Uco Bank (NSE: UCOBANK) Q4 2025 Earnings Call dated Apr. 28, 2025
Corporate Participants:
Unidentified Speaker
Shri Ashwani Kumar — Managing Director and Chief Executive Officer
Shri Rajendra Kumar Saboo — Executive Director
Analysts:
Amit Mishra — Analyst
Unidentified Participant
Ashok Ajmera — Analyst
Sushil Choksey — Analyst
Presentation:
Unidentified Speaker
Good evening, everyone. Welcome to Q4 FY ’25 Earnings conference call. It is my pleasure to introduce to you the senior management team of Bank. With us, we have today Mr Ashwani Kumar, MD and CEO of Health; Mr Kumar Sabu, Executive Director; and Mr Vijay N. Kamle, Execute Director. We’ll have the opening remarks from the MD sir, post which we’ll open the floor for question-and-answers. Over to you, MD, sir.
Shri Ashwani Kumar — Managing Director and Chief Executive Officer
Thank you. I welcome all analysts to this post-results press conference — sorry, Analyst Meet through. Let me first share with you highlights of our performance for the quarter ended March ’25 and the financial year ended September March ’25. Overall business growth of the bank, bank’s business grew by 14.12% on a Y-o-Y basis and the bank crossed INR5 lakh crore business. So the total business of the bank was INR530,527 crore. Deposit grew by 11.56% and saving deposits grew by 5.06%.
Current deposit grew by 18.47%. We were able to maintain our CASA at 37.91%. Our advances grew by 17.72%, of which retail grew by 35%. Of retail home loan growth was around 18.13% and vehicle loan growth was 58.99%. Agriculture grew by 20%. Agriculture growth was well-supported by improvement increasing our infra fund, SAG and gold loan portfolio.
MSME growth was 18.55%. Now coming to the asset quality. Gross NPA of the bank has been reducing consistently on a quarter-on-quarter basis. This quarter we have gross NPA came down to 2.69%, that is a reduction of 77 bps on a Y-o-Y basis. Net NPA again came down on a quarter-on-quarter basis came down 2.50%.
That is a reduction of 39 bps on a Y-o-Y basis. PCR of the bank has been improving on a quarter-on-quarter basis, 96.69% that is up by 1131 bps on a Y-o-Y basis. PCR excluding CW portfolio also improved by 704 bps on a Y-o-Y basis to 1.95%. Profitability, our net interest income for the year improved by 18.88%.
Non-interest income also improved by 34.91% on a Y-o-Y basis. NIM domestic improved by 17 bps to 3.29 bps on a Y-o-Y basis. Global NIM improved by 16 bps to 3.08 bps. Yield on advances improved by 6 bps to 8.89%. Yield on advances global improved by 9 bps to 8.55%. Our yield on funds improved from 7.89% in March ’24 to 8.25% in September — March ’25, that is a improvement of 36 bps on a Y-o-Y basis.
Overall operating profit for the quarter ended, we registered operating profit of INR1,699 crores, that is a 33.48% growth on a Y-o-Y basis. For the full financial year, operating profit was INR6,037 crore, that is a growth of 32% on a Y-o-Y basis. Similarly, net profit for the quarter ended March ’25 was INR653 crores with a Y-o-Y growth of 24%.
For the full financial year, the net profit was INR2,445 crores with a growth of 47.80% now coming to the guidance, which we have given at the start of the financial year and what is our achievement and about our future growth outlook. Deposit growth, we have given guidance of to 10% at the start of the year.
We ended the year with 11.56% deposit growth. CASA, our growth target was 8% to 10%. Our actual growth is 6.7%, that is tad below the guidance which we have given. Credit growth was 12% to 14%, our growth is 17.72%. CASA, we have given a guidance of 37% to 38%. We were able to maintain 37.91% that is within the guidance.
RAM percentage, we have given a guidance of 62% and actually 62.73%. CD ratio, 74% to 75% was the guidance, actually is 74.94%. Credit cost was less than 1% guidance, now actually is 0.87%. NIM global was 3% to 3.10, actually 3.17%. GNPA is less than 3%, actual is 2.69%. Net NPA guidance was 0.6%, 3.65%, actually 0.50%.
Slippage ratio of our guidance was 1% to 1.25%, actually 0.92%. Forth of recovery and upgradation of our guidance of INR3,000 crore, actual recovery and upgradation is INR4,427 crores. Recovery was surpassed by a bigger margin because there were certain NPAs which we were expecting as resolution in this current financial year, but they were — we could not a good recovery in the last financial year March quarter itself.
Now coming to the growth outlook for the coming — this year and deposit growth, our outlook is 10% to 12%, deposit growth. CASA growth is 8% to 10%, credit growth 12% to 14%. CASA would like to maintain in the range of 37% to 38%, RAM 61% to 63%, CD ratio, we like to maintain in the range of 77%.
Credit cost again less than 1%, NIM growth of 3% to 3.10% and 0.10 GNPA are less than 2.5, net NPA less than 0.35 and slippage ratio between 1% to 1.25% slip. And the recovery and operation, 2200 crore to 2,700 because we have already got some large recovery, which was expected in this financial year. We have already recovered in the last financial year.
As you all know, we have already got successfully completed our KYP of INR2,000 crore and with that, plus with the drawback of profits of this current financial year, CRR has also improved to 18.49% as against 16.25% last quarter. CAT has improved to 16.03%, Tier 16.37%. So the bank is well-capitalized and there is a growth capital is sufficient available with the bank.
Now coming to the approvals by the Board. Board of the Bank has approved recommended dividend of 3.90% as against 2.80% last year. Board of the Bank has also recommended for raising a equity or the capital-raising plan of by issuing 270 crore shares of each face value in this current financial year.
With this, if it happens, at the opportune time, the government only will come down to less than 75% so these are the financial performance and approvals by the Board and now coming to the various segments of growth where we have is achieved our parameters. In-home loan, our growth was 18%, vehicle loan 59%, personal loan around 46%.
These personal loan are again salary-backed and PQPL based on our transaction analysis for the last one year, which we gave and in the pool there was a — we have taken a pool now the pool out is 6,797 crore. Now coming to the parity sector, Bank has achieved all parity sector segments and there is no beach on any of the parameters of sector segment.
In financial inclusion also, bank has been registering reasonable growth and achieving all targets set by the government. PMSDY, our enrollment has reached to 63 lakh, enrollment has reached 28 lakh, APY12.89 lakh, will count 149 lakh and balances in PMJ will count is INR6,061 crores. And number of BCs engaged by the bank has also increased by 9% to 10,653 if you come to the NBFC advances then more than 96% are a and above rated and if we look at and above it is 99% a and above rated similarly, rating mix also, our — out of total rated Rated 77% — 80% are rated, of which 77% are above benchmark at BBB and above rated. Total unrated is 90.75% only, of which again PSE with the government-guaranteed is around 7.29% and without government guarantee is 3.64% and others are 8.82% only the coming to the profitability detailed analysis, the operating profit of the bank improved to INR1,699 crore and which was supported by net interest income of INR2,698 crore and non-interest income of INR1,9392 crore. Operating expenses INR2,391 crore, of which staff expenses was INR1,618 crores. In these staff expenses in this quarter, we have made a provision of INR180 crores towards PLI for the current year also. In operating expenses also, we have made a provision of INR100 crore for our IT-related expenditure for the projects which we have already taken with the payments have not been made coming in the next financial year it’s — in the provisions also, we have made doubtful three assets are already 100%, doubtful to assets we have already made now to 90% provision. And in unsecured substandard also, we have reached 50% provision and in substandard secured advances, it is 23%. Now coming to the financial indicators of ratios, cost of deposit, cost of deposit of the bank, which was 4.87 last quarter, now for this quarter is 4.90, but year as a whole, cost of deposit increased by 7 bps and cost of funds increased by-15 bps over the year as a whole. Cost-to-income ratio for the financial year ’23-’24 was 59.74%. Now for this current financial year, it is 56.99%. Yield on advances also has improved by 6 bps in this financial year and yield on global advances has improved by nine bps. Yield on funds has improved by 36 weeks in this financial year. Our earnings per share, that is also crossed INR2, now it is INR2.04 in this financial year. Book-value has improved to INR17.53. Business per employee, which was around INR20.93 crore in last financial year has improved to INR24.35 crores and business per branch has also improved from INR139 crore to INR155 crores in this financial year. These were the business financial parameters of the bank. Now coming to the stress asset portfolio, our SMA portfolio and restructured portfolio has been coming down on a quarter-on-quarter basis. And if you look at our SMA portfolio, which we declared more than INR1 crore, our SMA total SMA more than INR1 crore book is INR1,583 crore, of which only INR799 crore is in SMA-1 and 2, INR784 crore is SMA-1. So if we look at SMA-1 and 2 more than INR1 crore, the overall percentage is 0.36% only. If you look at our restructured book, which was at INR3,500 crore at the start of the year has come down to INR1,687 and that works out to 0.77% of the total standard losses. So it is — the restructured book is also coming down substantially and it is reached — it’s almost 50% from the last financial year. So in NCLT, 100% provision has been made and around 254 cases are in NCLT with exposure of INR17,585 crores. So capital adequacy I’ve already told shareholding I’ve shared. So now I — and yes, few of the initiatives which have started in last financial year, I would like to highlight a few of the initiatives and the progress made by the bank on those initiatives. Last year, in September, Bank started a new project called project. The purpose was to create a fully digital-first approach across all-bank office and target was kept that will be digitizing 25 journeys in one year time. I’m happy to share that in six months’ time, we have already done 14 digital journeys on our mobile platform and we have got a target of INR6,000 crore of business for the digital channels. We have already crossed INR6,100 crore in March itself. So 14 have already been launched, of which they imported was the announcement made by ownerable FM in the last to last budget to the cash flow-based lending to MSMEs, bank launched various MSME digital journeys, GST Smart, MSME smart that is up to 25 lakh and Modra digital renewal of CC counts up to INR10 lakh. So all those MSME journeys were launched and I’m happy to share that ever since launch of these journeys, bank has already clocked INR200 crore of business through digital channels from MSME another 15 journeys are in pipeline so will be around 30 journeys in the next three to four months time 30 journeys will be completed bank has also enhanced its WhatsApp banking offerings as on-date 43 services are available on WhatsApp Banking in the last quarter six new services have been offered making it to 43 if you look at our digital adoption, our active — active mobile banking users have been improving in a quarter-on-quarter basis in last one year. We have almost doubled our mobile active users. Plus we have revamped our mobile app also and I’m happy to share that our bank’s mobile app rating has improved to 4.8 and it is one of the best-in the industry across public sector banks. And to combat the problem of new account, bank initiated, launched a new initiative that was pulse alert monitoring system, we also integrated in for reveal time data on the fraud, digital frauds and then we have developed the various rules to identify some new accounts before they trigger any loss to anybody and as due process has been initiated by the bank. As a result, before they are reported as a fraud by any fraud registry, bank has been able to suspect and block those accounts before they are reported by any agency. To enhance our services to our customers who have revamped our chatbot also, that is Uday called Uday, where account-related 16 services and 14 general services are already made available. And three are in pipeline. So we’ll keep on improving our offerings on the chatbot channel also for the convenience of our customers. In retail segment, we improved all our products, maybe educational products or our customers, pension loan, vehicle loan, housing loan, all whole loan, every product was totally in last financial year. We’ll continue to work on these products in this current financial year, so that we will come to the expectations of our customers in this financial year as well. To help or to expand our regional MSME, 11 new MSME scheme were launched in last financial year and this financial year now the cluster-based financing schemes will be launched by the bank in HR, Bank has already implemented HR initiative, HRF and project subsidy, we call that is HR transformation project. Now that reward and recognition program, learning and development, everything has been completed and we’ll continue to build-on the learning and development policy which we have implemented in this financial year in true spirit so that our people, our employees are still in that direction. For female customers, bank has lots specific schemes like pink basket is one scheme where we offer them specific specialized saving account, current account, flax CRD account, special debit card that is called Debit card has been launched. MSM under MSME, we have launched MSME, Nari Salman scheme for females, we have given a special scheme for study abroad and special discount of 0.10%. On MSME loss, special discount of MSME is 0.25%. On home ground also it is 0.05%. In IT, we launched — initiated various projects and we completed. So we are — in IT, we have already done a NOK that is network operation center has been implemented. We have upgraded network bandwidth, that was from 2 MTPAs to-4 MTBS and in, it was 4 MTPAs, now it has made to 8 made. TAR banking has been introduced across the global — across the branches now. Earlier it was being done. So last quarter, it has been implemented in all the 3,300 branches. So digital bank certificate also has been launched through mobile banking. Application by listing solution has also been implemented. EBG facility has also been implemented. We have also integrated with the NSE for EFDR. New virtual machine setup has been implemented. IT asset management solution has been implemented. Application performance management solution has been implemented. Residence operation center rock has also been implemented. API banking solution has been implemented. Now we’ll be taking benefit of API integration with the various corporates. Overseas micro — overseas migration at upgradation has also been completed. So all these projects have been completed in the last financial year. In this current financial year, we have taken a budget of around INR1,000 crores and last year another INR1,000 crore was taken, of which around 64% was used. There are few projects which have spilled over to the next year. So this year also we have taken INR1,000 plus crore business and we intend to bring application to IDAM, data center consolidation, document enterprise document management system. We want to upgrade storage capacity of UPI, cyber recovery world, testing setup we intend to bring near DS site also at Kolkata. Apart from the CMS supply-chain, all these products are in pipeline and the CBDC is also in pipeline out, we will be testing our — once the accounts are opened, we will be going for the pilot stage also. So there are certain ATMs which need to be replaced. So all these things are already in pipeline, which we will work-in this financial year to bring a new and new technology. Apart from that, we are bringing — we are also working on robotic process automation and we are figuring out where which are the areas where we can use those facilities to facility automations and also the use cases of AI are being identified so that in current financial year, we bring AI into use also. This is all I wanted to share with you all, if anything you want to share the ADs? Yeah. So — and thank you all. And now we are open for discussions. Thank you.
Questions and Answers:
Unidentified Speaker
Thank you, sir. We will start the Q&A session. Participants who wish to ask a question, please raise your hands. We have a first question from the line of Mr Amit. Amit, go-ahead.
Amit Mishra
Good evening, sir. Good evening, everybody, and thanks for the opportunity. Sir, my first question is on your RAM share. So now our RAM share is almost 73%. So what is our ideal ratio? Are we going to 60-40% or 35% 65%?
Shri Ashwani Kumar
See, our RAM share is around 62.73%. And ideally I think we should be somewhere 65%.
Amit Mishra
Okay, 65% 35%.
Shri Ashwani Kumar
Yeah.
Amit Mishra
Out of your total advances, how much is linked to external bench rate?
Shri Ashwani Kumar
See, out of total advances our to give me a second 50 — around 50%, 55% is linked to external benchmark.
Amit Mishra
Okay, sir, 55%. Okay. Sir, we have witnessed a really good growth in-vehicle loan segment, almost 59%. So in — specifically in-vehicle loan, which sector are you seeing two-wheeler, four-wheeler is growing or which specific vehicle sector is implying.
Shri Ashwani Kumar
The growth is in four-wheeler only. My growth is in four-wheeler. And actually we have revamped our vehicle loan scheme last year and that has given a result and our base was very low. So on a base of with a branches network of INR3,300 crores, March ’24, our micro per branch was even less than INR1 crore. So now we have reached to a level of around INR1.5 crore per branch. And we have also revapped our incentive scheme for the DSAs also. So that has all contributed to the growth in-vehicle loan business.
Amit Mishra
Okay. Thank you, sir. And sir, next on — I may have missed in past quarters, have we changed any provisioning norms for employee benefits in past?
Shri Ashwani Kumar
No, no. There is no change. I employe norms — provisioning norms for employee benefits that is governed by S15. So they continue to apply as it is.
Amit Mishra
Okay, sir. Sir, you mentioned you have already spent like INR440 crores on IT this year and what would be.
Shri Ashwani Kumar
600 crores.
Amit Mishra
And for next year, we are targeting 1,000 plus.
Shri Ashwani Kumar
Yes, 1,000 plus.
Amit Mishra
Okay. Okay. Thank you, sir. These are my questions. Thank you.
Unidentified Speaker
Thank you. We have our next question from the line of Mr Rohan, you can unmute.
Unidentified Participant
Yeah, good afternoon. So my question is what is your outlook on NIM as it has declined sharply from 3.8% to 3.2% quarter-on-quarter and also the yields also dropped from 9.02% to 8.9%. What’s explaining this? And is this because of deposit is largely stable?
Shri Ashwani Kumar
And see last quarter, we had a interest component of around INR42 crores from one of the segments that is NRLM. So that was — that was overhead of our normal interest income and that gave us a slightly higher NIM and higher yield in the last quarter and which was not available in this quarter. So that is one. Because of that only. Otherwise, it is not. If you look at our yield on fund, that has improved on a Y-o-Y basis substantially.
Unidentified Participant
Okay. Thank you, sir. So the next question is around personal loan — loan group — loan book growth has been quite steep this quarter, about 10% to 11% quarter-on-quarter and 46% year-on-year. Though it is very small portion of total loan. Can you throw some color on it because at industry level, we are seeing de-growth degrowth or is it — is this two ETB customers or NTB customers as well?
Shri Ashwani Kumar
These personal loan is totally to ETB customers, number-one. And number two, these are — there are two components. One, what are the salary count holders. Second is our pension account holders. We are giving personal notes to them. Third is our regular customers who accounts are being operated for the last nine to 12 months regularly and we have a criteria of average the balance and minimum balance basis that we offer them facility.
So because of this, this has slightly increased, but on a smaller base, the percentage looks large. But if you look at total overall growth in a year is only INR800 crore. But on a percentage terms, it looks very large. But per branch, if you look, it is not even INR1 crore per branch. But we are mindful of the fact we are not going to NTB customers currently.
So our focus is only on our internal data usage. We — data analytics team is there, we have a data enterprise data warehouse from where we take basic our customer identified and then they are given offer to services.
Unidentified Participant
Thank you, sir. That’s answer my question. And one last question from my side, if what is our total gold loan portfolio and how is — how is that book shaping up in terms of growth, sir?
Shri Ashwani Kumar
10,500 crores. See total gold loan portfolio of our bank is INR10,500 crore and we are all-in compliance with the RBI guidance of our gold loan portfolio also. And if you look at the gold loan portfolio, it has behavior of the gold loan portfolio in last financial year has been reasonably okay. There is no delinquency we are observing that the Ticket size or anything or the NPA or the delinquencies are increasing, not like that. Our gold loan gold loan portfolio behavior is satisfactory and growth is also reasonable.
Unidentified Participant
Thank you very much. That’s all from my side.
Unidentified Speaker
Thank you, sir. We have our next question from the line of Mr.
Unidentified Participant
Thank you for giving this opportunity and compliments to you, our Sabuji and Kamil.
Shri Ashwani Kumar
Thank you.
Unidentified Participant
Thank you of the — I think the best profit, I mean you have come to INR2,445 crore of profit as against INR2,437 crore of loss in 2020. Yes. What a fantastic journey. So from a loss backing to a profitable and now consecutive, I think for last four years, you are in profit, but this is probably one of the highest I think in last 10, 12 months.
Shri Ashwani Kumar
Yes. Highest profit, sir.
Ashok Ajmera
So compliments to you, sir, for that.
Shri Ashwani Kumar
Thank you.
Ashok Ajmera
And the entire team of. And sir, even your growth is phenomenal even in this year also, like credit people are struggling. I think probably you and Bank of Maharashtra, I think these two are the only probably the banks which have gone beyond 17% or even 16%. So compliments for that also.
On deposit front also you are doing well, about almost 11.5%, 12%, which others is credit actually, deposit is 7%, 8%. So having said that, sir, how do you see like you have given a good target for the next year also, but you have a little bit tapered down your targeted number of credit to just 12% to 14% as against 17.7% which you already achieved in this quarter itself.
So — and similarly on the deposit front also little bit down, though it is better than others. So, sir, I mean, do you see that the demand may little bit come down or because of this geopolitical turmoil and so many changes, so many things happening around and recently what happened in India also.
So is there any impact you see going to be or it’s the general assumptions that little bit of a credit growth will be lower than what you achieved this year.
Shri Ashwani Kumar
See, if you look at our previous year’s guidance also, our guidance was 12% to 14% in advances and deposit was 8% to 10%. And our achievement was in deposit 11.56%. And this is this achievement of 11.56%, we have given a guidance of 12.10% to 12% in deposit, right. In advances, see, advances are again a opportunity based.
Sometimes you get a better opportunity, better pricing, yield, then you go for it. So like this and ours is a retail, we have already done around 62% of our RAM segment is there. So in RAS segment, when we are talking about RAM and India particularly where the economy is also good, there are no fears we are doing better than the world and domestic consumption and market is very sound.
So we expect that the RAM segment to continue to grow in the same range. And in corporate, our growth was, if you look at our growth in the corporate was only 12%. So again, corporate, it depends upon a case-to-case basis whether the pricing matches our expectation. We will get good banking proposal, bankable proposal with a pricing as per our requirement, we’ll definitely go for that.
So it will be a balanced approach towards credit growth in RAM segment and in corporate credit, depending upon the margin available, depending upon the pricing which we are getting. And accordingly, we have kept guidance of 12% to 14% given an opportunity if guidance as we have done in the last year also.
Ashok Ajmera
The point will take, sir. Now the second one is, sir, about very good control you are having on the SMA like SMA-1, which was INR730 280 has little bit come up, but SMA-2, which was INR420 crores has come down to INR66 crores. So it’s a like a good control, but what is the — basically, are you feeling any pinch in the individual accounts or with this little bit of slowdown, is there any impact, little bit of delinquency in our recovery or this thing, though the final number looks good but on a day-to-day basis, what is the experience sir on the recovery front, sir.
And this happens with this — our recovery from the written-off account is also good. I think it was INR964 crores in this quarter. So going-forward, what is our total written-off book and how much do we expect in percentage comes out of that, sir?
Shri Ashwani Kumar
See if you first is SMA book. If you look at our SMA book for the last three, four quarters and the financial year last financial year this year, we are declaring more than INR1 crore. We — generally other banks are declaring more than INR5 crores. We declared more than INR1 crore on for the last maybe around two years now.
And if you look at our book, our total SMA still continues to be in the range of INR1,500 crore only. Yes. SMA more than INR1 crore, 01 to 012. Sometimes some counts got back to zero, some come get back to-1 and some got account gets 2, 2 and then they go back to one. So if you look at total, 0.7 — around 0.7% of my total SMA is more than INR1 crore only of the book.
My total — total advance is only 0.7% and that is a continuous constant it is no — it is not that there is a surprise in 1/4 that somewhere it has gone up and somewhere it has come down consistently. And if you look at my segment-wise, we are also declaring. So in retail, our SMA is in the range of INR250 crores to INR270 crore for the last March, December and March again.
In agriculture also, it is in the range of INR150 crores, INR180 crore. MSME, it is a range of INR500 crore to INR600 crore. And in corporate, it is in the range of INR500 crore. So it is well spread across segments and is consistently it is there. There are few accounts which we are in the corporate segment around INR700 crores, which we are in our, which we continue to monitor.
Sometimes they come into SMA, sometimes they come out of SMA, but they are continuously paying and paying there are certain challenges with them, cash-flow issues are there. But these accounts we have seen over a period of last 1.5 years, they have not slipped. But at times they come into SMA and then they come out of SMA as well.
So on an overall basis, if you ask me from the behavior of our book, I don’t see any stress building up in any of the segments, either in retail, MSME, agri or corporate for the bank. And second, recovery, this last quarter yeah, recovery last quarter as I told in my opening remarks that last quarter we had a very good recovery in one of the account which we were expecting, we have targeted for this financial year.
That was around INR841 crore of recovery in one account around — that was we were expecting in this financial year. But that resolution happened and the money came in the last financial year itself in the March quarter. So that has given a boost to the recovery over the last year. Last year our recovery — total recovery was INR4,429 crores as INR303,127 crore previous year.
And that has given us a lot of confidence. We have a book of TWO account currently also aware ’22 to ’23 around INR23,000 crore of TW book is still there and there are certain NCLT, INR18,000 crore NCLT only. It again depends upon the resolution when it happens and how it happens and how much we get.
They are — if you look at my own book also, that is also now I think INR5,900 crore of on-book NPA. So there also we target some recovery. So overall recovery, we are expecting that because INR900 crore, around INR850 crores we have already taken this year. Otherwise, our initial estimate was that we will recover around INR3,500 crore of a recovery in this financial year. But since INR840 crore is already come, so we expect around INR2,500 crores to INR2,700 crores in the next financial year the company to come
Ashok Ajmera
Okay, sir, the last question in this round, sir, is on the treasury. Now with this rate softening and even 20 basis-point is just in this year itself, the reduction is there and with next two, three rate cuts, we might go to 6% like 6.1 or 6%. So do we expect a good bumper profit coming in the FY ’26 from the overall treasury operations.. Sabu, sir?
Shri Rajendra Kumar Saboo
Yes, sir. Yes, sir, yes. We all are looking at that.
Ashok Ajmera
So you are aware of treasury, sir.
Shri Rajendra Kumar Saboo
Yes, yes. Thank you, sir. So RBI has already cut the repo rate twice 25 basis-point each. And now we expect, as you have already said, further cuts if that happens, definitely the yields will be going down. But because profitability will depend upon — because the has changed the guidelines on investment last year only.
So the FETPL part only will come into the profits directly and AFS part will go to India only. So that is one thing. So — but again, we are active in the market. As you can see in our presentation also, we have plus 2,000 plus portfolio in FEDPL also and that trading is also means taken-up by the treasury.
So we see a reasonable profit from there. We can’t quantify because it is a function of the market movement. So we can’t quantify, but yes, we are hopeful of — because if yields are supporting market is supporting, definitely opportunity is there. So we are there in the market to case the opportunity as and when the prices. So we are hopeful to have a reasonable profit from that also. Already we have declared that the treasury.
Ashok Ajmera
Yeah, good, good, sir. If you permit, sir, one more last question, sir.
Shri Ashwani Kumar
Yes, please.
Ashok Ajmera
Sir, on the NBFC, on the NBFC front and co-lending space, now the RBI has also little bit — has become liberal saying that the non-priety sector NBFC also the banks can go for so what are your views on that? What is our existing NBFC exposure, including the co-lending? Would you like to throw some light on that, sir? What are your plans in future? Do you want to grow that portfolio? How do you plan to do it?
Shri Ashwani Kumar
See, our existing NBFC portfolio is around 12 — I think 12.5% of our total domestic advances. Right. And if you look at our co-lending partnerships, we have already done around seven co-lending partnerships and our total co-lending portfolio under these partnership is INR2,200 crores. So given an opportunity, if in the current financial year also, we’ll continue to evaluate the proposals coming to us.
If you match our loan policy guidelines or we are able to modify product and based our loan policy guidelines, we can offer those products through the co-lending partnership, we’ll continue to that. So we’ll continue to evaluate the opportunities and then take a call basis, the credentials, basic, the product, see the segment, so many things are to be seen, but we are open to look at the future partnerships in co-lending space with fintech, with private,, whatever. Thank you, sir.
Ashok Ajmera
Thank you very much for answering all our questions. Thanks a lot and all the best to you. You continue to perform better than what you have been doing. Thank you, sir.
Shri Ashwani Kumar
Thank you, sir.
Unidentified Speaker
We have our next question from the line of Mr Sushi Chosi.
Sushil Choksey
Congratulations to management and team of Yuco Bank on excellent stable numbers and the QIP which you concluded in the last quarter. So based on — based on current quarter CASA, which we have ended with now falling interest regime, Sabuji already answered on the treasury outlook that the yield — the RBI may drop two more times, maybe more also.
And second thing, most of the banks have started dropping rates where deposits are concerned. What will we do differently to strengthen our cost leads to a sustainable growth path and compete with larger banks.
Shri Ashwani Kumar
Hey, yeah. So, if you look at our CASA, in the last financial year, if you compare CASA of other banks and CASA of our bank on a quarter-on-quarter basis, we have already given a guidance of 37% to 38% and we are well within the guidance in the current financial year, 37.91%, we maintained CASA.
We have done a lot of initiatives in the last financial year to garner CASA to improve our offerings to the various walks of life, like for students, for females, for salad customer, for non-salid customers, for current account holders, like for — so for everybody, we have done a different type of product and we have bundled those products with various freebies or offerings by way of the free insurance or by way of some in concessions or waivers like that, we have already bundled all those things.
So that has resulted in a opening of new account. Then another thing which we started last year, if you remember was the tire banking. So initially we started tire banking 500 branches, reached to 700, 1,600 and then now in last March quarter, we have given to the entire 3,000 plus branches. So now our onboarding is through digital banking by reaching out to the customer.
Earlier a year back, we were 100% dependent on the walk-in customer. Then few of our branches were able to reach-out to the customers. Now by this March-end, all our branches are equipped to reach-out to the customer for opening a saving account. Not only saving account, we have already enabled current account for partnership — for proprietorship and individuals through tab banking also. That also been enabled.
Now what else we are doing is we are trying to build a functionality in the tab so that whenever our staff or employee reaches out to customer for opening or for anything, he can undertake transaction also sitting at his office through tab. So that functionality is also we are bringing so that customer need to visit.
Apart from that, through mobile app also, we are onboarding on various journeys, which will enhance our customer experience and customer offerings and customer engagement will improve. The purpose is to improve customer engagement. Since many of our customers are already into investment space also instead of saving, they are investing in mutual funds, they’re investing in shares, they are investing in various securities.
So we have already a platform which gives this services. In addition to that, we are also trying to have a partnership with NSE or BSE so that we partner with them also so that we offer our mutual fund opportunities to our customers through those platform. So that engagement is — similarly, insurance partners also will be onboarding so anybody wants insurance that also can onboard through our mobile banking app or Internet banking.
We are also bringing our total omnichannel experience also. So that is product is also in pipeline. So bank will continue to do enhance customer experience, whatever improve offerings, though we have already done once, but we’ll continue to reinvent those offerings basically customer expectations in an ongoing basis so that we engage more-and-more with our customers that will enhance and that will enable us to maintain our CASA ratio also. This is my feeling is.
Sushil Choksey
And when you’re doing a good job and you’re implementing so many digital technologies segment to segment and product-to-product wise, whether it’s a doctor, lawyer, student or MSME customer, all that. When interest rates are falling, I am quite sure that your CASA can exceed 40%. Your guidance may be conservative.
I’m fine. But looking at strength because we are showing positivity on credit, a sustainable CASA when the interest rates are falling may take the bank to a higher height and that’s the reason I was suggesting. Secondly, on treasury, sir, on treasury, the yields will fall, we’ll make-good money on bonds which we are holding on AFS, HTM, whatever we encash based on our CD ratio, which you would like to maintain.
What are we likely to different because we also have international presence and domestic presence that today majority of the corporates are in a position to borrow through gift city. Will we enhance the margin by taking some exposure on corporates, which enables for bank to perform better or maybe it’s a bond, three or bond or should we do something better which mismatch can be maintained?
Shri Ashwani Kumar
Sorry, usually we miss you in-between we don’t get the entire question please. Last part. Last part.
Sushil Choksey
So basically — yeah. Sir, repeat,. Basically [Foreign Speech] yield treasury may be beneficial way other than. That is what my question is.
Shri Rajendra Kumar Saboo
Other than so you are talking about non-SLR book, right? That’s right. Yeah. So yes, we are active in corporate bonds category also and we have improved our non-SLR book also, you can see there have been several certain maturities during the year from earlier discom bonds. So now we have already means front-loaded our deployments in corporate bond category also because we know the yields were attractive — quite attractive earlier before three, four months back.
So we have done that kind of investment also and we will continue to see the corporate bond segment as well in our investment book other than the and SLR book. Though we have reduced our SLR book, if you see year-on-year, we have reduced our SLR book from around 25% to 23% to augment our CD ratio.
But I think we will continue to maintain around these levels and we will further or enhance or augment our non-SLR book as well through the corporate bonds and whatever opportunities comes into that segment. I think that will support our yield — overall yield on investments. That is correct.
Sushil Choksey
Sure. How are you shaping up on the international book, similar growth opportunities or with the falling yield, there is pressure there.
Shri Rajendra Kumar Saboo
So in international book also our two — we have two branches, Singapore and Hong-Kong, they are also quite active, both in lending and as well as in investment also. So we have a little book of investment overseas as well. And yields, yes, of course, the yields — falling yields there means getting more opportunities to raise the cheaper funds also and to deploy that.
Yes, the pressure is there on the margins. But we still we are — we are able to get good deals into the overseas market also on lending side also and in investment book also. So we are quite active in overseas book also. So that will also continue and that will support our overall profitability.
Sushil Choksey
Sir, you answered the previous question this question on co-lending with RBI very elaborately saying now that a bank of our size or any bank can get into partnership, which enables banks growth, whether it’s MSME loans or any other category of loans, which you know better, what will we do differently or like every other big bank, we’ll only try up with AAA and AA and continue the process or we’ll identify a partner who is good on process, but doesn’t have the credibility because he may have the net-worth, but his rating may be not AAA and AA.
Shri Ashwani Kumar
Okay. There is no limitation on our part that will go only with AAA or AA will go with the any NBFC or partner or bank whatever with good standards, processes and their NPA percentage so there are certain parameters which is defined in our loan policy document that what type of partnership we can onboard in co-lending.
So whichever partnership fits into our criteria. So we’ll be open to look at all those partnerships and onboard with them for the co-lending purposes. So the rating is not the only criteria. If that rating is AAA or AA, but the NPA percentage of the NPA or the power of the NBFC is high, that does not mean that I’ll go with that NBFC itself may — merely looking at that AAA rating.
There are many other factors which are stipulated in the — in the Board-approved policy for the co-lending, which we look at and then we arrive at a score where we will be where we need to enter into the relationship. So we’ll continue to do evaluate all relationships which come — which come in our way and there — naturally their processes, their recovery mechanism, their underwriting standards, we will evaluate and then we’ll go-ahead with the partnerships.
Sushil Choksey
Okay, sir. Sir, last question on the credit side growth. How are we seeing what is the book position in terms of sanctions which are available, which are not disbursed, how is the pipeline looking because with whatever happening led by USIC direction on the trade, India may attract a lot of trading manufacturers and opportunities because lot of goods may not get shipped from China.
So I understand we may not get into any kind of a trade situation, which impacts our bank, but manufacturing as well as global demand/supply chain, India may attract a larger trade finance situation, including manufacturing opportunities. How are we locating or citing those opportunities in our bank or we are creating some opportunities by already talking to customers?
Shri Ashwani Kumar
Yeah. Surely our sanctions which are already in pipeline, which are likely to be disbursed over a period of last one year is in the range of around INR10,000 crores where we have already given sanctions and which will be availed. Again, it depends upon a scenario at that time when the opportunity comes to lend or to borrow whatever, but we have already pipeline of around INR10,000 crore in various segments which is available.
So-far as opportunities which we are exploring, we have already looking at various investment lending opportunities in various actions in manufacturing also, our teams are talking to various customers. They are also trying to figure out if any particular product is required, which is need to be — like for MSME, we have driven around 11 products in last financial year.
For any product or any industry is required, we are also working on a cluster-based product for like for example, simple example I will give you like tiles. So there are certain tile clusters. So we are working out for a product that will cater to the tiles cluster requirement. Similarly, various our team is working on various requirements and trying to figure out the possibilities where our customers are in the process of entering into some ventures for taking the benefit of this trade situation which is emerging now.
Look on those opportunities, we are open to bringing new products also to have those opportunities? Whatever extra mile we need to go, we’ll definitely go.
Sushil Choksey
Sir, understood that you’re taking lot of initiatives to capture the segments which are going to be emerging with us and the bank would fructify on a benefit. Sir, thank you for answering all my questions and good luck for the year to come. Thank you.
Unidentified Speaker
Thank you, sir. That will be the last question. This is any closing remarks?
Shri Ashwani Kumar
So thank you for to all the analysts for post-results con-call and I thank you all the analysts for showing interest in and we will continue to perform as we have been doing in the last financial year-on a quarter-on-quarter basis. Bank will continue to put in best efforts to improve its performance and we expect that the same support from the analysts for our bank to continue the times to come also. Thank you very much, all the analysts. Thank you very much. Thank you for showing your interest. Thank you.
Unidentified Speaker
Thank you everyone for joining the earnings call. You may disconnect the language