Lionheart Holdings Q3 FY2024 earnings call

• Aiming for 12-15% growth in FY '24, skewed towards year-end, working for double-digit advance growth.
• Implemented digital lending process with BCG, first phase of automated loan underwriting rolled out.
• Recoveries more than slippages, expecting reduction in NPAs, improved coverage ratio, ROA close to long-term average of 1.5%.
• Strengthening leadership team for digital, retail, etc.
• Opened 20 branches in FY '24, planning to open 800th branch by FY '24 end.
• Gold loan segment: non-agri gold loan grew by 28% or INR 1,200 crores, KCC gold loan degrown by INR 4,000 crores.

In Q3 FY '24, City Union Bank's PAT grew by 16% to INR 253 crores compared to INR 218 crore in Q3 FY '23. The ROA was 1.49% in Q3 FY '24 vs 1.34% in Q3 FY '23 and 1.52% for 9 months FY '24. Gross NPA declined to 4.47% in Q3 FY '24 from 4.66% in Q2 FY '24. Net NPA was 2.19% in Q3 FY '24. Yield on advances was 9.62% in Q3 FY '24, which would be 9.83% excluding a INR 25 crore one-off interest reversal from nonperforming FITL loans. NIM for Q3 FY '24 was 3.5%, becoming 3.67% excluding the one-off item. Cost-to-income ratio was 48.64% in Q3 FY '24 and 45.65% for 9 months FY '24.

• Originally aimed for 12-15% growth in FY '24, now hoping to get closer to double-digit growth.
• Expect PAT to cross 4-digit figure in FY '24.
• Slippages coming down, recoveries surpassing slippages, expecting lower NPAs in coming quarters.

• Headwinds in margin, base figures, and growth.
• Impact of restructured portfolio on yields and interest reversal.
• Floods in Tamil Nadu had minimal impact.
• Systemic factors like textile export sector sluggishness affecting credit demand.

Q: On growth guidance, what's the current outlook?

A: N. V. Kamakodi said they hope to get closer to double-digit growth.

Q: Elaborate on the FITL impact and interest reversal?

A: Reversal of INR 25 crores from interest income due to restructured loans turning nonperforming.

Q: What's the target for deposit growth?

A: Matching credit growth, balancing deposit and advance growth.

Q: Impact of floods in Tamil Nadu?

A: Very insignificant operational impact.

Q: Details of digital lending implementation?

A: First phase for less than INR 3 crores, moving to INR 5 crores, then INR 7.5 crores, improving turnaround time and decision-making.