Bank of India Limited (BANKINDIA.BO) Earnings Call Transcript & Summary

Good evening, ladies and gentlemen. On behalf of Bank of India, it's an honor to welcome all our esteemed analysts who have joined us in person as well as virtually. We are pleased to announce Bank of India's financial results of Q1 FY '26. As you all can see, the dais is already graced by our MD and CEO, sir, Rajneesh Karnatakji, who's flanked by the Executive Director, Shri PR. Rajagopal sir; Shri Subrat Kumar sir and Shri Rajiv Mishraji. So thank you all for joining us today. I would like to invite or rather it's my honor and privilege to invite our MD and CEO, sir, Shri Rajneesh Karnatakji to please address this gathering.

Thank you so much, madam. Ladies and gentlemen, good evening, and welcome to today's analyst meet. As I share with you the financial results of the bank for Q1 FY '26. It is my pleasure to welcome each one of you for the interaction. Thank you for joining us. As the world advances towards the later half of 2025, the global economy is steering through a tepid growth environment, emanating largely from trade tariff frictions and escalating conflicts. However, domestic growth underpinned by easing inflation continues to shield India from global headwinds. It's multidimensional economic framework, combined with policy responsiveness, strong foreign exchange reserves, increased public CapEx and prompt trade diversification helps to sustain against the external shocks. Alongside the RBI through a combo of rate cuts, liquidity injections, strategic bond operations and digital infrastructure enhancements is actively stimulating the demand, easing credit costs and backing the fiscal stability. Together, these indicators have been contributing towards maintaining investor confidence and moderating the spillover impact of disruptions on growth and inflation. Rapid digitization and fintech collaborations are transforming operations and customer engagement in the financial world. Against this backdrop, the Indian banking sector is emerging more resilient, endorsed by stronger balance sheets, higher capital adequacy and lower NPAs. The key focus of our bank will be enhancing customer experience through all channels and acquisitions of new customers. consistently by providing innovative and niche services. This will lead to fortification of low-cost deposits, that is CASA and retail term deposits for sustainable credit growth. My speech will be divided in three parts for this coverage. First part with respect to the initiative. Second part with respect to the business parameters and third part with respect to the ratios and the profitability. On the initiative side, the first part within that is with respect towards banking for Viksit Bharat. Here, we have the first thing, repo-linked export credit facility in Indian rupees for corporate borrowers to capture export credit business. We have devised the repo-linked export credit facility in Indian rupees for corporate borrowers. Second thing, with a view to support green energy initiatives and to expand our green finance portfolio, Bank has introduced BOI Star Energy Saver, vendor finance scheme to provide tailored financial solutions to vendors, executing residential and commercial power projects -- solar power projects, my correction. Digital initiatives, functionality for linking pre-sanctioned credit lines to the UPI platform has been implemented. This initiative aims to broaden UPI, functionality by allowing transfers to and fro pre-sanctioned credit lines in addition to the traditional deposit accounts. For driving paperless banking, a new -- NextGen Document Management solution is being implemented with enhanced customization and complete data migration. On the HR initiatives, during Q1 FY '26, the bank has rolled out the next step of project Saksham, which includes selection of sector champions. The project has been undertaken to improve every employee sector specific knowledge and to develop financial solutions for cluster-related finance, more particularly for the MSME segment. Second, our new rewards and recognition policy. BOI Star Grace has been introduced to enhance employee engagement, motivation and satisfaction while aligning individual and team performance with the bank's strategic objectives. And the third one being the revamped Job family policy. Job families will be closely aligned to the bank's learning and development initiatives, including customized training and mentorship programs at our esteemed centers of excellence. As regards to the business initiative, business part is concerned, the first being Global Business has grown by 10.37% from INR 13,64,000 crores in June '24 to INR 15,06000 crores in June '25 with an incremental growth of more than INR 1,41,000 crores. Global Advances have increased by 12.02% on a Y-o-Y basis from INR 6 lakh crores to INR 6,72,000 crores in June '25 with an incremental growth of more than INR 72,000 crores. Global Deposits have increased by 9.07% on a Y-o-Y basis. from INR 7,64,000 crores to INR 8,33,000 crores in June '25 with the incremental growth of more than INR 69,000 crores. Domestic gross advances have increased by 11.24% on a Y-o-Y basis from INR 5,08,000 crores to INR 5,65,000 crores in June '25. RAM advances have increased by 16.69% on a Y-o-Y basis from INR 2,81,000 crores to INR 3,28,000 crores in June '25, constituting 58% of the total domestic advances as on June '25. Domestic deposits have also increased by 9.62% from INR 6,48,000 crores to INR 7,10,000 crores in June '25. CASA has also increased on a Y-o-Y basis from INR 2.75 lakh crores to INR 2.82 lakh crores as on June '25 with an incremental growth of more than INR 6,000 crores, and the CASA ratio has stood at 39.88%. As regards the key profitability and asset quality, things are there. operating profit has improved by 9% on a Y-o-Y basis and stood at INR 4,009 crores for Q1 FY '26 as against INR 3,677 crores in Q1 FY '25. Net profit has increased by 32% on a Y-o-Y basis and stood at INR 2,252 crores for Q1 this year as against INR 1,703 crores in Q1 of FY '25. Slippage ratio has stood at 0.33% in Q1 FY '26 as against 0.35% in Q1 of FY '25. Credit cost has also improved to 0.68% in Q1 FY '26, as against 0.85% in Q1 for FY '25. Non interest income has increased 66% on a Y-o-Y basis and stood at INR 2,166 crores as against INR 1,302 crores in Q1 FY '25. There has been improvement in asset quality with a reduction to growth gross NPA and net NPA ratios. Gross NPA ratio has improved by 170 basis points on a Y-o-Y basis to 2.92% in Q1 FY '26. Net NPA ratio has improved by 24 basis points to 0.75% in Q1 FY '26. As regards PCR is concerned, provision coverage ratio is concerned, it has improved to 92.94% in June '25 as against 92.11% in June '24. As on June '25, Bank CRAR has improved to 17.39% from 16.18% as on June '24. In tune with growth of the global economy, the guidance for Global Advances growth will be at around 12% to 13%, and the Global Deposit growth would be at around 10% to 11% in FY '26. The key focus area will be low-cost deposit mobilization for protecting our net interest margins and increasing the high-yielding advances for consistent growth in the business with emphasis on digital initiatives, improvement in asset quality and arresting the slippages. The endeavor of the bank will be increasing efficiency and profitability, along with the focus on compliance and better corporate governance. I would like to thank all of you once again for your continued support. The floor is now open for discussions and questions and answers. Thank you so much.

[Operator Instructions], yes, Kindly introduce yourself and your organization.

This is Bhavik from InCred Capital. I have a few questions. Sir, firstly, as net NPA is down to 0.8% -- Net NPA is down to 0.8%. How far do we go to reduce this further? Any target for this year? And credit cost guidance. I'll follow up this with a few questions after you answer. So credit cost guidance for this year. Our net NPA ratio is 0.8%, what do you target to get to in FY '26?

As far as the credit cost is concerned, see, we have shown a credit cost of 0.68%. In March, we had a credit cost of 0.76% as far as the guidance on credit cost is concerned, we are giving a guidance at around 0.70% for FY '26. As regards to the other question was with respect to the.

So net NPAs do you want to take it down to 0 5%?

Yes. So net NPA, yes, we have improved our net NPA also, as I said, from -- we are presently at 0.75% as against 0.99% in Q1 of FY '25. So the guidance for that for net NPA is also 0.70% that we are giving.

Okay. So the 70 basis point of credit cost partly is because of reducing the net NPA?

Yes.

Okay. Okay. And sir, what has been the interest on IT refund this quarter versus last quarter? Interest on income tax refund.

This quarter, we did not have any income tax refund.

Okay. Okay. And sir, the recovery from written-off was quite muted this quarter as in any guidance for the full year and how should we think about the treasury gains very strong this quarter? Do we assume that 70% to 80% of the treasury gain is done for the year?

Yes. As far as the recovery from written-off accounts are concerned, see, in Q4, we had some three lumpy accounts in which we had recovery because of which you see a very big figure in the Q4 number. as far as that is concerned. So this time, as far as the return -- recovery from the written-off account was concerned, it was not that kind of big ticket accounts, which were there. So that is why you are seeing a muted number over there. The second part is with respect to the treasury gains. Yes, this quarter has been a good treasury income for us and as you are all aware that when the rates are coming down, then the treasury make some profits over there. And during this time, there was not much of margins as far as the advances was concerned because of the reduction in repo rate and that 60% of our advances are EBLR external benchmark linked. So -- but we expect that in the coming quarters that in the Q2 and Q3, this thing would improve, start improving now that we are expecting that the migration -- the transmission of interest rates, particularly on the liability side would be happening. So the rate cuts on the deposit side started happening from the month of October 2024. So the 1-year cycle will get completed in October '25 with the next quarter going forward, we should be expecting the transmission in deposit rate. And once that happens, both the net interest income and the net interest margin would start improving.

I have got a question online from Mr. Niteen S. Dharmawat from Aurum capital. Can the effective team put him through.

Hello. Am I audible, sir?

Can we have Mr. Niteen Dharmawat?

Yes, I'm there, mam. Can you hear me?

Yes, yes. We can.

And thank you for the opportunity. Sir, I must first congratulate you for the improvement in all important asset quality parameters in this quarter, including gross NPA ratio, net NPA ratio, PCR, slippage ratio cost, credit costs. But as we know, that this comes at a cost, our ROA has come down now to 0.82% from 0.98% in the previous quarter. So what will be the guidance for ROA for the full year. And when we are expected to reach at least 1% ROA and what will it take to be there?

Yes. Thank you so much for this. So as far as the NIM is concerned, see, we have ROA -- The first question was on the NIM also, no?

No, sir it was only on ROA.

Only on ROA?

Yes.

Okay, okay. As far as the ROA is concerned, we have shown an ROA of 0.82% in this quarter. So if you see the ROA for the whole year last year, it was 0.90%, and for the Q1 of FY '24, it was at 30th June '24, it was at 0.70%. So we have improved the ROA by nearly 12 basis points as far as the ROA is concerned, but we are giving a guidance of around 0.90% for FY '26. Only because of the fact that the net interest income and net interest margins are in pressure in this financial year. So we are giving a guidance of 0.90% for FY '26.

And my next question is when are we expected to reach at least 1% ROA, what will it take to be there? Just a follow-up question on this only.

See, if you see the data in Q4, we were very near to 1%. It's what we were at 0.98% in Q4 of FY '25. So this year, once this stabilization of the interest rate happens, and the passing on of the interest rate happens on the liability side and the NIM start improving net interest income, definitely, we will be in a position, but a much better position to give you in our guidance when we will be reaching that 1% mark.

Got it. My next question is, sir, our cost-to-income ratio has gone up by 300 basis points quarter-on-quarter. So what are the reasons for this, where it is likely to stabilize? It is right now at 51.47% versus 48.53% in the previous quarter.

So cost-to-income ratio, we are at 51.30%. If you see our Q1 numbers of the previous year. At that time, it was 51.47%. The guidance that we are giving it is around 51% for the simple reason that Q1 normally the income is muted in the books and the interest expenses are also there. With the ensuing September and December quarter, we expect that the credit will flow -- will improve. Interest income will start coming to the bank and the cost of income to income ratio would also get moderated.

Yes sir, Choksey sir.

Congratulations on very stable number in challenging times led by liquidity and global uncertainty. The monsoon has been very good. It seems that global tariff challenges may get over, India still needs to figure, but most of the geographies which do global trade is already in the list with tariff number. We've done well on RAM. So first is, how is visibility on RAM led by the India positive factors and retail growth is likely to exceed the market expectation? And what is the yield on RAM was first question.

Yes. So as far as the RAM is concerned, as you have seen that we have grown well in the RAM Advances. So the Y-o-Y growth also has been more than 18% in the RAM segment. And if you see the entire component of the book, our RAM component is at around 58% of the portfolio and the remaining being Corporate Advances and with the kind of growth that we are seeing in the RAM book and the kind of pipeline that we have -- so we have a pipeline of around INR 80,000 crores as we speak. So out of that INR 80,000 crores, INR 10,000 crores plus is the pipeline in the RAM segment and remaining is in the international and the domestic Corporate book. So we would be growing our domestic corporate book also quite healthy. But nonetheless, I can say that the component of RAM and Corporate would be at the same level at around 58% and 42%.

My next question is we have done exceedingly well compared to most of our peers in CASA. I'm sure that bank has taken a lot of initiative led by technology, tap banking and various things. Do we see accelerated performance where CASA is concerned, despite challenging times, led by initiatives at Bank of India or they should be stable between 38% to 40%.

So internally, at the top management side, we are targeting that we should be at 40% for FY '26. So that is the CASA growth that internally we are targeting within ourselves that our CASA percentage would be 40% in FY '26 when we close the financial year. This year also, this time also, if you see in this quarter, we are shared below 40%, there was a lot of pressure as far as the CASA numbers were concerned in the entire banking system. To just give you a number that we are still above sequentially above the March number in the CASA as far as CASA is concerned, so incrementally, if you see on the Y-o-Y side, we have grown by around INR 6,700 crores CASA on a Y-o-Y number. A lot of many initiatives we have taken within the bank for improving the CASA numbers. And the resources department is working quite efficiently over there. We have now designated regional relationship managers. We have 1,000 branches, which are high net worth individual branches, key branches and then we have a lot of digital initiatives, which we have taken on the CASA. We have opened 200 new branches in last financial year, 203 branches, new branches will be opened in this financial year also. So all these initiatives taken together, we are very confident that we'll be able to sustain our CASA number. And to meet with the credit growth, obviously, we will be taking retail term deposits and bulk deposit also. Nonetheless, we will be targeting within ourselves that we maintain the CASA ratio at around 40%.

Sir, most of the bankers in the Q&A, indicating at the back end of the year, we should have quarter 2 50 bps and majority say two cuts, not one cut. Keeping that in mind with deposits getting repriced mostly in Q2 or Q3, year-on-year basis. How do you see treasury and yield on most of the advances panning out over the period of year?

So at present, see already, there has been a 1% repo-rate cut from 6.5% to 5.5%. And in the short term, we do not see any further repo rate cut coming because for the simple sense that enough liquidity is there in the system. So when we see yesterday, there was a liquidity of more than INR 2 lakh crores. And there already has been announcement from RBI side with respect to the CRR cut. There also 1% cut has happened, which will come effective on the 6th of September in 4 tranches. Again, there will be liquidity coming into the system. So in the short term, we from the in-house do not expect that further report cut would be there. And we expect that the transmission of deposit rate to be happening in the Q2 and more so in the Q3 quarter and when the NIMs should stabilize and start -- should start improving from the Q3 quarter.

Specifically led by RAM and the initiatives which you are taking for betterment on TAT, what kind of digital spend and spend on human resource and connected whereby the bank's performance improves and your cost-to-income ratio gets more rationalized or stable compared to where we are?

So just to follow on, on the previous answer, I would just like to add one more thing that we have also opened nearly 20 emerging corporate credit branches. So we are focusing on our emerging corporate branches also in mid-corporate advances also, emerging corporates, which will become corporates. From there also, we are getting good traction and the pipeline, which I said of INR 80,000 crores also includes the pipelines, which are coming from the emerging corporate credit branches because there is where we see the margin for the bank because there, we can lend at MCLR rates there, we can get better LCBG commission, better process fee, better upfront fee. So that is one piece. That is one strategy to improve the margins for the bank. That is one part. Second thing is as regards to digital initiatives are concerned. So there, I can tell you that more than INR 1 lakh crore of underwriting, which has happened during the last 12 months has been on account of the fresh sanctions is through the digital initiatives. So already, our RAM book, either whether it is retail, whether it is agriculture, whether it is MSME, they are on the digital platform. So if you see our presentation also, nearly 20 products are there in the RAM segment, which are under the digital mode. So the sanctions are going on the digital mode. Liability side, also many products. In fact, 6 products are there on the liability side, which are automated under the digital. So a lot of initiatives we are taking on the digital side. to build operational efficiency, number one, to build the kind of platform wherein the branches are less burdened with the footfalls, which are happening at the branches and the customers are able to do the transactions through the digital mode to mobile banking through Internet banking. So this is a clear initiative. As far as the spending on IT is concerned, we are seriously spending on IT, not only on digital, but also on the technology part itself, IT and also on cybersecurity. So last year, we had spent nearly 2,000 -- we had a budget of nearly INR 2,000 crores, out of which we were able to spend nearly INR 1,850 crores. This year, again, we have kept our budget on IT. When I say IT, again, on IT, digital and cybersecurity of nearly INR 2,000 crores and again, this year, we'll be spending majority of the money to build more operational efficiency within the system, so that more we go into the technology and automation, so that there is less burden on the staff, and they are more focused on sales and marketing.

In my first question, indicative yield on RAM should be 9% or better?

So yield on exactly number -- exact number [Foreign Language] , I'm not having at present for the RAM.

It is around yes.

9%, Should be at around 9%.

9% plus.

It should be somewhere more than 9% only the best-in-class housing loan we are giving to the customer, which is rated at 40 and above CIC score is 8%. so right, so that is the lowest we are giving. So otherwise, our rates are above 9%. So in RAM, we are expecting a rate yield to be more than 9%.

Sir, I'll just take one online question. This person is waiting since long time. He's Mr. Dhiraj. He is a retail investor, sir. And he has put the question that the bank has reported INR 1,160 crores worth fraud cases with 100% provision. What specific controls field and what measures are being implemented to prevent a recurrence. Also, can you clarify how many of these were internal control failures versus external frauds and any staff collusion?

What is his name you said?

Mr. Dhiraj.

Mr. Dhiraj if you are listening, my answer is this. This time, what has happened is there was a Supreme Court judgment, which came up which said that in all those cases, wherever bank has already declared fraud, we have to again reexamine and then see whether there is a fraud or not. So this INR 1,500 crores that we have declared this time is actually a reexamination of the frauds and again, reaffirmed as fraud in the bank. There are no internal control failures as such. Out of that, most of them are credit-related frauds, where in terms of RBI definitions and all, this became a fraud. So there are no operational products as such in the entire INR 1,500 crores that we are talking about INR 700 crores 1 big account, another is INR 600 crores plus more than 94% of these frauds are all credit-related first, which are already declared as starts in the previous year, which again, I've been reaffirmed this.

Thank you very much, sir. I think Mr. Dhiraj is satisfied with the answer.

I'm Ashok Ajmera, Chairman Ajcon Global. Sorry, we got terribly stuck in the BKC traffic to come from St. Regis. Of course, I don't know how these people made it. They must have immediately left. We had an interaction with the MD and others. So having said that, sir, on this fraud point only because I'll just pick up from here only, that those accounts which were reviewed. I mean where the clients were called and that process was completed. The outstanding was only INR 40 crores, INR 50 crores. Outstanding balance, whereas the total fraud outstanding in this quarter is much, much higher. For which also, you have made 100% provision. I would just like to know that in this quarter, how much provision on account of fraud we have made, which has gone to provision in P&L account.

That I'll give you exactly. But basically, what has happened is already these provisions were held in these accounts. So they were again carried during this quarter that all. See, INR 1,500 crores of accounts, they already had provisions. We never reversed it. So after reaffirmed, again, these provisions are carried from the earlier quarters, that's all. You want to by clear -- I can give you that.

I will take it offline because in this quarter also, there are fresh frauds for which also you are saying?

No fresh frauds are there, only INR 30 crores worth of fresh frauds there.

That's what only I wanted. Sir, of course, first compliments on a very good business growth. I mean, in this difficult times, other people also might have complemented you good business growth, good -- I mean, coupled by credit and deposit growth at the same time, good asset management, even our GNPA and NNPA have also gone down well provided for. Having said that, there is some additional or extra pressure on the operating profit. I think by about INR 850 crore odd crores, the operating profit vis-a-vis the last quarter. Not the -- [Foreign Language] sequential quarter. So -- and out of that, again, INR 500 crores is offsetted by decrease in the salary in this quarter, if you take it from the March quarter. And something added by the lesser recovery from the written-off account, which is also substantial vis-a-vis the last quarter. So what I would like to know, number one, the reduction in the salary, which is shown, which is there in this quarter, whether this is going to be the run rate for remaining three quarters as far as the salary is concerned, so that we can take it as the normal expenditure and nothing of March is going to spill over a year. So this is number one. Number two, again, recovery from written-off account, of course, I can understand in June, there is a slackness. But going forward, what is our target for the whole FY '26 for recovery from written-off account as well as there is a pressure on the recovery of the cash recovery also. I mean if you look at the NPA sheet. So there also, so overall, what is the total recovery target for the FY '26 Out of that, how much is from the written-off account and the normal recovery and upgradation, which is there. And I think for the first time after many quarters, we have gone below 40% in CASA. So again, is it one-off quarter, we will regain that 41%, 42%, 42.5% in the coming three quarters. And one more, if I can add on is something on fresh slippages, which in the first quarter in some of the other banks is much, much lesser than the March quarter and in our case, it is almost the same. I think INR 2,008 crores, INR 2,100 crores rather a little more than the March quarter, INR 2,149 crores. So on the overall color on the slippage for the full year. These are some of the -- and whether any SBLC commission is there in this quarter, which has been taken in the other income.

Okay. So first of all, I'll reply the first thing, which is related to the staff expenses. In that, in Q4 of last financial year, we had booked the expenses with respect to the made provision for the PLI. So there is a performance- linked incentive with the -- from the DFS, PLI 1 and PLI 2, so the entire amount of the -- which we have to pay out to the staff, we have made the provision. So no more provision will be required for the last financial year FY '25. So that is one. That is why the inflated figure you are seeing in the staff cost in Q4 as against the Q1. So the run rate of staff expenses will be near to that number only in this -- in the ensuing quarters of Q2, Q3 and Q4. That is the first clarification. Second is with respect to the operating profit. Here, again, as you rightly said that there are certain items which were in the written-off accounts, there was bulky items. There were three, in fact, big ticket advances wherein recovery happened in the Q4 of the financial year, which you are -- you can see that non interest income had increased, which was not there in this quarter in Q1 but we are expecting that in Q2, there will be certain recoveries, which will be coming from the written-off accounts, number I cannot give you at this moment. There will be certain recoveries coming from there and also from the accounts which are NCLT accounts in the Q2. That will be there. And again, the operating profit will again get improved, as I said, with the transmission of rates happening and with the deposit rates coming down and the interest expenses coming down from -- starting from this quarter more we would -- we should be seeing improved net interest income from this quarter, which will help us to improve the operating profit going forward. So that is another part. The third part is with respect to the recovery. As far as recovery is concerned, that we are expecting a recovery. Last year, we had done a recovery of gross cash recovery of nearly INR 9,500 crores. So this year, internal target is that we should do a recovery, gross cash recovery, which includes recovery from written-off account, which also includes recovery from UCI and URI, which is the interest which has been applied somewhere at around a similar figure of around INR 9,500 crores. So with that kind of -- if you are able to maintain that kind of run rate with a gross cash recovery of INR 9,500 crores, again this year, we should be able to give a very good numbers as far as the gross NPA ratio, net NPA ratio and the PCR is concerned. So that is that part. As regards to the CASA percentage is concerned, you are very right that we have dipped below 40% after a long time. And -- but you should appreciate the fact that there have been many banks which have been facing further more challenge than us. In fact, if you see the numbers, if you see on a Y-o-Y number, we have grown by nearly 3% on CASA, which is a rare thing today. And if you see this sequentially also, our CASA number is above our March number of June. It is above the June number of CASA above the March number. So we have been able to maintain that the CASA number, which is there. So the -- as far as the dip is concerned, had we not grown our credit to the extent 11%, 12% of credit growth, which was there. So then we would not have raised the deposit also, then we would have been able to maintain the CASA. Also percentage. And it is just below by only 20 basis points. We have dipped below 40% by nearly only 20 basis points. However, if you see the overall retail deposit growth in the bank is concerned, so bulk deposits continue to remain within 14%. We need to appreciate that in this tough environment, our bulk deposit percentage is still below 14%, which means that our CASA percentage plus the retail term deposit is 86% of the entire domestic deposit. So our -- the entire franchise, which is there for the bank, which is 5,300 branches and all our BC points or the other avenues, which we are utilizing as a strategy for increasing our resources. They have been paying well. And in spite of the tough market and the tough challenge, which is there as far as resource is concerned, we have been able to maintain our retail deposits at 86% of the total domestic deposits. And as regards to the fresh slippage is concerned, yes, we agree that the fresh slippage has been more sequentially, if you see from Q4 in Q1, it is higher. But if you see on a quarter-on-quarter basis, it was a similar kind of number which was there in the Q1 of FY June '24 also. So there, I am not taking any excuse for that, but the number has been the same. But normally, if you see for us, the Q1 is normally a bit muted as far as the collection efficiency is concerned. And once the second quarter comes, the collection efficiency improves. And many of these accounts which have slipped in this quarter will get upgraded in this quarter, which got slipped in the Q1. So last year, we had a fresh slippage of around 7,500, I can say, INR 7,600 crores. So this year, when we are saying that we are giving a guidance, we are giving a guidance of slippage ratio of 1.20% only.

Sir, I'll take you. There is one gentleman waiting online. He is by the name [ Johan Schindler ] I hope, sir, I correctly spelt your name -- pronounced your name rather. Mr. Schindler, is he still on the line?

Congratulations on good set of results. I just have two questions. Number one is on the MSME, can you give some color on why SMA go up by 60% quarter-on-quarter, if any specific accounts or the situation on the ground for MSME segment?

Yes, yes. Yes. So what I could understand your question was with respect to the MSME portfolio and that too, on the SMA number of this MSME. So you are right that if you see the last year, June '24, the MSME, SMA was INR 1,010 crores. It has gone up to INR 1,630 crores. That is correct. But if you see over there, the increase in the SMA number is also because of the low collection efficiency, which was there in the Q1 of this financial year. So that is the basic reason why the MSME has gone up, but we are very confident that in the coming quarter, in Q2, Q3, we'll be able to arrest this number and the collection efficiency has already started improving as we are in the month of July at the end of July month. And this number, I think, should be the peak number as far as the MSME, SMA number is concerned for the bank.

Thank you, Mr. Schindler for joining us online.

So one more question. Just on the guidance on 0.9% ROA for FY '26. What kind of G-sec...

You are not -- I may interrupt in between Mr. Schindler. You are not audible. Kindly your mic a little -- Your voice is not clear.

Am I audible now?

Yes, kindly go ahead.

Sorry about that. Just on the guidance of FY '26, 0.9% ROA, what are we assuming for the mark-to-market gain for first quarter that 25% of our profit before tax...

Mr. Schindler, I would request you to kindly text your question. I'll take it because we are not able to hear you properly, right?

Yes. So as far as the ROA is concerned, yes, the ROA has come down to 0.82% in this quarter as against this 0.90% in the Q4 of the financial year. But let me explain to you that in Q1 of last financial year, we were at 0.70. So there has been an improvement of 12 basis points as far as the ROA is concerned. As far as the guidance for ROA is concerned, we are giving a guidance of 0.90% for FY '26. And the dip in the ROA is also because of the main reason that there was a lot of pressure on the net interest income and net interest margins. So that is one of the main reasons why there has been a dip off in the ROA. From this sequentially, if you see from the Q4 of FY '25.