Thank you. Good evening and welcome to Indian Overseas Bank's conference call to discuss our financial results for quarter one FY 2026-2027 ended June 30th, 2026.

Indian Overseas Bank, IOB, headquartered in Chennai, continues to strengthen its presence with over 3,522 branches with around 3,691 ATMs and 13,401 business correspondents across India. IOB also provides services in four countries: Singapore, Hong Kong, Thailand, and Sri Lanka, with the trust of 46+ million total customers in bank's fold.

Our comprehensive suite of services spans personal, corporate, and agricultural banking, along with credit cards, loans, and insurance products. Our financial results are available on our website and stock exchange platforms.

Before we proceed, please note that today's discussion may include forward-looking statements subject to risks and uncertainties that could impact future outcomes. We encourage you to consider these factors when evaluating our performance.

Joining us today are Shri Ajay Kumar Srivastava, Managing Director and CEO; Mr. Joydeep Dutta Roy, Executive Director; Mr.

Dhanaraj T., Executive Director. We will begin with an overview of our quarter one performance followed by a Q&A session.

Now I invite Mr. Raghuram Mallela, Company Secretary, Indian Overseas Bank, to present the financial highlights.

Over to you, sir.

Thank you, Sonali. Good evening, all.

I am pleased to present an overview of Bank's performance during the quarter ended 30th June 2026. It's a proud moment for the bank today that the bank has reached a new milestone by achieving an all-time high quarterly net profit of ₹1,659 crore for this quarter as compared to ₹1,111 crore as on June '25 with 49.32% year-on-year increase.

Bank has achieved the operating profit of ₹2,693 crore registering a year-on-year growth of 14.21%. Regarding the performance of the bank for the quarter ended 30th June 2026, bank has achieved the business mix of ₹6,98,325 crore recording a year-on-year growth over 17.72%.

CASA in absolute terms stood at ₹1,54,415 crore with year-on-year growth rate of 6.61%. CASA ratio domestic as on June 2026 stood at 41.45%.

CASA global stood at 41.05%. Total deposits reached at ₹3,76,193 crore as on 30th June 2026 with a year-on-year growth rate of 13.72%.

Total advances increased year-on-year by 22.75% reaching ₹3,22,132 crore as against ₹2,62,421 crore as at 30th June 2025. Provision coverage ratio improved to 97.67% as on 30th June 2026 as compared to 97.47% as on 30th June 2025.

Capital adequacy ratio stood at 19.36% as against the regulatory requirement of 11.50%. Net interest margin global for the quarter ended 30th June 2026 is 3.37% with an increase of 12 bps as compared to 3.25% as on the last quarter March 2026.

Net interest margin domestic stood at 3.48% for the quarter ended June 2026 as compared to 3.35% for the quarter ended March 2026. With regard to the NPA management, GNPA, gross NPA, reduced from ₹5,178 crore to ₹4,292 crore year-on-year basis.

Net NPA reduced from ₹816 crore to ₹588 crore. GNPA percentage has reduced by 64 bps year-on-year from 1.97% as on June 2025 and reached 1.33% as on June 2026.

Similarly, net NPA percentage has also been reduced by 14 bps year-on-year from 0.32% as on June 2025 and it stood at 0.18% as on June 2026. Slippage ratio of the bank is reduced to 0.06% for the quarter ended June 2026 as against 0.10% as on June 2025.

With respect to the valuations, there is a significant improvement in return on assets which stood at 1.41 for the quarter ended June 2026 with 27 bps increase as compared to June 2025. With regard to book value per share, it improved to ₹15.79 for June 2026 when compared to 12.41 for June 2025.

Similarly, improvement is evidenced in return on equity with 369 bps year-on-year. Currently, return on equity stood at 22.69 when compared to 19 for June 2025.

Earnings per share for June 2026 is 0.86, which improved from 0.58 as on June 2025. This is all about the financial performance of the bank for the quarter ended 30th June 2026.

Thank you.

Thanks for giving me the opportunity first. Compliments, Srivastava Sahab, Joydeep ji, Dhanaraj ji, and the entire team of the Indian Overseas Bank for the fantastic results for even Q1 '27.

You are just a whisker away from ₹7 lakh crore business, which will be achieved soon or might have already been achieved by now. Compliment that you met all the parameters of the targets which are given.

Even the current quarter also, there is a good credit growth of 3.77%, an overall annualized basis 22.75%, which is commendable. Having said that, sir, I've got a couple of observations and some questions.

In the profitability, which is one of the highest now in the net profit, as was told just now, ₹1,659 crore. Even ready profit is also good at almost about ₹2,700 crore.

There is a major component of PSLC commission of ₹863 crore and reasonably good recovery from written-off account of also almost about ₹490 crore. Fee-based income has also gone up.

This PSLC and equally in the investment in the treasury book also, the profitability is there. That is the major contributor of this profit in this quarter.

Going forward, can you give some color how are we going to close this FY '27 as far as profitability is concerned? Whether the consistency will remain there in spite of some of these factors which may not be materialized in the coming quarters?

Thank you so much. Good evening, Mr.

Ajmera.

Good evening. Good evening, sir.

Myself, Ajay Srivastava, and both the EDs are sitting with me along with my team. Regarding this profitability, see, you need to look at NII also.

Interest income and expenses. NII, we have grown by 34.30% year-on-year.

That itself is showing that out of operations, the lending activity, and whatever you are doing on liabilities front, NII growth is one major part of driving profitability. In addition to this, you talked about PSLC and recovery from technically written-off account.

These are routine activity. Every quarter it happens.

If you remember, earlier also the same type of query were there that whether this PSLC income or recovery from technically written-off account will continue going forward also. In fact, if you look at last eight to nine quarters numbers, these two parameters are there in all quarters.

What I'm trying to convey that this is part of the integral part of non-interest income. That will continue, of course.

It is table and it will continue going forward also. NII, of course, interest income is increasing quarter-on-quarter, year-on-year.

Going forward, I do not see any challenge in maintaining this profitability. Last 10 quarters, if you see the trend of operating profit and net profit quarter-on-quarter, it is only one-dimensional that is increasing.

Yes, sir. Hello?

Yes, please.

Yes, sir.

Profitability, yes, please go ahead.

Sir, now on the credit front also, this quarter has been good for almost every bank. Suddenly, a lot of demand has emerged, and there was some clarity in between on this West Asian war also.

Now again that conflict started again. Now, going forward, number one, on that ECLGS, how much was our sanction and disbursal?

Have you started seeing now any pressure again coming back to the smaller accounts or SME accounts on the recovery front or on the delinquency front? What are the numbers of the ECLGS if we can know that how many people have already availed it, how much is the amount of disbursement?

Yes. ECLGS, total universe from IOB side, whatever number of eligible accounts and amount is there, that is around ₹4,400 crore.

Out of that, we have so far disbursed around 2,000 CR ₹2,600 crore based on the requirement of the individual borrowers and in terms of ECLGS 5 requirement. ₹2,600 crore is already done.

₹1,800 crore is expected to be done over next 1, 1.5 months. Demand is there, request is there.

We are pretty sure that 95% to 100% of ECLGS disbursement will certainly take place by August end or September first week. Regarding West Asia issue and stress on any small borrowers or SME accounts, so far we have not seen.

Individual cases are there, but as one product or one sector, now this particular product or sector is struggling because of West Asia crisis, earlier also there were no such sign, and right now also, we are not observing anything of that type.

Sir. Point well taken, sir.

Now, on the ECL front, how are we prepared? Are we continuing the same what was there in the last quarter, the impact may not be that sizeable and we will be able to take care of it without taking the benefit of those 4 years or so on the ECL?

What is the total buffer provisioning on that, sir?

Yes, sir. The same strategy continues.

Our initial assessment or internal assessment, I will say, it is to the tune of ₹3,000 crore of additional requirement. Till March, we created forward-looking provision for ECL only ₹1,700 crore.

This balance sheet, we have added ₹400 crore additional. Against ₹3,000 crore of probable requirement, we have provided already ₹2,150 crore to meet this ECL provisioning requirement.

In coming quarters also, we will be equally making provision going forward so that by the end of this financial year, the entire requirement of ECLGS can be taken care of in one shot. As part of our internal discussion, we do not intend to go for 4-year dispensation.

Very encouraging, sir. Sir, last question in this rather a data point.

In our net worth, which has gone to ₹29,256 crore in this quarter from ₹28,114 crore, in addition to the profit, there is an addition of ₹554 crore in the net worth. Is it because of some addition in the reserves because of the valuation or the profit of the AFS book or some other components is there in this 550, some DTA or some other thing?

If you can

DTA we have done around ₹400 crore.

Sorry, for ₹200 crore.

It was ₹400 crore.

Sorry, sir. I couldn't hear, sir.

DTA?

DTA Less than ₹200 crore. DTA,

we have done 200.

196.65. That reversal has happened, plus one or two minor entries will be there.

Nothing substantial, sir.

AFS, any addition to that?

Sir, MTM addition is there around ₹300 crore.

That is there. Okay.

That is also there in the books, sir, yes.

In the reserves only,

it is. It was a negative impact of ₹500 crore.

Correct. Correct, sir.

This quarter, it is better, yes. Yes.

It has come in the positive now? It's Yes,

yes. MTM is positive now, yeah.

Yeah.

By around ₹300 crore.

That's very good, sir. Just last question going from this round is that, sir, your NIM is very good and increasing also.

One thing is that whether it can be maintained in the remaining three quarter? Second one, sir, somehow I couldn't find out the SMA numbers.

SMA1, 2, 0, 1, 2, or SMA above ₹5 crore. Either I have missed the slides or so can you give some color on that, sir?

Yes, sir. SMA is around 4%, sir, total SMA.

SMA0, 1, and 2, I will give you separately the numbers. Total SMA is around 4%.

It is coming down because 1 month before, it was 4.95%. We are paying attention to that.

The first question was about NIM. NIM, sir, last 1 year, if you see, we have been successfully maintaining NIM between 3.3 to 3.4.

Earlier also, we gave the same guidance that it will be maintained at that range. For June number, if you see our domestic NIM, it has gone to 3.48%.

Global is 3.37%.

We are pretty sure that going forward also, sir, NIM will be in this range only, around 3.3 to 3.4. In this range, it will move.

SMA numbers, right now we are having, sir, I can tell you. SMA0 is around March '26, yeah, 1.78%.

SMA1 is 0.95%.

Sir, can you give, sir, in absolute number, sir?

Absolute numbers, yes, of course. SMA0 is ₹5,733 crore.

Yeah.

SMA1 is ₹3,068 crore. SMA2 is ₹4,246 crore.

Total SMA is ₹13,000 crore. Percentage terms, it is 4.05%.

Sir, I don't remember exactly, but I think this SMA2 numbers have a little bit increased in this quarter. Isn't it?

SMA2 as on March was 3,646 ofcourse.

Yeah. Around ₹600-700 crore increase is there.

₹600 crore, it has increased, yes. If you look at percentage terms, March '26 March '26 was 1.20, now 1.32, yes.

So, ₹500 crore, it has increased, yes, over March.

Any concern or it is already regular Hello?

Hello?

Hello? Apna hai kya?

Apne yahan aaj theek hai. Hello?

Hello?

Line went off, I think. Is it on now?

Yeah. Hello?

Ajmera Sahab, SMA2 has increased by ₹500 crore over March. That is correct.

Total SMA, it has come down by ₹2,000 crore, ₹2,200 crore. Yes, sir.

Yes, sir. Any concern on that, sir, the SMA2 numbers increasing, or they are now regularized by now?

Mostly it is regularized, sir. If you look at our slippage ratio, sir, if you map that with SMAs, you can see that slippage ratio is 0.06 for June.

March, it was 0.10.

Yeah. It is almost 50% of March.

No, what I want to know, is there any government guaranteed account or anything out of this ₹4,246 crore, or these are all small? Major

part of that, not government guaranteed, sir. I will say that CGTMSE coverage or CGFMU coverage for smaller accounts will be there.

Nothing alarming, sir. Slippage ratio for last 10 quarters has been around 0.10, 0.12.

Asset-wise quality-wise, we are absolutely 100% sure, sir. These are

very good, sir. Very good performance.

All the best to you. I think a lot of other people are in the queue.

I'll step off from here, and if time permits, I'll come back again. Thank you.

Thank you, sir.

Hello.

Yes, please.

My name is Bimal Panchal. We have approval of a ₹5,000 crore equity raising plans.

Which way are we planning? Say, QIP, OFS, rights with the government not subscribing, or which way we are looking?

This ₹5,000 crore, are we planning in one shot or in staggered manner? Just want to know.

It is true that ₹5,000 crore of capital raising plan has been approved by the board. We are in the process of obtaining all other statutory approval before hitting the market.

We expect that in this quarter, it will happen. Maybe in Q3 or Q4 depending on the market conditions, we will go to the market, maybe in one or two or maybe more than two tranches also.

The method, QIP, OFS?

It will be QIP. Right.

Okay. Thank you very much, sir.

Thank you.

Hi, team. Good evening.

Sir, few questions from my side. Firstly, yield on advances has gone up by about 10 basis points QoQ.

If you can just explain what is happening. Along with that, if you can also share what is the strategy on the corporate loan book because that has declined 10% QoQ?

Yes, yield on advances has increased because of pricing issue, of course. About 54% of the credit portfolio is linked to MCLR and 30% 37% to RLLR.

Because of good quality lending at reasonable pricing, yield on advances has increased. The corporate book, I will say that there is a pipeline of around ₹14,000 crore already sanctioned and in different stages of disbursement.

We expect that corporate loan book also, by the end of this year, will grow by 12% to 13%.

Understood, sir. When you say the yield has gone up because of better pricing, can you elaborate a bit more which segments you are seeing this exactly and what is the response from the borrowers?

See, 80% of the portfolio is RAM: retail, agriculture, MSME. This yield is coming from everywhere: retail, agri, MSME.

A part of it is coming from corporate also. It's not only one area or product specific.

It is uniformly spread across.

Sir, is my interpretation right that yield has gone up across all segments, or you are saying there is something else?

Yes, more or less, yes.

Okay. Okay.

Sir, and the corporate advances which have declined 10%, would you have a sense of where the borrowers are going? Are they going back to the bond market or they are going to some other bank?

See, for IOB, this 10% decline is because of one bigger account amounting to around ₹10,000 crore, which we, in the first month of this financial year, in the month of April itself, since pricing was not matching, we came out of that arrangement. This corporate loan book of 10% decrease is because of that.

The ₹10,000 crore of impact was more, but around 40% of that we covered in the quarter one. After coverage of 40% of corporate loan book, this 10% negative growth is visible, which of course in this quarter it will be covered.

As I said, by the end of the financial year, we will be showing a growth of 12% to 13%. Having said that, if you look at the total overall credit growth, year-on-year, we have grown by around 22%.

Quarter-on-quarter also, I think we have grown by 4% credit.

Understood, sir. Sir, is it possible to share which sector this exposure belonged to, this ₹10,000 crore exposure?

It was corporate government account.

Understood, sir. Okay.

Sir, secondly, the cost of deposits has also improved. It has declined by about 10 basis points QoQ.

Can you explain what has happened there as well?

We have focused on CASA very aggressively. Despite 13% or 14% growth in total deposit and 18% growth 17% growth in retail term deposit, we have been able to maintain CASA above 41% on a consistent basis.

That is the only reason how cost of deposit has come down. We are not very aggressive in high rate of interest bulk deposit field.

All along, we maintain around 6% to 7% bulk deposit ratio out of total deposit of the bank. That strategy that focusing on CASA and not too much of reliance on bulk deposit.

Combined impact of these three, four strategies has resulted in reduction in cost of deposit.

Sir, one follow-up on that one. Is there any part of your term deposits which is yet to still reprice downward or all the repricing is already complete now?

All repricing done, already done, yes. Completed.

6

months before.

Okay. Understood, sir.

Sir, and thirdly, if I look at the fee income for the quarter, it has grown quite handsomely, about 20% YoY. Can you just explain what has happened here?

The growth is quite good.

Two major components are, one is PSLC commission, second is sale on retail term deposit, third is processing fee, plus all other usual charges.

Sir, if I look at the presentation, I'm talking about this component which was ₹476 crore. The PSLC income is sitting outside that number.

Let me see the number, I can.

What you call exchange and commission, that number.

Exchange and commission, that is ₹90 crore, you're talking?

It shows as ₹476 crore here.

₹476 crore, exchange and commission. Profit recovery technically return of PSLC commission.

₹476 crore will be normal exchange and commission: LC commission, BG commission, non-fund business, plus locker rents, plus all other charges, demand drafts. Uh-huh.

Sir, just trying to understand what has led to the growth here. It's grown about 20%.

See, base is low, it's looking at 20%. If you look at the numbers, last year June it was 398.

Absolute numbers you see. From 398 to 476, base is low, it is 20% you can see.

In absolute numbers, it is in that range only.

Okay. Sir, in any of your loan segments, have you changed your fee structure in any manner materially, processing fees or something?

At the time of sanction, whatever terms and conditions are part of the sanction, the same continues. In between, we do not change generally, unless and until rating downgrade happen.

Okay. Understood, sir.

Sir, and lastly, if you can share what is the outstanding loan book which you have under CGTMSE as of now?

CGTMSE around that data exactly I'm not having. I can share with you, but it will be around 15% to 16% of the total credit portfolio.

Broadly, I'm telling you.

Understood. Perfect, sir.

Thank you. I'll come back into the queue.

Yeah. Thank you.

Thank you. Am I audible?

Yes, please, you are audible.

Yeah. Sir, it's actually more of a bookkeeping question.

Thank you for the opportunity. Sir, the book value per share that we disclose in our presentation is about ₹15.79 on June '26.

If I calculate as per our net worth divided by the total number of shares, it comes to about 20.5. This is the kind of difference that we see in all the quarters and in all the time period ends.

When we disclose the book value, sir, what is the kind of adjustments we are making while disclosing this book

value? Some adjustment would have happened.

Can I come back on that?

Sure, sir. Sir, just what would be our full-year guidance on ROA?

It was not audible. Can you come again?

Full-year guidance on?

What would be our full-year guidance for the growth as well as ROA? Growth on the advances side and the ROA number.

See, credit growth, we are intending to grow at around 13%

to 14%.

I always say that having said that, this is the minimum we want to grow. Beyond that also, we'll be growing.

Last 3 years, we have grown in the range of around 20% over last 3 years.

So,

13% to 14% is the minimum we intend to grow. ROA is at 1.41%.

That is we are very comfortable with these numbers. Internally, at all points of time, we want to maintain it above 1.20.

Going forward, by the end of this year maybe financial year maybe we are looking at around 1.45, 1.46, like that, that number.

Okay. Sir, in your view, sir, will it be NIM driven or a reduction in opex driven?

Because credit cost seem to have bottomed out.

It will be NIM driven.

NIM driven. Okay.

That would be because of the mix change because again on the mix side also, I think we are maximum on the RAM side already about 75%,

80%.

Will it be more liability side then, cost of deposit reduction, or what would drive that NIM, sir?

It will be both sides. It will be increase in interest income and it will be decrease in interest expenses.

Both sides we have been working consistently. The same trend will continue.

The same strategy will continue. NIM-driven ROA will be basically driven by increased or improvement in NIM.

Okay. You see a further upside because of the product mix there could be some upside on the product mix basically?

Product mix, it depends on the type of requirement, in which geography. That is a very dynamic thing.

Our RAM is around 80%. We intend to maintain around that level.

Okay. There is no pressure going forward on the cost of deposit or the cost of funds side in the sense that it should not increase from here at least.

In the foreseeable future, yes, of course, I do not see any increase because we are not too much reliant on bulk deposit. It's basically CASA-driven deposit area we are focusing on.

I think it will be at that level only, around that level.

Sir. Sir, just one thing.

Sir, I believe in the last quarter you had mentioned that some corporates you classified as RAM if I am not wrong. What would be the criteria of classifying some corporates as RAM, or maybe that's the MSME side of the corporates?

No, no, there is no definition or change in definition. The RAM sector also consists of big-ticket loans in MSME and agriculture around 300, 400, 500.

Size-wise, they are equivalent to corporate. Classification-wise, they fall in agriculture or MSME.

That is what I intended to say. As per RBI definition, so that was the point I was trying to make last time.

Okay. Thank you, sir.

I'll fall back in the queue. Thank you.

Thank you.

Yeah.

Hello, am I audible?

Yes, please. Go ahead.

Yes, the question was on fee income slide seven, there was a miscellaneous expense there is a huge growth a 423% QoQ. Can you put a light on it?

Fee income?

In fee income section, miscellaneous income.

Miscellaneous income, it includes recovery from technically written-off account. PSLC commission is there.

PSLC commission, priority sector lending certificate commission, out of which it is mentioned here, no? You're talking of miscellaneous income, the second line it is mentioned, out of which PSLC income.

These two are the major components in addition to processing fee.

Okay. Second question is on agriculture loan.

How much agri loan is backed by gold, and are we seeing any delinquencies, or are we expecting it any?

Far, we have not seen any delinquencies in agriculture loan. Going forward also, we do not see any stress.

On gold part?

Gold part will be broadly around 40% of the total portfolio will be agriculture jewel loan.

Okay. Looking at the loan book growth, last time we said 13% to 14% loan book growth.

Are we being conservative, or what?

No, we are not being conservative. We are giving you that this will be the minimum we will grow.

Last 3 years, the guidance has always been 13% to 14%, but we are growing in the range of around 20%, 21%, 22%.

Okay. Are we expecting this growth pace to continue?

Yes, if everything remains normal, of course, you can expect that.

Thank you. That is it from my side.

Thank you.

Hi, sir. Am I audible?

Yes, please. Yeah.

Sir, firstly, my commendations on a good set of numbers. Just coming to two specific questions, I'll ask them together.

Sir, versus the rest of the peer set, you've seen our NIM, ROA, ROE, even cost to income has been pretty good, right? We've maintained that for a while.

Aspirationally, because, sir, you've achieved such a good level, what's your outlook for the next year or so in terms of sustaining or even bettering this? Because I believe, sir, you've reached a level which is quite good, how would you seek to improve from that?

It might not be the easiest challenge, but I'm sure you guys must be prepped for it. Second, sir, in terms of both the asset liability franchise, on digital initiatives, how are we looking at growing both our asset and liability franchise in terms of digital initiatives specifically?

Any new projects we are looking to initialize apart from our stack we've already built up, or something else that you have planned? Okay.

This NIM, ROA, and cost to income part, I will address that part first. Of course, the level where we have reached, I will say that last six, seven, eight quarters, we have been consistently maintaining and improving it also.

The strategy, whatever we have thought of, planned, we have been successfully implementing it. Going forward also, we will follow the same plan with maybe little change or some moderation wherever required.

If outside world, there are no uncertainties, there are no challenges, all of a sudden unexpected challenges, if everything remains smooth and constant, of course, these numbers you can see growth further going forward next financial year. Otherwise, despite challenges like West Asia challenges again, it is looming large now, we are pretty confident that NIM we will be able to maintain at around 3.3 to 3.40 because of our inherent strength and the type of efficiency we have brought into the system.

ROA also, around 1 point between 1.4 to 1.5, we do expect in foreseeable two to three quarters going forward. Regarding assets and liabilities, digital side, of course, without digital, nothing moves in the system, in the banking system also.

Everything right from asset side also and liability side, most of the things have already been shifted to the digital part. We engaged one of the Big Four consultants 3, 4 years back.

The entire digital product, processes, software, everything has got revamped to match with the latest expectations and requirement. As on date, around 96% of the total transactions happen digitally in the system.

Across the counter, transactions are hardly 2% to 3%. Lot of efficiency has come in through mobile banking, through net banking.

Of course, UPI, everyone does. We have created products and systems where people can apply for loan also sitting at home, and sanction letter they can get within 10 minutes on their laptop or mobile.

Throughout the country, anywhere, anyone can get a locker allotted digitally in 2 minutes time. Account opening, customer onboarding, whatever happens, around 75% of the onboarding happens digitally.

Lot of initiatives have been taken place. Digital is that area where we cannot say that whatever we have done that is sufficient.

Every day is a new challenge. Every day is a learning process.

We are on it, I can say.

Understood, sir. Just one more question, sir.

I believe in the news recently, and maybe you would like to shed some color on this, I think in terms of our international operations, we received the IFSCA license for GIFT City. How are we looking at monetizing specifically more on our international ops as well, if you could just shed some color on that?

We got this approval around 3 to 4 months back, and we have started the process of opening it. Maybe another 2 months, it will come into physical existence.

We will start the process. We are looking to build a book of around $500 million by end of this financial year through this GIFT City branch.

$500 million is internal budget.

Sir. Noted.

Thank you so much, sir, for answering my questions.

Thank you.

Hi again, sir. Thank you for the follow-up opportunity.

Sir, I just want to go back and discuss the corporate loan book part again. Sir, if I go back to this ₹10,000 crore exposure, I'm sure you would have thought about whether we should continue the pricing competition.

How did you arrive, as in what was the thought process in eventually letting it go? What is it?

What is the objective function? What are you trying to maximize here?

See,

we do not want to do any loss-making business. It's very clear.

For us, you look at the credit growth numbers, we have grown by 22%. Whether that is coming from corporate or retail or RAM or overall book, that is not material to that extent as to compared against that, at what pricing we are growing.

Just for the sake of increasing corporate book at sub-7% rate of interest, we are certainly not interested into that. This strategy, we are following over last more than 2 years very, very successfully.

The idea is to maximize income. At good price, wherever we have been able to match our cost of fund, cost of deposit, we are lending subject to, of course, asset quality should be good and stress and all those things are not visible.

Very successfully, we have been doing over last two quarters. You can see slippage ratio, hardly any slippage happens.

That shows about the underwriting capabilities. Credit growth of 22% is happening.

Color of money is same, whether we are growing in corporate or retail, or whether we are earning from corporate or retail or MSME. Overall, NII is increasing, NIM is increasing, ROA is increasing.

We are more focused on fundamentals. That again, I will come back to that point only, that any loss-making activity where that business does not make any sense to us, we generally do not venture into that.

Understood, sir. That helps.

Sir, and lastly, what is your plan on mobilizing FCNR deposits? How much have you mobilized already?

We have already mobilized, as on yesterday evening, $300 million since the time this dispensation came and we created new product on FCNR(B). We are having four overseas centers, and we are having more than 4.5 lakh existing NRI customers.

We are reaching out to them through personal contact, through SMS, through mails. We are extensively using our overseas centers and the new customers.

As a result of this aggressive outreach, I will say, we have been able to generate round figure $300 million as on yesterday. We intend to double it maybe by the time this dispensation period, which is coming to an end in September.

By September, we intend to double it to $600-$650 million. That is the plan.

Understood, sir. Perfect, sir.

Thank you. That is very useful.

Thank you.

Yeah. Thank you for the opportunity again, sir.

Sir, regarding that difference in the book value which is disclosed and as per the net worth, should I contact post the call, or is there any view on that?

We will get your number and we'll come back to you.

Sir. Sir, just one more bookkeeping question I had on similar lines.

For example, our cost of deposit is about 4.7% and our cost of funds is 4.85%. Generally, we have observed with the banks is that cost of funds is typically lower than the cost of deposits.

Any particular reason that we guys have a cost of funds more than cost of deposits? Is there a different formula that we have for it or maybe do we include cost of equity also in that?

See, we have seen many cases where cost of fund is higher than cost of deposit. Cost of fund includes borrowing cost also.

Borrowing as well as the equity cost?

Yes. That is how cost of fund generally remains higher than cost of deposit.

In spite of the equity cost being at zero in spite of that?

Yes.

Yes. All right, sir.

Thank you. Thank you for that.

Hello. Yeah.

Congratulations to the management for good set of numbers. In fact, very good set of numbers.

My question is around capital raising and dilution outlook. IOB recently approved a plan to raise up to ₹5,000 crore by equity and ₹1,000 crore by tier 2 bonds.

The Government of India holds a massive 22.44% stake. My question to you, sir, is, what is the precise timeline for the ₹5,000 crore equity raise, and will this be executed by a QIP or a public offering to help satisfy SEBI's minimum public shareholding rules?

Over to you, sir.

Sir, it will be through QIP only. We intend to go to the market, maybe in more than one tranches, in Q3 and Q4.

Okay. All right, sir.

My next question would be around the historic asset quality improvements. The gross NPA fell to about 1.33%, and net NPA at about 0.1%, this was supported by a tiny slippage ratio of 0.06%.

The question that I have is, what is the full-year credit cost guidance for this coming quarter?

Credit cost for June quarter, it is 0.14. We expect that for the full year, the credit cost should be around 0.35 to 0.40.

All right, sir. All right.

Thank you so much and have a wonderful time, sir. Thank you.

Thank you.

Thank you, everyone, for joining the conference and expressing your interest by way of raising queries on the numbers, whatever we have generated quarter-on-quarter. I have only to add here that we are very consistent.

We want to be known as a very consistent bank. Last 11 quarters of numbers, if you see, the things which are supposed to show positive growth, that is showing positive growth.

The numbers which are supposed to show negative growth, degrowth, it is happening accordingly. The consistency is the hallmark of IOB, and going forward also, I can assure you on behalf of the entire IOB team that the same type of consistency will be visible going forward also.

We intend to grow both sides, assets and liabilities, by 13% to 14%. As I said, that is the minimum.

We are committed to ensure good asset quality. Slippages will be closer to minimum only.

The capital adequacy ratio of 19.36%, that is against mandatory requirement of 11.50, 11.50%. That shows the strength of the balance sheet.

One particular thing which I will like to inform to all of you is that because of accumulated loss in the balance sheet, for last almost 12 to 13 years, IOB was not able to declare dividend. I am very happy to share this information with all of you that those accumulated losses have been made nil by way of internal accrual of net profit plus netting of by share premium.

In this financial year, we will be very happy to announce dividend, of course, in consultation with the board. Thank you for joining, all of you.

Thanks a lot.

Thank you, sir. On behalf of the Board of Directors and the management team, we sincerely thank you all for your participation and continued support.