Punjab & Sind Bank (533295) Earnings Call Transcript & Summary

Hello, everyone. Ladies and gentlemen, good afternoon, and welcome to Punjab & Sind Bank's Quarter 1 Financial Year '23/'24 Analyst Meeting. [Operator Instructions] Please note that this conference is being recorded. On behalf of Punjab & Sind Bank, I once again welcome all the participants to the Virtual Analyst Meeting. On the panel from the bank's management, we have Shri Swarup Kumar Saha, Managing Director, and CEO; Dr. Ramjass Yadav, Executive Director; and Ms. Mahima Agarwal, Chief Financial Officer. Following the management's address, we will conduct a question-and-answer session. We have placed all microphones on mute. At the end, during the Q&A session, we will be coordinating for unmuting the participants for asking questions. I will take you through that process before the Q&A session begins. However, the management will continue to remain unmuted throughout the session. I would now request our Managing Director and CEO, Shri Swarup Kumar Saha to address the gathering. Thank you, and over to you, sir.

Yes. Thank you, Diksha. And good afternoon to all, and welcome you all to this analyst to meet on a virtual mode post the declarations of the Q1 results of the bank. With me is Dr. Ramjass Yadav, Executive Director and the CFO Madam Mahima Agarwal; and some of our key functionaries at head office. You must have all received the presentation already. Just to mention a few of the highlights of the bank's Q1 results for the current year. Total business had increased at 11.6% to INR 1,94,525 crores. The deposits increased by 12.49% and stood at INR 1,14,211 crores. The gross advances of the bank increased by 10.43% with the -- and advances stood at INR 80,314 crores. The RAM percentage -- The RAM advances growth has been 19.64%, -- the RAM percentage to the gross advances has improved from 49.47% to 53.60% on a Y-o-Y basis. The gross NPA of the bank has gone down on a Y-o-basis from 11.34% to 6.80%. Net NPA has moved down from 2.56% to 1.95%. The PCR has improved from 88.10% to 88.58%. The operating profit was at INR 257 crores. The net profit declined to INR 153 crores. The noninterest income of the bank, which was a significant improvement of 54.8% on a Y-o-Y basis. The yield on advances has improved to 8.45%. The net worth of the bank has increased by -- from INR 5,226 crores to INR 7,213 crores. And the capital adequacy ratio overall basis has improved by [indiscernible] 16.79% to 17.19%. And on a sequential basis, our net interest income has improved by 7.9%. The net interest margin has also improved sequentially from 2.53% to 2.63%. As far as the other areas of our performance, we would like to say that the bank has also achieved all inspire sector targets. The future outlook in terms of the bank's strategic outlook would be to continue with our capital-optimized growth. And then, of course, we will be on the technology side, we will be upgrading our version of the current Core Banking platform from the Finacle 7 to Finacle 10 is going to happen very shortly. And we'll continue to focus on our -- on recovery. Our guidance for the year will be above INR 1,500 crores. The bank would be also looking for hiring more in the specialized areas and particularly for the capacity building on the human resources side. We will continue to focus our strategies to increase our noninterest income and fee income. And of course, on the lending side, we will continue to have a focus on core lending. We have already built a portfolio of INR 1,000 crores. We'd like to build it further. We have increased various partners, both on the priority sector side and the nonpriority side. Our digital transformation will continue to get a special focus. A lot of improvements have happened on the digital front. We have brought in new products like DigiLocker, Versa banking. And with the technological upgradation in the core banking solution, we feel that the digital transformation will take a fast-forward mode, and we'll continue to improve on it. And with the digital transformation, we would like to go into the digital innovation, improving the process delivery in our various segmental credit, like retail, agri and MSME. So that process of delivery will also show substantial improvement. And in terms of the increasing the operational efficiency, we'll be focusing on structural changes to improve the operation efficiency like stabilizing and improving our call center setup. And we'll also -- we like to -- we are already in the verge of -- in the process of implementing the Video KYC mode, so that will also improve our operational efficiency in acquisition of our entire accounts. Fintech collaboration would be one of the areas where we'd like to be move ahead very fast in the presentation, we have highlighted some of the key areas where we would like to have fintech collaborations, particularly in terms of underwriting -- improving the underwriting standards, lead management, [indiscernible] sourcing, auto-renewal and bringing in STP journeys, wealth management. And in that, we already announced that we will be engaging a fintech partner to provide a platform for entering into mutual fund business. So that fintech a collaboration – the fintech partner onboarding, we'd like to finish by September and maybe in our customization in Q3 and implementing on the ground by Q4. And as I said that our guidance for the overall year for recovery upgradation will be more than INR 1,500 crores. On the deposit side, we expect to grow between 8% to 10%. Advances, we intend to grow between 13% to 14%. Gross NPA, which is at 6.80% now, we'd like to bring it down to below 6%. Net NPA, which is at 1.95%, we'd like to bring it to below 1.5%. The PCR, which is at 88.58%, we'd like to move it towards 90%. The NIM that we are aware that there is a systemic pressure on the NIM. However, we'd like to improve our efficiency and improve from the current level of 2.63% and bring it to at least level of 2.90%. The credit cost we expect to -- which is at 0.08% now, will be below 1%. And the slippage ratio, which is at 0.60% will be maintained at below 1.25%. So that is the overall scenario of our -- and key highlights of our performance of Q1. Now I am open to the questions around this session. Thank you.

[Operator Instructions]. So I can see a question coming from the line of Amit Mishra.

This is Amit Mishra from Indus Equity Advisors. Sir, my first question is on SMA 2 movement. If I see it has gone up significantly as compared to last quarter, like it was INR 107 crores. And this quarter, it's INR 310 crores. So can you elaborate on this?

Yes. See, what -- overall, if you see our SMA book above INR 5 crores, I think that has come down from INR 446 crores to INR 372 crores. And this SMA 2 of increased sequentially from INR 107 to INR 310 is a one-off situation for the quarter, we'll be able to manage it in the subsequent quarter.

Okay. But I was asking more of that any -- what was this one-off event? Like why this -- any particular account is there.

No, that's a government account actually. It's a still backed by state comment guarantee also. As the fund came in a bit late, so technically, it was SMA 2, it was accounted for within 3, 4 days also after 30th June. So that's how we technically 30 June, that number came. That account is around INR 270 crores.

Okay. Sir, next question is on recoveries. You mentioned target for recoveries is around INR 1,500 crores, correct? But I think in the current quarter, our recoveries are around INR 240 crores, around 30, 40 crores, correct? INR 300 correct?

No, INR 300 plus core, yes.

Okay. So will we be able to reach that target by the end of this year? With this or this was just one-off quarters?

No, INR 345 crores is what we achieved this quarter. I think we have certain accounts lined up under the NCERT/NARCL accounts. We have some accounts lined up for that. We expect that about INR 1,000 crores of resolution will happen through that segment. So we can achieve those. And of course, we have a very strong recovery schemes internally on the other than the corporate ones. I think we can -- we are confident that we can achieve this INR 1,500 crores.

Because in last quarter, INR 1,153 crores for the recovery in March quarter. Because of seeing when I was looking at that number, I think we could have given a much higher target for recoveries.

But again, you see a bank of our size, the inventory of the -- as the gross NPAs come down, the net of the NPA figures also gets drastically reduced. So we had good recoveries last year, including some of that happened in Q4. So that's why we made our overall -- had an overall recovery upgradation of INR 2,100 crores in the last year. So if you compare that with that, so we are giving a guidance that keeping in view that our inventory of the big accounts are getting reduced. So that's given lesser...

So now the focus will be on smaller accounts because that [indiscernible] already recovered.

The mid-corporate ones, those would be the green focus, 8 years.

Okay. Okay. Sir, my next question is on your cost-to-income ratio. So in this quarter, it has gone up to 72%. So any particular reason for that? Because I think usually, it was around 67%.

That is because the major impact of the wage provisions that we have started making, INR 57 crores is what we have provided additionally in Q1 this year. This was not there last year. So if I see from that perspective, the last year Q1 at 69%. If you have observed by Q1 last year, the last year's Q1 was at 69.25% something. And this year, it is at 71% cars. It has increased. It has increased substantially from Q4. So the moot point is it has not increased too much compared to Q1 last year. And the main impact was due to this wage provision that we have rated.

Okay. Got it. Sir, another thing that we mentioned on Slide 30 that the target for FY '24. So we have mentioned this targeted branch for CASA. So can you explain a little more on this, like, in which areas we are going to open these branches?

Talking of Slide number, please. Slide number?

30. So we have given targets for FY '24 in this slide, correct?

30?

Not 30, 38. Slide 38, 39.

39? That's the guidance for the overall deposits and advances... Yes, yes. See, that's...

It is [indiscernible] For FY '20. Initiative plans for FY '20...

Yes...

On that slide have been CASA Bank office particularly.

Absolutely, yes. Now I got your point. Yes. See, this is where we would like to use a digital transformation in the operational aspects also. So today, what we are having is that we are normally branches as the brick-and-mortar branches or normal accounts are opened at the branches. So, therefore, we thought that in 2 ways, we need to strengthen ourselves. One is the regulatory compliances need to be strengthened, and there is one aspect. And the other aspect is that our efficiency on onboarding of customers should also improve. So there will be twofold strategy on this. One is, of course, the creation of CASA our back office structure to improve the regulatory norms and other areas of what we need to keep in view on the KYC compliances. The other aspect is, of course, we'll facilitate this back-office structure through a tap banking acquisition more wherein the branches will be enabled with cabs, we can open the account on an outreach program through our [indiscernible] online verifications can happen. And through a video KYC, the operations will get much more smoother and much more efficient as far as the other banks are concerned -- as compared to other banks are concerned. So that is what we intend to do through this methodology. So we are designing our program in this. And we will be able to complete this process. It's a structural change. So we'll be able to complete this process in some time in Q4 this year. That is what is our estimation. So that is the area. And on the CASA front, I would like to also tell you that, as I said in my submission that my technological upgradation is in the process of near to be completed. So I will be moving into a different version of -- upgraded version of the Finacle and once that happens, the acquisition of my CASA accounts through the digital mode, we'll get a great boost. We are still doing it now, but there are certain operating difficulties in our own version. So once the Core Banking comes in an upgraded version, the acquisition mode will also improve. Acquisition velocity will also improve. So that is what we intend to do in this sector.

So by when we can expect these changes of knuckle, it is changes.

Yes. So we expect that we are going through because there are a lot of technological collaboration that needs to be done in this process. So we expect that by the end of Q -- by early Q4, we should be onboarding the vendors by Q3 and customize them so that we can implement it by Q4. So we have kept an overall target by Q4 in the current year.

So majorly effect of these changes will be reflected in FY '25?

Yes, absolutely.

Okay. Sir, my last question is on your customer satisfaction rating. So I know you are doing a lot of changes in your bank on a digital side also, branches also.

Yes.

So do you have any internal rating to how -- to check whether the customer satisfaction rating is going up or down? Because I believe that [indiscernible] some the key point of banking customers -- so that [indiscernible].

We are losing you out a bit.

I was asking some internal rating. Do you have any internal rating on the customer satisfaction rate because we are doing a lot of changes in our banks -- so are we doing anything on that spend?

See, these are -- yes, it's a very interesting and very important area which we need to enter into. And we are in a process of designing. So this is all -- it all has to be based on technology. So though we are, at this point, after not having a technical collaboration on this customer satisfaction. But we do some service internally. However, once my technology upgradation happens, my digital transformation will happen and through my mobile ads, these such facilities can be given through the mobile app, which we are already in the process. The only thing that we just have to wait for the CBS 10 migration to happen. So that is a very important area. So we have some of the things are put on hold, but it is definitely one of the important areas in which you are looking into. And one of the things where we also monitor is our rating of the UNICAP that is monitored very closely. Our app rating is quite well-placed. So that is one way of the monitoring we do how our apps are working.

Okay. Sir, my one more question to CFO, ma'am. If she can give me any guidance on ECL provision, like how much is bank is going to provide whenever RBI comes with the guideline, any impact on other provisions time?

Sir, we are aware about the ECL. This time also, we are slightly building out the provision. This time also, we have said that we have created some extra provision. So in the future, we will -- we have assessed that and we will definitely make the provisions for ECL also, sir.

As you know that the formal guidance note has not come. However, we are building up the bookings slowly. And depending on our past history, we will be continuing to build this up strongly in the next few quarters. But we are holding substantial provisions on the standard account at this point of time also.

Mr. Ajmera, you may please go ahead and ask your question.

Sir, while we agree that net interest income and net interest margin has gone up in this quarter. But otherwise, all other parameters, we are a little bit disappointed with this first quarterly results. If you look at -- I mean even from the asset quality also, it is probably the only bank among these results which are published where your net NPA in terms of absolute and gross have gone up. In fact -- and even the CASA, which is already very, very low in our bank comparatively as compared to other banks and are further sleeping -- even in this quarter also it is slipped. If you look at the profitability also, the operating profit as compared to the last quarter has gone tremendously down even the net profit also. And sir, if you look at the recoveries, while you are seeing the recovery and upgradation, some respectable figure of INR 345 crores as compared to INR 1,153 crores in the last quarter. But if you look at the recovery from written-off account, in a bank like -- a bank having a business of almost about INR 2 lakh, INR 1,95,000 crore and a credit of INR 80,000 crore, INR 10 crore only from recovery from retail of account is a very, very, I mean, negative thing for the recovery department. I mean, what is INR 10 crore for such a large bank of the recovery as compared to INR 404 crore in the last quarter of the last financial year? And same thing is on the credit front. What we as a bank are doing? I mean if we are not like in the overall year, it is about 10.5%. But if you look at this quarter, it is negative by almost about 0.8% or 1%. So neither we are going for credit to increase our profitability and put our money for a proper use. Our CD ratio is also coming down. It means we are not utilizing our money properly for the banking purposes, for the loan purposes. So sir, overall, even though you have given the guidance of 13%, 14% on the credit and good guidance on the recovery and good guidance on the CASA and deposit, and you are also saying that a lot of developments have taken in digital. But I think it is not reflected -- and this is -- it is one of the worst -- I mean if you look at the quarter, no, I agree that there is some [indiscernible] other things. But I think we have to look very, very seriously on some of these numbers. We are not going in credit at all. I mean this has been my point in the last -- many of the analysts peak. We are a banker. We have to take a call on credit, sir. So really, sir, I would like to hear you on some of these points.

Yes. Thank you, Mr. Ajmera. I appreciate your very, very insightful feedback on my results, on the bank's results, and we acknowledge your concern. But I'd like to highlight a few things which from the bank's perspective. As far as the NPA asset quality is concerned, I'd like to inform you that our gross NPA numbers in absolute has come down along with the percentage, it has gone down from 56.48% to 54.5%, 56.4%. Yes, the net NPA numbers have marginally -- absolute numbers have gone up. And I explained that in my various press briefings also that primarily it was one of mid-corporate account, which slipped into NPA, and we had to book it. It was a restructured account. And that respected account had to be classified as NPA on a backdated manner in which we get the account goes directly to D2. So that was one of the areas where if I look -- if I take that out, my slippages of INR 450 crores is [indiscernible] INR 100 crores. It is -- we're in line with slippage ratio continues to be in line with the industry. But yes, your concern is correct that our slip – our overall performance in terms of the asset quality, it can be match further improved. One thing I would like to inform the house here is that we are -- as both the slippages have been a bit higher than the expectation, we have been able to recover in the July month itself, INR 100 crores of the slippages that have already happened in Q1. So we are really focused on our recovery mechanism, and we expect that we'll be able to contain the slippages overall run rate as we go along. In terms of the performance of the other ratios and the areas of credit growth, you will also appreciate the point that while the performance overall seems to be a bit of a dampener from Europe as far as you are concerned. However, I would like to tell you that if you see my overall asset quality of the bank. And if you see the credit profile of my borrowers, you will find that we are also focusing on that part of the story where we are creating a healthy book as we move along. As for a bank of our size, which we really need to be also functions of how we select our borrowers and due to delays. If you see from March 23 to June 23, my AAA accounts have moved from 58.4% to 66.4%. So overall -- and the total A and above has gone up to 99 -- and this is for the NBFC, sorry, 99.9%. And if I look into the overall rating portfolio of my [indiscernible] crore, which is also mentioned in my presentation, you can see the total of BBB and above has moved sequentially up from 56.7% to 58.88%. And if I add the government-guaranteed accounts in this case, so nearly 86%, 87% of my book is now in a much more healthier position. So these are some of the other areas where we are also focused on. Our CASA has gone down. And CASA, our CASA percentage has been always an issue and it is an outlier in terms of the lower CASA ratio. But you also appreciate the fact that in terms of -- if you see the other movement of the other banks, CASA ratio perspective, we -- the ratios of various -- in fact, all banks have gone down significantly from between 3% to 4% of their earlier figures. But that does not mean that we are not focused on that. Overall, my current account is still growing at 11%. My overall CASA is growing at 4% plus, which is in line with the industry. We need to -- we are focusing on those areas. And that is exactly why we need to -- we are focused because in today's acquisition mode if we are unable to give a proper efficient delivery systems and technology has to be a great, I think, has to be to provide technology for that. So that's why we are moving into the various areas of new methods of customer acquisition and various enablers like video KYC tab opening accounts to tabs would be an area or we would like to enter into. So we like to inform all of you that yes, though Q1, the net profits were down, we're primarily due to additional provision that we have to do for that single mid-corporate account we had to provide for the wage revision of INR 57 crores. So these are 1 or 2 areas where we -- and we also have preloaded some amount of the aging provisions in Q1 itself compared which would have been -- normally would have done in Q2. So we are internally trying to make their balance sheet much more stronger. My capital adequacy has improved from -- sequentially. I think that is also a sense of strength there. In the longer term, we are looking into building a longer-term healthier bank. So while profits is a very important area, which needs to be taken care by us in terms of the stakeholder interest. But we also feel that in the longer term, we need to build up a strong balance sheet. So we are protected in spite of the 10% growth plus in the credit side, our sequential there has been a sequential improvement in our capital adequacy ratio. As far as the recovery in [indiscernible] TW accounts is concerned, yes, we will continue to focus on the first quarter has been not of an encouraging thing, encouraging performance. But normally on these areas, we focus on a Y-o-Y basis. If you talk of Q4, normally, if you see the trend is that the bigger resolutions or the big corporate happens at the end of the year. So I don't think it would be fair if we compare our recovery in any recovery on a sequential basis. the more appropriate would be to compare ourselves on a Y-o-Y basis. Where in yes, we were INR 50/50 odd crores down in the Y-o-Y recovering TW in Y-o-Y basis. So all in all, we are focused in our approach. We have spot of sanctions in hand. We have over INR 10,000 crores of in-principle approvals in hand for which will take care of our future credit growth, and we are expediting out that process. So I hope that we'll be -- we are very positive and a bit that we can not only achieve the 13%, 14% credit growth, we can also surpass it. Thank you.

I'm just drilling up on little more on this [indiscernible]

Yes, Mr. Ajmera, we lost you.

[Operator Instructions] Mr. Ajmera. Can you please accept my request to unmute?

I have unmute.

Yes, please ask your questions.

[indiscernible] In spite of that, also their gross is less than 1.1% net NPAs [indiscernible]. So what I want to say to [indiscernible] grow our handling the book, but we taking business. We should look at our credit growth...

Yes, Mr. Ajmera, we have not had your concern. We will...

Thank you, sir.

Sure.

[Operator Instructions] We have a question from Divesh from IIFL. And his question to you is: That 10.43% growth in gross advances is noteworthy. Can you elaborate on these sectors that contributed the most to this increase in lending?

Yes, Kollegal will answer.

Yes, I think Divesh your concern is well taken. But as far as the overall growth, if you see in advances, normally, it has 2 constitutes and 2 pager parts, one is RAM and agri corporate. And our bank is really having the policy focus to expand in the RAM segment. And if I can the RAM segment, it is 19.64% percentage, which it falls within industry growth. And since we are strategically having the lesser growth in the corporate site happens so. But as far as its 10.30% of MSME is concerned, in the first quarter, it always remains the slow growth because of so many regions like the final things and other things. But in the coming quarters, definitely the growth in agriculture and SME, both segments, we are having a very robust plan and having also digital delivery and writing system. Some things have already happened and colony portion in part. Colony piece, we are the one we are moving very fast, and we already tie was B6 or 7 NBFC partners. So these both agriculture and MSME is going to be expanded through the Colony Partners too. Yes, Divesh, anymore?

Mr. Saha, we have our next question from B&K Securities. The question is that considering the overall economic recovery, how does the bank anticipate the growth trajectory and potential changes in the coming quarters?

Yes. That have already spread it out in terms of the various initiatives by the government of India and its overall focus on CapEx development in the country. We are also aligned ourselves along with the growth story of the country. And we have given a guidance of 13% to 14% to grow on the advances side. And we expect that this is achievable, and we are very -- as I said earlier, we have around INR 10,000 crores of leads that we are holding with us so that we can deploy. And I'm very sure in the coming quarters, we'll be aligned with that attend our overall guidance on the credit side.

Thank you, Mr. Saha. I can see there's another question from the representative of DAM Capital. He goes by the name of Pritesh Bumb, and he has asked that considering the overall economic recovery -- sorry, that was a previous question. His question is -- Yes. This question is that the company's net worth saw a significant increase of 38.02%. What were the key drivers behind this growth? And how does it strengthen the bank's financial position?

Yes, my CFO will answer this.

Yes. Our net worth has increased due to 2 main factors. One is the retain earnings. The second is the intangible -- reduction in tangible loss in the recapitalization bonds, both are the main reasons for increase our net worth.

I can see Mr. Ajmera has a follow-up question. Mr. Ajmera, you're on unmute. Can you please go ahead and ask your question?

Yes, sir. I'll come on to the specific questions, sir, in our note #8, #9, #10, #11, if you see, there is a restructuring January, February circular 20, up INR 321 crore, provision is INR 50 crores. Then again, Resolution COVID outstanding INR 964 crores, provision is INR 125 crores. And then Note #11, the outstanding is INR 123 crores provision is INR 43 crores. So it is approximately 15% to 20% provision of all this outstanding of around INR 1,400 crores, INR 1,500 crores. So where do you actually see this is as per [indiscernible], it is okay. But if you look at the quality of these accounts, have you made any assessment that how much more loss can be there or the amount can sleep into NPA to what extent in these 3, 4 notes to the account, if you look at these accounts.

Yes. We analyze this on a very -- on a very granular basis. And we find that during the quarter, there was a slippage of 8.25% on the restructured book. And from the GECL segment, it was 2.31%. So it is not that we are not looking into this, but these are, yes, restructured book, and we need to really -- overall, we need to be very careful. But the book size as such as is going down in terms of the overall restructured book. And as of June 23, my restructured book is now at INR 2,676 crores compared to INR 3,000 in FY '22 -- March 22, it was INR 3,322 crores. So the book size is coming down. And out of that INR 2,676 crores that we have on the restructured book, INR 928 crores is under the GECL.

So to still -- I mean, the -- if you look at it improvement [indiscernible] side, the IREC required including standard asset. How much do we have at a buffer as CFO, and I was also saying that we have got some buffer already built up for the credit loss.

INR 150 crores of a buffer in terms of the -- beyond the standard advances, they normally do as per the IREC [indiscernible].

Sir, on this credit side, this NBFC credit in this quarter on the private NBFCs at INR 3,404 crores against INR 2,968 crores last quarter to about INR 430 crores, something has gone up. So this NBFC and basically the credit -- I mean, the overall gross advances have gone down to INR 80,000 had this INR 400 would have been not there then it would have been another slip. So this INR 400 crore to which kind of NBFC, it is the private NBFC rated AA or...

No, in the as these are the good AA NBFCs which has been reflecting here.

But it has come down.

And it is really -- it is -- it has been come down. It has not been going up. And in the recovery cycle, they are also having their own recovery cycle. And in the Q2, more over Q2, Q3, they are also coming out this strategy and then extension plan. And accordingly, it will be happening in Q2 and Q3.

The overall NBFC book has gone down -- gone up in terms of -- above to 99.9%. And as far as the question on private NBFC is concerned, the overall outstanding has gone down from INR 3,404 crores to INR 2,968 crores.

[Operator Instructions] So Mr. Saha, our next question is from Pallavi Deshpande from Sameeksha Capital. She has joined us through audio call and has texted ask her question. We wanted to inquire about our 1.98% increase in operating profit. The shares are that despite 1.98% increase in operating profit, the net profit experienced a decline of 25.37%. What were the primary factors contributing to this decrease and what corrective measures are being considered?

Yes, you're absolutely right. The operating profit sequentially as -- sorry, Y-o-Y has gone up by 1.98%. However, the total provisions have gone up significantly due to, as I said, due to one of the mid-corporate accounts become [indiscernible] restructured and going -- has gone -- become NPA during the quarter as for the classification of some of the banks. So we have ourselves made that NPA. And that increased the NPA -- sorry, provisions under the NPA category. And more than that, also, we had the wage revision of INR 57 crores, which has been provided for around the INR 57 crores. So that was -- which was not provided in the Q1 of last year. So both these INR 57 and the provision on that the strip account accounted for around INR 42 crores. So INR 57 crores and INR 42 crores. So that was the number, nearly INR 100 crores of impact that was happening happened in the net profit. So that was the basic reason.

[Operator Instructions]. Mr. Ajmera, I'll get right back to you. Before that, please allow me to ask a question from another participant. All right, Mr. Saha, we have another question from -- just one second. We are receiving a question. There has been some problem with the chat, I have asked to and maybe question separately on WhatsApp. All right. So [indiscernible] and has asked that the 4.3% growth in gross advances as noteworthy. And can you elaborate on these sectors that contributed the most of this increase in lending? So this question was already answered by one of our panelists, Smiti.

Yes, this has been answered also.

Yes. Mr. Ajmera, I have unmuted you. You may please go ahead and ask your last question.

Thank you. I'm here again, but please don't mute me when I'm discussing the point. Sir, now coming to the treasury, our treasury income in this quarter was good at INR 52 crores as compared to INR 7 crores of last quarter. So can we get a color on our overall treasury book, AFS book and our modified duration? And where do you see, like we expect the RBI to take a pause even this time also in the interest rate? So if it is so, can we have some color on your treasury operation going forward, sir, in the coming quarters?

Yes. This quarter, we have been aided by some good things in the treasury department. Overall, our portfolio is mentioned in Slide #28. We have increased the portfolio of domestic investments from INR 45,464 crore to INR 49,000 crores. And the HTM book is around 35,000 and AFS book is 13,000 -- around 14,000. So we are now -- of course, the global uncertainties will always have an impact on the treasury book of all banks. But as of now, we are well pushed. But yes, the OEs have moved subsequently from 30th June due to certain international developments. But we expect that if the things stabilize, we are able to manage the fluctuations of the global yields. As far as your question on the RBI stance, I think yesterday also have explained that it will be data-driven. And overall, there are certain imports coming in terms of food inflation in some vegetable areas. So internationally, the global scenario is also a bit of a hawkish mode. We will be, of course, closely watching those developments. But we feel that, as I personally retail that we are in a situation where RBI will hold on to its rates for 1 or 2 more MPCs. And then maybe depending on the data that comes in both from the domestic and from the international scenario, maybe in Q post, Q4 or the end of Q4 or post Q4, we might some change -- we might see some changes in the overall RBI stance at the presently is going on. So we are -- I personally expect that the rate should hold on for 1 or 2 more unless or until RBI is actually having much more aggravated data on the inflation side.

Thanks for that, sir. Sir, as per the note #17, we have one old account of -- as for the daily high-court order of INR 91.33 crores where our exposure is. And the provision is around 40%, and we have still kept standard as per the court order. So on that account [indiscernible]...

Mr. Ajmera, we lost you again. Can I answer or we'd like to continue with your question?

Mr. Ajmera, we have lost you. We cannot hear you clearly. Would you prefer to drive down your question in the chat box? There is some disturbance in the line, please allow me to…

Shall I answer now, Deeksha?

Yes, please, Mr. Saha, go ahead.

Okay. So I think the question is quite understandable because it is in the notes to accounts. Yes, we have one account, which is under the -- which is sub-duties in the High Court of Delhi. And as of now, we are holding sufficient provisions in that 40% we are holding. And we are monitoring the account. It is ultimately because the sub-duties matter. We're really not in a position to comment on it at this point of time. And we'll take a call because -- but this is a potential account which can, in case of a high court or the state because we have declared this account NPA as far it is. We call was decreed NPA, but the stay order was invoked by the high court. So that's why we are building -- that's why we are building up this provision in case we have to declare NPA, then we are adequately pushed on that respect.

Thank you so much, Mr. Saha. There is one last question from Karthik from Investec. And he has asked that the RAM advances category saw a substantial growth of 19.64%, could you shed light on the specific retail agriculture and MSME segments that drove this expansion?

Yes, Ramjass Yadav will answer.

Yes, under this RAM, we have the agriculture growth with very, very marginally 2.72%, but this MSME and core retail -- these are the key drivers of this RAM growth. And in the retail, we have another home loan, vehicle, gold loan. Home loan, we grew by 14.8%, while vehicle loan it was 17.76%. And on the gold loan, though our base is slow, but it was 43% plus growth. So these are under the retail. And as far as MSME concerns, we've already built up our co-lending book of over INR 1,000 crores, and it is going to further expand and this will include both MSME as well as retail. So these are the drivers.

Thank you, Mr. Yadav. Before we close, we have one last question from Ritika from Ocean Dial. And she has inquired if there is any specific investment or expansion plans in the pipeline that the bank would like to share with the financial analysts and stakeholders.

Yes. As far as the expansion part is concerned, we are -- we will be opening branches and trying to reach out to as many districts as possible. Last year, we opened up 28 branches. This year, we plan to open 50 branches. And we'd like to reach to those districts where we are not present at this point of time. We're also trying to reach out to the -- increase our ATM network to increase our brand and our visibility. So yes, on the expansion side, this will be one of the areas where we'd like to focus on in the current year.

Sure, Mr. Saha. She has another follow-up question on these strategies and initiatives that the bank has implemented to achieve a significant 12.49% increase in total customer deposits compared to the previous year's first quarter.

Yes. See, that's all we are planning ourselves. We are increasing our retail base of customers. And what happens is the -- in 2023 and previous year '21, '22, we were unable to garner retail term deposits significantly. So that traction has now started. Though we are still dependent but on the bulk side. But what the good point is that the retail term deposits have now started coming back into the bank. And we have now various new products on the current and the savings side and salary accounts and various other enablers that we are bringing into the bank in terms of partnerships. So as the partnerships will happen, the entire bouquet of the products will be offered to the customers. As I said, that the mutual fintech platform will be another enabler for us. We have increased our -- we have now introduced the co-branding credit card, which is already now implemented, and we are getting very good response in that. We are now focusing on a lot of bank assurance business. We didn't have a health insurance partner stand-alone. So that has also been brought in on the nonlife also, we have good partners with us live partners, we have increased one. So on the fee income side, the bank is giving a lot of focus. And that's why the overall acquisition of our customers also gets benefited if we have more and more products in the bank. So that is where -- how we are planning ourselves.

Thank you, Ms. Saha. So I see that all the questions have been answered. So thank you so much, Mr. Saha, for taking up the questions. On behalf of Punjab and Sind Bank, that concludes this conference.

Thank you. Thank you very much.

And to all the participants, in case if they have any queries, they can reach out to me or my team. Our phone numbers are mentioned on the Webex chart or the invite that was sent out to you earlier. And we'll make sure to address your queries as best as we possibly can. Thank you so much for joining, and have a good evening. You may please disconnect now.