Anand Dama: Yes, sir. Good evening, sir. [crosstalk]. Good evening, ladies and gentlemen. I welcome you all to Indian Bank's post-result conference call for the Q2 of financial year 2027, hosted by Nuvama Wealth Management Limited. From the top management, we have with us Shri Binod Kumar, MD and CEO, Shri Ashutosh Choudhury, Executive Director, Shri Shiv Bajrang Singh, Executive Director, and Ms. Mini, Executive Director. I request the MD, sir, to briefly summarize the key highlights from Q2 FY 2027 results and also provide strategic directions on growth, margins, and asset quality, post which we will have the Q&A session. Over to you, sir.
Binod Kumar: Good evening, and thank you all for participating. Key highlights I will share, thereafter, we will go to Q&A. Total business grown by 14.22%, deposit grown by 12.50%. CASA, we have seen good growth of 13.77%. Sequentially, it has come down a little bit because of the FCNR, basically. But year-over-year basis, it has gone up from 38.87% to 39.36%. Bulk deposit has come down. Last quarter it was INR 1.62. This quarter it is INR 1.52. That means INR 10,000 bulk deposit has come down. Advances has grown by 16.39%. Corporate has grown by almost a double digit, 9.92%. RAM has grown by 17.74%. Almost all segments are equally growing. Retail 17.37%, Agri 17.18%, and MSME 19.06%. RAM constitute around 67% of the total portfolio. Coming to the profitability side, there I will give a few parameters.
Binod Kumar: I will give two numbers because during the quarter we have some share of NSE unlisted. It has been listed. On account of that, we have booked some profit and some MTM. Part of that has gone to MTM. We have booked INR 252 crore and INR 1,134 crore has gone towards MTM. Net profit has grown by 14.71% to INR 3,462. Operating profit has grown by 46.58% across INR 7,000 crore. Apart from NSE contribution also, it has grown by 18%. Net interest income has grown by 17.83%. Other income has grown by 58.95%, basically contributed by NSE. NIM has, year-over-year basis, has grown by eight basis point, but two basis point sequentially. Domestic by one basis point, global two basis points. We have done some churning in the overseas portfolio, so overseas NIM has expanded by eight basis point. Return on assets is flat at 1.31 sequentially.
Binod Kumar: Return on equity is 19.66%, 14 basis point expansion. Staff expenses flattish basically, 14.56%, INR 3,037. Other expenses, INR 1,545, has grown by -4.29%. Cost to income ratio, actually it is 44.59%, five five if you take NSE into account. If you don't take it, then it is 39 basis point, 39.30%. Provision coverage ratio is 98.22%. Credit cost has come down by one basis point, 0.22%. Earning per share INR 102.82. Book value INR 535. Cost of deposit has expanded, gone up sequentially by nine basis points. Yield on advances also has gone up sequentially by eight basis point. Yield on investment has also gone up by two basis points sequentially. Our total Tier 1 capital is 16.21%. Out of that, CET1 is 15.18%, Tier 2 is 1.03%. Gross NPA has come down to 1.61%, net NPA 0.14%, slippage ratio 0.69%.
Binod Kumar: It has come down by eight basis point from the last quarter. SMA has come down from 7.35 last year to 4.19, and basically absolute number INR 29,748. SMA to more than INR 25 crore is around only INR 400 crore. We are not seeing any major stress in any of the accounts. Going forward, I think I have given guidance of deposit 9% to 11%. I am revising that to 11% to 12%, and advances, we have given guidance of 11% to 13%, that I am revising to 13% to 14%. Recovery, I think I have not revised guidance, but I think we will be doing better than what we have given as guidance. Recovery also, if I talk of between a smaller account, a big account, more than INR 1 crore, we have INR 756 crore recovery and less than INR 1 crore, INR 791 crore. It is almost equally distributed.
Binod Kumar: We have a pipeline of corporate credit. We have a pipeline of INR 63,000 crore. Out of that, INR 30,000 crore is sanctioned, yet to be disbursed, and in principle given is INR 10,000 crore, and remaining some preliminary discussion around INR 23,000 crore. These are the basic few things. During the quarter, two, three things I will highlight. Last few quarters, we have taken many initiatives on basically CASA, like salary account, maintaining float in various accounts and also giving FinTech solution to the different companies or government departments. These are giving good result. Through CRM also we have launched, through CRM which has been launched in July only. We have been able to add business through CRM INR 1,500 crore approximately. In this quarter of FinTech solution, we have provided to 23 companies, government department taken together. In that, we have added around INR 5,000 crore.
Binod Kumar: Similarly, in CMS, we have started and there also the float is around INR 7,000 crore. These things are giving us good result. NGCC through NGCC is not only being used for the query resolution, grievance resolution, it is also being used for lead conversion. Through that, we have converted around 5,000 lead and amounting to INR 200 crore. These are the few initiatives we have taken. MCLR book constitute 43.19%, external linked benchmark 49.65%, 25 basis point, all of us you know it has already been increased repo rate, so we should see some expansion in the NIM, maybe five, six basis point. Going forward as and when it unfolds, we will see what will be the scenario. These are the few highlights. Now I will request my colleague, Mr. Ashok, to talk about the digital initiative, and thereafter, we can take forward.
Ashutosh Choudhury: Thank you, sir. Good evening, all. I will just highlight a couple of the initiatives that we have taken recently this Q2. One is AI conversational banking. We have named it as TARA, that is Trusted AI Relationship Assistant. This particular initiative is for ease of doing the transaction. It is a voice-based command transaction. Through this, we anticipate the customer engagement and the customer experience will improve, and that will help us in growing our desired low-cost resources. The next one is we have introduced a Smart Wealth AI-powered PFM, that is personal finance management. On the first phase in Q2, we have started with only an analysis of expenditure and the investment analysis it gives.
Ashutosh Choudhury: In the second phase, with an intelligent insight, it will also able to guide the customer what kind of expenditure they can reduce, what kind of investment they are looking for, and accordingly, it will guide. Along with all these digital initiatives, the digital business has grown 18% year-on-year basis. Thank you, sir.
Binod Kumar: Many people will have concern regarding treasury, so upfront I am explaining. Without NSE, I will explain because I consider NSE is a one-time. If I talk of H1 last year, we have earned INR 854 crore. This H2 also, we have earned around INR 794 crore. If I talk of the Q2, then last Q2 last year, INR 152 crore and this year, INR 290 crore. Other than NSE, there is MTM of around INR 11 crore. MTM loss.
Anand Dama: Sir, we will open the floor for Q&A?
Binod Kumar: Yeah, yeah.
Anand Dama: Sure. We will now open the floor for Q&A. Anybody who wishes to ask a question shall raise their hand. I request the participants to limit their question to two per participant. For further questions, please join back to the queue. We will take the first question from Mr. Ashok Ajmera. Sir, please go ahead.
[Analyst 1]: Yeah, thank you for giving the opportunity. Good evening, sir, and congratulations to you for a very good set of numbers. In spite of whatever is happening in the markets and whatever is going on globally, your performance is excellent. I think you are the third public sector bank having declared the result. So expediently, I think this time all the banks are, maybe I do not know, the reason may be the coming Diwali or maybe something happening there at FMO. Every bank is rushing up declaring the results, and your results are also one of the best set of results which are there so far. Sir, a few things like the provisions for the standard assets have, I think, gone up from INR 733 crore to INR 1,882 crore. But for this extra provisioning, the profitability would have been much higher.
[Analyst 1]: I think you have taken the benefit of that MTM profit of the NSE unlisted. Can you explain that this is because the ECL provisioning or some extra provisioning which you wanted to do? In the income and the profits, there are certain items which are, one is that miscellaneous income has gone up to INR 468 crore in this quarter and again INR 157 crore in the last quarter. If you can throw some light on that. I have a couple of other questions and some observations also. If you can answer these now and then I will take up the further questions.
Binod Kumar: Yeah. So provision very rightly, basically INR 1,500 crore we have made for ECL. Last quarter, we have made INR 1,000 crore. Now we have made INR 1,500 crore. So ECL, we have total we have made INR 2,500 crore. We are expecting total impact of INR 3,500 crore. Because of that, I think since we have some cushion, why not to make it when time is good.
[Analyst 1]: Yeah.
Binod Kumar: Other income, that is basically some. If you see last September also it was good around INR 500 crore something. June it was less. Again, it is INR 400 crore. Income tax refund has come and interest on that. INR 271 crore and interest on that.
[Analyst 1]: Okay. So INR 271 crore is the interest on the income tax refund that is related to this income.
Binod Kumar: Yes.
[Analyst 1]: Which may not be a continuous feature in the next quarters actually.
Binod Kumar: Yes.
[Analyst 1]: Yes, sir. On the treasury side, treasury front also comparatively. Of course, there is a pressure because of the yield hardening with every bank with the treasury and you have comparatively performed better than so far other banks. Going forward, we will have to depend only on this yield movement and the hardening of the yield even in the US. A little bit softening is there yesterday and today. Going forward, what do you see, sir? Where do you see the income coming from the treasury? Maybe from the trading opportunities or arbitrage opportunities, if it is there at all. How do you see the treasury income unfolding in the coming quarters?
Binod Kumar: Yeah. See, only one thing I will say in this week I have also told. Treasury, since we have not earned very handsome and that was part of a strategy, very handsome income last year also. Of course, treasury income going forward will be muted. I do not see very high profit from treasury, but impact in my case will not be very severe because we have still not booked in very good yielding security, so impact will not be much. Only one thing, we were also earning some good income in Forex, so let us see how that pans out. Some guidelines has recently come from RBI, how that pans out that is to be seen. Treasury overall, since I have seen overall, I have not accounted for very high profit from treasury, so that is not going to impact my numbers.
[Analyst 1]: Okay. Sir, now we have grown well on the deposit front also. Even in this quarter also the growth is 3.5% almost and matching your credit and giving health to the credit. Now with this FCNR window, all those routes are closed and where we got a lot of good dollar deposits. Going forward, do you see the pace of deposit at the same rate? Whether the credit growth, which is 5.5% in this quarter, will match in the remaining 2 quarters also and we will revise our targets for both the deposit and credit both going forward with this. Another coupled with this is, sorry for this interruption. This MCLR, you said is 43.19% MCLR linked credit.
[Analyst 1]: The benefit on the remaining loan book, the benefit must have started immediately with this increase in the rate of 0.25, I mean 25 basis point. As far as the increase in the deposit rates are concerned, what do we plan? What I understand is that deposit rates which are already going on are not going to increase even if we increase the deposit and interest on the deposit even if we increase it will take some time, there will be lag period. You said the overall difference in the NIM will be about 6 to 7 basis point NIM will increase from this rate hike, rate increase.
Binod Kumar: Yeah.
[Analyst 1]: Both the questions.
Binod Kumar: Yeah. Let me. Growth side deposit I have already told whatever FCNR we got we have managed it very well. Bulk we have said it around INR 10,000 crore. Retail also we got little slow. Overall, if you see my deposit growth it was not contributed much by FCNR. Last quarter also my deposit growth was around 12%. 12% deposit growth I am expecting that I will be able to maintain. Advances growth is 16.39%. It has come primarily on account of the loan being taken against the FCNR deposit which may not be in the next quarter. Having said that, I am expecting that 14%, 15% growth in advances we will achieve. It will not go down substantially and I am comfortable with 14%, 15%. I am comfortable with that.
Binod Kumar: Regarding MCLRs, of course, very next step from the repo rate increase on the external linked benchmark it has started accruing. Rightly told, NIM I think NIM will increase by 6, 7 basis point in this quarter. Going forward as and when repo rate unfolds, we will see.
[Analyst 1]: Our corporate book also is doing well. What is the status there of the sanctioned pipeline and the projects which are still under sanction? Some idea about that. Are we going to take the help of the growth of business in the corporate more as there is a saturation now in the RAM? Everybody is changing that. What is the strategy towards increasing our loan book through the corporate book?
Binod Kumar: Corporate, I will say growth of 10%, 12% I am targeting in corporate. Earlier, you see, basically corporate is also a function of capacity building. Earlier, if you see my growth in corporate is 1% to 2%. I have taken various initiatives. I started intensive training for credit.
[Analyst 1]: Yes
Binod Kumar: Because of these things, now people are gradually on capacity building happening, and I am expecting that corporate I will grow in lower double digits. Because, see, risk is also built up in the good time only. So that I also have to be mindful that in enthusiasm we should not start building up risk in the book.
[Analyst 1]: Good, sir. Point well taken, sir. Thank you very much for giving this opportunity. If time permits, I will come back again. All the best to you for the remaining part of the year.
Binod Kumar: Thank you.
[Analyst 1]: Thank you.
Binod Kumar: Thank you, Amera ji.
[Analyst 1]: Thank you.
Anand Dama: For the next question, I request Jayant Kharote to ask the question.
Jayant Kharote: Thanks, Anand. Congratulations on the good set of numbers, sir. First, if you could, maybe I missed this FCNR numbers, if you could clarify how much did you raise total? How much was on your own book, the leverage given? And the status as of 30 September, if you utilized this liquidity completely or you have some still remaining money.
Binod Kumar: See, still I am in borrowing side. You can say I don't have any surplus liquidity. We raised FCNR of $2.3 billion. That makes it around INR 21,000 crore. So INR 10,000 crore bulk has gone down by around from 1.62 to 1.52. Normally my retail term deposit growth used to be in the range of 10 to 11,000, which this quarter we have targeted around 5 to 6,000. So 5,000, 6,000 there, so remaining 5,000 we have utilized. So there is no surplus liquidity on account of FCNR with us.
Jayant Kharote: So if I'm right, you raised 21,000, of which you paid off 15. I mean, you didn't renew 15 of your bulk and another five, six in the retail side that you did not.
Binod Kumar: Yeah, utilized already. Yes.
Jayant Kharote: On the asset side, sir, you have how much self-leverage on this book?
Binod Kumar: Against a deposit of INR 21,000 crore, I mean $2.3 billion, you can say roughly around $2 billion will be the loan book. There we have preferred loan against the FCNR. People are taking loan up to 90%, 95%, 96%.
Jayant Kharote: Okay. This is what you meant by the rejig in the international book, right? You do not have non-anything.
Binod Kumar: Yes.
Jayant Kharote: Understood. Looking into the next quarter, some of this international book growing that should weigh on our NIMs and of course the benefit from the rate hike. How should we think about the yields for the next quarter? An ancillary question to that is, we see CD market again hardening in the last 1 or 2 weeks. I do not think people are waiting for the quarter to end before starting to raise. How do we see that wholesale market? I just wanted to understand the NIM construct for this quarter.
Binod Kumar: NIM, I will be very cautious in raising bulk also. Maybe if need be, we will go for other resources like we have taken approval for up to INR 5,000 crore infrastructure bond. We may go for that. We are also exploring refinance opportunity. If I get at good rate better than CD rate, better than bulk rate, I may go for that. We are exploring various opportunities. Otherwise also in bulk, I remain very cautious. That is why if you see I am not chasing growth. 12% to 13% growth is okay. I am okay with that. NIM, I expect that overall, particularly if you ask for this quarter, I think there should be some expansion of around 5 to 6 basis points. Because the deposit will reprice at subsequent route. Bulk already we have accounted for some. Ultimately, we will not get anything less than 7.20.
Jayant Kharote: Yes. When you say expansion, you have adjusted for the self-leverage on the book as well as some tightening on the bulk and the rate hiking.
Binod Kumar: Yeah
Jayant Kharote: All three put together, you still expect expansion in the Q3.
Binod Kumar: Yeah.
Jayant Kharote: And sir, second question is on the ECL. I think you have already disclosed how much is the one-time impact, and you have showed a provision. But on the recurring side, the steady state impact. In the last call you had said the range of 12 to 15 basis. One of the banks has reported saying the hardening of yield has an impact as well. So would you like to revise your estimate upwards or downwards? I mean, is that number still holding up? The recurring-
Binod Kumar: Hardening-
Jayant Kharote: I am not talking about the one-time impact. I am talking about the steady state recurring impact on credit costs for ECL.
Binod Kumar: Hardening of yield, how it is going to impact?
Jayant Kharote: So maybe we understood it wrong. You can help us.
Binod Kumar: I mean, I am just trying to understand how it is going to because see, this is function of ECL, is function of default and loss given default. If interest rates are hardening, then are they expecting a higher default rate? I do not know. But as per my calculation, I am not revising that number. Reason being, I expect the default rate will be under control. Because that is reflective of the SMA book. My SMA book, as I told, it has come down from 7.35% to 4.19% and more than INR 25 crore also hardly anything. Smaller accounts, we are already seeing a higher elevated default rate, which will continue. Maybe it is a little bit here or there. Not expecting any increase in default. As a consequence, going forward, as I said, I am maintaining that 10% to 15%.
Jayant Kharote: 10% to 15%. And sir, how do you think you manage that in the RWA construct? Do you want to pass it on in pricing or how do you see that play out? Because some banks are impacted, some banks are not. Unfair to say everybody passes on uniformly.
Binod Kumar: I do not think people will be able to pass on. Very clearly, I am saying. Because people are not maintaining now 6%, still they are giving rate on a few of the big loans, they are still giving 6%. Passing on will be very difficult. One cannot say because one year even I will wait and watch how things pan out. Because it is a new concept, it will take one and a half year to 2 year in stabilization. Model will be challenged.
Jayant Kharote: Yeah.
Binod Kumar: A lot of discussion will happen. Maybe the regulator may not buy in my assumptions. So one year it may take in stabilization. Thereafter, as you see, every quarter, we are making some additional provision. So I think that will be compensating that 10 to 15 basis point.
Jayant Kharote: Understood. Sir, one last question. For the LGD assumption for ECL, how many years back have you gone on your book?
Binod Kumar: 5 years.
Jayant Kharote: Across products, it is a 5-year window.
Binod Kumar: Yeah, 5 years.
Jayant Kharote: Great. Thanks, sir, and congrats again for a good quarter.
Binod Kumar: Thank you, Jayant.
Anand Dama: We will take the next question from the line of Mahrukh. Mahrukh, please go ahead.
[Analyst 2]: Hello, sir. Congratulations.
Binod Kumar: Yes, Mahrukh.
[Analyst 2]: Congratulations, sir.
Binod Kumar: Thank you.
[Analyst 2]: Sir, I had a few questions. Firstly, given that there has been aggressive lending in MSME, even agri and retail, do you see any points of stress?
Binod Kumar: Not reflecting so far. Very candidly, I am saying not reflecting so far. All of a sudden, something comes then I cannot say. But as of now, not.
[Analyst 2]: Okay. Sir, what are your disbursements under ECLGS?
Binod Kumar: Disbursement, I could.
[Analyst 2]: ECLGS, how much have you disbursed so far?
Binod Kumar: ECLGS. Okay, ECLGS. ECLGS already happened. How much, Sujay?
[Company Representative] (Indian Bank): It was around INR 5,000 crores. The release, 7,000 sanction was there.
Binod Kumar: Yeah. 8,000 sanction, 7,000 disbursement happened already in 31,000 accounts.
[Analyst 2]: Okay. Do you see the scheme coming back given drought? How will the banking sector face the drought now?
Binod Kumar: Drought, ECLGS will not come for that. Drought will actually, then there will be postponement of the repayment. But fortunately, in the state where drought has been declared, my exposure is very minimum, not even in thousands.
[Analyst 2]: Got it, sir.
Binod Kumar: In agri book, not even in thousands.
[Analyst 2]: Okay, sir. Sir, do you have any comments on banking sector consolidation? Off and on reports keep coming on M&A in banks. Any views, any thoughts you would like to share?
Binod Kumar: I also know the same thing which I read from the newspaper or media. I have no additional information.
[Analyst 2]: Okay, sir. Thank you. Thanks.
Binod Kumar: Okay, Mahrukh.
Anand Dama: We will take the next question from the line of [Jai].
[Analyst 3]: Yeah. Hi, good evening.
Binod Kumar: Good evening.
[Analyst 3]: Good evening, sir. First question on SMA book, sir. Given this INR 29,700 crore.
Binod Kumar: [Jai], there is echo. We are not able to hear you clearly.
[Analyst 3]: Okay. Is it better now, sir?
Binod Kumar: Yes.
[Analyst 3]: Okay. Thank you, sir. I was talking about if you can give this SMA 0, 1, plus 2 figure for all inclusive book, which is like INR 29,700 crore. The amount separately, sir, 0, 1, 2.
Binod Kumar: SMA 0 INR 15,683, SMA 1 INR 7,222, and SMA 2 INR 6,843.
[Analyst 3]: Okay. That means that SMA 1 and 2, they have been very unchanged, right? Actually, they have improved slightly only versus last quarter.
Binod Kumar: Slightly only, yes.
[Analyst 3]: Okay.
Binod Kumar: Yes, slightly only it has improved.
[Analyst 3]: Right. Sir, you keep continuing to hold 10% provision on both SMA 1 and SMA 2, right?
Binod Kumar: Yes.
[Analyst 3]: Sure. Sir, I think previous participant also asked. Other banks, what they have done is they have taken. I think initially you had also factored in the HTM impact on the HTM MTM. I think now the other bank has now realized that they have to factor in the HTM also. So your INR 3,500 crore impact, is it only loan loss pertaining to advances or that includes some HTM provision also that is outside this?
Binod Kumar: No, it is only credit book.
[Analyst 3]: Right.
Binod Kumar: HTM will be over and above that. So HTM, let us see, because actually it is not easy at all. Valuation guidelines has come. They have said that when the transition from 1 April you have to do one time MTM of your HTM book.
[Analyst 3]: Right.
Binod Kumar: So we will see after yield already 7.41 is, if that happens then every bank will have huge impact on that.
[Analyst 3]: Right. Because most of. Please continue, sir.
Binod Kumar: So, because every bank has HTM book of around 60%, 70%, 73%, 74%. There will be huge impact. So guidelines stands. Let us see.
[Analyst 3]: Right. Sir, this will be applicable to entire GSEC portfolio, right? On HTM and GSEC.
Binod Kumar: Yes.
[Analyst 3]: Right. So then earlier whenever there was such sharp hike, the RBI had even started this AFS reserve. Which eventually they said that you need not provide it further. So can they come up with some HTM reserve in the meanwhile, because we still have six months so that it will not be one fine day you have to provide for the entire HTM or do you think even that can be watered down considering the yield situation?
Binod Kumar: Actually, first of all, banks should take up with RBI. Only then RBI will come out. Let us see. I will talk with few banks then we will see.
[Analyst 3]: Okay, all right. And sir, on your gold loan, if you can provide, sir, you have given the jewel loan retail, but what is the agri gold and how has been the growth there? Agri gold loan book.
Binod Kumar: Agri gold loan book is around 22% growth is there.
[Analyst 3]: That is YoY.
Binod Kumar: YoY.
[Analyst 3]: Absolute amount, sir, if you have?
Binod Kumar: It is INR 1.16 lakh crore.
[Analyst 3]: So sir, that means the *QoQ growth is only flattish, right? There is not much growth on QoQ basis.
Binod Kumar: In?
[Analyst 3]: In agri gold, sir.
Binod Kumar: No, it is there. Oh, okay. 11%. INR 1.04 lakh crore to INR 1.16 lakh crore, 11% growth is there because of the tightening of the guidelines. First 2 months, up to. If you see there is hardly any growth from March to June. It was flat.
[Analyst 3]: Right.
Binod Kumar: INR 1.01 lakh crore to INR 1.04 lakh crore only.
[Analyst 3]: Right. Okay, now it is INR 1.16 lakh crore.
Binod Kumar: Yes, thereafter people have acclimatized and now they are working on it.
[Analyst 3]: Right. Okay. And sir, if you have the number for AFS reserves change. The MTM impact is very small in the P&L which is INR 11 crore. But what has been the change in AFS reserves, sir?
Binod Kumar: June it was +503, now it is -123.
[Analyst 3]: +503 and now -123.
Binod Kumar: -123. Yeah. So around 600.
[Analyst 3]: Right. And last question, sir. This borrowing, I believe the borrowings have increased because of you may have raised MTN bonds overseas. So how long do they remain in the book? Is there any other thing that you can offload and or will this borrowing remain the way it is at least for the next 3, 5 years? Or how to look at this borrowing jump?
Binod Kumar: No, sir. Borrowing cost increase on account of 2 counts. One is this, not MTN, we have not gone for MTN. MTN very costly. I have raised only 400 million OFCD.
[Analyst 3]: Okay.
Binod Kumar: So that cost is there. Plus if you see, borrowing side, I remain normally on the borrowing side from repo and TREPS, et cetera. So that has also gone up. Because of that it has gone up.
[Analyst 3]: So this borrowing is not a medium-term borrowing, right? It can come down. Only OFCD is medium-term but rest can decline.
Binod Kumar: No, interest I don't think it will decline because see, it is good source of funding INR 10, 11,000 crore, good sales, good rate we are getting. Depending on the situation we keep on, at times it is INR 2,000, at times INR 5,000, at times INR 7,000. So depending on the requirement, that helps.
[Analyst 3]: Right. Okay, sir. And sir, if you have the number for LCR, that will be all from my side.
Binod Kumar: LCR number you have? 116.
[Analyst 3]: Sir, ideally the LCR should have gone up, right?
Anand Dama: Back in the queue.
[Analyst 3]: You have. Sure. Thank you.
Anand Dama: We will take the next question from the line of [Sameer Bhise].
[Analyst 4]: Hi, sir. Thank you for the opportunity, and congrats on the good quarter. Can you just clarify on the update with respect to CET1 and the UCC impact which is there on CET1 and the Tier 2 capital which you have put out? Just wanted to understand some details and how does it impact the bank.
Binod Kumar: No. See, it is one-time impact. Actually, we are proactively making some provision for ECL, et cetera. Part of that we have taken as part of Tier 2, which in the eyes of regulator, they say that since we have identified for a specific sector, so it is not a free reserve. That is why they say that it should not form part of Tier 1, sorry Tier 2. So that will be one time. Henceforth, we will not take it, even if we are making something.
Binod Kumar: This unconditionally, there will be. It is also, you can say one time. Going forward, it will continue. Actually, in document, we have taken that limit can be canceled at any point of time. Because of that, on that portion, un-avail portion, CCF was not being applied. They say that you display that you can cancel limit at any point of time. There is interpretation issue.[i
[Analyst 4]: You have to take the entire credit RWA, including whatever was the unutilized portion as well.
Binod Kumar: Yeah. Unutilized portion also.
[Analyst 4]: Okay. Sir, does this any change, any way impact our, say, capital planning or any incremental with respect to business? Does it have any impact?
Binod Kumar: No. See, already we are 16.21, and by March end, the profit will be flowed back. So again, it will reach around 17 and a half. So there is no.*
[Analyst 4]: That is a very comfortable position.
Binod Kumar: But last year, my Tier 1 bond retired INR 2,000 crore, Tier 2 retired INR 3,000 crore, we have not raised. This again in January, Tier 2 is INR 1,000 is retiring. Maybe we will go for INR 1,000 to INR 2,000 Tier 2 bond, depending on the market condition.
[Analyst 4]: Okay. Sure, sir. Thank you. All the best.
Binod Kumar: Thank you. Thank you, Sameer.
Anand Dama: We will take the next question from the line of Pritesh Pang. Pritesh, your line has been unmuted. I guess due to some technicality, Pritesh is not able to. We will take the next question from line of Ashlesh.
[Analyst 5]: Hi, sir. Good evening and congratulations. Sir, first question is on the gold loan portfolio. If you can share what is the yield on this portfolio in the September quarter, and what was it in the June quarter?
Binod Kumar: Still in max. It is 8.85%. It is one year MCLR we are charging. Both June also, now also. 8.85% in June also, now also.
[Analyst 5]: Understood, sir. Sir, secondly, are you seeing any changes in the competitive intensity now across segments, let us say corporate segment, retail housing, and so on?
Binod Kumar: Already very high all segments. Retail housing loan, people are ready to give less than 7%. What do you expect more than this? Many banks are giving less than 7% housing loan. Competition is already there. My comfort is I am not very aggressively pursuing growth. That is my comfort. Normally, it is coming 16%, 17%. I am okay with that. I am not eyeing that every 20%, 25%, because then you change, then ultimately your bottom line start impacting adversely. Underwriting quality overall starts impacting. Let me share with you one number. My total 92% book CIBIL score is more than 750. We are not compromising on the quality in any way. Competition is already there, competition will be there.
[Analyst 5]: Understood, sir. Sir, just the 92% pertains to housing or the entire retail book?
Binod Kumar: Entire retail book.
[Analyst 5]: Understood. Sir, if you can share in the housing portfolio, where are you originating that book from? Let's say if you are sourcing INR 100 of loans in a quarter, what proportion is coming from your own branches, what proportion is coming from co-lending, what proportion is coming from DSA and so on?
Binod Kumar: Co-lending, zero. Co-lending, we are not doing, neither we are taking any assignment of the pool. You can say 40% will be DSA. Approximately 40% will be DSA. In retail, it is higher. Housing loan, it is around 40% and 60% through the branches.
[Analyst 5]: Understood. Sir, and lastly, if you look at the drawdown of your limits in the corporate and MSME portfolios since February, March onwards, would you have a sense of what proportion of that drawdown was because of the Middle East crisis?
Binod Kumar: No. My rather Middle East crisis, exact I cannot say, but I am just giving you sense. My WCDL and that book is almost stagnant. Rather, my WCDL book has come down by INR 1,000 to 2,000 crore. And even OCC, what we call CC book, there also it has come down by INR 1 to 2000 crore.
[Company Representative] (Indian Bank): INR 10,000 crore is undrawn.
Binod Kumar: MSME also INR 10,000 crore is undrawn. I do not see, because of that it has gone up. But exact number I do not have. This I am interpreting through the broad numbers.
[Analyst 5]: Understood. Sir, this decline you said is over what period?
Binod Kumar: Last two, three quarters.
[Analyst 5]: Okay, understood.
Binod Kumar: It is not going up.
[Analyst 5]: Got it, sir. Understood. Thank you, sir, and good luck.
Binod Kumar: Thank you, Ashlesh.
Anand Dama: We will take the question from the line of Aman.
[Analyst 6]: [inaudible]
Anand Dama: Aman.
[Analyst 6]: Hi, sir. Sir, as you highlighted, the LCR for the quarter is 1.6. I wanted to understand with the FCNR deposits coming in, the LCR should have ideally gone up because there is a lot of stable retail deposit in this quarter that will be there. If you can explain that.
Binod Kumar: FCNR, but I was also expecting same thing. But because of borrowing, this LCR basically is being impacted. Borrowing is the reason. Because of borrowing LCR. And less HQLA also we are not purchasing because LCR is comfortable. I was also expecting that LCR will go up, but then for that same level of HQLA, we will have to purchase. Only then it will go up.
[Analyst 6]: Right. Also, sir, have you seen an improvement in the corporate yields in the Q2 as compared to last two quarters?
Binod Kumar: Corporate yield, I have number? I expect I don't have, but overall yield has increased by 8 basis points. Corporate yield, what is position? Tell me.
[Company Representative] (Indian Bank): Corporate 8.49, sir.
Binod Kumar: From June. What was June?
[Company Representative] (Indian Bank): From June it was, sir.
Binod Kumar: 8.36 to 8.49.
[Analyst 6]: Sure, sir. Thank you so much.
Anand Dama: We will take that as the last question. With this, we come to the end of Indian Bank's post-result conference call of Q2 FY 2027. I now request the management to give their closing remarks.
Binod Kumar: Every point is already discussed. Only thing, we are trying to grow in a very balanced way, keeping track of the growth and bottom line. We remain cautious for the NIM. We remain cautious for the growth. Based on that, we revise our strategy. Neither pursuing very aggressive growth nor very subdued growth, which will be, I do not know, 1, 2 basis, 100, 200 basis point here or there with the industry. We will not be off mark there also, that we are not doing at all. A few initiatives we have taken, like salary account, I just highlight 2, 3 things on CASA front. This year so far, we have added a salary account of around 2.5 lakhs, against a total addition of 3 lakh last year.
Binod Kumar: Balance in their salary account has gone up as compared to last year or even around INR 1,400 crore balance has gone up. Similarly, FinTech solution wherever we have provided in this quarter itself, we have added around INR 5,000 crores. Various initiatives we have taken on the CASA front in last 2, 3 quarters, and that are yielding good results. Hopefully, we will be able to maintain CASA of around 40%. I was also expecting this quarter also 40%, but because of the FCNR disproportionate increase, it is around 39.5%. Thank you.
Anand Dama: On behalf of Nuvama Wealth Management and the management of Indian Bank, I thank all the participants for joining. Happy evening and have a good day.
Binod Kumar: Thank you. Thank you all.
Anand Dama: Thank you, sir.
[Analyst 6]: Thank you.
