CSB Bank Ltd — Q4 FY26

CSB Bank Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=LufudmzGSIc Published: 9 days ago

0:00 Ladies and gentlemen, good day and welcome to CSB Bank Limited earnings call for Q4 FYI26 financial results hosted by Yes Securities Limited. 0:12 12 seconds Please note all participant lines will be in the listenon mode and there will be an opportunity for you to ask questions after the presentation concludes. 0:21 21 seconds Please note that this conference is being recorded. With that I hand over the call to Mr. Shivaji Tapl from Yes Securities. Thank you and over to you. 0:35 35 seconds Uh thank you Swapnil. Uh good evening and a warm welcome to all those who have joined the call. Uh the CSP bank 0:43 43 seconds management is represented by Mr. Praai Mandal managing director and CEO, 0:50 50 seconds Mr. BK Dvakara, executive director and Mr. Satish Gundar, Chief Financial Officer. 0:58 58 seconds We specifically thank the management of CSV bank for giving yes securities the opportunity to host their result call. 1:06 1 minute, 6 seconds The management will first be making some opening remarks after which we will throw the floor open for questions. 1:13 1 minute, 13 seconds Uh I now invite the management to make their opening remarks. Railay over to you. 1:20 1 minute, 20 seconds Thank you Shivaji and uh thanks everybody for joining our uh annual and 1:26 1 minute, 26 seconds Q4 uh analyst call. Uh so to start with we'll start briefly on the global 1:34 1 minute, 34 seconds economic scenario. As we all know that the West Asian crisis has been continuing for more than two months now 1:42 1 minute, 42 seconds and with probability of further escalations remaining large though deescalations cannot be ruled out altogether. Higher good prices uh for an 1:51 1 minute, 51 seconds unduly long period definitely blows in inflation risk. Consequently, Federal Open Market Committee BOE and EU have 2:00 2 minutes kept the rates on hold cautiously with the guidance that they have may have to increase it. Subsequently, global growth 2:08 2 minutes, 8 seconds forecast remains subdued and financial markets are likely to remain highly volatile. 2:14 2 minutes, 14 seconds As a result of higher crude price, Indian growth is expected to reduce by 50 basis points as per certain 2:21 2 minutes, 21 seconds estimates. The inflation forecast has been revised upwards and RBI expects the inflation for the next year to be around 4.6%. 2:30 2 minutes, 30 seconds The deposit growth continues to lag the credit growth raising the B deposits and CD rates in Q4. Surplus liquidity since 2:38 2 minutes, 38 seconds then has reduced the rates slightly but they are likely to remain elevated due to uncertainties in the economic 2:46 2 minutes, 46 seconds conditions. The GC yield curve has also moved up sharper due to inflation and CAD concerns. We expect the banking 2:54 2 minutes, 54 seconds sector name to remain under pressure due to rising cost and unabating volatility. 3:00 3 minutes We expect the liquidity to remain easy and our way to stay on hold for longer in this financial year in the wake of impact of domestic and globally. 3:11 3 minutes, 11 seconds Now coming to CSB specifics first of all I want to apologize that my voice is little bad so you know uh it's little 3:19 3 minutes, 19 seconds difficult but hope you can hear me properly. 3:22 3 minutes, 22 seconds So on CSB specifics uh highlights on profitability net profit for FI26 stood 3:30 3 minutes, 30 seconds at 633 crores with 7% growth over FI25 and Q426 3:37 3 minutes, 37 seconds net profit of 202 crores was registered with a sequential quarterly growth of 32%. Operation profit of the bank uh 3:47 3 minutes, 47 seconds grew by 19% on a FI basis and stood at,085 crores as on 31326. 3:54 3 minutes, 54 seconds Net interest income grew by 17% on a full FI basis 1720 cr and niu grew by 4:03 4 minutes, 3 seconds 25% for FI Q4 FI26 versus Q4 FI25. 4:09 4 minutes, 9 seconds other income grew by 21% and constituted 21% of the total income for FI26. 4:18 4 minutes, 18 seconds Proportion of risk assets continue to be lower compared to the industry. 4:23 4 minutes, 23 seconds uh in terms of uh valuation book value per share stand at 272 EPS for the year is 36.5 4:32 4 minutes, 32 seconds where in in Q4 it was 37.12 u roe for the year stood at 14.14% and 4:41 4 minutes, 41 seconds for Q4 FI26 it was 17.66 66 percentage. 4:49 4 minutes, 49 seconds The cost to income ratio for FI26 stood marginally lower than the previous 4:54 4 minutes, 54 seconds FOY at 62.53 percentage. Uh NE for FI26 T at 3.76 percentage where Q4 FY26 NE 5:04 5 minutes, 4 seconds was 3.83 percentage. ROA for the quarter end 313 26 stood at 1.53%. 5:11 5 minutes, 11 seconds Being the highest among the quarters in FI26 highway for FI26 stood at 1.29%. 5:18 5 minutes, 18 seconds Contingency provisions were held impact in the bank is continuing with the accelerated loan prohibition policy which will aid the bank in transitioning 5:27 5 minutes, 27 seconds toward the sale. On the liability side uh the funding base continued to grow. 5:33 5 minutes, 33 seconds The deposit registered a robust growth of 20% y and faster than the industry growth of 13.5%. 5:40 5 minutes, 40 seconds Castle ratio stands around 20%. To aid the liquidity, we also avail both domestic and FCI borrowings based on cost considerations. 5:49 5 minutes, 49 seconds On the liquidity side, um bank managed liquidity risk reasonably efficiently. 5:54 5 minutes, 54 seconds CD ratio stood at 91%. Average LCF for the quarter is at 109%. NS NSF ratio was around 1%. 6:06 6 minutes, 6 seconds Asset growth uh was quite robust with 27% YI as against the industry growth of 6:14 6 minutes, 14 seconds 16%. Yield on advances for FI26 stood at 10.8%. 6:20 6 minutes, 20 seconds On asset quality metrics, I think it was a fantastic quarter for us. G&P and NP ratios for the quarters stood at 1.66% 6:28 6 minutes, 28 seconds 66% and 4% respectively with both ratios being the lowest across the last four 6:36 6 minutes, 36 seconds quarters. PCR now stands at 76.38% without PWO. 6:42 6 minutes, 42 seconds Bank is holding a provisioning buffer of again on this PCR there's a significant improvement. Uh bank is holding a 6:49 6 minutes, 49 seconds provisioning buffer of around 210 crores over and above regulatory requirements. 6:54 6 minutes, 54 seconds on the c uh capital based CS CR continues to be well above regulatory requirement and stored at 20.66 66 7:01 7 minutes, 1 second percentage tier 1 ratio as on 313 at 18.93 percentage on distribution side we 7:08 7 minutes, 8 seconds have network of 862 branches and 832 ATMs as on 313 2026 so these are key 7:18 7 minutes, 18 seconds numbers we'll deliberate this through the call in conclusion I'd like to say that we conducted FI26 on a strong and 7:26 7 minutes, 26 seconds positive note delivering consistent growth despite facing significant external challenges and going through a massive take overall internally. This 7:35 7 minutes, 35 seconds performance gives us strong confidence as we enter the final and exciting scale phase of our SBS 23rd vision which will 7:43 7 minutes, 43 seconds play out in the next four years and we are fully aligned to our strategic vision. For the fourth consecutive quarter, we outpace growth of the industry both in deposits and advances. 7:54 7 minutes, 54 seconds During FY26, we recorded 20% growth in deposits and 27% growth in advances compared to the industry average of 13.5 8:01 8 minutes, 1 second and 16.1 respectively. While our corporate portfolio has progressed as ensearched and planned, a calibrated and 8:09 8 minutes, 9 seconds cautious approach adopted throughout CMS/BG business an unsecured portfolio amidst an adverse operating environment 8:19 8 minutes, 19 seconds along with liquidation of the loan against security and here the security has been primarily gold as a collateral. 8:28 8 minutes, 28 seconds uh as as per regulatory prescription this portfolio had to be run down quite a bit and this resulted in a relatively 8:36 8 minutes, 36 seconds higher share of gold loans during the year. We'll discuss this as we go through the call. Uh importantly, our 8:43 8 minutes, 43 seconds gold loan portfolio has managed uh to be uh pretty risk-f free with strict oversight on parameters such as LTP 8:52 8 minutes, 52 seconds sensitivity and risk metrics ensuring a healthy and profitable group. 8:56 8 minutes, 56 seconds We have successfully migrated to the new core banking system with offs and all 50 salon system around it. On the Oracle 9:05 9 minutes, 5 seconds side, uh uh with technology advancement, bank is now in a better position to scale up its activities more meaningfully. 9:13 9 minutes, 13 seconds uh we are also uh planning actually we're implementing in the next 3 to four months the entire transa transaction 9:20 9 minutes, 20 seconds banking uh systems uh in form of VA or even on the CMS side and um trade side 9:28 9 minutes, 28 seconds on the core itself on the Oracle we are implementing so with all of this together and with the service now platform now we are building various 9:36 9 minutes, 36 seconds systems around it and with LMS LOS um a huge indust spans data center and various other initiatives on the digital 9:45 9 minutes, 45 seconds side, OBDX on the core. Uh I think we are firmly in place to really now meaningfully scale the bank as a full 9:54 9 minutes, 54 seconds service bank justifying our you know uh uh a full service and uh uh uh 10:05 10 minutes, 5 seconds scaled bank over the next few years. As we now are leveraging the capabilities of the new course system and surround 10:13 10 minutes, 13 seconds systems to launch the full retail product bouquet both on the deposit and assets front and with the new revamp products we plan to meaningfully 10:21 10 minutes, 21 seconds kickstart our retranchise journey by Q4 FI27 and Q1 FI28 because that's where 10:29 10 minutes, 29 seconds we'll start seeing the portfolio growing on that side. Growth in leadership book is also expected to resume once the ecosystem turns favorable favorable I 10:36 10 minutes, 36 seconds mean the global ecosystem we remain firm on achieving the targeted portfolio mix which is invis 2030 as 2030 which will 10:45 10 minutes, 45 seconds continue to strive towards this objective as advanced growth outpac deposit growth as was the case for most 10:52 10 minutes, 52 seconds of the banks during the year liquidity management and regulatory ratio maintenance remained challenging further 10:59 10 minutes, 59 seconds compounding by tight systemic liquidity conditions which is is now of course little bit. Despite this, we navigated 11:06 11 minutes, 6 seconds the environment effectively through prudent management of deposit cost and teners along with optimization of 11:13 11 minutes, 13 seconds borrowings. We continue to maintain adequate liquidity buffers and comfortable regulatory ratios with both cost of deposits and cost of funds declining sequentially. 11:24 11 minutes, 24 seconds From a profitability perspective, FI26 witnessed a strong operating performance with 19% growth in operating profit over 11:31 11 minutes, 31 seconds the previous year and a 7% increase in net profit. Q4 FI26 was particularly notable, marking our best performance in terms of slipage control and recoveries. 11:40 11 minutes, 40 seconds Consequently, we closed the year with lowest NPA levels compared to previous quarters with G&P of 1.66 and NNP of4%. 11:50 11 minutes, 50 seconds Non-interest income supported by sustained growth in core fees increased by 21% over last year despite 11:58 11 minutes, 58 seconds significantly lesser fraction in treasury income due to higher bonds and constituted 20% of the total income. Net 12:06 12 minutes, 6 seconds interest income growth remained robust by showing 25% y growth on a quarterly basis and 70 17% for the full year. All 12:14 12 minutes, 14 seconds key financial ratios remain stable and well above regulatory thresholds. 12:20 12 minutes, 20 seconds Delivering this performance in a year marked by significant infrastructure buildout and a large scale technology transformation further rein reinforces 12:29 12 minutes, 29 seconds our confidence as we transition into the scaling phase of our journey with a clear aspiration to become a midsize bank by 2030. We have also revamped our 12:38 12 minutes, 38 seconds organizational structure with a sharp focus on customer acquisition across verticals which will be critical to the success of our region. leveraging the 12:47 12 minutes, 47 seconds capabilities we have built. We look forward to a progressive and sustained delivery quarter on quarter and year on year. Uh if I can highlight primarily 12:55 12 minutes, 55 seconds two points here before we move into the Q&A. Um there are two primary key things which two or three key things which 13:04 13 minutes, 4 seconds really make us very confident about the future. Number one, the enter technology transformation which happened with such seamless 13:13 13 minutes, 13 seconds ability with almost zero challenges as we move into the advanced core system 13:20 13 minutes, 20 seconds with so many surround systems. Uh it has been really a fantastic experience and as we talk today we have almost zero 13:29 13 minutes, 29 seconds issues uh impacting the transition. I think this is like a one in a once in a lifetime experience for us. the entire 13:36 13 minutes, 36 seconds team came together and did it. I think congratulations to the team. The second thing is that we have sort of every time 13:46 13 minutes, 46 seconds performed what we had predicted and that requires lot of uh confidence on what we are doing and in terms of execution what 13:54 13 minutes, 54 seconds we have done. For example, when in Q2, I think we are talking about uh NIM 14:01 14 minutes, 1 second compression and I said that we will improve it in Q3 and we did it. Yeah. 14:08 14 minutes, 8 seconds In last quarter there were significant questions and rightly so about the quality of the portfolio in terms of G&P 14:15 14 minutes, 15 seconds and NPS slippages and other things and I gave exact explanation why it happened and how we will ensure that we take care of it and we have done it. 14:25 14 minutes, 25 seconds uh and in a very credible fashion the way the numbers have come out today. So I think the critical part is that what 14:32 14 minutes, 32 seconds it says in our view is we know what we are doing and we are progressing on the right path and most of the predictions which we gave through the year we have 14:41 14 minutes, 41 seconds been able to achieve. With that I end my initial comments here over to you for Q&A. 14:50 14 minutes, 50 seconds Thank you so much ladies and gentlemen. We will now begin with the question and answer session. 14:57 14 minutes, 57 seconds Anyone who wishes to ask a question may click on the raise and icon from the participants tab on your screen. 15:04 15 minutes, 4 seconds We request participants to restrict to two questions and then return to the queue for more questions. To rejoin the 15:11 15 minutes, 11 seconds queue, you may click on the raise and icon again. 15:15 15 minutes, 15 seconds We'll wait for a few minutes until the question queue assembles. 15:21 15 minutes, 21 seconds We have our first question coming in from the line of Suraj Das of Sundaram Mutual Fund. 15:28 15 minutes, 28 seconds Suraj, please go ahead. 15:30 15 minutes, 30 seconds Yeah. Hi, professor. Uh, thanks for the opportunity. I hope I'm audible. Please go ahead. 15:36 15 minutes, 36 seconds Yeah, sure. Um, sir, I had a few questions. First, sir, on your LCR, it has been declining over the past two quarters in and probably now in the 15:45 15 minutes, 45 seconds lowest quarter within the sector. What is the rational? I mean why why it is declining and also uh how do you see the 15:51 15 minutes, 51 seconds impact of new guidelines on the LCR? uh more broadly I think um how should one think about this in the context of 15:59 15 minutes, 59 seconds growth because uh especially in your case the deposit growth is lagging not just for you but also for the system as you highlighted but in your case the 16:06 16 minutes, 6 seconds deposit growth is increasingly you know driven by wholesale bulk deposit which is now almost I think 50% of the term deposit versus 20 years a couple of 16:14 16 minutes, 14 seconds years back and it has also cost implication right so I mean uh in terms of this uh what is your expectation that 16:23 16 minutes, 23 seconds the share of wholesale deposit will continue to go up and probably you will continue to uh deliver maybe 20 22% kind of a loan growth. 16:33 16 minutes, 33 seconds So that is question one. Question two is sir on the golden portfolio uh the number of accounts on the golden 16:40 16 minutes, 40 seconds portfolio is declining consistently over the past I mean not just this quarter but also over the past 2 years coming down from let us say six seven 16:49 16 minutes, 49 seconds lakhs to now four lakhs and then tonnage growth is also hardly there for the industry also so so it looks like that 16:56 16 minutes, 56 seconds the growth is largely driven by the higher gold prices uh rather than you know underlying volume expansion so while you have a LTV cushion But want to 17:05 17 minutes, 5 seconds know what is your strategy in terms of maybe incremental customer acquisition uh front here. And the last s if you can 17:12 17 minutes, 12 seconds comment on the NRI deposit flow I mean how it is trending let us say during the March quarter and then uh if you have 17:20 17 minutes, 20 seconds seen any slowdown post March particularly because of this Oasia crisis and so and so forth. Yeah those are my three questions. 17:30 17 minutes, 30 seconds Thank you S for the questions. So let me cover one by one. Uh on the LCR we ended average at around 109%. 17:39 17 minutes, 39 seconds And what I can say is that uh as we are talking today while I can't give that number it is significantly better 17:47 17 minutes, 47 seconds compared to that at that point of time and uh and we all know that uh March 17:55 17 minutes, 55 seconds being a year quarter the kind of uh deposit rates which were in the ecosystem and as we rightly said that 18:02 18 minutes, 2 seconds our B deposits are around 50% and our casio is slightly on the lower side. We had to play tactical on this one and 18:10 18 minutes, 10 seconds said that what is the LCR level on an average you are comfortable with because uh we could have easily taken it to 115%. 18:19 18 minutes, 19 seconds But cost we have to pay for that the service when you balance it out and you know that the same deposit if you take 18:26 18 minutes, 26 seconds it in next quarter you have to pay a lower cost. So given that we said that we'll keep it somewhere around 110%. We 18:34 18 minutes, 34 seconds targeted 110, we ended with 109 because in the last moment something happened. Uh uh because we wanted to be efficient. 18:41 18 minutes, 41 seconds Okay. Uh but at the same pace, let me tell you LC is not our function at this point of time because we are 18:49 18 minutes, 49 seconds significantly higher than these levels at this time and NSF is around 122% which also gives comfort that we are on 18:56 18 minutes, 56 seconds track on that front. Coming to your related question on wholesale deposits. 19:02 19 minutes, 2 seconds Yes, it is around uh 50% of our overall term deposits. Uh it is a tactical play because we all know and I'll talk about 19:10 19 minutes, 10 seconds it a little bit that how we are building our library franchise now because without a core system without all 19:17 19 minutes, 17 seconds systems and solutions building something uh uh is difficult and will carry a cost of building that. So which didn't want 19:25 19 minutes, 25 seconds to do that. So now we'll do it in a proper organic way. Uh but tactically it 19:33 19 minutes, 33 seconds played out because this is a tactical stuff on the wholesale side. If you look at our yearon-year 19:39 19 minutes, 39 seconds uh deposit cost [clears throat] coming down is significantly 19:46 19 minutes, 46 seconds uh higher cost uh reduction in uh uh in wholesale deposit service. If I remember 19:53 19 minutes, 53 seconds correctly, our deposit cost came down by 8 9%. But on the wholesale side, it came down by more than 20 30 basis points or 20:01 20 minutes, 1 second even more. So effectively tactically it plays out that cannot be a strategy but these are tactics and we locked in 20:08 20 minutes, 8 seconds ourselves only for short period of wholesale. We are not locking ourselves of five years, four years, 3 years. We have not dropped it too much I don't 20:16 20 minutes, 16 seconds think at all beyond one year and it has been between 6 months to one year. So to that extent this tactical play will play out. But yes the wholesale deposit cost 20:26 20 minutes, 26 seconds is slightly higher than the retail cost deposits but incremental cost reduction 20:32 20 minutes, 32 seconds in B deposits is better than the retail deposits. So this has helped us in our management of cost of funds in the short 20:40 20 minutes, 40 seconds term in a tactical way. So this has not played against us in our execution strategy. But yes we have to build the 20:47 20 minutes, 47 seconds liability. And before I move to the gold loans, let me tell you what are we doing on the liability side because eventually the main job the bank has is to build a 20:56 20 minutes, 56 seconds good liability franchise which will help us in our uh quality asset growth as well. So with the core system falling in 21:03 21 minutes, 3 seconds now almost every quarter we are launching three products on the liability side itself. As a talking we launched smart buy current account, 21:12 21 minutes, 12 seconds smart buy savings account with um you know uh very good features and it has already started doing for us. We 21:20 21 minutes, 20 seconds launched freedom account. Okay. So there are various uh products which we want to launch every quarter because now we have the system to launch. we super we didn't 21:29 21 minutes, 29 seconds have the system to launch on the current account side with the transaction banking 21:33 21 minutes, 33 seconds [clears throat] 21:33 21 minutes, 33 seconds uh CMS and supply chain and trade all of this coming together it will help us in going to both wholesale as well as 21:41 21 minutes, 41 seconds semicustomers and also to task customers um uh which will uh help us in building 21:47 21 minutes, 47 seconds our granular uh long-term customer franchise and also what you're doing is uh so far we didn't do it because it 21:56 21 minutes, 56 seconds didn't make sense but now with these products in our arsenal. We will uh we are launching the sales machinery for 22:04 22 minutes, 4 seconds especially for current accounts and also for service account in the metro markets and uh and this is the strategy which will play out effectively the liability franchise buildup process starts now. 22:14 22 minutes, 14 seconds Okay. [clears throat] uh uh also as you'll know that LCR new guidelines uh one of the guidelines 22:22 22 minutes, 22 seconds which is going to deliver us actually is the guideline on the task 22:29 22 minutes, 29 seconds trust association clubs and societies and in that uh because of that 40% 22:37 22 minutes, 37 seconds uh new regulation uh task will also be NCR friendly so to that extent we have created a separate vertical on task 22:45 22 minutes, 45 seconds headed by a very senior person who will work across also retail and theme and this should you will also see a significant growth in this last segment 22:54 22 minutes, 54 seconds other guidelines because our uh ASA itself is very low and penetration has still reach very high levels uh I'm not 23:03 23 minutes, 3 seconds saying that's a good thing to happen this is something we want to improve significantly from here but again tactically it has not taken away too much of healthcare from our side at this 23:11 23 minutes, 11 seconds point of time so that to that extent tactically we are on the right This having said that the main job will be to build the liability franchise. Now next 23:20 23 minutes, 20 seconds question on gold loans very relevant point which you have mentioned number of accounts gone down and tonnage growth are not 23:28 23 minutes, 28 seconds happening but let me tell you these are two different points for us. Uh number of accounts went down before and tage 23:35 23 minutes, 35 seconds growth is also going on. uh and the reason for that is uh on the regulatory guidance before uh there was some 23:45 23 minutes, 45 seconds challenge which has been now changed again favorably but there's regulatory guidance where um below 2 and a half 23:52 23 minutes, 52 seconds level okay uh there are some challenge in getting gold customers because of the collateral issue now that has been clarified no problems but once we moved 24:01 24 minutes, 1 second into the larger ticket size uh I we realized that overall for the bank that is better in the long run. uh and also 24:10 24 minutes, 10 seconds the risk with respect to LTB etc is much better there because there what we have seen is that high value customers only 24:18 24 minutes, 18 seconds take the loan they need and if you need 100 rupees loan you will give that tonnage what is relevant for you and 24:26 24 minutes, 26 seconds hence typically when prices goes down tonnage will go up and when prices goes up tonnage will go down as the ticket size increases to beyond 10 lakhs and 24:35 24 minutes, 35 seconds things like that and given our cost and other issues We also moved slightly on the higher end of the curve on the good 24:41 24 minutes, 41 seconds gold loan side and hence our number of customers have come down. The tonnage growth of course um it has gone down 24:49 24 minutes, 49 seconds because as I already explained that people takes what they need because we are not attempting that segment where 24:55 24 minutes, 55 seconds they giving their last kind of a savings uh on the gold to take some consumption loans. most of our loans go into 25:04 25 minutes, 4 seconds productive usage and from that time from that perspective I think tonnage growth will go up once the gold prices uh if at 25:11 25 minutes, 11 seconds all ever gold prices coming so that's from that there is no risk at all in the golden portfolio we have done 25:20 25 minutes, 20 seconds our analysis while you ask the question while you are touching gold I'm just saying that our LTV is uh pretty low 25:27 25 minutes, 27 seconds especially because a very large portfolio is on the agree side which is not governed by the 75% LTV. So given 25:35 25 minutes, 35 seconds that perspective, I think we are sitting off fair bit of margin in terms of risk. 25:40 25 minutes, 40 seconds Given another 10% fall in gold prices will do nothing to the portfolio. So to that extent we are fairly convinced. 25:47 25 minutes, 47 seconds Having said that I said before again I'm saying this is a tactical play or eventual play is to bring gold down to 25:55 25 minutes, 55 seconds uh 30% of a portfolio by 2030. out of that at least 5% of the 30% will be working capital loan and we have just 26:02 26 minutes, 2 seconds launched a product which is for targeted towards working capital SME backed by 26:09 26 minutes, 9 seconds gold as a collateral. So this should be around uh minimum 5% of a portfolio as we go to 30%. And hence it will be 25 + 26:19 26 minutes, 19 seconds 5 by 2030. Rest around 30% plus will be on the wholesale side around uh 18% will 26:26 26 minutes, 26 seconds be on the theme side and rest will be on the retail side which will be up within 26:31 26 minutes, 31 seconds 20 to 24. So that we are firmly uh uh at 26:38 26 minutes, 38 seconds that game. uh and one of the other things because you didn't ask that but let me answer that question also because that question may come later on by 26:46 26 minutes, 46 seconds somebody that our gold portfolio increased uh uh to by around 7%age in the mix 26:53 26 minutes, 53 seconds [clears throat] 26:54 26 minutes, 54 seconds uh uh from around 45 46% to around 53 54%. So uh but the funny thing here 27:01 27 minutes, 1 second there we'll see that on the retail side the retail portfolio has exactly decreased by that means and that is basically what we did is the loan 27:10 27 minutes, 10 seconds against security which was nothing but gold has moved from this side to that side and hence if you add it up and say 27:19 27 minutes, 19 seconds that what is our uh portfolio mix where gold is a collateral it has remained 27:25 27 minutes, 25 seconds below 50%. Okay. Uh uh but because this is regulatory reasons we uh moved that 27:33 27 minutes, 33 seconds business from this side to that side more on the retail side and from that perspective I think the gold growth which you are seeing around 53% year on 27:42 27 minutes, 42 seconds year it's slightly artificial from that perspective and obviously we don't see that growth next year. uh and if you continue to grow at the levels that we 27:50 27 minutes, 50 seconds are growing at a bank level on the asset side provided we can grow that deposit franchise uh you will start seeing some of the other businesses will grow much 28:00 28 minutes faster on the NR deposit flow which you asked that question very relevant question for us because I think we're around 15 16% of our deposits is in at 28:10 28 minutes, 10 seconds this point of time it's not good we can do better so we have created a very clear strong vertical with a very senior 28:18 28 minutes, 18 seconds person driving it right now. Uh we applied for our rep office representative office in um Dubai. By 28:26 28 minutes, 26 seconds now it would have been probably been operational also but because of the uh West Asia crisis we have asked for an extension of the because we are not able 28:34 28 minutes, 34 seconds to do anything there at this point of time. Uh but we have finished most of our legal paperwork etc. And we have finalized the CRO also. CR means chief 28:43 28 minutes, 43 seconds re office officer and um and also we have created a separate vertical within 28:51 28 minutes, 51 seconds the bank now focusing primarily on NRI business. uh obviously in the short run there has been little bit of a uh 28:59 28 minutes, 59 seconds disruption flow on the NRI uh flow bit remittances and NRI flow in the bank right now but these are short-term kind 29:09 29 minutes, 9 seconds of a things in the long run we think that we should be at least 20% of our deposits or liability must come from NR 29:17 29 minutes, 17 seconds and we have created a separate ver structure for this so I hope I could answer most of your question yeah yeah sir I That was very 29:25 29 minutes, 25 seconds elaborative. Just one followup sir. So this LCR coming down is because of wholesale sorted 10ear deposit you know impacting the denominator of the LCR. 29:37 29 minutes, 37 seconds Yes. And also what we are saying is was K we are um you know 29:44 29 minutes, 44 seconds having higher LCR um in a margin cost of con is very high in the 29:54 29 minutes, 54 seconds end in the last 20 days 15 days one month of the year where you know that cost will come down post March then no 30:03 30 minutes, 3 seconds point right so that's the reason we tactically said we targeted 110 but we achieved 109 so some things slipped 30:13 30 minutes, 13 seconds right right right sure thank you so much sir much higher right now 30:19 30 minutes, 19 seconds got it sir thank you so much thank you will take our next question from the 30:27 30 minutes, 27 seconds line of Akshit Agraal of Smith's Institutional Research [sighs] Akit please go ahead 30:36 30 minutes, 36 seconds good evening Morning sir. Thank you for the opportunity. 30:40 30 minutes, 40 seconds Sir, my first question is on uh your scale strategy. So sir, as we enter into the scale phase of SBS 2030 strategy 30:48 30 minutes, 48 seconds from this year onwards, could you please update on the progress of the retail transformation on the asset side? Uh when do you expect growth to be growth 30:58 30 minutes, 58 seconds to meaningfully pick up in retail and theme and what kind of numbers should we expect in FY27? 31:05 31 minutes, 5 seconds Uh sir my second question is on uh fee income side uh which picked up strongly. 31:12 31 minutes, 12 seconds Uh so wanted to understand the cre drivers. So, so like last quarter uh PSLC income was missing and so is this 31:21 31 minutes, 21 seconds uh has this come back uh this quarter and uh was there any syndication fee uh in this in the numbers uh this quarter 31:29 31 minutes, 29 seconds and a related question on cost or were there any material PSLC related costs uh which were largely absent in 3Q uh which 31:37 31 minutes, 37 seconds were charged uh in 4Q and did you see any headcount reduction and how should we think about the cost to income ratio 31:45 31 minutes, 45 seconds trajectory uh can we see it move below 60% in FY27? So those were my uh three questions. Thank you. 31:54 31 minutes, 54 seconds Thanks Aar for the questions. Starting with the retail assets. Uh we are um uh fast focusing on retail 32:03 32 minutes, 3 seconds liability because we our retail strategies is very very clear that for 32:10 32 minutes, 10 seconds assets which are earning assets and the way we define them are businesses like commercial vehicles, commercial equipments, healthcare. 32:20 32 minutes, 20 seconds uh so these uh and some extent inventory funding okay because this also goes in and to some extent auto loans but that's 32:28 32 minutes, 28 seconds a construction business that at least it's secure so these are the products where we would grow beyond our liability 32:36 32 minutes, 36 seconds franchise which means to dealership through various places including our internal customers of course okay and any other product which is on the 32:45 32 minutes, 45 seconds consumption side we'll do it on the back of a liability franchise and primarily it will happen by cross-selling to our existing customers. We have limited set 32:53 32 minutes, 53 seconds of score existing customers and hence we are primarily focusing on new customer acquisition this year onwards to have a meaningful growth on that side of the 33:02 33 minutes, 2 seconds board. Also we have been very cautious on the unsecured side of the business for the last two two three years and 33:08 33 minutes, 8 seconds this has helped us well because there our delinquencies are same as the markets but because our portfolio is coming down it is helping us in managing 33:17 33 minutes, 17 seconds our slippages and managing our uh credit costs. So uh prudent decisions were 33:24 33 minutes, 24 seconds taken. So now simple strategy is build the retail assets on the productive assets and this year you will see that 33:32 33 minutes, 32 seconds those products which has grown and what has degrone are products which are unsecured in nature also there was a 33:39 33 minutes, 39 seconds cycle on MFI and with the monsoons not being predicted very well for this year so far whatever we have seen we will not 33:48 33 minutes, 48 seconds take the risk on agri business also that much so given all these I think you will not see a meaningful growth on the 33:55 33 minutes, 55 seconds retail asset side but we'll create the dry gun powder there by creating a good liability franchise which means 34:02 34 minutes, 2 seconds basically more customers to whom we'll sell the retail assets our meaningful growth will retail assets will start from FI28 onwards I've already explained 34:11 34 minutes, 11 seconds it but I'll cursorly mention it that our retail assets growth this year has been negative primarily because of the loan 34:18 34 minutes, 18 seconds against gold security as we say loan against security backed up by gold that 34:25 34 minutes, 25 seconds portfolio has come down from more than 2,000 crores to around 300 crores and uh 34:32 34 minutes, 32 seconds that was a regulatory mandate and that we compensated on the golden side which I already mentioned that's why you're seeing a negative growth but core retail 34:40 34 minutes, 40 seconds assets have not grown negatively uh in addition to this we have launched two products in retail assets uh one is 34:48 34 minutes, 48 seconds the school fee financing uh which is a very good product and the second one is again it's called less but loan against 34:56 34 minutes, 56 seconds security but these securities now mutual funds eventually we'll do and other things insurance and all of this okay so 35:05 35 minutes, 5 seconds these two products also are very safe products at this point of time and it requires capability which you have built already so these two products will also 35:13 35 minutes, 13 seconds see some traction in the bank going ahead so that is about retail assets now coming to your question on fee income 35:21 35 minutes, 21 seconds I confirm there has been no syndication fee in uh Q4. Okay. And frankly PSLC premium 35:29 35 minutes, 29 seconds uh was very very low in Q4. I mean this year which is exceptional actually. We never felt it will be so low. So we 35:38 35 minutes, 38 seconds didn't book much. I mean we booked some but it was significantly lower than what we do booked in Q4 of last year. 35:44 35 minutes, 44 seconds Significant. Significant. Okay. And uh also as we all know which is a market 35:51 35 minutes, 51 seconds phenomena happened with all banks that uh uh the MTM gain which you had in Q4 35:59 35 minutes, 59 seconds of last year in fees uh was significantly higher and this quarter obviously there was nothing okay if at 36:07 36 minutes, 7 seconds all there was on a HFT there had been some something we had to compensate for. 36:13 36 minutes, 13 seconds So given all this uh if you look at Q4 last year on fees and Q4 this year on fees uh overall fee is actually lower 36:22 36 minutes, 22 seconds okay but the core fees what I mean by core is nonPSLC and non treasury uh our fees [clears throat] are higher which is 36:31 36 minutes, 31 seconds the core fee which is more critical for us because that sustainable over a period of time so in a very worst case 36:38 36 minutes, 38 seconds scenario we have done well and 21% steel is not a bad number when we didn't have syndication. We didn't have much from 36:45 36 minutes, 45 seconds PSLC and we didn't have um we had only negative on the on the other side on the increase side. So uh given all this I 36:53 36 minutes, 53 seconds think income is a good good story here like our uh know credit cost line the 37:02 37 minutes, 2 seconds thing coming to the u cost yes there was a significant increase in Q4 over Q3 but 37:10 37 minutes, 10 seconds again this is very tactical in nature because most of us CSR uh uh initiatives uh played out in the last quarter of the 37:18 37 minutes, 18 seconds year um and hence uh that is a one time kind of a cost which happened which generally gets distributed over the year 37:26 37 minutes, 26 seconds but this time it got little bunched up in the last quarter of the year that's why from Q3 to Q4 cost went up uh it was 37:34 37 minutes, 34 seconds not for any other reasons and uh on the headcount increase we had an increase of around 525 37:42 37 minutes, 42 seconds people uh in the headcount over a base of 7,700 so it's not even 8% increase in headcount but the cost increased uh 37:51 37 minutes, 51 seconds little more than that fairly uh I mean because this year we invested into high cost and high quality resources in 37:59 37 minutes, 59 seconds wholesale banking. Our wholesale banking franchise moved from a barely doubledigit number of relationship team 38:06 38 minutes, 6 seconds to a 80 plus relationship team. We also now invested in the transaction banking franchise. So all of these things 38:13 38 minutes, 13 seconds together the cost of some of the people whom we have got and they are expected to obviously reduce the cost to income of the bank because they're supposed to get much more income. So hopefully this 38:22 38 minutes, 22 seconds will play out for us. Uh on the CTI I always said that we 60 to 65 till FY end 38:30 38 minutes, 30 seconds of FY27 FY 28 onwards the operating leverage will kick in because all said and done the technology thing has just 38:38 38 minutes, 38 seconds come in now. uh so 25 28 onwards we'll start seeing the operating leverage across branches across products and 38:46 38 minutes, 46 seconds across the technology investments which you have done till FY27 end our CTI will remain between 60 to 65 and we are 38:53 38 minutes, 53 seconds somewhere in the midway uh around uh 62% so that's what your four questions thank you 39:01 39 minutes, 1 second uh very well sir uh thanks for the detailed answers uh just a follow up on that theme growth what kind of growth we 39:08 39 minutes, 8 seconds expect uh this year and I mean when when should it pick up meaningfully? 39:14 39 minutes, 14 seconds Yeah. So and lab together we call BNG which is business lending group. So that grew around two to 3% last year 39:22 39 minutes, 22 seconds year-on-year basis and uh this is something we did very consciously 39:28 39 minutes, 28 seconds because uh uh we saw a very strange year last year the first half of the year 39:36 39 minutes, 36 seconds actually and it's still going on is the tariff related issue but the tariff related issue got overpowered by the 39:43 39 minutes, 43 seconds West Asia crisis which also impacts in a way uh the not only exports now anymore it's also a supply chain and not always 39:52 39 minutes, 52 seconds the SMMES have the kind of a staying power a large corporate or a even sometimes the big corporate has. So given that given the size of our balance 40:01 40 minutes, 1 second sheet we didn't want to take a risk we always did it whether it was in personal loan whether it was in MFI and then we 40:08 40 minutes, 8 seconds did it in SM last year we deliberately didn't focus on SM portfolio growth but the same team worked very hard to get the portfolio quality better and that 40:17 40 minutes, 17 seconds has helped us in the Q4 coming this year till we get clarity on this uh Questia 40:24 40 minutes, 24 seconds prices and hopefully it can come in this quarter. 40:29 40 minutes, 29 seconds or maybe next quarter who knows it that will clearly decide what is the level of acceleration we want to put on the theme 40:36 40 minutes, 36 seconds but as we are talking we are investing more into people in theme because this thing will come and go but eventually 40:43 40 minutes, 43 seconds the 20 30 commitment of around 18% of portfolio into the uh book remains right 40:50 40 minutes, 50 seconds and it is now around 11%. So a significant road map is there for theme but we will accelerate only when we feel 40:58 40 minutes, 58 seconds comfortable in terms of race but whatever happens we will singledigit growth is given and hopefully we'll be 41:06 41 minutes, 6 seconds back to that 28% growth in the next two years. 41:11 41 minutes, 11 seconds Thank you very much sir. Uh I will rejoin the queue. Thank you. Thank you so much. 41:18 41 minutes, 18 seconds We have our next question coming in from Parka of 361 Capital. 41:25 41 minutes, 25 seconds Parth, please go ahead. Uh yeah. Hi. Uh can you hear me? Yes please. Yeah yeah yeah. 41:32 41 minutes, 32 seconds Yeah. Yeah. Hi. Uh uh thanks a lot for the opportunity sir. Uh so first what is the impact of ECL uh on on the day of transition? 41:44 41 minutes, 44 seconds Yeah. Is this our only question or can we answer? 41:48 41 minutes, 48 seconds Yeah. Yeah. So I have one more. I'll I'll take it up after this. 41:52 41 minutes, 52 seconds Okay. So I will give a one line answer to this. I hand it over to Satish to 41:59 41 minutes, 59 seconds respond in details. At a high level what we understand is um you know there are various smaller 42:07 42 minutes, 7 seconds components there but the large impact items are the uh stretch to especially on the SMS side where there are two 42:14 42 minutes, 14 seconds parts one is the 5% and one is the one and a half% the gold loan okay and uh uh 42:22 42 minutes, 22 seconds and also that is on the uh large impact item on the negative side and on the positive side we'll be able to uh or we 42:31 42 minutes, 31 seconds have to now write back the uh contingency provision of 105 crores and is enter 210 crores which I said which 42:38 42 minutes, 38 seconds are well above regulatory capital that can be subtracted from the or that should be subtracted from whatever is 42:46 42 minutes, 46 seconds going to come additional because of these uh uh provisions which you have to take. So at the margin there could be 42:53 42 minutes, 53 seconds some very very partial impact. Uh the calculations are being done and on that I'll hand it over to uh Sadish to answer this question technically. 43:03 43 minutes, 3 seconds Uh so part we already have a ECL model in place uh because we report our numbers as per IFS for the purpose of 43:11 43 minutes, 11 seconds Fairfax. Uh however that model we are reviewing completely based on the revised ECL guidelines. So that work is 43:19 43 minutes, 19 seconds currently underway. uh however based because our model was uh prepared uh some time back maybe over a period of 43:26 43 minutes, 26 seconds time or the model has also changed could have impact on that model. So we do not know what happens uh once this entire 43:33 43 minutes, 33 seconds model refresh happens. It is still uh one or two months away when we have the full model. Nevertheless basis the model 43:41 43 minutes, 41 seconds that we are using currently for our IFS reporting and basis the portfolio which we had as a December 25. 43:50 43 minutes, 50 seconds uh concluded what is the impact and that probably we can call it as a transition impact because as per the guidelines the transition impact uh will have to be 43:59 43 minutes, 59 seconds taken on uh 1st April 27 whereas the benefit of capital adequacy ratio we can 44:06 44 minutes, 6 seconds defer for a bit of four years but that transition impact um is not a significant number for us at the moment 44:14 44 minutes, 14 seconds um and this considers the fact that and we had that advantage because uh not only on NPS that we have been making 44:23 44 minutes, 23 seconds aggressive provision but even on uh standard assets uh we had this additional provision created at the time of COVID 105 crores which will now get 44:31 44 minutes, 31 seconds subsumed into the overall provision that we hold. So that benefit we have got and uh because of that the transition impact 44:39 44 minutes, 39 seconds is not a significant number at all. Uh subject to in case there are any significant changes which happen to the 44:46 44 minutes, 46 seconds model. So I would not completely uh say this is the impact and this is what will happen because the work is currently 44:54 44 minutes, 54 seconds underway once we uh refresh that model and then run that model on 21st March 2026 numbers then we'll have but uh all 45:04 45 minutes, 4 seconds along we have been validating the numbers and that impact is not very significant for us. Sure. Sure sir. 45:12 45 minutes, 12 seconds Thanks a lot for the answer. And my second question is uh on the gold loan portfolio the ease had been coming off over the last at least from Q4 FI 24 to 45:22 45 minutes, 22 seconds uh you know Q4 FI25 the EA had been coming off but over the last three four quarters you know again uh you know the ES have increased by around 40 to 40 45:31 45 minutes, 31 seconds pips uh the portfolio level. Is this largely because uh of the gold loan that we have been uh you know or or the new 45:39 45 minutes, 39 seconds vertical that's a working capital against gold loan that we have started. Is that a right understanding? 45:47 45 minutes, 47 seconds Yeah. So let me explain this. So we are not aggressively pursuing gold on the 45:56 45 minutes, 56 seconds way we are doing before because we are now looking at larger ticket sizes. 46:00 46 minutes Okay. And hence we said that um we must maximize returns to a great extent because we realize that a lot of these 46:08 46 minutes, 8 seconds customers who are coming to us are coming from various NBFCs and other other institutions where they are paying 46:15 46 minutes, 15 seconds higher than what uh we were [clears throat] asking for. So we said that uh uh you know this is an 46:23 46 minutes, 23 seconds opportunity where we do not want the growth and we are getting the growth. So let us try and uh maximize the returns 46:31 46 minutes, 31 seconds in terms of ease and they will ask for the so that means we are actually underpricing us so far uh in this 46:39 46 minutes, 39 seconds business. So it is more of a discovery for ourselves. Okay. It's not that it happened only in that portfolio 46:48 46 minutes, 48 seconds which you just talked about the working capital but also um in the other other portfolio as well. So overall that strategy has worked out well for us. 47:00 47 minutes Sure. Thanks. Thanks a lot for asking your question. Thank you Pat. 47:10 47 minutes, 10 seconds We'll take our next question from Vibour Tala of Nest Amplifier. 47:17 47 minutes, 17 seconds Please go ahead. 47:20 47 minutes, 20 seconds Hi, thank you for the opportunity. Am I audible? Yes, please. Yes. 47:25 47 minutes, 25 seconds Okay. Thanks. Hey, this question is more uh from a long-term perspective. 47:31 47 minutes, 31 seconds Uh this is probably your sixth year in CSB and from the start uh I think the idea was to grow liabilities which 47:40 47 minutes, 40 seconds somebody asked and you answered that it has taken its time and on the retail assets the business has done well and we have been beneficiary of gold prices but 47:49 47 minutes, 49 seconds on the retail etc. I I look at last four years, five years, it has been a fairly tepid growth than what we would have 47:56 47 minutes, 56 seconds thought through or planned for. Uh and even now if I understood correctly what you said was that this will pick up in 48:03 48 minutes, 3 seconds the Q4, FI27, Q1, FI28. So if you can give me a color of why exactly it is taking so much time is it because the 48:11 48 minutes, 11 seconds market exists there are NBFCs who are able to capture at that small base reasonable uh pool of assets and profits 48:19 48 minutes, 19 seconds but somehow despite our liability advantage we have been able to do fairly little on the retail side except the gold nonware which has been a meticulous 48:27 48 minutes, 27 seconds execution benefited by the increase in gold prices on Google. 48:32 48 minutes, 32 seconds Yeah. Yeah. So I will just uh explain uh we are a bank. So as a bank we don't 48:40 48 minutes, 40 seconds want to address a retail assess business like NBFC because I have also uh been on the board of NBFCs before like HTB and 48:49 48 minutes, 49 seconds uh access finance. But uh the way NBFCs does business is little different to how a bank does business. And there was a 48:58 48 minutes, 58 seconds time when I used to handle both a bank and together when I was in HDFC bank. So the whole approach is different when you're in a bank. Here we are not here 49:06 49 minutes, 6 seconds to build asset book. Here we are uh to build a franchise where liability comes 49:13 49 minutes, 13 seconds first and assets follows and in the process liability also goes because AMIs and the other things happen in that account. So that's the approach we are 49:22 49 minutes, 22 seconds taking and hence even if it takes a high role uh and the long term uh eventually 49:29 49 minutes, 29 seconds what it does is eventually it builds a franchise which is a compounding growth story but uh in a in a NBC kind of a 49:38 49 minutes, 38 seconds framework uh it is a slightly different strategy which is uh different to how a bank operates a bank operational 49:46 49 minutes, 46 seconds liability process. So given that perspective you are right that we took little time and 49:55 49 minutes, 55 seconds there's a reason for that. The reason is that our core system migration for whatever reasons are got little delay in 50:03 50 minutes, 3 seconds terms of decision making which core system we'll go for and uh when we'll go for that. So we started the core system 50:10 50 minutes, 10 seconds migration for various reasons internal reasons only in FI25. 50:16 50 minutes, 16 seconds Okay. FI24 the decision got taken FI25 we got delivered by May 25 and then we 50:26 50 minutes, 26 seconds are along with the surround systems and then in a very uh quick and record time we are able to roll this out. So primary 50:33 50 minutes, 33 seconds reason is and look at it this way without a proper core system because we are on Marvel which can't do much I think [clears throat] we and I also 50:42 50 minutes, 42 seconds realize over a period of time the in the the uh uh you know the shortcomings of Marvel where where used to run before 50:51 50 minutes, 51 seconds the core system where you really cannot launch new products you cannot have various functionalities and hence uh our 50:58 50 minutes, 58 seconds entire story of the bank from a retail franchise is starting Now frankly speaking because the core system only is 51:05 51 minutes, 5 seconds not stabilizing or stabilized. Now we can launch launch products uh we will uh launch uh uh sales team. We tried launch 51:14 51 minutes, 14 seconds sales team before then we realized in the absence of products customers comes but they don't give balance balances and those accounts becomes inactive. So 51:22 51 minutes, 22 seconds there's no point and definitely you cannot cross sell them anything. So given this the retail journey is starting now that's the honest answer 51:29 51 minutes, 29 seconds and we know how to execute it and take it forward. So I'm pretty confident that we are not shifting the goal post from FI30 to FI32 or FI33. We are saying that 51:38 51 minutes, 38 seconds if you have lost two years in taking the decision on the core system for whatever internal reasons uh uh we will work 51:46 51 minutes, 46 seconds harder to make up for that time and by 2030 we'll deliver 48 project. So that's a real answer. Uh hope uh this clarifies. 51:57 51 minutes, 57 seconds Thank you. All the best. 52:03 52 minutes, 3 seconds Thank you so much. We'll take our next question from Punit Balani of Dollar Capital. 52:11 52 minutes, 11 seconds Punit, please go ahead. Yeah. Hi, sir. Uh am I audible? Yes, please. Yeah, Punit. 52:18 52 minutes, 18 seconds Thank you, sir. Uh just on your NIMS, I uh like the reported NIS were flat Q and you know, advances growth at 9% QQ and 52:27 52 minutes, 27 seconds deposit growth, but it's does it the NI growth is only 2%. Is this some takeout convention or what am I missing here sir? This that's the only question I have. 52:39 52 minutes, 39 seconds So ni growth uh year on year was uh uh 52:46 52 minutes, 46 seconds quarter on quarter is lower but year on year is 25%. So your question is more on quarter on quarter you're saying yeah quarter on quarter like how do I 52:54 52 minutes, 54 seconds reconcile this because the loan growth has been 9% and NI growth is only in the range of 2%. So something I'm missing or 53:03 53 minutes, 3 seconds is it no but if ne has dropped by two three% two three basis points okay and quarter 53:12 53 minutes, 12 seconds quarter asset book has uh grown by how much quarter and quarter asset book growth is 9% growth with a name drop of 53:20 53 minutes, 20 seconds two basis points okay u I mean there is nothing here which will act differently right so I'm sure 53:28 53 minutes, 28 seconds mathematically it will work like that or short period which is uh this thing but on a year-on-year basis it's 25%. So uh maybe we can do the maths once. 53:39 53 minutes, 39 seconds Okay. Okay sir. Yeah thanks because if you look at it our yields has 53:47 53 minutes, 47 seconds fallen little bit in Q4 and uh cost of deposits or cost of funds has 53:54 53 minutes, 54 seconds gone up slightly which has impacted the need. I'll tell you what has happened. 54:00 54 minutes In spite of a significant um uh significant improvement on the uh 54:07 54 minutes, 7 seconds quality of the portfolio which is the uh G&B and NBA and uh credit cost. Okay. 54:14 54 minutes, 14 seconds Still if NE has fallen then the difference between uh cost of funds and um yields is little more than what it 54:24 54 minutes, 24 seconds meets the I based on only the two basis points on the name. I think that's where you will find the answer. 54:31 54 minutes, 31 seconds Okay. Okay. Uh is it I'll discuss this offline. Thank you sir. Sure. 54:41 54 minutes, 41 seconds Thank you so much Punit. 54:45 54 minutes, 45 seconds We'll take our next question from the line of Narendra Gandhi of Dante Equity. 54:58 54 minutes, 58 seconds Mr. Gandhi, please. Yes, please. 55:02 55 minutes, 2 seconds Yeah. Hi. Uh, I just wanted to know if your CTO is on the call. 55:07 55 minutes, 7 seconds CTO is not on the call, but you can ask me. I obviously will not know as much as it was, but I'll try to answer. 55:13 55 minutes, 13 seconds No, actually it was regarding this recent u AI related cyber security threat that even our FM kind of uh you 55:22 55 minutes, 22 seconds know came in came online and spoke about. uh just wanted to understand if there are any implications on the new update that we've uh just uh rolled out 55:32 55 minutes, 32 seconds and uh uh with regards to anthropic and a lot of uh banking softwares are sort 55:40 55 minutes, 40 seconds of already set to be under uh upgradations now in the next uh two years and since we've just rolled out 55:47 55 minutes, 47 seconds our software I wanted to understand if you're up to date with that or not. 55:52 55 minutes, 52 seconds Yes mi. Yeah. Any other question? I'll respond to this. 55:56 55 minutes, 56 seconds No, I do. Uh, so I've been we've been talking for the last two on calls and I'm really glad that you've been able to 56:03 56 minutes, 3 seconds deliver on the 1.5 RO and the 15% ROE. I think a lot of analysts were very skeptical in the last quarter about you 56:11 56 minutes, 11 seconds delivering on those numbers and you kind of told that you're going to make sure you know you end the year above 15% um 56:18 56 minutes, 18 seconds uh roe and uh I think for the quarter you've done around 17 to 18% RO which is a great number uh so congratulations on 56:25 56 minutes, 25 seconds that and uh other than that just wanted to kind of understand um what are we targeting for the next year in terms of 56:33 56 minutes, 33 seconds uh loan growth I think you said 25% if I'm not mistaken please correct me if I'm mistaken and uh I think ROA and ROE 56:40 56 minutes, 40 seconds wise I would like to know where are we targeting because I think the cost to income should start coming down uh from next quarter onwards right so these are 56:48 56 minutes, 48 seconds my questions sure Mr. I'll just respond on the cloud enthropy which you're talking about the 56:56 56 minutes, 56 seconds interthos thing. See advantage of working in a small bank is we all have to know everything. Okay. uh so there 57:04 57 minutes, 4 seconds there's an April 27th circular from RBI which is um uh which gives us a certain guidance 57:13 57 minutes, 13 seconds to the banks and within that there has been a advisory of what are the things 57:19 57 minutes, 19 seconds the banks needs to put together uh as a directional imports and update board within two months of that which is by 57:28 57 minutes, 28 seconds 27th June uh and whenever the board meeting happened before that board meeting or ITC. What is advised is 57:36 57 minutes, 36 seconds either ITC or SB or both. Okay. So we post most probably because our ITC chairman Saxon is a practitioner and he 57:45 57 minutes, 45 seconds is extremely good and he understands the subject very well. Of course our CT understands this very well as well including our uh security CISO also 57:54 57 minutes, 54 seconds understands this very well. So between all of us and I'll also be involved in this because this is too critical and too I'll not say strategic but too 58:02 58 minutes, 2 seconds critical uh thing uh not to have an eye on and not to have agree on this. Okay. 58:08 58 minutes, 8 seconds So uh we are we have started working on this based on the guidance also. I believe that some of the largest banks 58:15 58 minutes, 15 seconds in the country is also uh you know uh uh working on seeing that how the entire 58:23 58 minutes, 23 seconds guidance will play out for the entire ecosystem because this is not where uh it's a it's not a competitive land it's about the banking ecosystem 58:33 58 minutes, 33 seconds not only for India but for the whole world I think different countries are talking to each other also to understand because this not only the banking system 58:42 58 minutes, 42 seconds but uh the cyber security there are much larger implications on this beyond this banking ecosystem. So I think there is 58:49 58 minutes, 49 seconds lot of clarity will evolve on this over a period of time. So right now we are doing what the April 27th circular from 58:57 58 minutes, 57 seconds RBI says and we'll update the ITSC/board by before 27th of June and uh 59:06 59 minutes, 6 seconds uh just one question regarding this are we expecting uh our you know a cost to income which we're expecting to come down from next 59:15 59 minutes, 15 seconds quarter onwards. uh are you going to say that might be delayed because of the cost that might come uh with regards to this particular notification 59:24 59 minutes, 24 seconds u because obviously uh this is going to come with added cost right so let me put it this side right now I 59:32 59 minutes, 32 seconds think we are talking about frameworks and ways to do it because I don't think that there is complete clarity in exactly what is to be done will there be 59:40 59 minutes, 40 seconds a cost what will be the inputs how this will get shared etc we'll have to figure this out uh it is evolving scenario both 59:48 59 minutes, 48 seconds globally as well as in India. So it is to be mature answer on this one but I just want to clarify one thing I never said cost into income will come down 59:56 59 minutes, 56 seconds from next quarter. I said it will remain for FI till FI27 at the range of 62 65 hopefully somewhere around where we are 1:00:04 1 hour, 4 seconds FI28 onwards it will start drastically coming down and by FI30 we should be significantly go 1:00:13 1 hour, 13 seconds to say it'll stop going up uh uh this year onwards is what you said right so so what I'm saying Mr. Gandhi is we 1:00:21 1 hour, 21 seconds cannot respond on something where is no clarity to anybody in the world. Forget about us or in the ecosystem. So let 1:00:29 1 hour, 29 seconds it's a evolving story. Let's figure it out what it is and how it is to be worked out. It's too premature transfer that right. Understood. Yeah. 1:00:37 1 hour, 37 seconds On second question uh this one I can answer with more clarity. Uh which is uh 1:00:44 1 hour, 44 seconds on the uh loan growth. Yes. uh uh a loan will be completely deposit depends on 1:00:51 1 hour, 51 seconds the deposit growth what we have we have the ability to grow at similar or even faster rate than what we have grown last 1:00:59 1 hour, 59 seconds year uh even if our gold growth comes down little bit which may happen uh uh but uh but it all depends on at what 1:01:08 1 hour, 1 minute, 8 seconds cost what deposits comes and how the liability franchise picks up and this year onwards we will significantly 1:01:16 1 hour, 1 minute, 16 seconds focus [clears throat] on kasa acquisition the kasa acquisition will bring in customers the balances will start growing only at one year after 1:01:23 1 hour, 1 minute, 23 seconds that so from that perspective I think loan growth will be a function of our ability to build the liability franchise but yes I think 25% is something uh 1:01:32 1 hour, 1 minute, 32 seconds we'll be disappointed if we don't do that part that much at least on the other way you're right um uh we have pro 1:01:41 1 hour, 1 minute, 41 seconds delivered what we promised in Q3 same thing we delivered what we promised in Q2 nim and same way we delivered what he 1:01:48 1 hour, 1 minute, 48 seconds promised on asset quality last quarter in this quarter. So you can see we're consistent there. Uh coming to next 1:01:56 1 hour, 1 minute, 56 seconds coming to next year prediction uh I think our overall range of somewhere around 1.5% and overall range somewhere 1:02:05 1 hour, 2 minutes, 5 seconds around 15% of roe that will sustain. 1:02:14 1 hour, 2 minutes, 14 seconds Thank you. I hope this answer thank you so much. 1:02:19 1 hour, 2 minutes, 19 seconds We have a follow-up question coming in from Akshhat Agraal. Akit please go ahead with your question. 1:02:32 1 hour, 2 minutes, 32 seconds Thank you for the opportunity again sir. 1:02:34 1 hour, 2 minutes, 34 seconds Uh on margins would you say uh NIS have largely bottomed out and what kind of trajectory do we expect uh from here if 1:02:44 1 hour, 2 minutes, 44 seconds not quantitatively at least qualitatively and what were the drivers of the uh yield compression? Was it just 1:02:52 1 hour, 2 minutes, 52 seconds higher share of wholesale uh lending because uh gold yields uh increased on the portfolio level or was it coming 1:02:59 1 hour, 2 minutes, 59 seconds from the full impact of the December reporate cup uh flowing through P&L and the MCL repricing that was that was my 1:03:09 1 hour, 3 minutes, 9 seconds first question sir I have one more please go ahead please finish everything I'll answer it 1:03:16 1 hour, 3 minutes, 16 seconds uh yeah and on the SMA book of the 10 to 11 accounts that slipped last quarters, how many accounts have been upgraded or 1:03:24 1 hour, 3 minutes, 24 seconds recovered during this quarter and how many uh I mean are pending uh which could uh affect the asset quality or 1:03:33 1 hour, 3 minutes, 33 seconds credit cost upside uh next quarter and should we expect most of these to be resolved by 1Q or there's benefit to 2Q 1:03:41 1 hour, 3 minutes, 41 seconds as well and lastly sir on the livers to RO we have talked about it a bit uh but just to understand like because this 1:03:50 1 hour, 3 minutes, 50 seconds quarter 1.5 ROA was due to low credit cost. Are you done? 1:03:54 1 hour, 3 minutes, 54 seconds No, we didn't hear we didn't hear the last line. Please, can you repeat it? 1:03:57 1 hour, 3 minutes, 57 seconds Uh yeah. So, sir, uh just one uh uh more question on the roe medium-term uh levers. Uh well, you did 1:04:07 1 hour, 4 minutes, 7 seconds talk a little bit about it, but uh this quarter was due to very low credit costs. So going forward uh I mean the 1:04:15 1 hour, 4 minutes, 15 seconds credit cost will slightly move up and because we are uh having we will have better retail growth and fee income uh fee income. 1:04:25 1 hour, 4 minutes, 25 seconds Yeah, go ahead sir. 1:04:27 1 hour, 4 minutes, 27 seconds Yeah, I think I've understood your question though is breaking but I think I got a sense of your question. So let me try and answer that. If you don't get 1:04:35 1 hour, 4 minutes, 35 seconds the answer you ask so on the uh margins 1:04:43 1 hour, 4 minutes, 43 seconds the general guidance which I have given always it will be 3.75 to four somewhere in between we are right in the middle of 1:04:51 1 hour, 4 minutes, 51 seconds it somewhere around uh 3.82 or something like that so I think it's very difficult to predict in basis points do it go up 1:04:59 1 hour, 4 minutes, 59 seconds or go down but it will remain in the range of 3.75 to 3.8 Uh having said that 1:05:07 1 hour, 5 minutes, 7 seconds I am not so sure it has bottomed out or not because of two reasons. One is our own internal portfolio the business mix 1:05:15 1 hour, 5 minutes, 15 seconds will start gradually changing. I don't know whether it will happen in the next year or next quarter but over a period of time it will happen and whatever 1:05:23 1 hour, 5 minutes, 23 seconds business makes changes leading to any uh uh interfere 1:05:29 1 hour, 5 minutes, 29 seconds change in name will get compensated on the Rway side by fee and crossell to 1:05:37 1 hour, 5 minutes, 37 seconds those customers because in unlike gold uh in gold for the high ticket size we are planning to do some crossell uh in 1:05:46 1 hour, 5 minutes, 46 seconds wholesale SME and some of these businesses where your yields are lower. 1:05:51 1 hour, 5 minutes, 51 seconds We because transaction banking we are going big time into that we expect crossell and also we expect liability 1:05:58 1 hour, 5 minutes, 58 seconds which should bring down our uh on a on uh uh on a long-term basis to bring down our cost of fund. So there's some in 1:06:06 1 hour, 6 minutes, 6 seconds noise here and there but eventually it is building up a franchise and hence uh eventually we'll look at a name which is similar or higher but in the ending 1:06:14 1 hour, 6 minutes, 14 seconds there could be some noise there. uh but we will remain try to remain between 3.75 to four on e compression you are 1:06:23 1 hour, 6 minutes, 23 seconds right two three things happened and you only answered some of them which is with 150 part 1:06:31 1 hour, 6 minutes, 31 seconds on the BMG portfolio it immediately impacts and on wholesale business it impacts depending on the MCL how it is 1:06:39 1 hour, 6 minutes, 39 seconds moving and what is the tailor of the MCL with the customers so now everything is almost played out B plays out in in 1:06:47 1 hour, 6 minutes, 47 seconds instantly and on wholesale it is sort of played out almost and hence we could see 1:06:54 1 hour, 6 minutes, 54 seconds a competition both on the wholesale side as well as on the SL in terms of compression which has happened 1:07:02 1 hour, 7 minutes, 2 seconds uh uh so I think that's answers the compression side coming to your question on uh SMA book we don't give this level 1:07:10 1 hour, 7 minutes, 10 seconds of details uh in our disclosure so this is like answer because you have asked A very granular question but at a high 1:07:18 1 hour, 7 minutes, 18 seconds level for your comfort I want to tell you that uh I was looking at the presentations on SMA almost every 1:07:25 1 hour, 7 minutes, 25 seconds business and at a bankwide level or group has constantly been improving and 1:07:34 1 hour, 7 minutes, 34 seconds as we are talking on Q4 the SMA grow is lowest in the last five quarters. Okay. 1:07:39 1 hour, 7 minutes, 39 seconds I think just sir just to uh interrupt sir actually I was asking about the 10 to 11 accounts that slipped last quarter 1:07:46 1 hour, 7 minutes, 46 seconds on the theme no it is not right from giving from a customer perspective also and from a 1:07:54 1 hour, 7 minutes, 54 seconds disclosure perspective but you can obviously understand that some of them will get upgraded some of them will get recovered and and thankfully some of 1:08:02 1 hour, 8 minutes, 2 seconds them has got upgraded recessively because some of them were were I said in last quarter itself that because we're 1:08:09 1 hour, 8 minutes, 9 seconds going flow migration some of the MS etc got little delayed because of which you happen and is more technical so to that 1:08:16 1 hour, 8 minutes, 16 seconds extent yes some of those accounts are related to that obviously where else it will come from but exactly how many how much where we don't give that level of 1:08:25 1 hour, 8 minutes, 25 seconds details and you can appreciate that but yes you're right it is obviously coming from the existing portfolio uh or 1:08:33 1 hour, 8 minutes, 33 seconds existing right sir and liver and in the media done 1:08:41 1 hour, 8 minutes, 41 seconds uh and you mentioned that uh the golden portfolio comes down etc. It's not coming down immediately in terms of 1:08:49 1 hour, 8 minutes, 49 seconds percentage and levers for RO is basically cross- selling 1:08:57 1 hour, 8 minutes, 57 seconds uh product business because why should we do a business where it is lower ending if we do not have a uh visibility 1:09:05 1 hour, 9 minutes, 5 seconds of RO in that business right I mean we are not doing here business only for top line so if we uh strategize to build a 1:09:14 1 hour, 9 minutes, 14 seconds business it's an entry entry strate strategy whether it is in the wholesale SM or in retail and eventually the RO 1:09:22 1 hour, 9 minutes, 22 seconds will play out out there. Uh so in the transition this way that will somewhere it can happen and that will be managed because the gold portfolio is not coming 1:09:30 1 hour, 9 minutes, 30 seconds down uh in just one year's time from a 54% to a 30% and we'll get that time to manage this. So I think we should be 1:09:37 1 hour, 9 minutes, 37 seconds able to manage between Aro and Aroi and you will see that and this year also let's not forget that we had to we delivered this result this quarter in 1:09:46 1 hour, 9 minutes, 46 seconds spite of the most difficult uh uh scenario on the fee business uh especially on the treasury side. So the 1:09:54 1 hour, 9 minutes, 54 seconds upside on this nobody can see the future can predict the future but we had taken a large book on the LFS side which we 1:10:03 1 hour, 10 minutes, 3 seconds could do only one time during that period when RBA came out with the regulation from HDM to AFS hoping that 1:10:09 1 hour, 10 minutes, 9 seconds we leverage that last year but instead of leveraging the other way nobody predicted that from 6.6 six it will go 1:10:17 1 hour, 10 minutes, 17 seconds to 7.1 everybody thought it will come to 6.1 so eventually that will play out once the crisis gets over so hopefully 1:10:24 1 hour, 10 minutes, 24 seconds on a full year basis next year there's a significant leverage there on the ROA and automatically on the RO side so and 1:10:32 1 hour, 10 minutes, 32 seconds also with capital consumption going high that's more technical and no maths obviously RO naturally will improve but that thing I think you guys will factor 1:10:41 1 hour, 10 minutes, 41 seconds in so that that's broadly the answer of your questions very well sir thank Thank you very much and all the best. 1:10:47 1 hour, 10 minutes, 47 seconds Thank you so much. 1:10:51 1 hour, 10 minutes, 51 seconds Thank you so much. Ladies and gentlemen, that was the last question for today. On behalf of CSB Bank Limited, that concludes today's conference call. 1:11:01 1 hour, 11 minutes, 1 second Thank you for joining us and you can now click on the leave icon to exit the meeting. Thank you all for your participation. 1:11:10 1 hour, 11 minutes, 10 seconds Thank you very much and look forward to everybody joining the call again in Q1. 1:11:15 1 hour, 11 minutes, 15 seconds that this this Thank you. Have a good evening. Thank you so much.