Union Bank of India Ltd (NSE: UNIONBANK) Q3 2026 Earnings Call dated Jan. 14, 2026
Corporate Participants:
Ajay Bansal — Deputy General Manager
Asheesh Pandey — Managing Director and Chief Executive Officer
Sanjay Rudra — Executive Directors
Amresh Prasad — Executive Director
Ramasubramanian S — Executive Director
Analysts:
Mahrukh Adajania — Analyst
Jai Mundra — Analyst
Ashok Ajmera — Analyst
Dixit Doshi — Analyst
Bhavik Shah — Analyst
Kunal Shah — Analyst
Jainam — Analyst
Parth Gutka — Analyst
Antariksha Banerjee — Analyst
Akshay Badlani — Analyst
Ashlesh Sonje — Analyst
Gaurav Jani — Analyst
Siddharth Rajpurohit — Analyst
Presentation:
Operator
Ladies and gentlemen. Good day and welcome to Union Bank of India Earnings Conference Call for the period December 31st, 2025. The bank is represented by the Managing Director and CEO, Shri Asheesh Pandey; Executive Directors, Shri Nitesh Ranjan; Shri Ramasubramanian. S; Shri. Sanjay Rudra; Shri Amresh Prasad; and other members of the top Management.
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. [Operator Instructions]. Please note that this conference is being recorded.
I now hand the conference over to Mr. Ajay Bansal, Deputy General Manager. Thank you. And over to you, Mr. Bansal.
Ajay Bansal — Deputy General Manager
Thanks, sir. Good afternoon, ladies and gentlemen. I, Ajay Bansal, Head of Investor Relations, welcome you all for the Union Bank of India earnings call for the period ended December 31st, 2025. The structure of the con-call shall include a brief opening statement by respected MD and CEO sir and then the floor will be open for interaction.
Before getting into the phone calls, I will read out the usual disclaimer statement. I would like to submit that certain statements that may be discussed during the investor interaction may be forward-looking statements, based on current expectations. These statements involve a number of risks, uncertainties, and other factors that cause the actual result to differ from the statement. Investors are therefore requested to check this information independently before making any investment or other decision.
With this, I now request our respected MD and CEO sir, for his opening remarks. Thank you. And over to you, sir.
Asheesh Pandey — Managing Director and Chief Executive Officer
Thank you so much, Mr. Ajay Bansal ji. Good afternoon, everyone. With great pleasure, I welcome all of you to Union Bank of India, your bank financial results for quarter ended 31st of December 2025. Actually, we are meeting first time in this calendar year and the third time in the financial year. So on behalf of Union Bank family, I wish you and your family a very, very happy New Year.
Also, today being a good day, it is a Sankranti, Lohri, and Pongal. So all are coming for next since yesterday to next few days which is a festive season across India. So from behalf of the entire Union Bank family, I wish you and your families happy festivities.
Before we go to the figures, let me just set the tone the context. The first is the economy of the country, like last year, 6.5 to 6.7 band and other things. And now we see that expect around 7.4 in this year. So I think we are in the Goldilocks phase, which is a high growth combined with the low inflation. And if we take the few initiatives, like various reforms, are taken. By various regulators, various reforms are building by the government.
So, a few of that, related to the government, the GST, which came as a big enabler for various industries, various participants, and the government capex, which is supplementing to the private capex as well.
As far as banking is concerned, our regulator since last one year, I think 125 basis points is the repo cut. Then, CRR almost 100 points cut. The liquidity easing through OMO, assets and everything has happened. And so, I think rationalization of various circulars. So, I think these are giving the positive environment, conducive to the growth, and the same is happening.
Coming to your bank, Union Bank of India, just as a part of initial brief, in the Ease agenda, which is run by IBA and monitored, supervised by DFS. It is across all public sector banks, majorly with an objective of creating a good ecosystem, facilitating to the growth, to the digital, and to the customer service. We stand 2.0, and recently, two few days back, we had an IBA Tech award, and our bank has received four technology awards. Also, the best bank tech award.
So I think with this brief we have already — we had a board today and our audit committee and the board. The board has adopted the financial statements and the same in the form of a presentation. It has been uploaded to stock exchanges as per the regulations. And you will see as far as the business figures are there, mostly generally what — generally, the questions are asked, we have tried to inbuilt within the presentation itself.
Meanwhile, the important point is related to the staff members. So that is why you will see one or two slides pertaining to our staff. Because I am from this bank, and when I came back, I always see. The Union Bank staff, Unionites, are the best. Everybody will say. But then yes, it is a pet sentence for me. So that also gives a color like how many engineers. So almost I think out of 74,000, 32,000 approximately are like FRM engineers, CAs and other streams. So that is also a good composition. It’s just about training and other things.
Similarly, the bank has started a project, Muskan, which is also related to ease of doing business, actually more than 500. We have actually done some bottom-up approach survey. We have done a lot of groundwork, and within that, we are trying to sort out and streamline the things so that there is a Muskan — project. Muskan is nothing but a very small thing, like the Muskan in the face of our staff members and the customers. So actually the purpose and objective of the project is to streamline, smoothen. And at the same time, strengthen your risk mitigation across the bank.
And certainly, when you do all these things, there is a cost-cutting for sure, and there is a technology, as I briefed initially, there is a lot of the technology already inbuilt in the bank. Whether AI sort of thing, or whether the robotic process automation or whether — even I would say the bank is one of the banks where two DC and two DR are there all the four, correct? So I think that is one thing.
I think on technology, our ED sir will also brief whenever you are having any questions. But at the same time, coming to the financial performance. Net profit of your bank stood at INR5,017 crores for this quarter ended December ’25. Interest income stood at INR26,443 crores. The business growth, certainly, here you will see the figure like 5.04%, and the gross advances increased by 7.13%, and the total deposit grew by 3.36%.
But here, before going further detail in the financials, I would like to just inform you that very carefully we actually scrutinized, worked upon, thought and actually brainstormed on each of our portfolio. And in a very nutshell, the four pillars we worked. The first thing is that we already had the funds inside so around INR40,000 crores, INR38,000 crores to INR40,000 crores, we have shed off the bulk deposits, which was at the higher cost. So that is point number one on the first pillar.
The second thing is the treasuries contacted by INR15,000 crores. So that has moved over to the credit side. The third thing is that we had an IBPC, which we discussed in the last con-call as well. So that is now INR20,000 crores is not there. So I think that is become zero. Then around INR10,000 crores, we had a some portfolio on a very low yielding that actually we move to long-term loans. So there again we could gain something.
Now coming to the point in the December ’24 our NIM was around 2.91%, and there is a rate cut of 125 basis point since then till 31st of December ’25. But then, if you see from 2.91%, we stand at 2.76%. So I think that is where we could shield. And from September quarter, if you see there is an increase in the NIM opposite way. So I think that is the key point which justifies that the work which has been done on the four pillars how it has been worked or impacted upon.
So, with this, the capital ratios are all good. The liquidity ratios are good, we have given in the presentation. And the growth in the RAM sector certainly increased by 11.50%, 21.67% growth in retail and 19. — so the robust growth is coming into the RAM segment. Even there is growth, I would say in the corporate also, but it would not be visible because INR20,000 crores plus INR10,000 crores, INR30,000 crores we have churned within the portfolio. And certainly, it is an inflow from new proposals, good proposals. And if you see the portfolio, the AAA to A, it is almost, I think, how much? 95%.
So I think that is the level of the book which the bank is carrying. And while coming to the stress side, the GNP and NPA both have reduced. Both are at the comfortable range. And coming to the SME2, we are again at the very lowest level of INR4285 crores. Above INR5 crores. I think this is also gives a good color that the first time bank has crossed INR10 lakh crores of advances. As a bank, the return on assets is approximately 1 point — not approximately exactly 1.35%, which is again the highest one. The ROE is again the highest one.
CASA certainly it is point to be noted like you know, 150 basis point is increased from quarter-to-quarter. So I think this is one of the good things which has happened. And you can see within the three months the reduction in the cost of funds and deposit is really very steep. And with this, all, suddenly the assets of quality of asset is being maintained very well. The PCR is almost more than 95%. We are comfortable. Cost of — credit cost is again too low. Slippage ratio is again low. Keeping a view on this, we have not actually put our money into the provision, but we have put into the growth. I think this is one of the most pain points of the working of the entire senior management which are sitting there in this boardroom, including half of our vertical head GMs, CGMs and all.
And with this, I hand over to you, Mr. Bansal and to all our esteemed investors for any queries which they have. Along with me — I am accompanied with me — with my Executive Directors. Shri. Nitesh Ranjan; Shri Rama ji; Shri Sanjay Rudra ji; Shri Amresh ji. And I’m with my all CGMs and vertical heads.
You may please start the query.
Ajay Bansal — Deputy General Manager
Thank you, sir. Thank you, sir, for your opening remarks. Now you can start.
Questions and Answers:
Operator
Thank you. We will now begin the question-and-answer session. [Operator Instructions]. The first question comes to the line of Mahrukh Adajania with Nuvama. Please go ahead.
Mahrukh Adajania
Yeah. Hello. Congratulations, sir, to you and your team. So I had a couple of questions. Firstly, if you see your interest income break down, then the other interest is high, it’s around INR205 crores, INR206 crores, and it’s been in the range of around INR100 crores in the last few quarters. So what is the breakdown of this other income? Other interest income? That’s my first question, and then I have one more.
Ajay Bansal
I think we’ll come back to you. On the exact breakdown but it also includes our income that we get from the PSL deposits that we that we place, that’s a component. [Speech Overlap] So we will give you the exact breakdown but it includes the RFID, you can brief it is recovery. We have invested some funds that we are that the interest is being recovered is being done that being shown as the other income actually.
Mahrukh Adajania
Other interest income. Okay. But how much is actually around it’s INR100 crores or what?
Asheesh Pandey
Other income consists of some more parameters which we will send you across. Now coming to NNI madam Nil, let me brief you. There were two rate cuts in between. So the our book MCLR is around 38%. The other remaining is the T-bill. And the EBLR that is benchmarking. So I think you know the work which was done extensively so the NIH, which we can, because there is a good growth in the RAM sector, and the also corporate book, which we actually. Worked a lot upon that. So I think that is why even though there is a good amount of rate cut and it was conveyed further, but then we could have more sort of income, even than compared to OD rids is 198, actually that is the only thing.
That was the case. Of NII, which you asked. And also, you know when you sanction it like you know we still have a around INR24,000 crores to INR26,000 crores of disbursement. So generally, you will see that most of the quarter you will not get. To use that interest income because. It is you know once you Start. Sanctioning then it takes 10 to 15 days, 20 days time for the reimbursement. So then something has been sanctioned in October number then most of the things in December. So certainly the continuous and the regular. Book which was sanctioned and disbursed. I think that has given a good results.
Over to you, madam.
Mahrukh Adajania
So yes. So my other question is that based on the draft ECL norms what would be the run rate impact as in what will be on an ongoing basis the increase in your credit cost if ECL were to be implemented as it is in the draft form?
Asheesh Pandey
We have worked upon it madam. And if we take the total requirement and the ECL keeping in view our book and the provisions we are already which are we are already holding if. We come to the netting position it. Is hardly INR4,200 crores to INR4,300 crores range. It is not more than that required.
Mahrukh Adajania
Right. That is the transition impact I am talking about on a run rate basis. So see…
Ajay Bansal
Yeah, Mahrukh, I think even. On a run, even on a run rate basis, you can. You can see that you know our credit cost has generally been varying, you know, between the 20 to 40 bps mark. So while these are still draft and you know we await you know because we made some certain recommendations in terms of some changes that we want. Let’s discuss it once you know the final. Yeah, the final guidelines come together. That will actually be the. The right way to look at it. We’re not expecting too much of a change in terms of our current credit cost versus the expected under ECS.
Asheesh Pandey
Even if we see the SMA too, our hardly INR4,285 crores in the entire book. So at the credit cost well within. Control level, and now I am coming. To which is not an SMA. So 95% of the corporate book is A and above rated one. And so I think that is. That is the inference which you can draw. The book loan book is quite strong enough. Meanwhile, the bank has implemented various early morning signals, and now that FinTechs there, is a software there is a seat on street, and the entire system is working. So bank has strengthened the collection systems. So I think that is a robustness is there so we do not much worried about that. The transition as you said migration is not much right now. But the run rate as you said let us see how it happens, but then we are on the safer side.
Mahrukh Adajania
Sure. And what would be your estimate to below INR5 crores?
Asheesh Pandey
Below INR5 crore I think it will be hardly in the range of INR24,000 crores something like that.
Mahrukh Adajania
Sorry, how much?
Asheesh Pandey
INR24,000 crores, INR25,000 crores. Because generally, what happens you know when you apply the interest and many of the companies it comes very next. Day in the sense morning. So SME is.
Ajay Bansal
We’ll give you the exact number because we don’t disclose that in our. In our presentation we only disclose about INR5 crores. So we’ll come back to you on the below side.
Mahrukh Adajania
Thank you.
Operator
Thank you. Next question comes from the line of Jai Mundra with ICICI Securities. Please go ahead.
Jai Mundra
Hi, good afternoon, sir, and congratulations on a good number and revival of the loan growth. Sir, my first question is on the loan growth. You also talked about that there are ongoing mixed changes within Corporate, and some of the lower-yielding loan book getting transferred. Amidst all this, how should one look at the loan growth going ahead? Is this mixed change is broadly over? And can you like sustain this 4% or maybe higher QoQ loan growth? And how soon can you reach industry level loan growth on a YoY basis?
Asheesh Pandey
Yeah, see you have actually grabbed it you know around INR30,000 crore in the corporate itself, which we have churned out. So that is explicitly actually, it is visible, like you know how it is and what would be the actual growth. Now it is a very big bank. It is an exercise which we have taken very cautiously. There will be something going forward in. This quarter as well. But the thing is that the way in which we have grown in this quarter, certainly, the growth in this last quarter will be more than that.
Because when you galvanize the entire machinery, and you move into even right now in the corporate, only I am saying around INR24,000 to INR26,000 crore is the sanction and disbursement pending. And we further have a good pipeline in various stages of sanctions. So I think what this is the like you know the start with. So we expect better than this in the. In this quarter, and yes, we the aspiration the market which is having the growth is certainly is our aspiration and. We will be moving in that line only.
Jai Mundra
So I mean to conclude what we are saying is that this kind of a run rate growth on a QOQ basis can be sustained and you would be hopeful of achieving industry-level growth YoY basis soon. Right. That is the. That is despite all this. Yes.
Asheesh Pandey
Better than this one we expect. Better than this one we expect in the coming quarter.
Jai Mundra
Thank you, sir. And secondly, sir if you can highlight was there any provision carved out for gratuity leave investment for the under the new labor code. Because I believe that was like mandatory. Right. You all the at Least the gratuity part was mandatory. Have we done heavy provided if you can quantify that number?
Asheesh Pandey
Yeah. See, there are two things in the labor code broadly. The one is on the welfare benefit side. So certainly, what is there in the code and what is given in the banking industry under part-time is much better. So that is out of question. Now, coming to the second one. Like you know, the engagement gratuity and other things. You see this is bank which are for a long. Like year 107 years old. Now this impact is more which are younger age banks because you know moving from five years to one year and other things.
Now, up till now, they were not. In that group, because five years was the minimum. But in case of the banks like our and other. Public sector banks the impact may not be much. But at the same time, as per our conclusion maximum it will be in the range of 10. Because some of the code, some of the rules yet to be received. So that is what we are meeting even right now. And because see there is as per the bipartite, there is a basic pay, and then there is a special way. So there is some even clarification and other things which means under discussion. But then maximum I think as per our calculation it is coming in the range of INR10 crores to INR15 crore. Not much.
Jai Mundra
And this is for. I mean this is what we have done already in this quarter. Or you know this can be a. This is the only impact, right? INR10 crores to INR15 crore, nothing material.
Asheesh Pandey
It will not be because gratuity. Actually, we are already doing no. So that will not make much of a…. Yes,
Jai Mundra
Okay, understood. And sir, another thing is on trade release measure, right. So during the RBI during the quarter RBI had given a dispensation for moratorium for exporters. If you can quantify what was the request in rupees crore for our bank.
Asheesh Pandey
Yeah, actually, the total till date we have sanctioned around 78 of the proposals around INR500 crores. And within which 61 proposals of INR216.64. Crores are already been disbursed. So actually we already, we met with various clients in last three. Months and there were some specific pockets as well. So we understood the requirement, and as a the conduit for the economy and the measures which are taken. By the government of India, and all these are very good companies actually. So like various rated also in the good standing. So there are a few more proposals actually are there but we can be pipelined. But this one figure I am giving you is the sanction and disbursed.
Operator
Thank you. Mr. Mundra. Please rejoin the queue for more questions. Next question comes from the line of CA Dr. Ashok Ajmera, Chairman with Ajcon. Please go ahead.
Ashok Ajmera
Yeah. Thank you for giving this opportunity. Good afternoon, sir. Asheesh sir and the entire team of the Union Bank, compliments to you for, especially for the net profit going beyond INR5,000 crore, INR5,017 crore in this quarter, which is very heartening to note. The bank has been in the range, it has come, I think, in the fourth quarter of 2025 at around INR4,985 crores, but crossing INR5,000 crore and coming to INR5,017 is really commendable job as far as the profitability of the bank is concerned.
Having said that, sir, I echo the same sentiments of one of my other colleagues also about the growth in the business, that is, overall, the advances in the deposits. While in this quarter we have addressed the credit growth, at least in this quarter, we are a positive 4%. And going forward, you already assured that the coming quarter will be better.
But still, if you look at the, I mean, the deposit growth, that is just 0.95%, and the overall, if you take nine months also, it is only 3.88%. So, unless we match that, like, how are you going to increase your advances when your CD ratio is already 83.89%, your CRR has come down to 16.49%. So, how do we, with this kind of deposit, in spite of all the churning, because if you look at even last seven quarters also, the deposit growth is only 2.19% over the seven quarters, right from the Q1 of FY25. So, what is going to be drastically done by you so as to bring the deposit also up to match with your credit growth targets?
Asheesh Pandey
See, Ajmera sir, thank you so much for the appreciation to the bank, your bank and the staff members. I would put it in one very clear way that the raising of deposits is not an issue, and it was not an issue. Actually, we knew where the money is and where to deploy. This is what exactly we have done last three months. Now, if you see three, four things, then probably you will understand that otherwise excess money has cost more rather than creating a more value.
The first thing was the treasury, because we have shed off INR40,000 crores of our bulk deposit and which actually helped us in reducing the LCR requirement, and we had a huge excess of SLR and other securities as well, non-SLR. So, INR15,000 crores of treasury book is contracted, and we have shifted. There was a gap of 3%, 4% because our domestic CD ratio is below 81. So, in that case, we had 3%, 4% of the range to go about it, second point.
The third point is, first time CASA of the bank is increased by 140 basis point. Now, if you take the CASA, around INR8,000 crores, INR9,000 crores CASA is increased. Meanwhile, the Retail term deposit, actually, there the question comes. So, they are put together both, around INR15,000 crores, INR16,000 crores there is an increase. Now, that portion, INR15,000 crores, INR16,000 crores plus, further if you take INR15,000 crores of my treasury book, so, straight away you are getting INR31,000 crores, which is a resource for me for the — and even if I am not taking the CD ratio increased by 3 percentage point.
And that is the reason, outcome if you will see, the CD ratio is within range, the LCR is within range, the NSFR is within range, and all the ratios which are required or the Board approved are well within range. So, there is absolutely no issues. Now, coming to the coming quarters. Now, coming quarters, every bank is having the asset level, the buckets, and certainly we are working upon that. But more so, we are working more on increasing the CASA. So, last quarter itself, we could get 140 basis point, that is a good increase, and which has resulted, even though the two rate cuts, from September the other onwards. So, I think, even in that scenario, if the mean is increasing, that gives a good sort of a color and influence.
So, now, coming forward to this, and also, when we talk about deposit, it is not the only resource. There is a resource of refinance, there is a resource of MSME refinance, also we have done to an extent of INR5,000 crores. Union as a bank, when you manage changes, you have various resources. So, keeping in new resources, and that’s the reason that all the ratios, there is no abnormality or aberration. And actually, this is the reason why this time, at least five efficiency parameters are touching the highest ones.
Now, coming to this quarter, we already have a strategy in place. There are three, four new structures are created. One is the ecosystem banking, and the team is working really hard, and it is a very, very structural, some change which the bank has done. Probably, the next time we meet, somewhere in April, certainly we will be in a position to speak more about it.
Ashok Ajmera
Sir, point well taken, sir. Only thing that now At least a time should come when we are at par with the industry or even better, which used to be some time back also. And that will ultimately be requiring the deposit by whatever means it comes so as to match the growth. There are other means available. I mean, liquidity is there with you. But this mismatch has to be answered, sir. So, point well taken sir.
One of my other small observation is while the operating profit has gone up by about INR100 crore in this quarter, INR120 crore something. Our net profit has gone up substantially. And the main reason is that the provision on standard asset has come down to INR176 crore as compared to INR882 crore in the last quarter. So going forward — and that is the reason our trade cost is also very very minimal. So going forward can we take it as if the provisioning will be less only and the more profit will remain coming in the books only.
Asheesh Pandey
Coming to your provision. Certainly, we need to look into three, four, five ratios or parameters. One is the SMA, one is the loan book, and one is the PCR, how much and one is the GMP and NPA. So I think these four, five things very clearly tells credit cost. I think these seven parameters. This gives a very good inference that. What could be the provision requirement going forward. Number one.
Number two, coming to the OP. See, when you are seeing this group, you are always. There because in all the con-calls and in this meet in the month of June, September, this quarter and. You have seen what happens now. Whatever credit growth you are seeing, you. Say, even if you add INR30,000 crore further it is 9%. See what happens. It doesn’t happen on the 1st of October, it happens during the 90 days time.
Now that something would have been done, because if you start working, then something happens in November, something happens in December. So the entire — that is why the important thing is. What is your average advances growth and average deposit, and average CASA growth. Actually, in our bank we are totally working upon these three figures. Now the thing is that once you have achieved the growth in the next quarter certainly you will be in a. Position to get the interest income out of that.
So you cannot eventually spread out for the 90 days. So, probably like you know in the month of December. Because once you sanction so sanctioning itself I
Will tell you things, say minimum 20, 25 days but then the disbursement further takes 10 to 15 days. So I think this also gives an impact how it would have been spread. Over the 90 days. So I think the like you know the asked op. So we expect OP to be — though though I I will tell you again the net interest income and. You see again the factor of reducing rate of interest. But then we have shielded even in the 90-day period with that given. Circumstances which we grieved you. But even when we have shielded, we have made it better. So I think we actually expect better than this performance in the coming quarters.
Ashok Ajmera
Sir, can you give some color on our technology upgradation and the technology budget, IT budget, and where are we placed and is there any major ease of doing business? Something major is being done in the technology front?
Asheesh Pandey
Yeah, I think initially itself I told about these and I told about IBA Technology award and project Muskan since our ED is running this project and so many things in the bank, and actually, when we get a bestech award. I would like him to address this to all the investors. Yeah,
Sanjay Rudra
Thank you. So Ajmere ji, as you heard MD and CEO in the beginning, that the current focus of leveraging technology is also to create convenience for our employees, which will ultimately get converted into convenience for our customers. So, under project Muskan, we have currently identified around 300 odd processes, which we are trying to simplify, so that our employees can serve their customers in a better way. And as we progress, more and more processes will be covered under this project for the simplification.
But otherwise, as you asked about the budget, we have for this year around INR1,600 crores of capital budget for the technology, and it is higher than the previous year’s level also. And that is going on the strengthening the infrastructure network, as well as strengthening our cybersecurity framework. So, currently, we are in the process of implementing Phase 2 of the resilient center of excellence, which is more of proactive approach for responding to the trades and the disruptions.
The next-gen cybersecurity center of excellence that we have established, that is also almost at the kind closure stage, maybe a couple of months we will be doing. And that is, again, the most advanced technology so far as the security operations center and the cybersecurity management is concerned. You’ll also be happy, the investor community will be happy to note that bank, as MD and CEO touched in the beginning, that we are already running on the not only the DCDR, but near DC and near DR also.
On top of that, the digital banking platform that we have established, it is actually having a four-sided architecture, which is always active auto load balancing. And in terms of the usage, if you look at and I think we have given the numbers also somewhere, that today, almost 80% of the liabilities had relationship, liabilities and accounts are getting open using the digital means. Similarly, on the lending side, some of the low-ticket loans on the Retail, Agri and MSME are already doing on this.
And you will have also noticed our presentation, we have touched a bit on what we are going to do in the next for the digital and technology, because now we have the right setup infrastructure and we have to leverage in terms of business. So, we are setting up a digital business vertical, which will ensure that we are approaching our customer and serving them digitally through the three approaches.
One is the do-it-yourself, for the customers who are very tech and digital savvy, who can get the banking services on their own through the links and the icons available on the website, apps and the social media channels. Second is the assist channel, which through our call center will be assisting the customer in completing the journey. And third is that doing the digital approach of business at the branch level. So, that is what the approach is. Now I think today we are all set to kind of ramp up the business contribution, profitability contribution from digital. Thank you.
Operator
Thank you. Mr. Ajmera, please rejoin the queue for more questions. Reminder to all the participants, please restrict yourself to two questions. Next question comes to the line of Dixit Doshi with Whitestone Financial Advisors Private Limited. Please go ahead.
Dixit Doshi
Yeah, thanks for the opportunity. A couple of questions. Firstly in terms of provisions, you did mention that it has come down, but going forward to meet the ECL provision do you expect that we’ll increase the standard asset provisions or it will remain at lower end only? And my second question is in the so in H1 we did not had any PSLC income, but a small amount of INR100 crore has come in this quarter. Going forward from next year onwards, can we go back to the level of FY25 what we have done?
Asheesh Pandey
Yes, Doshi, a very good question. And I am thankful to you. We have noticed very keenly. So, the first part related to ECL, I would request my ED, Rudra Ji. And for PSLC, I would request my ED, Mr. Rama Ji to answer.
Sanjay Rudra
Yes, good afternoon. I am Sanjay Rudra here. Regarding the provision part, which you said has come down. Basically, if you see our total slippage for the quarter, December quarter is around INR1,800 crore. And almost the recovery and upgradation is also to the extent of the similar amount. So, there is a — and we have we are standing at a PCR of 95%. So, whatever the provision was required for the fresh slippage accounts, we already had an adequate release from the recovery and upgradation which has happened.
So, there was limited requirements for provisions. That is why our credit cost and provisions requirement has come down. Going forward, whether it is a sustainable or not, yes, we are working very hard on the containing the slippage. And, if you see there is no corporate slippage has happened and going forward, it should be also be well managed. So, we are confident that our provision requirement going forward will also be on a lower side.
Regarding ECL part, see we have already made adequate provision as the IGAAP. We have made a 95% provision, and on a half-yearly basis, we are making the assessment on the IndAS also. And what we observed that there is a gap between — earlier the gap was high, but gradually over a period of time in the two, three years, as we reached to a 95% provision, our ECL provision requirement has come down. And there is not much gap between the existing provisions and the required provision under the ECL guidelines. And bank is well placed, bank is having the adequate profit to take care of the provision requirements under the ECL.
In fact, in the guidelines, that five years dispensation is given to meet the requirement on the provisions requirement, but most likely bank may not go for that type of facility. Bank is well capitalized, and profit is adequate to take care of ECL provision requirement in the first year itself. And that is as far as the ECL is concerned.
And regarding PSLC profit, yes, we tried, but in the first half of the financial year, we were not having any opportunity to sell the PSLC certificates, which we did in the last year. Last year we did a very good business on the PSLC sales. It was around INR950 crores of the profit we booked in the first half year. But this year, that opportunity was not available. And gradually the portfolio was built. In third quarter, we were able to sell a small amount, and we booked a profit of INR108 crores. Moving forward also, the department is working very hard on the priority sector lending. And we are hoping that next quarter, also, if possible, we will try to sell some PSLC to have an additional profit. But definitely going forward in the next year onwards, we think we will be able to leverage the PSLC book, and we will be able to book a good amount of profit going forward.
Dixit Doshi
Yeah. Thanks for the opportunity.
Operator
Thank you. Next question comes from the line of Bhavik Shah with InCred Research. Please go ahead.
Bhavik Shah
Hey. Hi. Thanks for the opportunity and congrats on very good results. So two things. First. I think if I look at our investments book, I understand we have sold a lot of for mutual fund investment around INR10,000 crores. And overall also we have sold some SLR securities. And your income on investments in the interest income earned line have gone up by 4% quarter-on-quarter. I just wanted to understand like, what’s happening here. If you can kind of help explain. And also, is your treasury gain mainly? Because of the mutual fund sale income or — yeah
Asheesh Pandey
No, it is I think the normal treasury operations. In last quarter also the NSDL if you decrease, that was around INR500 crores, that is in the same range. Now coming to the treasury, the banking job is to lend first and on the quality assets and create a long-term asset. So, even if now if you see what is the yield in the SLR or non-SLR, and if you see what the option you have when you lend it to Retail, or Agri — but MSME and corporate and the mid-corporate. So, probably, certainly the option number two is much better. So, that’s the reason we contracted our treasury by INR15,000 crores and shifted it to better-yielding and better-quality assets.
Bhavik Shah
Okay. And sir, is your treasury in of INR580 crore mainly because of sale of mutual funds or no, that is not the way to look at it?
Asheesh Pandey
See, it will be like the foreign exchange income will be there then certainly, when you sell. It from the HTM and certainly sometimes maybe you play with the you arbitrage. Also, you do it. Some swaps are there. You can brief. This includes the mutual income, also this a part that is HTM sale also is there then exchange income also because of this fluctuation, we could get more exchange income. All these let to this INR900 crores for treasury income. If you compared with the Q3 of ’24, which has grown substantially above that number.
Operator
Thank you Mr. Shah. Please rejoin the queue for more questions. Next question comes from the line of Kunal Shah with Citigroup. Please go ahead.
Kunal Shah
Yeah. Hi. So a couple of questions, firstly on the recovery part. So when we look at the recoveries from written off account compared to the run rate over past five,six quarters it has come down a bit, and overall recovery as well. So, where should we see it settling over next three to four odd quarters?
Sanjay Rudra
Yeah. Kunal, if you’re looking at it the recovery actually what we are having earlier you cannot be comparing because the portfolio, which we are the new pages are very, very much less actually. And that bank is also trying to see that what are the leftover recovery we have been getting with various types like OTs, NCLT everything.
You look at in the last quarter — whatever the recovery around INR3,000 crores or INR2,800 crores, which are recovered. If you look at it, the maximum recovery in a single account is only INR130 crores, and that is the only account above INR100 crores. So we are concentrating on the mid account and small accounts for under try to get the recovery for maximum extent possible going forward. Yes, we will be expecting this quarter there will be some recoveries are expected. But I think it will be based on whatever the leftover portfolio which we will be able to do that.
There are three levels. One is through NCLT or the other route. Another one is the you go with the OTS and with the party bypass site. Another is the smaller amounts. So maybe the property sale and other things taking association and all. So the. The normal one is always there, and we are actually better than the earlier quarters. Actually, we expected as you said we were doing good. We actually were expecting some C4 accounts. We cannot name them. It was very close. But then, probably, we may see defaults in this quarter, probably.
Kunal Shah
Sure. And just a clarification on provisioning. So, last quarter, you indicated some prudent provisioning done towards ECL, and that’s why standard asset provisioning was higher this quarter. I believe from your explanation, there doesn’t seem to be any provisioning towards the ECL in this quarter. And second is on the fraud. This is, okay, maybe what the provisioning was done. So was it like 100% provided earlier, and there was nothing which was provided during the quarter for the fraud which were reported this quarter?
Ajay Bansal
Yeah. So Kunal, you’re right. We did mention in the last analyst call that we’ve taken from additional standard access provisioning to reduce the buffer that you know that’s required to meet the ECL provisions. You’ll see that we’ve done that in Q1 as well as in Q2. Given the low slippages in this quarter, as well as the PCR of 95% we did not feel need to make any standard assets provisioning in this quarter. So that explains why we are not seeing a big standardized explosion in the current quarter.
Operator
Thank you. Mr. Shah. Please rejoin the queue for more questions. Next question comes from the line of Jainam with Jayan Wealth. Please go ahead.
Jainam
Hello. Congratulations on the great set of numbers. I would like to ask you two basic questions, which are. Do you expect NIMs in FY27 to improve, stay stable, or moderate, and what will influence this? And the other question is what kind of revenue mix are you expecting from retail book, and MSME bookends your agri book?
Asheesh Pandey
So I could not understand no second [Speech Overlap] moderate or something. Please can you repeat please? Sorry, we could not get it.
Jainam
Do you expect the NIMs in FY 2027 to improve or stay stable or moderate? And what is going to influence this?
Asheesh Pandey
What is going to influence it. Okay. You would like to take, Amresh ji.
Amresh Prasad
Actually what we see that the NIMs will further improve because the whatever the deposit was taken that is going to be repriced in this this quarter or next financial year and the impact — you have already seen our book that our MCLR related books are only 32% and the balance are in the in the shape of the they are linked with the external rate of interest when the rate cut happens the impact of the rate cut automatically passed on to that deal but the deposits and cost of fund is being reprised after the maturity period so definitely if that happens in the this quarter and next quarter onwards definitely NIM is going to improve there is our expectation.
Asheesh Pandey
So, I think what you asked, like just to support ED Amresh sir, actually, last time also same thing was asked, we only said one thing, we would like to defend, but then we have come better. Again, we would like to say to you, we will defend. Let us see how it happens in the month of April.
Now, coming to the parameters, which is going to influence it. See, the one thing is that in the downward division scenario, when the repo rate is being cut, suddenly you will see, because there is a lag, the deposit lag behind by few months or quarters, but then there is an immediate impact on the loan part, asset part. So, I think that is one thing, but even then, we have defended. So, that is one part.
Second one is, how you place yourself with the CASA, and how you place yourself with the retail term deposit, and how you place with your total field deposits. And I think the more important thing for the NIM is that how you manage your average advances during the quarter, because the last moment will probably not make it more. So, I think we all are working in the same line. Just I wanted to supplement the first part, which our Amresh sir ED has already told, the parameters which you have asked, I think this one.
The second part of your question was that how you foresee the RAM, that Retail and MSME and growth and all, and corporate. So, what I would like to suggest, my ED Rama sir will tell you on the RAM side and from the corporate book side, our ED Shri Amresh sir will brief you.
Ramasubramanian S
Yeah. So, if you are looking at the Retail and MSME, consistently this year we have been showing a good growth year-on-year. It is around 22% and 20%. Agri, yes, we had some issues, but if you look at it, in the last quarter we have picked up, and we have shown a good growth on the agriculture. Going forward, we will be driving it because all have to be done by the field at the branch level. So, we will be driving this business and try to maintain the same 68-42 or 60-40 ratio between RAM and the corporate.
Amresh Prasad
Sir, regarding growth of the corporate books, MD has already said we are having some pipelines, already sanctions are there, and some good number of proposals are also in hand, which is going to be sanctioned this quarter or year. So, we do not see any challenge in growing the corporate book, also, sir. Thank you.
Operator
Thank you, Mr. Jainam. Please rejoin the queue for more questions. Next question comes from the line of Parth M.Gutka with 360 One Capital. Please go ahead. Mr. Gutka. Please go ahead.
Parth Gutka
Yeah. Hi sir, thanks a lot for the opportunity. What is your NIM guidance for FY26?
Asheesh Pandey
Yeah, NIM, I think we have already discussed in the last quarter also when. We met on 28th or 29th of October, the one stand which we communicated that we would like to defend it. And let us see. So actually we moved better though the condition or maybe the scenario was towards the downside. So still we will say that we would like to defend 2.76, but then we hope for a better. I think though, you may be finding a different scenario. But then there was some opportunity in our, you know, shuffling from the book, which we have done.
Parth Gutka
Okay sir. And second question, how much of the deposits are yet to reprice in terms of retail term deposits and certificate of deposits in quarter four?
Asheesh Pandey
Yeah, see, the deposits which are going to mature in this quarter are in the range of one plus around INR50 lakhs. So, that are under different rates. So, it consists of even the bulk side, and it also consists on the retail side. But how we are looking at it, the composition should be in such a fashion that doesn’t impact my LCR much, number one.
Number two, the high cost, we are very keen. Actually, even when we are quoting, we are very specific to the quote. If it is a financial institution, we are actually not quoting at a higher rate, because the runoff factor is 100% on that. But meanwhile, we have created a different structure. Probably, the only bank which we have created is ecosystem banking, which is headed by a very senior official at the general manager level. And he is having almost 1600 people under him across India, and he is having units at various locations. So, that is the effort which, if you want to know, the initial sort of results that our CASA has been improved with 140 basis points. So, we are actually thinking more of adding RTB, adding CASA, and then to an extent left out, we will be taking the deposit, but certainly in a range which is acceptable to us.
Operator
Thank you, Mr. Gutka. Please rejoin the queue for more questions. Next question comes on the line of Antariksha with ICICI Prudential. Please go ahead.
Antariksha Banerjee
Yeah good afternoon sir. Just wanted to ask what is the size of the gold loan book that we have both in retail and agri?
Asheesh Pandey
A gold loan portfolio is around INR84,000 crores total. Actually, let me share with you the we were hovering at the same level for past two quarters. But now this quarter can increase of around INR2,200 crore. But at the same time, we were actually it is not like the revenue is not there. It is not like you know we didn’t want it, but we wanted to strengthen the system is procedure in that. And actually, we have done it somewhere. In the month of October and November. And now we are poised for taking it forward. So I think that we will move forward, and our yield is also good. Actually, it is coming around up till — now I can take not exactly with the quarter but the nine months is coming around around 8.85%, 9% levels
Antariksha Banerjee
This you are saying agri?
Asheesh Pandey
I’m saying about gold level. With all the three total [Speech Overlap] agri is about INR48,000 crores. [Speech Overlap]
Antariksha Banerjee
And this wanted to incrementally what LTV are you doing these loans at in agri as well as retail?
Ajay Bansal
[Speech Overlap] Yeah difference on 75% in non-agri, actually LTV, and 85% in agri.
Operator
Thank you Mr. Antariksha. Please rejoin the queue for more questions. Next question comes from the line of Akshay Badlani with HDFC Securities. Please go ahead.
Akshay Badlani
Yeah hi. Thank you for taking my question. So on the credit cost just wanted to understand, so why, like we were, you used to be around 65, 25 bps kind of an average run rate. We have come down to 10 bps as of now. So is it largely because of slippages coming down or is there some one off in terms of write-backs. Recoveries that we are getting that the credit cost is at this range and what would be your steady state credit cost that you would guide for going forward sustainably?
Asheesh Pandey
I think if you see the movement of the provision, probably it gives some color out of it. According to the second point, there are six, seven parameters with the earlier questions which I replied. The one is the corporate book, what is the rating? So around 95% of the total loan book is BBB and above. And mostly it is in A and above. So that is the first part.
The second part is that the FMA position which we have already given the presentation almost lowest right now in the absolute terms, which is INR4285 crores. So this is the second point. Then, third point is that the slippage ratio. Is also well within control. Actually, the bank has taken, why you have strengthened the credit book on one side. The another side is you have developed. The better collection efficiency mechanism using the software apps and feet on street. So now, actually, that is giving the results. So going forward, we do not expect some — much of the things we think in the same fashion to go going forward as well.
Akshay Badlani
Understood. Second question is around….
Asheesh Pandey
One more thing, probably see my restructured book because there is one more portfolio from where this, you know, the credit card equipment has come. So if you take my research book Also even the 50% of that is we have realized already realized as an MPA. So the question is that when already you have taken care of the things probably we do not foresee, until unless the situation goes something very heavier like COVID or something like that, we forcing in a similar fashion to go forward.
Akshay Badlani
So any guidance around credit cost like what we could give like [Speech Overlap]
Asheesh Pandey
Yeah, in a similar role like one or two quarters, which you’re saying in the same range.
Sanjay Rudra
Yeah. If you look at our nine-month, credit cost is about 20, 26 bps. Right. So I mean what sir is indicating is we would like to try and achieve that kind of a number going forward. Yeah. Including because we have also evaluated, you know, as in the ECL comes in. Right. So it will be a number which will move, but hopefully around that.
Operator
Thank you. Mr. Badlani. Please rejoin the queue for more questions. Next question comes from the line of Ashlesh Sonje with Kotak Securities. Please go ahead.
Ashlesh Sonje
Hi team. Good afternoon. Two questions from my side. Firstly, if I look at the total recoveries which you report in your presentation on slide number 15 in FY25, you did upwards of INR15,000 crores on total recovery, going by the new presentation which you are sharing in so far in FY26, you have done some INR9,200 crores. So what do you think about the run rate? What do you think about the outlook for FY26 and FY27 on this number? That is one. [Speech Overlap] Yes, please go ahead
Asheesh Pandey
On the recovery. Since you are asking me what is the going forward, correct?
Ashlesh Sonje
Yes.
Ramasubramanian S
What I actually told just comparing to the last year portfolio is different now the are coming down actually. So still whatever the available we have. Already done for INR9,200 crores. We expect that as sir already told there are some recoveries which we expected in the last quarter, which we will be releasing it. We will be. We will be ending up around the. I think the most probably with you’re not giving any guidance this year. So I cannot exactly number. But you can expect more or less. The same average what which has been done in the last three quarters. It will be there.
Ashlesh Sonje
Understood sir. And going forward is it fair to assume a decline of let’s say about somewhere around 10% to 20% every year going forward in that number.
Asheesh Pandey
[Speech Overlap] See, recovery, I will put it differently, not per se about our bank or something like that. It is the efforts you have put in and the structure you have put in for the recoveries. Still, the book is always there, but you know, some windfall happens when there is an entity resolution. So, the thing is that if you are talking about the regular recoveries, you may expect better than that, because there are three baselines.
One is the regular recovery. Another one is when you get through NCLT or some bigger resolutions. So, bigger resolutions, we expected actually last week of, last 15 days of the last quarter, but that has not materialized, but will be materializing in this quarter. But at the same time, we do not consider in our forecast, because the thing is that we have to concentrate upon the cases which are in DIT or maybe the SARFAESI actions, and taking even the smaller loans are there, where recovery agents deploy and take the position of the cars or maybe the house, and then you try to put into auctions and all.
Actually, we have strengthened those systems, and that is why we are confident that this portion of the recovery you will see better than expected. And that related to the better ones we are still. We still have there. I think that will be going forward as well for maybe few quarters and years.
Operator
Thank you, Mr. Sonje. Please rejoin the queue for more questions. Next question comes on the line of Gaurav Jani with Prabhudas Lilladher. Please go ahead.
Gaurav Jani
Yeah, thank you for taking my question and congratulations. Just firstly, on the LDR side, while we have had liquidity benefit due to the CRR cuts, LDR is kind of shot up by about four and a half percent sequentially. So what kind of LDR levels are we looking at sustainably? Given the fact that capital, we are pretty comfortable at about 14% to 15%. So yeah, that’s the first question.
Asheesh Pandey
Yeah, see, there are two types of LDR. One is domestic, and the other one is as a global consolidated. Typically, let us discuss first with the domestic one. Compared to the domestic one, we are below 81. And if you see the banks today and the efficiency parameter wise, I think 80, 81 is a very good, comfortable range for everybody, all the stakeholders. So, absolutely, that is what we have achieved it.
The second one is, compared to, because foreign exchange you will be knowing, that including the gift city, generally you will see more CD ratios with them, LDR. So, then that is the reason it is globally, if you see it is somewhere 80, 83 range. But otherwise, we are in a comfortable range. We do not foresee any issue in that. That gives a good efficiency with that range. Subject to that, you deploy the assets qualitatively and quantitatively in the right direction. So, I think that LDR, we do not want to go beyond certain limit, maybe 0.5%, 0.75% here and there.
Gaurav Jani
Okay, understood. Thank you so much. Secondly, on the opex side, right. I mean last two years opex growth has been kind of low. So for the next two financial years, what kind of an OPEX growth do we effectively should it be in tandem with the loan growth?
Asheesh Pandey
Opex growth. Yeah, actually, we have taken a few steps here. That is actually, we cannot say, but then probably you will be seeing, like, one is the project Muskan itself, where we are moving towards the efficiency, point number one. Point number two, there are a few more, which we have taken on the ATMs and similar some sort of an equipment and other thing, where we see that certainly, because when you are in an economy where GDP is going everything, so the cost of your people, cost of your physical infrastructure increases, but then what we are looking at it, we actually have identified and identifying further that what are the parameters where we can have a control.
So, specifically those parameters, the entire team is working upon, but going forward on an operational expenditure, once we move towards more, like our ED, Shri Nitesh sir was telling you on the digital push and the digital infrastructure platform, which the bank has built. Once it is put to use to a good capacity, I would even not say 90% to 100%, but even if it is put to 60% to 70%, you will see good cost cutting along with the risk mitigation.
So, I think we do have a plan. Now, I will come back to one more point, because being an investor, you will have a noting of it. So, we have a plan of opening some 75 branches this year itself, and going forward, we want to further open 200 branches. So, that is also a cost, but even then we would like to come down and bring it into the control.
Operator
Thank you. Mr. Jani, please rejoin the queue for more questions. The last question comes from the line of Siddharth Rajpurohit with Systematix Group. Please go ahead.
Siddharth Rajpurohit
Yeah, congratulations to the team for a good quarter, and thank you for the opportunity. I have two questions. One is what is our excess standard asset provision that we hold? And second is this, this project finance provision rules have taken. So how do you see that impacting the provisions, and are you seeing an incremental increase in the private capex that is coming out, or when do you see it will pick up?
Ajay Bansal
So, okay, so I’ll take the first one, which is on the excess standardized provisioning. So, I don’t think it’s fair to look at it from a point of an excess standardized provision because what you’re trying to do is bridge the gap between ECL and the current level of provisioning. So that is something that even in the, you know, the last couple of quarters we’ve been saying that we will make standard access provisioning, and giving you the extra standard assets provisioning would also give you an indication of what could be the potential ECL-related provision so which we’ve not directly put in the public domain. So we are comfortable in terms of the excess — in terms of the standard access provisioning that we hold and we will continue to look at it as and when the RBI releases the final ACL guidelines to see whether we need to increase or whether we need to maintain at the same level.
Siddharth Rajpurohit
Second, on the Project Finance thing.
Asheesh Pandey
Project. Finance. I don’t think we’re expecting much of any but [Speech Overlap] not much.
Ajay Bansal
So in Project Finance, there is not much provision has been made in during this quarter. So, of course, there are some project finance where recently we have done it so accordingly the provisions have been made as per the norms. But that is not making a much of a provision on the provision side.
Asheesh Pandey
In fact you are trying to understand that what is the impact of this in this new project finance guideline and proving [Speech Overlap] So for existing portfolio there won’t be any impact because there even COD has been achieved or COD and will extend it for only new cases where COD is getting extended this will have some impact. So this will have incremental impact on it. Not so that will keep on moving based on new project which comes to us in our portfolio and then there’s extension required to significant.
Siddharth Rajpurohit
Yeah. Thank you. All the best to the team.
Asheesh Pandey
Thank you. So, thank you so much to all our investors, analyst. And we are always thankful to you for being along with us, and we always appreciate, whenever you tell some lacking from our side and something where we have to improve. So, we always welcome those suggestions from you and you have all our mail IDs and everything, and certainly, we can have a meeting as well.
But then as from the Union Bank and we all senior management sitting here, we welcome those and anywhere we would like to take further improvements because you will have some critical eye to make the analysis of the bank and tell us where we can a bit more improve upon. We are in that process, but certainly we value your submission. We value your proposition and thanks to you for along with us today. Thank you so much.
Operator
Thank you on behalf of Union Bank of India, that concludes this conference. Thank you for joining us. You may now disconnect your lines.