Lionheart Holdings Q1 FY2023 earnings call

• New Board Member: Shri Gurumoorthy Mahalingam co-opted as additional director, bringing expertise in regulation, finance, etc. - Performance: Q1 FY '23 satisfactory in growth, NPA, and treasury; slippages reduced, recoveries improved. - SpiceJet Update: SpiceJet servicing dues, renewed facility, moved out of SMA status with phased repayment plan. - Digital Initiatives: Almost on par with top banks in digital services, including video-based KYC, UPI features, and fintech partnerships. - Branch Expansion: Planning to open 50-75 new branches by year-end

Deposits: Grew 9% Y-o-Y from INR 44,606 crores to INR 48,772 crores. CASA grew 25% to INR 15,387 crores, with CASA percentage to deposits at 32% as of 30th June 2022. Credit: Grew 12% Y-o-Y from INR 36,395 crores to INR 40,934 crores, targeting 15-18% growth for FY '23. Net Interest Margin: 3.95% on a daily average basis for Q1 FY '23. NPAs: Gross NPA at 4.65% and net NPA at 2.89% as of 30th June 2022, both sequentially reduced. Treasury: MTM provision for government securities at INR 30.41 crores, with additional provisions. Insurance Income: INR 2 crores in Q1 FY '23 vs INR 1 crore last year, from bancassurance tie-ups. Restructured Book: ~INR 2,033.7 crores as of 30th June 2022, 58% of which had started repayment

• Credit Growth: Targeting 15-18% growth for FY '23, back-ended. - NPAs: Gross and net NPAs expected to reduce significantly by year-end. - Net Interest Margin: Expected to stay around 3.85-4%. - ROA: Aiming for 1.5% ROA, already at 1.46% in Q1 FY '23. - Cost-to-Income Ratio: Expected to hover between 42-45% due to lack of treasury income

• Treasury Yield: Unfavorable yield movements may impact domestic treasury profit, managed through ALM. - SMA/Restructured Book: Quarterly slippage aberrations, but overall stress within 2-2.5% of closing advances. - External Factors: Oil price, inflation, geopolitical issues could impact growth, but comfort level increased

Q: What gives confidence to increase loan growth guidance?

A: Improved comfort from book performance, customer discussions, and reduced uncertainties, allowing accelerated growth.

Q: On restructured book and recovery?

A: Most restructured book has started repayment; 15% yet to start, but overall slippage expectations within 2-2.5% of closing advances.

Q: Employee base and cost-to-assets?

A: Employee base may increase with new branches, cost-to-assets expected to be in between pre-COVID levels.

Q: Yield and deposit mix?

A: 65% of loan book in EBLR, 25% in MCLR; CASA growth managed, with sufficient liquidity to support credit growth