Bank of Baroda Ltd (NSE: BANKBARODA) Q3 2026 Earnings Call dated Jan. 30, 2026
Corporate Participants:
Debadatta Chand — Managing Director & Chief Executive Officer
I V L Sridhar — Chief Financial Officer
Lalit Tyagi — Executive Director
Lal Singh — Executive Director
Beena Vaheed — Executive Director
Analysts:
Mahrukh Adajania — Analyst
Nitin Agrawal — Analyst
Kunal Shah — Analyst
Abhishek M — Analyst
Piran Engineer — Analyst
Ankit Bihani — Analyst
Rikin Shah — Analyst
Presentation:
operator
Good evening everyone and welcome to the analyst meet for bank of Baroda’s quarterly results for the quarter ended 31st December 2025. Thank you all for joining us. We have with us our MD and CEO Dr. Devadut Chang. And he’s joined by the Bank’s Executive directors and our cfo. We will start with a short presentation followed by opening remarks by Dr. Chand and then we will move on to the Q and A session. Chancellor, over to you.
Debadatta Chand — Managing Director & Chief Executive Officer
Thanks Firoja. And again good evening to all my media friends who are present here on the call. And just to introduce the management team with me I’m D. Chan MDN CEO. With me Mr. Lalith Yagi the executive directors. He looks after the CNIC, the Treasury and the international banking with him Mr. Sanjay Mudalayar is the executive director. He looks after it, the retail asset and couple of other platform function. Then we have Mr. Lal Singh, Executive Director. He looks up for the HR recovery and the MSME and Agri vertical. And we have Madam Bina White his Executive director looks after control compliance platform function along with the retail liability franchise of the bank.
And we have the CFO Mr. IV Sridhar. He has been there for a couple of quarters now. So Mr. Siddha over to you for the presentation.
I V L Sridhar — Chief Financial Officer
Thank you sir. Good evening everyone. My privilege to present before you the financial highlights of bank of Baroda. For the quarter and nine months ended 31 December 2025. Our global advances have grown by 14.7% YoY with the domestic advances growing by 13.6% and international by 19.3%. Within the advances book the bank has continued to focus on RAM advances. Our organic retail book grew by 17.4%, agriculture by 19% and organic MSME by 16.4%. Corporate loans have grown by 8.1% y o y Within the retail segment we have seen small growth across the portfolio with education loan growing by 12.8%.
Personal loan by 12%. Home loan by 16%. Auto loan by 17.4% and mortgages by 21%. In terms of deposits growth our total deposits have grown by 10.3% with international deposits growing by 5.7% and domestic deposits by 11.1%. The domestic CASA deposits have grown by 8.6% and term deposits have registered a growth of 12.7% by over. As of 31st December 2025, the bank’s domestic credit deposit ratio stands at 83.89% and CASA ratio stands at 38.45%. With regard to quarterly profitability metrics, our operating profit for the quarter stands at Rupees 7377 crore. Bank’s net profit for Q3 stands at Rupees 5055 crore registering a growth of 4.5%.
YoYo return on assets remain consistently above 1% at 1.09% for the as of 31st December 25th. Return on equity stands at 15.59% for the quarter. For nine months. FY 2026 our operating profit stands at 23,190 crore. Our net profit for nine months FY 2026 stands at 14,405 crore. Return on assets remain above 1% at 1.05% in nine months. FY 2026 return on equity stands at 14.81% for the nine months ended December 2026. With regard to our key ratios, our yield on advances stands at 7.56% for the quarter and 7.81% for the nine months. Bank’s prudent liabilities management has led to a sequential decline.
The cost of deposits for the quarter which stands at 4.75% as against 4.91% for the previous quarter. With regard to our net interest margin it stands at 22.78% for the quarter and 2.88% for the nine months. Now we come to our asset quality which continues to remain robust. Our cross NPA ratio has improved by 39 bips by and stands at 2.04%. Net NP ratio is below 1% at 0.57%, an improvement of 2 bips by. Our provision coverage ratio including TW is comfortable at 92.73%. Our slippage ratio for Q3FY2 2026 has reduced by 4 bips y and stands at 0.86%.
Credit cost remains low and stands at a level of 0.17% for the third quarter of FY 2026. Coming to our SMA and collection efficiency, our clinic SMA 1 and 2 as a percentage of standard advances stands at 0.36% as of December 25th. Our collection efficiency excluding agriculture remains robust at 98.6%. In terms of our capital adequacy, our capital position continues to be strong with CET1 at 12.45% Tire1 at 13.10% and overall CR at 15.29%. Our LCR remains healthy at approximately 116% as of December 25th. Adjusted for the profit of 9 months FY 2026 capital adequacy would have been 16.47%.
Now I request MD sir to thank.
Debadatta Chand — Managing Director & Chief Executive Officer
You Mr. Siddharth once again all my analyst friends. Good evening to each one of you. Let me make some quick couple of qualitative points here. The financial this quarter again talks about the same business model that we have been talking about. Which is again to strengthen the fundamental core and be consistent and stable outlook. So the current quarter also the number shows that the bank pursue this objective of being a fundamentally strong or at the same time a sustainable performance. And secondly the profit that numbers that you see for this quarter is purely out of the operation.
We don’t have any one off anywhere in the the other non interest income or anywhere which gives slightly elevated level of profit or profit that you are declaring this quarter the net profit has seen a 4 1/2% jump is purely out of the operational profit. Secondly only the the balance sheet numbers we have seen already were declared the provisional. This is one of the strongest number we have in last eight quarters. The advance is almost reaching 15%. The deposit almost attend the domestic deposit at 11.1. I think we’re one of the strongest. Only two points I will touch here that the RAM is almost at 17 18%.
Corporate has gone into 8%. Now in the full year we are targeting to be at 10%. Similarly on the liability piece our saving growth of 7.6% and CASA Pro growth of. Sorry CASA growth of 8.6%. I think one of the best in the top quartile in the banking sector. So continue to focus on the low cost deposit. At the same time build asset book again consistent in terms of our objective of a diversified book. I mean creating a more stable outlook with regard to growth of asset book. On the. On the. On the main important part that would have seen is that the cost of deposit the global cost of deposit at 4.75 and the.
The. I mean the domestic at 4.99. That means on both the count last quarter we pierced the. The global deposit cost below 5. And this quarter we have both domestic and also global below 5. And in case you look at the market threshold this is one of the top quartile good number in terms of cost of deposit rather the pristine level level to have. And that’s something important liability management that we carry in terms of not to depend on heavily on the bulk deposit rather focus on the low cost deposit is giving us positive outcome. At the same time the margin that you see for the nine months is a 2.88.
We had given a guidance of 2.85 to 3 and we are right on the band of 2.88 whereas the Q3 is 2.79. But the overall guidance for the full year continued to be at the 2.85 to 3%. On the asset quality again the numbers were very well in terms of the on the benign asset cycle we have not only for the bank but the entire industry the GNP of 2.04 net NP of 0.57 slippage cost of 0.86 and the credit cost at 0.0.17 with the collection efficiency almost the same level at 99.6 excluding agree and the CMA I mean the.
The. The. The SMA 1 and 2 book of the prelate data has improved from 0.39 to 0.36. I think the bank is riding on an excellent asset quality as the end of the last quarter that is the Q3. A couple of fundamental things I think that’s important for you to understand that in terms of. If I compare December 25th over December 23rd the book value of the bank has gone up from almost from 180 to 250. Let’s say accretion of almost like 8085 rupees. That is significant. Secondly, the bank has been persistently putting a stable outlook like the ROA is almost now 14 consecutive quarters were posting continuously more than one ROA in terms of profit this is the 12th quarter we are posting more than 4000 crore of net profit out of the last six quarter.
This is the third quarter we are posting more than 5000 quote of net profit. So the point that I am driving is a constance a consistency in terms of the income earning potential of the portfolio and the outcomes are very favorable in terms of a consistency and also at an elevated level of profit that we are operated A couple of things that possibly just to take a note of that we got the best bank award by the bankers UK some time back that we put that on the the public domain also and that’s a strong validation of the bank’s journey which is consistent with growth which is sustainable and also transformative at the same time.
On the Technology IB Technology award which was announced recently there are seven themes on that and bank of Order could win four out of seven as a winner and the fifth one is also a special mention accord the special mention about so it’s a huge recognition to the the banks the digital robustness and on the bank’s architecture in terms of creating a customer experience which is definitely better and we’ll keep on driving more on this but then I think the the awards of 4 winner is a huge recognition to entire Berodian who works on transformation technology and deriving better customer service with this I open the floor for question answer over to you.
Questions and Answers:
operator
Thank you sir. We will now open it up for Q and A. If you have a question please raise your hand or you can also type your question in the Q and A box. Would request you to please limit your questions to two for now and if you have time we’ll come back to you. The first question is from Maruk. Maruk Ajanya.
Mahrukh Adajania
Yes sir. Good evening sir. So I had a couple of questions firstly so I, I, I, I, I’ll first list out my questions. Firstly in terms of NII growth if you could say if you could help us distinguish between total name and code name because last time you had kind of given that cut, right that 2.8 to 2.96 is the total NIM and then 2.76 or something is the code name.
So what is the comparable figure for code nim this quarter that would help and you know if there’s any recovery income on NPLs which is higher than last quarter in the NII and secondly in terms of written off recoveries they were they doubled qoq so if you could give the split between retail and corporate and if there was anything lumpy and my third question really sir is on the NII growth, right so of course there’s a bit of lower tax refunds and you know there’s a distinction between core and total nim but our loan growth is exceptionally high which is a big positive whereas the NII growth is in low single digits.
So would we be better off if we consolidated growth and improve margins or that’s not an option.
Debadatta Chand
Okay so Maruk typically your question around the ni, the name, the phone name. Look as I said that as far as NI is concerned 11,800 crore NIEs would have seen because you’re comparing with banks is one of the strong NI number on absolute terms. So that is very clear on that. So our NI is 11,800 crore and the NI is purely out of the core operation, nothing one up there. So that’s a pure operation NI that is 11,800 crore coming to your the NI growth has been slightly all. I mean stagnant or maybe at the same but the reason being the interest expenses and the interest income although there’s a strong asset book almost at 15% but there is a repricing happening on couple of books on the asset side also continue to do that.
Similarly on the liability piece although the cost of deposit has been lowest but on the wholesale market or the borrowing market still the cost elevated where you know the 10 year GSX still being high. So in scenario the NI is almost at the elevated level but stagnant in the sense the same level. I don’t have a core name or a separate name. All name is core Absolutely but specific to that in case you are talking about the income tax refund Last time also we had some amount. This time also we have some amount the impact on the number can be something around 5 6bps maximum but everything is cool and that is at 9 months it’s at 2.88 so we had given guidance of 2.88 to 3 and we are on.
On the. On the. On the target. You had one more question Maru, Can I just repeat that?
Mahrukh Adajania
Yes actually I wanted the WTO the recovery in written off has gone up. Yes.
Debadatta Chand
So normally I always say that’s a normalized. I mean it has been. I’ve been telling it for last five six quarter recovery of written off is a normalized 700 to 750 crore. I mean I’m repeating this statement for multiple quarters now last quarter was slightly less but this quarter it has gone into the level of that and look our we have a turbo book of almost 63000 so there will be recovery but the normalized quarter is 7 to 750 crore and this quarter it is slightly 800 plus something so in that way there is no one up there in it’s a normalized recovery order written off.
On a guidance scale we continue to have 7 to 750 crore per quarter so there is no one of you currently in the entire. Whether you talk about other interest income or a non interest income Absolutely book is a lookup Another thing also you need to you complemented on the loan book growth on a loan book of almost 11 lakhs everything our book is entirely organic. The outstanding pool process as in today is only 40,000 crore which is again going down quarter to quarter. So in that way the book is organic. The income out of this book is entirely again purely operational.
So that is what a statement I would make.
Mahrukh Adajania
Okay sir, thank you. Thanks a lot
operator
the next question is from Nitin Agarwal.
Nitin Agrawal
Yeah hi, thanks for the opportunity sir. I have two questions. One is around the LCR and the CD ratio. If I look at LCR ratio has dropped quite sharply in the last two quarters and so how do you think about that? And likewise on the CD ratio which has been like rising with a sort of strong growth that we are reporting. So what are the comfortable numbers that you will want to like guard?
Debadatta Chand
So Nitin, on the. On the LDR or the CD ratio we say perennially we have been operating 80 plus and this quarter the global is 86 and the domestic at 83.
So earlier also we said on the domestic will be compatible on the range of 82 to 84 but global is always something different. So global can impact but overall the global side also it would be something around 86 to 80. It would be the range saying so you rightly talked about the LCR part because the LCR gives comfort. So as long as the LCR is comfortable we should not be very, I mean focus on the LDR. So the LCR, I mean our target is always to operate around 120, right? So last quarter we were 120.
This quarter we are 116. If you look at the book on the investment side we almost sold 28000 crore of investment this quarter precisely to take advantage of the low yield and getting it replaced at a higher, you know the 10 year yield at this point of time. So that will build off actually our comfort range to operate120.116 is also a healthy number. But then I will going to operate at 120 on the LCR. So anything you want to add on the LCR?
Lalit Tyagi
In fact you have said it right that our target range is around 120.
We have been operating around that level and to take advantage of the market yields and also omos the excess SLR has gone down slightly but we will build up as the yield curve is showing some traction.
Nitin Agrawal
And so the other question is around like ecl if you can give some color as to what kind of requirement are you seeing in terms of for the transitioning to the ECL and when we are having already a very strong asset quality our slippages are in control. Credit cost is like making new lows. Why are we not like raising coverage further and making more provisions towards ECL transition? So what is the thought process on that and how many years like basically do you want to cover the journey?
Debadatta Chand
Okay, so let me come to aspect differently as far as credit cost.
I actually. Actually for all the analysts let me give the guidance actually that is important actually I missed this piece. Our great guidance continue to be 11 to 13% with upside which we have done it this quarter and possibly going to do in Q4 deposit is to be 9 to 11% at the same time the RoA above 1% margin guidance is 2.85 to 3% at the same time the slippage is 1 to 1.25% but the credit cost which was below 0.75 we have revised upward in a sense positive to below 0.60 precisely. The credit cost for last 9 or 10 quarters has been at 0.34 this quarter at 0.17.
So considering the. The quality of asset we have I think the PCR part you are referring to I think were adequately provided in terms of the. The. The. The provision coverage you required to build that. Apart from that we have built up a floating provision of almost thousand crore. We. We did that. We’re one of the only bank to do that and we typically said that keeping the ACL in mind then we have done that and going forward also we’ll be mindful in creating further buffer on the ACL. Just to give a data point on the ACL on a quick.
It’s a draft guidelines, nothing final but then we keep on doing performer calculation just to clear on the Kaufman calculation or the impact on the CRA because of the ECL. Because there are two factors here. One is a one time impact on because of the ecl. Another there is a the risk weight Also there is another guidelines where there is a significant write back possible. So the net impact on the ECL CR area which can be spread over five years would be somewhere at 0.6 or 0.7 maximum. That is what as per the guidelines final guidelines will calculate differently.
The incremental provisioning, recurring provisioning year to year because of the ECL is only can elevate the credit cost only by 18bps as in today. So considering my guidance of 0.6 the average of 1010 quarters almost at 0.34. Current quarter at 0.17 I think were adequately questioned over there.
Nitin Agrawal
Right sir. Got it. Thank you so much. These are my questions.
operator
The next question is from Kunal Shah.
Kunal Shah
Yeah, hi. Am I audible?
Debadatta Chand
You are audible. Please go ahead.
Kunal Shah
Yeah, sorry. So once again to touch upon on interest on income tax refund. So you mentioned like 4 to 5 bips of benefit in NIMS of 2.79. So the core NIMS would have been closer to 2.74 or so. So maybe interest on income tax refund would still be like 400, 500 crores even during this quarter.
Debadatta Chand
That’s the routine actually. That’s why last time also I said the tax report happens different amount, different quarter. So accounting it is part of the interest income which has been classified. So there is no core name or other name. Everything is core for that. But if you talk about the element policy then yes there is a impact because of that. And it can be in the range of 270 to 274 kind of a level. But that purely as a calculation. But my name is 2.79. So that’s the code name. Got it, Got it.
Kunal Shah
And secondly with respect to maybe on the ECL side last time you have still created the floating provisions as a prudent measure of almost like say 400 odd crores. We have floating provisions to the tune of thousand odd crores. So is that sufficient? And now there is no further need to create the floating provisions going forward.
Debadatta Chand
So as I said just the earlier question also the impact on the CRR will be 0.7 0.6. I mean 60bps. At the same time the the recurring provision requirement would be 18. So current provision level is adequate almost to that level. Right? Yeah.
Kunal Shah
Yeah. And just maybe on Labor Code any impact during the quarter or. No, not really. Maybe we have been making this auditors.
Debadatta Chand
Also given in their report key. There is no material impact because one of the key impact on the Labor Code is regard to the gratuity to be provided. Right. So our as for our current employment practice or the service call anybody joining the bank, we assume that he stays for five years. So we make adequate provision therein taking him as a five year. I mean he’s continuing for five year. So in that way there is no impact post the level code particularly on the gratuity which can have an impact. So there is no material impact as far as the gratuity the level code is concerned.
There are other codes there in other parts of the code. The bank would be complying with that. Anything further you want to add on the Labor Code?
Lal Singh
There is not much impact as far as the Labor Code is concerned. And these rules are being finalized. So once these are finalized then we see the actual impact. But right now there is a no impact hardly it impacted. It has impact of 8 to 9 crore. Okay. Okay.
Kunal Shah
And on growth you have not revised the guidance. Now you have revised on the credit cost side. But growth we are already like say closer to 10 odd percent year to date from March to December. Then doesn’t it appear that we will easily beat this 11 to 13 advances growth? Or is there a rundown expected on the corporate and that’s the reason we are not revising this guidance?
Debadatta Chand
No, actually there is no rundown here. Actually As I said, 11 to 13 is upside. So this quarter we had 15. So precisely that upside is to exceed 13% at the same time. Look, one thing structurally that we need to be mindful while designing businesses with regard to the. What is happening on the resource side, particularly on the deposit market. So although we have seen significant uptick in terms of deposit, my CASA the saving has been 7.6% which is one of the. I think one of the best in the market. Currently continue to focus on the low cost deposit but not be very over.
I mean over onboard into the wholesale market where the cost is slightly higher. So given the scenario, I’m not relying heavily on the wholesale market then I think the, the advances side, the growth would be somewhere around 15, 14 and a half 15%. So that’s why we revised that 11 to 13 with upside. So that’s the purpose of, I mean exceeding above 13% as of March 2026.
Kunal Shah
Thanks, thanks. Thanks a lot. That’s all from my side.
Debadatta Chand
Yeah.
operator
The next question is from Abhishek M. Okay. Abhishek New unmute yourself. Yeah.
Abhishek M
Hello. Am I audible? Yeah, thank you.
operator
Go ahead.
Abhishek M
Yeah. Hi. So, good evening. So you made an interesting comment. You said that if LCR is adequate then LDR should not matter. So your domestic LDR at 83, 84% as long as you have 116 to 120 LCR this can go up, right? Because even if it goes to 86, 87 it will be fine with you. Or do you have to manage the optics of 83, 84 not going up?
Debadatta Chand
Look, I mean is that right? Actually domestic we want to be in the 82 to 84. I mean the optimal that we are looking at domestic is 84 whereas global can be around 86 to 88 because the global city is always higher than 100%. That’s the market dairy. The, the point here in terms of resource management, if you are referring multiple alternate resources where you can optimize cost then we do not rely on high cost deposit. We have last 10 quarters at least we are telling the bulk deposit actually want to contain that because that’s a volatility.
So we are getting other alternate resources which is in the form of refinancing infra bond a global range of resources. So I think wherever we can optimize cost will go for that. That not necessarily be a deposit so in that way the solvency and the liquidity would be ensured while driving the asset side of the book Saying so on the LCR front which is more important we almost Our target range120 we normally, I mean this quarter it has gone down to 116 because we have sold almost 28,000 crore of investment book just to take advantage of the rate cycle and you know what is the rate cycle we’re going to replenish that because other tenure has been higher now so it’s more of a treasury operation to slightly go down below 120 but we’ll be in a position to recoup that I mean in a quick time in terms of maintaining our target range of 120.
So in terms of the resource profile the bank’s result profile is very strong Somewhere some change in terms of LDR we see because why do want to optimize that? Suppose I get a alternate resources which is cheaper than a. Although continue to focus on the low cost deposit cheaper than the bulk deposit or CD then obviously our tendency to go towards that and that typically not reflected in the deposit so your LDR seems to be slightly at a higher side Otherwise the bank is managing all this parameter I think on a sustainable and stable look and the solvency and the liquidity profile is very very strong for the bank. So anything that is
Abhishek M
absolutely. Yeah, no, no that is I, I take your point. That’s not my question. My question was that Even if this 8384 LDR goes up because you are optimizing for different liabilities and your loan growth is 15, your deposit growth is 10. So anyway it should go up as you go forward it shouldn’t be a problem, right? It shouldn’t become a limiting factor that is all I’m asking It can go up to 85, 86, 87 it’s fine.
Debadatta Chand
In terms of resource profile because you must be tracking many banks in terms of the profile of resources Our book is much more diversified on the resource side also not only on the asset side and again because we have a large operation say look the global LDR if you look at the international operation the CD ratio is more than 100 because many of the same sources of deposit if it is more than one year it is checked as a borrowing rather than a deposit so these are all the sources are quite strong So I don’t think There is any limiting factor for that the bank continue to grow strong and our guidance of growing at let’s say higher than 13% continue to be there without any issue there.
Abhishek M
And second question is on Nim. So from here what levers do you see?
Debadatta Chand
See there are two things we said earlier at the beginning of the year. Saying that in terms of resetting of interest both on the asset liability Q3 and Q4 will be better than the Q1 and Q2. That is one articulation. We had it in Q1 and Q2 but Q3 continued to be because there was a retraction in Q3 which was initially while commenting was not not was in mind. So the asset liability continued to again reset at a different level. Particularly there is a lot of resetting happening on the fine price asset particularly on the corporate loan book.
So a scenario like that and the absolute number of name if you see comparable with the industry it’s absolutely at a very good level, pristine level. In terms of a Q4 exit. Suppose you are referring in the process full year would be to 285 to 3 and exit has to be higher than 285. So it may end up somewhere at 285 or 290. Kind of like that is whatever expectation. Why I’m again hopeful on this. The cost of deposit is now all time low at 4.75 for the global book and which was 4.9 earlier. I mean 993 or 94 earlier.
So the entire book would run at 475 at least for this quarter full quarter. Whereas there is only on the asset side the repricing continue to be at a lower rate because of the asset market there. So net to net I think we’ll be in a position to maintain that 285 to 3 guidance that you are giving for the full year.
Abhishek M
Yes, it just seems like for the 4Q you know there wouldn’t be too much P pricing left on the deposit side. And on the yield side you’re continuing to grow. You know, NBFCs, power, AAA corporates, housing, all the lower yielding sectors where yields are low. So just on an incremental basis it seems like margins will come down rather than go up. So what am I getting wrong here?
Debadatta Chand
No, there are two things like as you said the. The.
Abhishek M
Even your slippages are really low. So the interest reversal benefit is also not going to be much incrementally. So whichever lever I look at. I. Can’T really find anyone which shows margin.
Debadatta Chand
Actually the pre deposit rate was the 650 which has been reduced to 625 during the quarter in Q3 on the retail side right so the repricing that you are talking about almost done the impact of the repricing would not have been felt full quarter in Q3 which would be felt full quarter in Q4 so that’s the upside there in the book in that way so the repricing due the only challenge here is with regard to the repricing due on the bulk deposit actually that market is slightly still tight so that can put pressure so there are ups and downs therein See on the RLLR side external benchmark these are already done the corporate which was getting fine price now because the tenure has been elevated I mean things are looking different now the repricing which used to happen at a lower rate now going to happen at a higher rate because the bond prices have gone up, the yields have gone up so there are both positives and negative and for a bank like our size I mean 6, 7bps optimizing on the the name is not a issue so we’ll be in a full year the same right so 285 to 3 Mr.
Anything you want to add on the replacing piece?
Lalit Tyagi
Yeah so sir in fact till November there is a data from RBI also which says that on the fresh deposits the transmission of the previous cuts before the December cut has happened but on the stock it is still happening so partly I am supporting your argument amd sir that still stock is yet to be repriced so probably there is some benefit which is still to accrue on the deposit side and on the advances side particularly on the corporates if no further cut is there so largely whatever demand they have made largely it has been met till last quarter so now looking to the elevated capital market rates probably corporates are also adjusting to the new reality of slightly higher pricing as we feel yeah.
Right.
Abhishek M
Okay thank you, thank you and all. The best
Piran Engineer
Congratulations on the quarter. Just firstly one clarification on one of your previous comments when you mentioned that incremental credit cost will be 18 bips due to eclipse Are you just referring to for the first five years of transition that is the 18 bips or the sustainable steady state actually there are.
Debadatta Chand
Two impact of the ACL one is impact is because of the one time impact we are looking at almost actually we are knitting it off There is a ACL impact and there is a I mean there is a kind of a reversal or pullback happening because of the risk weight getting changed as Per the draft guidelines. So the net impact is going to be 60 and that would be spread over over five years. So the spread over part is over on a ongoing basis. You need to have this ECL provisioning and our normal thumb rule calculation which may undergo a change talks about the impact of 18bps on an ongoing basis, year to year basis.
That’s why actually what we have done as on today our 8, 9 years average credit cost is almost at 0.34. So questioning that we got into a revised credit cost guidance of credit cost not exceeding 0.6 as against 0.75. So that’s the statement I made earlier.
Piran Engineer
Understood. Okay. Okay sir, then just getting on to my question. Firstly, in the agri book excluding gold loans, do we do farmer finance which has, you know, RBI had some observations with some private sector banks and made them they were not PSL compliant etc. Did we also have such an observation?
Debadatta Chand
No, frankly we no observation on the PSL categorization classification. We do big farm lending. So absolutely no.
Piran Engineer
So then if I may ask, none of the PSU banks have had this problem. What do PSU banks do differently that you know, they are on the right side of it and private banks, all the top three banks have had observations.
Debadatta Chand
You have to ask that.
Piran Engineer
It’s a fairly straightforward product.
Debadatta Chand
So I mean I think. I don’t know. But then I have to ask the other why they what they did indifferently so that otherwise.
Piran Engineer
Let me ask you this way sir. Do we track the end use of the loan on once we give it to a farmer?
Debadatta Chand
It’s a farm loan. Absolutely. The farm loans are for farm loans. Right? So as per the guidelines, whatever, we do comply to all those guidelines.
Piran Engineer
No, no, I mean that’s fair. But how would you track the end use of the loan? If you know farmer, he takes the money and buys a bike or a tv, how will you know?
Debadatta Chand
No, look, these are guidelines actually the banks are not doing farm loan only recently we have been doing for decades and century now. All right. So in that way whatever compliance required to extend farm law the bank is complying on, including the NV that is being prescribed as per the circular or as per the guidelines. So absolutely no issue.
Piran Engineer
Okay, okay, that’s.
Debadatta Chand
And in terms of farm loan also it is not that certain percentage can be used for consumption. Specifically referring to your part, anything you want to support on this? Yeah, we. In fact in farm loans we have the system of post inspection and verifying the end use in the larger farm loans.
Piran Engineer
Understood. Okay, then my Next question is on the MSME book one and a half lakh crores. Just can you give a sense of how much is secured versus unsecured and how much of the book is working capital versus term loans? Some sense on the average ticket size of that book.
Debadatta Chand
Mostly a secured book there because our unsecured book is with regard to the cash flow based which you have launched recently. Otherwise whether it is a MSME capital loan, term loan or this is a. Any loan we give on the msme these are by large secure. Anything lasting
Lal Singh
our book is mostly secured book and wherever there is unsecured that also is covered by the CGMSE coverage or NCTC coverage.
Piran Engineer
Yeah okay. And like is it mostly working capital or mostly term loans?
Lal Singh
It’s. It’s on both. Both way.
Piran Engineer
It’s a composite the split sir if you just rough split 50, 50, 70, 30.
Lal Singh
No, I don’t. I don’t have the exact figure. Where do the data.
Piran Engineer
And the ticket size would be like 50 lakhs to a crore or is it higher?
Lal Singh
It’s around 1 crore to 5 crore.
Piran Engineer
1 to 5 crore. Okay. Yeah. Okay. That’s it. That’s it from my end. Thank you and wish you all the best for the future quarters.
Lal Singh
Thank you.
operator
The next I think the last couple of questions first.
Ankit Bihani
Yeah thank you for the opportunity. So my question was on margins. So our nine month margin now stands. At 2.88% and is towards the lower band of our guidance. And now with full impact of the 25B cut coming in would we want. To revise our guidance? And the other thing is that you’ve highlighted that interest on it refund is part of code names but this number is very volatile. Further when you say it’s code names is it something structural and we’ll continue to see for the foreseeable future or it should be limited to a few quarters. How would one read into it? Because other banks refer this item as one off.
Debadatta Chand
Two things only with regard to you talked about the NIM a bit of a liability profile because our cost of deposit has gone down significantly lower at 475. Right. So in that way the reprice Almost we have 1 lakh 41 thousand quote were replacing due partly because of the bulk deposit and partly because of the poor deposit. So that is going to significantly upside the the N.I. in that room. On the. On the asset side of the book. Yes the VRLR cut has already happened. We have external linked benchmark. There is a book which not out of.
I mean that is beyond MCLR but affiliate because of the rate structure on the 10 year G SEC and all again the repricing happening on couple of so called fine asset is also at a different level higher level. So in that way the full year NIM would be in the range There can be changes therein when there is a transition happening in the entire economy particularly banking sector both on the asset because of the rate Precisely. I mean putting at one is not possible but then the level that you are declaring also you can see in the market is a quite elevated level because of a core strategy we have a lower dependency on the bulk deposit we have said multiple quarters earlier secondly in terms of the asset book we have a growth on the RAM which is stronger where the it is.
So I mean we are not getting into risky like personal loan growth is a normal 12% kind of thing. So in that way fairly being operating at 285 to 3 is a fairly a good level for us to achieve that. And I think we are hopeful of doing that. Right. That is one secondly the core name that you talked about refund say look it’s a guidelines which came saying that this the interest on income tax refund to be taken as part of the income right. That was a RBA guidelines. So otherwise suppose you take that as a oneop and a non core then should not have been that guidelines.
The guidelines clearly says about it’s accounting treatment as per the the regulatory norms. So that’s a treating so in terms of volatile component of that every year we get something on that because of the. The. The interest on that some quarter it can be higher or lower. And what is the delta? I mean negative delta. You’re talking about 300, 200 or 400 cr where my revenue is almost 120130 lakhs crore. I don’t think it’s. It’s something generating a 200300 is a. A one off for a volatile company. What is the one of we normally refer.
One of is a refer. Let’s carry NCLT all of a sudden there is a NCLT recovery substantially boosting the recovery of T of low. That’s one of. Suppose you have a sell up a investment which was not part of a normal float investment it is more of a strategic investment which is sold so these are one of. So I think in that way my comment was there and we need to take in that context so as far as computing we don’t have to define a code name or a normal name. It’s a code name only the element of tax refund the impact can be around 5, 6bps depending upon, you know, which quarter we get, how much in that way.
Ankit Bihani
Okay. And my next question is on the credit cost front. So the credit cost this quarter has been Quite low at 25 odd bip but it has been supported by decre decline in PCR also which are declined by 190 odd bip on a qq basis. If I adjust for that credit cost would have been largely flat on a QQ basis. How should one read into it?
Debadatta Chand
This is the PCR level you need to maintain better asset quality. And if you look at our bank for the matter last 13, 15, 16, 18 quarters the trending has been quite.
It’s not a volatile number we see on the asset quality. I mean the training has been clearly every quarter to quarter is declining in terms of the GNPA net npa. So we had a good level of asset quality in terms of the book in case you look at how much is the book A and above. So there is a normalized credit cycle which you are seeing now which likely to last for longer years. I think there is no concern with regard to the PCR level that you are taking and our PCR is lower possibly asset quality is a better.
We need not provide for all those. Right. So that the credit cost typically is a function of your slippage and all and how much provision you are making. Our last 8, 9/4 credit cost is the average of 0.34 and that’s why we’re revising from like earlier many people used to ask us saying that why you are not revising your 0.75. But first time we are getting a comfort of revising because of the average has been below this range so that something we are doing so in that way. I mean I think we’re fairly balanced in that way.
I mean our asset quality better. That’s why PCR many of the large banks, if you see a couple of banks are definitely higher but their journey on the net profit and asset quality are different behavior than the asset quality behavior we do have. And that typically puts you at the why you need to put your PCR right. So in that way so anything. Madam Bina would like to talk on the PCR.
Beena Vaheed
At a comfortable state sir, with regard to PCR because our slippages have been low and there’s no requirement for an additional provision at this point of time.
Ankit Bihani
Okay, yeah. Thank you for answering my question. All the best. Thank you.
operator
Thank you. That’s the last question we will be able to today.
Debadatta Chand
Yeah, sure, sure.
operator
Then the last question we’ll take from Rick. Rick?
Rikin Shah
Yeah. Good evening sir. Thank you for the opportunity. Just two questions. First one, you know you have been on the journey of bring down the bulk deposit share over the quarters. But in the last few quarters the bulk deposit growth has been higher and the share of retail term deposit has been declining. So why are we shoring this up again, especially when the wholesale rates have started to form? That’s my first question. And the second question is just if you could guide us perhaps as to what proportion of the term deposit book is yet to reprice.
So let’s say 20, 30, 40, whatever that percentage could look like.
Debadatta Chand
The bulk deposit as we said, the moment you fund your asset out of December 28on the incremental deposit and possibly are not focusing on the low cost deposit. So last six, seven quarters we focus on how do you focus your low cost deposit. And it’s not an objective. But if you look at the CASA growth of the bank visa based, what is happening in the system, not that we are, we are that topic, but we are one of the best in the market in terms of the CASA growth consistently for last many quarters. Clearly within and outside.
The message is that we need to rely on low cost deposit more. That’s going to give you a sustainability and also it’s going to be a gold reserve for you for long term. That’s something the fundamental core or the sustainable that we normally talk about. So the bulk, we have to rely on bulk at some point of time. The reason being there is a wide gap between the asset growth and the liability growth. Suppose this quarter itself, suppose I grow at 15% on the asset and the liability growth, all the liability has a larger base.
But then somewhere I have to depend upon the wholesale funding. Actually the bulk is more of a wholesale world. So the bulk is not the highest cost at every point of time. Some of the time the bulk plates are quite benign. So at some point of time the, the, the rate on the bulk was almost at the, the rate at the retain used to play and pick. So in that scenario we’ll try to slightly front run the bulk in terms of acquiring that. So it’s a balancing in terms of how do you manage. But the theme is that I mean I should fund my incremental asset more out of the low cost deposit rather heavily relying on the bulk deposit.
So as in today, if you look at the bulk as a percentage, actually this data you may not get from any banks, it’s almost at the Bulk as a percentage of. I mean the domestic deposit it is almost at 19 20%. That’s I think a fairly comfortable level for a bank like us to operate. Although some of the quarters you would have seen there is bit of a growth happening. So I’ll not say that will not rely on bulk. But as an objective will not be funding incremental asset only by raising or to raising the large extent.
So we’re not in a balance sheet expansion mode at a cost. So we want to rationalize cost. That’s the key thing. So that’s why we’ll find a couple of quarters of bulk growth is higher. Reason being the asset is growing faster. Right. So the system need to give enough deposit to us to only rely on the low cost deposit. Right.
Rikin Shah
Got it. Sir. Answer on the second question please. What proportion of term deposits are you had to reprice?
Debadatta Chand
I think roughly Bulpak number can be around 25% kind of a number. But then we’ll come back to you on this. Exactly. Data. I don’t have any today’s.
Rikin Shah
Got it sir. And so one last data keeping question. What is the quantum of outstanding standard restructured loans in this quarter?
Debadatta Chand
Just. It is not much actually that’s a subject we.
Rikin Shah
Yeah, it’s a very small number. Usually 6,7,000 crore.
Beena Vaheed
So it’s around 8,000 crores.
Rikin Shah
Okay, thank you very much.
Debadatta Chand
Initially when the standard structure we started post Covid. Actually what was important is the slippage that was happening. Migration that was happening. Now that is completely stopped. So. So there is no concern with regard to. It is no more a stress book as far as standard structure. But the number is 8,000.
Rikin Shah
Okay, thank you sir.
operator
Thank you. I would request Sridhar sir to please give the closing remarks and the vote of thanks.
I V L Sridhar
So I would like to extend my sincere gratitude to all of you for joining us today for the announcement and discussion of our financial results. Should you have any further questions please feel to reach out to me or to my investor relation team. Thank you once again for your time and continuous support. Have a great evening. Thank you.
Debadatta Chand
Thank you very much. Thanks for joining. Thank you.