City Union Bank Ltd (NSE: CUB) Q1 2026 Earnings Call dated Jul. 31, 2025
Corporate Participants:
Unidentified Speaker
Jignesh Shial
Kamakodi
Vijay Anandh
Ramesh
Sadagopan
Vijay Anandh
Analysts:
Unidentified Participant
Mona Khetan — Analyst
Hardik — Analyst
Sonal Minhas: — Analyst
Parth Gutka — Analyst
Himanshu Taluja — Analyst
Krishnan ASV — Analyst
Krishnan ASV — Analyst
Param Subramanian — Analyst
Bunty Chawla — Analyst
Pritesh Bumb — Analyst
Gaurav Jani — Analyst
Ajit Kabi: — Analyst
Chinmay Nema — Analyst
N. Kamakodi — Analyst
Anand Dama — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to City Union Bank Limited Q1FY26 earnings conference call hosted by Ambit Capital. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing Star then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Jigneshiyal from Ambit Capital Private Limited. Thank you. And over to you sir.
Jignesh Shial
Thank you Amshad and good evening everyone. On behalf of Ambit Capital, I would like to thank the management of City Union bank for allowing us the opportunity to host Q1 FY26 earnings call. We have along with us Mr. R. Vijayanan, Executive Director, Mr. V. Ramesh, Executive Director and Mr. J. Sadagupan, the CFO. I will now hand it over to the. Now I’ll hand over to Mr. R. Vijayanan executive Director of Citrine bank for opening remarks. Over to you sir.
Vijay Anandh
Thanks. Thanks Ignesh. Good evening everyone. Hearty welcome to all of you for this con call to discuss the unaudited financial results of City Union bank for the first quarter of FY 2026. The board approved the results today and I hope you all have received the copies of results and the presentation. First of all we are very happy to share that for the first time in the history we have crossed 300 crores pattern. I hope all of you have received the notice of ensuing annual general meeting to be held on 13th August 2025 which will happen face to face at Kumbakonam after six years along with the virtual mode as well.
On behalf of the board, I invite you all to participate in the agm. One of our directors Sri and Subrahmanian had retired from the Board with effect from 19 June 2025 after completing 8 years tenure during Q4 FY25 con call. We have stated the expectations for FY26 as follows. We did achieve double digit credit growth in all the quarters of FY25 and we stated that we will be back to double digit growth with our efforts. Our deposit growth is also back on track and we said that we will align with the credit growth. We have reached our long term average number with respect to credit growth, Pat ROE and NIM levels.
We said that the positive momentum will continue. We also committed that NIM will be in the range of 3.5% in FY 2526 largely we are in line with expectations conveyed on the last quarter call. No surprises during last financial year we had seen positive credit growth in the first quarter of the year first time in the previous 10 years. With that momentum in growth, we have achieved double digit growth in all the 4/4 of FY25. For Q1 FY26 we have achieved 16% credit growth quarter on quarter, the highest credit growth in June to June and our advances has increased from 46,548 crores to 54,020 crores in Q1.
As stated in our earlier calls, with improved efficiency level aided by the digital lending process, we have restored our consistent credit growth and we hope that the current trend will continue. Deposits Our deposits stood at 65,734 crores for Q1FY26 as compared to 54,857 crores in Q1FY25 registering a growth of 20%. During our last con call we have stated that concentrated efforts were given to deposits front to support our credit growth. With our efforts, our deposit growth surpassed our expected levels for Q1FY26. The average CASA increased by 6% from 15,757 crores in Q4 last year to 16,478 crores in Q1 of FY26.
Asset quality on asset quality print for the current quarter, the total slippages is around 196 crores while the total recoveries is 187 crores. Consisting of 143 crores from live NPA accounts and 44 crores from technically written off accounts. It is almost equal and we are confident of maintaining recoveries more than slippages for the year as a whole. Our gross NPA percentage had reduced to 2.99% in Q1 FY26. Both gross NPA and net NPA in both percentage and absolute terms is reducing quarter by quarter for the last nine quarters. Continuously for the past eight quarters our GNPA has shown sequential decrease starting from Q2FY24 where it stood at 4.66% compared to Q1 of FY25, the GNPA has reduced from 3.88% which is 89bps reduction.
Similarly, our net NPA number has reduced to 635 crores. Our net NPA in terms of percentage is 1.2% for Q1FY26. In Q1FY25 our net NPA was 1.87% which is a reduction of 67bps on yoy basis. Overall, our FMA2 to total advances stands at 1.59% in Q1FY26 as compared to 2.22% in the similar period last year. Our SMA to slippage numbers had shown substantial improvement in the last financial year. It is stable in the current quarter as well. While we are hearing from multiple financial institutions about building stress in asset quality front, we are closely monitoring the situation and so far we have not seen any sudden spike in the stress as of now.
PCR in FY25 we increased our PCR without technical write off to 60% to bring it closer to the industry level for Q1FY26. PCR without TW had improved to 61% which had improved from 53% last year. Similarly, PCR with TW stood at 79% for Q1FY26 which has improved from 73% last year. Interest Income Our interest income had grown by 16% in Q1FY26 and increased to 1605 crores from 1389 crores in Q1FY25. Our yield on advances stood at 9.81% for the current quarter as against 9.59% in Q1FY25. Our NIM for Q1FY26 stood at 3.54% during this quarter.
The bank has passed the benefit to customers in line with the repo rate cuts. During the last call we said though there will be fluctuations in the annual NIM we will be around 3.5%. That expectation continues even though the rate reduction was front ended and happened much earlier than expected. We continue with our expectations as suggested earlier. There will be a minor impact in Q2 as bulk of deposit repricing happens in Q3 but annual expectations continues to be around 3.5% as discussed in the last quarter con call on liability side we have reduced ROI on deposits during April in tune with the industry levels.
The slab of SP account undergone changes in the month of June which will give reductions in overall cost going forward. The cost of deposits stood at 5.95% in Q1FY26 as compared to 6.02% for Q4FY25. Other income the total other income for the year has increased by 27% from 192 crores in Q1FY25 to 244 crores in Q1FY26. The major contribution for this growth is from treasury profit of 64 crores for the current quarter our operating profit had grown by 21% and stood at 451 crores compared to 373 crores in the corresponding period last year. We have achieved a PAT growth of 16% and our PAT stood at 306 crores for Q1FY26 as against 264 crores in Q1FY25.
We have crossed the 300 crore mark as I said earlier in PAD for the first time in our history. Cost to Income Our cost to income ratio for Q1FY26 stood at 48.12% as compared to 48.21% in Q4FY25. As we had discussed earlier, our CIR will be in the range of 48 to 50 for the next few quarters ROE as per the expectations we shared, the ROE is at our long term average and stood at 1.55% in Q1FY26 compared to 1.51% in the corresponding period last year. Our ROA is over 1.5% consistently for the last five quarters.
To sum up with our best efforts, we have accelerated to mid teens. We will continue to explore various avenues of advanced growth in addition to our core strength of msme. With the growth engine up and running, we could see visibility in achieving mid teen growth at least 2 to 3% over and above that of the industry. Our deposit growth is also back on track and aligning with the direct growth expecting NIM in the range of 3.5 for the year FY 2526. As discussed in the last con call, ROE is expected to remain at our current level of 1.5 plus.
We will achieve our PAT growth with the help of better asset quality. Our cost to income ratio will continue to be in the range of 48 to 50% for the financial year 26. Thanks a lot. Open to Questions.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants may press star N1 to ask a question. The first question is from the line of Anandama from MK Global. Please go ahead.
Anand Dama
Yeah, so thank you for the opportunity. Growth has been trending very well at about 16% y. Whereas you said that you would want to grow 2 to 3% above the system. But that’s more of just a statement and you would continue to grow at more than 15% 15 to 16% range or you believe that this growth run rate will actually come down during the year?
Vijay Anandh
Sir, we will continue to grow at the same level what we are growing subject to the market conditions are conducive and our Overall numbers of SMA012 on track. As I said in the call, as I said in my note so till that time we don’t see any risk. We will continue to grow at the same pace.
Anand Dama
So do you really see any micro disruption or any asset quality risk on the SME space? So to say that you know there will be some risk on the growth front in next six to nine months.
Vijay Anandh
While we could hear this from other financials as of now we have not seen this. Our metrics are holding. Hence from our side we don’t see that risk as of today.
Anand Dama
Secondly, if you can talk about your retail strategy, how are you stacking up now? One and secondly on your golden front the Agri gold loan portfolio on a quarter on quarter basis is also static. So is it because of the PSN guidance that you have slowed down the growth in that segment or this is just a seasonal.
Vijay Anandh
I will try to answer the retail first before we go to the gold loans. Broadly our retail strategy is on track. We said that Lab HL Affordable and Microlab. Yes, the retail engine has started giving us the good numbers from both branch as well as from the DSA side we did around 825 crores for the last quarter. Combining all these three and hence our retail whatever we have planned is taken off well. With respect to gold loan book, our gold loan agricultural portfolio is 76,198 million billion. If you see the presentation page 1525 slide number 3030 30.
If you see slide number 30 there are details on page number 15.
Anand Dama
I saw that but that was largely flat on a quarter on quarter basis. He’s just wondering whether this will remain different for a while because of the impact of TSM guidance. So this should pick up.
Vijay Anandh
This is seasonal Agri is a seasonal business fluctuation. So this will move basis of seasonality.
Anand Dama
Okay and in terms of margin you guided for a 2.5% margins for full year. How do you see your 3.5? So how do you see your cost moving? Any cuts that you have done on the TV front or any anything on the staff that you have done for.
Vijay Anandh
Your panning I will give you the broad match. My advantages has brought down the yield by 135 crores. My reduction in deposit rate has given me 64 crores. This means I have a, I have a 135 crores on left side and 64 crores of deposit on the right side which is giving me a net impact of 71 crores. If you recall my, my name used to be around 3.6% earlier. So this 71 crore impact will give me a 1112 weeks reduction. So we will be around 3.48, 3.49. Hence we are confident of maintaining this 3.5.
That was a matched behind this commitment. And also just to add our repricing is happening on deposits in the month of Q2. Hence we should have this 3.5 on track.
Anand Dama
And sir, I think RV audit was on. Any observations over there from RBI side this time around?
Vijay Anandh
It’s currently happening sir. RB audit is currently happening for us.
Anand Dama
That’s, that’s very helpful. Thank you sir.
Vijay Anandh
Thank you.
operator
Thank you. The next question is from the line of Mona Ketan from Dalit Capital. Please go ahead.
Mona Khetan
Yeah. Hi sir. Good evening and congratulations on a good set of numbers. So firstly on the, on the margin front. So of the 100 bits of repo cut that has happened how much is reflected in the yield reduction currently or how much is factored in the margin?
Vijay Anandh
Pass the report rate cut to everyone, to all the customers. So okay 9.93% in Q4 2425 9.93 has moved to 9.81. 2526 Q1.
Mona Khetan
Right. So of the hundred bits is the, is the first 50 bits fully reflected and the next 50 bits yet to reflect in the yield in the subsequent quarters.
Vijay Anandh
We have done it in June so we are more or less there in this.
Mona Khetan
Okay, so the second good thing, that’s.
Vijay Anandh
The math I gave it in the first question. So my advances repricing has brought down 135 crores. To me. My deposit repricing has given me a gain of 64 crores. So 13564 is 71 crores is my net impact. And over and above that I will have the Q2 repricing happening for my deposits. So broadly we were in the range of 3.6. This should give me a 3.5 margin for us.
Mona Khetan
Got it. But I’m just trying to understand despite having a large share of EBLR loans why is the yield reduction very limited? I mean what is helping you here?
Vijay Anandh
So before I give that, if you have given the final pricing earlier reduction Will be low to that extent, number one. Number two, to answer your question, our EBLR is currently at 48, fixed is 30 and MCLR is 17. So our ABLR is only 48% of my book as we speak today.
Mona Khetan
Okay, got it. And just secondly on the SMA too, you mentioned what is the current number? I missed that. And what was it last quarter.
Vijay Anandh
Advances at 1.59% in Q1 FY26 as compared to 2.22% earlier in Q4 in Q1.
Mona Khetan
And what was the same in Q4?
Vijay Anandh
I can keep that one second. Give me a minute. We have come down further. So we were almost in the same range, more or less.
Mona Khetan
Okay. All right, thanks. And all the best.
Vijay Anandh
In fact we have come down a little bit which is very marginal.
operator
Thank you. The next question is on the line of Hardik from ICICI securities. Please go ahead.
Hardik
Hello? Yes, hi sir. Am I audible?
Vijay Anandh
Yeah, hi.
Hardik
Yeah. So, okay. How should we think look at your margins for the next quarter? Like this 6 basis points margin declared and probably 50 basis points of refer rate. That should be, you know, for two months. It should be pending, right to be reflected. So for the next quarter, how should. We look at your margin?
Vijay Anandh
Well, overall we have said that we will be around 3.5 for the year next quarter we should, that is this quarter. Q2 we should be around 3.45 to 3.5. That’s the number which we are looking at. And probably in Q3 we will be around 3.55 and Q4 we should be around 3.55 to 3.6.
Hardik
Okay, that’s helpful. Any was there any one off in net interest income in this quarter?
Vijay Anandh
Nothing, sir.
Hardik
Okay. And so the final question is so how do you look at your pcr? I understand that your PCR increase it but you know, it’s still at around 60. So what. What is your PCR target for let’s say like FY26 or FY27.
Vijay Anandh
That will not be much. We will be around 61 now we could move to 63, 64 max. Because you know it’s completely a secured business. Whatever we are doing, we. We have negligible unsecured in our book. So probably 63 to 64 we can look at.
Hardik
Okay. Okay, thank you. That is all from my side. Thanks.
operator
Thank you. The next question is from the line of Sonal Minhas from Present Cap Investment Advisors. Please go ahead.
Sonal Minhas:
Hi sir, I’m Sonal Minas. I wanted to understand the reason for increasing the provisions in this particular quarter. Anything specific or this is just specific to Q1 provisions being on the higher side?
Vijay Anandh
Oh we did actually the provision towards bad debt got reduced from 78 to 70 for the current quarter. Whereas the tax version remains in the range of 75. We made 145 for the current quarter.
Sonal Minhas:
Okay, so nothing to read on the bad debts in terms of provision?
Vijay Anandh
No sir. No.
Sonal Minhas:
Got it sir. Okay, sir. Second, I wanted to understand the segmentation of the advances growth. Is this incremental growth of being from early teens to mid teens largely attributable to the new verticals you’ve entered or this is largely working capital cash and credit loans that is basically seen a higher rate of growth. So what can we attribute the higher.
Vijay Anandh
I think I did give my number on retail. We did around only 825 crores in retail. And mostly it is a MSME growth. What we used to do before under JL, JL and MSME. So our hard remains same. The JL is around 700 crores, retail is around 825 crores and baki everything is MSME.
Sonal Minhas:
Got it. All right, that’s it. So much. Thank you.
Vijay Anandh
Thanks.
operator
Thank you. The next question is from the line of part M Gutka from BNK securities. Please go ahead.
Parth Gutka
Yeah. Hi sir. Thanks a lot for the opportunity. So my first question is what is the credit cost guidance for FY26? Now this is in the light of because we are hearing that you know southern regions, you know there are some delinquencies coming up in micro lab and lab portfolio and. And you know both both within secured and unsecured. So can you just throw some light on that, you know what are we hearing on the ground?
Vijay Anandh
Yes sir, we have just launched retail, you would be aware and this is our second full quarter and it is too early for us to comment anything on the delinquency because as of now we are not seeing anything. And to answer your question for the credit cards for the year we should be somewhere between 0.2 to 0.25.
Parth Gutka
Okay. Okay, thanks. Thanks a lot.
operator
Thank you. Before we take the next participant we would like to remind the participants to press star and one to ask a question. The next question is on the line of Himanshu Taluja from Aditya Builder Sun Life amc. Please go ahead.
Himanshu Taluja
Sure sir, thanks a lot for the opportunity and congrats on a good set of the numbers. So can you just throw some perspective on your on the MSME segment from. Are you seeing any signs of stress in the segment and anything to read From a Southern because we got to hear from some of the con calls that probably some of the southern states are showing some bit of the higher delinquency tense. Can you put some perspective around that would be very helpful sir, if you.
Vijay Anandh
Talk about MSME we are completely secure. We don’t give any unsecured MSME number one. Number two, as of now our SMA012 as we speak is currently holding and we don’t see any issues as of today. So whatever the commitment I am giving is basis today’s number and as I said SMA to 1.59% of my advances which has come down from 2.22% and even from Q4 it is more or less flat or marginally down. So we don’t see much issues on MSME secure front whatever we are.
Himanshu Taluja
Sure sir. Thanks a lot. Thanks.
operator
Thank you. The next question is on the line of Krishnan ASV from HDFC Securities. Please go ahead.
Krishnan ASV
My questions have largely been answered. I’ve just got one query. This is pertaining to just the demand. Demand environment within MSME has generally been feeling that working capital requirements are pretty low because inflation is pretty benign. Just wanted to understand what you are hearing, what you are sensing from the ground, what your RMS are actually telling you.
Vijay Anandh
The market as of now is flat. I would say so when we meet the existing customers some of the industries are doing well and some are looking flat and based on the requirements we are also analyzing and we are taking the exposure of the call even for the new to bank customers. We are looking at the business prospects and what kind of industry is operating and how is it going and what is the demand and really is there a need for working capital and what is going to be risk effects before we are taking the final call.
As of now the message from my existing two bank customers we have not seen anything very, very. What do you call unusual? Unusual. So looks like it’s stable and on track.
Krishnan ASV
I guess I’m asking you because you kept highlighting that retail is relatively new only in the second quarter. Dwell loans remain where they were. A bulk of your credit growth has come on the back of msme. But given that we are in a benign I was just wondering are there any early signs about this growth beginning to taper out?
Vijay Anandh
That’s what I said a couple of minutes back sir, the metrics is holding. We don’t see unusual pattern in our metrics. Whether it is SMA 0 or 1 or 2, probably something is not working as per our prediction or as per our plan. We could have switched off the engine but we did not see anything as we speak as of today. So our monitoring is very close and very frequent. And probably every month we go back and check whether things are looking fine and it’s well within the budget. So we don’t see anything. For your questions as of now.
Krishnan ASV
No, sure. Thanks. I think probably, I mean I can get in touch with you offline, with you to him offline because I was trying to address the growth component, not the stress.
Vijay Anandh
But anyway, I’ll come to that.
Krishnan ASV
The second issue was around all the tariffs. The noise that we are hearing around tariffs generally seems a lot centered around the textile industry given our exposure to that industry. What is the sense you’re getting there, sir?
Vijay Anandh
So we came to know last night, last evening and we immediately reached out to our customers. We have quite a good exposure there in textiles. As you rightly mentioned. Few of our customers are more Europe oriented. And out of my total exposure, only 20% of the customers seems to be with the US and having said that, their version is their profit margin should get compressed by 2, 3%. That’s the number which they are saying on this tariff. So nothing alarming. So we have around 1200 crores in our total exports. And out of that, even If I take 20% and the margins they are saying when we did have a discussion in the morning with few of the seasoned guys and who does decent exports, their version is 2, 3% compression, nothing beyond that.
And most of the players have started focusing on European segments now. So to diversify the risk. So I think it’s broadly, I would say flat and nothing much to worry because materialistically it is not a big number for us.
Krishnan ASV
Understood? Understood. Thanks. This answers my question. Thank you.
operator
Thank you. Participants who wish to ask a question may press star and one at this time. The next question is from the line of Himanshu Taluja from Aditya Birla, Sun Life amc. Please go ahead.
Himanshu Taluja
Thanks for the opportunity. Again. Just one question. If you put some perspective on the retail portfolio that you are building currently. What I can see is the housing and the personal loans. Can you put something? How much is the pure housing loans and the lab portfolio and what is the blended yield of your housing portfolio?
Vijay Anandh
Sir, no personal loan. We do only home loan and lab. No personal loan.
Himanshu Taluja
Okay.
Vijay Anandh
Hello. There is no personal. We don’t do unsecured. We do only home loan and labor. I have not taken it separately. Probably when I meet you I’ll give it to you in person or probably I’ll Chat separately and send it across.
Himanshu Taluja
What is the blended yield that you have on the home loans in the lab?
Vijay Anandh
Together home loan and lab put together we could be around 9.885, 9.8, 9.85.
Himanshu Taluja
And any other plans to get into any, any of the other retail segments that you are trying to look at?
Vijay Anandh
No, unsecured sir, we might get into. We have a huge presence, you know, in rural and UBR branches. So we want to get more active there in terms of affordable housing or. Because basically we are doing branch driven sourcing. As they said earlier, My DSA business is only 20%. 80% is coming from my home branches. So that, that, that strategy is still there. We have not changed our goal post so 8020 as we speak out of 825 crores, 160 crores alone has come from DSAS direct. So we will also get into affordable and micro lab to our home branches.
Himanshu Taluja
Yeah, sure. Thanks a lot.
operator
Thank you. The next question is on the line of Param Subramanian from Investech. Please go ahead.
Param Subramanian
Yeah, hi sir, thanks for the opportunity and congrats on the quarter. Sir, I just wanted to understand from your NSME exposure how much of the book is exposed to say exporting MSMEs and do you see any signs. Of course, you know tech science is one of the biggest sectors for us. But do you see any pressures that could come through from, you know, some of the announcements that are coming through today? For example.
Vijay Anandh
Yeah, I think we just discussed 1200 crores is my total exports and say 20% is broadly with respect to us so major, majorly textiles. And we did have a candid discussion with our good customers who do a very decent business. So their version is most of them have migrated, I mean moved their risk to European markets. And 20% who are doing with us, their view is that 2 to 3% there could be a margin compression. Beyond that they don’t see anything big negative in this. And anyway our numbers are quite less by the way.
Param Subramanian
Okay, so 1200 is the total exporting. Exposure
Vijay Anandh
business out of the 20% is focusing on US market.
Param Subramanian
Okay, and this is within textile or this is across your Ms. Because not.
Vijay Anandh
Only textile, sir, textiles is major for.
Param Subramanian
Us and others would not have any.
Vijay Anandh
Very, very less. Very less. Maybe carbon kind of stuff. Very, very less. Not a big number.
Param Subramanian
Okay, fair enough. That’s all I wanted to ask. Thank you and congrats on the question.
Vijay Anandh
Thank you sir.
operator
Thank you. The next question is from the line of Bunty Chawla from IDBI Bank. Please Go ahead.
Bunty Chawla
Congratulations sir and thank you for giving me the opportunity. Can you share some thought process on fresh pages of 196crores from which segments have come? If you can give some bit of a light on that.
Vijay Anandh
Okay, one second. One MSME is 148 75% 75.82 74% MSME out of 196 rest we have agree around 3% CRE around 2%. Educational loan around 0.7 it is again and all are very very negligible numbers after that. How wholesale trade around 0.96%.
Bunty Chawla
Okay. And sir what we are observing net addition has been negative up to two three from last two quarters. We are getting some bit of increase in net addition. For example this quarter was around 53 crores and last was 20. How one should see that number? Because we are targeting the provision upgrade should be higher than the slippage is asset.
Vijay Anandh
I will answer in two questions two parts in this. For the current quarter the total slippages is around 196 and the recovery is 187. So broadly we are talking about 9 crore difference. And as we said before on a on an annual basis our recoveries will be more than slippages. This is number one. Number two if you see our slippages our slippages have come down from 259 crores to 196 crores. Quarter from Q4 march to June from 259.49 to be precise we have moved down to 196.28. Yeah. Which is 50 crores reduction.
Bunty Chawla
Okay. Lastly on the PCR if we calculate it is it has quite drastically improved from last many quarters to 51% to currently 60.76% or roughly 61%. Where is our purposes to bring by end of FY26 this number we we.
Vijay Anandh
Would be around 63%.
Bunty Chawla
63%. It was very helpful sir. Thank you. And congratulations sir.
Vijay Anandh
Thank you sir.
operator
Thank you. The next question is from the line of Pritesh Bum from DAM Capital. Please go ahead.
Pritesh Bumb
Good evening. Can you hear me sir?
Vijay Anandh
Yeah, go. Please go ahead.
Pritesh Bumb
Yeah yeah. So few questions. One is on the yield perspective. Basically wanted to check what is the risk time for our working capital loss. I mean just wanted to check how much password has happened. How much.
Vijay Anandh
The the rates were fully passed on. My eblr is at 48. My pics is at 3078 and remaining is MCLR my years.
Unidentified Speaker
Sir. Sir, you are breaking now. Sorry we are not able to hear you. Sir, we are not able to hear you Sir. We are not able to hear you sir. Sorry.
operator
Sorry to interrupt sir but could you. Go to a better reception area?
Pritesh Bumb
Yeah. Now?
operator
Yes. You’re a bit. Yes.
Pritesh Bumb
Sorry sir. Yeah, sorry sir, just wanted to check although they are on EBLR, is there any reset or is it happening on T +1?
Vijay Anandh
See the passing is based on the final pricing. So. So the the passing will happen basis the pricing what we have given. So to answer your question, our repo rate passing has finished and we have done with the customers. So net net, that’s what I’ve been giving them. As in terms of advances my my negative is 135 cr. My deposits because of my reduction in rate positive is 64 cr. My net impact is 71 cr. As of now my deposit repricing again is happening in the Q2 end. So effectively I will have a 1111 12% 1112 bips cut.
So that’s the reason why we are saying we will be maintaining at 3.5 for the year.
Pritesh Bumb
Got it. But just on like the question which I asked basically what I wanted to check is generally the loans are for one year, right? Some working capital or cash credit can be for one year. So the reset happens immediately. Is that correct?
Vijay Anandh
See I’m a common body here. If it is based on the EBLR the passing on will happen like say immediately. For example if we had already given final pricing earlier like say some amount of discount given in the past based on that that much amount of like say for example whatever related to that risk rating EBLR related rating is say for example 10 percentage which is I have already given 50 basis point concession to the associated risk. When 1 percentage reduction in the EBLR happens, the net impact to that customers will be only 50 basis point.
You’ll understand what I’m trying to say.
Pritesh Bumb
Yeah.
Kamakodi
Finally whatever that is. So like EBLR will come down by whatever percentage but some amount of plus minus will be there depending upon the like say concessions given in the earlier period. Also because of the like the composition of advances. Say for example our 30 close to 30% of our loan book is from the gold loan which is at the fixed rate. You also have MCLR. So because of that even if you have 1 percentage reduction in the overall EBLR net impact will be only Alexa to that extent lesser and that is what it has happened.
So some amount of extra like say maybe 510 basis point extra can happen because some of the red passing happened only in the June they may not have impact for the entire quarter but they will be having full impact for the second quarter. So that’s why in fact we had given the. The question repeatedly came in the fourth quarter Tankal was that how are you circumstances on that your rate reduction will be let’s say, I mean you will be able to maintain the margin of 3.5. We repeatedly explained the this calculation and we are sticking with that calculation even now Even after having the 50 basis point, I mean the last rate cut which which was front loaded which we actually expected only in the like towards the end of the current calendar year even though it got implemented much earlier, we are still sticking with the like say expectations which we shared during the last con call.
We expect because the. We have higher amount of repricing of deposits because of the maturity in the third quarter. So the repricing of assets will be more in the second quarter. And that’s why we say there will be some reduction in the let us say maybe few basis point incremental reduction. But here as a whole, whatever expectations we shared in the last con call that we will be having 3.5 percentage, I mean 3.6 plus or minus 10 basis point to be precise, whatever we said. So we still stick with the let’s say the margins predictions or expectations whatever we shared during the fourth quarter last concal.
The it is very difficult to get. Into the individual basis point voice calculations and all. So we gave you a broader categorization calculations based on the composition of the loan and how they perform. What I can say, you know, is that the MCLR reduction, I mean the EBLR reduction that need to happen because of the rate reduction, whatever that has happened so far has already been given full effect to all our existing customers currently.
Pritesh Bumb
Got it. So second question was on branches time. So we’ve not added any branches. We added only one branch this quarter and we have announced some branch additions on the changes in this quarter. So how what kind of a branch addition we should see in this full year?
Vijay Anandh
On an average we have been doing 75 branches per year and we should continue this and the Q2, Q3 will be more. In fact as we speak in Q2 we have opened quite a substantial branches in the first week. So we have already done with I think 8010 branches and we will continue with that and we will be around 75, 80 branches for the year.
Pritesh Bumb
Okay, so the follow up on that is that will we see some OPEX increase because we’ll have to you know, add people maybe across the branch cross Operational and all.
Vijay Anandh
Once we open the branch apportionate expenses will be there and 15 expenses would be there and fine. That’s very normal whatever we do in terms of branch.
operator
Got it, sir. Okay. Thank you so much. Thank you. That’s one of my questions.
operator
Thank you. The next question is from the line of Gaurav Jani from Prabhudas. Please go ahead.
Gaurav Jani
Thank you. Sir, congrats on the quarter. Just a question on the fee income. So last quarter we had some bulk top fees because of I think a banker. And that has actually probably come off this quarter. So you know, that is number one. So as to why has there been a reduction and could we revert back to the previous levels is my question. And I’ll just come to the next part later.
Vijay Anandh
Sir, bank assurance income is always very high on Q4. If you see that’s normally bound to happen. And with respect to the bank assurance income we are on target with what we have stipulated for Q1, Q2, Q3, Q4. I think this quarter we have done around 15.74 crores to be precise. Which is. We moved from 12 crores. We were at Q1 last year and we have done 15 crores this year. Last year again we moved from 12, 18, 16, 51. We expect the same trend to continue this year. We don’t see any.
Gaurav Jani
Sure. And so the next part is FY25. Right. Versus FY24. Because obviously of the, you know, kicker from the banker. Our fee to assets will improve by 10 basis points. You know, what sort of a trend do you see that you know, do you see shaping up for the next over the near to medium term as to fee to assets as a percentage.
Vijay Anandh
We moved from 54.64 crores to 97.56 crores, sir, to the business. So this is always directly proportional to the business. So from 54 we have moved to 97. Now that we are having a 16% growth we should exit with the decent numbers for the year.
Gaurav Jani
Understood. No sir, what I meant is the fee to a set ratio. As to how do you see that shaping up? Overall someone near to medium term.
Vijay Anandh
Sir, this is not a materialistically big number for us. We did 54 crores in 24, 23, 24. As I said, we did 97.97 crores in 2425. And this increment is always visa my business. What I’m growing.
Kamakodi
Yeah, One minute. I just want to add earlier we had our relationship with only one insurance company Lic. Last year was the first year when we had for the whole year we had a tie up with multiple insurance companies. So we had a quantum jump last year. It cannot be just extrapolated year after year. So normally the bank assurance income will be growing in proportion to the business growth and branch growth and that usual growth. We hope it will be continuing for the current year also.
Gaurav Jani
Sure, sure. I. I’ll probably take it off. Thanks.
operator
Thank you. The next question is from the line of Ajit Kabi from BNP Parivas. Please go ahead.
Ajit Kabi:
Hi. Congratulations for a good setup. Number. I have a first. I have the first question from the line item in provisions. So the provision number this quarter is around 700. Sorry, 700 million out of which, you know the write off made in this quarter is around 744 million. So. And in the provision stock there is hardly any movement. In last quarter it was 985 crore. Now it came to 982 crore. So is it fair to assume that whatever provisions made this quarter was towards the write off and no additional specific provisions has made in this quarter?
Vijay Anandh
Actually we have written off probably in Q2 and D2 and D3 accounts which for that we made a earlier provision. Towards 50 and 70 to 80 percentage. So that the balance amount only to be provided for the current quarter and whatever the addition happened around 180 crores. In the quarter mainly consists of SSA. Which needs around 15 to 25 percentage of provisions only. So it’s all based on the Iraq nums and whatever the requirement we provided.
Ajit Kabi:
Okay, so can you give little idea? You know we are getting the restructuring, the provision towards the restructuring assets. Any idea about the standard asset provisions and any contingent provisions we were making earlier? Any idea or can you keep the number for those? The contingent provisions in the standard asset provisions.
Vijay Anandh
The provision, whatever the provision we made towards the MSME restructuring, although not MSME. Restructuring earlier two years back. Now after completion of successful 12 months period of repayment, the provisions are now we are getting back so that we don’t need to provide any additional provisions towards standard other and whatever the requirement that already.
Ajit Kabi:
Okay, so that’s, that’s. That’s nice. The second question is from that Gold Loan. The Gold Loan has seen, you know, a significant sequential jump this quarter. You can see the Gold Loan has improved around 11 sequentially. So I just want to know these loans, whatever you have dispersed or sanctioned in this particular quarter, are they to the existing customer or any new customer is already added because you know in this season we see the high gold rates and gold, gold prices already moved to a upper level. So I just want to know whether those particular loans is over leveraging or the new customers are going to are added in this quarter.
Vijay Anandh
So it’s a combo of both existing to bank and new to bank and broadly it will be 85, 15, 90, 10 kind of stuff stuff between ETB and NTB number one. Number two in terms of LTV it is very clearly documented regulatorly we cannot give more than 75% that includes even the interest as well. So when we start we do with 67, 68% so we, we have been doing this for the last so many years so it’s not new to us. Hence the portfolio is also holding and LTV is also well below the threshold limit.
Ajit Kabi:
And the last question for me is in the personal loan that which we have around 3% of the entire loan book which what carries in this personal loan? I just understood that personal loan is not unsecured loan. So what are those sort of segment of loans which are included in this particular segment?
Vijay Anandh
So whatever we would have given to the existing MSME customers we normally we have a holistic relationship. We don’t want them to go to some other bank if he is married to us because we are the sole bankers. So we would have taken the call only for my existing two bank MSME borrowers. We don’t do personal loans for new to bank customers.
Ajit Kabi:
Thank you.
Vijay Anandh
Thank you sir.
operator
Thank you. The next question is from the line of Chinmay Nema from Prison Capital. Please go ahead.
Chinmay Nema
Good evening sir, I just have one question. Could you talk about the competition that you see from large private banks on the MSME side?
Vijay Anandh
The competitions had always been there and they will always be there with all the competition only we also need to thrive which we had been doing from 1904.
Chinmay Nema
So sir, in terms of service quality metrics like turnaround time typically how do you differ from other banks in this space?
Vijay Anandh
See as I had been repeatedly saying in my multiple con calls, this is basically a commodity business and you have to like say you, you need to continuously convince the customer that you are providing something service for whatever price he is paying.
Chinmay Nema
Oh, got it. Thank you.
operator
Thank you. The next question is from the line of J from ICICI Securities. Please go ahead. J, are you there? As there’s no response from the participant I now hand the conference over to the management for closing comments.
N. Kamakodi
So thank you all for attending the conference. Kamagodi here. So when I was hearing like say the bulk of the like say the questions were particularly on like say growth whether we will be having mid teen or plus two or whatever it is. So these things are like always like till last minute on say 31st of March. You will be finding it extremely difficult to exactly give what it is. We are just giving a broader expectations. What I have to clearly say is that as of now everything is looking pretty good. So the acceleration in the growth is pretty visible.
Profitability for the first time we have crossed like say 300 crore mark for the quarter. The slippage also has sequentially reduced from the fourth quarter. Even though you listen at multiple from multiple corners that there are issues so far we have not let’s say facing them but we are very closely monitoring the situation situation it gives us sufficient comfort that we should be able to like say maintain the growth rate and probably maintain the profitability as we move forward. The margins should stabilize from the third quarter and also you have the like say we have to increase the CD ratio and also you have the CRR rate cut to that extent.
If you are able to to move there will be further strengthening of the margins. There are enough levers to improve the margins if we are able to increase the thing. Earlier there were issues of the LCRs and all a lot of constraints on the liability side which have been removed. Many uncertainties in the gold loans have also been taken out from the recent circular so there are enough opportunities now. Moreover currently gold loans particularly are looking extra lucrative because yields are also supporting and the it’s also coming in the fixed rate not getting affected by the decreasing interest rate scenario.
Considering everything the I think the the financial year like say should be progressing with let’s say a lot of positive hope. So we we are at the same time because of the 25% tariff now announced by the US or the other caution given by like say a few like say financial finance companies particularly on the Karnataka and all. I mean we have little exposure in Karnataka but overall things look extremely positive be it in terms of growth or be it in terms of the profitability and we hope to complete this year pretty in a decent way both in terms of growth and also in terms of the quality if at all any changes in the pattern.
We will be continuing to like discuss with you during the forthcoming con calls. So in that background to some like say things are even shared better than what we anticipated maybe six months back. Things are turning out to be much positive and we hope this positivity will continue for the foreseeable future. With these words I once again thank you all for participating in this and hope to meet you all with the better quarters in the, let’s say, future, be it in after September or December and March onwards. So once again, thank you all and thanks for Ambit for arranging this conference and thanks for all of you for attending this.
And once again, we welcome you for the for attending the our annual general meeting. Thank you all.
operator
Thank you on behalf of Ambed Capital t hat concludes this conference. Thank you for joining us. And you may now disconnect your lines.