# 1. Financial Performance ## A. Key Figures * **Global Business:** **₹15.62 Lakh Cr** (Sep-25) (+83% YoY) · **₹13.97 Lakh Cr** (Sep-24) * **Non-Interest Income:** **₹2,220 Cr** Q2 FY26 · **₹4,386 Cr** H1 FY26 (+15%) * **Net Profit:** **₹2,555 Cr** Q2 FY26 (+8%) · **₹4,800 Cr** H1 FY26 (+18%) * **ROA:** **91 bps** Q2 FY26 (+9 bps) · **87 bps** H1 FY26 * NIM: 2.41% Q2 FY26 · 2.48% H1 FY26 * **Credit Cost:** **28 bps** Q2 FY26 · **47 bps** H1 FY26 ## B. Revenue Growth * **Explosive Global Expansion:** Global business surged with strong double-digit growth, driven by robust credit demand and strategic market penetration. * **Non-Interest Income Momentum:** Fee income growth accelerated, with other non-interest income more than doubling due to **₹124 Cr from PSLC sales** and higher penal charges. ## C. Net Profit & ROA * **Profitability Uptick:** Net profit growth outpaced revenue in H1, supported by operating leverage and improved asset returns. * **ROA Improvement Trend:** Return on assets showed consistent sequential improvement, indicating enhanced earnings efficiency on the asset base. ## D. NIM & Credit Costs * **NIM Pressure from Rate Cuts:** Net interest margin declined in Q2 due to the 50 bps repo rate cut, though full-half NIM remained resilient within guided range. * **Sharp Credit Cost Decline:** Credit costs fell significantly YoY, with further reduction expected; annualized credit cost projected at **~60 bps**, well below prior year. ## E. Balance Sheet Strength * **Sector Resilience:** Indian banks exhibit stronger balance sheets and lower NPAs, enabling sustained credit support to economy. * **Strategic Priorities:** Focus on credit growth discipline, low-cost deposit mobilization, margin stability, and tech-led operational efficiency. --- # 2. Loan Book & Asset Quality ## A. Key Figures * **Gross Advances:** ₹709,000 Cr (+3%) * Gross NPA Ratio: 2.54% (-187 bps) · Net NPA Ratio: 0.85% (-29 bps) * Credit Cost: 0.28% (-0.48 ppt QoQ) * Provision Coverage Ratio: 93.39% (+1.17 ppt YoY) · CRAR: 16.69% (+0.06 ppt YoY) ## B. Asset Quality Trends * **Significant NPA Reduction:** Sharp decline in gross NPA driven by robust cash recoveries and write-offs, with minimal reliance on upgradations. * **High-Quality Book Profile:** Over 99% of NBFC exposure rated BBB and above, with sub-BBB segment largely contained and transparently disclosed. * **Strong Recovery Momentum:** Gross cash recoveries reached **9x** slippages in Q2, underscoring effective collections and resolution capabilities. ## C. Slippages & Underlying Credit Trends * **Low Fresh Slippages:** New slippages remain tightly controlled below **₹900 Cr**, reflecting disciplined underwriting and improved portfolio resilience. * **Sustained Credit Cost Improvement:** Declining slippage ratio and elevated recoveries drove a sharp reduction in credit costs, marking a structural improvement. ## D. SMA & Portfolio Stress Indicators * **Low Stress in Large Accounts:** SMA 1 & 2 accounts (≥₹5 Cr) improved QoQ and represent 89% of standard assets, signaling portfolio stability. * **MSME Portfolio Resilience:** MSME SMA book declined meaningfully to **₹1,200 Cr**, with only **₹470 Cr** in SMA 2, indicating minimal stress in the segment. --- # 3. Deposit & Funding Mix ## A. Key Figures * Global Deposits: ₹7.75 L Cr → ₹8.53 L Cr (+10.08%) with ₹78,000 Cr incremental growth * Domestic Deposits: ₹6.73 L Cr → ₹7.30 L Cr (+8.53%) * CASA: ₹2.76 L Cr → ₹2.86 L Cr (+₹10,000 Cr YoY) · CASA Ratio: 39.39% * **Savings Deposit Rate Cut:** 75% → 50% (-25 bps) * **MCLR Reductions:** **20 bps** across tenors over past 6–8 months ## B. CASA Growth & Ratio * **CASA Expansion with Strategic Upside:** CASA grew robustly, reaching a 39% ratio, driven by strong deposit base momentum and structural initiatives. * **Cross-Sell Leverage:** New financing products are positioned as **CASA enablers**, with significant potential to boost fee income via mutual funds and third-party products. * **Savings Dominance, Limited Cost Impact:** Savings accounts represent **36–37% of total deposits** within the CASA mix, yet exert minimal downward pressure on overall deposit cost. ## C. Term Deposit Repricing * **Repricing Lag Persists:** Full liability-side term deposit repricing remains incomplete, delaying full benefit of rate cuts on margins. * **NIM Improvement on Horizon:** Completion of term deposit repricing expected in **Q3 FY26**, paving way for meaningful NIM expansion. ## D. Cost of Funds Trend * **Funding Mix Volatility:** Cost of funds showed significant variation by period—down to **67%** on a full half-year basis—driven by elevated costs from **certificates of deposit and refinance**. * **Deposit Cost Stability:** Despite quarterly fluctuations in overall funding costs, the **cost of deposits held steady at 85%**, indicating resilience in core deposit pricing. ## E. Deposit Rate Transmission * **Partial Rate Pass-Through:** A 25 bps cut in savings rates failed to lower the **blended deposit cost**, constrained by mix effects across retail and bulk deposits. * **MCLR Linked to Deposit Trends:** Further reductions in MCLR contingent on sustained decline in marginal cost of deposits; recent 20 bps cuts already implemented across key tenors. * **Loan Repricing Lag:** MCLR reductions benefit only new loans; existing book reprices only after reset periods (e.g., annually), creating earnings inertia. --- # 4. Segment & Product Performance ## A. Key Figures * RAM Advances: ₹3.40 Lakh Cr (Sep-25) (+17.02%) · 58% of total advances * Domestic Gross Advances: ₹5.97 Lakh Cr (Sep-25) (+14.73% YoY) * **Digital Loan Book:** **₹1.20 Lakh Cr** (20% of ₹3.47 Lakh Cr domestic book) * **NBFC Book Outstanding:** **₹93,000 Cr** (QoQ increase) * **Gold Loan Book:** **₹40,000 Cr** (healthy share of ₹6 Lakh Cr domestic book) ## B. RAM Segment Growth * **Resilient Core Growth:** RAM segment shows **nearly 19% growth in H1** with strong momentum expected in H2, underpinned by digital adoption and healthy pipelines. * **Digital Momentum:** Digital initiatives driving scale, with **20 digitized products** and a growing digital credit engine enhancing retail and MSME outreach. * **Pipeline Strength:** RAM contributes **₹20,000 Cr** to the bank’s overall credit pipeline, signaling sustained retail credit demand. ## C. Corporate & NBFC Book * **Corporate Credit Acceleration:** Domestic gross advances surged **73% YoY**, fueled by robust corporate lending and a **₹50,000 Cr+ corporate pipeline** within a **₹70,000 Cr global pipeline**. * **Strategic NBFC Lending:** Portfolio concentrated in **AAA/AA-rated entities**, with **50% exposure to PSU and bank-promoted NBFCs**, ensuring high credit quality. * **Yield Enhancement Focus:** Expansion of **MCLR-linked lending via 20 dedicated emerging corporate branches** to capture better yields in mid-corporate segment. ## D. Digital Loan Portfolio * **Platform-Led Innovation:** Launch of **BOI TradeEasy**, a digital supply chain finance platform, enhances automated credit delivery for MSMEs. * **Sustained IT Investment:** FY26 IT budget set at **₹2,000 Cr**, prioritizing digital transformation and cybersecurity resilience. ## E. Gold Loan Performance * **Stable Growth Amid Headwinds:** Gold loan book maintained **₹40,000 Cr** despite high gold prices and recent **RBI guideline changes**, reflecting resilient demand. * **Conservative Risk Framework:** LTV ratios held between **65%–75%** across Agri. and Retail segments, preserving asset quality. --- # 5. Capital & Regulatory Position ## A. Key Figures * **Net Profit:** **₹4,800 Cr** half-year · **₹10,000 Cr** estimated full-year * **1% CRAR Impact:** **₹4,700 Cr** * **NPA Recovery Target:** **₹10,000 Cr** for FY26 ## B. Capital Position & Strategy * **Capital Adequacy Strong:** Bank maintains a robust CRAR of 69%, well above regulatory requirements, supported by strong profitability and internal capital generation. * **No Equity Dilution Planned:** Management has **no intention or Board approval** for fresh equity raising in FY26, signaling confidence in organic capital sufficiency. * **Phased Regulatory Impact:** Anticipated ~1% CRAR drag from new guidelines will be absorbed smoothly due to **five-year transition period** (Apr 2027–Mar 2031). ## C. Regulatory Opportunities & Initiatives * **New High-Yield Avenues:** RBI’s recent approval for M&A, share advance, and IPO financing opens **double-digit return opportunities**; bank is developing dedicated products to capture share. * **Compliance & Quality Enhancement:** Establishment of a **Testing Center of Excellence** ensures adherence to regulatory standards and strengthens technology delivery framework. ## D. Strategic Expansion & Risk Management * **Global M&A Ambition:** Bank is actively pursuing M&A financing mandates across geographies, leveraging international presence in **GIFT City, New York, London, and Singapore**. * **Aggressive NPA Resolution:** Internal recovery target of ₹10,000 Cr from NPA book reflects focused bad loan resolution strategy, excluding performing accounts. * **Provisioning Strategy Undecided:** Bank is withholding near-term front-loading of credit costs related to transition impacts, pending further assessment. --- # 6. Credit & Liquidity Risks ## A. Key Figures * **Treasury Income:** ₹896 Cr H1 FY25 → **₹1,134 Cr** H1 FY26 (+26%) ## B. Repo Rate Cut Impact * **Calibrated Monetary Stance:** RBI’s policy stability supports credit conditions, bolstered by digital payments and rupee-linked cross-currency trading. * **Rate Sensitivity:** **60% of loan book** is exposed to Repo rate movements; ongoing shift toward **MCLR-linked loans** to moderate interest rate risk. * **Policy Outlook:** Treasury team assessing potential Repo rate cuts; market expectations hinge on **WPI and CPI inflation trends**, with no firm guidance for December or March. ## C. Geopolitical Uncertainties * **Favorable Regulatory Shifts:** Relaxed RBI norms on loan against shares and IPO financing enhance opportunities in equity-linked lending amid improved market sentiment. ## D. Treasury Income Volatility * **Near-Term Pressure:** Q3 FY26 Treasury income expected to remain subdued due to prevailing rate environment despite strong H1 performance. * **Full-Year Upside:** FY26 Treasury income projected to surpass FY25 levels if current **year-on-year growth trend sustains**. --- # 7. Guidance & Outlook ## A. Key Figures * **Credit Growth Guidance:** **13–14%** FY26 · **12–13%** next six months (conservative) * **Global Deposit Growth Guidance:** **10–11%** FY26 * **NIM Improvement Timing:** Begins **Q4 FY26** after stabilization in Q3 * **ROA Guidance:** **90 bps** FY26 (conservative vs. current >91 bps) ## B. Credit Growth Forecast * **Robust Macro Backdrop:** India’s real GDP growth at a five-year high, supported by structural reforms and policy stability, underpinning strong credit demand. * **Cautious Lending Trajectory:** Despite sustained execution at **14–15%** credit growth, guidance trimmed to **12–13%** for H2 FY26 due to geopolitical and tariff risks. ## C. NIM Recovery Path * **Margin Rebound in Sight:** NIM stabilization expected in Q3, with full recovery commencing in Q4 as deposit repricing pressures subside. * **Gradual Yield Enhancement:** MCLR-linked loan book expansion will drive yield improvement over the next two quarters. ## D. ROA Guidance * **Profitability Momentum:** ROA improved sequentially, with further gains anticipated on the back of NIM recovery and operational discipline. * **Conservative Targeting:** Management maintains **90 bps** ROA guidance despite outperformance, enabling headroom for overdelivery.