Uco Bank (NSE: UCOBANK) Q1 2026 Earnings Call dated Jul. 21, 2025
Corporate Participants:
Unidentified Speaker
Ashwani Kumar — Managing Director & CEO
Analysts:
Unidentified Participant
Ashok Ajmera — Analyst
Niteen Dharmawat — Analyst
Amit Mishra — Analyst
Sushil Choksey — Analyst
Presentation:
operator
Good evening everyone. Welcome to UCObank Q1FY26 earnings conference call. It is my pleasure to introduce to you the Senior Management of UCO Bank. We have with us today Mr. Ashwani Kumar, MD and CEO Mr. Rajendra Kumar Sabu Executive Director and Mr. Vijay Kamle Executive Director and other management team from Yuko Bank. We will have the opening remarks from the MD sir post which we will open the floor for question and answer. Over to you MD sir.
Ashwani Kumar — Managing Director & CEO
Thank you. Thank you all analysts for sparing time to join the post. Results Quarter 1 Post Result Conference call. Along with me I have our Ed Sheer Sabuji and also our entire top management team. Various vertical heads are with me. So first I’ll share a few important salient points of our performance during this quarter and then we will be open for your question and answers. I believe that our presentation is already uploaded and all of you have gone through the presentation. I’ll give you the brief about the numbers. First, our total. Our bank’s total business as of 30th of June 2025 we close 5 lakh 23, 736 crore with a growth of 13.51% on a YoY basis which includes deposit of rupees 2.
98,635 crore with a growth of 11.37%. Advances of 2, 25. 101 crores with a growth of 16.48%. Within deposits the saving grew by 4.8%. Current grew by 8.79% and our CASA was maintained at 36.91% in advances. Our RAM advances grew by 23.47% within RAM, retail grew by 30.73% percent. Housing within the retail housing grew by 17.92%. Car loan, vehicle loan grew by 66.94%. Agree grew by 15.46% and MSME grew by 20.33%. Our ramp percentage to total advances was 62.97% as against 61.22% same period last year our asset quality, the gross NP of the bank has been declining on a quarter on quarter basis and now it stands at 2.63%.
A decline of 69 bips on a yoy basis. Net NPA declined 2.45% with a decline of 33 bips on a yoy basis PCR improved to 96.88%. The improvement is 112 pips on a yoy basis. PCR excluding 2 that that is tangible. PCR also improved by 607 pips to 83.12%. Coming to profitability the operating profit of the bank grew by 18 to 1562 crore in this quarter. Net profit grew by 10% to 607 crore in this quarter. Our net interest income grew by 6.64% to 2403 crore in this quarter. Non interest income also grew by around 20% to 997% in this quarter.
Cost of deposit Our cost of Deposit was at 4.84% whereas in the same period last year it was 4.79. There is a grow increase of 5 pips on the cost of deposit. Similarly cost of fund Also it was 4.71 last year June quarter now it is 4.73% yield on advances also it was 8.76 last year same period now it is 8.6%. This is the yield on domestic level cost to income ratio which was 57.23% and quarter on quarter basis it is coming down. So now it is at 54.06% in this quarter. Name global earlier last quarter Last last year same quarter it was 3.09 and in March it was 3.
Now it is 2.96. Name Domestic 3.29 same period last year now 3.18. Now coming to slippages. Slippages for the quarter was around 631 crores slightly on a higher side than the last year basically because of the one particular one mid corporate account in the MSME segment slipped in this quarter which was our watch list which we monitor on a quarter to quarter basis as a result. But overall slippages are within the our guidance given 1 to 1 1.25% and sector by slippages. If we look at in retail slippages was around 149 crore and agree it was 91 and MSME 370 crore.
So slippages this was the slippages sector wise coming to the SMA book more than 1 crore. As you all know we declare more than 1 crore of SMA on every quarter. So SMA more than 1 crore is around now 1550 crore 550 crore and as a percentage wise it is 0.7% of the total advances coming to the capital Adequacy position of the bank. Bank’s capital adequacy position is quite strong. We stand at 18.39% with Tire 1 at 6 16.3 16.36%. Now coming to the provisions. As you all know we have been maintaining some additional provision over and above the RBI mandated provision.
We continue to hold the same provision at the same level. We have not reversed any provision and that approximately thousand plus FR provision is being maintained in addition to the RBI mandated provision. On our now coming to certain initiatives which bank has in started last year where we shared with you was the project that’s a digital transformation journey. We started in September and our target was to digitize around 25 journeys in one year time. I’m happy to share that till now our team has already developed 22 journeys and eight journeys are in pipeline. I think by the end of September we’ll be live with 30 journeys, 22 already live and 8 will be live more.
Last year we targeted 6000 plus cr of digital business. This year our target is 25,000 crores and already we have crossed 8000cr of digital business. In this current quarter bank introduced WhatsApp banking also and 43 services are active and now we expanded to 5 languages. English, Hindi, Bengali, Assamia and Odia. 5 languages are. We are regularly working to increase their services and five more services are in pipeline. So maybe another three months time will be up with 48 WhatsApp banking services. We have been focusing more on the digital adoption also and I am happy to share that Mobile banking users which which was very low around two years back so we had only 14 lakh active users.
Now we have crossed 51 lakh active users as we speak. So it is around 38% of our registered mobile users are active on mobile banking. Now various IT and other initiatives were also taken taken which we have already highlighted. Some are more planned in this year now with regards to the ATM infrastructure, interoperable cardless cash withdrawal and deposit via UPF facility. We are working unified dispute and issue resolution system. We are working to improve our robust infrastructure. Application performance monitoring software is being implemented. We are also in the process of setting up near doctor at Kolkata Cyber security vault for enhanced cyber security.
Also to improve efficiency and cost optimization we are now in the process of implementing Centralized Forex Processing Center, Enterprise DMS and CASA back office Further to improve efficiency and again cost optimization, Robotic process automation is being put in place in selected areas. Then in order to identify risks and mitigate security and all these things, Identity, assess management System is also being implemented. We launched. We announced about the cbdc. Now CBDC is in the final stage. This quarter we’ll be going live with the cbdc. All you are all approvals and onboarding has been completed. Accounts have been opened.
Now this quarter we see that CBDC is also live. We introduced TAP banking last year in the month full fledged banking was launched in the month of March. Now around 35% of our accounts are open being opened through the TAP banking that is being used by the branches for quality customer onboarding. To announce our outreach bank has been. Bank is now doing carnival on a full time basis where we focus more on customer outreach in respect of agree MSME and retail customer along with the CASA customer acquisition. So that every fortnight it is being implemented now and last year and with these initiatives we brought out various new schemes based on the requirements of our customers.
Around 11 new MSME schemes were launched in the last year and around six or seven are additionally planned in this quarter. Also for bringing out to serve our MSME customers with respect to HR bank has engaged 545 apprentices and recently bank has also taken 102. 182 local bank officers in various parts of our country. Reward and recognition policy has also been put in place. Further women centric policy has been further strengthened in this current financial year. Skill development programs have been introduced for the specialization specialized skill development of our requirements in the IT risk, Treasury Forex areas.
To improve our customer service we introduced Pulse alert monitoring system and that has been working fine. Now with with the help of this monitoring system we are able to identify certain mule accounts and the success rate which was initially at the start of this alert monitoring System was around 40% has reached to 88%. So whatever alerts the team is getting now 88% of the accounts are being identified and marked well in advance. Bank is very closely working the Reserve bank of India also for Reserve bank of India Innovation Hub with regard to integration the Mule Hunter and ULI also ULI we have already.
We have already onboarded and many services we have started using. Some services are in pipeline. So in this quarter we’ll see that most of our services available in the ULI platform Bank will be integrated. Thank you. And this was the major time important highlights I will say which I wanted to share with all our colleagues in the analyst fraternity and I have my vds also if they want to add anything. Otherwise we. We are open for the question answer session. Thank you very much. Thank you sir.
operator
We will start the Q&A session now participants who wish to ask a question please raise your hand. We have first question from the line of Mr. Ashok Ajmera. Ashok. Sir, you can ask your question.
Ashok Ajmera — Analyst
Yes, Hello. Yeah. Am I audible? Sir?
operator
Yes sir. Yes sir.
Ashok Ajmera — Analyst
Sir, at the outset compliments on business growth. It is a time when others are facing problem and they are going in de growth. You have grown Well, I mean even 2% of this growth in the quarter in the overall business and 1.73% in the deposit and 2.32 in credit is really commendable in this environment. So my compliments to you and both the ED and the top management team for the same. Having said that sir, we have little bit lagged on the profitability front maybe because of the margin pressures and because of that I think RBI rate cuts another combination which you can explain little more in detail.
Our net profit has. Operating profit also has gone down. And eventually, I mean accordingly consequentially net profit has also gone down. And one major contributor is a lesser recovery from the written off account. I think which is almost about 500 crore. Had that recovery been even little better or as equal to the March quarter. I think on the recovery from return of account it’s only 2425 crore as again 954 crore in the last quarter which is a measure to somewhat some extent the treasury profit As a added 150 crore more than the last quarter. But that has the major dampener in our profitability.
But considering the business growth and we would like to hear from you the the targets for this year FY26. Many banks are shying away from that because of the uncertainties. But we would like to have it. So this is one. Secondly sir, there is one note on the note number 10 on SRS Security Receipts in which because of the change in the provision guidelines of the RBI the note says that 274.95 crore has been taken have been received in this quarter. It is received or it is provision written. I mean provision is reduced or this amount is received or it’s a fresh sr.
What is it? So please. So this is my fresh.
Ashwani Kumar — Managing Director & CEO
These are the fresh SR. Yes.
Ashok Ajmera — Analyst
So means 85%, 15% must have been in cash.
Ashwani Kumar — Managing Director & CEO
Yes, yes, yes.
Ashok Ajmera — Analyst
And this is the amount of the SR in the fresh. Okay. Provision might have been written back in the earlier quarter itself when the regulation came. I think extra provision so that clear clarifies this point. And one point sir on this I think MTNL also we have some small exposure of I think 27573 crores. So how much provision total has been made against that amount so far? Maybe as per IRAC norms or even more as you are saying that you are. You are floating reserves. You have got some hidden reserves still now. So whether it has been fully provided for or what is the percentage of them.
My last in this round is on the SMA2 numbers. So SMA2 numbers in this quarter has gone up from 66 cr to 696 crore. Maybe something from SMA1 spilled over to SMA2. So what is the status of that sir? I mean whether some recovery has already taken place in July again that upgradation or they still persist. And can you give some color on that kind of. And that one account, you know one bitcop account which you said is slipped. So how much amount of that out of the total slippage of 608 crores. So these are some of my questions, data points and observations sir.
Ashwani Kumar — Managing Director & CEO
Thank you. I’ll go one by one. First was about the operating profit and net profit. See if you look at you rightly pointed out the last year we had a good amount of return of recovery in last quarter particularly that was in around 900 crore. If you recall that we were expecting some one account to to be resolved in this quarter. But that recovery came in the last quarter. That was a bonus for us in the last quarter and as a result of a recovery return of account was higher. Second in last March quarter we received.
We resolved which account is resolved. It had also a component of around 280 crore of interest income which was booked. So if you look at my interest income during this quarter though the advances have grown in this quarter but interest income has come down. The basic reason for interest income coming down in this quarter from advances was that 283 crore rupees which was booked as an interest income last quarter on account of return of recovery in return of account which was not available in this account. If we discount that and these two things you will.
You will find that with the growth of business though there is a impact of repo cut also. But we are. We were able to have our interest income intact during this quarter barring if we exclude 283 cr of income for that quarter. Right? So yes sir. In spite of these two things, in spite of these two there is a marginal decline in operating profit and net profit during this quarter. So the growth has contributed to the profitability. Though the impact is can be seen in our name also slight impact I think 4/5 impact is there in the name also.
Our cost of deposit is also coming down now. Our yield on advances also there is a slight impact. But having said so this cost of deposit may come down further in the coming quarters. Because repricing of the deposit will keep on happening every quarter now. But the repo cut till now which was probably front ended which we were expecting that repo cut will come in stages. So it was front added. It had impacted slightly higher. In this quarter maybe coming quarters we will have a better visibility of the things now coming to your targets. You asked about the visibility of the target.
See we have given a guidance of around 12 to 14 of growth in advances. And if you look at our advances have grown by 16.48%. And from where our growth has come. Growth has come from our own nodes, our vehicle, our MSME segment and our agility segment. So these are the components or the. I will say the engines of our growth. And we our products are well aligned with the market. So our teams are already active the momentum which we gained in the last year and last year. So that momentum is continuing. So we. We expect that we will be within our a guidance of profit.
The growth credit growth of 12 to 14 by the year end deposit growth. We have given a guidance of 10 to 10 to 12%. We are this quarter we are within that 11.37%. But considering the CRR. Sorry CRR liquidity which will be available now in the next next quarters onwards. So we may be having a surplus liquidity available. So we may have. I have a slight cut in our deposit guidance maybe after seeing the performance in September quarter. But as of now we are not making any cut in our guidance. So 10 to 12%. We are continuing with our guidance in that.
And CASA we have given a guidance of 37.37 to 38. We. We are marginally lower than 37. But we expect that the way now the market is behaving mutual fund industry. Certain cash flows are now less. So we expect certain amount to be with the banks. So we expect that we may touch again 37%. But I think this is. This is this will continue to be a challenge not only for our bank, for all the banks. Third SR I already clarified that SR we have received in this quarter and existing SR which are available with the bank.
We are already holding the provision. We have not reversed the provision. So this thing that our notes. We already say that around 48 crore of SR are available with the bank. We continue to hold that provision we have not these 275 crore we have taken as per the new norms, new guidelines, right? Third sir, you talked about MTNL exposure. MTNL we are giving. We have already having 100 provision in the MTL account. So there is no room left for MTNL account. Another was your SMA numbers. Sir, if you look at SMA it is. You’re right that 66 to 96.
Basically this is because of the last year. If you recall that quarter was for 89 days. That was not. I think one day differential was there. Because of that certain accounts though technically they were in two but they were reflected in SMA one. So. But if you look at overall bucket and if you look at previous quarters like December quarter and September quarter you if you find that overall numbers are almost in this range only SMA2 range only. So there is no much difference. Only this March quarter was exceptional where because of this one day differential it could not.
They did not cross 60 days. So they were in the SMA1 bracket. So that is the reason that was there that another account which. Which slipped 100 that is exposure is around 137 crore. 137 crore. So if we exclude then our slippages are in the similar range as in the last quarter. But including this also our overall slippage ratio remains within the guidance.
Ashok Ajmera — Analyst
Point well taken. Sir, you explained it very much in detail. Just one or two small data point. Our employees cost has come down by about 350 crore as compared to the March quarter 1276. Similarly our other operating expenses have also come down by almost about 200 crore. So what I would like to know whether this is going to be the trend for the remaining three quarters. Maybe because March quarter needed some more spending or. Yes, the subsequent quarters will be higher on salary than the operating expenses.
Ashwani Kumar — Managing Director & CEO
See this salary and staff expenses as 15 provision will be in line with this quarter only for the next two quarters. And last March quarter we provided for the PLI and the AS15 provision was there. Yes. So whatever shortfall was there that was provided for the March quarter. So that. And then PLI provision was also there. So in the in this year also In March quarter PLI provision will be there 150cr of PLI provision which we kept last year in March which we will be using this year and in the March quarter basis the performance then we will making an PLA for visual pocket this next year also.
So for the next two quarters I. I feel that this should be in line with this quarter only.
Ashok Ajmera — Analyst
Sir, if you permit just one this RBI relaxation on asking for the collateral of below 2 lakh loan for the that agree from the agree loans and the farmers. How, how is it going to help us growing our book on that account? Because now we’ll be having at least some collateral against those loan. We can officially ask, excuse me, ask for. So what is our strategy on that and how much I mean additional growth. You, you see because of that, see.
Ashwani Kumar — Managing Director & CEO
You see we have not very large presence in the south where prominently this gold loan portfolio is there. But we over a period of last one year we have already built a a gold loan portfolio of around 10,000, 10,000, 10,500 crore. And with this new relaxation available, I think it’s going to benefit the bank and the industry as a whole. Because there was a lot of ambiguity or I would say clarity was not there. Whether they can be classified as agriculture or they can be taken as a collateral or not. Because RBA guidelines say below 2 lakh you cannot take collateral.
Now having come this clarity so we can go at least in a big way to converse our gold loan portfolio also in the south and in the north or east. Ash.
Ashok Ajmera — Analyst
Thank you sir. If I get, if I get a chance again, I’ll come back again for this some more discussion. But let others also have the opportunity. So thank you very much and all the best.
Ashwani Kumar — Managing Director & CEO
Thank you.
operator
Thank you. Ashok. Sir, the next question we have from the line of Nitin Dharmawat. Nitin, you can ask your question now.
Niteen Dharmawat — Analyst
Hello. Am I audible?
Ashwani Kumar — Managing Director & CEO
Yes please Nitinji please.
Niteen Dharmawat — Analyst
Yeah. Thank you so much sir for the opportunity. So my first question is related with the return on assets ROA, it has been hovering around, you know 0.7 to 0.75%. And it has come down during this quarter because of the net profits. So when we’ll be able to see you know, 1% ROA across in 1% benchmark, does the bank have any such target management, you know has any target in mind for 1% as well.
Ashwani Kumar — Managing Director & CEO
See Nitin, if you look at our gross NP and net NP we have been consistently coming down and our net NPA stands at around 998 crore only. Thousand odd crore. So going forward it’s this. Except that slippage, one additional account. If this quarter happened, the slippages are likely to be within the range which we are expecting. So that additional provision requirements is going to come down in the subsequent quarters maybe a quarter later. So I, I, I, I believe that from next year, first quarter or second quarter we may see that we reach across at least one Hour away going to come.
Because the way the portfolio is behaving our SMA levels are there. SMA level more than 1 crore we declare and more than 1 crore portfolio is around 1550 crore only currently and that includes SMA 0 also. It is not that all includes SMA 1 and 2. So SMA 01 and 2 all three put together is 1550 crore against a book of 2 lakh 20,000 crore. So that is not even 0.7%. So I believe that maybe next year anytime we will see that bank crosses 1% ROI.
Niteen Dharmawat — Analyst
Okay, my second question is any possibility. You see this amount is small in mtnl. But do you see any possibility of recovery in MTN account?
Ashwani Kumar — Managing Director & CEO
Yes, discussions are, discussions are going on, going on. Bankers are waiting for a favorable solution so that not only the employees stake, all stakeholders, our shareholders are also benefited out of the resolution plan. So discussions are already on. We expect something to come anytime. It is again depending on the acceptability of the resolution which is coming to us.
Niteen Dharmawat — Analyst
So will there be any haircut for the banks or it will be 100.
Ashwani Kumar — Managing Director & CEO
Because the government as of now, as of now there is no talk about the care cut as of now.
Niteen Dharmawat — Analyst
Got it. And my last question is sir, do you see any stress in any of the sectors where we are serving currently or any, any potential sectors? Where do you see the stress is building up in. In general in industry, across the industries.
Ashwani Kumar — Managing Director & CEO
See if you. I’ll first talk about our bank’s portfolio. If you look at our bank’s portfolio, if I go back to around two years back our slippages used to be in the range of 2% of our advances. And slowly and slowly we have strengthened our credit monitoring system. We have strengthened our recovery collection system also. And as a result Last year we. 24, 23, 24 we improved in our slippages and upgradations plus collections 24, 25 we further improved and this year also we have kept a target of 1 to 1.25% only. So that is the last.
This is the continuous decline in our slippage ratio. Basically mechanism or the control mechanism or monitoring mechanism we have put in place. I am confident that this will be a achievable in this year. And if you ask me any particular segment where the stress is building up, I will say that as of now we don’t see any particular sector because if you look at my restructured book also consistently it is coming down. It is now, you know around I think maybe 1500 cr or 1500 crore lakh now restructured and that includes your normal restructuring plus Covid so both so that is.
That is very small amount where we could have thought of some and the slippages which we see and they are in the range bound when we do business certain slippages will continue to happen. But when we look at our segment wise NP also in various sectors like in retail agree MSME so that segmental NPA is all percentage is also coming down on a quarter on quarter basis slippages are there but they are not out of control. They. They are well within the knowledge also and manageable also.
Niteen Dharmawat — Analyst
Got it sir, thank you so much and wishing you best.
Ashwani Kumar — Managing Director & CEO
Thank you.
operator
Thank you. We have the next question from the. We have the next question from the line of Amit Mishra. Amit, you can unmute your line now.
Amit Mishra — Analyst
Hi. Thank you and good afternoon everyone. Sir, my first question was on cost to income ratio. I think we are around 54% this quarter. I think it’s low lowest in 8 to 10 quarters. So what was the reason for this and do we look similar range of cost to income in future or 56 57% as we have reported in last two years.
Ashwani Kumar — Managing Director & CEO
See Amit if you you are right that our cost to income ratio is lowest in the last 878 quarters we were at 61 also consistently we have been coming down. There are many contributors to the cost to income ratio. If you look at our operational efficiency our business per employee, business per branch is increasing. So so additionally that that is helping the bank to improve on efficiency and cost efficiency is coming into the play. Then if you look at our cost overall cost that is also under control and cost of deposit also is under we are managing.
When we are with a 37% of CASA we are able to manage our cost of deposit. And maybe if you can compare with some other banks with this higher CASA rat issue their cost of deposit is still high but we are able to manage. We are using all available sources to raise resources maybe for refinance or overseas deposited overseas or or to raise. We raise the equity also. So that is one then on yield front also we are very cautious in taking exposures. You can see that our main focus is on the RAM segment where yields are slightly better than the corporate segment.
And our focus is on that we have already reached around 63% of our RAM segment. So all these factors are helping us to improve our cost to income ratio. I believe going forward the way we are planning the things to control the cost improve our income fee based income also you see that we are increasing. I Believe that it should be in this range only. I. I believe it should not go up again. Our conscious effort is to reduce it further.
Amit Mishra — Analyst
Okay. Okay, thank you sir for the answer. So my next question is on retail mix. In your retail mix there is line at a pool. What kind of types of loans are in there? Covered in pool.
Ashwani Kumar — Managing Director & CEO
See in pool majority of the pool is home loan pools and their simple is more than 725. Okay, that is our cut off. 725 is a cut off total pool. Majority of the pool is. Oh no.
Amit Mishra — Analyst
90 plus percent I can assume.
Ashwani Kumar — Managing Director & CEO
Yes, it could be. It should be. Just give me a second, I’ll just open the slide. Yes, 90% should be in the housing segment.
Amit Mishra — Analyst
Okay and sir my last question is on a current account. So we have seen a decline of 8%. And across other banks also we have observed that there is a decline in current account. So any particular reason for sector or our bank Any trend? You can point it out.
Ashwani Kumar — Managing Director & CEO
See there is no particular reason for any declining current account. Current account. Maybe in March in order to strengthen balance sheet corporates may be keeping certain amount of liquid in their books. So that may be the reason that in March there was a slightly higher current account balances. And in June there are slightly lower current current account balances. I don’t think any other reason will be there. This may be the reason.
Amit Mishra — Analyst
Okay and sir my last question on the same topic. Do you have average kasa number with you? Average K during the quarter?
Ashwani Kumar — Managing Director & CEO
Average. Average. I can give you separately right now I am not having. But it. It will be around I think 95%.
Amit Mishra — Analyst
90 to 95.
Ashwani Kumar — Managing Director & CEO
90 to 95.
Amit Mishra — Analyst
Okay.
Ashwani Kumar — Managing Director & CEO
It’s an. It’s. It’s 88. 4% maybe 90%. 90%. 90%.
Amit Mishra — Analyst
Okay, thank you. Thank you sir. Thank you sir and thank you.
operator
Participants we request you to raise your hands for any question and also you can ask your questions via the chat window. Then we have a few questions from the chat window. The first question is can you specify the total exposure for MTNL?
Ashwani Kumar — Managing Director & CEO
Total exposure for MTNL is 245 crore. Okay.
operator
The second question is is there any challenge in your SME book because your slippages have increased from 198 to 368 crores. So can you give some color there?
Ashwani Kumar — Managing Director & CEO
See SMA book. I already informed that only because slightly elevated because of one account only. Otherwise the slippages are in the normal range only. That was one account which was already SMA2 and that was under the watch list we have already declared and because of that only otherwise slippages in SME book are in the normal course of business. And normal slippages are there.
operator
Thank you sir. We have the next question from the line. Mr. Sushil. Shoksi Sushil. Sir, can you. You can unmute your line now.
Sushil Choksey — Analyst
Good evening team Yuko. For a very stable result.
Ashwani Kumar — Managing Director & CEO
Thank you.
Sushil Choksey — Analyst
My first question is in your slide you’ve shown vehicle loan at 50 to 82 crores. I know that Yuko does second hand car finance which yields much better than any of your retail loans. What would be that portfolio out of vehicle loans?
Ashwani Kumar — Managing Director & CEO
Sir, that exact number five to eight.
Unidentified Speaker
Second.
Ashwani Kumar — Managing Director & CEO
That number I’m not having. But majority is first hand. Second hand will not be so huge. By second hand will be very small number may not be very huge. We have just started. But we are not have such a huge portfolio to look into.
Sushil Choksey — Analyst
You are one of the few banks which has started this product. And the market for second hand car is very good. Whether it’s a imported, secondhand or a domestic. And the yield can be almost nearing double digit or at least 100 higher than the car loan which you are doing today. In view of that, how are we going to capitalize on the market through a bank’s branch strategy, publicity or what that yields your benefit. Because looking at your guidance we need support from some of these products to match all your aspirations.
Ashwani Kumar — Managing Director & CEO
See in this segment we are looking for DSA tie up. Because these segment generally comes through DSAs only because they like there are corporate agencies also like Maruti, they have their own Mahindra, they have owned Toyota. They have one. So we we are planning to have some tie up with these corporate agencies itself. So that the leads flow to us. So that is one segment. There are certain imported car dealers also secondhand car dealers. We are talking to them also. And we got some leads also. Maybe maybe slightly high ticket leads we got also and we sanctioned also.
That is also there. So apart from branch the DSA network will be the most helpful online. DSA network is there companies DSA network is there. So that that which we are exploring.
Sushil Choksey — Analyst
So my next question is our RAM and corporate book. 6237 or 6337 is stable. Where we are concerned. How are you seeing other than car loans which is growing well, home loans are growing in reasonably double digit. You may do 18, 20%. How are you seeing the advances on agriculture, MSME Retail. If you’re looking from a yield perspective where the bank’s balance sheet is concerned.
Ashwani Kumar — Managing Director & CEO
See our home loan around 18 will continue to grow in this range of 18 to 20% hormone segment for last if you look at last around 6, 7/4 or 8/4. Our home loan growth continues to be in this range and vehicle own growth is also in the range of more than 30% for last 5, 6 quarters. And MSME particularly we have started focusing for last 3, 2, 3 quarters where yield are slightly better than these retail loans. And MSME our target is slightly mid corporate segment than the small micro segment. So that is mid corporate is the segment which we are now focusing in the MSME segment where yields are slightly better than the corporate also and then the retail segment also.
In personal loan the growth is there. Personal loan we are growing mostly in loans given to salaried employees of accounts customers gaining account with our bank and pensioner is getting pension from our bank. Now we are coming out with a new product that loan personal loan to salaried customers maintaining account with other banks also through nudge mandate and all this. That product is also in the offing. So we’ll try to grow to focus on those areas also where yields are slightly better in in the than the corporate and or the home loan segment.
Sushil Choksey — Analyst
Sir, most of your offerings would be there in the marketplace from private or public sector small finance bank also. Now to beat the banks who are in competition either it has to be TAT which is a better way to manage this or it is a rate which is lower than the market. What strategy we are adopting where MSME is concerned specifically retail. I understand it’s a rat race so nobody can compete with a 1020 bps difference unless you sacrifice on quality.
Ashwani Kumar — Managing Director & CEO
See MSME we have only one USP. I will say there is the TAT where we are focusing very closely which is being monitored from head of his level daily our MSME team monitors these sanctions and dependency at the hub level. Just to give you some idea about the. I think we have already talked about that. We last year we created specialized half for MSME segment. And last year because of the creation of the first time in the history of the bank total MSME sanctions crossed 12,000 crore which was earlier 7,000 to 8,000 crore. So last year 12,000 this quarter in the first quarter itself it is more than around 3,000 crore MSME sacraments sanctions.
So it will continue to grow in next quarter and next quarter. So this MSNE focused hubs along with the tight monitoring because MSME journeys are all digitalized that is in the loan processing system as and when anybody enters their proposal in the Loan processing system. It is being monitored and the pendency is being watched at head office level. Wherever the proposal goes. Beyond that our team from MSME team immediately gets into action to ask questions why it is getting delayed. So that is the only mantra. If you see our MSME growth for the last 4 5/4 or 8/4 only for last 2 3/4 our growth has picked up earlier.
Our growth used to be 5%, 8% 7%. Now it is 20% this quarter, previous quarter 18%. Prior to that 13% and otherwise it was not. It was around 77% 8% overall growth. So focus is purely on the MSME core business growth.
Sushil Choksey — Analyst
So this business of MSME average ticket would be 1020 crores or lower.
Ashwani Kumar — Managing Director & CEO
It is lower also. It is lower also. It is not that we are Getting every proposal 1020 crore. It is 5 crore also. 4 crore also. 2 crore also. 1 crore also. So every type of proposal is coming.
Sushil Choksey — Analyst
These are what regional sanction or zonal managers power or it will come to ho.
Ashwani Kumar — Managing Director & CEO
These are the see up to up to 2 crore or 3 crore depending upon the delegated. Delegated powers of the hub. They are getting sanctioned there only. And the zones are mostly headed by DGMs. Now there they get around 20 crore and about 20 crore that comes to head office. So we have only three. One at hub, second is at zone and third is at head office. So head office gets into action only about 20 crore zone. Up to 3 crore to 20 crore and 3 crore is sanctioned at the hub level.
Sushil Choksey — Analyst
So what would be the tat on this product?
Ashwani Kumar — Managing Director & CEO
See that if you. If you ask me at head office, our head office that we try to see that 15 to 21 days is.
Sushil Choksey — Analyst
The maximum tat as a bank average. You may say it because I don’t want to dismet the retail or a regional level on average. Can I consider three weeks or two weeks as a good times?
Ashwani Kumar — Managing Director & CEO
Two to three. Two to three weeks will be reasonable for all levels. Two to three weeks.
Sushil Choksey — Analyst
Sir. My next question to Mr. Gam. What is the unavailed credit today where corporate sector is concerned which you have sanctioned or what is visible in pipeline.
Ashwani Kumar — Managing Director & CEO
It should be. It should be around 6,000 to 7,000 cr which is which was availed earlier. And because of the rate to sensitivity the amount we got back and another 5,000 to 10 6,000 crore is sanctioned which are yet to be disbursed. Disbursement. So overall if you ask me 10 to 12,000 crore is the unaware limit for limits which are already availed paid Back and which limits which are yet to be obeyed.
Sushil Choksey — Analyst
What is the sanction pipeline looking like?
Ashwani Kumar — Managing Director & CEO
Sanction pipeline will be again 5 to.7,000 crore currently
Sushil Choksey — Analyst
sir most of the large PSU banks or peer banks have. I am not mincing words but I’ve shredded assets when NABAD should be NAFID or equivalent agency whether PFC REC where the yield is below 6.5, 6.2, 5.8, 6.3 what is the strategy at Yuko? Are we still having advances to this few selected PSU and locking in or we have given a term.
Ashwani Kumar — Managing Director & CEO
See you talked about two three names we don’t have exposure currently we have taken back long back so we are not there I think for last three four quarters in this maybe in one or two NBFCs we are still there but our rates are slightly better than the rate which you told so it’s not that it it is still there for NDFC but other than NBFC it is already back home so that is already. I’ll say that unaware that is sir.
Sushil Choksey — Analyst
Understood willing to lend to that good for us. Third is what is your outlook on Treasury? Will you have a bumper profit in coming quarters or it’s just a sustainable trajectory as RBI has already done all the prediction maybe one more repo cut may come in 1/4 or 2/4 later. One doesn’t know India batting top end.
Ashwani Kumar — Managing Director & CEO
So yes especially we all know that RBI cut repo rate in the last quarter it was 0.75 basis point 25 in April and 15 June again. So the June quarter has seen a bumper profit from Treasury. You can see from the numbers also we have around four times more profit from treasury in the June quarter. So we have taken the opportunity and now going forward I think in the current quarter so far the yields are stable and we don’t think that any cut would be there in the current quarter. If at all it will be maybe in the next quarter.
So the current quarter will be stable quarter maybe still we have some opportunities of trading and booking some profits from the treasury also that will continue as in when we see the opportunity. So the reason reasonable number of profitability might be there.
Sushil Choksey — Analyst
So how open are we to buy corporate bond which are yielding better than government bond.
Unidentified Speaker
That also we are continuously means seeking the opportunity in the market. In the last quarter also we can see that we have increased our non SLR portfolio particularly in the corporate bonds so that we are continuously seeking for the opportunity in the market. Wherever the yield is okay and it meets our requirement we are going into that Also so we’ll continue to invest into the corporate.
Sushil Choksey — Analyst
I mean are we investing in REIT and Invits also?
Unidentified Speaker
No, not yet. Not yet. We have not yet invested in any rate or in it. Right.
Unidentified Participant
Please have a look.
Sushil Choksey — Analyst
Yes, yes.
Unidentified Speaker
So we are sending all other opportunities also we are exploring that also we’ll take a call, reasonable call as and when it comes to us.
Sushil Choksey — Analyst
Sir, good luck to the bank and you may have the best year in coming them. Sir, last question. I forgot there is chatter from the ministry that you may have to do a QIP again. Is it soon or it is in the year?
Ashwani Kumar — Managing Director & CEO
See, we have already taken the approval of the shareholders after the board recommendation. Shareholders have already given approval and bank is having it in government holding of 90%. So we will be reaching out to the government also for giving their approval and once approval is received, this is the opportune time if required, we may go for the best way to raise capital. So whatever is the mode available? Maybe OFS or KYP or whatever. So we don’t know but let us see and be.
Sushil Choksey — Analyst
Thank you very much and all the best for the year to come.
Unidentified Speaker
Thank you. Thank you. Thank you.
operator
Thank you. We have two more questions from the line from the chat box. The first one is for FY25 and one QFY26 in terms of retail disbursements especially in housing, what is the contribution of origination from DSA branches, co lending assignment or others?
Ashwani Kumar — Managing Director & CEO
See, if you ask me in the housing loan the in the pool segment there is a contribution of. I will say that is. That is. I will not say co landing or the origination but that is in the pool. The growth is in home loan. If you look at our home loan portfolio particularly there is no CO origination Nothing that is purely branch initiated housing loan. Yes, there will be contribution of DSS in that housing loan segment. What exact number that how much origination was done by DSA that I’m not having but that number is clearly branch and originated of DSA initiated housing loan co landing and pool we have a separate number that is already there around.
I think 60 was around mainly 5,600 or 5,700 crore is from pool housing loan pool out of 6,500 crore.
Unidentified Participant
Okay, the next question is how can NIM decline by 4 basis points when yields decline by 30 bips QoQ while cost of funds declined by 5 bips.
Ashwani Kumar — Managing Director & CEO
QQ see if you look at our income income total 30 pips yield in the income I explained that last quarter we had 283 crore of additional income in one of the accounts and which was a TW account which was booked. So yield was slightly higher during that quarter. Now with this rate cut I think the Yield was expected around 22. So yield expected yield was 22 BS but actual yield is around 30 BS. Okay.
Unidentified Speaker
We average decline due to the repur.
Unidentified Participant
Was around 22 B.
Ashwani Kumar — Managing Director & CEO
22 BS weighted average. So that is basically because of some additional recovery. One time recover one of. Recover one of interest income in March 25th.
Unidentified Speaker
So one more thing is there that this yield is only on the advances. But if you see the investment yield that has declined only marginally. So we have around 2523% portfolio in investment also. So the overall means NIM is protected through that also.
Unidentified Participant
Thank you. We take that as the last question. I request MD sir for any closing remarks.
Ashwani Kumar — Managing Director & CEO
Thank you. I thank you all our analyst and for taking out time and attending our call and supporting the bank. I will say and we continue to strive for the better performance in quarter after quarter as we have been doing for the last two years. So wishing all you also and to the bank also very best and look forward for your continued support in the times to come. Thank you very much.
Unidentified Participant
Thank you very much from our side sir. We generally don’t get the opportunity but in your case I got it. So thank you for expiring your time for the analyst community. Thank you very much sir and all the best.
Ashwani Kumar — Managing Director & CEO
Thank you.
Unidentified Speaker
Thank you.
operator
Thank you everyone for joining the UKO Bank Earnings Conference call. You may disconnect the lines now. SA.