Some key takeaways from the call:
a) The risks on the asset side were allayed.
b) The deposits have normalized after the initial run.
c) NPAs and provisions will keep coming down.
d) maintained the guidance of ballpark 1% RoA and PCR of 65% for Q4.
The key thing for me was the increase in opex and cost to income ratio. The bank could have gone slow on the Credit card front to control the opex but the way I look at this is that the increase in opex is a matter of choice and the bank is sacrificing short term profitability over a better and more profitable book. From the presentation:
The management had said that almost 75% of the increase in opex increase came from the Credit card business which means out of the 180 cr. increase in opex , around 135 cr was for CC. If one looks at normalized levels and assuming other parameters like PCR etc remaining same the RoA could have reached the 1% number this quarter itself if the bank had chosen to go slow in the CC business.
Discl.: Invested. I have added/sold the stock in last 15 days.