City Union Bank Ltd (NSE: CUB) Q4 2025 Earnings Call dated May. 02, 2025
Corporate Participants:
N Kamakodi — Managing Director & Chief Executive Officer
R. Vijay Anandh — Executive Director
J. Sadagopan — Chief Financial Officer
Analysts:
Jignesh Shial — Analyst
Sameer Bhise — Analyst
Dhaval Gala — Analyst
Mona Khetan — Analyst
M.B. Mahesh — Analyst
Jay Mundra — Analyst
Rakesh Kumar — Analyst
Akshay — Analyst
Puneet — Analyst
Anand Dama — Analyst
Bunty Chawla — Analyst
Gaurav Jani — Analyst
Unidentified Participant
Ajit Kumar — Analyst
Pritesh Bumb — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to Citi Union Bank Q4 FY 2024/25 Earnings Conference Call hosted by Ambit Capital Private Limited. Thank you. 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 touchtone phone. Please note that this conference is being recorded.I now hand the conference over to Mr Jagnesh Yal from Amit Capital. Thank you, and over to you, sir.
Jignesh Shial — Analyst
Yeah. Thank you,, and good evening, everyone. On behalf of Ambit Capital, I would like to thank the management of Bank for allowing us the opportunity to host Q4 and full-year FY ’25 earnings call. We have along with us Mr Dr Anne Kamakodi, MD and CEO; Mr R.L, Executive Director; Mr V. Ramesh, Executive Director; and Mr Jay, CFO.
I will now hand over the call to Dr, MD and CEO of Premium Bank for his opening remarks. Over to you, sir.
N Kamakodi — Managing Director & Chief Executive Officer
Thank you. Good evening, everyone and Dr here. Warm welcome to all of you for this conference call to discuss the audited financial results of Bank for the 4th-quarter and year ended 31st March 2025. The Board approved the results today and I hope you all have received the copies of the results and the presentation. The Board of Directors recommended a dividend of INR2 per share on the face value of INR1 per equity share at the 200 percentage for the year ended 31st March 2025, subject to the approval by the shareholders in the ensuing Annual General Meeting. Last year, it was 150 percentage. We are glad to inform you that based on the approval accorded by RBI on February 14, 2025, the Board of Directors of the Bank had appointed Srivi Ramesh as the Executive Director on the Board of the Bank with effect from February 21, 2025. The process of obtaining the shareholders’ approval is under progress. At present, the Bank has two whole-time Directors apart from MD and CEO.
Now I hand over the mic to Sri, Executive Director to discuss the details of the results. Later we can go for the Q&A. Over to Vjianan
R. Vijay Anandh — Executive Director
Thank you, sir. Good evening, everyone. At the beginning of the year, we shared our expectations for the financial year FY 2025, which are as follows: with all the new digital initiatives supported by strengthened top and senior-level management, we express confidence to restore the credit growth on par with industry levels sooner and go beyond.
On asset quality front, the trend of reduced slippages coupled with improved recovery would continue for financial year ’25. We said we would reach between 1% to 1.25% of net NPA for FY 2025 and we would explore the possibility of improving the provision coverage ratio. We also said our ROEA would be back on our long-term average of 1.5% and this trend will continue. Since we were taking the cost of digital lending retail business upfront, our cost-to-income ratio, we said would be around 48% to 50% for the current year.
And once the full benefits of digital lending and other initiatives transfer into growth, the CAR will start coming down. So for the current quarter Q4 FY ’25, we are almost on-track on our expectations, which we shared with you all earlier. For FY 2025, we have registered 14% growth on our gross advances. We have increased to INR53,066 crores from INR46,481 crores for the financial year ’24. As we stated in our Q3 FY ’25 con-call, our growth restarted from calendar year 2024 and we reached a double-digit growth of 10% in June ’24. For September ’24, we registered 12% growth. In the last quarter, that is December ’24, we registered 15% credit growth and for Q4 FY ’25, we have achieved 14% credit growth.
In the current financial year, we had registered double-digit credit growth in all the four quarters, a feat achieved after FY 2018 to ’29. That is first time post-COVID. This growth we have achieved after we have decided not to renew IBBC to the tune of INR1,100 crores and we have also let go of low-yielding NBFC funding to the tune of INR150 crores, which is approximately INR1,250 crores of reduction in advance, of which INR70 crores of reduction has come in Q4 FY 2025 — sorry, INR750 crores. I’m sorry, INR750 crores of reduction has come in Q4 FY 2025. As stated in our earlier calls, with improved efficiency level by the digital lending process, we have restarted our consistent credit growth and we hope that the current trend will continue for financial year ’26 as well. Next, deposits. Our deposits has also increased by 14% and stood at INR63,526 crores for FY ’25 as compared to INR55,657 crores for FY ’24. The CASA has increased from INR17,050 crores to INR18,119 crores in FY ’25.
CASA to total deposit stood at 29%. In the calendar year 2024, our main concentration was to get the credit growth on-track, which has happened now. In parallel, we have made efforts to take care of the deposit growth to support the recovered credit growth. As a result, our deposit has grown by 11% in Q3 FY ’25 and 14% in Q4 FY ’25, which is in-line with our credit growth of 14%. And based on the same, our LDR or CD ratio stands at 84%. Cost of deposit stood at 6.02% for Q4 FY ’25 versus 5.75% in Q4 FY ’24 and for the full-year FY ’25, the same was 5.85% compared to 5.59% last year. Asset quality.
On asset quality front, our slippages used to be around 2% during pre-COVID and it stood at 1.91% in FY 2019. During the COVID years, that is FY ’20 and ’21, this has increased above 3% and it was hovering around the same level till FY 2023. Post COVID, we have taken every possible measures to arrestore slippages and we have started seeing reduction of our slippages from FY 2024, where it stood at 2.18%. We have said that we are aiming for approximately INR800 crores of slippages for this financial year at the beginning of the year and we have stick to that and we have ended-up this financial year with INR815 crores of slippages, which is 1.54% against 2.18% of last year. Apart from that, we have stated earlier, the trend of recoveries is more than slippages. The same trend is continuing. For Q4 FY ’25, the total slippages is at INR259 crores, while the total recoveries is at INR291 crores, consisting of INR238 crores is from live NPA accounts and INR53 crores is from technically written-off accounts, resulting in negative slippages again.
The total recovery for FY ’25 is INR1,042 crores. The INR1,042 is splittered into INR834 crores of live NPA and INR2.8 crores from technically written-off accounts as against INR1,031 crores in FY ’24. Again, 2031 is INR1816 crores is from live NPA and INR215 crores is from technically written-off accounts. We closed gross NPA last financial year at 3.99% and now we have closed at 3.09%, which is 90 bps reduction from the last financial year. Similarly, our net NPA number has reduced to INR653 crores in FY 2025 as against INR899 crores in FY 2024, which is 1.7 1.97% in Q4 FY ’24 and 1.25% in the current quarter, which is 72 bps reduction for the year. Overall SMA-2 to total advance stands at 1.10% in Q4 FY ’25 as compared to 2.08% in a similar period last year.
We could see substantial improvement in SMA and slippage numbers. In our Q2 FY ’25 con-call, we have conveyed that we will try to increase our provision coverage ratio to bring it closer to the industry levels. PCR with technical write-off stood at 78%, which has improved from 72% last year. Similarly, PCR without technical write-out Has improved to 60% for FY ’25, which has improved from 52% last year. Our interest income has grown by 12% in Q4 2025 and increased to INR1,533 crores from INR1,374 crores in Q4 ’24. For the full financial year FY ’25, our interest income stood at INR5,834 crores as against INR5,271 crores last year, registering a growth of 11%. Our yield on advance stood at 9.93% for Q4 FY ’25 as against 9.81% in Q3 FY ’25, which is increase of 12 bps sequentially. Our NIM for Q4 FY ’25 stood at 3.6% as compared to 3.58% in Q3 FY ’25. For the full financial year FY ’25, NIM is at 3.6%. During the quarter, the bank has passed the benefit to the customer in-line with the cost of 25 bps reduction in repo rate. As discussed in earlier calls, our NIM is in the range of 3.6% for the past few quarters and we hope to maintain the same trend with plus or minus 10 bps. If you look at the last 50 to 60 quarters, 90% of the time, our NIM had been in the range of 3.4% to 3.7%. During the middle of the quarter, we have also decreased our savings bank rate by 25 bps and during the month of April, we have also reduced our term deposit rate in-line with the reduction in repo rates. The benefits of rate reduction in deposits will start reflecting in the coming quarters. In addition, with respect to gold loans, we have migrated to fixed-rate from floating-rate as we envisage decreasing interest cycle rate and these measures will act as a cushion during decreasing interest-rate cycle. The total other income for the year has increased by 21% from INR742 crores to INR898 crores. The insurance commission has increased by 79% from INR55 crores last year to INR98 crores. Also, the loan processing charges has increased by 67% from INR93 crores to INR156 crores. For the current quarter, our operating profit had grown by 25% and stood at INR441 crores compared to INR352 crores in the corresponding period last year. For the year as a whole, the same has increased by 11% from INR1,516 crores to INR679 crores. We have achieved a PAT growth of 13% and our PAT stood at INR288 crores for Q4 FY ’25 as against INR255 crores in Q4 FY ’24. The PAT for the year FY ’25 is at INR1,124 crores as against INR1,016 crores last year, registering a growth of 11%. Cost-to-income ratio. Our cost-to-income ratio for FY ’25 is at 47.77% as against the expectation of 48% to 50%. This is mainly due to some expenses we have planned for retail vertical in FY ’24-’25 were postponed for the next year, that is FY ’25-’26. Hence this year CIR will be around 48% to 50% and start reducing once the benefit of retail vertical start showing results. ROA. Our ROA for the year, FY ’25 is at 1.55% compared to 1.52% in the last financial year. Our ROA for all the four quarters of FY ’25 is about 1.5%, which is our long-term average. ROE stood at 12.6% for Q4 FY ’25 as compared to 12.39% in Q4 FY ’24. In our last con-call, we had briefed about our tie-up with IPL franchisees. We have signed agreement with Chennai SuperKings and Hyderabad for 400 credit card and banking partners respectively. We have done pilot launch in March and we went live from April ’25. We have been successful in creating and issuing the cards to the customers through completely do-it-yourself journey without any physical interface or branch intervention. The journey is fully digital and paperless and it is in-line with our broader strategy to enhance customers’ service capabilities and operational scalability. By removing manual touch points, we are not only improving our customer convenience, but also reducing the turnaround time and operational cost associated with onboarding. This progress is in-line with our expectation and this is in a slow and a steady manner. To sum-up, we have achieved double-digit growth in all the four quarters of this financial year and we have ended this year with 14% credit growth, which is broadly in-line with our guidance given at the beginning of the year. Now we have aligned with the industry-level credit growth and we expect this level of credit growth to stabilize and move forward. We are making this assumption on as-is various basis, subject to current economic environment continues without any turbulence or geopolitical tension, we can improve growth by a few more points as well. The current level of credit growth was achieved majorly from MSME core business, gold loan, retail journey has started from second-half of the last year and we hope it will give a significant contribution to our credit growth in financial year FY ’25-’26. With our efforts, our deposit growth is also back on-track and aligning with the credit growth. We had also achieved our long-term average numbers with respect to credit growth, PAT, ROA and NIM. We have reached — we have reached our decide levels of 60% PCR with our technical write-off within this year. We hope to continue this positive moment — momentum for the current financial year as well. In case if you are moving away from the trajectory, we would update this on our quarterly results. Thanks to everyone open for questions.
Questions and Answers:
Operator
Thank you very much. We will now begin with the question-and-answer session. Anyone who wishes to ask a question may press start in one on the touchtone 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 you know press RN1 to ask a question the first question is from the line of Sameer from Dayman Asia. Please go-ahead.
Sameer Bhise
Yeah, hi. Thank you for the opportunity, sir, and congrats on a steady quarter in a difficult environment. Just wanted to kind of ask on the growth outlook, I understand you have done a reasonably good job coming to around 14% plus kind of a growth. But if one were to look at FY ’26, assuming that there is a more supportive regulatory environment with respect to liquidity and even the growth chunk of the regulators. Also, we are in a better shape with respect to the CV ratio. Is there upside risk to your growth expectations? And if especially if the whole retail exercise kind of plays out the way we are expecting it to.
R. Vijay Anandh
If we see the visibility, we would be 2% to 3% more than the credit growth 2% to 3% and the year where we ended currently the systemic growth. Oh, 2% to 3% over and above the systemic growth. That’s what we are looking at.
Sameer Bhise
Okay. And secondly, outlook on margins, can you just repeat if I heard correctly, around plus, minus 10 basis-points from the current level? Is that a fair assumption?
R. Vijay Anandh
Yeah. Yeah, we will be — we are at 3.6, we will be plus or minus 10 as we spoke in the call, we have reduced our SB rate and DD rate. Eventually we will start seeing this in the next two, 3/4. So we will be in the range of 3.6 plus or minus as confirmed in the call.
Sameer Bhise
Sure, sir. Thank you. I’ll get back-in the queue. All the best.
R. Vijay Anandh
Thank you. Thank you.
Operator
Thank you. Participants, you may press to ask a question. Next question is from the line of Dhaval Gala from Aditya Birla. Please go-ahead Daval, may I request you to unmute your line and proceed with your question, please.
Dhaval Gala
Hello.
Operator
Yes, Daval, go-ahead.
Dhaval Gala
Hello. Yeah. Yeah. Sir, if you could talk about outlook on margins for the next Fiscal year and also possible targeting — target of loan growth?
R. Vijay Anandh
Yeah. As confirmed, we will be around 3.5% to 3.7%. This is what we are looking at and 2% to 3% more than the industry growth is what we are looking at. See, the visibility is good for the current year.
Dhaval Gala
Okay. And you would also talk about incremental cost of funds and any change of SAR deposit rate for your bank?
R. Vijay Anandh
No, whatever we have done, we have reduced the SB rate, we have reduced the TD rate and we are fine with this. On this results we will start getting it in the next two to 3/4
Dhaval Gala
Of all right, sir. Thank you.
R. Vijay Anandh
Thanks.
Operator
Thank you. Participants, you may just start in one. Would you like to ask a question. Next question is from the line of Mona from Dolat Capital. Please go-ahead.
Mona Khetan
Yeah, hi, sir, good evening and congratulations on a good quarter. So firstly, on the — on the loans, what is the reset date that we have? What is the frequency of resets reset
R. Vijay Anandh
It’s. It’s mostly one year,
Mona Khetan
So the so from the time the repo rate cut happens in how in what period is the re does the reset of yields happen. Is it 3 months, is it one month?
R. Vijay Anandh
Yeah, we have passed out the rate cut of 25 bps in the month of February itself. For the second weekend it’s on car, probably in the first week of May, we are going to do it.
Mona Khetan
Okay. So it’s more like an immediate reset in your case or how does it play-out?
R. Vijay Anandh
Yeah, overall, we have around 48 percentage of total exposure to EBLR,
Mona Khetan
Right?
Jignesh Shial
So first-rate cut-off on the second rate cut of 25, we are going to do it now
R. Vijay Anandh
In this week
Mona Khetan
Got it. And you have seen some yield improvement during the quarter. What has contributed to that?
R. Vijay Anandh
So as mentioned in the call, we have moved out of IBBC, which was a low-yielding and we have moved out of low-yielding NBFC. So if you see from previous quarter to this quarter, we had 1% dip in-spite of moving of INR750 crores in Q4, we still had a 14% growth since we have moved out-of-the low-yield loans, our NIM came better.
Mona Khetan
Okay. And from a full-year, these amount to about INR2,000 crores?
J. Sadagopan
What about INR1,2250.
Mona Khetan
Got it. And just finally on the — on the fee growth, which has been quite strong this year, the — do we expect it to grow a better than the overall balance sheet even going-forward or what’s the outlook here?
J. Sadagopan
It will depend on the business. If the business grows, obviously, this will also have a good growth.
N Kamakodi
Proportionately.
Mona Khetan
Got it. And just one last thing on the — so in the loan mix on Slide 27, there is a PL personal loan of INR1,200 crore. What’s the nature of these loans? I understand these should not be unsecured in your case. So what exactly are these?
R. Vijay Anandh
No, no. This is —
J. Sadagopan
It’s not unsecured, partly secured.
R. Vijay Anandh
This is not an unsecured loan. This is a loan given to my existing borrowers on MSME under the personal loan headline, which are the collateral with us.
Mona Khetan
Okay, got it. That’s all from my side.
R. Vijay Anandh
Thanks.
Mona Khetan
Thanks. And all the best.
R. Vijay Anandh
Thank you.
Operator
Thank you. Thank you. Next question is from the line of M.B. Mahesh from Kotak Securities.
M.B. Mahesh
So just this question again on margins where you said it is between 3.5 and 3.7. Just trying to understand what would drive a 3.7% for next year?
R. Vijay Anandh
So, Mahesh, we have three types of things. One is MSME, we have JL and we have a retail. So when I speak now, as we speak today, our fixture rate is almost close to 31%, which is a — which is a jail loan, gold loan. So one, our MSME growth, our loan growth of fixed-rate of 6% and our focus on retail secured, which we have already started clicking on double-digits is giving us a good growth. Over and above that, our deposit pricing, we have reduced our deposit pricing as I said couple of minutes before in both SB and TD, this is giving us an advantage, hence, we are slightly able to predict this number.
M.B. Mahesh
So the question is mostly given the fact that there has been a rate cut also that you’re doing on the other side. Just trying to understand what will — what can poss — can possibly cause the margin expansion based on the current mix of loan book that you have? It’s only the fixed-rate loans that is available, is it?
R. Vijay Anandh
So the fixed-rate is 31%. The deposit benefit, I will get it only post two, 3/4, number-one. Number two, our retail secured has already started achieving double-digit interest yield. And our MSME loans has always been doing well. When the deposit rate comes down after two to 3/4 and my three engines started doing as per the expectations, then 3.5 to 3 points on should be a decent number I think.
M.B. Mahesh
Okay. Perfect. Second question is, Gold loans is now doing reasonably well. All the — this book will continue to grow at this rate or you see that it can kind of slow-down from these levels?
R. Vijay Anandh
I don’t think so. I think we should be comfortable in growing this book at this rate.
M.B. Mahesh
Okay. Okay, sir. Done. Thank you.
R. Vijay Anandh
Thanks. Thanks.
Operator
Thank you. Next question is from the line of Jay Mundra from ICICI Securities. Please go-ahead.
Jay Mundra
Yeah, hi, sir. Good evening and congratulations, sir, on the results. Sir, I have few questions. So first is, this quarter we had cut during the quarter, but still the cost of deposits have gone up. Was there any deposits repricing which — which led to higher-cost of deposit? And is it safe to say that the cost of deposits now have peaked because we have cut the rate and TD rate also? I mean, there is no more repricing disadvantage there.
R. Vijay Anandh
So the cost of deposits is because of TD and we have cut the ATD rate only in the month of April. Number-one. Number two, our SB rate also we cut only in the month of March. February last year. February last week. So that’s the reason why the cost of deposits is slightly higher,
Jay Mundra
Right? And there is no more — even if the TD were to reprice, I mean, there will not be any, let’s say, I mean, you will set — you are again to benefit only, right? Even if any maturity TD were to reprice, it will be repricing downwards only.
N Kamakodi
Yeah, Mangra, there are pa two things come about here basically like the deposits which are current to fixed deposits which are maturing today, when they get contracted into the new rate, there itself I am getting a benefit now. So the — so incrementally like — but as said, it will be cumulatively giving us benefit, but already the benefit has started. Basically like say two things we timed well. One is shifting the gold loan into fixed-rate. So when the rate reduction cycle started, we actually we need not reduce the rate. And also when the 25 basis-point reduction happened in the repo rate, the final average yield reduction, it worked out about close to 10 basis-points depending upon the risk rating and how much of adjustment that happened in the risk premium and things like that. Because of that and also the cumulative effect of like say savings bank let’s say, reduction and also the withdrawal of — I mean to the previous question why the cost of deposit increased.
When we — just before entering into the 4th-quarter, anticipating a tighter market, we have gone for a special FD schemes of 33 DASH tune with the market rate and like say the bulk of the growth happened through the term deposit accretion and which has like say that 12 basis-point increase in the weighted-average yield. So when the older deposits getting matured now, we get that benefit on the — their rate of interest in the term deposit today. And so it has potential to cushion the — I mean, particularly you might have always seen the — whenever we get into the reducing interest-rate cycle, the margins contract and whenever we get into the increasing interest-rate scenario, margins expand. Despite into the rate cycle where you have seen, like say, two rate cuts, instead of the margins decreasing, it slightly expanded by-4, 5 basis-points, mainly because we timed it well. So the — some amount, I mean, you cannot make it with a surgical position, but we are able to manage it at a reasonable let’s say, a level. So we are able to say with the confidence that the existing rate margins should Be at the current level, plus or minus 10 basis-point is what can I?
Jay Mundra
Right. No, sure, sir. That is very helpful. Just that — so you mentioned this out of first 25 basis-point rate curve to the blended yield, let’s say, impact on the portfolio was around 10 basis-points, right? So this — this relationship should ideally held — should held up, right, in the sense that if RBI cumulatively cut 75 or 100,
N Kamakodi
Like say, you have — it is basically on the EBLR plus wherever you have given a strategic discount, wherever you have a risk premium, there are multiple factors getting involved. Finally, market forces take cap,
Jay Mundra
Right, right? No, no, so I’m asking, sir, if there is a cumulative 100 basis-point rate cut by regulator, then you should ideally have around
N Kamakodi
You can’t say it is going to be only 40 basis-points.
Jay Mundra
Okay. So but what could be the range, sir? I mean, 40 to 60?
N Kamakodi
Yeah, it could be 50 to 45.
Jay Mundra
Okay. Okay. Understood, understood. Right, right. And despite that, right, because the consensus is that
N Kamakodi
Yeah, will understand is like the sum of the — like say, every quarter 25 percentage of your what you call credit like say CC limits will get renewed. Whenever you renew it, you will be having a revised contract where, like say, you will be resetting the rate.
Jay Mundra
Right.
N Kamakodi
That reset rate will depend upon the let’s say my individual accounts rating their individual risk assessment and all such things, which like say see that like you have like say some amount of lead and lag factor-in transmission. In the past, like say almost, almost a decade back, we had seen a cycle when because of surplus liquidity available in the system, the lat rate transmission was even faster than the RB rate. So all these things are determined by the market forces and the — both at a overall level and also individual account basis. So it’s very difficult to have one-to-one, like say prediction or another thing, if the rate cut cycle is relatively slow, say, for example, if a one percentage rate reduction, whether it happens in one-half or one year or 1/4, it also plays a role. So multiple factors determine how fast the transaction happens. And like say, for example, like the — as you always know only the — which are directly involved with the 50 percentage of your portfolio is for example, is linked to the EBLR, only that 50 has to have a direct relation of, like say, the 25 basis-point means the overall portfolio will have only 12 percentage.
So within that, you will be having a quarterly what you call my renewals for which the, like say, there will be a reset of rates depending upon the individual risk-weight and all and there will be some amount of what do you call leak lead factor or lag factor, you will find it a I mean very difficult to predict precisely what will happen.
Jay Mundra
Right. No, no, that is fair point, sir. I can understand there are lot of multiple moving parts. What I was trying to understand is this NIM guidance of plus-minus 10 basis-point is you of course assume that there will be, let’s say, which is widely anticipated to more rate cuts, right? So this guidance is not only the rate cuts which have announced so-far, but also assumes that RBI may further announce one or two more rate cuts, right, two rate cuts. Assuming that is the right.
N Kamakodi
See, the point is if two rate cuts happen in 1/4 the — if two rate cuts have happened in one-half or the two rate cuts happen in 3/4 or four quarters, the impact will be like say different depending upon how quick the rate cuts happen. That’s what I’m trying to say. I’m like say, whatever predictions we give is that we are — we take an assumption that this rate cut will happen over a period of, say, next one year in a fashion. When whatever, let’s say, yield cuts we have to take because of the like say reduction in the repo rate under the benefit we get-in the repricing of the term deposits, they will by and large match and compensate to a greater extent. And overall like say, yield will not go every from wherever we are is our expectation with which we are going?
Jay Mundra
And secondly, sir, on the growth, right, so I mean, I wanted to understand how — what is the MSME growth in the sense that there is some change in the MSME reporting over the last one, two quarters or one to — with last one year because of this MSME norms, etc. What would be MSME growth and maybe if you have number for disbursement growth in MSME, just to understand how effective is the new LOS versus what we were doing earlier. So if you have any number for, let’s say, 4th-quarter disbursement versus 4th-quarter of last year and just to understand — just to get a sense as to how this new LOS is helping in terms of the fresh disbursement. Of course, the outstanding number is visible, but I wanted to check if you have any number on disbursement loans.
N Kamakodi
See, we had, like I say, total credit growth of about INR6,500 crore for the current financial year. Perhaps the highest whatever we have recorded over the period of, I mean, in our history. Out of this INR6,500 crore growth, about INR4,000 crore growth has come from the MSME for example the this should give you some idea, definitely the digital lending for MSME through our like say Nugen software which was, let’s say, guided by BCG last year and all almost for the current year. It has helped us to accelerate our credit growth per se. So less than INR7.5 crore. The decision is by and large now taken by the system with minimum manual intervention.
So that has — that is now helping us to proceed further. Actually, speaking, the outstanding MSME growth was 23 percentage for the current what you call financial year.
Jay Mundra
Okay. So MSME growth was 23% and of course, the overall growth was 14% because we also took some IBPC, etc. And disbursement growth must-have been maybe 40% 50%, right, in the MSME itself. I mean, just to get that 23% number.
N Kamakodi
Yeah. The disbursement for the whole year clock opening although INR9,000 crores which is close to INR10,000 crore for the — like say year. So in that you have — in that — you will also have CC portion, which will be having lower utilization. You can’t have one-to-one. So that’s why we don’t discuss too much about that disbursement per se, we explain on outstanding basis.
Jay Mundra
Sure, sure. And sir, in this software, if you have the rough number of green amber red, how is that — how is that progressing, just to get a get
N Kamakodi
Still the amber portion is more. So how we have made is that like the rent conditions are clearly given when the conditions are clearly given, they are washed off on Amber side like say the tuning will take at least I think by before the end-of-the financial year ’25, ’26 that tuning will happen
Jay Mundra
Thank you.
Operator
Thank you. Jay, I’m sorry to interrupt you. I’ll request you to come back for a follow-up question. Thank you. Next question is from the line of Rakesh Kumar from Valentus Advisors. Please go-ahead
Rakesh Kumar
Yeah, hi, sir. So like I think this quarter the quite critical part was deposit growth that you managed to report quite a strong number. So just wanted to know what is the strategy around that deposit mobilization that we did because we had to manage the earlier as well. And so what are the product on the asset side or on the liability side we had this quarter or what is the like-kind of a manpower that we had to manage or to show this kind of a deposit growth and what would be the strategy going ahead also because we are looking at a similar kind of credit and deposit growth number with the LDR. So if you can help us understand that part? Thank you.
N Kamakodi
So we started this year with the Advances target. We wanted to have a good growth on advances. I think we were pretty decent. And Q3, Q4, we had dedicated structure for liabilities and we had a lot of trust and we had the structure in-place in-sourcing the liabilities numbers. I think there were a couple of new arrivals — new recruits as well. So this is given a strong focus, we could have a dedicated structure and this has yielded the results, number-one. Number two, what’s going to be the future? As I said, as we said in the call, we wanted to keep the LTR at 85%. So that’s the number which we are looking at and our growth will also be basis the same hello.
Rakesh Kumar
Got it, got it. So next year, next fiscal year, we are looking similar kind of a growth number in deposit or because if I look at the real TD — real TD rate for the system, it is like-kind of high in the last four, five years. So real TD rate has to come down. So it will have some repercussion on the TD growth number. So TD — so overall deposit growth number, we have a similar number in mind as compared to credit growth number?
R. Vijay Anandh
Yeah. That’s the point I said. We have already reduced the TD rate in April. We have kept the target of 85% in LDR. That’s the number which we are targeting for the credit growth, what we are imaging for this financial year for the current financial year
Rakesh Kumar
Got it. Got it. Thank you. Thank you, sir. All the best. Thank you, sir.
R. Vijay Anandh
Thank you, sir.
Operator
Thank you. I request to all the participants kindly restrict to two questions per participant and join the queue for a follow-up question. Next question is from the line of Dhaval Gala from Aditya Burla. Please go-ahead. Dhaval, may I request you to unmute your line and proceed with your question, please. You no response. We move on to the next participant. Next question is from the line of Akshay from HDFC Securities. Please go-ahead.
Akshay
Yeah, hi. Thank you for taking my question. So firstly, the slippages are slightly higher for this year — for this quarter, around 2%. Would like to know the reason for that or from which sector that it is coming from?
R. Vijay Anandh
Yeah. So we — when we started this year, we confirmed that we would be around INR800 crores. So we started with Q1 of INR178 crores.
Akshay
Yeah.
R. Vijay Anandh
Q2, we moved from INR178 crore to INR176 crores and Q3 from 176 we moved to INR201 crores. So we were around INR55 crores as of Q3. We had INR800 crores, that’s the number which we were envisaging for the quarter — we were envisaging for the year basis the prediction what we have done. We had a — yes, I have a SMA to a customer. So we do not want to take any chance. So we thought that when we have a room, we will just fill this. And that’s why we have moved it to INR800 crore INR815 crores. And we were well within the expectations and hence, we made this movement.
Akshay
Sure, sure. And second question was around there is uncertainty regarding the global tariffs, global scenario because of the increase in tariffs. So has any of our — within our MSME sector since we have exposure to — to export-oriented companies, the specialty textile sector. You know, have we seen any sort of some disruptions in some of the sectors or any early signs of any stress building up here?
N Kamakodi
Yeah. See the are currently, so-far the — like say, first of all, we did not have significant exposure to the, like say, export-oriented units or whatever it is, it was in like say low-to middle-single digit only. But within that whatever that is happening so-far is like say it is giving some positive like say thing in the sense that like — like say particularly the built the textile exposures. For the last three, four years, they had impact because of, like say the strong competition from the Bangladesh.
After the regime change and things like that, there were some, like say, advantage for them. And currently also like what you can say is that the — on — so-far, it is better than what it was there last year. But since the things are extremely fluid and how fast like say, they are going to get affected and all like only time has to say. But what I can definitely say is that whether it is any significant improvement, they will have positive effect, but if it’s any deterioration, they will not have much deterioration. But other to what extent supply-chain impact will be there and whether per India-Pakistan war will come, whether it will affect the thing. There are macro questions and all which we expect there should be, like say the existing situation will continue that you have tension always, but nothing on-field any change. This is what we expect.
Akshay
So thank you. Thank you so much.
Operator
Thank you very much. Next question is from the line of Puneer from Macquarie Capital. Please go-ahead.
Puneet
Yes, sir. Thanks for taking my question. Just one bit on the credit cost this thing. We are expecting to increase our PCR in-line with other private peers, right, around 70% and we plan to maintain our credit cost around the FY ’25 levels, right, all else being equal, of course. And so according — am I right or sorry, I missed some of the opening comments, that’s right.
N Kamakodi
No, actually like in the beginning of the last year, we told we will be improving our — like say what do you call the PCR average ratio number. And the number that we were anticipating was like say, somewhere around the current level 60 only, which we have already done. You always — as of — on where-is conditioned, like we don’t have any specific number in our mind. So we don’t like say, make a call depending upon what is, like say, happening in the market or whatever, because the 70 percentage coverage ratio, including technical write-off is something which was there on the regulation, which we had covered a long back. Post that it is a call which you take depending upon how the, like say, market progress and what are all the things you need. So we made, like say, so-far, we have per — without drastically changing anything in a manner, we are — we are able to see about 90 basis-point reduction in the, what do you call your gross NPA number and about 70 plus basis-point reduction in the net NPA number. We can proceed in the, say, either slow and steady fashion without compromising on the ROA.
If you need to compromise on the ROA, increase your provision — provision coverage ratio to a much higher-level and all. That option we always have — we can take at any point of time. But as of now, we think we’ll be proceeding on this level. And other decision whether to go for, let’s say extra provision to reduce the like say net NPA number and to what extent you need to compromise the ROA and have extra provisions and all. Those choices will be taking a call as the quarters proceeds — progresses.
Puneet
Okay. So right now, we are targeting stable ROAs with a — like there is no target to improve
N Kamakodi
No, we don’t anticipate any respeak with the current level on the — with that slow and steady fashion itself, you have already seen like say desired reduction in the gross NPA and the net NPA. You also need to factor-in this is going to be financial year ’25, ’26 going to be my 15th year, which is regulatory permissible as the CEO. What is the net NPA number? I want to hand over to the successor, we have to take a call as the way how we proceeded during the quarter.
Puneet
Got it. And sir, your margins, the guidance of 3.5%. Sir, if I’m not right, I heard that only 31% of the book is fixed. So in such a scenario, sir, deposit repricing happens with a lag, right? So for us guiding 3.5% to 3.7% next year is looks like an aggressive guidance given we have around 70% floating-rate book, right? So any comments on that?
N Kamakodi
So that’s what I explained in detail. So you have multiple levers working. In fact, the expectations was even for us, we would have had a reduction in the net interest margin in the 4th-quarter itself compared to the 3rd-quarter because there were multiple rate hikes, I mean rate cuts. But still we were able to scrape Through because like on — yes, on the yield side, you are going to have a reduction in the yield. As you rightly said, you have, like say only 30% in fixed-rate. On, like say, floating-rate also, like say the 25 percentage of your CC accounts get repriced every quarter when they come for the renewal. So in that to 25 percentage, it need not be that the same reduction in the repo rate is getting passed on because you renegotiate the rate depending upon the risk appetite like say how you want to have a strategic discount, whether like whether there is a surplus liquidity in the system, so many factors come into play. So on — as I explained earlier, the 25 basis-point repoff, finally, the net impact on the yield was only in the, like say, high-single-digit north of that 25 basis-point as you guys think, which was to greater extent taken car by whatever reduction in the savings bank rate or in future, the benefit you are going to get the — because every quarter you are going to have 25 percentage of your term deposits getting repressed. So we had what you call special for term deposits for the last quarter, which we have withdrawn and the rate at which the current term deposits are maturing and at what rate we are now currently offering market rate the market rate we are offering for the let’s say, renewals. So there is going to be reduction in the deposit rate. Similarly, to greater extent, they will be getting offset by the reduction in the yield. So they will be going-in tandem. So that’s why we feel it will — it may not be in a surgical precision. We — that’s what I also explained. In future, it depends upon how fast the rate of interest comes down. Say for example, everybody is factoring another 50 basis-point reduction in the financial year. If the reduction of 50 basis-point happens in one-go, the market dynamics, separate liquidity in the system, so many things come into play. So if we expect this 25 basis-point reduction in stages over the period of next four quarters. We hope the — this is what we expect based on that the existing margins with the plus or minus 10 basis-point will hold is our expectation.
Operator
Thank you very much. Puneet, sorry to interrupt you. May I request you to come back for a follow-up question, please?
Puneet
Yeah, I’m done. Thank you.
Operator
Thank you. All participants kindly receive to two questions per participant. Next question is from the line of Kanand Dhama from Emkay Global. Please go-ahead.
Anand Dama
Yeah, sir. Thank you for the opportunity. I wanted to check, sir, how do you see the retail portfolio shaping up in FY ’26 and FY ’27 because you’ve been very strong on the gold loan front, housing is also a strong. Which other new products that you are going to introduce or scale-up, number-one. On people front, have you made any new changes? Have you hired some new team as such in the retail team as such? And whether that will have an impact on the overall cost in FY ’26? I think you — in the initial comments, you talked about some increase in the cost. Is it more related to the retail business as such or there is something more to it.
R. Vijay Anandh
Yeah. Yeah, the cost was more on retail front. We said that we will be around INR48 to 50 this year, number-one. Two, in terms of retail, yeah, our home loan has been pretty decent and our lap has also started picking-up load against property. As I was speaking sometime before, we on an average, we started hitting double-digit rate in terms of overall blended rate for retail. So our focus on LAP and HL will continue. Also through our branch network, we are focusing on affordable home loans. So this business is also giving us — we have just started this. So this business is also — once it starts picking-up, I think we should have the decent book in terms of retail. And broadly, the hiring is done. We have hired sales head, we have had the zonal heads. We have had the credit risk heads for the zones. We also hired the feet on-street. As mentioned multiple times, we don’t have plans to go with third-party sourcing for home loans for sure. So broadly, home loans will be a brand sourcing only for lab, North and West and some part of South bearing Tamil Nadu, we plan to do DSA sourcing for loan against property.
Otherwise, AHL it is broadly a branch-based strategy where the branch will sell the affordable home loans to their customers or new to bank customers with the existing retail setup. This is what is broadly on the retail plan. So we will continue with our overall strategy of 95% to 98% secured. We don’t have any change there and remaining would be a credit card and a small bit of PL, if you want to give for our existing customers or salary customers per se.
Anand Dama
Great. Sir, on your SME book, wanted to check like now that the rates have been cut, so are you passing on all the rate cut to the customers or you are trying to delay that by a few months by increasing the risk premium because the macro disruptions are certainly up there. And so you can always increase the risk premium. Are you doing anything of that sort and that is basically a reason why you seem to be more confident on the margins front or maybe in the guidance seems to be more optimistic as compared to what one would have expected it to be?
N Kamakodi
See, I — as we explained, you may clearly see there are multiple levers, say you have fixed-rate for which you are not going to have any impact. So you have — what is EBLR for which the impact reduction will be immediate. And for the — the like say other floating, by and large, what is in MCLR you will be getting only when it is coming for the renewal. And the 25 percentage of your CCL limits will be coming for renewal every year. So as we explained, 25 basis-point reduction in the repo, the ultimate impact in the blended yield of the portfolio was in high-single-digit. It was not into the double-digit because of the composition of the loan book. And also wherever we had given strategic discount even earlier, where some amount of, let’s say, the interest-rate concessions and let’s say benefits were given in the — in earlier contract itself.
So whenever there is a reduction in the — like say EBLR comes, yeah, part of that will be absorbed in that like say, the extra reduction that was given in the past. So taking everything into account for the 25 basis-point repo rate cut because of the composition of loan book with the fixed-rate, EBLR, MCLR or all different type of things, the net impact in the overall yield was in high-single-digit is what we faced.
Anand Dama
And sir, any reason for a sharp jump-in the CEBA and the other charges, the fee income in this quarter?
N Kamakodi
We had basically like one of the — I mean, I in fact, it’s a good question. There are two things which had — let’s say, which was resulted in this. One, in the — from the year beginning, we had like say concentrator, I mean, I have been talking about this for quite some time and we spoke about how we, like say, came out of timescale-based increment and how we are going to change the incentive structure and things like that and how concept of sales getting introduced, which was not the part of DNA of our bank.
One impact because of change in the remuneration structure is this increase in the insurance income. So we could see, let’s say, a substantial jump-in the insurance income, which was hovering about INR54 crore, like say, the commission income we earned from the insurance third-party distribution in the financial year ’24, we could get closer to 100 — just under 100 — just under 100%, about INR97 crores or something for the financial year ’24, ’25, which is a substantial jump. Similarly, we had, like say, two, three years of lower-growth in the core advances growth and MSME and things like that. As the advances growth rate started picking-up, particularly after the arrival of Nugen-based electric and other things, there is a substantial jump-in the processing fees also. These two have resulted in a substantial increase in the commission exchange brokerage fee side of the bank.
Anand Dama
Sure, sir. That’s very helpful. Thanks a lot.
Operator
Thank you. Next question is from the line of Manti Chawla from IDBI Capital. Please go-ahead.
Bunty Chawla
Thank you, sir. Thank you for giving me the opportunity and congrats on a good set of numbers. As you — earlier in FY ’25, you guided for the slippages of INR800 crores and net slippages will be negative. So if you can share similar outlook For the FY ’26, this net slippages negative will continue for FY ’26 and how will the slippages number or slippage ratio will be in FY ’26?
R. Vijay Anandh
So we were — we gave the number of 800 CR for the current financial year, which we closed at INR850 crores. We are looking
Operator
Sorry to interrupt you., can you mute your line from your side? Thank you.
R. Vijay Anandh
So we gave a guidance of INR800 crores for the current year and we closed at INR815. And for the next year, we will be around INR650 crore to INR700 crores. That’s number we are looking at. But in terms of provisions, we will also have D1 doubtful one to doubtful extra provisions we will have for the year, which will — which we may have to take. Otherwise, we are quite confident of recovery will be more than slippages for the current year as well. So to answer your question, INR650 crore to INR700 crores is the number we are looking at. Recovery will continue to surpass the slippages.
N Kamakodi
And number two, like say, the extra provisions depending upon the provisioning requirement and also in tune with the expected net NPA numbers. The provision numbers, we, we are — as we have always that it will be — the additions will be taken as we enter into the quarters.
Bunty Chawla
Secondly, sir, as you said, the margins will be in the range of plus to plus 5 to 10 bps, 3.5 bps to 3.7 and cost-income ratio will be around 48% to 50% kind of a thing. So any chances of improvement in ROA or we are still going with the stability in the ROA at 1.5% for FY ’26? That’s it from my side.
N Kamakodi
See the — like say, we don’t want to be too optimistic over-promise and underdeliver. So our earnest effort to improve that are always there and we will be working for that.
Operator
Thank you. Thank you. Next question is from the line of Gaurav Jani from Prabhaj Lilladher. Please go-ahead.
Gaurav Jani
Thank you, sir, and congrats on a really good quarter. Firstly, sir, I missed your — I missed comments on shedding of lower — lower-rated lower interest-rate loans. Can you repeat that please? I mean which two segments did we actually share?
N Kamakodi
Yeah. See, I mean, what we explained was that for the entire year that 14 percentage growth rate was achieved. After, let’s say, are exiting about INR1,200 crores of interbank participation certificate, a low-yielding and also the low INR150 crores of low-yielding NBFC advances. Out-of-the INR1,250 crore INR750 happened in the last two-quarter itself. The interbank participation certificates and all, we had to enter, like say, the previous year because we had to exit a gold loan agri portfolio and because of that achievement of, some amount we had to enter, but we — that we had to compromise on the yield that we had now exited.
So there are two things because of the two outcomes. One, we could achieve 14 percentage growth despite, like say, shelling about INR1,250 crores of loan book. And it has also helped us to have a better yield because whatever we exited were of, like say low-yielding. In fact, the — about that INR150 crores were around like say 8% to 8.5 percentage. Under that remaining INR1,250 were about like say 6% to 6.5 percentage are in that very low rates because we had to regulatory go for that to achieve our agri target in the previous year because of the — to achieve the targets.
Gaurav Jani
So thank you for the size also, so just an extension to this. So is there any more scope for reduction in this low-yielding this? I mean, given the fact that you’re looking at further?
N Kamakodi
We have given — opened — you opened up almost everything possible, like say to what extent, like say renewals are coming, to what extent fixed rates are there, whatever these things are there. We don’t anticipate any more, like say, finally, it all depends upon the market dynamics and how we are going to have, like say how the rates pan-out.
As of now, at least on cards, we don’t see anything to come down so fast. Say, for example, we have about 2 percentage of our portfolio from NBFC lending, which is about INR1,417 crore as given in the slide number 27. So how that yield adjusted as we get into the — I mean, these are all basically corporate lending and they will always have lawyer yield comparative or core advances and if the yield in that portfolio, how it gets adjusted because of the market yield and what are all the alternate options available for them, whether we will be better-off by continuing those rate of interest because these corporate lending will be around even 8.5% to 9 percentage and things like that. But we will be able to have an average yield of the portfolio close to, let’s say 9.5% to double-digit whatever it has come closer to that. So those calls are taken on a dynamic basis on a continuous thing. We don’t have a target and all-in our mind and all. We also never expected that we will be, let’s say, totally exiting from all these things.
One of the reasons are is because that like the — we could do the gold loan better with better yield and also on agricultural lending and things like that.
Gaurav Jani
So thank you. Just last one from mind, if I may. So you mentioned about the commission exchange in brokerage, right? So can we understand that was it also bulked up in because it was Q4 and could there be a further or a normalization in the coming quarters or this is new base that we are looking at?
N Kamakodi
See, the — like say, the — on commission exchange brokerage basis, the insurance income hike is perhaps as I told you, like Madi we change of remuneration structure and some amount of change of our like say marketing campaigns which we took, we will be fine-tuning and there is some more juice available over there. And on the processing charges currently, it will be the function of the credit growth
Gaurav Jani
On this. That is it from my end. Thank you so much.
Operator
Thank you. Thank you. Next question is from the line of Arun, independent shareholder. Please go-ahead.
Unidentified Participant
Yeah, hello, can you hear me? Yeah. Yes, sir. Yes, sir. Thank you for taking my question. Actually, my questions are largely answered, but one question I had on the retail portfolio growth. Are you looking at it primarily to grow in Tamil Nadu or is it other states as well? Because I also saw you’ve done a fair amount of branch expansion recently. So is the focus going to be more on your MSMEs in the other states only or will retail growth be there as well? And related to that, do you have like a goal or target in mind on the retail growth?
R. Vijay Anandh
Sir, the retail growth is going to be across. It’s not restricted only to South. Having said that, we have a decent presence in South. So whatever the business we are getting is at a zero cost. Yeah. So basically, I don’t have an acquiring cost, which is very normally very-high in retail. Our branches can fulfill this business. Having said that, our retail business is going to be in complete a pan-India apart from South. We wanted to be 3% of our overall business on MSME business year-on-year. That’s a number which we have in mind. So to be precise, we are looking to exit this year with INR3,000 crores. INR3,000 crores should be the exit number for retail for this year, so as we speak.
Unidentified Participant
And currently, what it is here? Sorry, I don’t have it off and but
R. Vijay Anandh
We should be around INR1,000 odd crores as of now.
Unidentified Participant
Okay. So you’re looking to grow it for FY ’26 to INR3,000 crores.
R. Vijay Anandh
Yeah, INR3,000 crores should be the exit number.
Unidentified Participant
Okay, thank you. That’s all I have.
R. Vijay Anandh
Thanks. Thanks.
Operator
Thank you very much. Next follow-up question is from the line of Jay Mundra from ICICI Securities. Please go-ahead. MR. Jay Mundra, may I request you to unmute your line and proceed with your question, please.
Jay Mundra
Yeah. Hi, sir, thank you. I wanted to check, sir, when did you move the gold loan from floating to fixed? And what is the outstanding risk-weighted assets on
N Kamakodi
We move
R. Vijay Anandh
On July from floating to fixed the whole loan rate. Sorry, what was your next question
Jay Mundra
Sir, the outstanding risk-weighted numbers, risk-weighted assets number
R. Vijay Anandh
39,900, 39,000 to INR.
J. Sadagopan
So overall assets.
Jay Mundra
Yes, sir.
R. Vijay Anandh
39,900, Jay. Is it audible?
Jay Mundra
Yeah, yeah. Audible, sir. Thank you so much, sir.
Operator
Thank you. Next question is from the line of Ajit Kumar from JM Financial. Please go-ahead.
Ajit Kumar
Thank you for taking my question, sir. Just one question from my side. I wanted to know your take on recent deal introduced by the Tamil Nadu government to prevent coercive loan recovery practice. I understand it is not applicable to RBI regulated entities, but any impact on your on-ground operation if this deal is passed and especially given Tamilado forms more than 70% of your total business. So yeah, any impact for you?
R. Vijay Anandh
Yeah. This law doesn’t apply to RBI regulated entities, you are right, right, particularly for the banks. So we don’t anticipate any, like say issue because of this law — any new impact because of this
Ajit Kumar
Okay. Okay. That’s it from my side. Thank you.
Operator
Thank you. Next question is from the line of Pritesh from DAM Capital. Please go-ahead..
Pritesh Bumb
Good evening. Just two questions. One is on the branch expansion strategy. We have done a good branch expansion this quarter and this year. Next year, what do you — how do you target — I mean, where do you target and how much are you targeting to increase the branches?
N Kamakodi
See, we’ve opened about 75 branches in the, let’s say, current financial year ’25. We had been consistently opening about 50 to 75 every year, except during the COVID years. So for this year from 875, probably we will be taking it to about another 50 to 75 basis-points as 25 branches. If like say, things are favorable, we may also open a few more branches.
Pritesh Bumb
So 925 is what we are looking at? I mean is that number.
N Kamakodi
Yeah, 925 to 950.
Pritesh Bumb
Okay. Okay. And second, the new — the branches will be incrementally outside Tamil Nadu or it will be spread across depending.
N Kamakodi
Yeah, exactly. You might have seen incrementally the non-Taminard branch numbers are increasing. Proportionately, the based branches in terms of percentage is holding or coming down. So we are almost reaching a stage of like say exhausting the TN expansion. So incrementally, except for the unbanked rural and regulatory to be open to branches, we will have, like say proportionately higher number of branches in the states.
Pritesh Bumb
Got it. And a question related to same. Basically, as we open more branches, the branch number is coming down. We were doing quite a decent few quarters back, but we’ve seen that from last two quarters, the branches coming down. What is the strategy there? How do we improve our branch of number?
N Kamakodi
See the — there are certain like say whenever we open a new branch, maybe for the first three, four years till it comes to a stable number of, like say, stable business, the number of people employed per branch will be after one manager, one officer and about three to four relationship managers. So it will be lower than the current level of average number of persons per brand. So that number may look a little bit coming down.
But on the other side, we are in the process of like say I’m like say, creating the sales structure partly we have done and a small portion is left under the sales structure itself, we are in the process of making why in the — like say beginning, we told a like say some amount of expenses. We expected in the last year slowly getting shifted for the current year also. So the — we — like I said the — as we explained, maybe for another one, one and a half years that the cost-to-income ratio because of this additional, like say, sales force and things like that, some amount of, I’d say the 48 close to 50 percentage cost-to-income ratio will be there. Once that start delivering results, when the income starts coming, you will start seeing the cost-to-income ratio coming down.
Pritesh Bumb
Sir, thank you so much. Thank you for answering those questions.
Operator
Thank you very much. As there are no further questions, I’ll now hand the conference to Mr Jignesh, please go-ahead.
Jignesh Shial
Yeah. Thank you,. On behalf of Ambit Capital, we are thankful to the management of Man for the detailed discussion. I’ll now hand over the call to Dr An Kamakodi, MD and CEO of Union Bank for his closing remarks. Over to you, sir.
N Kamakodi
Thank you. Thank you, Ambit, for arranging this call and thank you all for joining. So just to sum-up, for some years, the credit growth was avaiding us and we have now recorded firmly about 2% to 3 percentage growth over and above that of the credit growth of the industry. We should be in a position to firm that up further in the current financial year. The — we also — we are getting better visibility for the asset quality. We are seeing, like say, the slippage ratio getting better. We are seeing SMA numbers getting better. We are seeing NPA ratios getting better. We hope these things will further get better in the financial year. And the — so the — with this, we are also seeing other income showing substantial growth, particularly from the third-party sales and the insurance and your credit processing charges. So overall, as I told, we are like say, entering into the year when the remuneration structures and are seeing. Going-forward, the productivity has to get aligned with that and the things have to get improved from here.
So we hope for the geopolitical situations don’t deteriorate from wherever we are, but on whatever situation we are currently seeing and as-is where it’s condition, the visibility for like say, a better year is there. And with this positive note, I hope we should be having a financial year ’25, ’26 even better than whatever we saw in the financial year ’24, ’25. So with these words, I once again thank you all and let us complete this call. Thank you.
Operator
Thank you very much. On behalf of Ambit Capital Private Limited, that concludes this conference. Thank you for joining us and you may now disconnect your lines. Thank you out of there.