Good evening, everyone, and welcome to the analyst meet for Bank of Baroda's quarterly results for the quarter ended 31st December 2025. Thank you all for joining us.

We have with us our MD & CEO, Dr. Debadatta Chand.

He is joined by the bank's executive directors and our CFO. We will start with a short presentation followed by opening remarks by Dr.

Chand, and then we will move on to the Q&A session. Chand sir, over to you.

Thanks, Foram, and again good evening to all my media friends who are present here on the call. Just to introduce the management team with me, I am D.

Chand, MD & CEO. With me Mr.

Lalit Tyagi, Executive Director. He looks after the C&IC, Treasury, and the international banking.

With him Mr. Sanjay Mudaliar is Executive Director.

He looks after IT, the retail asset, and a couple of other platform function. Then we have Mr.

Lal Singh, Executive Director. He looks after the HR, recovery, and the MSME and agri vertical.

We have Madam Beena Vaheed. She is Executive Director, looks after control, compliance platform function along with the retail liability franchise of the bank.

We have the CFO, Mr. I.V.L.

Sridhar. He has been there for a couple of quarters now.

Mr. Sridhar, over to you for the presentation.

Thank you, sir. Good evening, everyone.

It's my privilege to present before you the financial highlights of Bank of Baroda for the quarter and nine months ended 31st December 2025. Our global advances have grown by 14.7% YoY, with domestic advances growing by 13.6% and international by 19.3%.

Within the advances book, the bank has continued to focus on RAM advances. Our organic retail book grew by 17.4%, agriculture by 19%, and organic MSME by 16.4%.

Corporate loans have grown by 8.1% YoY. Within the retail segment, we have seen smart growth across the portfolio, with education loan growing by 12.8%, personal loan by 12%, home loan by 16%, auto loan by 17.4%, and mortgages by 21%.

In terms of deposits growth, our total deposits have grown by 10.3%, with international deposits growing by 5.7% and domestic deposits by 11.1%. The domestic CASA deposits have grown by 8.6%, and term deposits have registered a growth of 12.7% YoY.

As of 31st December 2025, the bank's domestic credit-deposit ratio stands at 83.89%, and CASA ratio stands at 38.45%. With regard to quarterly profitability metrics, our operating profit for the quarter stands at Rs 7,377 crore.

Bank's net profit for Q3 stands at Rs 5,055 crore, registering a growth of 4.5% YoY. Return on assets remained consistently above 1% at 1.09% as of 31st December '25.

Return on equity stands at 15.59% for the quarter. For nine months FY 2026, our operating profit stands at Rs 23,190 crore.

Our net profit for nine months FY 2026 stands at Rs 14,405 crore. Return on assets remained above 1% at 1.05% in nine months FY 2026.

Return on equity stands at 14.81% for the nine months ended December 2026. With regard to our key ratios, our yield on advances stands at 7.56% for the quarter and 7.81% for the nine months.

Bank's prudent liabilities management has led to a sequential decline in the cost of deposits for the quarter, which stands at 4.75% as against 4.91% from the previous quarter. With regard to our net interest margin, it stands at 2.79% for the quarter and 2.88% for the nine months.

Now we come to our asset quality, which continues to remain robust. Our gross NPA ratio has improved by 39 bps YoY and stands at 2.04%.

Net NPA ratio is below 1% at 0.57%, an improvement of 2 bps YoY. Our provision coverage ratio including TWO is comfortable at 92.73%.

Our slippage ratio for Q3 FY 2026 has reduced by 4 bps YoY and stands at 0.86%. Credit cost remains low and stands at a level of 0.17% for the third quarter of FY 2026.

Coming to our SMA and collection efficiency, our crilac SMA-1 and 2 as a percentage of standard advances stands at 0.36% as of December '25. Our collection efficiency excluding agriculture remains robust at 98.6%.

In terms of our capital adequacy, our capital position continues to be strong, with CET1 at 12.45%, Tier-1 at 13.10%, and overall CRAR at 15.29%. Our LCR remains healthy at approximately 116% as of December '25.

Adjusted for the profit of nine months FY 2026, capital adequacy would have been 16.47%. Now I request MD sir to—

Thank you, Mr. Sridhar.

Once again all my analyst friends, good evening to each one of you. Let me make some quick couple of qualitative points here.

The financial this quarter again talks about the same business model that we have been talking about, which is again to strengthen the fundamental core and be consistent and stable outlook. The current quarter also the number shows that the bank pursue this objective of being a fundamentally strong core at the same time a sustainable performance.

Secondly, numbers that you see for this quarter is purely out of the operation. We don't have any one-off anywhere in the other non-interest income or anywhere which gives slightly elevated level of profit.

The profit that you are declaring this quarter, the net profit has seen a 4.5% jump, is purely out of the operational profit. Secondly on the balance sheet numbers you have seen already we have declared the provisional.

This is one of the strongest number we have in the last eight quarters. The advances almost reaching 15% and the deposit almost at 10, the domestic deposit at 11.1.

I think one of the strongest, only two points I will touch here. That the RAM is almost at 17, 18%.

Corporate has gone into 8% now and the full year our target to be at 10%. Similarly on the liability piece, our saving growth of 7.6% and CASA growth of 8.6%, I think one of the best in the top quartile in the banking sector.

Continue to focus on the low-cost deposit at the same time build a asset book again consistent in terms of our objective of a diversified book, creating a more stable outlook with regard to growth of asset book. On the main important part that you would have seen is that the cost of deposit.

The global cost of deposit at 4.75% and the domestic at 4.99%. That means on both the counts, last quarter we pierced the global deposit cost below 5% and this quarter we have both domestic and also global below 5%.

In case you look at the market threshold, this is one of the top quartile good number in terms of cost of deposit, rather a pristine level to have. That's something a prudent liability management that you carry in terms of not to depend heavily on the bulk deposit, rather focus on the low-cost deposit is giving us positive outcome.

At the same time, the margin that you see for the nine months is a 2.88%. We had given a guidance of 2.85 to 3% and we are right on the band of 2.88%.

Whereas the Q3 is 2.79%, but the overall guidance for the full year continue to be at 2.85 to 3%. On the asset quality again, the numbers were very well in terms of on the benign asset cycle we have, not only for the bank but the entire industry, the GNPA of 2.04%, net NPA of 0.57%, slippage cost of 0.86%, and the credit cost at 0.17%, with the collection efficiency almost the same level at 98.6% excluding agri, and the SMA-1 and 2 book of the CRILC data has improved from 0.39 to 0.36%.

I think the bank is riding on a excellent asset quality as of end of the last quarter, that is the Q3. A couple of fundamental things I think that's important for you to understand that in terms of if I compare December '25 over December '23, the book value of the bank has gone up from almost from 180 to 250.

That's a accretion of almost 80, Rs 85, that is significant. Secondly, the bank has been persistently putting a stable outlook, like the ROA is almost now 14 consecutive quarters we are posting continuously more than 1 ROA.

In terms of profit, this is the 12th quarter we are posting more than 4,000 crore of net profit. Out of the last six quarters, this is the third quarter we are posting more than 5,000 crore of net profit.

The point that I am driving is a consistency in terms of the income earning potential of the portfolio, and the outcomes are very favorable in terms of a consistency and also at a elevated level of profit that we have operated. A couple of things that possibly just to take a note of that, we got the Best Bank Award by the Banker UK some time back that we put that on the public domain also.

That's a strong validation of the bank's journey, which is consistent with growth, which is sustainable and also transformative. At the same time on the technology, IBA Technology Award which was announced recently, there are seven themes on that, and Bank of Baroda could win four out of seven as a winner, and the fifth one is also a special mention award.

It's a huge recognition to the bank's digital robustness and the bank's architecture in terms of creating a customer experience which is definitely better. We'll keep on driving more on this, but then I think the awards of four winner is a huge recognition to entire Barodian who works on transformation, technology, and delivering better customer service.

With this, I open the floor for question-answer. Foram, over to you.

Thank you, sir. We will now open it up for Q&A.

If you have a question, please raise your hand, or you can also type your question in the Q&A box. Would request you to please limit your questions to two for now, and if we have time, we'll come back to you.

The first question is from Mahrukh, Mahrukh Adajania.

Yes, sir. Good evening, sir.

Sir, I had a couple of questions. Firstly, I'll first list out my questions.

Firstly, in terms of NII growth, if you could help us distinguish between total NIM and core NIM, because last time you had kind of given that cut, right, that 2.82, 2.96% is the total NIM, and then 2.76% or something is the core NIM. What is the comparable figure for core NIM this quarter?

That would help. If there's any recovery income on NPLs which is higher than last quarter in the NII?

Secondly, in terms of written-off recoveries, they doubled QoQ. If you could give the split between retail and corporate and if there was anything lumpy?

My third question really, sir, is on the NII growth, right? Of course there's a bit of lower tax refunds and there's a distinction between core and total NIM, but our loan growth is exceptionally high, which is a big positive, whereas the NII growth is in low single digits.

Would we be better off if we consolidated growth and improve margins or that's not an option?

Okay. Mahrukh, typically your question around the NII, the NIM, the core NIM.

Look, as I said that, as far as NII is concerned, Rs 11,800 crore NII is, would have seen because you are comparing with banks, is one of the strong NII number on absolute terms. That is very clear on that.

Our NII is Rs 11,800 crore, and the NII is purely out of the core operation, nothing one-off there in. That's a pure operation NII that is at Rs 11,800 crore.

Coming to the NII growth has been slightly a stagnant or maybe at the same. The reason being is the interest expenses and the interest income.

Although that is a strong asset book, almost at 15%, but there is a repricing happening on couple of books on the asset side also continue to do that. Similarly, on the liability piece, although the cost of deposit has been lowest, but on the wholesale market or the borrowing market still the cost elevated, where the 10-year G-sec still being high.

A scenario the NII is almost at elevated level, but stagnant in the sense the same level. I don't have a core NIM or a separate NIM.

All NIM is core. Absolutely, but specific to that, in case you are talking about the income tax refund, last time also we had some amount, this time also we have some amount.

The impact on the number can be something around 5, 6 bps maximum. Everything is core, and that is at nine months is at 2.88%.

We had given guidance of 2.88 to 3% and we are on the target. You had one more question, Mahrukh, can you just repeat that?

Yes, sir. Actually, I wanted the recovery in written-off has gone up, yes.

Normally I always say I have been telling it for last five, six quarter. Our recovery of written-off is a normalize 700 to Rs 750 crore.

I am repeating this statement for multiple quarters now. Last quarter was slightly less, but this quarter it has gone into the level of that and look, we have a TWO book of almost 63,000.

There would be recovery, but the normalized quarter is 700 to Rs 750 crore, and this quarter it is slightly 800-plus something. In that way, there is no one-off therein.

It's a normalized recovery out of written-off. On a guidance scale, we continue to have 700 to Rs 750 crore per quarter.

There is no one-off currently whether you talk about other interest income or a non-interest income. Look, another thing also you complimented on the loan book growth.

On a loan book of almost 11 lakh, everything, our book is entirely organic. The outstanding pool purchase as on today is only 20, 20,000 crore, which is again going down quarter to quarter.

In that way, the book is organic. The income out of this book is entirely again purely operational.

That is what a statement I would make.

Sir. Thank you.

Thanks a lot.

The next question is from Nitin Aggarwal.

Yeah. Hi, thanks for the opportunity.

Sir, I have two questions. One is around the LCR and the CD ratio.

If I look at LCR ratio has dropped quite sharply in the last two quarters, and so how do you think about that? Likewise on the CD ratio, which has been rising with a sort of strong growth that we are reporting.

What are the comfortable numbers that you will want to guide?

Nitin, on the LDR or the CD ratio, we say perennially we have been operating 80-plus. This quarter the global is 86% and the domestic at 83%.

Earlier also we said on the domestic we'll be comfortable on the range of 82 to 84%. Global is always something different, global can impact, but overall the global side also it would be something around 86 to 88% would be the range.

Saying so, you rightly talked about the LCR part because the LCR gives comfort, so as long as the LCR is comfortable, we should not be very focused on the LDR. Our target is always to operate around 120, right?

Last quarter we were 120, this quarter we are 116. If you look at the book on the investment side, we almost sold 28,000 crore of investment this quarter, precisely to take advantage of the low yield and getting it repriced at the 10-year yield at this point of time.

That will built-up actually our comfort range to operate 120. 116 is also a healthy number, but then we're going to operate at 120 on the LCR.

Tyagi sir, anything you want to add on the LCR or?

No, sir. In fact, you have said it right that our target range is around 120.

We have been operating around that level, and to take advantage of the market yields and also OMOs, the excess SLR has gone down slightly, but we will built-up as the yield curve is showing some traction.

Sure, sir. Sir, the other question is around ECL.

If you can give some color as to what kind of requirement are you seeing for the transitioning to the ECL? When we are having already a very strong asset quality, our slippages are in control, credit cost is making new lows, why are we not raising coverage further and making more provisions towards the ECL transition?

What is the thought process on that and how many years basically do you want to cover that journey?

Okay. Let me come to aspect differently.

As far as credit cost, for all the analysts, let me keep the guidance actually that is important, actually I missed this piece. Our credit guidance continue to be 11 to 13% with upside, which we have done it this quarter and possibly going to do in Q4.

Deposit is to be 9 to 11%. At the same time, the ROA above 1%, margin guidance is 2.85 to 3%.

At the same time, the slippage is 1 to 1.25%, but the credit cost which was below 0.75%, we have revised upward, in the sense positive, to below 0.60%. Precisely the credit cost for last 9 or 10 quarters has been at 0.34%, this quarter at 0.17%.

Considering the quality of asset we have, I think the PCR part you are referring to, I think we are adequately provided in terms of the provision coverage you require to build that. Apart from that, we have built up floating provision of almost 1,000 crore.

We did that, were one of the early bank to do that, and we typically said that keeping the ECL in mind then we have done that. Going forward also, we'll be mindful in creating further buffer on the ECL.

Just to give a data point on the ECL, it's a draft guidelines, nothing final, but then we keep on doing pro forma calculation. Just to clear on the pro forma calculation, the impact on the CRAR because of the ECL, because there are two factors here.

One is a one-time impact because of the ECL, another there is the risk weight also there is another guidelines where there is a significant write-back possible. The net impact on the ECL CRAR, which can be spread over five years, would be somewhere at 0.6 or 0.7% maximum.

That is what as per the guidelines, final guidelines will calculate differently. The incremental provisioning, recurring provisioning year-to-year because of the ECL is only can elevate the credit cost only by 18 bps as on today.

Considering my guidance of 0.6%, the average of 10 10 quarters almost at 0.34%, current quarter at 0.17%, I think we are adequately cushion over there.

Right, sir, got it. Thank you so much, sir.

These were my questions.

Yeah.

The next question is from Kunal Shah.

Yeah. Hi.

Am I audible?

You are audible. Please go ahead.

Yeah. Sorry, sir, once again to touch upon interest on income tax refund.

You mentioned 4 to 5 bps of benefit in NIMs of 2.79%, the core NIMs would have been closer to 2.74% or so. Maybe interest on income tax refund would still be 400, 500 crores even during this quarter.

That's a routine actually. That's why last time also I said the tax refund happens different amount different quarter.

As a accounting, it is part of the interest income which has been classified, there is no core NIM or other NIM, everything is core for that. If you talk about the element per se, then yes, there is a 5, 6 bps impact because of that and it can be in the range of 2.70 to 2.74% kind of a level.

That purely as a calculation, but my NIM is 2.79%, so that's the core NIM.

Got it. Secondly with respect to maybe on the ECL side, last time you have still created the floating provisions as a prudent measure of almost, say, 400-odd crores.

We have floating provisions to the tune of 1,000-odd crores. Is that sufficient and now there is no further need to create the floating provisions going forward?

As I said just the earlier question also, the impact on the CRAR would be 0.7, 0.6%, 60 bps. At the same time, the recurring provision requirement would be 18 bps on the credit cost.

Current provision level is adequate almost to that level, right? Yeah.

Yeah. Just maybe on labor code, any impact during the quarter or no, not really?

Maybe we have been making this

The auditor has also given in their report key there is no material impact because one of the key impact on the labor code is with regard to the gratuity to be provided, right? As per our current employment practice or the service condition, anybody is joining the bank we assume that he stays for five years, we make adequate provision therein taking him as a five-year, he is continuing for five years.

In that way, there is no impact post the labor code, particularly on the gratuity, which can have a impact. There is no material impact as far as the gratuity, the labor code is concerned.

There are other codes therein, other parts of the code, the bank will be complying with that. Lal Singh sir, anything further you want to add on the labor code?

No, sir. There is not much impact as far as the labor code is concerned, and these rules are being finalized, once they are finalized then we'll see the actual impact.

Right now there is no impact, hardly it has impact of 8 to 9 crore. Okay.

Okay. On growth you have not revised the guidance.

You have revised on the credit cost side, but growth we are already, say, closer to 10-odd percent year-to-date from March to December, then doesn't it appear that we will easily beat this 11 to 13 advances growth, or is there a rundown expected on the corporate and that's the reason we are not revising this guidance?

No, actually there is no rundown here. Actually, as I said, 11 to 13 is upside.

This quarter we are at 15, precisely that upside is to exceed 13%. At the same time, look, one thing structurally that we need to be mindful while designing businesses with regard to what is happening on the resource side, particularly on the deposit market.

Although we have seen significant uptick in terms of deposit, my CASA, the saving has been 7.6%, which is I think one of the best in the market currently. Continue to focus on the low-cost deposit, but not be very over on board into the wholesale market where the cost is slightly higher.

Given in this scenario, I am not relying heavily on the wholesale market, then I think on the advances side the growth would be somewhere around 15%, 14.5, 15%. That's why we revised that 11 to 13 with upside.

That's the purpose of exceeding above 13% as on March 2026.

Got it. Thanks a lot.

That's all from my side. Yeah.

The next question is from Abhishek M.

Hello. Am I audible?

Yeah. Thank you.

Yeah. Go ahead.

Yeah. Hi, sir.

Good evening. You made an interesting comment.

You said that if LCR is adequate, then LDR should not matter. Your domestic LDR at 83, 84%, as long as you have 116 to 120% LCR, this can go up, right?

Because even if it goes to 86, 87, it will be fine with you or do you have to manage the optics of 83, 84 not going up?

No, look, you said right. Actually domestic, we want to be in the 82 to 84%.

The optimal that we are looking at domestic is 84%. Whereas global can be around 86 to 88% because the global CD is always higher than 100%.

That's the market therein. The point here in terms of resource management if you are referring, multiple alternate resources where you can optimize cost, then we do not rely on high-cost deposit.

Last 10 quarters at least we are telling the bulk deposit actually you want to contain that because that's a volatile element. We are getting other alternate resources which is in the form of refinancing, infra bond, a global raise of resources.

I think wherever we can optimize cost, we will go for that. That not necessarily be a deposit.

In that way, the solvency and the liquidity would be ensured while driving the asset side of the book. Saying so, on the LCR front, which is more important, our target range 120.

This quarter it has gone down to 116 because we have sold almost 28,000 crore of investment book just to take advantage of the rate cycle. What is the rate cycle, we are going to replenish that because the tenure has been higher now.

It's more of a treasury operation to slightly go down below 120, but we'll be in a position to recoup that in a quick time in terms of maintaining our target range of 120. In terms of the resource profile, the bank's resource profile is very strong.

Somewhere some change in terms of LDR you see because why do we want to optimize that. Suppose I get a alternate resources which is although continue to focus on the low-cost deposit, cheaper than the bulk deposit or a CD, then obviously our tendency to go towards that and that typically not reflected in the deposit, your LDR seems to be slightly at a higher side.

Otherwise, the bank is managing all this parameter I think on a sustainable and stable look, and the solvency and the liquidity profile is very, very strong for the bank.

No, no, I take your point. That's not my question.

My question was that even if this 83, 84 LDR goes up because you are optimizing for different liabilities and your loan growth is 15, your deposit growth is 10, anyway it should go up as you go forward, it shouldn't be a problem, right? It shouldn't become a limiting factor.

That is all I'm asking. It can go up to 85, 86, 87, it's fine.

In terms of resource profile, because you must be tracking many banks in terms of their profile of resources, our book in much more diversified on the resource side also, not only on the asset side. Again because we have a large operation, look, the global LDR, if you look at the international operation, the CD ratio is more than 100 because many of the same sources of deposit, if it is more than one year, it is taken as a borrowing rather than a deposit.

These are all the resources are quite strong. I don't think that it's any limiting factor for that.

The bank continue to grow strong, and our guidance of growing at let's say higher than 13% continue to be there without any issue there.

Sure, sir. Second question is on NIM.

From here, what levers do you see?

See, there are two things we said earlier at the beginning of the year saying that in terms of resetting of interest both on the asset liability, Q3 and Q4 would be better than the Q1 and Q2. That is one articulation we had it in Q1 and Q2.

Q3 continue to be because there was a rate action in Q3 which was initially while commenting was not in mind. The asset liability continued to again reset at a different level, particularly there is a lot of resetting happening on the fine-price asset, particularly on the corporate loan book.

A scenario like that and the absolute number of NIM if you see comparable with the industry, it's absolutely at a very good level, pristine level. In terms of a Q4 exit suppose you are referring in the process, full year would be 2.85 to 3% and exit has to be higher than 2.85%.

It may end up somewhere at 2.85 or 2.90% kind of a level, that is what our expectation. Why I am again hopeful on this, the cost of deposit is now all-time low at 4.75% for the global book and which was 4.99% earlier, 93 or 94 earlier.

The entire book would run at 4.75% at least for this quarter, full quarter. Whereas there is only on the asset side the repricing continue to be at a lower rate because of the asset market theory.

Net-to-net, I think we will be in a position to maintain that 2.85 to 3% guidance that we are giving for the full year.

Yes, sir, it just seems like for the 4Q, there wouldn't be too much repricing left on the cost of deposit side, and on the yield side you continue to grow, NBFCs, power, AAA corporates, housing, all the lower-yielding sectors where yields are low. Just on an incremental basis, it seems like margins will come down rather than go up.

What am I getting wrong here?

No, there are two things, as you said the

Even your slippages are really low, the interest reversal benefit is also not going to be much incrementally. Whichever lever I look at, I can't really find a lever which shows margin will go up.

Actually the peak deposit rate was 6.50%, which has been reduced to 6.25% during the quarter in Q3 on the retail side, right? The repricing that you are talking about almost done, the impact of the repricing would not have been felt full quarter in Q3, which will be felt full quarter in Q4.

That's the upside there in the book in that way. The repricing due, the only challenge here is with regard to the repricing due on the bulk deposit, actually that market is slightly still tight.

That can put pressure. There are ups and downs therein.

See, on the RLLR side, external benchmark, these are already done. The corporate which was getting fine-priced now because the tenure has been elevated, things are looking different now.

The repricing which used to happen at a lower rate now going to happen at a higher rate because the bond prices have gone up, the yields have gone up. There are both positives and negative, and for a bank like our size, 6, 7 bps optimizing on the NIM is not a issue.

We'll be in a full year the same, right? So 2.85 to 3%.

Mr. Tyagi, anything you want to add on the repricing piece?

Yeah. Sir, in fact, till November there is a data from RBI also which says that on the fresh deposits, the transmission of the previous cuts before the December cut has happened, but on the stock, it is still happening.

Partly I am supporting your argument, MD sir, that still stock is yet to be repriced. Probably there is some benefit which is still to accrue on the deposit side.

On the advances side, particularly on the corporates, if no further cut is there, largely whatever demand they have made, largely it has been met till last quarter. Now looking to the elevated capital market rates, probably corporates are also adjusting to the new reality of slightly higher pricing, as we feel.

Yeah.

Got it. Right, sir.

Okay.

Thank you, and all the best.

Thank you. Next question is from Piran Engineer.

Yeah. Hello, sir, and congratulations on the quarter.

Just firstly, one clarification on one of your previous comments when you mentioned that incremental credit cost will be 18 bps due to ECL. Are you just referring to for the first five years of transition that is the 18 bps or the sustainable steady state is 18 bps?

The sustainable steady state. Actually, there are two impact of the ECL.

One is impact is because of the one-time impact on the CRAR.

Correct.

Actually we are netting it off. There is a ECL impact and there is a some kind of a reversal or pull-back happening because of the risk weight getting changed as per the draft guidelines.

The net impact is going to be 60 and that would be spread over five years. The spread-over part is over.

On a ongoing basis, you need to have this ECL provisioning, and our normal thumb-rule calculation, which may undergo a change, talks about the impact of 18 bps on a ongoing basis, year-to-year basis. That's why actually what we have done as on today, our 8, 9 years average credit cost is almost at 0.34%.

Cushioning that, we got into a revised credit cost guidance of credit cost not exceeding 0.60% as against 0.75%. That's the statement I made earlier.

Understood. Sir.

Then just getting on to my question. Firstly, in the agri book excluding gold loans, do we do farmer finance, RBI had some observations with some private sector banks they were not PSL compliant, etc.

Did we also have such an observation?

No, frankly we had no observation on the PSL categorization classification. We do big farm lending, absolutely no.

Then if I may ask, because none of the PSU banks have had this problem, what do PSU banks do differently that they are on the right side of it and private banks, all the top three banks have had observations? It's a fairly straightforward product,

I think I don't know, but then you have to ask the others what they did differently so that others

Let me ask you this way, sir. Do we track the end use of the loan once we give it to a farmer?

It's a farm loan.

Right?

Absolutely. The farm loans are for farm loans, right?

As per the guidelines, whatever we do comply to all those guidelines.

No, no, that's fair, but how would you track the end use of the loan? If you give a farmer, he takes the money and buys a bike or a TV, how will you know?

No, look, these are guidelines actually. The banks are not doing farm loans only recently, we have been doing for decades and century now, right?

In that way, what are the compliance required to extend farm loans, the bank is complying all, including the end use that is being prescribed as per the circular or as per the guidelines, absolutely no issue

on that. Okay.

That's

In terms of farm loan also, it is not that there are certain percentage can be used for consumption, specifically referring to your part. Lal Singh sir, anything you want to support on this?

In fact, in farm loans we have the system of post inspection and verifying the end use in the larger farm loans.

Understood. Okay.

Then my next question is on the MSME book, 1.5 lakh crores. Just can you give a sense of how much is secured versus unsecured, and how much of the book is working capital versus term loans, some sense on the average ticket size of that book?

We have a mostly a secured book therein because our unsecured book is with regard to the cash-flow based which you have launched recently. Otherwise, whether it is a MSME working capital loan, term loan, or whether this is a any loan we give on the MSME, these are by and large secured.

Anything Lal Singh sir you want to say?

Our book is mostly secured book and wherever there is a unsecured, that also is covered by the CGTMSE coverage or NCGTC coverage.

Yeah.

Okay. Like is it mostly working capital or mostly term loans?

It's on both way. It's composite.

The split, sir, if you just rough split? 50-50, 70-30?

No, I don't have the exact figure. We'll provide you the data.

The ticket size would be like 50 lakhs to a crore or is it higher?

It's around 1 crore to 5 crore.

1 to 5 crore. Okay.

Yeah. That's it from my end.

Thank you, and wish you all the best for the future quarters.

Okay.

The next, I think the last couple of questions. First Ankit Bihani, please.

Yeah. Hi, thank you for the opportunity.

My question was on margins. Our nine-month margin now stands at 2.88% and is towards the lower band of our guidance.

Now with full impact of the 25 bps cut coming in, would we want to revise our guidance? The other thing is that you have highlighted that interest on IT refund is part of core NIMs, but this number is very volatile.

Further, when you say it's core NIMs, is it something structural and we'll continue to see for the foreseeable future or it should be limited to a few quarters? How would one read into it, because the other banks refer this item as one-off.

No,

two things. One is with regard to talked about the NIM.

Bit of a liability profile because our cost of deposit has gone down significantly lower at 4.75%, right? In that way, we have 1,40-odd thousand crore of repricing due partly because of the bulk deposit and partly because of the core deposit.

That is going to significantly upside the NII in that way. On the asset side of the book, yes, the BRLLR cut has already happened.

We have external-linked benchmark. There is a book which is also that is beyond MCLR.

Off late, because of the rate structure on the 10-year G-sec and all, again the repricing happening on couple of so-called fine asset is also at a different level, higher level. In that way, the full-year NIM would be in the range.

There can be changes therein. When there is a transition happening in the entire economy, particularly banking sector, both on the asset liability because of the rate, precisely, putting at one is not possible, but then the level that you are declaring also you can see in the market is a quite elevated level because of a core strategy.

We have a lower dependency on the bulk deposit, we have said multiple quarters earlier. Secondly, in terms of the asset book, we have a growth on the RAM which is stronger, it is NIM accretive.

Personal loan growth is a normal 12% kind of thing. In that way, fairly being operating at 2.85 to 3% is a fairly a good level for us to achieve that, and I think we are hopeful of doing that, right?

That's one. Secondly, the core NIM that you talked about refund.

Look, it's a guidelines which came saying that the interest on income tax refund to be taken as part of the income, right? That was a RBI guidelines.

Otherwise, suppose you take that as a one-off and a non-core, that should not have been that guidelines. The guidelines clearly says about it's accounting treatment as per the regulatory norms.

That's how treating. In terms of volatile component of that, every year we get something on that because of the interest on that.

Some quarter it can be higher or lower. What is the negative delta you're talking about, 300, 200, or 400 crore?

On a book where my revenue is almost 120, 130 lakh crore, I don't think it's something generating a 200, 300 is a one-off or a volatile component. What is the one-off we normally refer?

One-off is referred all of a sudden there is a NCLT recovery substantially boosting the recovery of TWO, that's one-off. Suppose you have a sell of a investment which was not part of a normal float investment, it is more of a strategic investment which is sold.

These are one-off. I think in that way, my comment was there and we need to take in that context.

As far as computing, we do not have to define a core NIM or a normal NIM, it's a core NIM only. The element of tax refund, the impact can be around 5, 6 bps depending upon in which quarter we get how much in that way.

Okay. My next question is on the credit cost front.

The credit cost this quarter has been quite low at 25-odd bps, but it has been supported by decline in PCR also, which has declined by 190-odd bps on a QoQ basis. If I adjust for that, credit cost would have been largely flat on a QoQ basis.

How should one read into it?

You see, the PCR level you need to maintain based on the asset quality, and if you look at our bank for the matter, last 13, 15, 16, 18 quarters it's not a volatile number we see on the asset quality. The trending has been clearly every quarter-to-quarter is a declining in terms of the GNPA and net NPA.

We're at a good level of asset quality in terms of the book, in case you look at how much is the book A and above. Subject there is a normalized credit cycle which you are seeing now, which likely to last for longer years, I think there is no concern with regard to the PCR level that you are taking.

Our PCR is lower possibly, the asset quality is better, we need not provide for all those, right?

The

credit cost typically is a function of your slippage and all and how much provisioning you are making. Our last 8, 9 quarters credit cost is the average of 0.34%.

That's why we are revising from earlier many people used to ask us saying that why you are not revising from 0.75%. First time we are getting a comfort of revising because the average has been below this range.

That's something we are doing. In that way, I think we are fairly balanced in that way.

Many of the large banks if you say PCR, couple of banks are definitely higher, but their journey on the net profit and asset quality are different behavior than the asset quality behavior we do have. That typically puts you at the why you need to put your PCR, right?

In that way. Anything Madam Beena would like to talk on the PCR?

We are in a comfortable state, sir, with regard to PCR because our slippages have been low and there's no requirement for an additional provision at this point of time.

Okay. Okay.

Yeah. Thank you for answering my questions.

All the best.

Thank you.

Thank you. That's the last question we will be able to take today.

Ankit has a hand raised. Firoza, if you can take that.

Sure, sure.

Ankit already finished, no? Ankit finished.

Then the last question we will take from Rikin. Rikin?

Rikin Shah?

Good evening, sir. Thank you for the opportunity.

Just two questions. First one, you have been on the journey of bringing down the bulk deposit share over the quarters, but in the last few quarters the bulk deposit growth has been higher and the share of retail term deposit has been declining.

Why are we shoring this up again, especially when the wholesale rates have started to firm? That's my first question.

The second question is just if you could guide us perhaps as to what proportion of the term deposit book is yet to reprice? Let's say 20, 30, 40, whatever that percentage could look like.

See, bulk deposit as we said, the moment you fund your asset out of the incremental bulk deposit then possibly you are not focusing on the low-cost deposit. Last six, seven quarters we focus on how do you focus your low-cost deposit.

It's not a objective, but if you look at the CASA growth of the bank vis-a-vis what is happening in the system, not that we are the top, but we are one of the best in the market in terms of the CASA growth consistently for last many quarters. Clearly within and outside, the message is that we need to rely on low-cost deposit more.

That's going to give you a sustainability and also it's good with good reserve for you for long term. That's something the fundamental core or the sustainable that we normally talk about.

You have to rely on bulk at some point of time, the reason being there is a wide gap between the asset growth and the liability growth. Suppose this quarter itself, suppose I grow at 15% on the asset and the liability growth, although liability has a larger base, but then somewhere I have to depend upon the wholesale funding, actually the bulk is more of a wholesale funding.

The bulk is not the highest cost at every point of time. Some of the time the bulk rates are quite benign.

At some point of time the rate on the bulk was almost at the rate at the retail used to pay. In that scenario, we'll try to slightly front-run the bulk in terms of acquiring that.

It's a balancing in terms of how do you manage, but the theme is that I should fund my incremental asset more out of the low-cost deposit rather heavily relying on the bulk deposit. As on today, if you look at the bulk as a percentage, actually this data you may not get from many banks, the bulk as a percentage of the domestic deposit, it is almost at 19, 20%.

That's I think a fairly comfortable level for a bank like us to operate. Although some of the quarters you would have seen there is bit of a growth happening, I will not say that we will not rely on bulk, but as a objective, we will not be funding incremental asset only by raising the large extent.

We are not in a balance sheet expansion mode at a cost. We want to rationalize cost, that's the key thing.

That's why you'll find couple of quarters the bulk growth is higher. Reason being the asset is growing faster, right?

The system need to give enough deposit to us to only rely on the low-cost deposit, right?

Got it, sir. Sir, on the second question, please, what proportion of term deposits are yet to reprice?

I think roughly a ballpark number can be around 25% kind of a number, but then we'll come back to you on this. Exactly data I don't have as on today.

Got it, sir. Sir, one last data-keeping question.

What is the quantum of outstanding standard restructured loans in this quarter?

It is not much, actually. That's a subject we

It's a very small number usually,

6,

7,000 crore.

No, no. Sir, it's around 8,000 crores, 8,400.

Thank you very much.

Actually, initially when the standard restructured was started post-COVID, actually what was important is the slippage that was happening, migration that was happening, now that is completely stopped. There is no concern with regard to it is no more a stress book as far as standard restructured, but the number is 8,000 crore.

Okay. Thank you, sir.

Thank you. Would request Sridhar sir to please give the closing remarks and the vote of thanks.

Sridhar ji, you are on mute. You have to unmute yourself.

Yes. I would like to extend my sincere gratitude to all of you for joining us today for the announcement and discussion of our financial results.

Should you have any further questions, please feel free to reach out to me or to my investor relation team. Thank you once again for your time and continued support.

Have a great evening ahead.

Thank you.

Thank you very much. Thanks for joining the call.

Thank you.