What are the key drivers that enabled this highest-ever net profit in the fourth quarter in FY26?
We changed our product mix. Earlier, we were focusing majorly on the corporate segment and now we have shifted to the retail, agri and MSME (RAM) segments. It is nearly 86 per cent of our books, compared to 40-60 per cent earlier. We also changed a few of our floating rate loans into fixed rate loans. Our low cost Current Account Savings Account (CASA) deposits grew 12 per cent to Rs 31,122 crore in FY26 compared to last year. We also reduced our bulk deposits and certificates of deposit. All this boosted interest income. The non-interest income like cross-selling income, processing fees and non-fund-based business also helped.
Total recoveries during FY26 was Rs 679 crore from the written-off accounts. Our Special Mention Accounts 30 plus (where overdues are more than 30 days) numbers were at 0.17 per cent of our loan book at the end of March 2026, which is one of the lowest in the industry. Now we have plugged all the holes in terms of earning leakages and this has started reflecting in our net profit.
You have made Rs 163 crore provision for West Asia war-related impacts in the fourth quarter. Was it out of prudence, or do you see some stress emerging?
Our risk management department found it prudent to make the provision. I have spoken to customers across sectors like textile, marine, fishing, etc. Most of them are confident of navigating the challenges. But they are facing second order effects like non-availability of ships, higher cost of fuel, manpower shortage, etc. Usually, in such situations working capital utilisation goes up. But this time, surprisingly, our working capital utilisation has come down by 3 per cent. When I speak to customers, they say why should we borrow and pay interest when the order book is not good, reflecting customer discipline. We are relatively insulated nut if the situation continues beyond May, there can be some stress.
Given FY27 is going to be a challenging year, what is your growth guidance?
Last year, industry credit growth was 16 per cent, and we grew 18 per cent. We wish to continue this year in a moderated way compared to last year. We expect our credit growth to be 1 or 2 per cent over the industry growth.
I cannot put a particular number on deposits. That is because the whole game has changed. Earlier, we had a credit-deposit ratio, which was typically in the range of 80-85 per cent. Now the Reserve Bank of India has issued guidelines requiring a liquidity coverage ratio of 100 per cent. We would maintain a LCR of around 115 to 120 per cent and deposit growth will be in line with that.