• RoA guidance: Management maintained its guidance of 1 to 1.05 and said RoA is currently 1.04, with a level in excess of 1% expected to continue; it described the 0.8% comment as hypothetical.
• Profit growth: The bank reported half-year profit of 10,000 crore and quarterly profit in excess of 5,000 crore, with core NII growth of 20%. Management expects NII growth to support profitability.
• ECL provisioning: Management said there was no material risk from the higher ECL provisioning, citing PCR in excess of 95% and the RBI’s 5 years dispensation. It estimated the impact on capital ratios at around 1% and said internal accruals and existing capital would suffice, with no capital raise planned.
• Capital and asset quality: CRAR is in excess of 17%, while CET1 is 12.80 against 8.50 required. Net NPA was 1.33, below the March 27 guidance of 1.50%, and management said stress in the book was minimal.
• Margins and yields: NIM was 2.55%, within the 2.5 to 2.6 guidance. Management said rising bond yields were a temporary feature and expected NII growth and support from the 53% of the book linked to the repo rate to help offset the impact.