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

Ladies and gentlemen, good evening, and welcome to Bank of India's Q3 FY '25 Virtual Analyst Meet. I would like to thank you all for taking out time and joining us today. We have with us Shri Rajneesh Karnatak, MD and CEO; Shri M Karthikeyan, Executive Director; Shri Subrat Kumar, Executive Director; Shri Rajiv Mishra and other top management team from Bank of India. [Operator Instructions] I would now request Shri Rajneesh Karnatak to address this gathering. Thank you. Over to you, sir.

Thank you so much. Good evening to all the dignitaries, ladies and gentlemen, present in today's analyst meet. It is my pleasure to welcome you all for today's interaction post publication of our financial results of the bank for Q3 FY '25. In this present geopolitical landscape characterized by uncertainty and volatility, India's GDP growth estimates for FY '25 is at around 6.5% and is the highest among both advanced economies and emerging markets. The visible demand, rebound and revival of public CapEx on infrastructure will have multiplier effects, stimulating growth in key sectors. There has been visible upturn in economic indicators signaling sustained growth path ahead. The key focus area of our bank will be enhancing customer experience through all channels and acquisition of new customers consistently by providing innovative niche services. This will lead to fortification of low-cost deposits, that is CASA and retail term deposits for sustainable credit growth. My speech today has four parts for the coverage. Part one is with respect to new initiatives. Number one, new home loan product, Star Samriddhi home loan scheme designed for employees of central, state government, PSUs, large corporates and MNCs has been launched. Number two, bank has adopted 2-year road map under champion sector priorities of MSME targeting business in tourism, hospitality and logistics. Number three, utilizing market intelligence and analytics-driven strategy for development of MSME cluster-based finance. Number four, introduction of new Kisan Drone Scheme, Akashdoot, loan up to INR 25 lakhs for purchase of new drones with equipment and accessories for agriculture usage. Number five, automation and simplification of re-KYC via BC channel applicable to low-risk customers having valid OVDs. The second part is with respect to IT and cybersecurity. Number one, as part of the Project Nextech, bank has opened 24/7 resiliency operational centers, ROCs for quick response and recovery from disruptions of bank's applications, including CBS, e-platforms, mobile banking app, et cetera, due to natural disaster, system outages and cyber attacks. Number two, procurement of cyber solutions for proactive management with focus on retention and containment of cyber risk. Number three, enhancement of universal application API gateway for open banking. Number four, implementation of customer feedback through QR code displayed at branches for improving service quality. The third part of the speech is with respect to business. Global business has increased by 13.62% on a Y-o-Y basis from INR 12.72 lakh crores in December '23 to INR 14.46 lakh crores in December '24 with an incremental growth of INR 173,000 crores. Gross advances increased by 15.30% Y-o-Y from INR 5.65 lakh crores in December '23 to INR 6.51 lakh crores in December '24 with incremental growth of more than INR 86,000 crores. Global total deposit has increased by 12.29% Y-o-Y from INR 707,000 crores in December '23 to INR 794,000 in December '24 with incremental growth of more than INR 86,000 crores. Domestic deposits increased by 13.26% on a Y-o-Y basis from INR 599,000 crores to INR 678,000 crores in December '24 with incremental growth of more than INR 79,000 crores. CASA has increased by 6.07% on a Y-o-Y basis from INR 261,000 crores to INR 277,000 crores in December '24 with incremental growth of more than INR 15,000 crores and with a healthy CASA ratio of 41.05%. Domestic gross advances have increased by 15% on a Y-o-Y basis from INR 475,000 crores in December '23 to INR 546,000 crores in December '24 with incremental growth of more than INR 71,000 crores. Sequentially, it has grown by more than INR 25,000 crores with a sequential growth of 4.92%. RAM advances have increased by 18.96% on a Y-o-Y basis from INR 262,000 crores in December '23 to INR 312,000 crores in December '24 with an incremental growth of more than INR 49,000 crores and with the RAM advances contributing 57% of the total domestic advances. The fourth part of the speech is with respect to profitability and asset quality. Operating profit for Q3 FY '25 stands at INR 3,703 crores, witnessing a Y-o-Y growth of 23%. Net profit of Q3 FY '25 stands at INR 2,517 crores, witnessing a Y-o-Y growth of 35% for 9 months December '24 and it stands at INR 6,593 crores with a Y-o-Y growth of 35%. Global NIM has stood at 2.80% and the 9-month NIM is at 2.90% for December '24. As regards interest income, interest income for the quarter Q3 FY '25 stands at INR 18,211 crores, witnessing a Y-o-Y growth of 20% and the 9-month interest income stands at INR 52,000 crore plus with a Y-o-Y growth of 18%. Noninterest income for Q3 FY '25 stands at INR 1,746 crores, witnessing a Y-o-Y growth of 46% and the 9-month figure is at INR 5,566 crores with a Y-o-Y growth of 28%. There has been improvement in asset quality with reduction in both gross NPA ratio and the net NPA ratio. Gross NPA ratio is at 3.69% only and has improved by 166 basis points. Net NPA ratio is at 0.85% only and has improved by nearly 56 basis points on a Y-o-Y basis. There has been also significant improvement in the slippage ratio at 0.19% only. And as regards credit cost, it is at 0.39% only. Considering the positive outlook, as stated earlier, domestic credit growth will be around 14% to 15% and domestic deposit growth is projected at around 13% to 14% for FY '25. The major thrust will be on increasing high-yielding advances, CASA mobilization and retail term deposits for improving margins by leveraging technology. Apart from above, we shall work on reducing SMA and fresh slippages. Our priority will also be to strengthen the bottom line by improving efficiency parameters, intensifying recovery measures and expanding our market share. Moreover, ensuring robust risk management, corporate governance and compliance culture in the bank will remain the guiding force of the top management. I would like to thank you all for your continued support. The floor is now open for discussion and question and answer. Thank you so much.

[Operator Instructions] The first call is from Niteen Dharmawat from Aurum Capital.

This is Niteen Dharmawat from Aurum Capital. A couple of questions, sir. In personal loans, the category has gone up by 42% growth. And it is the highest growth amongst the retail loans. It is still small in size compared to overall book, but do we see any risk here as it grows further?

Yes. So on personal loan side, as you have observed that INR 12,394 crore is our outstanding in the personal loan book, and the growth is Y-o-Y 42.49%. See, this growth of 42% is also because of the low base, which is there. That is the reason why this figure of Y-o-Y growth is coming. However, to give you some color on our personal loan book, this also includes INR 500 crores plus of the credit card book, which we hold in Bank of India. So this includes that. Other thing is that our personal loan book of INR 12,394 crores is only 1.89% of the global loan book. So it is less than 2%. As regards within the retail book of the bank, which is at INR 127,000 crores as on December, the personal loan book component is only 9% of it. And within the personal loan book, to clarify, we have put a lot of guardrails as regards to the sanctions and credit underwriting is concerned. Here, we have taken a CIC score of 700 plus. Our total personal loan book has salaried customers of nearly 65% of the book and remaining 35% are the self-employed and others. And within the salaried class, majority of the customers are having salary account with Bank of India. So we have clear visibility as far as the cash flows of these borrowers are concerned. Apart from that, we have also given personal loan under a scheme where the borrower has taken housing loan from us. And as a top-up, we have given the personal loan also. There also, we have clear visibility and mortgage also available as far as the housing loan is concerned. To give you something more information about the personal loan book, the stress in the personal loan book as regards SMA-1, SMA-2 and the NPA is only about INR 600 crores of this total outstanding of around INR 1,200 crores, which is not even 0.5% of the total personal loan book.

Got it, sir. My next question is, there is a lot of talk about slowdown, growth issues, stress in some of the pockets of the banking and financial sector. Do you experience that as well along with any risk or we are able to find good opportunities as visible from our Q3 results?

So if you see our Q3 results, our growth has been in double digits on all the segments, right? If you see our overall business growth, it has been in double digits -- if you see our credit growth and domestic -- whether it is domestic deposit or whether it is global deposit, it is in the double digit. So global deposits have grown for us by 12.29%. Global advances have grown by 15.30%, and total global business has grown for us by 13.62%. So as Bank of India, we find no challenge as far as the growth numbers are concerned. As I said in my opening speech also, for us, we are projecting a guidance of credit growth of around 14% to 15% for the bank and deposit growth of 13% to 14%. As on date, as when we speak, if I give you the credit pipeline, which we have, we have nearly INR 70,000 crores of credit pipeline, out of which nearly INR 60,000 crore is in the corporate book, both domestic and international and another INR 10,000 crore of the pipeline is in the RAM book. So INR 70,000 crore plus is the pipeline with us, which is more than 10% of the global advances of the bank. So that is the kind of credit growth which we are seeing. So we don't see any challenge happening on that front for us.

Got it, sir. And my next question is why cost-to-income ratio is going up and where it is likely to stabilize?

Yes. So cost-to-income ratio has definitely gone up in this quarter and 51-point-something is the cost-to-income ratio. But in the 12-month number, when you will see, this will get moderated for the bank.

Got it, sir. And my final question is you mentioned that infra growth is visible. Can you please elaborate more on this as we hear that it is still missing in the economy?

Come again, please, which book?

Infrastructure growth. So my general question, when you were commenting about the result, that time you mentioned that infra growth is visible now. So can you elaborate more on that?

Yes, yes. So as far as the infra book is concerned for us, we are seeing a lot of transactions in the infra side also happening. So we are sanctioning accounts in road sector, which is predominantly HAM segment and also in ports. Apart from that, in power sector, renewable energy also, we are seeing traction where disbursements are taking place, both in the solar and also in the wind side. Apart from that, there are other segments of the infra sector also which we are seeing some traction coming. And even in thermal energy, we are seeing some refinance transactions which are happening wherein the present CODs there, cash flows have already come. And if the rate of interest is high, that borrower is coming to our bank for reduction in the lower rate of interest. So there also, we are seeing some traction. So infra book also, we are seeing certain tractions as far as our sanctions and disbursements are concerned.

Sir, next question we've received in the chat from Mr. Narendra. His question is, what is the longer-term guidance on credit cost and cost to income?

Yes, credit cost and cost to income. So as regarding credit cost is concerned, see, our credit cost for this quarter has come down to 0.39%, which was as high as 0.97% in the Q2 of this financial year. As regards to the guidance for the full year is concerned, we are giving a guidance of 0.70% for FY '25 on the credit cost, which remains to be the same with the guidance which we had given in the last quarter. As regards cost-to-income ratio is concerned, there also, we are expecting that our guidance is at around 51%. So we would be able to maintain a cost-to-income ratio of around 51%, even though there has been increase in this quarter at 52.63%. However, the 9-month number, if you see for us, is only 51.76% and the last quarter, it was 51.22%. So we would be -- as from the management side, we would be liking to get it controlled and remain at a level of around 51% for FY '25.

So the next question is from the line of Ms. Aditi Nawal from RSAN Ventures (sic) [ RSPN Ventures ].

So I just had a few questions. So one was on -- so in the last quarter, you had mentioned that there were certain corporate loans that you had not repriced them -- sorry, you're not renewing the corporate book, I think around INR 18,000 crores to INR 19,000 crores. And looking at the sequential growth in the corporate book, there seems to be a good growth in the book. So my question was, how is that NIM compression that had come owing to this degrowth in the corporate book not reversed in this quarter? That is one. And second is, sir, you had also guided for tech expenses of around INR 2,100 crores for the entire quarter -- oh, for the entire year, and of which one half, you had done about INR 700-odd crores. So are we on the -- are we in line to attaining that budgeted expense of INR 2,100 crores?

Aditi, what we'll do is we'll take one question at a time. First question was regarding the corporate credit growth of the bank, right?

Right.

Yes, so if you see our slide also, our corporate credit number was INR 212,000 crore as on December '23. It has now touched INR 234,000 crores as on December '24, and there has been a Y-o-Y growth of more than 10%. So that is the one part. The other thing is that, as I said earlier also, if you have heard, we have a very healthy pipeline as far as the corporate credit growth is concerned. So credit pipeline in corporate is around INR 60,000 crores and which is nearly 10% of the total credit which we have. And if you see within the corporate credit book, which is nearly 25% of the credit book, which we have. So that is the kind of number we are having, and we have traction in all kinds of segments and sectors, not only infrastructure, but also in the new age segments and sectors like solar and PV modules, there also we are giving sanctions. We are giving sanctions in ethanol also. We are giving sanctions in warehousing also. Apart from that, there are certain proposals and sanctions which have happened for data center funding and also for the automobile segment, not to speak of the traditional sectors like steel, textile, pharma and other kinds of things, mining and oil. There also, we have given sanctions. So all in all, we do not see any challenge as far as Bank of India is concerned with respect to the corporate credit growth is concerned. If you can repeat second question.

My question in terms of the corporate book was, sir, in the last quarter, there was some subdued interest income owing to the corporate book being very flattish or not growing as much. So if that corporate book has sequentially grown in Q3, then ideally that interest or the NII should have favorably gotten impacted by that. That is my question, which is essentially on the interest income part.

If you see our ratios also and the presentation also, you will see that there has been improved in the overall interest income of the bank. So last quarter, what had happened that we had left some of the transactions, which were at very fine rate. So that kind of situation is not there as far as this quarter is concerned. In fact, if you see our yield on advances, they have improved from 8.45% in the month of September to 8.55% in the month of December. And our cost of deposit has gone down by -- gone up by only 1 basis point for 4.95% to 4.96%. The gap between the 2 now is 3.59%, a very healthy number as against the gap of 3.50% in the last quarter. In fact, we have been able to reverse this trend in this quarter by having better corporate advances, which are on MCLR and better rates. And in fact, if you see our website and other things also, we have increased our MCLR -- 1-year MCLR also. Now our present 1-year MCLR is 9.05%. And when the last time the repo increase was made by RBI was in month of January 2023, when they had increased the repo from 6.25% to 6.50%, that time, our MCLR was 8.40%. The increase of MCLR was -- that repo was only 25 basis points. And today, as we speak, our MCLR has gone up by 65 basis points. So we have done the transmission of rate of interest also on the MCLR side, which is now helping us to improve our interest income and obviously, at the end of the day, the net interest income.

Got it, sir. So again, just one -- just sorry for hopping on that, but that NIM dropped from 2.82% to 2.8% this quarter. So is it owing to the P&L charges going from interest income to other income? Or is it some other factor?

One of the reason is the P&L charges also. But otherwise, if you see our global NIM, it has come down from 2.82% to marginally 2 basis points less at 2.80%. Another important thing in our balance sheet, Bank of India balance sheet, which is not there in other banks is that 50% of -- 15% of our book is international book, where the margins are even lower. So that is also contributing to a lower NIM. However, overall, we are very confident that our -- see, if you see our 9-month NIM, it is 2.90%. But this quarter, it has come down to 2.80%. But nonetheless, if you see other bank results, our NIMs are at par with what the industry is doing.

Understood, sir. Sir, second was a little data keeping question. So again, going back to last quarter, you had mentioned that IT expenses, you've been budgeting around INR 2,100 crores for the entire year. And until one half, you've done about INR 700-odd crores. So are we on track of meeting that INR 2,100 crore or is there any revision in the estimates in the budget?

No, no. We have not changed the guidance. In the OpEx and CapEx, both on the IT segment, we have kept that book at around INR 2,000 crore expenditure. Last year also, it was INR 2,000 crore, and we had spent nearly INR 1,800 crore, which was nearly 90% of our budgeted IT expenditure. This year also, it is between INR 2,000 crores to INR 2,100 crores, and we are on track to that. And by Q4, we'll be able to achieve most of the budget in the IT sector. And it is all -- in all the 3 components, whether it is IT, whether it is digital and whether it is cybersecurity, in all the 3 components, we are spending on the IT side.

Got it. And sir, just one last question will be on employee expenses. So sequentially, there has been a drop. So is it explainable by the fact that last quarter, there was bond yield decline and hence, you had to increase the provision on your retirement benefits. So that is not there this quarter? Or is there any other one-off?

So last quarter, there was some provision also because of the employee expenses. Now the wage settlement, which was there, it has now been implemented and now it is well settled within the system. So for all our officer staff and also clerical staff, the new salary package is there. So now it has now got streamlined and moderated.

Sir, the next call is from the line of [ Yash Darak ].

So first question with regards to slippages and provision for bad and doubtful debts. So it is evident that in the December quarter, the slippages and provision for doubtful debts have substantially reduced as compared to the last 3 financial quarters. If you could please explain this, sir?

Yes. So as regards our fresh slippages are concerned, if you see the fresh slippages have come down significantly. So this quarter, our fresh slippages are only INR 1,105 crore as against INR 2,546 crore in September and further as against INR 1,313 crore in December '24. So that is regarding the fresh slippages. As regarding the provision is concerned, the provision has come down in this quarter on the NPA side. So that is a number which is there because that is whatever the provision we have made in this quarter on the NPA book is as per the RBI guidelines as per the IRAC guidelines.

So last quarter, you've mentioned that there were some government loans, which were actually slipped and they were secured in nature. So are they still -- have they upgraded or have they slipped down? Could you please elaborate on that?

No, there were certain provisions with respect to the 7th June circular. Now those accounts, basically, they have now got regularized in the system. So no more provision is required under the standard category of 7th June 2018 of RBI. So because of which there has been certain reversals as far as the provisions is concerned.

And as far as next question is concerned, so you had guided for a better recovery in the TWO in the Q3 and Q4 in the second half of the financial year. But as we can see that the recovery hasn't been so great and the other income has dipped quite a bit, if you could clear that.

Yes, yes. So recovery in the written-off account, if you see our noninterest income, which is there, so recovery in written-off account was INR 685 crores in Q2, which has come down to INR 391 crore. There was one lumpy recovery, which had happened in the Q2 of this financial year because not being there in this quarter, it has now moderated at INR 391 crores. As regards the other part that the overall income from INR 2,518 crores, noninterest income has come down to INR 1,700 crore. That is more because of the profit from sale and revaluation of investments in the treasury book, which has happened, which has resulted in the moderation of the income from the treasury book. That is why the overall, it has come down. However, let me clarify that on a Y-o-Y basis, our total noninterest income has jumped by 46%. It was at INR 1,193 crores in December '23, and now it is at a healthy number of more than INR 1,700 crore as on December '24, an increase of 46%.

Next in line, we have Mr. Sushil Choksey.

Congratulation to Bank of India for excellent performance. Sir, my first question is your outlook on growth. Specifically about credit and the end market is very positive and encouraging. So CASA at 41%. Now to improve on all parameters from where you stand today, you stand tall but you can grow further. What kind of initiatives will you take which you think [indiscernible] to get accelerated growth much more from where we stand today?

Yes. Thank you, Sushilji. Thank you so much. See, if you see our growth, both the domestic and international growth and global growth, everything is in the double digit. So that kind of number we have already achieved. As regarding guidance, as I already said, we have already given a guidance that credit growth in this financial year will be around 14% to 15% and the domestic deposit and international deposit combined together will be around 13% to 14%. So we have taken many steps within the bank to improve both liability side and the asset side franchise. And that efforts will continue to happen and a lot of transformational journeys, all the verticals have taken in the bank. And not only in the CASA side, but also on the retail term deposit side, in fact, we are also focusing on the bulk deposit where we can get bulk deposit at lower rate without giving anything over the card rate. There also, we have identified more than 100 branches in the bank, where we are trying to take bulk deposit at the card rate, which we have -- we publish every day. So that is another step we have taken. As regards the credit side is concerned, RAM, our all underwriting centers, whether retail, agriculture, MSME are functioning well and smoothly with all operational efficiency being coming to that because of which we are seeing very good RAM growth of nearly 19%, which has come in during this quarter on a Y-o-Y basis. Similarly, on the corporate side, our emerging corporate branches also have started giving traction and also the large corporate branches. Similarly, as regards the recovery is concerned, there also a lot of good work is happening from the ARB branches where we have shifted all our NPA, which is INR 50 lakh and above to these branches and good settlements and other kinds of recoveries are happening through these branches. Apart from that, fresh slippage, if you see, Chokseyji, we have now brought down our fresh slippage to INR 1,100 crore in this quarter. And our zonal collection centers are doing very well and the field is totally attuned and doing the collection efficiency. And our collection efficiency has now improved to as high as 97% as on 31st December 2024. So overall, we feel that with the kind of top line which is happening and the kind of operating profit that we are able to get -- garner, and we'll be able to get good operating profit and net profit for the financial year '25. Already, we have achieved a net profit of INR 2,500 crores in this quarter. We had given a guidance, if you remember, INR 8,000 crore of net profit for FY '25. Already, we have achieved INR 6,500 crore of net profit in the 9 months. So whatever the guidance we have given to The Street, we'll be achieving those numbers.

Sir, I know the previous participant did ask you on the margins. If you can break up what is your domestic NIM and global NIM on separate note?

Yes, with respect to domestic and global NIM, so domestic...

Global NIM you have given. Domestic NIM would be what? Because your growth path is very visible on the domestic front, and I suppose Bank of India is tuned well to grow within the Indian corporate sector or retail sector with CASA being at 41%, retail consumer touch point may be growing, SME will be growing better. You've reenergized your brand image with the whole base of customer, which have banked with Bank of India for many decades. So that loss touch is gaining back. So maybe you may create a tall tower. But that tall tower maybe more coming from the domestic NIM. So if you have a guidance on domestic NIM, because I suppose the deposit rates have peaked, how do you see that shaping up? So answer around cost-to-income and all basis indirectly and directly?

Yes, so Sushilji, you have seen our global NIM, which is at 2.80%. It has come down by 2 basis points only in this quarter. And as regards domestic NIM is concerned, last time, our domestic NIM was at around 3.14%. This quarter, it is at 2.98%, which is a healthy number. And if I tell you the 9-month NIM -- domestic NIM, it is at 3.19%. So we have to be mindful of the fact that we have 15% book, which is international book where the NIMs are less because of which the global NIM for Bank of India comes down, similarly for other banks who have good international book in their total global book. So as far as the guidance is concerned on the global NIM, it should be at around 2.90% for March '25. That is the number we are giving. As I explained earlier also, our yield on advances have improved by 10 basis points compared to last quarter, and our cost of fund has increased by only 1 basis point from 4.95% to 4.96%. And the gap is at 3.59%, which was earlier 3.50%. So there also, we have made a healthy margin in the interest income of 9 basis points during this quarter, and this is what we are focusing on by pursuing all the field functionaries and the branches. So we are very sure that whatever the number guidance we are giving at 2.90% for the entire financial year on the global NIM, we'll be able to achieve.

No, sir, I have no doubt that you'll underperform your guidance. I'm seeing that there is a scope that you'll outperform the market expectations, including what you are guiding for. So what are the 2, 3 steps which you've taken which over a period of the entire calendar year of '25 may enable bank to get a bigger and greater height from where you stand today?

So a lot of things we have done. See, especially on the technology side, we are doing a lot of things. If you see our MSME book today, out of the total MSME book, 15% of the MSME book is now coming through the digital platform through the assisted journey and the direct straight through process. So that kind of thing has already happened in the bank. So a lot of transformational journeys we are doing at the top management side. On the data lake side, we have the entire data lake structure now in place with a lot of artificial intelligence and machine learning, not only happening on the sales and marketing side in resources and also the asset side, but also on the credit underwriting side also, it is helping and also on the early warning system, it is helping. So all these things are helping the bank in improving the overall efficiencies. Apart from that, we have already embarked on the project, which is Tech Next (sic) [ Nextech ], which is -- under which we are going for transformation journeys in IT, digital and cybersecurity. There also, a lot of automation is taking place. And whatever the mundane task and other kinds of things are there, that will get automated, resulting in more time at the branch level for the staff so that they can concentrate on sales and marketing and also on the collection part as far as the SMA is concerned. So all these things taken together and also apart from that, not to mention the HR transformation journey also, which is going, wherein we are redefining the job families, wherein we are making the succession planning. And we are also giving a lot of upskilling and reskilling and a lot of training in the hybrid mode, both physical and the mode, which is the online mode. So all these things taken together, I'm very sure in the next coming 1 and 2 years, there will be more operational efficiency coming to the bank and which will finally result into the better bottom lines for the bank.

Sir, my last two questions. In the credit growth, if I have to ask you how much was private credit growth and how much was public sector credit growth, is it possible because if your credit growth is higher, the market appreciates much more. So that's the reason on an yield basis, that would account for better point.

See, as regards the state government and central government accounts, we have been clearly bringing them down as a glide path outstandings, we have been bringing down. As I said, INR 60,000 crore is our pipeline. So I can -- I do not have the figure exact breakup between the government and the nongovernment, but I can confidently say that majority of this book is private corporate sector.

Sir, your outlook on investment book for the year?

So investment also, we are doing very aggressively. And the IPOs, which are coming there also, we are investing and making good money. That is another thing which is there. And as regards the present situation which is there in the market with respect to rate of interest and the dollar rupee which is there, we are very mindful of that. And wherever we see any option coming and situation coming where we can make some profit and gains, we are immediately doing the transactions.

Sir, we received a follow-up question from Aditi Nawal on the chat. Her question is SMA-2 increased by INR 800 crores. Any specific account that has slipped?

Yes. SMA -- as regards SMA-2 number is there, overall SMA has come down, if you see from our presentation. However, there has been an increase in SMA-2 number, which is there. But that is because of a few accounts which are of state government -- state government PSU accounts, which are there because of which it has increased. However, overall SMA number has come down from INR 7,600 crores to INR 7,200 crores. So in percentage terms, it is only 1.16% and as against 1.29% in September. Within SMA-2 also, this number is at 0.49% only of the overall standard book of the bank. And these accounts which are there for the PSU, state PSUs, a couple of them accounts are having state government guarantees also. In fact, one of the account is now as on today, when we speak, is totally out of SMA category and is a standard regular advance. So we find no threat in this quarter of any delinquency happening in these accounts.

Sir, next question we have received over text from Mr. Sai Karthik from Investec. He's got 2 questions. The first one is, when system growth has reduced, how is Bank of India managing 14% growth? And the second one is, what is the guidance for recovery from write-off assets for FY '25 and FY '26?

So as regards the credit growth is concerned, I have already explained earlier that our entire machinery at the field level is totally geared up for credit. So we have underwriting centers in the bank, wherein the branch is totally dealing to the underwriting and the underwriting happens at the centers, which are retail, agriculture and MSME. 450 underwriting centers are there in the bank and branches are hooked up to them. And this and the proposal do the sales and marketing and underwriting happens there, which helps in improving the operational efficiency. So that is one part. Apart from that, as far as the emerging corporate is concerned, there also, we have now emerging corporate branches. From there also, the proposals and traction is coming from the Tier 2 and Tier 3 cities. And then we have the large corporate branches where also they are reporting directly to the head office, and we are seeing a lot of traction coming through the proposals which are there. International book is also growing for us. On a very selective basis, we are growing the international book. Apart from that, we are also growing the overall numbers which are there in the book, and we are concentrating on the disbursements. So we are not only concentrating on the sanctions, but also the disbursements, which are helping us increase the outstanding in our overall book and also improving the interest income in the bank. So all these efforts are helping us to improve the overall credit numbers, which are there and the growth which we are seeing now in our book. As regards the NPA numbers are there, written-off accounts, there also, as you see from the book that this year -- this quarter also, INR 300-plus of recovery we had done on the written off. Last quarter, it was more at INR 600 crore plus, but that was a lumpy account. But this quarter also, we expect that the recovery from written-off account will be somewhere around INR 300 crores to INR 500 crores.

Sir, next question, we have received over text from Mr. Vijay from HSBC. His question is, if you could shed some more light on the quality of the retail book, specifically the unsecured and the personal loan segment.

Yes, yes. As far as our retail book is concerned, there, if you see our total outstanding is INR 127,000 crores as on December '24, which comprises of housing loan, which is nearly 51% of our total retail book. Vehicle loans are nearly 15% of the retail book. Education loan is 3%, mortgage loans are 8%, personal loan are 9%, and others, which is predominantly staff loan, loans against FDs and others are 14%. So if you see the unsecured portion, basically, it is the education loan maybe to a certain extent, which are loans up to INR 7.5 lakhs and personal loan book of nearly INR 12,000 crore, which is only 1.89% of the total global loan book. And within the retail book, personal loan book is only 9%, which is in single digit. As regard the stress in the personal loan book is concerned, as I had said earlier also, it is only between INR 500 crore to INR 600 crore, which is SMA-1, SMA-2 and NPA in the personal loan book. So that again is only 0.5% of the total personal loan book of the bank. So we do not foresee any challenge as far as the personal loan book is concerned on the asset quality. And as I said, a lot of guardrails we have placed on the underwriting, INR 700 crores and above is the CIC score. And apart from that, 65% of this book is the salaried book and remaining 35% is the nonsalaried book and salaried book also majority are the -- having their salary account and saving with us Bank of India, and we have clear visibilities on the cash flow. So we foresee no challenge as far as our personal loan book is concerned.

Thank you, sir. We've received one small question in the chat box from Mr. Manoj Kumar. His question is, may I know the LCR of the bank?

LCR.

So LCR, our average LCR is around 117 something. That is the number at which our LCR is. And it is above the threshold level of 100 fixed by RBI. So we are comfortable as far as the LCR is concerned.

Sir, next question is from the line of Atishay Choudhary. We'll come back to you. Sir, the next question is from the line of Mr. Ashok Ajmera. Sir, allow us a moment, we will try to understand. We are unable to get Ashok sir on the call. Atishay, you may now proceed or alternatively both of you type in your question in the chat box that you can see on the screen. In the meanwhile, sir, we have a follow-up question from Yash.

Sorry to repeat the question. I just wanted to need more clarity, what resulted in the slippages and bad and doubtful debts being reduced so much.

Can you come again, please?

The bad and doubtful debt and slippages have reduced quite considerably as compared to the last 3 quarters. What resulted in such a big improvement as far as slippages and doubtful debts are concerned? That's all.

Yes, there are -- Yash, there are 2 things in that. One thing is that, as I said earlier, our zonal collection centers are really doing good work at the field level and a lot of good collections is happening at the field level and 97% nearly is our collection efficiency as on 31st December. That has helped us in reducing the fresh slippages, which are happening. As regards the aberration, which you are seeing between the 2 quarters, last quarter, our fresh slippage was INR 2,546 crores. And this time, it is only INR 1,100 crore. That is because of one single PSU account of more than INR 1,000 crore, which had slipped. And that was a one-off thing which was there because of which the entire figure got distorted in the last quarter of September. So now that account not being there in this quarter, now it is normalized and we are very confident that going forward, we'll be at these numbers. INR 1,100 crore is the fresh slippage only during this quarter.

Sir, we've received a question from Atishay Choudhary on the chat box. The question is, in SMA-1 and 2, how much rupees in crores is from state government?

So SMA-1 and 2, so we'll provide it separately. We are not aware. In SMA-2, majority is from the state government only, state government PSU. Total -- fully listed from the PSUs, INR 5,000 crore. So of the total SMA book, which we have shown of INR 7,200 crores, INR 5,000 crore is for the PSU book -- from the PSU book.

And sir, if you have the reasons for write-back of INR 299 crores of standard assets provisions?

So write-back of provision is because of the 7th June circular note. So we had made some provisions of the 7th June circular in standard accounts because of which the proper functioning of the account, they are not in SMA and out of order now because of which as per RBI guidelines, we can reverse those provisions. So that has resulted in reversal of that provision.

Okay, sure. And sir, if I look at presentation, the yields on advances have gone up. Yields on investments have gone up, but the yields on funds have actually declined. So I was not able to understand the math.

Yes, yield on funds has gone down from 7.55% to 7.22%. Maybe [indiscernible], you will be able to...

So what happened in this quarter -- sorry, in this quarter, what we did, we have optimally utilized both the channels, deposit as well as the borrowing. And with the mix of that, the entire fund -- costing of fund has gone down because, of course, like we have used the normal borrowing plus borrowing through CD, borrowing through deposits.

Can you hear me, sir?

Yes. I think I was responding to Mr. Atishay Choudhary, right?

Yes, sir.

I think -- so this is the major reason, the optimal use of all the mix of borrowing as well as deposits and keeping a tab on the bulk deposit, which you can see, which is one of the lowest in the industry, like public sector peer if you compare with. So that's why we have managed our yield of funds on the lower side.

Yes, sir, I actually was also asking on yields on funds, which is -- I think is the -- on the asset side, right? I mean the yields on funds, when you have yield on investment rising, yield on advances rising, and yet the yield on -- overall yields have actually seemed to have declined. So that was the -- I also wanted to check on that.

[Foreign Language] From 7.55%, it has come down to 7.22%.

Right. But advances and invest...

Yields on placements have come down, so...

Sorry, what is that, placement?

Interbank placements.

Yields on placement has come down because most of the things are through borrowing only in today's tight situation. That's why placement has come down.

Interbank placements, that income has come down. That is why. And we are mostly on the borrowing side.

Yes, that's what.

Okay. And sir, lastly, I mean, last quarter, you had said that you could not deploy a large amount of funds and then you could only deploy at the end of the quarter. And hence, the last quarter margins were lower. This quarter, we had lower slippages also from corporate as well as across all things. And yet the margin improvement is only 2 basis points. So is there any follow-through that can come in fourth quarter? Or you think that because you are growing corporate, that advantage is lower?

No. This time, what we have concentrated is with respect to the disbursals. So as I said that last time, the -- mostly disbursals had happened in the end of the quarter in September after 15th September, which is the reason that the entire interest income did not come in the 90 days. So this quarter, what we did it, we followed up with the field functionaries and made sure that the disbursements are followed up and quick disbursals happens wherever the sanctions are happening. That is one point. As regards your yield on advances is concerned, if you see the data here, so our yield on advances have gone from 8.45% to 8.55% and they have increased by 10 basis points. And our cost of fund has increased by only 1 basis point. So the gap between the yield on advances and the cost of fund is now a very healthy 3.59% as on December, which was at 3.50% as on September. So that -- in that area also, we have improved by 9 basis points, which has helped us in improving the overall net interest income of the bank.

Right. And sir, what would be your incremental yield to corporate blended? I mean, roughly, I mean, would it be like 8%, below 8% or maybe above 8% to corporate book.

In corporate book, majorly, we are lending at the MCLR. It may be overnight MCLR, 1 month, 3 month or 1-year MCLR. So that figure exactly at the corporate blended return, I'm not having at this moment. But definitely, our -- from the top management side, it is that we should have advances on the MCLR side only.

Sir, we have a follow-up question from Mr. B. Manoj Kumar on the chat. His question is, may I know the reason for high balances with banks, and money at a call, short notice, which is a drag on NIMs, which we can see by a drop in the yield of funds.

The higher balances are account of our foreign branches placing funds overseas. Because of that, the balances are higher as well as the swaps which we do that those placements are with the overseas banks. Am I audible?

Yes, sir. Thank you for your response. Sir, next question with -- taking back from Mr. Ashok Ajmera.

Sir, compliments for the good set of numbers to the entire team of Bank of India. Having said that, sir, because I was not there half of the time, I'm traveling basically, and I couldn't hear the entire conversation. But on the first look, I just found that our operating profit has gone down in this quarter. And that is mainly because of the other income has also gone down in this quarter, though the overall performance on the credit and the deposit side is -- growth is good. So on the profitability front, sir, what are the reasons for the operating profit going down, sir? And our net profit is higher because the provisions are less...

Yes. So thank you so much, Ashokji. On the first point with regarding to operating profit, so operating profit has come down from INR 4,147 crore in September to INR 3,700 crore this quarter. The decrease is around INR 400 crores only. But if you see the noninterest income, it has come down from INR 2,500 crores to INR 1,700 crores. There, the dip is more than INR 800 crores. And that is also because there was a lumpy recovery in written-off account, wherein the recovery in written-off account figure had touched INR 685 crores in the last quarter. But overall, if you see the operating profit on the operational part, our operating profit has gone up by 23% on a Y-o-Y basis. So our operating profit, which was INR 3,004 crores in December '23 is now improved to INR 3,703 crores as on December '24. And so the jump is nearly 23%. As regards the net profit, you have rightly observed that there has been some less provision which has taken place. But what I can assure is that whatever the provision we have made is basis the asset quality in the book and also as per the IRAC guidelines of the RBI. So whatever is required has been provided for as per the RBI guidelines. So because of which the provision you are seeing on a lesser side, both on the bad and doubtful side and also on the performing side.

Have you used the provision out of our buffer or our additional provision earlier made over the IRAC norms? Have you used some of it during this quarter?

No, no. See, actually, what has happened in the standard book, 7th June circular is there. Wherever in those accounts where it was invoked, the account was SMA and because of which INR 1,500 crores and above 7th June circular was there, provision was kept. Those accounts are performing okay now. And with the discussion, we have now reversed those provisions and these accounts are no more part of 7th June circular.

All right. Sir, my second question is on the treasury front, sir. On the trading because treasury most of the income opportunity has gone with the profit M2M going to the reserve directly. But on the trading book, how the treasury performance looks? Because if you look at the segment, segment profit side, I think our profits are lower from the treasury operation.

[Foreign Language]

As far as treasury operations are concerned...

Apologies to intervene, sir. Your voice is very feeble, if could come closer to mic, please.

Am I audible now?

Yes. Yes, sir, now.

So if you see compared to Q2 and Q3, our profit numbers from treasury operations, especially through the sale of securities as well as foreign exchange transaction has come down majorly because yields went up in Q3. And most of the times, yields were up and the market was volatile. So it provided less opportunities for trading. And secondly, on the FX side, -- in the back end of the quarter, we had forward premium going up -- shooting up, so -- which brought the revaluations in the books down. So because of these 2 reasons, our income has come down from -- if you see from INR 730 crores in Q2 to INR 266 crores in Q3. However, in Q4, looking at the markets, we feel that yields are going to come down from here. If you see 10-year is trading around 6.71%. We expect a rate action as well as the regulator to ease liquidity in the markets. So that will bring yields down, and we hope to make money both on the investment side as well as on the FX side. So we'll be posting better numbers in Q4 as far as treasury operations are concerned.

Ashokji, interest income has also gone in the treasury. In the treasury book, interest income, there is a growth in interest income. But any directional movement always impact the portfolio as well as the trading opportunity. That's why the profit has taken a hit.

We have a follow-up question from Mr. Atishay on the chat. The question is how much of the NPA recovery is flowing into net interest income?

So that is part of the written-off recovery from [Foreign Language] Kumar, will you be able to tell?

INR 464 crore.

Yes, yes. INR 464 crore is that part. So that is INR 464 crore that we have shown in Slide #25, recovery from URI and UCI. So that recovery is going directly for improving the net interest income.

Sure, sir. And a subsequent question is that what is your guidance for NIM for Q4 FY '25 and full year FY '26?

So for FY '25, as I said earlier that we are expecting that the NIM should be at around 2.90% for the full year. FY '26, at this juncture, we will not be able to give any guidance. Post March only, we'll be giving the guidance for FY '26.

Noted, sir. And Atishay's last question is what is the overseas NIM this quarter?

1.67.

So that figure I'm not having at present. So, global NIM, we are having and the domestic NIM we are having. That number we have not brought here, but we can send to you separately.

And we have a last question from Mr. B. Manoj Kumar on the chat. It's a final question where he says, may I know what is the PCR, including to 1 PCR, excluding 2.

So PCR is 92 point...

[ Too high ]. The 92%...

Tangible and reversal, that PCR. 92.3%, no? 92.43%.

Yes.

Sir, with this, we now conclude this session. I would now hand this conversation over to Mr. Rajneesh Karnatak for his closing remarks. Over to you, sir.

So thank you so much for all the analysts who have been present over here, spend their precious time here for this analyst meet. Thank you so much from the entire top management of Bank of India here at the head office. Thank you so much.

Thank you, sir. Participants, on behalf of Bank of India, I announce this conference as concludes. Thank you for joining us. You may now disconnect the call.