Note: This is a preliminary transcript and may contain inaccuracies. It will be updated with a final, fully-reviewed version soon.
Punjab & Sind Bank (NSE: PSB) Q3 2026 Earnings Call dated Jan. 20, 2026
Corporate Participants:
Ganesh Shankarnawar — Moderator
Swarup Kumar Saha — Managing Director and Chief Executive Officer
Ravi Mehra — Executive Director
Analysts:
Ashok Ajmera — Analyst
Unidentified Participant
Unidentified Participant
Unidentified Participant
Sushil Choksey — Analyst
Unidentified Participant
Presentation:
Ganesh Shankarnawar — Moderator
Good evening everyone. I am Ganesh Shankarnawar, the moderator for today’s earnings call. I welcome and thank each one of you for joining us today for the Punjab and Sindh Bank’s earnings call for Q3FY26. Please note that this conference is being recorded and all participant lines will be in the lesson only mode. There will be an opportunity for you to ask questions after the opening remarks by the management. Should you need any assistance during the conference call please raise your hand on the webex panel or press 3 on your phone.
I repeat, should you need any assistance during the conference call please raise your hand on the webex panel or press 3 on your phone. I would now like to introduce the management of Punjab and Sindbank. We have with us today Sri Swaroop Kumar Saha, Managing Director and Chief Executive Executive Officer Sri Ravi Mera, Executive Director Sri Rajiva, Executive Director and Sri Arnab Goswami, Chief Financial Officer. I would now like to hand over the conference to Sri Arup Kumar Sah, MD and CEO of Punjab and Sindh bank for the opening remarks after which we will have the forum open for the interactive Q and A session.
Thank you and over to you Sir.
Swarup Kumar Saha — Managing Director and Chief Executive Officer
Thank you Mr. Ganesh and good evening everybody. I welcome you all on behalf of Punjab and Sindh bank to the Q3 analyst conference call for FY 2526. The results were declared on 17th of January and the results were also uploaded in the website. I’m very sure that most of you have been seeing the presentation and the bank’s results. However, just to keep a brief snapshot of the of the and the highlights of the performance of the bank for Q3 I would like to mention the following. The total business of the bank stood at 2,49,499 crores and has shown a growth of 11.75%.
YoY. The deposit’s growth was 9.27% and stood at 1 39,202 crore. The advances grew by 15.05% and the same stood at rupees 1,10,297 crores. In spite of the challenges of the CASA in the entire system the CASA deposits also showed a moderately handsome growth of 8.78%. However, one of the another important component of the liability resources the retail term deposits has been growing at a very very handsome rate. And for the quarter ending December 25th the retail term deposits grew at 18.34%. In terms of the operating and net profits, the bank’s operating profit for the quarter ending December 25th grew at 22.73% and stood at 594 crores and for the nine month period it grew at 30.18% and stood at 1,639 crores.
The net profit for the quarter increased by 19.15% and stood at 336 crores and for the nine Month period it increased by 28.02% to 900 crores. The NII grew at 5.01% for the quarter and 6.5% 57% for the nine month period. What is significant is that we are laying a lot of focus on core fee income which excludes the treasury and the recovery in right of accounts and that traction continues to be positive. And for the quarter end at Q3 the core fee income grew at nearly 29% yoy and for the nine month period it is around 19.33%.
Overall the non interest income grew at 50% yui and 51.52% for a nine month period. The asset quality continues to be significantly improved. The gross NP now stands at 2.60% and it shows a decline of 123bps yy the net NPA of 0.7% which is as per our guidance given that we should bring it below 0.75 and we have already achieved that guidance in December and we have brought it to 0.74 which shows a 51bps decline. YoY the PCR continues to grow and here again the PCR on a YOY basis has increased by 270 pips to 92.23%.
With 2 and without TW it has shown a significant improvement of 408 bips to 72.28. The slippage ratio continues to be at a moderate level of only 0.16% and it continues to decline and the credit cost also is at a at a low level of 0.05%. In terms of the other parameters as far as business is concerned as we have been interacting with you for the last few years we have been said that we will like to focus on the increasing the retail agri MSME segment and here again on in the December quarter we were able to show a consistent performance in this segment and it grew at 21.94.
The percentage to the total advances has now improved to 57.45% and we expect that the this percentage will gradually go up and by the end of March 26th we should be at 60% and next year for the guidance which we have kept for this growth of ramp percentage is 70% for the year 2627. So we will continuously work on this on the various segments as you must have observed in terms of the individual segments also the retail has shown a growth of 19.58% agree of 24.29 and MSME of 22.94%. So all round in all the three segments a healthy growth in and consistent growth.
In terms of the capital adequacy the bank continues to be have a good capital adequacy of 16.83%. If you add back the nine month profit which we have not added so far as per norms if we add back the nine month profit it is at 18.01% so just 18%. For overall we shows that the bank continues to work on capital optimized growth. In fact the credit risk weighted asset density which we call RWA density has also shown improvement from 61.18% to 58.64%. So overall we believe that we’ll continue on this capital optimize growth in the going forward as well.
Cost to income ratio has also declined 373 bips yoy and stands at 60.84%. Return on assets is at 0.79%. We’ll like to take it forward but we’ll at the end of nine months we are at 0.3 months we are at 0.79 we’d like to take it forward going Forward to around 0.80. So these were the some of the numbers in terms of the efficiency parameters. Our our. If you observe our that the progress in the operating profit and the net profit that the bank continues to have a steady growth in terms of the operating and net profits.
If we look into from June 23rd onwards there is an uptick and every year in the quarterly operating and net profits the other areas of what I like to in terms of slippages also we find that the slippage is also continue to decline overall and of course we have the significant we had a retail retail slippage of 34 crores agree of 39 crores. MSME on a yo basis slightly increased 94 crores but we don’t think that’s a very worrisome area. And overall the percentage gross NP amongst the three segments has also shown significant improvement in terms of the SMA 1 and 2 while the sequential sequentially the total number total amount of SMA 1 and 2 has shown an uptick but these are the primarily the two state government guaranteed accounts which we have also adequately provided for in our internal books as a standard but it is backed by state government guarantee.
We don’t foresee any immediate delinquency situation but however we we as as a precautionary measure and as per the norms we have we have significantly provided for in these two state government guaranteed standard accounts. Finally, as far as the future futuristic outlook, we continue to focus on branch expansion expanding our delivery channels through branches, brick and mortar VCs, ATMs we will we have also build we are also now decentralizing more and more for in terms of operations we have no few new four new zones were opened during the year then zonal offices, another four zones are planned for the next financial year.
We have now two FGM offices. We intend to increase it to five, increasing another three and also expansion of BCS to further to around 6,000. In terms of the other areas which are very important for any bank institution today Innovation we find that our digital journeys have have streamlined. In fact the digital home loans during the quarter of December 40% share of the total housing loan sanctioned was digital E or digitally assisted. Similarly for the Digital car loans 54% share was total vehicle loan that was sanctioned was either through digital STP or digital assisted journey.
So that shows that it is picking up MSME loans you have just launched. So it will take a bit of time to traction but we find that initial signs are very encouraging. In fact we’ll also now launch the digital rooftop solar and A scheme under STP Journey and also the digital commercial vehicle loans. And by March we’ll have a host of other other new digital journeys on personal loan, gold loan, self help groups, mutual funds, secondhand car finance, educational loans. So these are all lined up at very advanced stages.
We expect that by March 26 most of these will be actually implemented. A bit of one or two areas may spill over to Q1 but overall the traction is that we will continue to focus on smart delivery of our products from the bank side in terms of the customer protection we all know that we are living in a very dynamic world and therefore we need to create multi layered defense to protect our customers in terms of cyber related frauds that happen. So we have taken lots of host of measures. We have integrated with i4C Mule Hunter, the enterprise for risk management services also has been activated and much more and more activities are happening in that as we learn from the system.
The fri mnrl of the negative list of mobile numbers for enhanced due diligence are also being worked on so we are being very, very conscious of the fact that we need to take all the mitigants that are required to protect our customers in various forms that are happening in today’s ecosystem in terms of future of course a lot of technology driven interfaces are getting created for customers and also for bank staff through various AI generated chatbots. I think these will all play its role in going forward.
And with extant CRM solutions the audit systems have also brought in lot of value to the bank. The security operations centers also getting upgraded. The CASA back office is one of the very important thing that the bank has taken important step. You know there a lot of news items float around the mule account process. So we had earlier announced that the savings accounts have been integrated. All the savings accounts were getting opened through activation from the back end. Over 1 lakh accounts have been opened through that.
That’s the only channel for the branches to open. And now the current account and the non individual accounts opening has also been made live recently. So we hope that by these robust measures on opening accounts, on customer acquisition, lot of much more due diligences will be made. The activations will be done at the back end which is through a centralized software system. And we expect that going forward these sort of risks that we carry in terms of the challenges of the ecosystem will to a large extent get mitigated.
However, we never can be complacent. We need to continuously upgrade our systems and processes to mitigate those emerging operational risks that are coming. Forex businesses is also under pipeline decentralized Forex division is at a very final stage to be centralized. Forex trade finance solution is a very advanced stage. By March we intend to complete the project and take the bank in the next year to a much more augment to increase our forex business. In fact we have also approached RBI for the gift city and approvals.
We are hopeful that we will get it sometimes. But the at the present point what the matter is that we have requested RBI throughout for the formal process to give us an approval for the gift city. So if that is done, I think the bank will also get a lot of opportunity to do forex business sitting in India. A lot of other initiatives also being planned in terms of operational cost management, CRM, lead generation, AI driven features, mobile apps, etc, HR initiatives have also been taken to a very.
I think when I joined this bank lot of questions came from the analysts that how are we building capacities and we are now in a position where we have got the state of the art processes to to do this manpower not only manage them but also skill reskill and reskill them for their. For their to various tools, scientifically devised tools. So we are doing it in two phases. The first one has been implemented and the second second phase is under implementation which takes. The second phase particularly focuses on learning and development.
I think that would be the key. The first part was on performance management system, target settings, appraisal tools etc. Manpower assessment, succession plan. All these are primarily the first phase that has been now done. Now the second phase is getting implemented. I’m very sure these will all get in in. It will all give benefits to the bank in. In the going forward. A lot of various products have been introduced. And finally if we. If you come to the achievements of the bank visa vis the guidance that we have been given.
I think we have summarized the guidance in the last slide and we find that overall whatever targets that we had set for in terms of the financial year, we are all in track. In all we have achieved most in most of them. And also in track in the gross NPA which we are already at 2.60 and we are very sure that we are going to bring it to below 2.5% very shortly. So thank you for very much for your patient hearing. Now we can open up the floor for the discussions. Thank you.
Ganesh Shankarnawar — Moderator
Thank you sir. We will now begin the question and answer session. Ladies and gentlemen, we will wait for a moment while the question queue assembles. I request the participant to limit their question to two per person and please re join the queue for additional questions. Anyone who wish to ask question, you may raise their hand by clicking on the raised hand hand icon on your webex panel. For those who have joined us via audio call and wish to ask question, please press start 3/ash. If anyone is having connectivity or audio issue, you may share Your question on WhatsApp to us at 777386 88746.
I repeat, if anyone is having connectivity or audio issues, you may share your questions on WhatsApp to us at 777386 888-8746. Before asking the questions, I request you to please introduce yourself and your organization. Our first question is from the line of Ashok Ajmera. Please go ahead sir.
Questions and Answers:
Ashok Ajmera
Yeah. Thank you for giving this opportunity and congratulations. Asab Ravi sir, Rajiva sir, all the top management and the other management staff and the staff of the bank for a good quarter, a very good results in this quarter. If you talk about the operating profit also has gone up. The net profit also has gone up good growth in the credit also in this quarter of 4.48%. On the whole, it’s a very good quarter and my compliments to you all for the same, sir. Having said that, sir, I got certain observations, some queries and some clarifications.
So my first question is on, basically on the overall business and the especially the credit and deposit growth. Now whereas the Deposit is at 67.26% in nine months and targeted to be around 8 to 9%, 8 to 10%. Our credit growth target is 15 to 16% out of the 10.73 we already achieved in nine months. So with this kind of difference in the deposit growth and the credit growth, how are we matching the our ambition of going for large credit growth of 15 to 16%? This is my first question, sir, if you can just little bit elaborate on that though your, your opening remark was very, very, I mean you elaborated everything.
But some of these questions. Need some more clarification, sir?
Swarup Kumar Saha
Sure, yeah. Thank you Mr. Ajmera for your kind words and a very, very appropriate question that you have raised in terms of the mismatch between the credit and deposit growth. And you have rightly pointed out that our credit growth is a bit higher comparatively to the deposit growth. Having said that, if you’ll appreciate that in terms of the present situation that what we are in at this point of time, our CD ratio is around 79.24%. And what is interesting here is that while the pressure on the CD ratio may look a bit challenging in terms of managing the, managing the overall outlook of the bank’s business growth, what I would like you to focus on is that that though the total deposit growth is a bit less, our little term deposit plus CASA is, sorry, the little term deposit is growing at around 18% plus and overall the credit growth we are aligning around 15 to 16%.
Right. So, and, and also we are trying to, in terms of the various dynamics of the ecosystem to protect our margins as much as possible. We are also very conscious of that and we are trying to do a dynamic, what you call strategically, strategically and dynamically we are trying to monitor that how do we fund credit in terms of the various resources that we have. So one, of course deposits is a very important resource for funding credit growth. So what we are trying to do is this is our LCR average liquidity coverage ratio.
We feel that if we are able to handle. Comfortable lcr, we can have a leeway in terms of the increase in the CD ratio so that we don’t get choked in terms of our business projections. So therefore we are doing a very calculated methodology of trying to fund our credit growth. We are not because as the last quarter comes the interest rates are getting hardened. Now both on the. While the retail we have taken a lot of steps. We have rationalized our deposit interest rates, our savings bank interest rates.
So these are some of the steps we have taken to to maintain the margin. But going forward we’ll take a very quarter on quarter analysis. How do we handle this this, this situation of the hardening of rates and one side on the. And also the impact on the repo rate cuts that have the Reserve bank has been done has done continuously overall at the end of it. What I can summarize my submission is this. We don’t feel any challenge in terms of funding our overall credit growth and we expect, we are very confident that that we will be able to maintain the guidance that we have been giving you.
But on a quarter, on quarter basis these things will be monitored and going forward.
Ashok Ajmera
Yes sir, the point well taken sir. But. But with a low NIM of 2.59% I mean it is continuously coming down which alternative source you feel can be cheaper than the deposit or CASA so that you can protect your name also at the same time growing the advances to this level. So, so what are your views on the NIM going forward with this alternate method with dynamic methods which you are using to raise the funds and maintaining the LCR above a comfortable level of say 120 or so. So how do you means from where do you get a this g cheaper access to the cheaper fund than the normal deposits?
Swarup Kumar Saha
Yeah, point well appreciated. If you see the two, three things here in the dynamics in the dynamics of the ecosystem. While it is. It is very difficult to to really get a substitute of a CASA and which is the low yielding, low, low low cost resources. And the only option for us as deposit is very important is to go strongly on the retail term default. So that let’s say we have also done a lot of changes while we are growing at 18%. What I’m trying to tell you is this that in spite of the challenges of the deposit mobilization we are still growing handsomely at 18% in spite of lowering the rates in the deposit buckets in various deposit buckets.
But the the point to be what we have to in terms of the name. If you see that in spite of the insignificant reduction in the. In the repo rate cuts by the regulator we still in the. In the December quarter we were still at more or less at the level of September quarter. So that shows that the NIM going below US threshold has been. We expect that it gets. It gets bottomed out by the end of this quarter or maximum to the end of. By the next quarter. And the alternative is, and the alternative is this that we price our products and we go into the segments of the asset side where we can really get a margin of 3%.
Five and three, three and a half. Three to three and a half percent. And if you see our dynamics of our rating rating, credit rating, external rating portfolio you will find that we have moved from the AAAs to the AA’s. And overall we are keeping the balance. Well at one point of time was 19.49. It is at 16.60. Now AA rated was 22.38. Now it is 26.43. So this is where we create a room for us. And also as we increase our retail agri MSME growth now you find that earlier in our bank the agriculture was not growing at any rate which was to be boasted about.
Now you find that the every three segments, retail, agri msme, all the three segments are growing at tandem with each other. And these are the areas where we find that the margins are still possible to go. Because in the. In the corporate world we will not be able to compete with a low CASA base. It is very difficult for us to compete in the. In the. In the corporate world in terms of pricing of the good rated accounts. In fact we have let go around 3000 crores of corporate. We have shed 3000 crores of corporate loan book just because we didn’t want to provide a repricing at a rate which is not convenient to us.
So we have let go those. But in spite of that we are still growing our corporate book at a reasonable rate. So how do we balance our portfolios in will be very very important and but this is a challenge we will like to overcome through our various. So that’s why we are saying that as we increase our retail ag MSMs to 60% and maybe from next year to a. To a very very significant level of 70% this dynamics will play out very very solidly in favor of the bank in protecting the margins.
Ashok Ajmera
Yes sir. Taking your point forward of rating and getting a higher yield or higher margin on the advances. What I see is that in NBFC and Gold loan there are greater opportunity at the time of. At the same time a good security also. But when it comes to the nbfc, you know we are still on a double A Kind of a thing where there is a small business NBFCs which are even triple B minus also. Triple B minus also. But their business is very very secured. They are giving to low cost housing. Average size is 5 to 7 lakh rupees and not a single default and other things.
But at the same time we get very good returns. Maybe the interest from 9.15 to maybe 10.25%. So that those kind of strategies should be relooked. It should also be looked at similarly for the gold loan also. I would just like to know the the composition of NBFC and the gold loan and gold loan also how much is the agriculture and non agriculture and the kind of yield we are getting sir.
Swarup Kumar Saha
Yeah. So first of all from your first point regarding the giving taking exposures in the NBFCs with a lower credit rating. We will take your feedback and we’ll look into that strategically in house to see whether what we can do. I think it’s a fair point that you have raised. And regarding the agriculture gold loan portfolio I request Mr. Mehra to come in here.
Ravi Mehra
Good evening sir. Good evening. With regard to the Overall golden portfolio 4800 crore rupees. 1700 crore rupees is through co lending and out of that 1000 quotes in agriculture and with regard to the yield in gold on somewhere around 8.85%.
Ashok Ajmera
How much sir? Can you repeat it?
Ravi Mehra
8.85%.
Ashok Ajmera
8.5 8.5 8.85. 8.85%. Very good sir. So that’s what only I’m saying sir that in case of even some of this lower NBFCs where with a secured business also you can get a very good margin and can increase the profitability bank. So having said that sir now you in the. In the segment results are. I just. I was looking at the segment bifurcation because of this high profitability in the corporate book and the retail book of 269 crore 390 crores. So overall was coming was 863 crores. Out of that unallocated expenses of 270 crores has gone for the first time so high as compared to 50 crore 70 crore unallocated.
So what happened this time that unallocated expenses had gone up to so much of 269.58 crores. Whereas the segment wise profitability if you individually look at treasury, corporate retail book and retail banking then it is 863 crores.
Swarup Kumar Saha
We’ll reply. I think let me look into that this a fair point and I’ll Just look into it. My CFO will. Will inform you separately on this matter.
Ashok Ajmera
Arnabji will explain. Okay. Yeah. All right, sir. Sir, my last question in this. This round is basically that the government account. You know like you. You said that two state government backed. They slipped first SMA1 and then part of that SMA1 and SMA2. And you need not worry and you made some reasonable provision also. But is that those accounts are going to slip finally as per the IRAC norm in the. In the NPA category or before that only they are going to be resolved.
Swarup Kumar Saha
See, these are. These are systemic accounts. First of all, as of now we don’t foresee the accounts getting delinquent. Now number one. And I can also tell you if they. If they do so at. At any point of time. At present we are having more provisions in a standard account than it is required in a. In a substandard account. So we have built that question already. Okay. So. But we don’t foresee those. Because you know in one of the accounts we had exposure of 1500 crores. Exposure has come down to 1000 crores.
Another account we had an exposure of 1200 crores. It has come down to 627 crores. So the repayments are coming albeit at a. At a. Not at a space that we like to have. But we don’t foresee any immediate delinquent delinquency in these two accounts.
Ashok Ajmera
Thank you very much, sir. I’ll give the opportunity to others. But if time permits I’ll come back again, sir. Sure. Discussion and question, sir. Okay. Thank you, sir.
Unidentified Participant
Thank you, sir. The next question is from Sunil Choki. Over to you, sir. Good evening, Mr. Choksi. Hello. Good evening,
Unidentified Participant
Mr. Choksee.
Unidentified Participant
Mr. Choksi,
Unidentified Participant
Are you there? We can move forward. Yes, sir.
Unidentified Participant
Yes, sir. Yes, sir. The next question is from J. Mundra. Over to you, sir. Hello, Mr. J.
Swarup Kumar Saha
Mr. Mundra, good evening. Are you there? Can
Unidentified Participant
You hear me, sir?
Swarup Kumar Saha
Yeah, I can hear you. Please come in.
Unidentified Participant
Sure. Yeah. Hi, sir. Congratulations on a steady quarter, sir. And thanks for the opportunity. Sir, I have a few questions. One is. Sir, this quarter we had a stable name almost
Unidentified Participant
And
Unidentified Participant
Negligible credit cost.
Unidentified Participant
But
Unidentified Participant
Still the ROA is below 80 basis point. All other banks they are now. Well, they’re very close or higher than 1% ROA.
Unidentified Participant
This
Unidentified Participant
Quarter we had a negligible credit cost. And still we are far off from 1% mark. Of course it is a journey. It will. It may take some time. But I wanted to know, sir, do we have an aspiration for 1% ROA. And how soon you know, can, can we reach there? Hopefully the NIMS will expand and credit cost may not be negligible, but I do not see any problematic thing on credit cost. So in your assessment when can we, you know, reach that 1% threshold?
Swarup Kumar Saha
Yeah, I think Mr. Mundra, I think excellent question from your side. Very, very appropriate Also you have actually. Already discussed how we have maintained the September,
Unidentified Participant
The ROA
Swarup Kumar Saha
Part, the net profit actually.
Unidentified Participant
Please, somebody please put it
Swarup Kumar Saha
Mic on mute please. Others. Yeah. Mr. Mundra, can you hear me?
Unidentified Participant
Yes sir, I can hear you, sir.
Swarup Kumar Saha
Yeah. So now the point recovering to the point of your, of your roa. See, ROE is a component straight away from the net profits. What we have been building and as you rightly said that it’s a journey we would like the bank to move in a very, very steady and a very strong footing in terms of our efficiency parameters. So there is a lot of cushion being built up in the balance sheet in terms of managing our portfolios. In fact, as I said that in terms of the standard account provisioning we have a ECL framework coming up in future.
So we are building up in one of those two state government. We are having provision of 30%. One of them is at 20%. So we are providing more than required. Number one. We also see our increase in our provision coverage ratio is also increasing and we have also built up cushions in that we are now our aging provisions are as, as, as extended up to October 26th. So we are building that we should be ahead of this at least by six months in terms of our aging. Why are we building it? Your question could be what was that?
What was the when the credit cost is low. What, what, what is pushing the bank to these sort of strategies? We are doing it very consciously, Mr. Mundra, first of all and we would like that the banks, whatever assets that we are having and any semblance of stress in some form or the other, though we feel that we have a lot of other standard assets. We are in another standard asset from the which is technically an NPA. We are having provision of more than 80% in that. So all these and we don’t have too many of these accounts but whatever we have because of a, the size of the balance sheet is small for a 1000 crores of one corporate.
And if that goes bad it can have a massive impact on the overall scheme of things of the bank. So we are building it steadily and in terms of the futuristic ROA guidance we think that ROA of 1% is surely possible by the end of March 27th.
Unidentified Participant
Right? Sir, if you see in this quarter you have made excess provisions and all along you have been let us say making some extra buffer. But sir, this quarter the credit costs are negligible, right? It. It may not become negative. Right? Because so I was under the impression that if credit cost is negligible still ROA is only
Swarup Kumar Saha
Very minor uptake.
Unidentified Participant
Yeah, it’s minor uptake. I’m saying over the next five quarters even if roa, I mean asset quality remains steady but your. The credit cost will not fall down below this level. Right. So credit cost is not a lever anymore from this quarter perspective. All you have to do is either improve name or fee or opex. These are only three, right?
Swarup Kumar Saha
Absolutely. Absolutely. You’re absolutely right. Yes, it’s free income. Free income. If you see as I was saying the bank was not. Was a. Was not doing well earlier in core fee income treasury and recurrent return of of course recovery right off they also contribute quite significantly but those are also part of market dynamics. We are more concentrating on the. On the areas other than these two big non interest income method. So our cofare income continues to increase. A lot of. A lot of stress has been improved, has been given for revenue to stop revenue leakage to promote third party products to increase non fund business our and whatever.
In fact, yes in fact in this time we have also been able to generate some additional income through our sale of PSLC. The PSLC component we have contributed 25 crores, 21 crores in this. In this quarter. So now with an agriculture thing picking up the portfolio picking up we think that we have a lot of scope for. For increasing the. The more getting more and more income through these sort of methods. In terms of futuristic planning we have now we are going to very shortly implement supply chain financing.
We are going to have cash management services by June. So wherein some of the banks are generating lots of fee income through these methodologies. So I think your point is absolutely right. We need to improve NIM and that’s why I was talking about how we churn our assets book into the various segments and also increase our fee income to that and hopefully supported by a good sometimes good or sometimes moderate treasury performance because of the market dynamics and good recovery and our slippages continues to be less and less but our recovery in NP accounts continues to be a lot of focus as continues to be given.
So in this quarter also we expect around 250 to 300 crores of recovery in the written of accounts. We expect that and if all that materializes this will not add value going forward in in our overall scheme of things. So we will focus on. On getting generate more and more NII name and other income from various sources.
Unidentified Participant
Sure, sir. And sir, are you also have you migrated to the new tax regime or that is you’re still on the old earlier. No, not because we
Swarup Kumar Saha
Have taken away or we have covered all our accumulated losses. So we will look now we the time has come for us to to look into this subject and maybe going forward we will be. We’ll look into this. Yes now we have come to that situation.
Unidentified Participant
And secondly sir, on on gold loan, right. So there is a hundred percent YUI increase in the gold loan. Is there any reclassification that in the sense that earlier you were having retail gold or agree loan which has now reclassified from agree to retail or retail to agree or these are all I mean like to like sort of a number.
Ravi Mehra
Yeah. Mr. Mehra will actually Gold loan growth is there. I just informed that we have done the coining part as well. First time we have done it and 1700. So because of. Because of that that growth is there and then there is no declassification in the among this these three sectors in the world.
Swarup Kumar Saha
I think Mr. Buddha as far as retail and agri classification that’s a dynamics. But overall what I like to say is that the portfolio as such is growing both organically through our branch network and also through our co lending technology. Our co lending has been doing exceedingly well. Our experience has been excellent so far. So we will promote more and more such models of financing both organically and inorganically. And so far I think the quantum jump that you see are contributed by both the segments both on the branch side and.
And also from the from the polanding side.
Unidentified Participant
Thank you sir. Now we’ll begin to the next participant. Next question we have from Mr. Sunil Sushil Choksi. Over to you sir. Hello Mr. Choksi.
Sushil Choksey
Yeah. Good evening.
Swarup Kumar Saha
Good evening.
Sushil Choksey
Good evening. And my congratulations are very good numbers starting in reverse going to your guidance slide. You have tick box everything except gross npa. I know you would not revise but if if on a general discussion basis what is likely to get further enhanced from where we stand? So why don’t you elaborate because these are positives and we are not willing to change your guidance.
Swarup Kumar Saha
See, I think the color combination sometimes may be misleading. Okay. So I tell my CFO to be careful in the color combination. Why you have put it in a Different color is that we have not reached that level. That’s the other thing. We are going to be much better than what we have guided. I can assure you that.
Sushil Choksey
No, no sir. I sense in the numbers that your deposit growth is as what the market is estimating and RBI is also forecasting your advances are doing very well. Your ramp specifically secondhand car, solar, agri, housing loan all are doing well. Your gross NPAs have performed well, Net NP has performed well. PCR is stable. Recovery and upgradation possibly you will far exceed the number what you have said. Credit cost is minimal and slippage ratio is also under control. So I personally feel that your numbers outlook and bank is on a superior stage compared to what you are guiding so thinking.
I just feel that if you can throw a better picture than what you are looking at aspirational on March 26, nobody is going to hold the gun that you have not achieved it. But if you think it is what is going to show your credit cost can it collapse from where we are by one or two notches? Maybe your NIMS can improve far better. Whatever it may be, you may highlight that
Swarup Kumar Saha
So absolutely. I think. I think I can clear the year in that manner. See, while we are objectifying that 2.5 is a reasonable guidance, I think we are looking at a number of 2.25 by the end of March. I think that is the. That is the number we are 2.75
Sushil Choksey
Or 2.25.
Swarup Kumar Saha
2.25. 2.25.
Sushil Choksey
Okay. Second thing, sir, what is our technology spend and human resource spend because we are moving on digitization, co lending branches, geographical expansion, new initiatives. So basically entire staff and technology is a must enabler. So what is that we are going. To do different and what is that spend? We can tell us.
Swarup Kumar Saha
Yeah, yeah, I think I have. When I was submitting my initial remarks I did talk of the areas where we are working on HR front and amongst the other host of things that we are doing in various things. I think we are also work very strongly on the HR front. On the HR front particularly what we as a terms of investment, basically we have taken the global consultant who is implementing the best of the HR practices which is across all the banks, particularly public sector banks. And I think we are getting the best of the benefits.
It is not a big cost in that way and the overall in the package of things that we are doing the entire cost is in terms of the engagement of consultant whether you are taking any tools on the various tools that have been mentioned in the presentation 16 to 20 tools are being adopted for whether it is target setting, whether it is performance management, whether it is other areas. I think there we are investing in terms through a consultant mode. So that’s not a very significant number for us to really be worried about.
But the point is that. On the HR front and the second phase on the HR transformation that we are doing, it really talks about the leadership development. I think that’s the key area which we would like to work on in the current six months. It’s a six months project that we are going to implement and hopefully at the end of it we are getting. We create more and more skill assessments, more and more tools for training purposes and engage custom staff members in a, in a, in a. In a much more efficient manner.
I can just give you one example in terms of capacity building what we have done internally through AI chatbot is staff members normally architect when they are more used to reading WhatsApp messages and circulations that come through WhatsApp and do not get enough maybe time to read formal circulars in the bank’s internal portal. So what we have developed is that we have created an AI chatbot in an internal circulation where any staff member would like any query when it’s a regulatory guideline, whether it’s a board approved guideline, whether it’s any sop he can just put a chat into that Aria bot, we call it Aria Bot portal in our bank and through that he can get an updation immediately with an immediate response through a system generated AI tool that has been utilized to that will give them the immediate answer to a problem that he may immediately face at any point of time.
So this is on a small area which I have talked about and trainings is another area which are investing very very strongly. We find that our amongst the total number of employees that we have around 10,000 odd. We are, we are now working on how many unique employees are getting trained every year and that figure is also significantly increasing year on year Earlier a unique employee means employee who is not giving multiple trainings was we were giving trainings to around 3,000 employees. Now that figure is ranging between 6,000 to 7,000.
So it’s nearly doubled. So a lot of investment is happening there. Also through our training colleges we are opening a second excellence center staff training college which we call it center of Excellence on Food and Agro Processing. It will be hosted in Chandigarh and which will give another flip to our overall capacity building initiatives that we intend to take going forward. Because we all realize that how it and HR has to go hand in hand in the overall scheme of things for any efficient bank.
So we are doing lot of taking a lot of initiatives. Hopefully these will all give better results as we go forward.
Sushil Choksey
So what is the digital spend and human resource spend likely to be additional. On all these measures
Swarup Kumar Saha
On the human resources spend? See I can give you a snapshot that just to give you an idea of what you are trying to arrive at. In the last three years we have an approved outlay of 900 crores in it. Okay. I think that will give you an overall idea of scheme of things which will get utilized as we go forward. Yeah. Please carry on
Sushil Choksey
Sir. Your RAM is doing well. How well? Efficiently we are able to market some other products including CASA to the same customer.
Swarup Kumar Saha
Yeah. So the next transformation journey that we have decided internally would be on the digital front which is one of a key area of customer acquisition, whether it is on a liability side or whether it is an asset side. So the bank is internally working out and I think we’ll roll it out by the end of the financial year next which we may call PSB unit 2.0 and which we will demonstrate to the external stakeholders that we also have the capacity to turn around a digital oriented customer journeys and with a great UI UX experience and overall make make stickiness.
The idea is having more stickiness from the customer perspective, more product per customer of cross selling. So on the as of now on the lending side, asset side, we are doing a lot of digital transformation in the lending side. But we like to have it a common platform wherein both the assets and the liabilities will be taken care through a very, very robust digital platform. So that is on the offing in the next year. We have taken a lot of steps in various areas now I think it is now culminating for business purpose the digital transformation will be taken forward.
So we will be going through the process approvals by the end of the this month or maybe next month and then we open it up and we engage somebody which is efficient and delivers to the best of the apps in terms of the industry. So I think those acquisition journeys of salary stickiness and also will work. And one more thing, we are also much more focused on garnering as much salary at home as possible. We have done host of tie ups with various state government organizations to build up this CASA portfolio in terms of salary accounts.
And of late of course the Central Government Employee Connect program will be across all public sector banks where central governments employees have been advised by their nodal ministries to open all their Accounts in a public sector bank only. So we will be. Although it’s a competitive market, but we think we can have a fair share in that. The defense salary account is playing out very well. Now earlier we had a. We had a centralized defense major general who was the central defense banking advisor.
We had one person. Now we have five persons on the ground to assist the major general at the center so that there’s a lot of leg work required to mobilize salary accounts from the defense establishments. And I think we have recruited them, they’re already on the job, they’re going places and we are getting a lot of positive feedback that going forward we may make some significant breakthroughs in the defense account salary accounts as well, including aggravates. Because our package is one of the best, if not the best.
It is one of the best in the. Amongst all the banks that offer the products to the. To the defense people. So stickiness of customer would be important. Giving them good UI UX experience, give them all the facilities under one mobile app to maintain accounts with us, have good credit card business, mutual fund business. So put them all together and try to build a robust digital, digital journey. So these would be some of the few points which will be taken forward in the next financial year.
Sushil Choksey
Sir, my next question what is the unavailed credit limits which you have sanctioned in recent months and what is the pipeline looking for the quarter specifically on the corporate side?
Swarup Kumar Saha
I think on the corporate side overall if I see the sanctions in hand, the undisbursed portion, the proposals under consideration with a good NBG in principal approval given which are going to get converted. The overall pipeline so far is 20,000.
Sushil Choksey
Okay. And this does, does it give you a color of any kind of sector or. It is across.
Swarup Kumar Saha
It is across. We, we are now getting into the. Of course NBFCs we are there but other than that we are into the. We’re looking for good infrastructure, LRDs, real estate, good real estate projects if if we get something renewables manufacturing. We are now getting into cement. We are getting good leads. Many of the big corporates, the cement manufacturing companies are in touch with us and we hope that at least one or two of them will be converted in terms of our acquisition. So manufacturing is.
Is there A lot of state government entities are who are doing well in the power segments are also bringing out new capex programs in their respective states and we are also giving them line of credits or credit lines in those areas whether it is northeast, central India, northern India. We are getting it from across the Country, Orissa, Andhra. So now our business expansion is really being taken forward in the geographies which we think are going to be very important today in the whether it is the central part of the country, southern part, eastern part of the country.
So we are going to expand our business horizon across this. And that’s why we are making a lot of visits. MDs are visiting them, meeting the chief ministers, top bureaucrats, meeting top officials. Anywhere the our MD or ED visits we generate at least 5000 crores of leads. That’s the bottom line. We have taken that if any MD goes to a visit in a particular zone for business mobilization that zone should generate 5000 crores of leads. Otherwise you don’t go. Initially people are hesitant. I think now it has picked up whether it is Gujarat, whether it is Chhattisgarh, whether it is Orissa, whether it is mp, Madhya Pradesh, Karnataka.
I think that’s how the things are moving in in the bank. And I’m very sure as we move more and more the these will be converted in a better way.
Sushil Choksey
So then you need to accelerate your deposit, nothing more.
Swarup Kumar Saha
Yeah, yeah, yeah that’s. That’s true. That’s true. Or you find a alternative way of funding amending the lcr. But that is that that situation has not come yet. Many banks of the city ratio are already at 82, 83. We are at 79. We’ll work on that leeway that we still have and then take a call. Of course deposits will be very important. I agree with you.
Sushil Choksey
Because 5 state itself amounts to 25000 crores. Last question to you. You have been, you understand treasury well. What is it today that rates are where it is and what’s the outlook? Second thing, how do you manage cost of funds better than where we stand today in near quarters.
Swarup Kumar Saha
Yeah. In terms of the outlook you know that the yields have hardened and a lot of dynamics are happening particularly on the SDL front. We expect that there is a bank. I must be. I’m very sure the reserv bank is looking very closely on it. And there has been I think the omos subsequent omos are may again come. There’s a lot of discussion going on that OS may be brought in. There was also we. I feel that some of the SDLs which RBI has experimented earlier in the O they have not off done that. Maybe some SDL because the hardening is happening in the SDL front.
More spread is increasing more there. RBI may consider as some as a measure to bring down the yields from that perspective. But the Global situation is something is very dynamic I expect, I don’t expect immediate cuts happening in terms of it. The numbers, the GDP numbers are also holding on which doesn’t really trigger any potential action by the Monetary Policy Committee. So in the scheme of things as we stand today I feel that the RBI will have a wait and watch. We have a long pause maybe in terms of the overall guidance and take it every.
Every two months going forward. That’s my. On the treasury front and what was your second point?
Sushil Choksey
Cost of funds?
Swarup Kumar Saha
Yes, yes. On the cost of fund we have brought it down. In fact if you see our trajectory in the cost of deposit and cost of fund we have taken a lot of steps and that is actually yielding a lot of results. We have, we have re priced our savings very aggressively and we don’t find any challenge there. Savings continues to grow. We feel that today is the stickiness of the customer which holds on to a. Which holds the bank which gives the bank savings accounts. So we have drastically reduced our savings deposit rates.
We have drastically reduced our retail term deposits particularly on the special schemes. At one point of time we were giving as high as 7.45% in the retail term deposits in one of the brackets that has gone down to 6.60. And that if you see our movement sequential movement in the cost of deposit and the cost of fund we feel that that is there is some positive development there. What you now need to do is increase our yield on funds and the yield on advances. So that is the work in process. You may say.
Thank you.
Ganesh Shankarnawar
Thank you. Next question we have from another participant. Call in user. Dear participant, could you please introduce yourself and come up with the question.
Unidentified Participant
Good
Unidentified Participant
Evening.
Unidentified Participant
We will move on to the next question which is from Rite Choksi.
Unidentified Participant
Good evening sir. Thank you for the opportunity. So one very quick question. You earlier guided on our vision for a 1% roe over the next few quarters. So looking at your numbers so we have a very volatile and a much higher cost to income ratio versus majority of our peers. So what is our vision in bringing this down? Because you spoke a lot about digitization and operations. So where can we bring this down to and how do we move to that 55% target and then because this will also eventually help our roi.
So what is your guidance here?
Swarup Kumar Saha
Yes, absolutely right. The only solution is to increase income. Cost is on only was limited impact that happens in terms of reduction in cost. So our entire effort our traditionally our bank’s cost on income ratio has been very high. So the only way is to do is to generate more and more income out of our business models. So we expect that our idea would be if all the things work out to the way that we have planned out, I think by the end of March 27we should be nearly around between 50 to 55%. I think that’s the overall dynamics that we are working on.
We’ll try to phase it by three to four bips every year. And if you see our trajectory so far we are holding on to that. Earlier it was 75 at one point of time. Earlier in the bank it was 72 also. So now we are able to maintain the 60 to 64, 62 for 64 range. We expect that this range will come down to around between 55 to 60 very shortly. Not 58 to 60 sorry. And then move on to a range between 53 to 56 somewhere. It will stabilize. So another two years down the line we should be having a. A much better cost to income ratio.
The only way to do it is to increase income. And that’s what I have been telling all along. And that’s what we are trying to do also. If you see our income in going up, our, our churning the balance sheet etc which I’ve already said so that will continuously take place going forward.
Unidentified Participant
Noted. Thank you very much.
Swarup Kumar Saha
Thank you.
Ganesh Shankarnawar
Thank you sir. As as there are no further questions from the participant we now conclude this conference. Should you have any further queries please reach out to Mr. Ganesh Ankar at 77738688746 or ganeshonceptpr.com on behalf of Punjab and Sindh Bank I thank each one of you for joining the conference call today. You may now disconnect your lines. Thank you. Have a great day.
Swarup Kumar Saha
Thank you. Thank you Mr. Ganesh. And thank you everybody.
Ganesh Shankarnawar
Thank you sir.