THE KARUR VYSYA BANK LIMITED (NSE: KARURVYSYA) Q3 2026 Earnings Call dated Jan. 23, 2026
Corporate Participants:
Ramesh Babu — CEO
Analysts:
Jai Mundhra — Analyst
Rohan Mandora — Analyst
Param Subramanian — Analyst
Jignesh Shiral — Analyst
Presentation:
operator
Ladies and gentlemen. Good day and welcome to the Q3FY26 earnings conference call of the Karur Vaishya Bank. We have with us today the management team of KVB represented by Mr. Ramesh Babu, M.D. and CEO Mr. Shankar Balabhadra Patroni, Executive Director, Mr. Chandrasekharan, Chief Operating Officer and Mr. Ram Shankar, CFO. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing Star then zero on your touchtone phone.
Please note that this conference is being recorded. I now hand the conference over to Mr. B. Ramesh Babu, MD and CEO to take us through the highlights of the quarter gone by. After which we will open the floor for questions. Thank you. And over to you sir.
Ramesh Babu — CEO
Thank you. Thank you very much. Good evening to all of you. On behalf of Karur Vaisha Bank, I would like to extend a cordial welcome to all participants joining our Q3 earnings call for the financial year 26. Our financial results and the accompanying presentation are available on our website and we trust you have reviewed them prior to this meeting. As discussed during our previous call, we maintain a cautiously optimistic outlook while underscoring the importance of managing margin pressures and diligently monitoring asset quality. Our current performance indicators remain aligned with the guidance previously issued. The stability across all three key metrics, growth, profitability and asset quality demonstrate the sustained robustness and resilience of our operations since the beginning of the year.
As of 31st December 2025, the Bank’s total business reached 2,11,647 crore reflecting our sustained growth momentum in the third quarter with an overall business increase of 4% quarter on quarter and an year on year increase by 16%. Advances rose to Rs. 97,052 crore representing a growth of 5% quarter on quarter while deposits increased to 1,14,595 crore achieving a quarter on quarter growth rate of 4%. Advance and deposits grew by 17% and 16% respectively on year on year basis. Business mix remained same with ramp verticals constituting 86% of the business while corporate banking 14% of the business ram verticals grew by 4% quarter on quarter basis and 19% on year.
On year basis, commercial business constituted 36% followed by retail at 26 and ABG constituting 24%. Retail advances rose by 6% quarter on quarter, largely attributable to the growth in jail loans and mortgage loans. The collaboration between the branch channel and open market channel demonstrated ongoing progress reflected in a 14% increase in mortgage loan volumes during the quarter. Early asset bookings are facilitating steady interest income generation throughout the years. Given the low yields and heightened competition, we have mellowed down towards housing loans and vehicle loans. The commercial business segment recorded 3% growth over the previous quarter.
Disbursements in the commercial segment increased by 21% year on year. To enhance MSME business, we have launched the Small Business Group relationship model across 79 branches identified for their growth potential. In this segment, relationship managers are tasked with acquiring new small business customers, ensuring quality disbursals and sustained customer engagement through the financial year end. Before transferring the relationship to the branches under commercial segment, we had also exited few weaker accounts. Consciously conscious of acquisition of accounts both in terms of quality and pricing, allowed few accounts to be taken over by others due to lower pricing which did not fit into scheme of things for our bank.
We had also witnessed lower utilizations in sectors like textiles during the quarter. Our focus on commercial continues and also our approach of balancing risk reward continued during this quarter too. The agricultural loan portfolio experienced a 4% growth during the quarter. Agri jewel loans accounted for 91% of the portfolio while other agriculture loans comprised of remaining 9%. The loan to value ratio for agri jewel loans is at 55.59% demonstrating adequate margin availability. Our continued focus on improving the TAT and customer connect have supported us in agriculture portfolio growing at 4% during the quarter. Despite competition. As the portfolio is growing and gold prices are also soaring, we are mindful of maintaining higher margin and we have also strengthened our monitoring mechanism to address inherent risks if any.
The corporate Portfolio recorded a 6% quarter on quarter growth despite the current interest rate environment, presenting challenges for expanding the corporate portfolio. We have identified opportunities in select segments such as commercial real estate, capital markets, EPC, contractors etc. These areas enable continued portfolio growth while maintaining the desired spread and aligning the bank risk appetite. Our corporate advances portfolio inclusive of credit substitutes grew by 6% during the quarter registered a 14% year on year increase. The bank’s liability business constitutes to 54% of the total business of the bank. Total deposits increased by 4% during the third quarter driven by gains in both retail term deposits and CASA.
CASA balances grew by 2% over the same period. Demand deposits grew by 1% and savings deposits grew by additionally more than the anticipated end of the quarter. Inflows into the current accounts further supported overall deposit growth. Our strategy to prioritize higher balance variance in savings accounts through both branch and sales channels is showing positive results with year on year growth of 6% in savings account balances for new to bank customers. Similarly, new to bank current accounts value also increased by 10% year on year. Retail deposits grew by 2% during the quarter, a flat growth reflecting the competition in sourcing of deposits and these deposits grew by 13% year on year.
With respect to net interest margins, we previously provided guidance in the range of 3.7 to 3.75 for financial year 2526. I am pleased to announce that we successfully navigated the quarter achieving an expansion in margins to 3.99%. This represents a 22 basis points increase from the prior quarter primarily driven by a 16 basis points reduction in cost of funds and 6 basis points increase in yield of funds. The cost of deposits reduced by 13 basis points on a sequential basis as major part of the deposits are repriced during the quarter. The yield on advances increased by one basis point during the quarter.
We were able to stem the reduction by improving our fixed rate loans in our asset portfolio mix. Our fixed rate loan book which was at 15 in total book as at the end of September have now increased to 23% at the end of December 25th. MCLR loan book has reduced from 29% to 20% during the same period. EBLR book increased from 54% to 55%. Yield on investments improved by 4 basis points during the quarter. This was primarily due to reinvestment and incremental deployment being made at higher yields with a preference for SDLs offering better spreads over central government securities.
Additionally, a selective increase in the NSLR portfolio contributed to the overall enhancement in portfolio yields. Our NIM YTD is 3.88, that is excluding one off item of the quarter. 2. Considering the rate cut of 0.25% in December which would have full effect in Q4, we expect NIM for the full year to be in the range of 3.9 to 3.95. That’s what we presume we need to look at it. Operating profit for the quarter was at 1005 crore representing a 23% increase compared to the same quarter in the prior year. While the Sequential figure appears lower.
Excluding the one time interest recovery of 139 crores in Q2 which will result in a growth rate of 14%. Non interest income for the period stood at 509 crores. Recovery from written off accounts amounted to 179 crore during the quarter we had guided recoveries from written off accounts would be around 600 crores for the full year and we have achieved 601 crore till the end of December. Including the interest recovery. We had made income by way of sale of PSLC certificates amounting to 3.35 crores during the quarter and totally 14.06 crores till the end of nine month period.
Our income from Bank Assurance was 133 crores YTD as against 99 crores achieved during the previous year, a growth of 33%. We are continuing our focus on improving our income from bank assurance and non fud based business. Our operating expenses for the quarter stood at 743 crore representing a sequential decline of 14 crore. Establishment expenses, salaries and allowances remained flat quarter on quarter. With respect to the new labor codes, we have assessed the impact of these changes to the extent possible and have made an incremental provision of 1.64 crores during the quarter. The cost to income ratio for the nine months period ended was 43.98% which remains within the guided range of less than 50%.
Net profit for the quarter is at 689.96 crore, an increase of 20% quarter on quarter and 25% year on year. Fresh slippages for the quarter are 154.14 crore. That comes to 0.63% on an annualized basis compared to 350 crore in the preceding quarter. SMA 30 plus levels have come down to 0.24% from 0.27% of the previous quarter and this is for the whole portfolio. That’s what all verticals are covered. Here it is 0.24 and we are confident in our ability to maintain the slippage ratio below 1% levels. As we have previously indicated during the quarter under review an allocation of 114 crore was made towards the NPA migrations.
NPA migrations comes to 81 crore. Standard assets comes to 17 crore and restructure and other advances 16 crore resulting in an annualized credit cost of 0.47% for the quarter and 0.67% for the nine month period ended 31st December 2025. Our gross NPA has slightly decreased from 0.76% to 0.71%. Our net NPA remains steady at 0.19%. The proportion of standard restructured loan portfolio has further decreased to 0.45% of our total loans and continues to perform satisfactorily. At present we do not anticipate any significant setbacks or slippages within this segment. Notably, a substantial portion is secured by collateral and we maintain a provision of 44% for this portfolio.
Our unsecured portfolio is only 1.91% of the total advances here we wish to mention saying that so without increasing the unsecured advances to 5% and 10% we are able to manage rest of the parameters and we are able to get this NIM of 3.99%. The ROA for the quarter stands at 2.05%, improved from 1.81% sequentially and 1.87% for the nine month period. Our car Vasal 3 continues to be healthy and is at 16.05% without reckoning the current year profit that provides us comfortable headroom for growth. Our liquidity coverage ratio continues to be well above the regulatory requirement of 100%.
We had opened 10 branches in the nine month period ended comprising of seven light branches and three regular branches. We have planned to open another six branches in the last quarter of the year. I would like to touch upon some of the new initiatives which the bank is working on now. We are in the process of revamping our credit card business and likely to launch with new variants by the end of this quarter. But we will grow in a measured way and we will look at various factors then only we will scale it up. We have started affordable housing loans in a small manner and we are in the final stages of technical integration with a co lending partner also in addition to the lending otherwise we have planned for the affordable housing and in this segment now our MFI portfolio stands at 207.83 crores as at the end of 31st December reduced from 333 crores since 31st December 2024.
The MFIN guardrails introduced by the self regulatory organizations have encouraged MLIs to adopt more prudent quality conscious lending practices prioritizing risk management and long term portfolio stability. The past concerns about multi lender risk and delinquency have been addressed to a great extent. The bank is in a better position to manage and ramp up the portfolio when the segment picked up again in the next year. So all of you know that from April onwards we started covering under the guarantee cover. So all fresh exposures are covered under the guarantee cover. I would like to express my sincere gratitude to all the investors, analysts and stakeholders for their continued confidence and ongoing support.
We are committed to upholding this trust through continued strong performance in the future. To sum up our guidance for credit growth of above 2% of the industry growth continues for the whole year. NIM for the full year will be in the range of 3.9 to 3.95. ROA expected to be above 1.85. Gross net NPA is expected to be less than 1.5% and net NPA to be less than 1%. Slippages to be less than 1% of our book. Before I conclude, I wish to convey that. So December 2020 our net profit was 35 crores and 5 years.
December 2025 our net profit is slightly short of 10 crores 700 crores which has grown by 20 times during this 5 years. I sincerely thank each one of you. Many of you have given tons of guidance to us. And they have been giving us feedback also. All this has helped us to perform this journey. We are grateful to each one of you for this wonderful journey. How you have helped us. So now I will be glad to respond to your questions. Thank you.
Questions and Answers:
operator
Thank you very much, sir. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press star and two participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We’ll take a first question from the line of Jai Mundra from ICICI Securities. Please go ahead.
Jai Mundhra
Yeah. Hi. Good evening sir. And congratulations on a fantastic number. Sir, my first question is on nii, right. So last quarter we had said that cost of deposit may not decline as much. Whereas there was anyway pressure on yields. You mentioned the change in the loan mix in terms of floating, fixed etc. But apart from that was there any other one off any other, you know, non business as usual thing which would have added either interest income or cost of deposit.
Ramesh Babu
Jay, thank you very much for the good words. Nothing actually because I’ll tell you, last time also when we were mentioning when we looked at our repricing of the deposit. Major chunk of the deposits have come up in this quarter for the repricing that has really helped us to reprice the deposit. Other than that no one off item like last quarter to what we had thing is there you also know how much of importance we give for the transparency. Last quarter also then it was there. We have shown everywhere with and without. If had we had that sort of a number this time you would have definitely shown there is absolutely no one off.
It is absolutely the threat. Sure.
Jai Mundhra
No, no. I, I, I, I trusted so. But the number looks incredibly good. So that is that was the question.
Ramesh Babu
Also the reason is lot of emphasis is given on the yields. Suppose there is very absolutely it is very easy to grow the top line because many banks they are offering competitive rates and all had we given those rates we would have grown. So we have compromised to some extent on the growth of the advances. Because other side when there is an issue issue as far as deposits is concerned, you cannot be so liberal in the pricing. So every committee, every committee headed by Ed cgm, everyone including the board level committees, they are appreciative of the fact that risk reward needs to be maintained.
That helped us a lot.
Jai Mundhra
Right? Sir, enter this fixed to floating to fixed rate is mainly gold, right? And it may continue considering we have a lot of gold loan portfolio, right? So as on when it gets renewed it can, it can be converted.
Ramesh Babu
That’s the reason you have seen that. So the gold loan portfolio even after we made it fixed so there is no dip. The same tempo is continuing here. The differentiator is the customer connect and the TAT what our branches and the counter teams they maintain that is helping us a lot to continue the growth with the fixed rate at a higher rate. That also. Right.
Jai Mundhra
So enter as you guided that ROA will be above 1.85%. So and as you mentioned, there is no one off sort of a thing and there are no asset quality risk on horizon. This is now a step up, right? Earlier we were saying 1.6, 1.65. Now this is clearly we are on the next level in terms of ROI trajectory as of now.
Ramesh Babu
It looks like that. It looks like that actually because when we are focusing on what we are supposed to do, the numbers have derived from the efforts what we have made. But now if you look at it, everything is more or less organically what all we have done no one off and nothing has come here. Right.
Jai Mundhra
Sir, sir, two questions more. One is any quantum of the this have any customer of ours who are into exporting thing, have they come and ask for any dispensation or under that trade relief measure or any. I mean last time you had given some number in terms of how sensitive Is the portfolio anything quantification there?
Ramesh Babu
Yeah, in fact only one customer out of the entire lot. They have come and they ask for a very small portion of that. They ask for dispensation for the benefit of others also. I’ll just share what is happening on the ground and we have been continuously in touch with the exporters who are dealing with exporters and currently none of them they have approached us for an additional funding or any sort of issues when we are talking to them also they said that so big firms in US still they are continuing and few of them. They also mentioned that up to March 2026 their order book is there.
So diversifying into other countries is not that easy though we may think of that because US offers scale and other countries are there. Each one they have a customization small, small quantities need to be manufactured. So that’s why this sort of a course correction will take some time. But good thing is the customers have that sort of a strength. They are able to manage the show and all. So we didn’t find any issues even for the dispensation also as on day.
Jai Mundhra
Right sir, and my last question is sir, on your term extension. Right. So we are now six months ahead of the broadly six months behind this thing. Just wanted to check sir, when. I mean has the board has your proposal. I mean when, when does the board send the name to RBI and you know if you can clarify anything from your intent. I’m not asking to speculate on the regulator but your term extension sir.
Ramesh Babu
Thank you. No, no, Jay, I think you have not seen five o’. Clock. We have already uploaded in the stock exchange about my extension.
Jai Mundhra
Okay, sorry sir, I missed that. Okay, thanks a lot.
Ramesh Babu
Board has. Board has, let me be very frank with all of you. Board have been insisting for a three year term extension for me and they are very comfortable. They were saying. Saying that I need to take it. So then I felt saying that because I need to balance the bank as well as my personal commitments also. So finally I took a call for an extension of two years that will practically if you look at it two and a half years from now onwards. So I will be continuing there and all in the meanwhile what all other things are there for the summer.
All these things will be taken care of for the transition and all. So that way five o’ clock we have uploaded about my extent for two years and RBA will be approached and for the approval.
Jai Mundhra
Right sir, Thanks a lot and all the very best sir.
Ramesh Babu
Thank you. Thank you Jay. Thanks.
operator
Thank you. We’ll take Our next question from the line of Rick and Shah from iifl, please go ahead.
Jai Mundhra
Good evening sir and congratulations on again one more quarter of good numbers. So just two questions. The first one is on yield on advances. Even adjusted for the one off in the last quarter, the yield on advances are broadly stable. So have you not seen any pricing pressure or even repricing of the earlier repo rate cuts or MCLR into your loan mix? Or is it the mix is changing favorably which is why you are able to sustain your advance yields. So that’s the first one and the second one is given that Agribook has been a reasonably big book and we have seen some large private banks seeing some regulatory actions taken against the PSL classification.
So if you could talk about what is the issue at hand and whether that is something that even we need to watch out here. Thank you.
Ramesh Babu
Thank you. Thank you Rickett. Thank you. First thing is regarding the yield and advances. What you said is correct. Because last we leave the December rate cut September 6th, more or less first week, second week, all our earlier loans got repriced. So that way we felt saying that second quarter is concerned at least few months we have got the benefit of interest at a higher rate. But Whereas in the third quarter from October 1st onwards we were getting at a lower rate only ideally, had we left it that way, we would have got a hit.
But what we did some of the low yielding accounts, what all are there either exiting or engaging with them for a higher pricing. And not only that, shifting the rates, floating to fixed rate at a higher rate, all these things have supported us. So that way we are able to maintain 9.76 to 9.77 same levels we are able to maintain that. But next quarter, if you look at it so it may not be the same way because this 25 basis point rate cut of December will kick in. So we need to see how it works out there.
Coming to the ABG is concerned agriculture. So our 91% of the portfolio is agriculture jewel loans last year. Luckily Reserve bank of India has consolidated and gave a clarity. And later when banks have represented they have given so many relaxations on that. So up to some amount actually you need not do these things and all. So we have followed all those things and April 1st onwards all these guidelines will kick in. But in the meanwhile also what all is required we are working on that. And I can tell you before the RBI guidelines itself, even for the gold loans more than one 1.5 years back itself we started working.
So like background check, verification, the Document what they have centralized teams, creation of all these things and all so whether the scale of finance is followed all these things even for the gold loans also we started that is the reason as and when the RBI guidelines have come it was relatively easier for us to seamlessly to migrate to the new system. So that way internally we have been looking at this particular point and all we feel we are in line with the guidelines.
Jai Mundhra
Got it, sir. And no issues regarding the tagging of the PSLs or the end use.
Ramesh Babu
Nothing, nothing, Nothing. There.
Jai Mundhra
Perfect.
Ramesh Babu
Thank you very much, sir.
Jai Mundhra
Thank you Rick. And thank you.
operator
Thank you. We’ll take our next question from the line of Suraj Das from Sundaram Mutual fund. Please go ahead. Since there is no response, we’ll move on to the next question. The next question is from the line of Rohan Mandora from Equirus Securities. Please go ahead.
Rohan Mandora
Good evening sir. Thanks for the opportunity and congrats on good set of numbers. Sir, you made a comment that on the deposit side a good amount of repricing is done. But if I look at the peak TD rates we had seen a good cut of around 65 odd basis points from May to July. So should the repricing of this not be there in the forthcoming two quarters? Just trying to understand how the cost of funds can move incrementally Here I agree with you.
Ramesh Babu
Yes, it may not move the same way the benefit what we have got because when we bucket it quarter wise, what all the accounts, what are the deposits to be repriced so it got bunched up majority because we started a product like 400, 444 days those sort of products when we have launched one and half years back they got majority matured in this quarter. That’s why we could get the benefit of it next quarter onwards it will be normalcy. In fact when we look at it there are few deposits which are having a lower pricing than currently we are offering for a lower periods.
Those deposits if they get repriced we may have to pay a higher price on the deposit also. But that may not be much. But overall if you look at it what all the benefit we have got it in this quarter may not continue in the next quarter for the deposits cost.
Rohan Mandora
So any quantification what proportion of our term deposits would have repriced this quarter?
Ramesh Babu
This quarter around 20% something like that got repriced 2500 term TDs huh?
Rohan Mandora
Sure. And so second is on the technical right of pool like what is outstanding number and what kind of recoveries can we expect in FY27.
Ramesh Babu
No, I agreed. But I’ll tell you it’s slightly a deceptive thing of thinking because the technical rate of accounts are there with nclt. So you will not have any visibility when the money will come out because legal proceedings are going on. And second thing, even if finally NCLT these things come out also how much is the value you are going to get out of? That is also not known. So that is why what we are doing, wherever these sort of securities are there, where we are able to get the court orders, we are expirating the codes also for taking the physical position on a running basis.
We have put special teams on this job and getting that. And we have put teams for the asset disposal also. One, we have put a team for the legal centralized legal team. They are exclusively working on expediting the legal cases and getting the physical position. Second side asset disposal team also we have created and these two. That way wherever assets are there, our focus is on that. And we are trying to push them giving a fixed number like an advances how much you can roll deposit. Because there are so many ifs and buts are there which are not able to control.
So we may not be able to give any guidance on that number at this stage for 27. But this year we had some sort of a visibility. That is the reason around first quarter and second quarter when this number has been asked by one of the analysts we are told around 600. We are on track as far as that guidance is concerned.
Rohan Mandora
Right. But from a pool outstanding perspective, what would that number be?
Ramesh Babu
The pool outstanding? That’s what I’m saying. Suppose the securities what all are available can be around 2,500 crores. Let us assume where landed properties are available. The point is the moment you go for that there can be an injunction. So then it gets stuck. So that way straight away you cannot say the 2500 crore this year I’ll get 1500 crore. It’s not like that. Because legality issues are there and all. So so many things we need to work out what best can be done to salvage and get the money. We are on the job.
Rohan Mandora
Got it? Good. Because. Because. So this 1.85% plus guidance, does it hold for FY27 as well? ROA.
Ramesh Babu
No, no. 27. I have not yet spoken anything. Still we are in 26. Let us get the 26 numbers. March when with the march numbers when we come, we will spell out what all our thoughts on the guidance.
Rohan Mandora
Sure, sure.
Ramesh Babu
Thank you.
Rohan Mandora
Sure sir. Thanks a lot.
Ramesh Babu
Thank you.
operator
Thank you before we take the next question, would like to remind participants to ask a question. Please press star n1 on your phone. Next question is from the line of Param Subramanian from Investec. Please go ahead.
Param Subramanian
Yeah. Hi sir, thanks for the opportunity and congrats on the quarter. Sir, I wanted to ask what is the LCR for this quarter and what is the impact of the LCR circular for us that flex from FY27.
Ramesh Babu
Yeah, I agree. But you see in my initial statement I mentioned we are always above 100. It hovers around 120 and 133%. 133%. But even if this sort of effect is there it can be around 5 basis points.
Param Subramanian
Sorry sir, 133% was the average for last quarter.
Ramesh Babu
Not average. Average for last quarter is 133. If this effect is there, it can be around 5 basis points here and there can happen 2 to 3%. 2 to 3%. Sorry, not basis points. Percentage. Percentage. 2 to 3 base percentage can come down. You take it that way. 5% on upper limit. You take it that way which can have a bearing.
Param Subramanian
Okay sir, so 133 so can fall by 2.3 percentage point. And last quarter you were at 135%. So it has not fallen much your NCR in this quarter.
Ramesh Babu
Two to quarter three are talking.
Param Subramanian
Yes, yes, yes.
Ramesh Babu
Yeah, yeah. True, true.
Param Subramanian
Okay. Okay. And sir, have any of your exposures across exporters have they seen, have any of them taken the moratorium benefit from.
Ramesh Babu
RBI or even that is moratorium actually when small benefit only one customer, very small account they have taken it. Other than that no one has approached us also.
Param Subramanian
Okay. Okay. And sir, could you talk a little bit about say your loan growth outlook sir for. For next year. So we are doing it is too.
Ramesh Babu
Early because the reason is every quarter we need to pass through the question is not the question of growing in the loan book. All loan vertical engines are firing now whether we will be able to fund them with proper, proper raw material. Understand? Suppose if you give half a percent more on the deposit you will be able to raise money. Then it doesn’t look nice having taken a bearing on the margins and this sort of a money. So if you are able to get the proper money which we can deploy. Actually loan verticals are fine.
So we need to work more on the deposits front to get the to fund these loan verticals. That’s it.
Param Subramanian
But you are very comfortable at an NCR of 133%. I mean you’re way above the Private bank, peer.
Ramesh Babu
So I mean deposits thing. Not only lcr, you have a CD ratio also. You have to keep in mind. So various things are there within which you need to balance that way. So that is the reason we have also started seeing. We started investing in the trade substitutes, these NCDs. We have started pushing that there also. So various things. What can be done? We are doing. So let us see. But next year this thing we will see next quarter when the quarter end results will come. We will give a guidance for that.
Param Subramanian
Okay, great. Sir, thank you so much. And congratulations on your tenure extension, sir. Thank you.
Ramesh Babu
Thank you. Thank you. Thank you, Farah. Thank you.
operator
Yeah, thank you. We’ll take our next question from the line of Param Subramanian from Investec from MK Global. Please go ahead, sir.
Param Subramanian
Congratulations on a great set of results. And you know, two years extension that you have taken. We would have loved to have you for more years. But nevertheless. So what is a succession plan that bank is looking at whether we will. Today 5 o’ clock only we have uploaded. You are talking about succession. Give some time here. So when I think you would have asked for a two year extension, I.
Ramesh Babu
Think there would have been board and myself will sit together, will plan for that two and half years time is there from now because it’s 2028 July end of July. So that way enough time is there. Don’t worry. Absolutely will be taken care of. So it will be absolutely seamless. Don’t worry on that.
Param Subramanian
Because I think City Union bank also had a similar situation and they already CEO and you know, they have done it pretty smooth. We expect that also to happen with Karu Asha back. That is what we would request.
Ramesh Babu
We’ll do that. We’ll do that. Don’t worry on that. Yeah, please.
Param Subramanian
Yeah, sure, sure. So secondly, we have been growing a lab book meaningfully. So what is basically driving that book is it that we have become more aggressive? Is the market basically opened up for us. We have hired someone. If you could just basically talk about the lab book. That was very helpful.
Ramesh Babu
No, no, you see lab book actually market opening up, it patted four, five years back itself when we have experimented with NIO and open market channel. We have done that later. What we did, the learnings, what we have got in the vertical, we started institutionalizing them in the branches also. In addition to that, what we did, we have started around 20 branches on mortgage focused branches. The existing branches, wherever focus is there. We started mobilizing LAP and other loans related to mortgage loans in these branches. And to some extent so the good practices of the OMC channel have been brought into these branches.
After that few more branches we have identified in a blended model, we are going for that. So that way the number of branches as well as the acquisition teams which are working on this have been going up year on year. So that is showing up in the lab book.
Param Subramanian
That’s. That’s helpful. Thanks a lot sir.
Ramesh Babu
Thank you. Thank you Anand. Thank you.
operator
Thank you. Next question is from the line of part Gurtka from 361 Capital. Please go ahead.
Jai Mundhra
Yeah. Hi sir. Thanks a lot for the opportunity. Sir, what’s happened?
Ramesh Babu
It’s been de growing on a quarter. On quarter basis for last several quarters. Your voice got broken. Yeah. Hi sir.
Jai Mundhra
I’ll repeat myself sir. Within the vehicle book it’s been de growing on a quarter on quarter basis for the last several quarters. I can give a guidance to you for the next year also. Okay. It’ll degrow subsequently also the reason is very simple. When the rates were there actually at a high level also. So that is a case where the delinquency levels are high and Absolutely. The capital cost is 150%. And with these things the LGD is also high loss given default. Once you possess repossess a vehicle, sell it with all these things and the upfront commission what you need to pay to the dealer which you need to amortize over a period of time with all these things we thought if we have a better avenue for deploying the fund, it is better we do that.
But when the deposits business is absolutely for growth itself is difficult for many bank. When we are able to have other alternative deployment avenues, we didn’t go for that. So now if the rates are the lowest, it doesn’t make much sense to go for a fixed rate loan at such a lowest rate for three years, four years, five years. So we may not evince much focus on the vehicle loan for some more time. Sure, sir. And my next question is what proportion of your deposits reprice in Q4 reprice downwards. I mean. Between 10 to 15% I think lower side also you can think around 10%. You can think of that because last quarter only 20 to 25% was there. That sort of a number is not there in this quarter. And above that what I told in the earlier response also you would have seen there are few deposits with lower pricing than currently we are offering. They are also getting repriced. So on those cases you may have to pay the current pricing also. So overall net. Net that is a very small portion. I am saying that but overall the benefit what we have got in quarter three, we may not be able to get in quarter four.
Sure, sir.
Param Subramanian
Thanks. And my last question is also borrowings have gone up on a QQ basis. Substantially.
Ramesh Babu
Despite we seeing good deposit growth. So anything to read into it. Now you see the question is simple. If the cost of borrowing is relatively cheaper than what I am raising as a deposit so it makes sense for us to borrow the money. And next thing suppose if you are investing in the credit substitutes and other things and all so naturally suppose both of them, they match each other that way. So you are able to make money from the borrowings as well as the investment treasury instruments what you have invested there. So that is only a tactical call to manage the treasury is nothing that nothing beyond that.
So if the deposits comes at a cheaper rate, definitely we’ll go for that. Okay. Okay, sir. So thanks a lot. Thank you. Thank you. Yeah.
operator
Thank you. Ladies and gentlemen, to ask a question please press star and one on your phone. Next question is from the line of Jignesh Shiral from Ambit Capital. Please go ahead.
Jignesh Shiral
Yeah, hi. Thank you sir. Thanks for the opportunity and congrats on a good set of numbers I just had on borrowings. I also had the same question but now that as you answered similar manner. So if we see your slippages, if I adjust for that 200 crore plus kind of slippage for last quarter that has happened from your two corporate accounts sequencing we are seeing this, the overall flagship pages have seen a kind of a surge. So can you just elaborate what is it exactly that are we seeing it? Which, which accounts or.
Ramesh Babu
No, no. Where did you find that search?
Jignesh Shiral
Yeah. So basically if last quarter slippages that to the there had been a two large accounts that we the two corporate accounts we have basically recognized. Right. And that basically. Yeah. So if I adjust for it then I’ll see that apart from it that if I adjust for it then sequential I’m seeing a kind of a rise. Is it coming up from again from corporates or how if you can give some color on the freshly business this.
Ramesh Babu
Quarter there is no slippage from the corporate major league. I’ll tell you so okay. It has come from rest of the RAM verticals only. It can be a commercial or somewhere some sort of an MFI accounts. What all is there earlier? What all 203 crore balance and all that will come up and also retail accounts would have come so but one thing we need to see see that majority slippages, what all they come up five years back and now there’s a difference. Five, seven years back these slippages were majority unsecured and corporate. Now even if the slippages they come up also they are more or less backed by security.
So do not now will be able to recover the money in a matter of one month and a half years. That way because you are equally active. So you don’t get worried because the slippages is absolutely under control. It is spread over all the verticals and there is no bunching up in a particular vertical.
Jignesh Shiral
Perfect. Secondly, even if you see so the write off pool, I mean total write offs that you have done during this quad, I mean this nine months that also seems to be little higher number. So any, any. Any particular thing? I mean any reason for it or how do we read into it?
Ramesh Babu
No, no, nothing. Nothing particular. What we did. Simple. You see, suppose if we have a gross NPA and we have money, we have provided for that. When good times are there, it is better we provide that. So automatically after reduction only you will show a net npa. So everyone knows what is a net npa, how much we have provided by just writing it off. Writing it off. Both on the asset side as well as a provision side. We are reducing it just to clean it up. In fact, in the whole process we are a loser because had we retained these numbers, our credit growth numbers would have been much better.
Because we are writing it off, we are a loser. Still what we felt is making a clean balance sheet is much better than showing a number for getting a credit growth and these sort of things.
Jignesh Shiral
Understood. Is it fair to assume that, you know, because it’s little looking higher than what your historical average has been. So is it fair to assume that this kind of trend will continue in coming periods or it is kind of.
Ramesh Babu
This year only point you would have seen Our total gross NPAs are in the range of 600, 650 and not write off the amounts. Also what you require. And our net NPA is below 200 crores. 400 crores are already been provided. So there is nothing needed to write off from now onwards. So it may mellow down from now onwards.
Jignesh Shiral
Understood? Understood. Secondly, sir, this all you already have answered. But our investment yields have been, you know, doing pretty. Pretty. I mean has been improving or remaining quite stronger. So this is to the shift that you are talking about, right? From G Sec to. And that’s the reason why this is. And this strategy is going to continue going forward as well?
Ramesh Babu
No, no, not only that. You see, one is G Sec to that second Thing when we started investing in the corporate bonds. Corporate bonds, which is fitting into our risk appetite. In fact, few of the corporate bonds they are our customers. Also, instead of taking an exposure as a cash credit or a term loan in our books, we have taken other side where the operating cost is relatively low and you are able to lock the funding there. Also you do not have the issue of a priority sector for the investments what you have made there and all.
So that way few other cases from this side we have booked there we are getting a better yield compared to placing the money in a G Sec.
Jignesh Shiral
Understood. Finally on the branches and the OPEX run, Sir, So we have added, you know, I think 10 branches. This, this, this nine months right out of its seven light branches and six more. You are you’re planning to add up in the info queue. Is this correct?
Ramesh Babu
Correct. Correct. Yeah. Right?
Jignesh Shiral
Yeah. So this is relatively lower what than what we have done it previous years.
Ramesh Babu
I agree with you. And I fully agree with you. What happened? We have been working on them, but we are not getting the suitable premises in few other locations. So to meet our target of branch opening, if we take some sort of a second rated premises and go for that, we need to live with that for the next 15, 20 years. That’s why we told saying that we will not compromise on the proper branch premises. Once we get that, then only we’ll go for that. So.
Jignesh Shiral
Okay, understood. So when we are saying that we are opening, say half of your branch addition, six or seven had been light branches and all. So even if I see your opex, other opex or more importantly your employee charge that looks almost flat sequentially, no major growth and all. So is it to do with this, you know, light branches and all or how do we see that?
Ramesh Babu
No, no light branches. Overall, if you look at it, the whole scheme of things, it’s 40 to 50 branches. So the tail will not be able to wag actually the dog that way. So this is a small portion of that we have done many things on. Also as far as staff expenses. These things are also productivity because the staff numbers, if you look at it, the staff numbers have plateaued and it is lower than the earlier numbers what all are there. So that way we look at it where productivity is not up to the mark.
We got out of them and the existing teams how to improve the productivity. We started working on that many measures. What we have taken are really working and showing in the numbers.
Jignesh Shiral
Perfect, that answers it. So can I get the number of employees as on date, as on December and Then as on date March, is it possible to get it?
Ramesh Babu
Yeah. So yeah, 9,700, 9,788 or something like that. Yeah, 9,700. You can take it. Yeah, that’s it.
Jignesh Shiral
Yeah, yeah that’s. That’s quite helpful sir. And thank you and all the best and congrats on your extension of two years, sir.
Ramesh Babu
Correct. Yeah. Thank you very much sir. Thank you.
operator
Thank you. Next question is from the line of Rohan Mandora from Equis Securities. Please go ahead sir.
Rohan Mandora
Thanks for the opportunity again. I wanted to know what was the treasury gain this quarter? What is that an outstanding effect? Treasury gains trading gains.
Ramesh Babu
Treasury trading gains. It is quite marginal here because we did too much activities. We didn’t sell many of the securities also because we thought when the pricings will come down and all at that time we can look at it. So that’s why we didn’t go back 16 crores. 16 crore. That is more or less last time also if you look at it, December, September was 6 crore. Now it is 16 crore. Last year December also if you see it was 18 crore. So it is more or less moving in the same range. Exactly.
Rohan Mandora
Sure sir. And sir, out of this 179crores of TW recovery what was the interest component?
Ramesh Babu
Yeah, this is all full, full normal. This unlike quarter two, it is not like that this time. So our interest numbers what we have shown are pure interest gain. What all we have we have actually earned.
Rohan Mandora
Okay. Hi sir, on slide 20, the discrete that you given investments. See if I look at the outstanding investments as of the quarter end and multiplied with the yield that you have given 6.64 that comes to almost 500 crores of interest income for the quarter. And we have reported 498 very close to that number. So obviously there would have been some moment of investment book and others. So just want to understand like what exactly happened in that portfolio because it’s like jumped very much on the interest on investment.
Ramesh Babu
That’s what I was mentioning. So one thing is rebalancing of the investment portfolio. What we have done which used to be there in the G Secs and all we have shifted somewhere where within our risk appetite what we can go for the SDLs. Second thing, so corporate book earlier which we were taking into our own loan book. We have those customers who have these sort of MCDs and Treasury instruments. We have booked the business there actually so that we are getting a better yield there and we are able to lock in and the operating cost is much lower and above all we have the benefit of the priority sector also for that.
So all these things supported us in a better yield on the investments.
Rohan Mandora
But the investment book would have been higher during the quarter. And there has been a runoff towards the end of the quarter. Is that something that would have happened?
Ramesh Babu
Investment book you see 30,156 now September ending it is 28,198. So that way if you look at it has gone up by 2000 crores.
Rohan Mandora
Yes, so. So that’s what I was saying. See 29,780 into 6.64 when we are taking the peak numbers. That is exactly correct.
Ramesh Babu
But how much is the investment income? We have got it.
Rohan Mandora
498 is what you are reporting.
Ramesh Babu
You cannot count these two numbers straight away. Because the average would be moving here and there. The pricing also the yield also must be moving here and there.
Rohan Mandora
Okay, so this is. So 640 is on the average.
Ramesh Babu
Otherwise one thing, I will do one thing. So CFO will work on that. We’ll come back to you on that.
Rohan Mandora
And so lastly. Yes sir. Lastly, do you have any refinance facilities?
Ramesh Babu
Yeah, we have the refinance. Because like suppose Nabard as well as sidb. Wherever these automated refinance facilities are there. To the extent possible we have been drawing the refinance.
Rohan Mandora
Sure. So what will outstanding or what?
Ramesh Babu
Ideally I may not be able to tell you that also our CFO will share with you. Okay.
Rohan Mandora
Sure sir. Sure sir. Thanks a lot.
Ramesh Babu
Thank you.
operator
Thank you. As there are no further questions from the participants I now hand the conference over to Mr. B. Ramesh Babu, MD and CEO for closing comments. Over to you, sir.
Ramesh Babu
So once again thank you all for the wonderful guidance, encouragement and the support given and all. So as assured whole team KVV will work for making the bank much more stronger and to meet the expectations of all of you. Thank you very much and good day to all of you. Thank you.
operator
Thank you sir. On behalf of the Karul Vaishya bank. That concludes this conference. Thank you for joining us. And you may now disconnect your lines.