EARNINGS CALL NOTES:
Part 1
MANAGEMENT COMMENTARY
VEMBU VAIDYANATHAN
- The key highlight I think for this quarter is that we have come out with guidance 2.0 - so when you think of guidance 1.0, which is what we gave at the time of the merger in December 2018, we had guided for at that point of time we almost thought that the first year will be gone and just dealing with many, many matters so we gave guidance for 2025
- So while that guidance stays and we will still keep it on the website and we’ll track ourselves to it, you will continue to see it, in the interim we just saw that this quarter marks exactly the end of five exact years after the merger so we’ve come out with the guidance 2.0
- When we gave the guidance of 1.0 - let me just share that we really had very little visibility very little because the merger had just happened, Capital First & IDFC had just merged and the retail deposit book was something like about 10,000 crores - 10,400 CR to be precise - the loan book was something like about 1,00,4000 crores, we had bonds of about maybe 50 or 55,000 crores, we had wholesale deposits of about 30,000 crores, we had Certificate of Deposits which was about 28,000 crores - so that’s sort of an odd base on the deposit and borrowing side – which was largely institutional. We call it 92% institutional.
- So frankly for any management to guess how quickly we will fix this and make it retail would have been just a good educated guess - again on the asset side a lot of things would have been still been uncertain, and under those circumstances, we still came out of the guidance, and then after that, we saw Covid, we saw many things, but I’m happy to say that almost literally on every Benchmark we are coming good
- On one front probably maybe one or two elements they’re not right up there, but I think we’ll get close
- Let me just say that during this period Over The Last 5 Years, the key success for the bank has been deposits
- Just to share with you that the retail deposits of as of 31st December 2018 was precisely 10,400 crores
- Today just 5 years it is 1,39,431 crores - that is a growth of 129,000 crores
- If you take the total deposits, we also had 29,000 crores of wholesale deposits with us, so 10,400 plus wholesale deposit of that 29-30,000 crores
- That 39,600 crores is today 1,76,481 crores
- So that is again a good growth on deposits
- So third is CASA ratio - CASA ratio now has come to about 46.8% which is again quite strong
- So let me just say that one defining factor for the last five years has been deposit growth, period
- And all of us know that deposits are the foundation of any bank, and this kind of deposit growth has come despite the fact that along the way, we dropped interest rates - most people thought that we stay with a 6%-7% strategy for like will be long time, but literally within three years we dropped it and now we pay on 0 to 1 lakh we just pay 3% - just three - and still last quarter we saw deposit grow by 43% YoY
- Frankly, once deposit is strong we are sorted
- Because the contra side is loan book
- The loan book has not grown very much during this period over the last 5 years
- The loan book has grown from 1,04,000 crore to 1,89,000 crore in 5 years
- So you might say that if the loan deposit grew so fast - 4.5x in 5 years - from 39,000 CR to 176,000 crore then how come the loan book only grew this much?
- All of you seasoned investors know the reason that we slowed down the loans just because we wanted to fix the CASA ratio
- So basically the point is that both on the asset side we have a strong stable business model
- I’m actually happy to share that our NPA is now - for its 14th year running - it’ll become the 14th year in March of 2024 - now 14 years is a really long time I hope you all agree, that our gross NPA net NPA has been 2% and 1%- really long time
- And in this 14 years we have broadly migrated from lending to the largely unorganized segment - when we started to now we have become more, more relatively Prime Banks like for example if you to give a loan against property, say 8 years ago - 10 years ago, we would lend loan against property at maybe 12 or 13% because the banks were doing the prime lending against property at maybe 9-9.5% then.
- Today we lend at 9-9.5% on the LAP and then maybe the other NBFCs at 13-14%
- So we’ve come down the risk curve and therefore we’re feeling much more stable about our credit quality going forward
- Now the gross NPA at the end of this quarter is just about 1.5% on the retail side, retail, MSME, and rural side - 1.45% and the net NPA is only .5% - so it’s been a very long time to have sustained know quarter on quarter, year on year for 14 years - let me say 13 years and three quarters to be more precise - it really gives us a lot of confidence
- And now anyway since we come down the risk curve to become a little more like the mainstream Banks I think this should continue now for a while
- So therefore there are three things that jump out at our last four-five years of work is that the deposit grew, the loan book grew, the asset quality is stable
- Second part is that when we look at our bank there’s a lot of Harmony within our bank -harmony means the way the bank is working, the way the system is working up and down across, up and down the chain into division, there is a lot of tranquillity, and we just focus on our work and that gives us the ability to move smoothly move smoothly ahead, and this is all a lot of teamwork going on in the bank you know
- Today myself, Sudhanshu, speaking to you, Saptarshi too, but frankly we are speaking on behalf of all our employees - that this success is actually coming from Dr Rajiv Lal
- I really don’t want to go back in time and say this was the issue or that was the issue because really someone worked very hard, almost against impossible odds got this Bank a license
- So let me just say the first note of thanks starts with him, it’s like an impossible feat but after that, if he had not got the license I guess there be no IDFC Bank today or IDFC First Bank
- And after that about how the bank has built over the last 5 years and things have all come good
- Now basis what has happened and how the foundation is built, and also based on the moment that we are having, we are now looking for to how the next five years would look like
- When you look at the next 5 years frankly today we have a lot more visibility as this conversation - we had less visibility when we started then we give the guidance 1.0 - but now we have far more visibility
- We have a stable lending model, we know we’re originating about 45,000 crores a year on deposits, and now we are trying to only extrapolate what it would take for us over the next 5 years, so we are now guiding that our deposit base as of December 31, 2023 is 1,76,000 CR as we spoke as the close of this quarter
- We believe that we will be something like about 5,85,000
- Now if you think that’s a very steep climb just remember that we came from about 38,000 CR to here
- Now the other reason why you should feel reasonably confident about this is that currently deposits are growing upward of 40% - for the next 5 years we’ve assumed a deposit growth of only 24.8%
- We think this should be reasonably easy for us
- Next is assets - on the assets front, as you know we started with 104, today we are 189 - now we are guiding that our assets will be 5 lakh crores in 31st March 2029 - so again don’t think too steep a jump from 1,89 to 5 lakh crore because we are guiding for only a 20.3% growth as 5 year CAGR
- We’re currently growing 24.5% - 20% should be easy, should not be a problem
- So a 5 lakh CR loans and advances book now including SLR Etc will take us to an assets of about 7 lakh CR
- Third thing is after deposit and the assets is asset quality
- Now asset quality today, our gross NPA is only 2.04% - but remember this has infrastructure
- We know infrastructure will go away, we’re bringing it down
- So if you see infrastructure today our gross NPA is 1.66% and our net NPA is 0.47% the way we are trending, we are guiding for a gross NPA of 1.5% and net NPA of 0.4%
- Maintaining this should not be a problem
- Fourth is, profitability. Now we believe that the bank is comfortably moving towards an RoA of 1.9-2%
- If you do the maths, multiply 1.9 or 2% on 7 lakh crore of assets – 7 lakhs is closing number – so you can see the average assets of 2028-29 should be around 6.3 lakh crore
- 6.3 lakh crore you apply a 2% on, you will get at 12,500 crore
- So our broad guess is that we would be at around 12,000-13,000 crore in profitability in March 2029.
- For context, this year would be around 3,000 crore – so this 3000 crore going to 12,500 crore should be very possible and frankly, if we deliver the 1st four items – if we grow the loan book to about 5 lakh crore, deposits to 5,85,000 crore – the rest should fall in line
- Now, roe is the last one – we have had a tough time dealing with out Cost to Income ratios and roes, etc – because our Cost to Income was also high – we have branches, ATM network, tech, we told you but net-net we had to do what we had to do to build the bank for the future
- In Phase 2 we will be able to reap the benefits of such expenses in Phase 1
- We are guiding for an RoE in the range of 17-18%
- So, I would say these are all in good faith as you know results may vary it can happen- we may have achieved, overachieved ,underachieved whatever
- These are numbers which we believe are reasonably achievable and frankly for a bank starting where it was in 2018 December - in 10 years to reach a position of 5 lakh CR of loan book and 7 lakh CR of deposits - sorry 6 L CR of deposits - and 12,000-13,000 Crore of Pat with an RoA of 1.92 by 2029 will be a solid position to be in
- And more importantly directionally will be looking good and other things anyway apart from these numbers the bank is a good bank, really high quality Bank, good customer practices good culture, good practices, good you know governance, really very, very good board very you know high quality board with high quality people, all of them have been very sensitive to regulatory commentary and so on and wanting to work within the guidance of the law, and guidance of regulations - so that sort of you know compliant bank I think that we are reasonably well set
SUDHANSHU AGARWAL – CFO
- Balance sheet expanded by 22% on a YoY basis
- We continue to see strong momentum on deposit as well as lending book
- Growth in retail deposits was higher – at 47% on a YoY basis
- CASA ratio also you would have seen has improved sequentially to 46.8%
- CASA deposits increased by 29% on a YoY basis
- Average current accounts have increased by 33% on a YoY basis
- We also continue to see a faster growth in term deposits which grew by 59% on a YoY basis - as customers to lock in which are prevailing in the system
- the growth here also was predominant driven by retail
- Retail deposits ratio to Total customer deposits continues to improve and has increased to now 79% Vis-à-vis 76% at the start of the year
- We have opened about 35 branches during the current quarter thereby taking the branch down to close to 900 branches
- The high cost Legacy borrowings for reduced by about, 1400 odd crores during Q3 and another 1,300 crores is scheduled for runoff in Q4 24
- We have given more details around this in the presentation
- Moving on to the asset side overall funded assets grew by 24.5% on a YoY basis to reach 1.8 lakh cores
- I will cover this in four segments
- Retail book comprising of mortgage, vehicle portfolio that’s essentially car, and two wheelers then Consumer loans, credit card, education loan, and vehicles - this portion of the book grew at 29% on a YoY basis
- We have seen strong growth across all categories - growth in certain segment like vehicles and consumers were also relatively higher on account of higher demand due to festive season and other increasing presence
- Talking of credit card within retail the bank has now issued more than 2.2 million cards
- The book has almost touched rupees 5,000 crores
- The gross spend of credit cards increased by 61%
- Also happy to note a report that infrastructure book is now just nearly 1.6% of the total funded assets and is now below rupees 3,000 crores
- moving on to asset quality the gross NPA of the band further improved by seven basis points during the current quarter and stood at 2.04% and net NPA ratio stood stable at 0.68% during the current quarter
- As Vaidya mentioned if we exclude the infrastructure book, the GNPA improved to 1.66 and net NPA improved to 0.47
- GNPA in the retail, Rural, and SMA segment also improved by eight basis points to 1.45% and the net NPA is now just at 0.51%
- The overall standard restructured book continues to come down and has further reduced to 0.35% of funded assets as compared to 0.38% last quarter
- More than 93% of the restructured book is secured in nature
- moving on to profitability - profit after tax for 9MFY24 increased to Rs 2232 crores versus Rs 1635 crores in 9M of last year - up by 37%
- for the quarter profit grew by 18% YoY to rupees 716 crores
- This was largely driven by strong growth in core operating income
- Core operating profit which is NI plus fees excluding trading gains for 9MFY24 grew by 35% YoY
- For the quarter it grew by 24% to Rs 1515 crores for the quarter NI increased by 30% on a Y0Y basis to rupees 4287 crores
- The net interest margin improved by 10 basis points on a sequential basis to 6.42%
- Operating expenses increased with 33% on a YoY basis due to strong business volumes witnessed during the quarter – I would say branch expansion and some increase in in in other expenses, like marketing and so on
- We had a trading gain of Rs 48 crores during the quarter and Provisions came in at Rs 655 crores for the quarter
- The credit cost as a percentage of average funded assets for 9MFY24 stood at 1.26% - which is well below the guidance which we had given earlier
- We are not impacted by the guidelines recently announced around AIF Investments at all
- On an annualized basis RoA stood at 1.16% as against 1.05% in 9MFY23, and RoE stood at 10.7% for 9MFY24 as against 9.9% for the same period last year
- The bank has maintained strong Capital adequacy - the capital adequacy now stands at 16.73% at December 31st ‘23 with CD ratio at 13.95%
- This takes into account the capital of Rs 3,000 crores which we mobilized in early October
- We continue to maintain healthy liquidity levels and average LPR was at 121% for Q3 FY24
- We have been maintaining this for on a consistent basis across quarters if you see our previous numbers - with this I’ve covered all broadly all the facets
Q&A
ISHAN AGARWAL – EREVNA CAPITAL
Q: Hi good evening thank you for the opportunity. I would say decent but slightly underwhelming performance by the bank - three questions. The first one is that management has always highlighted that core total income will go faster than OPEX for FY24-25 and FY26 and that is how operating leverage was going to play out. It is slightly disappointing to see OPEX here growing 33% YoY and income growing 31% - which in turn has upped our cost to income from 72.1% last year to 73.3% this year. What is really causing this pain in OPEX? What are the factors playing out? And what the management could not envisage while giving the past numbers?
- Thanks for that very crisp question see the thing is I always mentioned to you I don’t know Sudhanshu may have told you again and again - that listen please don’t track every quarter by quarter –
- Wee we are early stage Bank - sometimes you know one odd item expense catches up, some digitization expense catches up, on some other product something happens one quarter of the other – If you go YoY, own, I want just point out one number to you that if you take you know a five window that is 19 to 23 - four years -you know you’ve seen that the balance sheet has grown by 9%, from the time of merger today five years but PPOP (Pre-Provisioning Operating Profit) has grown by 43% so my point and by the way I’m not claiming it is still the jaw will be that wide still, but definitely for a balance sheet loan book growing by about 20%, which we guided for, for the operating profit to increase about 32 to 33% should be the kind of Zone you should look for the next four-five years
Q: Understood. But this was a YoY increase in cost to income and that is why I highlighted this - so it’s not quarter on quarter which I’m comparing. Even Year on Year, from 72.1 it is up to 73.3, whereas we are expecting a maybe a plateauing or maybe a decline from here on…
- So I agree with that. I fully agree with that.
- I say this result is a bit underwhelming actually…we should have expected to post a little better - at least at the PAT level should have posted a bit better
Q: Core operating even Pat – there may be some one-offs but even that is slightly underwhelming on that part
- I agree, I agree 100% I agree could have done a bit better, could have expected do a little better, but it’s you know like I said we’re running a long game here – a 10 year game out of which five we’ve finished maybe even longer from there - maybe many, many decades after that right
Q: So going ahead do you expect that cost to income should start declining from here on or do we still expect it to keep at this level for a year or two?
- Our sense is that Q3-Q4 of FY25 should begin to see material movement downwards
- If we take digital loans for example in the digital loans you know for period of time there was there was no FLDG permitted for example, and last quarter FLDG got permitted
- Now we have a certain structure with the counter-party, now we’ll move to another structure with is FLDG (Firs-Loss Default Guarantee), when we move to FLDG structure, the benefit of not having credit cost because the counterparty will guarantee - that benefit will come two quarters from then meaning when the credit cost would have hit us - they would have supported us, they would be paid for it but in the interim the impact would be there
- So the I don’t want to confuse all of you with all these mathematics but the point is that our own sense is that next quarter we will move over to the FLDG structure so the benefit of moving to structure will come in Q3 Q4 FY25 and which will show up in credit cost line
- So therefore these movements will slightly give better benefits for us by exit quarter FY25
Q: So now as you mentioned about FLDG, my next question was actually regarding credit cost. While our loan book has grown by say 24% YoY, our Provisions have grown by 45% YoY - in spite of all collection efficiency numbers, SMA numbers improving YoY, so what is the reason for this?
- I said this to you earlier also often times when you compare YoY for early stage Banks either last time there would have been something very much…so we were running really very low credit cost for a book that was giving the kind of yield and NIMs it was giving us, our credit cost is running so low - in fact many people can us to scratching their head…how can a credit cost be only 1.1%?
- It is even lower than many top Banks - so during post covid we were getting certain recoveries because, if you remember during Covid we took Provisions - now many of the recoveries had started coming, so for the last two years - we were getting benefit of the recoveries – and now some of the recoveries are tapering off
- We moved over to the 90th-day recognition of NPA rather than 91st day and that also had some impact
- What we are seeing is our collection percentage which we reported at 99.5% now for literally like two years at a stretch - now last month in December it was 99.6% right let me call it 99.5% for clarity’s sake- so if collection percentage stays the way it is, cheque amounts is very low
- Very low meaning very low - it’s like 6 points something which also collected during the same month in a big way
- So the point is that the underlying parameters are strong so there’s no reason like fundamentally to be disturbed or anything like that
- I mean you watch our next quarter you see the results for yourself.
Q: One more for my end with the new RBI Norms on risk weights for unsecured credit, our tier one capital adequacy is down to less than 14 in spite of the capital raise that we did last quarter, that is in October. So now given that it is at 13.95% when do you think we’ll again have tier one Capital to show up the capital adequacy?
- We will watch the numbers with the way the profits emerge over the next four quarters and then make our
Q: We do have an idea of the capital consumption that the bank will do so what is your target - that okay we don’t want to go below tier one say 12.5 or…
- no we don’t we don’t spell out precisely when you raise capital
- you know it’s not a good strategy for any bank to exactly put out in the market capital I hope you’ll agree so we’ll make up a mind as it goes along depending on the numbers
Q: So if I look at the cards data released by RBI it is unusual to notice that the number of debit cards in force for IDFC in November has reduced for the first time as compared to September - from 67.8 to 66.5 lakhs - so is there some reason? Were there some dormant accounts that were closed or what?
- Could have been some dormant account clean-up being done by the respective teams
- See basically the bank is more and more moving towards quality - we are very firm about it
- So we are opening lesser number of accounts than before on the bank account especially on the digital side - but we focusing on quality
- So the inflow is very strong that’s how we saw growth of close to about 4,000 crore a month of deposit which kept coming in so let me say deposits are rising very well
- That would have been some closure of some customers inactive and those kinds of respective product teams keep doing the work
SUDHANSHU MISHRA – PHILLIP CAPITAL
Q: Two or three questions - the first one is around the personal loans - just wanted to understand the Run rate of personal loans that we originate from various fintechs and the level of FLDG that we do from these fintechs. My fair understanding is that a lot of lending Partners do slightly above 5%, or maybe about 5% which is the mandated requirement of FLDG. The second is on the vehicle Finance - if we can give out the split of a car finance new car finance and used car finance, and the Outlook for the industry as such and our own growth estimates there in FY25 these are my two questions
- We do work with fintechs broadly but we have not exactly put out how much who’s doing how much and all
- Let me say broadly growing they are very conscious that on the personal loan front - personal loan meaning basically unsecured personal loan given our model is largely lending to salaried people who want to take personal credit typically term loans so in that model I think things are running pretty well for us, some originated to Partners, some originated by ourselves etc etc
- Second question is about vehicle Finance – I say we have more on the used car financing side than the new car type, though we also do new cars, but you know new cars have no margin, and it’s just a waste of time and money - so we give it only to our customers who come to our branches and you know our base, we give new cars - With a limited Capital we have to use it for either two wheeler Finance or for used cars
- And frankly the credit quality we are getting is so fantastic - so why waste money on new cars
Q: one last question in terms of fintechs when we onboard a customer onto our balance sheet when we taking the risk -that customer permanently becomes ours. What I mean by that is that once it’s on boarded to our balance sheet, it’s only we who own the customer in terms of any kind of cross-sell up-sell of credit products or the fintech through which it was originated, can also do any kind of cross-sell up-sell?
- This is the typical complication that happens in this industry so typically digital Partners like to also do offer other things with the same customer
- But we are very clear… one condition that is non-negotiable for us is that we have full rights to access the customer, and we will do business with the with the customer it’s very important to us
Q: So the status of the customer is transient and not permanently ours - so that’s a fair understanding?
- That’s a fair understanding yeah but when we get our salary customers and we lend to them, we feel more in control because it’s our customer 100%
- But when it’s originated by a party sometimes party also does something with the customer
Gau (?) Zisuan – Shanfeld
Q: First question is just data -can you share the numbers for gross and net slippages?
- Yeah slippage was for the quarter was about, 1400 crores
- If you see it’s broadly flattish as in the previous quarter, and even the net slippage is flattish - right it’s at about 850 Crores for the current quarter got it
Q: So last quarter there were some timing issues and one offs - is there any such issue that is repeating this quarter or are we expecting ? You know slippage to be gradually trending down from here?
- so we feel quite comfortable as Vaidya mentioned that we are seeing a consistent asset quality right so even in this quarter the slippages have not gone up while the book has expanded
- so we feel that we should be quite okay on this plan
Q: So why does our credit cost is trending up, while our you know if our slippage number is similar to last quarter - you know our credit cost should not be tending up?
- So if you see that credit cost has been for this 9 months has been just 1.26% right. We had guided the market for 1.5%
- This quarter we have seen a slight jump right - but that’s a combination of existing book where as the Aging happen some more Provisions come in
- So as you rightly said the gross slippage that has been quite stable right
- And other indicators also like if you see the check bounce right which we have presented the data in the presentation - that it continues to be lower - first check bounce is about 6.3%.
- Even the collection efficiency is quite stable right over the quarters in 99.6%
- So which talks of that the incremental book which is getting built is quite pristine
- We may have as I said some of these provisioning impact may come because of aging and so on
- but we feel quite comfortable
- The point which I was trying to mention was that gross slippage and net slippage has been quite stable
- If you see the asset quality indicators right in terms of our check bounce - that’s down from 9.9% to 6.3% right over a period
- And similarly collection efficiency is quite stable for early buckets at 99.6%
- so we feel quite sort of confident or on the incremental assets which are getting generated
- As I said some of these Provisions would come in because of Aging, there could be some smaller lesser recoveries during the quarter
- So that is precisely the imp which some of that impact which has come during the current quarter
- For the 9 months if you see the credit cost has been just 1.26% and which is well below the guidance which we had given earlier
- so we feel that things should normalize from here and should continue to stay so
- Of course we are very cautious in terms of sourcing, in terms of credit underwriting, and and so on
- So we’ll continue to exercise Prudence on this front
Q: If I remember correctly previously we were talking about next four to five years 25% growth is quite sustainable. So I’m just wondering our 20% kind of guidance now is it just on a conservative basis or is there some you know changing strategy that we maybe focus a bit more on the profitability side? Maybe slow down growth a little bit or it’s you know some RBI related issue
- See basically when you look out it’s probably just better to be guiding at a number which we feel is reasonably safe and in the bag
NITIN AGARWAL – MOTILAL OSWAL
Q: So one question on CD ratio - while bank has been doing well and the CD ratio has been coming down pretty consistently every quarter. And any discussions about this with the RBI given the ongoing media reports about this? And any near-term Targets therefore that you have?
- So if you see that we have been Bringing Down the CD ratio because deposits have been growing faster
- Of course we had Legacy problems right that’s why our CD ratio was 137% at merger
- If you see even into this year so far we have brought it down from 109% to 101% and maybe by the end of the year we will be lower than 100%
- So we feel that and even in the guidance if you see our deposit growth is tad faster than the loan growth which we are guiding
- so this should keep coming down as we sort of we move along
- One data point - the incremental CD ratio - if you see for this year is about 80% and for this Quarter it was just 65%
- So as long as the deposits continue to come strong right and we feel that we should be able to improve on this ratio.
- We feel quite confident of bringing it down
Q: Second question is on the OPEX where we are seeing a fair bit of an increase - so if you can provide some color as to what are the key drivers within this number so that we can better appreciate the operating leverage that is likely to play over the coming years and from Q4FY25 that you indicated?
- If you see that a guidance see because you go to the specifically go to the guidance - see for you to really appreciate where this game is headed and I read out the operating leverage numbers at a bank level that we’ve been seeing year on year, this year let me say that the operating leverage has not paid out that much because you know this digitization expenses and technology, and we are really building the bank for the future - and that has been our consistent strategy as you know thus far
- So therefore we feel that from next year onwards like we said Q3-Q4 of FY25 we should see meaningful movement
- Our own estimate is that the OPEX of FY25 for example should just increase by about 20% where the loan book or the income could Rise by let me say maybe 24-25% because of the reason so we feel that in FY25 we should start seeing material opening of the jaw - and again
- Because see one thing you should note in the way we are building out story 2.0 that the deposit numbers we have kept very modest- the requirement imagine this going at 25% -we are used to grow at 40%, so 25% is nothing and remember what is something unique will play out after FY26 onwards which is FY 27 28 29 - I’ll tell you what is unique
- Today even are growing the loan book at 25% - 24.5% bank is funding the growth of 24.5 from deposits - as you know we not borrowing anymore - funding it from deposits - plus we are repaying bonds pertaining to the pre-merger
- so we are carrying double burden - you fund yourself and also pay your past liabilities
- Now one and a half years from now, lot of it would have gone away - two years and then after that you’re only funding a loan growth for somebody who’s used to carrying such heavy weight - that should be pretty lightweight actually for us
- I mean relatively lightweight
- So that is a material change coming in our life from FY26 onwards let me say FY27 on to FY30 and we’ve done the maths - there is there is a big relief in the requirement for deposits then
- And actually who knows we might even cut deposit rates and that might be positive for the bank
- Or we put less branches you know one of the two
Q: Last question is on the guidance 2.0 where you are giving guidance on very key metrics -but when you look at the RoA of 1.9 to 2 by FY29 what levels of margins and cost and income ratios are you breaking in?
- Cost income ratio looking like more like about 55% by the exit year FY30
- Margins resonate similar stuff
SAMIR BISE – JM FINANCIAL
Q: Just wanted to get a sense on the others portion of the loan book which is roughly 15,000 CR and growing at a fast pace?
- We have given in the presentation that it includes digital loans, it includes some portfolio buyout which we have done, and some revolving credit - so that’s part of the others book
Q: And would this portion be secured or unsecured?
- Depends on what you’re buying no? but chances are you’ll be buying the secured portfolios to the extent they buy out
- And to the extent digital loans could be unsecured also
Q: Secondly I think in the opening remarks it was mentioned that there’s no impact of the AIF guidelines on the bank - just wanted to reconfirm ?
- Yeah that’s correct we have nil impact on that count
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