Bank of Maharashtra Ltd (NSE: MAHABANK) Q1 2026 Earnings Call dated Jul. 15, 2025
Corporate Participants:
Unidentified Speaker
Nidhu Saxena — Chief Executive Officer, Managing Director
Rohit Rishi — Executive Director
Asheesh Pandey — Executive Director
Divesh Dinkar — General Manager
Subhasish Roy — Chief Risk Officer
Analysts:
Unidentified Participant
Rohan Mandora — Analyst
Suraj Das — Analyst
Ashok Ajmera — Analyst
Akshay Badlani — Analyst
Abhishek Kothari — Analyst
Bhavik Shah — Analyst
Ashlesh Sonje — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to Bank of Maharashtra Q1FY 2026 earnings conference call. As a reminder, all participant lines will be in the listen only mode. And there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. Please note that this conference is being recorded. We have with us from the management Sri Saxena, Managing Director and Chief Executive Officer Sri Ashish Pandey, Executive Director Sri Rohit Rishi, Executive Director and all General managers of the bank.
I now hand the conference over to Sri Mithu Saxena. Thank you. And over to you Mr. Saxena.
Nidhu Saxena — Chief Executive Officer, Managing Director
Good afternoon and thank you for joining this con call and hearing out from the bank how the quarter FY25 26Q1 has been. And I’m happy to share that the quarter is among our, I should say consistent quarter. Bank has been delivering this consistent performance for three to four years now. And this quarter also qualifies as yet another consistent performing quarter. Whatever guidance that we have kept for the business growth, total business advances deposit CASA ran so growth, asset quality, profitability and efficiency ratios.
I think all the guidance numbers seem to be well within the range if I should say for all the parameters, 15, 16 parameters where we are sharing guidance for the FY the bank performance is in sync with the guidance number. The Q1 traditionally we all know becomes a lean quarter for the business, lean quarter for growth. But bank has been maintaining the trend. There is no spike up down. This is a consistent growth story also. And there are some enablers of course would like to little bit talk about that. A lot of new things have been done around products processes, how the products are competitive in the marketplace.
When our field functionaries are going and trying to fetch new business, trying to add more customers to the bank’s business. Are the products supporting them? Are the products finding competitive edge for them? Are they in sync with what the best of the best offerings are there in the market. So we keep looking at our product profile. In fact all basket of liability and asset products are mandately reviewed in the bank once in a year. And all my verticals who are managing these portfolios keep looking at because environment is dynamic. So in between the year also if any change is mandated or they themselves want to give some differentiated proposition to the clients, they would keep doing that throughout the year.
Beyond the product we also see the process that we are following for Onboarding customers. Customers, once onboarded, whether on my digital channel or through the physical branch channel, are they conveniently able to bank with us, conveniently able to transact with us or there are any pain points to address. So we keep looking on beyond products and see that our processes, how they can be improved, how they can be made more seamless, give a better experience to the customers. This is very consciously done product processes and another differentiator, the bank is very consciously expanding into new geographies.
We are a fast expanding bank. While you would have seen post the merger consolidations in 2020 in the industry, some of the large banks had gone for rationalization and that typically was the logical step to do. And under that process some branches had to be rationalized. But we are a differentiated bank that for the last three years we have been actually opening branches, reaching out to new geographies and ensuring that our presence makes us a pan India bank which is sometime back already achieved. The branch expansion is still going on. And for the next five years we have a broad objective approved from our board to open 1,000 branches in five years.
And we have broken down this large objective to the next three years and we have carved out a list of 321 branches. So a project 3, 2, 1 is running in the bank. And passionately a vertical is driving this objective that they are opening branches. And if I tell you the branches are opened in the potential growth centers of the country and lot of data has been used around to identify which is the center bang of Maharashtra should be opening its presence and down to the pin code level. The study has indicated to us that this is where the growth is happening in the district.
And that’s how you have to look at your expanding the presence. So we have this objective of opening 321 branches in the next 18 months. And a lot of planning has gone behind this. We have gone for recruitments to match the expanding needs. We have gone for recruitments in the specialized verticals. We have gone for taking care of specialized skill sets in the areas of improving the compliance, the governance, managing risk, the technology risk. So all these have been very consciously looked at and skill sets in these domains have been recruited in the bank and they are actually put together.
We are ensuring that the bank is not only growing but growing in a sustainable manner. Because today if you ask me, the regulator will not have a forbearance if you are found not growing a segment, not following the guidelines or the expectations from the regulator. So we are very mindful of what the expectations from regulators are not only that even if a draft set of guidelines are released, we quickly have an in house system to look at what are the prospective set of guidelines that may come and whether my current functioning is addressing those concerns that are being flagged by the regulator.
And we start working on building the right setup if there is something found to be improved in our present set of working. So that’s how we are growing, fast expanding. And we are very mindful that the growth that we are looking at it is not only in the top line growth which is important for us, any growth in the top line, correspondingly how it impacts the bottom line and the various ratios which we actually are leading in many of the parameters in the industry, in the growth parameters, in the financial ratios, profitability parameter. We lead the industry and typically we do a comparison every quarter.
So March 2025, the full year performance. We looked at 25 metrics across growth, asset quality, NPA levels, profitability, ROA, ROE, NIM numbers, capital adequacy, CET1, so on, so forth. And out of 26 parameters we were leading the industry in 18 parameters. So industry we are not only comparing ourselves with the peers in the PSBs, all the PSPs and the large even new generation private banks form part of that comparison. We submit this analysis every quarter to our board to also look at how the bank is performing. So it is not only growing but growing sustainably and also growth is with profitability.
So we are very mindful that the new business that we are acquiring, how it is impacting the bottom lines and very consciously. We have even taken calls to probably not onboard a new business where the bottom lines are not impacted favorably. We have taken a lot of initiatives, try to differentiate ourselves. Technology is one focus area and we are decided to not only come up with a new version of our mobile banking application which today we all understand is a powerful medium of transactions for clients. So mobile banking, it’s not a new version. We have taken this project on a fast track and probably one month from now we will be revamping our existing mobile banking application and try to deliver a world class kind of an experience through the new application that will be available.
We feel that this will bring lot of full traction to the core business. New clients in the personal segment will be attracted. We have got the regulator permission for opening a gift IBU and that project is approved to the bank in less than five months from the regulator when we made our request for allowing us the license. And today I think that is going to be one big Enabler Gift City is getting a lot of emphasis, lot of focus from the government also. And for the last one and a half two years a lot of traction is seen and this should be the best time, the right time to see that we scale up our activities and operations.
And within this five months we have onboarded the recruitment has been done wherever we wanted to have some extra skill sets and the best resources try to identify available in the market and on board the technology decision has been taken which ideally takes six to seven months time. But we are also requesting our partner to help us start operations as soon as possible. And this again will be a game changer we feel because it will open up lot of opportunities being the first global presence for the bank of 90 years. We will be able to participate in global syndications, we will be able to do ECB transactions for our good old corporate clients.
And not only customer stickiness will enhance. We will be able to get new business opportunities for growth. And that gift IBU should be in this year itself because we envisage in Q2 we will start booking business there. That’s how we are moving. And so this is all broadly from my side. Maybe the performance presentation we have shared with the investors and maybe I’ll take a pause and look at some questions or queries from your side.
Questions and Answers:
operator
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press STAR and one on your touchstone telephone.
If you wish to remove yourself from the question queue, you may press STAR and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question comes from the line of Rohan M with Equidus Securities. Please go ahead.
Rohan Mandora
Good afternoon sir. Thanks for the opportunity and congrats on good set of numbers. So I wanted to understand the NIM movement this quarter because we have done a good job on nims. So on the yields, what was the benefit that came from nimclr? How much was the impact from Repo Cut and what was the benefit of NIM Exchange?
Nidhu Saxena
Yes Rohan, if you see my last year guidance was to have a NIM of 3.75.
But if you see last year Q1, Q2, Q3, Q4 we were already having 3.97, 3.98, 3.98 and we closed the year with a 4 NIM. So but if you look at the guidance because this fact of rate cuts was well known and on expected lines. So NIM guidance last year we have maintained despite doing 3.984 kind of number. My NIM guidance for this year is conservative again 3.75. If you look at NIM that we have achieved in the Q1 with the repo cut. My 40% of portfolio is linked to repo loans. Now I have to mandately pass the benefit which we have done immediately on the entire portfolio.
And we were. The calculations were there. We were expecting around 18 to 19 bps as per the entire RBI rate cut that had to be passed on the 40% loan book. But what has been other strategies that we have put in place. I will just like to mention those to see that my NIM contraction is not to that extent or how we can protect it. So if you see my cost of deposits, it has actually come down sequentially. And how it has happened is we have very consciously during the last 1012 months we have not gone for high cost bulk deposits.
So very consciously strategically with the bulk deposit when it is coming for renewal, we have not taken the renewal and we have focused entirely on the low cost. My CASA share when we close the year is 53%. The guidance we are keeping to maintain above 50 and if you see by Q1 also it is above 50. So this is one big enabler. My average CASA has seen an improvement of 14 bips. 14% point year on year. So straight away the 18 bps of reduction in repo loans have been offset with this the high CASA and very conscious strategy of not depending on high cost bulk to fuel my growth.
So that’s how we have seen. Whereas probably the industry may see that kind of contraction. But we have seen my name has come down to 3.95 also we have still some leftover portfolio. My MCLR book is 55% now that 55% in the last 12 months we had gone for MCLR raise 5.10bps and over the 12 months almost 35bps of MCLR raise happened. So there is still one or two more quarters where some accounts reset will happen. So these two factors put together. Low cost of low cost deposit, that kitty of more than 50% and consciously doing away with bulk, high cost bulk and this little bit of MCLR resetting remaining in accounts or happening in phases.
This has actually cushioned my NIM contraction. And but still I am mindful of maybe we can see with the benign inflation number retail inflation is 2 point something and we may see further rate cuts. So my guidance if you look at is 3.75 for the full year. And I feel the kind of Consciousness in terms of doing business growing fine. But growth with profitability, that kind of focus that we are having this guidance we will definitely achieve for this year as well.
Rohan Mandora
Sure sir, this was helpful. But sir, on the EAS also despite the compression from repo though we have been able to maintain almost flattish Q on Q yield loan advances.
So does that does the MCLR movement explain the entire thing or is there also a component of loan mix change? Because this quarter we have increased gold loans, we almost doubled that and we have run down agree and MSME portfolio by almost 7% Q on Q. So did that also have an impact on the managing yield?
Nidhu Saxena
So yield on advance has been 9.28 which is a healthy yield. And I tell you couple of things have worked to have this kind of profitability numbers. We are very consciously on the profitability and the pricing aspect in every transaction that we are doing.
So we have a T bill link rate product with us board approved and where we could have lent to Central PSUs, AAA corporates and built up our top line. But whatever exposure we had that we actually consciously product is there. But today we don’t have any exposure in that. So the segments we are not that we are not mindful of quality. It is all investment grade and is what we are looking at. But consciously any business, any new customer acquisition if it is not impacting favorably the bottom line we are not so willing to look at that.
Sometimes out of sheer competition we will match. But we also then try to look at how the relationship can be made profitable. If it is a vanilla credit. That relationship we are having can we have some ancillary business from that corporate some of their payment collection requirements can that be rooted through us? Some fee based income can come from payroll business can come. So we are very mindful on the profitability with every customer at transaction level. We have tried to drive this point in the field functioning also essential part of my review now from this quarter 1718.
So we have acquired some software which helps me to let the branch see how profitably they are operating. If they are growing, fine. But it’s not only the top line in this FY that we are going to review. We will see that whether their growth at the branch how the profitability has behaved. So bringing in that kind of consciousness in the field functionaries I’m sure things will people will be more conscious at the ground level as well in terms of how they look at offering concessions, special rates, can they compensate any finer rate with some ancillary business so on and so Forth.
So this is how we are looking at this issue. Yes. With more rate cuts that can happen. My 40% loan book immediately gets repriced. We have kept I think conservative guidance. Despite even maintaining IT for last four quarters above 3.95. We are keeping a guidance of 3.75 which again is a very good number. We in fact with 3.75 we again lead the industry. The next number could be if I’m not wrong 3.5 or 3.6. 3.5. So that’s how we differentiate ourselves in this NIM metric also.
Rohan Mandora
Sure, sir. And sir, lastly we’ve added duration in the investment book in 1Q. So just wanted to understand your thought process for doing so. Given that yields have fallen.
Rohit Rishi
Yeah. So you know that when the RBI reduce the repo rate but the market they have not formed yet and rates have come and we were knowing that going forward the RBI is further going to do the rate cut. So we have purchased longer term duration securities and she taken a deal also in order to maintain hill or to protect our yield. So that is the thing that it has impacted the enduration. The whole idea is that and protect the yield and going forward there will be cut. We can take the benefit of the market.
Rohan Mandora
Thank you.
Nidhu Saxena
You want to add. You want to add anything?
Divesh Dinkar
Yeah. And when we have purchased when the yield was on the harder side and now rates are coming down, cooling down. So there will be the good appreciation even return from the book to the good and effort. If you see that we are sitting on the appreciation of roughly 600 crore and same with the case of STM. So going forward you will see that some of the appreciation will come in the form of the to improve the profitability.
operator
Thank you. Mr. Rohan. Please rejoin the queue for more questions. Next question comes from the line of Suraj Tas with Sundaram mutual funds. Please go ahead.
Suraj Das
Hello. Am I audible?
Nidhu Saxena
Yes, Suraj, please go on. We can hear you.
Suraj Das
Yeah. Hi sir. Thanks. Thanks for the opportunity. Sir, I think I will follow up with the previous question only of Rohan. I think Last quarter your 40% of the loan was linked to repo. Now I guess your transmission of the report would be immediate. I mean which would be T +1. So 40% of the portfolio seeing something like 7,500 basis point rate cut.
But still your yields are intact. So what is the rest? I mean mathematics are here. If you can just explain beyond the. I mean whatever you have mentioned. Because if you transmit 70 or 200 basis point on the 40% of the portfolio it would be something like 30 to 40 basis point kind of a yield decline but your yields are intact on a QQ basis.
Nidhu Saxena
So as I mentioned in terms of pricing our loan offerings we are very mindful of that. Our the emphasis is always that business is happening and profitable business is happening. Growth is profitability.
With that kind of a philosophy today when proposal is brought to a committee of the board or my committee or my AD’s committee or CGM’s committee or GM’s committee in head office I’m talking about they’re all mindful and very consciously looking at this aspect. It is not just growing the portfolio. We have kept our aspirations to become a bank of greater significance to grow in terms of our ranking among the 12 PSDs. But that’s not aspiration. But we are not going mindlessly taking top line growth and not looking at how it is impacting the bottom line.
We have also done a couple of things around See beyond this CASA maybe I can and we have look at these co lending opportunities. So we started off the year with around two NBFCs where we had done some co lending and we have developed some announced technology where the entire transaction of disbursements collections value dating of payments and is taken care by technology in a seamless manner. And we are through proper integrations with the IT of the NBFC and today we have nine partnerships here again we are leveraging on their strength their reach to areas geographies where they are not we are not present in the segments.
Suppose it is gold. They have been doing this kind of activities for decades. They have their robust audit mechanism, robust recovery mechanism and when I am doing the business from the branch same business Gold loan versus when we are doing co lending partnerships we are able to charge 100bps more there. So that kind of things are actually somebody mentioned I think I skipped Their gold loan portfolio has grown 58% of year on year growth in the gold book Whereas we had put the focus in the last beginning of the year itself. So gold loan has grown and we have taken care of the associated risk that are there in the business Only after putting in place the entire system of safekeeping of flat jewelry the valuation the two critical components.
Once we have set that infra in place we have gone ahead and done that business in large manner and in co lending we are getting more better yield, better returns, better pricing maybe you like.
Rohit Rishi
So surat, you see the last year we have did MS.35bps and that increase in number of will be applicable at the time of Reset with that annual reset. So number of resets are happen after the repo card. So that’s why despite the reduction in repo increase in unclear and such reset it has protected our yield.
Suraj Das
Sure sir. Understood. Understood. That’s very helpful.
And sir, I mean while your cost of deposit has come down, I think your cost of fund has not. That is also partly because your borrowings has increased. Is this opportunistic in nature or I mean because you are. I mean it could be strategic also that you are replacing your bulk or deposit with some of the borrowings this year. I mean if you can give some rational there.
Nidhu Saxena
Surat said what you are saying. Cost of deposit has come down by 15 bits. Where I mean that is I just mentioned and we discussed cost of funds also have come down 4bps.
Not as sharp as the cost of deposit. But overall cost of funds have come down 4bps. And yes there was a conscious strategy to look at other options of refinance or raising resources funds through infrastructure bonds and those kind of enablers approvals from the beginning of the year also we have gone to board and taken and now appropriate time. We will keep doing these raises. Where to see that overall borrowings and cost of funds and things are remaining under control. And our NIM is getting favorably impacted through such measures. We keep very mindful of those things to not or less depend or not depends on at all on high cost bulk and look at other options to raise resources.
Divesh Dinkar
To answer if you see those there may be higher cost of the raising the alternate resources.
But looking to the benefit involved in respect of the exemption from CRR and HLR cost and the ability to directly divert such fund to the advances which that Madison hind side it has improved. It has positive impact on our team.
operator
Thank you Mr. Das. Please rejoin the queue for more questions. A reminder to all the participants that you know. Please restrict yourself to two questions. Next question comes to the line of Ashok Ajmera with Ajkan Global. Please go ahead.
Ashok Ajmera
Thank you for the opportunity. Compliments Mitu sir and the entire team of bank of Maharashtra. First for coming out so fast with the results on the 15th. I think you probably be the first guy which shows like you know your accounting, your corporate governance and your entire CFO and team deserves rich compliments for the same. Having said this sir, you have also maintained the NIM in spite of the pressure of the rate cut. You know like and not passing on the entire interest to the borrower. Still you maintain your name, brother. It’s a good name sir. Compliments for the same also having said that sir, this quarter though is a lean quarter and a needed quarter. But I think for the first time in last three years we have gone into the negative business growth.
I think the last was June 22nd which is for the first time I think in 12 quarters or so. Coupled with that my question is that you still maintain the trading guidance of 17% which you had given for FY26 deposit 14% Tata about 15 any cases there. So do you think that looking at the performance of this quarter you will be able to maintain the same guidance and activity numbers or you would like to revise the guidance on the business growth and the credit growth especially? This is the first.
Nidhu Saxena
Ajmiraji, thank you for complimenting my team.
Yes, they are working really hard. Every vertical is putting in their best efforts and you would have seen traction in every of the segment of the bank. Bank is business and other other issues, other activities. How we are looking at ramping up of hr. How we are looking at ramping up our other infrastructure which is going to support our growth. Our expansion needs new branch opening. So every vertical is doing that. Thank you, they deserve the compliment. As regards I think there is some error in understanding. So this quarter also has seen a year on year growth of 15% in total business which has gone up to 5.46 lakhs crores and we have added 70,000 crores.
So maybe somewhere total business we are growing. There is no not a single parameter. In fact business alone is as I said not important. You look at asset quality, you look at profitability metrics, Roa roe you look at capital adequacy, you look at the stress numbers you will see for the last 36 months, 48 months. If you plot a graph it will be a consistent performance. There is a no quarter single quarter where we will see spike up or down. So this quarter also in terms of business it is there and what is actually supporting.
I already explained the new geographies that we are entering into. That also new branches are adding annually business to the bank kitty and 500 branches in last three years, 120 in the last whole year and this 321 this I think the pace of growth with the new branch, new geographies, new markets that we are going to enter Gibbsiti I view that alone holds a huge potential. So I think growth will not be a challenge at all. We will have to keep looking at which are the profitable opportunities and how to reach out to them and how to see in this era of competition how we can differentiate ourselves in sometimes through pricing, sometimes to quick decisioning.
Sometimes to just to differentiate ourselves by the reach out. How we reach out to the top rated borrowers and how we fulfill their completely understand financial needs and deliver them. So that’s how we will keep differentiating and growth guidance that we have kept total business to grow at for this year also 15%. I see there will be no challenge in doing this that advances within which will grow at 17% deposit. We have kept a guidance of 14%.
Ashok Ajmera
Point well taken sir. Few data points and some some clarification and explanation. This quarter we had a little higher of 727 crore as compared to the last quarter.
Then our SMA2 numbers also have gone up to 171 crore as compared to 40 crore of the in the last quarter which is little bit of cause of concern because the numbers have gone up substantially high. So on these two and secondly I would like to know something about the profitability which has gone to the result of the AFS stock. Because there is a gap of 226 crore. I mean when the addition. If you look at the network and of the June and the march I think 226. So what was the profit figure which has gone to the reserves on account of the treasury operations.
Because treasury otherwise also performed very well. If you look at the segment wise the treasury profit for the quarter is 625 crore income as against 360 crore. So these are the few data points and some explanations.
Nidhu Saxena
Sure. So Divesh, you answered the treasury part, you answered SMA. I will just say 727 crores of slippages. Yes. Within which if you look at you ask me 343 crores. So 47% of that slippages come from the agriculture segment. And now what we have done is what we have looked at. This is the trend we have seen in Q1 for past couple of years.
Three to four years. The agri segment because of the cyclical nature is finding a slippage in the Q1. But what since we are aware we have very consciously looked at how fast, how quick these slippages either if not arrested how can the accounts be upgraded? I am happy to share. Last year during this 15 days we upgraded 100 crores. We have already upgraded to 40 crores from this freshly pitch and as I said agree which is a cyclical kind of thing. I don’t see major concern emanating here. Because if you see the monsoon prediction, if you see how monsoon is already reached and I Think the agri segment is going to have good prospect for this season as well.
So with overall prospects favorable I think the agri segment challenge that typically is seen in the Q1 is not going to impact much this year the way it would have done last year. I think divesh you can.
Divesh Dinkar
Yes. So sir treasury there are three major components which have contributed. One is that domestic profit so it has increased from Q1 of 253037 to 141. So we had some maturities where we booked that this particular quarter and we also had this opportunity to book profit in mutual funds which was not there in the Q1 of FY25. So 104 crore added through domestic profit additional Q1 Q forex also as you know there has been market has been little you know active and we could book better forex profit from trading and that has added to almost 40 crore.
So and these are the major additions what you are talking about in terms of the treasury income growth.
Rohit Rishi
So supplement diversity. What you rightly said in respect of aff. You know further appreciation in this quarter it has gone to the result directly. It will go to reserve north to to profit logical that have also added to our captain.
Asheesh Pandey
So as you know the commission already gives some response on the agricultural slippages. But I will tell you that the agricultural season is this as good. There are some renewal delayed happened into the some of the zones.
So definitely that review renewal once done then again that whatever slippages are there we will definitely recover it coming to the SMA level the observation you have taken for the SMA 240 to 171. But if you see the SMA1 it gone from the 214 to 114. So it came down by 100 crores from SMA1. So some accounts from shifted from the SMA1 to SMA2 and it will always happen. It will be rolled back sometime it will roll forward also. So definitely we will take care. If you see our slippages and the the total stress on the book every year and every quarter it is in improving stage.
Rohit Rishi
The one more thing as between SMA1 and SMA2 if you see historically there this figure has been more or less equally divided. So some distortion here and there that happen. But it’s not something which is alarming and team is on the job. Our CP remain under control.
operator
Thank you Mr. Ajmera. Please rejoin the queue for more questions. Next question comes from the line of Akshay Badlani with SDFC Securities. Please go ahead.
Akshay Badlani
Yeah hi thank you for taking my question. The first question is more on the strategic side. I think whenever we see our MSME MPA’s overall asset quality in the MSME book it stands out compared to other PSU banks.
So what are we doing separately or what are we doing differently compared to other PSU banks that our underwriting has been superior for quite some time now when we compare it to other PSU banks.
Nidhu Saxena
So Akshay, we are very very conscious on quality. As I said in the beginning, we have aspirations to grow. We have numbers also in mind. But I don’t mind if it takes two more quarters extra to reach that milestone of growth. But we are very conscious that the loan book that is getting generated created how it is we are actually making it is prime borrowers or what kind of segment we are lending to.
So if you you asked me not only in MSME we have strengthened our underwriting benchmark standards. So bank has been growing fast. We have put even if I give you an example for a retail segmented loan, no underwriting, not a single loan under any scheme is permitted for an individual if the credit score is below 681. So we have linked our underwriting strategy standard to transunion civil and below 681 is their definition of a subprime. So we are not lending. We have restricted completely for the last 1012 months even if it restricts my growth. But lot of things that we did around products, the processes I think we have not seen that pain coming in.
Our growth has only gone up. So the differentiator in MSM that we are trying to do and we have successfully done also is to is to reach out with quick decisioning. And I am able to even because the ground realities are if I am able to convey my decision customers can happily we can negotiate and charge a premium to our good and fast and quick decisioning 25 basis more I can this is what philosophy we work with and we do the reach out to the right segment forwards and identify them. And we have put in place some cluster schemes where we give some special enablers with pricing or otherwise also and the CMR score we have kept below which we don’t underwrite in MSME also.
So these kind of strengthening of underwriting benchmarks is ensuring that what enters in my system in the loan book is a borrower which is of some prime category kind of a borrower. So this is again going to help me not now only there are no quick mortality numbers but you in times to come one year, two years we will see that my loan book, even if there is a cycle and the cycle has to reverse. The philosophy we have is we should not be seeing the worst hit if the system goes down. I am not out of system but I will be not the first to be hit because that is how we are building our loan book consciously of prime book borrowers.
So I think it partly it does answer your question. And the philosophy has been like this in past also. But in 12 months we have been more consciously, you know, strengthened our underwriting standards to make sure that what we are saying it is happening in a better measure.
Akshay Badlani
Understood sir. Thank you. The second question is around the OPEX intensity. So I think this quarter, you know, we have added around 850 plus employees. And you mentioned in your opening remarks as well that you know, we are focusing on, you know, recruiting newer equipment and higher equipment.
My question is, you know, where are, you know, exactly the way we are recruiting now? How has it changed visa with you know, earlier how used to recruit or from there which you know, fitments used to recruit. And secondly, when I see the OPEX for this quarter, it’s not reflective of the additions that we have made in the employees and branches. So is that impact going to kick in in the next few quarters or is it something else.
Nidhu Saxena
Understood? I mean I will explain. So if you look at my cost to income, cost to income is, is last year it was 38 point something.
We have closed this year even this quarter is 37.57. So guidance is to maintain cost to income below 40. This parameter again is one of the parameter where we lead in the industry. And even if I’m maintaining it below 40, I’ll be best in the industry. And despite having 38, 37 kind of cost to income, my guidance is kept to maintain below 14. Knowing that when I am going for this fast paced recruitment there is some likely increase in the employee cost that will happen. And so I will try to maintain below 40. But if you see it is not happening actually and I will tell you the reason behind so we have a robust recruitment plan for supporting this massive branch expansion.
But the entire branch is opening and recruitment is not happening on day zero. It is going to come in phases. And today when I am going to open my branches in I am saying potential growth centers, we will see that these branches are turning, turning around also fast today once I do some OPEX around the new branch opening and if I am at the right location incrementally, what revenue that they will generate for me will be More than offsetting the cost that will be experiencing. And so the third thing, the third thing is we have opened 500 branches in the last three years.
So the branches that were open, opened three years from now are all profitable as per our parameter. And that’s how we will see that those which were opened two years from now, around 50% have already turned profitable. So we will see gradually what we opened in last 12 months, by the next 12 months they are open. So that’s how I think the point I’m trying to make. First of all, this big change of recruitment, big change of new branch opening is not happening overnight. It is coming in staggered phase manner. We have kept a defined timeline and recruitment is also matching that part.
And at least for the last 12 months, I have seen my cost to income has not gone up and my guidance of the FY25 26 is also to maintain it within below 40. I have a strong sense, we strongly feel that we’ll be able to maintain it.
Akshay Badlani
Sure. Thank you. Thank you.
Nidhu Saxena
Thank you. Next question comes from the line of Abhishek Kotari with Aviva India. Please go ahead.
Abhishek Kothari
Yeah, sir, you have a plan of this year. Could you timeline the same as to when would you be raising funds?
Nidhu Saxena
Sorry sir, please repeat. Fundraising.
Abhishek Kothari
Fundraising. Sir, you have a board approval of QIP by when is it going to be likely? In which quarter?
Nidhu Saxena
Right, so pardon me, did not get your question in the first place, but as of now, when See last year we did a GUI dilution, we achieved 7%, we did an equity raise.
Today my CRAR stands at 20.5%. So it’s a healthy CRR that I’m maintaining. We have kept the guidance, these are the best times is what regulator says to maintain it at reasonably high levels to see that we are adequately cushioned to meet any cyclical doubt. That’s what the regulator overall guidance keep coming in that these are the best times you should create cushions and buffers. So we have kept the guidance to maintain crar at around 18. So there is no immediate case for me to go and raise capital, number one. Number two, last year we came down from 86 to 79.6.
So 7% dilution has brought me below 80. Optics have changed, so it is just a mere 4.6 if I have to meet the SEBI regulation. But what will happen when we will do that? And opportune time and opportune mode, we have taken no decisions on that part. We have done a lot of investor engagement, but that is as a matter of fact of our sacrosanct duty to the investors. Last 12 months we have been meeting investors both domestic, foreign covering all markets. Those who are invested with us. But as of today I have a board approval.
We have taken board approval for raising 7,500 crores debt plus equity. And. But at the opportune time and opportune mode we will look at this option also.
Abhishek Kothari
Okay. This quarter you explained that your slippage ratio was slightly higher due to Agrib portfolio. So a normalized slippage ratio guidance for FY26 as well as credit cost guidance.
Nidhu Saxena
So slippage is to guidance is to maintain it within one below one and credit cost 1%. And if you look at my PCR provision coverage stands at 98.36. And with this high level of PCR that we are maintaining the aging provision pressure is not there.
Hardly there. And so. But the fine NNPA that we are maintaining. So my guidance of NNP is 0.2 to 0.25. But my NNP number is 0.18 for the last two quarters March as well as June this year. So this is the guidance that I’m keeping for both the metrics that you asked.
Abhishek Kothari
Thank you, sir. That’s it. From my side.
Nidhu Saxena
Thank you.
operator
Thank you. Next question comes from the line of Paviksha with Incred Capital. Please go ahead.
Bhavik Shah
Hello. Hi sir. Congrats on very good number. Just a few questions. So what would be our outstanding AFS reserve as of June?
Rohit Rishi
AFS reserve. If you see that it is which we have transferred to capital is around 497 crore.
Bhavik Shah
Yeah. That would be slow. Right? What will the outstanding amount.
Rohit Rishi
That would be outstanding? Yeah. Yeah.
Bhavik Shah
Okay. And sir, have we transferred 5% of heritage already? Have you sold that? I guess we don’t need approval to sell that, right?
Rohit Rishi
Yeah. So till that we have not exercised that option.
Bhavik Shah
Okay. And so do you plan to do that over the course of the year?
Rohit Rishi
Pardon?
Bhavik Shah
Okay. You. You plan to do that over the course of the fiction 26.
Rohit Rishi
At a point in time we will take the decision. Because we are having appreciation afs. So we will see that. It is required or not depending upon the yield movement.
Bhavik Shah
Okay. Understood. And the last question, sir. St within the staff cost. So what would be the employee Provisioning this quarter versus last quarter.
Rohit Rishi
Is 15,000. Roughly 220.
Bhavik Shah
220. Okay. 240 crore. 240 crore. Okay. Okay. Thank you so much, sir.
operator
Thank you. Next question comes from the line of Ashles with Kotak securities. Please go ahead.
Ashlesh Sonje
Hi team. Good afternoon. And congratulations. First question is on your MCLRLink loan book can you share what was the average yield on the MCLR linked loan book in this quarter and previous quarter?
Nidhu Saxena
So MCLR we have around 55% which is a high number that gives a definite advantage when we compare with other lenders in the industry their MCLR share is not as high as ours and again lot of scope to grow the retail book but you can explain.
Asheesh Pandey
I’m still on read if you see that average Yield on that 9.75 income.
Ashlesh Sonje
What was the number in the previous quarter?
Asheesh Pandey
Previous quarter it I’m not remembering but it will be around that 9.75 to 9.80.
Nidhu Saxena
Can we find that out until in the meeting or we can share Suppose the meeting is going to close then it’s fine but Kotak securities please take a note that we share the number what was the last quarter MCLR yield and what is this quarter MCLR share? You sir no problem sir.
Ashlesh Sonje
Frank secondly, what proportion of the MCLR linked loan book is yet to be repriced to the higher rate?
Nidhu Saxena
So we kept this exercise at the because MCLR goes by calculation and during the 1012 months with every review that is taken monthly in the alco this decision has been taken CRO you can add something.
Subhasish Roy
Last one year around 75 basis points and 5 basis per year but is the one of the component of NCLR is the cost of deposits and also the market dynamics so we have to review the market dynamics and also how it will be done Generally that we have one more thing Our insurer will see that one year link can sell at around 70% so that is the main change to that so considering this from the market and the cost of deposits.
Nidhu Saxena
Just to add to what CROs told so this whatever rate we would have done see the the repricing of that particular is going to have on the reset date which is the annual exercise so there’ll be couple of accounts and couple of I think one or two more quarters where this repricing in the MCLR loan book is going to still happen.
So that advantage actually has worked in some way to even ensure that we have not lost on our NIM number the way the calculations had shown NIM has come down from 4 to 3.95 only so still some one or two more quarters if that explains your or answers your question Answers your question we have a portfolio of MC yet to be repriced that 20 to 30% it is yet to be repriced.
Subhasish Roy
As you see that from March 24th we started increasing the MC 30% that we did.
Ashlesh Sonje
Understood sir. And sir just lastly your agri loan book is down 8% QQ and your golden books on the other hand have increased.
Has there been any reclassification of gold loans from aggregate to retail? And along with that can you explain why the MSME book is also down 7%.
Nidhu Saxena
Fully agree MSME.
Subhasish Roy
Yeah this agree book if you see that that the ATM gold loan that has decreased by near about 8% that is because of that RBI guidelines for the not to take as a collateral amount less than 2 lakhs. So because of that we have reclassified this agriculture to the retail gold loan. Because of that there is a decrease of 8%.
Rohit Rishi
However if you see that decent RBI guidelines they have allowed that such a loan can be taken agree after taking the voluntary declaration for the customer again it will come back to our ag portfolio.
Ashlesh Sonje
And sir on the MSME book that is down 7%.
Rohit Rishi
That is has come to MSME now around 1031.
Nidhu Saxena
It’s F. MSME is down so MSME so MSME I’ll tell you MSME there is A. I mentioned about co lending partnerships we have gone ahead and done some co lending with these whole loan NBFCs also and we in my co lending book sizable amount of businesses also with the gold owned NBFCs and this is all the lending by them is to all the shopkeepers, small traders and the ones which are actually MSME. But because of the clarity in the regulator guidelines this co lending portion which was gold owned in NBFC with NBFC and getting classified as MSME advance we have reversed that.
But I can share this is also a matter of discussion like RBI is issued for up to 2 lakhs. This circular has already been released two days back that if the the MSME or the Agri borrower has taken the loan for their this agree or the MSME activity that can be that will be a priority sector advance PSL advance. So we will take review of this reclassification up to 2 lakhs. We can now go ahead. We will do that. This is only a two days old guideline I think two days two days old. So we will review this segment because now RBI has come out with this clarification and whatever rightfully we had been doing because if you ask me in the cold ending 2500 kind of a exposure we have with the gold owned various NBFCs now entire was MSME which has moved to non priority retail.
So we will again have a relook CRO is examining these guidelines and the guidance will come from him and the business vertical will take the call and we will reverse this as entitled by the RBI clarification. And I think that’s all.
Ashlesh Sonje
Just one last clarification. This Gold loan and MSME which you can now again classify that would be both of them will be able to classify as PSN now from here on.
Nidhu Saxena
Absolutely. There’s a limit sir, limit is up to 2 lakhs and if you ask me the average ticket size of the gold loan NBF unlike public sector banks they are funding to the small segment shopkeepers which are MSME borrowers micro segment their ticket size is 45 to 50,000 so comfortably we will be able to do that.
But we will the CRO is examining and they will come back with the complete guidance and the vertical will do that. Regarding other than golden this MSME inflation Agree both are for this year for us a focus segment. We have done some special initiative of creating separate verticals in both of these two segments Agree as well as MSME. So there is a separate general manager heading independently these verticals and they will have. They are having lot of to do list and lot of strategy already implemented wherein we will be now targeting for MSME in agree advance investment credit and some last ticket medium ticket business which will qualify for MSME as well as a agree loan.
So we have given them enablers some special schemes wherein some special pricing offers are there but of course they need to the borrower need to be it’s not available to one and all. They must have some level of credit rating and they will be reaching out again in the form clusters and these clusters will be approached by my branches zone managers also from head office team in a very focused manner Go and visit and talk to the clients there in a cluster textile cluster who are if there are 100 units in one cluster we will contact the top 1012 borrowers with this kind of special offering and bring them in our fold.
So that’s a very conscious strategy that we have planned to grow MSME and agriculture this year and I’m sure we will wait for one more quarter and we will see that numbers really looking up.
Ashlesh Sonje
Thank you sir.
operator
Thank you Ladies and gentlemen. Due to time constraints we have reached the end of question and answer session. I would now like to hand the conference over to Sri Nedu Saxena for closing comments.
Nidhu Saxena
I think we had a detailed discussion. I only to thank everyone to join the investor call and bank has been trying to not only perform but to reach out with this performance consistently.
Not every quarter close with our quarterly performance that we try to engage and talk to you we are doing in between the quarters also. So there is a vertical again and bank today has positions of chief general manager and and this vertical of capital raising is headed by a chief general manager. So we are consciously engaging with all the entire community at large in terms of who are the brokers who are going to cover my scape, my company and we will keep of course performing consistently to give the comfort that whenever we do plan for a capital race at the opportune time using opportune mode that we continue to get the patronage and with our own merits and sustainable performance we will come back to you at the right time when we do that exercise also.
operator
So thanks from my side for joining the call. Thank you. Thank you on behalf of bank of Maharashtra. That concludes this conference. Thank you for joining us. You may now disconnect your lines.