Thank you, Renju. Good afternoon, everyone, and thanks for joining the call.

On behalf of ICICI Securities, we welcome you all to Q1 FY27 post-earnings conference call of South Indian Bank. From management side, we have with us Mr.

P. R.

Seshadri, Managing Director and CEO; Mr. Dolphy Jose, Executive Director; Mr.

Anto George, EVP and Chief Operating Officer; Mr. Vinod Francis, SGM and Chief Financial Officer; and Mr.

Jimmy Mathew, SGM and Company Secretary, along with other senior executives of the bank. I'll now hand over the conference to management for their opening remarks, post which we can start with the Q&A session.

Thank you, and over to you, sir.

Thank you very much, Aman. Good evening to everybody on the call.

I thank you very much for joining us for the South Indian Bank Limited Q1 FY27 earnings call. My colleagues, as Aman had mentioned, are with me in the room, and we look forward to our conversation today.

Let me preface the conversation that we are going to have subsequently with some of the key highlights from our financial performance for the quarter. The bank declared net profit of ₹378 crores for quarter one, FY26-27, registering a growth of 17% compared to ₹322 crores in Q1 FY25-26.

Total deposits grew by 11% to ₹125,817 crores from ₹112,922 crores on a YoY basis. Retail deposits, which exclude bulk deposits, grew by 14%.

That is to say that whilst total deposits grew by 11%, retail deposits grew by 14% to ₹124,306 crores from ₹109,368 crores. Gross advances grew by 17% to ₹104,368 crores from ₹89,198 crores.

During the last financial year, we had a technical write-off of ₹1,163 crores, and if we were to exclude the impact of this, then the YoY growth is actually 18%. Total business of the bank grew by 14% to ₹231, ₹230,185 crores.

Net interest margin for the quarter was 3.23%. With this, we have clawed back the dip in net interest margin that occurred as a consequence of the repo rate cuts.

The net interest margin for the quarter was up sequentially 28 basis points, and on a YoY basis, the NIM was up 20 basis points. The bank was able to show a healthy growth in average advances during the period, with a growth of 17%.

Return on assets at 105 basis points and return on equity at 12.84%. Bank declared the highest ever net interest income in the quarter at ₹1,025 crores, which is a growth of 23% compared to ₹832 crores registered during Q1 FY25-26.

It also represents a sequential growth of ₹110 crores between Q4 and Q1. Capital adequacy ratio for the bank was at 19.62% and the Tier 1 ratio stands at 18.93% as on June 30th, 2026.

CASA grew by 15% year-on-year to 14,000 ₹41,496 crores versus the earlier year period amount of ₹36,204 crores. Provision coverage ratio, including write-off, improved by 569 basis points to reach 54.91%, and PCR, excluding write-off, improved to 81.40% during the year.

Overall gross NPA reduced by 177 basis points from 3.15% to 1.38% on a YoY basis. Net NPA reduced by 42 basis points from 68 basis points to 26 basis points, again, on a YoY basis.

Slippage ratio for the quarter was at 12 basis points, which, when annualized, comes to 48 basis points. The credit cost for the bank for this quarter was 9 basis points.

I'd like to now take you through some other operational and financial performance indicators of the bank. Our focus on MSME loans continues.

On a YoY basis, our business loans improved from ₹14,391 crores, sorry, they improved to ₹14,391 crores from ₹12,660 crores. This number includes a ₹554 crore charge-off.

If you were to exclude the impact of this, that amounts to a growth of 18% on a YoY basis. The gold loan business grew by 43% and now stands at ₹24,930 crores, with an average LTV of 65.25% and an average ticket size of ₹2.94 lakhs.

Mortgage loans, home loans, and auto loans are other areas of focus. On a YoY basis, we were able to achieve 34% growth in mortgage loans, 19% growth in home loans, and 34% growth in auto loans, and these numbers exclude the impact of IBPC/DA or other bulk transactions that we may have entered into.

We will continue to maintain the momentum in disbursements and collections in the coming quarters, and we aim to achieve the desired targets that we've set out for ourselves. As many of this is the last conference call that I will be attending in my current capacity as the Managing Director and CEO of South Indian Bank.

Before I conclude and open the floor for questions, I'd like to thank all the folks on this call for working together with us as we've built the franchise for South Indian Bank over the last two years and nine months. During this period, we've made very significant progress in terms of new products, changes to existing products, new systems so that we are able to do business better with our counterparties, significant improvements to our processes, changes to our organizational structure, significant enhancement in our capabilities that enable us to compete better.

All of this was possible because, A, I was given this opportunity to be part of this organization, for which I thank the board and the others who are responsible for it, and I'd also like to thank all my colleagues within South Indian Bank who have afforded me the trust and collaborated with me in making possible whatever progress that we've had over the last two years and nine months. I'd also like to thank all of you on this call for your forbearance, for your advice, for your help in transitioning South Indian Bank from where it was to where it is today.

With that, I'd like to open the floor for questions. Thank you very much once again.

Good evening, sir. Thanks for the opportunity.

Sir, if you can provide some color on what drove such a sharp decline in cost of deposits? Have we absorbed all residual deposit repricing, or is some left?

How much contribution was from the very strong growth in CASA during this quarter? Sir, similarly, on the asset side, what drove the better yield on advances?

Was it a shift towards the better yielding retail, MSME, and mid-corp, or was there something else? Overall, sir, what's the outlook for the margin going forward?

That was my first question, sir. Thank you.

Thank you, Akshat. I think basically we've been working on our cost of deposits for a while, and a substantial chunk of our liability base Sorry, we are getting some kind of background noise from somewhere.

Okay. As you are all aware, the interest rate cycle changed when RBI started cutting repo rates, at which point in time we started marking down our deposit rates as well.

During the period from the first quarter and the second quarter of this year, I'm saying from January of this year to June of this year, a very substantial portion of our high-rate deposits actually rolled off and repriced downwards by anywhere between 40 to 60 basis points. That, in large measure, is what is reflected in the significant reduction in our cost of funding.

There's also a very significant impact that is coming from the increased CASA balances that we have. The good news is that our average CASA balances grew 119%.

I'm sorry, grew 9 19%, they went from 100 to 119, and that, in turn, has helped manage our cost of funding. The final element that helped us manage our cost was the fact that the bulk deposits rolled off.

We basically dropped bulk deposits by 50% from where they were a year ago, and if you're overfunded, then you end up paying X on the deposit and then receiving Y when you place the money overnight with Reserve Bank of India. The arbitrage losses that we were suffering was reduced very considerably.

There was a lot of active management on the funding side that enabled us to do all of this, but the principal reason is the fact that the higher cost deposits rolled off. Now, your question was, will it continue going forward?

I suspect that a substantial portion of the repricing impact is already baked in. Going forward, this kind of sharp reduction is quite unlikely.

The second part of your question was, how did we get the five basis points increase in our asset yields that was largely driven by a shift in mix, and we were also helped by the fact that a portion of our corporate book is linked to T-bills, and T-bills moved up very sharply during this period. There was a mixture of various things that happened: change in mix, us being on the right side of the rate cycle movement.

All of that helped to get the yield on assets up. I hope this answers your question, and there is NIM, you want a guidance?

From a Right, sir. Right.

Yeah.

Okay. With respect to NIM guidance, what I would like to say is that when the rates were going down, we were perhaps the most impacted bank because we give effect to a repo rate change on a T+1 basis.

If rates go down, we are the most impacted, and the logic for us to adopt that was, A, it's in line with RBI's policy of rate transmission, and so on and so forth. Equally importantly, if you are the first one to be impacted, you're also likely to be the first one to take action to counter the impact of the change.

Now we are in a position where our belief is the rate cycle has switched, it's more likely to increase than to reduce. If that belief is right, then our view is that the NIMs from here should harden as the repo rate changes come into effect.

While I cannot give a guidance on the number, all I can say is that we are reasonably well-positioned with respect to NIM, and we do expect that the outcomes for us during the year will be positive. Sir,

thanks for the detailed answer. My second question is on opex.

The bank has resumed the employee hiring and branch expansion this quarter. Do you expect further hiring and branch addition for rest of the year, and how should we think about the cost going forward?

It's a very good question. We are in a very small way restarting branch rollout.

It's essentially because we had frozen almost everything for the last three years. In fact, we had reduced our branch count by a little bit, and we are now coming back to where we were.

The branch rollout this time is going to be in very key locations for us. We think that we are going to make better choices in terms of where to put the branches, and our whole process of managing the branch rollout in such a fashion that we get outcomes that we want, which is revenues to come reasonably quickly after the expenses crystallize, is something that we are working on.

The idea is to be very, very careful as to where we put the branches and how we get them to actually be accretive to ourselves. At this point in time, there is no significant change in our process.

We think that we should be able to manage our costs quite tightly going forward. As an institution, we are aiming to get operating leverage, positive operating leverage.

For the last few years, we've demonstrated positive operating leverage. This quarter, we don't have it, but for the full year, our aim is to get full positive operating leverage.

I think the traction that we have on NIMs, the traction that we have on business lines in general, gives us some confidence that whilst costs will increase a little bit, our total revenues will increase more, and consequently, pre-provisioning operating profit should actually increase. I'm going to request our CFO, Vinod Francis, to give you further details if you so desire.

To add on to the points what MD, Seshadri sir has mentioned, by and large, we are not expecting any significant increase in the opex that to come in the current year to materially alter the P&L structure. We should be within the range of say five, maybe 5% to 6% in that range.

My last question is on fee, sir. It have been a little bit soft, declining Q-o-Q, and even other income, which includes the bancassurance and recoveries, were on a lower side.

What would be the outlook for the rest of year? Can we expect fee recovery this year, or is it more of a FY28-20 agenda?

Within others, how did banca trended versus the recoveries, sir?

What was the last question, versus recovery? I'm sorry, I couldn't hear you.

Yeah. There's an other part of the non-interest income where we put bancassurance as well as the recovery income.

I wanted to understand how both are trending, as in, is bancassurance income increasing and recoveries coming down? Something like that happening over there?

To answer your question, A, firstly, we think that this is a one-off. We were very busy working on our NIMs, and we were not, laser-focused on fees.

We will start our renew our focus on on this element, and we do not see this as a trend. I think we should be able to address this going forward.

We are also working on a series of new systems which will enable us to participate in other products more effectively. Our trade and FX platform, we are hoping will go live by end of September with all capabilities.

It'll enable our customers to do everything electronically with us, FX bookings, LCs, guarantees, the ability to send money overseas, receive money from overseas, or everything being done electronically, settling the export bills, import bills, all of that. Currently, the on the FX side, we have limited revenues, but you can see from our presentation that our revenues, whilst they're limited, have been growing at 40-50% year-on-year.

With these new systems coming in place, business volumes will grow and revenues will also grow. With respect to fees, my my own view is that it's a one-timer.

We shouldn't read this as something that is going to last forever. It is something that we can work work out of.

It is perhaps because we were focused on other elements, and we we did not focus on this as much as we should have. The second question was, how much was the first quarter of any financial year is a traditionally a softer year a softer quarter when it comes to recoveries.

Our recoveries for the quarter were round about was approximately ₹170 crores, 179 crores in in reality. Our slippages were 120-odd crores, 128 crores.

The the the difference between slippage and recoveries was lower than normal, and a small proportion of that that comes in as revenue into the revenue line, which which should have been significantly lower than the numbers that we've had historically. To give you the exact number, I'll request Vinod Francis to walk you through the numbers.

With regard to the recovery side, if you see, we had the recovery from technical write-off accounts close to 60 crores, and that remains with the last quarter, that is March quarter. On the other side, the contribution of the recovery towards the interest income is slightly lower, as because of the total recoveries are slightly lower when compared with the March quarter.

Because this quarter, we had a total recovery of 179 crores.

Right, sir. Sir, thanks a lot for answering my questions.

I will rejoin the queue. All the best.

Yeah. Thanks for the opportunity.

Congratulations, sir, on a remarkable tenure of South Indian Bank. Under your leadership, the bank has delivered a significant turnaround, and we wish you all the very best for your future endeavor.

My first question is on asset side, and corporate credit has grown at a healthy pace over past few quarters. With a corporate portfolio now accounting for around 40% of total loan book, but our strategic objective was to reducing around 30%.

Has the bank consciously recalibrated its portfolio mix, or do you still intend to gradually bring down the book to around 30% over the medium term?

I think it's a very good question. Our aim in the long run is to bring corporate down.

Under the current circumstances, given the disturbances in West Asia, and so on and so forth, our belief is that high-quality corporates offer lower risk than some of the other segments we operate in. The other thing that had happened was pricing on corporates had improved very dramatically during the last quarter, especially for the shorter duration facilities.

We took advantage of that because we already had credit lines on many large corporates. Given the fact that we had liquidity, we chose to deploy it with the corporates because the view was that in an environment which is uncertain, deploying money which is marginally accretive with low-risk counterparties was better than trying to grow high-risk assets, and that's why corporate grew last quarter.

The environment hasn't changed very dramatically. The uncertainty associated with the Persian Gulf continues.

Our view now is that we will continue to look for opportunities on the corporate side. As long as they are remunerative, we will engage with them.

Long run, those balances will be wound down. Please remember that these are all very short duration assets, and we have the ability to wind them down practically at will.

It's not really at will, but they are short duration, they roll off very quickly. Therefore, this is a one-time adjustment which has occurred on account of environmental conditions and also given the strength that we have on the corporate side.

If we did not have lines on these same counterparties, we'd not have been able to grow this. Given the fact that we had them, and we had the liquidity, and we were a little wary about credit risk that is likely to hit us in the future, we took this opportunity.

I trust I answer your question.

Hi, sir. Thanks for the opportunity.

I have three questions, but before that, one clarification on fee

Is it better now?

Is it better now?

Sure. I was saying thanks, sir, for the opportunity.

I have three questions, but before that, one clarification on this fee income that you were mentioning, there was some one-off. If I look at your core fee income line item, which is 179 crore this quarter, if I look at this trend in terms of, let's say, RoA contribution, the contribution seems to be coming down only, let's say, from 60 basis point to now 50 basis point for last two, three quarters consistently.

If you can highlight what are the factors behind this weakness? Is this the new products that you are doing, you are more focused on, let's say, margin or yield rather than the fee component, the new products that you are doing are of lesser fee component?

Is this that trend? That is question one.

Question two, sir, in terms of employee cost, I think there are some one-off in the last quarter in terms of actuarial thing of 80 crore. It looks like that this quarter this has reversed fully, while the G-sec movement has been half of only the movement in 4Q.

Can you clarify that thing? The last two questions are one on the credit cost.

Right now, I think on a run rate basis, you are 30-35 basis point. After ECL, do you think this could be the run rate, or it can go up because eventually there is a higher requirement under SME 1+2?

Sir, the last question is on FCNR(B) deposit growth. This quarter, it has been good, I think 6% Q-o-Q growth.

Question is, sir, do you still seeing this kind of growth post-June as well? Because I think there are a lot of noises in terms of this leverage thing, talks between RBI and UAE Central Bank, and so forth.

Are you seeing that the growth remains good or it has come down or if you can give some color? Also, what is the landed cost of this deposit?

Okay.

Those are a lot of questions. Let me answer the first one first, your your your question on fees.

Fee basically multiple lines. One line, which is treasury and forex, has been very, very muted for us, as you can see.

It was very good on in Q1 FY26, but now it is Q4 FY26, it was actually zero. Now we've recovered a little bit, we are 44 crores, but it is 80% below what it was in Q1.

With respect to the core fee income, you're right in the sense that it has come off a little bit from 191 crores in Q4 down to 179, and it's a little lower than Q1 of FY26, which is 188. There are some technical reasons for it.

We seem to have changed some product setup on our system where when an account is renewed, the way we renew it and the way we charge the fee by way of an oversight or by way of a change in the process, it's helped we and unfortunately resulted in lower fees being charged on a particular product. That difference between 191 and 179 can in large part be be sort of attributed to that, which we will now fix going forward, and we should be able to change the the mix.

The other area where we have a reduction is in terms of recoveries, a portion of which gets attributed to interest income because of the nature of the loan and where it is and the quantum of recoveries that we get. As I told you, Q1 is lower than Q4 of last year, and it tends to improve as time goes along, and therefore my view is that this, lower non-interest income line is an aberration which will get fixed as we move forward.

We are aware of it, we are addressing it, and our belief is that this is something that we will be able to fix as we go forward. The credit cost guidance from a credit cost perspective, our cost was 9 basis points for the year, for the quarter.

Slippage was 12 basis points for the quarter. Slippages was 128 crores.

We think that our slippage will be in the neighborhood of 500 to 750, 800 crores will be the, slippage given the current trend lines that we can see, even assuming that there is some deterioration on account of the West Asia problem, and our recoveries will be in the neighborhood of 800 to 1,000 crores. That's the the current view that we have.

Obviously, we'll try and restrict the slippage to the maximum possible. The exact credit cost that translates into our P&L is a factor of many is a is a function of many many things that go into it.

We think that the 9 basis points that we currently have is probably, on a on a on a generous side. Hopefully, as we go forward, our credit costs will moderate from here if anything.

I'll turn this out over to our CFO for a more detailed answer.

Thank you, sir. With regard to the other income, just to touch upon one more thing, an addition to what MD was mentioning.

As we know, there is a level of one-off items if you compare with the last year's

Am I audible now?

Okay. Just to add a few points on the other income side, apart from what MD was mentioning, if you compare with the figures of Q1 of the last year, there are certain one-off items you can see over there.

That is one which MD had already mentioned with regard to the treasury. Last year Q1, we had a spectacular income from the treasury, and apart from that, the income what we earned from sale of PSLC was there, so that was amounts close to around 60 crores.

Current year, we were not having that kind of surplus to have that sale. That is also one of the items which is not there as a one-off income in the current quarter.

Then coming to the recovery side, okay, from the technical write-off accounts, we are almost flat compared to the last quarter. It's almost 57 crores current quarter, and last quarter it was 60 crores.

It remains almost flat, even though total recoveries have reduced from Q4 to Q1. In Q1, the total recovery is at 179 crores.

Going forward, historically, if you see the recovery pattern, the Q1 seems to be a little bit slower, and thereafter the more and more recoveries to come in the coming quarters, and hopefully, we should be able to post close to around 1,000 crores for the year.

Okay. Sir, on the actuarial thing on the opex?

Yeah.

The actuarial valuation as we right mentioned, last quarter, we had a write-back of around 80 crores. This quarter, as you know that the year beginning, we take the actual valuation at the projection for the current year, and based on that, we started providing as normal.

Last year also, first quarter if you see, we had a total actual contribution of around 80 crores, and this year also, we had made a contribution of 84 crores. It is back to the normal.

Sure. Sir, last on the FCNR, I think is the growth good even after June?

The growth has been robust, and we are participating actively on the FCNR scheme. Internally, our view is that as long as the price matches the price of liquidity within the country in Indian rupee terms, we will price it at that level.

We are offering very attractive rates to our customers, and we are seeing flows. We believe that a vast amount of this flows will come in August and September because the offer is open till September 30th.

We are working with our rep office in Dubai. The Dubai rep office, what it can do and what it cannot do, has been an area of some focus with the Central Bank of the UAE, and we are engaging with them to ensure that we operate to the maximum extent possible and permissible under the law.

The one area where we do have a concern is that we don't have credit lines from external entities, nor do we have an entity in GIFT City. Consequently, offering leverage for us is not possible, and therefore, by definition, the customers who at this point in time are placing deposits with us are those who are placing unlevered deposits.

We are working with foreign banks to get ourselves lines, but those have not materialized as of this moment. If they do happen, then our volumes will materially change.

Right now, the pace of growth is good, and we are quite confident that we will get reasonable numbers.

Sure. Thank you, sir, for answering all my questions.

Yeah. Hi, sir.

Thanks a lot for the opportunity. Sir, I see security receipts have gone down on a Q-o-Q basis.

We would have recorded some income on the same. What was the quantum?

I'll request our CFO to answer that question. Security receipts, we got some 40-odd crores of cash.

Yeah. Security receipts, at the beginning of the year, we had a balance of 119 crores, and we closed the quarter with a balance of 72 crores.

There was a recovery of close to 47 crores.

Right, sir, but then we would have recognized it from some portion of it in the P&L as well?

No, we don't have anything upside on that with the P&L side. It's only the recovery of the principal.

The upside was recognized when we recognized the SR itself. The entire SR was recognized as an upside.

Okay. Fair enough, sir.

My second question was, if I look at a Q-o-Q growth within the gold loan book, it's just around 0.8% on a Q-o-Q basis. What has actually happened in this quarter?

There was a change in our process and policies occasioned by the fact that the RBI had come out with a circular on gold loans and which went into effect on the 1st of April. As a consequence, some of our other arrangements, which is basically where we were doing some co-lending, where we had some portfolio purchases, and so on and so forth, those ran off to the extent of almost 270 crores or so.

Our branch banking by itself grew quite nicely, but because of the runoff on our bulk deals, the net growth was only the number that you are talking about, which is roughly 80 basis points. Underlying core growth from our branches is quite solid, and we are reasonably confident that, going forward, you will see material growth on the gold loan business.

Okay. Sir, my last question, SMA-1 and 2, both has gone up on a Q-o-Q basis by roughly 80 crores.

Anything to read into it?

SMA-1 and 2 always increases in the first quarter from the fourth quarter. There is a seasonality in it, and you can see it in the prior years also.

If you see March '24 versus June '24, you'll see that it goes up. If you see March '25 versus June '25 also, you'll see the same trend line.

As of this moment, we don't see anything material in the changes, and we've reviewed these numbers, and we've seen the constituents of SMA-1 and 2, and we believe that they are reversible and that they do not materially add to the risk that we are carrying.

Sir. Thanks a lot for answering my questions.

Hi. Good evening, sir.

Sir, a few questions. Sir, first is, ECL will also change the effective interest rate regime, right?

Have you done any working? Will this change the NII in any manner or it is too early to say or it does not change anything materially?

You want to answer that, Vinod?

Jai, good afternoon. With regard to the effective interest rate coming in as a part of ECL, we don't expect that there'll be a material change.

Of course, working is still on. We are not in a position to give a concrete numbers, but initial workings reflect that there will not be any material change to the one we have currently.

Right. Sure.

Secondly, sir, this DICGC insurance, the insurance repricing is not uniform. Does this change any outgo for insurance, or this is status quo, or was there any benefit, if you can highlight that?

Yeah.

Because we also got benefited by that change. If you have seen the numbers on Q-o-Q basis, there is a reduction of close to around 10 crores over there.

Sorry, reduction in percentage, it will be like 15% type reduction, right, for full year? Is that the right understanding?

Because that is the

Okay. Sure, so that is good.

Lastly, sorry, second lastly, one, sir, Vinod, if you have any breakup for this other income breakup into PSLC, TWO recovery, and maybe FLDG and, third party or something, just to just to understand the movement better of the non-core non-treasury fees?

Okay. Broadly, as I already earlier mentioned, this quarter, we don't have any income on the PSLC sale.

That is one. The second thing, FLDG also currently we don't have any FLDG income under the part of any of the products because earlier it was in the credit card, and that has been done away with based on the RBI's guidelines.

There is no FLDG as of now. By and large, we don't have any one-off income in the P&L side for the current quarter compared to the last year or last quarter.

Okay. TWO recovery was around 60 crores, right, which is what you said?

Yes.

Sure. Just a small clarification, sir.

I think you mentioned that this quarter had a chunky disbursement in corporate, but still the yield were favorable, part of that is because of the T-bill movement, right? Or within corporate, you think you have scope to improve the yield or the spread?

It is a bit of both, Jai. Some of it was T-bill movement, and some of it is the market hardening.

Liquidity was a little tighter, and therefore, we took advantage of it, and pricing to corporates went up. Otherwise, we wouldn't have grown the corporate book.

It was opportunistic, it was available, pricing was better, and on the retail side, prices were not moving upwards, whereas on the corporate, they were moving upwards quite considerably, and there we took advantage of that.

Right. Thank you, sir.

Just a small parting message. You have been there for the three years, and you have helped us a lot in understanding, explaining the bank.

Wish you all the very best for your next innings. Thank you, sir.

Thank you very much, Jai.

Hi, sir. Thanks for the opportunity.

With CRAR at 19.6% and legacy book cleaned up, what's the clear plan for deploying excess capital? Where do we see RoEs sustaining on a steady-state basis?

The plan for deploying excess capital very clearly is to grow the balance sheet at wherever the market is growing plus 2%, a couple of percent above where the market is growing, and also to change the asset mix a little bit. Our CRAR is also helped by the fact that we have a large concentration of very low-risk assets where the capital charge is very low.

They also have the problem of being lower yielding. As we move up the capital charge ladder, automatically the spreads also improve for us.

Some of it will get utilized as we originate more retail and MSME business, which is not necessarily rated AAA, where the capital charge will be closer to 100%, if not 150%, and the risk density will increase as we start increasing all of this. To answer your question very simply, our balance sheet will grow, the constituents of the balance sheet will change, and the CRAR computation will change accordingly, and capital will get used because the asset structure has changed.

Right, and any guidance on RoEs?

We've been saying that we have a few levers for our financials to manage our financials. We have the ability to change the structure of our balance sheet on the asset side while keeping a tight lid on our costs.

If you see our cost of money today, we believe that we are amongst the better-placed institutions in our peer set. Obviously, we can't compete with a State Bank of India or any such other institution, but amongst our peers, we have arguably amongst the better cost of money.

Therefore, our aim has been to grow our balance sheet at a rate at which we can continue to keep this advantage, whereas on the asset side, we try and move away from the lower-yielding assets and move it into the higher-yielding assets. I think as we do that, our return on assets will improve from where we are today.

We had said that we'd be in the 100 to 110, 115 range. Over time, that should sort of migrate to 120, 125, and given our leverage, you can compute the return on equity automatically.

That's the trend line that we see as of this moment. I'm hesitant to give you a more concrete answer considering that I'm nearing the end of my tenor, and therefore it would be inappropriate for me to proffer something which binds my successor.

Sure, sir. Thanks for that.

All the best for your next journey.

Thank you.

Hello, am I audible?

My question is to Mr. P.

R. Seshadri.

Thank you, sir, for serving three years, and all the best for your next innings. My only question is why South Indian Bank is having a leadership stability?

Because previous year, Mr. Murali also left in three years, and you are also leaving in three years.

Mr. Ravindra, thank you very much for the question.

I cannot really answer for Mr. Murali's decisions.

I can only say that I'm leaving as a consequence of the fact that I believe that I want to do other things with my time, and considering my age, I believe that there comes a point in time when you have to lay down some of these roles and move into others, and that's the reason why I'm moving on. I can't really address the actions taken by others, Mr.

Ravindra.

Sir. My next question is on the net interest income.

This quarter, it has grown very nicely. Is it sustainable in the coming quarters as well?

Will this run rate continue?

I'll request our CFO to address that question.

Thank you, Ravindra. If you see the growth in the net interest income for the current quarter, as we already mentioned in the call, we had a couple of advantages which we derived from the repricing of bulk of deposits.

Apart from that, another strategy what we've done is that to reduce the bulk deposit by almost 50%. This advantage what we got from the repricing of deposits may not be there in the same quantum in the coming quarters.

Of course, we continue to ensure that the net interest income holds, and at the same time, another leverage that can come in favor of the bank is that, as we mentioned in the call, that in case if the interest rate cycle moves up and the repo rate increases, definitely, that also will work in favor of the bank, as we pass on this repo change on T+1 basis to the customers. That is also expected to be in favor of the bank over the period.

All right, sir. Thank you very much.

That's my questions.

Thank you.

Hi, sir. Thank you for the opportunity.

Can you spell out the loan outstanding for retail as a whole segment and retail gold?

Aman, I'll request my team to give you the numbers. It's not available with me right away, but we can give you the numbers.

Those are available in general. Yeah?

Sure, sir. I'll request you or Dolphy sir can speak about the prospect of MSME segment loan growth.

I'll request Dolphy to walk you through that.

Good afternoon, Aman. MSME, yes, there has been the growth has been a little muted from our expectation.

We were actually well-poised for this quarter, last quarter for scale. Unfortunately, there was too many uncertainties which probably gave us a caution to go a little slow.

Having said that, the fraternity has reacted as business as usual, and that's giving us some confidence to make sure that this quarter, we will go back to the scale mode, and we intend to keep our narrative intact on the changing the balance sheet mix from shrinking the corporate and increasing our contribution to the advance book from better-yielding assets, specifically MSME. That narrative continues.

I can only reassure you that we are on the narrative and the right direction.

Sir, what would be disbursement under the ECLGS scheme?

We have limit set of about 400 crores as of date and disbursement for about 238 crores, exactly. The utilization is where the struggle is.

I think we have a utilized book of about 50-odd crores. That is yet to fructify, but we are on it.

I think we're looking at progressively increasing that ECLGS contribution to the book.

Got it, sir. Just the last question, if you can give me breakup of upgrades, recoveries, and write-offs during the quarter if that is readily available.

I'll request Vinod and Prashanth to give you the numbers.

Sure.

Aman, with regard to the recovery side, the total recoveries for the current quarter was 179 crores, and out of that, technical write-off or recovery from technical write-off account is close to around 60 crores, and interest on NPA that contributes to the net interest income as a part of recovery, that is close to around 40 crores.

Got it, sir. Thank you.