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

Good afternoon, ladies and gentlemen. I am Shilpa Abraham, the Moderator for today's Earnings Call. I welcome and thank each one of you for joining us today for the Punjab & Sind Bank Annual Earnings Call for FY '25. Please note that this conference is being recorded and all participant lines will be in the listen-only mode. [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.

Yes. Thank you, Shilpa. A very good evening to all of you and on behalf of Punjab & Sind Bank, we thank you all who have taken out your valuable time out to attend this Con Call for the Bank’s quarterly performance of financial year '24-'25. I will just briefly read the highlights of the performance of our quarter. The presentation has already been uploaded in the stock exchange as per requirement. The press release has also been uploaded. So many of you may have seen the same also. But just to set the context for today's meeting and the conference, I would just like to mention some of the key highlights of the bank's performance of FY '24-'25. The business of the bank grew by 11.69% and stood at INR 2,29,379 crores. Deposits showed an uptick of 8.68% and stood at INR 1,29,774 crores. The advances growth was robust at 15.87% and just falling short of the INR 100,000 crores figure at INR 99,605 crores. The interesting point in this business performance is that the bank is now much more in the business growth-oriented path and we have touched the double digit business growth compared to the last year. In terms of the other performance of the bank, the NII grew at 33.19% for the financial year. The operating profit was a very robust at INR 2,075 crores for the entire financial year and it grew at 83.47%. The net profit for the year was INR 1,016 crores showing a growth of 70.76% and for the quarter -- as far as the quarter is concerned the net profit was at INR 313 crore and it grew by more than 125.18%, the operating profit grew at 142% and stood at INR 816 crore for the quarter. In terms of the efficiency parameters, the net interest margin for the financial year increased by 40 bps and stood at 2.85%. The cost-to-income ratio showed a significant dip of 1093 bps and has reduced to 61.23%. The return on assets was at an improved level of 0.67% for the financial year. In terms of the asset quality, the Gross NPA has reduced by 205 bps for the financial year, it has gone down to 3.38%. The Net NPA has gone down to below 1%, which was as per our guidance, has touched 0.96% for March '25. The provision coverage ratio also has shown an uptick and it increased by 269 bps and has increased to 91.38%. So we were also given a guidance that the provision coverage ratio, we will be able to cross 90%. So as far as the -- this part, I would like to mention that we have given during our past conference calls that the deposit growth guidance was between 8% to 10%. We were able to maintain at 8.68%. The advance growth, we have given a guidance of 10% to 12%. We have surpassed that growth and stood at 15.87%. The RAM percentage we had given a guidance of 56%. We just fell short of it, but it's fair enough, 55.15% we make up for the small differential that is there. And in terms of the gross and net NPA, we had given a guidance to be below 4.5% by the end of March. We are now at 3.38%. The net NPA, we had given a guidance of below 1.5%. We have reached 0.96%. The PCR guidance was between 89% to 90%. We reached 91.38%. So we have been able to meet all the guidance parameters. The recovery upgradation also, the guidance was to achieve more than INR 1,000 crores. We have achieved INR 1,738 crores of recovery upgradation. Of course, this is because of one of a big resolution that has happened by a transfer of an asset to NARCL, which the industry all knows about. The credit cost guidance was below 1%, and we were at 0.20%. We were able to achieve it comfortably. The slippage ratio was -- guidance was given at less than 1.25%, and we were just below 1% for the financial year. So overall, the performance of the bank has shown much improved -- at much improved level. The overall business growth has happened. The efficiency ratios have improved. The CASA, of course, we had a CASA -- we are facing challenges. The CASA grew moderately at 5.38%. However, the CASA and retail term deposits, we are growing over 7%. So that is on the deposit front, and it increased at 8.68%. The RAM percentage we had said that we were going to sequentially improve it year-on-year and quarter-on-quarter, and we have been able to maintain the trend. And from March -- if you compare from March '22 onwards, the RAM percentage, which was at 50.71% has now improved to 55.15%. The overall credit profile of the external rating as far as the external rating of our accounts is that we have been telling the investors and analysts that we are churning our corporate credit portfolio. And we are -- and the trend of March '25, if you see Slide #12, you can find that there is a shift in the overall churning that is happening in the credit portfolio, and we are now also focusing on higher-yielding assets. So the AAs and A's are showing a slight uptick in the quarter of March. So overall, the yield on advances have improved. Of course, as the notes to accounts must have mentioned that we have booked additional income due to the NARCL resolution, which has boosted our other income and also our interest income on advances because that was one of the factors, which also helped the performance of the banks. The performance of the bank was also boosted by a good contribution from the treasury and the treasury income has also improved significantly. And from the investment slide, you can be seen that the profit from sale of investments was INR 106 crores for the quarter ending March. The fee income has also shown a very significant improvement of over 27%. We are constantly working on how to improve the core fee income, and we are very concentrated on how to prevent revenue leakage and making the systems more robust so that our revenue earnings do not get impacted. All in all, overall, I would like to say that due to -- as we have been committing to the investors that we will continue to show a sustainable performance. I think for the last 4, 5 quarters, the trends continue to be positive, and we'll continue to work on this sustainable performance going forward also. So now I would like to open up the session for the question and answers. Thank you very much.

[Operator Instructions] Our first question is from the line of Sushil Choksey from Indus Equity.

Excellent result and a successful QIP. Sir, you've spoken all about FY '24-'25. For FY '25-'26, what are our estimates in terms of advances, deposit, NIM, cost to CD ratio, what kind of ROE & ROA we will achieve, what kind of gross NPA & net NPA are you targeting? How will you target CASA increase when the interest rates are falling? CASA can be attracted, what measures will you take on this? These are my initial questions.

Yes. Thank you, Mr. Choksey. As we have talked about the performance of '24-'25, we have also given a guidance for '25-'26, it was last slide on Slide #40. Wherein we have set the tone for the year '25-'26. The deposit growth would be between 8% to 10%. Advances growth would be -- we are targeting between 15% to 16%. Our CD ratio is at 70 -- we'd like to keep it between 78% to 80%. Overall, the gross NPA is at now 3.38%. We'd like to bring it below 2.5%. Net NPA, which is at 0.96%, we'd like to bring it down to 0.75% -- below 0.75%. The provision coverage ratio, we'd like to jack it up to more than 92% between 92% to 93%. So these are some of the highlights that we have provided. As far as the guidance on the ROA is concerned and ROEs are concerned, we'd like to mention that we have increased the ROA to a level of 0.67%. We'd like to bring it up to -- for the next year, we'd like to bring it up to a level of 0.75% to 0.80%. As far as the NIM is concerned, we feel that there will be some correction maybe in the NIM going forward because of the developments that are happening on the liquidity front and the -- 2 of the cuts already have happened, maybe 1 or 2 more cuts are on the anvil. So we are expecting another 50 bps cut maybe down the line during the financial year, which may have some impact on the NIM. So the NIM may moderate, but we will make all efforts to keep it at a level at which we are at this point of time. On the cost-to-income ratio, we did -- as you said -- you must have observed that the cost-to-income ratio has come down from 72% to just over 61%. That's a good development. We had told the market and the investors that the one-off impact of the wage provisions of the bipartite had impacted our cost-to-income ratio. We are happy to see that we have been able to bring it back to a level which is much more comfortable. And we'd like to keep it at a 58% to 60% cost-to-income ratio during the end of the financial year. In terms of the deposit mobilization, as you -- we all understand that the deposit mobilization is a challenge that we have to face. We are innovating our products. We are improving our digital products on the CASA and the retail front. The product customization for various customized customers like the defense accounts, like the salary accounts, like women customers. So we are moderating and customizing various products for the bank and the more and more digital acquisition will going to happen. We are also working on, as I had told in multiple times during our previous interactions on the new projects that are on the verge of completion. The call center has started the initial part of the call center project, which we have promised in the previous quarters as the initial part has started, which will help also -- which will also contribute to the lead management on both deposits and the asset side apart from helping the bank on the collection efficiency and the overall 360-degree feedback of customers to do cross-selling. So the deposit is already -- we are already -- just post 31st March, we didn't wait for a single day. Our teams are already on the ground, mobilizing deposits in the market in spite of a season which talked -- the first quarter and the first month post the annual results. So -- but still, our teams are already in the market and trying to acquire as much customers as possible. The tap banking, which we had promised also are also going to be implemented very shortly, which will also help us on our CASA acquisition.

Sir, I'm referring to your slide of guidance on Page #11. When we are already at 3.38% on gross NPA, net NPA is at 0.96%. Your recovery and upgrades, I understand last year, you had an exceptional year. This year, INR 100,000 crores is fine. Credit cost, you achieved 0.2%, maybe thanks to one-off. But why are we being so conservative in our numbers compared to what we have? My second question here is, what is the outlook on treasury and how are we positioning when the 10-year G-SEC is at 6.35%? And third is with all your new initiatives, what kind of digital spend are you likely to do? And what kind of digital spend is being done if you bifurcate between retail RAM and corporate bank?

Okay. As far as the credit cost is concerned, yes, you may feel that we are giving a conservative guidance. We'd like to be in that zone because see, we are still having some stress in the agriculture and a small segment of MSMEs, while the corporate looks very healthy. We are still having some -- if you see our slippages trends in this quarter also, you'll find that the agri slippages have gone up a bit more, though the quarter-on-quarter, Y-o-Y basis, the slippages are less, but still there is a residual area of -- on agriculture, which we like to address and take care of. In 1 or 2 mid-corporate accounts, the accounts would be -- though we are well providing for them already, which are at the INR 100 crores to INR 150 crores range, those may -- which we feel are hovering between the SMA-1 and SMA-2. So if those slips also, that can have a small impact on that. Otherwise, but we will like to keep this guidance and show a much -- and achieve the guidance in a better fashion. So that was the basic idea. In terms of treasury, of course, we are starting -- I am very sure with the movement of the yields, the quarter would be -- looks much more rosier than what it was in the last quarter, though the last quarter was also good for treasury. But with the movement of yield that has happened, we find that -- we feel that this year's performance on treasury will be much better, even much better than what it was on the last year. Apart from -- the third question was on the new initiatives. Yes, the digital lending is some of the areas where we have already started is on the housing and the vehicle loan. We're now up to -- we have already started on MSME up to INR 25 lakhs. We are going to bring the digital part, the STP. I'm talking of the straight-through processing of digital lending. This would go above INR 1 crore -- up to INR 1 crore very shortly. The process is on. We have started with the up to INR 25 lakhs MSME. Then there are many other digital lending products on the anvil like the GST product, the gold loan, the personal loan. So these are all tied up and will happen in maybe 3 to 6 months' time as we customize the products for ourselves. Gold loan also, we'd like to customize for us. So the digital lending is a big project for us, and we'd like to take it forward as we move ahead. On the new initiative -- other new initiatives, I've already said that we are going to have the call center. I've already talked about the CASA back office is also getting operational this month -- I mean the next month and the centralized trade foreign exchange transaction module is also -- the customization is going on. Maybe by September, we will have those -- all these things in place because these are now very realistic projects which are getting implemented. We are also working parallelly on a performance management system, which has been also a talking point in our interactions before. So the performance management system in the bank to have a much more scientific way of assessing performance of employees in the bank who is going to get implemented in the current financial year. And we are in a very advanced stage of starting the process. So with that also -- will also support the overall environment on our initiatives going forward.

Sir, any amount quantified for digital spend and treasury outlook?

We have the -- but I don't have it ready at this point of time. I can share with you separately after the meeting.

Okay. And second thing, sir, treasury outlook, you mentioned that we are well positioned, but are we churning from more lucrative in terms of corporate bonds? Or what are we doing in those respects?

See, this is a dynamic environment. So as the dynamism happens in the ecosystem, we will churn our portfolios, and we'll make all best -- we'll use all our skills to make best use of the opportunities that the market provides with us. So there is no demarcation on what can be done today and tomorrow. But the overall optics is this that in a very, very -- the environment that we are in at this point of time, we'll make full use of the treasury functioning in the bank in this year.

And secondly, India is likely to attract a lot of manufacturing because of this global trade war. Are we looking at something to benefit from GIFT City or anything -- something new initiative which we need to take, which we are not in place for?

Yes. We have got the in-principle approval for the GIFT City but you know that there's a process for getting the final approval and the implementation of it. But the Board has given the in-principle approval of going ahead with this GIFT City concept, by opening a GIFT City branch. And we will now -- we are now going through a consultancy process for opening. Yes, that is in the agenda for the financial year. But that has its own ways of implementation. So it's a project of maybe a year or so, which we'd like to -- the benefits of it may come next year. But the process -- yes, the process has initiated.

Our next question is from the line of [ Ms. Saloni Shah ].

Sir, my question is that can you specify the contribution of digital channels to overall business? And are there any cost savings happening?

Yes. Can you a bit clearer please? We are not getting your voice clearly. Now you are loud and clear. Please go ahead.

Okay. Sir, my question is that can you specify the contribution of digital channels to overall business? And are there any cost savings happening?

Yes. Mr. Mehra will answer this.

Ravi Mehra this side. [indiscernible] sanctions just like to mention that out of the total loans that we sourced and sanctioned during this year, we started the digital journey on 5th of December. And since then, we have sanctioned almost 7,000 loans pertaining to home loan and auto loans with a quantum of around almost INR 1,100 crores. Digital or assisted journey, or STP journey.

And also, sir, I have one more question is that your UPI transaction volume have grown over 60% year-on-year. So how is this translating into customer acquisition or cross sell opportunity?

Madam, may I understand what is the cost that you mentioned that has gone up by 60%? Your voice is a bit...

UPI transaction.

Okay, UPI transaction. Yes. Please let me know your question again, ma'am. Now I understood the context.

Okay. So my question is that your UPI transaction volume has grown over 60% year-on-year.

Correct.

How is this translating into customer acquisition or cross-sell opportunity?

Yes. This is an interesting question, and I think very rightly -- the right opportunity. We are -- the volumes are increasing, as you are rightly saying that the UPI volumes are -- transactions are increasing. Now the customer acquisition also is one of our process, which we carry out through the digital process, but we are also upgrading our digital banking app in a better fashion. The customization is getting more and more strengthened. We will get the full benefit of it maybe during the current year. So while we appreciate the point that the UPI transactions are increasing. So that's why we are bringing this concept of the tab banking for acquisition of customers and the call center also once it gets activated, these 2 parallel projects, once it gets implemented, will be help us to analyze our transactions and go for more and more acquisition of our customers. So that is on the cards. And in terms of the numbers, I think I'll not be able to mention to you at this point of time. But yes, definitely, your point is well taken that we are on the process of analyzing our transaction to acquire more and more customers.

Our next question is from the line of Mr. Ashok Ajmera from Ajcon Global.

Yes, sir. So complements on very good numbers for the quarter as well as the whole year. The operating profit is jumping to INR 816 crores in the quarter and the overall year is I think INR 2,075 crores. Phenomenal achievement sir, and on many other parameters also the bank has started performing much better than what it used to be. Even at this time, even the credit growth is also good. Having said this sir, my question generally remain on that, that our -- we have a very a low base among the public sector banks. We are amongst those few small banks, but having the benefit of being a public sector bank, with the reduced government holding and all that. So this number should not be sort of a benchmark like comparable with other banks, we have a lot of scope to grow faster, faster than what we are growing. Of course, keeping the quality, asset quality improve into mind.. Have you -- in that background, can we -- are we not looking for some good MSME or some good small corporate accounts may not be [ 65:35, 55:45 ] but so that we have good income also as well as we grow much after and come to a particular different level. So this is my first observation and your comments on that, sir.

Yes. Thank you, Mr. Ajmera, for your compliments. And as you have been watching over the last 2, 3 years, how the bank is slowly transforming into not only in systems and processes, but also qualitatively, we're trying to grow. While we appreciate the point that we have a low base and we need to -- we have opportunity to grow faster, it is actually correct. But also, we need to understand that in today's environment, we also need to be cautious of the fact that the top line should not hamper the bottom line. And we are working on how we have a better bottom line growth also on a sustainable basis. So therefore, in terms of the top line, while you observed this time also, our deposit growth has grown 8.68%. Our advances has grown by 15% plus. And we are maintaining more or less the same guidance for the current year as well. So therefore, there is -- and the systemic growth at this point of time is around 11% to 12% on the advance side. So we are giving a guidance that we will be growing a bit faster than the system, which takes care of your question that we can grow faster than usual. But we are mindful of the fact that the growth has to be qualitative, that the growth has to be on a sustainable basis and the growth also should not impact the bottom line going forward. When in terms of any eventuality in the ecosystem, we should be also prepared for that system. So -- but we will continue and we'll continue to progress on our growth front on a very, very qualitative and a sustainable method. On your remarks on the MSME, mid-corporate, yes, we are a bank, we should and is doing -- giving focus, lots of focus on MSME and mid-corporate. That's why we have now opened more than -- how many mid-corporate branches are there? More than 12 mid-corporate branches. We are opening specialized MSME branches all across the country. We are doing -- we have designed our products on the cluster-based financing, and we are also expanding our branch network on a PAN-India basis. We have a program of expanding -- opening at least 150 branches for the current year in this financial year. So therefore -- and get into the catchment areas where we are not present at this point of time. So we are overall in 361 districts out of the 700 potential districts that we can be in. Therefore, we're keeping a 360-degree view, we need to expand in those territories where there is a lot of scope for penetration. So we are opening a new zonal office in Patna. We're opening a new zonal office in Varanasi. We're opening a new zonal office in Agra, and we are opening a new zonal office in Moga in Punjab. So which will not only enable the bank to be much more granular on the specific area you are hinting at regarding the retail, MSME, mid-corporate financing. So -- and many of these zones presently, which are getting covered are having more than 80 or 90 branches, which for -- in today's environment, it is very difficult to generate business by a zonal head by controlling so many branches. So we have now rationalized the zonal office structure of the bank, and we have brought down the level of number of branches per zone to an average of around 60 to 65, which gives a much better control by growth and for compliance. So therefore, we will take this as a key strategic area for focusing on retail MSME and mid-corporate accounts. And that's why you find a very, very significant shift in the composition between RAM and corporate, which has now already touched 55%. So we will take your advice very, very seriously and move ahead in the coming years.

Thank you sir for very elaborate answer on that question. Sir, you covered -- my next question was, which you -- I mean, you have covered this point actually is the PAN-India presence of our bank -- Punjab & Sind Bank. Now you are saying that you have a lot of initiatives that are being taken at the zonal offices are being opened and you are already in fact, almost about 45% of the total districts, you are present there. Can I have some data or numbers on our total credit disbursal, credit in NCR, Punjab, Haryana in that area and the rest of India. Can you elaborate that -- some ballpark, some number?

So I will not have the segregation of the numbers at this point of time between state-wise segregation that is I can share -- my team will share it separately with you. But I can give you an overall figure that we are now having nearly more than INR 13,000 crores of sanctions/in-principle sanctions in hand, which the pipeline now is increasing. So -- and also, I'd like to tell you one more point here is that, earlier, we were not having this tool with us on branch expansion. We are having a very, very customized tool, which allows us to understand district-wise penetration of banks in a particular district. And we have customized data on which districts we are doing good, which districts we are not doing as good as the others. And in which districts we are not there at all, while there is a lot of good performance and there's high CD ratio in those districts. So therefore, this area of opening branches in areas where we can open and there's a lot of potential. I can just tell you, we opened a Vizag branch very recently with more than INR 100 crores of business. Another branch we opened in Thrissur down south in Kerala, where we opened -- the opening day business was more than INR 100 crores. So that is the potential we are looking at while opening new branches. And while we can do that opening of a branch. In fact, we have kept a separate vertical only to open new branches, rationalize new branches and monitor the branches -- monitor the business in those new branches. So that is the structural changes also that we are bringing in so that we can penetrate deeper and deeper in the levels where we are not present at this point of time.

Yes, sir. That is a very, very good initiative and taking the bank really to PAN India. Sir, what are your views on this co-lending and NBFC space where now RBI has also permitted that you can go for NBFC funding even for nonpriority sector onward lending or something like some kind of realization or something. Have you -- are we working on that in this space to increase our book through either co-lending or through NBFC lending so that we get much higher returns also where our book also increases faster.

Yes. I think we have said this in our earlier interaction, we are using the co-lending model business, model of doing business to co-lending as per RBI guidelines in a big way. We have already reached a figure of INR 3,300 crores of business, both either retail or MSME in this area through co-lending. And now with the -- and we have developed proper systems also in place. And with RBI coming out with fresh guidelines on the nonpriority sector also, which shows that the model of business is very, very appropriate for lending in MSMEs and on the retail segment. So once we are waiting for the final circular to be issued by RBI, and we will use this model of lending very, very effectively till today, our experience in co-lending is highly satisfactory in the lending level we are in at this point of time. Out of the INR 3,300 crores, our retail is around INR 1,475 crores and MSME is INR 1,800 crores. Very limited delinquency. So our experience has been very healthy. Our conversion is only 30% of the leads that we get. So our due diligence process is at a very highest level. And once we get the final circular on the nonpriority segment, which is going to be issued by RBI at any point of time, we'll explore that and we'll take it in our stride to expand our business in MSMEs as well and non-priority segment as well.

Point well taken sir. Sir, will you throw some light on the overall recovery -- I was, in fact, [ SNL ] was the part of the time because of the connectivity issue. The recovery [indiscernible] return of accounts, the prospects were in the year FY '26. And our overall written off book, what kind of percentage we expect every year to recover or maybe especially in the FY '26? And what is the total overall recovery efforts us either through NCLT, through NARCL in FY '26, will you be able to give some color on that, sir?

Yes, my ED Mr. Rajeeva will take this question.

So if you look at the recovery trend over last 4 years, we have been recovering close to INR 1,700 crores to INR 2,000 crores. So last year, we had approximately INR 2,000 crores. This year, we have recovered close to INR 1,700 crores. Now in the return of book, which is quite substantial, our return of book is almost INR 7,000 crores, and we have been recovering almost 10% over the last 4 years. So I believe that -- so this year also out of INR 7,495 crores, we have been able to recover INR 821 crores, which is close to 11%. So we believe that there's a lot of scope for recovery in return of accounts, and that is likely to continue in future also. And in FY '26 also, we expect the recovery to cross INR 1,000 crores for certain. And of course, it will be in line with what we have been doing in the past 2, 3 years.

That's great sir 10% the recovery from the written-off book is very, very good number, this is well taken. Generally people give the guidance of 5% to 7% or 5% to 6%. So your efforts are really paying off and you are doing well on this front. Sir, my last question in this round, sir, on the treasury front like with the great softening and there are expectations of some more rate cuts coming in. I think we are in a very comfortable position. I think 6.35% something if I go down to [indiscernible]. So in FY '26, are we -- do we expect a bumper profitability to be added from the treasury books both by way of sale of treasury assets. And secondly, I think apart from the AFS book, which goes to the reserve, what in trading as well as the security sales, which comes in the profit. So whether you will be able to give some information on that?

Yes. I have also -- I've already answered this question partially to Mr. Choksey earlier, but I'll repeat it once again for you also. I appreciate, yes, the treasury yield is now in the softening stance and there are expectations of further rate cuts. So it is expected and with the OMO was also being announced from time to time, there's a lot of hope that there will be further -- as liquidity also improves, there will also be softening of the yields. I don't know whether I can call it a bumper year for treasury, but what I can fairly say from our side is that the treasury contribution to the overall profitability of the bank will be much more than what was in the previous year. I think [indiscernible] at that point of time. I think your next question on AFS. Sorry, I think your another question on AFS. Madam?

Yes, if you see as per the new guidelines, the profit FVTPL profit will be hit to P&L account and AFS through General Reserve. So this year, we have a total MTM gains of around INR 56 crores that has contributed in the P&L account, around INR 75 crores was -- it has gone to General Reserve and it has increased our capital. So according to the yield movement this year, the figures of this year will depend upon the yield at the quarter end, sir.

Do we have a healthy book to generate some profit out of that?

Pardon sir?

Do we have a healthy book?

Yes, sir. We have churned our portfolio according to this and new guidelines also. So we are having a good portfolio. According to the market, we'll definitely earn profit out of it, sir.

Trading profit too?

Yes, sir? Sir, last...

Yes, generally active in treasury for the trading profit?

Yes, sir.

Yes. We are very active on trading.

Yes, we are churning our portfolio also. If you see in the March quarter, we have earned INR 106 crores profit and total profit out of the trading revenue last year was INR 371 crores. So we are hoping in the same line, sir. As the yield movement, so we do churn our profit also, and we are hopeful it will be in line with the last year only, sir, and much more than that also, sir.

Thank you very much sir all of you for having answered my queries so very well and giving a very elaborate presentation on the bank and bank is really moving very fast now in the right direction and all the best to you sir.

Thank you Mr. Ajmera.

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

The government has planned to clear 30%, 40% of unclaimed deposit held by public sector banks by FY '26. Is it possible to successfully clear the large quantum of unclaimed deposits by FY '26? And will this exercise also likely to result in increased litigation, how our bank stands on this?

Are you talking of the -- see, the unclaimed deposit is a regulatory -- the migration of the unclaimed deposit to the DEAF Fund is a regulatory phenomena, which we comply with it. That is an amount that migrates to the RBI. But we also -- when the demand comes, we also get the returns from RBI very, very promptly. The efforts that are getting put in for our side is that we are -- much before the accounts become eligible under this unclaimed deposit or DEAF fund, we are contacting the customers. We are trying to reach out to them on various ways of media and through our digital -- our channels of branch or digital or website. And we make concerted efforts on that. But some of the legacy accounts that we are still having with maybe those will continue to migrate to the DEAF fund. But the efforts for the accounts not getting migrated is on a very, very high scale. Our operations division works on that very, very closely and tries to touch base with as many customers as possible. And that's why we are also getting requests on -- sometimes when the accounts get transferred to the RBI, we also get request from [indiscernible] once it goes there to the RBI, then we get request and we make the request to RBI, we get the money back. So that's a continuous process. But the migration of the old accounts will happen to a reasonable extent as we still go along. We will not be able to fully cover the entire amount that is there. We have already -- so far in our bank, we have already transferred around INR 870 crores of money to the DEAF fund.

Do you see any real bottom line impact from this?

Not really. This migration is happening every -- on a periodic basis, it's already factored in our overall strategy of things.

Okay. Also, my last question was, will there be any further capital raising in FY '26?

We have raised -- as you must be knowing, we have raised capital earned by way of QIP of INR 1,219 crores in Q4 in March last quarter. And also before that, we had a INR 3,000 crores of infra bond issuance. So our -- we are adequately capitalized. But we will take a view on this after our post results or our ICAP committee will work on this and maybe we will analyze the situation to whether -- how to go about it. But we will keep the doors open for raising further capital, but the assessment of it is still to be done. We are waiting for the completion of the results. Now we'll go into the assessment mode. And at an appropriate time, all of you will come to know what is our plan for the capital raising. It is in the agenda. But at what time and at what point, we will let you know at an appropriate time.

Our next question is from the line of Mr. Umesh.

I congratulate all the team of Punjab & Sind Bank for the wonderful results. I have 2 questions. Sir, the bank has achieved significant improvement in ROA that is standing at 0.79% and ROE at 12.4%. But how does the management plan to further enhance the profitability in FY '26, particularly with respect to the cost optimization and improving the cost-to-income ratio, sir?

Yes. See, as I said, the ROA, the substantial uptick in the ROA is also due to the one-off contribution that we got from one of the resolution in recovery, which increased our entire income, interest income and the other income by over INR 460 crores. So that is a one-off transaction that has happened. But we feel that the overall situation is that we are also -- if you see our provision coverage ratio has also shown an uptick from 89% plus to 91.38%. So we are also -- we have also now provided adequately on the aging front, at least up to December. So our forward-looking initiative is like this that while we have taken a substantial income due to the recovery, we have also ensured that our future aging also requirement gets diluted slowly and slowly. Therefore, as of now, we have been able to provide the requirement of aging till December '25. So a 3 quarter, we are moving a 3 quarter ahead. So that's how if there is any impact, and of course, we expect a good treasury year. We also expect that the recovery we have still some low-hanging fruits on the mid-corporate segment. Of course, the larger ones are more or less resolved for our bank. We still have a segment between INR 100 crores to INR 300 crores of segments where we expect some resolution to happen, which will contribute to our bottom line. We are also churning our balance sheet in a way in the corporate lending between the AAAs and the AAs, you will find that in this quarter also, the AAs have increased compared to the AAAs, which has decreased. And while maintaining the health of the portfolio, we also churn our balance sheet, our RAM segment, we are estimating more than 57%. So that will give you a better yielding assets. We have concerning on gold loan, equipment finance, MSMEs, GST, education loan, gold loan, these are some of the key areas. So overall, what we would like to say. And of course, while there will be some correction on the advance income due to the repo, which is 47% of our total book at this point of time, we will also get some positive impact on the borrowing rates that are cooling down. The rates on the CDs and the bulk deposits have also cooled down. We have already reduced our term deposit rates on certain products. We had from 7.45% to 7.25%. We have reduced our savings account deposit rates by 10 bps in this period. So these moderations will have also been -- will also contribute. So in view of the -- in this entire scenario, we expect that we will be able to -- the ROA annually is 0.67%. So we'd like to guidance on that part will be between 0.75% to 0.80%. And of course, the resultant impact will be on the return on equity also.

Sir, I have another question. Sir, with regard to your gross and net NPA ratios, which have been improved to 3.38% and 0.96% surpassing your financial '25 guidance. With regard to your financial year '26 targets, that is less than 2.5% GNPA and less than 0.75% net NPA, what are the specific measures or the sectors will be prioritized for the further NPA reduction, sir?

Yes, Mr. Rajeeva, our ED will respond to that.

So if you look at our numbers, of course, you rightly quoted, both GNPA and net NPA have gone down. Now this year, we have been able to recover substantially from OTS. Now to quote you some specific numbers, we got around INR 317 crores as compared to INR 101 crores last year. Of course, sale to NARCL was another big gain for us. So there are various strategies for reduction in NPA, which includes onetime settlement, special schemes for handling agriculture cases. Of course, from sale of properties in Sarfaesi, we keep on getting some recovery. This year, we have been able to get something around INR 84 crores and sale to ARC. So there are various means we are deploying. So in a way, it's increase in the awareness of the field level as well as improvement in the recovery culture in the bank. We expect the downward trend in GNPA and net NPA in line with the guidance that MD sir has given for FY '26.

We have got 2 questions on the chat, sir. May I go ahead with the question?

Yes, please.

The first question is from [ Ms. Myara Mittal ]. Her question is the bank opened 52 new branches in FY '25. What is your expansion plan for FY '26, especially in semi-urban and rural markets?

Yes, Mr. Ravi Mehra, ED will respond to this.

Actually, this financially, we plan to open around 150 branches primarily into the Southern state and Maharashtra, Andhra and all these areas, particularly Eastern region as well. And majority of the branch will be semi-urban and urban areas.

Our next question is from Ms. Sakshi. The actual RAM percentage to deposit slightly missed the guidance given for FY '25. And now the guidance for FY '26 is greater than 57%. What are the plans to push this over the 57% mark in FY '26? And what are the top priorities for FY '26?

Yes. Ravi Mehra this side again. For this particular financial year, as we have given the guidance of 57% and more the RAM segment, we definitely want to focus on a few particular segments like MSME and home loans as well. We are also open to more channel partners with regard to the co-lending and DA assignments. And as we are going to open more branches in the districts where we don't have any presence, and we have also opened some more than 12 mid-corporate branches this year as well. So hopefully, we'll be able to surpass this guidance given.

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 the Webex chat and the 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 the lines. Thank you.

Thank you, Shilpa. Thanks again to everybody for joining this call. Thank you.

Have a good day.