Oct 17, 2026 earnings call — Deposit and loan growth, FCNR deposits
Profit before tax excluding treasury grew 23.4% year-on-year to INR 199.54 billion.
Revenue $3.5B (est $3.5B) · EPS $0.48 (est $0.40)
Key quotes
"The bank has mobilized gross FCNR (B) deposits of about USD 18 billion pursuant to RBI swap facility."
"The net NPA ratio was 0.30% at September 30, 2026, compared to 0.35% at June 30, 2026, and 0.39% at September 30, 2025."
"The increase in proportion of the assets of overseas branches in the total assets and the large sequential increase in the retail term deposit base have led to a moderation in margins"
Analyst Q&A 6
Corporate vs retail loan growth
Q (Mahrukh Adajania · Tara Capital): Analyst asked if strong corporate growth is temporary parking of FCNR funds or will stay high, and how retail vs corporate mix will evolve. They also asked when the agri provision (INR 13 billion) will be reversed and whether there was a big corporate recovery this quarter.
A: Management said retail loan growth has recovered to close to 15% and that corporate growth is driven by client demand and pricing, not temporary parking of FCNR funds. They said new corporate NPL formation is negligible, there was one relatively chunky corporate recovery this quarter, and higher general provisioning this quarter included a one-off expansion related to loans against FCNR deposits. On the agriculture-related provisioning, remediation is ongoing and they expect an update over the next 2 quarters.
"It is really a response to client demand and our view on pricing." — Anindya Banerjee
Credit cards, gold loans, and margins timing
Q (Nitin Aggarwal · Motilal Oswal): Analyst asked about the weak credit card growth and slower sequential gold loan growth, and when these will recover. They also asked whether FCNR-driven growth is changing the bank's growth trajectory and how margins will evolve over the next quarters.
A: Management said they remain engaged in the credit card business, are launching new products, and the Q2 decline was seasonal and a timing/base issue; jewel loan volumes slowed sequentially while operations were aligned to new RBI rules and should recover. On growth, they said the franchise is open across segments and they will calibrate growth by pricing and market conditions; on margins they said the full impact of FCNR deposits raised in Q2 will show in Q3 and they expect margins to start recovering from Q4.
"So the full impact of these on the average balance sheet will come in Q3, and we will see a further moderation in margins, offset a little bit by the rate hike, which has already taken place." — Anindya Banerjee
Why overseas margins rose
Q (Kunal Shah · Citi): Analyst asked why overseas margins rose even though much of the incremental overseas book should earn lower margin, and asked how much FCNR affected margins and how long utilization will take.
A: Management said higher dollar interest rates over recent months have increased margins on overseas operations, not just the FCNR mix. They said the full balance-sheet impact of the higher term deposit proportion will be visible in Q3, pickup should start in Q4, and they expect to deploy excess liquidity over the next 2 quarters during the seasonally strong credit period. They declined to give a pro forma number excluding FCNR.
"Interest rates have gone up in dollar markets over the last 3, 4 months." — Anindya Banerjee
FCNR strategy and fee income
Q (Parameswaran Subramanian · Investec): Analyst asked if raising a large FCNR proportion signals a strategy change (prioritizing NII over NIM), and whether any FCNR-related one-off items explain strong fee growth. They also asked about soft savings growth and September LCR.
A: Management said there is no strategy change; they solve for sustainable earnings growth and viewed the FCNR raise as a one-off opportunity to support long-term business growth and NRI engagement, and they disclosed roughly USD 18 billion mobilized with breakdowns to loans, partner bank loans and customer capital. They confirmed some processing fees were charged for leverage against FCNR but sequential OpEx rose due to wholesale funding costs, and on savings they said retail savings is okay while institutional savings fell; they noted September LCR was not informative because excess liquidity was deployed in non-HQLA safe instruments.
"Yes, there is some amount of the processing fees that were charged for the leverage against FCNR." — Anindya Banerjee
Returns and RAROC by business
Q (Chintan Joshi · Autonomous): Analyst asked whether retail and corporate businesses have similar RAROC thresholds and whether corporate lending gives lower returns than retail, possibly diluting ROE if corporate share rises.
A: Management said corporate credit cost is lower because corporate decisions focus on return of capital and are more go/no-go, while retail portfolios accept some portfolio-level credit loss; they also noted corporate brings ancillary revenues such as transaction banking which affects returns beyond lending RAROC. In short, they do not see corporate as producing worse returns than retail.
"I would expect credit cost in the corporate portfolio to sustainably be lower than in retail." — Anindya Banerjee
Is corporate worse than retail; NIM excluding FCNR
Q (Chintan Joshi · Autonomous): Analyst repeated whether corporate returns are worse than retail and asked if underlying NIMs excluding FCNR improved quarter-on-quarter.
A: Management restated that corporate is not worse than retail. On NIMs excluding FCNR they declined to give an excluding number, saying the money is already on the balance sheet and they can explain the impact but not provide a pro forma excluding figure; they added that their funding raising ability, pricing focus, and loan pricing capability remain unchanged.
"See, I don't -- because it's now money which is sitting in the balance sheet." — Anindya Banerjee