Canara Bank Ltd (NSE: CANBK) Q3 2026 Earnings Call dated Jan. 29, 2026
Corporate Participants:
K Satyanarayana Raju — Managing director
S.K. Majumdar — Chief Financial Officer
Analysts:
Unidentified Participant
Piran Engineer — Analyst
Jay Mundra — Analyst
Param Subramanian — Analyst
Gaurav Jani — Analyst
Sushil Choksey — Analyst
Chetan Wadia — Analyst
Presentation:
operator
Sir, now it will start. Sir. Please. Silent. Can I start? This meeting is being recorded and summarized. Good evening everyone. Welcome to Canberra Bank Q3F426 earnings conference call. I would like to thank the Canberra bank management team for giving us this opportunity to hold the call from the management side. We have with us Sri Hardeep Singh Aluvalaya, M.D. cEO Sri Bhavendra Kumar Executive Director Sri S.K. mazumdar Sir Executive Director and Sri Sunil Kumar Chuk Executive Director. With this I now hand over the call to MD sir for his opening remarks post which will start the floor for the Q and A. Thank you. And over to you sir.
K Satyanarayana Raju — Managing director
Good evening to all of you. First let me share the highlights of December quarter results. Our bank’s global business stood at 27.1 lakh crores and it grew at 13.23% on a year on year basis. The global deposits stood at 15.21 lakh crore and grew at 12.95% year on year basis. The global advances stood at 11.92 lakh crore and grew at 13.59%. Operating profit stood at 9009119 and increased on year on year basis at 16.36%. The net profit stood at 5155 crores and grew at 25.61% on year on year basis. The return on asset improved by 9 basis point year on year basis and stood at 1.13%.
The PCR on a year on year basis improved by 293 basis point and stood at 94.19%. Our credit cost was at 0.64% and improved by 25 basis point year on year. There was a GNP decline of 126 basis point on year on year basis and stood at 2.08%. Our net NPA stood at 0.45% and declined by 44 basis points year on year basis. Now Our more than 13% credit growth is driven by RAM credit which stood at 7.04 lakh and grew at 18.70%. The retail credit grew at 31.37% and stood at 2.73 lakh crores. The housing loan grew by 17.58% and stood at 1.21 lakh crores.
Vehicle loan also shown fantastic growth. The growth was 26.20% and stood at 25,098. MSME has also shown robust growth of 13.74% and stood at 1.60 lakh crores. The earnings per share was at 21.48 rupees and improved by 22.11%. Our CET1 stood at 12.37% which improved by 40 basis points. Year on year our slippage has shown enormous decline. It declined by 32 basis point year on year basis and stood at 0.64%. Now coming to the guidance parameters. In the beginning of the year we have given guidance numbers for 13 parameters and we have easily surpassed and comfortably surpassed 11 parameters except CASA and NIM which is industry Challenge.
Now I am joined. Along with me Mr. Bhavinderji is there who is AED. Mr. Majumdar Ji is there who is also CFO ED and Shiri Sunil Chuk is also there. He’s also ED. And all my CGM’s vertical heads are now ready to respond to all the questions. Thank you.
Questions and Answers:
operator
Thank you. We’ll start the question and answer session. The participants, those who have any questions, please raise your hand. We have first question from the line of Maru. Please go ahead with your question.
Unidentified Participant
Yeah. Hi. Hello. Hello sir. Hello, madam. Hello. So I had a couple of questions. Firstly on your margin. So I appreciate that you know the repo rate was cut and there was pressure on margins. But from a strategic longer term point of view, see our margins are already slightly lower than peers, right? And people are ruling out a policy cut in the forthcoming policy. But you know, these things are still evolving. Maybe after one or two policies there are rate cuts again. So given that our margins are already lower than peers, what are the steps we would take to bring them at least in line with peers? Is there like a growth margin trade off? Is there a level below which we will not want margins to fall even if there are rate cut sales a quarter down the line or 2/4 down the line? What is the absolute level of margins that you would be comfortable with at any point in time? Otherwise we can slow down growth and improve margins a bit.
You know, given that we have a traditional issue with casa. So that’s my first question and my second question is on ecl. So what would be the broad impact of ecl? Not the impact of one time transition but on an ongoing basis. So if ECL were already implemented today, what would your credit cost have been instead of what you have reported this quarter? So that’s my second question, sir.
K Satyanarayana Raju
Okay. So madam, now I respond to it. Regarding margins, our NIM contracted by 2 basis points because the yield on advances. Because on 5th there was a reduction in repo by 25 basis point. And about 49% of our advance is repo linked. So immediately that transition was happening in those accounts. So yield on advances contracted by 6 basis point. Although the cost of deposit also reduced by 4 basis point which had a net impact on NIM or 2 basis point. So going ahead, if you see there is a strong drive in RAM sector, our RAM is showing a growth of 18.70% and it is led by retail which has showing 31.37% growth.
And MSME also you see is growing at 13.74%. On MSME, the yield on advance is 9.28%, in retail it is 8.88%. So our strategy going ahead is to further capitalize because if you see our guidance number on advances, our advances growth is more than 13.5% 59%. So to capitalize on this retail momentum that has been built now coming to the CASA front. Also if you see our saving bank is growing at 8.51% and saving bank individual is growing more than 10%. So we are performing better than the peers in savings. Even if you see the current account it is growing at 14.92% only due to one single transaction that has happened previous quarter of 26,000 in current account.
That is why Q on Q some dip is there. But CASA growth is shown as 9.32%. So I think we will retain this margin with the same momentum going ahead in the CASA and RAM growth. So even if further reduction in depot happens, we presume that our name will be in the range of 2.45 to 2.50 coming to ECL. The other parameters matter. It is going to be implemented from 1st April 2027. Now our bank is making last year it has made a profit of 17,000. This year going by in the same trend our profit will be in the range of 17,000 to 20,000.
So in the ECL under stage two because stage one and stage three does not have any much material impact because it is almost similar to IRAC norms. But in stage two some impact will be there because the provisioning increases from 0.4 to 5%. And there we see that 2500 additional provision will be required. And for NFP also non fund limit some 2500 will be required. Coming to the default rate on stage one additional provision of 5000 may be required. So if I total that one it will come around 10,000 and that can be amortized in four years.
So the impact may come to 2000 to 2500. Going by the profit we are earning year on year. It is very much absorbable. And our CET1 is very strong. Yes. No.
Unidentified Participant
But sir, the credit cost on a quarterly basis will that figure change? This is the transition impact. 10,000 crores over four years is the transition impact.
K Satyanarayana Raju
On a run rate basis I will answer to it. If you see my slippage ratio it is 0.6 which is the industry best. If you can compare with the our peers and our SMA in absolute numbers it has come down from 46,000 to 35,000. And from 4.16% our total SMA has come down to below 3%. So on both fronts we are very very comfortable to absorb this one. We don’t see any further.
Unidentified Participant
What will be your SMA below 5 crore. Your total SMA that is above and below.
K Satyanarayana Raju
Yeah. Total SMA is 35,604. Last year in December it was 43,917. So 8. Even our advances has grown above 13%. Our SMA is on absolute numbers. It has come down from 43,917 to 35,604. So that’s a credible achievement. I tell you. And slippage also. It is an absolute control. And our slippage ratio is 0.64% which you can compare with others. It is industry best.
Unidentified Participant
Yes, sir. Got it. And so just one last thing. How much of deposits are left to reprice? A lot of deposit repricing has been done. How much of it is left? In terms of term deposit repricing, pricing.
K Satyanarayana Raju
Only 15% is left for repricing. If you see year on year there is a 77% dip in the cost of deposit.
Unidentified Participant
Right? Correct. Okay, sir. Thank you so much.
K Satyanarayana Raju
On retail term deposit. Yes, thank you.
operator
We’ll take the next question from the line of Anandama Anand. Your line have been unmuted. Please go ahead with your question.
Unidentified Participant
Yes, sir. Thank you for the opportunity. My question was related to our PSLC fees which has been pretty low as compared to what we saw in last quarter. Is it more of seasonality or you are strategically booking lower PSLC fees in this quarter? Or is it something to do with an RBI action where the PSL some declassification has happened. If you can explain on that field.
Unidentified Participant
Mr. Dhamma, if you have followed us. PSLC we it was only a product. Or earnings of the first quarter for. Third three consecutive years or two last consecutive years. We have only earned in the first quarter of 12 to 1300 crores. And this quarter not only we have earned 12. Around 1240 crore we have earned 900 crore in the second quarter third quarter actually there is no chance for a PSLC there also we earn 140 crore and I assure you we’ll earn a substantial amount in the fourth quarter also. So it is the industry if any regulatory thing has happened it is only helping us and it is helping us as a renewed avenue of a sustainable quarter on quarter earning which was not so till last year.
You will see it is in the first quarter and last quarter some amount. Yeah yeah right. It is now a sustainable thing over three quarters. Starts doing change their portfolios as as. Of now though it should not. I mean at least next year there should not be any effect going forward. We can’t say there will be always surplus and efficient players of PSLC and Kendra bank has that advantage.
Unidentified Participant
Sure sir and so what explains a quarter on quarter jump in our other opex Is there any line item where we have seen some surge in the current quarter?
K Satyanarayana Raju
If you see the other operating expenses there are two one time items. One was IPO charges that Canrabco and canary HSBC that needs to be absorbed by the promoter. So there is around for that there is a fees of around 80 crore. Another 80 crore is of depreciation that is for the employee benefit as a part of the furniture scheme. The furniture for employees were replaceable every 10 years which we have brought down as a extra facility for employees to five years. So to do that we had to provide additional depreciation. It is one time and at par with industry most of the banks so it is so that around 160 crore another 100 crore on technology related expenses were there that is AMC charges and that on the ongoing capex that is happening that has happened.
So this is more or less around 250 crore which of is of additional which is not of routine image.
Unidentified Participant
Sure. And so taking for from Maru’s question so should we see a margin bottoming out if there is no further rate cut or we should still see some contraction in the margins going forward.
K Satyanarayana Raju
Yes, yes I that is with the OMO coming up and the swap being announced the liquidity will be injected and we see that cost of deposits further cooling down. So yes we if the rate of cut rate cut doesn’t happen we see that it will stabilize.
Unidentified Participant
Sure sir that’s very helpful. Thanks a lot.
operator
Thank you. We’ll take the next question from the line of Piran engineer Please go ahead. Sir your question sir not audible please. Go ahead with your question. We’ll move to the next question from the line of part. Gutka, please go ahead. As there is no response. Yeah.
Piran Engineer
Hi. Sorry. So sir, first question is. Out of the total recovery from the return of account what went to the interest income line item.
K Satyanarayana Raju
Total right of recovery more than 2000 crores. It is interest income. 370. About 370 crores went to interest interest.
Piran Engineer
Okay, sir. Fair enough. Thanks. And my second question is. You have raised your. So within the term deposits within the 1, 2, 3 year bucket. You have raised the deposit rates by 35 bips in January. And so should we expect that to flow into the cost of funds say by Q4 or Q1. And therefore the decline in the cost of funds will not be as much as what we are anticipating. Is that the right assessment?
K Satyanarayana Raju
So almost 15% is now replaceable the term deposits. And we see there is a steep decline. Whatever we have raised last year. If that is getting replaced we are getting some 70, 77 bips lower in the new deposits.
Piran Engineer
Okay. Okay sir. Fair enough. Thanks a lot, sir.
operator
Thank you. We’ll take the next question from the line of Jai Mundra. Please go ahead with your question.
Jay Mundra
Yeah. Hi sir. Good afternoon and congratulations on the quarter. Thank you. My first. First question is sir, if you can bifurcate SMA012 separately out of 35000 crore number. And have you started providing anything on SMA1 2 just for you know ECL transition. Sir, our SMA in absolute terms it has come down from 43,000 to 35,604. The SMA2 has come down from 21,268 to 15,454. And SMA run has come down from 11,882 to 10,593. So SMA2 has come down from 2% to 1.30%. SMA1 has come down from 1.13 to 0.89%. And 1946 crores in three accounts.
We have done additional provision as prudent banker outside the SMA purview. If you see that SMA 1 increase due to shifting of only one Kaleswaram irrigation project.
K Satyanarayana Raju
But that is 5,000 total. I am telling that is that gives a bigger picture. Our SMA has come down from 4.18% to 2.99%. And our slippage has come down to 0.64%. That is industry best. So on both counters counts our bank is doing extremely well on slippage also and reduction of SMA also. And out of this 15,000 and 10,000 crore of SMA2.1 sir, outside of this Kaleswaram and some other large are we providing any. Any. Any rule driven provisioning or. As of now there is no rule driven provisioning on SMA1.2 sir, as on date the provision coverage ratio is 94.12%.
And in these three accounts we have provided 1946 crores. The outstanding is 6600. Although we don’t see that it will slip because continuously these are appearing in sms. Right? Okay, sure. And secondly sir, on your gold loan if you can quantify sir, how much is the agri gold loan and retail gold loan on as on December. And is there any change in the way you classify retail or agree gold? Because there have been observation at other banks. You know in this, in this assessment by RBI or in general also sir, our total gold loan portfolio to 2 21,000.
Out of that agri gold is 1 lakh 48 thousand and 9 non agree is 72 thousand 661 crores. So very consciously we have rolled back the products of gold loan in metropolitan and urban centers. Because that was the RBI observation. Now we are totally complied to it. And our gold loan portfolio is improving at 30% on a yoy basis. Right? Right. And said this, there’s a lot of. I mean strong jump in the retail. Right? 30% plus. Is this a buyout thing or this is totally organic growth. How should one look? This is totally organic.
This is totally organic. No buyout in the retail. No buyout Totally or. Okay, sure.
operator
We’ll take the next question from the line of Asokaj Meera. Please go ahead.
Unidentified Participant
Good afternoon sir and compliments to you sir and on the entire team. Am I audible, sir?
operator
Thank you Meena sahib. Yes, audible.
Unidentified Participant
I’m Ajmera sir. Hope all is well. Yeah, all well. My compliments to you for the I think highest ever quarterly profit of 5,155 crore. I think the last time we touched 5,000 crore was in Q4.25. If I am. Yes sir. Correct. So my compliments to you and the entire team. Sir, my first question is on the credit growth target. In nine months itself you already achieved around 11% of the credit growth. Whereas your target for the overall whole year was 10 to 11%. So would you divide it now upward on this. Similarly in case of opposite side, in case of deposit the target is 9 to 10%. But we could achieve in nine months only 6.39%. So little divergence there. So would you maintain your target on the credit? The Same or you will increase by say 2 3% up.
K Satyanarayana Raju
Sir, coming to the first point regarding complements on profit. So this net profit we have made despite increase in provision ratio by 293 basis point. So despite making huge PCR and still we have maintained the net profit and recorded the highest net profit Regarding credit growth. Sir, you have told we have given a guidance of 10 to 11%. But already we are crossing 13.59% and we see that going ahead this will be maintained. And in the deposit side also we have given a guidance of 9 to 10%. We are already near 13% and we see that it will be maintained in the fourth quarter also.
Yeah, though there were some disturbances but anyway I could hear you properly.
Unidentified Participant
Okay. Sir, in fact one of the major contributor of the profit in this quarter was treasury income also which is almost doubled from the last quarter to 3,056 crore now. And profit on sale of investment is 2.590 crore out of that. So going forward whether the treasury will continue to contribute so much in the profit for the last quarter of this FY26 or we might see it slowing down and maybe the income on the other the net interest side the income is higher and this is how we’ll be able to maintain the 5000 plus quarterly profit.
K Satyanarayana Raju
Sir, in the Q3 due to listing profits of Canra Rebaco and Kendra HSBC. In Kendra HSBC we offloaded 14.5% stake and in Canra Rebaco we offloaded 13% stake and could gain 2006 crores. So going ahead if the yields soften then definitely this will be maintained. But at the moment the yields are not cooling. Suppose more OMO operations takes place and with the buy sell swap if liquidity flows and the cost of deposits come down and the yields soften then definitely treasury will take a upturn.
Unidentified Participant
Sir, as regards the NBFC portfolio, I know that the Canada bank is always, you know not very optimistic and encouraging the co lending part and other things. But of late is there any change in that stance on the NBFC side and co lending side? And what is our present exposure to the entire NBFC sector? The loans given to NBFC for onward lending, Sir.
K Satyanarayana Raju
Sir, the NBFC exposure is at 1:51,000 and it is growing at 6.09%. We are open to NBFC lending provided the rates are compare. Good. So normally the AAA rated NBFCs when they approach us but the rates are not competitive then we are shying away for that because protection of NIM is also our major criteria. And while we are growing at more than 13.5 we don’t see any reason to entertain low yielding advances. No point well chicken. Point well taken sir. In the recovery in the return of account is good. During this quarter of 2051 crore what is our total write off written off book. And do we expect to maintain the same momentum of recovery from the return of account?
Unidentified Participant
Sir, if you see last 3, 4/4 continuously our recovery in write off has been consistent and that will continue. Sir. What is the total return of book?
K Satyanarayana Raju
Sir, size 60. 64,000. 66,000 crore.
Unidentified Participant
66,000 crore. So are we going in the range of some 7, 8% kind of recovery from this book for the whole whole year?
K Satyanarayana Raju
Sir, we have taken a conscious call that it it has to be more than 2000 crores range. And we are. We are continuously trying to achieve that number. If you see last December also it was 2008 crores. This year 2051 crores. Although my total NPA book is falling but we are trying to maintain this recovery ratio.
Unidentified Participant
Sir, any ballpark, any calculation has been done. Like one of the other bank is also doing on the underwriting standard. Like over the last five years you know post Covid how many how much amount of the loan has been sanctioned and disbursed. And what is the NP ratio out of this new underwriting of this last five years. Is there any any such which will give the color to the present underwriting standards and how the bank is going forward?
K Satyanarayana Raju
Sir, already if you see our underwriting standards has improved and our slippage ratio is now industry best at 0.64%. That that can all is a reflection of good underwriting standards already prevailing with Kendra bank. And your SMA also has drastically come down from 4.16% to 2 below 3%. So definitely underwriting has played a very very important role in that.
Unidentified Participant
Good sir. Thank you very much and all the very best. Thank you sir to you and everyone sitting there. Thank you.
K Satyanarayana Raju
Thank you very much sir. Thank you sir.
operator
Thank you. We will take the next question from the line of Bhaviksha. Please go ahead.
Unidentified Participant
Hello. Hi sir, thanks for the opportunity. What would be your average LCR for the quarter? Around 150%. Last quarter.
K Satyanarayana Raju
Our LCR is 125%. 125. To assume that borrowing increase in the quarter approximately of 60,000 crores was like back ended. And also wanted to understand at what yield and what instruments were the. Please Repeat your question.
Unidentified Participant
Bhavi hi sir. Sir, our borrowing increased by 55 57,000 crores this quarter. Quarter on quarter it was 90,000 and it is 1.5 trillion. Now I just wanted to understand what instruments were there and at what cost have they come in?
K Satyanarayana Raju
No. If whatever borrowings have increased it is on two fronts. One is we have raised 81 bonds this quarter. And we there was refinancing from Nabard and Sidbi of our existing loans. These are the only borrowings that we had in this quarter. And a part of this borrowing that is 81 bond is replacement of old also that maybe the net increase is only 6, 700 crore. In as far as Tire 1 bond is concerned. So it cannot be. And the rest is mainly seatbe and Nabad refinancing at a lower rate.
Unidentified Participant
What sir is asking is borrowing increase.
K Satyanarayana Raju
That is part of the borrowing only. Our SLR is 24% and the prescribed is 18%. We have excess SLR of 6%. And whenever the opportunity comes we borrow and take that advantage.
Unidentified Participant
Okay sir. And sir, would you be comfortable to share the refinance cost of these NAB. Cost?
K Satyanarayana Raju
It is around 5%.
Unidentified Participant
Okay. Okay. Answer last thing. Sir. Standard asset provisioning last quarter was also 300 crore. This quarter is also around 286 crores. Sir, anything specific to read here?
K Satyanarayana Raju
Standard asset provision one is. We had to provide for DCCO extension that some provision of around 80 crores is there. Around 90 crore is there. And other than that I think these are often routine nature. There is nothing else.
Unidentified Participant
So thank you so much.
operator
Thank you. We will take the next question from the line of Param Subramanian. Please go ahead.
Param Subramanian
Thanks for taking the question. So I wanted to ask something. Recovery from written of account 2050cr in this quarter. If you can get some mix between retail and corporate. Were there any chunky accounts that you tune or is there a retail granular mix?
K Satyanarayana Raju
Actually in this written of recoveries of 2051 crores there are four major accounts. One is Chinani Nursery. We have received 288 crores. 271 crores. So that is the. But few few bigger accounts will always materialize. Also. Yes you are. That is around 5050 retail. And. And even for the nine months it will be like that. That is retail recovery. P E N TW O. That is. That is around thousand crore per quarter. Thousand crores per quarter. You are getting retail recovery. That is. That is yes. From retail recovery in two is around is on an average it may in some quarter it may be more Some Quarter it may be less on an average around thousand crores.
Param Subramanian
902,000 crores. Okay, very useful.
operator
We’ll take the next question from the line of Atlas Sunjay. Please go ahead with your question.
Unidentified Participant
Good afternoon. Two, three questions from my side. Firstly on the margin front do you see any room to cut your term deposit rates or hike your loan pricing. Let’s say on housing in order to boost your margins from here on that is one continuously. See we are continuously studying the market. And our term deposit is pricing according to the prevailing market conditions. Got it. And on the home loans you think you. You can increase the pricing there. Potentially it is repo linked and prevailing market conditions. Understood. Secondly the borrowings. Yeah. Sorry sir.
K Satyanarayana Raju
No, carry on. Carry on.
Unidentified Participant
Carry on. The borrowings which have gone up how much further can they go up from here? And I heard your explanation on what is causing it. But how much further can it go up from here?
K Satyanarayana Raju
I mean I. We feel we are already at an optimum level. It is. Borrowing is always as a product and we don’t want to increase it. It is. We borrow just to leverage our cost. Just to see that is as sir said a major chunk is overnight. That also to that with excess SLR that we do to. To neutralize the cost and take opportunities in the market. Market. So it will be. I don’t see that going up. That is at an optimum level. And lastly the bad loan recoveries have been quite good for the last couple of years. Both from the written off accounts as well as from NPAs. What is the outlook you have for FY27? Sir? It will continue. Because the recovery tools in market today we have NCLT options. We have DRT options, surface options. Your low cadala is being regularly conducted. We have aggressive OTA schemes so we don’t see any shortfall coming. So that has. We have been consciously maintaining that. And recovery actions are prescribed as per the accounts. So similar run rate as this year is possible.
Yes. Or it will continue. Thank you sir. Those are all the questions.
operator
Thank you. We will take the next question from the line of Piran engineer. Please go ahead. Please go ahead with your question. And there is no response. We will take the next person from the line of Akshay Bazlani. Please go ahead.
Unidentified Participant
Yeah. Hi. Thank you for taking my question. Firstly wanted to ask around. So we got this 2000 crores of one off profit. Have we utilized that to make any contingent buffers? And what would our current contingent buffer be?
K Satyanarayana Raju
Sir, in three accounts we are maintaining 1956 crores as abundant precaution Although we don’t foresee any slippage in this account but as prudent banker we have done so. And whatever regulatory provisions are coming up like for DHTCCO extension and all we are making that adequate provisions for that. And and also you see our provision coverage is going up. It is also. It is as you said we are still. I mean when you compare us with our peers we are a shade below them. We also want to be in that space of our peers as far as provision coverage is concerned. And as sir said in standard asset wherever there are some weaknesses we are proactively making provisions within the regulatory framework. Framework.
Unidentified Participant
Understood, Understood. And my second question was around you know current account balances there has been overall a lot of, you know fluctuations when I see on a quarter to quarter basis so and overall on a deposit strategy I wanted to understand, you know what are we trying to do in order to improve the deposit franchise since it’s you know relatively weaker when we compare it to the peers.
K Satyanarayana Raju
Sir, this current account fluctuation is due to one account in September quarter. We have got some 26,000 crores deposit in that account. If we subtract from the prevailing this one, the September this thing then from 49,000 it has grown to 54,000. So in current account also we have seen 15% roughly growth in saving also we have seen a growth of 8.51% and within saving actually individual is more than 10%. So we are performing quite well in that CASA space it is growing at a rate of 9.32%.
Unidentified Participant
Sure. Thank you. Thank you for answering the question.
operator
Thank you. The next question is from the line of Jayant Karote. Please go ahead.
Unidentified Participant
Thank you for the opportunity sir first question is there’s a strong growth in retail at 31%. Yoy. I see vehicle has grown at 26. If you could also tell us which are one or two top products outside vehicles that are growing in that book. And also if you could help us with your average yield on vehicle book as well as some of the other products exhousing I believe you spelled out your average yield on retail book is 8.83%. What would it be on vehicle and some other fast growing products in retail?
K Satyanarayana Raju
Sir, our yield is 8.79%.
So that comprises of the total retail portfolio of housing clubbed with your vehicle loan and other retail products in lam sector it is 8.88%. So what is the yield on vehicle book? What is the yield on our vehicle book? It should be it should be above 8.5. It’s around 8.5.
Unidentified Participant
Okay. And sir, what are the other products X of vehicle and housing that are.
K Satyanarayana Raju
Growing rapidly that you in that around 70,000 or 74. 75,000 crore is gold loan portfolio in which is growing at a jet speed more than 30%.
Unidentified Participant
And what would be our yield there? Sir, there it is around 8.8.
K Satyanarayana Raju
It is around 9. A little below 9.
Unidentified Participant
So you are confident of this 8.79 holding up and expanding next year as well? Absolutely.
K Satyanarayana Raju
Yes. That portfolio will grow at this speed.
Unidentified Participant
Great. Great. Congratulations. All the best. Thank you, sir. Thank you.
operator
Thank you. The next question is from the line of Gaurav Jani. Please go ahead with your question.
Gaurav Jani
Thank you for taking my question. The first is despite a strong retail growth, sir, why is our margin down sequentially by 5 basis points? And while the LDR has also gone up, sir, margins are low. Because the CASA is not growing to the level. It is growing at 9.32%. And our average your CASA is 30%. That is I think on a lower side. Although our endeavor is still to improve that. And it is improving also. But not to that level. No.
K Satyanarayana Raju
I’ll add to this. Your question is why it got reduced. You must agree with us that whenever there is a policy rate cut that has to be passed on to RLLR linked loan immediately. And my 49% of the portfolio is RLLR linked. Whereas deposit pre pricing takes minimum six months. Six months to one year. That is to answer your question. That is the reason for reduction and that is the main reason for the compression that you see. And I think that will continue till that rate cut stabilize to some extent. That challenge will continue for I suppose lenders like us.
Gaurav Jani
Sure. And so my last question is, you know, how are you looking at deposit growth? Right. While this quarter did have the benefit of crr it has been kind of lagging. So how do we kind of plan to ramp this up to meet our guidance on loan growth?
K Satyanarayana Raju
See, our deposit is growing at 12.95% against the guidance given 9 to 10%. So going ahead also we will continue with the same performance for the last quarter also. So just a bookkeeping one, there is a restatement in deposits for September. So anything to read into it. And you know what has been declassified? Sir, there was a RBI observation that overseas branches that deposits taken from bank were taken as were earlier considered as borrowings.
Now we earlier were considered as deposits. Now we have reclassified as borrowings. So. And subsequently we have changed in other other previous quarters also that effect has been changed. Sure. So 33,000 reclassification has been done has been reduced and it ranges from 23,000 from December 24 in subsequent quarters. Accordingly in the December 33,000 has been reduced. Understood. Thank you so much.
Gaurav Jani
Thank you.
operator
There is a question in the chat box what is the breakup of the fresh slippages during the quarter?
K Satyanarayana Raju
Yes sir in agriculture it is total slippage is 1857 crores. 789 is from agriculture sector 739 is from MSME retail 294 and 35 is from gold. No corporate account has slipped.
operator
Thank you sir. The next question is from the line of Sushil Choksee. Please go ahead sir.
Sushil Choksey
Congratulations to Team Canada for excellent performance.
K Satyanarayana Raju
Thank you sir. Thank you.
Sushil Choksey
Chuck Sisar Majority of my questions are answered Sir I have difficult same questions from every what is our digital spend because we are focusing on RAM and enhancing our business and what is our cost for human resource which we are going to incur for enabling technology as well as new initiatives.
K Satyanarayana Raju
Sir our staff cost is now stabilizing as 4900 crores and efforts are being taken to continuously upskill our staff. So there there we have our definite expenditure and we see that entire staff goes undertaking the undergo training Last year also entire staff underwent training as per their Kris so that their performance improves. So are we spending on enhancing the current management as well as top management and other staff members capability. Because tomorrow AI will be there many other technology initiatives, new product initiatives. So what is the digital spend for all these initiative and additional incentive and other focus cost. This is your regular staff expense. I’m saying. Sir we are conscious that what our future workforce will look alike. So accordingly we have recruited data scientists, your Python engineers and all so for AI capabilities and all. So our vertical has been created separately for AI which is working on identification of use cases that can be implemented in the bank. So already under fraud prevention and default prediction AI is implemented to some extent so you will see more and more users use cases coming up and further also we will enhance the capabilities of our employees and entertaining. There are a lot of products we have introduced.
One is our business around has now been nominated to be adopted across industry. We have a dedicated business analytics team so that works for lead generations within the system.
Sushil Choksey
Secondly your total digital spend for the year, the budget for the total spend which you are going to do in digital and what is your future outlook on that.
K Satyanarayana Raju
Around thousand crores. We are spending sir annually on digital. Initiatives for Last three years sir, we have been spending around thousand crore between 800,000 to 1,000 every year. And I think this year also. I mean it is we should be able to reap the benefits now. I think now it is the time to reap the benefit. But AMC charges and all will go up. But as sir said AI related we have established a department where we need both from people side and technology side. Some investment will go going forward. We have three other listed companies under a hold in the cross selling of business as well as for touch points. How are we benefiting and if we are able to succeed how many products are we selling to our existing customers? No, no. For our Canada Rebeco and Canada HSBC including the canteen home. So two of our subsidiaries now. So we are getting substantial benefit out of this. So insurance company in the previous NFO what we have launched. So against the target of 500 we have reaped some 6050 crore in 15 days. The room what was given to the snow. So we are valuing this subsidiary and we are enhancing the value for the customers by cross selling. So the whether it is The Canada Rebeco SIPs or mutual fund selling or it is the insurance what we are selling through our branches 10066 branches.
So we are getting substantial benefit out of these two subsidiaries by cross selling in a large scale. And our company is also benefited and we are earning close to 500 crores income out of the subsidiaries by selling their products.
Sushil Choksey
Income. But do you mean to say that majority of our CASA customers are taking two products from us. Three products from let’s say account. Is the car loan coming to you?
K Satyanarayana Raju
Yes. Yes. That is what I wanted to say. So apart from car loan and housing loan we are also selling credit card. We are selling the other product the demat account we are selling to them. We are giving so much of benefit by way of this engaging with them. Sir. Sir, we have a business analytics wing and that is responsible for creation of leads. So they have certain machine learning models and they scrub the data and accordingly they suggest a person how many products we can sell to him. So whenever a customer approaches the counter so they have this opportunity the how many products, what other products can be sold to this customer? So leads are generating from our customer relationship models and leads generating through our own machine learning models.
So that conversion rate is also very high. That that is why you are seeing that our credit growth in ram sector is 13.5.
Sushil Choksey
My last question in this round is that the market is favoring PSU banks over all other sectors including private banks, we are showing healthy profits. We may not for a nominal growth which we are doing, we may not need equity. But if the market is rewarding. In the past we had capitalized ourselves by doing qips ahead of time. Do we plan something in this quarter or coming time or we looking to it at a future date?
K Satyanarayana Raju
So qip I don’t think QIP is now lined up. As you know and you have seen that my capital adequacy is already at 16.5. We are adding around 17 to 20,000 profit per annum. So there is no re. I mean as of now we are adequately capitalized to do business to do to have a double digit growth going forward next couple of years. And if as and when, if any moment it is required, I don’t see a challenge raising it. But in the immediate future I don’t think bank will require that. So basically self reliance is going to work in your growth machine. That is your summation exactly sir. Strongly it should work right now on business growth front, on profitability front, capital adequacy front, asset quality front bank is doing extremely good in all parameters.
Sushil Choksey
Congratulations and best wishes for the time to years to come.
K Satyanarayana Raju
Thank you doctor. Thank you. Thank you.
operator
The next question is from Chetan Wadia. Please go ahead.
Chetan Wadia
Yeah. Can you hear it? Okay. Can you hear me Sir? Yes sir.
K Satyanarayana Raju
Yeah.
K Satyanarayana Raju
My I only one question one in terms of your growth in advance. If I written the correct list you are saying advising 13% growth in your credit growth for the NEV for the next year which are the five areas of top five areas of growth that you see for yourself and what are the yields on those at advances? Sir, RAM sector is the strength which is growing at 18.70% and where the yield is also 8.88% under MSME. Also if you see we are growing at 13.74% and the yield on such advances is 9.28% so going and gold is also growing at 30% where the yield is around 9% and apart from that we are generating income through PSLCs.
So the surplus priority sector that we have, so these are strength areas of the bank and the retain of recoveries also. Okay, that we will continue. Sure noted.
Chetan Wadia
Then my second and second and the. Last question is that you said the NIM range would be around 2.45 to 2.5% as you said in the beginning. And any scope for improvement over there over the next one or two years. Is there any such deliberation internally happening to make it to 2.6 to 2.7% range.
K Satyanarayana Raju
Sir. Definitely. Yes. That will happen as the rate cycle effect settle down. Because now there is always a time lag on passing on the RLLR based loans and the deposit repricing. Once that stabilizes automatically 1520 basis point will immediately rise across lenders. So we should be no exception. It should be more in fact.
Chetan Wadia
All right, Noted that. Thank you very much. All the best. Thank you.
operator
We’ll take the last question from the line of Ankit. Please go ahead.
Unidentified Participant
Hello. Yes sir. Sir, my question is on ECL sir. Sir, are you doing any ECL provisions or what is the total number of. ECL provisions from 1st April 2027 that you will be doing? I.
S.K. Majumdar
You. It is. It is as our MD said. It will be less than five digit the number. And it is as you know if one side it is less than five digit number. It has one more year to get implemented. In a year we will add minimum between 17 to 20,000 crore of profit. There is my provision coverage will be all time high of over 95%. So the requirement of ECL by the time it gets implemented will further come down from that five digit figure to a much lower figure. And even if we implement as we said in the past my CRAR and CET1 will get affected by only a percentage point.
That means Even then my CRAR will be at above 15 and CET1 will be above 12. Above 11. But this is if we implement in one go. But as we understand RBI has allowed it to be spread across four years. So it has got almost no effect. And we will be able to maintain ECL differently will have no impact. The provision release that has happened or in on non provision release it is the release of funds that has happened on account of this CRR cut over during September and November. That itself has cushioned all that. I think there is no effect on this across banks. I don’t see if there will be much effort. Okay sir, I got your point. But your peer bank are doing the ECL provisions like PNB has done. I’m just asking are you doing any. ECL provisions in these quarters or you. Are doing just one go? Sir, we feel we don’t need to do any preemptive provision before that. That will come from my quarterly profits will be sufficient at any point in time to absorb that without hindering business growth and capital position.
Chetan Wadia
Okay. Thank you sir.
K Satyanarayana Raju
Thanks. Thank you.
operator
That was the last question for the day. I hand over the call to the MD sir for his closing remarks.
K Satyanarayana Raju
So Sir, I have already said it is a strong numbers, be it business growth, be it asset quality, be it profitability, operating profit, net profit and capital adequacy. And I don’t see any reason that this growth will not continue the last it will. It will continue in the last quarter also. So thank you sir.
operator
Thank you. That concludes Canada bank conference call. Thank you. This meeting is no longer being recorded. This meeting is being transcribed and summarized. Thanks for using webex. Visit our website at www.webex.