HDFC Bank Limited

Ladies and gentlemen, good day and welcome to HTC Bank Limited Q2 FI26 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Srinivasan Vaidyanathan, Chief Financial Officer, HDFC Bank. Thank you and over to Mr. Vaidyanathan.

Thank you, Nirav. Good evening and welcome to all the participants on a very busy day. Without much ado, let me get to our CEO and MD, Sashi Jaigrishan for his opening remarks before we get on. We also have Kaisar Barucha, our Deputy Managing Director. We will also get him at some point. Please, Sashi, forward to you.

Good evening, friends. First, let me wish all of you Shubha Dhanteris and Shubha Deepavali. So, first, let me start with the macro. Global outlook remains very volatile thanks to the uncertainty related to tariffs and immigration policies. However, the domestic economy appears to be getting stronger and The triad of fiscal and monetary measures, whether it is the direct tax reductions, the GST reductions, or the up-fronting of interest rate cuts, I think have galvanized economic activity in the recent past. The headline inflation has been printing very low, thanks to the low food inflation. this probably gives the Monetary Policy Committee to maneuver on future interest rate actions. We've had strong rainfall in most parts of the country. The GST rate changes have created a lot of buzz in the market in the later part of September onwards. And coming to the bank, The improvements in the economic activity has given us the opportunity to accelerate loan growth. We can see a lot more color as we get into Q&A. We've seen our growth pick up across segments. We continue to see market share gains in deposits and we are very focused in discipline pricing. As expected, Due to the front loading of the interest rate cuts of the asset side of the balance sheet, we did see NIM compressed by about eight basis points. We should see over the next six to 12 months the deposit repricing having some amount of tailwind effect in the NIMs. We are managing our expenses in a very tight band and we should see our investments in distribution and technology, creating an operating leverage over the medium to long term. We continue to invest in technology, not just in core platforms and middlewares, which will bring about a lot of stability and scalability in availability, in resilience, and in security. but we are also embarking on creating a platform to embark on certain low-hanging new age experiments such as in Gen AI. Largely, these are to re-engineer our processes and create a kind of a great customer experience by reducing turnaround time. It will have a second-order impact if it becomes successful, which is what we are all working hard towards. in the bottom line of the bank. I think our USP as probably you have seen the numbers continues to be our very healthy asset quality and we don't see too much of issues in that even in our early indicators as well. Our matrices, large part of our matrices whether it's NIMS, whether it is cost to earnings, whether it's return on assets, have been very range bound. And we should see a fair amount of stability with a positive bias in the medium to long term. So let me pause out here and happy to take on any questions. We have our CFO, our DMD, and other colleagues who will collectively answer. would be answering to some of your questions. Thank you.