Q : How does Axis Bank's conservative asset quality policy compare to peers, and what impact does it have on financials? A : Puneet Sharma, CFO, stated that Axis Bank provides 100% provisioning on unsecured retail loans on day 91, which is more conservative than many peers. This approach impacts reported numbers by increasing credit costs initially but ensures prudence in asset quality management.

Q : With the current macroeconomic challenges, how does Axis Bank plan to manage its loan and deposit growth? A : Amitabh Chaudhry, CEO, emphasized that Axis Bank is focused on building a sustainable franchise by prioritizing quality over growth. The bank is making strategic choices to ensure the right asset and deposit mix, even if it means moderating growth in the short term.

Q : What is the outlook for unsecured loan delinquencies, and how is Axis Bank addressing this issue? A : Puneet Sharma, CFO, noted that while the macro environment remains challenging, Axis Bank has taken corrective actions, including tightening credit filters and enhancing collections. Early indicators show improvement, but it will take time for these measures to fully reflect in portfolio performance.

Q : How does Axis Bank plan to address the Loan-to-Deposit Ratio (LDR) constraint, and what is the strategy for maintaining liquidity? A : Amitabh Chaudhry, CEO, mentioned that Axis Bank has a strategy accepted by the RBI to manage its LDR. The bank is comfortable operating within the current range and is strategizing for potential regulatory changes, such as new LCR guidelines.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus .