Key Financial Performance (Q2 FY27)

  • Net Profit: ₹1,080 crore (65% YoY increase)
  • Operating Profit: ₹1,678 crore (29.4% YoY increase)
  • Net Interest Income: ₹2,822 crore (22.7% YoY increase)
  • Core Fees: 15.5% YoY growth
  • Return on Assets: 0.9% (vs 0.6% in Q2 FY26 and 0.9% in Q1 FY27)
  • Cost-to-Income Ratio: 64.3% (vs 67.1% in Q2 FY26)
  • Total Assets crossed ₹5 lakh crore
  • Deposits crossed ₹3.5 lakh crore
  • Advances exceeded ₹3 lakh crore

Supreme Court AT-1 Bond Judgment Impact

  • Honorable Supreme Court upheld Bombay High Court judgment setting aside ₹8,415 crores of Additional Tier 1 bonds written down in March 2020
  • Dismissed appeals filed by YES Bank, Administrator, RBI, and Union of India
  • Pro forma impact on CET-1 ratio: ~240 basis points reduction to approximately 11.4% (including profits)
  • Overall Tier 1 capital ratio expected to remain around 13.7% on pro forma basis
  • Bank is examining judgment details, legal options, and appropriate steps forward
  • Treatment of AT-1 bonds and related accounting matters to be addressed per judgment terms and professional advice

Balance Sheet and Deposit Franchise

  • Mobilized ₹18,575 crores of FCNR(B) Deposits
  • Extended Foreign Currency Term Loans of ₹15,215 crores through IBU at GIFT City
  • Reported Advances growth: 23.7% YoY
  • Normalized Advances growth (ex-FCTL): 17.6% YoY
  • Credit-to-Deposit Ratio: 83.1% (normalized)
  • Deposits growth: 19.5% YoY (end-of-period), 22.1% (average quarterly balance)
  • Retail and branch-led Deposits: 20.9% YoY growth, 58.8% of total Deposits
  • CASA Deposits growth: 15.5% YoY (average quarterly balance)
  • Current Account growth: 21.8% YoY
  • Savings Account growth: 11.6% YoY

Margins

  • Net Interest Margin: 2.6% for the quarter
  • Sequential moderation of 12-14 basis points largely due to FCNR(B) mobilization and associated liquidity deployment

Non-Interest Income and Operating Expenses

  • Non-interest Income: 14.4% YoY increase, 4.7% sequential increase
  • Core fees growth supported by trade and cash management, loan processing fees, and card product fees
  • Operating expenses: ₹3,026 crores (14.2% YoY increase, 5.1% sequential increase)
  • Includes ₹51 crores commissions on foreign currency borrowings, ₹20 crores marketing expenditure for Asian Games sponsorship, ₹31 crores from changes in wage codes

Asset Quality

  • Gross NPA ratio: 1.2%
  • Net NPA ratio: 0.2% (both improved YoY)
  • Gross slippages: 1.3% of Advances (broadly unchanged sequentially)
  • Net credit cost: 0.3% of average assets (similar to Q1 FY27)
  • P&L gains from Security Receipts portfolio: ₹395 crores
  • Standard asset provision increase driven by loan balance growth including FCTL portion

Business Segment Growth

  • Retail asset disbursement: 35% YoY increase
  • Retail book growth: nearly 9%
  • Commercial Banking Advances: 20.2% growth
  • Corporate and Institutional Banking Advances: 31.4% YoY growth

Capital and Liquidity (Reported)

  • CET-1 ratio: 13.7%
  • Liquidity Coverage Ratio: 131.4%

Management Outlook and Priorities

  • Focus on improving core profitability, risk-calibrated growth, granular deposit franchise, margin management, and operating efficiency
  • Capital planning to remain important area of focus
  • Evaluating implications of Supreme Court judgment while maintaining growth momentum

Q&A Session Highlights

  • RIDF reduction planned: ₹8,000 crores in H2 FY27 (₹4,500 crores in Q3, ₹3,500 crores in Q4)
  • Expected CET-1 impact from ECL implementation: 50-60 basis points (offset by new credit risk circular)
  • Floating-rate book constitutes ~65% of portfolio
  • Certificate of Deposits increased to ~₹11,000 crores for tactical reasons including LCR/NSFR considerations
  • Market share in payment systems: ~58.7% payee PSP, ~36.4% payer PSP
  • Growth capacity: Can sustain 11% growth without consuming capital at current ROE levels
  • Rating agencies view AT-1 judgment as credit-neutral event