Speaker #1: Two FR27 earnings conference call. Today we have with us the Senior Management Team of Canara Bank, represented by Rajesh Kumar Singh, MD and CEO, sir.
Speaker #1: Sri Hardeep Singh Alu Alia, ED. Sri Bhavendra Kumar, ED. And Sri SK Majumdar, sir, ED. With this, I hand over the call to the MD, sir, for his opening remarks post which we will have a Q&A session.
Speaker #1: Thank you, and over to you, sir.
Speaker #2: thank you. Thank you there. I just welcome all our esteemed analysts to this analyst meet after having published our September quarterly results. And I'm very happy to inform some of the—some of the salient features, though we have already provided the full balance sheet and profit and loss statement posted.
Speaker #2: so we have this quarter crossed a very important milestone of 30 lakh crores of business, and our total global business stands at 30 lakh 72,000 crores at 15.88% YOI growth.
Speaker #2: Then global deployed also grew by 13.13% YOY, and it is as of now at 16.97,000 crore, 16 lakh 97,000 crores. Global advances grew very robustly at 19.46% YOY, 13.7 lakh 75 lakh crores, and the most heartening to note is our core business, the income from core business, that is net interest income grew by 20.39%, and it is at ever highest YOY also, and ever highest outstanding gross amount at 11,000 plus crores.
Speaker #2: Net profit also grew very handsomely, and it is also ever highest profit of any quarter, at 5.175 crore. And YOY is 8.40%. CRRR is very well placed at 17.19% due to fallback also, and at the same time our density of our respected asset has also improved like anything.
Speaker #2: Then PCR coverage is also—we have increased it by 175 basis point YO basis, and now it stands very robustly at 95.34%. Gross NPA, our total asset quality has improved like anything.
Speaker #2: Our guidance for the full year at March 31st, March 27 was for gross NPA 1.50, now we have already improved it at 1.33%. And net NPA also, we said that it will be around 0.40%.
Speaker #2: It has further improved at point, and it is as of now only at 0.30%. So, if we go granularly in the advances side, it is—the advances growth was broad-based, I mean, every RAM and large corporate, everybody has equally contributed, to discuss RAM grew by 21.303%.
Speaker #2: Within RAM, retail credit at 31.61%. And when we—in retail, if we talk about housing loan, it has also grown 17.35%. All these numbers are YOY.
Speaker #2: Vehicle loan grew by 25.50%. If we talk about MSME also, that is a very good growth at 15.49%. And in earning per share also 5% is the growth is 5.5%, and we are at 22.06 rupee.
Speaker #2: And there is a growth of 21, there is a improvement of 21 basis points on YOY versus in credit cost, and it is very handsomely placed at 0.47%.
Speaker #2: And then slippage ratio has been contained like anything, and the analyzed slippage ratio is only 0.58%. And there is an improvement of 18 basis points.
Speaker #2: So, and let me just conclude by just giving you how we have fared against our guidances, which we gave in the start of the year.
Speaker #2: So we said we'll grow total business by 10 to 11% against that we have grown 15.88%, advances we said 11 to 12%, we have grown 19.46%, deposit growth we said 9 to 10%, now we have growth at 13.13%.
Speaker #2: Casa we have said that it will be between the range of 30 to 30 to 32%, which is as of now we are at 29%.
Speaker #2: In that we have protected at 29% in spite of the fact that we could garner 5.8 billion of FCR we deposit, which in repeat terms is close to 55,000 crores.
Speaker #2: Which is all under term deposit. Had it not been there, we would have been also achieved or surpassed these guidance also. Despite of so much term deposit, that too in a very short span of time, we have still maintained it 29%.
Speaker #2: NIMBY said it will be range between 2.5 to 2.60. We are at 2.53%. on annual basis, and on quarterly it is 2.55%, even better.
Speaker #2: Gross NPA, like I already discussed, net NPA also I discussed, PCR also discussed, slippage ratio guidance was 0.80%, now it is only at 0.58%.
Speaker #2: Credit cords also have said that we have improved and against the guidance of 0.75% is only 0.47%. Return on equity we said 16.5%, it is 2% more around 18.49% to be precise.
Speaker #2: Earning per share also we said 20 and it is at 22.06%. Return on average we said between 1.01 to 1.05, we are at 1.04%.
Speaker #2: So you see, barring one, Casa that too I have explained hackney why we have surpassed by good margins on all the, this thing, I mean, all the guidances.
Speaker #2: Now I shall be open to your analysis, your questions, your any further clarification from our side, and any guidance from your side, please.
Speaker #1: Thank you, sir. We will start the question and answer session. Participant is those who have any question, please raise your hand. We will take the first question from the line of Maru.
Speaker #1: Please go ahead with your question.
Speaker #3: Please go ahead with your question.
Speaker #4: Yeah, hello sir, good evening. Congratulations.
Speaker #2: Good evening, Maru. Yeah.
Speaker #4: Yeah. Congratulations, sir. So, I just had a couple of questions: what would be your incremental yield on corporate loans currently and what would it be last quarter?
Speaker #4: As in, what was the incremental yield on corporate loans in the second quarter and what was it in the first quarter? And likewise, on gold loans, your yields.
Speaker #2: Okay, that I will provide you. Yeah, we have got, yes, let me sit here.
Speaker #3: The corporate, the yield is 7.72%. And on gold, it is, increased to 9.10%. It has improved from 8.96 to 9.10.
Speaker #4: And corporate has improved?
Speaker #3: From 7.68, it has improved to 7.72.
Speaker #4: Okay, sir, got it, got it, got it. And sir, what is your take on margins from year on? do you see margins improve from year on too?
Speaker #2: I, I, I guess we will be able to sustain this NIM at 2.5, 5, 5%, considering, I mean, there is a rate hike also of 0.25 basis point, 25 basis points.
Speaker #2: And our repo rate link book is 53%. And again, MCLR will be also repriced, but at the same time, it will further depend upon how deposits and advances are getting repriced.
Speaker #2: But as of now, we speak 53% of book is already repriced. And then there, there is a festive this, this, this season, there will be a lot of festivity also.
Speaker #2: So there will be a lot of underwriting and the retail lending, and, growth propelled through widespread consumption. So we see there is good, good margin also.
Speaker #2: In retail, our margin is 8.65% our earning. So that way it will improve.
Speaker #3: 50% already repriced.
Speaker #2: Yeah.
Speaker #4: Got it, sir. So, and again, on gold loans, competition keeps increasing. I know Canada Bank has done well, it's one of the leaders there.
Speaker #4: But competition keeps increasing. So do you see pressure on yields going ahead? Your yield has actually improved QOQ, but do you see pressure on yield going ahead given that competition keeps rising even large NBFCs are now getting into it in a big way?
Speaker #2: so we work under a very competitive environment. So that we are used to, I mean, taking on competitions. So yes, but one thing I would like to say, gold loan, we, we are doing for years altogether.
Speaker #2: And we are very, very, I think very, very much skilled in doing gold loans. All our people are very smart. We have got a very good setup of appraisers, gold safes, you know, the whole ecosystem we have got, very well placed.
Speaker #2: We are market leaders also. And as, as of now also, we are not pricing very aggressively. Like this NBFC and all, and we are always below, below NBFC.
Speaker #2: And they can't be below us considering they borrow from us only and then they further go and lending. They are not a deposit taking NBFCs.
Speaker #2: So yes, competition is there, but we know how to, we know this business how to do this business. It will be further bettering. It will be not dipping, I guess.
Speaker #4: Okay, sir, perfect. Thank you so much.
Speaker #2: Yeah, thank you, Maru.
Speaker #1: Thank you. We will take the next question from the line of Jayamundra. Please go ahead.
Speaker #2: Sir, good evening and congratulations on the very steady quarter. Good evening, sir.
Speaker #3: Thank you.
Speaker #2: Sir, a few questions, sir. First is the bulk deposit while we have raised huge FC and RB, but it looks like that the bulk deposit has not moved either ways.
Speaker #2: I was under the impression that, you know, you, the bank may be tempted to reduce bulk deposit or may replace bulk by FC and R.
Speaker #2: So what is your thought process? Can bulk deposit be decreased and is there any the entire FC and R will be in retail TD only, right?
Speaker #2: Is that understanding correct? Yeah, let me request Alu Waliaji to answer.
Speaker #3: See, sir, last quarter we have increased the bulk and CD by 12,000 crores. So from 4,25,000 the bulk has gone to 4.37 lakh. Now this quarter we have consciously not taken and maintained at the June level from 4,37 to 4,38.
Speaker #3: During this process we have decreased the cost of deposit by 1%. Because the FC and R deposits were at the 1% less than the bulk prevailing market price.
Speaker #2: Right. So, okay, so it is at cost. We have grown by 19% in advances also. We have grown 13% in deposit. So there is a gap also.
Speaker #2: So it was funded there also. Part of it was utilized there.
Speaker #3: For credit too. With robust credit growth, it was utilized. No, it has replaced what you understood was correct. It replaced bulk deposit. It fully replaced the bulk deposit.
Speaker #3: Otherwise, had FC and RB not been there, bulk deposit would have been more by 30, 35,000 crores. I mean, bulk CD put together.
Speaker #2: Yes. Right, right. Okay. And in the process, you have saved 100 basis point cost on bulk, right? Yes, yes. Wherever we have replaced it, we have said 100%.
Speaker #2: Consider it was at 6.5% and that was at 7.5%. Further, we have saved on cost of CRR and SLR also, which is also 22, 23 point.
Speaker #2: Consider this were not supposed to be charged CRR, SLR also. So again, there is that earning also. Yeah. So, sir, I'm not able to understand your NIM trajectory because 50% of the book will move up by 25 basis point immediately or it has already moved.
Speaker #2: And bulk deposit, even if, you know, the, the, the rate seems still softer or stable type, right? So mathematically the NIM should go up only.
Speaker #2: What is the offset?
Speaker #3: See, okay, okay, okay. I'll answer. This, this quarter, that effect of that FC and RB leverage will also come. Wherein we do not have a spread of 2.55%.
Speaker #3: It is that the spread in the, say, 3.2 billion in leverage is only 40 pesa, 50 basis point points. So that will be compensated with this, little more it will compensated more.
Speaker #3: So that impact will also come this quarter, from this quarter, nah.
Speaker #2: Okay. Sure. And sir, in interest income, interest income on advances, was there any one of, I mean, the calculated yield and even the reported yields are up by, you know, four, three, four basis point.
Speaker #2: On the yield, loan yield, is there any anything which helped us in, in improving the loan yields?
Speaker #3: No, no, no. It is only since our average advances has continuously increased and it never dipped, you see. So due to average advances on the increasing side, and very calibrated underwriting also we have, we have done.
Speaker #3: We have not done any sub seven loans. We have rather we have ceded some of the sub seven loans and at the same time we have ceded some of the high cost deposit like Mr. Alu Walia told.
Speaker #3: So that's why this increased earning is there. It is merely on the count of average outstanding advances going one side northward only.
Speaker #2: Right, understood. And sir, your gold loan, total gold loan in rupees crore and how much of that is agri gold and retail gold, sir, if you have that number?
Speaker #3: Okay. So 282,000, 2 lakh 82,000 crore is the total gold loan. Out of which agriculture is 1,74,000. And other 1,108 is the other, non-agriculture.
Speaker #3: 1,08,000. So altogether 2,82,000 crore.
Speaker #2: Right. Last question, sir, from my side is, sir, AFS reserves, if you can quantify what was the AFS reserve at the end of Q1 and at the end of Q2.
Speaker #2: Yeah.
Speaker #3: Number I will also give, but in percentage terms I would like to say 80% of our investment book is HTM. 20% is other than HTM.
Speaker #3: AFS and FPTBL. Out of that also 15% book is 15 point some out percentage is AFS reserve. AFS. So even if HTM is not supposed to be, if you are asking about that dent of mark to market, so HTM is not supposed to be hit by MTM, but AFS is also not hitting our profit and loss.
Speaker #3: That will directly go to AFS reserve. Only FBTPL, which is less than 4%, around 4%, their impact of mark to market is coming. That also I can quantify.
Speaker #3: Last.
Speaker #2: Jay, you wanted to know that what is the increased loss, AFS, the loss for the quarter is around 1,300 crore for the quarter in AFS.
Speaker #3: Okay, but that is adjusted in AFS reserve, right? Nothing to do with PNF.
Speaker #2: Exactly. It is, it is adjusted in AFS.
Speaker #3: Yes.
Speaker #2: Right. And sorry, sir, you are mentioning about the sensitivity of FPTPL.
Speaker #3: Yeah, FPTPL, last quarter our earning was from 55 crore. This year loss 55.
Speaker #2: This year loss was 55 crore. Last quarter earning was around 500 crore.
Speaker #3: 555.
Speaker #2: 555. So altogether loss is, say, 600 crore.
Speaker #3: Right. That is there.
Speaker #2: That is the last, yeah, lastly, sir, if you can I think I heard you on TV saying about this drought situation is not very problematic as of now.
Speaker #2: But are you, are you seeing anything that, you know, that can reduce your recovery efforts even for the in those affected districts? How, how is, how can that pan out?
Speaker #2: I mean, if you can.
Speaker #3: Not much. Three, three states have been declared drought affected.
Speaker #2: Part of Karnataka, then Maharashtra. So these two states are only affected. That too, part. So there will not be much effect on, on the recovery because restructuring is happening through SLBC.
Speaker #3: And total, exposure to drought prone area is not less than, around 10 to 13,000 crores.
Speaker #2: 13,900.
Speaker #3: So that will not affect much, you see. 13,900 somewhat amount. And again, some dispensation also will come from SLBC side. So there, that has already come.
Speaker #3: So we'll sell through that, I guess.
Speaker #2: Right. So, sir, these amount, let's say 13, 14,000 crore, that will be restructured, right? Or can be restructured? Yes.
Speaker #3: Yes. Restructured somewhere like any, moratorium, deferment is there. Moratorium is there. Some restructuring, some additional support also. It comes. It is decided by state by state by state level banker committee.
Speaker #3: Like, last to last quarter emergency line of credit was there. So that helped. So some kind of dispensation, every time comes. This will be also not an exception, you see.
Speaker #2: Right, right. No, sir, my worry is by the time dispensation come, can these accounts become NPA or they will be state of the rest.
Speaker #3: So, like, I've said like any, there is no stress in my book for the going further also. Even if you take SMA zero into consideration, total stress is only 2.42%.
Speaker #3: And slippage is also last quarter were only 0.15%. So that way we do not see or perceive any stress in our book.
Speaker #2: Right. This 2.4% is all ticket size, right? Including below 5 crores.
Speaker #3: Every ticket. Yes, yes. If you talk about more than 5 crore, then it is less than 1%. 0.30% only.
Speaker #2: Right, right, right. Okay, sir, great. And thank you and all the very best, sir.
Speaker #3: Thank you, Jay.
Speaker #2: Thank you. We will meet the next question from the line of Sushil Choksi. Please go ahead.
Speaker #4: Sir, congratulations to Team Canara on excellent performance.
Speaker #3: Thank you, Choksi saab.
Speaker #4: First question to you, sir. Your key ratio table, page number, I heard whatever you have replied to Maruk and Jayamundra. So I have a specific question.
Speaker #4: As you were saying, there is no stress. Margins are bottomed out. Your efforts on saving casas looking good. Irrespective of FCNR deposit taking up the tool.
Speaker #4: Would you like to revise your guideline, guidance for the year on any parameters starting from ROA, ROE, cost to income, CD, or any of the parameters?
Speaker #3: Like, like I said, sir, like any, yeah, these were all decided before my joining the bank. And we are just respecting that. I said if I will, I'll work hard.
Speaker #3: Team will work hard. We'll better it. So you have seen everywhere we have already bettered it and we'll keep on, we'll sustain it. So instead of, I said instead of going revising my own guidances, so let me better it.
Speaker #3: So we are bettering it only. We are not restating ourselves anywhere, like any, we are not sticking to guidances. You see, against advances growth 11, 12% we are booking 19%.
Speaker #3: We'll, we are just concentrating ourselves to let this growth story be a very sustainable one.
Speaker #4: Sir, we are.
Speaker #3: So we have no plan to revise it, sir. Yeah.
Speaker #4: Sir, as of October 14th, what is the visibility on RAM business being festive quarter and Karnataka has a big festive? It is specifically around this era.
Speaker #4: Second thing, how is your gold loan business looking? How is your corporate pipeline looking? And overall business mix? How do you see visibility for Canada for the quarter and for the year?
Speaker #4: And specifically, looking at the businesses which are emerging in state of Karnataka and Tamil Nadu where we have a good concentrate, manufacturing businesses are expanding.
Speaker #4: Wheat, auto, wheat, defense, many other such businesses are emerging out of these two states. So how is the new business segment emerging for you where the credit is likely to do well?
Speaker #3: So, so first question, sir, we are seeing very robust demand for retail lending products, you see. Like, I mean, our housing loan in excess of 17, 18% is growing.
Speaker #3: Total retail 21%. Vehicle loan 25%. So it's a very good demand also. That too, without this festive season. So we, we have all studies started getting those, those numbers.
Speaker #3: We are already in the festive festive mode. And then, yes, our presence is very good in the state of Karnataka and Tamil Nadu, Kerala and Andhra Pradesh, Telangana also.
Speaker #3: So the what benefit we get due to this presence and since we are born here only, that we are very well recognized. So that branding and the issue, issue is not there and we are, we are kind of first choice first choice bank here.
Speaker #3: So that benefit we are all, all, already, already getting. So and like this quarter, due to this festivity and other like governors have also, you know, seen in spite of he raising repo rate by 25 basis points, he revised the growth projections for the country from 6.7 to 7, 7.1%, 40 basis points.
Speaker #3: So that way country is also very resilient and robust and we do not see any stress in our books also. So we see that this quarter going further will be a good quarter.
Speaker #3: And again, regarding pipeline of large corporate book, your mid corporate book, if you ask, so altogether already thanks and not disburse and we have got good hot leads in, in hand.
Speaker #3: So that is around 47,000 crore. Let's say around in and out 50,000 crore. And in June also similar kind of pipeline was there. So I guess key there is a sustained demand also from the market.
Speaker #3: Most particularly from power sector, green sector, power evacuation, battery savers, data centers. So many from infrastructure also. So there are there is a good pipeline, I can say that 50,000 is in my hand only.
Speaker #3: And RAM is also doing good, sir.
Speaker #4: Sir, my next question is, how is Outlook for recovery from return of accounts? Second thing is on your subsidy. And third is treasury. You'll have a painful time.
Speaker #4: How are we weathering the storm where treasury is concerned? So if you can highlight more on your subsidies and the return of accounts.
Speaker #3: Okay, sir. So I'll start with the recovery part. Recovery may though there is no challenges, sir. In percentage basis, we are recovering very handsome.
Speaker #3: And every quarter, we are recovering more than what we are sleeping. This quarter was also not an exception. That is one. But yes, at the same time, let me expect accept key that very pool of that return of accounts is dwindling down.
Speaker #3: And all those gross advances also you have see, it is only 1.33%. And in the total absolute terms also, it is around 18,000 crore only.
Speaker #3: So part of it is already resolved and recovered also. And this is some of the outstandings are in our book. Only due to CIRP or PIRP processes.
Speaker #3: So that pool is dwindling down and we are not slipping also very heavily in the, in the new slippages. Only 0.15% quarter. So that pool is this.
Speaker #3: So in absolute term, recovery will be not as much as what we are recovering as of now. But yes, one or two quarters there is absolutely no issue.
Speaker #3: But going further, that very pool is dwindling down. One thing. But there will be other, another benefits which we are not slipping than what we will, we will recover.
Speaker #3: So that is one thing. And then the next question you ask, sir, regarding.
Speaker #4: Subsidies. Insurance and. Treasury and subsidies.
Speaker #3: Treasury also. Yeah. Subsidies last time two of our subsidies we listed them. They are all good. Profit burning earning and their shares stock is also doing good.
Speaker #3: Congratulations. We see life and Kendra Robeco. That is a mutual asset, asset company. This quarter also we intend to, I mean, sell it out one of our subsidiary called Canara Bank Factor.
Speaker #3: That deal is already done. So total investment was only 14 crore, but we'll get 4x 4x will get at least our share will get 4x.
Speaker #3: So that is on count of subsidy. All we have got 14 subsidiary associates and joint ventures. Everywhere we are doing good. All our subsidiaries are doing good and giving synergy to us and augmenting our balance sheet side also.
Speaker #3: So then we come to treasury operations. Yes, there is pain in that side. Only due to hardening of yield and at the same time, there were no much OMO operations.
Speaker #3: So that we had any arbitrage. So last year, very handsome income was there from treasury side. This year, instead of income, there is a loss.
Speaker #3: But that everybody is exposed to that. We do not have much say into that. But yes, with our own prudence, we are trying to minimize losses.
Speaker #3: But whatever is mandated, like mark to mark, you have to book, you have to book. So that is what we have booked and said I can we'll be not little bit less affected considering 80% of book is HTM.
Speaker #3: 20% may, 15% is FS. That will go to FS reserve directly. 5% that vulnerability is there. For one quarter, it was affected by 600 crore.
Speaker #3: That is due to 44 basis points hardening of yield in one quarter. It is further further hardening. But that is a dynamic situation. We do not know.
Speaker #3: So if we know how we can speculate, but there is no speculation. Whatever is there, we are coping with that. But that is being compensated by robust NII growth.
Speaker #4: Yes, sir. I agree with you on all the parameters. Sir, my last question, I know I won't get an answer, but still I'm asking you.
Speaker #4: Looks government is expedited results season for PSU banks this time. And this is led by some speculation or reality. We don't know that there is a Diwali gift of some merger and Canara stands out to pick one or two banks in the merger fold.
Speaker #4: Do you have any comment on it?
Speaker #3: No, no, sir. It was all our decision to give result at as early as possible. It has got nothing to do with the government.
Speaker #3: It is all solely our decision top management decision and every supported by all my vertical heads. And our statutory centralized statutory auditors only. Why we wanted to result publish our result as early as possible?
Speaker #3: Considering every quarter, every we are publishing this results by 22nd, 22, 24, and sometime by 28th of the month. In a way, what happens, we lose one, one month.
Speaker #3: Then we are left with only two months in the quarter. So even if you are not that much bogged down with the process of auditing and publishing your results, still your mind is occupied with the results and all.
Speaker #3: So that way we have just tried to make ourselves free now at least we are having two and a half months instead of two months to perform in the quarter.
Speaker #3: And this is a very important quarter.
Speaker #4: Save all PSU banks are justifying with productivity. It's congratulation and best wishes that it sustains the same momentum for quarters to come back. Thank you.
Speaker #3: Thank you.
Speaker #4: Thank you for answering all my questions.
Speaker #3: Thank you. Stay blessed.
Speaker #4: Thank you. We will take the next question from the line of Parth Gutka. Please go ahead. Parth, please go ahead with your question. As there is no response, we will move to the next question from the line of Ashleesh.
Speaker #4: Please go ahead.
Speaker #5: Hi sir, good afternoon. Sir, few questions from my side. Firstly, if you can share what was the interest of IT refund this quarter? I believe the number for June quarter was roughly 250 crores.
Speaker #5: Secondly, what was the quantum of AS50 related provision in the June quarter as well as September quarter?
Speaker #3: Okay, I'll ask CFO to answer. Please here.
Speaker #5: So this quarter we could book the IT interest income around 90 crore. And your second question is regarding AS50 provision. So pension and graduity either put together 950 crore we have provided.
Speaker #5: As per actuarial valuation. is for September quarter. Right? Yes, this is for quarter. Correct. And what was the corresponding number for the June quarter?
Speaker #5: June was also more or less same. Okay, understood. Another 40, 50 crore was less, but more or less same trade. Understood. Sir, and secondly, can you share any update on the ECL one time provision impact which we'll see?
Speaker #3: See, amount we have not calculated exactly. But what we roughly we presume it will be somewhere 12 to 15,000 crores. It has increased to 3,000 crore considering the hardening of yield, considering one time provision for M2M we'll have to provide.
Speaker #3: So that the kind of CRR we are having. 17.19% which is as against 11.5% only. And CET on also 8.5 we have against 8.5 we are having 12.80%.
Speaker #3: Even if in percentage term we count so it will be not more than 1.2% 1.2% 1% to 1.2%. So I guess we'll be easily selling selling through it and the kind of profit also we are making last year we could make 19,000 crores of profit and this year also in half year itself we have booked 10,000 crore.
Speaker #3: I think that will be not much only thing we have decided in how many years we are going to do it. Considering RBI has given dispensation for five years.
Speaker #3: But nobody will take it to five years. Let us decide. But otherwise we are not very and kind of PCR also we are having 95.34%.
Speaker #3: So it will also also help. And kind of asset quality improvement in asset quality is also going to help you.
Speaker #5: Understood sir. Sir, and you mentioned some additional impact because of the or other some revision in estimate because of the hardening of yields. Can you just explain how the yields factors into the ECL calculation?
Speaker #3: See, so all those books now on date of reckoning that first of April now like how we are doing March to March as of now.
Speaker #3: So we have to do do it March to March. But yes, HTM will be not March to March. HDF HTM will be also March to March.
Speaker #3: So that will affect us by two to three thousand crore rupees depending upon how much holding we are on that day and what is the yield rate on that day.
Speaker #3: We do not know. It will further harden or soften but if you at the same level we have calculated then then it also it's two to three thousand crore.
Speaker #3: So there is not much impact of that also. And that is also no way going nowhere out. It will remain with you only. That provision that is a provision.
Speaker #3: So it will come it will go sometime you write back sometime you have to provide.
Speaker #5: Okay. Sir, in that case, how do you expect to protect your ROI of 1% because it seems like the credit cost will inch up next year.
Speaker #3: Credit cost is not a yeah, you answer please.
Speaker #5: This this is credit cost will only increase if I make a provision for that. Extra provision for going forward. It is yet still not decided what the industry will do whether a part of it will be passed on.
Speaker #5: This that will be based on the industry scenario. At this point we do not see that will affect much. There may be some in case we decide to make provision for that going forward that that will have some credit cost effect.
Speaker #5: As you have seen our credit cost today is below point point five. So it will and kind of asset quality improvement that is happening and the kind of slippage restrictions are happening.
Speaker #5: I think that that will automatically offset if any such provision requirement. Understood sir. Sir, and another thing you mentioned was on the gold on yield that the yield has gone up by roughly 15 basis points quarter on quarter.
Speaker #5: Do you expect to take more hikes going forward? Can this yield go up further?
Speaker #3: Yeah, certainly. When it comes to gold loan, so we are earning as of now 9.10%. But it is going to give further because rates are now hardening.
Speaker #3: So I think we can we we can have better yield than gold going forward. Still we are lower than many of the peer banks.
Speaker #5: Understood sir. Sir, and just lastly one data keeping question. If you can share the slippages across segments. For the quarter.
Speaker #3: Okay. So total slippage is 1844 and segment wise segment wise I will tell you. Slippage I'll just tell you. yes. So 687 crore we slipped in agriculture.
Speaker #3: 13 crore in corporate. Gold way 40 crore. 777 crore in MSME. Retail 327. All taken together 1844. 1844 crore. So it is not somewhere very concentrated sort of.
Speaker #3: Yeah.
Speaker #5: Understood sir. Thank you very much for answering the questions.
Speaker #3: Thank you.
Speaker #4: Thank you. We will take the next question from the line of Param. Please go ahead.
Speaker #5: Yeah. Hi sir. Congratulations on a great quarter. Yeah. Sir, firstly just to again pick up on the comment you made on ECL. Did I hear you correctly?
Speaker #5: You said that the extra provisioning may not pass through to the bottom line there might be some say pass through to the customer. Is that what you were trying to imply?
Speaker #3: No, no, no. We've said actually how market is going to respond. We will be aligning with the market. As of now there is no plan to pass it on to the customers.
Speaker #3: Even if we are not passing then okay then ROI will be not say in excess of 1% then new normal will become 80 basis points you see.
Speaker #3: That is also very handsome and good. Yeah.
Speaker #5: Yeah. So that is what we are trying to understand sir as investors that you know will we reset to a new normal or you know will our effort be.
Speaker #3: So that we that will be very premature that that will be very premature to say that market market will decide nah. As of now we do not see much of movement out of that also also.
Speaker #5: Okay sir. And this 12 to 15,000 crore sir when I look at it as a percentage of your net worth your reported book value sir it is like almost 10% of your book value.
Speaker #5: So even that will get so when you're saying the phasing of that over 5 years will I mean on day one will the you know your net worth look 10% lower or will that also get spread over 5 years?
Speaker #3: No, no, no. So yeah, you answer.
Speaker #5: Yeah. It it it net worth will it will be spread over 5 years many that option is there but we don't think we need to spread it over beyond 2 years.
Speaker #5: It should be I mean there if not in first one year itself it all depends how the if the bond deals remain elevated then we may have to cover it in 2 years.
Speaker #5: I think 2 years should be more than enough given a profit of more than 20,000 crore and asset quality coming improving still maybe coming to below point three and you know the provision coverage going up beyond 95 to 96 97 hopefully.
Speaker #5: I don't think that we will need more than without denting even your credit cost and even ROA for that matter. Because one thing you we you should also look at an overall profit improvement going forward.
Speaker #5: So I feel that that even if we have to provide that will neutralize given the increased profit figure. Absolute profit figure. Okay. Okay. Okay.
Speaker #5: Got it. Okay. And and on on the quarter sir I wanted to understand so there is a very strong growth in agri quarter on quarter 10%.
Speaker #5: Is that largely the gold loans that you have seen or anything to call out over there?
Speaker #3: No, no. This is not only gold loans. So core agriculture also we are growing close to 9%. So that is there. And because we have seen growth in the first quarter that is June September in the same line and we have done exceedingly well under core agriculture also.
Speaker #5: Okay. So it's a mix of both.
Speaker #3: No that to to be very specific our out of the total agri of 3,004,000 gold is 1,74 and core agri is 129. 130.
Speaker #5: And similar numbers for last quarter.
Speaker #3: Growth is.
Speaker #5: Yes.
Speaker #3: Last quarter was 151 1,51 was agri gold and core agri 125.
Speaker #5: Yes. Okay. Got it. Got it. Thank you so much and congrats on the quarter.
Speaker #3: So growth is broad breast sir. Growth is broad breast. Yeah.
Speaker #5: Yeah. Thank you so much.
Speaker #4: Thank you. We will take the next question from the line of Parth Gutka. Please go ahead.
Speaker #5: Yeah. Hi sir. Can you hear me?
Speaker #3: Yes please.
Speaker #5: Yeah. Hi. Thanks a lot for the opportunity. Sir, I would like to know what was what is the amount of disbursement we have done under ECLGS?
Speaker #3: Okay. So 13,000 plus crores.
Speaker #5: Okay. And okay fine. 13,000 plus crores. And and what were the advances given against the FCNRG deposits?
Speaker #3: 3.2 billion out of 5.8 billion 3.2 billion.
Speaker #5: Okay. Okay. Fair enough. And and and my last question was is it fair to assume that that you know large part of the FCNR be deposits that we have garnered have been utilized this quarter and you know from next quarter onwards will again have to rely on the bulk deposits if we want to maintain the these levels.
Speaker #3: No part of yeah part of it has been utilized but part of it has been used for replacing so our bulk has not increased it has but it was constant okay okay fair enough sir thanks a lot thanks a lot sir.
Speaker #4: Thank you. We will take the next question from the line of Pranav. Please go ahead.
Speaker #3: Hi sir. Thanks a lot for the opportunity. Sir any any other other avenues of fees that you are investing your time and capital on and also what kind of upside you see on MDR MDR latest MDR inclusion for UPI money transfer.
Speaker #3: Thanks a lot sir. So we are investing heavily both in terms of money and time also in our all those digital advancements we are just working on adoption adoption part of it made with QR code made with school fee collection modules internet payment gateways and regarding the second part of your question that we have not calculated as it has not come yet as of now we are out of cash only by way of paying some switching charges you can say charges and all and that we do not see much earning considering our penetration in PSPs like we have also one payment service provider platform that is called AI1 pay so that has not been popularized very very very much so we do not see since much of earning will be there so and that too it will come on more than 2,000 rupees and again it is capped at 300 rupees so I do not see much much of earning out of it but it's going further a volume further increases our our platform is widely utilized then only will get get to earn something as of now we are out of cash only considering we have to pay charges to others since other platforms are being utilized or somewhere require is different somewhere pay bank is different different.
Speaker #5: Understood sir. Understood. Thanks a lot.
Speaker #3: Yeah.
Speaker #4: Thank you. We will take the next question from the line of Aman Singh. Aman Singh please go ahead.
Speaker #5: Hi sir. Thank you for the opportunity. Sir can you help me sir can you help me with the all ticket size SMA 012 for the quarter as of date?
Speaker #3: Okay. Okay. So if it is 5 crore and above then our total SMA including zero is only 0.51 percentage term and in outstanding term it is 7,000 crores that's all on a book of 13,75,000 crore.
Speaker #3: And when it is all taken together not 5 crore and all everything taken together then it is 2.42 percentage that is in absolute terms is 33,340 crores that's all.
Speaker #5: Sir can you break it down into SMA 012 also?
Speaker #3: Yes. In if you take SMA 2 then if 5 crore above we are talking about it is 0.21 percent only 2,838 crore. If we are talking about SMA 1 in 5 crore and above it is 0.09 percent 1,304 crore.
Speaker #3: Taken together SMA 1 and 2 is 0.30 percent 4,142 crore. And all SMA 0 is 2,901 and in percentage term it is 0.21 percent.
Speaker #3: Altogether 0.51 7,043 crore. If we take all even 1 rupees then SMA 2 is 0.9 percent SMA 1 is 0.53 percent total SMA 1 and 2 is 1.43 percent and SMA 0 is 0.99 percent taken together all it's 2.42 percent only.
Speaker #5: Right sir. Thank you. Also sir can you give me the LCR for the quarter?
Speaker #3: Pardon LCR?
Speaker #5: Yes. Yes sir.
Speaker #3: 115 as of 30th of September 115.
Speaker #5: Okay sir. Thank you so much.
Speaker #3: Yeah thank you.
Speaker #4: Thank you. We will take the next question from the line of Lavish. Please go ahead. As there is no response we will move to the next question from the line of Shakir Kapoor.
Speaker #4: Please go ahead with your question.
Speaker #3: Yeah. Yes please. Yes sir. Yeah. I'm audible sir. Yes please.
Speaker #5: Yeah. Sir firstly in terms of the impact of the treasury that MTM is negative of 600 for this quarter and what is the total number for H1 and the comparable number for last year sir agaram profits may इसका impact इस quarter में negative 600 देख रहे हैं तो Q1 में क्या था और H1 में क्या है total?
Speaker #3: Okay okay okay we'll ask.
Speaker #5: I'll I'll respond to this.
Speaker #3: June में total अपना trading MTM OMO and others मिला के cumulatively it was 654 crores. And in this quarter it is 153 crores. So this is and if I compare to previous year it was 1,217 basically on MTM profits of 762 crores.
Speaker #3: In September last year.
Speaker #5: Last year it was profit of 762 crore and this time it is a loss of 600.
Speaker #3: On MTM it is a loss of 61 crores. If I compare to previous quarter it was 611 crores. MTM profit.
Speaker #5: Sir what our chairman sir mentioned MD sir mentioned was that for this quarter we have booked losses of 600 crores. That understanding is correct?
Speaker #3: No. No no. As compared to last quarter.
Speaker #5: Last quarter.
Speaker #3: There was a 550 crore earning in last quarter. This quarter it is 50 crore loss. So if you add them it becomes 60 600 crores.
Speaker #5: Yeah.
Speaker #3: It's like that.
Speaker #5: Sir next coming to the next coming to the valuation part sir our book value currently 124 closer to 125 rupees and the market price is closer to either 120 or 125.
Speaker #5: We are we are trading at one time book. So what according to you sir are are the steps that are still in the annual that will improve the valuations for for the investing community as as you have guided for 2.5 name and and ROA closer to 1.02.
Speaker #5: Where are we sir in terms of that that that valuation curve that that will benefit your investors and second point is on the bid pipelines of loans.
Speaker #5: If you could just give us some color how how that pipeline is shaping up and and our win ratio in the same.
Speaker #3: Yeah also we second when people start showing interest into it it is trading on book value or a little less than also but today we have gained some some market after this result and I guess if you people are spreading good thing about us all these analysts and all so it will further go up.
Speaker #3: I have personally and belong with Mr. Majumdar our ED went Mumbai and met many of the analysts or our investors also just to bring about our perspective for our part we have to perform we are performing continuously for last two three quarters you see last year also we have stayed 19,000 crore and we have given 220 basis points of yield also our yield is also more than 7 saving bank rate of interest so people will understand and they'll start investing and remain remain invested it will take our share to some greater heights that is I wish and pray and regarding pipeline we have got 50,000 13,000 already 30,000 hard lead and 17,000 already sanctioned but not disbursed taken all together is 47,000 crore close to 50,000 crore and this is basically all from green energy battery energy saving power evacuations and data centers some ham projects also one or two so it's widespread so a lot of good pipeline we see so going further also we absolutely have no death of good leads and proposals so from these sectors we are getting good deals and all and we have given many NBGs also so those things also will come and materialize.
Speaker #5: Thank you. We will take the next question from the line of Sobir. Please go ahead.
Speaker #6: Hi sir. Thanks for the opportunity. So I know we have spoken a lot on ECL but just one last bit on the steady state impact.
Speaker #6: I think last quarter we had called out that it would be very minimal like around four to five bips. So have we had a chance to firm up those numbers?
Speaker #3: Come again please.
Speaker #6: So last quarter I think we had mentioned that it would be four to five bips the steady state rate cost impact.
Speaker #5: We said no if you remember last time we said 10 to 12,000 will be the requirement. Now with a given market conditions that is farming off of fields and this we are saying it for HTM category because we need we understand even HTM may require a provisioning.
Speaker #5: So it may we if this kind of yield continues then it will we expect it to maximum maybe instead of 10 to 12 it may be 12 to 15,000 crore.
Speaker #5: 15,000 crore. But we are also optimistic if. The oil prices comes down the de-escalation in political scenario happens it may even we may come back to the previous forecast of 10 to 12 but maximum we envisage around maybe 14 to 15,000 crore.
Speaker #5: And you have seen in that that my CRAR is today at 17 above 17 and 17.19 and even my CET1 is very comfortable at 12.8.
Speaker #5: We have a we have a real control on the risk weighted assets which is coming down quarter on quarter. And there is no reason this trend will not continue.
Speaker #5: Keeping all that into consideration we feel now the question is whether we should provide in one year or we should spread across a couple of years since we have the flexibility given by regulator.
Speaker #5: That will take a call maybe as we come towards in the last quarter.
Speaker #3: Yeah.
Speaker #6: Thank you sir.
Speaker #3: Yes.
Speaker #6: Sorry sorry Jay. Sir thanks for that but I meant the the steady state impact not the one time impact. So if you could clarify on that.
Speaker #5: I mean see that may not be because from you you are talking of April going forward in the coming year that that that that will have to see weight and watch whether I do provide for that or we decide to pass it on that the market conditions will decide but I don't see a much effect on the overall financials because given because it even if it is we decide to provide given the dwindling credit cost and the other parameters I said that should get offset there cannot be any upside to that there I don't think what projection we gave earlier we need to enhance that.
Speaker #5: As we as on today I don't see that happening. Thank you. We will take the last follow-up question from the line of Jayamundra. Please go ahead.
Speaker #3: Yeah. Hi sir. Sorry sir. No on this ECL 10 to 12,000 going to 12 to 14,000. Is this including HTM which on on investment also right?
Speaker #3: It has loan loss provision do they also impact or no?
Speaker #5: No no no it is including HTM. Yes you understood correctly.
Speaker #3: Correct. But sir do you have a number because I think yields are yields impact will be uniform across banks right depending on their HTM and but on loan loss only only loan related provision do you have a number sir for how much will be the advances plus credit substitute put together.
Speaker #5: No we have not crystallized the number but these what we have just said taking into HTM I don't. Very significantly on that. Total number.
Speaker #3: Right. And you have made the sir this September 30th banks were supposed to make the you know final final kind of a run on ECL right?
Speaker #3: Have you have you done any?
Speaker #5: No. No no no. There's nothing that September 30th. We have time up to April maybe by end of this quarter.
Speaker #3: So we have this thing had our this thing understanding our technological our knowledge partner then co forge is also there. So technological capabilities we are working on models we are writing I mean so those things are all under under testing and final stage.
Speaker #3: So somewhere in this quarter we'll have that dry run and all. So technical capabilities also we have to grow nah. Same time.
Speaker #5: Right right.
Speaker #3: Okay. All right sir. Thank you so much.
Speaker #5: Thank you. Thank you. That was the last question for the day. I hand over the call to the MD sir. For his closing remarks.
Speaker #3: So thank you all who have participated and very enthusiastically you have understood our balance sheet also and probed and asked questions also. I would request all of you to please just like some of the analyst asked why our share price is not fancy in the marketplace.
Speaker #3: So I would request all of you to propagate something good about us. Our fundamentals you see we are continuously working on our efficiency parameters more than top lines.
Speaker #3: And kind of strength we are giving to balance sheet like you've seen 175 five basis points we have increased in PCR. You would have shown more profit instead that we have provided for PCR which is going to help us in ECL considering there were many questions in ECLs also.
Speaker #3: Good we are very well capitalized our assets are very balanced very good quality of assets we have got. We are going at a very good good pace.
Speaker #3: Our name are protected. We are making good kind of profits. So there is no no case that we are not being rewarded in the marketplace.
Speaker #3: Today yes market has responded very well after our results. Let us hope and we'll ask your help also to have an give us kind of support in the marketplace so that our market capitalization increases.
Speaker #3: So that is all from my side. Thank you all for being there for us and every time every quarter I see some of you and most of you are there to to that means that shows your interest in Canada Bank.
Speaker #3: Thank you and appreciation for that also. Thank you all. Have a good rest of the day.
