir. Just one thing just as a clarification.

Is there any one-off opex from raising of USD bonds for the FCNR thing?

We have not raised bonds. There is some loan processing transactions, which are built in, yeah.

Got it. Also, just could you help me understand the NIM thing in totality now?

If you had not raised FCNR, our NIMs would have been at least 8, 10 bps higher? Is that a fair conclusion?

It's flat because you raised FCNR, and ex of that, that would be higher?

Piran, that is a slippery slope of calculation. All I can say is it would have, of course, been higher, for sure.

How much is a matter of what all assumptions you make. If this scheme did not come, doesn't mean no FCNR(B) would have come, right, in normal course of business.

All those are very complicated calculations to make. All I would say is, yes, has the FCNR(B) impacted NIM?

Of course, it has impacted NIM, especially the lending side of the leverage side has impacted the NIM. How much is a matter of what all kind of assumptions you make.

Hi, Jai.

Hi, sir. Sir, a few questions.

Sir, first, on gold loan, we have yields at around 10.4%. Now, if you can specify what is the usual average tenure of this product, because I believe the rates are fixed here, and how quickly or how easy or difficult would it be for you to change the rate in rising rate cycle, or you believe because it is a short-tenure product, it may not have any issue from the NIM accretion perspective?

Jai, if you look at overall structure of our book, it's fairly healthy. 33% of our book is fixed, 45 is repo-linked, and the rest of it is MCLR-linked.

We have a good mix of floating and fixed book in our balance sheet now. Gold loans are typically a one-year kind of a product, we don't see an issue.

I think this mix overall it's a fairly good mix for us to work with NIM in overcycles.

Right. No, sir.

I'm saying the yields on gold loan are higher than the blended yield. When the other floating rates yield go up in line with repo, do you think that this product can also see similar upward movement in yield, or this may not have because it's a fixed loan product?

No,

no. It's a fixed loan, but every month something matures, right?

It is the maturity will be repriced at the higher level. Yeah.

It is a one-year maturity product largely. We have a little bit of long-term loans.

Otherwise, it is a one-year maturity product, and every day some new loan matures, which will obviously be priced at higher interest rates if interest rates go up.

Right. No.

Sir, that is the precise question, sir. When interest rate were to go up, do you see a scope to increase the price?

Of course. Why would we not?

The only thing is, sir, there are a lot of competition from PSU banks which charge less than 9%. That is the background of the question.

They were always charging less than us.

Right. Okay.

Sure. Secondly, sir, on opex, right, apart from this ₹32 crore of ESOP provisioning change, how to look at the staff cost incrementally?

₹32 crores pertain to only this quarter or maybe some backdated? Is this the new normal for staff cost, or how to think about this, sir?

No, no. The 32 is the one-time impact of change in accounting policy.

It's a one-time impact of 32. Just to go back to your question, you asked others were charging low.

There were many people charging higher than us also in the market on gold loans.

So Right. No, understood, sir.

On this staff cost, one, ₹32 crore is let's say one-time.

Yes.

The rest of the base is reasonably the new revised base, right? That is the way to look at this.

No, it has a combination of two or three things. One is, of course, we are adding people and that is adding to cost.

As we are adding branches and people, therefore, it is adding cost. Second is that actuarial impact is there, and that keeps fluctuating a bit.

As interest rates rise, some of that will get written back in the next few quarters. That retirement cost will fluctuate a bit with the market.

Right. Sure.

Last question, sir, we had around ₹390 crores of bancassurance fee last year. What would be your rough cut impact of this fee and under the light of draft regulation, and how do you intend to sort of offset that?

Thank you.

Too early to answer that question just now because we have many options like changing the mix of products we sell, all of that. Yes.

Volumes can go up, and therefore, we have to see what is the impact. Is there an impact?

Of course, there is an impact. How much is something that we would get a better handle as we go, and of course, we must remember this is just a draft guideline yet, and we don't know what the final outcome will be.

Having said that, we will be in a better position over the next quarter or so to be able to estimate this better.

Right, sir. Sir, if I may ask the last question on ECL, I think last quarter you had mentioned that the impact is less than 2% of net worth.

I believe there is no change in that. Because the yields have hardened by 40 basis points, does that impact the ECL transition impact at all, or that less than 2% number was only for loan loss, and hence, that ECL impact is because of HTM hardening is a separate impact, right?

Yes, yes. We talked about the ECL trajectory of impact, and that doesn't change with this, yeah.

Right. Okay.

Thank you, and all the very best, sir.

Thank you, Jai.

Hey, hi. One question then it is.

Sir, on the gold loans, this quarter on quarter, the LTV has moved up from what used to be around that mid-50s to early 60s in a matter of quarter. Just if you can clarify what's happened in the quarter.

Just additionally, on that yield question, you also've seen an improvement in lending yield for the past couple of quarters in this portfolio. Yes.

Suggesting that you have taken some rate actions on the portfolio which I think you'll probably see for the next couple of quarters. Is this two assumptions right, what is happening here?

Mahesh, yes, 55 has moved to about 60 early 60 61 or so. Some movement has happened there, but having said that, we have also grown tonnage in the last quarter.

This quarter we have grown tonnage. Okay.

I would say it's a mix of things, and yes, we have taken rate actions which we are trying to get better yields on the portfolio.

Just to clarify, if you were to increase, I don't know, 100 basis points, you see sensitivity on the customer base or is the pushback is more at the field staff level rather than the customer level? What is your sense on that?

Mahesh, we play the fine balancing game between what NBFCs do and what the PSU banks do. Somebody asked this question earlier also, and we play the middle band, right?

We play the middle band where we try our rates are better than NBFCs, but they are better than the lowest-cost providers. This is a fine game to play, but we are able to do that.

Marginally, we keep pushing a bit to improve our rates there. There is no perfect answer to your question.

Harish, you want to add something?

I'll just add one more thing. We are also focusing a lot on income-generating loans, which typically they give us a higher yield also over there.

That's another context over there, that we move when you are doing agri with gold loan earlier. Now micro is gold loans also under the income-generating loan, which is typically a higher yield.

Which is a product we just launched in Q2.

Sorry, I didn't get that. You said income generation gold loans?

Income-generating gold loans. Yeah.

In the sense purpose of the loan is for productive purposes of generating income. That is a new classification.

RBI had come back with certain dispensation around that in the new gold loan policy. We launched a product around that in the last quarter, and that gives slightly higher yields, yeah.

Done. Thank you.

Thank you. Thank you, Mahesh.

Thank you, sir, and congratulations. Just two quick questions.

The first is, this quarter has been pretty

Hello? We lost you.

We'll

Hi.

Hi, good evening.

Thanks for taking my question. Sir, congrats on the quarter.

Sir, I just wanted to clarify on the opex, the other opex in the quarter. Do we have to look at it in conjunction with the higher fee also?

Is that what you were trying to say as in are the two sort of linked? Is it a processing fees and grossing that is happening over there, say, relating to channel expenses, some of that?

No, not materially. Some in the FCNR thing, there can be on the borrowing side some cost and the lending side some fees, but it's not material, yeah.

Okay. Is there any one-off then that asset in the fee line?

FCNR is not very material, you're saying.

Not material.

Okay. That's it from me, sir.

Congrats on the quarter and thanks.

Thank you.

Hi. Am I audible?

Yeah. Hi.

Congratulations on a good set of numbers. A couple of years back, I think we had outlined our strategy to kind of add financial services side, right, be it wealth or also kind of to tap the NRI segment, right.

We had mentioned that we had significant large exposure to NRIs on the deposit side, but not so much on the product side. I think there have been discussions and rumors about this Jana Finance and all.

That the two kind of don't seem to kind of go hand in hand. Just was wondering if you could share whether our thoughts on monetizing or utilizing the very strong NRI franchise remains a focus area, or if you could kind of share some more insights there.

Second, on initiatives that we have taken on the CASA side, which seems to have done significantly better in the last one year. If you could just share some thoughts on both the sides.

Thanks.

We remain steadfast on the fact that our NR franchise needs to be holistically covered, and one of the items there was building our wealth side of the business. We remain committed to doing that.

Coming to initiatives on CASA side, there is no one silver bullet on initiatives on CASA. There are multiple things that we have done to get CASA right.

Now we have got it right for last six to eight for six quarters or so, and we'll continue there are still new initiatives happening. All the initiatives, it is not my intention to discuss that on this call here.

I am assuming that that will be a long discussion.

Right, right. Sir, just under your aegis in Kotak, I think the ING Vysya merger happened, right?

It was a painful merger for a few years, I am sure so investors are kind of a little wary about this Jana Finance news that has been floating around. I'm sure you'll have best interest of shareholders, but these mergers have had they've kind of been very tough.

Thank you. Thank you for your advice, and I've taken note.

Thank you. Sure,

sure.

Thanks a lot.

Am I audible please?

Yes, Gaurav.

Yeah. Sir, two questions from my end.

First is, this quarter we've seen a pretty strong growth in our higher-yielding segments, right? I think be it unsecured, be it business banking, right?

Is it a fair assumption next quarter also, given the impact of the repo hike, our margins would probably the movement would be pretty positive? That's number one.

The second is if we could talk about is this growth sustainable in these segments, the momentum? Just one data keeping question on the staff cost and the other opex, if we could call out the change due to the interest rate movement.

That's it. Thanks.

Your first question was on the asset side. Of course, we have always called out the mid-yielding segments as the category of assets that we want to grow, and we had called out that in some we were successful and in some we were still trying to get that better.

A few quarters back, LAP was not showing the traction that we wanted, but it is now. Last two, three quarters you can see good growth.

Similarly, in personal loans, now for a couple of quarters we have built a traction. Last quarter when we came here, we talked about BUBs as a segment that we would like to build traction going forward, which you are seeing now.

Each of these are initiatives that we have put in through various quarters, and it's finally about executing those initiatives in the right earnest and making sure that we see the outcomes. That's what is happening.

Of course, margin, I already gave a guidance that we will stick to that guidance that we said, 5 to 6 basis point, not necessarily linear, but that kind of on an average that kind of improvement is what we are wanting to strive for. Growth guidance, again, I gave a specific guidance saying that

mid-teens

guidance, we'll stick to that. On staff cost, other than the ₹33 crore like we mentioned about the ESOP accounting change, yes, interest rate fluctuations do cause a difference to that retirement cost there, but that is something that we take in our stride, and we don't call out that usually as a variation.

It's too complicated to keep calling out that.

Okay. Sir, any one-offs in the other opex because of the interest rate fluctuations?

Nothing material.

Nothing material.

Okay. Okay.

Sure. Thanks.

That's it from my end. Thank you.

Thanks, Gaurav.

Hi. Congratulations on a good quarter once again.

My question is very simple. If you could share your thoughts on the roadmap to a 1.5% kind of an ROA, especially given that your asset quality is very strong, there's not much of headroom, and you mentioned that you don't want to kind of cut back on costs because those are necessary investments.

The onus basically is on the interest margin and a bit on the fee. Given this scenario, what kind of a timeline do you see for that kind of a target?

Madhu, if you just go back and look at our ROA four quarters back, it was close to 1 1%. We are today sitting at about 1.33.

There are liability mix actions, asset mix actions which have resulted in that, and fee growth options. Therefore, the execution on those fronts continue.

That's

You don't want to give any timeline for that kind of a target?

We have given you a guidance on ROA in the past that 3 to 4 basis per quarter is the improvement we want to strive for. That's the broad guidance that we have given even earlier, and we stick to that guidance.

Again, this may not be linear every quarter, but on an average, we will get there. This quarter we were 10.

Yeah. Got it.

Thank you.

Sir, thank you for the opportunity. First question is on your thought process on risk-adjusted margins, sir.

Given when we started this transformation, we had focused on mid-yielding books and that sort of kept the investor comfort on the trajectory of credit cost as well. Of course, this is in context of the rumors around MFI.

Want to understand if your thought process is still anchored around margins or it has been expanding to risk-adjusted margins? That is the first question.

We were reporting our risk-adjusted margins always. We were always focused on risk-adjusted margins.

Every quarter for the last four to six quarters, we have seen improvement in our risk-adjusted margins.

Yes, sir. Philosophically, you do get that you are anchored to risk-adjusted margins incrementally as well?

I don't know how to answer. I have shown you last six quarters that It's happening, right?

Proof of the pudding is in the action, right?

Yes, sir. No, no.

Of course, the context is if you are willing to add more risk for more yields and that's why the question was not what is in the for the past.

Already we have said that we are keen on mid-yielding assets, and Does mid-yielding assets add some risk? Yes, it does add some risk.

Does it give a improved yield? Yes, it does give an improved yield.

The question is whether the net of the two whether it works or not. Mid-yielding assets has been our focus.

No,

no, sir. That's what we started the question with.

Mid-yielding is what all of us are very comfortable with. The question was with high-yielding assets, where we are doing very good work in credit card.

Why are you asking hypothetical questions?

Agreed.

I am telling you what we have done.

No, no, sir.

Let's move on, please.

Sure. Sir, second question is on the opex piece.

While you have guided on the cost to income in the past, but I think what Kunal was also saying, on cost to assets, this is quite a meaningful increase. Especially when our asset growth has accelerated this quarter, even if we do assume if we are even holding the ship tight on our core PPOP ROA, QoQ movement seems hardly, fairly 2, 3 basis points, especially when our credit costs are below normal.

That jaw doesn't seem to have played out this quarter. Or am I misreading it?

If we remove treasury income and looking at the core operating jaw, sir.

Right. We have always been saying that this is a tightrope walk that we will do.

We are working towards improving incomes and therefore, being able to invest more through higher opex, and that remains our strategy. We are very conscious about what kind of costs we incur and what kind of income improvement we can get.

Like we guided that, we had said that we were operating at about 54-ish on cost to income, and we said we will continue to operate around that, in and around that, a few basis points here, there. You assume please that we will operate at around that kind of a cost to income for the time being.

Understood, sir. Just last question on the other opex.

Is there any upfronting at all for branch expansion on the other opex, not the employee cost?

No. Branch cost cannot be upfronted.

No. Nothing of that kind.

Great, sir. Thank you, and all the best.

Thank you. Thanks, Jayant.

Hi, sir. Thanks for taking my question, and congratulations on a great quarter.

My question is actually on Thank you.

On? Hello?

Sorry, we lost you.

We lost you.

Looks like we lost him. Yeah.

wait for a couple of seconds for him to join back, just in case if he does.

Hello?

Let's bring him back later.

The next one. No,

Okay. All right.

Perfect. On time.

Thanks, Ryan, for all the help. Thank you.

Thank you everyone for joining us. Happy festival time to all of you, and thank you very much for the interest and in the company.

Thank you. Thank you.

If you have any further questions, please feel free to reach out to us offline. We'll be more than happy to assist.

Wishing you and your families a very happy Navratri. Have a wonderful weekend ahead.

Thank you.