Central Bank of India (CENTRALBK) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Central Bank of India Q4 FY '22 Earnings Conference Call hosted by Antique Stockbroking Ltd. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Prabal Gandhi from Antique Stockbroking Ltd. Thank you, and over to you, sir.

Thank you. Good afternoon, everyone. Thank you for joining in. On behalf of Antique Stockbroking, I welcome you all to Central Bank of India's fourth quarter earnings call. From the management side, we have Shri M.V. Rao, MD and CEO; Shri Alok Srivastava, Executive Director; Shri Vivek Wahi, Executive Director; Shri Rajeev Puri, Executive Director; Shri Mukul Dandige, CFO; and other senior members on the team. Without further ado, I'll hand over the call to M.V. Rao for his opening remarks, post which we can open the floor for question and answers. Thank you, and over to you, sir.

Yes. Thank you. Good afternoon. And once again, thank you for sparing -- rather, investing your time on our presentation and taking part in the interaction. I'm confident your investment will yield good dividends. You must have gone through our presentation, which is already uploaded, and I will be presenting key highlights, and then I will rush through the presentation. Before that, let me share whatever the results and whatever the presentations we are making with around the outcomes of the measures, what we have taken for the past year. And we have taken various steps in strengthening the systems, rebalancing our credit book, protecting the investment book, improving the underwriting standards and diversifying into the new lines of business acquisition, reskilling and upskilling of our manpower. All these measures not only made us to record the net profit after a drop of 6 years. See, earlier, we recorded a [ net ] profit to loss in financial year 2015/'16. Now in 2021/'22, now we are recording a net profit, [ about ] INR 2,045 crores. So all these measures have helped us. And also, more importantly, the sustainability is ensured now. And going forward, I'm confident this bank is going to deliver the numbers on sustainable and consistent basis. Coming to the key highlights. Total business has increased to INR 5.32 lakh crores from INR 5.06 lakh crores, registering a growth of 5.03% on Y-o-Y basis. And CASA, it is at INR 1.72 lakh crores, which is 50.58% of my total deposits, which is mostly USP and strong pillar and which is giving the pricing power to our bank that has enabled to increase our exposure in AAA assets. And total advances increased to INR 1.89 lakh crores from earlier INR 1.76 lakh crores, that is a growth of 7.23%. And coming to the net NPA, which was 5.77% in March '21. Now it has come down to 3.97%. There is a reduction of 180 bps in our net NPA, 3.97, which is the lowest for this bank recorded now. And operating profit, it has increased 25.40%. Now it stands at INR 5,742 crores against INR 4,579 crores on a year-on-year basis. Net profit, I already told you that is INR 1,045 crores. In the previous year, we have recorded a loss of INR 888 crores. Coming to the efficiency part on the NII, there is an increase of 15.07% from INR 8,245 crores to INR 9,487 crores. And cost-to-income ratio, there is a reduction from 59.70% to 53.90%. Slippage ratio, which was 3.20% in '21/'22 -- which was 4.40% in 2021, now it has come down to 3.20% in '21/'22. And credit cost, which was 2.95% in 2021, now it has come down to 1.41%. And the CRAR now stands at 15.75, but in between, there was a RBI direction to recon the recapitalization bond on NPV basis. With that calculation, our CRAR stands at 13.84%, which is quite comfortable for our bank where we have a lendable resources of almost INR 31,500 crores. Provision coverage ratio, now it has improved from 82.54 to 86.65. This is our key highlights. Just I will rush through the presentation because you must have gone through our slides in our uploaded version, where just I would like to highlight CD ratio, which 53.79 in March '21. Now it has moved up to 55.63. And deposit mix, 49.24 was the CASA in earlier year. Now, it stands at 50.58. And there was a conscious decision on our side not to move our deposits because of the deployment issues. So now we have the coming out of whatever the restrictions that we may have, that we will have a larger field to further exposures. And coming to the credit, the way we have guided earlier, our ramp is at 65.89%, and remaining is our corporate book. Earlier also, we have guided all of the -- to that market saying that 65% to 70% will be my RAM and 30 to 35 will be the corporate. Now we have stabilized that 65%-35%. And going forward, it is not only the RAM will be the focus, it is the entire credit book in a balanced credit growth in all the segments including corporate, RAM and corporate, and we would like to make -- maintain the balance of 65%-35% here. And we have a very diversified loan book catering to all segments, and which is also very much required for the risk diversification. And as far as the pension and disbursements in this year, because of certain issues -- certain measures, what we have taken, which has given a lot of confidence to the field function is in taking the credit [ shell ]. So with that dispersal percentage has gone up, sanctions percentage has also gone up. And one more line, what we have explored in this previous financial year is the whole lending. And we feel we are having the highest portfolio among the public sector banks in the whole lending portfolio. Now outstanding stands at INR 1,500 crores. Almost 13,272 accounts we have catered through this whole lending model. And as far as the mandated topics, whatever the norms that are there in respect of agriculture, total price, weaker section, a small and marginal farmers, that we have not only met, we have exceeded. And in this sector, almost INR 15,528 crores we have sold PSLCs in the market, almost to INR 208 crores that we have booked from this portfolio. Regarding the standard advances, this investment grade, the rating 78.15% (sic) [ 78.20% ] earlier we used to have now will stand at 83.65% (sic) [ 83.96% ]. Most notable feature is there is a good increase in our exposure in the AAA accounts. where earlier we used to have only INR 6,546 crores. This time, we have INR 14,916 crores in AAA accounts. Regarding the SMA, I'm very happy to share with you we have given the entire spectrum of the SMA accounts, even below INR 5 crores also we have given. So total, it was 9.85% that was there in March '21. It has come down to 8.24% in December '21. In March, it is 7.87%. And if you see the SMA-2, even in the March '22, we have only 0.61%. That is only INR 1,158 crores in SMA-2 in March '22. And coming to the COVID support, and we have given whatever the relief that are required to be given as per the RBI guidelines and the government guidelines. Regarding the restructured book. Let me share with you, this is one of the most crucial book, which you would like to have the insights in this. Total restructured book, what we have is INR 8,794, of which INR 2,245 is a standard restructured book. And COVID resolution framework restructured book is INR 6,549. So it is not too high, and it is very much a sustainable portfolio, what we have going forward, the way once you see the slippages. The percentage of slippage in the restructured book is almost -- I can say it's very less when compared to the slippages from the actual credit book. So that means the restructured facility that COVID relief whatever has to be given, it is given in the benign cases there where that units are now performing well. And whatever the weaknesses are some differences that were there, those accounts already taken care in the March '21, and they have slipped into NPA at that time itself. Coming to the NPA classification, and in this total net NPA, now it stands at 3.97%. We have only INR 6,675 crores as net NPA. And you are all aware, that gross NPA, which is around 14%, unless until this MRPL comes into force and some resolutions, big resolution happens at the NCLT level. This drop in NPA may not come down. However, our PCA is almost 86% now. So we are not worried on that front. Now we are more focusing on the net NPA, which is 3.97%, which is a very good figure and also the efforts what we did towards the recovery and the war room, which was considered in the head office for the past 1 year has given the good results in the recovery. And coming to the NPA movement. Opening balance was INR 29,277, where slippages has happened to INR 447.3 crores and upgradation and recovery. This is INR 4,741 almost net to net. And we have closed with INR 28,156 crores, which is almost INR 1,000 crores less than the opening balance of the gross NPA. And provision coverage ratio, that's what I was sharing with you is 86.69%. Now coming to the slippage ratio, which was 4.40% in March '21, now it has come down to 3.20%. Regarding the NIM, now it stands at 3.21%. Regarding the capital ratio, this was 15.75 we have right now and the leverage ratio of 4.98. And in the CRAR, which we have taken the NPV of the recapitalizing bonds issued by the GOI, it stands at 13.84. And coming to the investment portfolio, which was INR 1,10,414 in March '21. Now in the SLR, now it stands at INR 1,05,841. There is a reduction because of the credit offtake has increased and also certain securities we have sold and also redemptions also took place in between. And one notable feature I would like to share with you, which is after the March, the security is what we have shifted, that shifting positions was fired out by [ DHFL ] itself. So whatever the spikes that we have observed afterwards have not affected and we are in the positive territory and we are maintaining the same modified duration under PV01 even in the new portfolio in this month of April onwards. So further, we will be giving you further insights about the multi-duration in our AFS book going forward. And additional transactions have picked up. And as far as the PCA, last but not the least and most important and being only one in the industry. Now I would like to share with you all the parameters which are required to be met that we are meeting all the benchmarks for the past -- all the quarters in this year, and we have recorded good profit in the March, and we will be submitting our audited figures to the RBI to consider our request of moving out of the PCA. This is from my side and only the guidance, which what we would like to give to the market. Deposit growth, we would like to be around 10% to 12%. And advances growth, we would like to be between 12% to 14%. And business growth, almost 10%. So RAM, credit portfolio, we will be maintaining the same of 65%-35%. And the NIM will be around 3. CASA, we would like to maintain around 50% and the gross NPA, once this NARCL comes into play, definitely, we will be less than 10%. And net NPA would like to keep around 3% to 3.25% as for the conditions that emerged. But our confident level will be between the 3% to 3.25%. And the PTR, definitely, we will be in between 88% to 90%. Slippage ratio, we're in between 2.25% to 2.50%, it will be range bound. And the credit cost annualized will be around 1.50% to 1.6% and the return on assets will be 0.50% to 0.60% and cost-to-income ratio, definitely, we will be pushing below 50%. And with this, again, just as a conclusion, the bank has turned the corner and reduced a decent profit. And the gross NPA and net NPA substantially has come down. Provision coverage ratio has improved to 86.69%, and we are complying with all the PCI parameters and our frozen across the spectrum, across the GDP sectors and across the geography is uniform, and we are looking forward from the better growth and consistent performance in the financial year also. Thank you. Thank you very much.

[Operator Instructions] The first question is from the line of Amit Mishra from Indus Equity.

So there was a news article 2 days back in the closure of 600 branches. So any comment on that? Are we trying to reduce the cost by closing branches, something like that?

One thing we have made it clear and we have released a press release also. In this, our submission is regarding revisiting the branches regarding their bottom line and their viability, it is a continuous exercise in any bank. And in any financial year, in the first 2 months, definitely, we get into the viability and also contribution made by the branches across. So there was a communication from the central office to the field saying that these are all the branches which are not performing as per the benchmark, what we have sitting, kindly review it and come back to us. What is that to be required to be done? And this decision is to be taken. And more so, background for this is if any small brick-and-mortar branch having a lot of expenses is not contributing, as per the RBI, we can deploy a banking correspondent, which is also taken as a banking outlet for the competition. So there is nothing that is -- it is a big one. It is a routine exercise, what we carry out on a yearly basis.

Okay, sir. Sir, my question, sir, you spoke about co-lending. So with how many partners are we doing co-lending? And how is the asset quality of the book that you talk about INR 1,500 crores of book?

Yes. Well, see, right now, we have 7 partners with us. And our book stands INR 1,500 crores point. So that is the book. And until now, there is no irregularity, no SMA accounts that has come in this portfolio.

Okay, sir. Sir, my last question, we have a relatively large investment book as a proportion of total assets, so how do we plan to optimize this book? Since we are targeting a growth of 12% to 14% in advances. So can you see some change in this?

No, that's what I explained in my submission already. We have taken care our investment book. And then the possible hit there. Normally, people think once the way market has moved right now. For that, I have given you how we have acted in the first 28 days itself, whatever the shifting that has happened from my HTM to AFS, we have 80% of the securities we have exhausted. And then we have booked a decent numbers, which not only fired off my existing lots and also has given a markup in that. That is one. Number two is, I think this is one of the very few banks which have gone from the hedging of the AFS portfolio, and where with the increase of the yield on the other side has contributing to the appreciation in my OIS instruments. So going forward, as far as my investment book is concerned, it is well protected. And the PV01 it is, right now, PV is -- how much under SLR?

3.33%.

3.33%. So it is very much in our -- and the duration is 1.05%. So with this, you can evaluate the efficiency of treasury, what we are operating.

[Operator Instructions] The next question is from the line of Sohail Halai from Antique Stockbroking.

Congratulations on a good set of numbers. Sir, I have a few questions if you may allow. So first, in terms of your growth aspiration and your growth delivered so far, so if I look at in terms of your growth construct, then probably in terms of most of the segments you are growing in the range of 5% to 6% on a year-on-year basis, excluding corporate, which is a tad higher at around 10%. So when you are talking about that 0 to 14% kind of growth for next financial year, what would it need to be driven by?

Okay. Next, any other question? As the growth path is concerned, yes, you are right, 5% to 6% that was what growth we have reported in the previous financial year. And I also shared with you the measures what we have taken for improving the business at the field level. And the way the balancing that has to happen in the credit book already we have achieved, that 65%-35%. And as far as the corporate is concerned, I'm sure that what are the repayment that has to happen in the month of June, September, December and next March, so it is very much visible. And also, we have already zeroed in on what type of assets with what risk weight we have to acquire, this is on the corporate side. So to balance that 35%. Regarding the 65%, retail, agriculture and MSME. This is also very much worked out on a granular basis. And then we have very much confident whatever the numbers we have given to achieve that growth of 10% to 12% and the 12% to 14%, that is in our radar. Whatever we are giving, it is only the floor level figures we are sharing with you.

Okay. Okay. And sir, correct me if I'm wrong, our loan-to-deposit ratio is low right now. So in terms of even if RBI has really reported, would we be in a hurry to raise the deposit rate? Or how should we look at basically the liquidity in your balance sheet vis-a-vis the deposit rate that you offer over a period of next, say, 6 to 12 months?

See, as far as liquidity part is concerned, I'm comfortable because my CD ratio is only 55.3. And we have -- and if you see investment book, all the liquidity is moving on to the deployment side. So as far as liquidity for funding purpose on the credit book side, I'm not worried. As far as the rate of interest is concerned, because of the increase in the reform of the CRR increase, we have already calculated, also we have taken some additions just day before yesterday. As far as this external benchmark related and RLRR concerned that we have popped down those increase to the asset side customers. And coming to the liability side customers, we are very much aware that there is a room to increase the rate of interest. But just we are in the wait-and-watch mode. Maybe in the next talk or meeting, we will be taking the decision on that.

So probably can it not be that you would delay the rate in a deposit rate because you're already setting up excess liquidity? And probably the rate of deposit growth is not that high in the bank. So in the interim phase, and that time you reach a reasonable loan-to-deposit ratio, you can keep your rates low, right? So just wanted to understand that dynamic in terms of the completion of raising rates.

Here, you are right in your conjecture. You are very bang on that. Lead whatever the time, what we are taking is only evaluating how things will pan out. Because see, I am going to protect my CASA at any cost. where that 50% of CASA has to be there. And even if it is the previous financial year, that some deposit growth we have this credit are disincentivized in many ways. That's why my growth is only 2% to 3% in terms of deposits. But my growth on the CASA side is still robust just because my presence in the rural and semi-urban is very strong, and they are contributing to the CASA. So going forward, definitely, we will be waiting how things will come up. And at the same time, we are not going to wait for a long period until my credit book picks up. In between, we will take a call so that there should not be any lag or that our own customers or depositors should not feel that they are getting less than what they are getting from -- in other banks. That also will balance.

Sir, final 2 questions from my side. Probably you are doing a good job under in terms of asset quality and your NPA guidance of 3% -- around 3% also is increasing. But sir, I just wanted to understand what is happening in terms of your below INR 5 crore per ticket exposure? Because if I look at basically in terms of the entire SMA, that is 0, 1 and 2. Probably that is still a little sticky at around 13,000 crores. So in terms of how do we look at it, whether in terms of debt, [ where do we go on the ] level in the small ticket housing -- in the small ticket place? Or probably we are still away?

As far -- that's why we have made all the figures open are transparent to the market above and below whatever the numbers that are there, we have given. And as far as the handling of this question, this portfolio of the high-volume, low-value accounts, we have that expertise. And if you see the previous year also, this is the SMA number that was prevailing in the below INR 5 crore level. But yes, the fail ratio was left. So there is a constant effort that are happening towards regulating of these accounts. And then going forward, also because of the expertise that is available at the speed level, that we will take care. And that's why the guidance what we have given, we said that is for the entire book, that will be maintained.

And sir, a final question in terms of the priority sector lending certificate sold, which you did around INR 15,500 crores, could you actually tell us how big is this market? And what is the kind of fee that you've earned? So is the fee is going up or actually coming off?

Sir, this is again, it's a market dynamics. And more so, this time, we may not -- we're getting the demand what we got in the previous year because of certain change in the parameters that are know but also many of the private banks and also foreign banks, they have their portfolio in those segments where RBI has given that they can be recalled for the private sector. So their demand may be -- may not be there to the extent of what we have experienced. But here, most important aspect is the timing when you're going to hit the market. That is more important. See, you know very well that as a whole, all the banks put together whosoever has participated with PSLC, all of SRM, they cannot -- even with the reclassification also, they may not be reaching their track record percentage. At what time you are going to hit the market and how you are steadying and then putting your portfolio for the sale, that determines your return. When demand is high, you can go up to 2.08% up to 2.12%. And if you leave it and if you go enter into the market in the month of January and February, definitely that this will come down. At times, you may have to sell it down by 80 basis points also. It is [ one area which ] is there in that.

Sir, in terms of -- if I actually look at the private banks, which are growing much faster, I am quite sure that their agriculture portfolio would not be able to catch up. So that's 18% agriculture portfolio or the book of that, which we still are in excess that will continue to generate demand and would be at a higher fees?

Correct.

Okay. And sir, what was the PLSC fees that we generated this year? And if you could bifurcate into nonagri and agri, if that is possible?

But overall figure, I can give you INR 208 crores we have earned in this PSM fees.

And that is for the full financial year, sir?

Full financial year.

The next question is from the line of Bhavik Shah from Antique Limited (sic) [Morgan Stanley].

Sir, sorry for harping on the loan mix. But sir, we have a strong CASA ratio of 51%. But our growth in retail and MSME space has been quite subdued. So are we looking for any initiatives which can accelerate the growth in these segments? And also, this segment has become quite competitive though. So how do we ensure any adequate risk pricing, while keeping the credit costs in check?

Yes. Madam, as far as we are otherwise is concerned of the previous financial year, it is right that the growth in this retail or MSME is low. Going forward, this is going to be a good contributor to the total credit book. Besides my entire field outlet, now we have gone further co-lending model, where already we have achieved a book of INR 1,500 crores. And this year, we have a very aggressive target on the co-lending model, where all your retail, MSME, these advances will be taken care. And to cater to the needs and also to evolve and then bring the modification changes as for the cost possible, we have already created a new vertical in our bank as he is -- headed by the General Manager as Emerging Businesses. So this particular vertical is going to take care on our co-lending, IEFs, partnerships, collaborations and also trade platform and pool buyouts. These are all the segments that what we are bringing under this vertical. And definitely, this is going to give us a lot of growth in the retail and the MSME.

Okay. So sir, are we also exploring the fintech partnerships for this or for the boosting the business momentum in this space?

Yes, yes, yes. For that only the separate vertical is there. A lot of interactions are happening. Almost 7 who have enrolled and business is happening. Another 6 to 7 are in the pipeline in the next 15 to 20 days for the negotiations and also to go into the nitty gritties of those fintechs for shortlisting.

Okay. Sir, what will be your technology spend as a percentage of overall operating expenses and the target for cost-to-income ratio FY '23?

Madam, right now, I'm not having this number. Definitely, we will share this year because it's all -- we have to call out when we get there.

Okay. No problem. And sir, lastly, on the asset quality. Sir, can you share the breakup of slippages during the quarter and for FY '22?

Slippages for?

For the quarter and financial year '22.

Yes, [Foreign language] '21. Yes. Madam, this is the total INR 4,473 crores slippages for the entire year '21, '22.

Yes, sir. Sir, I wanted to breakup actually the detail, MSME.

Your agriculture is INR 1,684 crores, corporate is INR 1,527 crores, MSME is INR 897 crores, retail is INR 365 crores.

Okay. Okay. And what will be the guidance for the next year? How do we see that shaping up? And also, have you recognized any retail account in this current quarter?

See, as far as the slippages already, we have given you the guidance of 2.25% to 2.5%, that will be our range for the slippages. What is that your second question?

Is that have you recognized any retail account in the current quarter?

Retail account means? This is a small account that will be there. That is -- it's a continuous process. Something will form and then some upgrades happen and then that is the thing. But at the end of the day, it is the slippages in the total portfolio, what happened. So that's what we measure.

[Operator Instructions] The next question is from the line of Ashok Ajmera from Ajcon Global Services Limited.

Congratulations to you from ourselves and the entire team for these fantastic results. And in fact, as I see -- and you also said that after 6 years of continuous losses of almost about, I think, INR 16,500 crores to INR 17,000 crores, your bank has come in the profit and that to over INR 1,000 crores, INR 1,045 crores, that's an absolutely great level. And for the first time, the gross NPA has also come below 15% and net is below 5%, and not even 5%, below 4%, commendable. Sir, having said that -- and also expect that now our bank will come out of PCA and you will go on full throttle because your CD ratio is only 55.63% now and you have a lot of scope. I have got some specific questions, sir. One is on the profitability, the employee cost, which is covered under note#19. Now this is only INR 382 crores as against the last quarter of INR 1,297 crores and yearly spend of about INR 4,000 crores. This is INR 1,000 crores a quarter. So this is based on the change as per the leverage allowed by the Reserve Bank of India, what will -- somebody will run through the entire calculation of employee cost of INR 382 crores because even if you take those numbers, it doesn't come so low as compared to the normal quarterly expenses.

Yes, just let my CFO explain the figures quarter because a lot of cushioning, what we did in between the quarters that he will explain.

Sir, majorly if you see, I mean, the employee cost -- because financial year, while if you see the overall financial year, the cost is almost same. There is not much difference. So what we have done is in the Q3, we had built up some cushion, and I mean some write-back has happened as far as the actuarial valuation for the terminal benefits has happened, and that is why this cost has come down in this quarter because the bond is also increased. So because of that, the write-back has happened in -- as far as the terminal direct exposure is concerned.

Is it some correlation with the bond?

Yes, because the funds that are available with the investor, I mean, if the bond go up, then I need to provide for that, sir. It will be just reversed towards the what in treasury happens.

Sir, will you give the guidance that in the normal quarter, I mean, without this differentiation, now you've got only some small amount left, INR 277 crores, to be provided balance in the new pension out of INR 122 crores, so what makes the normal quarterly employee cost? Suppose from the next quarter, that is April to June?

Every quarter, roughly around 800 crores to 900 crores is the total outgo as far as the employee cost is concerned.

Because of it, we assume that in the June quarter, we will have a hit of INR 500 crores if you compare with quarter 4 only. So profitability will get affected accordingly. And sir, this exceptional income is also there, of INR 352 crores. Some part of that has come from this note #19, as you explained. What is the other part, again, INR 172 crores, INR 352 crores, what is the exceptional item?

In this presentation, is not there are no figures that are there.

Note #9, sir. INR 180 crores has come from there that the additional pension liability on account of revision of the pension is considered as an exceptional item and disclose as a separately in a separate account. But this is not full. The entire amount is INR 352 crores.

INR 352 crores is 31st March. Okay. I'll provide that detail, sir, to you. See, INR 352 crores was towards this terminal benefits only for this quarter, March quarter. Then INR 172 crores is what we have already paid in December '21. So put together, for the financial year, this amount has come to INR 545 crores.

Okay. So you have taken INR 352 crores in this quarter? And INR 172 -- INR 177 crores, that is left provided for.

Right.

Okay, sir. And sir, now I come to some other questions. Like you said that the gross NPA will come down to almost 10% if the NARCL works out from 13.5%-or-so. So what is your guess now? We have been hearing for last 2 quarters, September, December also, then January, March also. What is happening in this NARCL? And then sir, if in the first tranche, how much gross loans will go from your bank?

Say earlier, whatever the workings that they have done, we were expecting around INR 3,400 crores to INR 3,600 crores [Foreign Language]. Now get to hear from them, whatever the further any tweaking that has happened in the accounts and what is left? Most probably, I think within 10 to 15 days, we may hear something from their side.

So in this...

We are also eagerly waiting. See, this is only a way what we have to reduce our gross NPA. So it is not affecting any of the financials because almost 90% rate is provided for.

Sir, my next question is on the note #17 on SR. SR Rating, it is INR 2,484 crores and INR 155 crore rating has been withdrawn. So where do we stand as far as the SR are concerned? And how much total provision has already been made?

Sir, our treasury in charge will tell you. But one thing I will tell you, in all the public central banks, this is the bank where highest provision is made in SR, we will give you that numbers now.

Sir, we have provided around 96% of the outstanding SRs up to March '22. And the remaining will be provided wait for in June quarter.

So you mean to say that rating withdrawn of INR 155 crores is fully 100% provided for?

Yes, sir.

Coming to your segment reporting though upwards is out of the overall results only. But the figures are a little away from the normal, like treasury, you have an income of INR 393 crore in this segment as against INR 38 crore, whereas in the retail book, you have a loss of INR 377 crores, whereas the provisions are to that extent. And wholesale banking, again, has gone up the profit of INR 452 crores against INR 72 crores. So how does -- is there any...

We will give you the reconciled this one sir because right at this moment, we are having the material not on this segment, we have overall presentation with us. And anyhow, these are all only thing we can share the information with all perfect one, no issues. Variations in the retail and corporate on the profit side, what you are seeing.

I was just trying to connect it with the treasury operations. As you said that we have done very well, and we don't expect to do all this rate hike is not going to affect us so much because the AFS transfers are there and you utilize a lot of money for the advanced. So where do we expect then now in this coming quarter and onwards? Will we not have the treasury will not give the pressure still with such a large treasury investment?

Sir, our AFS portfolio has pulled down considerably. And right now, my modified duration has come down to 1.05% and PV01 has come down to 3.33% as against March '22 numbers. We are making concise efforts to prune down the AFS and only filling the gap in HTM for coupon.

Yes. All right, sir. Sir, last question is on NBFC space and the co-lending, you're doing extremely well in co-lending, and your outstanding is INR 1,500 crores, out of the retail is INR 1,300 crores and [ MSEB ] is [ 195 ]. How much is the security coverage out of this INR 1,500 crores, I believe, that retail must be 100% covered?

All lending is fully secured. No unsecured portfolio we are anchoring that is the only totally secured portfolio we are doing.

And what is our target for '22/'23, growing INR 5,000 crore or something?

Yes, yes. We have a very aggressive target, whatever the number you are taking, you can take it as a below [ those ] levels.

[Operator Instructions] We'll move on to the next question. That is from the line of Mahrukh Adajania from Edelweiss.

So a couple of questions. So...

Ma'am, we are not able to hear you clearly.

Can you hear me now?

No, your voice is sounding very soft. Yes, ma'am, we are not able to hear you clearly.

Can you hear me now?

Please proceed.

Sir, my first question is on what is building on the transfer to NARCL? Why isn't it happening?

Madam, this particular issue is not in our domain. That much only I can say.

Okay. But any chances of it to happen?

Madam, your voice is so feeble. Unable to understand.

I'll come back.

We'll move on to the next question. That is from the line of Sushil Choksey from Indus Equity.

Congratulations to Team Central Bank for a stable result. And you gain a guidance on more or less every parameter. Now I just wanted to know that when we are doing very well on co-lending, what is our internal target of INR 1,500 crores outstanding? And number of partnerships? And what kind of businesses which we would partner for?

Now in co-lending, we are exploring for the niche area, where these NBFCs, though their size is small, if they are efficient, let us say, in medical equipment line of business, that we are already shortlisted and maybe in 2 or 3 weeks that agreement may be signed up. So like that, we are exploring the niche areas where traditionally bank was not having exposure, and then where good business is prevailing, to our understanding that it makes great sense for us to move in those areas. So like that, we are picking up the NBFCs in the certain areas.

Sir, currently, as for my understanding, what I see between the presentation I hear, it will be more of housing loan and MSME as outstanding and gold loan does a portfolio. So if I look at medical is one thing, which you highlighted, any other domain which the bank would like to pursue on?

Yes, where certain things -- where vendor financing or supply chain operators are there, all those things we are exploring. It's not that a traditional only a housing vehicle or some MSME market with certain collateral that is okay. That is a faster mover in this co-lending space to get the confidence and also the way NBFCs are operating and their collection mechanism and their monitoring mechanism, the way we are getting the confidence in that, then we are slowly expanding to other emerging businesses now.

Keeping in mind on co-lending and with CASA at 50%, I'm sure the bank in 1 year of the entire new team has completed, what kind of initiative between digitization and retail are we taking to energize the bank as our thinking is more towards them and retail?

No, no, sir, that's what I was saying. It is not just we will be focusing on the RAM side this time. We have already achieved our objective of balancing the credit book 65%-35%, and we will continue to maintain that 65%-35%. It's not that we are only focusing on the RAM, and we are neglecting the corporate or we are working on corporate, neglecting the brand. It is not like that. It will be the balance of growth that we will be pursuing in this financial year. That is number one.

No, no, sir, possibly my question was not understood well what I said. Sir, what kind of digitization will we pursue to achieve the target as what we are.

Yes. That's what I've been coming to your next -- the second question of the digitization. Now we are with the PSV 59 that is the low value, high-volume MSME segments are being taken care. In the similar lines, now we are going for the API integration for the other loans. So that is another platform, which is available in the market. Already, our technical team has zeroed in and then the API integration negotiations are going on. So that is on the digitization part. Larger picture, what we would like to give on the digitation front is our [ element us ] what we had earlier, now we made it very robust and then a lot of [ push ] and then acquisition through these digital channels now started happening. Besides this, for our bank, we have already shortly said 2 consultants to bring entire transformation on the digital front. That most probably in 10 about 15 days, 1 will be selected on this and then further what we will be doing on this. So there are a lot of what is going on the digitization. Going forward, maybe by October, November, a lot of good business will be acquired through this digital channel only.

Sir, if I ask you in a simple manner, we have 50% CASA, which is 50% of our deposits in CASA. How many customers would be utilizing some facility on a direct manner of Central Bank of India, whether it is other than CASA, how are they connected with bank? Or have you mined any kind of data that they can be a customer of Central Bank, which are not as of today?

Yes, yes. Sir, already, my data analytics and MIS team is working, and we are getting good business outlook through analytics. What we did from our database, we called out those customers, which are availing certain services from the other banks or financial institutions, and we have taken over good accounts also. So that is happening.

Okay. sir, now for subsidiaries, what is our plan? And on the associate banks, what is your thought process?

Subsidiaries is our home finance. Now his headquarter already shifted from Bhopal to Mumbai, and a lot of work is going on. And as NBFC, we are energizing with the new software and also new way of working for the NBFC. And probably, we expect by September that the NBFC will be in the market with full steam.

And sir, on the associate bank, specifically Uttar Bihar and Gramin Banks and Indo-Zambia?

Indo-Zambia is doing well, and on a yearly basis, we are getting the good dividends and whatever our initial investment of around INR 47 crores, almost 75% of that initial investment has come back to us as dividend that is doing well. As far as 2 Gramin Banks are concerned, yes, there were issues regarding their [ term year ] benefits provisions, which are to be made as for the Supreme Court order. Now these 2 banks have already provided, of which 1 bank has already moved into profit by MRG in this March '22. Another we are expecting by September, it will be turned around.

Sir, moving to the bank now, sir, where do you see the benefits accruing on the entire financial year basis? I'm not going quarter-on-quarter, let's say, I'm taking an outlook for 12 to 24 months, where do you see the bank gaining out of all your efforts over the last 12 months, which would fructify into the bottom line of the bank.

There are a lot of things that are happening. If you say that to prioritize those things, I can only tell as far as the priorities, what we have given to my rural branches, that is on the agri, not only on the crop loans, we will be moving on to the investment part in agriculture. As far as the semi urban and urban is concerned, our focus is on the MSME and the cluster base of the financing, where there are niche areas we have worked out an entire those branches, which are in that cluster area will be increasing their businesses. Coming to the metro, we have the segments where these corporates are there and also even in the corporates, now we are going for the end-to-end. That means we are exploring to finance their debtors and creditors so that the entire value chain, we can have that benefit from the good corporates that we are doing. And coming to the individual borrowers as the retail and existing, whatever our brick-and-mortar branches that are working, and now we have panel, the DFS and we have a digital marketing DFS also we have panel. And then a lot of projects clearances we are giving so that housing can be ramped up housing portfolio. And today, we have taken one more decision that our ex-employees. For them also, we have given some type of leeway to contribute for the business growth. That type of things are happening now.

Okay, sir, where do you see your cost deposits in March '23 from current 3.86%?

See, March '23 is too long to predict right at this moment. But definite indication goes up by CASA, what do I from the rural and semi urban, it should be in the range of around 4.20% or 4.25%. It should not move beyond that.

Sir, with NIM stable at 3% a number as what you are saying, field loan advances also, which is at 6.5%, I assume that...

It will also move up automatically...

Yes, to 7%. Sir, on your treasury with CASA at 50, do you see a reasonable profitability because you have managed AFS and held-to-maturity book well?

Sir, in this -- see, we have plotted the entire movement of the economy and treasury performance across the banking industry for the past 18 years, okay? So in that whatever the cycle what we have observed, this is one of the cycles where we are experiencing, where there is a larger gap between the repo and inflation and also growth, the GDP that we are plotting and accordingly, we have decided this year are not much interested in booking large profits in treasury rather than protect the portfolio from the NPL losses.

Second thing is our government holding is at 93%. Do you estimate or do you expect that government holding would fall in the current financial year towards second half?

I don't have a -- no clue on that, sir.

I mean there's no -- what I'm asking is, is there any direct competition that we have to reduce the room holding?

No, no, nothing. Definitely, we have presenting where we want to bring much of the equity for -- in the market so that the trading volumes have to go up. Some solicitors who have driven and it is for the government to fund around that.

Ladies and gentlemen, due to time constraints, we will take that as a last question. I now hand the conference over to Mr. Prabal Gandhi for his closing comments. Mr. Gandhi?

So thank you. On behalf of Antique Stockbroking, I thank you and the entire Central Bank team and all the participants for joining in. Thank you, and have a good day. Bye, everyone.

Okay. Thank you very much. Thank you all the participants.

Thank you. Ladies and gentlemen, on behalf of Antique Stockbroking Ltd., that concludes this conference call. We thank you for joining us, and you may now disconnect your lines. Thank you.