Lionheart Holdings Q4 FY2023 earnings call

["- Tightened underwriting process pre-COVID, reducing new customer approval rate from ~50% to ~25%.", "- Tied up with Boston Consulting Group to upgrade existing digital lending processes.", "- Gross NPA ratio improved from 4.70% last year to 4.37% in FY '23.", "- Recovery improved significantly in FY '23 with NPA addition minus recovery moving from INR 481 crores in FY '22 to INR 222 crores in FY '23.", "- Cost-to-income ratio reduced to 38.85% in FY '23 from 40.37% in FY '22.", "- Bank insurance commission grew from INR 9 crores in 2019 to INR 27 crores in FY '23."]

City Union Bank's advances have major segments with MSME accounting for 43% share and gold loan at approximately 25% of advances. Gross NPA stood at INR 1920 crores as of 31st March 2023 with a gross NPA ratio of 4.37% compared to 4.70% last year. In FY '23, total recovery upgradation was INR 1,007 crores, comprising INR 813 crores from live accounts and INR 294 crores from technically written off accounts. Net NPA improved from 2.89% in FY '22 to 2.36% in Q4 FY '23.

["- Expect 12-15% growth in current year, skewed towards year-end.", "- Hoping for ROA closer to or better than the long-term average of 1.5%.", "- Margin expected to be around 3.65% plus or minus 10 basis points for FY '24.", "- Anticipate further improvement in recovery to reduce net NPA and enhance coverage ratio."]

["- Pressure on net interest margin due to deposit repricing.", "- Regulatory challenges and past divergence issues.", "- Uncertainty in recognizing interest subvention for Agriculture KCC Jewel Loan."]

Q: Mona Khetan asked about retail focus and loan mix change.

A: N. V. Kamakodi said no major change in loan mix expected, but retail focus may come later.

Q: Rohan Mandora asked about ROA improvement.

A: N. V. Kamakodi said improved recovery is the major driver.

Q: Amish Thakkar asked about regulatory processes.

A: N. V. Kamakodi discussed past divergence issues and steps taken.

Q: Gaurav Jani asked about margin and loan repricing.

A: N. V. Kamakodi said almost the entire loan book repriced, and margin expected to be around 3.65% plus or minus 10 basis points.