• Financial performance: Net interest income grew by 23% and profit rose 65%, supported by a 57% year-on-year decline in provisioning and net interest margins nearing 6%. Asset quality improved quarter-on-quarter across gross and net levels, driven by lower slippages.
• Return metrics target: Management targets a sustainable long-term return on equity (ROE) of 15% to 16%, noting that Q4 ROE reached around 17% while FY26 full-year ROE was 14.2% alongside an ROA of 1.6%.
• Asset quality recovery: Credit costs and slippages declined following improvements in the microfinance portfolio over the past six months, alongside healthy recoveries across vehicle, mortgage, and commercial banking segments.
• Net interest margins: Yields on the book stand at approximately 14% to 15% against funds cost around 7%, keeping margins protected due to the bank's small-ticket retail lending focus, with future support expected from microfinance and personal loan growth.
• ECL framework impact: The RBI's new expected credit loss guidelines are viewed as progressive and balance-sheet strengthening, with an anticipated one-to-two-year transition period as provisioning adjusts across SMA categories.