THE KARUR VYSYA BANK LIMITED (NSE: KARURVYSYA) Q4 2025 Earnings Call dated May. 19, 2025
Corporate Participants:
Unidentified Speaker
B Ramesh Babu — Managing Director and Chief Executive Officer
Ramshankar R — Chief Financial Officer
Analysts:
Unidentified Participant
Jai Prakash Mundhra — Analyst
Akshat Agrawal — Analyst
Pritesh Bumb — Analyst
Akshay Badlani — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Q4FY25 earnings conference call of the Karur Vaishya Bank. We have with us today the management team of KVB represented by Mr. Ramesh Babu, MP and CEO, Mr. Natarajan Executive Director, Mr. Shankar Balabhadra Patroni, Executive Director, Mr. Chandrasekaran 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 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.
B Ramesh Babu — Managing Director and Chief Executive Officer
Thank you. Thank you very much. Good evening to all of you on behalf of Karur Vaishnav, I welcome you all to our bank earning call for the quarter four of the financial year 2025. We have uploaded our financial results along with the presentation on our website and I hope you have had a chance to go through it in detail ahead of this call before going to our performance. I heartily welcome Mr. Shankar Balabhadra Patani to the con call who has joined our bank as executive director. Mr. Shankar, a seasoned banker and a former DMD deputy managing director of State bank of India has more than 3.5 decades of professional banking experience in various areas in the banking domain.
We are pleased to share that our performance indicators are in line with our guidance that we had spelled out in the beginning of the financial year 2425. And it is encouraging to note that our consistent and inclusive performance well and well above our guidance on three metrics Growth, profitability and asset quality. The bank’s total business stands at 1 86,569 crore as on 31st March 25th as compared to previous year 1 63,536 crore registering a growth of 14%. The advances stand at 84,491 crores and deposits grew to 1 lakh 2078 crore with a growth of 14% each.
We had indicated at the beginning of the year with respect to business mix of our advances portfolio with more focus on RAM verticals In tune with that RAM verticals have grown by 20% year on year, that is 3% quarter on quarter constituting 86% of the overall advances portfolio. Commercial loan book increased its share to 36% and both retail and agriculture groups had a share of 25% each. The commercial business continued to grow at 21% over the previous year with significant contributions from various channels and various verticals during the year. In spite of various challenges, the Agriculture Loan book had a growth of 20% year on year, 6% quarter on quarter and achieved all the targets and subtargets under Priority Sector for all the quarters of the year and priority Sector advances as a percentage to AMBC as on 31st March 2025.
We are very cautious with our MFI portfolio which we ventured in a small way two years back. We have commenced covering under CGFMU from 1st April 2025. The total outstandings is currently only 0.37% of the overall portfolio. Though it is small, we are cautious in ramping up and shall wait for one or two quarters more. You are aware that we integrated Open Market Channel with Brand Channel as Consumer banking department assets at the beginning of the year. The synergy has resulted in growth of 18% during the year under review. Mortgage loans grew by 34% over last year.
The focus is more on cash flows rather than solely relying on the collateral. We have strengthened our monitoring mechanism using predictive analytics too to spot the stress much early. With the experience gained all along, we found it reasonable to ramp up this book as it is fully secured and offers a reasonable risk reward. Retail gold loans also grew by 61% and housing loans by 12% over previous year. Our co lending Amazon BNPL program is performing well and the book is around 844 crores. In view of the household elevated leverage, we are cautious in ramping up this book.
We have further tightened our onboarding norms to exercise caution. At present I shall review periodically to relax and to ramp up the book in due course as all enablers are in place. Corporate and institutional book had a degrowth of 14% during the year. This resonates with our indication during the quarterly calls. Our preference over margins than the top line growth prepayments and closures amounted to 12. 69 crore during the year. Also we have decided to wind up the precious metal division which we started in 2019 as it was not roa accretive. We had outstanding of 674 crores at the beginning of the year and reduced to 41 crores on 31st 2025.
The above factors resulted in de growth in corporate portfolio. However, the vertical explored investing in corporate instruments of corporates where lending margins were low as credit substitutes during the year and investments outstanding 350 crores were made as of the end of March 25th. This would continue for the coming year too. In view of the tightness in raising CASA resulting in elevated cost of deposits, lending to corporates still do not appear to be margin accretive. Hence, for the first half of 202526 also we may adopt same strategy to focus on RAM till proper mix of deposits comes back.
Transaction Banking Group continues to support the bank for a diversified portfolio and anchor stock corporate relationships. We are in the final stages of upgradation of the platform to meet the requirements of the business and we will focus on this area too in the periods to come. Our partnerships for co lending with NBFCs continue to perform well and the loan book under this segment is about 472 crores. We we have consciously lowered this book due to lower margins. We will ramp up once the mix of deposits returns to normalcy. As our ramp verticals are sustaining their organic growth momentum, we would keep this CO lending as secondary to our organic growth.
Our unsecured loan book is 2.22% of the total advances as at the end of 31st March which is very low among the peers. The low base offers us a tremendous opportunity to offer various personal loans and other products to those curated and tested customers of our BNPL book. Currently we will be low on this and we have this opportunity to grow with the partners in due course. The bank’s liability business constitutes to 55% of the total business of the bank with respect to liabilities financial year 2425 through many challenges like shift in customers preferences with respect to investment needs just in time disbursement of funds by the government departments.
This resulted in lot of pressure in sourcing liability business. Most of the banks launched special FD schemes for shorter periods. In spite of all these challenges, I am very happy to say that our deposit figure crossed landmark figure of 1 trillion during this year. Deposit growth continue to remain one of the key focus areas for the bank and you are aware that the bank had initiated various strategies for deposits including establishment of acquisition channel for both term deposit and CASA growth. Our term deposit growth during the year is a 20% the share of short term deposits for total deposits increased for all banks in the industry.
So we are not an exception. Our CASA grew by 3% over the previous year. Financial year 2425 was the first full year of our acquisition channel. The bank had also launched new variants in CASA products. This resulted in opening more than 19,000 accounts with balances. More than specific segments have been formed under CASA acquisition channel targeting institutional clients, corporate salary accounts, trade and forex customers. While our CASA acquisition numbers are progressing well, there is a depletion in the existing book on account of other opportunities available for the depositors resulting in lower growth under this segment.
Our asset verticals also have started mobilizing deposits as we introduce the self funding concept during the year with respect to margins. Financial year 2425 was an year where margins were under pressure throughout the year raising cost of funds. Expected rate cuts though happened only in the last quarter. Increasing floating rate asset book all kept the banks in tenterhooks throughout the year. Considering the above factors, we had indicated in the last call that our NIM would be around 3.85 at the exit quarter of the year. I’m happy to say that we were able to maintain NIM for the fourth quarter at 4.05% and for the full year at 4.09%.
NIM dropped during the year by 11 basis points from 4.2 during the our continued rebalancing of the portfolio with more focus on better yielding granular secured advances in RAM verticals has helped us to maintain the margin above 4% levels. The cost of deposits increased by 8 basis points sequentially as against 10 basis points guided by us in the last call. For the full year, cost of deposits was 5.61% showing an increase of 42 basis points from 5.19% of previous year. Yield on advances increased by 3 basis points during the quarter in spite of rate cut.
For the full year, yield on advances was 10.1915% showing an increase of 20 basis points from 9.95% of the previous year. Our continued efforts on rebalancing of the portfolio with focus on high yielding products falling within our risk appetite in ramp verticals has resulted in this growth. Yield on investments has increased by 14 basis points during the quarter. For the full year, yield on investments was at 6.61% showing an increase of 38 basis points from 6.23% of the previous year. Given our expectation that interest rates will stabilize at current levels or potentially decline slightly, we plan to maintain the current duration thereby rebalancing interest rate risk and investment returns.
We have achieved operating profit of 835 crore for the quarter and 3212 crore for the full year a growth of 20% over previous year. Our net profit touched a high of 513 crores for the quarter and 1942 crore for the full year. Our operating expenses for the quarter is at 764 crores. Establishment expenses was at 385 crores increased sequentially by 12 crores mainly on account of increase in pension obligations on account of drop in yields. Other opex increased to 379 crores from 357 crore sequentially mainly on account of increasing channel related fee, BSA commissions and tech related expenses.
For the full year under review OPEX has gone up by 9% over the previous year. For the quarter under review we have provided a sum of 136 crores towards NPA migrations, standard assets and prudential provisions and credit cost works out to 0.64% on an annualized basis as done in last three quarters we have provided a sum of 25 crores towards the prudential provisions and cumulative provision available under this is 100 crore. Our gross slippages during the quarter was at 179 crore and for the full year it was 482 crore which is 0.57% of our loan book.
SMA 30 plus numbers were at 254 crores as at 3132025 which is 0.3% of our loan book reduced from 0.38% of the previous year indicating continued maintenance of control over this aspect. With our persistent focus on recovery from technically written off books we were able to recover a sum of 182 crore during the quarter. Total recoveries during the year is 638 crore as against 341 crore of financial year 2324. Due to lower slippages, recoveries, upgrades and write off our gross and PA has come down to 0.76% or net NPA remains at a level of 0.2 and we would continue to maintain net NPA at less than 1% of our book.
Our standard restructured loan book is further reduced to 0.64% of the loan book and is performing well and we do not foresee any major setbacks or slippages from the book. Above all many of them are backed by the collateral and we were holding 41.24% provision for the set book. Our cost to income ratio for the quarter is 47.77% for the quarter and 47.25% for the full year which is within the guided range of below 50%. Our car Basel 3 continues to be healthy and is at 18.17% providing us comfortable headroom for growth. There may not be any need to raise money in financial year 2526 for the growth plan.
Our digital transactions grew by 115% in financial year 25 and the share of digital transactions stands at 98%. We have rolled out our new version of our mobile Delight app with enhanced features during the year. I am happy to say that the rating for the app is 4.7 in Google Play Store and 4.1 in Apple Store and there are 1.3 million monthly active users for our Delight app and 5 million downloads for our Delite app. We have achieved an ROA of 1.73 in this quarter. It could be noticed that our ROA has consistently improved from 0.19% in December 20 and grown sequentially in the last 21 quarters, which is the result of our concerted efforts in stimulating the various levers of ROA and enabled us to achieve this parameter well ahead of timelines.
I am happy to share that we have declared a dividend of 130% as against 120% last year and this is subject to shareholders approval. Now let me move on to what we intend to do in 2526. The financial landscape is witnessing a dramatic transformation globally as well as in India, driven by technological innovations, changing consumer preferences and emergence of alternative business models. The Reserve bank of India is expected to adopt a more accommodative monetary policy stands. This could involve further rate cuts to stimulate domestic demand and support economic growth. The sudden escalation at the border in the last few days has also added more uncertainties for the coming year.
Considering the above outlook for financial year 2526 remains cautiously optimistic. We need to navigate margin pressures too and monitor asset quality closely. We expect our credit growth to be more than 2% over the industry growth. Our RAM verticals would continue to sustain the momentum with an eye on the margins. Corporate book has come down by 14%. However, this is a temporary phenomena which would come back once liabilities pressure eases off a moment. Liability pressure the proper mix of liabilities Given our diversified corporate exposure to NBSCS and other corporate entities, we see merit in exploring freight opportunities through investment route, particularly in the corporate rated AA minus and below where risk adjusted returns remain attractive.
We would continue to look for credit substitutes opportunities in corporate vertical as we did last year. The credit growth would align with our growth in liabilities. We are sanguine that branch and sales acquisition channel would continue with greater rigor for sourcing the raw material and our branch channel team would put their efforts to maintain the balance in the the CD ratio would be maintained at around 85% levels during the coming year too. We have added 50 branches during financial year 2425, so 38 branches were light branches and 12 branches are regular branches. With respect to branch expansion for the current year, we have planned opening 19 light branches and nine regular branches before the end of first half of the current year, mostly in the southern and western part of the country.
We believe the peak in retail and wholesale deposit rates is now behind us and we are witnessing a decline in deposit rates accompanied by a drop in CD rates. Given the lagged impact of deposit cost movements, we anticipate decrease in the cost of deposits for the banks starting from the second quarter of this financial year with respect to margins as two more rate cuts are expected. We expect that NIM to be in the range of 3.7 to 3.75 for the full year. Our loan book comprise of eblr book of 52% and NCLR book up 37%.
Considering the uncertainties in the market, there will be fluctuations during the quarters. However, our endeavor is to maintain within the above range for the full year. Considering our branch expansion, additional manpower plant, our cost to income ratio would continue to be around 50% in 2526. Our efforts on recoveries would continue and we expect the momentum gained in the last year would be retained in financial year 26 too. GNP is expected to be less than 150 basis points and net NPA to be less than 1% for the full year. Slippages would be expected to be below 1% of our asset book.
We have achieved an ROI of 1.72 in financial year 25 and 1.73 for the last quarter quarter on quarter we have been improving this and our ROA was at above 1.5. Our ROI is at above 1.5 throughout all the quarters for the last two years. We expect with the reasons above we will continue to maintain our ROA. It will be in the range of 1.55 to 1.65. Renowned Warren Buffet recently mentioned when asked about on protecting progress, he mentioned the question is how do you keep it and how do you improve it? We want to protect the progress by focusing on margins which is the key to sustainable profitability and long term success.
It is a hallmark for the health and efficiency of bank’s operation. This does not mean Saying that we will be totally compromising on the top line. So as I said earlier, our top line growth under advances can be 2% above the industry. I am grateful to all investors, analysts and stakeholders for the confidence and continued support which we will reciprocate through our better performance in the days to come. Before I conclude, I would like to thank our ED, Mr. J. Natarajan who is debating office on Wednesday for his excellent support and guidance for the growth of the bank over the years.
On behalf of all, we wish him the best in all his future endeavors. Now I am glad to respond to your questions.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their digital 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 our first question from the line of Jai Mundra from ICICI Securities. Please go ahead.
Jai Prakash Mundhra
Yeah. Hi. Good evening sir. And congratulations on good numbers. Sir, few questions. First on gold loans, you said that you have closed down the precious division. Is it something to do with the new RBA circular? And you know, do you see any changes or fine tuning in your gold loan business basis? The recent draft guideline by rba.
B Ramesh Babu
Hi Jay. First of all, thanks for the greetings. And in fact these two are different sets of operations. What we are talking about the RBI jewel loans is what in the branches we dispense that will continue as we are doing both under agriculture as well as the retail segment. This was another segment which we have created precious metal. So giving a bullion loan to the manufacturers of jewelry. So that being because the margins are very few. And what we thought is it is not equivalent to the whole ROA. And above all on those lines where margins are low also you need to maintain a CD ratio on one side.
The deposit cost has gone up. It is not making much sense for us overall also. So that’s the reason. What we thought is there’s no point because last four, five years if you look at it, the overall book we have built is 650 crores. So that’s why we thought that. So let us focus on restaurant things and all we have come out that way. These two are altogether different.
Jai Prakash Mundhra
The detail business agree plus non agree. That should not have any material impact after the RBI drop circular, right? That there is no fine tuning that you need to do or any material thing Material changes that you need to do.
B Ramesh Babu
Yeah. In fact I’ll tell you RBA settler which the draft settler has come final settler is about to come. So one first good thing is all players will have the same platform now no one will have a differentiated platform that gives us a better edge and the major impact in the appraisal of the gold loan. What they say in the circular is you have to treat it as a production loan but the process can be elaborate and will consume both manpower and time. It will lead to a higher tat and for disposal of such loans currently if you are able to dispose of in 20 minutes it may take slightly higher time for that.
What we need to do we are planning to do is training the front end staff on the finer aspects of handling and appraisal of the production loans. Second thing is we want to develop user friendly templates to reduce the processing time and various technology interventions measures to reduce attack. So that way if we take these measures because this is not only for KBB, whole banking industry, NBSCs, everyone they need to pass through this one. So it may take two to three months for fixing all these things but we are reasonably confident it will not have a major bearing on the portfolio.
Jai Prakash Mundhra
Right? Sure sir. Secondly sir, on there is some 26 crores of NPI and other provisions. If you can just elaborate. Is this related to security receipts or is this related to some. I mean what exactly is that? And the bifurcation of other income? I mean core income you have given but non core fee. How much is recovery from write off or maybe treasury or some other line item.
Ramshankar R
This is the SRS which we received for the our existing NP account But it was a form of invitation investments based as the new circle. It has to be valued at one. So I have to in the base loan of salary NPA classification continues in the new form also. So we have to keep it as NPA only. So I have to make a provision for that investments. That’s what the provision is there Jay.
B Ramesh Babu
In fact coming to the recovery from write off in my inaugural guidance. So I have conveyed that quarter as well as year.
Jai Prakash Mundhra
Yes, no, but if you have this Number out of 245crores of other fee how much is recovery from TW or Treasury income separately?
Ramshankar R
182 is the recovery from that now for this quarter.
Jai Prakash Mundhra
Okay, sure. And lastly sir, you have given elaborate guidance on NIM and CNB range bound on roa. There is likely to be pressure on NIM as you have also mentioned. But is it fair to assume that the contingency that we are, that we are providing 100 crores which is roughly 8, 9 basis point ROA. That is. That is the buffer you have, right? I mean what I’m trying to understand is this ROA guidance. You have the flexibility or let’s say between choosing between contingency and roa. What would you prefer? So I mean contingency is flexibility or you think that you can continue to do contingency and still report ROE of.
1.5, 1.65,
Ramshankar R
any contingency whether we will be able to continue or not. Because the board has to take a call when the position is becoming tight on the margins front. So board will have to go and read them also on this point. So now the contingency for using this contingency, it is like a fire extinguisher. We want to use it as in when absolute necessity is there then we can use. In the meanwhile the bank is able to generate its own revenues in the normal course. It is better we meet from that and contingency will keep it aside.
So I am not saying that 25 crores with provision and without provision I cannot say on the point now. But going forward the need for contingency may not be there. That’s what the board has to take a call, right?
Jai Prakash Mundhra
Sure, sir. Thank you so much. I’ll come back.
B Ramesh Babu
Thank you. Thanks Jay. Thanks.
operator
Thank you. Ladies and gentlemen, to ask a question please press star and one on your phone. Now take our next question from the line of Akshat Agarwal from Smith. Please go ahead. Akshat, please unmute your microphone and go ahead with your question please.
Akshat Agrawal
Good evening sir. Thanks for the opportunity and congrats on a good set of numbers. So my first question is. My first question is on fee income growth. It was quite strong. Over 10, around 13% poq. So where is it coming from? Given. Given. We are like negative growth on corporate, right? So is it like to sustain going forward?
B Ramesh Babu
No. What do you mean by negative? What is the negative growth?
Akshat Agrawal
The corporate lending. We have like a weak growth.
B Ramesh Babu
Right. So understood. Yeah. Please clear. Go ahead.
Akshat Agrawal
So that means. Yeah, so that was my first question, sir.
B Ramesh Babu
Okay. No, no. Fee income, it has different components, are there? As we mentioned earlier, it includes the right of income also. Is there other income? So that has come up a good source of fee income for us. I agree. Corporate, had we grown in the normal course our processing fee all these things would have come up. So. But other verticals are there including agriculture dual loan also we started charging process and commercial as well as retail all these started giving some fee. So now corporate instead of going for a muted performance this year because we do not know whether the cost of funds, what all we acquire with majority coming from fixed deposit will support our corporate funding or not.
We want to focus on the non fund based business this year and already we are on the job on that. So that way the shortfall what all we are going to get under the nil non interest net interest income partially we want to make it through our fee income also that is our end event. So this year also the same tempo we would like to continue on the recovery from rate of accounts as well as the other income what all they are getting from the processing the others also. So that’s what is our plan of action.
Right sir. So this was one more point. One more point. Now three years, four years back when we were taking a baby steps as far as a third party products are concerned. That is cross sell. So we were growing at 2530 crores that sort of a range. So we have ramped up and all activated all channels. So with that progressively it is more or less reaching around 180 crores this year. So that way we have still lot of scope available there. So we will make up from third party products marketing also in fact wealth management also another tie up we have entered into that also should support us.
Akshat Agrawal
Right sir. So this recovery from write off is it a part of the others or the part of the fee income? Because they’re like 264 from the fee income and 245 source from other side. So this I would assume that that recovery from write off is coming from into the other client, right?
Ramshankar R
Yeah, absolutely right.
Akshat Agrawal
Okay. So this co fee income 264 crore 13% coq is broadly from. You know all this is part of the core part of the.
B Ramesh Babu
Absolutely. 264 as against last 238 it is from the course we only absolutely are. Right. Okay. Okay. That’s very.
Akshat Agrawal
That’s great sir. And my second question is on cost you mentioned CPI to be around 50% versus current 47%. So is there like what’s the outlook for the opex? So do you expect it to go. Above operating income growth or is it like going is it expected to go below operating income growth given elevated staff hiring in the recent past as well as do we expect continued higher growth from non staff expense?
B Ramesh Babu
No, in fact what all the broad hiring we need to do for the acquisition channel as well as the service channel we have completed. So this year, the same intensity with which we did earlier years may not be there. But to some extent the branches what we have opened last one year and this year what we are going to open these sort of things will kick in. But the point what we need to look at it is so the opex rest of the things you see, employee cost may go up to some extent because the yields when they are coming down.
So naturally, what you need to provide for this pension fund and all these things will go up and all. So factoring all these things, what we thought correspondingly, there may not be an increase in the income because the net interest income will take a hit on account of two factors. One is the yield on advances may come down because of the eblr. Second thing is the cost of deposits may continue to have these sort of an elevated issue for two to three quarters. So both sides there can be a compression. So with these things we thought that it will be around 50.
Otherwise what will happen? You know, if I need to contain the cost to income at 47, so few of the developmental activities, what we are trying to do, it will take a back seat. So we do not want to do that. It is a transitory phase currently we are having at this stage. If you are able to pass through that one later, we will be able to get the benefit of that.
Akshat Agrawal
That’s great, sir. Thank you for answering my questions in a very detailed manner.
B Ramesh Babu
Thank you, Akshay. Thank you.
operator
Thank you. Ladies and gentlemen. To ask a question, please press star N1 on your phone. We’ll take our next question from the line of Pritesh Bam from DAM Capital Advisors. Please go ahead.
Pritesh Bumb
Good evening. Coming from a great set of numbers, a few questions. First is on the. Yeah, first is on the loan growth. I think you are quite clear in terms of aligning loan growth, deposit growth and CD ratio at 85 and. But the guidance was that you will grow 200 books above the industry. Considering the recent numbers which have come from the RBI, it looks like the industry growth is about 10 and a half. So how do you see that digitally? And because the guidance is 200 basis points higher, like 11 and a half to 12%, maybe it will pick up in the second half.
But how do you see that?
B Ramesh Babu
Yeah, I agree with you. Why your estimates what we have mentioned. But look at one thing. When we are talking about a loan growth of it can be 12, 13, whatever it is you say now the composition undergoes a change. Suppose if the corporate still goes down and to that extent we need to compensate the growth in the RAM vertical this year. Also you can see that 20% when RAM vertical has grown, 14% reduction in the corporate has been set off. And even with that we could achieve our final number guidance given. So I somehow feel the current mix of deposits, what we are getting, this may continue for some more time.
So that is the reason our focus on the ramp continues. And though all engines are working well, because if the margin is not accruing further, we may not grow that aggressively on the ramp. But whatever it is you look at the 20% when we have done last year, it cannot suddenly come down to 12%. So that way the mix is more towards RAM and corporate low lying. With all these things. What you said is around 12, 13% we can think of.
Pritesh Bumb
That’S quite clear. Second was on asset quality. A couple of points there. First is one. We have seen certain banks showing slightly higher stress in msme. Now there could be different pockets to that stress. But how are we seeing in our books going ahead? And also as you said that RAM is the focus area. How do you see the new book building up in terms of asset quality?
B Ramesh Babu
No, I agree because MSME is vulnerable. But somehow in 2019 bank has gone for a digital lending wherein every part, every account needs to pass through the loan origination software with so many checks and balances. So these that has really helped us. It’s pre los and post los. If you look at it so more or less 10 to 20% of the pre LOS stress numbers are there only in the post los. So our SMA 30 plus what we have disclosed it includes MSME book also. So that itself is around 300 crores and a portfolio of 85,000 crore.
So we can think saying that the portfolio is still under control. And above all we are using the early warning signals also as I said earlier, predictive analytics and all so much in advance. We are trying to take some sort of a measures to rectify or fix these issues. But last but not the least is we will think of loss given default. Majority of our MSME book is backed by collateral which is more than 100%. So if at all those situations arrive as so we are sufficiently guarded through the collateral. But otherwise we are for the time being confident saying that that sort of an overnight stress will not come up in our MSME book because we are cautious.
Our collection teams are active and the monitoring team is active and continuously the focus what we give on the business growth. Equal monitoring. We are giving equal focus. We are giving on the monitoring too.
Pritesh Bumb
Okay. Got it sir, Couple of questions on deposit side One is that the current account deposit seems to be slightly muted given that this is a year end and again P banks have seen a very strong flow maybe on averages it may not be that great but on period end basis so we have not seen that kind of a flow. Is there anything that has not made the flow to us?
B Ramesh Babu
No. In fact from March 1st onwards we are very conscious about one point. If some sort of a windfall comes in the last week and goes out in the first week of April it may not support us a lot. So that is the reason what we thought throughout the next year you need to bleed. So we didn’t make any conscious efforts to go for these 10 days, 15 days during the month of March. So what all organically what we need today that we got it and all so that we can continue to grow this way.
Pritesh Bumb
And the second point on deposits was as you mentioned that you are degree your corporate book just wanted to check how much will be deposits contributed by this corporate because these will be generally bulk and just trying to check if the bank deposit also from then would have come down.
B Ramesh Babu
I agreed but that usually we will not share actually because self funding is a concept which we have started a year back so. But still I can very well say that many of the corporate banking units are active they are able to mobilize as you said majority has come in the form of of a time deposit but money is money. Now even if I go and mobilize in the retail front or this side and all coming up and all. So a decent progress has been made by the corporate wing in mobilization of the deposit. Our intention is over a period of time to bring it to around 50% self funding ratio for the corporates.
50%
Pritesh Bumb
okay, got it. And the very last question was on basically on the your margin side you mentioned that 3.7 to 3.75 is a range which is seen so just trying to. As you said it could be volatile within the quarters but as a trajectory do you see first half to be a little bit higher because if you look at the average for full year then your second half will be better. Right? Because you will be cutting like that.
B Ramesh Babu
Absolutely. You see a simple calculation let us say 1% the repo is cut our EBLR portfolio is 52% so 50% 50 basis points there can be a hit straight to the NIM so 4.05 minus 50 so it had to be 3.55 but we are taking many measures out of that so that way we have guided overall 3.7275 because first half will support us and second half may have issues. Overall, we need to manage this way.
Pritesh Bumb
Got it, sir. Thank you so much. Thank you for those answers. All the best.
B Ramesh Babu
Thank you. Thank you.
operator
Thank you. We’ll take our next question from the line of Akshay Badlani from HDFC Securities. Please go ahead.
Akshay Badlani
Yeah. Hi. Thank you for taking my question. My first question would be around the commercial loan book. Average ticket size has been increasing in the last two, three years. Just wanted to understand is this by strategy that we are going for higher ticket sizes or some, you know, in terms of asset quality. If we could get some, you know, color as to amongst the ticket sizes that we disclosed, you know, is the higher ticket sizes performing better or something like that?
B Ramesh Babu
Absolutely. You are on dot, Akshay. Because we started with a low average ticket size to Tesla waters. We have verified all the parameters, how they are working because the onboarding conditions are one and the same. So then progressively initially we thought of 50 lakhs. The average ticket size used to be 25 lakhs, 30 lakhs and all. Then we started pushing the verticals for slightly higher because the advantage is it’s a lower labor actually you will get a higher growth there. So that we have been encouraging and in fact we have been giving a target also to the verticals about the average ticket size which they need to reach.
So that way everyone knows. So I have to balance this way because when we saw the stress is under control, we can take that amount of reasonable risk so that it will reduce the load and increase the growth.
Akshay Badlani
Understood. And will would that be like yield accretive or. Because probably in lower ticket sizes it would slightly be more ro accretive slightly here and there.
B Ramesh Babu
There can be a 5 basis point here and there in the yield. But you understand the amount of opex, what we need to spend on servicing these accounts. If I am saving there the five basis points and on the object size. So it is more or less neutral for me.
Akshay Badlani
Got it, got it. Just my second question was around the incremental, you know, branches that we are opening. So what is the strategy there going forward? How much would be like you know, non Tamil Nadu and you know, how much would be from the home state and how are we, you know, seeing like a three to five year view? How is our view there in terms of geographical expansion?
B Ramesh Babu
Very true. In fact, Tamil Nadu and south, more or less Tamil Nadu, we have good number of branches. But whereas in respect of Andhra And Telangana still we have a scope. We are not deep into the markets there. So that way there exists some scope there. And Karnataka also offers some scope there. Because we are not so deeply penetrated there. Our next preference is, is always Maharashtra and Gujarat because we want to go in a contiguous area so that the connection is there and all. So that way we will compete south simultaneously. We will work on the west also.
So depending upon the opportunities available, we will not miss north. But east can be the last preference. First of all, the potential what we are getting here is much, much better. We will try to exit because the same cost, if you are able to get a better business there and all we want to exploit on those lines.
Akshay Badlani
Got it. Thank you. Thank you for taking the question.
B Ramesh Babu
Thank you.
operator
Thank you. Participants who wish to ask a question may please press Star N1 on their phone now. Ladies and gentlemen, we’ll take that as the last question for today. I now hand the conference over to Mr. B. Ramesh Babu MTN. CEO for closing comments. Over to you, sir.
B Ramesh Babu
Yeah. Thank you all for going through our presentation and showing so much of interest in asking questions and all. As I said earlier. So we will strive further to see that the momentum is maintained and the expectations are met. Thank you all. Thanks.
operator
Thank you. On behalf of the Karur Vaishya Bank. That concludes this conference. Thank you for joining us. And. And you may now disconnect your lines.