Highlights:

The bank has posted the record high quarterly net profit and net interest income in Q2FY2024. RoA and ROE continued to trend higher.

The bank has completed significant capital raising in Q2FY2024, which would help to pursue growth opportunities.

The asset quality of the bank is well under control under driven by improved risk management practices.

The environment continues to be challenging, but the bank has made good progress on all counts.

The bank aims to grow both deposits and good quality loan book.

Fee income trend is encouraging and bank aims to move from pure lender to banker with focus on better risk rated clients.

The share of fee income has increased to more than 1% of assets.

The deposit environment is challenging and it has not cooled off as yet. The bank expects the cost of deposits may continue uptrend for next couple of quarters.

The bank has exhibited marginal improvement in the margins in Q2FY2024 over Q1FY2024, while the bank expects margins to further improve in H2FY2024. The bank expects full year margin at 3.25% for FY2024.

The opex growth is volume related and there is no one-off.

The bank expects credit cost at 25-30 bps for next 2-3 quarters.

An incremental CRR had an impact of 3-4 bps in Q2FY2024, which was offset by QIP capital raising.

The bank has accelerated investment in branch expansion and brand building. Thus, the cost to income ratio is expected to be sticky around 50% in FY25.

The LCR ratio stood at 121%.

The bank remains focused on improving RoA to 1.4% by FY2025, driven by increase in fee income, reduction in cost of deposits and rise in share of higher yielding loan book.

The bank is confident of sustaining its growth momentum and targets loan growth of 18-20% for FY2024.

The share of fixed rate loan book is 26%, EBLR is 51% and MCLR 13%.