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We present the earnings conference call compendium which has the detailed takeaways from Q1FY24. The underlying discussion revolved around NIMs trajectory, growth outlook, opex / attrition and sustainability of the current benign credit cost cycle. Investors / analysts also discussed the incremental costs of deposits / funds and the extent of re-pricing of the existing base to understand the steepness of the NIMs decline ahead. On growth side, there were more discussion on bank-specific growth strategies amidst expectation of moderation in systemic credit growth. Please click on the link below to refer to respective company’s earnings call.

Q1FY24 earnings call takeaways

Opening remarks

* Began Q1 with strong operating performance

* Fine-tuning strategy to deliver sustainable and consistent performance

Margins

* 3bps QoQ delta in margins is due to interest on income tax refund (3 bps positive impact in 4Q vs none in Q1) and 9bps QoQ decline in margins is due to rise in cost of funds being offset by increase in yield (business as usual)

* Bank has seen an improvement in credit yield as well as yield on incremental disbursements. However, market is competitive

* 42% of fixed rate loans mature over the next 12 months

* Saw an increase in funding cost YoY as well as QoQ. The cost of deposits should rise though the pace should come down

* LCR at 123% and as bank runs down excess SLR, its LCR will come down

Opex

* Integration expenses of INR 3.85bn for the quarter

* Expect integration expense of INR 20bn pre-tax and INR 15bn post tax in 18 months

* Some of the integration expenses would be up fronted in 12 months

* Continue to look at white spaces across the country in urban markets as well as Bharat

* Looking at opening incrementally 400 branches across the country for the current FY

Advances

* Share of unsecured disbursements in the past 4 quarters has been in 20-25% range

* Bank has a plan in place now to grow its home loan book

* Trend wise across industry, revolve rates have been coming down; while EMI loans have been inching up

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