UCO Bank (UCOBANK) Earnings Call Transcript & Summary

Good evening, everyone. Welcome to UCO Bank Q4 FY '25 Earnings Conference Call. It is my pleasure to introduce to you the senior management team of UCO Bank. With us, we have today Mr. Ashwani Kumar, MD and CEO, sir; Mr. Rajendra Kumar Saboo, Executive Director; and Mr. Vijay N. Kamble, Executive Director. We'll have the opening remarks from the MD, sir. Post which, we'll open the floor for question and answers. Over to you, MD, sir.

Thank you. I welcome all analysts to this post results press conference -- sorry, analyst meet through Webex. Let me first share with you highlights of our performance for the quarter ended March '25 and the full financial year ended March '25. Overall business growth of the bank, bank's business grew by 14.12% on a Y-o-Y basis and the bank crossed INR 5 lakh crore business. So the total business of the bank was INR 513,527 crores. Deposit grew by 11.56% and saving deposits grew by 5.06%. Current deposit grew by 18.47%. We were able to maintain our CASA at 37.91%. Our advances grew by 17.72%, of which retail grew by 35%. Of retail, home loan growth was around 18.13% and vehicle loan growth was 58.99%. Agriculture grew by 20%. Agriculture growth was well supported by improvement increase in our infra fund, SHG and gold loan portfolio. MSME growth was 18.55%. Now coming to the asset quality. Gross NPA of the bank has been reducing consistently on a quarter-on-quarter basis. This quarter, we -- gross NPA came down to 2.69%. That is a reduction of 77 bps on a Y-o-Y basis. Net NPA, again, coming down on a quarter-on-quarter basis, came down to 0.50%. That is a reduction of 39 bps on a Y-o-Y basis. PCR of the bank has been improving on a quarter-on-quarter basis, 96.69%. That is up by 131 bps on a Y-o-Y basis. PCR, excluding TWO portfolio also improved by 704 bps on a Y-o-Y basis to 81.95%. Profitability. Our net interest income for the year improved by 18.88%. Noninterest income also improved by 34.91% on a Y-o-Y basis. NIM domestic improved by 17 bps to 3.29 bps on a Y-o-Y basis. Global NIM improved by 16 bps to 3.08 bps. Yield on advances improved by 6 bps to 8.89%. Yield on advances global improved by 9 bps to 8.55%. Our yield on funds improved from 7.89% in March '24 to 8.25% in March '25. That is improvement of 36 bps on a Y-o-Y basis. Overall operating profit for the quarter ended, we registered an operating profit of INR 1,699 crores. That is a 33.48% growth on a Y-o-Y basis. For the full financial year, operating profit was INR 6,037 crores that is a growth of 32% on a Y-o-Y basis. Similarly, net profit for the quarter ended March ' 25 was INR 653 crores with a Y-o-Y growth of 24%. For the full financial year, the net profit was INR 2,445 crores with a growth of 47.80%. Now coming to the guidance which we have given at the start of the financial year and what is our achievement and what is our future growth outlook. Deposit growth, we have given a guidance of 8% to 10% at the start of the year. We ended the year with 11.56% deposit growth. CASA, our growth target was 8% to 10%. Our actual growth is 6.71%. That is tad below the guidance which we have given. Credit growth was 12% to 14% our growth is 17.72%. CASA, we have given a guidance of 37% to 38%. We were able to maintain 37.91% that is within the guidance. RAM percentage, we have given a guidance of 60% to 62%, and actual 62.73%. CD ratio, 74% to 75% was the guidance, actual is 74.94%. Credit cost was less than 1% guidance. Now actual is 0.87%. NIM global was 3% to 3.10%, actual is 3.17%. GNPA is less than 3%, actual is 2.69%. Net NPA guidance was 0.65%, actual is 0.50%. Slippage ratio of our guidance was 1% to 1.25%. Actual Is 0.92%. Total recovery and upgradation, our guidance was INR 3,000 crores. Actual recovery and upgradation is INR 4,427 crores. Recovery was surpassed by a bigger margin because there were certain NPAs, which we were expecting resolution in this current financial year, but they were -- we got the good recovery in the last financial year in March quarter itself. Now coming to the growth outlook for the coming -- this year. Deposit growth, our outlook is 10% to 12% deposit growth. CASA growth is 8% to 10% credit growth 12% to 14%. CASA, we would like to maintain in the range of 37% to 38%. RAM 61% to 63%. CD ratio, we like to maintain in the range of 77%. Credit cost, again, less than 1%. NIM global 3% to 3.10%. GNPA less than 2.5%. Net NPA less than 0.35% and slippage ratio between 1% to 1.25% and recovery and upgradation INR 2,200 crores to INR 2,700 crores because we have already got some large recovery, which was expected in this financial year, we have already recovered in the last financial year. As you all know, we have already successfully completed our QIP of INR 2,000 crores. And with that, plus with the clawback of profits of this current financial year, our CRAR has also improved to 18.49% as against 16.25% last quarter. CET has improved to 16.03%, Tier 1, 16.37%. So the bank is well capitalized, and there is a -- growth capital is sufficient available with the bank. Now coming to the approvals by the Board. Board of the bank has approved recommended dividend of 3.90% as against 2.80% last year. Board of the bank has also recommended for raising equity or the capital raising plan of -- by issuing INR 270 crores shares of INR 10 each face value in this current financial year. With this, if it happens at the opportune time, the government holding will come down to less than 75%. So these were the financial performance and approvals by the Board. And now coming to the various segments of growth where we have achieved our parameters. In home loan, our growth was 18%, in vehicle loan 59%, personal loan around 46%. These personal loans are again salary backed and EQPL based on our transaction analysis for the last 1 year, which we give. And in the pool, there was a -- we have taken a pool. Now the pool amount is INR 6,797 crores. Now coming to the priority sector. Bank has achieved all priority sector segments and there is no breach on any of the parameters of priority sector segment. In financial inclusion also, bank has been registering reasonable growth and achieving all targets set by the government. PMSBY, our enrollment has reached to 63 lakh. PMJJBY enrollment has reached 28 lakh. APY, 12.89 lakh. PMJDY account 1,049 lakh (Sic) [149 lakhs] and balances in PMJDY account is INR 6,061 crores. And number of BCs engaged by the bank has also increased by 9% to 10,653. If you come to the NBFC advances, more than 96% are AA and above rated. And if we look at A and above, it is 99% A and above rated. Similarly, rating mix also, out of total rated, 80% are rated, of which 77% are above benchmark at BBB and above rated. Total unrated is 19.75% only. Of which again, PSU with the government guaranteed is around 7.29%. And without government guarantee is 3.64% and others are 8.82% only. Coming to the profitability, detailed analysis, the operating profit of the bank improved to INR 1,699 crores and -- which was supported by net interest income of INR 2,698 crores, noninterest income of INR 1,392 crores. Operating expenses, INR 2,391 crores, of which staff expenses was INR 1,618 crores. In the staff expenses in this quarter, we have made a provision of INR 180 crores towards PLI for the current year also. In operating expenses also, we have made a provision of INR 100 crores for our IT-related expenditure for the projects which we have already taken, but the payments have not been made will come in -- in the next financial year. In the provisions also, we have made doubtful, 3 assets are already 100%. Doubtful 2 assets, we have already made now to 90% provision. And in unsecured substandard also, we have reached 50% provision. And in sub-standard secured advances, it is 23%. Now coming to the financial indicators by ratios, cost of deposit. Cost of deposit of the bank, which was 4.87% last quarter. Now for this quarter, it's 4.90%. But year as a whole, cost of deposits increased by 7 bps, and cost of funds increased by 15 bps for the year as a whole. Cost-to-income ratio for the financial year '23/'24 was 59.74%. Now for this current financial year, it is 56.99%. Yield on advances also has improved by 6 bps in this financial year, and yield on global advances has improved by 9 bps. Yield on funds has improved by 36 bps in this financial year. Our earnings per share, that has also crossed INR 2. Now it is INR 2.04 in this financial year. Book value has improved to INR 17.53. Business per employee, which was around INR 20.93 crores in last financial year has improved to INR 24.35 crores and business per branch has also improved from INR 139 crores to INR 155 crores in this financial year. These were the business financial parameters of the bank. Now coming to the stressed asset portfolio. Our SMA portfolio and restructured portfolio has been coming down on a quarter-on-quarter basis. And if you look at our SMA portfolio, which we declared more than INR 1 crore, our SMA -- total SMA more than INR 1 crore book is INR 1,583 crores. Of which, only INR 799 crores is in SMA 1 and 2. INR 784 crores is SMA 1. So if we look at SMA 1 and 2 more than INR 1 crore, the overall percentage is 0.36% only. If you look at our restructured book, which was at INR 3,500 crores at the start of the year has come down to INR 1,687 crores, and that works out to 0.77% of the total standard advances. So it is -- the restructured book is also coming down substantially, and it is reached -- it's almost 50% from the last financial year. In NCLT, 100% provision has been made and around 254 cases are in NCLT with exposure of INR 17,585 (Sic) [17,584] crores. Capital adequacy, I've already told, shareholding I've shared. So now I -- yes, few of the initiatives which we have started in the last financial year. I would like to highlight a few of the initiatives and the progress made by the bank on those initiatives. Last year in September, bank started a new project called Project Parivartan. The purpose was to create a fully digital-first approach across all bank offerings and target was that we'll be digitizing over 25 journeys in 1 year time. I'm happy to share that in 6 months' time, we have already done 14 digital journeys on our mobile platform. And we have kept a target of INR 6,000 crores of business from the digital channels. We have already crossed INR 6,100 crores in March itself. So 14 journeys have already been launched, of which the important was the announcement made by Honorable FM in the last to last budget with the cash flow-based lending to MSMEs. Bank launched various MSME digital journeys, GST Smart, MSME Smart that is up to 25 lakh and Shishu Mudra, Kishore, Tarun, Digital renewal of CC accounts up to 10 lakh. So all those MSME journeys were launched. And I'm happy to share that ever since launch of these journeys, bank has already clocked 200 crores of business through digital channels from MSME journeys. Another 15 journeys are in pipeline. So we will be around 30 journeys. In the next 3 to 4 months' time, 30 journeys will be completed. Bank has also enhanced its WhatsApp banking offerings. As on date, 43 services are available on WhatsApp banking. In the last quarter, 6 new services have been offered, making it to 43. If you look at our digital adoption, our active digital -- active mobile banking users have been improving on a quarter-on-quarter basis in last 1 year. We have almost doubled our mobile active users. Plus, we have revamped our mobile app also. And I'm happy to share that our bank's mobile app rating has improved to 4.8 and it is one of the best in the industry across public sector banks. To combat the problem of new account, bank initiated -- launched a new initiative that was Pulse alert monitoring system. We also integrated with 4-C for real-time data on the fraud, digital fraud. Then we have developed various rules to identify some new accounts before they trigger any loss to anybody, enhanced due diligence process has been initiated by the bank. As a result, before they are reported as a fraud by any fraud registry, bank has been able to suspect and block those accounts before they're reported by any agency. To enhance the services to our customers, we have revamped our chatbot also that is called UDAY, where account related 16 services and 14 general services are already made available and 3 are in pipeline. So we'll keep on improving our offerings on the chatbot channel also for the convenience of our customers. In retail segment, we improved all our products, maybe education loan products for our customers. Pension loan, vehicle loan, housing loan, all gold loan, every product was totally revamped last financial year. We'll continue to work on these products in this current financial year so that we come to the expectations of our customers in this financial year as well. To help -- or to expand our reach to the MSME, 11 new MSME schemes were launched in last financial year. And this financial year, now the cluster-based financing schemes will be launched by the bank. In HR, bank has already implemented HR initiative, HRMS and project subsidy, we call that -- that is HR transformation project. Now that reward and recognition program, learning and development, everything has been completed, and we'll continue to build on the learning and development policy, which we have implemented in this financial year in true spirit so that our people, our employees are skilled in that direction. For female customers, bank has launched specific schemes like Pink Basket is one scheme where we offer them specific specialized saving account, current account, flexi RD account, special debit card that is called Aparajita debit card has been launched. Under MSME, we have launched UCO MSME Nari Samman scheme for females. We have given a special scheme for study abroad and special discount of 0.10%. On MSME loans, special discount to MSME entrepreneurs is 0.25%. On home loan also it is 0.5%. In IT, we launched -- initiated various projects and we completed. So we -- in IT, we have already done NOC, that is network operations center has been implemented. We have upgraded network bandwidth that was from 2 Mbps to 4 Mbps. And in zantos, it was 4 Mbps, it has made to 8 Mbps. Tab Banking has been introduced across the branches now. Earlier, it was being done. So last quarter, it has been implemented in all the 3,300 branches. So digital certificate also has been launched through mobile banking. Application white listing solution has also been implemented. EBG facility has also been implemented. We have also integrated with the NSE for [ EFDR ] new virtual machine setup has been implemented. IT asset management solution has been implemented. Application performance management solution has been implemented. Residence operations center ROC has also been implemented. API banking solution has been implemented. Now we'll be taking benefit of API integration with the various corporates. Overseas Oracle migration -- upgradation has also been completed. So all these projects have been completed in the last financial year. In this current financial year, we have taken a budget of around INR 1,000 crores. And last year, another INR 1,000 crores was taken, of which around 64% was used. There are a few projects which have spilled over to the next year. So this year also, we have taken INR 1,000-plus crores budget. And we intend to bring FFPC application, IDAM data center consolidation, document -- enterprise document management system. We want to upgrade storage capacity of UPI, cyber recovery vault, testing setup we intend to bring [ near DS ] site also at Kolkata. Apart from the CMS supply chain, all these projects are in pipeline. And the CBDC is also in pipeline. Now we will be testing our -- once the accounts are open, we will be going for the pilot stage also. So there are certain ATMs which need to be replaced. So all these things are already in pipeline, which we will work in this financial year to bring new and newer technology. Apart from that, we are bringing -- we are also working on robotic process automation, and we are figuring out which are the areas where we can use those process automations and also the use cases of AI are being identified so that in current financial year, we bring AI into use also. This is all I wanted to share with you all. If anything you want to share...

No.

So thank you all. And now we are open for discussions. Thank you.

We have our first question from the line of Mr. Amit Mishra.

Sir, my first question is on your RAM share. So now our RAM share is almost 73%. So what is our idle ratio? Are we going to do 60-40 or 35-65?

See, our RAM share is around 62.73%. And idle is, I think we should be somewhere 65%.

65-35.

Yes.

Sir, out of your total advances, how much is linked to external bench rate?

See, out of total advances, our link to -- give me a second. around 50%, 55% is linked to external benchmark.

Okay. 55%. Sir, we have witnessed a really good growth in vehicle loan segment, almost 59%. So specifically in vehicle loan, which sector are we seeing 2-wheeler, 4-wheeler is growing or which specific vehicle sector is growing?

The growth is in 4-wheeler only. Maximum growth is in 4-wheeler. And actually, we have revamped our vehicle loan scheme last year, and that has given a result and our base was very low. So on a base of -- with a branch network of 3,300, March '24, our vehicle loan per branch was even less than INR 1 crore. So now we have reached to a level of around INR 1.5 crores per branch. And we have also revamped our incentive scheme for the DSAs also. So that has all contributed to the growth in vehicle loan business.

Okay. And sir, next on -- I may have missed in past quarters. Have we changed any provisioning norms for employee benefits in the past?

No, no. There is no change. Employee norms -- provisioning norms or employee benefits that is governed by S15. So they continue to apply as it is.

Okay, sir. Sir, you mentioned you have already spent like INR 440 crores on IT this year. And what would...

INR 600 crores.

INR 600 crores.

INR 640 crores.

INR 640 crores. And for next year, we are targeting INR 1,000 crores...

INR 1,000 crores plus, yes.

INR 1,000 crores plus...

We have our next question from the line of Mishra Rohan.

So my question is what is your outlook on NIM as it has declined sharply from 3.38% to 3.22% quarter-on-quarter? And also the yields also dropped from 9.02% to 8.9%. What's explaining this? And is this because of deposit is largely stable?

Last quarter, we had an interest component of around INR 42 crores from one of the segments that is NRLM. So that was over and above our normal interest income and that gave us a slightly higher NIM and higher yield in the last quarter and which was not available in this quarter. So that is one. Because of that only. Otherwise, it is not. If you look at our yield on fund, that has improved on a Y-o-Y basis substantially.

Okay. So the next question is around personal loan -- loan book. Loan book growth has been quite steep this quarter, about 10% to 11% quarter-on-quarter and 46% year-on-year, though it is very small portion of total loans. Can you throw some color on it because at industry level, we are seeing degrowth? Is it -- is this to ETB customers or NTB customers as well?

This personal loan is totally to ETB customers, number one. And number two, these are -- there are 2 components: one, over the salary account holders. Second is our pension account holders. We are giving personal loans to them. Third is our regular customers who are accounts are being operated for the last 9 to 12 months regularly, and we have a criteria of average balance and minimum balance basis that we offer them PTO with their facility. So because of this, this has slightly increased. But on a smaller base, the percentage looks large. But if you look at total overall growth in a year is only INR 800 crores. But on a percentage terms, it looks very large. But per branch, if you look, it is not even INR 1 crore per branch. But we are mindful of the fact we are not going to NTB customers currently. So our focus is only on our internal data usage. We -- data analytics team is there. We have a data -- enterprise data warehouse from where we take basic our BRE customers are identified and then they are given offer to avail this services.

That answered my question. And one last question from my side is what is our total gold loan portfolio? And how is that book shaping up in terms of growth, sir?

INR 10,500 crores.

See, total gold loan portfolio of our bank is INR 10,500 crores. And we are all in compliance with the RBI guidelines of our gold loan portfolio also. And if you look at gold loan portfolio, it has behavior of the gold loan portfolio. In last financial year has been reasonably okay, there is no delinquency. We are observing that the ticket size or anything or the NPA or the delinquencies are increasing, not like that. Our gold loan portfolio behavior is satisfactory and growth is also is there.

We have our next question from the line of Mr. Ashok Ajmera.

Compliments to you, Ashwani, Saboo Ji and Kamble Sahab.

Thank you.

One of the -- I think the best profit -- I mean you have come to INR 2,445 crores of profit as against INR 2,437 crores of loss in 2020.

Yes, yes.

What a fantastic journey from a loss-making to a profitable. And now consecutive, I think for last 4 years, you are in profit, but this is probably one of the highest, I think, in last 10, 12 months.

Highest profit, yes.

Highest profit, sir. So compliments to you, sir, for that and the entire team of UCO Bank.

Thank you.

And sir, even your growth is phenomenal even in this year also. Like credit people are struggling. I think probably you and Bank of Maharashtra, I think these 2 are the only probably the banks which have gone beyond 17% or even 16%. So compliments for that also.

Thank you.

On deposit front also, you are doing well, about almost 11.5%, 12%, which others is credit actually, deposit is 7%, 8%. So having said that, sir, how do you see -- like you have given a good target for the next year also, but you have a little bit tapered down your targeted number of credit to just 12% to 14% as against 17.7%, which you already achieved in this quarter itself. So -- and similarly, on the deposit front, also a little bit down, though it is better than others. So sir, I mean, do you see that the demand may a little bit come down or because of this geopolitical turmoil and the so many changes -- so many things happening around and recently what happened in India also. So is there any impact you see going to be? Or it's a general assumptions that a little bit of credit growth will be lower than what you achieved this year?

See, Ajmera Ji, if you look at our previous year's guidance also, our guidance was 12% to 14% in advances and deposit was 8% to 10%. And our achievement was in deposit 11.56%. And this is this achievement of 11.56%, we have given a guidance of 10% to 12% in deposit, right? In advances, see, advances are again a opportunity based. Sometimes you get a better opportunity, better pricing, yield, then you go for it. So like this and ours is a retail oriented -- we have already done around 62% of our RAM segment is there. So in RAM segment, when we are talking about RAM and India, particularly where the economy is also good, there are no fears, we are doing better than the world, and domestic consumption and market is very sound. So we expect that the RAM segment to continue to grow in the same range. And in corporate, our growth was, if you look at our growth in the corporate was only 12%. So again, corporate, it again depends upon a case-to-case basis whether the pricing matches our expectation. If we get good banking proposal, bankable proposal, with a pricing as per our requirement, we will definitely go for that. So it will be a balanced approach towards credit growth in RAM segment and in corporate credit, depending upon the margin available, depending upon the pricing which we are getting. And accordingly, we have kept a guidance of 12% to 14%, given an opportunity, guidance as we have done in the last year also.

Yes, sir. The point well taken, sir. Now the second one is, sir, about very good control you are having on the SMA, like SMA-1, which was INR 280 crores has a little bit come up, but SMA-2, which was INR 420 crores has come down to INR 66 crores. So it's like a good control. But what is the -- basically, are you feeling any pinch in the individual accounts? Or with this little bit of slowdown, is there any impact, a little bit of delinquency in our recovery this thing, though the final number looks good. But on a day-to-day basis, what is the experience sir, on the recovery front, sir? Coupled with this, our recovery from the written-off account is also good. I think it was INR 964 crores in this quarter. So going forward, what is our total written-off book? And how much do we expect in percentage comes out of that, sir?

See, if you -- first is SMA book. If you look at our SMA book for the last 3, 4 quarters and the financial year -- last financial year this year, we are declaring more than INR 1 crore. We -- generally, other banks are declaring more than INR 5 crores. We declared more than INR 1 crore for the last maybe around 2 years now. And if you look at our book, our total SMA still continues to be in the range of INR 1,500 crores only. SMA, more than INR 1 crore, 0, 1, 2, 0, 1, 2. Sometimes some accounts got back to 0, some accounts get back to 1 and some account gets slipped to 2 and then they go back to 1. So if you look at total, 0.7 -- around 0.7% of my total SMA is more than INR 1 crore only of the book. My total advance is only 0.7%. And that is a continuous -- constant. There is no -- it is not that there is a surprise in 1 quarter that somewhere it has gone up and somewhere it has come down consistently. And if you look at my segment-wise, we are also declaring. So in retail, our SMA is in the range of INR 250 crores to INR 270 crores for the last March, December and March again. In agriculture also, it is in the range of INR 150 crores, INR 180 crores. MSME, it is the range of INR 500 crores to INR 600 crores. And in corporate, it is in the range of INR 500 crores. So it is well spread across segments and consistently, it is there. There are a few accounts which we have -- in the corporate segment, around INR 700 crores, which we -- are in our watch list, which we continue to monitor. Sometimes they come into SMA, sometimes they come out of SMA, but they are continuously paying there. There are certain challenges with them. The cash flow issues are there. But these accounts we have seen over a period of last 1.5 years, they have not slipped. But at times, they come into SMA and then they come out of SMA as well. So on an overall basis, if you ask me, from the behavior of our book, I don't see any stress building up in any of the segments, either in retail, MSME, agri or corporate for the bank. And second, recovery this last quarter -- yes, recovery last quarter, as I told in my opening remarks that last quarter, we had a very good recovery in one of the account which we were expecting, we have targeted for this financial year. That was around INR 841 crores of recovery in one account around -- that was -- we were expecting in this financial year. But that resolution happened and the money came in the last financial year itself in the March quarter. So that has given a boost to the recovery over the last year. Last year, our recovery was -- total recovery was INR 4,429 crores as is INR 3,127 crores previous year. And that has given us a lot of confidence. We have a book of TWO account currently also where around INR 23,000 crores of TWO book is still there. And there are certain NCLT -- INR 18,000 crores under NCLT only. It again depends upon the resolution when it happens and how it happens and how much we get. There are -- if you look at my on book also, that is also now, I think, INR 5,900 crores of on book NPA. So there also we target some recovery. So overall recovery, we are expecting that because INR 900 crores, around INR 850 crores we have already taken this year. Otherwise, our initial estimate was that we will recover around INR 3,500 crores of recovery in this financial year. But since INR 840 crores has already come, so we expect around INR 2,500 crores to INR 2,700 crores in the next financial year overall recovery to come.

Okay. Sir, the last question in this round, sir, is on the treasury. Now with this rate softening and even 20 basis points is just in this year itself, the reduction is there. And with next 2, 3 rate cuts, we might go to like 6.1 or 6. So do we expect a good bumper profit coming in the FY '26 from the overall treasury operations? Saboo, sir?

Yes, sir. Yes. We all are looking at that.

You are a man of treasury, sir.

Yes, yes. Thank you, sir. So RBI has already cut the repo rate twice 25 basis points each. And now we expect, as you have already said, further cuts if that happens, definitely, the yields will be going down. But because profitability will depend upon -- because the RBI has changed the guidelines on investment last year only. So the FUDPL part only will come into the profits directly and AFS part will go to them only. So that is one thing. So -- but again, we are active in the market. As you can see in our presentation also, we have plus INR 2,000-plus portfolio in FUDPL also, and that trading is also means taken up by the treasury. So we see a reasonable profit from there. We can't quantify because it is a function of the market movement. So we can't quantify. But yes, we are hopeful of -- because if yields are supporting, market is supporting, definitely opportunity is there. So we are there in the market to catch the opportunity as and when it arises. So we are hopeful to have a reasonable profit from that also. Already, we have declared that to the treasury. Yes.

Good, sir. If you permit, sir, one more last question, sir.

Yes, please.

Sir, on the NBFC front and co-lending space, now the RBI has also a little bit has become liberal saying that the nonpriority sector NBFC also the banks can go for. So what are your views on that? What is our existing NBFC exposure, including the co-lending? Would you like to throw some light on that, sir? What are your plans in future? Do you want to grow that portfolio? How do you plan to do it?

See, our existing NBFC portfolio is around 12 -- I think 12.5% of our total domestic advances, right? And if you look at our co-lending partnerships, we have already done around 7 co-lending partnerships, and our total co-lending portfolio under these partnership is INR 2,200 crores. So given an opportunity in the current financial year also, we'll continue to evaluate the proposals coming to us. If we match our loan policy guidelines or we are able to modify product and base our loan policy guidelines, we can offer those products through the co-lending partnership. We'll continue to do that. So we'll continue to evaluate the opportunities and then take a call basis. The credentials, we see the product, we see the segment. So many things are to be seen, but we are open to look at the future partnerships in co-lending space with fintechs, with private, nonpriority, whatever.

We have a next question from the line of Mr. Sushil Choksey.

Congratulations to management and team of UCO Bank on excellent stable numbers and the QIP, which you concluded in the last quarter.

Thank you.

Based on current quarter CASA, which we have ended with now falling interest regime, Saboo Ji already answered on the treasury outlook that the yield -- the RBI may drop 2 more times, maybe more also. And second thing, most of the banks have started dropping rates where deposits are concerned. What will we do differently to strengthen our CASA to a sustainable growth path and compete with larger banks?

See, Sushil Ji, if you look at our CASA in the last financial year, if you compare CASA of other banks, CASA of our bank on a quarter-on-quarter basis, we have already given a guidance of 37% to 38%, and we are well within the guidance in the current financial year, 37.91% we maintained CASA. We have done a lot of initiatives in the last financial year to garner CASA to improve our offerings to the various walks of life like for students, for females, for salaried customers, for non-salaried customers, for current account holders, like -- so for everybody, we have done a different type of product, and we have bundled those products with various freebies or offerings by way of free insurance or by way of some concessions or waivers, like that. We have already bundled all those things. So that has resulted in opening of new account. Then another thing which we started last year, if you remember, was the Tab Banking. So initially, we started tab banking with 500 branches, reached to 700, 1,000, 600. And then now in last March quarter, we have given Tab to the entire 3,000-plus branches. So now our onboarding is through digital Tab Banking by reaching out to the customer. Earlier, a year back, we were 100% dependent on the walk-in customer. Then a few of our branches were able to reach out to the customers. Now by this March end, all our branches are equipped to reach out to the customer for opening a saving account. Not only saving account, we have already enabled current account for partners -- for proprietorship and individuals through Tab Banking also. That has been enabled. Now what else we are doing is we are trying to build a functionality in the tab so that whenever our staff or employee reaches out to customer for opening or for anything, he can undertake transaction also sitting at his office through Tab Banking. So that functionality is also we are bringing so that customers need not to visit. Apart from that, through mobile app also, we are onboarding on various journeys, which will enhance our customer experience and customer offerings and customer engagement will improve. The purpose is to improve customer engagement. Since many of our customers are already into investment space also instead of saving, they are investing in mutual funds, they are investing in shares, they are investing in various securities, so we have already a platform which gives these services. In addition to that, we are also trying to have a partnership with NSE or BSE so that we partner with them also so that we offer our mutual fund opportunities to our customers through those platform. So that engagement is similarly, insurance partners also will be onboarding. So anybody wants insurance, that also can onboard through our mobile banking app or Internet banking. We are also bringing our total omnichannel experience also. So that is other project is also in pipeline. So bank will continue to do enhance customer experience, whatever improve offerings, though we have already done once, but we'll continue to reinvent those offerings basis the customer expectations in an ongoing basis so that we engage more and more with our customers that will enhance and that will enable us to maintain our CASA ratio also. This is my feeling is.

Sir, when you're doing a good job and you're implementing so many digital technologies, segment to segment and product to product-wise, whether it's a doctor, lawyer, student, MSME customer, all that, when interest rates are falling, I am quite sure that your CASA can exceed 40%. Your guidance may be conservative, I'm fine. But looking at strength because we are showing positivity on credit, sustainable CASA when the interest rates are falling may take the bank to a higher height, and that's the reason I was suggesting. Second thing on treasury. Sir, on treasury, the yields will fall. We'll make good money on bonds, which we are holding on AFS, HTM, whatever we encash based on our CD ratio, which we would like to maintain. What are we likely to different because we also have international presence and domestic presence that today, majority of the corporates are in a position to borrow through GIFT City [indiscernible]. Will we enhance our margin by taking some exposure on corporates, which enables for bank to perform better? Maybe it's a 1-year bond, 3-year bonds, will we do something better, which mismatch can be maintained?

Sorry, Sushil, we missed between. We could the entire question, please. Last part [Foreign Language].

[Foreign Language] That is what my question is.

So you are talking about non-SLR book, right? So yes, we are active in corporate bonds category also, and we have improved our non-SLR book also. You can see there have been certain maturities during the year from earlier DISCOM bonds. So now we have already front-loaded our deployments in corporate bond category also because we know the yields were attractive, quite attractive earlier before 3, 4 months back. So we have done that investment also, and we will continue to see the corporate bond segment as well in our investment book other than the GSIC and SLR book. Though we have reduced our SLR book, if you see year-on-year, we have reduced our SLR book from around 25% to 23% to augment our CD ratio. But I think we will continue to maintain around these levels, and we will further enhance or augment our non-SLR book as well through the corporate bonds and whatever opportunities comes into that segment. I think that will support our yield overall yield on investments. That is correct.

How are you shaping up on the international book? Similar growth opportunities or with the falling yield, there is pressure there?

So in international book also, our -- we have 2 branches, Singapore and Hong Kong, they are also quite active, both in lending and as well as in investment also. So we have a little book of investment overseas as well. And yields, yes, of course, the yields -- falling yields, they are -- means getting more opportunities to raise the cheaper funds also and to deploy that. Yes, the pressure is there on the margins. But still, we are able to get good deals into the overseas market also on lending side also and in investment book also. So we are quite active in overseas book also. So that will also continue. And that will support our overall profitability.

Sir, you answered the previous questioner's question on co-lending with RBI very elaborately saying now that a bank of our size or any bank can get into partnership, which enables bank's growth, whether it's MSME loans or any other category of loans, which you know better. What will we do differently or like every other big bank, we'll only try up with AAA and AA and continue the process or we'll identify a partner who is good on process, but doesn't have the credibility because he may have the net worth, but his rating may be not AAA and AA.

See, there is no limitation on our part that will go only with AAA or AA. We'll go with any NBFC or partner or bank, whatever with good standards, processes and their NPA percentage. So there are certain parameters which is defined in our loan policy document that what type of partnership we can onboard with co-lending. So whichever partnership fits into our criteria. So we'll be open to look at all those partnerships and onboard with them for the co-lending purposes. So rating is not the only criteria. If the rating is AAA or AA but the NPA percentage of the NPA or the par of the NBFC is high, that does not mean that I'll go with that NBFC itself merely looking at the AAA rating. There are many other factors which are stipulated in the Board approved policy for the co-lending, which we look in and then we arrive at a where we need to enter into a relationship. So we'll continue to do -- evaluate all relationships which come in our way. And naturally, their processes, their recovery mechanism, their underwriting standards, we will evaluate and then we'll go ahead with the partnership.

Okay, sir. Sir, last question on the credit side growth. How are we seeing what is the book position in terms of sanctions which are available, which are not disbursed? How is the pipeline looking? Because which, whatever happening led by U.S. direction on the trade, India may attract a lot of trading manufacturers and opportunities because a lot of goods may not get shipped from China. So I understand we may not get into any kind of a trade situation, which impacts our bank, but manufacturing as well as global demand supply chain, India may attract a larger trade finance situation, including manufacturing opportunities. How are we locating or citing those opportunities in our bank or we are creating some opportunities by already talking to customers?

See, Sushil Ji, our sanctions which are already in pipeline, which are likely to be disbursed over a period of next 1 year is in the range of around INR 10,000 crores where we have already given sanctions and which will be availed. Again, it really depends upon a scenario that time when the opportunity comes to lend or to borrow whatever -- but we have already pipeline of around INR 10,000 crores in various segments, which is available. So far as opportunities which we are exploring, we are already looking at various lending opportunities in various sections in manufacturing also, our teams are talking to various customers. They are also trying to figure out if any particular product is required which is need to be -- like for MSME, we have developed around 11 products in last financial year. For any product for any industry is required, we are also working on a cluster-based product for like -- for example, a simple example, I will give you like tiles. So there are certain tile clusters. So we are working out for a product that will cater to the tile cluster requirement. Similarly, various -- our team is working on the various requirements and trying to figure out the possibilities where our customers are in the process of entering into some ventures for taking the benefit of this trade situation, which is emerging now. We look on those opportunities. We are open to bringing new products also to tap those opportunities. Whatever extra mile we need to go, we definitely go.

Sir, I understood that you're taking a lot of initiatives to capture the segments which are going to be emerging with us and the bank would fructify on a benefit.

Thank you, sir. That will be the last question. MD, sir, any closing remarks?

So thank you to all the analysts for post results con call. And I thank you all the analysts for showing interest in UCO Bank, and we will continue to perform as we have been doing in the last financial year on a quarter-on-quarter basis. Bank will continue to put in best efforts to improve its performance, and we expect that the same support from the analysts for our bank to continue in the times to come also. Thank you very much all the analysts. Thank you. Thank you for showing interest. Thank you.

Thank you, everyone, for joining the UCO Bank earnings call. You may disconnect your lines.