The Karnataka Bank Limited (KTKBANK) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to The Karnataka Bank Q4 FY '22 Conference Call hosted by Investec Capital Services. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Mahabaleshwara M.S., MD and CEO of Karnataka Bank, and his team. Thank you, and over to you, sir.

Good evening, and welcome you all to the con call on the results of Karnataka Bank for the quarter and year ended March 31, 2022. I am Mahabaleshwara M.S., MD and CEO of the bank. I also have with me Mr. Balachandra Y.V., our Chief Operating Officer; and Mr. Muralidhar Krishna Rao, Chief Financial Officer. I would like to drive your attention to the 5 important developments. The first one is bank has migrated to the new tax regime by absorbing a onetime EBITDA of INR 80 crores to INR 85 crores during the Q4 of FY '22. Bank has upgraded its audit system to the fully centralized audit mechanism. Third one is bank continued its consistent stance of accelerated provision to further improve the PCR and reduce the net non-performing assets. Fourth, we have on-boarded 2 additional independent directors. They are Mr. Jeevandas Narayan, former Deputy Managing Director of State Bank of India and the former MD of State Bank of Travancore. And Mr. Gururaj Acharya, a leading chartered accountant from Bengaluru, who also served as Independent Director and Chairman of the Audit Committee of the Board [indiscernible] erstwhile State Bank of Mysore. With this, my Board has 11 members, of which 9 are independent and it constitutes around 81.82% of the total strength. Bank's risk management practices and processes have been accredited with ISO 90012015 standard on quality management system. I'm very happy to share with you that we are not only the first bank in India, but the only bank to get this ISO certification as of now. With this, let me highlight on the standalone results for the quarter ended March 22 as well as the year ended March 31, '21/'22. First and foremost is net profit. Net profit reached a new high of INR 508.62 crores. You all know that first-time bank has crossed the mark of INR 500 crores. Not only that, bank has also declared a steady profit of over INR 100 crores in all the 4 quarters of FY '21/'22. The net profit during this particular quarter is at INR 130.35 crores as against the corresponding previous year quarter of INR 31.36 crores with a growth rate of INR 315.65 crores (sic) [ 315.65% ]. However, on a year-on-year basis, the net profit [Operator Instructions] overall year-on-year basis our March '21 annual net profit was INR 482.57 crores, now we stood at INR 508.62 crores with an annual growth rate of 5.40%. If you look at the operating profit during this particular quarter, it has shown a growth rate of 15.64%. And whereas on a year-on-year basis, it is down by 14.37%. Of course, the main reason is last year, we had good trading profit. However, if you exclude the trading profit, the annual growth rate of the operating profit is at around 23.52% for the full year, whereas for this particular quarter, it is at 20.01%. Net interest income during [indiscernible] up by 11.38%. And for the full year, it's almost remained at the same. And net interest expenses during the current quarter, it is down by 3.76%. On year-on-year basis, it is down by 7.87%. So as a result, the net interest income went up during this quarter to 42.98%. And whereas for the full year, NII is up by 14.10%. If you look at the NIM, Net Interest Margin for this quarter ended March '22, it is at 3.25%, whereas it was 2.41% for the quarter ended March '21. For the full year, it went up from 2.91% to 3.18%, a 27 bps up. ROA for this quarter, it went up from 0.15% to 0.56%. For the full year, it remained at 0.57%. ROE, it went up from 1.89% about a year back to 7.42% now. And for the full year, it is at 7.41% compared to 7.65% about a year back. It is 24% is down. Gross NPA, now it is at INR 2,250.82 crores, whereas March '21, it was INR 2,588.41 crores. Whereas similarly, the percentage also, March '21 it was 4.91%. Now it is at 3.90%. That is both amount-wise and percentage-wise, GNP has further moderated. And if you look at the December '21, the previous quarter position, it was at INR 2,330.52 and 4.11%. And as far as the net NPA is concerned, during this particular quarter, it is now at INR 1,376.97 crores and total is 2.42%. Last year, March '21, it was INR 1,642.10 crores (sic) [ INR 1,645.05 ] and the total percentage of 3.18% (sic) [ 3.19% ]. So from 3.18%, it's further moderated was 2.42%. So slippage ratio last quarter -- last year quarter, that is March '21, it was high at 2.25%. The reason is there was a split of scope of the Supreme Court also. So NPA recognition resumed during March '21. So as a result, there was high slippage ratio during that particular quarter. And during this quarter, that is March '22, it is at 0.73%. And for the full year, last year, we had 2.44%. And this year, it is 3.10%, So we are -- the main reason is that last year, even though during the last quarter, there was NPA recognition. In the remaining quarter, NPA recognition was not there. So intra-quarter slippage was also not there. But here, it was a normal -- at quarter throughout the year. Credit cost during this particular quarter, it is at 0.21%. Whereas March '21, it was 0.67%. For the full year, last year, our credit cost was 2.38%. Now it is 1.04%. Price and coverage ratio has further improved from 69.99% a year back to 73.47%. Cost-to-income ratio has increased from 46.81% to 52.57%. Of course, it is mainly on account of some reduction in the income, which was mainly on account of lower trading profit. Otherwise, it is almost at par. CRAR has also improved to 15.66% from 14.85% about a year back. And overall business turnover has reached the new high of INR 137,169.99 crores with a growth rate of 7.71%. Deposits grew at 6.25%. Advances grew at 10.22%. CD ratio has improved to 70.64% from 68.09%. CASA has also further improved to 32.97% from 31.49% with a Y-o-Y growth of 11.23% in the CASA. Yield on advances during this particular quarter, it has improved by 54 bps from 8.06% to 8.60%. However, for the full year, there is a 21 bps down from 9.05% to 8.84%. Of course, it is mainly on of some strict competition in the interest rate in the market. However, the plus point is cost of deposit. So overall, for the full year, it was at 3.76% last year, now it is 4.1 -- yes. No, for the full year last year, it was 5.29%. Now it is 4.66%. So it is down by about -- it has improved by 63 bps. And as a result, our spread has improved significantly. Last year, our spread was -- interest rate was 3.76%. Now it is 4.18%. So 42 basis points increase in the spread is also upsell. Our Board of Directors have also proposed a dividend of 40%. And going forward, I have every reason to believe that stage is all set for an impressive takeout from here on. So as to ensure the business excellence during FY '22, '23, especially in the areas of credit growth, which could be in the range of -- which could be upward of 15%. And asset quality would further moderate. Technology initiatives would be for [indiscernible]. And of course, all in all, we will be focusing for more in further strengthening the fundamental structure bank. So this is in nut-shell what I have to share with you. And I welcome the further clarifications for the questions or the suggestions whatever maybe from all the participants.

We will now begin the question-and-answer session. [Operator Instructions] We have the first question from the line of Suraj Das from B&K Securities.

[indiscernible] then your sequential [indiscernible] have increased from [indiscernible].

Suraj, can you start from the beginning? Your voice is not clear. Some disturbance is there, Suraj.

[indiscernible] will be much better.

Yes.

[indiscernible] breaking.

Is this any better? Okay. So sir, are you asking about slippages so if I see your sequences given the net increase [indiscernible] around growth. So just wanted to [indiscernible] why the slippages is coming as of [indiscernible].

Mr. Suraj your voice is breaking into the call.

[indiscernible] Rejoin the queue.

We have the next question from the line of [ Yash Dee ] from [ Dundee ] Equity Research.

The performance has been all around extremely good. I just wanted some idea on how the demand is -- how the loan demand is dining up right now? What about the -- are you going to give any guidance regarding the net interest income for this coming financial year or the coming quarters? Whatever you can will be good.

Yes. My -- the credit demand, the pipeline is very strong. That is what I can share with you. In fact, as far as also, we had sanctioned about INR 5,250 crores, and that was pending for disbursement as of March '22. At least 50% of it hadn't been released. The credit growth would have been somewhere near 13% to 14%. But anyhow, that is going to be discussed during this quarter and going forward. Along with that, I had about INR 7,783 crores. [indiscernible], maybe working capital and other things. So I should say the pipeline for remittance is very strong, and that is going to happen. And added to that current year also, we will be continuing our focus on the retail and the mid corporate. Last year, yet the growth has come from the large corporates. So this year, because of this strong pipeline sanction as well as the fresh demand I think we will be able to get a very solid growth in the retail and the mid corporate sector. As far as net interest income, your second question is concerned, I think going forward, it will still improve, even though during current year, we have grown at a rate of 14.10%. The interest earning assets would also grow. And I'm also confident that the yield on advances would also significantly improve. Third one is I'm not foreseeing any negative surprises in the asset quality. So I think in our disclosure, also the detailed analysis of the statement, whatever that we have uploaded in our website. You may have seen there I was given a part of NPA accounts of INR 35 crores and above on the provident fund. Last year, INR 35 crores and above, I had INR 355.09 crores under NPA. Now it is drastically reduced to 158.06%. So that is INR 25 crores from above NPA, whereas last year, it constituted 13.72% of our total NPA, now it is at just 7.02%. So these are all the major steps that we have taken, and I'm confident that the NII would be go to improve going forward.

I mean the last -- continuously for the last 3 years from 2.4 [indiscernible] 2.5 and 2.55%, it went to 2.7% for the last financial year. Would you be able to give your guidance?

Sorry, I missed your first part of the question. Please repeat.

I said your NIM, net interest margin has gone up consistently for the last 3 years from 2.43% to 2.55% to 2.7% for the last financial year. Would you be able to give a guidance on the next financial year? And do you see an improvement in the NIMs further?

As far as NIM is concerned, we have been consistently working on it. From 2.91%, it has improved to 3.18% now, and that is on a year-on-year basis. And I can only share with you that our best is yet to come.

Also, sir, you have time till September to raise funds as far as the knowledge that I have. So is there any update on that? Because we do very long, I think almost a year since you took the access to raise INR 6,000 crores or something for the QIP or corporate money, but there hasn't been any update on that piece yet from the bank or some. So I'm sure you wouldn't be able to get into the detail because it's the right transaction. But at least you can give us an idea of how you're hedging whether it's moving forward. It's not moving forward, it's sold or whatever it is because your time in September only to make those ones, right?

Yes. See, our capital to risk-weighted asset ratio, which was at 14.85%, has now further consolidated at 15.66%. This is 1 point, which is worth noting. And the QIP is still on. At appropriate time, we will disclose our strategy.

Okay, sir. Also one last question. Sorry for taking so many questions. But regarding the book value for the last year has come up to around [indiscernible]. So do you have a threshold for using the NIM QIP that, for example, we won't raise money below 0.5 book value to price? Or do you won't raise money below 0.6 or 0.7. Your last 10-year medium average has been 0.8% book value to price. Will you raise money below that or don't you raise money below that? That is my last question because the reason this question is very important. And because anything below 10-year median price to book value average is would be actually a loss to the shareholders, if I may say -- so I would really...

Yes, you have raised a very valid point. Definitely, we will be considerate of all these points before taking an informed decision.

We have the next question from the line of [ Shirish Vas ] from Moneylife Advisory.

My question is pertaining to the loan book mix that we are targeting going forward between retail, mid corporate and corporate. If you can give some idea of what is the kind of loan book mix that we'll be targeting between these 3 segments. And within the corporate loan book, what are the kind of products that according to you will be driving the growth going forward?

See, retail, mid-corporates and corporates. Most probably, our corporates would be in the range of around 20% of the loan look and remaining 80% would be from the retail and the mid corporates, what we are seeing is there is very good demand for the mid-corporate segment, INR 35 crores to INR 100 crores, including the MSMEs. So our effort will be there. to get good quality advances, EDA less than INR 100 crores exposure segment. And in the corporate as well as in the market corporates, we will continue to focus on MBS as well as lease in rental discounts and other MSMEs, including some good agricultural advances also apart from the coal and [indiscernible] initiatives. So these are all the areas where we have already made certain headway, and we will be further consolidating our position. If you look into these 2 portfolios of NBFC as well as the lease rental discount. So that these portfolio are performing very well. And that is why we have been taking exposure to that good rated advances also. So this will continue to be our focus period for the current year.

Okay. Got it. Just one additional question, if I may ask. So in terms of these 3 segments the bank will be focusing on. In which segment and if you can also give details on which kind of products are you seeing most kind of competition from other banks and NBFCs in terms of the interest rates, et cetera?

No, no, I'm not seeing any competition. So wherever the competition are very good opportunity for further lending is there. We are exploring co-lending opportunities. I'm getting some good feedback in that area also good business rates. So I think that is where we have abundant opportunity for a quality lending in that area as well.

We have the next question from the line of Suraj Das from B&K Securities.

So sir, I was asking earlier about asset quality. So if I see the slippages movement on a Q-o-Q basis, your slippages has increased on a Q-o-Q basis by around INR 100 crores. So I just wanted to know if there is any large account here or I mean, is it more of granular accounts? Or what is the reason of increasing slippages? Because if I see that the system level then the system levels are coming down and also for your [indiscernible].

Yes. I will answer that question. There was a temporary aberration of one account worth INR 35 crores, and that was only for a couple of days, March 30 or 31, 31 split and got upgraded on during the first week of April '22h. But for that, there are no -- this is INR 37.62 crores, it is MSME sector. Excluding that, the majors we paid is from the another MSME that is exposure was INR 19.62 crores. So our no exposure, more than INR 20 crores of slippage during this particular quarter.

Okay. Okay. Sir, I mean, at this thing for all of these, I mean, your roughly will be something around 2%, 2.5%, something like that. So I mean, what is your expectation going ahead because, I mean, most of the corporate slippages as I think now has been recognized at the bank level as well. So for full year FY '23, what is your slippages guidance? .

Here, what happens here, there are some inter-quarter slippage also factored again. It is not a mix slippage including that intra-quarter which gets upgraded during the intra-quarter, that is also factored in. So that being the case, I presume that my slippage ratio would be somewhere around 2%.

Okay. Okay. Understood, sir.

During this quarter, you may have seen, it was at 0.73%. So even if I store at the trade, I think it would be around the same, around 2%.

Right. Understood, sir. Now sir, coming to the PCR. So while -- I mean, if I see the PCR, excluding technical write-offs, that is a specific PCR, so that thing has declined on a Q-o-Q basis, and there is something around 39%. So are you comfortable in these trends, sir, whenever [indiscernible]? And I mean this kind of...

It is not me being comfortable, you have to be comfortable. I would request you to -- I would request your attention to our sector-wise PCR percentage slide in our analysis of financial results, which we have put up in website. Have you seen that?

Yes, sir, I have seen that.

So I would draw your attention there. So PCR, we have mentioned at 73.47%. And all the sector-wise is [indiscernible] NBFC, Infra, large enterprises, CRE, Agri, MSME, housing, all sector [indiscernible]. And I have also given PCR, excluding technical write-offs, which is at 38.82%. This time, I have also disclosed another thing of this how much is secured. So you would come to know after total this NPA around 93.16% is fully secured. So 93.16% plus additional provision of 38.82%. So in fact, 131.98% would be the total security coverage. Now you draw a conclusion whether this PCR -- I mean PCR, excluding technical write-offs, is adequate or not. We are fully convinced that this is adequate. We have all the bandwidth to absorb that any amenity [indiscernible]. But nevertheless, we will try our level best to further improve the provision on the PCR, excluding technical write-off also. But this is our -- the greatest position. We have adequate security even though it is non-performing asset.

Right, sir. Sir, I was actually more coming from that point of view, what you said at the last that, I mean, your endeavor would be increasing the specific PCR. So while your endeavor would be increasing a specific PCR, do you still believe -- I mean, do you believe that your credit cost for next fiscal year would be as same, like something around 1% level?

Yes. Yes. Yes. Credit cost , see, here credit cost has 2 components here. This is for the fresh provision for the fresh NPA and also additional accelerated provision for the existing NPA slightly improve our PCR, and that would also indirectly help me to further reduce the NNPAs because I'm not expecting any major addition to the GLP. And it is angle from the point of view of further strengthening the fundamentals of the balance sheet. We'll take an informed decision at appropriate time.

Any internal kind of guidance that you have, I mean, for this fiscal year, let's say, in terms of PCR or net NPAs?

PCR, we would definitely further improve it, maybe around 200 bps or so. And NPAs would both GNP and NNP I'm very confident that we would further moderate.

Okay. Understood. And sir, one more question on the ECLGS side, sir, if you can disclose what is the outstanding ECLGS amount as of 4Q that you see there.

ECLGS, I think one minute? Do you have a number? We will share with you. We will share.

Sure sire. And qualitatively, sir, how that book is performing, any kind of stress that you were seeing on that book? Or I mean, what are the delinquency levels here?

Delinquency where the NPA is at around 8% or so. And I'm sure that it would be the same rail or it will slightly come down. So as of now in the restructured book excel, 8.18% is the NPA, whereas 3.28% in SMA2. So even if about 50% of SMA2, that is presumed that it slips to NPA. I don't think even under the worst-case scenario, the NPS business may not exceed the percent of our restructured book. Another thing we see on the restructured which is INR 4,115.18 crores. For that, itself, we have INR 560.34 crores provision, which amounts to around 13.62%. So even in the worst-case scenario, let us say, 10% prepaid for INR 411 crores prepaid, we have INR 560.3 crores provision. So that means from the provision shop, the restructured portfolio is totally insulated. And we are taking at most all the precursors to see that these restructured advances, including the DC and also things they are properly monitored. I have already constituted a separate restructuring monitoring cell with the 2 activities exclusively in charge for that cell. And as a result in focus, we have already started receiving the recovery as per the pre-restructured this -- some of the requirement, repayment scheduled as per the pre-restructured situation. So things are improving even though [indiscernible] restructuring, what we are seeing is once the cash flow has improved. So they're all voluming retail alone. So even the restructured portfolio also. I'm very confident that it would not further deteriorate.

Understood, sir. And sir, this restructuring number, INR 4,115 crores, this is the net restructure move, right? The reason I'm asking -- net of provision, the reason I'm asking is that because one of your slides, Slide # 20 you have given the total restructured book of INR 4,478 crores. So the number is different than this INR 4,115 crores. So I am just wondering, I mean, what could be the difference?

The net base for [indiscernible] standard respect CF effective toward [indiscernible] total restructuring is INR 4,468, out of the standard restructuring is INR 4,115, balance is the NPE and the restructuring. Which slide you are referring to?

Sir, I'm listening to Slide #20, where you have given -- I mean in the column of restructured. I mean where you have given the geographical credit concentration. So there you have -- under the restructured column here in the total amount, so is that INR 4,478. And in the subsequent slide, Slide #21, if I add the INR 4,115 plus NPA amount, which is INR 336.42 crores, it will not add up to INR 4,000 -- It will add up to INR 4,478.

INR 4,478, correct? So out of INR 4,478 crores, INR 4,115 crores is the standard [indiscernible]. .

Okay. Okay. Understood, sir. And sir, 2 more data keeping questions. One is if you can give the loan book breakup by benchmark in terms of how much of the total loan book would be linked to EBLR how much it being to MCLR or, let's say, fixed-rate loans?

MCLR is coming down. Now I think it is around 40% of our loan book unit under MCLR. Next time, we will incorporate that -- 1 minute. I should be having that details here just hold on, let me see the Yes. Yes, the MCLR has drastically come down. Last year, March '21, 48.85% of the total, this gross bank credit was under MCLR. Now it is 28.88%. EBLR [indiscernible] Last year, it was 10%, now it is 9.51%. EBLR linked to T-Bill. Last year, it was 23.22%, now it is 39.9%. And balances EBLR not linked to others and basic. So major is EBLR [indiscernible] rate is going up and MCLR is coming back. So that is why I said the in advance has also shown a negative trend and now it's appear to be moderated. And we offer, I think, strongly may improve.

Right. Understood, sir. And sir, one last question on the SMA side. So the SMA 1 and 2 number that you have given for this quarter, it looks like that the numbers have restated for the previous quarters, like for December '21 and March '21. So I just wanted to know whether the SMA number is all inclusive? Or this is only for INR 5 crores and [indiscernible]?

No, no, no. say [indiscernible] SMA is all inclusive, not only the main accounts, but also the related accounts, not only INR 5 crores and the down even less than INR 5 crores. It is all inclusive.

Okay. Okay. But sir, in your last quarter present is under SMA2 number was something different for December 21, which was something around INR 1,155 crores. But in this quarter, the December '21 number for SMA2 reach INR 890 crores. So there is, I mean, some gap.

I'll look into that. Right now, I don't have. But it is all inclusive.

We have the next question from the line of Sushil Choksey from Indus Security Advisors.

Thank you for giving a great set of results. Sir, what is our digital spend likely to be in the year of '22, '23 with the centenary year coming up?

Digital spend will slightly increase in tune with our corporate strategy of to emerge digital bank of future. So keeping that in mind, we have realigned that. So for the revenue expenses as well as capital expenses, it will slightly increase. But when you compare to the industry, I am still below the industry level.

Any number which you can put?

No, I don't have, Sushil.

Okay. Sir, where do you see a CD ratio going forward? Historically, pre-COVID we used to be at 79%, 80%. And currently, we are below 75%. So where do you see that...

I may require about a couple of years. But definitely, it would keep on improving. Now it is at 70% plus -- sorry 80%, we can. I will take your advice and let me work on that. For me, the most important thing is growth with quality. I can definitely improve the CD ratio. But whenever we get a good qualitative growth opportunity, we will explore that.

The question keeping in mind growth in quality. So I'm not asking to sacrifice.

No, no. It is all depending on so many external factors also. So going forward, let us [indiscernible] or as we said, 75% to 80%.

What enablers are in place to improve CASA and NIM?

Yes. See, CASA enablers have started yielding results. And as I said, we have already have a CASA marketing officers at a field level. And CASA regional sales [indiscernible] 14 regional officers, we have also rolled out a good number of CASA products, especially ESP products, which would also cater to the requirements of high network individuals. Secondly, we are also now in [ internal ] the bank for the agency business of the government department also, we have already started an exclusive cell of the government agency business. I have already have one national head to pursue this particular line of activity. So I'm reasonably confident that by next year, my CASA would surplus 35% of our total deposits. So a lot of enablers are being placed there.

If I take a 1- or 2-year outlook on little medium-term outlook, what would be ROE, ROA or aspiration of the bank?

Yes, another 2 to 3 years outlook, ROE should be in the range of 0.8% to 1% and ROE should cross about 12%, another 2 to 3 years.

Looking at that, that we actually don't need equity. I remember in the last quarter, we were discussing about some equity infusion, which would be more of important or strategic in nature. Is there anything fructifying on that side?

Very active consideration, deliberation at the Board level, Management level, everything is going on. We are just waiting for an appropriate time for an appropriate move.

Sir, you have a large southern presence, which are the rich states in terms of where unit bonds and a lot of capital is on flowing also the educated class of India, there's in the states where our branches are. So what is it making difficult that the connectivity or the print between the customer and the bank is missing to achieve that?

What type of connectivity de-link that you are realizing?

I'm asking of CASA cross-selling, maybe customer base increase because Karnataka, Maharshtra, Tamilnadu Andra, and Telangana, there it is NRI or domestic productivity, digital customers, new startups, manufacturing activity, maybe [indiscernible]

All those things, have started. In fact, we have started in our digital marketing initiative also -- so that is the reason why our CASA is consistently improving. About 3 years back, it was somewhere around 28%, and now close to 33%. And these are on the areas have rightly pointed out the use, which are going to support our, not only the CASA, but also the cross-selling activities. So keeping that in mind, I am going to start my ACoE Analytical Center of Excellence at Bengaluru, which would provide a lot of analytics and predictive analysis -- analytics, which is also there [indiscernible]. And these are the good technology-oriented initiatives that we have planned under [indiscernible] mix. All those things, whatever that you have just mentioned, it is in the pipeline in a big way.

Sir, what is the outlook on our investment book? .

The investment, 1 minute. Our total investment is around INR 22,000 crores now. Outlook, [indiscernible] in fact, interest rates have started increasing, all of you are aware that. Definitely, we'll be having an opportunity to build up the portfolio for the future now. So [indiscernible] not to be for this particular year also.

Profit is fine, but at what yield are you comfortable based on the current book what you own? Because we already May is almost completely 2 months are down. So where do we stand as of today on today's yield gotten?

No, there may not be much depreciation impact here because our holding in AFS category and [indiscernible] categories are slightly minimum. So [indiscernible] has in the market is for the time being in the government continues because now, government is also increasing the HCM portfolio to 23%. Banks are permitted to yield up to 23% there has not been material depreciation impact, but profit booking opportunity may not also be there. .

And we have reached [indiscernible]

[indiscernible] at 5.47%.

Okay. Sir, we're already on May 30, what kind of unutilized limit and sanctions we would have achieved whereby I think I mean the growth would be visible in the quarter -- current quarter and the year to go.

There will be a positive traction in the first 2 months also. As I said, the unavailed and unutilized limit. So the credit uptake has already started -- so I'm expecting a positive traction in that sector.

Sir, are you sensing this credit offtake more led by inflation in every business segment or it is new fresh schedule?

It is all demand mainly from the point of view improved production wherever we have exposure to the manufacturing sector, and also in the trading sector so that demand for credit is on positive traction.

What would be the fresh sanctions for the year in April, May?

Yes. Sanction, see especially for INR 5 crores and above, we have this CMC approach, that is the Credit Management Committee approach. So there also on a weekly basis, credit inquiries are on the increase. So compared to the last year, this time, credit inquiries have almost about 1.25, 1.3x of the previous years as of now for the first 2 months.

Do you think we can sustain the NIM of 3.25% with [indiscernible]?

100%. I'm fully confident.

We have the next question from the line of Yashwan T, who is a retail investor.

Firstly, congratulations on a decent number of results. So I have 2 questions. One is with respect to the restructuring, what percentage of advances have been restructures to the last quarter? And second question is both a buyback of shares. So I mean I think I did hear in public investors raising this point. So -- and it would also help us pay some dividend distribution tax, so we go for a buyback. So yes, I mean, what is stopping us to consider this buyback of shares.

Thank you, Yashwan. We will continue to strive hard to include these coming results quarter-on-quarter basis that have seen the consistency in our results the last almost 8 quarters. You have 2 questions for me from the restructure, second or if you were suggestion on buyback of shares. As far as the restructure, the Board book is concerned, it is around 8% of our total advances. As I said, we'll be more concerned as those further improving the quality of the restructured portfolio. I have already shared the index [indiscernible] what are on the enablers that we have put in place. As far as buyback of shares, yes, we were at -- I have nothing to comment on that because no thought process has gone in that direction as far as we are concerned.

I mean, pretty much every other companies out there are considering just to make sure that instead of paying those tax, so it will also help us improve the value of the share. So that is one tone which is available. So that is the reason I asked the question.

Yes. As you know, banking not one is our bank, our banks need capital. So I think this may not be the right or the appropriate time to return the capital. But as said, we will take the bank to that level 1 day, that's the situation better.

Okay. Let me add the information on that part. So it is more about instead of paying [indiscernible] considering INR 4 per share or 40% per share. So where it can't we see to grow like 30% on this and growing 20% on the buyback. So that was my point.

Your suggestions are welcome. We will keep interacting with your plan. Thank you.

We have the next question from the line of [ Shirish Vas ] was from Moneylife Advisory.

I just wanted to understand if the kind of proposed fund raise that we have planned does not go through. What is the kind of loan book growth that the bank has the capacity for on its existing capital and liability base?

Loan book growth, I think our present CRAR would definitely sustain the loan book growth of around 15% to 20% for the next 1 or 2 years. Because as I have already made clear, the flowback of the profit will also be this. And considering all these things that the provision pressure has considerably reduced, and our ability to earn profit has significantly improved. And of course, we are also keeping this option of raising the capital also. So definitely, we are having a very balanced approach as far as maintaining the CRAR, raising capital without compromising the loan book growth.

We have the next question from the line of Anil Kumar Sharma, an individual investor.

Congrats for the very good numbers. So my question is, as usual, last year, also same question was there. That are we -- have we have received any ceiling for the target of our bank because our value of all things are all parameters we are doing well or the value of share is not increasing. That is not in your hands, but how we can increase that.

My focus area is to strengthen the fundamentals in every possible areas and also create a new benchmark. So if you see the results of the bank for the last couple of years, we have been very consistent, and there is a sustainability also. And we have totally minimized the negative surprises. So on the proven [indiscernible] track record, and I will be definitely further strengthen all these things. And I'm hopeful that as it happened today. The share price is up by INR 5 by 8.29%. I think going forward, when the real strength of the bank is understood by all the wise investors like you I don't think why this shares should trade at such a low level. So because the book value itself is at about INR 200 crores, and the adjusted book value is also somewhere, I mean. INR 200. And adjusted book value is also somewhere around INR 194 and up. Definitely, it will get a right price in the market going forward. That is my belief. Myself and my entire team, we are totally committed for this qualitative improvement going forward. And also keeping in mind the centenary year that the bank is going to have during, I mean, 2023 and '24. So we have -- that is why I said this is a -- the stage is all set for an interesting takeoff from here on. And definitely, we work hard towards that in realizing you were green, too.

My second question is, we are -- have your target -- we should be a target to acquire by anybody [indiscernible] call good corporate for internal or external. Do we have received any feelings like that?

Yes, I'm optimistic. Let us see. Every quarter, I will miss you.

That was the last question. I would now like to hand it over to the management for closing comments.

Yes. Thanks. A special thanks to all the investors and analysts, and I appreciate the keen interest being shown by you and also the good support being extended for you. So I'm sure that the bank will continue to come up to your expectation in the days to come as well. So from our side, we will definitely strive hard to give a still better results going forward. Thanks to [indiscernible].

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