Canara Bank Ltd (NSE: CANBK) Q4 2025 Earnings Call dated May. 08, 2025
Corporate Participants:
Satyanarayana Raju — Managing Director & Chief Executive Officer
S.K Majumdar — Executive Director
Debashish Mukherjee — Executive Director
Analysts:
Ashok Ajmera — Analyst
Mahrukh Adajania — Analyst
Kunal Shah — Analyst
Piran Engineer — Analyst
Harsh Jain — Analyst
Bhavik Mehta — Analyst
Anand Dama — Analyst
Unidentified Participant
Akhilesh Upadhyaya — Analyst
Sushil Choksey — Analyst
Presentation:
Operator
Good evening everyone. Welcome to the Q4 FY ’25 Earnings Call of Canara Bank. With us today we have Mr. Satyanarayan Raju, M.D. and CEO sir; Mr. Debashish Mukherjee, Executive Director; Mr. Hardeep Singh Ahluwalia, Executive Director; and Mr. S.K. Majumdar, Executive Director. We will start the call with the opening remarks from the MD sir post which we will start the Q&A session.
MD sir, over to you.
Satyanarayana Raju — Managing Director & Chief Executive Officer
Good evening to all of you sir. Thank you once again for attending this investors meet — analyst made sir. I am here to share some snapshots or the performance highlights of the entire financial year as well as the fourth quarter to all of you. Along with me, my senior colleagues, Debashish Mukherjee sir is here, Hardeep Singh Ahluwalia is there and Majumdar is there. And all our top brass, top management is sitting here. Once I give them highlights, you are free to ask any of the clarifications. We are here to clarify that sir.
Our global business has grown at 11.32% and stood at INR25.30 lakh crore as against our guidance of 10%. The first time the bank has crossed INR25 trillion. And last two years we garnered the business of more than INR5 trillion. Our global deposit has grown at 11.01%, stood at INR14.56 lakh crore as against our guidance of 9%. Our global advances have grown at 11.74%, stood at the INR10.73 lakh crore as against the guidance of 10%. Our operating profit grown at 12.14% year-on-year and stood at INR8,284 crores. The first time we have crossed a quarterly operating profit above INR8,000 crores. Our net profit has crossed INR5,000 crores with a growth rate of year-on-year it’s 33.19%. And first time in the history of the Canada Bank a quarterly net profit has crossed INR5,000 crores.
Our PCR has improved to 92.70% with a year-on-year improvement of 360 basis points. It’s the highest in the history of the Canada bank that in one year the PCR has increased that much. Our gross NPA has reduced considerably and stood at 2.94% as against our commitment of or guidance of 3.5% and year-on-year decline of 129 basis points. Our net NPA stood at 0.70% as against the guidance of 1.10% with a year-on-year end declare of 57 basis points. With all these bottom line growth, steady growth and the top line growth. I am very happy to share with all the investors and the analysts that our Board has recommended for a dividend of 200% with a paid up capital as against the last year 161% that is a INR4 for every INR2 rupee share face value of that.
One thing I want to clarify to you is we have tremendous improvement we could show in the asset quality both in the PCR as well as gross NPA and net NPA by recovery as well as controlling the slippages. But without compromising the top line growth and the bottom line growth. So that’s what actually the best point of this year what performance we can say that. This is always possible because our RAM credit has grown at 13.23%, stood at INR6.10 lakh. Our retail credit has grown at INR2.23 lakh with a year-on-year growth rate of 42.80%. The 42.80% you may feel that it is an outliner. But the reason already last two times I shared with you. But once again at the cost of repetition I will share it with you.
So last one year, for last year, 1st of April onwards we stopped lending to agriculture purpose in the metropolitan. But to meet the requirement of metropolitan borrowers who wants to borrow against the gold, we introduced a loan against gold, secured loan against the consumption purpose. That has actually attracted by the many people. That is the reason actually earlier we have INR16,000 crores agriculture loans in the metropolitan. That entire thing has been shifted to — it’s not that as it is shifted. Some of those loans have been closed. Some of those loans have been renewed and all but so that’s here the agriculture that to the extent of INR16,000 crores, there was a dent was there in the agriculture gold loans. But that has been benefited in the retail credit.
Our housing loan growth is at 13.57% and stood at INR1,06,000 crores. Our vehicle loan is almost growing at 20%. That’s stood at INR20,637 crores. Our earning per share is at INR18.77 for each INR2 rupee face value share with a 16.98% growth and our fee based income, the bottom line, the growth is mainly helped by the recoveries in the technical return of accounts as well as the fee-based income growth year-on-year it is a 20.30%, stood at the INR2,335 crores. Our slippage ratio we could well maintained well less than the 1% as against the given guidance of 1.10 but we could maintain it to 0.90. Previous quarter it was 0.96. It is further down to the 0.90 with an improvement of 38 basis points.
These are all the few few highlights I could share it with you. I am sure that by this time you all might have gone through that our presentation. Now you are all welcome for asking any clarifications or questions sir. We are all here to clarify to you. So over to you sir.
Questions and Answers:
Operator
Thank you, MD sir. [Operator Instructions] We have our first question from the line of Mr. Ashok Ajmera. Sir please unmute yourself and go ahead.
Ashok Ajmera
Yes sir. Good evening sir. [Technical Issues] the entire team of Canara Bank.
Satyanarayana Raju
Good evening Ashokji.
Ashok Ajmera
Again compliments to you sir for fantastic results. Especially on the — if you see straight away the bottom line of the quarter, it has gone from INR4,100 crore to INR5,002 crore which is very very important. Otherwise there are headlines. You know the profit has gone down by 10% or 5%. So this is some very, very positive this thing in spite of all the provisioning and everything. Having said that sir, this profit has been on the back of certain changes in the RBI norms, also in the, mainly in the SRs issued by the NARCL which is the 100% government guaranteed SRs.
And because of that there is some provision reversal and there are some gain. So sir, I would like to just understand the entire mathematics of these two, three items which are together. One is that excess provision reversed in P&L is 1-4-6-3, INR1,463 crores on the sale of stress loan. Then excess provision reversal of INR1,724 crore for NARCL. The SR revaluation based on the fair market price and also the unaccounted gain of INR97 crore which has also been taken in P&L. So — and net-net the — the net provision overall is INR1,831 crore. So can — somebody can unfold the — or this entire — how this figure has finally come of — [Speech Overlap]
Satyanarayana Raju
I’ll ask our Executive Director Majumdar to answer this question.
Ashok Ajmera
Because there is an extra provision of NPA. I mean the provision on NPA account is also much higher or INR2,847 crore in this quarter.
Satyanarayana Raju
So that’s why you can see…
Ashok Ajmera
So all these three, four different figures — yes sir.
Satyanarayana Raju
Ashokji, that’s why you can see that you can really with the overall whatever the benefit we got through that SRs reversal, provisioning reversal and all we could use it for strengthening our PC, provision coverage ratio, PCR. In last quarter it is 91.29, something is there. Now this quarter it is 97 — 92.70. Almost 150 basis points increased in our provision coverage ratio. That is why that you are showing that the higher provisioning in the NPA accounts. It is not mandatory. But we want to strengthen that our balance sheet. We want to strengthen that our PCR to make it at par with other peer banks. Because you know that the historically we were little behind that in the PCR. We don’t want to continue like that. We want to take that benefit whatever it’s there in that. That is the major accounting policy that we have used them for strengthening our PCR.
Further down to down, line to line, apple to apple if you want any clarifications, our Executive Director Mazumdar is there. He will clarify to you sir.
S.K Majumdar
Sir, your basic question is how much of that profit is due to change in the norm that SR reversal provision, isn’t it? Sir, our total SR we was around INR1,700 crore. Of which till December there was a provision of INR1,100 crore. The rest INR600 crore there was a no question question of reversal which we need not have to do for the March quarter. That INR1,100 crore is actually that reversal happened. And out of that INR1,100 crore, INR500 crore has gone into what you see as part of the profit. Another INR600 crore which we have made a provision, as sir explained for non-performing assets just to improve our provision coverage ratio.
You will also agree that when you compare our bank with my peers all of them are today having a provision coverage of 95% or above 95%. So we also want to be in that space. It is because once you cross that 95% PCR you can do — nothing worries you. Any sort of dents you are no longer worried. So we want to go to that space. We want to improve the PCR strongly. And to answer your question that has gone — INR600 crore has gone into that. An extra provision of INR500 crore has gone into profit. And INR600 crore is gone in providing for this. For this extra provision which has improved the provision coverage ratio to us considerable extent.
And sir, you will see that now sir, the major thing this don’t — I think you will be impressed if you see the key data that our provision coverage ratio excluding TWO, has crossed 76. It is 76.6. It is almost 77, which is the real strength of the bank. And it will go and we are almost in line with my peers, formidable peers. So I hope and this is how you have got also we could declare 200% dividend. Having said that as you know that this amount from out of SR addition as per the guideline cannot be used for dividend payment. So these five, these whatever INR500 crore I have added in profit could not be used for dividend payment. And this also needs to be deducted from capital, CET1. So we have also it has not that I could take. This has also had to be that INR1,700 crore had to be reduced from CET1. So you want to find out what is the strength of the bank without this non-core income. And I am sure you must have seen and glad to know that even without this non-core income our CET1 today is 12.03, which is a formidable strength for this bank.
Ashok Ajmera
Yeah. Thank you very much sir for such an elaborate answer. And especially what we wanted to know that on a continuous basis how much profit is unusual and this thing. So you have very well clarified that only INR500 crore has finally gone on account of this SR provision reversal in the P&L which may not accrue to you quarter-after-quarter. Because…
S.K Majumdar
Exactly. And sir, I could not take it to capital also that you must remember.
Ashok Ajmera
And definitely sir, as far as the core strength and the complements are concerned for the business you cross for the first time I think INR25 lakh crore business. So definitely a lot of good things have happened in the bank especially in the whole year and this quarter particularly. Another data point sir was on PSLC commission profit. I mean the commission income. So in the whole year you earned about INR1,546 crore. And in this quarter you have made INR130 crore. Now going forward whether this can be taken as a normal income coming regularly to the bank or we may say that it may or may or may not in future.
Satyanarayana Raju
No sir, actually this PSLC how it comes it’s a demand and supply. Because that now we used to last year we have sold almost INR86,000 crores in the form of a PSLC. But the last year supply also is comparatively high. Because of the gold loans under agriculture and all. Because of latest RBI regulations and all there may be a reduction in the availability of the priority sector loans in the market. So even that may impact the Canara Bank also for amount to which we can sell but not the income. Because when the supply is more your demand will be less — the available commission will be less that we will get.
Lastly first quarter move we used to get 1.75% to only 1.8% or 1.9%. But the tendency has reversed at the end of the fag end of the quarter. For one quarter we got almost 2% commission. Generally that is against 0.4%, 0.5%. And the first quarter, this quarter may I have seen rates are already touching 3%. So maybe my quantum may reduce in the selling in the market from 80,000 to may be a 40,000 or 50,000. But my income may not be reduced because the demand will be very high and the commission will be very high.
Ashok Ajmera
Yes sir. Sir, one question is on the investment book because of the change norms…
Operator
Please join the queue. We have a question from the line of Ms. Mahrukh. Ma’am, please go ahead with your question.
Mahrukh Adajania
Hello, good evening. So I had a couple of questions. My first question is on recovery in written off accounts in the P&L. Right? So that is a very strong income item this quarter. It’s been strong for the last few quarters. But this quarter it’s actually a bit higher than SBI’s as well. You know, whereas SBI also has a large ORCA pool. So what is your total write off pool and what is the visibility on this? Because now we’ve even crossed SBI’s. Right. And it’s on the higher side. So that’s my first question.
And I have other two. So in the interest income breakdown, interest on loans, interest on investments and other interest income there is a sharp jump over Q3 of FY ’23. Right. So it has increased by around INR300 crore. So is there a one-off tax refund? What explains that sharp jump? And my third thing is explain how the retail gold — how the agri gold loans were converted to retail gold loans. Yeah.
Satyanarayana Raju
First recovery in return of accounts, Madam, return of recovery in return of accounts every year we are telling that on an average INR4,000 crores to INR5,000 crores, we can easily recover that with whatever the we have book of almost INR70,000 crores as on date also. When we have INR70,000 crores. So we are nothing to do compare with the other peer bank or anybody because we have potential to recover. Our systems are very strong with some centralized processing is there. Special schemes are there in those written off accounts pay. It will continue to do that. Last year if you see the total INR5,963 we could recover this time almost INR1,000 crores more we could recover.
Last time when we recovered INR5,963 crores, you people have asked. So it may not be possible in the next year because is it this much you are recovered. But we have shown that we can recover better than that. Simultaneously you should agree that when you have in the balance sheet pay 100% provisioning we are also doing the written off to clean the balance sheet that will be added to my kitty and that will be available for recovery in the forthcoming quarters. So for my the whatever the base is there that INR70,000 crores it is not coming down. Maybe the composition is changing. But the base is available to us. So we are sure that this year also we will continue to perform at the same level in the written off accounts. And I don’t see any reduction in that recovery in the written off accounts.
The second one is interest income…
Mahrukh Adajania
Was there any one-off this quarter?
Satyanarayana Raju
Pardon madam? No, no madam. There is no one-off. It is actually comes from small, small accounts. Many things are there. We have actually set up of corporate as well as non-corporate. We get equal amounts in that, targets will be given like that only. It is a through OTS systems through collections. It’s not a one time allotment anything is there madam.
And the second one is interest income. You asked me that interest income increase. If you first before telling the interest income one thing I have to tell you that our cost of deposits and funds you should look at that. That the entire year we could manage with only from June 2024 to March 2025. So both in that it’s a hardly 4 basis points in the cost of deposits and 3 basis points in cost of funds that we could manage in the cost. When you can manage in the cost, it will help in your yield and advances simultaneously our interest income pay, net interest. Total interest income pay jump, this quarter also we got — second quarter we got very good interest on NPA recovery. And third quarter it has come down little slightly, one or two hundred. But again this quarter we got more than INR700 crores in the interest on NPA. So that also is helping in that. So when our collections are very good, it will be helping that. Pardon madam.
Mahrukh Adajania
So the other interest, means interest on loans.
Satyanarayana Raju
Other interest is nothing — but that’s what Madam, other interest is nothing but when you have a surplus or the available liquidity fronts in your system. That’s true liquidity you will lend in the overnight call money markets that will be used in the — that is the actually income. Depending on your liquidity, depending on the demand you do that. So that is quarterly it may be a little bit changes will be there. Sometimes if the supply is less, we get more benefit. If supply is more, we may get little less. But it’s a part of the regular business. There is no one time on that.
Mahrukh Adajania
Got it sir. Got it.
Satyanarayana Raju
And third one you spoke about agriculture gold loans. Agriculture gold loans have come down from last year to this year. Now the actually the agriculture gold loans have now come down to around 1,30,000 crores Madam. Out of these, 246, the agriculture total 247, 132, 133 is agriculture gold loan. Earlier it used to be almost 153, 154. Now it has come down almost 130 to 133. Because metropolitan we stopped lending that. But we have not lost the business in the gold loan. The gold loan portfolio has increased, grown almost near to the 20%. We have grown from 153 to 181. INR1,81,000 crores. So the overall growth has not come down. But it is little bit shifting from agriculture purposes to the RAM credit, the retail credit. Because we have come out with a new product. That product is compensating that whatever we lost in the agriculture gold.
Mahrukh Adajania
Okay sir. Thank you. Thanks a lot.
Operator
We have our next question from the line of Mr. Kunal Shah.
Kunal Shah
Yeah. Am I audible?
Satyanarayana Raju
Tell me sir.
Kunal Shah
Yeah. First question maybe in terms of again sorry touching upon the notes to accounts which is there, there it still mentions that the excess provisioning reversal has been almost INR1,700 crores on account of this maybe the government guaranteed SRs. But you said like it’s only like INR1,100-odd crores. So not able to get that number. Like in notes to accounts it clearly said that it is reversed excess provisioning of INR1,700 crores to P&L.
S.K Majumdar
Exactly. It is INR1,700 crore including March. But March provision was to be made. So when I reverse the SR quantum then the requirement is INR1,700 crore. Because I am doing it in April. But INR600 crore was not booked till December. So I need not have to make that INR600 crore provision, INR1,100 crore plus INR600 crore becomes INR1,700 crore. INR1,100 crores provision was already made which is reversed.
Kunal Shah
Got it. And when you look at it in terms of the homes to accounts on 12.5…
S.K Majumdar
No, no. Your voice — we are unable to hear. Please be louder.
Kunal Shah
I’m saying again when you refer to 12.5. Hello. Is it better?
S.K Majumdar
Yes. Yes.
Kunal Shah
Yeah. I was saying when you refer to notes to accounts 12.5 again it says that there is excess provisioning reversal of the on account of stressed loans. So this is the subset of government guaranteed SR or this is different?
S.K Majumdar
No, no. This has got — this is this has got not government SR. This is something in the normal course the sale that happens to ARC this, whatever that those provisions gets reversed.
Kunal Shah
Yeah. So this is how much would be for this quarter, for 4Q. This is for full year?
S.K Majumdar
This is for the full year. Full year.
Kunal Shah
So how much is for 4Q?
S.K Majumdar
This is SR plus other than that, that is the total figure.
Kunal Shah
Yeah. No, no, I was saying how much is fourth quarter?
S.K Majumdar
It is fourth quarter only. It is from that you revert, you deduct the SR part. The rest is for others.
Kunal Shah
Okay, okay, I’ll just take that offline. And maybe secondly when you look at it on the slippages. So slippages have increased on a quarter-on-quarter basis. If you can just highlight in terms of these segments is it largely MSME and agri which is leading to this kind of a sequential increase? No doubt on a year-on-year basis it is still down. But quarter-on-quarter basis there is some rise over there. So which segments are getting fit?
Satyanarayana Raju
No, it is only the three sectors. That is MSME it is INR1,250 crores. The agriculture is INR750 crores. The retail is INR650 crores. We have seen that only the earlier MSME was used to slip around INR1,000 crores. That has gone to the INR1,250 crores. Only that much difference is there. Not much more than that.
Kunal Shah
Okay. Okay, got it. Yeah, thank you.
Operator
We have a next question from the line of [Technical Issues]. We have our next question from the line of Piran Engineer.
Piran Engineer
Yeah, hi sir. Congrats on the good set of numbers.
Satyanarayana Raju
Thank you sir.
Piran Engineer
Yeah, thank you sir. So just firstly on gold loans sir, you said with the new guidelines ability to sell PSLC will be less this year. Can you just broadly elaborate what you meant by that? Like how does this impact our business overall?
Satyanarayana Raju
No, actually the business overall business it will not impact but there will be some reclassification. The reclassification may happen in the agriculture when we have seen that in our priority sector agriculture including the agriculture gold loans. That is the core agriculture and the gold loans against for agriculture purpose. But core agriculture is growing at a double-digit growth more than 10.5%. That’s continuing its growth. But the agriculture gold loans gradually we ourselves is coming out. Instead of waiting for the final guidelines from the RBI. That steps we have taken last year previous year we have taken.
We have stopped lending against the in the interest subvention. Then there afterwards last year we start put a stop lending to in the metropolitan cities agriculture purposes. But this — these are all the actually activities now shifted some of those agriculture gold loans from these two agriculture to retail. But in the industry may the some concerns some areas some banks when there are inspections are happened the regulatory concerns of that up to INR2 lakhs of agriculture loans and gold taking again as a pledge maybe some concerns may come in the when it comes for that final guidelines.
So that also may cause to reduce in the classifying these gold loans under the agriculture. So only classification purposes — the agriculture loans may available for the selling in the PSLC in the market itself may come down. When the market itself come down. But the demand will be automatically increases from every corner. Your income will continue to be earning on the same level. Only there’s a nomenclature changes from agriculture to retail. So overall business will not impact anything. That’s what actually I want to clarify to you.
Piran Engineer
But sir, it will also impact us, right? Because the agri gold loan will get Canara Bank. Because the agri gold loan now will not be PSL compliant if it is below INR2 lakh.
Satyanarayana Raju
Our 40% requirement priority sector, our achievement is 56%. You have a 16%. When you have 16% with us and all other banks also having some surplus, the demand is less. The commission offered on that PSLC used to range from — first quarter May 1.5% to 1.75%. In the last quarter 0.4% to 0.5%. But since they available because of this reclassification. It’s not that the reclassification impacts only the bank, Canara Bank. It impacts all the banks. So supply also will even RRBs also will be impacted. So supply itself will come down. But it’s not that we will be coming below 40%. From 56% we may come to 50% or 51%. But still we have cushion of 10% to 11% to sell in the PSLC. But it gives an opportunity to sell at a higher commission.
Piran Engineer
Cost. Yeah.
Satyanarayana Raju
So already in the 1st of April itself I have seen that the commission is touching almost 3%. In the last quarter we sold more than 2% generally that’s the last quarter the commission used to be get only 0.4% but we got 2%. So the demand increases that naturally we expect more higher commission when the demand is more.
Piran Engineer
Understood. Understood, sir. So and also just on retail loans, we’ve overall book is up 42% Y-o-Y. Now the main driver here will be gold loans. Is it sir? Because housing is up 13%, vehicle 19%.
Satyanarayana Raju
Normal retail is growing at 14% to 15% other than gold, housing, vehicle and all. But the gold loan portfolio new product we have launched in the for metropolitan cities and all that is helping that portfolio to grow at 42%.
Piran Engineer
Okay. So, how big is our retail gold?
Satyanarayana Raju
Other than gold is growing at 14% to 15%. With gold it is 42%.
Piran Engineer
Okay. So how big is the retail gold book? Around INR50,000 crores, is it?
Satyanarayana Raju
Now it is, total INR2,23,000 crores retail growth, INR48,000 crores is gold loan book.
Piran Engineer
Understood. And so just last question on bulk deposits. What sort of — what is the cost of bulk deposits today? How has it moved in the last one month?
Satyanarayana Raju
Bulk deposits, the demand has come down. The market rates also has come down drastically. And we also reduced our retail deposit. Our interest rate on the deposits have reduced drastically. But this we have seen only in the bulk deposits. Still we are not seen much rate reduction in the retail term deposits. Unless otherwise interest on retail term deposits comes down, it may not get benefit in the cost of funds.
Piran Engineer
Yeah, yeah. No, but [Foreign Speech] like 6%, 6.5%, the rate.
Satyanarayana Raju
No, no, no. Even now also it is ranging around 7%. It depends on the tenure also. See, you can’t generalize it. So 46 days, 90 days, six months, three months, one year. It varies for that, but overall it is, I think it’s a around — if it is one year it is around 7%, 7.10%. That is the result. It is percentage.
Piran Engineer
Understood. Okay. This is it from my end. Thank you. Wish you all the best.
Satyanarayana Raju
Thank you sir.
Operator
We have a next question from the line of Mr. Jain.
Harsh Jain
Hello. Yeah, good evening sir. A few questions. First sir, out of this just on agri gold and retail gold, just to reconfirm the number. So out of INR2.46 lakh crore of agri portfolio, the agri gold is INR1.3 lakh crore, right?
Satyanarayana Raju
Yes sir.
Harsh Jain
Is that the number?
Satyanarayana Raju
Yes, sir.
Harsh Jain
And retail gold is INR48,000 crore.
Satyanarayana Raju
Yes, sir.
Harsh Jain
Correct. And sir, this number, how much was this last year FY ’24, retail gold and agri gold?
Satyanarayana Raju
Retail gold was a hardly it is a INR1,000 crores to INR2,000 crores, sir. Now it is increased to INR48,000 crores. But the agriculture gold was INR153 crores. It has come down to INR133 crores.
Harsh Jain
Okay. Right. So sir, and what is the yield on this retail gold? Broad range.
Satyanarayana Raju
Above 9%, sir.
Harsh Jain
Okay. So sir, this growth in this retail gold is also helping the yields, right? That is a fair assumption, right?
Satyanarayana Raju
Definitely. Definitely. Definitely, sir.
Harsh Jain
And sir, how do you the growth has been phenomenal, right? And you said that part of this was because you had a portfolio which was earmarked as agri. So from INR48,000 crore, how big can this be? Or you think that whatever shift has to happen has already happened in this agri — in retail gold?
Satyanarayana Raju
So from metropolitan book it is shifted already, completely. Now this year we may take little more our actions in line with the regulator. That is we may stop funding up to INR2 lakhs on the agriculture purpose by taking the gold. So that also may push another INR20,000 crores to retail. Hello?
Harsh Jain
Sir I was saying that this INR48,000 crore can move up to INR70,000 crore by FY ’26-end. Is that the range, broad range?
Satyanarayana Raju
We can expect that — that’s in the retail pay sir.
Harsh Jain
Right. What is the yield in agri gold?
Satyanarayana Raju
See, it is around 8.7%, 8.6%. That will be like that. But this is a 9.10%, 9.15%.
Harsh Jain
Right? So maybe 30, 40 basis point yield differential, not material.
Satyanarayana Raju
It will help for us sir.
Harsh Jain
Okay, sure. And secondly sir, if you can also highlight what is your loan mix by benchmark, EBLR, MCLR and this gold…
Satyanarayana Raju
That is 44% sir. MCLR is 45%.
Harsh Jain
Okay. 44% is EBLR?
Satyanarayana Raju
EBLR sir.
Harsh Jain
And gold loan, sir. Would that be fixed or still floating?
Satyanarayana Raju
No sir. It is in a MCLR linked, sir.
Harsh Jain
Okay. So sir, your EBL are resetting if the RBI decides to cut repo rate on let’s say in February 4, you would have passed on almost immediately, right? One, two days difference.
Satyanarayana Raju
Yes sir. Yes sir. In both the times we have passed it on within three days or three, four days.
Harsh Jain
Right. So sir, now when RBI is yet to complete, I mean yet to cut let’s say broad consensus around 50 basis point. Your 44% of the EBLR will see immediate repricing. Your cost of deposit will remain more or less flattish or may come down by 5, 10, 20 basis point. How is it that your margin will held up? I mean you have said that margin will decline more or less by 5 basis point only. So what is the offset sir.
Satyanarayana Raju
If you see that sequentially from December and the March our NIM is improved 3 basis points. But the rate of interest — though already one time we have reduced that in the February itself that repo rate. This is only because of our effective operations of retail deposits and bulk deposits. In the March quarter on January 26 we have given a call to — we have taken — as an entire bank we have taken a call to focus more on the retail deposits and CASA. We are given a call that each staff has to mobilize INR10 lakh deposits which is actually the tremendous response has come from our 82,000 staff members. Though we are expected that we may garner around INR8,000 crores. But we could garner INR17,000 crores. That INR17,000 crores at a retail deposits are CASA —
S.K Majumdar
I’ll request everybody else to mute the mic please. Others who are not talking.
Satyanarayana Raju
So this INR17,000 crores has helped us in improving that 3 basis points in the NIM there. Like that we want to continue and already bulk deposits this year it has come down already April 1st onwards we have seen that softening in the rates on the bulk deposits that also will help us in maintaining that. Maybe first quarter and second quarter some stress may be there. But I am sure that in the third quarter and fourth quarter we can regain it. And we will be there at 2.75% to 2.80%. See already 2.73% is there in the current March quarter where you find that the deposit rates have gone to the peak. Now deposit rates also started softening it. When such conditions we are confident that overall cumulative it can be maintained at 2.75% to 2.8%.
Operator
Thank you sir. We have our next question from the line of Kunsh Khanna.
Satyanarayana Raju
Hello.
Operator
We have a next question from the line of Mr. Praful Agrawal. We have our next question from [Technical Issues]. We have a next question from the line of Mr. Janardhan. Janardhan? Mr Bhavik?
Bhavik Mehta
Hi sir. Am I audible?
Satyanarayana Raju
Hi. Yes, you are audible, sir.
Bhavik Mehta
So thanks for the opportunity. Sir three questions. So first our SAR it would be a 2.9% versus our peers at 2.7%, 2.75%, savings account rate.
Satyanarayana Raju
Repeat the first question.
Bhavik Mehta
Sir, our savings account rate would be 2.9% versus peers at 2.7%, 2.75%. Do we plan to cut our savings account rate?
Satyanarayana Raju
See the decision we are yet to take. We are not focused on that. Actually our rate of interest at 2.90% at this moment. So we have a cushion to reduce up to match with that other banks at 20 basis points. We are yet to take a call on that because we are not focused. Once this results and all is over, the ALCO Committee, next ALCO Committee the discussion will happen and we’ll take a call on that.
Bhavik Mehta
Okay. But sir, I think you would be open to do it, right?
Satyanarayana Raju
But at the same time we may take some benefit to the customer also. It’s not that that we want to take benefit from the customer. We want to give it back to the customer. Also that maybe it’s a too early to comment on that. We may waive the minimum balance charges completely something we will be there. It is not that we want to take something from the customer.
Bhavik Mehta
Understood. Understood. Sir, answer as in how should we think about your credit cost. As in last few years PCR improved meaningfully. Incrementally as in we don’t need to improve PCR a lot. So why still guidance of 90 basis point. [Speech Overlap]
Satyanarayana Raju
No. No. Still our PCR is at 92.70%. Last time also several times I shared with you that our target is our PCR should be above 95%. So that any shocks, anything is we will be easily absorbing that. It’s a complete — it will be ensured. That is the purpose. Actually we want to ensure that our PCR should touch either 95% or cross the 95%. That’s the approach we have taken two years back also we have shown that in the current year, one year itself we are increased 360 basis points. There we want to touch that the — till that we touch the 95% we want to keep additional provisioning in the NPA accounts. That additional provisioning whatever we are doing it that is turning into a credit cost. Otherwise in practical purposes, in real purposes the credit cost will be much, much low. But in the future-ready balance sheet we want to strengthen that balance sheet. We want to strengthen our PCR. That’s why we are providing more provisions on the NPAs.
Bhavik Mehta
Understood, sir. And sir, what would be your average LCR as on date, liquidity coverage ratio.
Satyanarayana Raju
See average LCR is almost 139%, 140% is there.
Bhavik Mehta
Understood, sir. Thank you so much, sir. That’s it from my side.
Satyanarayana Raju
Thank you dear.
Operator
We have our next question from the line of Mr. Anand Dama. Sir please unmute yourself.
Anand Dama
Thank you. Sir my first question is on your SME slippages during the current quarter. Do you see more NPAs flowing from there? Because if you look at your SMA book also has gone up, particularly the SMA0. Is it more because of the mid-corporate segment to some extent slipping through?
Satyanarayana Raju
No, sir. Let me clarify to you that actually SMA if you see that to overall if you year-on-year or if quarter-on-quarter if you see there is a reduction. That’s because of that RINL has gone out of this. But still earlier also I shared with you that three more accounts are there, two government accounts from one state that one our Bengaluru one corporate account. These three accounts are coming. They are continuing in the SMA. So those two together itself is INR7,000 crores. These three accounts together. If you remove that it is a hardly any INR3,000 crores.
Anand Dama
But then if you look at this quarter you had higher SME slippages so that is not part of the SMA book at all. Right?
Satyanarayana Raju
No sir. Actually again I am telling you this quarter — again I am telling you this quarter you should not see that the quarter-on-quarter sir, I don’t agree with you. So always March quarter you should compare with the previous year March quarter because it’s a 100% auditing will happen. It’s not the system — whatever the system driven is there only that NPAs will be looked into that. Sometimes on technical grounds also some of the auditors would like to classify some accounts as an NPA, maybe a small accounts. Such things will happen and the respective authorities will agree for slippages and all. Otherwise actual slippages were INR2,200 crores. Then during the branch audit and all some INR400 crores have been added. That’s why it has come to INR2,700 crores.
Sequentially if you see that it’s a INR2,500 crores to INR2,700 crores. So INR200 crores to INR250 crores more you can see that. But mostly it has happened only in the MSME sector. Generally quarter-on-quarter every quarter our MSME slippages are INR1,000 crores. But this quarter because of some auditors’ technical grounds may if they classify that in the through MOCs another INR250 crores is there. Our MSME slippage is now this quarter it’s a INR1,250 crores.
Anand Dama
So it’s mainly because of technical not underlying stress in the SMA pool?
Satyanarayana Raju
No, no, no.
Anand Dama
That’s a conclusion, right?
Satyanarayana Raju
Nothing. Yeah.
Anand Dama
Sir one more question was on your PLA…
Satyanarayana Raju
Again my request to you is March always compare with the previous March, not sequentially.
Anand Dama
Sure. Sure, sir. And how much is our PLA incentive that we provided during the quarter?
Satyanarayana Raju
Almost INR250 crores we have provided, sir.
Anand Dama
Okay. Great sir. Thanks a lot.
Satyanarayana Raju
Thank you dear.
Operator
We have our next question from the line of Apurva Deshmukh. Please unmute yourself. We have our next question from the line of [Indecipherable].
Unidentified Participant
Hi sir, can you hear me?
Satyanarayana Raju
Hi. I can hear you, sir.
Unidentified Participant
Yeah, so. Good evening. So just one question. If you can provide a certain guidance on your overall advances, growth and the return on assets. I mean your targets going further for financial year ’26?
Satyanarayana Raju
Advances growth already we are given a guidance of 10% to 11%. Our return on average assets also we have given a guidance of 1.05%. Generally you are aware that we give conservatively and we’ll try to surpass that what we have given.
Unidentified Participant
Okay. Okay. Thank you. And all the best.
Satyanarayana Raju
Thank you sir.
Operator
We have our next question from the line of Mr. Akhilesh. Please unmute yourself.
Akhilesh Upadhyaya
Hi, sir. Good afternoon. First question is on a disclosure on slide number 16 where you have shared the non-interest income recovery. This amount is about INR2,471 crores. That is one disclosure. Then on slide number 28 you have given another number which is INR3,049 crores, which is recoveries in written off account. Can you explain what is the difference between these two?
Satyanarayana Raju
Let me say that. In the written off accounts when you recover the amount something will go to the book balance, something will go to the interest amount. This is the difference. Actually when you shown that INR3,000-odd crores is a total together, both towards the book balance and the both the interest. But when you see the other side only the reduction of the NPA when you see that there we have taken only book balance.
Akhilesh Upadhyaya
You mentioned another amount of about INR700 crores earlier in the call which was interest from NPA recoveries.
Satyanarayana Raju
That is earned interest on NPA. That will be reflecting that — no, no. That will be reflecting in other interest income. Interest on advances. That is adding to my NII.
Akhilesh Upadhyaya
So the difference between — okay, so both these items go into NII?
Satyanarayana Raju
No, both will not go. One will go to that NII interest portion. The other portion will come to that other income. Principal portion will go into the other income.
Akhilesh Upadhyaya
Okay, sorry. Sorry to repeat this one. The difference in the slide numbers INR2,471 crores on slide 16 and INR3,049 crores. That’s about INR600 crores difference.
Satyanarayana Raju
So that’s what — that’s what I’m telling sir. Whatever the actually interest on recovery. Interest also interest on NPA accounts will be bifurcated in two. One is interest on actual NPA accounts. One is interest on written off NPA, TWO. So that’s where when we reflect the written off accounts we will not take the interest on NPA accounts. We will show only the interest on written off accounts and plus recovery towards the return of accounts balance. These two together only we reflect that. That’s why you are thinking that the difference.
Akhilesh Upadhyaya
And both these items go into interest income? Both these items going to interest account.
Satyanarayana Raju
I am telling you interest on written off accounts and interest on NPA accounts both will go to the interest on advances. But interest recovery towards the written off accounts book balance will go to the other income.
Akhilesh Upadhyaya
Understood sir. Secondly can you just share the size of your personal loans book and the credit card book.
Satyanarayana Raju
Credit card? Only personal loan book we don’t have actually the problem. We have around INR18,000 crores to INR19,000 crores is there. Out of that INR6,000 crores to INR7,000 crores is unsecured educational loan. The remaining INR13,000 crores is loans to salaried class and the pensioners who draw their salaries and pensions towards through Canara bank only. We don’t give the personal loans to non-customers or the customers who are not salaried class and who are not drawing the salary through our bank. That’s why we don’t have any apprehension on that. And our credit card is only INR1,100 crores to INR1,200 crores. That is the outstanding.
Akhilesh Upadhyaya
And what would be the NPL ratio in the PL as of now?
Satyanarayana Raju
PL or NPA ratio is even less than 1% sir. 0.49% or 0.50% it is there.
Akhilesh Upadhyaya
Okay. Perfect sir. Thank you.
Operator
We have our next question from the line of Mr. Kunj Khanna. Mr. Kunj please unmute yourself. We have our next question from the line of Mr. Ashok Ajmera.
Ashok Ajmera
Thank you for giving me the opportunity again. Though the lot of questions have been asked and the answers were given. So many things have already been clarified. But sir, I just would like to know little color on the our total overall investment book. And now with the change valuation norms it is becoming difficult to get the more of the investment income from the investment into the and directly in the P&L account other than the what goes into the interest income. Having said that for the — as per the gain which have gone to the reserve INR1,748 crore has gone to general reserve, and AFS gain of INR404 crore also has gone to AFS reserve and not in P&L. So I just wanted to have one small data point. Had it been a gain which would have gone to P&L, for this quarter how much out of this gain is belonging to this quarter gain, which has gone to the general reserve and which has gone to AFS reserve.
S.K Majumdar
Sir, that INR1,700 crore what you said has happened in the beginning of the year that when it was shifted that. That is on the 1st of April. That is in first quarter. And this INR400 crores also has happened during the course of the year.
Debashish Mukherjee
So we can provide you that figure also.
S.K Majumdar
But that’s not a very big figure sir.
Satyanarayana Raju
Okay. Bifurcation you can send it.
Ashok Ajmera
Okay sir. Now coming to the analysis like on the treasury front with these two rate cuts are expected I think 50 basis point or maybe even more. Going forward can you give some color from the treasury gains which are going to be very handsome gain as everybody is predicting. So on that the trading gain, I mean any kind of gain or profit which will come to P&L from our treasury book. What is the estimates or can you give some idea on that?
Debashish Mukherjee
You see, no last March this it was around INR3,610 crores. We can have an estimate of somewhere around INR4,000 crores growth for these type of trading gains.
Ashok Ajmera
Okay, because you have a very — your AFS book is also INR56,000 crore and HTM also INR3,0,1,000 crore and must be having a very frequent trading gains also.
So all together you are expecting a gain of about INR4,000 crore in the FY ’26 sir.
Debashish Mukherjee
FY ’25-’26 we want. We are estimating that. Of course it depends on many factors as you are all aware. So our conservative estimate is that only.
S.K Majumdar
Sir, the estimate what you said is this is expected to be better. But as you know HTM now I cannot trade freely.
Debashish Mukherjee
We are restricted to INR4,000 crores only.
S.K Majumdar
That is. And we can shift — we cannot shift — only once in a year we can shift. That last year what we have shifted that is the only shifting that we can do. And the rest is 5%. So that free trade that immediate what you are telling in the past that bond rate falling means there is a change we can trade that is no longer there. But having said that there definitely will be a increase in the AFS portfolio which we expected to gain. And we are building our books accordingly. But given the volatility that happens and it is still there it is difficult what you want to hear that quantification is a problem. We don’t want to quantify what we want to say what we have achieved last year there is definitely will be an upside to that.
Ashok Ajmera
No sir. Point well taken sir. Sir, one data point only. Our investment has a small investment of INR1,577 crore.
Operator
We have a next question from the line of Mr. Sushil Choksey. Please unmute yourself.
Sushil Choksey
Sir, congratulations on a very good numbers. Sir, how would we stabilize CASA on a upper trajectory from the aspiration what we have?
Satyanarayana Raju
Sir, first you hope you will see from the December quarter quarter-on-quarter there is an appreciation is there in the CASA.
Sushil Choksey
No, no. I can see.
Satyanarayana Raju
The second then the CASA when you compare to March and this the March 24 it is 32.29% something is there, now it is 31.17% or something is there, 1 basis point, that is 100 basis point we might have lost. That is not lost that actually the growth momentum what is there in the total business or the term deposits is more than 10%. But the CASA that the same thing. The 10% growth is not happening. But you definitely I’m sure that you will agree with that we are not lost as the other peer banks have lost that much. Almost every bank has lost 300 to 400 basis points in the CASA. But we have not lost that.
Actually we are able to maintain the above 30% with all our initiatives whether it’s the products or processes we are the first bank we introduce n number of targeting, the aiming the life cycle of individual. We have created a new products. These products are giving us lot of comfort to that we continue to work on that CASA. Even today or the next financial year I can openly say that for us the most priority is CASA. We’ll keep continuing that.
But in the given circumstances, growing in the CASA at the rate with the other market parameters are growing definitely it’s a difficult task sir. The reason behind is the payment systems are matured. People are matured. Everybody is using the technology and the most of the transactions are happening on the mobile app. Under such circumstances, they can do banking 24 hours on 365 days. I don’t think that the people will keep in the savings or the current deposits too much amounts beyond their minimum requirement. Under such circumstances you can only attract from other bank customers with innovative products and all. That’s what what we are doing.
And nurturing of existing customers also we have come out with one new innovative product that is also Canara Crutch [Phonetic], the product that is also is giving some good results. These are all the efforts we continue. And in addition to that last two years we have opened almost 500 new branches. This year also we are opening 250 more branches. These 750 branches we are targeted. We have opened — whatever the opened and what are going to open these branches we are locating by using the market trends and the AI and machine learning tools. We are using, especially data analytics we are using effectively. Pin code wise we have the data bank where the CASA potential is there where that potential — looking at that potential, we are planning to open the branches. This entire 750 branches we are opening like that only. So that will also will help us in maintaining or the improving little bit. We cannot assure you that we will — steeply we will grow in this. But we can continue that. We don’t want to lose the market what we have.
Sushil Choksey
I agree with your numbers on quarter on quarter on CA and SA both. I have read the numbers. What I feel that aspiration with so much digital spend which you have done so many new products have initiated, management is making so effort. I suppose the entire effort of last two, three years and digitization starts paying off Canara on much higher outcome. That’s the only question I have. I’m not — my thinking is that —
Satyanarayana Raju
Definitely it has benefited the Canara Bank much higher than the industry whatever the initiatives we have taken. But the only thing whatever initiatives we taken unfortunately the regime is high interest rate regime. Now the tendency has started that rate cuts are coming from the regulator so slowly we expect that in next one year the rate competition, deposit rate also will cool down. Once that cool down, our efforts will give much more benefits. Whatever the efforts we have done in the investment in the technology or the product, the result, the better results we can see in the coming years. That’s what I’m telling sir.
Sushil Choksey
Current year what would be our digital spend? And second thing, when we have a super abnormal profit in treasury this year, how do we intend to balance that treasury profit with what kind of other assets? Will we buy more corporate bonds which are lucrative or how would we work on that aspect?
Satyanarayana Raju
Mukherjee sir will answer you sir.
Debashish Mukherjee
Actually in this year also we have tried to increase our non-SLR book and book profits by transaction in that book. This year also we will try to repeat whatever we did because our non-SLR book historically has been very low. So that will be our strategy as well as last year we could churn our investment in mutual funds and earn profit. This year also market supporting we will try to do that. So whatever extra profits we earn by way of treasury income will be invested in these two portfolios. And we will try to — and also in the equity market.
Sushil Choksey
The digital spend number if you can elaborate what are we likely to spend?
Satyanarayana Raju
Sir, around INR800 crores, sir.
Sushil Choksey
Sir, thank you and all the best for the year to come.
Satyanarayana Raju
Thank you sir. Thank you so much.
Debashish Mukherjee
Thank you Sushilji.
Sushil Choksey
Thank you, sir.
Operator
That was the last question for today.
Satyanarayana Raju
Thank you.
Operator
[Indecipherable] for closing remarks.
Satyanarayana Raju
Thank you so much.
Operator
[Operator Closing Remarks]