Ashok Ajmera ·
On credit growth for FY26: half-year has been comparatively slower. What is the sanction pipeline and how are we going to meet the target? In our corporate book there is a fall of about Rs.4,000 crores - are we rebuilding corporate or continuing with the Retail-only approach?
See, so far as credit growth is concerned, you will find that our Retail, Agri, MSME is growing well. In Corporate, we have de-grown. And if you look at our Corporate where we have de-grown, if you go a little deeper into that, more than Rs.2,000 crores is from PSU segment. So, basically that is because of the yield pressure. So, when we wanted to give them at a higher price, they had the option of taking it at a lower price from some other competitive banks or peer banks. So, we did not agree to the lower pricing, and we thought that instead of bringing our NIMs under pressure, it is better to not go for a top-line growth without having any margins in the yield. So, that was the intent, and because of that only… and there were certain IBPC which were there, which became due for payment, but we did not agree for the pricing which they were offering. So, now the balance sheet is totally free of IBPC; there is no IBPC outstanding as on date. So, because of this only, there was a de-growth. But if you look at previous quarters, every time there was a growth in Corporate credit book also.
And so far as the next half-year is concerned, let me also tell you that around 17,000 to 18,000 crores sanctioned pipeline is there. It is again subject to agreement on the pricing. If we agree to the pricing or corporates agree to the pricing, we will be able to lend them. Otherwise, we look for more and more new opportunities, which are now, I think, available in the market in various renewable segments, your data centre, your battery swap segment, this smart metering. So, a number of opportunities are there in the market where we are targeting new business opportunities.
Ashok Ajmera ·
Our income this quarter has gone down - non-interest income is under pressure because Treasury income went down from 198 crores to 104 crores and recovery from written-off accounts is also about 45-50 crores lower. Can you comment on the profitability trajectory?
Yes, Treasury non-interest income, if you look at fee-based income, there is a growth in fee-based income. But because of Treasury and write-off recovery, you can see. Every quarter we cannot have same set of recoveries, that whatever we recovered. If you remember in March, we had a bumper recovery from one account, and that helped us to register a good amount of total overall recovery and a good amount of profitability also. So, that is the reason we have already reduced our target of recovery because that was expected in this last quarter.
But if you look at overall recovery, including upgradation, recovery, and written-off, we are well within our guidance given, right? In spite of our slight reduction in Treasury income and in non-interest income, our Operating Profit has grown. So, that clearly shows that other channels have participated maybe NII or fee-based income. That's what led to the growth in our operating profit also.
Ashok Ajmera ·
We have a recovery through the NCLT resolution of 104 crores in this quarter. Can you throw some light on that and what are the recovery prospects in the remaining two quarters on that?
Yes. Yes, that is, I think in a few accounts it has come, and two accounts are already in pipeline where maybe in the next quarter, we'll get some recovery. It's five accounts, and through resolution, it has come Rs.104 crores. Other than Rs.104 crores, it is through a SARFAESI action or normal recovery or upgradation. So, out of total recovery of Rs.758 crores, which we have reported as Rs. 792 crore. Out of Rs.792 crore, only Rs.104 crore is through NCLT. Other recoveries are through SARFAESI actions or recovery and upgradation efforts by the branches.
Ashok Ajmera ·
On the government security NARCL SR - there is a note on 274 crores SR where you have applied revised norms. How much in absolute terms has come into P&L in this quarter because of that?
No impact on P&L. This SR is basically a government-guaranteed line with the RBI guidelines. This 275 crore pertaining to government-guaranteed SRs has been deducted from the capital. So, accordingly, the capital positions has been reduced. No, no impact on P&L.
Sushil Choksey ·
You are showing very good growth on car loans and new segments. Now with new RBI credit guidelines, co-lending and new policies CLM 1 and 2, what kind of initiatives are we taking to energize our RAM sector on a higher trajectory?
See, Sushil ji, you are right that car loan has been growing well. We have revamped our product in housing loan, car loan also. And that segment is growing well now. In light of new RBI guidelines on co-lending, we have started looking at certain tie-ups with certain NBFCs to enter into some relationship with them so that this co-lending thing can be taken further. As far as at present is concerned, we have a co-lending exposure. Currently, we have a co-lending exposure of Rs.2,100 crores. And we expect that in light of the new guidelines, we should enter into relationship with more and more NBFCs and take it forward. Pool exposure is around Rs.10,700 crores. But the target will be that we enter into a co-lending where we have more control and visibility about the customers to whom we are onboarding.
Sushil Choksey ·
In market activities where M&A financing is at boom, you have international positions from Singapore and Hong Kong. Do you see traction from that segment this year? And on retail products - share advances and IPO financing?
See, this new announcement made by RBI, I think it is definitely going to open up a new stream for the banking sector as such. So once the guidelines are in place, I think we should be open to looking at the opportunities for participating in those M&A activities, having our presence in Singapore and Hong Kong. We should be very keenly looking at those opportunities.
Yeah, GIFT City. We have already got approval from Reserve Bank of India to open GIFT City branch. And now we are getting all the infrastructure in place. So once the GIFT City comes into play, at that time, GIFT City will be a major contributor to this segment.
And then third one? Capital market. Capital, yeah. IPO financing, yes, definitely this is an area which is, I think, a very interesting area. We should be looking at getting into this area. We have not yet ventured into this, but definitely we will be looking into this area now.
Sushil Choksey ·
What is your outlook on global NIM and domestic NIM, and also on balance between Corporate and RAM?
See, Corporate and RAM, we have given a guidance of 61% to 63% in RAM and 37% Corporate. We'll continue to have that guidance of 61% to 63%, though we are at 65%. The 65% is basically because of some reduction in our Corporate by 4,000 crores this quarter, otherwise we were at around 63%.
And second, on global NIM and domestic NIM. Earlier, global NIM, we have given a guidance of 3% to 3.10%, but subsequently in June, there was a sharp reduction in repo cut by RBI. So we have revised our guidance to 2.80% to 2.90% for global NIM and 3% to 3.10% for our domestic NIM.
Sushil Choksey ·
What is our digital spend and what is your outlook on Treasury for the year?
See, digital, I've already told, our target is around Rs.1,000-odd crores in this year, out of which Rs.275 crores is already spent, and another Rs.370-odd crores projects are in pipeline, which are under ordering stage or RFP stage. Further, new projects will come. So I believe that by the year-end, we'll be spending around Rs.800 to 900 crores in the digital spend. That is one.
Number two, in the Treasury, if you look at Treasury, we have slightly built our book in this quarter. Earlier, our total book was around… the investment book was around Rs.91,000-odd crores, and now it is Rs.94,000 or 95,000 crores. So to take advantage of the slightly higher yield during this quarter, we have built some portfolio. And hopefully, whenever there is an opportunity in the times to come, either some repo cut is coming or some other treasury yields are falling, that time we'll have an opportunity to make use of those securities and to book some profit on those securities.
Sushil Choksey ·
How are you positioning for a likely commodity boom - gold, silver, minerals? Are you capitalizing in East where many commodity companies are headquartered? And what about green energy financing?
First, let me tell you green financing, we have a very good appetite for green financing. I think in last two years we have already done around Rs.3,000 crores of sanctions, and Rs.3,000 is outstanding. So this is again done in last almost two years. But two years prior, we don't have much exposure. We are into that Surya Ghar Yojana also, EV financing also. These are the small chunks which are adding to the renewable segment.
And now coming to minerals, I'll say though we are there, we have customers who are dealing in all those commodities. So we are ready to explore the funding opportunities in those commodities to those customers who are into manufacturing lines, and we'll try to avoid the customers who are into speculative trade in these commodities.