Release Date: July 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Business of the bank grew by 7.10% YoY, reaching INR2,08,331 crores.
- Net interest income increased by 15.18% YoY.
- Operating profit grew by 23.35% YoY.
- Net profit increased by 18.95% YoY, with a sequential growth of 30.94%.
- Gross NPA reduced to 4.72%, showing a reduction of 208 bps.
Negative Points
- CASA growth was only 5.36%, which is relatively low.
- Retail agri exposure reduced by roughly 2.5% quarter-on-quarter.
- Cost-to-income ratio remains high at 69.67%.
- Challenges in deposit growth vis-Ã -vis credit growth.
- Impact of INR4,200 crores adjustment to general reserve due to new investment guidelines.
Q & A Highlights
Q: Will the Q1 FY25 trend continue for the year?
A: Yes, we expect to keep this momentum going as we have done in Q1. (Swarup Saha, CEO)
Q: What measures are being taken by the bank to more than double the BC network this fiscal year?
A: We are moving from individual BCs to a corporate BC model. We have completed the RFP process for the second round and will be onboarding more corporate BCs to cater to different parts of the country. (Swarup Saha, CEO)
Q: What new products and services are planned for the PSB UnIC app in the current fiscal?
A: We have added DEMAT services, SIP mutual fund investment, government PPF account opening, and Sukanya Samriddhi. We are also working on a refined current account corporate biz app and other value-added services. (Swarup Saha, CEO)
Q: What is the NIM guidance for fiscal year '25?
A: Our Q1 NIM was at 2.69. We intend to keep the NIM between 2.75 to 2.8 for the March '25 year-end. (Swarup Saha, CEO)
Q: Can you explain the reason for INR4,000 crores to net worth due to the shift to new investment guidelines?
A: As per the new RBI guidelines, recap bonds are valued at fair market value, resulting in an adjustment of INR4,200 crores to the general reserve. (Swarup Saha, CEO)
Q: What is the impact of the recent RBI draft LCR norms for additional 5% run-off for retail deposits on the bank's earnings?
A: Our back-of-the-envelope calculations show an impact of 10% to 12%. We are sufficiently cushioned, maintaining an LCR around 130%. (Swarup Saha, CEO)
Q: What is the guidance for other financial metrics like return on assets, cost-to-income ratio, and return on equity?
A: Return on assets is expected to be between 0.65 to 0.75, cost-to-income ratio to be below 69%, and return on equity between 9% to 10%. (Swarup Saha, CEO)
Q: Why can't the cost-to-income ratio be reduced to 60% in the next two years?
A: We are working on augmenting income and reducing costs. The cost-to-income ratio was impacted by wage revisions and low CASA. We aim to bring it down to 60%-62% in the next three years. (Swarup Saha, CEO)
Q: What factors influenced the decision to open 100 new branches this fiscal year, and which regions are being targeted?
A: We are focusing on regions other than the Northern belt, primarily in Central, Southern, Eastern, and Western India. We have identified 100 potential locations based on district-wise business viability. (Swarup Saha, CEO)
Q: What is the expected loan growth for this year and the next year?
A: We expect to grow at 12% to 14% this year and 14% to 16% next year. Our base for this year is around INR88,000 crores. (Swarup Saha, CEO)
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
