Good evening, everyone. I welcome you all to Indian Bank's post results conference call for fourth quarter of financial year 2025, hosted by Emkay Global Financial Services.
From the top management, we have with us Shri Binod Kumar ji, MD and CEO; and we have Executive Directors, including Shri Mahesh Kumar Bajaj ji, Shri Ashutosh Choudhury ji, Shri Shiv Bajrang Singh ji, and Shri Brajesh Kumar Singh ji.
I request the MD, sir, first to briefly summarize the key highlights from fourth quarter FY '25 results and also provide us some strategic direction on growth, margins and asset quality, post which we will have the Q&A session. Over to you, MD, sir.
Thank you, Anand, and good evening to all the friends from investors' community, my colleagues on the Board, all the executive directors. First of all, I will say this quarterly results has been good. Annually also -- annual results has also been good. We have crossed figure of INR 13 lakh crores for the first time. Also PAT has crossed -- we have crossed INR 10,000 crores for the first time. And to be precise, it is INR 10,918 crores. So that is the first time we have crossed. And also one good number I would like to -- at the outset, I will share with all of you. Our SMA book, including 0, 1, 2, which used -- which was 15.59% at the end of the financial year March '24, has come down to 8.06% for the financial year FY '25 -- the financial year '25.
Having said that, so total business reached INR 13.25 trillion. Q-o-Q growth has been good. Annually, we have added around INR 103,000 crores, INR 104,000 crores. Out of that accretion in the Q4 was approximately INR 60,000 crores. Deposit also overall growth, we reached INR 7.37 trillion. Out of that Q-o-Q growth is 4.97%, annual growth is 7.14%. Current account also, we reached INR 40,000 crores. So Q-o-Q growth is 11.33% and Y-o-Y growth is subdued at almost flat at 1.63%. Similarly, in savings fund, we reached 2.43% with a Q-o-Q growth of 4.15% and Y-o-Y growth of it is flat at 0.84%. We have been able to maintain CASA at 40.17%. And one good thing in retail term deposit, less than INR 3 crores. We have been able to reach at 2.79% with a growth of -- Y-o-Y growth of 10%.
Similarly, in advances, we have achieved INR 5.88 trillion with a Q-o-Q growth of 5.18% and Y-o-Y growth of 10.19%. RAM sector, RAM sector, we reached INR 3.51 lakh crore or trillion. Q-o-Q growth is 4.82% and Y-o-Y growth is 13.22%. Retail, we reached INR 1.19 trillion with a Q-o-Q growth of 3.60% and Y-o-Y growth of 13.71%. Agri, we reached INR 1.38 lakh or trillion with a Q-o-Q growth of 6% and Y-o-Y growth of 13.68%.
MSME, which used to be in the range of growth used to be in the range of 5% to 6%. This year, we have been able to achieve growth of 11.9%, approximately 12% in the MSME. MSME RAM share, RAM share is flat around at 64.23%. Net profit for the quarter, it is INR 2,956 crores. And for whole financial year, it is INR 10,918 crores with Y-o-Y growth of 35.41%.
Operating profit is at INR 5,019 crores with a Q-o-Q growth of 5.69% and Y-o-Y annual operating profit is INR 18,998 crores with a Y-o-Y growth of 12.82%.
NII, NII Q-o-Q sequentially, it came down marginally because of the impact of the two repo cuts. But annually -- for the Y-o-Y, it has grown by 8.17%. Similarly, other income, other income, we have seen good sequentially, we have seen good growth and with -- of 27.46% and Y-o-Y growth is 17.24% annual.
Return on equity (sic) [ Return on assets ], it slightly came down from 1.39% to -- sequentially, 1.39% to 1.37%. However, for annually, if I talk of annual, it has grown from 1.07% to 1.32%. That is 25 basis point increase. Return on equity, almost it is flat. 21% was the Q3 sequentially, and now it is 21.01%. And for full year, it is 20.76%.
Cost-to-income ratio, it is flat at around 45%. December, it was 44.56%. And for annual, it is 44.77%. So it is almost flat. Then provision coverage ratio, sequentially, 1 basis point improvement is there, 98.09%. It has gone up to 98.10%.
Then credit cost, credit cost, if we talk of the credit cost, it has gone a little -- sequentially, it has gone up from 0.47% to 0.81%. But for annual, it has come down from 7.77% (sic) [ 0.77% ] to 0.66%. Credit cost has gone up because we have some MOC was there and some slippages. And -- but the major impact is because of the one account in NFB. We made a provision in NFB also to be on conservative side, safer side.
Gross NPA has sequentially come down from 3.26% to 3.09% and net NPA from 0.21% to 0.19%, it has come down.
Slippage ratio, slippage ratio sequentially, it has increased, as I told you on account of the some MOC 0.78% to 1.09% it has come down -- it has gone up. But annually from -- it has come down from 1.49% to 1.11%. Slippage, absolute slippage for the quarter was INR 1,393 crores. December, it was INR 1,004 crores. So a little increase because of some MOC branches were audit -- under audit.
SMA, as I told you, SMA has come down from INR 79,931 crores in the March to INR 45,923 crores. So there is some substantive reduction in SMA book. And SMA-2 book also more than INR 5 crores is only INR 659 crores and more than INR 25 crores, only one account of INR 160 crores. And there also we have made 100% provision.
We have been able to open around 55 lakh accounts during the financial year, saving fund account, and current account around 1.58 lakh current account, we have been able to open. One good thing I will -- I'm happy to say our average balance in new account, which was INR 21,000 in the quarter 4 last year has gone up to INR 30,000. So that is one good aspect of that.
Guidance, guidance if I talk about the guidance, deposit guidance, we are giving 8% to 10%. Advance guidance, we are giving 10% to 12%. CASA, we are giving guidance of maintaining around 40%. Then LDR in the approximately 80% range. Gross NPA 3.09% already there. So we are giving guidance of less than 3%. Net NPA, we will be able to maintain because already we have reached at 0.19%. So we will maintain that. Recovery, recovery also, we are giving guidance of INR 5,500 crores to INR 6,500 crores.
Then NIM, because two rate cut is already there, we have some moderation on yield on advances also and NIM also. Sequentially, it has come down by domestic 9 basis points. And we also see since inflation is within comfortable range, we see there may be some few more rate cuts. So we are revising NIM guidance from -- in the range of 3.15% to 3.30%. And ROA, we are giving -- although we have achieved 1.32%, but because of the increased asset or some moderation in the profitability, we are giving guidance of -- in the range of 1.20%. Cost-to-income ratio, we will be able to maintain around 45%. Credit cost, I'm giving guidance of less than 1%. Slippage also, we're giving guidance of less than 1%.
One good thing I would like to say, recoveries, recovery is continuously more than the slippage since FY '22, '23. This year also, recovery was INR 7,651 and slippage was INR 5,683 crores. And I'm happy to say this amount of recovery we have been able to achieve despite very subdued recovery contribution of NCLT and NARCL. If I give you further bifurcation, out of this INR 7,651 crores, recovery less than INR 1 crore is INR 6,730 crores, so contributed by the basically smaller accounts. If I talk of the capital, capital, we are well capitalized at 17.94%. See out of that CET1 is 15.36%.
Digital, my colleague, Mr. Bajaj will explain. But before that, I would like to only add one or two things. Digital adoption is our focus area. We have made so many investments during the last 2 to 3 years. Benefit of that is yet to come. So that's -- our focus will be on digital adoption using customer base of the mobile banking, Internet banking also. And on HR, HR, we have already initiated -- bank has already initiated capacity building for leadership development program. Rising Star, we have initiated. But capacity building for -- that was for the top management group, AGM and above.
We are also making efforts or capacity building for the middle management in a specific area of credit and ForEx. So intensive credit -- intensive training for 6 months -- 17 weeks. In credit, we have already -- we are starting a program and similar program will be also initiated for the ForEx.
And customer service, customer service will be a focus area. And business sourcing, we are also thinking of the business sourcing, how to increase the business sourcing. So that's why RAC, resource acquisition center, 100 is already there. We may increase that number to 121. R&GR, resource and government relationship. So that is 18 centers are there. We will increase that to 21. And also our subsidiary, IGSS, we use that subsidiary for garnering business in all segments, like current account also, MSME also retail also. So I will use that for garnering the business.
Now I will request my colleague to explain about the initiative taken in the digital side during the year.
Thank you, sir. Good evening, everyone. The digital migration continues this financial year, if we take the entire year FY '25, the digital transactions have gone up from 87% to 92%. If we take only this quarter, it has gone up from 89% to 93%. So, presently, March '25 quarter, the digital transactions are 93%. Even on the UPI also, which used to be 1.56 crores per day transaction in March '24, now it is per day 2.67 crore. On mobile banking also per month, 55 lakh per month transaction have gone up.
Then on the mobile banking, our customer base has gone up by 16% from 1.67 crores to 1.94 crores. Same way transactions also have gone up by 3%. On UPI, our customer base has gone up from 1.75 crore to 2.18 crore, which is a growth of 25%. Same way, the transactions also remittance plus beneficiary has gone up by 51%. It used to be 570 crores per year, and now it is 862 crores. Internet banking also our customer base has gone up from 1.06 crores to 1.15 crores, which is 8% plus. Same way on the credit card user also from 2 lakh to it is 2.78 lakhs. Same way the POS transaction also from 1.14 crore to 1.28 crores, which is a growth of 13%.
The digital journey, now we have added another 43 journeys, which is now 121 journeys. We did business of INR 167,390 crores. And last year, it was INR 81,000 crores, which is a Y-o-Y growth of 106%. As far as the adoption is concerned, the MSME business is 83%, retail 85% agriculture 95%. And even the liability side also, the deposit, which used to be INR 10,759 crores last year, this year, it has gone up by 174%, which is close to INR 29,439 crores.
Total overall business, through digital, it is INR 254,000 crores. When we started our journey in April '22 with first launch of PAPL first year of our business, we did business of INR 5,640 crores. And then March '24, it was INR 81,250 crores. And March '25, it is INR 167,000 crores, and we are projecting INR 225,000 crores for the financial year 2026.
As far as the digital migration is concerned, the number of accounts have gone up by 133%. It is 1.2 crore accounts opened under digital platform. Digital liability business gone up 3x, growth is 3x. Same way in digital home loan also growth is 3x Y-o-Y. Digital vehicle loan growth is 4x Y-o-Y. Digital agri loan growth is 2x, which is INR 42,064 crores. In digital MSME also, there is an adoption and the growth is 2x, which is INR 7,355 crores. We have now focused on the digital retail jewel loan also where the growth was 6x. And same on the SHG loan also, we -- which was 5x growth, we did 2,244 digital SHG loans. Last year, we launched 43 digital journey. And this year, we are proposing to launch another 37 journeys. With that, probably we'll be covering each and every product of the liability as well as asset side.
Our app IndSMART, which was launched in June '24, which is an omnichannel app, we have 280 functionalities and another 30-plus features will be added during the current financial year. Apart from that, the already 77 lakh customers are onboarded on this new app. We launched the corporate mobile banking on the omnichannel platform recently. And in March '24 -- '25, 2,200 customers already, they have onboarded.
As far as the fintech partnership is concerned, we used to have last year, it was 130 -- more than 130. Now it is 167 fintech partners. We provide all the fintech solution to the institution or the government department, maybe the SNA or the cess collection or the municipal corporation taxes, FASTag, e-RUPI, CBDC, hospital solution, coaching college solution and mobile app for the apartment society for the business on the CASA side.
And upcoming projects, I would like to tell the analysts that we are coming up with a newgen call center, which will be shortly launched. IndSMART business app for the MSME for the MSME customer. CMS is again our ongoing project. RBI innovation of the ULI, the unified lending interface, we have now various APIs and we did the business close to INR 5,000 crores with those -- the API by using the API of RBIH.
For our relationship manager, which MD saab was talking about resource acquisition centers. So for them, for the employees, we have already start giving them the app, which is IndConnect app. For our -- the capacity building, MD saab was talking about and where the knowledge gap is there for that by using generative AI, we are coming up. We have already launched the employees in the CUG group. But in the June, it will be launching that app also for the employees.
CRM solution, we have already onboarded a new vendor for our next-generation CRM solution. On the data analytics model also, we have created new models on the SaaS platform. Cloud migration, we have completed and still it is -- wherever the new apps are coming, new things are coming, we are putting on our own private cloud, and we are going to the micro services instead of the monolithic platform.
By using generative AI, we have a couple of more the use cases. One is with the RBI Innovation Hub, the automated grievance suggested system, then chatbot solution for other things. We are planning to come with our own -- the UPI app apart from the mobile app. Same with the data lake also, we have gone for the data lake, the new RFP is floated. Corporate credit also, though it's a tough journey, but we are close to the various models on the corporate credit also on the digital journey side. And by using Agentic AI also, we are working on a couple of use cases. Maybe this -- by the end of this year, we'll have some use cases on Agentic AI also. Thank you so much.
We will now open up the floor for Q&A session. [Operator Instructions]
Before we assemble the question queue, sir, my first question is that there is an account where the Supreme Court judgment has come, which is very adverse judgment. Number one, what is the exposure that the bank has to that account? And whether the bank will have to refund back that money to the bidder, number one. And I mean, whether there is that kind of a covenant which is there in the agreement? And secondly, what could be the impact of this kind of judgment on the other resolutions, which are there in the pipeline?
Very rightly, I mean, this is a judgment, and we have received a copy of judgment only very recently. And of course, it is, I will say, a landmark judgment and how it will impact only time will tell.
But one thing I can tell you, if at all, we have to reverse, I think it will be good for the bank because if you see, we have got that -- our resolution at the 40%. That means 60% haircut was there. Now that asset is up and running, so enterprise value must have gone up. So if at all it happens, of course, there will be some legal battle. But net-net, my personal view is it should be positive net-net. But let us see how other party -- I mean, they may also prefer for appeal, et cetera. And so let us wait and watch, I will say.
Sure. And any impact that you see on the other resolutions also? Any other resolutions where the -- this kind of judgment actually could come through? Or do you expect that?
I don't think, psychologically, there may be some impact for resolution applicants because it has come after a substantial gap of 3 to 4 years. So, psychologically, yes, there may be some impact. But at the same time, if you see the asset, they are getting at the haircut. So that factor is also there.
Certainly, sir. And sir, is it possible for you to share like what kind of consideration that we had received at that point of time?
40% we told you, our outstanding was INR 2,600 crores, and we got around to INR 1,200 crores, INR 1,250 crores.
So that is amount which we need to reverse earlier first. And then basically, after that, as and when the new bid comes, we can again book higher gains.
Yes, yes. So I mean, if they don't prefer appeal, if they go for appeal, then I mean, immediate reversal may not be required.
[Operator Instructions] Yes, [ Sameer ] you can unmute yourself and ask your question.
Sir, my question is more on growth. We have seen systemic growth coming down. How does one look at growth for next year for the bank?
And secondly, if you could comment on the slippages as well as credit cost outlook. I'm not sure if you kind of already guided. I missed earlier part of your commentary.
So, see, growth, we have given very conservative guidance of deposit of between 8% to 10%, advance 10% to 12%. And we believe we will achieve this -- because if you see our Q -- last quarter growth, it has been good in almost all the parameters. Total business grew by 5%, deposit also grew by almost 5%. Advances also grew by 5% in the Q4. That's why we are giving guidance of in the range of 8% to 10% and 10% to 12%.
We could have achieved even this year, but for conscious call we have taken because we raised some other deposits -- fund from other sources like infrastructure bond, we're also getting at competitive rate, some refinance we are getting. So credit demand was met by these sources. That's why deposit we did not go for the growth because wholesale deposit, we ended at flat, INR 1.04 lakh crore to INR 1.06 lakh crores, so almost flat. We didn't go for the wholesale deposit.
Similarly on advance, we said at some around INR 10,000 crores to INR 12,000 crores of low-yielding advances. So because of that, we just missed that. And we will be able to achieve that.
Credit cost, credit cost, I'm giving guidance of less than 1%, 0.66% annual is there, but we are giving guidance of less than 1%, and we will -- I'm confident that we will achieve this. Slippage also for annual, it was 1.11%. And for Q4, it was 1.09%. And I'm giving guidance of less than 1% slippages. And I'm pretty confident we will achieve this.
Okay, sir. Just finally, on recoveries, any meaningful accounts which are still pending or some chunky recoveries that you look at for FY '26?
See, if you see recovery even for this year, recovery through NCLT was only INR 486 crores. And through NARCL, it was INR 621 crores, last year against INR 1,400 crores for the FY '24. So even without the support of the -- these channels, we have been able to recover, achieve the guidance, INR 7,651 crores. And as I told you, recovery in the lower segment was high. Less than INR 1 crore, it was INR 6,730 crores. So our reliance on the smaller accounts is more for the recovery. What was [indiscernible] NCLT also...
Sorry to interrupt, but the question is more pertaining to the fact that last couple of years or 3 years, recovery has also been led by the strong economic environment that we've had. Given the moderation that we are seeing last, say, 12 months and probably likely to persist in F '26 also, what will drive recovery? That is how I was -- that is where I was coming from. Yes.
So, recovery, we will -- our reliance on big accounts are not that much. Only smaller accounts and through OTS, various channels are there. OTS is there. Then SARFAESI is there. And SARFAESI is there. Lok Adalat is there. And here we go for -- if you go for auction in the -- under SARFAESI without taking physical possession, chances of materializing is low.
So here, we are making very conscious efforts for getting the physical possession. And account-wise, we are monitoring that CMM application has been logged or not and what is the status of the physical possession. Because if you take -- we have physical possession, our recovery number will go up, we will be able to sell the property also.
So through these modes, I'm confident that whatever guidance we have given, INR 5,500 crores to INR 6,500 crores, we will be able to achieve.
Next, we'll have a question from Mohit Jain.
Sir, my question is on the SMA. Last time when we had the investor call after the results, you said our SMA exposure has come down to INR 3,000 crores from INR 7,500 crores that we reported in Q3. From that context, if I'm seeing right now, it is back to INR 5,000 crores. Any comments you want to make on this, sir?
SMA?
Yes, SMA, sir.
Two big accounts are there. They have come in SMA-1.
Government guarantees.
Because of that one.
Yes. And sir, what is the status like as on date? Is it still in SMA or has it moved to SMA-2? How do we look at that?
No, no, it is in SMA-1. But we don't expect that amount will in any way slip to NPA.
Okay. Okay. And sir, one follow-up on the loan guidance. This year, you are guiding for 10% to 12%. Last year, the guidance was 11% to 13%. And when in Q3 call, we -- I think we specifically discussed whether we can achieve the guidance. You were positive, but we somehow ended missing on this guidance. So I wanted to understand, obviously, we did some -- you said, we did some shedding of the low-yielding deposit -- advances.
Apart from that, sir, what can be the -- what was the possible reason in which we missed the guidance? And how optimistic and strong you are about achieving the guidance for the current year of 10% to 12% that you are giving, sir?
If you see, Mohit, if you see our last quarter growth, it was approximately 5%. So we tried to cover the lost ground, but somehow just missed that. Around 10%, we achieved against guidance of 11%. So it was a question of only INR 5,000 crores. And let me tell you, I have some opportunity around INR 5,000 crores to INR 6,000 because price is so competitive, I didn't go for that. So that was the main reason. And I'm confident that 10% to 12% guidance we will achieve this time.
And sir, just if you can also guide us to what kind of a growth you are expecting in the corporate segment because I think that is a place where generally, we are seeing across the banks, the growth is pretty low. So in the 10% to 12%, if you can just provide some sort of a color as to how much growth are we expecting in the corporate sector, sir?
Corporate, we have kept a target of around 9% growth.
Next question we'll take from Sushil.
Congratulations to team Bank of India, team Indian Bank for doing an excellent job and a stable result. So my first question is what is your outlook on treasury with falling interest rate scenario and low inflation and the interest outlook on your global international division, too? And if treasury gains are high, how are you going to reposition in the market where treasury operations are concerned?
Okay. So interest outlook -- thank you, Sushil ji. So interest outlook already, we have seen two rate cuts and inflation number is within the comfortable range of RBI, that is less than 4%. So I expect -- and hopefully, this trend of inflation will continue. So we are expecting further rate cuts going forward, maybe 2% to 3%.
Coming to the treasury gain, treasury gains, yes, we will book profit as per only requirement. We will not go for because we are getting -- we will go for the -- I mean, booking the entire profit. We will pay it as per our requirement. Globally also, I mean, our international exposure also, interest rate, yes, so far has also started coming down. So there will be some impact on overseas book also on the NIM side. That's why if you see, I have revised my NIM guidance in the range of 3.15% to 3.30%.
Sir, keeping in mind, CASA can be a big challenge for many banks, but a bank which has all products available, raising your CASA number from current by 10% should not be difficult because of digitization, maybe cross-sell and various other initiatives. Is it possible that we improve our CASA number to improve our margin?
See, I don't think increasing this percent -- CASA percent of 40% will be -- I mean, possible or will be very challenging, increasing this CASA share from 40% because already see, one possibility I see, but not now, maybe towards the fag end of the year when substantial rate cut, two, three rate cuts are there and difference between the saving fund or current account and term deposit comes down. And there are not many opportunity -- alternate opportunity in the market. Otherwise, increasing CASA share will be very challenging. That's why I'm giving CASA guidance of around 40% because see, JIT is also coming. Because of JIT also, government is very conscious of their cost also. So they are coming out of the just in time only at the time of need, they will release the funds. So that -- maintaining that will also be a challenge.
Sir, what is the expected budget for digital footprint and digitization, new initiatives?
We have digital business of around INR 2.67 crores. We are expecting to increase it up to INR 4 lakh crores during the year.
Sir, my question was we've been spending annually INR 1,000 crores to INR 1,500 crores. And if I recollect 2 years back, we had a INR 4,000 crore budget on digital road map for the entire bank. What is the current year budget on digital spend in new products, initiative, digitization and various other things?
No, INR 4,000 crores was not there. Our expenditure is in the -- on digital and IT is in the range of INR 1,200 crores to INR 1,300 crores.
INR 4,000 crores was for 3 years, that is the time we...
Okay, okay. That means that's around INR 1,300 per year. So similar budget we are maintaining INR 1,300 crores to INR 1,400 crores per year.
Sir, any idea how are we expanding our cross-sell business?
Cross-selling?
Yes...
Cross-selling, that's why I told we have RAC centers and resource acquisition center, and R&GR will be for the government only. But RAC are also doing for this cross-selling and our subsidiary, which we have launched, IGSS. Through that, we are increasing our cross-sell footprint.
Next question we'll take from Dixit Doshi.
Firstly, you guided for 1.2% kind of ROA. So don't you think that the impact on the NIM will be offset by the treasury gain next year to some extent? I mean if you can elaborate what was the thought process behind reducing the ROA target from the current level?
No. See, absolute number, profit will not come down. That I can assure you. But since assets will grow, so there will be an impact on the ROA.
Coming to the treasury gain, so some of the treasury gain will be offset by the requirement under AS 15 or so. If interest rate goes down, our requirement under AS 15 will go up. So part of that will be compensated there also. And as I told the treasury gain, we will book as per our -- I mean, requirement only. We are not going for selling all -- because see, this is not the only year when rate cut will be there. There will be another opportunity. So we will be very mindful of booking profit.
Okay. And second question is, so our CAR is very healthy, more above 17% and with 10% to 12% kind of growth we are targeting. Is it fair to assume that this INR 5,000 crores of fundraising is just an enabling resolution?
You can say so because last year also, this approval was there, what we didn't require. And this year also, if we see it is very healthy at 17.94% and CET at 15.36%. So may not be required, but we have kept enabling clause because there is call option of around INR 4,000 crores of the bond. So if we see we can reduce cost or there is some opportunity for raising some equity and we are getting good return, I mean, at a very competitive rate, then we can think of. So that we have kept for enabling so that if some opportunity is there, we can use that.
Next question we'll take from Mona Khetan. Mona, we can't hear you. We'll take next question from Ashok Ajmera ji.
Sorry for having joined a little late because the SBI meeting went on for a longer period of time and then there were some snacks, et cetera. Sir, compliments to you, sir, for a good set of numbers.
Thank you, Ajmera ji.
Sir, I have missed some of the questions and your answers also. So maybe some time at the cost of repetition, if you may permit me, I would like to know a little on the recovery side that what are the prospects in 2026 for the recovery, recovery from the written-off accounts and the overall recoveries?
And secondly, now since the valuation of SRs issued by NARCL now is permitted, earlier you used to take a value, I mean, INR 1 value are totally provided for, but now it is permitted by RBI. So what is the impact was there in the books in 2025 in March? And what are the prospects going forward there for FY '26?
Thank you, Ajmera ji. Recovery, we have -- last year, we have been able to achieve INR 7,651 crores. Out of that recovery in a smaller account, less than INR 1 crores is INR 6,730 crores. We have -- we are giving guidance of recovery of -- in the range of INR 5,500 crores to INR 6,500 crores for the next financial year. And AUC also, we are giving -- maintaining the guidance of INR 2,000 crores. Last year also, we have given guidance of INR 2,000 crores, but we could achieve INR 3,290 crores. But we are giving guidance of INR 2,000 crores in the AUC book.
Coming to the SR, SR, we have not -- I mean, we went with the conservative approach, and we have not gone for the restoration or release of the provision in this financial year. Going forward, we will see if we need at all, then we will go otherwise we may not opt for that. We will continue with the same approach.
Okay. Sir, taking it a little forward, sir, what is our total write-off book totally? And when you say INR 2,000 crores, what percentage of it comes INR 2,500 crores or INR 3,000 crores, whatever which you expect to recover?
Yes, yes. See, my return of book is around INR 41,000 crores. So approximately 5% of that.
It's a very conservative, I think, estimate.
Last year also, we have given guidance of INR 2,000 crores, but we could have overachieved that. Let us see.
And sir, this -- our composition of loan book, the corporate, and I mean, the retail is going to remain same or you would start looking some opportunity, good opportunity in the corporate sector also, even tweaking the ratio also?
See, endeavor will be to maintain the same 65, to 64-36 or 65-35. But we will -- we are already looking for the opportunity. And wherever we are getting good opportunity, we are according sanctions also. And recently also, we have been in the Q4 itself, we have been able to accord sanction of around INR 38,000 crores. So we are already looking for -- but endeavor will be to maintain this ratio 65-35.
65-35.
Yes.
Am I audible, sir?
Yes, yes, Ajmera ji.
Yes. So sir, my next question was on the treasury front only that now going forward, with all these changes taking place and even the valuation norms have been changed by RBI for the AFS book profit, and we have a very healthy investment book. So going forward, I think I have heard part of the answer of your last question that you are not that very optimistic to take the entire profit in the 1 year only because there will be opportunity in the coming years, too.
But having said that, what will be the expectation of both the trading profit as well as the books? From where we can realize the profit to the P&L credit to the P&L account in the treasury front?
Treasury front, as I told you, we will be -- I mean, booking profit according to the, I mean, situation only, will not go for the very aggressive booking because I expect interest rate will -- we are entering into a regime of lower interest rate. So -- of course, exact number, I may not be able to give you, we'll pass you on. But treasury profit will definitely increase. Trading also and other income also definitely will increase because -- and volatility is there in the ForEx side also. So some -- we are expecting some good trading profit that side also on ForEx book also. Even if you see the number of the Q4, we have booked a good gain in the ForEx trading. Exact number, we'll pass it on to you.
No. Okay, sir. Sir, what is the approach going to be for this Bhushan Steel and Power with that judgment of the court, you have any exposure you had, I think, some exposure on that?
Yes, yes, we had exposure on Bhushan. So let us see how ultimately it pans out. Judgment has come whether the affected party go for the appeal or not, if they go for the appeal, so when ultimately, we will have to -- if at all, we have to reverse the transaction.
But one thing I would like to share with you. See, when this resolution happened, we got a haircut of 60%. Only 40% was the recovery rate. Now that asset is up and running and in a good shape. And last 2, 3 years, the steel sector is also doing good and a lot of capacity creation has happened recently also government has also taken action on the dumping side. So, hopefully, net-net, I think it will be good for the banks. If at all, we have to reverse and go -- to go for the...
So it's a blessing in disguise. So, you don't expect.
Yes, yes.
Sir, one last question in this round. On the NBFC front and the co-lending front, when the RBI has also now a little bit relaxed the norm that you can lend for onward lending to NBFC, even for nonpriority sector credit also by them. And also RBI is encouraging co-lending also. So what is our bank's approach? And what is our co-lending book, if at all, it is there? And how do you see the further lending to NBFC sector?
No. Further lending to NBFC will happen, but we will be very cautious in lending to NBFC. We will go further with the only good rated NBFC and having good track record, number one. Number two, our exposure in co-lending is less than INR 500 crores, not much. So co-lending, why it has not picked up, it's not because of only primary or participative this thing.
Because, see, unless we have some reconciliation mechanism, we have issue. In past also, because of the reconciliation issue, we have not been able to onboard -- go for the co-lending. So -- and we are in the process of creating capacity. And as and when our IT infrastructure is ready because reconciliation is a bigger issue. So as and when we have digital readiness, only then we will go for the co-lending.
Yes, yes. That is definitely required. Even a small bank like Bank of Maharashtra has developed the complete end-to-end solution for that. And unless you have that kind of capability, it is not advisable to go for that. I'm sure.
Yes, yes.
I agree with, sir. Yes, yes. Thank you very much, sir. And all the best. And we'll meet again after the first quarter.
[Operator Instructions] We do not have any further questions. Jay, yes, Jay please unmute yourself.
Sir, a question on your yields on advances, right? It looks like that the decline in yields on advances is much sharper relative to what policy action suggests. If you can provide some more color here?
Yield on advances, yes, declined by 28 basis points. Not any specific reason, impact of the EBLR only because see 50 basis points, we already passed on. So -- and our -- my 40% book is on the external benchmark.
Apart from that, just to add to that, I'm just giving one example. We have seen a huge rate cut in the WCDL loans. So it is impact of that only. WCDL loans, what is happening because of the surplus liquidity also -- but this is after these numbers. Because of the surplus liquidity, they are going for CP, and they are getting CP at a much cheaper rate...
But sir, we are anyway growth -- I mean, profitability conscious in the sense we are not growing corporate too much. So I was a bit surprised that in the quarter, there was only 25 basis point rate cut for 2 months only. Okay. So -- and we pass on the rate cut immediately, right, the 40% book maybe within a...
Yes. No, no, no, very next day.
Okay. Sure. And secondly, sir, the MSME slippages, anything to understand what is -- I mean, there was a rise in the slippages Q-o-Q in the MSME. Anything to read into this because there are a lot of reports saying that export-oriented MSME, they are having some little bit of a trouble.
No, no. MSME because of the -- as I explained in my earlier opening remarks, it is on account of the MOC, auditors' audit of the branches. There -- see, there are three accounts where auditors say stock is not -- so there is reduced DP from some bad debt. So because of that, that impact is there.
But one thing I assure you, slippage number will be less than whatever we have achieved. That is for sure in MSME sector also and overall also.
And sir, if possible, can you share the SMA 0 plus 1 plus 2 number, including below INR 5 crores loan? I mean, if you have that number.
Yes, yes, yes. SMA 0 total is INR 23,255 crores. SMA-1 is INR 14,843 crores and SMA-2 is INR 7,825 crores. Total 45,923 crores and it is 8.06% total. And more than INR 25 crores, we have only one account, and that is also because of the court order, but we have made 100% provision in that also.
Right. Okay. And lastly, sir, on gold loan, after that RBI seemingly tightness and we have a decent quantum of gold loan. How are you seeing that business shaping up in terms of growth and maybe the relative competitiveness by other banks or NBFC or gold financiers?
Yes, yes. Of course, there will be impact both on growth and income. But it is draft guidelines, and we have given our feedback. Let us see how in what shape the final guidelines comes. But if it comes as it is, yes, there will be some impact on both growth and earnings also.
No, so, sir, what kind of -- I mean, why should there be any impact, sir, if you can elaborate because other this gold loan circular, yes.
Yes. See, one example I'm saying. They have told income producing whatever is there. So there should be hypothecation of that also. Earlier, we used to take only gold loan and create chargeable -- place the gold loan and we used to give. And if we are not able to produce the income criteria, then we have to classify it under retail or consumption loan. So consumption -- LTV for the consumption is 75% and LTV for if it is classified under, say, agriculture is 90%. So there will be less quantum of loan, number one.
Number two, part of the growth in the gold loan that is not related to the -- basically the circular. Gold was at peak, around INR 1 lakh crores. So maybe some more reason, so some growth may impacted there also. And gold was also being classified as agriculture. So because of that, some income impact may be there.
Understood, sir. And all the very best.
Thank you. So I think we'll take that as a last question. With this, we come to the end of the post results con call. Sir, do you have any closing remarks to make?
No, I think all the questions has been, I mean, taken and opening remark, I have taken all the things.
One or two points, ROA also I have given guidance and recovery number and slippage number, I will very -- I mean, we have given good number, and we will be able to achieve that. Slippages also, whatever we have achieved, it will be less than that. That is sure.
And recovery through other channel, NCLT, I think we will be -- we have kept a decent target of INR 800 crores for this year. And through NARCL also, we have kept target of INR 250 crores.
And one more point. See, branch expansion, branch expansion, we will be going for some branch expansion in the area where we have less presence like in western side. So we will go for some branch expansion also because one branch, we have garnered some good business in a year. So that will be the strategy for the next year also. Thank you.
Thank you, sir. On behalf of the management and Emkay Global, we thank all the participants for joining so late. Happy evening, and have a good day. Thank you, sir.
Thanks, Anand. Thanks to all the participants for sparing your time on holiday, I will say, and in late hours. Thank you.
Thank you, sir, for opportunity.
Thank you. Thank you.
