Highlights

The bank has exhibited strong business momentum across segments, while recording highest ever operating profit, net profit, ROE etc. The underlying momentum is strong and broad based.

The business volume of the bank has crossed Rs 3.5 lakh crore level in the quarter ended September 2022.

The bank has continued to gain market share in identified areas

The focus of the bank remains on ROA expansion, while bank has raised the guidance on FY2023 exit RoA guidance of 1.15% to 1.25%.

The credit portfolio of the bank is playing out well, while deposits growth is enough to match loan book funding.

About 65% of the loan book is linked to external benchmark rates or MCLR, while about 25% is fixed and 10% is employee advances and advances against deposits.

The margins of the bank were supported by full benefit of lending rate hikes of Q1FY2023 available in Q2FY2023. Lower slippages of loans also supported margins.

The bank is raising guidance on NIM from 3.25% for FY2023 to 3.30% and sustain ahead.

The bank is witnessing strong growth in card fee income driven by partnerships.

As per the bank, about 10-12% of incremental deposits comes through fintech partners. The bank sees scope to raise the share of fintech partners to 25% of incremental deposits inflows over a period of time.

About 7500 employees of the bank joined after 1 April 20210 are on NPS scheme and about 3900 employees are on defined benefit scheme.

Bank expects deposit growth to be in early teens and credit growth to be high teens. Bank would be managing deposits and borrowings well to fund loan growth. Bank expects to be competitive on deposits pricing and would not participating in rate war.

The bank is witnessing strong growth in NRI inflows with improvement in share of remittances.

Credit card business started in September 2021 is doing well and bank is well focused on the business.

Bank expects cost to income ratio at 48-49% for FY2023.

The fresh slippage of loans is expected at Rs 900-1000 crore in H2FY2023.

The bank carries excess provision of Rs 138 crore on restructured loan book.

Bank has raised PCR by more than 250 bps in Q2FY23. It requires additional provision of Rs 40 crore to raise PCR by 100 bps.

The bank does not have capital raising plans for current year.

The bond yields were stable in Q2FY2023, so there is some write back of provisions.

The forex income growth is driven by strong corporate foreign borrowings and hedging opportunities.

The bank expects credit cost at 50-55 bps for FY2023