Thank you, Ryan. Good evening, ladies and gentlemen.

I'm very happy to announce the Quarter 1 financial results. This quarter was replete with geopolitical uncertainties, rising inflation, and supply chain disruptions.

Our strategy in these times, as I had mentioned in my Q4 results call, was to stockpile customer liabilities, work on improving productivity, focus on portfolio quality, optimize capital utilization, and finally resulting in improving profitability. Let me take you through the key financial highlights.

Total deposits have grown by 20.06% YoY, and total advances by 17.06% YoY. Our NIM at 3.35% has increased by 15 bps over the last year, primarily on the back of lower cost of deposit and improving recoveries.

Our growth in core fee income, from ₹134 crore in Q1 of last year to ₹175 crore in this quarter, 31% growth, has helped us offset a one-time treasury income impact of ₹85 crore between these two quarters. On the cost front, we have hit a historic low of 2.42% cost to average assets for the quarter.

Remember, Quarter 1 is when you have the salary increases, traditionally it's a higher cost quarter, and we knocked off 10 bps from the cost to average assets of Q1 of the last year; from 2.52%, we come down to 2.42%. Even quarter on quarter, we have our cost to average assets has decreased from Quarter 4 to Quarter 1.

If you have to dig into where the reduction of cost is coming from, you'll see that our number of employees is currently at 11,554, which is lower than the 896 people we had 2 years back in June 2024. We have grown somewhere around 18.5% year on year for 2 continuous years, and the number of absolute number of employees in the bank is actually lower.

As a consequence of this, our business per employee is at an all-time high of ₹11.06 crore. If you are to look at the portfolio quality, it has consistently improving.

Last year, I told you that we were at the 7-year low from a yearly basis. Our GNPA currently is at 2.43%, which is 55 bps better YoY and 2 bps better QoQ.

Net NPA, on the other hand, was at 0.84%, 38 bps lesser YoY and 5 bps less QoQ. The credit cost for the quarter is 26 bps.

Our provision coverage ratio is a shade under 80%, and our recovery and upgrades as a percentage of fresh slippage is 92%. We continue to make optimal use of our capital.

Our Tier 1 capital, including profits for the period, has increased to 14.9% from 14.26% of Q4. Finally, the bottom line is that the for the quarter has grown 36% to ₹213 crore, which is the highest ever quarterly profit in the history of our bank.

In fact, in each of the last 4 quarters, in Q2 of last year, that was the highest ever, followed by Q3 of last year which was highest ever, followed by Q4 of last year which was highest ever, and so far Q1 is the highest ever. We So we sign off the quarter with the highest ever quarterly EPS of 6.62 and a book value of 198.12.

Last but not the least, our ROE for the quarter for the first quarter is 13.61%, which is a 2.05% improvement over Q1 of last year. What gives me some happiness is that the bank has shown the ability to give time-bound guidance and show the consistency to meet it within the time frame.

The guidance on cost to average below 2.5%, GNPA below 2.5%, NNPA below 1%, ROE > 13.5 have been met in Q4 and repeated in Q1. As you can see, we as a bank thrive on consistency, predictability, and sustainability.

With this, I thank you for your patient listening. Now, operator, if you can open the floor for the comments, observations, and clarifications.

Thank you.

Good evening, sir. Thanks for the opportunity.

My first question is on margins. Yield on advances declined by 20 bps QoQ.

Sir, please could you elaborate on the key drivers? With the loan mix gradually moving towards business loans and we have the benefit of residual deposit repricing as well.

How do you see yields, funding costs, and overall NIMs evolving for the rest of the year? That was my first question, sir.

Right.

Our yield came at 10.75%, which is primarily due to the product mix that we went for in Q1. As you have seen, gold was the driver.

The big movement has come from gold, which comes at a slightly lower yield and substantially lower cost and fairly minimal credit cost. We would see that as the year passes, in Q2, Q3, and Q4, you will have higher yield mortgages contributing more.

Over the next three quarters, yield increase will come from a higher product mix of the mortgage sourcing that we do and the secured non-gold products that we will do.

Right. If you could share the proportion of LAP versus retail home loans even on a flow basis and if possible on the stock basis?

Currently, we are at the 70-30 mark. What used to be a 75% 25% cut is now looking like 77-23 on business loan and home loan.

That will continue. We are happy with the 70-30 kind of cut.

Probably it will be a steady-state 70-30 unless there is something dramatic which happens which makes us change this skew again.

Sir, secondly, on the gold loan slippages, if you could provide some color and how should we see this going forward? It's now set 7.3, right?

I know it's all secured, but still, if this will continue or is it going to come down by next quarter?

If I remember right, it's 5.3, not 7.3. I think you said 5.3, right?

On the total slippage of overall, you're seeing that the non-gold slippage is considerably better. We are at 1.52%, which is very well within the norms.

On gold, I would tend to see that slippage is not really indicative. You look at the last 8, 9 quarter actual NPA stock of gold loan, it is fairly within the 20 to ₹30 crore mark, even the book has increased significantly.

On a close to 7,000 or maybe ₹7,500 crore book, you're having an NPA of 30%, and credit loss which is even negligible, not even worth mentioning this call.

Right. In terms of the growth trajectory going forward, what's your outlook for the gold loan growth in light of the recent softening in the prices?

How do you see mortgage portfolio performing over the coming quarters with currently it's at 1% QoQ, on year-on-year 10% YoY?

On gold loan, we have taken a conservative view where, even though RBI permits LTV up to 85%, we have been conservative, and we give a maximum of 75% LTV. If you walk into our branch, 75% is the maximum LTV that you will get.

Despite being conservative and being less competitive than what other players in the market, we're still able to grow the book sufficiently. If you notice, gold had a 17,000 crore ₹17,000 per gram value in middle of the quarter, it has come down to 14,400.

If you were to look back and with the benefit of hindsight look at it, I think it's a good call. You're able to grow to your ambition and still not to have to do any margin call.

It helps the business considerably. I would tend to think that the gold as a percentage of overall percentage of our book would be somewhere in the 20% to 22% mark.

On mortgages, traditionally Q2, Q3, and Q4 are the months where the disbursals significantly goes up. One way of looking at it is if you were to compare our disbursals of ₹1,500 crore with ₹1,100 crore which we used to do in the same quarter 1 year back, that's a 35% increase in disbursals.

If you continue to increase the disbursal by that kind of a number, you will see the benefit flowing into the balance sheet growth as well.

Very well, sir. Sir, my last question is on fee income.

Was the decline primarily seasonal in nature with low disbursement in 1Q?

We had a ₹101 crore treasury income in Quarter 1 of last year. This year, we've got ₹16 crore.

We had to make up ₹85 crore of shortfall, and we made that through core fee income, which is repeatable in nature.

It declined on a QoQ basis. That's just seasonal, right, because 1Q is a seasonally weak

Third-party distribution in Q4 is higher. Also, the processing fee from loans, which are higher in Q4, is the reason why Q4 to Q1 will be less.

If you were to compare the Q4 to Q1 delta with the previous Q4 to Q1 delta, you'll find that that is much more in our favor for this year.

Thank you very much, sir. Thanks a lot for answering all my questions, and all the best.

Thank you

very much.

Thanks for the opportunity. Am I audible?

Very well, Chetan. How are you doing?

All good, sir. Thank you.

Sir, my first question regarding the CASA ratio. How do you expect the CASA ratio to evolve going forward?

As we can see that in Q1 FY '26, it was around 23.32% and currently it stands around 21.65%. What's the strategy to improve in the coming quarters?

I want you to look at the cost of deposit of the bank when the CASA ratio was 20 22% in Q1 and the cost of deposit today. Okay.

Despite CASA decline, you're seeing that our cost of funds actually has come down from 7.18% to 6.75%. Okay.

In my mind, it is good to have CASA ratio going up. Specifically CA, our CA YoY growth was 5% only.

I think that's a clear area for improvement. CASA doesn't really reflect the truth as much as cost of fund does or as cost of deposit does.

The way we look at it from management perspective is how do you bring the cost of deposit down, where one component of course is CASA.

Correct, sir.

One more, sir. Just a request from my end that during the preparation of the IC report, I tried to get in touch with the concerned team, but the earliest appointment available was around 45 days later.

If possible, could you please guide me to the appropriate point of contact whom I can reach out to for directly and quicker response for a better coordination?

Certainly. We'll also tell you what the blackout periods are so that there is no surprise in that.

Right? That's the least we can do.

Sir. Thank you.

Right.

Hi. Questions, one is last quarter, you had indicated that the headroom to maintain margins was reasonably okay for '27.

If you can just comment about this. The second question is on, while you indicated mortgages tends to be quite slow on disbursements in the first quarter, even the YoY numbers doesn't look particularly strong.

Is it a choice on margins to defend the margins that this choice was taken, or is there some actions on the ground that you're seeing which is making you to grow slower?

Hi, Mahesh. Sorry, didn't recognize your voice.

Okay.

Sorry, I'm outside. Yeah.

On mortgages, no, intentionally we are not slowing down. As in it's not to improve the margins that the growth is not moving in.

Consciously, we have decided about a year back that we're not going to do any further DA in mortgages. The DA book will always be run down.

It will never be replenished because we don't see the reason for that. Currently, it's all organic sourcing, better yield, much better portfolio quality, and considerably better ability to do cross-sell.

That's the reason why we're seeing the momentum happening. On growth, the real early indicator is the disbursal.

If you were to see the delta in disbursal, you're seeing a 35% increase in disbursal between Q1 of last year and Q1 of this year. If you continue the same momentum, by the end of the year, you will see a very, very different growth path on the balance sheet growth.

We're not seeing any considerably higher closures, foreclosures, or part payment coming in. If we maintain the similar level of disbursal, probably mortgage will outpace the overall growth of the bank as well.

On the first question, which is on margins, which you had indicated last quarter that will be stable for the year, how are you seeing it for this year now?

On margins, if you see, it's a 90-day Quarter 4 versus a 91-day Quarter 1. You will see a 1-day ka impact coming through.

Our product mix was such that it was more gold loan in Quarter 1. Probably that will not repeat itself in Quarter 2.

You will see the mortgage product increasing its presence. You'll see more of agri, higher yield products having a higher amount of sourcing and impact on the portfolio.

We will probably see a upward curve in the interest yield curve. Having said that, 14 bps is the reduction that we managed on cost of deposit between Q4 and Q1.

Be very happy if we continue with that 14, but realistically, I would expect something like a 7% to 8% decline. If you hold the portfolio to the standards that we are keeping to right now, there's no reason why NIM will not increase in Q2 and also going forward.

Perfect. Thank you.

You're welcome.

Yeah. Hi, sir.

Good evening, and congratulations on a good quarter.

Hi, Jai.

Yeah. Hi.

Sir, we used to have actually a bit of a adverse seasonality in Q1, right, in terms of growth, in terms of slippages, and margins also. If I see this quarter, it is less visible in terms of the growth is flattish QoQ, but interest on advances have grown up decently at 4%, slippages, while they are up QoQ, but they are not dramatic change.

Cost has also held up. Any changes that has happened in the business, or that is something different which has happened?

The usual seasonality is not there. That is the observation or question.

We've given a guidance with a clear timeline on on multiple metrics of the bank, including cost, NPA numbers, and ROE. Right?

We said and it's not like in the next 6 to 9 months, it is exactly in the year 26-27, 13.5%. We also said in the year 27-28, 14.5%.

We are we are ensuring that we have calibrated growth, and calibrated growth of the right right quantity, right quality. You're seeing the efficiency improvements that we have implemented a year, year and a half back is giving the kind of results that we we want to get.

Possibly this this should continue. An ROE of 13.5% in in in this year should happen without a hockey stick kind of movement.

Right? Every year every quarter, that kind of movement has happened, and the bank is geared up for that.

We don't give a guidance unless we are reasonably sure of it. That's why in September, we gave that guidance.

We could see what is coming in, and over a period of time, that guidance will be taken with more and more credibility if you have the kind of performance that we have been having for the last four, five quarters. Otherwise, there is really no no no dramatic strategic change there.

Sir, secondly, on your co-lending book, right, we understand there was change in the co-lending regulation, etcetera. Hopefully that is done.

How to look at co-lending portfolio growth going ahead this quarter? Of course, it is a relatively weak, but how to think about as we go to FY '27?

Expect it to go to 15%. The guidance we've given is that co-lending will not exceed 15%.

We have a room of about 2.5%, 2% more to go. That is an opportunity which is there.

We could go up all the way. Personally, I prefer organic lending improvement, and co-lending can be somewhere maybe at that 12.5% to 15% kind of range, somewhere in between this.

Don't want it to go far below this, but definitely we don't want to be kind of relying on co-lending for our growth. Organic will pick up.

Co-lending will not be at 12.5%, it will be somewhere around the 13% to 14% range. We have the luxury to go all the way up to 15% as per our internal ceiling and benchmarks are concerned.

Sir,

on gold loan, the growth is very strong, 100% almost 100% YoY, 35% QoQ. Just to understand the risk framework, how do you, let's say, price the loan?

Because there could be daily variation. Do you do some moving average?

Do you do some minimum floor or maximum ceiling, etcetera? How much percentage of the gold loan book could be, let's say, above a 75% LTV?

Not at the blended level, but individual cases where or what is the risk management that you have for gold loan?

Jai, you can test it for yourself. RBI allows for consumption loans, up to 85% LTV.

Okay? For business loan, there is no upper cap.

You can go 110% also, 120% also if you want to. These are new rules applicable from Jan 1 or April 1?

1st April onwards. You can call up any of our branches or walk into any of our branches, and not one branch you'll be able to get more than 75% despite RBI allowing 85%.

Okay? We're able to grow.

You don't necessarily have to go all the way to 85%. You're comfortable having a buffer there.

Look, we're happy with the kind of growth we're getting at a maximum LTV of 75%. Now that may change tomorrow if there is intensive competition happening, that can change.

As of now, we have taken this call. With the benefit of hindsight, I think it's a good call because when gold price was 17,000 per gram, had we given 85%, it would have become 100% LTV today because 85% of 17,000 is 14,400, which is the gold price of yesterday.

We'll be doing margin calling like crazy and spending a lot of management time, will not be NPA hopefully, but it'll be a lot of management time wasted on margin calling. We remain conservative.

Having said that, for co-lending, we go up to 85% as per the RBI norms apply. What the originator source can be at 85%, but internally within the bank for organic sourcing, we don't go above 75%.

That is all right, sir. The question is if hypothetically

Sure. Thank you so much.

Yeah. Hi, sir.

Thanks a lot for the opportunity. My first question is the disbursements which we see within the MSME segment has been falling on a YoY basis for the last couple of quarters.

That's true.

What actually is happening there, or can you just highlight that?

Yeah. On MSME, because three things we are working on which we need to improve.

I think all the three are interrelated. One is current account, two is MSME overdraft facilities, and three is trade finance.

As you can see, our current account growth has been 5% YoY. SME has degrown partly because we stopped doing TReDS, which is a very low-yielding book.

Fundamentally, getting the current account traction going and improving SME are the critical focus area for us. It will also help us in getting the trade fee income.

That disbursal number going up is critical for us. A lot of work is happening on it.

You're not seeing the output on it yet. We are also not seeing the output of it yet, but I am sure that maybe in Quarter 2, definitely in Quarter 3, that numbers is increasing.

We have put in higher quality people. We have opened up new sectors.

It is a change that is bound to show itself in output in Q2, definitely Q3.

Sure, sir. Sure.

Sure. My second question is, first, how much of the deposit repricing is left or all the costs have largely bottomed out?

Just squeezing one more quickly, how much room is there within the opex to asset ratio to bring it further down from 2.44%? Of course, we have done a commendable job past six to eight quarters.

If I look at the next four to five quarters, then what is the headroom? Thanks, sir.

See, keeping to the mandate as well the guidance of 2.5%, we should come below that. Obviously denominator increasing at similar kind of levels will help bring the cost down.

Traditionally, Q1 is where you take the hit of salary increase, etcetera, with the denominator coming in later. There's a good chance that we'll be able to maintain or slightly improve the cost to average assets going forward.

Your first question on

Deposit repricing.

Deposit repricing, yeah, Q2 also has a bit of it. There is some tail of the old repricing still continues.

One of the good benefits of having a long-duration term deposit is that you continue getting the benefit for a longer period of time.

Sure, sir. Thanks a lot, sir.

You're welcome.

Yeah. Hi, sir.

Thanks for taking my question. Sir, just two.

First, on the SME, I know you gave the explanation earlier, but the TReDS thing, are we building that up? I thought we already had a decent infrastructure in place for that.

Is that the main reason for the rundown of the book? Secondly, even in the CV, I know CV is not a big proportion, but there also we have seen some rundown.

Is that done to maintain asset quality, or is there any other reason as such which I'm not aware of? These are the margin bit.

Yeah. Sorry, I'll answer the first one, Punit.

We don't have a CV team at all. It's a rundown book.

We don't incrementally source anything. It's just a pure-play rundown book.

300, ₹400 crore will be there. How much is that?

₹350 crore, yeah. As long as it doesn't create a problem for us from NPA, there's no attention going into building the book, and we have no intention also to keep building the book.

It's a historical legacy which we are just ensuring that we run down without any incremental loss. On the MSME, my response remains the same.

It's an area where we want to grow. We have not really gotten to the level of where we want to get it to yet, and that's where the opportunity lies for us.

We certainly think that once we get the execution right on that, Today, we are incurring the cost, not getting the benefit. Q3, I can clearly see we will be getting the benefit of the incremental investments we've done, both on people and technology, opened up new sectors.

Right now, just grinning and bearing it. We'll see maybe even Q2, you'll see an improvement happening on the MSME, like I told Parth of 360 ONE.

Got it, sir. On the margin front, driven by the cost of fund decline, we are seeing margins remaining stable.

On the yield bit, is it fair to assume that once we see the SME book picking up or any other segment which you could highlight, we will see some upliftment on the yield because this deposit repricing, I guess, a couple of quarters more, right, or we have any more leeway? If you could quantify, how much bps we have left for deposit repricing?

Just trying to ascertain what the trajectory will be going forward.

Look. You're getting it wrong.

Deposit repricing is a natural phenomenon. There's a lot of effort going into the bank to get deposits at a lower rate, fresh deposits getting at a lower rate.

We are not relying only on deposit repricing happening automatically. The rates that we currently give are such that we were at one point in time one of the highest deposit-paying banks in the country.

Today, that's changing. It is not just automatic rollover renewal of old high-cost deposits which is coming through.

There's a lot of effort in branch banking to get a lower cost fresh customer into the system as well. That's the first point.

The second is, without changing anything else, the sourcing profile when it changes when you see the disbursal of mortgages going up, and that's bound to happen in Q2, you will find that the kind of yield that you get on mortgage is far higher than the kind of yield you get on organic loans. It'll definitely add to the improvement of the yield.

If you keep the portfolio quality at similar levels or improve it slightly, you continue to get a NIM benefit going on it. As a bank, NIM improvement will be primarily driven by cost of fund reduction and maintaining good-quality portfolio.

I don't see us wandering into higher yield segments chasing NIM and then potentially suffering the consequence of that 1 year down the line or 1.5 years down the line. Clearly the strategy is, bring down the cost of deposit, keep the portfolio quality momentum going, and that would be the way the NIM improvement happening by changing the product mix.

More of LAP, more of mortgages by itself, and so SME frankly is a ₹1,800 crore book. It cannot alter the destiny of the bank.

A ₹29,000 crore mortgage book certainly can.

Got it, sir. Thank you so much, sir, for answering.

You're welcome.

Yeah. Hi, sir.

Thanks for the opportunity, and congratulations on a good set of numbers. Hi, Aditya.

Thank you very much.

Sir, first one clarification on cost of deposits. Q2, you see a drop considering the repricing which is left.

Going forward, from Q2 onwards, do you see that remaining stable or it should increase considering, if I look at your last two, three months, you have increased our peak deposit rates by 25 to 30 bps, and with tighter liquidity in the system, do you think deposits would increase from Q2 onwards?

Aditya, good question. I want to tell you this.

In Q4, we grew 21% liabilities. Okay?

In in Q4. In Q1, we have grown 20%.

We were very clear that, even if it means that you have a higher carrying cost, it is important to get money now than money later. I'll tell you I'll tell you us a five trendlines.

Our cost of deposit over the last 5 quarters was 7.12, 6.96, 6.86, 6.84, 6.71. These are times like 6.84 was done in a time in Q4 when most banks were scrambling for deposit.

In Q1, most banks were scrambling for deposit. We still got 20% growth with and we brought down 14 bps on the cost of deposit.

The best way to answer the question is by doing it and by doing it consistently. That's what you're seeing.

If you can grow by 20%, if you can bring 14 bps down on the cost of cost of deposit, and keep your top 20 well within the 7% mark which you kept for us without ruining the profile, and you do it repeatedly quarter after quarter, especially Quarter 4 which is traditionally a very difficult quarter, Quarter 1, you would have seen how the various competitive banks have performed on deposits. If you can keep that going, and there is merit in in our squeezing the the cost of deposit even further going forward, and it's not just from repricing of deposit alone.

That helps, but that that's not the only it's only a every every passing quarter, the importance of that is being less and less and less.

Understood, sir. Also, sir, if I look at your CD ratio, it has come down, it's now around 80% to 81%.

Is there room for that to increase going forward?

Yeah. We're at 80.49% right now.

You'll see there's a possibility that asset growth could outpace liability growth going forward. We're comfortable with that because you're sitting on stockpiled money.

Got it. Sir, just two small questions.

Do we see any benefit from the SCRR scheme launched by RBI, and secondly, any impact of ECL on us?

Yeah. SCRR, we are keen on it because they are individual deposit, they are long-term deposit, and maybe they are slightly better than cost neutral.

To that degree, it's not a bad thing. We are focused on it.

As far as ECL is concerned, there are two things I want to tell you. You've seen how the GNPA, NNPA movement is.

You've seen a credit cost of 26 basis points. You've seen that the trendline of how all the three have been going for the last 7, 8 quarters.

For ECL, clearly recency matters, the fact that we are secured-heavy matters, and also the fact that every quarter, we are adding ₹6 to ₹7 crore to a floating provision, which is now ₹210 crore, from which we are not even dipped into it even during COVID or demonetization or whatever else, never in the lifetime. That gives enough buffer for us when ECL goes live in April.

Got it. Sure, sir.

I'm done with my questions. Sir, thank you.

Thank you, Aditya.

Hi. Very good evening and thanks for taking my question.

Hi, Krishnan. How are you?

Absolutely fine, sir. Thank you.

A couple of quick questions. The asset quality that you just mentioned, your GNPA has been trending lower, your NNPA has been trending lower, and this is five quarters.

This is about a year since the tariffs were introduced by the US. Right?

Does that surprise you that why are MSMEs so resilient? It's not just you.

This is something that we see across the banking system now. Just wanted your thoughts because you have been in a MSME-dominated bank predominantly.

Just wanted to understand your thoughts on what's keeping the MSME engine running. That's one.

The second, I'll probably come to once you answer this, please.

See, primarily the MSMEs that we look at is from the service and not from manufacturing. Okay?

As far as service were concerned, we clearly not seeing any impact of tariff or inflation so far. I was more concerned about inflation.

I had expected that the bounce rates or the slippages would increase because petrol price were to increase by ₹15 over a 2-month period, it has to result in squeezing of the wallet somewhere. One of the things I can tell you is that we have moved up the ticket size.

We did some mortgage DA in 2024, and that really bit us badly. It was small ticket, secured lending, secured DA that we did from some originators, and that is not kept us in good stead.

At that time, we decided not only will we not do any DA on small ticket, but increase the average ticket size significantly. Partly, I would say that it's because you've gone to a slightly more resilient customer.

Even when I speak to other CEOs of other companies, and or credit bureaus, there is no indication of any big problem coming in the kind of segments that we deal with.

Right. What seems to be anchoring the inflation because, even in services, including banks and financial services, I think the general cost of doing business is now higher than what it was say 6 months back.

Right? What is it that's keeping inflation at an edge now?

I just hope it's not the loan supply. There is supply.

There is no restriction of credit. Right?

I just hope it's not this supply of credit. Otherwise, you're seeing when I go for customer visits, etcetera, I'm finding increasing shrinkflation everywhere.

Both the height of the cup and the diameter of the cup is reducing for every cup of chai that you're having, whether in rural India or suburban India. Just to give you an example.

There is some bit of pressure, but that's not really reflecting in the financial system. Frankly, we have an option to pick and choose.

You can choose the right kind of customers, the demand across, and you're able to command your ability to choose. That's why it's not reflecting anywhere, but I genuinely believe that petroleum price increase will have a ripple effect on multiple other costs.

Got it. My second question is about your NIMs.

You mentioned NIMs still has some headroom or should I say the cost of deposits has some headroom on the way down. Is this despite the hike in incremental cost of funds, because what you expected 6 months back is a very different environment now,

right?

Do you see and the RBI is quite stubborn with rates, they're not letting go on rates, there's no EBLR benefit coming through for banks yet. Right?

How are you so confident about NIMs going up in this environment?

See, I think the answer lies in inefficiency. As a bank, I think we have been giving a higher rate than what is required for the kind of growth that we had for a decade.

We were putting more money on the market than what was required, and that's the honest answer. One way of looking at this, if you were there in the Investor Day presentation, I spoke about it.

The difference between our rate and the

rate The card rate.

Yeah. That delta is decreasing, and that is good enough for bringing down the cost of funds and cost of deposits.

Even after the reduction, there is enough for the avaricious, greedy customer to come to us because 45 bps over what some other bank gives is also good money. You don't have to give 65 basis points.

You don't have to give definitely not give 120 basis more than what the biggest banks are giving. The movement from 120 to 70 is helping us in the cost of funds, and cost of deposit and cost of funds.

Any reduction thereon is still enough in our pricing to attract good customers. In a sense, I'm kind of shooting myself in the foot when I'm saying this.

There is that opportunity, there is that efficiency improvement that we can do. The whole theme of the bank for the last 3 years I've been MD, CEO has been about improving efficiency in terms of productivity, in terms of cost of funds, in terms of capital utilization, in terms of output per person.

I really think we are a very generous company earlier. Now we are being a bit more leaner, meaner, fitter, and that's reflecting in the kind of bottom line that you guys are seeing for the last 4, 5, 6 quarters.

Got it. Thank you.

That was very helpful. Thanks, and all the best.

My pleasure, Krishnan.

Good evening. Thanks for taking my question, and congrats on the quarter.

Hi, Param. Thank you very much.

Yeah. Hi, sir.

First question is on the cost to asset. You are at 2.4% You are already doing better than the medium-term target that you set for yourself.

Can we assume we are very much or near the bottom here, or are there more efficiency gains that we can see? That's first.

Yeah.

In the last quarter, I've said that I would expect the number of people increasing from 11,500 to somewhere around 13,000. I still hold on to it.

We probably will be increasing people because for all the talk on digital, we still require feet on street in increasing the sales volume. Some bit of the efficiency improvement will get consumed by the incremental staff salary.

I would tend to think that we would be under the 2.5% guidance that we have given. We will try and keep it within the 2.45% kind of mark for the full year.

Great, sir. Perfectly clear.

Secondly, sir, some of the mid-sized banks have called out sort of a lending rate sort of pressure on the gold loans. If I can understand what is the say broad yield on your gold loan portfolio, and is there a pricing pressure you're seeing there say led by public sector banks that could say hurt your margin?

Yeah.

Look, see, when I ask the sales folks, they will always say there's humongous pressure. Not a single salesperson will ever say there's no pressure.

The fact of the matter is, and you can check it out, like I told Jai Mundhra earlier, you call up our branch, you walk into our branch, you will not get more than 75% LTV, whereas the bank next door or the gold loan company next door will give you 85%. And 10% is a lot of money.

If you're able to grow the way we are able to grow without giving 85% LTV, right, and keeping LTV down by 10 10 10 10 percentage points, why would you face a pressure? There is enough in the market.

Maybe we haven't seen that pressure coming in, either pricing pressure coming in or the market pressure coming in. If we do, then we'll probably revisit how we do the gold loan business.

If you see Q4 Q4 and Q1 both, we haven't seen too much of pricing pressure or LTV exposure pressure coming into us. From an organic perspective, I am not talking about co-lending at all.

I'm talking about our own book.

Fair enough, sir. If you are comfortable sharing, what is the broad portfolio yield on your gold loan?

We don't

give product-wise, Aditya. No worries.

We don't we don't we don't. Okay.

Thank you so much, and congrats once again on the quarter.

Thanks, Param. Thank you very much.

Hi, sir. Thanks for taking my question.

Hey, Vaibhav. How are you?

Yes, sir. I'm fine.

Sir, my question was regarding with the branch additions and branch growth vision that we've been having. I have seen that we have seen good number of additions over past few quarters, though Q1 was flattish.

Going forward, what would be our vision for that, and what would be the markets we would like to penetrate going forward?

Can be another 20 branches this year. See, we're not very branch-focused for our growth.

Maybe 500 would be a good number to have at the end of the year, slightly more than that. At least for the next two three 2 to 3 years, I don't see branch being central to our growth story.

Where will the 20 branches come in? Mostly second, third branch in the existing cities which are doing well.

Increased penetration in existing neighborhoods would be the way to go. Otherwise, proportionately, more of people increase than branches increasing.

Got it, sir. Thanks a lot.

You're welcome.

Hi, sir.

Hi, Vaibhav. How are you doing?

I'm good. Looking a bit ahead, your tenure is till April of 2027.

Has the bank board indicated anything about an extension? If the board decides to offer an extension, what would be your willingness to accept it?

Secondly, any update regarding the fund raising plan of the bank for the current financial year?

Yeah. Has the branch spoken to me?

No. Has the board spoken to me?

No. I think it's a bit too early.

What my personal choices are, I've been with this bank for 19 years. I can work for another 19 years in the same bank.

I have the energy, willingness, and I got a great team which you're working with. No two ways about it.

Again, it's a board's call, RBI's call. That's a simple answer to your question.

With regard to fundraise, you're right. 14.26% was at Tier 1 capital 3 months back.

Now that has gone to 14.9%, right? If you were to look at 1 year back YoY, our capital adequacy has gone up from 14.20% to 14.90%, right?

Overall, if you were to look at Tier 2 included, CRAR has gone from 16 16.66% to 17.03%. That's very weird because all of banking is an industry which is very guzzling capital.

We are in a good space controlling RWA. The reason why you want to have capital is not to conserve capital, it's to expand on it.

I think the model is more or less proved, right, that we can run a secured book of where 13.5% definitely, and next year you will see 14.5%. With that model comes into place and we demonstrate that, look, it is very much possible to run a 13.5% to 14.5% kind of ROE book keeping it secured, the kind of small-ticket, secured, granular assets that we have.

Then the whole idea is how do you get incremental capital for the next phase of growth, maybe what is good enough for the next 3 years. Last time we raised capital was 8 years back, 8 9 maybe 9 years 8 years back.

For the next 3 years, what is required, we'll take it up. There's no urgency, but we are open.

We're having conversations. We had a AGM where an enabling resolution was passed for a ₹2,000 crore, of this ₹1,400 crore of Tier 1 and a total of ₹2,000 crore capital raise.

That has gone through pretty smoothly. There is obviously, with the kind of consistency that we're bringing in, there is interest.

The timing, quantum, and pricing will be decided by the board.

Thanks a lot, sir.

Thank you, sir, for the opportunity.

Hi, Devam. How are you?

Hello, sir. Hi.

Sir,

firstly on the non-interest front. Given that our sort of fee income is partly liability-linked and we have seen a very strong deposit growth, plus there is a potential of higher advances growth during the year given the disbursement run rate and the existing CD ratio, why could one expect the current outperformance of core fee income in the first quarter to only extend and grow in the remaining part of the year, and also any branch-level intervention or initiative we have taken to enable this as of now?

Look. By definition, core fee income is something which is replicable and recurring in nature.

Okay? I'll tell you what is working well for us, what can work better for us, okay, what can improve.

Mostly core fee income is driven by third-party distributions and processing fees. Q1 usually is lukewarm in terms of asset disbursal.

We expect that to improve in Q2, Q3 going forward. Processing fee, by extension of logic, should go up.

Third-party distribution, Q4 usually is a great quarter, and Q1 is a very sleepy quarter. We've managed to kind of change that.

Okay? That's a big mover because usually 4 months' worth of output happens in Q4, and 2 months' worth of output happens in Q1.

We managed to kind of change that Q1 behavior. That also, logically speaking, we should see an improvement happening in Q2 and Q3 because that's the natural flow of things.

The area where we need to improve a bit more is trade finance income. It is tied to how well we do current account in SME, and if you heard me speak to the earlier folks, either you can call it inefficiency or you can call it an opportunity.

Getting the current account SME right will, by force of nature, improve our trade finance. That is recurring income, that's core fee income.

That I think is a real big opportunity. The other two, I think we're doing fairly well, and we'll continue to do fairly well.

Trade finance, how well we build it up, which will also partly address our current account issue and partly address our SME momentum, is one area where we're focusing on. We're putting a lot of effort, not seeing great results, but we're patient about it.

Things don't happen overnight in retail banking. Putting the effort, you sow now, you reap maybe after three, four either years or quarters.

Sir, and any branch-level initiative or intervention that you have taken that seems to be working well on this front?

There's huge number. There's nothing called a branch, there are 480 branches, and each branch is different.

It is not a one-size-fit-all. Some just go gangbusters on gold loan, some are fully term-deposit-oriented, some are practically current account.

It really depends upon what kind of market it is, what kind of competition is there. The sum total of that is what you see as the output coming in either in the balance sheet or in the fee growth, or even in the asset growth.

It's different horses for different courses.

Finally, sir, we do recognize that you have done a very disbursement in this quarter, but at the same point of time, there seems to have been a high rundown as well. Any thoughts on that front, and whether that was on the balance transfer side, and what would be the general churn in the mortgage book and the overall tenure of the same?

Okay. In the mortgage book, there are two things you have to look at.

One is that, like I told you, we we did some wrong calls in '24 and got some DAs which which contributed to NPAs, it still does. We stopped that completely.

If you see the the mortgage book today, it's it's practically fully organic. Right?

Secondly, the disbursal of today will lead to the growth of tomorrow. If you have a 35% increase in disbursal, it is unlikely that you will see a 35% increase in growth.

If you continuously do a 30%, 35% increase in disbursal over the over the Q1 of last year, Q2 of last year, Q3 of last year, and Q4 of last year, then you'll see that the growth will not be 9% as you see currently seeing, it will be upwards of 20% to 23%. If you ask me, how are we on the premature closures, the the the non-contractual closures, Q1 and Q4 are I mean Q1 is slightly better than Q4.

I almost said they are equal, no. Q4 was was more aggressive, there was far more of takeovers.

Q1, there has been lesser of takeover. On the mortgage book, I'm happy to see the the the lead indicator of growth coming in, which is disbursal.

If we continue on the same path, there cannot be two ways about growth not coming through because we have a good very good retention management system, pretty highly tech-driven. AI plays a big role in identifying the goods and the bads, probability of defaults.

I think it's reasonably well managed, and we I don't lose sleep over mortgage growth.

Yeah. Hi.

Am I audible?

Hi, Khushwant. How are you doing?

Very well, sir. A small question.

Congratulations first of all on decent set of numbers.

Thank you.

Remember calls in previous quarter for most of the banks, one common question that was coming was the impact of crude oil prices and war and its stress coming into the banking system in the later part of the year. Just wanted to pick your thoughts on that.

I believe that then, and I believe that now also. Honestly, I don't see an impact of that hitting us.

It is because of these fears that we significantly increased our liquidity. We increased our deposit growth significantly.

That is the reason why we kept our LTV very conservative and went after gold loans in Q1. Honestly, look at the slippage ratios, non-gold slippage ratios, bounce ratio which we don't publish otherwise, but these are the early indicators.

Our 12 MOB, 12 months on board, 30+, 90+, there is no indication to believe that there is going to be a problem in terms of repayment based on historical facts. That's what we did.

We just stockpiled liabilities and turned our sourcing engine towards safer assets. Frankly, clearly Q2, Q3 mortgage sourcing will significantly increase, has already increased in July.

Similar with SME and MSME. All the other asset products also start kind of rolling it in.

That's our indicator. If you look at external indicators of credit bureaus, one doesn't see any impact of that in this particular target market.

By saying that, I mean a ticket size of X and above in locations that we are currently present in, we just don't see any negative impact.

That's all lovely to hear. My best wishes to you all.

Thank you so much.

You're welcome. Thank you.

Thank you very much, whoever is still in the call. We hope to keep getting the same kind of questions and the same kind of answers and the same set of results, and the whole idea is to bring in the consistency of performance, not just of growth alone, but also of all the engines of growth.

We're focused on it. What we didn't speak about in this particular meeting is the kind of investments that you're continuing to make in technology, the incremental use in AI, etcetera.

Hopefully, we will come back to you next quarter with the results of Quarter 2, and you will see how well our talk of being consistent, being predictable, and being sustainable is. There's nothing to prove as much as results can prove, keep watching out for our results.

Thank you very much.