City Union Bank Ltd (NSE: CUB) Q3 2026 Earnings Call dated Feb. 02, 2026
Corporate Participants:
Jignesh — IR
N. Kamakodi — Managing Director and Chief Executive Officer
R Vijay Anandh — Executive Director
Analysts:
Sameer Bhishe — Analyst
Anandama — Analyst
Pad Gurkha — Analyst
Pritesh Bam — Analyst
Rohan M — Analyst
Subramanian K — Analyst
Param Subramanian — Analyst
Gaurav Jani — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to. Ladies and gentlemen, good day and welcome to the City Union Bank Limited QT 9 months FY26 earnings conference call hosted by Ambit Capital Pvt Ltd. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call please signal an operator by pressing Star then zero on your touchstone phone. I now hand the conference over to Mr. Jignesh from Ambit Capital Private Limited. Thank you. And over to you sir.
Jignesh — IR
Yeah. Thank you Ruth 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 Q3FY26 and nine month FY26 earnings call. We have along with us Dr. N Kamakodi, M.D. cEO, Mr. R Vijayanand Executive Director Mr. V Ramesh, Executive Director Mr. J Sadh Gopan, CFO and the management team of City Union Bank. I will now hand over to call to Mr. D N Kamakodi, M.D. cEO of City Union bank for the opening remarks. Over to you sir.
N. Kamakodi — Managing Director and Chief Executive Officer
Good evening everyone. Dr. Kamakodi here. Hearty welcome to all of you for this con call to discuss the unaudited financial results of State Union banks for the third quarter nine months ended 31 December 2025 for financial year 2026. The board approved the results today and I hope all of you have received the copies of the results and the presentations. As you all know, my tenure as MD and CEO of the bank will the 15 years will be completed on the 30th of April. As you all know this is my 59th quarter today so we have one more quarter to go.
And based on the regulations currently in force let’s say I have to complete my tenure on 30 April. Keeping that into account, our board has sent the list of candidates to RBI and once we receive the further approval we will be in a position to communicate to you all the status so far. Everything is going as per the planning and all so far so good. And we are also happy to note that our net worth has crossed 10,000 crore mark today which is an important milestone in the history of the bank. And we are also happy to inform you one of our board members Professor V.
Kamakoti who is also the Director of the IIT Madras had been honored with the country’s prestigious Padma Award, Padma Shri and his significant contributions to our country’s science and technology sector. And we are happy to share with you all. And also we have a new induction to our board today. Shri K. Subramanian, Chartered Accountant and also an executive with almost 3839 years service with the Tata Consultancy Services admin inducted to into our board like say who will we expect a good contribution from him in the future. Other details are available at the presentation. So with this I hand over the mic to Our executive director Mr.
Vijayanand who will discuss the numbers and also we will be discussing the question answers.
R Vijay Anandh — Executive Director
At the end over to Vijayanand. Thank you sir. Good evening all. During last con call we had shared with you our expectations for the current financial year. As below we could see the visibility in achieving mid teen to high teen growth at least 2 to 3% over and above that of the industry. Our deposit growth is aligning with credit growth and this will continue. CRR cut is giving positive impact and. We are expecting some positive bias in the NIM during Q3 and Q4. Roea is expected to remain at our current level of 1.5 plus. Our cost to income ratio remains in the range of 48 to 50 for financial year 26. For the current quarter nine month ended FY26 our performance is more or less aligned with our expectations. Whatever we have shared with you all you could see we have surpassed on some counts advanced growth. We had registered 21% advance growth in Q3 financial year 26 yoy and our advance have increased to 60,892 crores from 50,409 crores in Q3FY25.
This growth is consistent starting from Q1FY25 and we had achieved double digit credit growth all the quarters up to Q3FY26 which is the risk. For the last seven consecutive quarters we have achieved this double digit growth. In Q3 alone our advances had grown over by 3300 crores which is more or less similar to our Q2 growth. Also the growth of 21% is the highest credit growth after financial year 18 which is almost after 28 quarters. As given earlier we will continue with the targeted growth of mid teen which is 2% to 3% over and above the system growth.
At the same time we will not let go the opportunities when we encounter. The focus continues on core MSME Gold loans and secured retire deposit front. Our deposits also had a growth of 21% similar to advances and our deposits stood at 70,516 crores for Q3FY26 as compared to rupees 58,271 crores in Q3FY25. Our average CD ratio for Q3FY26 stood at 86%. The CASA percentage to total deposit stood at 27. The daily average CASA grew by 3% between Q2FY26 and Q3FY26 and 19% year on year which is Q3FY25 and Q3FY26. As you know we had received AA rating last quarter which enhanced our opportunities to participate in the wholesale deposit market.
To test the waters we went for a certificate for 49 crores in Q2FY26 and around 1150 crores in Q3FY26 to get a feel for the market. Anyway, our focus will be on granular retail deposits and this participation in CD market is purely to get an experience Asset Quality Status in asset quality front we are continuing with the trend of recoveries over and above slippages as we have seen in last several quarters. For Q3FY26 the slippages is around 193 crores while the total recoveries is rupees 219 crores consisting of 164 crores from live NPA and 55 crores from technically written off accounts resulting in reduced NPA figures.
Our gross NPA percentage had reduced to 2.17% from 2.42% in Q2FY26 and 2.99% in Q1FY26. Both gross NPA and net NPA in both percentage and absolute terms is reducing quarter by quarter for the last 11 quarters or say close to 3 years on continuous basis. When compared to Q3FY25 the GNPA had reduced from 3.36% which is almost 119bps reduction. Similarly, our net NPA number had come below the 500 crore mark and decreased to 469 crores and our net NPA percentage to 0.78% in Q3FY26 as compared to 1.42% resulting in 64bps reduction in net NPA on year.
On year basis net NPA was at 1.2% in Q1FY26 and 0.9 in Q2FY26. We are now at 0.78% showing substantial sequential decrease. In our last con call we have stated that our Overall SMA including SMA 0, 1 and 2 put together are in decreasing trend. For the past few quarters the total SMA numbers for Q3FY26 stood at 3.68% compared to 5.06% in last quarter showing significant improvement in these numbers. Overall, SMA2 to total advance had come down below 1% and stood at 0.95% in Q3FY26 as compared to 1.34% to Q2FY26 at 1.59% in Q1FY26. As we speak today we are at 0.95% for this quarter.
For Q3FY26, PCR with technical write off stood at 83% which has improved from 77% in Q3 last year. Starting from Q1FY25 we had been increasing our PCR without EW to bring it closer to the industry levels. For the current quarter, PCR without technical write off had improved to 64% compared to 59% in Q3FY25. Interest Income Our interest income had grown by 19% in Q3FY26 and improved to 1756 crores from Rupees 1479 crores in Q3FY25. For nine month ended FY26 our interest income stood at 5014 crores as compared to 4301 crore showing 17% growth 5014 crores compared to 4301 crores.
Yield on Yield Front Our yield on assets stood at 9.73% in Q3FY26 as compared to 9.81% in Q3 last year compared to Q2FY26 the yield has marginally improved by 7bps for 9 month FY26. The same is 9.73% as against 9.74% similar period last year. On the cost side, the cost of deposits have reduced by 14bps sequentially due to the repricing benefit and stood at 5.57 for the quarter compared to 5.71 in Q2FY26. As a result, our NIM has increased from 3.63 in Q2FY26 to 3.89 in Q3FY26. Faster repricing of Deposits an increase in gold portfolio with fixed rate is driving this improved NIM.
For the 9 months ended FY26. The NIM is at 3.69% as compared to 3.59% for the same period in FY25. We expect a stable NIM for Q4 as well with 10bps plus or minus the other income for 9 months FY26 has increased by 16% from 748 crores sorry to 748 crores from 647 crores last year. Further opportunities on treasury profits are getting limited which we are working hard to compensate through other means like insurance, income processing charges etc. Our operating profit had grown by 18% in Q3FY26 and stood at 513 crores compared to 436 crores in Q3FY25 which is in tune with 21% business growth for year to date I.e.
9 months ended FY26 it had improved to 1435 crores from Rupees 1238 crores for 9 months ended FY25 registering a 16% growth. The total fat had grown by 16% for 9 months. Enter FY26 it stood at 967 crores as against 836 crores in the corresponding period in FY25. On Q3FY26 our PAT was at 332 crores as against 286 crores in Q3FY25 Cost to income Our cost to income ratio for Q3FY26 stood at 48.56 compared to 49.16 in Q2FY26 showing some decrease while for 9 month ended FY26 it is stood at 48.62% ROE. Our ROA for Q3FY26 is at 1.53% and our 9 months FY26 ROE is at 1.55% which is over and above our long term level of 1.5%.
To sum up we have achieved consistent double digit growth in all the 4/4 of FY25 and also 3/4 for the current financial year. We would end up in high team growth for FY26 which will be over and above the industry level growth. Our focus continues to be in the areas of core msme Gold loan and secured retail. Our deposit growth will be aligned with the curric growth with focus on CASA and granular deposits. The effects of CRR cut will have some positive bias in the next quarter as well as in our NIM levels. ROE is expected to remain at our current level of 1.5 plus and our cost to income ratio remains in the range of 48 to 50 for financial year 26.
Thanks a lot to everyone. Happy to take the 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 the 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. To ask a question, please press star and one. Now. The first question is from the line of Sameer Bhishe from Diamond Asia. Please go ahead.
Sameer Bhishe
Yeah. Thank you for the opportunity, sir. And congrats on a fantastic set of numbers. Just wanted to understand the provisioning breakup for this quarter. Given that it is slightly higher on a sequential basis, does it also involve any floating or standard asset provisions? I can also see that PCR has gone up. But if you could elaborate the thought process here, I think it will be helpful.
N. Kamakodi
See like sir, we had 74 crore provision for NPI visa vision. 40 crore for the last quarter. And the provision for tax is almost stable at 85 year. And the standard assets provision increased from 7 crore to 22 crore. See, the logic is when I hand over, I have to reduce the NPI level as much as possible. And we have achieved our targeted ROA of 1.3 percentage plus. And we are going for higher provision to improve the coverage ratio and also reduce the net NPA numbers.
Sameer Bhishe
Yes. Okay, fair. Fair enough. Thank you so much. And secondly, if one were to look at incrementally, how should one look at slippage ratios going ahead? Because we are entering, we are now on a reasonably strong growth trajectory and also share of retail assets continues to inch up. So if you could comment on that especially for FY27, if you can share some thoughts, that will be great.
N. Kamakodi
See basically for many quarters now, the total recoveries of live NPA and the technically written of NPI together are more than the slippage numbers. And using that and also having like say some increase incremental provision like say we were slightly behind the pack in terms of gross and net NPA percentage even last year which we have caught up to a greater extent. Whenever we feel that gross NPA and net NPA numbers are comfortable and we can go for higher profits, we will be taking the call and we will be reviewing that situation. And probably Vijay will also concur with me.
Like based on that decision, the incremental credit provisioning will be decided.
Sameer Bhishe
Sure, sir. Okay, that’s all from my side. Thank you and all the best. Congrats again.
operator
Thank you. Participants do ask a question, please press star and 1. The next question is from the line of Anandama from MK Global. Please go ahead.
Anandama
Yes, sir. Thank you. For the opportunity and congratulations for a good set of results. What is basically driving up our margins? We saw your interest on advances actually shooting up this quarter despite most players reporting a rate cut. Is it that last year or basically earlier on we had a lot of interest reversals which is not happening now or the incremental loans are basically coming at the better yields. The MCL related regulatory issues that we had that also seems to be likely behind. So what basically explains the jump in interest for advances existing at this point of time?
R Vijay Anandh
So sir, basically we had a repricing on deposits. As mentioned in my commentary, almost 14,200 crores got repriced. This is from the deposit side and from the advancer side you know we have moved to fixed rate in gold loans so that is now stable. And in MSME also we are targeting the numbers what we are supposed to as well in retail secured. I think the combination of these factors is helping us in getting it right.
Anandama
So do you expect the interest on loans to go up further?
R Vijay Anandh
I don’t think so sir. Quite difficult.
Anandama
Okay. And your cost will keep coming down.
R Vijay Anandh
Yeah, yeah.
N. Kamakodi
One more thing which you have to keep in account. Anandama. The reduced CRR ratio also is helping us and also we are operating at slightly inched up average CD ratio. All are helping us to have better margin.
Anandama
Okay. And that basically gives you confidence that in fourth quarter margin should be nicely flattish.
R Vijay Anandh
Yeah.
N. Kamakodi
That’s why we have like usual as usual we have given plus or minus 10 basis point band.
Anandama
How should we look at FY27? Should the margins be in the range of about 3.9 or should inch up further?
N. Kamakodi
Ask for 1/4 at a time. But you are still not sure how the like say RBA rate cuts or let’s say how it is going to move and all like we thought it is by and large. I mean there are multiple factors which we have to look into. But whatever that happens our endeavor is to like say have it. Let’s say that 3.5 to 4 is what we had done in the like say previous cycle for few quarters. That stability is what we are targeting and trying to work out.
Anandama
But if assuming there is no rate cut then you should expect a stable to better margins next year.
R Vijay Anandh
Yes, yes.
Anandama
Secondly what is driving of the other OpEx during the current quarter? It was 254 crores versus 230 crores last quarter. Is it more related to business because there was some one off over here?
R Vijay Anandh
No, I think it’s almost same. It was flat. We had at 455 crores in Q2 and we are at 484. So majorly it’s going to be technology expenses and salaries. Nothing much.
Anandama
You have already taken the labor code inside, right? This quarter itself.
N. Kamakodi
Fortunately like say right from the beginning the, the. The changes in like say you have to calculate based on the basic plus DA. We are not getting impacted because right from the beginning our calculations on the retireal benefits and all are almost. I mean everything is based on the basic plus DA basis only it, it was not purely based on the basic. And also that both the things would come above 50% is also not making any impact to us. Only thing is impacting us in a minor form is like say the graduality you have to give for even one year unlike what it was 10 years in the past for which we don’t expect a big impact.
And all we have not yet got to the like say actuarial calculations and all from our let’s say LIC which is managing our fund and all expecting those things. We have made a marginal provision of 2 crore for the current quarter.
Anandama
Okay, answer easier provision you made last quarter. This quarter you not made any quarter.
N. Kamakodi
Also about 4 or 5 crores we have made.
Anandama
Okay. In your PPT.
N. Kamakodi
So this quarter we have not made any incremental provision for ecl.
Anandama
Okay. So you expect you will make it next quarter.
R Vijay Anandh
Yeah.
N. Kamakodi
See basically the after that SMA numbers are coming down. We we are seeing some moderation and based on the requirement and the clarity we will be taking that we are like I just keeping a tab on that and trying to look out how we can take it forward.
Anandama
Sure. And so lastly the RBA supervision would be over by now. Hopefully you would have got the final report. Any observations over there in terms of PSL or anything else that you want to highlight?
N. Kamakodi
No, I think if you remember we had that hit about three years back. After that this year cycle is over and nothing to so far so good and nothing to to declare to market.
Anandama
Great, thanks. Thanks.
operator
Thank you. The next question is from the line of Pad Gurkha from 361 Capital. Please go ahead.
Pad Gurkha
Yeah. Hi sir. Thanks a lot for the opportunity. My first question is your gold loan portfolio within agriculture has declined on a 2% on a QQ basis. So anything to read into that. That’s my first question. My second question is what proportion of the deposits are yet to be repriced in quarter four. And my third and the last question is within the, within the overall advances. Last time around you quoted that you know there’s a 500 crore renewable energy portfolio, you know which is slightly higher in link than your core MSME portfolio. So just you know within the overall advances what, what proportion is a, is these high railing portfolio and what would be that proportion say 2, 3/4 down the line? Yeah, those were my questions.
Thank you.
R Vijay Anandh
So gold loans we don’t expect much. It’s almost, it’s an agricultural gold loan which has come down and it’s again based on the season harvesting and other things. So we don’t expect that I think it should be back to normal. So nothing much materialistically in this with respect to the next question of repricing of deposits another, another 10,782 crores to go. This is a repricing which is going to happen in the next couple of quarters. So this is on your second question. Sorry I missed your third question. I’m sorry sir.
Pad Gurkha
Yes. Yeah so third question was. So last time in the last quarter’s con call you had mentioned that you have started doing renewable energy portfolio which was around 500 crores as of Q2 and you know there were certain other segments where you are earning slightly higher yield than your core MSME portfolio. So just trying to understand. What are. Those segments and what would be the proportion of Those segments say 2, 3/4 down the line.
N. Kamakodi
See like I think you are linking what we got from the IFC when we sold. That is the purpose is kept for the solar and many of our customers are asking and there is a slow and steady progress and our expectation is that we should be able to complete that before the completion of the calendar year 2026. So the progress is slow and steady without much issues so far.
Pad Gurkha
Okay. Okay, thank you.
operator
Thank you. The next question is from the line of Pritesh Bam from Dam Capital Advisors. Please go ahead.
Pritesh Bam
Hi sir, Good evening. Congrats on a brief set of numbers. Just few questions. One is that what is the growth outlook from here on? So we’ve seen a very strong loan growth you guided in the last quarter that we may also do something around 1820. It’s more than that. So how do you see that from here on?
R Vijay Anandh
Sir, as explained in the summary we are expecting it to mid to high teenage so we will continue to grow like this. Mid to high teen I think you. Can expect it from us.
Pritesh Bam
And sir if I want to ask a follow up online is what CD ratio we are comfortable on from here on.
R Vijay Anandh
We want it to be between 85 to 86. That’s the number which we are looking at okay.
Pritesh Bam
85 to 86 is where we are comfortable at. Yeah, yeah right. So can you give some data on this? How much is EBLR fixed MCLR as a share in our loans?
N. Kamakodi
See the EBLR around 48 percentage MCLR around 17 and 32 percentage by way of fixer rate for good loans and 3 percentage towards grass NPA.
Pritesh Bam
3% is what. Okay, got it. And last question was on write off. We’ve seen write off going up a bit quarter to quarter. Last quarter we had of course quarter on quarter it has fallen but as a number still looks like we’re doing about plus thousand crores. What is the thought process there and what is entering that write off?
N. Kamakodi
See as I told for I think one of the earlier questions Kamakodi here we want to like say have you may like say there are the third process involved is like this one. Wherever we have we have made maximum provisions and all we are using this opportunity to let say reduce it so that the management of grass and net NPI will be better. And number two it help also helps in the like say taxation purpose also. So considering both and you can also see that we continuously have a decent stream of recoveries from the return of assets.
Even this year also we had a very reasonable sum. So this technical write off is one instrument which are which we are using for quite some time and we feel comfortable with that and our future also we. We feel we will be continuing with the same methodology.
Pritesh Bam
If I can squeeze one more. Our tax rate has been consistently lower at about 20% and we managed to keep that for some time. So. So can that continue for some time more given Is there some room there? You mentioned about write off.
N. Kamakodi
Yeah, it will go as far as we are like say once again depending upon how much write offs we are doing on how much incremental production we are making. So it will take a comprehensive step on like say all these parameters put together. This will like say probably continue for at least another two, three or four quarters maybe even to the completion of the next year. And further future will be depending upon like say increase in your npi. Like say slippage cycle which we hope we should be another not less than 4 3/4 away.
Pritesh Bam
Sure sir. Got it. Thank you so much. And all the rest for future.
operator
Thank you. The next question is from the line of Rohan M from Equivira Securities. Please go ahead.
Rohan M
Good evening sir. Thanks for the opportunity and congrats on good set of numbers sir. In the previous in the repo cuts which have happened up till now we have been able to manage by not by not transmitting the entire cut to the borrowers. So for the 25 cut that has happened in December like will that be a complete transmission or we will be able to manage lower cut. And has that got reflected in the yield this quarter?
R Vijay Anandh
Yeah, whatever the rate cut which has happened by December this has completely got transferred to the customers and there is nothing much left in EBLR. So effectively 25 basis point has got transmitted.
N. Kamakodi
Yes. Yes. For all the loans which are in. Yeah. 30 percentage in gold loan those portions will not get that this thing. So that’s why the overall impact will be less than. Let’s say whatever. Let’s say 25 basis point. And just to give you our overall annual impact because of this rate cut comes to about 40 odd crore. 45 crore which translates into about 11 crore per quarter because of this last rate cut. Whatever we had. And one thing is that in this third quarter it has happened only towards the like say last one month or so.
But this impact will be there for the all the three months in this current quarter. But you will be having that compensation from the benefits we are getting on the repricing of term deposits which Vijayananda gave a figure of about 14 to 17,000 crores or something like that. So with that taking both these things into account only we are like say we said based on they were expecting expectation that our ANIM will be by and large the stable may even have an upward bias but will be in the band of plus or minus 10%.
Rohan M
Just on the yield on the MSME portfolio. How would it have moved in the last nine months? This is March to December.
R Vijay Anandh
Msme we are maintaining at 9.5 the yield is more or less same. So there is nothing much materialistically. Broadly no changes in the quarter. Sir.
Rohan M
It was. It would have been at a similar level in March.
R Vijay Anandh
By and large. Yes, same 1015 pips. Nothing materialistically. Not a big difference sir.
Rohan M
On the. Standard explosion of credit to pros this quarter. Is it only linked to the increase in the balance sheet or is there any other component here?
R Vijay Anandh
Only increase in the balance sheet?
Rohan M
Sure. And sir, with the reduction in SMA like where do we stand on the ECL requirement provisions versus the requirements?
N. Kamakodi
So we have in fact discussed about this in the I think last quarter or I think even on the second quarter quarter. We discussed that at length and we are seeing like say negative bias even in that requirement in the last couple of hours because of the lower SMA numbers. You can probably get the Details from the. I think last quarter or first quarter? Last quarter only. Yeah, last quarter. Kongal, we have discussed at length on these numbers.
Rohan M
Right. But as for the assessment as of 3.
N. Kamakodi
I also clearly said I will not be giving any exact number till other banks give the exact numbers. I. I stand to that statement. I will not be the one of the first banks to give that. But I can what I can directionally I have given everything possible with which you can make your own assessment. And after I declared that there is still downward bias on that requirement is still what I can add.
Rohan M
Sure, sure. Thanks. Thanks a lot.
operator
Thank you. The next question is from the line of Subramanian K from ITIS Capital. Please go ahead.
Subramanian K
Hi sir. Good evening. Congratulations. My first question is what are the segments in retail facing competition and how is the yield for each segment has changed after the rail cut.
R Vijay Anandh
So sir, retail our major focus is on LAP and home loans. And of course we are leveraging our rural branches for affordable home loans. LAP I think we are down by 2025 bips. What we used to do before, what advantage we are getting is our DSA sourcing. So called third party sourcing is negligible. We don’t go beyond 1050 so that’s giving us a benefit. So as we speak the lap is around 9.5, 9.4, 9.5 affordable. In rural we have been consistent basis of branch sourcing and that’s giving us a double digit yield. So there is in home loans we are always at around 8.8 to 9%.
That’s been our core thing.
N. Kamakodi
Yeah. Just to add to Vijayanand’s comments and also just to give you a right perspective to your question. After the rate cut in the like say RBI rate cut new at industry level we are not seeing any like say equal or substantial reduction on the new files procured. So the by and large like say gold rates are holding up because of let’s say liquidity position in the overall industry. And we had few weeks when we could even what you call negotiate increase in the rates also.
R Vijay Anandh
Okay. Okay. Thank you.
N. Kamakodi
Overall speaking on weighted average basis there is some downward push. But it is not let’s say exactly correlating with the 25 basis point rate that it is somewhere in between.
Subramanian K
Got. Yeah. My second question is on the deposit. So deposit is currently growing at a low teen base. So going forward how do you think this would be growing at a high base?
N. Kamakodi
See the. We have given like adding the CD and other things. Both have grown by 4 to 21. Percentage is what you are are seeing from on point to point basis. And far as the what we have seen is that it is not that every quarter the growth rate of deposits and growth rate of advances will match. There are fluctuations here and there as explained by ed. Mr. Vijayanand, the focus is on for us is on retail term deposits and also granular casa. And we don’t have anything to currently suggest that like say the deposit growth will not be matching with the credit growth or whatever it is both deposit and credit growth on overall business basis on what you call one year full basis as suggested by ed.
Mr. Vijay Anand it will be in like say in fact earlier we used to set low to mid teens. Now we are seeing mid to high teens. Some amount of positive bias we are able to see and we do not get any threatening now or to suggest that we will not be having sufficient deposit growth and all that could be quarterly operations to manage that liquidity position only. We have made trials on the certificate of deposits and understood the process and all and keeping it up as a backup. One or two quarter liquidity management can be done by that.
But overall growth rate of our business will be from the retail term deposits, granular CASA and also on advances front MSME Gold Loan and security retail.
Subramanian K
Okay. Okay. Thank you sir.
operator
Thank you. The next question is from the line of Param Subramanian from Investec. Please go ahead.
Param Subramanian
Hi sir. Good evening. Thanks for taking my question. Firstly on the quarter on quarter OPEX growth. So there is no meaningful change in. Our channel sourcing or payments to DSAs or any such thing.
R Vijay Anandh
Right.
Param Subramanian
Because the quarter on quarter OPEX growth is up. And if not, you know what is driving this? Some color and how we should think about this going ahead.
R Vijay Anandh
Yeah, very, very negligible for DSA payout. As I said couple of minutes before the DSA sourcing is hardly from 10 to 12% for us. So there is no DSA.
N. Kamakodi
Just to give you a perspective in third quarter there will be a provision for the Diwali bonus and things like that. Last year if you look at to our salary increase between Q2 and Q3 it was like say depending upon where we give it was 178 to 196. About 18 crore growth was last year. It happened in the fourth quarter and some amount of quarterly operations will be there based on when we give our like say the variable pay and other things for our these things. So there is an increase of about on salary between Q3 and Q2 and Q3 about 6,7 crores and about 30 crore increase in the overall operating expenditure in that depreciation also increased from 25.7 crore to 29 crore.
Another 4 crore like that in different items. Another item basically on GST taxation payment. So it increased from 12.25 crore in the Q2 to 21 crore in the Q3 port 9 crore. So this the 35 crore 29 crore incremental cost the breakup is coming from about 4 Q2 to Q3. Breakup of increased salaries about 3. 4 crore. The GST payment by about 8. 10 crore and the depreciation about 4. 5 crore. Like that it is getting segregated among multiple head counts. That depending upon the situation it is overall cost to income ratio. Whatever we had indicated during the year beginning it is holding up and feel.
In fact there is a small reduction in the overall cost to income ratio also.
Param Subramanian
Fair enough. So largely all business as usual.
N. Kamakodi
So nothing, nothing abnormal in the pattern between Q2 and Q3.
Param Subramanian
Okay, fair enough, sir. Next on the gold loans, if you can tell us what is the LTV on sourcing roughly and on book also.
N. Kamakodi
At the onboarding time it’s around 65. When you add the interest for the one year period for all the non.
R Vijay Anandh
Aggregate gold loan it comes to 72 or 73.
Param Subramanian
72 including the interest. Okay. And on your book basis on average roughly. You would have an idea.
N. Kamakodi
Now after the increase in the gold price it’s worked out around 55 percentage.
R Vijay Anandh
To the overall portfolio.
Param Subramanian
Okay. Okay. So fair amount of equity is there. Okay, that. That part is clear. Thirdly, sir, how to think about growth going into FY27. I mean I. I heard in the opening commentary we are clearly surpassing our normal trend line. This is our best growth since FY18 as you called out. But how to think about growth going into next year?
N. Kamakodi
So we have given what you call a lot of sentences on this question asked. And you are asking a question for which we have not any. We don’t have any written answers with us. But what we can. You can. You have to. You can infer is that we. Earlier we said we will be growing from low to mid teens. So now we say mid to high teens. So this is the summer substance.
Param Subramanian
Okay, fair enough. Congratulations on the quarter. So thank you so much.
operator
Thank you. Participants who wishes to ask a question please press star and 1. Anyone who wishes to ask a question may press star and one. Now the next question is from the line of Gaurav Jani from Prabhu Das Leeladar. Please go ahead.
Gaurav Jani
Thank you sir. And congrats. Just One question on the gold book, right. You mentioned 30% of your total book is gold, right?
R Vijay Anandh
Yes.
Gaurav Jani
Okay. And that is fixed rate. So what will be the tenure of these loans?
R Vijay Anandh
For agree it may be in the. Range of 18 months to 24 months, whereas for non agree, it’s around 12 months.
Gaurav Jani
Okay, so within 12 months these can be repriced?
R Vijay Anandh
Yes.
Gaurav Jani
Okay.
operator
Okay. That’s it. Thanks. Thank you. As there are no further questions from the participants. With that, I now hand the conference over to management for closing comments.
N. Kamakodi
Thank you all for attending this conference. And if you have any more questions, you can always contact Mr. Jayaraman or our ED. Mr. Vijayanan. And as I explained to you, like say the. I have successfully completed my 59th quarter and so far, so good. Things have been working out well. And I think going from here on every parameter, you will start to see improvement. So with this few words, I once again thank you all for joining. And also thanks to Ambit for arranging this. Thank you all.
operator
Thank you. Ladies and gentlemen, on behalf of Ambit Capital Private Limited. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.