FY26 credit beat 19.44% vs 12-15% band.

We are a little bit lagged on the profitability front, maybe because of the margin pressures and the RBI rate cuts. Our operating profit has also gone down. One major contributor is lesser recovery from written off accounts, only 425 crores against 954 crore in the last quarter. We would like to have the targets for this year, FY26. Also, on Note No. 10 on SRs - 274.95 crore: is this received or provision written or fresh SR? Also, MTNL exposure of 273-275 crores - how much provision has been made? And SMA-2 has gone up from 66 crores to 696 crores - what is the status of recovery? What is the amount of the one mid-corporate account that slipped?

I will go one by one. First was about the operating profit and net profit. See, you rightly pointed out the last year, we had a good amount of written off recovery in last quarter, particularly that was in around 900 crores. If you recall that we were expecting one account to be resolved in this quarter, but that recovery came in the last quarter. That was a bonus for us in the last quarter. Second, in last March quarter, this account which got resolved, it also had a component of around 280 crores of interest income, which was booked. So, if you look at my interest income during this quarter, though the advances have grown in this quarter, but interest income has come down. The basic reason for interest income coming down in this quarter from advances was that Rs. 283 crores which was booked as an interest income last quarter on account of recovery from written off account, which was not available in this account. Our cost of deposit is also coming down now. Our yield or advances also, there is a slight impact. But having said so, this cost of deposit may come down further in the coming quarters because repricing of the deposit will keep on happening every quarter now. But the Repo cut till now, which was probably front-ended, which we were expecting that Repo cut will come in stages, but it was front-ended, that had impacted slightly higher in this quarter. Now, coming to your targets. We have given a guidance of around 12% to 14% of growth in Advances. And if you look at our Advances, they have grown by 16.48%. And from wherever growth has come, growth has come from our home loan, our vehicle loan, our MSME segment and our Agri segment. So, these are the components or I will say, the engines of our growth. And our products are well aligned with the market. So, our teams are already active. The momentum, which we gained in the last year and last years, that momentum is continuing. So, we expect that we will be within our guidance of credit growth of 12 to 14% by the year end. Deposit growth, we have given a guidance of 10 to 12%. This quarter, we are within that guidance, 11.37%. But considering the CRR liquidity which will be available now in the next quarter onwards, we may have surplus liquidity available. So, we may have a slight cut in our deposit guidance, maybe after seeing the performance in the September quarter. But as of now, we are not making any cut in our guidance. So, 10 to 12%, we are continuing with our guidance in that. And CASA, we have given a guidance of 37 to 38. We are marginally lower than 37. But we expect that the way now the market is behaving, mutual fund industry, certain cash flows are now less, we expect certain amount to be with the banks. So, we expect that we may touch again 37%. SR, I already clarified that SR we have received in this quarter and existing SR, which are available with the bank, we are already holding the provision. We have not reversed the provision. So, in our notes, we already say that around 48 crore of SR are available with the bank. We'll continue to hold that provision. We have not… This 275 crore, we have taken as part of the new norms, new guidelines, right. MTNL, we are giving… we are already having 100% provision in the MTNL account. So, there is no room left for MTNL account. SMA numbers: last year, if you recall that quarter was for 89 days, that was not… I think one day differential was there. Because of that, certain accounts, though technically they were in SMA-2, but they were reflected in SMA-1. But if you look at overall bucket, and if you look at previous quarters, like the December quarter and the September quarter, you will find that the overall numbers are almost in this range only, the SMA-2 range only. That other account which slipped, that exposure is around 137 crores. So, if we exclude that, then our slippages are in a similar range as in the last quarter. But including this also, our overall slippage ratio remains within the guidance.

Our employees' cost has come down by about 350 crores as compared to the March quarter. Similarly, other operating expenses have also come down by almost about 200 crores. Whether this is going to be the trend for the remaining three quarters, or the subsequent quarters will be higher on salaries and operating expenses?

See this salary and staff expenses AS 15 provision will be in line with this quarter only for the next two quarters. Last March quarter, we provided for the PLI, and the AS 15 provision was there. So, whatever shortfall was there, that was provided for in the March quarter. And then PLI provision was also there. So, in this year also, in the March quarter, PLI provision will be there. 150 crore of PLI provision which we kept last year in March, which we will be using this year. And in the March quarter, basis the performance, we will be making additional PLI provision for this next year also. So, for the next two quarters, I feel that this should be in line with this quarter only.

This RBI relaxation on asking for the collateral of below 2 lakh loan from the Agri-loans and the farmers - how is it going to help us grow our book? What is our strategy on that and how much additional growth you see because of that?

See, we don't have a very large presence in the South where prominently this gold loan portfolio is there. But over a period of last one year, we have already built a gold portfolio of around 10,500 crores. And with this new relaxation available, I think it's going to benefit the bank and the industry as a whole, because there was a lot of ambiguity, or I would say, clarity was not there, whether they can be classified as agriculture or they can be taken as a collateral or not, because RBI guidance say below 2 lakh, you cannot take collateral. Now having got this clarity, we can go, at least in a big way, to converse our gold loan portfolio also in the South, and in the North or East also.

Any possibility of recovery in MTNL account? Will there be any haircut for the banks or it will be 100%?

Yes, discussions are going on, bankers are waiting for a favorable solution so that not only the employees, our stakeholders, our shareholders are also benefited out of the resolution plan. So, discussions are already on, we expect something to come anytime. It is again depending on the acceptability of the resolution which is coming to us. As of now, there is no talk about that haircut, as of now. That is not on the agenda.

Do you see any stress in any of the sectors where we are serving currently or any potential sectors where you see the stress is building up in general, in industry, across the industries?

See, I will first talk about our bank's portfolio, if you look at our bank's portfolio, if I go back to around two years, our slippages used to be in the range of 2% of our advances. And slowly and slowly we have strengthened our credit monitoring system, we have strengthened our recovery collection system also. And as a result, last year '23-24, we improved in our slippages and upgradations plus collections, '24-25 we further improved. And this year also we have kept a target of 1-1.25% only. So that is the last, basis the continuous decline in our slippage ratio, basis the mechanism or the control mechanism or monitoring mechanism we have put in place, I am confident that this will be achievable in this year. And if you ask me any particular segment where the stress is building up, I will say that as of now, we do not see any particular sector, because if you look at my restructured book also, consistently it is coming down. It is now around I think maybe 1,500 crores or 1,500 crores that we have now restructured. And that includes your normal restructuring plus COVID-19 restructuring, both. So that is a very small amount where we could have thought of some…and the slippages which we see, and they are in the range bound.

My first question is on cost to income ratio. I think we are around 54% this quarter, I think it's lowest in 8 to 10 quarters. What was the reason for this? And do we look at similar range of cost to income in future, or 56-57% as we have reported in last two years?

See, Amit, you are right that our cost to income ratio is lowest in the last 7-8 quarters, we were at 61 also. Consistently, we have been coming down. There are many contributors to the cost to income ratio. If you look at our operational efficiency, our business per employee, business per branch is increasing. So additionally, that is helping the bank to improve on efficiency and cost efficiency is coming into play. Then if you look at our cost, overall cost, that is also under control. And cost of deposit also is under, we are managing where we are --- with a 37% of CASA, we are able to manage our cost of deposit. And maybe if you can compare with some other banks with this higher CASA ratio, their cost of deposit is still higher, but we are able to manage. We are using all available sources to raise resources, maybe through refinance or overseas deposit at overseas or we raise equity also, so that is one. Then on yield front also, we are very cautious in taking exposures. You can see that our main focus is on the RAM segment where yields are slightly better than the corporate segment and our focus is on that. We have already reached around 63% of our RAM segment. So, all these factors are helping us to improve our cost to income ratio. I believe going forward the way we are planning to control the cost, to improve our income, fee-based income also you see that we are increasing. I believe that it should be in this range only. I believe it should not go up again. Our conscious effort is to reduce it further.

In your retail mix, there is a pool. What kind of types of loans are there covered in pool?

See in pool, majority of the pool is home loan pool. And their CIBIL is more than 725, that is our cutoff. 725 is our cutoff for the pool. Majority of the pool is home loan. Yes, it should be. It should be. Yes, 90% should be in the housing loan segment.

Can you specify the total exposure for MTNL?

Total exposure for MTNL is 245 crores.

Is there any challenge in your SMA book? Because your slippages have increased from 198 to 368 crores. Can you give some color there?

See SMA book, I already informed that only it is slightly elevated because of one account only. Otherwise, the slippages are in a normal range only. That was one account which was already SMA 2 and was under the watch list as we have already declared and because of that only, otherwise slippages in SMA book are in the normal course of business and normal slippages are there.

Our RAM and corporate book 62:37 or 63:37 is stable where we are concerned. How are you seeing the advances on agriculture, MSME, retail if you are looking from a yield perspective where the bank balance sheet is concerned?

See, our home loan is around 18% we have continued to grow in this range of 18-20% home loan segment for last --- if you look at last around 6-7 quarters or 8 quarters, our home loan growth continues to be in this range. And vehicle loan growth is also in the range of more than 30% for last 5-6 quarters. And MSME particularly we have started focusing for last 2-3 quarters where yield is slightly better than these retail loans. And MSME our target is slightly mid-corporate segment than the small micro segment. So, mid-corporate is the segment which we are now focusing in the MSME segment where yields are slightly better than the corporate also and then the retail segment also. In personal loan, the growth is there --- personal loan we are growing mostly in loans given to salaried employees accounts, customers are keeping accounts with our bank and pensioners getting pension from our bank. Now, we are coming out with a new product that personal loan to salaried customers maintaining account with other banks also through NACH mandate and all this, that product is also in the offing. So, we will try to grow, to focus on those areas also where yields are slightly better than the corporate and the home loan segment.

On MSME strategy - to beat competition, what strategy we are adopting where MSME is concerned specifically?

See, MSME we have only one USP I will say and that is TAT where we are focusing very closely which is being monitored from Head Office level. Daily our MSME team monitors these sanctions and their pendency at the hub level. Just to give you some idea about… I think we have already talked about that last year we created specialized hub for MSME segment and last year because of the creation of the hub first time in the history of the bank total MSME sanctions crossed 12,000 crores which was earlier 7,000 to 8,000 crores, so, last year 12,000. This quarter in the first quarter itself it is more than around 3,000 crores - MSME sanctions. So, it will continue to grow in next quarter and next quarter. So, these MSME focused hubs along with the tight monitoring because MSME journeys are all digitalized that is in the loan processing system. As and when anybody enters their proposal in the loan processing system it is being monitored and the pendency is being watched at Head Office level. Wherever the proposal goes beyond TAT, our team from MSME immediately gets into action to ask questions why it is getting delayed. So, that is the only mantra if you see our MSME growth for the last 4-5 quarters or 8 quarters, only for last 2-3 quarters our growth has picked up, earlier our growth used to be 5%, 8%, 7% now this quarter it is 20%, previous quarter 18%, prior to that 13% and otherwise it was around 7% - 8% overall growth. So, focus is purely on the MSME core business growth.

What is the unavailed credit today where corporate sector is concerned which you have sanctioned or what is visible in pipeline?

See it should be around 6000 to 7000 crores which was availed earlier and because of the rate to sensitivity the amount we got back, and another 5000 to 6000 crores is sanctioned which are yet to be disbursed. So, overall if you ask me 10,000 crore to 12,000 crore is the unavailed limit for limits which were already availed paid back and which limits which are yet to be availed. Sanctioned pipeline will be again 5000 crore to 7000 crores currently.

How open are we to buy corporate bonds which are yielding better than government bonds? Are we investing in REIT and InvITS also?

That also we are continuously seeking the opportunity in the market. In the last quarter also we can see that we have increased our non-SLR portfolio particularly in the corporate bonds. So, that we are continuously seeking for opportunity in the market wherever the yield is okay and it meets our requirement we are going into that also. So, we will continue to invest. No, not yet. We have not yet invested in any REIT or InvITS. We are particularly in the corporate. We are seeking all other opportunities also. We are exploring that also. We will take a reasonable call as and when it comes to us.

For FY25 and 1Q FY26 in terms of retail disbursements especially in housing what is the contribution of origination from DSA, branches, co-lending, assignment or others?

See, if you ask me in the housing loan, in the pool segment there is a contribution of I will say that is I will not say co-lending or the co-origination but that is in the pool the growth is in the home loan. If you look at our home loan portfolio particularly there is no co-origination-nothing-that is purely a branch-initiated housing loan. Yes, there will be a contribution of DSAs in that housing loan segment but exact number that how much origination was done by DSA that I'm not having but that number is clearly branch and originated of DSA initiated housing loan. Co-lending and pool we have a separate number that is already there around I think around maybe 5600 or 5700 crores is from housing loan pool out of 6500 crores.

How can NIM decline by 4 basis points when yields decline by 30 bps QoQ while cost of fund declined by 5 bps QoQ?

See, if you look at our income total --- 30 bps, in the income I explained that last quarter we had Rs.283 crores of additional income in one of the accounts and which was a TWO account which was booked so yield was slightly higher during that quarter. Now, with this rate cut I think the yield was expected around 22 bps with this rate cut, so yield the expected yield was 22 bps but actual yield is around 30 bps. Weighted average yield decline due to the repo cut was around 22 bps. So, one more thing is there that this yield is only on the advances but if we see the investment yield that has declined only marginally so we have around 25 or 23% portfolio in investment also so the overall means NIM is protected through that also.