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

Good afternoon, ladies and gentlemen. I'm Shilpa Abraham, the moderator for today's earnings call. I welcome and thank each one of you for joining us today for the Q3 Fiscal Year '25 Earnings Conference Call of Punjab & Sind Bank. Please note that this conference is being recorded. [Operator Instructions] I would now like to introduce the management of Punjab & Sind Bank. We have with us today, Shri Swarup Kumar Saha, Managing Director and Chief Executive Officer; Shri Ravi Mehra, Executive Director; Shri Rajeeva, Executive Director; and Shri Arnab Goswamy, Chief Financial Officer. I would now like to hand over the conference call to Shri Swarup Kumar Saha, MD and CEO of Punjab & Sind Bank, for the opening remarks, after which, we will have the forum open for the interactive Q&A session. Thank you, and over to you, sir.

Thank you, Shilpa. And good evening, everybody, and I welcome all the participants in this Q3 Financial Results Con Call of Punjab & Sind Bank. The results were adopted last -- yesterday by the Board of the bank, and it was uploaded in the stock exchange website along with the presentation and the press release. Many of you may have already gone through the results in detail. But however, to kick off this interaction in this analyst con call, I'd just like to present some of the few highlights of the bank's performance of Q3. The overall business growth grew at 10.58%. Deposits grew at 7.64% and advances at 4.73% (sic) [ 14.73% ]. The business -- total business as on 31st December stood at INR 2,23,267 crores. The retail term deposit grew at 10.66%. CASA grew at a muted level of 2.36%. The net interest income has grown by 27.06% in the quarter and 23.70% in the 9 months period. Operating profits grew by 74.73% during the quarter and 58.36% during the 9 months. Net profits grew by 147.37% in the quarter and 54.17% during the 9 months. The net interest margin stood at 2.78% during the quarter, a rise of 24 bps Y-o-Y on the quarter and 9-month figure of 2.73 bps -- 2.73%, a rise of 23 bps. The return on assets of the quarter was at 0.73%, a rise of 42 bps, and at 9-month 0.60% at a rise of 21 bps. The cost-to-income ratio, we have been monitoring this cost-to-income ratio very closely, has gone down to 62.10% during the quarter, a decrease by 1,274 bps Y-o-Y; and the 9 months cost-to-income ratio has gone down by 859 bps to 64.57%. We have been continuously doing good in asset quality area with the reduction of gross NPA percent is now at below 3% at 3.83%, and also the net NPA, which has gone down to 1.25% during the quarter. The provision coverage ratio has also improved to 89.53%, a rise of 137 bps Y-o-Y. The recovery and upgradation has been very robust for the bank, which also aided the bottom line during Q3. The total recovery and upgradation during Q3 was INR 565 crores, which makes it INR 944 crores for the 9-month period. The slippages was again another area where we have been able to succeed in our efforts. And the slippage issue was restricted to 0.34%. I remind you, this was -- this includes one chunky telecom company, which got downgraded during the quarter. And in spite of that, which was INR 167 crores -- and in spite of that, the overall fresh slippages during the quarter was INR 299 crores, which shows that the robustness of our credit -- collection efficiency and the credit monitoring mechanism that we have developed. On the -- as we continue to derisk our balance sheet from the corporate to the RAM segment, the RAM percentage has improved further to 54.20%, the RAM grew at 20% and -- grew at 20%. Core fee income increased by 26.09%. Capital adequacy without the -- considering the profits of 9 months stood at 15.95%. We are adequately capitalized. And during the quarter, as you all know, that we have been able to successfully raise infra bonds of INR 3,000 crores at a very competitive price. On the digital front, the total transactions that happened in the bank on the digital front is now 92%. We have carried out many innovations in digital products. And the latest one, of course, was the digital lending in vehicle loan and in the housing loan, wherein we have created STP journeys and straight-through processing and digitally assisted journeys. And we find that in the November, December period, we find that 60% of our vehicle loan gets sanctioned with this assisted journey and 48% in housing loan has gone through this digitally assisted journeys, which shows a landmark development in terms of the innovation that the bank has been talking about over the last few quarters. Various transformation projects have been also taken into consideration, which is going on. We are going to implement the CASA back office during the quarter, which will also have the tap banking customer acquisition mechanism. The revamped call center, which will improve the overall customer grievance redressal mechanism, collection efficiency, lead management and a very ultra-modern customer relationship management. We are also going to invest in the centralized trade finance, which we have been also talking about. The RFP process is about to end, and maybe in 3 to 4 months, we'll have the trade finance model also with us. Apart from that, we also have the data warehouse project that we are going to -- we have taken up, fraud monitoring, cyber resolution center, et cetera. We have been collaborating with various agencies and various organizations for our business, and the latest success that we are getting is on the defense establishments. We continue to do the MOUs with various defense establishments. And during the quarter, we did with The Assam Rifles and the other defense establishments. We will continue to expand our delivery channels. We are now present in 351 districts compared to 316 districts, which we were earlier 2 years ago. And we are opening new branches where we are not present. So we will be adding 12 more districts during the quarter where we are not present at this point of time. As far as the -- so as far as the delivery channels are concerned, we are going to have further 2,500 DCs, another 50 branches/ATMs. So our -- we'll be having additional touch points of 2,550 during the quarter, which will make the overall touch points as of 31st March to over 7,000. And we will continue to increase these touch points and maybe around another -- add around 2,000 to 2,500 touch points during the next financial year. So this was, in a snapshot, what our Q3 results were. And thank you for giving me this opportunity. And I am -- we are all willing to -- we are ready for taking the question-and-answers. Over to you, Shilpa.

[Operator Instructions] Our first question is from Mr. Ashok Ajmera.

Yes. Congratulations, Saha-saab.

Thank you.

Finally, many of those things which we used to always expect the bank to do, have been implemented by you. And the bank has made very good profit during this quarter. In fact, quarter-on-quarter, the bank has maintained good profit, whether you talk about operating profit or net profit. And at the same time, taking care of the asset quality also, which you are improving quarter after quarter. Your gross NPAs are also coming down. Net NPAs are also -- considerably has come down. ROA has increased, very good recovery, cash recovery also. So my compliments to you and the entire team, sir.

Thank you.

Having said this, sir, you have achieved something like on the credit front, which is generally my concern, a very good progress during this quarter. And overall, during the 9 months also, I mean, of almost about 11.52% during 9 months ended December and 5.31% in this quarter. So going forward, do we expect the same rate because you have increased -- you have started increasing now your corporate book also? So your corporate book has also gone up by almost about, I think, INR 2,000 crores during this quarter. And even the MSME book also has gone up substantially, that is also around INR 1,800 crores, INR 1,900 crores, while the agri book has slightly been -- has gone down, which is the right, this thing. So having said that, sir, can you please elaborate a little more on the composition of the credit and going forward in this coming quarter of January-March, so at the end of the year, how do -- how are we placed? And how do we take care of the -- because the deposits are going down and your CD ratio is now going up to 75.25%. So how the overall mix looks to you, sir?

Yes. Thank you, Ajmera-ji, for your kind words. And we have been trying to perform to the best of our abilities, and we'll continue to do so. And whatever feedback we get through these calls, interactions, we take them seriously, and we do our strategies accordingly. So we thank you once again on behalf of the bank for your assessment of the results this quarter. And now coming to the question that you have asked is on the guidance on the credit growth. Yes, we have been -- we have increased the pace of credit growth in this quarter, and we have been increasing over the last 2, 3 quarters. So this quarter, we have ended at 14.73% Y-o-Y with a sequential growth of 5.31%. We expect that this will continue to grow, and we expect that we will be within the range of 14% to 15% by the end of the current quarter. And as far as the composition is concerned, yes, you are right, we have observed that the corporate credit has also taken a growth of 4.54% during the quarter, yes, which we have been now repricing our assets in a better way. We are now much more confident that the corporates, which were, of course, very competitive, which will always remain competitive, but we are very selective in our decisions. So we continue to -- we'll hold that. So in terms of the RAM percentage, I agree, you rightly said, that we have gone slow, I agree. And that is we will observe how the movement happens. While retail and MSME we'll continue to focus on and this momentum shall be maintained. As I said, the RAM growth have been 20.85% during the quarter. And I think we are very hopeful that the pace will continue to happen in this segment as well. And of course, your second point was, of course, on the deposit side. Deposit, we were not negative as such. We were -- of course, the pace of the deposit growth was not as in line with the advance growth. But our total deposits still grew at 7.64%. I agree with you that there is a lag between the deposit and the credit growth. But we all understand that in the current context, the challenges of deposit mobilization, we are focusing with a lot of -- on this segment, a lot of innovations, both on the CASA front and on the retail term deposit front. And we will continue to focus on garnering more and more deposits so that we can have a comfortable CD ratio. But at this point of time, we don't find -- while this will continue to happen. So we are estimating that in the deposit side, we'll be around 8% to 9% in the deposit growth and between 14% to 15% on the credit side.

Very good, encouraging target, sir. Sir, my second question is on the total restructured book. Now today, we are very comfortable that way. But what is the total restructured, including that I think, COVID book of around INR 662 crores? And other -- and do we have any buffer other than the IRAC norms in the provisioning? So this is -- if you can elaborate a little more on that and that aviation, the telecom account also, something therein.

Yes, yes. I'm sure Rajeeva will answer this on the restructured front.

Yes, please.

Ajmera-saab, the total restructuring book as on date, we have INR 1,974 crores, out of which the standard restructure is INR 1,512 crores. And of course, INR 462 crores continue to be NPA. Now if we look at the stressed asset ratio, which is basically a combination of NPA and standard restructured assets, there also the bank has done significantly good. Now in December '23, the ratio was 8.02%. Now in March, it was 7.56%. As of December, it is 5%. So the combination of both restructured as well as the NPA, that is coming down year-on-year as well as sequentially.

Okay. Sir, a small question on this debit in existing NPA account, which has shot up to INR 36 crores from generally INR 8 crores, INR 10 crores. So is there any specific account on that? I mean this debit of INR 36 crores, is there any major account involved in this?

No, I think INR 36 crores happened last quarter -- is it September?

September.

Okay, okay, okay.

Sir, this is in this quarter, sir.

Yes, yes, this quarter. In December -- it was in September. Yes, debit in the existing NPA accounts was in September. You're referring to the slide on movement of NPA, I understand? Yes, so in this quarter, it has been only INR 1 crore. And last quarter, it was INR 36 crores.

And it was because of...

Accounting change, yes, yes. That's because of some -- you know that we have implemented a change in the accounting policy on the appropriation of the recovery in September. So that was the -- it was only an accounting change. But it's not just something which is to be very...

Okay, okay. So this is only because of the accounting change, it has...

Yes, yes.

Not this thing.

Not actual, not actual. This INR 1 crore is actual. For the current quarter, that is actual, yes.

And on the cash recovery front, you recovered INR 275 crores and income booked is INR 134 crores which has come to bottom line out of INR 275 crores. Isn't it?

That is because we were able to crack two big corporate segments accounts on the -- one was upgraded. It was a road project, which got upgraded. The amount was INR 58 crores. So we recognize the interest now. It is now on standard. And we had a good recovery through a settlement mechanism of another big corporate account on the hospitality sector. So there also, we earned a lot of -- substantial amount of the -- this is through the recovery mechanism.

And sir, while I'm here, one more small thing. There is old account of -- that insolvency account as per RBI, that INR 400-odd crores, on which we are 100% provided for. So any chance of any recovery from that account, INR 435 crores?

Which one? Sorry?

Insolvency account.

The one which is now under process, you're asking of that?

Yes, yes, on that...

Yes, yes. We expect substantial recovery in that segment. Yes, we expect in Q4.

That's very good.

Yes.

Our next question is from Mr. [ Saket ]. Sir, I request you to please introduce yourself.

Firstly, sir, if you could give us some more further understanding on the state of the economy as per the understanding of the current advances. If you could give us some color. What we are seeing in terms of what the export/import data, the fiscal deficit numbers, the government CapEx, all are pointing towards some somberness in the economy. So firstly, if you could just highlight to us, although we are a midsized bank, but we have a good book. So give us some understanding. And when you mentioned about our corporate loan book growing, if you could give us some more color how the bid pipeline currently is with respect to corporates. And also, which are the major industries which we are already -- we are catering to and we are looking to cater going ahead?

Yes. See, as far as the economy is concerned, I think lots of -- are being written in the various media, and of course, the stakeholders are all talking on it. But at the end of it, what we still find is that we are still a growing economy and the opportunities to grow are considerable in an emerging economy like India. So I will restrict my answer to how it impacts our bank's overall growth strategy. See, the bank's market share in the entire system of the scheduled commercial banks is not very significant. So the pie of the growth, the pie that is available for growth, I think that's a huge pie that is still available for us. And we are -- as we expand our business, as we expand our geographies, as we expand our technological upgradations, as we expand our sectoral growth stories in the corporate segment, I think we are still -- we don't feel that there is a major impact on a bank of our size of INR 2,23,000 crores. So we'll keep that topic of discussion maybe for some later stage. We will continue to grow in spite of whatever the things that are building around us. But of course, we will grow very qualitatively. That's the trajectory we will maintain that we will, of course, maintain our due diligence as we are making a lot of efforts to improve our asset quality, our collection efficiency. We will continue to be vigilant in these good times also in the overall -- we still feel it's a good time of the country and we'll continue to remain vigilant. As far as the corporate loan book in pipeline, we are -- we still -- we have around INR 6,000 crores in the pipeline in the corporate loan book segment, which will continue to help us to reach our goal post for the March and then subsequently, again. The major industries which will come is, of course, the infrastructure, hospitality sector, renewable energies. So some of the things -- these are some of the -- real estate, some, of course, real estate also would be some of the areas which we are looking into.

Our next question is from the line of Mr. Sushil Choksey.

[Audio Gap] for your excellent performance after...

Choksey-ji, we cannot hear you. Sorry.

Can you hear me now?

Yes, please. Yes. Now it's better. Yes.

Congratulations to the team and management of Punjab & Sind Bank for your excellent result.

Thank you.

Looking at your current performance and specifically going to current quarter, along with your infrastructure bond raise, could you elaborate how Q4 is going to shape up, provision coverage ratio, credit costs, SMA-1, 2, any slippage guidelines, how is loan book looking, where is the CD ratio headed, how is CASA going to look, ROA and ROE? So at least a picture is emerging that there is elaborate and a positive change towards betterment. So I'm sure from the guidance which you have given so far, seems to be under transformation for betterment. So if you could elaborate something on that?

Yes, yes. Thank you, Mr. Choksey, for those -- for that assessment. Yes, we are -- we have embarked into a transformation journey of the bank on various fronts. Last year, we did -- we started with a lot of measures. We consolidated ourselves in terms of structural changes, technology upgradation, innovations, digital processes and improving our underwriting standards. So that was the consolidation we did last year. Having done that, now we are now well trenched and well placed to grow qualitatively. We expect that the -- as I said earlier, that the growth story will continue to happen on multiple fronts. On the credit side, as I said, we have 14% to 15% growth, is a very strong reality. And on the CD ratio front, we have still room though the CD ratio is increasing quarter-on-quarter. But at 75% plus, we still have sufficient room to increase the CD ratio. So we are conscious of the fact that the deposits are important. We'll continue to do a lot of door-to-door campaigns, innovate our products, and on the digital front, on the brick-and-mortar front, all sorts of innovations will continue to happen. And I think the overall growth story continues to be robust for the bank. The asset quality, as I said, we are already -- the guidance that we had given and the performance that we have achieved so far, the guidance that we had given at the beginning of the year, we have mapped our performance of December, and you will observe in most of the parameters, we are in line with the guidance. In fact, we have overachieved in terms of some of the parameters. And going ahead, in some of the areas like on asset quality, the gross NPA should be below 3.5%, net NPA should be below 1%, the PCR should be above 90% to -- above 90%. It should range between 90% to 91%. Our NIM should be between 2.75% to 2.80%, the ROA should be between 0.65% to 0.70%. I think that is the overall things that we are heading towards. And I think we will continue to show our results in a very positive manner.

[Technical Difficulty] loan book which is [Technical Difficulty]. And how do you see this volatility supporting us from a perspective of how you raise money, there's ability to let go of longer term loans and even our retail traction seems better. So if you could throw some light on which area of business are you emphasizing?

Yes. See, as you have rightly observed that we now have the stronghold of having some additional liquidity in terms of the bonds that we have raised. So now what we intend to do is select our borrowers, select our customers in an appropriate way. Our asset liability -- taking into consideration of the asset liability mismatches that happened in terms of big gestation lending. So we will be -- we are more flexible now and we are looking for opportunities to lend in various infrastructure projects, in various -- we are also looking into some of the strong real estate groups that are in the country and we'll open there. Colending is another area where we'll continue to -- which is giving us a good traction in our bank. So the colending partnership model is working very well. We are now around INR 3,700 crores -- INR 3,100 crores in colending at this point of time, we have sufficient room to increase it further. So overall, the sectoral part, of course -- in the overall scheme of things, the sectoral part would be -- the RAM would play a predominant role. But we will continue to fund our corporate segment. Of course, we'll -- we are obviously -- we will be very conscious of the pricing that the competition that -- pricing competition that we are in, in the market while taking corporate -- increasing the corporate loan book. So because we have to protect our NIMs, we have to protect our ROAs, so the corporate lending will be vis-a-vis the pricing that we get. But we will look into all sorts of opportunities that we have to lend in the segment.

Sir, what is treasury outlook? And what is the CapEx guidance for digital?

CapEx guidance? Did you say CapEx or did you say the treasury guidance?

What is the total capital expenditure you want to do for digital transformation for...

Okay. So first -- on the first part is the treasury. I think the treasury has been -- performance of the bank for the last 2 quarters has been robust. Of course, there are market dynamics which play in our treasury performance. But we are confident that what the run rate that has been set for the last 2 quarters will be kept going, unless and until, of course, there is some significant global and geopolitical situation that erupts. So the treasury will continue, performance will be robust. And on the front of the CapEx, investments that we are looking into on the various transformation, digital, altogether, we have approvals and we have the necessary things to do of at least INR 400 crores to INR 450 crores of investments over the next 5 years. That investment, I repeat, is over a period of 5 years. So INR 400 crores to INR 450 crores of investments are on various fronts, not only digital, it is innovation, it is call center, it is the back-office structure, the centralization, all correlated. So the overall package that we look into is, as of now, we are at around INR 450 crores for the next 5 years.

Sir, we have an additional question from Mr. Saket. Please provide granular details of other income and outlook ahead.

As far as the granular details are concerned, I think it is very clearly elaborated in our Slide # -- I'll just tell you, 1-5, Slide #15, and the core fee income has grown by 26% Y-o-Y. We are -- sequentially, it has come marginally down. That's okay. That's a part of our day-to-day business. But this will be continuously -- will be also our important factor in terms of monitoring -- in terms of generating revenue for the bank, whether it is commissions, whether it is third-party business, whether it is processing fee collections, penal charges, other -- sorry, bancassurance business. So all these will continue to play a very important role. As far as the granularity is concerned, I think it is quite elaborated in the Slide #15.

Our next question is from Mr. [ Rahul Sinha ]. Sir, please introduce yourself and go ahead with your question.

Yes, Mr. Rahul?

My question is the bank's GNPA and NNPA ratios have been declining...

I'm sorry, GNPA and?

NNPA, sir.

Net NPA, okay, yes.

That has been declining steadily. How many quarters do you anticipate this trend will continue? And what is your medium-term forecast for asset quality?

Yes. So I think if you see our trend, it continues to be on the downward trend, as I already gave you a guidance, that by the end of March, we should be below 6.5% in gross NPA and net NPA we should be below 1%. That's for the March '25, which we think we can achieve. And in the next 3, 4 quarters, I think we can -- we'll be below 3% very, very shortly and bringing the net NPA level down as much as possible. Because our credit growth is now robust, slippages are coming down significantly, we don't have too many bothering accounts as of now. One, of course, is two accounts which are already declared through the notes that one is a court-related account, which is not classified as NPA. That can go away. That can be NPA any time depending on the court, but we are adequately provided for in that account. So -- and another standard restricted account of around, say, INR 15 crores, INR 16 crores, that account has also been fully -- that has also been provided for. So apart from these two accounts, we don't foresee too many slippages in the overall loan book. The corporate book has been stabilized quite strongly. What we find a bit of a stress still in the MSME segments, where we will continue to monitor that -- I think someone is on -- yes, we'll continue to monitor the collection efficiency of the -- of our MSMEs also and retail are being monitored very closely by us. We will continue to keep focus. The overall collection efficiency of the bank has now moved on a sequential basis from 92.87% to 94.77%. That's the way we are working on in the granularity. And in fact, in the agriculture segment also, our collection efficiency, which is the most difficult area, there again also the collection efficiency has improved on a quarter-on-quarter basis. So this downward trend will continue to happen. Where it will reach, it's too early to say at this point of time.

Our next question is from the line of Mr. [ Ashlesh ].

Sir, a few questions from my side. Firstly, the corporate slippages in this quarter have increased a bit to INR 167 crores. Can you share some details of which account has slipped?

Yes, this is the industry -- telecom company you all know about.

Okay. Sir, I think I was under the impression that this one was -- this one had slipped in the previous quarter.

No, for our bank, it did not slip. We did provide for the entire amount -- we did provide adequately in September, but the actual slippage happened on 8th October this quarter.

Okay. Got it. And sir, any reason for the sharp jump in yield on advances in this quarter?

Yes, some of it has been impacted by the strong recovery that we have had in one or two midsized accounts, which will increase my yield on advances. Interest income has been booked in that -- in those two accounts.

Okay. Is it possible for you to quantify the interest recovery?

Yes, that's mentioned in the movement of NPA. So it's INR 134 crores. The slide on movement of NPA. I don't know which numbers, I will let you know.

No, that we can see, sir. That is okay.

Yes. Slide #22, if you'll see that, cash recovery income booked INR 134 crores.

Can you break out the interest part of this recovery? Is that possible?

Yes, the entire amount is interest recovery.

Okay. Got it. And sir, there was a good traction on the recovery income as well this quarter, sits in your noninterest income. Can you share some details on which are the accounts where you saw recoveries?

Yes. We cannot share you the name of the accounts, but these are all mid-sized accounts. And we -- these are which account? So this was a hospitality sector account which we earned in -- for the [ TW ]...

Understood, sir. Sir, and just last one. How do you look at the outlook for bad loan recoveries for the next year or 2?

For our bad?

Yes.

Yes, yes. As I told you, yes, the recovery will continue to remain robust. In the guidance, you must have seen that for the financial year '24/'25, we had given a guidance that INR 1,000 crores is our guidance. We already achieved INR 940 crores or INR 942 crores -- INR 944 crores already in 9 months. So we will surpass that. In the next year, we will -- we expect that this run rate of INR 1,000 crores is achievable.

Our next question is from the line of Mr. [ Chandra Prakash ].

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We will wait for another minute to see if there are any more questions lined up. Sir, we have a question from Ms. [ Sakshi ], an individual investor. She wants to know how are you balancing growth between rural and urban markets? And what measures are in place to deepen penetration in semi-urban and rural areas? Second question, are there specific partnerships or initiatives plan to expand your digital lending and other innovative offerings? Third, could you provide details on the adoption and performance of your newly launched digital loan products, PSB E-Apna Vahan and Ghar loans?

Mr. Mehra will answer all the questions.

As far as the penetration in rural and semi-urban area is concerned, we are growing equally in all the segments. You can see that our MSME growth is almost on the same lines. Because if you go for the agriculture as well, food processing industry is doing well. Our growth is quite substantial. Numbers are there. And similarly, as far as semi-urban is concerned, we have developed some products and created some specialized products as well. Going forward for the digital lending, yes, we have partnered with some of the fintechs and specialized, you can say, developers who are developing software for us, and we are taking the journey forward. And the response to our digital lending, that is particularly the car loan and home loan, is quite good. And the journey doesn't take more than 15, 20 minutes to get a loan sanctioned. And with regard to this going forward, we are also coming up with this MSME loan up to INR 25 lakh for this digital front. And once it is launched and stabilized, we'll be taking up to maybe somewhere around INR 1 crore also.

Our next question is from Mr. [ Rohan ]. There are three questions. First, we have seen a decline in AAA retail exposure. Is it because of downgrade or repayments? Second question, gold loan is very small in our portfolio, any plans to scale it up? Third, we still have an elevated C/I ratio at 62% as compared to peers. What is the ratio outlook for next 2 years?

Yes. I think the first question related to the exposure. It's a conscious call that we are rebalancing, churning our corporate credit portfolio within the top-rated accounts, yes. And whenever pricing, we are very concerned about our pricing, while the external rating is very important and AAAs are very sound and resilient in terms of repayment, but the pricing is also very demanding. So we do churn -- we are churning our books, and we have got repaid some low-yielding assets in the AAA category. It is not due to the downgrade. It is due to the repayment that has happened in a big AAA-rated account. So we are -- just because the pricing was not adequate to -- for our bank. So that is your #1 question. On the gold loan front, the gold loan, yes, the portfolio is small. In fact, actually, we have shown the portfolio of retail lending. If we add the agriculture gold loan, the total portfolio is INR 2,000 crores. Yes...

INR 1,600 crores.

INR 1,600 crores in the agri gold loans, so INR 1,600 crores plus 1,000...

Total gold loan, INR 1,600.

Okay, INR 1,600 crore is the total gold loan. Yes, in spite of that, the base is small. We have now taken a view that we should expand in this segment and we'll continue to expand at the rate of 20% to 30%, in fact -- 25% to 30% on the overall gold loan portfolio because it's still a safe way of lending. Yes, I appreciate the point that the cost-to-income ratio is still high compared to our peers. We are at 64.5% on a 9-month period. We expect to be around 63% to 64% by the end of the year, and bring it below 60% by another 1 year and by -- and at least 2%, 3% down by another -- so in another 2 years down the line, we should be around 56% to 58%.

One additional question from Mr. Rohan. Can you please also give some color on the colending book that we have built?

Yes, Mr. Mehra will answer.

Yes. As of now, we have a portfolio of INR 3,100 crores in colending and 10 partners are there. And going forward, maybe somewhere around -- by March, INR 3,500 crores will be the volume of colending.

And the portfolio is behaving very well. We have absolutely...

Yes. Absolutely. We have no issues.

We have no issues as of now.

Our next question is from Mr. Sushil Choksey.

As far as raising your first infrastructure bond, as I can sense from your commentary that credit pipeline seems healthy, can we look in the current deposit market situation other than infrastructure bond possibly in the current quarter?

Yes. It's a relevant question because we were successful in raising the bond and now we have followed it up with a good performance. So there is always a scope to garner some more. But the first, as far as the capital -- I mean, I'll cover this question in two ways, on the capital raising plan that we also have and this. So the first endeavor of a bank this quarter is, of course, for the QIP. And we will be going at some time during the quarter. The merchant bankers are on board, the legal consultants are on board. We'll be starting to kick off very soon. We'll be on the ground -- our feet will be on the ground very soon on the QIP. So at an appropriate time in the quarter, we will like to make an effort to garner the INR 2,000 crores of QIP. Notwithstanding this effort, we will also keep the options open for raising another round of INR 2,000 crores depending on the market conditions, but primarily keeping in mind our requirement on the credit growth. So if we feel that -- and we are getting a better pricing, we will, of course, look for it. But for that, as I said, to be categorical in our answer, the first option will be QIP and the second option will be the infra bond of INR 2,000 crores.

Sir, does the QIP more related to SEBI holding norms which you have to dilute 75%? Or it is you need capital for growth?

Yes, it's -- primarily, of course, the SEBI requirement, because we know that we -- banks are in that category which is required to bring it down. So of course, INR 2,000 crores will bring that percentage to around 5% to 6% -- 8%, it will bring around 8% down. So therefore, we will explore that option. As far as -- per SEBI capital requirement, if you ask me, see the capital adequacy as of 31st December, though has shown a sequential decline, but if you add the 9-month profit, the capital adequacy is at 16.97%. That's close to 17%. So therefore, as far as the capital adequacy requirement, we are very comfortable, okay? So -- but it's always good to explore. One, of course, is the compliance issue of the SEBI, but also it is good to have more capital in your books. And because we'll be not only growing quickly, we'll also be investing quite substantially in technology upgradations and various processes. So it will be a combo of all those two, three factors for which we will be in the market for QIP.

Our last question is from the line of Ms. [ Myra ]. She has messaged me asking what is your expectations for the upcoming budget?

Yes, Mr. Rajeeva will answer.

As far as banks are concerned, I think, some suggestion goes from the IBA side. But informally, of course, as banks would like to have measures whereby the economy grows so that we also have room to grow. And of course, government and both the regulators must be looking at the current scenario of the inflation also. So overall, some measures whereby the growth is boosted, there's a CapEx in the market, the inflation is under control, and so that the environment is conducive for the growth of financial sector banks like us.

Thank you, sir. As there are no further questions from the participants, we now conclude this conference. Should you have any further queries, please reach out to Ms. Mamta Samat at 9930625104 or [email protected]. Details are mentioned in Webex chat and analyst invitation sent to you earlier. On behalf of Punjab & Sind Bank, I thank each one of you for joining the conference call today. You may now disconnect your lines. Thank you. Have a good day ahead.

Thank you, all. Thank you, Shilpa.

Thank you, sir.