Punjab & Sind Bank (NSE: PSB) Q4 2025 Earnings Call dated Apr. 30, 2025
Corporate Participants:
Swarup Kumar Saha — Managing Director and Chief Executive Officer
Ravi Mehra — Executive Director
Rajeeva — Executive Director
Unidentified Speaker
Analysts:
Unidentified Participant
Presentation:
Operator
Good evening, ladies and gentlemen. I’m Shilpa Ibraham, the moderator for today’s earnings call. I welcome and thank each one of you for joining us today for the Punjab and SIN Bank’s annual Earnings call for fiscal year ’25. Please note that this conference is being recorded and all participant lines will be in the listen-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 panel or press star 3 hash on your phone. I repeat, should you need any assistance during the conference call, please raise your hand-on the panel or press star 3 hash on your phone. I would now like to introduce the management of Punjab and.
We have with us today Kumar Saha, Managing Director and Chief Executive Officer; Shri Rabi Mehra, Executive Director; Shri Rajiva, Executive Director; and Shri Annab, Chief Financial Officer. I would now like to hand over the conference to Shri Saru Kumar Saha, MD and CEO of Punjab and SinBank for the opening remarks, after which we will have the forum open for the interactive Q&A session. Thank you, and over to you, sir.
Swarup Kumar Saha — Managing Director and Chief Executive Officer
Yeah. Thank you, and very good evening to all of you. And on behalf of Punjab Bank, we thank you all to have taken your valuable time-out to attend this con-call for the — for the Bank’s quarterly performance of financial year ’24-’25. I will just briefly brief the highlights of the performance of our quarter. The presentation has already been uploaded in the stock exchange as per requirement. The press release has also been uploaded.
So many of you may have seen the same also, but just to set the context for today’s meeting and the conference, I would just like to mention some of the key highlights of the bank’s performance of FY ’24-’25. The business of the bank grew by 11.69% and just INR2,229,000 crores. Deposits showed an uptick of 8.68% and just INR1,29,000 crores and the advances was robust at 15.87% and just below — falling short of the INR1 lakh figure at INR99,605 crores.
The interesting point in this business performance is that the bank is now much more in the business of growth-oriented path and we have touched the double-digit business growth compared to the last year. In terms of the other performance of the bank, the NII grew at 33.19% for the financial year. The operating profit was a very robust INR2,075 crores for the entire financial year and it grew at 83.47%. The net profit for the year was INR1,016 crores and grew at more than 70.676%.
And for the quarter, as far as the quarter is concerned, the net profit was at INR313 crore and it grew by more than 125%, the operating profit grew at 142% and stood at INR816 crores for the quarter. The other in terms of the efficiency parameters, the net interest margin at — for the — for the financial year increased by-40 bps and stood at 2.85%. The cost-to-income ratio showed a significant dip of 1,093 bps and has reduced to 61.23%. The return on assets was at an improved level of 0.67% for the financial year. In terms of the asset quality, the gross NPA has reduced by 205 bps for the financial year. It went down 3.2%. It has gone down to 3.38%. The net NPA has gone down to below 1%, which was as per our guidance and just touched 0.96% for the March ’25.
The provision coverage ratio also has shown an uptick and it has increased by 269 bps and has increased to 91.38%. So we were also given a guidance that the provision coverage ratio, we will — we will be able to cross 90%. I think we have been able to manage that. So as far as the — till this part, I would like to mention that we had given during our past conference calls that the deposit growth guidance was between 8% to 10%. We were able to maintain at 8.68%. The advance growth we have given a guidance of 10% to 12%, we have surpassed that advanced growth and stood at 15.87%.
The RAM percentage, we had given a guidance of 56%, we just fell short of it, but it’s fair enough, 55.15% will make-up for the small differential that is there. And in terms of the gross and net NPA, we had given a guidance to be below 4.5% by the end of March. We are now at 3.38%. The net NPA, we had given a guidance of below 1.5, we have reached 0.96%. The PCR guidance was between 89% to 90%. We reached 91.38%. So we have been able to meet all the guidance parameters. The recovery of upgradation also, the guidance was to achieve more than INR1,000 crores.
We have achieved INR1738 crores of recovery. Of course, this is because of one of a big resolution that has happened by a transfer of an asset to NARCL, which the industry all knows about. The credit cost guidance was below 1% and we were at 0.20%, we were able to achieve it comfortably. The slippage ratio was guidance was given at less than 1.25% and we were just below 1% for the financial year. So overall, the performance of the bank has shown much-improved at much-improved level. The overall business growth has happened, the efficiency ratios have improved.
The CASA, of course, we had a — we had a CASA, we are facing challenges. The CASA grew moderately at 5.38%. However, the CASA and retail term deposits, we are growing over 7%. So that is on the deposit front and it increased at 8.68%. The RAM percentage, we had said that we are going to sequentially improve it as for year-on-year and quarter-on-quarter and we have been able to maintain the trend. And from March — if you compare from March ’22 onwards, the ramp percentage , which was at 50.71% has now improved to 55.15%. The overall — the overall in credit profile of the external rating as far as the external rating of our accounts is that we have been — we have been telling the investors and analysts that we are churning our corporate credit portfolio and we are — and the trend of March ’25, if you see a slide number 12, we will confine that there is a shift in the overall churning that is happening in the credit portfolio. We are looking now also focusing on higher-yielding assets. So the AAs and A’s have — are showing a slight uptick in the quarter of March. So overall, on the yield — the yield on advances have improved, of course, as the notes to accounts must-have mentioned and that we have booked additional income due to the NARCL resolution, which has boosted our other income and also our interest income on advances because that was one of one of the factors which also helped the performance of the banks. The performance of the bank was also a boosted by a good contribution from the treasury and the treasury income has also improved significantly and from the — from the investment slide, it can be seen that the profit from sale of investments was INR106 crores for the quarter-ending March. The fee income has also shown a very significant improvement of over 27%. We are constantly working on how to improve the core fee income and we are — we are very concentrated on how to prevent a revenue leakage and making the systems more robust so that our revenue earnings do not get impacted. All-in all, overall, I would like to say that due to — as we have been committing to the — to the investors that we will continue to show a sustainable performance. I think for the last four, five quarters, the trends continue to be positive and we’ll continue to work on this — on this sustainable performance going-forward also. So now I would like to open up the session for the question-and-answers. Thank you very much.
Questions and Answers:
Operator
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 participants to limit their questions to two per person and please rejoin the queue for any additional questions. Anyone who wishes to ask a question may raise their hand by clicking on the raised hand icon on your Webix panel. For those who have joined us via audio call and wish to ask a question, please press star 3 hatch.
If anyone is having connectivity or audio issues, you may share your questions on WhatsApp to us at 790-743-1859. I repeat, if anyone is having connectivity or audio issue, you may share your questions on WhatsApp to us at 790-743-1859. Before asking the question, I request you to please introduce yourself and your organization.
Our first question is from the line of Mr Sushil from Inderson Equity. Sir, please go-ahead with your question.
Unidentified Participant
An excellent result and a successful QIP. Sir, you’ve spoken about all about ’24-’25. For ’25, ’26, what are estimates in terms of advances, deposit, NIM, cost to CD ratio, what kind of ROE, ROE you’ll achieve, what kind of gross NPA, net NPA are you targeting? How will you target CASA increase when the interest rates are falling, CASA can be attracted, what measures will you take on this? These are my initial questions.
Swarup Kumar Saha
Yeah. Thank you, Mr. As we have talked about the performance of ’24, ’25. We have also given a guidance for ’25 ’26 in our last slide on Slide number 40, wherein we have set — we have set the tone for the year ’25, ’26, the deposit growth will be between 8% to 10%. Advances growth would be — we are targeting between 15% to 16%. Our CD ratio is at 70 — we’d like to keep it between 78% to 80%. Overall, the gross NPA is at now 3.3%. We’d like to bring it below 2.5%. Net NPA, which is at 0.96%, we’d like to bring it down to 0.75%, grow 0.75%. The provision coverage ratio would like to jack it up to more than 92% between 92% to 93%. So these are some of the highlights that we have provided.
As far as the guidance on the ROA is concerned and ROEs are concerned, we’d like to mention that the — we have increased the ROA to a level of 0.67%. We’d like to bring it up to — for the next year, we’d like to bring it up to a level of 0.75% to 0.80%. As far as the NIM is concerned, we feel that there will be some correction maybe in the NIM going-forward because of the developments that are happening on the liquidity front and the — and the two of the cuts already have happened and have happened, maybe one or two more are on the annual. So we are expecting another 50 bps cut maybe down the line during the financial year, which may have some impact on the NIM.
So the NIM may moderate, but we will make all efforts to keep it at a level at which we are at this point of time. On the cost-to-income ratio, we did as you said — you must-have observed that the cost-to-income ratio has come down from 72% to just over 61%. That’s a good development. We have told the market and the investors that the one-off impact of the wage — wage provisions of the had impacted our cost-to-income ratio. We are happy to see that we have been able to bring it back to a level which is much more comfortable and we’d like to keep it at a 58% to 60% cost-to-income ratio during the end-of-the financial year.
In terms of the deposit mobilization, as you — we all understand that the deposit mobilization is a challenge that we have to face. We are innovating our products. We are improving our digital products on the CASA and the retail front. The product customization for various customized customers like the — like the defense accounts, like the salary accounts of like women customers. So we are — we are moderating and customizing various products for the bank and the more-and-more digital acquisition will going to happen.
We are also working on, as I told multiple times during our previous interactions on the new projects that are on the verge of completion. The call-center has started the initial part of the call-center project, which we have promised in the previous quarters as the initial part has started, which will help also a part — which will also contribute to the lead management on both deposits and the asset side, apart from helping the bank on the collection efficiency and the overall 360-degree feedback of customers to do cross-selling. So the deposit is already — we are already — just post 31st March, we didn’t wait for a single day.
Our teams are already on-the-ground mobilizing deposits in the market in-spite of a season which talks — which the first-quarter and the first month post the end results. So our teams are already in the market and trying to acquire as much customers as possible. The tab banking, which we had promised also are also going to be implemented very shortly, which will also help us on our acquisition.
Unidentified Participant
Sir, I’m referring to your slide of guidance on page number 11. When we are already at 3.38 on gross NPA, net NPA is at 0.96. Your recovery in upgrades, I understand last year you had an exceptional year. This year INR1,000 was fine. Cost to — credit cost, you achieved 0.2 maybe thanks to one-off. But why are we being so conservative in our numbers compared to what we have? My second question here is what is the outlook on treasury and how are we positioning when the 10-year is at 635? And third is with all your new initiatives, what kind of digital spend are you likely to do and what kind of digital spend is being done if you bifurcate between retail RAM and corporate bank?
Swarup Kumar Saha
Okay. As far as the credit cost is concerned, yes, you may feel that we are giving a conservative guidance. We’d like to be in that zone because, See, we are still having some stress in the agriculture and the — a small segment of MSMEs. While the corporate looks — looks very healthy. We are still having some — if you see our slippages trends in this quarter also, find that the agri slippages have gone up a bit more. Though the quarter-on-quarter-on-quarter Y-o-Y basis, the slippages are less, but still there is a recipuble area of — on agriculture, which we like to address and take care of. In one or two mid-corporate accounts, the accounts would be — though we are well providing for them already, which are — which are at the INR100 crore to INR150 crore range, those may — we should feel are hovering between the SMA-1 and SME 2. So if those slips also that can have a small impact on that otherwise, but we will like to keep this guidance and show a much and achieve the guidance in a better fashion. So that was the basic idea. In terms of treasury, of course, we are starting, I am very sure with the movement of the yields, the quarter would be — looks much more rosier than what it was in the last quarter though, the last quarter was also good for treasury. But with the movement of yield that has happened, we find that we feel that this year’s performance of treasury will be much better, even much better than what it was on the last year. Apart from the — the third question was on the new initiatives. Yes, the digital lending is some of the areas where we have already started is on the housing and the vehicle alone. We now up to — we have already started on MSME up to INR25 lakhs. We are going to bring the digital part — the STP, I’m talking of the straight-through processing of digital lending, then this would go about INR1 crore — up to INR1 crore very shortly, the process is on. We have started with the — up to INR25 lakhs MSME. There are many other digital lending products on the annual like the GST product, the gold loan, the personal loan. So these are all tied-up and will happen in maybe three to six months’ time as we as we customize the products for ourselves. Gold loan also we like to customize for us. So the digital lending is a big project for us and we’d like to take it forward as we move ahead. On the new initiative — other new initiatives, I’ve already said that we are going to have the — the call-center I’ve already talked about the CASA back-office is also getting operational this month the next month and the centralized trade foreign-exchange transaction module is also the customization is going on. Maybe by September we will have those — all these things in-place because these are now very realistic projects which are getting implemented. We are also working parallelly on a performance management system, which has been also a talking point in our interactions before. So the performance management system in the bank to have a — to have a much more scientific way of assessing performance of employe — employees in the bank was going to get implemented in the current financial year and we are in a very advanced-stage of implement of starting the process. So with that, it also will also support the overall environment on our initiatives going-forward.
Unidentified Participant
And any amount quantify for digital spend and treasury outlook
Swarup Kumar Saha
We have the — but I don’t have it ready at this point of time. I can share with you separately after the.
Unidentified Participant
Okay. And second thing is that treasury outlook, you mentioned that we are well-positioned, but are we churning from more lucrative in terms of corporate bonds or what are we doing in those respects?
Swarup Kumar Saha
So see, this is a dynamic environment. So as the dynamism happens in the ecosystem, we will — we will churn our portfolios and we’ll make all best — we’ll use all our skills to make best use of the opportunities that the market provides with us. So there is no a demarcation on what can be done today and on tomorrow. But the overall optics is this that in a very, very — the environment that we are in at this point of time we’ll make full use of the treasury functioning in the bank in this year.
Unidentified Participant
And secondly, India is likely to attract a lot of manufacturing because of this global trade war. Are we looking at something to benefit from Gift City or anything, something new initiative which we need to take, which we are not in-place for.
Swarup Kumar Saha
Yeah, we have got the in-principle approval for the GIF City and you know that it is a process for getting the final approval and the implementation of it. But the Board has given the principle approval of going ahead with this — with this Gift City concept by opening us Gift City branch and we will now — we are now going through a consultancy process or open. Yes, that is in the agenda for the financial year, but that is as its own ways of implementation. So it’s a project of maybe a year or so, which we’d like to — the benefits of it may come next year. But the process has — yes, the process has initiated.
Unidentified Participant
Sir, thank you and all the best for the year and thank you for answering all my questions.
Swarup Kumar Saha
Thank you. MR.
Operator
Thank you, sir. Our next question is from the line of Ms Saluni Shah. Ma’am, please go-ahead with your question.
Unidentified Participant
Hello. Thank you for the opportunity. My question is that, sir, can you specify the contribution of digital channels to overall business and are there any cost-savings?
Swarup Kumar Saha
Yeah, can you be a bit clearer, please? We are getting your voice clearly.
Unidentified Participant
Okay. Okay. Now you’re loud and clear. Please go-ahead. Okay. Okay. Sir, my question is that, can you specify the contribution of our digital channels to overall business? And are there any cost-savings happening?
Swarup Kumar Saha
Yeah. MR. Mehra will answer
Ravi Mehra
After this side. With regard to retail sanctions, I’d just like to mention that out-of-the total loans that we sourced and sanctioned during this year, we started the January 5th of December. And since then, we have sanctioned almost 7,000 loans pertaining to home loan and auto loans with a quantum of around almost INR1,100 crores with digital or journey to journey
Unidentified Participant
Okay. And also, sir, I have one question is that your UPI translation volumes have grown over 60% year-on-year. So how is this translating into customer acquisition or
Swarup Kumar Saha
May I understand what is the cost that you mentioned that has gone up by 60%. Your voice is a UPI transaction. UPI transaction. Okay. Yeah. Please let me know your question again, ma’am. Now I’ve understood the context.
Unidentified Participant
Okay. So my question is that your UPI transaction volumes has grown over 60% year-on-year. Correct. How is this translating into customer acquisition on cross-sell opportunities.
Swarup Kumar Saha
Yeah. This is an interesting question and I think very rightly the right opportunity. We are — we move — the volumes are increasing as you rightly saying that the UPI volumes are transactions are increasing. Now the customer acquisition also is one of our — of our process which we carry-out through the digital process, but we are also upgrading our digital banking app in a better fashion, the customization is getting more-and-more strengthened, we will get the full benefit of it maybe in during the current year.
So while we appreciate the point that UPI transactions are increasing. So that’s why we are bringing this concept of the tab banking for acquisition of customers and the call-center also once it gets activated, these two parallel projects, which once it gets implemented will be help us to analyze our transactions and go for more-and-more acquisition of our customers. So that is on the cards. And in terms of the numbers, I think I’ll not be able to mention to you at this point of time.
But yes, definitely, your point is well taken that we are — and we are on the process of analyzing our transaction to acquire more-and-more customers.
Unidentified Participant
Okay, sir. Thank you. Thank you so much.
Swarup Kumar Saha
Thank you.
Operator
Thank you, sir. Our next question is from the line of Mr Ashok Ajmera from Agcon Global. Sir, please go-ahead with your question.
Swarup Kumar Saha
MR. Ajmera, good evening. Good evening, Mister Ajmera,
Operator
Can you Still.
Swarup Kumar Saha
Yeah, now you’re audible.
Unidentified Participant
I can hear you. Can you hear me?
Swarup Kumar Saha
Yeah, now I can hear you, Mr. Please go-ahead.
Unidentified Participant
Yes, sir. Complement that very good numbers for the quarter as well as the whole year, the operating profit is jumping to INR816 crores in the quarter and the overall year is, I think INR2,075 crores, phenomenal achievement, sir. And are many other parameters also, the bank has started performing much better than what it used to be. And even this time, even the credit growth is also good. Having said that, sir my question sir generally remain on that we have a very low-base, you know, among the and among the public sector banks we are among those few small banks, but having the benefit of being a public sector bank with the huge government holding and all that.
So these numbers should not be sort of a benchmark like comparable with other banks. We have lot of scope to grow faster, faster than what we are growing of course keeping the quality, quality into mine. Having in that background can we are we not looking for some good MSAV or some good small corporate account may not be speaking 55, 45 but so that we have good income also as well as we grow much faster and come to a particular defense level, sir.
So this is my first observation and your comments on that, sir.
Swarup Kumar Saha
Yeah. Thank you, Mr, Mr Ajmera, for your compliments. And as you are — as you be watching over the last two, three years, how the bank is slowly transforming into not only in systems and processes, but also qualitatively, we’re trying to grow. While we appreciate the point that we have a low-base and we need to — we have opportunity to grow faster, it is actually correct. But also we need to understand that in today’s environment, we also need to be cautious of the fact that the top-line should not hamper the bottom-line.
And we are working on how we have a better bottom-line growth also on a sustainable basis. So therefore, in terms of the top-line, while you observed this time also, our deposit growth has grown 8.68%, our advances has grown by 15% plus. And we are maintaining the more or less the same guidance for the current year as well.
So therefore, there is — and the systemic growth at this point of time is around 11% to 12% on the advance side. So we are giving a guidance that we will be growing a bit faster than the system, which takes care of your question that we can grow faster than usual. But we are mindful of the fact that the growth has to be qualitative, that the growth has to be on a sustainable basis and the growth also should not impact the bottom-line going-forward when in terms of any eventuality in the ecosystem, we should be also prepared for that system.
So — but we will continue and we — and we’ll continue to progress on our — on our growth front on a very, very qualitative and a sustainable method. On your — on your remarks on the MSME mid-corporate, yes, we are a bank we should — we are a bank, we should and is doing for — giving focus lots of focus on MSME and mid-corporate. That’s why we have now opened more than how many mid-corporate branches are there. More than 12 mid-corporate branches.
We are opening specialized MSME branches all across the country. We are doing — we have designed our products on the cluster-based financing and we are — and we are also expanding our branch network all-in on a pan-India basis. We have a program of expanding — opening at least 150 branches for the current year in this financial year.
So therefore — and get into the catchment areas where we are not present at this point of time. So we are overall in 361 rich districts out-of-the 700 potential districts that we can be in. Therefore, we keeping a 360 degree view, we need to expand in those territories where there is lot of scope for penetration. So we are opening a new office in Patna. We are opening a new zonal office in Varanasi. We are opening a new zonal office in Agra and we are opening a new zon office in Moga in Punjab.
So which will not only enable the band to be much more granular on the specific area you are hinting at regarding the retail, MSME, mid-corporate financing. So — and many of these zones presently which are getting covered are having more than 80 or 90 branches, which for in today’s environment, it is very difficult to generate business or buy a zona head by controlling so many branches. So we have now rationalized the zone office structure of the bank and we have brought down the level of number of branches per zone to an average of around 60 to 65, which gives a much better control by for growth and for compliance.
So therefore, we will take this as a key strategic area for focusing on retail MSME and mid-corporate — mid-corporate accounts. And that’s how you find a very, very significant shift in the composition between RAM and corporate, which has not already touched 55%. So we will take your advice very, very seriously and move ahead in the coming years.
Unidentified Participant
So thanks, sir for very elaborate answer on that question. Sir, you covered my next question was which you — I mean you covered this point partly is a pan-India presence of you know our bank fundamental bank. Now you are saying that we have a lot of initiatives are being taken and the offices are being opened and you are already in fact almost about 45% of the total districts you are present there. Can I — can I have some data or numbers on our total credit dispersal credits in NCR, Punjab, Haryana in that area and the rest of India. Can we have that some ballpark, some number?
Swarup Kumar Saha
So I will not have the segregation of the numbers at this point of time. Between statewise segregation that I can share, my team will share it separately with you. But I can give you an overall figure that we are now having nearly more than INR13,000 crores of sanctions/in principal sanctions in-hand, which the pipeline now is increasing. So — and also, I’d like to tell you one more point here is that earlier, we were not having this tool with us on branch expansion, we are having a very, very customized tool, which allows us to understand district wise penetration of banking banks in a particular district. And we have customized data on which districts we are doing good, which districts we are not doing as good as the others.
And in which districts, we are not there, we opened in down south in Kerala where open — the opening gay business was more than INR100 crores. So that is the potential we are looking at while opening new branches. And while — and while we can do that, the opening of a branch, in fact, we have kept a separate vertical only to open new branches, rationalize new branches and monitor the branches — monitor the business in those new branches. So that is the structural changes also that we are bringing in so that we can penetrate deeper and deeper in the levels where we are not present at this point of time.
Unidentified Participant
Oh, yes, sir. That is a very, very good initiative and taking the bank really to India. Sir, what are your views on this co-lending and NBFC space where the now RBI is also permitted that you can go for NBFC funding even for non-priority sector onward lending or something like some kind of realization or something? Have you — are we working on that in this space to increase our book through either co-lending or through an NBFC lending so that we get much higher returns also whether our book also increases faster yes.
Swarup Kumar Saha
Yes. I think the — we have said this in our earlier interaction, we are using the co-lending model business — model of doing business to co-lending as per RBI guidelines in a big way. We have already reached a figure of INR3,300 crores of business both either retail or MSME in this in this area through co-lending. And now with the — and we have developed proper systems also in-place. And with RBI coming out with fresh guidelines on the non-prietary sector also, it shows that the model of business is very, very appropriate for lending in MSMEs and on the retail segment. So once we are waiting for the final circular to be issued by RBI and we will use this model of lending very, very effectively.
Till today, our experience in co-lending is highly satisfactory in the in the lending level we are at this point of time in out-of-the INR3,300 crores, our retail is around INR1,475 Crores and MSME is INR1,800 crores. Very limited delinquency. So our experience has been very healthy. Our conversion is only 30% of the leads that we get. So our due-diligence process is at a very highest-level. And once we get the final circular on the non-prietary segment, which is going to be issued RBI at any point of time, we’ll explore that and we’ll take it in our stride to expand our business in MSMEs as well and non-priety segment as well.
Unidentified Participant
Sir, will you throw some light on the overall recovery — I was in fact for the part of the time because of the connectivity issues. So the recovery from written-off account of the prospects in the year — FY ’26 and our overall written-off book what kind of percentage we expect every year to recover or maybe especially in the FY ’26 and what is the total overall recovery efforts and are either through, through NARCL in FY ’26, will you be able to give some color on that, sir?
Swarup Kumar Saha
Yeah, my idea, Mr Rajiva will take this question.
Rajeeva
So if you look at the recovery trend, over last four years, we have been recovering close to INR1,700 crores to INR2,000 crores. So last year we had approximately INR2,000 crores. This year we have recovered close to INR1,700 crores. Now in the written-off book, which is quite substantial, our book is almost INR7,000 crores and we have been recovering again almost 10% over last four years. So I believe that. So this year also out of INR7,495 crores, we have been able to recover INR821 crores, which is close to 11%. So we believe that there is lot of scope for recovery in return of accounts and that is likely to continue in future also.
And in FY ’26 also we expect recovery to cross 1,000 crores for certain and of course, it will be in-line with what we have been doing in the past two, three years. Oh, that’s great from the recovery from the written-off book is very, very good numbers again, you know, generally people give the guidance of 5% to 7% or 5% to 6%. So your efforts are really paying-off and you are doing well on this front.
Unidentified Participant
Sir, my last question in this round is around the treasury front. Like with the rate softening and there are expectations of some more rate cuts coming in, I think we are sitting in a very comfortable position. I think 6.35 is something it may go down to 3.11.5. So in FY ’26, are we — do we expect a bumper of profitability to be added from the treasury books, both by the sale of treasury assets?
And secondly, I think apart from the AFS book which goes to the results, what in trading as well as the security sale, which comes into profit. So whether you will be able to give some information on that.
Swarup Kumar Saha
Yeah, I’ve also already answered this question partially to a Mr Choksi earlier, but I’ll repeat it once again for you also. I appreciate, yes, the treasury is now in the softening stance and there are expectations of further rate cuts. So it is expected. And with the OMOs also being announced from time-to-time, there’s a lot of hope that there will be further — as liquidity also improves, there will also be softening of the yields. I don’t know whether I can Call-IT a bumper year for treasury, but what I can fairly say from our side is that the treasury contribution to the overall profitability of the bank will be much more than what was in the previous year. I think we can leave it at that point of time.
Unidentified Participant
And the question on AFS.
Swarup Kumar Saha
Sorry. I think you had another question on the AFS, yeah.
Unidentified Speaker
Sir, sir, if you see as per the new guidelines, the profit FPTR profit will be hit to account and AFS will general is up. So this year, we have a total MTM gain of INR55 — around INR56 crores that has contributed in the P&L account and around INR75 crores was — it has gone to generalism and it has increased our capital from that. So according to the yield movement this — this year, the figures of this year will depend upon the yield of the — and at the quarter-end, sir.
Unidentified Participant
Do we have a healthy book to generate some profit out of that?
Unidentified Speaker
Pardon, sir
Swarup Kumar Saha
We have a healthy book.
Unidentified Speaker
Yes, sir, yes, sir. Yes, sir. We have — sir, we have churned our portfolio according to this new guidelines also. So we are having a good portfolio. According to the market, we’ll definitely earn profit out of it, sir. Yes, sir. Sir, last about
Unidentified Participant
The active and in treasury for the trading profit.
Unidentified Speaker
Yes, sir. Yes, sir. Yes.
Swarup Kumar Saha
We are very active on trading.
Unidentified Speaker
Yeah, yeah. So we are churning our portfolio also. If you see in the March quarter, we have INR106 crore profit and total profit out-of-the trading — last quarter — last year was INR371 crores, sir. So we are hoping in the same line, sir. As the yield momentum, we do turn our profit also, I mean we are hopeful that it will be in-line with the last year only, sir and much more than that also, sir.
Unidentified Participant
Thank you very much, sir and all of you sir for having answered my queries so very well and giving a very elaborate presentation on the bank. And bank is really moving very fast now in the right direction.
And all the best to you, sir. Thanks a lot. Lot.
Swarup Kumar Saha
Thank you, Mr.
Operator
Thank you, sir. Our next question is from the line of Mr Omkar Shaman. Sir, please go-ahead with your question.
Unidentified Participant
Even sir. Thank you for this opportunity. Sir, my question, the government has planned to clear 30% 40% of unclaimed deposit held by public sector banks by FY ’26. Is it possible to successfully clear the large quantum of unclaimed deposits by FY ’26? And will this exercise also likely to result in these legitation? How our bank stands on this?
Swarup Kumar Saha
Are you talking of the — definitely. See, the unclaimed deposit is a regulatory — the migration of the unclaimed deposit to the debt fund is a regulatory phenomenon, which we comply with it. That is a amount that migrates to the RBI. But we also when the demand comes, we also get the returns from RBI very, very promptly. The efforts that are getting put in for our side is that we are — we are much before the accounts become eligible under this unclaimed deposit or debt fund, we are contacting the customers, we are trying to reach-out to them on various ways of media and through our digital — our channels of branch or digital or website.
And we made concerted efforts on that, but some of the legacy accounts that we are still having with maybe those will continue to migrate to the debt fund, but the efforts for — for the accounts not getting migrated is on a very, very-high scale. Our operations divisions works on that very, very closely and tries to touch base with as many as customers as possible and that’s why we are also getting request once sometimes when the accounts get transferred to the RBI we also get requests from it goes there to the RBI, then we get requests and we make the request to RBI, we get the money back.
So that’s a continuous process, but the migration of the old accounts will happen to a reasonable extent as we still go along. We will not be able to fully cover the entire amount that is there. We have already — so-far in our bank, we have already transferred around INR870 crores of money to the deaf fund Mr, are you there yes sir do you see any real bottom-line impact from this not really our this migration is happening every — on a periodic basis, it’s already factored in our overall strategy of things.
Unidentified Participant
Yeah. Okay. Also, my last question was, will there be any further capital-raising in FY ’26?
Swarup Kumar Saha
We have raised — as you must be knowing, we have raised capital by of QIP of INR1,219 crores in Q4 in March last quarter. And also before that, we had a INR3,000 crore of infra bond issuance. So our — we are adequately capitalized, but we will take a view on this after our post-results or our ICAP committee will work on this and maybe will analyze the situation to whether — how to go about it. But we will keep the doors open for raising further capital, but the assessment of it has still to be done. We are waiting for the completion of the results. Now we’ll go into the assessment mode. And at an appropriate time, all of you will come to know what is our plan for the capital-raising. It is — it is in the agenda, but at what time and at what point term, we will let you know at an appropriate time.
Unidentified Participant
Okay, that’s — thank you so much.
Swarup Kumar Saha
Thank you.
Unidentified Participant
Thank you.
Operator
Thank you, sir. Our next question is from the line of Mr Umeer. Sir, please go-ahead with your question
Unidentified Participant
Well, I congratulate all the team of Punjab and Sin Bank for the wonderful result. So I have a few questions. So the bank has achieved significant improvement in ROA that is standing at 0.79% and ROE at 12.4%. But how does the management plan to further enhance the profitability in FY ’26, particularly with respect to the cost optimization and improving the cost-to-income ratio, sir.
Swarup Kumar Saha
Yeah, yeah. See, as I said, the ROA, the substantial uptick in the ROA is also due to the one-off contribution that we got from one of the resolution in recovery, which increased our entire income — interest income and the other income by over INR460 crores. So that is a one-off transaction that has happened. But we feel that the overall — the situation is that we are also — if you see our provision coverage ratio has also shown an uptick from 89% plus to 91.38%. So we are also — we have also now provided adequately on the aging front at least up to December.
So our forward-looking initiative is like this that now while we have taken a substantial income due to the recovery, we have also ensured that our feature aging also requirement gets diluted slowly and slowly. And therefore, as of now, we have been able to provide the requirement of aging till December ’25. So a 3/4, we are moving a 3/4 ahead. So that’s how if there is any impact. And of course, we expect a good treasury year. We also expect that the recovery is — we have still some low-hanging fruits on the mid-corporate segment. Of course, the larger ones are more or less resolved for our bank.
We still have a segment between INR100 crores to INR300 crores of segments where we expect some resolution to happen, which will contribute to our bottom-line. We are also churning our balance sheet in a way in the corporate lending between the AAAs and the AAs. You will find that in this quarter also, the AAs have increased compared to the AAAs, which has decreased. And while maintaining the health of the portfolio, we also churn our balance sheet.
Our RAM segment, we are more than 57%, so that will give me a better yielding assets. We are concerning on gold loan, equipment finance, MSMEs, GST, educational loan, gold loan, these are some of the key areas. So overall, what we would like to say and of course, while there will be some correction on the on the advance income due to the repo, which is 47% of our total book at this point of time, we will also get some positive impact on the borrowing rates that are cooling down the rates on the CDs and the bulk deposits have also cooled down.
We have already reduced our term deposit rates on certain products. We had from 7.45% to 7.25%. We have reduced our savings account deposit rates by-10 bps in this period. So these moderations will — have also been — will also contribute. So in view of the — in this entire scenario, we expect that we will be able to this — the ROA annually is 0.67. So we’d like to — guidance on that part will be between 0.75 to 0.80. And of course, the resultant impact will be on the return-on-equity also.
Unidentified Participant
So thank you for the answer. So I have another question. Sir, with regard to your gross and net NPA ratios, which have been improved to 3.38% and 0.96%, surpassing your financial ’25 guidance. With regard to your financial year ’26 targets, that is less than 2.5% GNP and 0. Less than 0.75% net NPA, what are the specific measures or the sectors will be prioritized for the further NPA reduction, sir?
Swarup Kumar Saha
Yeah, Mr Rajiva, our ED will respond to that.
Rajeeva
So if you look at our numbers, of course, you rightly quoted, both GNPA and net NPA have gone down. Now this year we have been able to recover substantially from OTAs now to quote you some specific numbers, we got around INR317 crores as compared to INR101 crore last year. Of course, sale to was another big gain for us. So there are various strategies for reduction in NPA, which includes a one-time settlement, special schemes for handling agriculture cases.
Of course, from sale of properties in AC, we keep on getting some recovery. This year we have been able to get something around INR84 crores and sale to ARC. So there are various means we are deploying. So in a way, it’s increase in the awareness of the field-level as well as improvement in the recovery culture in the bank, we expect the downward trend in GNPA and net NPA in-line with the guidance that has given for FY ’26
Swarup Kumar Saha
Mr Omesh, are you there?
Unidentified Participant
Yes, sir. Yes, I’m here only. Thank you for the answer, sir congratulations once again. Thank you very much.
Swarup Kumar Saha
Thank you.
Operator
Thank you, sir. Our — we have got two questions on the chart, sir. May I go-ahead with a question?
Swarup Kumar Saha
Yeah, please.
Operator
The first question is from Ms Meira Mittal. Her question is the bank opened 52 new branches in FY ’25. What is your expansion plan for FY ’26, especially in semi-urban and rural markets.
Swarup Kumar Saha
Yeah, Mr Al Mehra will — ED will respond to this.
Ravi Mehra
Actually, this financial year, we plan to open 150 branches primarily into the southern state and Maharashtra, Andhra and all these areas, particularly Eastern Asian as well and majority of the branch will be the same urban areas.
Operator
Thank you, sir. Our next question is from Ms Sakshi. The actual RAM percentage to deposits slightly missed the guidance given for FY ’25. And now the guidance for FY ’26 is greater than 57%. What are the plans to push this over the 57% mark in FY ’26 and what are the top priorities for FY ’26?
Ravi Mehra
Yeah, Ravi decide again. For this particular financial year, as we have given the guidance of 57% and more in the RAM segment, we definitely want to focus on few particular segments like MSME and home loans as well. We are also open to more channel partners with regard to the co-lending and DE assignments. And as we are going to open up more branches in the districts where we don’t have any presence and we have also opened some more than 12 mid-corporate branches this year as well.
So hopefully, we’ll be able to surpass this guidance given.
Operator
Thank you, sir. As there are no further questions from the participants, we now conclude this conference. Should you have any further queries, please reach-out to Ms Salman at 99306-25-104 or one at densu.com. Details are mentioned in the WebEx chat and the analyst invitation sent to you earlier. On behalf of Punjab and, I thank each one of you for joining the conference call today.
You may now disconnect the lines. Thank you.
Swarup Kumar Saha
Thank you,.
Operator
Have a good day.
Swarup Kumar Saha
Thank you everybody for joining this call. Thank you.
Operator
Thank you, sir