Any realization from the extra property with Bank of Baroda?
Yes, we have published that. That is on the public notice that we have published, SARFEASI notices. One or two customers are evaluating, whatever the prospects and bids, we are just waiting for that. Once they give their bid, we can proceed further.
On digital yearly expense and HR expense to empower youth in the Bank as well as for the new generation clients - what kind of HR initiatives and spend will be incurred this year?
As far as the HR initiatives, that is for our internal resources, that is already geared up. And a lot of initiatives we have rolled out and new recruitments are also happened. And this time we have specifically gone for around 2,000 credit officers. That almost that indent is done and then people will get on boarded after a month or so.
Congratulations to Rao sir. My major concern is on the credit growth - overall YoY 9.9-10% but this quarter went down by 5% vs March. SMA-0 has gone up from Rs. 221 crores to Rs. 537 crores. Treasury income contributed a lot. Plans for Future Generali associate company by investing Rs. 500 crores. Color on restructured book of Rs. 4,000-5,000 crores and recovery from write-off accounts slightly lower than March.
It is not at all a concern. Bank is much more concerned about the bottom line. RAM portfolio grew almost 15.7% and reduction happened on the corporate side - a very conscious decision that we do not want to lend at the rates what the corporates were demanding. Our investment yield is almost 6.71% - there is no point in giving 5.85%-5.80% just to show the topline. We never played to the gallery and we never played for the top-line. We are interested in the bottomline and strengthening the Bank. That's why we have moderated our RAM growth around 16% and going forward another eight-nine months we will get opportunities to pick up assets at the right price. On the SMA, very minuscule amount - SMA-0 now already Rs. 353 crores regularized. On insurance, we have already signed shareholders agreement, trademark licensing agreement and distribution agreement with Generali. In the last week of this month, once the name change approval comes from the ROC, we will be ready for launching with the new name - two more joint ventures, one life and one non-life. The customer base and bouquet of products are going to add value to the Bank as a whole.
Update on the airline account - what is the status there?
There is a favorable decision from Singapore arbitration that execution has to happen in Delaware. That is the thing that is happening. It is a legal process taking some time.
This DTA calculation, revised at Rs. 2,531 crore vs Rs. 4,378 crore last year - when do we move out of it and out of this Rs. 614 crore how much actual tax are we going to pay after taking benefit of past carry forward losses?
We estimate that whatever the DTA on account of business losses, we should be able to consume entirely by Q4. And in Q4, by taking a small hit of actual payment of tax to the tax authorities of say, Rs. 65 crores-Rs. 70 crores roughly, we should be able to move to the new tax regime and in our calculations, next year onwards, it should give us a positive side of roughly around Rs. 900 crores, which will mean that around 9 to 10 bps of my ROA will get impacted, that is by plus side.
This ECL provisioning which we are making - many banks have stopped worrying about this ECL. Any clarity that within changed circumstances you will need this kind of provision?
Buffers are always good to have. So, that is why we are still continuing with the requisite provision. If they are not required anytime, we can write it back if the RBI guidelines or RBI doesn't come. Because now we are very comfortable as far as the NPA provisions are concerned at 0.49%. So, we are continuing to build around Rs. 250 crores required for the ECL. So, now this is the fourth straight quarter wherein we have built this provision. So, Rs. 1,000 crores that, plus a lot of my restructured assets are also carrying requisite provision of 15% or 10%, whatever the case may be. So, all in all, it is going to strengthen the balance sheet even more.
RBI revised guidelines on taking collateral for small loans from Agri Gold collateral. Whether our loan strategy and targets for Agri loan book and Gold loan book have been revised? What are the loan growth targets overall for FY26?
No, we have not revised our targets at all. We will continue with our plan on Gold loan portfolio, even last year it was a very handsome growth. We are targeting around 14% to 16%. That is what the guidance we have given. So, we will continue with that 14% to 16% we should be able to achieve.
Congratulations on excellent result and specifically on sustainable CASA number and acquisition of Future Generali. How well do we see the tower being built in the year and years to come on the foundation that the current team has built?
As far as the internal work which has gone into for all these years, very robust platforms are built, whether it is on the policy side or the product side or the technology platform, and more so on the structures, what the new structures, what we have built in and additional revenue streams, whether it is from the trades off, from the co-lending, these are all the areas which are going to stay. And another thing which I would like to share is this year already we have declared further business acceleration as a year of business acceleration. And whatever the numbers that we achieve in March, that we used to cross those numbers around September, October. This time we are crossing the June itself. So, there is acceleration. There is a tremendous amount of traction that is on the field level. That's why if you see the composition of the ramp, which basically happens at the field level, it is at 72% and 28% is the corporate side where much of the role of the central office or higher level comes into picture. So, what we feel that the foundation which is built is very robust and you can have whatever the towers you want to build, that is we have no doubts in that.
Co-lending platform - we are seeing a visibility of almost Rs. 2,000 crores per quarter currently, Gold Loan, LAP Loan, MSME, all these products combined. How are you seeing that traction being built? Is Rs. 2,000 crore a sustainable number or can it increase with more partners?
That number is going to increase because we have further plans for the co-lending. So, that is going to increase at least by Rs. 2,800 crores to Rs. 3,000 crores.
What kind of blended yield are we earning on co-lending over our retail direct sale?
Co-lending we are getting around 9% overall.
On the trade platform rollout on a digital, end-to-end - what kind of portfolio can we build on those?
In the trade, one good aspect is whatever the bills that are accepted by the corporates that are only we are discounting. That is the trade platform business. Where we are a little bit choosy in terms of the corporates who are accepting those bills. We have our own due diligence mechanism and tenure of 60 to 90 days. So, even at the lower rates, we are competitive because of our pricing power. I think this time we have closed by around Rs. 3,200 crore and with a turnover of around Rs. 18,000 crores.
CASA number at Rs. 2 lakh crores - any color on how we sustain that? What kind of retail penetration can drive incremental support to building CASA franchise but also third party products like insurance in our foray?
As far as the CASA part is concerned, number one is the reach for customer acquisition. You know that we have brought the BC MAXX model and it is very, very successful. That 25 units are already working. This year we are going for the 250 BC MAXX centers. That is all in the places where we do not have the brick and mortar branches and banking business is growing around 15% to 16% CAGR. So, such type of locations we have selected and this BC MAXX model will be one of the customer touch point for the acquisition of the new customers. Number two is our BC points, which are around 12,800, which will be ramped up to another 1,800 that is around 14,000. And that will also be adding for the customer acquisition. And coming to the products, since the digital channels are stabilized, our omni-channel is already rolled out and which is having almost 200 plus services and we are very happy to share with you almost now 12 lakh new customers are on boarded on to this Cent eeZ app. So, going forward, these new accounts which are being added on this digital channel, the average balances is around Rs. 27,000. So, this is a very, very good channel, not only for acquiring new customers and also maintaining the good balances.
What is your outlook on treasury for the year?
Our outlook continues to be the same which we discussed in the previous quarter. Already 100 basis point is cut and terminal repo by March. I am seeing another 2 cuts of 25 each. So, 5% would be the realistic repo which I am seeing terminally. So, it will be a good year for the treasury, for the Bank. It is a cyclical thing. But hopefully we will encash on that based upon our portfolio.
You are expecting G-Sec to be below 6% by year end?
Yes, sir. G-Sec will be below 6% by March.
Recovery from written off is very good this quarter. Any lumpy accounts there?
There was one account wherein we got around Rs. 301 crores. But other than that also, there are recoveries in many other accounts. I mean, it is not only from 4, 5, 6 accounts we have been able to do Rs. 600 crores.
This Rs. 301 crore account - it should be through NCLT right - which sector would it be from?
It is a cement account which got resolved.
We have seen private banks cutting MCLR rates by 60 basis points and SOE banks are still at 15-20 basis points. Why are SOE banks holding up MCLR rate cuts?
MCLR, as you said, it is a formula-driven thing. And deposit rates, if you see, deposit rates have not come down that drastically as the repo cut. So, wherever my advances are repo linked, there the transmission is complete with 100 bps reduction till now. But as far as the other deposit rates and based on that the MCLR cut, because it is purely formula-driven. I mean, nobody can do anything in that.
Do you expect MCLR rate cut to accelerate in second quarter? By September we should be like 60-70 basis point down on MCLR versus March?
60-70 bps may not be. 10-15, 20 bps max. Again, it depends on the cost of deposits and how low the cost of deposits can go.
If you don't cut MCLR, how do we negotiate with the NBFC? They would BT-out, right?
We have seen good traction even in the NBFC. It is just that we have been very choosy as far as the NBFC sector is concerned. We have not budged in the past also. Even now, whatever sanctions we are doing, we are getting a very good rate of interest as far as the NBFC accounts are concerned. NBFC, MCLR-based rates and we are getting 9%-9.05% kind of rates even now.
How do you see your retiral provisions going ahead? It is around Rs. 550 odd crores this quarter - similar pace going forward?
We have taken a consistent stand that we want to make this fund self-sufficient by December 27. And so, whatever extra required over and above the calculation, we are providing it for. And if any opportunity comes, we would further like to give something but this is the minimum that we are going to provide going forward in the Retiral Benefit Department.
On the treasury gains, assuming there are no further rate cuts, can you assume like 70% of the treasury gains is booked through the year?
If there is no further rate cut, then I would say majority of the means 70 %-80% of the sale of investment gain is already booked.
What would be your AFS reserve as on date?
Rs. 433 crores, not much.
On credit growth of 14%-16% - where exactly do you look the major chunk coming from in terms of industry or pipeline? Renewable energy, engineering, SME?
Mainly the areas where we are finding the scope is in the data center, logistics, and only one or two manufacturing sectors, not more than that. And much is on the government or government-backed entities, whether it is the NTPC or the IRDA, like that. So, this is the broad composition. And we are not just keeping anything away from our radar. As and when the opportunity appears, and then in our judgment, it appears it is prudent, we are ready to take the call on that. Even LRDs are also coming now, a lot of LRDs. Repricing is happening in the market because of this repo cut.
On SRs - any happening in this SR or asset sale to the asset recovery companies this quarter? And non-SLR investment?
There was a write-back of around Rs. 2.5 crores, that's all. In one account, it came roughly around Rs. 30 - Rs. 34 crores also, yes. Yes, during this quarter, where we were not required to make any provisions on SRs. Non-SLR investment has not increased really. From our debenture and bonds, they are mainly to our public sector entities. It was Rs. 27,000 crore last year. It is now at the same level, Rs. 27,000 crores.
Did we have any exposure on MTNL?
No.
Since the IPO market has again picked up, earlier we made good profit in investing into IPOs and getting out on listing. Whether this strategy still continues?
We ar e continuing with that. Wherever we see good listing gains, we are continuing to do investment and that would continue.
Do you see a margin coming off by 20 basis point in Q2? NIMs?
NIMs, see, we are at 3.16 % right now. And as MD sir explained, we are very conscious about our bottomline and the margins also and that is why we took a conscious call that we will not give the corporate loans at sub 6 % rates. So, we'll continue to be guided by that. And our guidance is that we'll stay above 3% as far as the NIMs is concerned. And we'll ensure that our NIMs stay above 3%.
For a standard account which is 30 days past due, if we think that account is going to go delinquent, do we propose OTS schemes to them?
Substandard is okay. But our standard accounts, even if it is just some 30 -60 days past due, no OTS is there.