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

Ladies and gentlemen, good day, and welcome to Central Bank of India Q1 FY '25 Earnings Conference Call hosted by Antique Stockbroking. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Raju Barnawal from Antique Stockbroking. Thank you, and over to you, sir.

Thank you, Shubhangi. Good afternoon, everyone, and thank you for joining post-results conference call of Central Bank of India. From the management side today, we have with us Shri. M.V. Rao, MD and CEO; Shri. Vivek Wahi, Executive Director; Shri. M.V. Murali Krishna, Executive Director; Shri. Mahendra Dohare, Executive Director; and Mr. Mukul Dandige, Chief Financial Officer. Now without any further delay, I hand over the call to MD sir, for his opening remarks, post which we will open the floor for the question-and-answer session. Thank you, and over to you, sir.

Yes. Thank you, Raju Ji. And first of all, very good afternoon to all the participants. Just I'm going to give you the performance highlights for this June quarter, and this will be followed by our CFO's presentation on the details of the financials. We are very happy to share that this time, our net profit has gone up to INR 880 crores. That is from Y-to-Y if you see it is 110%. In the earlier June '23, it was INR 418 crores. Coming to the total business, it was grown by 9%. Precisely, it is 8.97%. Now it stands at INR 6.35 lakh crores, and total deposits stands at INR 3.84 lakh crores. And CASA deposits, INR 188,863 crores that is 49.19% of the total deposits. Gross advances increased by 13% -- 13.99%, it stands at INR 250,615 crores, and CD ratio improved to 65.27%. There is an improvement of 452 basis points from the previous June '23 quarter. And gross NPA, it is at 4.54%, which was 4.95% a year back. Net NPA, it is now below 1%, that is 0.73%. There is an improvement of 102 basis points. In the earlier June, it was 1.75%. Provision coverage ratio improved to 96.17%, and net interest income has increased to INR 3,548 crores. That is 11.71% increase from the previous June. And net interest margin, now it is at 3.57%. Earlier, it was 3.43%. And return on assets has improved to 0.82%. If you see in previous June, it was 0.43%. There is an improvement of 39 basis points in return on assets. Return on equity, which has improved to 3.14%. Earlier, it was 1.63%. And CRAR improved to 15.68%, of which Tier 1 is 13.36%, and there is an improvement of 126 basis points. These are all the highlights. Now for the details, I request our CFO, Mr. Mukul Dandige, to give the details of the financials. Thank you.

Thank you, sir. I'll go a little brief. Financials as the performance highlights have already been highlighted by our MD sir, the interest income has gone up by 15.36% on Y-o-Y, and it has reached a level of INR 8,335 crores. The total interest expenses have increased by 18.23% to INR 4,787 crores. The net interest income has grown by 11.71% to INR 3,548 crores. The total income has seen an upside by 16.08% to INR 9,500 crores. The operating profit has seen an uptick by 8.43% to INR 1,993 crores. And the provisions have reached a level of INR 1,113 crores, they are down by 21.62%. And the net profit has touched INR 880 crores, which is an upside of 110.53%. The further breakup of interest income is, interest on advances has gone up by 19.94% to INR 5,402 crores. The interest on investment has gone up by 8.03% to INR 2,463 crores. Thus, the total interest income has gone up by 15.36% to INR 8,335 crores. The noninterest income. The fee-based income has seen an upside of 5.99% to reach the level of INR 425 crores. The service charges, there was an upside of 5.80% to INR 292 crores. Other miscellaneous income has seen an upside of 43.59% to INR 56 crores, and treasury income has gone up by 42.55% to INR 402 crores. Other receipts like recovery and write-offs have gone up by 22.46% to INR 338 crores. As far as the interest expenses is concerned, the interest paid on deposits has seen an uptick by 13.05% to INR 4,443 crores. The other interest has gone up to INR 344 crores. The staff cost has seen an upside of 15.03% to INR 1,714 crores, and other operating expenses have reached a level of INR 1,006 crores and upside of 24.66%. So total expenses have gone up by 18.29% to 75.07% (sic) [ INR 7,507 crores ]. This provision, the NPA provisions, the bank has made INR 1,322 crores of provision, which is including additional provisions made by the bank on prudence basis. It is up from INR 509 crores in March and INR 241 crores in June '23. There has been a write-back in standard asset provision, the depreciation on investments, the income tax and other restructured accounts also. So total provisions stand at INR 1,113 crores. As far as the asset quality goes, the gross NPA has come down to 4.54%, an improvement of 41 bps. The net NPA, as MD sir has said, has reached a level of 0.73% from 1.75%, which is an upside of 102 bps. The sector-wise net NPA, if you see the retail NPA, has reached a level of 0.15%. Agriculture & Allied, it is 1.74%; MSME at 1.53%; and corporate is at 0.17%. The provision coverage ratio is 96.17%. It is a very healthy ratio. The slippage ratio has reached a level of only 0.34% now. The credit cost, if you see, it is appearing as 2.13%. However, if we consider the -- if we remove the prudence basis, additional provision that the bank has done, then the credit cost is only 0.63%. The restructured book is at INR 6,038 crores. In this INR 6,038 crores, accounts were -- INR 1,678 crores are common in restructured also, and they are appearing in the special mention accounts also. If you see the special mention accounts book, it has come down from 7.75% of the total advances in June '23 to now 6.14% and stands at INR 15,402 crores. The capital ratio, the CRAR, has improved to 15.68%, and the leverage has reached a level of 5.48%. The business across the board. Total business has grown by 8.97%, and it has reached a level of INR 635,564 crores. Deposits have shown an improvement by 5.93% and CASA at 4.87%. We are still maintaining 49.19% of CASA, which is one of the premier position in the banking industry. The advances growth was at 13.99%, and the RAM segment has seen a very healthy growth of 18.81%, and it has reached a level of INR 171,660 crores. The CD ratio has improved to 65.27%. The credit, segment-wise growth is retail has grown at 13.87% to reach INR 72,469 crores. Agriculture grew at 15.36% to reach a level of INR 47,080 crores. MSME has reached a level of INR 52,111 clocking a growth of 30.20%. The credit risk-weighted assets, if you see, it still continues to be at 64.82% only. The bank has got a very good diversified loan book and the retail segment, which constitutes 28.92% in that segment, the housing loan has seen a growth of 15.50% to reach a level of INR 45,393 crores. The rated standard advances, we still continue to have very good portfolio as far as the retail standard advances, that is AAA, AA and A-rated advances are concerned. And out of the total INR 74,173 crores close to 75% is out of these AAA, AA, A-rated advances. The co-lending book, where we are the industry leader, we still maintain that #1 position, and the co-lending book has reached a level of INR 12,355.08 crores. The bank has achieved all the mandated targets under the priority sector lending guidelines of the Reserve Bank of India. These were all the highlights as far as the performance of the bank is concerned. Now we shall be taking up any questions that are there. Thank you.

[Operator Instructions] The first question is from the line of Mr. Ashok Ajmera from Ajcon Global.

Yes, a very good set of numbers with regards to the profitability of the bank, especially the operating profit is concerned. It has been maintained almost at the same level at which it got in the last -- previous quarter. And only there are a couple of observations, sir, in some data points. Now in the provisioning, we have gone by a little higher provisioning on the NPA as compared to the January-March quarter, that is INR 1,321 crores. So what is the total composition of this? And how much is the GoAir out of this? And I believe that it was mostly provided in the last quarter itself. So because of that there has been an impact because of the higher provisioning and we got some benefit in the tax, so that we are in a position to maintain the profit. But had the taxation burden would have been higher, I think our profitability would have got impacted negatively. So one is on that. A clarification on the tax credit of INR 78 crores as compared to the tax provision of INR 549 crores and second is on the NPA provisioning.

Okay, right. First of all, as far as the NPA part is concerned -- NPA provisioning part, let me make it very clear. If you see our slippage ratio, it is just 0.34%. Based on that slippage ratio, if I calculate my credit cost, it would be 0.63% only, for which provision required was only INR 523 crores, but we have provided INR 1,321 crores. That is almost INR 710 crores additional provision we made. That is a proactive provision. It has nothing to do with the GoAir account, NPA account provisioning, which we have done in entirety in the previous financial year. So I think that is very clear now. And as far as the tax cost is concerned, this write-back, our CFO will explain.

Sir, what happens because of the one, it has had 2 impacts: One is because of this fair value transfer through P&L. The zero-coupon bonds of INR 4,800 crores that the bank was carrying, we had to take the hit in the results. So the NPV was hit by close to INR 2,000 crores. NPV loss was INR 2,000 crores. There was some upside also from the other equity valuation. So the net impact was roughly around INR 1,200 crores. So out of that, the write-back of tax has come to the level of around INR 350 crores, one. Secondly, the additional provision has also helped us in reducing the tax liability. So that is why you see that INR 78 crores write-back of taxes there. But going forward in the next quarter, this onetime hit that we have taken through the results, that upside will not be available in tax, and normal tax will have to be paid by us.

Okay. So basically, you are referring to note #4, the entire explanation given about the investment and the change of -- as per the changes made by the RBI policy. Sir, on that additional provision of INR 710 crores, which we you are referring, is it because of the ECL you are planning something to create a buffer? And...

See, it is taking care of the ECL requirements also because whatever is coming through ECL, we are trying to be prepared for that well in advance.

Okay. And sir, now coming back to the business growth overall, the credit growth, rather, I would say. And the competition, which is there in the deposit side also, how the bank is prepared and what are our targets this year for FY '25 on the credit growth as well as the deposits? And if the deposit is not matching with the credit, what are the strategy that the bank is going to adopt with regards to maintain the capital adequacy?

See, here, since our CD ratio was less that we were aiming to enhance our advances portfolio. Now the way we have planned earlier and the guidance what we have given in the month of April for '24, '25, we are just sticking to that, and we are following, and we are achieving. In '24, '25 financial year guidance, what we have given is 14% to 15% growth was there in advances. That we are very much there. Now it is at 13.99%. And coming to the CD ratio, that we are aiming to reach around 69% to 70% CD ratio at the end of this financial year. So as far as the deposit growth is concerned, yes, there is a lot of competition in the market. And one more thing I would like to tell you that our bank was never in the CD market, certificate of deposits we are not issuing. And our LCR is almost 190% is there, which one time we have crossed 200% also. Now our LCR is also very comfortable. And our CRAR is also comfortable, and our growth capital is also available for us the way we are growing. And the deposit growth, we have 3 components. One is the current deposits, another is the saving bank deposits and third one is the time deposits. Time deposits, we are not aggressive in that just because I'm having the enough liquidity and also the enough room for further growth. As far as the saving bank is concerned, yes, we are a force to be reckoned with, and we are growing the way our -- to maintain our leadership position in the CASA. That is around 49%. So that growth also, we are in line with our planning. So going forward, what we see is, since we are aiming at 70% CD ratio, this advances growth, what the guidance we have given, 14% to 15%, continues to be there. And the deposit growth, which was just 6% in the first quarter, will accelerate further. The incremental CD ratio that will be maintained in such a way that we continue to have the deposit growth in a minimum 8%, max to max 10% in this financial year. That is the plan.

Okay, sir. My last question in this round sir. Again...

I'm sorry to interrupt Mr. Ashok...

Will you allow me this question, please?

Okay.

Sir, about the selling of the collateral security of GoAir, what is the status, sir? Where do we stand? And when do we expect to get some money out of it, sir, which is a major part of our...

It is a legal process. Already SARFAESI notices are issued, and 13(4) is also issued now. And it is in the process. And if everything goes well, I think, by March, we have to recover a large chunk from the collateral.

The next question is from the line of Mr. Rohan from Equirus Securities.

Sir, just coming back to that investment thing. On Slide 14, we are seeing profit and revaluation of investment of INR 250 crores this quarter. So I just want to understand why this is coming? Because as per my understanding from first of April, whatever MTM happens on the investment book that goes into AFS reserve. So what is this INR 250 crores relating to?

See, the profit or the loss has to be -- has to pass through the P&L account. The initial transition, the impact had to be carried through the reserves. So whatever the portfolio, it was...

The majority of this profit comes from our -- the equity portfolio, which was from 1st April, has to be kept in the HFT one and with the rise in the equity scenario and the way our stock markets are moving, so majority of the profit comes from that part.

Sure. Sir, this is HFT MTM that we are getting here?

Yes, it goes through our P&L.

Okay, okay. So the HTM and AFS is not there, only the HFT MTM is here.

And the excess will go to reserves only [indiscernible] accounted for in the P&L.

Got it, got it. And secondly, just on the comment 4 -- the Note 4 on the exchange filings. Now when we are saying that the income on investment has increased by INR 312 crores. See I don't see a restatement happening for the 1Q of last year. So what exactly are we meaning by this, that it's not comparable because investment income has gone up by INR 312 crores?

No, see, because this was taken for this quarter. Now it is very difficult to reclassify the income and expenditure part of the previous March quarter also and June '23 quarter also. That is what we are seeing.

Okay. So you are saying if this same accounting would have been followed, then this would have an impact?

Yes.

Okay. Sure. And sir, lastly, on the cost of funds, cost of deposits this quarter have gone down by around 7 basis points. So how should one look at cost of deposits incrementally? And what was the component that helped reduction in the cost of deposits this quarter?

No. If you see the cost of deposits on a quarter-on-quarter basis, if we see...

It improved by 7 basis points.

It has gone up from 4.61% from March, it has gone to 4.66% in June. But from year on year...

No. Sir, 4.61% is for full year. 4.61% is for full year. If you look at the quarterly presentation, it was 4.73%.

March '24, it was 4.73%. Now it has become 4.66% for this quarter, right? So -- because in the last March quarter, what had happened is close to INR 4,000 crores, INR 4,500 crores of deposit -- bulk deposits that we are allowed to be prepaid -- not prepaid, paid on maturity. We did not give the rates for its renewal. So that impact has come and that is why the rate has -- I mean, the cost of deposit has come down to 4.66% during this quarter.

And sir, incrementally, how should one look at this number?

I think the cost of deposit has almost plateaued. Now none of the banks are increasing it because we were already higher now comparatively, I mean, other banks have come to the rate that we were already offering.

The next question is from the line of Mr. Omkar from Vasuki India Fund.

Yes. I would like to know your view on the interest rates going and how are you strategizing to take benefit of it in your investment book? So if I could just have your view on that.

See, presently, the yield is hovering around a -- 10-year yield is hovering around 7%. And as early as in September, Fed is also expected to have a rate cut. So in line with the other markets, we are also expecting at least a couple of rate cuts in the current financial year. So with that going, we are seeing the yield maybe at around 6.75 levels. So with this 25 basis point, we have a very decent amount of portfolio with us. And it is in line with other banks also. And we'll be making a good -- adding a good amount to our bottom line. So this is a normal scenario we are expecting as far as rates are concerned.

Okay. And my second question is on your guidance. So you have mentioned the split of RAM corporate book that is like 65:35 against current 68:31. So are you expecting growth picking up and coming from the corporate side during this year? And if so then which sectors or what kind of corporate account targeting in large corporate or mid-corporate, so the strategy around that?

Yes. As far as this corporate retail RAM is concerned, we still hold the 65:35, it's plus or minus 5. So right now, at the end of the June quarter, we are at 68.50% for the RAM and 31.5% for the corporate. Yes, corporate, we are looking at the good assets, trading off with the good-rated accounts because of the pricing power, what we have. Because of the CASA, we will be only aiming at assets which are having a very good rating so that we can convert the capital there. And then some of the things which we have offloaded in this quarter from the corporate book is of the very low-yielding advances. So we are trading off in between. So our guidance still will be same as we have given for this financial year, 65:35 with plus or minus 5% that we used to maintain.

Okay. And sir, is the pricing better now in corporate? Because during the last year, there was a lot of pressure in the corporate side. So is that situation improving now?

See, we are very choosy as far as the corporate assets are concerned. We are going with the pedigree, and we are going with the prospects of the activity, which these corporates are taking up and then how economy is opening. So since we have a very small quantum, which we can allocate to the corporate, that's what I was saying. We are trading off between the quality and pricing. We are not that much accelerating aggressively nor we are not so conservative, in between balancing we are making.

[Operator Instructions] The next question is from the line of Mr. Prashant Galphade from ISJ Securities.

Am I audible sir?

Yes.

I have a few questions on Telangana farm loan waiver. So my first question, when such a policy is announced, do bank first show the loan as NPA before receiving the money? Or do they receive the money first and then they show loan as NPA? And my second question is, in some article, there was mentioned that Telangana Government will transfer the money directly to the farmers' bank account. So my question is, is it right -- if the bank receive the amount directly from farmers' bank account or what?

As far as the Telangana is concerned, that too from the crop loan perspective, we have a very small portfolio of up to [ INR 2 lakhs ] it is there. Then what is the quantum of portfolio? INR 280 crores? We have a very small portfolio that offline, we will be giving you the details. Very small portfolio we have. That is number one. But per se on principal basis, whatever the first question you have asked, we may not be in a position to give the answer, which you want. So that is that. And as far as the direct account, it is going to the farmers, it's okay because, always, all the banks will maintain the right of cut-off procedure, whether it goes to the loan account or to his saving bank account, no matter that will get -- be absorbed in the loan account. If anything specific you have, please ask me, if I am not clarifying you enough.

The next question is from the line of Mr. Ashlesh Sonje from Kotak Securities.

A couple of questions from my side. Firstly, sir, there was some change in accounting which the RBI suggested from April '24 on penal charges. Can you quantify what is the amount of penal charges, which were classified now under noninterest income, but earlier, it would have been classified under interest income.

To give you exact number, it was INR 48 crores roughly, which was part of interest earlier. Now it has come as penal charges.

Understood. Secondly, sir, you gave out a number on recoveries from return of accounts. Just can you please confirm that amount as INR 338 crores?

See, that is inclusive of other things. Recovery from write-off is INR 211 crores.

Okay. And sir, what is the outlook on the recoveries from return of accounts for FY '25?

See, we have got a decent portfolio of close to INR 35,000 crores as far as return of accounts are concerned, maybe technical, may be prudential. And last year, if I want to give an indication to you, we recovered -- we were able to recover INR 1,433 crores. So we estimate that we -- our recoveries during this financial year also should be in line with the last year's figures.

The next question is from the line of Mr. Sushil Choksey from Indus Equity Advisors.

Congratulations to the team and management of Central Bank of India on excellent performance. Sir, my first question is, we have spent, and we have replied in the previous calls, a lot of money on technology. How are we seeing it shaping up in the current year and specifically with balance sheet perspective, where we'll have the benefit of that?

See, yes, we are spending a lot of amount. First visible outcome, what you are seeing is on the slippage ratio. The collection management system, what we have established with a separate call center and feet-on-street people pan-India that has given a good start for us. That's why our slippage ratio is 0.34%. If you see the previous, previous quarters, it was never, never below 0.6% or 0.75% that was most visible result, what we are seeing from the slippage ratio. Since slippage ratio is so low that you can just imagine the cascading effect what the credit cost reduction happening because of the low slippage ratio and how extra provisioning is not required. So all those things concurrent benefits are also being seen now. And coming to the -- on the customer experience part, where already we have started certain digital lending products that is the gold loans and also Shishu Mudra -- and Tarun loans of the Mudra loans and end-to-end for the KCC loans. These type of journeys that already we have gone through live on our NEO platform. That is a new lending platform. And going forward, and now again, we have started onboarding the SBA accounts through the digital means through VKYC that is Video KYC. Almost -- let me share our figures. Almost we have opened 28,000 accounts. And average balance, which is being maintained is almost INR 20,000 is these accounts, which are opened through digital channels and Video KYC. So there is a good traction that we are getting in this digital channel. And coming to the products, which we will be rolling out in coming days is a business loan, housing loan that we'll be rolling out in the next month. So a lot of traction that is coming, and then we will -- we are going to reap the benefits in the near future. In this financial year itself, we will be reaping much of the benefit of this new platform.

Sir, between our digital spend, co-lending, which we have one of the largest banks and the partnership, how is it having an impact on home loans and other products? Second thing is, Mr. Wahi, if you could give outlook on the treasury market.

Regarding home loans, co-lending is also one of our channels to improve the housing loan portfolio. And as far as the co-lending part is concerned, out of INR 12,000 crores, it is a decent book. And as far as the SMA and NPA part, it is almost negligible in that. And housing loans, it is adding to my housing loan portfolio. It is a good number. We will -- a ballpark figure I am saying.

Are we seeing a big traction because we are one of the best and attractive on rates, and we also have scheme for women housing loans?

Yes, yes. See, whatever the targets we have, we are reaching. It's not that we are falling short of our planned targets.

I was made to believe -- rather I understand that our market share will increase. That's the reason I'm asking this question.

Yes, definitely, definitely. The way we have planned our target, our market share is going to improve on that. That is going to happen. And as far as your treasury part is concerned, Wahi sir will give you the brief, what is going to happen, though it is a futuristic, though he is not an astrologer, but he will give some forecast, yes.

See, the outlook remains the same, but with the war continuing and other geoeconomic factors in the bigger continents, election year being in U.S. and also very conflicting data coming there from the U.S. side. But more or less, now it is crystallized that Fed will be going for a rate cut in the month of September. So if this happens, we are also not lagging behind. And our scenario, of course, inflation remains a sticky thing. And it is above our comfort level of 4%. So going forward, we are expecting at least a couple of rate cuts in this financial year. So I would say that the yields -- with these 2 rate cuts, the yield should come back to 6.75. And overall, it will be a good year for the treasury. It is expected that it will be a good year for the treasury. Also, equity continues to rise and give the comforting factor and as already in one of the previous answer, we have said that equity remains now a part of HFT portfolio. So that also gives us some good P&L numbers on a regular basis. This is on -- and as far as FX is concerned, dollar-rupee continues to be around INR 83.50 to INR 83.60 levels. And it showed a little bit of weakness, rupee showed a little weakness when it went from INR 83.30 levels to INR 83.55 levels. But overall, we do not see -- our currency is still one of the best emerging markets performing currencies. So we do not see -- foresee a much weakness further in the level of dollar-rupee. And it is being a stable part, so that is the reason we are expecting good foreign inflows also. That's all on this.

Sir, my next question is I saw the advertisement in the leading newspaper about the airline account recovery by selling the assets. Any update which you can share because that would dramatically impact our balance sheet in the current quarter or the quarter to come by?

See, it's all a legal process. The way we are moving ahead. If everything goes well, that's what I was saying earlier, we may recover major chunk by March.

That's good to know, sir. Second thing, sir, we have -- because of our CASA a potential to be a large consumer bank seems very visible because our CASA comes from areas, which other banks are finding difficult to tap. And on a consistent year, we may be one of the best performing PSU banks in the last 5, 6 years since I've been tracking Central Bank on the CASA side. Our deposits can attract many consumer loans, cross-selling and other things. And you have taken great effort to establish some products. Can I have some kind of a color where we can get the substantial benefit visible? I'm not saying immediate, but over a number of years.

See, it is a continuous process that the innovation and technology and then marketing that goes hand-in-hand. As far as our bank is concerned, rightly, you have pointed out the hinterland, what we have. So there is a lot of scope for the cross-selling and upselling. And because of the new technology, what we are bringing in, whether on the insurance side or wealth management side, on other products of the liabilities, exactly, we are going to reap a good harvest in this. That is going to happen.

[Operator Instructions] The next question is from Mr. Priyesh Jain from HSBC.

Yes. Sir, with respect to the RBI's draft circular on project finance provisions, could you just quantify what is the percentage of your portfolio that is impacted by it?

Sir, it's a very small portion. What we have calculated from the existing portfolio, it will be around INR 247 crores.

Okay. All right. And sir, as per your estimate of what is the quantum of provisions you would be required to make on this portfolio?

INR 247 crores is the provision.

Okay. This is a provision. Right, sir. Sir, then could you also tell me what is the amount of your portfolio that is the loan amount on...

Which may attract this, yes. [Foreign Language] INR 4,800 crores something. Yes.

So the next follow-up question is from Mr. Ashok Ajmera from Ajcon Global. As there is no response from the current questioner, we will move to the next question. The next question is from the line of Mr. [ Manish ] from Moneycontrol.

Am I audible?

Yes, yes.

So I have -- I just want a clarity on the project financing impact you have just recently -- just now answered. So just correct me if I'm wrong, you said INR 4,800-odd crores is your project financing book as of June 30. Correct?

Which attracts the 5% provision.

Which attract the 5% provision. And what was the total size of the book?

Total infrastructure projects or project?

Infrastructure business?

Infrastructure, just a minute. Total portfolio, yes, we will be informing you off-line because right now -- it's not available right now, yes.

Okay, okay, okay. No problem. So out of the total portfolio, INR 4,800-odd crores will be -- get impacted. And of that, INR 247 crores will be the provisioning you are going to -- you have already made it?

We have not made it, but we have enough pockets that we have kept it, not for the provisioning for the infrastructure. Once that guideline comes, we will implement without affecting any of my P&L figures.

[Operator Instructions] And the next question is from Mr. Sushil Choksey from Indus Equity Advisors.

Sir, as you wear a dual hat of Central Bank and IBA, do you estimate this -- like ECL provision, infrastructure provision on loans will come this year?

No, I'm not going to say anything from the IBA's perspective. I can only tell you from bank's perspective. The bank's perspective...

Yes, yes, but whatever you [indiscernible] get diluted. That's what I'm asking.

See, during the -- from the bank's perspective, whatever the measures that is being taken to strengthen the balance sheet in the long run is always welcome.

Yes. And I think the cost can be passed on. It would be 10, 20 bps at max. That -- am I right to assume that?

See, if it is a corollary to that, that is going to happen.

Okay, okay. I appreciate the answer, sir. And second thing, sir, as the bank is progressing well on the retail and cross-selling and co-lending and other things, do we have plans based on the current business outlook? If you are going to add some new products or new initiatives in current year or next year, which the market should like to know about?

Number one is what we are planning right now is we have almost identified 438 PIN codes where our bank branch is not there, but the banking business is growing at a very decent pace. So now without going into the brick-and-mortar branches, now we will be piloting with our BC max branches -- outlets which is a hybrid between the BC Point and the brick-and-mortar branch, that BC max concept we are bringing in. And probably next month, we may roll out some pilot branches. That is for the -- garnering the additional businesses where economy is doing well, and our presence is not there.

Okay. Second thing sir, on the equity front, how are you seeing the picture on the dilution side? Government [indiscernible] likely or will you raise -- because we don't need equity based on the current profitability and our liquidity ratio. So how are we seeing the move from government or government may not dilute because a lot of people are saying government is reluctant to dilute.

Let us wait and see. There is nothing more I can say at this moment.

The next follow-up question is from the line of Mr. Ashok from Ajcon Global.

There was some technical problem. I couldn't take the last time.

No issue, sir. Please.

Sir, Wahi sir has just explained about the treasury side of it, and he has given some emphasis on the equity earnings from even equity -- and equity being HFT portfolio. So can I know exactly -- I mean, what is our, basically, the equity book in the treasury, which has been, I mean, active book on the treasury side and the kind of profitability, which we are having from the IPO pool, the money, which we are putting in the present public issues? So -- and going forward, what will be our stand?

See, as far as our treasury operations and the equity is, we are not the main player, number one. Number two, portfolio, what we are holding is more of the converted from the equity book during the restructuring period. And wherever that upside is coming up in many of the scripts that we are just offloading in the market. . And as a player in the equity, is on the IPO side, where our people take the call on the first day, first minute itself, that's how the things are moving right now. We are not holding any equity from the secondary market that -- with the hope of getting appreciation in the future and then offloading it.

And in addition -- Ajmera, in addition, we have the equity as far as our long restructured accounts. So that equity is slowly -- when the moment those accounts are getting dissolved, that equity is giving us a decent amount of good side -- upside. So that is the reason. And in addition, our IPOs, we exist on the listing gains. That is the major thing. Overall, equity trading per se in our bank is very, very minimal.

Because we are active on the IPO side.

Only IPOs plus equity gains on the restructured accounts.

Okay. At least it is giving you some color of the equity market and the power of compounding in the equity along with your banking business also. And I feel the time is there when now debating the overall growth story of the country, some portion of the investment must be put in, in the equity. Anyway, that's the point we've taken. Sir, a small just point of information. If the RBI has levied a penalty of INR 1.45 crores, is it a normal industry kind default or violation penalty? Or is it specific to our bank or some violation, sir?

No, it is not. Reason is not specific to the bank. It is same reason for which other banks are also penalized.

Okay. It's a one-off kind of a thing, isn't it?

Yes, it is same for all the banks.

I see. And sir, on this ROA target of 1%, we stand on that for FY '25, now '24-'25?

See, guidance, what we have given is 0.75% to 0.85% for the financial year '24, '25. But we are already at point 0.82%. Definitely, our endeavor will -- is to reach 1%.

Okay. So I must be remembering that endeavor may not be the target. Yes sir, because as you see, our bank has great potential still to grow the profitability. And the books have been clean so much so there is not much pressure on the future provision point of view also. So I think overall, we can definitely try and grow ROA to 1%.

Yes, yes, yes. There is opportunity.

And sir, we were talking about this equity dilution and when our government share of equity is so high, 93%, so -- but you must have got at least some feeler that how the government is going to comply with the reduction or as per the guidelines to bring down the equity share of the government in the bank. Some -- any -- though you replied the earlier question.

Yes. That's what I was remembering wait and watch, I told, yes. I have to maintain the same thing now also. I cannot change within 5 to 6 minutes.

And sir, the last question in this, I mean, last round, is that with this change in the RBI policy on the investment book, the treatment of the investment book and AFS, HFT, et cetera, is there any change in our treasury planning or the policy of duration of the holding in various books? Is there any...

No, no. Ajmera Ji, duration as per se -- duration is dependent more on the interest rate scenario rather than the accounting strategies and we do not foresee any change in that policy. However, now we are expecting -- all are expecting that it will be softening of interest rates. So naturally, duration will increase on -- in the -- every bank would like to encash on that scenario. So duration is bound to increase a little bit.

All right. Sir, and whatever the profitability will go back to our capital adequacy straight away rather than in profit.

Right.

The next question is from the line of Mr. Ashlesh from Kotak Securities.

Just a couple of data keeping questions. Can you give a segmental breakup of your slippages of INR 650 crores for the quarter?

One second, I'll give you. [Technical Difficulty].

Ladies and gentlemen, the line from the Chairperson seems to have disconnected. Please hold while we reconnect. Ladies and gentlemen, we have the management team reconnected again on the call. And we also have Mr. Ashlesh Sonje from Kotak Securities.

Yes. So you had asked about sector-wise slippages, Ashlesh.

Yes, sir.

Yes. So slippage of agri was INR 106 crores. Corporate, it was INR 66 crores. MSME, it was INR 297 crores. And retail, it is INR 180 crores. So that is the breakup of the INR 650 crores.

Okay, sir. Secondly, sir, earlier, a few quarters ago, you used to provide a breakup of your NPA provision on the P&L into 3 categories. One was aging provisions. Second was increase in slippages. And third was provision write-back due to recoveries and upgradations. Do you have a similar breakup handy for this quarter?

I will be able to send it to you offline.

As there are no further questions, I would now like to hand the conference over to Mr. Raju Barnawal for closing comments.

Thank you, MD sir, for giving us the opportunity to host the call. And over to you, sir, for your closing remarks. Thank you.

Nothing more, just to thank all the participants for their time. And let me assure you the way we have given the guidance in the initial start of this year, it will continue to be our north star. And we will be making all endeavors to reach that. That is a testimony of the June quarter that we are on the right direction. Thank you.

On behalf of Antique Stockbroking Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.