INDIAN BANK (NSE: INDIANB) Q4 2025 Earnings Call dated May. 03, 2025
Corporate Participants:
Binod Kumar — Managing Director & Chief Executive Officer
Mahesh Kumar Bajaj — Executive Director
Brajesh Kumar — Executive Director
Analysts:
Anand Dama — Analyst
Sameer — Analyst
Mohit Jain — Analyst
Sushil Choksey — Analyst
Dixit Doshi — Analyst
Ashok Ajmera — Analyst
Jai Mundhra — Analyst
Presentation:
Anand Dama — Analyst
Thank you. Everyone. I welcome you all to Indian Bank’s post-results conference call for 4th-quarter of financial year 2025, hosted by Emkay Global Financial Services. From the top management, we have with us Sri Binod Kumarji, MD and CEO; and we have Executive Directors, including Sriev Mahesh Kumar Bajaji; Shiri Ashutosh, Srishiv Bajrang Singhy; and Shrif Brajesh Kumar.
I request the MD, sir, first to briefly summarize the key highlights from 4th-quarter FY ’25 results and also provide us some strategic direction on growth, margins and asset quality. Post which we will have the Q&A session. Over to you, MD.
Binod Kumar — Managing Director & Chief Executive Officer
Thank you, Anand, and good evening to all the friends from investors community. My colleagues on the Board, all the Executive Directors. First of all, I will say this quarter — quarterly results has been good. Also — results has also been good. We have crossed figure of INR13 lakh crores for the first time on also PAT has crossed — we have crossed INR10,000 for the first time and to be precise, it is 10,918. So that is the first time we have crossed. And also one good number I will like to — at the outset I will share with all of you, our SMA book, including 012, which used — which was 15.59% at the end-of-the financial year March ’24 has come down to 8.06% for the financial year FY ’25 — the financial year ’25.
Having said that, so total business reached INR13.25 trillion. Q4 2 growth has been good. Annually, we have added around INR1,3004,000 crore out of that accretion in the Q4 was approximately INR60,000 crore. Deposit also, overall growth, we reached INR7.37 trillion. Out of that Q-o-Q growth is 4.97%, annual growth is 7.14. Current account also, we reached INR40,000 crore. So Q-o-Q growth is 11.33% and Y-o-Y growth is subdued at almost flat at 1.63%. Similarly in saving fund, we reached 2.43% with a Q-o-Q growth of 4.15 and Y-o-Y growth of — it is flat at 0.84%. We have been able to maintain CASA at 40.17%. And one good thing in retail term deposit, less than INR3 crore.
We have been able to reach at 2.79% with a growth of — Y-o-Y growth of 10%. Similarly, in advances, we have achieved INR5.88 trillion with a Q-o-Q growth of 5.18% and Y-o-Y growth of 10.19%. RAM sector, RAM sector, we reached 3.51 lakh cover trillion. Our Q-o-Q growth is 4.82% and Y-o-Y growth is 13.22%. Retail — retail, we reached 1.1 lakh — 1.19 trillion with a Q-o-Q growth of 3.6% and Y-o-Y growth of 13.71%. Agri, we reached INR1.38 lakh trillion with a Q-o-Q growth of 6% and Y-o-Y growth of 13.68%. MSME, which used to be in the range of growth used to be in the range of 5% to 6%. This year, we have been able to achieve growth of 11.9 approximately 12% in the MSME. MSME RAM say, RAM share is flat around at 64.23%.
Net profit for the quarter it is INR2,956 and for whole financial year, it is INR10,918 with Y-o-Y growth of 35.41%. Operating profit is at 5,019 with a Q-o-Q growth of 5.69% and Y-o-Y annual operating profit reached 18,998 with a Y-o-Y growth of 12.82%. Right. So we — because other income — NII, NII Q-o-Q sequentially it came down marginally because of the impact of the two repo cuts. But for the Y-o-Y, it has grown by 8.17%. Similarly, other income, other income, we have seen a good sequentially, we have seen good growth and with 27.46% and Y-o-Y growth is 17.24% annual. Return-on-equity, it slightly came down from 1.39 to sequentially 1.39 to 1.37. However, annually, if I talk of invol, it has grown from 1.07 to 1.32, that is 25 basis-point increase.
Return-on-equity, almost it is flat, 21 was the Q3 sequentially and now it is 21.01%. And for full-year, it is 20.676%. Cost-to-income ratio, it is flat at around 45% to December it was 44.56% and for, it is 44.77%. So it is almost flat. Then provision coverage ratio, sequentially 1 basis-point improvement is there 98.09, it has gone up to 98.10. Then a credit — credit cost, credit cost if we talk of the credit cost, it has gone a little — sequentially it has gone up from 0.47 to 0.81%. But for annual, it has come down from 7.77 to 0.66. Credit cost has gone on because we have some there and some slippages. And but the major impact is because of the one account of in NFD, we made a provision in NFD also now to be on conservative side per side.
Gross NPA has sequentially come down from 3.26 to 3.09 and net NPA from 0.21 to 0.19, it has come down. Slippage ratio, slippage ratio, sequentially it has increased as I told you on account of the some MOC, 0.78 to 1.09, it has come down. It has gone up. But from it has come down from 1.49 to 1.11. Slippage absolute slippage for the quarter was not INR1,393 crore December it was INR1,004. So little increase because of some MOC branches were audit under audit. SMA, as I told you, SMA has come down from INR79,931 in the March to INR45,923. So there is some — there is some relaxation reduction in SMA book. And SMA-2 book also more than INR5 crores is only INR659 crore and more than INR25 crores, only one account of INR160 crore. And there also we have made 100% provisions.
We have been able to open around INR55 lakh account during the financial year, a fund account and current account around 1.58 lakh current account we have been able to open. One good thing I will — I’m happy to say here, our average balance in new account, which was 21,000 in the quarter-four last year has gone up to 30,000. So that is one good aspect of that. Our guidance, guidance, if I talk of the guidance, deposit guidance, we are giving 8% to 10%. Advanced guidance, we are giving 10% to 12%. CASA, we are giving guidance of maintaining around 40%. Then LDR in the approximately 80% range. Gross NPA 3.09% already there, so we are giving guidance of less than 3%. Net NPA will we will be able to maintain because already we have reached at 0.19, so we will maintain that.
Recovery — recovery also, we are giving guidance of INR5,500 to 6,500. Then NIM, there — because rate cut is already there, we have some moderation on yield on advantage also and NIM also. But sequentially, it has come down by domestic 9 basis-points and we also see since inflation is within comfortable — comfortable range, we see there may be some few more rate cuts. So we are reviding NIM guidance from 3 point — in the range of 3.15 to 3.30. And ROA, we are giving — although we have achieved 1.32, but because of the increased asset or some moderation in the profitability, we are giving guidance of — in the range of 1.20.
Cost-to-income ratio, we will be able to maintain around 45%. Credit cost, I’m giving guidance of less than 1%. A slippage also we’re giving guidance of less than once. One good thing I would like to say here that recoveries, recovery is continuously more than the slippage since FY ’23 through ’23. This year also recovery was 7,651 and slippage was 5,683. And I’m happy to say this is this amount of recovery we have been able to achieve despite very subdued recovery — recovery contribution of NCLT and NARCL. If I give you further bifurcation, out of this 7,651, our recovery in less than INR1 crore is 6,730, so contributed by the basically smaller accounts.
If I talk of the capital, capital, we are well-capitalized at 17.94%. See, out of that CET is — CET1 is 15.36%. Digital, Mr my colleague, Mr Bajaj will explain, but before that, I would like to only one or add one or two things. Digital adoption is our focus area. We have made so many investment during the last two to three years. Benefit of that is yet to come. So that’s — our focus will be on digital adoption by using customer-base — base of the mobile banking, internet banking also. And on HR, HR, we have already initiated — bank has already initiated a capacity building for leadership development program, rising star we have initiated, but capacity building for — that was for the top management group, AGM and.
We are also making efforts or capacity building for the middle-management in a specific area of credit and ForEx. So intensive credit — intensive training for six months for 17 weeks. In credit, we have already — we are starting a program and similar program will be also initiated for the ForEx. And customer service, customer service will be a focus area and business sourcing, we are also thinking of the business sourcing, how to increase the business sourcing. So that’s why our RSC, Resource acquisition Center 100 is already there. We may increase that number to 121, RNG, Resource and government relation. So that is 18 centers are there. We will increase that to 21%. And also our subsidiary, IGSS. We use that subsidiary for garnering a business in all segments of like current account also MSME also retail also. So I will use that for garnering the business.
Now I will request my colleague to explain about the initiative taken in the digital side during the year.
Mahesh Kumar Bajaj — Executive Director
Thank you, sir. Good evening, everyone. The digital migration continues this financial year if we take the entire year FY ’25, the digital transaction have gone up from 87% to 92%. If we take only this quarter, it has gone up from 89% to 93%. So presently March ’25 quarter, the digital transactions are 93%. Even on the UPI also, which used to be INR1.56 crore per day transaction in March ’24, now it is per day INR2.67 crore. On mobile banking also per month INR55 lakh per tonne transaction have gone up. Then on the mobile banking, our customer-base has gone up by 16% from INR1.67 crore to INR1.94 crore. Same way transactions also have gone up by 3%.
On UPI, our customer-base has gone up from INR1.75 crore to INR2.18 crores, which is growth of 25%. Same with the transactions also plus beneficiary has gone up by 51%. It used to be INR570 crore per year and now it is INR862 crore. Banking also, our customer-base has gone up from 1.06 crore to 1.15 crore, which is 8% plus. Same way on the credit card user also from 2 lakh to which is 2.78 lakhs. Same way the POS transaction also from 1.14 crore to INR1.28 crores, which is a growth of 13%. The digital journey, now we have added another 43 journeys, which is now 121 journeys. We did business of INR167,390 INR7,390 crore and the last year it was INR81,000 crores, which is a Y-o-Y growth of 106%.
As far as the adoption is concerned, see MSME business is 83%, retail 85%, agriculture 95%. And even on the liability side also, the deposit, which used to be INR10,759 crore last year. This year it has gone up by 174%, which is close to INR9,439 crores. Our total overall business, the digital, it is INR2,54,000 crore. When we started our journey in April ’22 with our first launch of BAPL, first year of business, we did business of INR5,640 crore and then March ’24, it was INR81,250 crores and March ’25 is — it is INR167,000 and we are projecting INR2,25,000 crore for the financial year 2026. As far as the digital migration is concerned, the number of accounts have gone up by 133%. It is 1.2 crore accounts opened under digital platform.
Our digital library business gone up 3x, growth is 3 times. Same way in digital home loan also growth is 3 times Y-o-Y. Digital vehicle loan growth is 4 times Y-o-Y. Digital agri-loan growth is 2x, which is INR42,064 crore. In digital MSME also, there is an adoption and the growth is 2 times, which is INR7,355 crores. We have now focused on the digital retail drill loan also where the growth was 6 times. And same in the SIG loan also, which was 5x growth, we did 2,244 digital SAG loans. Last year, we launched 43 digital journey and this year we are proposing to launch another 37 journeys. With that probably will be covering each and every product of the liability as well as asset side.
Our app in Smart, which was launched in June ’24, which is an omnichannel app. We have 280 functionalities and another 30 plus features will be added during the current financial year. Apart from that, the already 77 lakh customers are onboarded on this new app. We launched the carpet mobile banking on the omnichannel platform recently and in March ’24 — ’25, 2,200 customers already they have onboarded. As far as the fintech partnership concerned, we used to have last year it was 130 — more than 130, now it is 167 fintech partners. We provide all the fintech solution to the institution of the government department, maybe the SMA or the SaaS collection or the municipal corporation taxes,, E rupee, CBDC, hospital solution, coaching, college and mobile app for the apartment society for the business on the CASA side.
And upcoming projects, I would like to tell the analyst that we are coming up with the call-center, which will be shortly launched in smart business for the MSME for the MSME customer. CMS is again our ongoing project. Our innovation of the ULI, the unified lending interface, we have now various APIs and we did the business close to INR5,000 crores with those the API by using the API of RBIH. For our relationship manager, which MDSA was talking about resource acquisition centers. So for them, for the employees, we have already start giving them the app, which is inconnect app. For our — the capacity building was talking about and where the knowledge gap is there for that by using generative AI, we are coming up. We have already launched the employee associate in the CG group, but in the June, it will be launching that app also for the employees.
CRM solution, we already onboarded a new vendor for our next-generation CRM solution. On the data analytic model also, we have created new models on the SaaS platform. Cloud migration, we have completed and still it is where the new apps are coming, new things are coming, we are putting on the private cloud and we are going to the micro-services instead of the monolithic platform. By using generative AI, we have couple of more the use cases. One is with the RBI Innovation Hub, the automated gravance adjustment system, then chatbot solution for other things.
We are planning to come with our own — the UPI app apart from the mobile app. Same with data lag also, we have gone for the data lake, the new RIP is floated. Corporate credit also, though it’s a tough journey, but we are close to the various models on the corporate credit also on the digital journey side. And we — by using Agentay also, we are working on couple of use cases. Maybe this by the end of this year, we’ll have some use cases on AI also.
Thank you so much.
Questions and Answers:
Anand Dama
Thank you, sir. We will now open up the floor for Q&A session. Anybody who wishes to ask a question shall raise their hands. I request the participants to limit their questions to two per participants and for further questions, you can fall-back into the queue. Before we assemble a question queue, sir, my first question is that there is a account where the Supreme Court judgment has come, which is very adverse judgment. Number-one, what is the exposure that the bank has to that account and whether the bank will have to refund back that money to the bidder, number-one? And I mean whether there is that kind of a covenant which is there in the — in the agreement? And secondly, what could be the impact of this kind of judgment on the other resolutions which are there in the pipeline.
Binod Kumar
I mean this is a judgment and we have received a copy of judgment early-on very recently. And of course, it is, I will say, landmark judgment and how it will impact only time will tell. But one thing I can tell you, if at all, we have to reverse. I think it will be good for the bank because if you see we have got that our resolution at the 40%, that means 60% haircut was there. Now that asset is up and running, so enterprise value must-have gone up. So if at all it happens, of course, there will be some legal battle. But net-net, my personal view is it should be positive net-net. But let us see how other party — I mean, they may also prefer for appeal at et-cetera. And so let us wait-and-watch, I will say.
Anand Dama
And any impact that you see on the other resolutions also? Any other resolutions where the — this kind of judgment actually could come through or do you expect that?
Binod Kumar
I don’t think psychologically there may be some impact for resolution applicants because it has come after substantial gap of three to four years. So psychologically, yes, there may be some impact. But at the same time, if you see the asset they are getting at the haircut. So that factor is also there
Anand Dama
Certainly, sir. And sir, is it possible for you to share like what kind of consideration that we had received at that point of time.
Binod Kumar
40% we told you our outstanding was INR2,600 and we got around to 1,200, okay, 1,250.
Anand Dama
So that is the amount which we need to reverse earlier first. And then basically after that as and when the new bids come in, we can again book higher gains.
Binod Kumar
Yeah, yeah. So I mean, if they don’t go prefer appeal, if they go for appeal, then I mean immediate reversal may not be required.
Anand Dama
Okay, got it. Got it, sir. Sure. Any participant, if you have a question, you can please use the raise add option and ask your question yes, Sameer, you can unmute yourself and ask your question Amil, please unmute yourself. Hello. Yeah, Samil, go-ahead.
Sameer
Yeah, hi. Thank you for the opportunity. Sir, my question is more on growth. We have seen systemic growth coming down, how does one look at growth for next year for the bank? And secondly, if you could comment on the slippages as well as credit cost outlook. I’m not sure if you kind of already guided, I missed earlier part of your commentary. Thank you.
Binod Kumar
So see, growth we have given very conservative guidance of deposit of between 8% to 10%, advanced 10% to 12%. And we believe we will achieve this because this — because if you see our Q1 last quarter growth, it has been good in almost all the parameters. Total business grew by 5%, deposits also grew by almost 5%, advances also grew by 5% in the Q4. And that’s why we are giving guidance of in the range of 8% to 10% and 10% to 12%. We could have achieved even this year, but for conscious call we have taken because we raised some other deposit — some fund from other sources like infrastructure bond, we also getting at competitive rate, some refinance we are getting.
So credit demand was met by these sources, that’s why deposit we did not go for the growth because wholesale — wholesale deposit, we ended at flat, INR1.404 lakh crore to INR1.06 lakh crores. So almost flat. We didn’t go for the wholesale deposit. Similarly on advance, we somewhere around INR10,000 to INR12,000 crores of the low-yielding advances. So because of that, we just missed that and we will be able to achieve that. Credit cost, credit cost, we I’m giving guidance of less than 1, 0.66% is there, but we are giving guidance of less than one and we will — I’m confident that we will achieve this. Slippage also for Inval, it was 1.11 and for Q4, it was 1.09 and I’m giving guidance of less than 1% of slippages. And I’m pretty confident we will achieve this.
Sameer
Okay, sir. Thank you. Just finally on recoveries, any meaningful accounts which are still pending or some chunky recoveries that you look at for FY ’26.
Binod Kumar
See, if you see the recovery even for this year and recovery through NCLT was only 486 and through NARCL, it was 621. Last year against 1,400 for the FY ’24. So we went without the support of the — these channels, we have been able to recover 7th — achieve the guidance, INR7,651. And as I told you, recovery in the lower segment was high, less than INR1 crore, it was 6,730. So our reliance on the smaller accounts is more for the recovery. Whatever,
Sameer
Sorry to interrupt, but the question is more pertaining to the fact that last couple of years or three years recovery has also been led by the strong economic environment that we’ve had. Given the moderation that we are seeing last say 12 months and probably likely to persist in F ’26 also, what will — what will drive recovery? That is how I was — that is where I was coming from.
Binod Kumar
Yeah. So recovery, we will — our reliance on big accounts are not — are not that much. Only smaller accounts and through OTAs, various channels are there. OTS is there are then surfaces, they are kind of surfaces, they are low there and here we go for — if you go for auction in the under surface without taking physical position, chances of materializing is low. So here we are making very conscious efforts for getting the physical position and account-wise we are monitoring that CMM application has been lost or not and what is the status of the physical position. Because if you take — we have physical position, our recovery number will number will go up, we will be able to sell the property also. So these mode — through these modes, I’m confident that whatever guidance we have given 5,500 to 6,500, we will be able to achieve.
Sameer
Okay, sir. Thank you so much and all the best.
Binod Kumar
Thank you.
Anand Dama
Thank you, Sameer. Next we’ll have a question from Mohit Jain. Mohit, please unmute yourself.
Mohit Jain
Hello. Can you hear me, sir?
Anand Dama
Yes, Mohit, I can hear you.
Mohit Jain
Yeah. Hi, good evening, sir. Sir, my question is on the SME. Last-time when we had the investor call after the results, you said our SME exposure has SME exposure has come down to INR3,000 crores from INR7,500 crores that we reported in Q3. From that context, if I’m seeing right now it is back to INR5,000 crores. Any comments you want to make on this, sir?,
Binod Kumar
SMA big accounts are two big accounts are there, okay. They have come in SMA-1.
Brajesh Kumar
Because we add only.
Mohit Jain
Yeah. And so what is — what is the status like as on-date? Is it still in SMA or is it moves to SMA-2? How do we look at it?
Binod Kumar
No, it is in SMA-1. But we don’t expect that amount will in any way to NPA.
Mohit Jain
Okay. Okay. Yeah. And sir, one follow-up on the loan guidance. This year you’re guiding for 10% to 12. Last year the guidance was 11% to 13% and when in Q3 call we — I think we specifically discussed whether we can achieve the guidance. You were positive, but we somehow ended missing on this guidance. So wanted to understand, obviously, we did some — you said we did some shedding of the low-yielding deposit advances. Apart from that, sir, what can be the — what was the possible reason in which we missed the guidance? And how optimistic and strong you are about achieving the guidance for the current year of 10% to 12% that you are giving, sir.
Binod Kumar
If you see, Mohit, if you see our last quarter growth, it was approximately 5%. So we tried to cover the lost — lost ground, but somehow just missed that. Around 10% we achieved against guidance of 11%. So it was a question of only INR5,000 crore. And let me tell you, I have some opportunity of around INR5,000 to INR6,000, but price is so competitive, I didn’t go for that. So that was the main reason. And I’m confident that 10% to 12% guidance we will achieve this time.
Mohit Jain
And sir, just if you can also guide us what kind of a growth you are expecting in the corporate segment because I think that is a place where generally we are seeing across the banks, the growth is pretty low. So in the 10% to 12%, if you can just provide some of a color as to how much growth are we expecting in the corporate sector, sir.
Binod Kumar
Corporate, we have kept a target of around 9% growth.
Mohit Jain
Okay, okay. Yeah. Okay. Thank you, sir. Thanks.
Anand Dama
Thank you, Mohit. Next question we’ll take from Sushil. Sushil, please unmute yourself.
Sushil Choksey
Congratulations to team, Bank of team Indian Bank for doing an excellent job and a stable result. Sir, my first question is what is the outlook on treasury with falling interest-rate scenario and low inflation and interest outlook on your global international division too? And if treasury gains are high, how are you going to reposition in the market where treasury operations are concerned?
Binod Kumar
Okay. So interest outlook, thank you,. So the interest outlook already we have seen two rate cuts and inflation number is beyond — is within the comfortable range of RBI, that is less than 4%. So I expect — and hopefully this trend of inflation will continue. So we are expecting further rate cuts going-forward, maybe two to three. Coming to the treasury gain, treasury gain says, see, yes, we will book profit as per only requirement. We will not go for because we are ga we are getting, we will go for the I mean booking the entire profit. We will — we will pace it as per our requirement. Globally also, I mean, our international exposure also, interest-rate, yes, so-far has also started coming down. So there will be some impact on overseas book also on the — on the NIM side. That’s why if you see I have revised my NIM guidance in the range of 3.15 to 3.30.
Sushil Choksey
Sir, in keeping in mind, CASA can be a big challenge for many banks, but a bank which has all products available, raising your CASA number from current by 10% should not be difficult because of digitization, maybe cross-sell and various other initiatives. Is it possible that we improve our CASA number to improve our margin?
Binod Kumar
See where I don’t think increasing this percent CASA percent of 40% will be, I mean possible or will be very challenging maintain — increasing this CASA from 40% because already see a only possibility I see, but not now, maybe towards the back-end of the year when substantial rate cut two, three rate cuts are there and difference between the saving fund or current account and term deposit comes down. And there are not many opportunity — alternate opportunity in the market. Otherwise, increasing CASA share will be very challenging. That’s why I’m giving CASA guidance of 40% — around 40% because see JIT is also coming. Because of JIT also, government is very conscious of their cost also. So they are coming out about the just-in-time only at the time of need, they will release the funds. So that maintaining that will also be a challenge.
Sushil Choksey
So what is the expected budget for digital — digital footprint and digitization? New initiatives?
Binod Kumar
We have digital business of around INR2.67 crore. We are expecting to increase it up to INR4 lakh crore during the year.
Sushil Choksey
Sir, my question was we’ve been spending annually INR1,000 crores INR1,500 crores. And if I recollect two years back, we had a INR4,000 crore budget on digital roadmap for the entire bank. What is the current year budget on digital spend in new products initiative, digitization and various other things?
Binod Kumar
No, INR4,000 was not there. We have expand — our expenditure is in the — on digital and IT in the range of INR1,000 crores to INR1,200 crore to INR1,300 crore. And what I meant was that we 4,000 was for three years, that is that time which I think that means that’s why that’s why around INR1,300 per year. So similar budget we are maintaining 1,300 to 400 per year.
Sushil Choksey
Sir, any idea how are we expanding our cross-sell business?
Binod Kumar
Cross-selling, yes. Yes, yes. Cross-selling, that’s why I told them we have our RSC centers and resource acquisition center and RNGR will be for the government only. But our RSER are also doing for this cross-selling and our subsidiary, which we have launched, IGSS. Through that, we are increasing our cross-sell footprint.
Sushil Choksey
Thank you for answering all my questions and best wishes for the year to come.
Binod Kumar
Thank you.
Anand Dama
Thank you,. The next question we’ll take from Dixit Doshi. Dixit, please unmute yourself.
Dixit Doshi
Yeah. Thanks for the opportunity. Firstly, you guided for 1.2% kind of ROA. So don’t you think that the impact on the NIM will be offset by the treasury gain next year to some extent? I mean, if you can elaborate on what was the thought process behind reducing the ROA target from the current level?
Binod Kumar
No, see, absolute number profit will not come down, that I can assure you. But since assets will grow, so there will be impact on the ROA. Coming to the treasury gain, so some of the treasury gain will be offset by the requirement under AS 15 also. If interest-rate goes down, our requirement under AS 15 will go up. So part of that will be compensated there also. And as I told the treasury gain, we will book as per our — I mean requirement only. We’re not going for selling all — because see this is not the only one year where when rate cut will be there. There will be another opportunity. So we will be very mindful of booking profit.
Dixit Doshi
Okay. And second question is, so our CAR is very healthy, more above 17% and with 10% to 12% kind of a growth we are targeting. Is it fair to assume that this INR5,000 crore of fundraising is just an enabling resolution.
Binod Kumar
But you can say so because last year also this approval was there, but we didn’t require. And this year also if you see it is very healthy at 17.94% and CET at 15.36%. May not be required, but we have kept enabling launch because there is call option of around INR4,000 crore of the bond. So if we see we can reduce cost or there is some opportunity for raising some equity and we are getting good return, I mean, at a very competitive rate than we can think of. So that we have kept for enabling so that if some opportunity is there, we can use that.
Dixit Doshi
Okay, okay, that’s it from my side. Thank you.
Binod Kumar
Thank you.
Anand Dama
Thank you. Next question we’ll take from Mona. Mona, please unmute yourself Mona, please unmute yourself ask your question Mona we can’t hear you will take next question from Ashok Ashok you please unmute yourself.
Ashok Ajmera
Yeah, good evening. Thanks for giving this opportunity. And sorry for having joined little late because the SBI meeting went on for a longer period of time and then there were some snacks, etc. So sir, compliments to you, sir for good set of numbers.
Binod Kumar
Thank you. Thank you.
Ashok Ajmera
I have missed some of the questions and your answers also. So maybe sometime at the cost of reputation, if you may permit me, I would like to know a little on the recovery side that what are the prospects in 2026 for the recovery — recovery from the written-off accounts and the overall recoveries? And secondly, now since the valuation of SRs issued by NARCL now is permitted, earlier used to take value, I mean, INR1 value or totally provided for, but now it is permitted by RBI. So what is the impact was there in the books in 2025 in March and what are the prospects going-forward there into FY ’26?
Binod Kumar
Recovery — thank you as Mr. Recovery, we have — last year we have been able to achieve INR7,651 out of that recovery in a smaller account, let’s say less than INR1 crores is INR6,730. We have — we are giving guidance of recovery of INR5,000 — in the range of INR5,500 crores to INR6,500 for the next financial year. And AUC also we are giving — maintaining the guidance of INR2,000 crores. Last year also we have given guidance of INR2,000 crores, but we could achieve INR3,290. But we are giving guidance of INR2,000 crore in the AUC, AUC book. Coming to the SR. SR we have not — I mean we went with the conservative approach and we have not got for the gone for the or release of the provision in this financial year. Going-forward we will see if we need at all, then we will go otherwise, we may not opt for that. We will continue with the same efforts.
Ashok Ajmera
Okay, sir, taking it little forward, sir, what is our total write-off book totally? And when you say 2,000, what percentage of it comes INR2,500 or 3,000, whatever which we expect?
Binod Kumar
Yeah, see my return of book is around INR41,000 crores. So approximately 5% of that,
Ashok Ajmera
It’s a very conservative, I think estimate.
Binod Kumar
Yeah. Last year also we have given guidance of INR2,000, but we could overachieve that. Let us see.
Ashok Ajmera
Yeah, yeah. And sir, this our composition of loan book, the corporate and I mean the retail is going to remain same or you would start looking some opportunity — good opportunity in the in the corporate sector also, even tweaking the ratio also?
Binod Kumar
See, endeavor, endeavor will be to maintain the same, 65 to, 64 36 or 65 35, but we will also — we are already — we are already looking for the opportunity. And wherever we are getting good opportunity, we are recording sanctions also. And recently also we have — we have been in the Q4 itself, we have been able to record sanction of around INR38,000 crores. So we are already looking for, but endeavor will be to maintain — will be to maintain this ratio, 65%, 65-35.
Ashok Ajmera
Yeah. Am I audible, sir?
Binod Kumar
Yes. Yes, Miraji.
Ashok Ajmera
Yeah. So, sir, my next question was, on the treasury front only that now going-forward with all these changes taking place and even the valuation norms have been changed by RBI for the FS book profit and we have a very healthy investment book. So going-forward, I think I heard part of the answer of your last question that you are not that very optimistic to take the entire profit in the one year only because there will be opportunity in the coming years too. But having said that, what will be the expectation of both the trading profit as well as the books from where we can realize the profit to — to the P&L credit with the clinical ador in the treasury front.
Binod Kumar
Front, as I told you, we will be — I mean, booking profit according to the — I mean situation only will not go for the very aggressive booking because I expect interest-rate will — we are entering into region — regime of lower interest-rate. So, of course, exact number I may not be able to give you will pass you on. But treasury profit will definitely increase. Trading also otherwise and other income also definitely will increase because — and volatility — volatility is there in the ForEx side also. So some — we are expecting some good trading profit that said also on ForEx book also. Even if you see the number of the Q4, we have booked a good gain in the ForEx trading. Exact number will pass it on to you.
Ashok Ajmera
No, nice. Okay, sir. Sir, what is the approach going to be for this still in power with that judgment of the court, you have any exposure you had, I think, some exposure on that?
Binod Kumar
Yes, yes. We had exposure on? Yeah. So let us see how ultimately it pans out. Judgment has come whether the affected party go for the appeal or not, if they go for the appeal, so when ultimately we will have to — if at all, we have to reverse the transaction. But one thing I would like to share with you, yes, sir. See, when the this resolution happened, we got a haircut of 60%, only 40% was the recovery rate. Now that asset is up and running and in a good shape and last two, three years, the steel sector is also doing good and a lot of capacity creation has happened recently also a government has also taken action on the dumping side. So hopefully, but net-net, I think it will be good for the banks. If at all we have to reverse and we will go further.
Ashok Ajmera
So it’s a in disguise, so I mean, would do this yeah, yeah. Don’t expect this. Sir, one last question in this round. On the NBFC front and the co-lending front, when the RBI is also now a little bit relax the norm that you can lend for onward lending to NBFC even for non-priority sector credit also by them. And also RBI is encouraging co-lending also. So what is our bank’s approach and what is our co-lending book, if at all, it is there and how do you see the further lending to NBFC sector, sir?
Binod Kumar
No, further lending to NBFC will happen where — but we will be very cautious in lending of — lending to NBFC, we will go further with the only good rated NBFC and having good track-record, number-one. And number two, our exposure in co-lending is less than INR500 crores, not much. Okay. So co-lending, why it has not picked-up, it’s not because of only primary or may participate in this thing because see unless we have some reconciliation mechanism, but we have issue. In past also because of the reconciliation issue, we have not been able to onboard or go for the co-lending. So — and we are in the process of creating capacity and as and when our IT infrastructure is ready because reconciliation — reconciliation is a bigger issue. So as and when — as and when we have a digital readiness, only then we will go for the co-lending.
Ashok Ajmera
Yeah, yeah. That is definitely required. Even a small bank like Bank of Maharashtra has developed the complete end-to-end solution for that. And unless you have that kind of capability, it is not advisable to go for that. I’m sure.
Binod Kumar
Yes.
Ashok Ajmera
I agree with you. Yes, yes. Sure, sir. Okay. Thank you very much, sir and all the best.
Binod Kumar
Thank you. Thank you thanks.
Ashok Ajmera
And we will meet again after the first-quarter.
Binod Kumar
Okay. See all you
Ashok Ajmera
Anand. Thank you.
Anand Dama
Thank you, sir. Any other participant as a question, please use the raise an option and ask a question sir, we do not have any further questions. Jay, Jay, please unmute yourself and ask your question.
Jai Mundhra
Hello, sir, hi, good evening. Sir, a question on your yields on advances, right? So it looks like that the decline in yields on advances is much sharper relative to what policy action suggests. If you can provide some more color here.
Binod Kumar
The yield on advances, yes, declined by 28 basis-point. Not any specific reason impact of the EVLR only because see 50 basis-points we already passed on. So and our my 40% is book is on the external benchmark. Apart from that — apart from that just to add to that, I’m just giving one example. We have seen a huge rate cut in the WCDL loans. So it is impact of that only. WCDL loans, what is happening because of the surplus liquidity also, but this is after these numbers. So because of the surplus liquidity, they are going for CP and they are getting CP at much cheaper rate.
Jai Mundhra
But sir, I think we are anyway growth conscious — I mean profitability conscious in the sense, they are not growing corporate too much. So I was a bit surprised that in the quarter, there was only 25 basis-point rate cut for two months only. And okay. So — and we pass-on the rate cut immediately, right, the 40% book, maybe a two, three days. Yeah, okay
Binod Kumar
. Yeah. No, no, very next day.
Jai Mundhra
Okay, sure. And secondly, sir, the MSME slippages, anything to understand what is — I mean, there was a rise in the slippages Q-o-Q in the MSME. Anything to read into this? Because there are lot of reports saying that export-oriented MSME, they are having some little bit of a trouble.
Binod Kumar
No, no, MSME because of the — as I explained in my earlier opening remarks, it is on account of the MOC, auditors — audit of the branches. There — see, there are few accounts where auditors say stock is not — so there is reduced DP from some bad debt. So because of that, that impact is there. But one thing I assure you, the slippage number will be less than whatever we have achieved. That is for sure in MSME sector also and overall costs also.
Jai Mundhra
And sir, if possible, can you share the SMA zero plus 1 plus two number including below INR5 crores loan?
Binod Kumar
I mean if you — yes, yes, yes. SMA zero total is 23,255, SMA-1 is 14,843 and SMA-2 is 7,825. Total 45,923 and it is 8.06%. Okay. Total. Yeah. Okay. And more than more than INR25 — more than INR25 crores, we have only one account and that is also because of the quote order, but we have made 100% provision in that also.
Jai Mundhra
Right. Okay. And lastly, sir, on gold loan, after that RBI seemingly tightness and we have a decent quantum of gold loan, how are you seeing that business shaping up in terms of growth and maybe the relative competitiveness by other banks or NBFC or gold financiers.
Binod Kumar
Yeah, yes. Of course, there will be impact both on growth and income. But it is draft guidelines and we have given our feedback. Let us see how in what the final guidance comes. But if it comes as it is, yes, there will be some impact on both growth and earning also.
Jai Mundhra
No, so sir, what kind of — I mean, why should there be any impact, sir, if you can elaborate because other circular yeah.
Binod Kumar
Yeah, see one example I am saying they have told income-producing whatever is there. So there should be of that also earlier we used to take only gold loan and get chargeable go place the gold loan and we used to give. And if we are not able to produce the income — income criteria, then we have to classify each under retail or consumption loan. So consumption — LTV for the consumption is 75% and LTV for if it is classified under say agriculture is 90%. So there will be less quantum of loan, number-one. Number two, part of the increased growth in the gold loan that is not related to the basically the circular. And gold was at peak around INR1 lakh crores. So maybe some more reason. So some growth may impact it there also. And gold was also being classified as agriculture. So because of that, some income impact may be there.
Jai Mundhra
Right. Understood, sir. Thank you very much, sir and all the very best.
Binod Kumar
Thank you, Jeff.
Anand Dama
Thank you,. So I think we’ll take that as a last question. With this, we come to the end-of-the post con-call. So do you have any closing remarks to make?
Binod Kumar
No, I think all the questions have been — I mean taken an opening remark, I have taken all the things. One or two point of ROA also I have given guidance and a recovery number and slippage number will — I will very — I mean we have given good number and we will be able to achieve that slippages also. Whatever we have achieved, it will be less than that. That is sure and a recovery through other channel NCLT, I think we will be — we have kept a decent target of INR800 crores for this year and through NARCL also we have kept target of INR250. And one point, more point see branch expansion, branch expansion, we will be going for some branch expansion in the area where we have less presence like in Western side. So we will go for some branch expansion also because one branch we have garner some good business in a year. So that will be the strategy for the next year also. Thank you.
Anand Dama
Thank you, sir. Yeah. On behalf of the management and Emkay Global, we thank all the participants for joining so late. Happy evening and have a good day. Thank you, sir.
Binod Kumar
Yeah, yeah. Thanks. Thanks, Anand. Thanks to all the participants for sparing your time on holiday, I will say on the — and in late hours. Thank you. Thank you, sir for. Thank you. Thank you. Thank you.