• Growth guidance: The bank expects asset and liability growth to track system growth; asset growth was around 11% in the first quarter, including FCNR(B), and management said the seasonally strong second half should support its guidance.
• Funding mix: Retail plus SBC now accounts for 50% of liabilities, and new accounts opened were up about 20% Q-on-Q. The bank is building its wealth-management and salary businesses and expects corporate, government and retail deposits to support liability growth.
• Margin outlook: NIMs fell 12 basis points, with 7 to 8 basis points attributed to FCNR(B) deposits. Management expects to recoup the decline in the second half as higher-yielding commercial vehicle, microfinance and retail asset disbursements grow.
• Lending priorities: The bank will cautiously calibrate microfinance growth while it monitors rural conditions. It is rethinking two-wheeler lending, expects no meaningful growth there in the second half, and expects tractors and the rest of the vehicle business to improve.
• Gold and returns: Gold loans were up about 3x YoY from a very low base; management expects the sector to keep growing, citing both formalization and household stress. It is reasonably confident of reaching an exit RoA of about 1% in Q4, with a medium-term aspiration of 1.7%, 1.8%.