Punjab National Bank (PNB) Q4 FY22 Earnings Concall Transcript

Punjab National Bank (NSE: PNB) Q4 FY22 Earnings Concall dated May. 12, 2022

Corporate Participants:

Suraj Das — Batlivala & Karani Securities India Private Limited — Analyst

Atul Kumar Goel — Managing Director and Chief Executive Officer

Analysts:

Akhil Hazari — RoboCapital — Analyst

Ashok Ajmera — Ajcon Global Services Limited — Analyst

Mahrukh Adajania — Edelweiss — Analyst

Unidentified Participant — — Analyst

Bhavik Shah — Morgan Stanley — Analyst

Jai Mundhra — — Analyst

Akash Jain — Ajcon Global Services Limited — Analyst 

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to the Punjab National Bank 4Q FY ’22 Post Results Conference Call hosted by Batlivala & Karani Securities India Private Limited. [Operator Instructions] Please note that this conference is being recorded. Participation in this conference call is by invitation only. Punjab National Bank reserves the right to block access to any person to whom an invitation is not sent. Unauthorized dissemination of the contents or the proceedings of the call is strictly prohibited and prior explicit permission and written approval of Punjab National Bank is imperative. Please note that this call is only for investors or analysts.

I now hand the conference over to Mr. Suraj Das from Batlivala & Karani Securities India Private Limited. Thank you, and over to you, sir.

Suraj Das — Batlivala & Karani Securities India Private Limited — Analyst

Thank you, Deeksha. Good evening, everyone, and thanks for joining the call. On behalf of Batlivala & Karani Securities, we welcome you to the Punjab National Bank’s 4Q FY ’22 Post Results Conference Call. We have with us today the management team of Punjab National Bank, represented by Mr. Atul Kumar Goel, MD and CEO, sir; Mr. Sanjay Kumar, Executive Director; Mr. Vijay Dube, Executive Director; Mr. S.K. Saha, Executive Director; Mr. Kalyan Kumar, Executive Director; and other senior officers of the bank.

I would now request MD and CEO, sir, to start the call with his opening remarks on 4Q FY ’22 results, post which we will start the Q&A session. Thank you, and over to you, sir.

Atul Kumar Goel — Managing Director and Chief Executive Officer

Thank you very much, Mr. Suraj Das. I’m very happy to present the result of the Punjab National Bank for the quarter ended 2022 March quarter as well as the financial year 2021, ’22. The key highlights of the results are net profit for the quarter 4 financial year 2022 was at INR202 crores. Net profit financial year 2022 grew to INR3,457 crores. Year-to-year growth of 71% from the figure of INR2,202 crore in the last finance year, that is 2021. Operating profit increased to INR5,265 crores during the quarter 4 of the current financial year ’21, ’22, with a growth of 17.30%. Global NIM improved by 7 basis points to 2.76% in the quarter 4 financial year 2022 from 2.69% in quarter 4 of the financial year 2021.

Cost-to-income ratio improved by 690 basis points to 46.02% in quarter 4 financial year 2022 from 52.92% in the quarter 4 of the last financial year, that is 2021. GNP ratio improved by 234 basis points to 11.78% in March 2022 from the figure of 14.12% in March 2021. Net NPA ratio improved by 93 basis points to 4.80% in March 2022 from 5.73% in March 2021. PCR improved by 146 basis points to 81.60% in March ’22 from 80.14% in March ’21.

CRAR improved to 14.50% in March 2022 from 14.32% in March 2021. Retail credit increased by 6.69% on Y-o-Y basis to INR1,30,225 crore at the end of the March ’22. Agriculture advance grew by 9.79% on Y-o-Y basis to INR1,24,286 crores. Domestic CASA share improved by 195 basis points on a year-to-year basis to 47.43% in March 2022 from 45.8% in March 2021. Saving deposits grew by 8.25% on Y-to-Y basis to INR4,51,684 as of March 2022. If you see the deposit of the bank grew by 3.8 — 3.61%, but the growth in the saving is much more as compared to the normal deposit growth to 8.25%. Current deposit grew by 8.51% on a Y-o-Y basis to INR81,975 crores as of March 2022.

Now come to the business parameter, business key parameter as on March 2022. Global business increased by 4.64% on Y-o-Y basis to INR90,31,322 crore as at March 2022 as against the figure of INR18,45,739 crore in March 2021. Global deposits grew by 3.61% on a Y-o-Y basis to INR11,46,218 crore as at end of March 2022 as against the figure of INR11,06,332 crore in March 2021.

Global advance grew by 6.18% on a Y-o-Y basis to INR7,85,104 crore as at end of March 2022 as against the figure of INR7,39,407 crore as of March 2021. In retail segment, housing loans grew by 3.6% basis at INR73,805 crores. Vehicle loan increased by 23.4% on a Y-o-Y basis to INR12,615 crores. Personal loan grew by 14.1% on Y-o-Y basis to INR12,193 crores. As far as pricing sector is concerned, bank has achieved all the target of the bank sector, whether it’s agriculture, agriculture as against the 18%, bank has achieved 18.35%. Small on margin [Indecipherable] as against the norm of 9%, bank has achieved 9.87%. Like credit to weaker sector as against the norm of 11%, the bank has achieved 13.46% and [Indecipherable] INR90,000 too. Credit to micro enterprises stood at INR53,963 crores and achieved the normal goal of 8.07% as against the 7.5% is the requirement. Efficiency ratio is concerned of the bank. Cost-to-income ratio for the quarter for 2022 improved by 690 basis points to 46.02% in quarter 4 of the financial year ’22 from 52.92% in the quarter 4 of the financial year ’21.

Global cost to deposits improved to 3.9% in the quarter 4 financial year ’22 from 4.22% in quarter 4 of the financial year 2020, ’21. Return on sales improved to 0.26% in the financial year ’22 from the figure of 0.15% in the financial year ’21. Yield on advantage at 6.64% in quarter 4 2022, yield on investment at 6.41% in quarter 4 of financial year 2022. Business per employee improved to INR1,941 lakhs in the March ’22 from the figure of INR1,885 lakhs in March 2021.

As far as asset quality of the bank is concerned, there is an improvement in the asset quality. Gross NPA number stood at INR92,448 crores as of March ’22 as against the number of INR1,4,423 crores as of March 2021, declined by 11.47%. Net nonperforming assets stood at INR34,909 crores as in March 2022 as against the figure of INR38,573 crores as on March 2021 and declined by 9.51%. Provision coverage ratio including TWA stood at 81.60% in the March ’22.

As far as capital advocacy is concerned, CRAR improved to 14.50% in March 2022 from a figure of 14.32% as of March ’21. Tier 1 is 11.73%, which was 10.561% AT1 (sic) [ common equity ] and 1.17% is the AT1. Tier 2 CRAR is 2.27% (sic) [ 2.77% ] as of March 2022. In the last 2 years, we have raised the capital, INR2,780 crores in 2020, ’21 and INR1,800 crores in the ’21, ’22 by way of QIP as far as AT1 is concerned. The bank averaged INR495 crore in 2021 and INR3,971 crore in 2021, ’22. As far as Tier 2 concerned, INR3,994 crore we have raised in 2021 and INR1,919 crores we have raised in last financial year ’21, ’22. And bank has already got the approval from the Board for raising of the further capital of the INR12,000 crore out of 12 — in ’22, ’23, out of the INR12,000 crore AT1 is INR5,500 crore, remaining is INR6,500 crores.

As far as digitalization is concerned, because the feature of every banking industry is the improvement in the technology as well as the digital platform, internet banking service user increased to INR3.40 crore as of March 2022. PNB ONE mobile banking service user increased 69% Y-o-Y to INR3.37 crores as at March ’22 from the figure of INR1.99 crores in March 2021. Number of debit card issued stand at INR7.61 crores as of March ’22 with 71.33% debit card penetration to eligible base. As far as UPI transaction is concerned, that is increased by 81% to INR200 crore at March 2022.

And other new initiative bank has taken in the ’21, ’22 PNB 360, a compressive dashboard to monitor the business performance of the bank, collection of the loan EMI through BBPS, repaying loan EMI through Bharat Bill Pay System because in the composition of the total advance of the bank of INR785,000 crores, 50% is the retail loan. We have the monitoring and the collection is a very, very, very — every cent is required. Trade finance redefined model facilitates customers to initiate the ForEx trade transaction online. Digitalization of the recovery process for optimization of the TAT. ASBA on PNB One facilitate the investor to subscribe the IPO 24×7. Insta personal loan to the pensioner, cardless cash withdrawal, PNB virtual debit cards and PNB ECOLENS. This is a monthly bulletin covering economic and the banking indicator.

As far as this NIM is concerned. NIM of the March 2022 quarter, domestic NIM was 2.86% and the global NIM was 2.76%. And if you see the NIM for the whole of the year ’21, ’22, it was 2.79% domestic and 2.7% as the global. So our guidance to all the — our team analyst from the domestic NIM of the 2.86% in the March 2022 of the whole of the year, 2.79%, our endeavor should be to reach around 3% of the NIM in the domestic. As far as credit growth is concerned, last financial year ’21 ’22, we have achieved a credit growth of around 6.18%. And the guidance for the current financial area ’22, ’23 will be in double digit that will be around 10%.

As far as guidance for the gross NPA number is concerned, our gross NPA number is 11.78% at the end of the March 2022. And our guidance is the gross NPA numbers should come in the single digit, less than 10% by the end of the financial year ’22, ’23, and the guidance for the net NPA numbers would be less than 4%. So this is my initial remarks to all of you.

Now whatever your question, I will try to reply you all the questions. Thank you. Thank you very much.

Questions and Answers:

Operator

[Operator Instructions] Let me take the first question from the line of Akhil Hazari from RoboCapital.

Akhil Hazari — RoboCapital — Analyst

Am I audible?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Yes, yes. You are audible. Yes. Please go ahead.

Akhil Hazari — RoboCapital — Analyst

So the main question I want to ask related to the PAT guidance that you have given, you would have been able to reach that had it not been for this increase in provisions that you have made in Q4. So I just wanted to know the reason behind the increase in provision.

Atul Kumar Goel — Managing Director and Chief Executive Officer

The increase in provision is on account of the aging provision as well as the slippage also because if you see the number of the slippage of the last quarter, it was around INR10,506 crores. So on which we are required to make the provision of around 15% and remaining well on account of the aging provision.

Akhil Hazari — RoboCapital — Analyst

Okay, fine. And so going forward then the guidance that you had given in the last con call, credit cost was 1.5%. So I just want to know would it — does that guidance still stand?

Atul Kumar Goel — Managing Director and Chief Executive Officer

If you see the guidance for the credit cost quarter-to-quarter in the whole of the year, the last quarter of the last financial year ’21, ’22, credit cost was around 1.91%. And this was declining. If you see the last year of the last quarter of the 2021, that was the 2.24%. So our guidance for the credit cost for the next financial year ’22, ’23, I think it should be around 1.75%, whatever the number we have given to you 1.5% because I think we should revise to 1.75%. The reason behind that, we want to strengthen the balance sheet. We want to increase the provision coverage ratio. Provision coverage ratio, which was 80.14% of the March 2021 already improved to 81.60%, so our endeavor whether we will be in a position to achieve the PCR of 85% until March 2023. This is the reason we are looking a bit to revising credit cost of this from 1.5% to 1.75%.

Akhil Hazari — RoboCapital — Analyst

Right, right. Okay. And my next is regarding cost-to-income ratios, any guidance on since it decreased by quite a bit. Going forward, FY ’23, what would it be?

Atul Kumar Goel — Managing Director and Chief Executive Officer

The cost-to-income ratio, if you see the last quarter of the March 2021, it was around 52.92%. If you see the last quarter of the last financial ’21, ’22, it was 46.03%. I would like to inform to all of you because the reduction in the cost-to-income ratio in the last quarter of ’21, ’22 on account of the reversal of the AS-15 because on account of the increase of the 10-year [ USAT ] deal, that there was a reversal of INR1,600 crores in the AS-15 basis. So on account of that reversal that was the main reason for the reduction in the cost-to-income to 46.03%. If you see the whole of the cost-to-income ratio, was around 49.38%. So my guidance to all the esteemed analysts, it would be less than 50% over the next financial year.

Akhil Hazari — RoboCapital — Analyst

So this was a onetime reversal?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Yes, yes. This was a onetime reversal. So this is the reason I give you the guidance of the less than 50% because if you see the whole of the year, it was 49.38%, yes.

Operator

We take the next from the line of Ashok Ajmera from Ajcon Global Services Limited.

Ashok Ajmera — Ajcon Global Services Limited — Analyst

I welcome to you in this bank. Having said that, sir, I’ve got some couple of observation s. My first observation is on Note #7 of the family pension, where the INR1,520 crore is amortized. And if you look at the auditors come in, then you said that have this would not have been amortized for the future, the profit would have been — would have come down to INR2,468 crores. I fail to reconcile the number that if INR2,468 crores, if you add INR1,520 crores, it doesn’t match with INR3,457 crores of profit. So is there any other component the auditor has? If you look at note number, I think, 14, auditor’s Note #7, what is the other component could be? INR1,520 crore is amortized and your profit was INR3,457 crores. So it should have been INR1,937 crores and not INR2,468 crores.

Atul Kumar Goel — Managing Director and Chief Executive Officer

Ajmera-ji, it is a net of tax. If you will address the composition of the taxes, then we have given this number. Otherwise, whatever the note is written, note is very clear. The bank has opted the share provision of the [ RBI ] in addition to the minimum amount of this [ INR618.79 crores ] for the financial year, yes. This is the family pension because I may tell you, Mr. Ajmera, the liability for the family pension was around INR3,093 crores. Out of this INR618 crores we have provided in the last quarter. And this quarter, we have provided INR952 crores. So ultimately, there was an unamortized expenses by INR1,520, which they have adjusted the tax implication and we’ve given this number.

Ashok Ajmera — Ajcon Global Services Limited — Analyst

Yes. So I think they should have clarified it [Indecipherable] number particularly for…

Atul Kumar Goel — Managing Director and Chief Executive Officer

Like if you will charge the INR1,520 crores in your P&L, then taxation liability will be reduced. Moment the flexible liability will be reduced, whatever the profit we have sold, that will be adjusted accordingly.

Ashok Ajmera — Ajcon Global Services Limited — Analyst

Sir, [Indecipherable] auditor area, we have been seeing the other banks also [Indecipherable] taking front, the on number segment you have done as per the [Indecipherable] you have amortized INR1,028 crores. I mean you are limited to the reserve and which will be taken care of in the future. But the auditor has put this note in the emphasis to the account. The auditor should not emphasize something which is already as per the terms of the RBI circular. This note has not been seen in any other bank so far.

Atul Kumar Goel — Managing Director and Chief Executive Officer

Yes, yes, yes. I think this, I think it will — will not be appropriate on my part. You should raise this to the auditor also because you are also a charter accountant also. Normally, whatever I have seen, whether the RBI has permitted and not whatever the amortizes an amount, you are taking in the balance sheet for the next financial year. Each and every auditor, normally, they are seeing in [Indecipherable] are low and also the emphasis clarification, we are given in the note 2 accounts.

Ashok Ajmera — Ajcon Global Services Limited — Analyst

Sir, but anyway emphasis means something which is not — emphasis is given on something which is not regular or which is not accepted by the auditors. They get the emphasis. But anyway, I mean, this is just for your information and knowledge because I think we have seen already last 3 banks whether quality got reformed. Nowhere this note has come accordingly, even if — whether they are provided or not.

Atul Kumar Goel — Managing Director and Chief Executive Officer

They have fully provided also because some of the banks, they are also because — this was given by the RBI is the key, whatever the pension liability, you can amortize in the next 5 years, whatever the fraud, you can amortize in the 4 quarters. There are some banks also who are not aware of the strategy. So this may be my view, maybe that recently that has not come in the [Indecipherable] of the those banks, yes.

Ashok Ajmera — Ajcon Global Services Limited — Analyst

Anyway sir, now I come back to my, sir.

Operator

Sorry to interrupt, this is the operator.

Ashok Ajmera — Ajcon Global Services Limited — Analyst

Please, this was not my. We were just discussing. Do allow me some time, please? Sir, the guidance of the operating profit last year — last quarter, also, Mr. Mallikarjuna gave, that we still stand to INR22,000 crores to INR24,000 crores. It is there in the s given, while we have come down to INR20,762 crores. So something unusual has happened in this quarter in the profit even so near in the last quarter itself, it says it would be INR22,000 crores to INR24,000 crores for the full year. So what has gone wrong in that, sir?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Ajmera-ji, nothing has gone wrong. Because if you see the operating profit of the current — last quarter of the current — last financial year, it was INR5,265 crores. It is much more the figure of the operating profit of the December 2021. That was INR5,076 crores only. And if you compare this INR5,265 crores of the operating profit from March ’21, there is a growth of 17% because March ’21, operating profit of that quarter was INR4,489 crores. So nothing has been wrong because the operating profit of the March — last quarter of the ’21, ’22 is much more than the December 2021. So my guidance to you next year, what is the operating profit we have achieved in this financial year ’21, ’22? Around 15%, there should be an increase. One more thing I would like to tell you, Mr. Ajmera, because there is a 2, 3 number, which comes in the operating profit, which was not coming earlier. First is the trading profit is already part of the operating profit. Now mark to market of the investment portfolio, is it is being captured in the operating profit.

Now you have seen also after the improvement in the rivers reported by the 40 basis point was 10 years gone up. So whatever the mark-to-market will be AFS in the June quarter or the subsequent quarter on account of the hardening of the [Indecipherable], this provision of the investment was coming up through the operating profit. Now is the part of the operating profit, it is being factored in the — so this will be one of the reasons also. But as I told you, in this particular quarter, March quarter was operating profit was quite good, INR5,265 crores, which was much more than the earlier quarter.

Operator

We take the next from the line of Mahrukh from Edelweiss.

Mahrukh Adajania — Edelweiss — Analyst

Sir, my is on [Indecipherable] So usually, there was an impression that fourth quarter ECLGS in other sector would be lower than third quarter slippage. So I have in the slippages, especially in agri, MSME, retail gone up quarter-on-quarter. That’s my first. And my second is with at all, you can give the number for SME to below INR5 crores because SME to above INR5 crores has reduced substantially, it’s hardly anything, right? It’s almost 0 now.

Atul Kumar Goel — Managing Director and Chief Executive Officer

Yes. Yes. Thank you, Mahrukh. Mahrukh, the number of the slippage was around INR10,506 crores last quarter of the — financial year ’21, ’22. If you see normally, you are sinking normally in the last fourth quarter of the financial year, slippage is always less. I think I tend to disagree with you. If you see the number of all the banks in the last year also in the current year, normally, the slippage in the last quarter is normally high as compared to the previous quarter. So out of the INR10,506 crores, retail was around INR1,000 crores. It is not in a particular segment. It is among the — all these segments. Retail was around INR1,157 crores; agri was INR2,726 crores; MSME was INR2,871; and remaining was in the corporate and the others. So your another is the number of SME to below INR5 crores. As one, I’m having the number of the SME to more than the INR5 crores, which is very less INR120 crore. This number used to be around INR3,000 crore in the December ’21 and the more than INR13,000 crore in the March 2021. So you are asking the number of the SME to below INR5 crores. That is not immediately available. I will tell this number to you.

Mahrukh Adajania — Edelweiss — Analyst

Yes, sir. So would you have the amount of slippage from ECLGS? So how much of ECLGS is included in the MSME slippage of Q4?

Atul Kumar Goel — Managing Director and Chief Executive Officer

The slippages in the ECLGS, around INR838 crores, which has already been factored in the slippage, yes.

Mahrukh Adajania — Edelweiss — Analyst

Okay. But was this related to the fourth quarter only?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Normally more or less in the fourth quarter because the 2 — because they were also eligible for the moratorium and they really listen to us. So mostly in the last quarter, a little bit maybe in the past also, yes. But part is in the fourth quarter, yes.

Mahrukh Adajania — Edelweiss — Analyst

Okay, sir. So about INR838 crores, that is the full amount, right? [Indecipherable] includes ECLGS plus the base loan, correct?

Atul Kumar Goel — Managing Director and Chief Executive Officer

The ECLGS plus?

Mahrukh Adajania — Edelweiss — Analyst

The base loan. ECLGS is 20% of the outstanding loans, right?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Yes, yes.

Mahrukh Adajania — Edelweiss — Analyst

It includes ECLGS and the base loan?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Yes, yes, yes.

Operator

We take the next from the line of Ankit Bansal [Phonetic] from A.B. Private Limited.

Unidentified Participant — — Analyst

Am I audible?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Yes, yes, yes. You are audible. Please, please go ahead.

Unidentified Participant — — Analyst

Okay. Okay. Sir, looking at your numbers, sir, I want to ask, apart from your numbers, I read your presentation, all that I have understood things. So I want to ask about the shareholders. Sir, their value is getting eroded day by day. What are your comments on that? I just want to ask a simple.

Atul Kumar Goel — Managing Director and Chief Executive Officer

Your is very good, but I think you should be happy. After 8 years of the last financial year, we are declaring the dividend of 32% to the investors. I think it is a good sign.

Unidentified Participant — — Analyst

Sir, all other banks are delivering more than — you can see Canara Bank. It has delivered a dividend of INR7. But in terms of size, PNB is much, much bigger than Canara Bank.

Atul Kumar Goel — Managing Director and Chief Executive Officer

I partly agree with you. Time will come. We will deliver much more the expectations of the other bank also, yes.

Operator

We take the next from the line of Rahul Jain [Phonetic], an individual investor.

Unidentified Participant — — Analyst

My first is on, sir, what is our guidance on slippages, recoveries and on loan growth going ahead in this quarter and for the full year?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Yes. As far as loan growth is concerned, the last financial year, we have closed with the growth rate of the 6.18%. So we are of the view, and we have given the target also in financial year ’22, ’23, we should be in a position to achieve the — both in the double digit. That is 11%. You’re — it is 10%.

Another is the guidance on the slippage also and the recovery also. So as far as slippage is concerned. So our endeavor is like this is next financial year, our addition should be less than the recovery. That will be our area and we will try to monitor it every fortnightly, monthly also. So number, if you see the addition of the 2021 was INR28,100 which has already reduced to INR24,744 in the last financial year ’21, ’22. And as far as slippage is concerned, why I don’t foresee slippage from the big account because we have just checked our SMA-2 portfolio, more than INR5 crores. INR5 crores more than this number is hardly INR120 crore, which used to be around INR3,000 crore in the December 2021 more than IN 30,000. But definitely, slippage maybe some on the small account. So we will strengthen our monitoring system also and the collection system also. So I can give you the guidance of the credit cost rather than the slippage. So I have already given the credit cost, which was 1.91% in the last quarter of the last financial year. So our credit cost would be around 1.75% for the next financial year.

Unidentified Participant — — Analyst

My next, sir. Do we have any exposure to future group? And as what will be the PCR here? And has it slipped into NPA this quarter?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Yes, I can give you the — around INR1,600 crores. We are having the exposure in the future group and out of which already 50% already been slipped to the NPA in the last financial year. And we have made adequate provision adequate provision on the — which we have classified in the NPA. So it is around 70%. And I’m happy to say yesterday also, we have received some recovery around INR100 crore-plus in this group amount also.

Unidentified Participant — — Analyst

And sir, one last, sir. So sir, you suppose yield, it increases by, say, 40 to 50 basis points going ahead. And what will be the MTM hit on the AFS book?

Atul Kumar Goel — Managing Director and Chief Executive Officer

You are asking from the 2 days, 50 basis point, yes, already, it has increased around 40 basis points. If you see my duration of the portfolio is less than 3. So less than 3 is normal calculation is. 3 is multiplied by the 4. So my portfolio will be impacted by 1.2%. So I am having a INR1 lakh crore, so maybe around INR600 crores, INR700 crores of EBITDA, a 40 basis point from 2 days’ date.

And Operator Message

Operator

We take the next from the line of Bhavik Shah from Morgan Stanley.

Bhavik Shah — Morgan Stanley — Analyst

Sir, our CET1 declined by 40 basis points. So can you understand — can you help me understand why?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Yes, this is a 3 factor. There is a 3 factor. One is the thought, which is not one, which we have already told earlier also, INR1,000-crores plus. The other is the unamortized amount of the family pension. And as I told you, INR3,093 crores was the number of the family pension and the INR685 crores we were provided in the last INR980-something, to INR1,500 crores was also pending. Third important thing is also because we have bought the reversal of the AS15, INR1,600 crore. Although we have taken a credit of this as per the Basel guidance, it has shifted to the prepaid expenditure. The prepaid expenses are also being deducted from the CET1.

Bhavik Shah — Morgan Stanley — Analyst

Okay, sir. Understood, sir. Sir, I was looking to your segmental loan growth. Sir, mortgage growth seems very low. Sir, any color on that?

Atul Kumar Goel — Managing Director and Chief Executive Officer

As far as growth of the total is concerned, basically it is 6.1% of the whole of the year. You are asking for the retail. Retail, it was around 6.69%. Your specific, the personal loan also. So personal loan definitely, as I told you, last 2 years, definitely on account of the COVID, was very different for the [Indecipherable]. So we are thinking activity growth for the housing loan or the personal loan in the ’22, ’23 because it is a [ single ] loan. So it would be more than 13% to 14% because the total growth, which we are envisaging around the 2-digit 10%. But particularly, this segment, housing loan and the personal loan, we are estimating the growth of around 15%.

Bhavik Shah — Morgan Stanley — Analyst

Okay, sir. Understood. And sir, what would be your net restructured loan book on an annual net of slippages from restructured?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Can you repeat the, please?

Bhavik Shah — Morgan Stanley — Analyst

Sir, what would be your net restructured outstanding loan book?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Net restructuring or loan growth. There is a 3 type of reactors. First is the whatever the RBI has given the regulation. That is around INR5,000 crores, which was the [Indecipherable] 2019. The another dispensers have come in the May 5, 2020. We changed around INR11,000 crores. So INR11,000 crores plus INR5,000 crores, another normal restructuring is INR2,500 crores.

Bhavik Shah — Morgan Stanley — Analyst

Sir, these are net restructuring or these are gross restructurings?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Of course, we are increasing the COD also. Account will not be down due, but that will come on the tender restructuring that is around INR2,500 crores.

Bhavik Shah — Morgan Stanley — Analyst

Okay. Sir, also I wanted to understand, these are net restructured numbers or gross?

Atul Kumar Goel — Managing Director and Chief Executive Officer

This time, I’m giving the outstanding. Number was much more because this amount which I told you, the INR11,000 crores, around is the resolution 2 of the RBI and the resolution 1 of the RBI is INR5,500 crores. This is the outstanding as on the date. So some of the account has also been closed. Yes, this is the net outstanding.

Bhavik Shah — Morgan Stanley — Analyst

Okay, sir. Okay. And sir, around future exposure, recently you said INR1,600 crore exposure was there, 50% is already into NPA. So we are left with INR800 crores. And you said adequate provision of 70%. Sir, 70% was on INR1,600 crores or 70% you’re talking on the balance INR800 crores?

Atul Kumar Goel — Managing Director and Chief Executive Officer

The NPA account. NPA account, 70%, yes.

Bhavik Shah — Morgan Stanley — Analyst

Okay, okay. So nothing has been provided apart from that?

Atul Kumar Goel — Managing Director and Chief Executive Officer

No, no, no. There may be some guidance also into 7th July circular 19 also. There may be some provision in the standard also. Yes.

Bhavik Shah — Morgan Stanley — Analyst

Okay. So basically, INR550 crores is the provision towards the NPA account. And apart from that, standard provision?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Yes, yes, standard provisions. The rate is very high because 15% for the first 6 months. And another, we have to increase the problem to 35%, yes.

Operator

We take the next from the line of Debashish Dev [Phonetic] from Horsepower Securities [Phonetic].

Unidentified Participant — — Analyst

Yes. Am I audible?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Yes, yes. You are audible. Please go ahead.

Unidentified Participant — — Analyst

Yes. Yes. Yes. This is Debashish here from Horsepower Securities. I want to ask you that to reach your targeted 85% provision coverage ratio, what would be the additional provision you would recur in the next financial year?

Atul Kumar Goel — Managing Director and Chief Executive Officer

It will be around because my portfolio is around INR1 lakh crore. Less than INR1 lakh crore will be gross NPA. If we want to increase the — by 4%, which I told you, so the number will be around 4%.

Unidentified Participant — — Analyst

So after 85%, are you comfortable at 85%? Or do you need to still need to increase it to 88% or 89% like State Bank of India?

Atul Kumar Goel — Managing Director and Chief Executive Officer

We will load mine to increase even more than 90% also in times to come.

Unidentified Participant — — Analyst

See, but considering the shareholders’ value delivery, I mean, your bank is every quarter there, I mean, out of INR5,000 crores operating profit, you are just creating INR4,000 crores, around INR4,000 crores, at least about INR3,000 crores, INR3,500 crores provision. I mean, so how long it will take, sir? You have to — I mean, our [Indecipherable] business, sir, you are the only bank that the debt has been heated by — I mean, how many of these fraud cases, right? I mean, this cannot go on forever. You need to do something to — I mean, recently, your current business model, right? And look at the SBA earlier, your next competitor, what they have gone to, I mean, the level they have got [Technical Issues]

Operator

We’ve lost the connection for Mr. Debashish. The next is from the line of Mr. Jai Mundhra.

Atul Kumar Goel — Managing Director and Chief Executive Officer

Should I the — whatever the of Debashish, whatever we have are. Debashish-ji, your worry is very genuine. And we are all concerned, all the top management is very concerned, whatever you have raised. And we are working on how to reduce the slippage and how to increase the recovery from the NPA. So we are all concerned. Your worry is very genuine.

Jai Mundhra — — Analyst

I have more or less similar s on slippages, right? So it looks like your SMA-2 number is not at all indicative of the other bank. And because this quarter, we have had INR10,000 crore slippages. SME to the last quarter of early INR3,000 crores. As though it’s clearly estimate number is not any help in understanding what would be the future slippages. How should — I think the more better indicator would have been it should improve below INR5 crores numbers that even in this quarter, if we see your slide, it says that RAM slippages are total INR6,700 crores, which is kind of that is below INR5 crores, and hence, they are not coming out. if you have the number, sir, for — which is at the bank level, including all ticket size, maybe — and how is that behaving, behaving this lending from last quarter to this quarter, is there any significant drop there if we were to include [ kid-size ] loan?

Atul Kumar Goel — Managing Director and Chief Executive Officer

You are right. I fully agree with you. What I was trying to tell just I was giving the indication key. Account more than INR5 crores. My sales are, if there is no big lumpy account as on date in the bank, which we have to recognize. But your is very right. If we have to make our system very robust for the account less than INR5 crores, I fully agree because the main slippage of the INR10,000 crores, the INR6,000 crores was the small account. So I fully agree with you and we are working on that. That will give the correct idea. I fully agree with you.

Jai Mundhra — — Analyst

And just on this future exposure, which is pending industry to get it over. This is not SMA-2 as of March, right? Is that it right? Or cause [Indecipherable] restructured, and hence, it is not coming in SMA because it will directly may slip? Is that the reason or…

Atul Kumar Goel — Managing Director and Chief Executive Officer

It was definitely in the SMA-2 also because the amount was overdue because what I told you, out of INR1,600 crores, only 50% has been recognized. So whatever number I am telling you, more than INR5 crores, the part number of the INR3,000 crores in the December 2021. And definitely, it may be included in this INR3,000 crore number.

Jai Mundhra — — Analyst

Right. And sir, now we have around INR5,000 crores and plus, I mean, [Indecipherable] in SME is around INR6,000 crores roughly is the restructuring loans, which are under MSME category. And clearly, we have seen there is some sharp jump in the MSME slippages. What is your sense, sir? I mean how much of this MSME loans of INR6,000 crores roughly can slip?

Atul Kumar Goel — Managing Director and Chief Executive Officer

This is very difficult to predict at this particular time because time is definitely difficult on account of the COVID also and the discussions are also given to increase the period for the repayment also. But now because the COVID period is over, now we are reaching to the pre-pandemic situation. So we are quite hopeful also the SME who are restructured also, they will be behaving good also in time to come out. So some number may be slipped to the NPA. I’m not telling you some number may be slipped to the NPA category also. But I am very optimistic on account of the COVID is over, too. I am of the view business of MSME to whom we have to do the restructure. They will also grow in the good times to come.

Jai Mundhra — — Analyst

All right. And sir, out of this corporate slippage of INR3,700 crores, INR800 crores is roughly on future retail. What else is there? I mean any account which is more than INR100 crores?

Atul Kumar Goel — Managing Director and Chief Executive Officer

I think I can give you this one of the account Jai Power — Jai Prakash, I can give you the name of the — otherwise, I think other it will not be appropriate for us to give the name also. The INR698 crores was the Jaiprakash and INR759 crores was the futures. Two, three account was also there of the INR367 crores, the another is the INR287 crores. One another account of INR284 crores.

Jai Mundhra — — Analyst

So this Jaiprakash Power is part of divergence, right? And hence — or failed restructuring and everything?

Operator

Ladies and gentlemen, the line for the management is dropped. I request you all to please be connected while we reconnect the management back. [Technical Issues] Sir, over to you. Sir, you may go ahead, please.

Atul Kumar Goel — Managing Director and Chief Executive Officer

Yes. Please go ahead. Please go ahead.

Jai Mundhra — — Analyst

Sir, the was on slippages only that you had said — so I was saying that out of this Jaiprakash and some other smaller accounts, would it be downgraded because no other bank is downgraded, right? So is this because they were part of our divergence report or they were field restructuring, et cetera. So that is all I wanted to know.

Atul Kumar Goel — Managing Director and Chief Executive Officer

No, Jaiprakash Power, you are saying other bank has not downgraded?

Jai Mundhra — — Analyst

Yes. Now in this quarter.

Atul Kumar Goel — Managing Director and Chief Executive Officer

My request is to please recheck. Please recheck because it was upgraded also, but they are not completely whenever that comes of the restructuring also. But this was the reason it was again downgraded.

Jai Mundhra — — Analyst

Okay. Okay. Understood. And they’re seeing some reclassification in the loan book, sir, I mean last quarter and this quarter. Is there any — some change of principal or something? I mean there’s some reclassification in the loan book?

Atul Kumar Goel — Managing Director and Chief Executive Officer

I think we have not changed any — any particular number you are having, you are thinking there is a change. I think we have not seen any classification of the loan in the last quarter and probably the December quarter. No.

Jai Mundhra — — Analyst

Okay. Understood. Yes. So that is the — and then now you’re saying that last — for the last year, we have said that slippages will be lower than the recovery upgrade. And we did that for 9 months. And this quarter, clearly, the slippages are much, much higher. And we are again saying that slippages will be lower than upgrade recovery, right? So you are confident about this thing panning out, right, that slippages should be lower than upgrade recovery. That is what we just wanted to recheck.

Atul Kumar Goel — Managing Director and Chief Executive Officer

Yes. Yes. Yes. We will work on that. We — because if we want to reduce the number of the gross NP, then we want the gross number in the single digit. So that is the only method available. Our recovery should be more than the addition to both about the recovery, they are doing the need for the recovery and the monitoring department also, they are working. And we are using the technology also. Some of the solution is also a level we are discussing. So we will also use those solution also and we are increasing the efficiency or call center also. So that whatever the demand is indeed on the SMA-2, 0 or 1 also that can be registered in the mind of the borrower for making the repayment.

Jai Mundhra — — Analyst

Right. And sir, this capital that you have shown, this is already adjusted for dividend, right, even if we have not paid?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Yes, yes, yes, definitely because it is a part of the application of the P&L that has already been reduced from the reserve circulars that have come in the liability side.

Operator

We take the next from the line of Akash Jain from Ajcon Global Services Limited.

Akash Jain — Ajcon Global Services Limited — Analyst

Sir, my is regarding write-offs this quarter. It is significantly high in this quarter. Could you throw some color on it?

Atul Kumar Goel — Managing Director and Chief Executive Officer

The write-off is the 2 types. One is the actual write-off, another is the technical write-off. So we have definitely used the — where we have made already the 100% provision. Out of INR10,548 crores maybe around INR558 crores — around INR10,000 crores is the technical write-off, remaining is the actual write-off.

Akash Jain — Ajcon Global Services Limited — Analyst

Okay. And sir, what is your [Indecipherable] over the years?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Can you please repeat the? Your voice was breaking, please.

Akash Jain — Ajcon Global Services Limited — Analyst

Yes. What is your return of book for the year, built up over the years?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Return on?

Akash Jain — Ajcon Global Services Limited — Analyst

Return of book. You can say advances under collection account.

Atul Kumar Goel — Managing Director and Chief Executive Officer

I could not understand this. You are asking about the recovery from the regional account?

Akash Jain — Ajcon Global Services Limited — Analyst

Yes, yes, yes. So what is the cumulative return of…

Atul Kumar Goel — Managing Director and Chief Executive Officer

I can give you the total number. The total number of the closing TWO is 97,801 [Phonetic], which number was 89,800. And I can give you the recovery also of the recovery from the technical written off, it was 2,498 in 2021, which has improved the last year 6,321.

Akash Jain — Ajcon Global Services Limited — Analyst

Okay. And sir, on the corporate [Indecipherable], what is the pipeline?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Can you — we are…

Operator

Sorry to interrupt. Sir, your voice is not clearly audible.

Akash Jain — Ajcon Global Services Limited — Analyst

Yes. In terms of corporate credit, what is the sanctions pipeline?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Sanction pipeline in the corporate credit, there is a 2 type of sensor. One we have already sanctioned, but they have not taken the deferment. The another we have clear in the NBG, and we have to [ evaluate ] a sanction. And we have to — total number of the pipeline is INR1,20,948 crores.

Akash Jain — Ajcon Global Services Limited — Analyst

Okay. And what has been disbursed still so far out of this?

Atul Kumar Goel — Managing Director and Chief Executive Officer

This is on the pipeline. Sanction was INR [ 131,000 ] crores and pipeline is INR1,20,948 crores.

Akash Jain — Ajcon Global Services Limited — Analyst

Okay. Okay. And sir, regarding the slippages, as you said that it [Indecipherable] slippages will be lower than the recovery considering the macroeconomic environment?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Akash, we have to very optimistic. That is the best approach.

Akash Jain — Ajcon Global Services Limited — Analyst

Okay. Because in this Q4, we were not expecting this kind of slippage, but still, we have…

Atul Kumar Goel — Managing Director and Chief Executive Officer

I can give you — of your. If slippage will be more on account of whatever you are saying, then we will make our — recovering the more amount also.

I may give one more thing also. If you see my NCLT book, it is around INR68,550 crore as on date. Again, we have made a provision of INR66,852 crores. So it is 97.52%. Last year, we have recovered around INR2,703 crores from the account over repo to the NCLT. And we are optimistic the next year ’22, ’23, we are expecting the recovery of around INR6,000 crores. As I told you, the percentage of the provision is 97.52%. So it is whatever, we will get the recovery. It will add to the profitability of the bank.

Akash Jain — Ajcon Global Services Limited — Analyst

Okay. And sir, one more. Regarding the Srei account. I think in the last call, that account was around 70% and it was supposed to be 100% by this quarter. So have we fully private…

Atul Kumar Goel — Managing Director and Chief Executive Officer

[Indecipherable] we are having around INR2,600 crores is the provision. So 100%, we have not made in this current quarter.

Akash Jain — Ajcon Global Services Limited — Analyst

Okay. Okay. So balance, we are planning to do it to when?

Atul Kumar Goel — Managing Director and Chief Executive Officer

It will be in the next or the next to next quarter also. We will see. I told you that we want to improve the provision coverage ratio also.

Akash Jain — Ajcon Global Services Limited — Analyst

Okay. And track. So how many accounts have you identified? And what is the kind of amount that we are likely to transfer to any RCL?

Atul Kumar Goel — Managing Director and Chief Executive Officer

Any RCL maybe have already identified the account of more than INR2,000 crores, and I think it will be transferred in the very near future. It is in the high space. Other amount is the total amount is INR8,000 crores and the price [Indecipherable] account for the amount of INR2,000 crores will be transferred in the first phase.

Akash Jain — Ajcon Global Services Limited — Analyst

Okay. Okay, sir. And what is the kind of pressure you are seeing in the MSME book? Any advent you are witnessing in that sector?

Atul Kumar Goel — Managing Director and Chief Executive Officer

In the MSME, it was earlier, not a new phenomena also because some of the other MSMEs are also asking what is your restructuring number also. [Indecipherable] current also. But we should be very optimistic, as I told, because that is the segment who is definitely contributing for the export of the country and the GDP of the company, which should support definitely the sector.

Operator

I now hand over to Mr. Suraj Das for closing remarks. Over to you, sir.

Suraj Das — Batlivala & Karani Securities India Private Limited — Analyst

Thank you. On behalf of Batlivala & Karani Securities, we thank Punjab National Bank management for giving us the opportunity to host the call. Thank you, everyone, and have a good day.

Atul Kumar Goel — Managing Director and Chief Executive Officer

Thank you very much, Suraj-ji. Thank you very much. Thank you. Thank you to all.

Operator

[Operator Closing Remarks]