Thank you so much. Good evening, everyone, and a very happy new year to all of you.

Thank you for joining us today for a Q3 earnings call. Before we begin, a quick housekeeping note.

In the last interaction we had mentioned that we would try and avoid scheduling earnings calls on Saturdays, and we are glad we could keep this promise this quarter. As always, the entire senior team is here on the call with us today.

We'll begin with the opening remarks from our MD, then Venkat, sir, ED, would take you through the quarter, the main numbers actually, and after which we'll open the floor for the questions. Given the number of participants on the call and the time available, we request everyone to restrict themselves to one question each so that we can accommodate as many participants as possible.

With that, I'll hand it over to our MD, Manian, sir. Over to you.

Thank you, Saurav. Before Venkat walks you through the numbers in detail, I would like to make a few introductory remarks about some of the important events during this quarter.

First, refresh. This was one of the twelve strategic themes that we had listed in February last.

As you are aware, we took on board Vidya Balan as brand ambassador and launched a media campaign Savings Ki Vidya. We took the next steps forward in this quarter.

From decades, our customers discovered us by walking into the branch or by speaking to our people by experiencing our values in person. Today, the first interaction often happens on a six-inch screen.

The first judgment is formed not in our offices but in our pixels. We are evaluated not just on rates or products, but on experience, simplicity, and the quiet confidence with which we project in those early moments.

That was the rationale for our brand refresh exercise. This is not a rebranding.

At its core, this refresh stands on three ideas: pride in a 90-year legacy, while actively shaping the next chapter. Retaining the colors of the brand is indicative of that.

Openness to evolve how we work, communicate, and collaborate while remaining anchored to what we stand for, make the new brand look familiar yet fresh, retaining the connect with our existing customers. Ownership: this is not a management's brand or a marketing's brand; it is the bank's brand carried forward by every one of us every day.

At the heart of this refresh, a new visual expression of who we are, the Fortuna wave, is a new visual expression of what we are. It brings more fluidity and freedom of expression to attract newer audiences.

The Fortuna wave represents three things that define our relationship with all our stakeholders: authenticity, prosperity, and togetherness, what we call APT. These are not aspirational words; they describe how we conduct ourselves with our customers, our investors, and our employees every day.

The intent behind this refresh is simple and deliberate: to enhance recognition, to sharpen differentiation. Importantly, the refresh will go beyond digital identity.

Also with this brand refresh, we have finalized our new branch design and aesthetics. We will gradually roll out that change as well.

Confidence in our direction is also reflected in a significant development during the quarter. In Q3, we received board and shareholder approval through an AGM for the proposed strategic investment by Blackstone.

The transaction has also received clearance from Competition Commission of India. This is a strong validation of our strategy, governance framework, and execution capabilities.

Beyond strengthening our capital base, it opens up avenues for unlocking business synergies and expanding access to global institutional expertise, reinforcing our long-term growth trajectory and deepen stakeholder confidence in our bank's future. Against this backdrop, our Q3 performance reflects a steady strengthening of underlying fundamentals, improvements in margins and ROA, reduction in funding costs through improved CASA mix, growth traction on chosen asset segments, and sustained stability in asset quality are actually outcomes of disciplined balance sheet management and consistent execution over multiple quarters.

We are beginning to see the benefits of stronger liability franchise and a calibrated shift in our asset mix towards segments that offer superior risk-adjusted returns. Cost discipline and prudent risk management remain central to how we operate and will continue to operate.

While competitive intensity remains elevated, our focus is deliberate: consistency over volatility, quality over headline growth. This positions the bank to deliver sustainable performance across cycles.

With that, I will now hand over to Venkat to take you through the numbers of the quarter in more detail. Thank you.

Thank you, Manian, and good evening, everyone. Thank you for joining us to discuss our performance for the quarter.

I trust you have had a chance to review our investor presentation and disclosures. Let me begin with a quick view of the macro environment for the quarter.

Inflation remained well contained, with headline CPI moving up 1.33% in December from 0.71% in November, reflecting some bottoming out in food prices, and the print came in below market expectations. The key driver was a sharper-than-anticipated decline in vegetable prices, while core CPI edged up.

This was largely driven by higher gold and silver prices. When we exclude these volatile components, underlying core inflation moderated to about 2.4%, indicating that broad-based pricing pressure remains subdued.

On the policy side, liquidity conditions remained supportive following the rate cut in December, which helped anchor interest rate expectations. In summary, the macro environment during the quarter remained broadly constructive, notwithstanding the ongoing global geopolitical uncertainties.

Inflation was low, underlying pressures subdued, and the operating environment remained relatively stable. This provided a supportive setting for us to focus on execution, balance sheet discipline, and prudent growth.

Now coming to our performance for Q3. Q3 was a quarter of strengthening fundamentals and measured progress.

We delivered 1,041.21 crore in net profit, representing 9% sequential growth, driven by sustained margin expansion, disciplined cost management, and continued improvement in asset quality. More importantly, these outcomes are the result of structural shifts in our balance sheet, not short-term action.

On the balance sheet momentum, as at the quarter end, total business stood at 5,053,364.49 crore, growing at 3.71% QoQ and 11.4% YoY. Deposits closed the quarter at 2,97,795.82 crore, up 3.07% QoQ and 11.8% YoY.

More importantly, CASA balances grew at 6.59% sequentially and 18.86% YoY, and the CASA ratio improved to 32.07%, an increase of 106 basis points QoQ and 191 basis points YoY. This, we believe, is amongst one of the best in terms of CASA growth in the industry.

This steady retailization of our liabilities is materially improving the durability of our funding profile, and it is now clearly reflected in our margins trajectory. Gross advances closed at 2,55,568.67 crore, up a very healthy 4.46% sequentially and 10.94% YoY.

Again, importantly, the emphasis growth continues to be led by the segments which we have consciously prioritized. Commercial banking grew by 5.35% QoQ and 26% YoY, reflecting sustained traction in the mid-market and medium yielding lending.

Business banking grew by 3.82% QoQ, which, as showed signs of turning around last quarter but was muted at the beginning of the year. This gives us the close to 4% growth in this quarter gives us belief that the momentum will continue in the next quarter and going forward.

Retail banking grew by 2.84% QoQ and 14.76% YoY. Gold loan, which is another one of our medium yielding portfolio, grew 12% YoY and 9% QoQ, despite a calibrated downsizing of a portion of the book in line with recent regulatory guidance.

In addition to BUB, LAP is another portfolio which expanded quite strongly in Q3 at 4.47% QoQ, with growth momentum expected to sustain and improve in the coming quarters. Corporate and institutional banking grew at 8.59% QoQ and 14.46% YoY.

The mix of growth remains intentional. We are expanding in segments that deliver superior risk-adjusted returns while maintaining underwriting discipline.

On margins and core income, our NII for the quarter was at 2,652.73 crore, growing 6.31% QoQ and 9.1% YoY. NIM expanded to 3.18%, up 12 basis points QoQ.

This was supported by a reduction in our funding costs, cost of deposits, cost of funds and cost of borrowing, in addition to improvement in yield on investment and the CRR cut impact. The improvement in margins reflects the combined impact of liability mix optimization and asset repricing.

As stated earlier, this was a quarter in which we had highest ever NII, highest ever fee income and highest ever OP. Our fee income stood at 896.47 crore, growing at 5.23% QoQ and close to 19% YoY.

Fee growth remains well distributed and continues to strengthen the quality of earnings. Our cost to income ratio improved to 53.92%, down 12 basis points sequentially.

During the quarter we also added six branches, aligned with our calibrated approach to network expansion. On asset quality and risk, our GNPA declined to 1.72%, an improvement of 11 basis points QoQ, and NNPA improved to 0.42%, down 6 basis points QoQ and at an all-time low.

Our provision coverage ratio, excluding technical write-offs, increased to 75.14%, and we continue to maintain around the 75% levels. Credit cost for the quarter closed at 0.47%, improving 3 basis points QoQ.

These trends reflect both portfolio seasoning and sustained focus on recovery, and give us confidence in the resilience of our book. Our slippage ratio for the quarter was 0.7%.

As a result of all the above improvements, our ROA increased to 1.15%, up 6 basis points sequentially, and ROE improved to 11.68%, an expansion of 67 basis points QoQ. You will notice that despite the 125 bps rate cut from last year December to this year December, we have margins have expanded, our ROA is also better than last year December levels.

EPS for the quarter was at 16.79 rupees, up 8.89% sequentially. Also during the quarter, we increased our stake in our associate company, Ageas Federal Life Insurance, from 26% to 34% through the acquisition of 3.24 shares at rupees 30.45 per share.

The transaction was completed on November 25 after receiving all necessary approvals from RBI and IRDAI, and it strengthens our long-term strategic partnership in the life insurance business. To conclude, Q3 reinforces the fact that we are building a more stable, margin-led and buoyant franchise.

Our priorities remain unchanged: strengthening the liability franchise, secondly growing in chosen higher quality lending segments, and thirdly maintaining control on cost and asset quality. While competition remains intense, our focus remains on risk-adjusted profitability and consistency of outcomes rather than just pure headline growth.

The balance sheet that we are building is more granular, more resilient and better positioned across rate cycles. Thank you, and we will now open it up for questions.

Operator, let's start. I already see a few.

Hello, congratulations. My first question is on your outlook on margins, right?

You already expanded margins by 24 bps over the last two quarters. Where do we see margins from here on, given that the growth in mid and high segments is already very strong?

I guess it has stabilized from here on. What is your outlook on margins for the next two to three quarters, assuming no further rate cut, and even for the longer term, where do you see them stabilize?

My next question is in your fee income, on the distribution income, if you could throw some light, that wasn't very strong this quarter. Those were my questions.

Right. Hi, Mehruk.

Just to talk about the NIM expansion, it's a journey. I don't think we are at the end of that journey, and as we keep changing the mix of our liability profile, as our CASA percentage grows and our medium-yield assets continue to grow faster than the low-yielding asset side, I think we hope to continue this journey for many more quarters to go.

Of course, there will be immediate quarter, you will see the impact of the last rate cut play out. We have to keep that in mind in the next quarter.

Last part of the last rate cut will play out in the next quarter. Of course, we have to try and mitigate that as we have tried in the last few quarters.

We will attempt to do our best. I don't think that journey is anywhere close to peak of what we want to get.

Your second question...

You did. You usually have a T plus one repricing, except for new loans, right?

Part of the repricing would have played out this quarter or no?

Yes. For a month it would have played out.

The rest of the two months it wouldn't have played out. One third of that impact would have played out this quarter.

Two thirds of that impact will play out in the next quarter.

Okay. Thank you.

Okay.

On the distribution side, we do have a seasonality every year. Our insurance income, distribution income, is usually better in the second quarter than in the third quarter, usually.

Having said that, there was also GST impact in the last quarter because commissions were impacted by the change in GST structure. Last, also the product mix.

When the markets are buoyant, customers tend to choose ULIP products, and there the commission percentages are lower. It's partly reflective of that.

In terms of volume, our traction continues to remain good.

Okay. Thank you so much.

Thank you.

Thank you.

Hi, sir. This is Akshay.

My question is on asset quality. How do you look at asset quality for MFI segment going ahead?

If I reverse calculate your MFI credit costs, they come out to around 10-11%. How should we expect this number to move incrementally?

On other segments, they are performing very well. The credit cost you have disclosed to be around 29 basis points.

Assuming you build moderation in MFI credit costs, how should this blended credit cost number move? Should we expect it to be much lower than your 50-plus basis point guidance?

Or are we expecting some deterioration in other segments? That's my first question.

Secondly, on the loan mix. While you continue to state that you will be focusing on the mid-ease segments, any quantitative number on how the mix should settle down maybe in three, four, five years?

How much will be your high-yielding book, medium-yielding book, and low-yielding book? Anything on that?

Let me take the second one. I'll ask Venkat to answer the credit cost question, but I'll take the second one.

The way I look at it is this is again a journey. It's too early to put a stable number to that.

Our attempt is to keep working towards growing the medium-yield book faster than the high-yield book. Remember one thing, that we have still not changed the composition of the high-yield and very high-yield portions, because that is the microfinance.

My card, you can see good growth in cards. Other high-yield segments we have not pushed the accelerator on, whether it is personal loans or MFI, because we have been waiting for pushing the accelerator on that to get more comfort on the potential credit costs of that.

I think this journey is, we are too early in the journey to tell you how it will look three to five years later. I think the attempt is to keep working towards changing this mix favorably.

How much it will reach, where it will reach, too early to say. Clearly our attempt is to improve yield on the asset side by changing this mix.

On the credit costs,

at the beginning of the year, and Q1 also we said the full-year guidance we gave 55 to 60 basis points. Right now for nine months we are already at 55 basis points.

We should end the year somewhere between 55 and 50, say 52, 53 basis points for the full year. For the quarter the credit cost was 47 basis points, of course lower than last quarter.

We will continue to see the credit cost getting better in Q4 as well.

My question is, while MFI book is down...

Hello? Hello, am I audible?

Yes.

On the MFI, yeah, if you have seen the trajectory of delinquencies, it's coming down every quarter and the credit cost is also coming down. We are seeing it come down and we expect even Q4 to be lower than what we have seen in Q3.

We should see the improvement being reflected in the MFI as well. Now have we seen a full recovery in MFI?

We don't think so. We are still cautious in terms of growing the MFI business, and it's being grown selectively.

We'll watch for one more quarter before we decide how much to press the pedal on MFI.

Just to add to that, in the medium term we should also remember that as we build the medium-yield asset, the credit costs on those will be higher than the low-yield asset, right? For example corporate credit costs are close to zero, whereas there will be credit cost coming out of the...

As of now we are not yet giving significantly different guidance compared to where we are today. We will evaluate that guidance as we go forward.

Understood, sir. Just one more question on how is your MSME asset quality progressing?

Any impact you are seeing from U.S. tariffs, or you are hearing anecdotally from the industry?

No. Venkat mentioned earlier, if you see what we call the BUB segment, the lower end of MSME, we have actually begun to grow that in this quarter with comfort on the credit side.

Actually our credit costs are well in control and the portfolio is absolutely, we haven't seen any deterioration at all. In the commercial banking, which is the higher end of MSME, again our portfolio quality remains robust.

We aren't seeing any stress in that portfolio. Actually both these segments this quarter costs are lower, credit costs are lower than what they were last quarter.

Understood, sir. Thank you.

Thanks, Akshay.

Thanks for the opportunity. I had four questions.

The first one, on the growth.

Is this better?

Did we hear you correctly? You have four questions.

I had four questions basically. The first one is on the growth.

On the growth, you're clearly restructuring the mix towards the medium-yielding segment, which partly is reflecting in your margin performance as well. When does this restructuring largely get done?

You reach your target mix and we can expect the bank to grow in line or maybe faster than the system? That's number one.

Second, if I look at the reported margins, they are up 12 basis points sequentially, but the lending spreads are broadly flat. If you could just provide some walkthrough of where this reported NIM improvement is coming from.

Third is on CASA. This is again second quarter of good CASA traction.

Last quarter we saw some momentum was good. It sustained this time, and this quarter even CA has picked up.

Just wanted to check on CASA specifically, any period-end chunky balances that may get potentially reversed, or this is real organic improvement in CASA as well that we saw in the quarter. Fourth and the last one, wanted to get a sense on when do we expect the first tranche of fund infusion from Blackstone coming in?

Would it be in full year FY26 or maybe 1QFY27? Thank you.

Thanks, Rikin. Rikin, this quarter our asset growth is 4.5%, close to 4.5%.

I don't know when you say that we need recover to industry levels, I don't know which industry level you are talking about. I don't have an answer on that.

No.

Yeah,

I was talking.

I am assuming you are measuring momentum by the last quarter.

Fair enough. You're saying that this momentum should broadly sustain going ahead as well?

I will qualify it partly. As we have seen, all our chosen segments, our run rates are quite good, and this quarter, of course, we got very good growth on corporate as well.

Maybe the 8% kind of quarterly growth on corporate may not sustain, but even if you drop that lower, our run rates will be fairly healthy, right? That is on the asset growth.

On the NIM, I'll ask Venkat to take it, but before that on CASA, yeah. Now on CASA, first of all, there are no chunky stuff there.

It is all reasonably granular, but I will just requalify it by saying that there are usually, of course, bump-ups that happen in the quarter due to nature of the business, but we should. That is why we disclose our averages through the quarter.

If you see the average growth, growth in averages also are quite healthy. Therefore, if you remain focused on the averages that we report, it will tell you that it is reasonably secular.

CASA growth, of course, there is no one silver bullet we have used. It is a factor of multiple things, including better productivity from branches, newer products.

It's a combination of various things, and this journey, of course, continues. We can do more, and we will continue to focus on that.

On the Blackstone, of course, we are awaiting final regulatory approvals on that. We are hoping that this quarter we will get, in the last quarter we will get done.

That's our expectation. We'll keep you posted with the actual development on that.

NIM walkthrough again, my broad comment will be NIM again is no one single silver bullet. It is a combination of multiple things that improve our NIM.

We work on granularly on multiple things to make sure our NIM improve. I'll ask Venkat to take the details on this.

Yes. In terms of NIM, like Manian said, several factors help.

On the downside, yield on advances has gone down by nine pits, but on the upside we have had several factors. One is cost of deposits has come down, or cost of borrowing has gone down, CRR cut to some extent has come, better yield on investments as compared to last quarter, and our own average own funds.

A combination of these five, six factors helped us in terms of getting to 3.1. Several things, and we have to continue to work on all of them.

Got it. Perfect.

Thank you, Manian and Venkat, sir.

Thanks.

Hi, team. Congratulations on the quarter, and thanks for keeping your promise of not keeping it on the weekend.

Just getting back on the NIM question, how much of your TD repricing is left?

As we had earlier indicated, from the cycle started, we think it is about 14 months on an average. 14 months it takes to fully reprice the term deposits, and that means we have about four or five months to go

two more quarters.

One and a half more quarters, yeah.

Okay. That answers my question.

Secondly, just in this quarter also, the yield decline of 10-12 bits QoQ, now two-thirds would have come because you have immediately passed on the repo rate cut. What led to the other, eight, nine bits of decline?

The

total decline is only eight bits, or rather nine bits. So

yield on advances. Yeah, 8-86 to 8-97.

On NIM basis, it's only nine bits. Drop in yield on advances.

I'm going by your reported numbers, 8-86 going to 8-74. Now out of that fallback two, three bits would be due to the repo rate cut.

Incremental business also happens at lower rates, right? As the rate drop, incremental business, for example, NCLT repricing would have happened on other assets, non-repo assets.

New business would come at lower rates because markets do pricing drop in rates. New corporate business would have come at lower rates.

All that also happens, right? Yes, the yields do go down overall.

Of course our costs also go down. So

that this NIM improvement this quarter, going back to Rikin's question, is essentially balance sheet management, where we must have reduced liquidity on the balance sheet, more loans on the balance sheet, and that's why we see this 12 bits benefit. Is my understanding correct?

When you say balance sheet management, CASA improvement, CASA percentage improvement has an impact on cost of funds.

Cost of deposits go down,

yeah. It is a mix of both.

Borrowing cost is not balance sheet management. Borrowing cost reduction is an actual cost reduction.

It's a mix. Like I said, this is not one silver bullet which is solving it for us, right?

We have to work on multiple parameters to improve NIM, and we'll continue to do that.

Understood. Okay.

Lastly, in terms of your mortgages and your auto loans book, now those have been fairly stable for the last four, five quarters. Just wanted to get a sense of when we will start seeing these segments pick up.

Right now, on the home loan, particularly home loan, as you can see, we have stepped up the pace on our LAP book, as you can see the growth rate in the LAP is reasonably healthy this quarter. On the home loan side, we are not finding the risk-rewards attractive just now.

We feel that the pricing is below the optimal levels that we require, and therefore, as you can see, we have not grown that aggressively. We, of course, continue to serve our existing customer needs, but we are not going out and acquiring aggressively at those kind of rates.

These are long-term commitment. This is a very long-term product, and structurally you can lock the balance sheet on poor rate economics for a long time, and therefore we are cautious.

When we get comfortable, I don't have an answer as to when we will change that one. We will continue to focus on areas where we think the risk-rewards are good.

Auto, hopefully we can. We are working towards—we have made some structural changes internally to make auto work.

Auto, we hopefully get back sooner. On the home loan, I will wait and see how the situation evolves, the competitive intensity evolves, and how the pricing in the market evolves, to see whether we can press the accelerator on that.

The way, Piran, I see is we have opportunity to grow the other assets. As you can see, many of them are growing in their twenties, and we will continue to focus on that to build the balance sheet.

Got it. Just lastly, quickly, branch openings have slowed down across this year.

Why is that?

As earlier we have addressed this issue. We have been working on multiple things on the branch side, like the phase branch initiative that we have been doing.

We are reimagining the branch operating model, and we wanted to concentrate on tackling that before we push the accelerator on branch openings. We also wanted to—we were working on the brand refresh, branch format, reformatting our actual physical layouts of the branches, branding.

We have also gone through evaluation of branch network in terms of the efficiency of the network, whether we need to relocate some branches, whether we need to review some branch sizes. Various things were in the pipeline.

We wanted to get a better handle on all that before trying to push the accelerator on the branch numbers. You will see better branch traction in the quarter four already.

Got it. Okay.

That's it from my end. Thank you and all the best.

Thank you.

Yeah. Hi, good evening, and congratulations for the quarter.

A couple of questions. The first one is,

can you get closer to the mic, or? You are not very audible.

Is this better?

That's better. Yeah.

Thanks. The first question is on opex.

I just wanted to check that, although now seems you're anyway going to grow, maybe lending, etc., which is a more granular business. What would be the run rate of opex?

Would it grow at this 4-5% QoQ range, and that means annualized high teens maybe, or does that taper off at some point of time?

Abhishek, hi, this is Venkat. On the cost, as we have indicated earlier, the cost-to-income ratio, which has changed, is to do with both, management of cost and the income traction.

This quarter it's down because we have had strong income momentum. Our guidance, we have said that over a two- to three-year period, it will be range-bound in the 53 to 55, because we will be reinvesting the sales and distribution technology and all the other initiatives.

At the same time, our endeavor is to ensure that we try and get to a positive Jaws, so that the alignment of cost is in line with the income growth.

Yeah,

so we had said earlier that it is a tightrope walk we will do. We will build incomes, and we have always stated that.

Our guidance has been that don't build in benefits out of that, if we get that, it's a bonus, but we will remain very focused on making sure that we are efficient. Just now we don't want you to— our guidance is don't build efficiencies out of that in the short term.

We'll see in the medium term.

Exactly, because if there is a build-out, things you will need to invest.

Yes.

Okay. The other one is on your three segments of your loan mix.

One I want to check: gold loans, are you seeing any kind of yield pressure or pressure to raise LTV, etc.? Or is the market largely rational at this point of time?

Hi, Ashit. The pressure on yields on gold loans in general would be there because of the falling interest rates and some of the PSU banks operating rates.

The gold loan book has grown substantially. We have actually maintained our yields on the gold loan book.

The challenge on LTV has actually not happened, because our LTV has actually come off. If you look at from last quarter to this quarter, the LTV has actually dropped, and this is not just for us, industry-wide phenomena, because of the increase in the gold loan prices.

We are not going to push growth by targeting only LTV. This is where it is.

At this point in time, I would say that the yields are being maintained and managed, and growth has been reasonably good for us, and LTV pressures are not there at this point in time.

In fact, the gold loan growth rate of 9% is in spite of what Venkat mentioned in his thing, running down of our wholesale lending kind of a book we had, which is not allowed under the new regulation. If you gross for that, it's another 2-2.5% higher.

it's actually almost 19% Y-o-Y, and if I look at from the beginning of the financial year, it's actually 22%.

Okay. Most of all, it would be price, not really tonnage?

The growth?

The growth. Basically,

our tonnage has not gone up this quarter. Somewhat price.

And

on LTV, we are at 52. So

from LTV perspective, we are at

52.

Sure. Perfect.

The personal loan book, NFIU indicated that you're still looking at the environment and where the credit costs will settle. Is it the same in the personal loan book, or are you seeing any kind of comfort there and you could start growing?

I know you indicated that you're still watching, but what is that metric or indication that would make you start growing that book?

No, compared to MFI, we are more comfortable in the personal loans space. Yeah.

We are—I would say we are in baby steps in terms of actually we did the highest personal loan disbursement in the last 12 months in the last month, actually in the month of December. We are trying to build that, but slowly, baby steps, I would say yes.

We have more comfort in that space than the MFI space just now. We are just now focused that product on our existing customers alone.

We haven't gone out to acquire customers on that product, which is something that we are evaluating. We'll see.

The economics of that must justify. We are looking at the options there.

Sure. In terms of book growth potential that start contributing, please incrementally?

The personal loans?

Yeah.

See, just now it is a small book. Even if it grows at a reasonable pace, I think it'll take time for it to really make a dent on the overall scenario.

It's a very small book, as you can see this, 3,000-odd crore book, 3,600 crore book. Let's start building it, then we'll see the impact over a period of time.

Too early to start talking about an impact arising from that.

Got it. Thanks.

Thank you, Sheshan.

Hello. Hi, thanks for the opportunity and good evening everyone.

Hi.

Hi.

I have two questions. One is on the yield and the rating distribution of your corporate exposure.

How are you looking at that? If you look at the slide 2021, and so the mix of A-rated corporates gone down in this quarter by nearly 500 basis points.

I understand, of course the bank is working on improving the yield, but how are you looking at this equation? Any desired number that you would like to reach?

Any color around this?

We had very pointedly that we would not be focusing flat on the low-yielding one. Even corporate banking, typically Indian, the maximum price extraction from the bank.

We have consciously let go of certain large assets, which has made a difference. In terms of asset quality, I can assure you that we are not going down the risk spectrum to build the book.

We will be more granular. It won't be corporate, it will be geography, but not directly in the credit standard.

It's just not focusing so much on the triple-A names because reciprocity doesn't come from there, neither does the yield come in from there. The other thing which will lead to further spread, how we strengthen our business, we ensure that they are either very securely asset-backed, or there is proper cash flow trapping over there.

Right. Just on this, at the same time we have also reported a pretty strong growth sequentially.

While we have let go of this asset, but still we have reported a 6% growth. Does that mean that the growth otherwise was running in double digits in corporates this time?

Nitin, you have to see it in the context of the last one year, we have also grown this book slow, right, over a period of time. The restructuring of this book had impacted the growth of this book for the last three, four quarters.

Actually they have not grown very fast. We had started focusing on mid-corporates, but obviously it takes time for mid-corporates to build, and I think now we are able to see the progression towards that.

Yes, but some opportunistic, still some assets have happened in corporate, which are recent yield, and therefore we have also done that. Like I mentioned earlier, don't go by the 8% you see in this quarter in that as a steady-state run rate of growth for that segment of business.

Right, sir. Is the unwinding more or less over, or do you expect more unwinding to happen?

No, unwinding is over. We have to now build.

Okay. So

over in the sense, see, like I said, all these are process, some long-term loans sitting there, which you can't easily unwind. It's always a process.

By and large, I would say, yes, over.

Right.

Also keep in mind, we also very selective in many cases, and very opportunistic. If we do see opportunity at any point of time, we will do that.

We look at from our balance sheet perspective, our ROE return point of view, reciprocity. This is something we are doing as a conscious call.

Okay. The other area that I wanted to check upon is the margins.

Last two quarters we have reported a 24 basis point NIM expansion. Do you think that margin will be a bigger driver in ROA expansion, as you alluded that even going forward the margins will continue to expand?

Will this turn out to be a bigger driver in our overall books, and on which the margin expansion or ROA expansion is going to be based?

NIM is obviously one of the important drivers for ROA expansion. There is no question about that.

Having said that, yes, can fees also add to that? Of course there are other things that will add on to that, and margin also is both an asset-side game and a liability-side game.

I would say all three, liability side mix, asset side mix, and fee improvement, all three need to drive our ROA trajectory. Having said that, I just want to caution you that for the coming quarter, Q4, our endeavor will be to maintain NIMs around the current level, given the fact that we have impact of the last rate cut to be passed, the two months.

Right, got it. Thank you.

Thanks so much. Those are my questions.

Hi. Thanks for the question.

First on fee income side, maybe at the discussion earlier you alluded to the overall distribution income, but if we look at it, maybe the overall fee income growth or fee income to asset, where do we expect it to settle over next 12 to 18-odd months once all the factors play out? Because it still seems to be settling closer to 1% even in this quarter, and that's been largely flat.

Kunal, I don't think we are—I will say that again, in some other cases, I don't think we are looking at settling. Wherever we are is not the place we are settling at.

Clearly there are levers that we have. This quarter we will launch our wealth proposition in the market, and that's a business that we will grow over the next few quarters and years.

Our trade and forex has upside possible, which, I don't think we have yet got the trajectory that we want to. There is potential to grow that.

Our cards business continues to grow well. That adds to fee income going forward.

These are things that are still to play out. I think we are far from saying that we are settled at a 1% level.

We want to see upside on that, and we will drive progression, upward trajectory.

This would be visible over, maybe four to six odd quarters. Maybe this wealth management and card business and all, that will be driven over a period?

Yes, as you can see, even in the last two quarters we have seen some trajectory, right? It has moved up to 1% from 90 points at 92 that it used to be.

There is traction. You see, hopefully you will see it on a continuous basis.

You not necessarily have to wait for four to six quarters.

Sure, got it. Yeah.

Thanks. Yeah.

Hi, good evening, team. Congrats on the quarter.

Two questions. Firstly on LCR, what is the LCR as of this quarter, and what is the impact for us from the RBI agent regulation from April?

Positive, negative? So

our quarter-end LCR was about 114%. Average was about 127— 123.

123 average was 123. We expect about 5 to 6% impact out of the new regulation from RBI, approximately.

This is a negative impact?

Yes.

Okay. Then what does that mean for your growth?

Broadly we talk about 1.2 to 1.5x nominal GDP, right? Is there any change to that after, taking into account both these things?

Firstly, you have capital next year, then is the drag on of this LCR norms as well. How to think about the growth trajectory?

Param, it's also a function of opportunity and the external environment. Having said that, we will continue to remain focused on media plating segment growth, and as you saw last quarter, four and a half percent advances.

Assuming all things equal, we will try and stay around same levels, and so high teens is what we are working towards.

High teens loan growth? Okay.

That was around 60. 16 for next year is what you're talking.

That part is clear. On this corporate loan growth bit.

I think you mentioned, there is, there is a growth sequentially. What is, and we can see it in the RBI data as well.

Is this just substitution of bond markets primarily, or is there some capital limited lending here? Could you give some color on this corporate?

Mix of it, basically a part has also come from the fact that bond markets have priced it higher, and bank lending had come on in line. That was one part of it.

Therefore you stay in the right. There's also been an increase in requirement of both working capital by corporates.

If you look at the data also, the net offtake from the corporate sector is also increased. That has also led to it.

A little bit of capital I want to spend for a little bit of competition. Quality has actually continued.

Fair enough. Thank you.

Yeah. Okay.

Yeah,

thank you. Just one last question.

Again, this has been asked before, but if you would just explain some margin walk, right? I think that slide nine, the top left chart that you're showing, it's showing yield on loans and cost of funds are down broadly the same.

Yeah? There is a TRR positive we can see, four, five basis points, which we are aware.

There is a 12 basis point improvement, right? How exactly do we...

Param, I'll take the soft line after the...

Yeah. Thank you.

Congrats on the quarter again.

Thank you.

I said congratulations on the quarter. Sir, you spelled out on NIMs and loan growth trajectory.

If you can share your aspirational ROA over the next two years, sir, that would be much...

Sir, Jai in our February document we had shown some, we had given you a guidance on how to look at our ROA over the next two, three years, right? I don't think that changes.

I think we are just now in the execution mode on the same strategic plan, and that continues to be your guidance on what we think our ROA is.

Sure, sir. Sure.

Lastly, sir, if you have the quantifiable number from RBI trade relief measures, right? RBI had given this window of dispensation for exporters.

If they want, they can take moratorium. Do you have any quantum of such requests where people have taken moratorium?

Very negligible, insignificant, negligible. Negligible.

Yeah. Sir, if you can quantify the labor code impact, have you done any higher provision on gratuity, etc., on the new labor code?

It's stated in the results, right? The results, point number eight captures the quantum, and we have discussed, partly discussed.

Sure. Thank you so much.

It's a very small amount. It's not a material amount, but it is disclosed.

We have provided for sure. And

this is done for now, right? you need not remove for the...

this is one-time and it is done all. There is no recurring impact.

This is the direct impact relating to our employees. Now, people we work with, they may have an impact on, in the sense our contractors and suppliers and partners, they will have this impact, and that can have a knock-on impact on us over a period of time, but those are not quantifiable risks.

Sure. Thank you very much.

Thank you very much, sir, and all the very

best.

Thank you, sir, and congrats on the quarter. Just touching upon the margins again, right, it seems to me that, largely the premium improvement is from balance sheet management, right?

We have reduced the proportion of liabilities, overall LDRs have gone up, borrowings have come down. I think that's the main contributor, apart from the TRR cut.

Now my question is, sir, how sustainable is this CFO, sir? You did mention about, margins probably being steady in the next quarter.

How would we achieve that? Surely from the loan mix?

Because then surely we, normalization in terms of liability growth, right, in the next quarter? That's my first question.

I thought we already answered that, that we continue to work on the liability mix, asset mix, all of that, and therefore all that will be mimetic, and that's our effort. Yes, the repo rate cut will play out fully in the next quarter.

There will be a negative impact for that. We'll have to look at how we can mitigate that.

Secondly, sir, on the TDB rate cuts, right, the first tranche of repo rate cuts that happened was followed by system-wide TDB rate cuts. What is your sense on further TDB rate cuts?

Is that possible?

Yes and no. There are, in fact, after the last rate cut, the drops in rates, of course savings rate did not drop at all.

Term deposit rates, very moderate cuts have happened, not as much as the repo rate cut, but lower cuts have happened, but not fully reflective of the repo rate cut. Yes.

Increasingly, as the market, after the last rate cut, actually the bond markets have hardened, rates have hardened. The opportunity to cut rates was lower post the last rate cut, and that's true for the entire sector.

Also, as said earlier, we also want to focus on growth and keep the momentum on growth going, and to achieve that we have to ensure that the deposit growth keeps pace. It may not be wise to cut the rates subsequently.

One second.

Thanks. Just if I may squeeze one more, sir.

On the provisions side, right, we have been buffering up on the standard asset provisioning. It will help if you could just run us through as to what are you thinking or how are you planning in terms of ECL.

We have been showing up standard asset provisions. Does it mean that we would continue to see credit costs of about 50 basis points moving towards the ECL, or then because improvement in asset quality, we will see credit costs coming down.

Credit cost, I said earlier guidance will be around 55-60 bps. We are still waiting for the final guidelines from RBI.

Based on the draft we have worked out the impact. We'll have to see how that plays out.

There are certain transitions which the industry has asked. If that comes through, the impact will be quite minimal, and for which we have in the past indicated what this.

So,

but as of today we are in line with ECL, or we are a bit short?

Little bit short.

Understood. Perfect.

Thanks a lot.

When you say short, you mean from credit cost perspective?

That's right. So, fundamentally—55-60,

it will cover. Fundamentally, we don't think ECL changes the credit cost dramatically.

Over a period of time, it should align with credit cost. We cannot have an accounting mechanism which does not reflect the actual credit cost, right?

We don't believe that ECL mechanism is—There may be a one-time impact of the... but even for that,

transition

period which RBI is giving over, they said they'll do it over a few years. You won't see any material bump-up on this.

Understood, sir. That's it from my end.

Thank you so much.

Hi, good evening. Congrats on a great set of numbers.

Turnover, the income trends, we have gradually increased to 1%, but how much further improvement do we foresee over the next couple of years? Just a broad range is sufficient.

I don't have a specific guidance on that. Having said that, our effort, I just mentioned that there are levers that we have not yet used well: card, trade and forex, all of that has to still play out.

We are trying to get those things done. Upward trajectory we would hope to get.

How much is time will tell.

Makes sense. Also, unsecured portion of the book, has most of the stress burnt out, and how do we see the growth on that front?

Are we going to push growth on unsecured?

On the, we have already been pushing growth on the organic card side. Organic cards, our own cards, we are already growing it reasonably fast.

In the last few quarters, we have seen our book grow reasonably fast from that. On the fintech partnership cards, we are still cautious on that.

We are not growing that fast enough. PL, I would say, we are making baby steps, as I mentioned earlier.

On microfinance, we are still cautious. That's the current status.

We'll be happy with the, as you said earlier, a high teens growth of around 16% in the NPA.

The overall growth. That's overall.

Okay. Thanks.

Thank you so much.

Thank you.

Thanks, Pranjal, and thank you everybody for your time and for the timely connect, and if any case you need further clarifications, you can reach out to us, happy to connect after the call. Thank you so much and have a great weekend.

Thank you. Thank you.

Thank you so much.