Asset Strategy and Growth Post-Merger

3 SECTION 2: PATH AHEAD Profitability • Net Interest Margin: As the retail asset contribution moves towards 70% of the total fund assets, it is planned that the gross yield will continuously increase. Coupled with lower cost of funds (From improved CASA ratio), it is planned to expand NIM to about 5.5% in the next 5-6 years. • Cost to Income: The Bank plans to improve C:1 ratio to ~50-55% over the next 5-6 years, down from ~79% currently (Q3 FY 19) • ROA and ROE: With the improvement in the NIM and cost to income ratio, the bank aims to reach the following benchmarks in the next 5-6 years. ROA of 1.4%-1.6% • ROE of 13%-15% 18 IDFC FIRST Bank

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