Karur Vysya Bank Ltd — Q4 FY26

Karur Vysya Bank Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=aA5LM4qvpH8 Published: 6 days ago

0:00 Ladies and gentlemen, good day and welcome to the Q4 FYI26 earnings conference call of the Kuru Russia Bank. 0:08 8 seconds We have with us today the management team of KVB represented by Mr. Romesh Babu MD and CEO, Mr. Shankar Bala Badraatrroni, Executive Director, Mr. 0:19 19 seconds Chandra Shakharan, Chief Operating Officer, and Mr. Ram Shankar, CFO. As a reminder, all participant lines will be 0:27 27 seconds in the listenon mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the 0:35 35 seconds conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. B. 0:45 45 seconds Romesh Babu, MD and CEO to take us through the highlights of the quarter gone by after which we will open the floor for questions. Thank you and over to you sir. 0:55 55 seconds Yes, thank you ma'am. Um good evening to all of you. First of all, sincere apologies from our side. There is a technical glitch and we have been trying for the last 10 minutes and there's a 1:04 1 minute, 4 seconds disability in the call that's why we couldn't. So sorry again once again for all of to keep all of you waiting. So again good evening and on behalf of 1:12 1 minute, 12 seconds career bank I extend a warm welcome to all the participants joining our earnings call for the fourth quarter of the financial year 2026. Our financial 1:20 1 minute, 20 seconds results and accompanying presentation have been made available on our website and I trust you have reviewed them thoroughly prior to this call. We are 1:28 1 minute, 28 seconds pleased to report that our performance indicators for the financial year 2526 are fully aligned with the guidance provided at the outset of the year. This 1:37 1 minute, 37 seconds alignment is a testament to the effectiveness of our strategies and operational discipline. It is particularly encouraging to observe that 1:44 1 minute, 44 seconds our performance has consistently surpassed our guidance across three key metrics, growth, profitability, and 1:52 1 minute, 52 seconds asset quality. Our growth trajectory has been robust, reflecting our commitment to expanding business operations and enhancing value for all stakeholders. 2:02 2 minutes, 2 seconds Profitability has remained strong throughout the year, underscoring our focus on prudent financial management 2:09 2 minutes, 9 seconds and sustained earnings. Furthermore, asset quality continues to be wellmaintained, reaffirming our dedication to sound risk practices and 2:18 2 minutes, 18 seconds inclusive banking. The bank's total business stands at 2 lakh 14,420 cr as 2:24 2 minutes, 24 seconds on 31st March 2026 as compared to previous year 1 lak 86,569 critic 2:32 2 minutes, 32 seconds growth of 15%. The advances stand at 98,754 crores and deposits grew to 1 15,666 cr 2:42 2 minutes, 42 seconds with a growth of 17% and 13% respectively. With respect to business mix of our advances portfolio, RAM 2:49 2 minutes, 49 seconds verticals have grown by 18% yearonear 2% quarteron quarter constituting 86% of our overall advances portfolio. 2:59 2 minutes, 59 seconds Retail loan book increased its share to 27% agree remained at 25% and commercial book at 35%. You may find a moderation 3:09 3 minutes, 9 seconds in the growth of advances in the last quarter of the year as we took a cautious call in advances growth considering the geopolitical situations 3:17 3 minutes, 17 seconds and not to take unwarranted risk in the growth as we had front ended our advances growth comfortably in the first 3:26 3 minutes, 26 seconds three quarters. Retail advances increased by 25% over the year 3% quarter on quarter 3:33 3 minutes, 33 seconds 3% quarter on quarter primarily due to growth in mortgage and dual loans. The collaboration we established between the 3:41 3 minutes, 41 seconds branch channel and open market channel at the start of the year paid off as evidenced by 56% yearon-year 9% 3:49 3 minutes, 49 seconds quarteron-quarter rise in mortgage loan volumes. Retail J loans saw a 61% annual increase, 5% quarteron quarter. Housing 3:58 3 minutes, 58 seconds loss grew modestly by 2% reflecting low yields and greater competition due to a 4:05 4 minutes, 5 seconds management change with our BNPL partner midyear and due to elevated household leverage. Growth was negative compared 4:13 4 minutes, 13 seconds to previous year. With operations now stable, we anticipate growth in the current year. The outstanding of our 4:19 4 minutes, 19 seconds BNPL book is 798 cr as at 31st March 2026. 4:27 4 minutes, 27 seconds The agriculture book demonstrated an year year-on-year growth of 19% 5% on quarteron quarter with agri jail loans 4:35 4 minutes, 35 seconds constituting 91% of the portfolio [clears throat] and other agriculture loans representing remaining 9%. The 4:42 4 minutes, 42 seconds loan to value ratio for agri lo stands at 55.59%. 4:47 4 minutes, 47 seconds indicating sufficient margin availability. Our sustained emphasis on enhancing turnaround time and customer 4:55 4 minutes, 55 seconds engagement has contributed to the agriculture portfolio's 5% growth during the year despite competitive pressures. 5:02 5 minutes, 2 seconds Given both the expanding portfolio and increasing gold prices, we remain vigilant in maintaining higher margins 5:10 5 minutes, 10 seconds and have reinforced our monitoring mechanism to mitigate inherent risks as necessary. The MFI portfolio stood at 5:18 5 minutes, 18 seconds 173 crores representing just.18% of our total portfolio. CGM coverage commenced 5:25 5 minutes, 25 seconds from uh 1st April though uh 1st April actually uh the real disbburus started in June. So at present the situation has 5:34 5 minutes, 34 seconds stabilized, collection efficiency has improved, guardrails have been implemented and guarantee coverage has been secured. Going forward, we will 5:42 5 minutes, 42 seconds assess growth under this segment in a measured and strategic manner. The commercial business grew 11.56% yearon 5:50 5 minutes, 50 seconds year but had a flat growth during the last quarter of the year. As mentioned in my previous call, we continued to exit few weaker accounts consciously. 6:00 6 minutes conscious of acquisition of accounts both in terms of quality and pricing allowed few accounts to be taken over by others due to lower pricing which did 6:08 6 minutes, 8 seconds not fit into the scheme of things for our bank. In addition to this, we needed to be mindful of the impact on this 6:16 6 minutes, 16 seconds segment due to the geopolitical tensions that started in the last quarter. 6:21 6 minutes, 21 seconds Disbustment growth from NTB was 25% during the year and 29% including the 6:28 6 minutes, 28 seconds ETB customers book. However, in the last quarter, utilization of working capital accounts were lower. To improve the MSME 6:36 6 minutes, 36 seconds business, we initiated relationship model to strengthen capacity building and drive sustainance growth, 6:44 6 minutes, 44 seconds sustainable growth in the small business group segment with estimated manpower of around 100 relationship managers. 6:51 6 minutes, 51 seconds Already 72 of them are in place. The primary focus of this team would be to source new relationships. The corporate 7:00 7 minutes portfolio achieved a growth of 12% over the past year which was degrowing up to last year. Strategic opportunities were 7:08 7 minutes, 8 seconds identified within segments such as commercial real estate, capital markets and EPC contractors which contributed to 7:15 7 minutes, 15 seconds this progress despite challenges associated with the prevailing interstate environment. These sectors supported sustained portfolio expansion 7:24 7 minutes, 24 seconds while preserving the required spread and remaining consistent with the bank's risk profile. In response to external 7:31 7 minutes, 31 seconds conditions, growth was moderated in the final quarter. 7:36 7 minutes, 36 seconds Including trade substitutes, our corporate advances portfolio posted a 20% year-on-year increase. With respect 7:44 7 minutes, 44 seconds to create substitutes, incremental growth during the year was 969 crores. 7:49 7 minutes, 49 seconds We had focused ETB customers with an external rating of A and above and were able to offer finer pricing in create substitutes compared to the loans. 8:00 8 minutes In the mean offer finer pricing, we are able to get a better pricing in the trade substitutes than the loans. The transaction banking group plays a key 8:08 8 minutes, 8 seconds role in the bank's digital transformation agenda by providing API first realtime banking capabilities for corporates and 8:17 8 minutes, 17 seconds emergency clients, scalable bulk payment infrastructure supporting payroll, vendor and B2B settlement and automated 8:25 8 minutes, 25 seconds trade finance and supply chain monitoring workflow. 8:29 8 minutes, 29 seconds TBG remains committed to supporting the bank's efforts to maintain a diversified portfolio and also to strengthen 8:37 8 minutes, 37 seconds strategic relationship with leading corporate clients. Our unsecured loan book is at 1.81% 8:45 8 minutes, 45 seconds of the total advances as at the end of March 2026 which is one of the lowest amongst the peers. Our partnerships for 8:53 8 minutes, 53 seconds co- lending with NBFCs continue to perform well and the loan book under this segment is 9:00 9 minutes about 249 cr. We had deliberately reduced the book as it was not ROA 9:07 9 minutes, 7 seconds accretive. As mentioned earlier as our RAM verticals are sustaining their organic growth momentum we would keep this whole lending as secondary to our 9:16 9 minutes, 16 seconds organic growth. The bank's liability business constitutes to 54% of the total business of the bank. Total deposits 9:22 9 minutes, 22 seconds grow by 13 13.31% during the year driven by gains in both retail term deposits 9:29 9 minutes, 29 seconds and kasa. Kasa balances grow by 12%. And 3,290 crores is the actual growth during 9:36 9 minutes, 36 seconds this year as against 677 crores during last year. Highest in the last 10 years in terms of actual growth. 9:45 9 minutes, 45 seconds So demand deposits grew by 10% compared to 1% growth in the corresponding period of previous year. Savings deposits grew 9:53 9 minutes, 53 seconds by 13% with incremental growth of 255 crores which is again the highest in terms of the actual amount. The total 10:00 10 minutes deposits excluding certificate of deposits grew by 2.66% on quarteronquarter basis. The subdued growth in term deposits in the last 10:09 10 minutes, 9 seconds quarter was a conscious call taken. You are aware that we frontloaded our retail deposits growth in the first quarter itself with a growth of 5.3%. 10:20 10 minutes, 20 seconds We also did not go for bulk deposits at the factory year. Our bulk deposits grew by 9% year on year as an 44% in the corresponding previous period. 10:32 10 minutes, 32 seconds Certificate of deposit was tune of 1,773 crores were also reduced during last quarter. This was a determined decision 10:41 10 minutes, 41 seconds to optimize funding costs given the elevated CD rate during March. As all of you know it ranged between 7.75 and sometimes 8.5 or 3 months to one year. 10:51 10 minutes, 51 seconds These efforts substantially reduce our cost of funds by nine basis points in the last quarter. All these were taken 10:59 10 minutes, 59 seconds considering the moderation in advances growth and need to maintain margins in mind in the last quarter of the year and 11:07 11 minutes, 7 seconds assisted with this the normal repricing of the RTD what all happened also that also supported us a lot in the reduction 11:15 11 minutes, 15 seconds in the cost of funds as well as cost of deposit. Our approach to focusing on higher balance savings account varants through both branch and sales channels 11:23 11 minutes, 23 seconds has delivered encouraging outcomes. The average balances for newly acquired customers have demonstrated robust 11:31 11 minutes, 31 seconds year-on-year progress in current accounts, savings accounts, and overall CASA with an annual growth of 44%. 11:38 11 minutes, 38 seconds Existing customers contributed a 4% increase this year, indicating that there are options available for customers to allocate their funds outside of traditional banking channels. 11:49 11 minutes, 49 seconds Overall, the combined portfolio shows consistent advancement in acquisition quality and relationship strength, 11:56 11 minutes, 56 seconds helping to build a more resilient and balanced Kasa franchise. 12:02 12 minutes, 2 seconds The bank is strengthening its presence outside Tamil Nadu by partnering with institutional clients and state government bodies to capture recurring 12:10 12 minutes, 10 seconds payment flows which directly enhance deposits and customer visibility across these markets. Retail deposits increased 12:18 12 minutes, 18 seconds by 11% during the quarter compared to 8.59% previously demonstrating the branch's focus on attracting stable granular retail deposits for long-term stability. 12:29 12 minutes, 29 seconds In terms of margins, 2526 year was marked by sustained pressure 12:36 12 minutes, 36 seconds throughout the year. Rising funding costs and repo rate reductions till the third quarter of the year created 12:43 12 minutes, 43 seconds ongoing challenges for the banks. With respect to net interest margins, we provided a guidance in the range of 3.7 12:50 12 minutes, 50 seconds to 3.75 for financial year 2526. At the beginning of the year, we improved the guidance in the last call that NIM would be around 3.9 to 3.95 for the full year. 13:02 13 minutes, 2 seconds I'm happy to say that we were able to maintain a NIM for the full year at 3.97. 13:08 13 minutes, 8 seconds If you can look at it 4.11 actually including one of the interest from the return of accounts as well as the income 13:16 13 minutes, 16 seconds tax refund. So if you exclude that it is 3.97 which is literally as per just above our guidance means for the fourth 13:25 13 minutes, 25 seconds quarter was 4.25% excluding seven basis points interest income from tax refund income tax 13:32 13 minutes, 32 seconds refund. This represents a 26 basis points increase from the prior quarter 13:39 13 minutes, 39 seconds primarily driven by nine basis points reduction in the cost of funds and 18 basis points increase in yield of funds. 13:47 13 minutes, 47 seconds The cost of deposits reduced by 13 basis points on a sequential basis as a major part of the deposits repric during the 13:55 13 minutes, 55 seconds year. The yield on advances increased by 16 basis points during the quarter. We were able to stem the reduction by 14:02 14 minutes, 2 seconds improving our fixed rate loans in our assets portfolio mix. Our fixed rate loan book which was at 23% in the total 14:10 14 minutes, 10 seconds book at the end of December has now increased to 29% at the end of March 26. 14:17 14 minutes, 17 seconds MLR loan book has reduced from 20% to 14% during the same period. EBLR book 14:24 14 minutes, 24 seconds remained at 55%. Yield on investment has increased by 19 basis points during the 14:31 14 minutes, 31 seconds quarter. For the full year, yield on investments was 6.68% showing an increase of 7 basis points 14:38 14 minutes, 38 seconds from 6.61% of the previous year. We have achieved operating profit of 1,247 14:44 14 minutes, 44 seconds crores for the quarter and 4,75 cr for the full year. A growth of 27% over 14:52 14 minutes, 52 seconds previous year. Our net profit touched a high of 725 crores for the quarter and 2,500 crores for the full year a growth 15:00 15 minutes of 29%. So all of you must be knowing uh this quarter profit as well as the annual profit are highest in the history 15:07 15 minutes, 7 seconds of the bank. Our operating expenses for the quarter is 728 cr. Establishment 15:13 15 minutes, 13 seconds expenses was at 341 crores decreased sequentially from 363 crores mainly due 15:21 15 minutes, 21 seconds to lower pension obligations on account of increase in discount rates. Other opex increase to 387 cr from 380 cr 15:30 15 minutes, 30 seconds sequentially mainly on account of increase in rents repairs and maintenance and channel related fees. to DSA commission and tech related 15:39 15 minutes, 39 seconds expenses. For full year under review, OPEX had gone up by 2.45% over previous year. 15:46 15 minutes, 46 seconds For the quarter under review, we have provided a sum of 116 crores towards NPA migrations, aging provisions and 7 cr 15:54 15 minutes, 54 seconds for standard assets. We had a reversal of 10 crores on release of provisions and restructured advances. Credit cost works out to 45% on an annualized basis. 16:07 16 minutes, 7 seconds We have provided prudentially 163 crores. I repeat 163 crores which 16:13 16 minutes, 13 seconds are one time toward sectors identified that they get affected due to ongoing geopolitical tensions. So total 16:23 16 minutes, 23 seconds provisions including standard restructured NPA credential and floating 16:29 16 minutes, 29 seconds provisions as at the end of the year is 1,747 cr which works out to 1.77% of our advances. 16:41 16 minutes, 41 seconds Our gross pages during the quarter was at 187 cr and for the full year it was 744 cr which is 75% of our loan book 16:50 16 minutes, 50 seconds slipage ratio it is a for the full year if you can look at it during the second quarter we had some sort of a uh chunky 16:58 16 minutes, 58 seconds slippages were there so it comes to around 200 crores so 744 crores includes the 200 crores also SMS 30 plus numbers 17:06 17 minutes, 6 seconds were at 172 crores as at the end of March 26 6 which is.17% 17:13 17 minutes, 13 seconds of our loan book reduced from.3% of the previous year indicating continued grip over this aspect 17:22 17 minutes, 22 seconds with our persistent focus on recovery from technically written off accounts we were able to recover a sum of 2416 cr 17:29 17 minutes, 29 seconds during the quarter total recoveries during the year is 679 crores from the written off accounts excluding 139 17:38 17 minutes, 38 seconds crores interest recovery which you have got it in one of the quarters earlier quarter as against 638 crores of 202425 17:48 17 minutes, 48 seconds our gross NPA has come down marginally to 75% as against 76% of last year our 17:56 17 minutes, 56 seconds net NPA remains at the level of.19 and we would continue to maintain net NPA at less than 1% of our loan book our 18:05 18 minutes, 5 seconds standard restructured book is further reduced to 41% of our loan book and the book is performing well and we do not 18:13 18 minutes, 13 seconds foresee any major setbacks flippages from the book. Above all, many of them are backed by real estate collateral and 18:21 18 minutes, 21 seconds we are holding a 40% provision for the set book. 18:26 18 minutes, 26 seconds Our cost to income ratio for the quarter is 37% supported by higher recoveries, interest on income tax refund and lower 18:34 18 minutes, 34 seconds establishment costs. And this is for the quarter and 42% for the full year which 18:40 18 minutes, 40 seconds is within the guidance of below 50%. Our car continues to be healthy and is at 18:48 18 minutes, 48 seconds 18.76% providing us comfortable headroom for growth. There may not be any need to 18:55 18 minutes, 55 seconds raise money in financial year 2627 for the growth plan as our plowback of net profits will take care of our growth plan. 19:05 19 minutes, 5 seconds Our LCR is at 125.47. 19:08 19 minutes, 8 seconds The share of digital transaction stands at 98%. We have rolled out our new version of our mobile delight app with 19:16 19 minutes, 16 seconds enhanced features during the year. I'm happy to say that the rating for this app is 4.8 in Google Play Google Play 19:23 19 minutes, 23 seconds Store and 4.6 16 Apple store and there are 2.5 million monthly active users for our Delight app and 7 million Delight 19:32 19 minutes, 32 seconds downloads for the app. We have achieved an ROA of 2.1% in this quarter and 1.93% 19:41 19 minutes, 41 seconds for the full year. I'm happy to share that we have declared a dividend of 130% as declared last year and this is 19:50 19 minutes, 50 seconds subject to shareholders approval. Of course we need to see. So last year come we have issued a bonus share. So every 19:57 19 minutes, 57 seconds five shares one bonus share we have given it. So this year when we are paying this 130 so the payout will be relatively more because we'll be paying 20:05 20 minutes, 5 seconds on those bonus shares what we have issued. Now let me move on to what we intend to do in financial year 2627. 20:13 20 minutes, 13 seconds The global financial system faces sign significant challenges and uncertaintity. 20:18 20 minutes, 18 seconds Geoeconomic fragmentation driven by tariffs, trade restrictions and industrial policies is reshaping supply 20:26 20 minutes, 26 seconds chains and fragmenting financial movements. As stated in April 206 20:34 20 minutes, 34 seconds monetary policy, high frequency data up to February 2026 show continued economic 20:42 20 minutes, 42 seconds growth led by strong private consumption and investment. However, conflict in West Asia could impede progress, 20:49 20 minutes, 49 seconds increase input costs from energy prices, freight, insurance, and supply chain disruptions are expected to limit 20:57 20 minutes, 57 seconds expansion. The MPC noted that the conflict's intensity and duration along with related infrastructure damage raise 21:05 21 minutes, 5 seconds risks for inflation and growth. India's economy remains resilient with strong fundamentals to absorb shock. It is 21:12 21 minutes, 12 seconds prudent to wait and watch the changing circumstances and the evolving growth inflation outlook. Considering all the 21:19 21 minutes, 19 seconds above, the outlook for 2627 remains cautious moderate moderated growth. We need to 21:27 21 minutes, 27 seconds navigate the challenges carefully without compromising on the quality which we have got it all along with lot 21:34 21 minutes, 34 seconds of efforts. We expect our credit growth to be one or two% over the industry growth. We have been focusing on margins for the past two years or few years. 21:46 21 minutes, 46 seconds Considering the current scenario, we must take a strategic bet on preserving relationships over margins. We need to 21:53 21 minutes, 53 seconds balance both top line as well as the bottom line. Our RAM verticals would continue to sustain the momentum with respect to commercial. The relationship 22:02 22 minutes, 2 seconds man manager model approach and a small business group would focus on increasing the ticket size in the segment. Business 22:10 22 minutes, 10 seconds banking team would focus on non-fund business and exporter and customers for increasing transaction based fee income in addition to regularly what they do 22:19 22 minutes, 19 seconds the work business under MSNB segment. We may need to compromise on margins to 22:25 22 minutes, 25 seconds some extent in retail assets. Our main goal is to further enhance collaboration between branches and the open market 22:33 22 minutes, 33 seconds channel. Over the past year, the bank has established a partnerships for affordable housing which will be 22:40 22 minutes, 40 seconds expanded cautiously. We plan to launch premium credit cards in first year of this year. Clap segment is experiencing 22:49 22 minutes, 49 seconds strong pricing competition making both customer retention and new acquisition a bit challenging. If you focus solely on 22:57 22 minutes, 57 seconds maintaining margins, quality might become a concern. Our IT integration for loan against mutual fund is at the start 23:06 23 minutes, 6 seconds and is expected to be launched in the first half of this year. 23:11 23 minutes, 11 seconds Given the uncertainty in external environment, it may be necessary to pursue corporate lending in a risk calibrated approach. Under trade 23:20 23 minutes, 20 seconds substitutes, we will be focusing more non-financial services customers for this year. The dual loans portfolio 23:27 23 minutes, 27 seconds encompassing all verticals accounts for 30% of the bank's overall portfolio. We maintain an internal cap of 35% growth 23:37 23 minutes, 37 seconds will be pursued in either retail or agriculture segments based on prevailing circumstances as increased expansion in 23:45 23 minutes, 45 seconds retail would also indirectly elevate the PSL requirements. We continue to focus on enhanced monitoring to take care of 23:53 23 minutes, 53 seconds world price fluctuations. Our credit business mix and corporate would 24:00 24 minutes be in the mix of 80 to 20 that's what we were mentioning earlier. However, it may toggle bit between another 5% allowance 24:08 24 minutes, 8 seconds here and there can be there within the liability segment. We will maintain our dual approach of pursuing new acquisitions and strengthening existing 24:17 24 minutes, 17 seconds partnerships. This vertical has transitioned from traditional deposit mobilization to a technology enabled 24:24 24 minutes, 24 seconds transaction anchored franchise. Key focus areas include enhancing transaction banking services, expanding 24:32 24 minutes, 32 seconds merchant ecosystems through expedited merchant acquisition and increasing kafa by leveraging institutional business 24:39 24 minutes, 39 seconds initiatives. A dedicated MR channel is planned to be rolled out. With respect to margins, we expect that limbs to be 24:48 24 minutes, 48 seconds in the range of 3.75 to 3.8 for the full year. Though we are at 4% plus at the 24:56 24 minutes, 56 seconds exit quarter of this year. So the MVC is a drop in margins due to expected rate 25:03 25 minutes, 3 seconds increase in the retail time deposits. So you would have seen that we already increased rates in April 2026 and it'll 25:12 25 minutes, 12 seconds kick in from this quarter itself the higher cost of deposit. In addition to that we expect a drop in the yield on 25:19 25 minutes, 19 seconds the advances side due to prevailing competition and to retain the relationships. Considering the uncertaintities in the market there may 25:28 25 minutes, 28 seconds be fluctuations during the quarter. Our endeavor is to maintain within the above range for the full year. 25:36 25 minutes, 36 seconds So you can recollect that last year also we have conveyed the same thing when we are giving the full year guidance. So 25:43 25 minutes, 43 seconds one quarter can be here and there but our endeavor is to deliver that number within the full year. So tactically depending upon the opportunities 25:51 25 minutes, 51 seconds available we'll be taking calls one quarter may be low one quarter may be high but we keep in mind the full year 25:59 25 minutes, 59 seconds we expect 15 to 20 basis points investment portfolio yield yield enhancement through strategic rebalancing of the HTM portfolio during 26:08 26 minutes, 8 seconds 2627 our duration is relatively low at less than four years we will maintain around 4 to 4 and a half years in the 26:15 26 minutes, 15 seconds medium-term portfolio tilted with the yield curve expectation at any point of time. Our efforts on recoveries will 26:23 26 minutes, 23 seconds continue and we will take efforts to sustain the momentum. With respect to branch expansion, we are planning to open 50 branches. Out of the 38 will be 26:32 26 minutes, 32 seconds regular and 12, seven will be light and another five they are going to short list shortly. So to the extent possible 26:40 26 minutes, 40 seconds how best we can frontload the first half year we will see that so that we'll get the benefit in the second quarter from these branches opened our cost to income 26:49 26 minutes, 49 seconds ratio would be below 50 as we have been continuously planning and we'll end to retake that way GNPA is expected to be 26:56 26 minutes, 56 seconds less than 1.5% and net to be less than 1% for the full year slipages would be expected to be below 1% of the asset 27:04 27 minutes, 4 seconds book LCR would be maintained around 115% to 120%. RBI issued final ECL 27:12 27 minutes, 12 seconds provisioning guidelines which we are regulating. The bank has maintained adequate provisions and buffers through 27:19 27 minutes, 19 seconds floating and credential provisions over the past 3 years with strong asset quality and provisions to advances at 1.77%. 27:28 27 minutes, 28 seconds We expect minimal impact from this transition. The bank recognizes that environmental, social, and governance 27:36 27 minutes, 36 seconds principles are fundamental to sustainable growth and responsible banking. Our commitment extends beyond compliance, focusing on real world 27:45 27 minutes, 45 seconds impact through ethical governance, environmental stewardship and social responsibility. By integrating ESG into 27:52 27 minutes, 52 seconds our core business strategy, the bank aims to enhance financial resilience while contributing to a sustainable 27:59 27 minutes, 59 seconds future. Our ESG rating has improved to 68 which implies is a strong rating for 28:06 28 minutes, 6 seconds the financial year 2425. It is awarded by Crisil demonstrating continuous enhancement in non-financial 28:13 28 minutes, 13 seconds performance. We achieved a return on assets of 1.93 for the whole year of financial year 26 and 2.1 in the last 28:23 28 minutes, 23 seconds quarter. There were one of items for 2526 that contributed to.12% to our ROA calculation. Given the 28:32 28 minutes, 32 seconds current macroeconomic environment and the anticipated effects on the net interest margins discussed earlier, we 28:38 28 minutes, 38 seconds expect the ROA for the full year to be between 1.7 to 1.8. 28:44 28 minutes, 44 seconds Nonetheless, we remain committed to exceeding the expectations to the extent possible. So our primary areas of focus 28:53 28 minutes, 53 seconds will be to continue to have the focus on the growth, asset quality and profitability. We understand the 29:01 29 minutes, 1 second environment. It'll be volatile but we are prepared to adapt while keeping these core metrics strong. 29:10 29 minutes, 10 seconds Finally, I'm grateful to all the investors, analysts and stakeholders for the confidence and continued support which we will reciprocate to our better 29:18 29 minutes, 18 seconds performance in the years to come. Now, I'll be much glad to respond to your questions. Thank you. Thank you all. 29:27 29 minutes, 27 seconds Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchstone 29:35 29 minutes, 35 seconds telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a 29:44 29 minutes, 44 seconds question. Ladies and gentlemen, we will wait for a moment while the question assembles. 29:51 29 minutes, 51 seconds We'll take our first question from the line of J Mundra from ICIC securities. Please go ahead. 29:58 29 minutes, 58 seconds Yeah. Hi, good evening sir and uh congratulations on a strong set of numbers. Um sir first I just want to reconcile on the guidance part that you 30:07 30 minutes, 7 seconds said uh RO is here but at the test margin you said that you know we even for the last year we started guiding at 30:16 30 minutes, 16 seconds 375 380 but we delivered 397 uh sorry what is the guidance for FI27 sir on margin 30:25 30 minutes, 25 seconds uh in fact I mentioned it is 3.75 to 3.8 8. So J in fact thank you first of all 30:31 30 minutes, 31 seconds for the compliments and now for this reason 3.75 to 3.8 also I elaborately 30:39 30 minutes, 39 seconds explained the reasons why we wanted to do fundamentally if you look at it there are few factors we need to keep in mind the cost of deposits the though we were 30:48 30 minutes, 48 seconds thinking saying that the involvement will be much easier and all you'll be able to get that but still there is some sort of a tightness in the market that's 30:57 30 minutes, 57 seconds why you cannot raise the funds so easily as we think that way so that is the reason we expect the cost of deposits to 31:04 31 minutes, 4 seconds go up further retail deposits also And the second thing on the yield. So we have been pretty holding the rates 31:12 31 minutes, 12 seconds interest rates. In the process we find the leakages have become more. Many of the existing accounts when others are 31:20 31 minutes, 20 seconds offering very finest rates we are losing. Now a stage has come getting back these connections will become 31:27 31 minutes, 27 seconds pretty difficult over a period of time if we still hold these rates so strong. 31:33 31 minutes, 33 seconds So we may have to concede and reduce the rates to existing customers and also for the acquisition also we have to be in 31:41 31 minutes, 41 seconds the market though as I said our ETB the dispersment are 29% under commercial so it make tapper over a period of time 31:50 31 minutes, 50 seconds that is the reason we need to take a conscious call having such a strong name is good to have but not at the cost of 31:57 31 minutes, 57 seconds continuously losing the top line so that is the reason what we thought keeping all these things in mind. So we may have to compromise to some extent on the 32:06 32 minutes, 6 seconds names in this year that's why I suggested for 3.7 to 3.8 Eight 32:13 32 minutes, 13 seconds right sir and sir any any numerical guidance on the growth part sir at overall level I heard that gold we have 32:20 32 minutes, 20 seconds still internal scope but what would be the overall book growth uh look like 32:27 32 minutes, 27 seconds if you can look at it last year we have conveyed 2% over the industry so you have seen RBA last data at the end of 32:35 32 minutes, 35 seconds March 16.1% exactly we are more or less 18% Now 18% 32:41 32 minutes, 41 seconds if you look at our RAM also 18%. If you take the corporate which was not growing earlier also if we include the paid 32:49 32 minutes, 49 seconds substitutes it has come out 18%. So what we planned it has come that is the reason we were relatively a bit slow in 32:57 32 minutes, 57 seconds our quarter 4 when the pricing was pretty high so we light low otherwise growing in credit is not a big task. Now 33:05 33 minutes, 5 seconds engines are fairing well. If you are unable to do inorganically growing also pretty easy you can go for a pool purchase and buy that but the point is 33:13 33 minutes, 13 seconds for that you need to raise the deposits in such a way pretty costly and that you need to deploy that it is not making any economic sense that is the reason what 33:22 33 minutes, 22 seconds we thought so let us confine to 18% and maintain the margins this year also what the guidance I gave is particularly in 33:30 33 minutes, 30 seconds respect to the credit so it'll be 1 or 2% over the market or industry coming to the deposit is concerned it will be 33:37 33 minutes, 37 seconds derived from the credit growth what all we are getting because earlier we were looking at the CD ratio now we will look at the LCR so what all to the extent LCR 33:47 33 minutes, 47 seconds permits and where we need to be in the range of 115 to 120% we'll be mobilizing the deposits that two in a combination 33:55 33 minutes, 55 seconds where KA and TD so so that our cost of deposits are under control 34:03 34 minutes, 3 seconds right sir sir and last question is on uh sorry on on gold yield. So what will be 34:10 34 minutes, 10 seconds a blended gold yield on I mean the majority of the gold is agri gold. So what is the blended yield? Uh I mean the 34:18 34 minutes, 18 seconds gold having higher growth that also has a uh favorable impact on the overall yield right that is that is correct that 34:25 34 minutes, 25 seconds is absolutely correct you are right that way but if you look at it as you are mentioning 91% of our portfolio and 34:33 34 minutes, 33 seconds agree is gold loan. So that is our 11 that is at 11% when we are funding it can all and the rest is concerned it's a 34:41 34 minutes, 41 seconds smaller amount that way but if you look at this agree portfolio also everything is not repriced is still a part of that 34:49 34 minutes, 49 seconds under still MCLR so that way a small portion is below the trade and even if 34:56 34 minutes, 56 seconds something is more under the retail the average if you can take it it can be between 10.75 to 11% you can take 35:05 35 minutes, 5 seconds Okay. Okay. Understood, sir. And this quarter while I understood that there is some 2122 crores of interest RT refund 35:13 35 minutes, 13 seconds where that number that amount is in interest on advancing line or where is that and apart from loan mix 35:23 35 minutes, 23 seconds change sir what have what help in the you know uptake in the loan yield because 35:33 35 minutes, 33 seconds J I'm sorry it's sounding muffled. Can you repeat your question please? 35:37 35 minutes, 37 seconds Yes sir my question is where is the 22 crores of interest on ITV fund in which line item and uh interest income in 35:46 35 minutes, 46 seconds other interest income. So there is interest in line part of this way when you talking about him we have excluded 35:54 35 minutes, 54 seconds that income footnote was there with a star so we excluded that so it's a part of interest only they included that 36:01 36 minutes, 1 second there and sir the loan yield apart from loan exchange corporate did not grow and 36:09 36 minutes, 9 seconds retail agree was there any other thing which helped in the uptake in the loan yield on a PO2 basis. 36:19 36 minutes, 19 seconds Yeah. Yeah. I agreed. Yeah. To the extent possible suppose few of the low yielding advances 36:25 36 minutes, 25 seconds which is not making sense for us through the riskreward portfolio. Yeah. replace it. If you are losing those accounts 36:33 36 minutes, 33 seconds automatically rest of the portfolio the yield will go up right now my only thing is going ahead 36:40 36 minutes, 40 seconds when interest rates were to go up in retail deposit you can also increase the NCLR right I mean the competitive 36:47 36 minutes, 47 seconds intensity is what now it has come down drastically suppose 55% 36:54 36 minutes, 54 seconds 30% is under now 15% is there so out of that how much you can play 37:02 37 minutes, 2 seconds Okay. All right sir. Thank you and all the very best. I'll come back in. Thank you sir. Thank you. 37:08 37 minutes, 8 seconds Thank you. Next question is from the line of Pitesh Bum from Dam Capital. Please go ahead. 37:15 37 minutes, 15 seconds Yes sir. Uh good evening and great set of numbers and thanks for the insights in the opening remarks. Uh just two questions. So one is on this uh 37:24 37 minutes, 24 seconds potential uh provisions of 150 or cross uh what kind of sectors uh you would have uh taken it on and what could be the ticket sizes? 37:35 37 minutes, 35 seconds Uh in fact there are a few sectors which actually have a risk when we saw it can be let us say to some extent textile also we have taken okay like ceramics we 37:44 37 minutes, 44 seconds have taken fertilizers we have taken chemicals we have taken that way uh to some extent these granite quads all these things are also taken and few 37:52 37 minutes, 52 seconds other sectors also we have taken where it can be a direct or indirect bearing will be there those sectors critically 38:00 38 minutes they have seen that based on that sector wise a call has been taken how much we need to provide for that. 38:07 38 minutes, 7 seconds ticket size for that any broad portfolio basis 38:14 38 minutes, 14 seconds and a portfolio suppose textile yeah textile portfolio is this some sort of working we have done that how much is 38:22 38 minutes, 22 seconds vulnerable how much is susceptible these things are seen so with the different cuts and this thing and all the working has been done in consultation with the 38:29 38 minutes, 29 seconds business verticals a risk has taken a call so we thought it is worth it to keep that money rather than later repenting for Sure. 38:39 38 minutes, 39 seconds Uh just to follow up on that uh as the ECBS scheme is now approved by the government uh we think uh that most of 38:48 38 minutes, 48 seconds these accounts will be available in that and there could be reversal of these provisions. 38:54 38 minutes, 54 seconds No yet to see if you can recollect you may not be looking at our position in 2020 when we thought of researching the 39:02 39 minutes, 2 seconds provisions have come up. So we were one of the banks who had very tight gating conditions wherever actual genuine 39:11 39 minutes, 11 seconds necessity is there we have permitted few things not for the sake of doing and to postpone the impending problem we never 39:18 39 minutes, 18 seconds allowed that. So that was the reason at that time we were getting a feeling we will have more hits compared to other 39:25 39 minutes, 25 seconds banks but we thought it is better to bite the bullet at that time but later hindsight if you look at it our restructuring percentage is lowest 39:34 39 minutes, 34 seconds amongst many banks. Now also just now the scheme has come out we need to look at it we need to work out but the same 39:41 39 minutes, 41 seconds principle we'll try to follow wherever absolutely a helping hand is required definitely we'll come forward but for the sake of restructuring and to 39:50 39 minutes, 50 seconds postpone the problem we may not do so all these things we need to work and then we need to see now it will be too 39:56 39 minutes, 56 seconds premature to say anything about that sure uh second question was on the 68 book you mentioned that it moved to 29% 40:05 40 minutes, 5 seconds Now uh apart from Z and loans what kind of uh products would have contributed to that and from here on where do you see that uh mix to you know end up at? 40:17 40 minutes, 17 seconds I can very well say major portion is fixed rate because if you look at the another product vehicle loans will have to go into that one but if you look at 40:25 40 minutes, 25 seconds our vehicle loan portfolio for the last three years it has been coming down. The reasons are many number of times I was mentioning the pricing at these rates if 40:33 40 minutes, 33 seconds you give it you may be locking in for three to five years. First thing and second thing delinquency levels and the fixed vehicle book [clears throat] is 40:40 40 minutes, 40 seconds pretty high and third thing upfront commission you have to pay for the dealer which cannot be amotized. With all these things we stayed away from the vehicle loan book for the time being and 40:49 40 minutes, 49 seconds the tactical approach and then when it makes sense we'll go. So with all these things when we look at it the majority majority of the portfolio is Jans only. 41:00 41 minutes Got it. And last question uh will be on write off uh this quarter write off uh is slightly lower than the usual trend 41:09 41 minutes, 9 seconds which we have been seeing. Anything to read into that? 41:13 41 minutes, 13 seconds No you see the point is we were one of the banks with below 1% gross NPA. We 41:19 41 minutes, 19 seconds are at 75. So provision wise when the net NPA is around 200 crores comfortably you can provide but there is no need to 41:27 41 minutes, 27 seconds go for a write off that's why consciously we have gone for a lower write off compared to earlier years so the ratios are okay recovery is going on 41:36 41 minutes, 36 seconds with all these things why should you go for an aggressive and accelerated write off that is the simple reason 41:44 41 minutes, 44 seconds sure thank you so much and all the best thank you very much thanks thanks thank you we'll take our next Question 41:51 41 minutes, 51 seconds from the line of Rohan Mandura from Ikurus Securities. Please go ahead. 41:55 41 minutes, 55 seconds Uh good evening sir. Thanks for the opportunity and congress on good set of numbers. Uh so this is regarding your question on your guidance on yield uh uh 42:04 42 minutes, 4 seconds probably falling in next year. So just want to understand like uh like what's changing on the ground uh that will drive this uh competitive pressure on 42:13 42 minutes, 13 seconds yield because uh uh like if if you look at the business environment the liquidity that PSU banks have that thing 42:22 42 minutes, 22 seconds has been coming down uh uh over the last few quarters. So their ability to price at a very competitive rate would be 42:31 42 minutes, 31 seconds lower incrementally. So, so what is that or is it just that you are giving a very conservative guidance to be able to uh 42:38 42 minutes, 38 seconds beat that? How should we read on the guidance on the yeah Rohan anything any is there something else that we that you you 42:48 42 minutes, 48 seconds I'll respond to each of your points don't worry so Roan thank you very much for that compliment now coming to the 42:54 42 minutes, 54 seconds competition and the I can very well say so market has much much moved ahead as 43:02 43 minutes, 2 seconds far as the concessional pricing and we have been holding to our pricing all along now the stage has come now if we 43:10 43 minutes, 10 seconds do not budge the good accounts what all we have we may have to lose so now we need to strike a balance between the top 43:18 43 minutes, 18 seconds line and bottom line now tomorrow if the growth is coming only 8% 9% and if you maintain an ROA and minimum of 4.25 2 or 43:27 43 minutes, 27 seconds 4% all these things it doesn't make much sense they have to go in tandem so that is the reason what we thought the 43:34 43 minutes, 34 seconds competition is coming from many corners including few private banks as well as public sector banks so the point is to 43:41 43 minutes, 41 seconds extent possible keeping the relationship that we have been maintaining now a stage may come we may not be able to 43:48 43 minutes, 48 seconds maintain in that process there can be an exodus of accounts in a particular geography if a set of people know say a 43:56 43 minutes, 56 seconds certain Such bank is offering such a rate and someone has gone there. There is every possibility along with the 10 more accounts may go out. So you need to 44:04 44 minutes, 4 seconds be mindful of the fact that so what is the breaking point beyond that you cannot go now I somehow I feel the way 44:12 44 minutes, 12 seconds the market has no and all I agree how this sort of pricing riskreward and all theoretically it will not work but 44:20 44 minutes, 20 seconds somehow theory is something different from the practice. the practically something what people quote and we are looking at the sanction letters approval 44:28 44 minutes, 28 seconds letters also so naturally when the customer builds you may have to yield so that way what I said instead of having a 44:36 44 minutes, 36 seconds future competition I say competition has already come in one or two years back itself we have been holding now we need 44:43 44 minutes, 43 seconds to relate now coming to the public sector banks what you sell agreed even though if you look at it many of them 44:50 44 minutes, 50 seconds are not in the 85% fee ratio also The earlier concept of CD ratio has gone out now to some extent and everyone is 44:57 44 minutes, 57 seconds looking at the LCR through LCR how much is their [clears throat] ammunition with each one we do not know naturally if 45:06 45 minutes, 6 seconds everyone loses their ammunition if the pricing goes up it'll be good for us also then we'll be able to comfortably give a better guidance if you can look 45:14 45 minutes, 14 seconds at the last quarter then we felt saying that the things have improved on our own we made the guidance of 3.9 to 3.95 45:21 45 minutes, 21 seconds market didn't demand for despite that we did it. The same is the case here when we see bright spots saying that we will be able to command the price in what we 45:30 45 minutes, 30 seconds want it and all definitely we'll come back and we'll revise our guidance. 45:34 45 minutes, 34 seconds Sure. The risk of losing these accounts is to which category of bank large five banks or uh any other cohort as well. 45:42 45 minutes, 42 seconds Uh no no let us not talk about that competition is competition can be from any corner. So that's why I do not want to name any bank in this. 45:50 45 minutes, 50 seconds Sure. Thank secondly uh in terms of the on ground activity within your borrower uh set in the past two months given the 45:57 45 minutes, 57 seconds market environment where we are so if you can just share what is the business momentum there what kind of an impact are you seeing in the sectors where you 46:05 46 minutes, 5 seconds started creating Koreans some color around that would be helpful. 46:09 46 minutes, 9 seconds Yeah, if you look at it actually textiles is one sector where you find saying that we have some sort of an exposure particularly in our backyard I 46:18 46 minutes, 18 seconds can say is there so they had the problem of tariff issues and when tariff issues have come out now and all suddenly other 46:27 46 minutes, 27 seconds issues have come out now like not getting the vessels these things now suppose if they feel the US government 46:34 46 minutes, 34 seconds is refunding the tax that also uncertaintity is there that they'll get a part the refund or not because these 46:42 46 minutes, 42 seconds refunds are going to come to the importers. So the importer will be willing to share that or not they do not know. Now if you look at the sector also 46:51 46 minutes, 51 seconds excepting the government section all others they are able to pass on the higher pricing to the rest of the buyers 46:59 46 minutes, 59 seconds but government is concerned they are unable to pass on because the buyers are not accepting that way sharing to some extent happening. In addition to all 47:07 47 minutes, 7 seconds these things they have take a cut on that but the logistics is a problem. Now with all these things few uncertaintities have prevailed otherwise 47:16 47 minutes, 16 seconds it can return to a good position. So spinning is doing well and garments all these things is a problem that way 47:23 47 minutes, 23 seconds textile to some extent can have a problem but a silver lining is during 47:28 47 minutes, 28 seconds code when whole world has stopped next two years we didn't had much problem 47:36 47 minutes, 36 seconds that's why we are keeping our fingers crossed the same way we'll be able to cross over this time also there should not be a problem like other sectors what 47:43 47 minutes, 43 seconds I was mentioning saying that it can be quartz Granite and chemicals these sort of 47:50 47 minutes, 50 seconds things are there which is a major part but let me tell you what is the indirect effect of this suppose really on account 47:58 47 minutes, 58 seconds of the girls for the inflation both of these things and all it'll have a bearing on many our portfolio majority if you look at it wholesale and retail 48:06 48 minutes, 6 seconds trading services good processing is there so if the demand comes down naturally their utilizations will come 48:14 48 minutes, 14 seconds down as I was mentioning in my guidance we started seeing the lower level of utilization in the working capital 2 to 48:21 48 minutes, 21 seconds 3% it is down in across the sectors many sectors it is there so on one side though we feel that the top line is coming down other side we are pretty 48:30 48 minutes, 30 seconds happy because someone not needing the money they're taking the money and redeploying somewhere getting back the money will be very difficult but here we 48:38 48 minutes, 38 seconds are happy so you are continuing with the reduction top line but they have the discipline to maintain so that way we cannot straight away say that This 48:47 48 minutes, 47 seconds sector will get impacted. It is absolutely as a dynamic situation. We need to see but to 48:54 48 minutes, 54 seconds the extent possible what we can visualize our risk department can visualize we visualize and we did it. If at all if everything goes on well and 49:02 49 minutes, 2 seconds the war is over business as usual we'll be reversing the provision. It's within the bank only not left it outside. 49:08 49 minutes, 8 seconds Sure. And lastly what was the cost of incrementing term deposits uh currently and I borrowing credit cost? Yeah, we have launched a product for 7.2%. 49:20 49 minutes, 20 seconds So we need to pay something more on the senior citizens also. So that way if you look at our overall portfolio the senior 49:27 49 minutes, 27 seconds citizen deposit works between 27 to 30% of our total deposits. So a blended way if you look at it even if you assume 49:35 49 minutes, 35 seconds majority of that is coming there also it will be between 7.2 to 7.5 that range it can be at the max. 49:43 49 minutes, 43 seconds Sure. And the guidance on RO and credit cost ROIA I mentioned it will be between 1.7 49:50 49 minutes, 50 seconds to 1.8 8 with all the reasoning what I have given credit cost I can think around less than 1% we can think of 49:58 49 minutes, 58 seconds it thank thank you thanks thank you next question is from the line of Axaral from Smith's limited please go 50:07 50 minutes, 7 seconds ahead good evening sir thanks for the opportunity and congrats on another strong quarter 50:17 50 minutes, 17 seconds my on other income uh it saw a strong contrib contribution even excluding the core fee income component which was uh 50:24 50 minutes, 24 seconds very strong. Uh so this increase to 336 cr. So can you help uh break down the drivers for that if possible? 50:36 50 minutes, 36 seconds Sorry sir can you come closer to the microphone please your voice is not clear. 50:42 50 minutes, 42 seconds We have our own third party products what we call it as insurance commission we get from insurance product for our customers. uh that we had a very good uh 50:50 50 minutes, 50 seconds uh income last year. Apart from that we had uh the recoveries from the SRS also but also we had our own 28 days of SR 51:01 51 minutes, 1 second in fact few more heads also I'll tell you our processing charges also have gone up by 18%. And as I was mentioning our third party income also has gone up. 51:10 51 minutes, 10 seconds And I can say this year the non-fund based that is guarantee business which we started focusing last year we could 51:18 51 minutes, 18 seconds see an uptick there. The income has come up there also. So that way few of the smaller things which we started taking 51:25 51 minutes, 25 seconds they are supporting us. So this can be one of the sources because our plan is in such perennally we cannot have the 51:33 51 minutes, 33 seconds right of recovery. It can be one year or two years. So our plan is how best a part of this 52 basis points and due 51:42 51 minutes, 42 seconds point what you are getting under the write off how you are going to compensate through other income. So then finally the ROA at the end will have to 51:50 51 minutes, 50 seconds come. So in that anxiety we started working we need to see but there's a long way to go that way but few levers which were not working earlier work this 51:59 51 minutes, 59 seconds year. So that way we are able to support this other income levers. 52:04 52 minutes, 4 seconds Very well sir, thanks for that. And uh while asset quality was uh robust uh there was some higher slippages in the retail and commercial segment this 52:13 52 minutes, 13 seconds quarter. So is it all seasonal or there's some uh west Asia uh some slightly higherages due to that? 52:19 52 minutes, 19 seconds No no I can say that it's not west Asia effect has not yet come into this one but what we thought actually which are 52:26 52 minutes, 26 seconds on the borderline where the activity is relatively low. So instead of we waiting for the time to get that it is better 52:34 52 minutes, 34 seconds you frontload that one and absolutely recognize that as an MPA your chances of recovery are relatively better. So 52:42 52 minutes, 42 seconds proactively few the accounts where the sort of weakness we found out we did it. 52:47 52 minutes, 47 seconds So that is the reason you can find this sort of a number. But whatever it is in my guidance when I was mentioning then total whole year is 140 out of the 220 52:56 52 minutes, 56 seconds crores which are the three corporate accounts in the second quarter we had if you exclude that one it will be around 53:03 53 minutes, 3 seconds 500 crores on a book of 1 lakh cr 500 crores per year the 0.5% slippage is absolutely reasonable. 53:12 53 minutes, 12 seconds Uh right sir thanks a lot for answering my questions all the best. 53:17 53 minutes, 17 seconds Thank you. Next question is from the line of MB Mah from Kotak Securities. Please go ahead. 53:25 53 minutes, 25 seconds Good evening sir and congratulations. 53:27 53 minutes, 27 seconds Um so just a few questions. U one is what is the contribution of recovery of return of income in the non-interest income line? 53:38 53 minutes, 38 seconds Uh it is this quarter if you look at it is 182 crores and overall if you look at it including interest all these things 53:46 53 minutes, 46 seconds 670 crores what I said that was the number actually so it is shared better than the last year number what we had 53:54 53 minutes, 54 seconds perfect and uh in page number 19 the corporate banking you have been consistently increasing the share of 54:01 54 minutes, 1 second tripleB just if you could just kind of give us some clarity as to what is your thought process on is getting into what 54:08 54 minutes, 8 seconds appears to be some weakness on the on the economic cycle. 54:12 54 minutes, 12 seconds Uh no no point is simple. What we did is we studied the past portfolio. It can be double B, triple B, double A what all is 54:21 54 minutes, 21 seconds there and the gating conditions with which we are taking those accounts. Not every triple B we may not take, every double B we may not take. We may have 54:29 54 minutes, 29 seconds taken few WB also but all these consciously we are looking at our gating conditions whether we'll be able to manage past when these accounts when we 54:37 54 minutes, 37 seconds have taken are they working well so we'll be able to manage these accounts keeping all these things in mind the risk as well as the business they have 54:46 54 minutes, 46 seconds taken a call if continuously if you confined to AAA and double A so naturally there's a fierce competition 54:53 54 minutes, 53 seconds for these accounts and all you will not be able to make any money and second thing when the cost of deposit is not coming and the yields on this has come 55:01 55 minutes, 1 second down. So literally we will not be able to recover even operating cost on the margins. So that's the reason why we thought. Second point if you look at it 55:10 55 minutes, 10 seconds we have been consciously trying to increase our risk weighted assets to total assets. You can see that average is between 57 to 55 to 58 only going on. 55:19 55 minutes, 19 seconds So there is still a room available to us which we can take it up to 65 over a period of time for that. I'm not saying 55:27 55 minutes, 27 seconds we will take the wild risk. It is an informed call we need to take. So along with the risk uh with the past experience what we have 55:36 55 minutes, 36 seconds is the default risk that you're seeing today is it any different from let's say a rated portfolio 55:45 55 minutes, 45 seconds today. No mah in fact this is a very good point what you mentioned at various levels including MD we are continuously 55:53 55 minutes, 53 seconds in touch with the customers we are talking to them every day uh across the segments understanding what is happening 56:00 56 minutes surprisingly even today last 15 days when I'm talking not even a single customer has given any pessimistic you 56:09 56 minutes, 9 seconds saying that it is going to crash I have a problem nothing in fact above all if I am asking any support is required 56:16 56 minutes, 16 seconds funding wise. None of them have come forward saying that in a situation difficulty will come for the time being 56:23 56 minutes, 23 seconds we can manage. So that way so it is only we are visualizing this can happen and all but on the ground the confidence of 56:31 56 minutes, 31 seconds the customers if you look at it they are pretty confident as they were earlier. 56:36 56 minutes, 36 seconds Perfect. Just one clarification is retaining existing T deposits is that the problem that you're facing on the 56:44 56 minutes, 44 seconds ground uh getting new deposit is a problem. Mix of the two is a bigger issue right now. 56:51 56 minutes, 51 seconds No no no I'll tell you retaining is definitely we are able to maintain around 70 75% definitely we'll be able to roll over that is not a problem the 56:59 56 minutes, 59 seconds 20 25% also when we go deep into that one deeply we delve into that one we are finding if they have an alternate 57:07 57 minutes, 7 seconds investment avenue like a real estate or something else or settling and all so otherwise people are willing to retain the money and fresh also started coming 57:16 57 minutes, 16 seconds into the bank that way so that way it's coming but the required will flow what we wanted. So the way it is not there 57:23 57 minutes, 23 seconds that forced us to increase the pricing which last year also if you can look at it we have frontloaded in the first quarter that bailed us out throughout 57:31 57 minutes, 31 seconds the year first and second quarter we wanted to adopt the same strategy this year. So we are focusing both on the fresh as well as retention. So retention 57:39 57 minutes, 39 seconds also every day what is the renewal percentage our teams they are looking at it that two division wise granular they 57:47 57 minutes, 47 seconds see wherever something is not happening they are seeing. So it is a two approach both we are working on that perfect sir and last one final 57:54 57 minutes, 54 seconds clarification wait provision for the next five people you will start making for it during the course of this year 58:03 58 minutes, 3 seconds I tell you it is yet to start actually because the IB has not yet formed the committee they have to start that way 58:11 58 minutes, 11 seconds and all once we have some sort of clarity we can start doing but recently last year only we have completed the whole thing and all so once that the 58:19 58 minutes, 19 seconds date November has start from then onward making the provision doing it now itself 58:27 58 minutes, 27 seconds around it that's okay Mah for the sake of comfort I'll tell you you have seen that the contingent provision floating provision other 58:35 58 minutes, 35 seconds provisions everything what all we have put in and above all this war is not going to be permanent as and when the proposed war comes to an end you have 58:43 58 minutes, 43 seconds another 163 crores also buffer with you with all these things coming up these sort lot of smaller shocks here and are there. The bank has become so robust to 58:53 58 minutes, 53 seconds take these sort of a shocks. It should not be a problem. Perfect. Perfect. Perfect. Thanks a lot. Thank you. Thank you, Mahes. Thanks. 59:01 59 minutes, 1 second Thank you. Next question is from the line of Akir Madlani from HC Security. Please go ahead. 59:09 59 minutes, 9 seconds Yeah. Hi. Uh thank you for taking my question. Uh my question is on gold loans. uh so last 2 years we have 59:15 59 minutes, 15 seconds increased the rates from 25% to 30% currently so where would be be 59:22 59 minutes, 22 seconds comfortable uh and also you know what would be our outlook on gold going forward especially if the prices don't move up or slightly decline going 59:30 59 minutes, 30 seconds forward now good good question actually it's a very pertinent question also it is so topical now what I say our 59:39 59 minutes, 39 seconds internal limit where internally risk wise was not now. Initially itself when gold prices were not moving up itself 59:47 59 minutes, 47 seconds proactively what we thought we need to have a product level concentration limit we thought 35% can be ideal but still 59:56 59 minutes, 56 seconds conservatively we have been maintaining between 28 to 30 as you mentioned now so it can go up to 32 33 because depending 1:00:03 1 hour, 3 seconds upon the opportunity what all is there bring it down or if we find any other product which is worth giving and it is supporting our riskreward we may go that 1:00:11 1 hour, 11 seconds there also but the increasing pricing and these things when you say we have introduced a very robust monitoring 1:00:19 1 hour, 19 seconds mechanism for the margin call and above all if you look at it when the January and February when the gold price have 1:00:26 1 hour, 26 seconds gone to 1 lakh 60,000 also also 16,000 if you can say 10 g and we never cross 1:00:32 1 hour, 32 seconds 12 to 13,000 to 12,500 so that pay itself the market price to our price 1:00:39 1 hour, 39 seconds there is a marginal gap margin gap of around 2025 % in addition to that so we also maintain a margin internally on 1:00:49 1 hour, 49 seconds this price what all is there so more than 75% we will not land for the retail and agriculture also if you look at it 1:00:56 1 hour, 56 seconds hardly 80 85% we will give it so with all these things with the market price what all we have we are having a margin 1:01:04 1 hour, 1 minute, 4 seconds of 20 30 to 40% on that and above all if you look at our LTV we've many times mentioned 45 50 55 1:01:13 1 hour, 1 minute, 13 seconds We also monitor in another way what is the portfolio above 75%. So that can be 1:01:20 1 hour, 1 minute, 20 seconds a portfolio which can be having a problem if really gold prices crash by 40%. As I said the gap between these two 1:01:28 1 hour, 1 minute, 28 seconds 40% is there. So that is absolutely minuscule about 75% 80% portfolio 1:01:35 1 hour, 1 minute, 35 seconds actually what all we have is absolutely minuscule. is less than 1% or one and a half% of the total portfolio. If that be 1:01:43 1 hour, 1 minute, 43 seconds the case then we have refer things everything we have formalized and having a great managing the sort of shocks 1:01:50 1 hour, 1 minute, 50 seconds should not be a problem. That's why in a risk mitigated way we are going and next thing the way the demand what we have is 1:01:59 1 hour, 1 minute, 59 seconds comfortably if you reduce the pricing from 11% to 9 and a half or 9% reaching 1:02:05 1 hour, 2 minutes, 5 seconds 40% is just a cakewalk for us. The very reason why you made it from so below 10% 1:02:12 1 hour, 2 minutes, 12 seconds to 11% is to have a check on the so that we should not cross it 35% any point of time. So in a measured way they will 1:02:21 1 hour, 2 minutes, 21 seconds grow with that reason while strengthening the internal mechanism what we have. It can be including the mystery shopping or increasing the 1:02:29 1 hour, 2 minutes, 29 seconds number of checks what we have on the quality and uh totally digitized the total loans and centralized audit teams to look at what is happening and all the 1:02:37 1 hour, 2 minutes, 37 seconds agriculture and all we are looking at the end use also from centralized it's all these things. So compliance angles 1:02:44 1 hour, 2 minutes, 44 seconds as well as risk angle and pricing angle we are trying to manage the portfolio in a better way so that we'll have an absolute control. 1:02:55 1 hour, 2 minutes, 55 seconds Understood sir. Thank you for thank you. 1:02:58 1 hour, 2 minutes, 58 seconds Thank you. Next question is from the line of giant K from Access Capital. Please go ahead. 1:03:04 1 hour, 3 minutes, 4 seconds Uh thank you and congratulations on a great set of numbers. So what is the amount of wage provision reversal uh this quarter that you have taken which 1:03:13 1 hour, 3 minutes, 13 seconds provision uh employee expenses uh you you would have had benefited from the yield hardening. Yeah. Yeah. But I tell you 1:03:22 1 hour, 3 minutes, 22 seconds agreed. So if you look at it last quarter if you look at it employee provision so AS15 we have provided 21 cr 1:03:29 1 hour, 3 minutes, 29 seconds this year it is 2 cr. Okay. Pension payments and all more or less the same level continuing. So that way I can say around less than 50 cr benefit you would 1:03:38 1 hour, 3 minutes, 38 seconds have got on this employee cost because the hardening of the wheels 50 cr in fourth quarter or uh uh 1:03:48 1 hour, 3 minutes, 48 seconds 15 crores in the fourth quarter 15 crores okay uh thank you for that. The second question is on the margins again 1:03:55 1 hour, 3 minutes, 55 seconds uh the the retail deposit hike that you have taken how much uh only only that specific hike that you have taken in 1:04:03 1 hour, 4 minutes, 3 seconds this quarter what is that uh in basis points impact on our names? 1:04:07 1 hour, 4 minutes, 7 seconds Uh that will be known in the next quarter. The reason is we started in April. So we need to watch and wait how 1:04:16 1 hour, 4 minutes, 16 seconds it is working there because every deposit what all is coming it will not go into that particular scheme and the 1:04:24 1 hour, 4 minutes, 24 seconds 400 day support scheme it may not go. So we need to wait and watch for this quarter once then only we'll have a full 1:04:32 1 hour, 4 minutes, 32 seconds view on the incremental cost what we are paying and what will be the bearing on the that is the reason I was telling 1:04:39 1 hour, 4 minutes, 39 seconds when I was giving the NIM guidance it can be a two-pronged approach one will be and the cost of deposits can go up 1:04:46 1 hour, 4 minutes, 46 seconds yield I cannot wait for the deposit cost how much it comes by the time my exodus of the accounts would have been 1:04:53 1 hour, 4 minutes, 53 seconds completed so these two are independent I need to work on the advances front giving concessions and at the end of the 1:05:00 1 hour, 5 minutes quarter we'll be knowing how much loss is there on account of the yields yield and advances and how much of the incremental cost we need to pay on the 1:05:09 1 hour, 5 minutes, 9 seconds cost of deposit but this whole math this whole deal when it is working and all the machine that's why we thought saying that we may be landing between 3.7 to 3.8 eight of the name at the end. 1:05:21 1 hour, 5 minutes, 21 seconds Sir, if I could just rephrase this question, you said roughly 30% of your book is uh uh it is where you expect the repricing to happen. Um and this will 1:05:30 1 hour, 5 minutes, 30 seconds happen around 7.2 blended. What is the current uh uh I'll tell you the repricing book if you 1:05:38 1 hour, 5 minutes, 38 seconds look at it we had to split that into two parts. Suppose if I say let us say 30% of the book is getting repriced. So 25 1:05:46 1 hour, 5 minutes, 46 seconds to 30%. Last quarter Q4 we had the majority repricing that's why you are able to see the major benefit of 16 basis points there in advances and 1:05:55 1 hour, 5 minutes, 55 seconds yields also this year this quarter we don't have that much of benefit and if you further 1:06:02 1 hour, 6 minutes, 2 seconds uh dissect that one you see the deposits which are 7.25% 25% and above they are 1:06:08 1 hour, 6 minutes, 8 seconds coming to around 14% of the total deposits. If at all we are able to retain all these deposits at a lower 1:06:17 1 hour, 6 minutes, 17 seconds rate we will be able to get the benefit of that and the rest of the renewals what all are happening we may not get much benefit there. 1:06:26 1 hour, 6 minutes, 26 seconds Understood sir that is very clear and lashi sir more from a growth perspective why is that guidance 1 to 2% this year 1:06:34 1 hour, 6 minutes, 34 seconds versus 2% last year I understand the macro setup but if the macro continues uh to to be benign um should we assume 1:06:42 1 hour, 6 minutes, 42 seconds we can again do an 18 odd percent or or is this more of a capital constraint that that that keeps you around that 15 16 1:06:51 1 hour, 6 minutes, 51 seconds okay capital constraint you see how much you are plugging back at a point of time our annual profit used to be 250 cr now 1:06:59 1 hour, 6 minutes, 59 seconds it is we have just added a zero to that so with that 18% of the capital adequacy something is there that two major 1:07:08 1 hour, 7 minutes, 8 seconds portion is a tire one straight away with a risk weighted assets of 55% there's a constraint for capital there so comfortably next two years you can grow 1:07:16 1 hour, 7 minutes, 16 seconds not a problem at all only thing what we thought is as you said is a benign environment outside when to grow is 1:07:23 1 hour, 7 minutes, 23 seconds pretty easy to understand when to low and take a careful call that required some sort of a care. So that is the 1:07:31 1 hour, 7 minutes, 31 seconds reason we thought all along we have proved and we have been doing with the right time we have to be prudent not to be aggressive so that if we may get 1:07:40 1 hour, 7 minutes, 40 seconds additional income by way of yield and advances that should not offset by credit cost in the provisions that is 1:07:48 1 hour, 7 minutes, 48 seconds the reason what we thought let us continue this way okay thanks last one last question the ECL transition uh I get that one time impact can be absorbed 1:07:57 1 hour, 7 minutes, 57 seconds but what is the steady state credit cost impact uh ongoing ongoing credit cost impact. No, that some more time is required. 1:08:04 1 hour, 8 minutes, 4 seconds Recently circular have come they were pretty busy with our results and all. So once you walk out some sort of a clarity is there we'll be able to share that. 1:08:12 1 hour, 8 minutes, 12 seconds Thank you sir. Thank you. Thanks. 1:08:15 1 hour, 8 minutes, 15 seconds Thank you ladies and gentlemen. We'll take that as the last question for today. I now hand the conference over to Mr. B. Romesh Babu MD and CEO for 1:08:24 1 hour, 8 minutes, 24 seconds closing comments. Over to you sir. So thank you all uh uh for taking out time and to be in our call and the questions 1:08:32 1 hour, 8 minutes, 32 seconds what you have asked that shows the interest what you have. So definitely whole team is geared up what best is possible we will always try to deliver 1:08:41 1 hour, 8 minutes, 41 seconds that. Thank you for the guidance and the support. Once again thank you all. 1:08:45 1 hour, 8 minutes, 45 seconds Thank you on behalf of the kuratia bank that concludes this conference. Thank you for joining us and you may now disconnect your