Union Bank of India ($UNIONBANK)

Ladies and gentlemen, good day, and welcome to Union Bank of India Earnings Conference Call for the period ended March 31, 2026. The bank is represented by the Managing Director and CEO, Sri Asheesh Pandey, Executive Directors, Sri Nitesh Ranjan, Sri Ramakrishnan Subramanian, Sri Sanjay Rudra, Sri Amresh Prasad and other members of the top management. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Ajay Bansal, Deputy General Manager. Thank you, and over to you, Mr. Bansal.

Thanks. Good afternoon, ladies and gentlemen. I Ajay Bansal, Head of Investor Relations. Welcome you all for Union Bank of India Earnings Con Call for the period ended March 31, 2026. The structure of the con-call shall include a brief opening statement by respective MD and CEO and then the floor will be open for interaction. Before getting into the con call, I will read out the usual disclaimer statement. I would like to submit that certain statements that may be discussed during the investor in section may be forward-looking statements based on the current expectations. These statements involve a number of risks, uncertainties and other factors that cause actual results [indiscernible] statements. Investors are, therefore, requested to check this information independently before making any investment or other decisions. With this, I now request our respectedMD and CEO, for his opening remarks. Thank you, and over to you, sir.

So thank you so much, Mr. Bansal, and good afternoon, and welcome to all the analysts, investors and to the analyst call [indiscernible]. And we had today a Board Audit Committee and the Board -- and results are adopted by the Board, and we had a press meeting and just now from press meeting, we have switched to analyst meeting. Now as you know, the current scenario, which was from January may August, so macroeconomic environment has been influenced by ongoing global conflicts and war-related disruptions and other things. But at the same time, the government of India RBA has come forward to put up a cushion so that the impact is not much of that. So we have seen various measures the RBI has come and also various measures, the Government of India has come and which is well taken in the market. Now similarly, if we come to Union Bank of India, so all of you are aware that initial in the last September when we had a con call and 28th or 29th of October and 13th January, we had for December quarter. And I think the third time we are meeting right now. So from there, we have moved in luck. We are also pleased our provisional numbers on 3rd of April to the stock exchanges. So initially, yes, we had a muted a lot of many questions we are also there for our analyst and press and investors that -- on the growth side. So certainly, these last 6 months, we have made a good [indiscernible] on the business front, whether it is a CASA, whether it is even a deposit or a late-term deposit, I should say, or maybe advances on the retail and MSME and the large corporate. I mean if you see the business of last 6 months, it has increased by [ INR 171,000 crores ]. So that growth was around 5-point -- sorry, say, around 6.5%. If we underline it comes around25% -- sorry, it is about 13%. So we could make it and even our strategy was very clearly that we wanted to be more on CASA. So yes, CASA has increased. You can see around -- if you see half an half-year basis, which is around 2.7 percentage, which has been increased. And the second one is that when we talked about the retail term deposits because we are purposefully shifting from one deposit retain term deposit. So put together, it is INR 110,000 crores we could garner. And here, if you see on the growth, the figures which we will be giving to you, the global deposits, certainly, you may feel around 2.72%. But then around INR 46,000 crores, we raised alternatively, in which INR 25,000-odd amount which can be [indiscernible] so that we move to lending book, #1. Number two, on the refinance and other things around [ INR 18,000, 3,000 ] infrastructure bond. So if we add that INR 46,000 the actual increase in the deposit. So I believe there to reduce INR 1.29 crore, which is almost 9%. So that is not -- the thing is that we are very cautious about our cost. We are cautious about the mean. We are cautious about very clearly more profitability. And that's why we are working on the efficiency parameter. So you may see that we are above with [indiscernible] ratio, much comfortable. NCR, 114 much comfortable and NSS also much comfortable. So all maintaining, all regulatory and the liquidity and other guidelines, we are under good footing. Now this 6 month, we could have a very good increase in business. So quarter -- sorry, quarter-to-quarter, if you take it is [indiscernible], if you take the global business, then certainly in totality, we're putting together [indiscernible] liability side. it is into [indiscernible] if you analyze trading is coming around 13%. So I think we could make it the headway in the last 6 months. So with this background, we will come to the figures. And first of all, the Board of Directors have recommended a dividend of INR 5 per equity share, 50% of the face value for year ended 31 2026, subject to the requisite approvals. Net profit of the bank stood at INR 18,697 crores, and interest income of the bank stood at [ INR 105,009 crores -- ] approximately INR 1.06 lakh crores. The business growth is around 5.78% Y-o-Y wherein gross advances increased by 9.74. And total deposit grew by 2.7% Y-o-Y, for which I have already told, if we take INR 46,000, the additional ones which we have raised alternatively, then the total [indiscernible] grew by [ INR 53.85 lakh crores ]. So with this, the ramp segment, which we were focusing, it is 12.56% Y-o-Y, in which 16.75% in [ 18.75 ]. And the domestic advances Ram advances is 57.49%. The gross NPA revenue was 78 bps on Y-o-Y basis to 2.82 and net NPA reduced by 15 bps on Y-o-Y to 0.48. The strong capital ratios, the capital adequacy [indiscernible] stood at 18.10% increased from the earlier one. And the CET1 ratio, which is important is [indiscernible] is improved from [ 14.98% ] to [ 15.69 ]. And if we take the return on asset and the return equity. So return on asset is y-o-y is flat [indiscernible] levels. But if you take the quarterly, the last quarter, we were at [indiscernible] this quarter, we are at 1.36%. And one more highlight, which I would like to real to you that this time, Apart from the we have kept INR 700 crores of an additional provision, general provisions sort of. Just as a good time is there, it is always better to keep aside. But this INR 700 crores is not impacting either the net profit or it is impacting the impacting the capital. So this new asset and depending upon the situation, whether ECL framework comes or whether this issue of anything, any inventory. So we had a last time our profit was INR 5,017 crores, and now it is much better than that. And secondly, the dividend also last time, it was 4.75%. This time, it is 5%. And if we take the payout ratio, it is [ 20.66 ] levels. So I think we have maintained all in. With this, I hand over to the coordinator for Q&A for all of us. Thank you.

[Operator Instructions] The first question comes from the line of CA, Dr. Ashok Ajmera, Chairman from Ajcon Global.

Yes. First, congratulations, Andean the entire team, Ashish for a very good quarter because or rather, I would say, in the last 6 months have been good for the bank competitively as compared to the previous 4 quarters before that. And at least to a great extent, we are covered as far as the credit growth is concerned, 6.07% only in one quarter and 9.74% for the whole year, respectable figure. Having said that, sir, but on the deposit front, even though in this quarter, we have performed very well, 6.87%, but the overall for the year, the deposit is 2.72%. So now going forward in order to -- presently, we are good CRAR, but going forward with the kind of the growth, I would like to know the credit growth target also as well as how are we going to match the asset liability, if our deposit growth do not match with the credit growth going forward?

Okay. So thank you, Amer. As I said this time also, if you see the [ 46,000 ], which we -- actually see let us understand banking that we raise resources and we deploy resources to product investments. And we invested whether in ton India loan book. And then we [indiscernible] the interest income, and we see this income related to the [indiscernible] happening. Now coming to that, if you see, we have reached INR 46,000 crores. So and in which the -- this I'm saying not remote resources, which we have tried to build. So our [indiscernible] book was reduced by INR 25,000 crores odd, which we shifted. So, if you see the last year, the March '25 levels. At that point of time, the [indiscernible] ratio was around [ 77 ]. And now it is around 3.5% up. Now the question is that whether the CB ratio, we are getting very comfortable in tees, nicely regulatory, but at the same time, an efficient [indiscernible] level, number one. Number 2 is that our LCR, NSFR on liquidity ratios are very comfortable range. Comfortable in the sense again inefficient because last time our NCR was average [ 123 ] But this time, it is [ 114 ]. [Audio Gap] So I take the [ INR 70,000 ], then certainly, I can say that we must be having the average [indiscernible] but when you talk of converting these to retail term deposit in CASA, my average cost would be somewhere [ 4.5% or maybe 4.75% ] level. So [indiscernible] I'm just noting this with the February somewhere '25, where from there and up till now, the repo has been reduced by 1.2 percentage points. But if you'll see the view of our bank which was 2.91% has right now at 2.7%, that is only 21 bps point. So I think this is the only thing which is helping us and we always say that we want to defend our name, we want to definitely continue saying that. And that is what we tried. But then I think the last moment when there was an increase in the Gecina there was increase in the deposits as well. And that was the reason. But then from here onwards. And if you see the last cut, which has happened in December, the entire 5 basis points was conveyed for the entire quarter. But then also our revenue see the NIM from 2.[indiscernible] points. So this is the reason that cautiously, we want upon each parameter of the balance sheet, each parameter of our asset liability. And even under a 9% good, but then respond [indiscernible] of ICBC, which is 0 now, number one. Number 2 is around INR 30,000 crores we had on -- which is at below 6% level, which is almost -- is not there. Now somewhere it is [indiscernible] with the new business. It has gone out of somebody new business has come. Now if you add that, so the team has worked and team has worked well. And actually, if you see the figures, we have worked better than the industry average. But yes, the severe if you see the year-on-year basis, certainly, you see -- [indiscernible]. We are working upon the average, whether it's CASA, whether it is deposits, whether it is advances, whether it is [indiscernible] that's the reason our profitability has continued towards an upward trent. And that's the reason that we win recovery, we are trying hard to improve. And that's the reason that we are having the profit of more than INR 5,300 crores. And even then, we have kept INR 700 crores for anything contingency or anything. It is not like like any dent or any suspicion on the book. We have wanted to do them in our presentation that our 90 -- more than 95% [indiscernible], I think, is more than [indiscernible] and other portfolio. And more than 95% in [indiscernible] and above. So I think that gives the color of the business also last 6 months which we have done. So I think this background, I count in I could answer that. And going forward, you can expect the industry trend, we will be meeting and we would like to be better than more than that going forward in the coming years.

Can we expect a 13%, 14% growth in the FY '27?

Yes, certainly, I think we are around that line. Yes.

Sir, now coming to the profit and loss account in our profitability you have clarified that the profitability would have been much higher, but for the INR 700 crores other standard provision which we have done, which according to you is just to take care of any provisions for ECL or other things and nothing is to take care of any known account or -- so that is good point well taken. Sir, one other reason of the profit being a little high, is there is a reduction in the employee cost in this quarter of -- by about almost about INR 600 crores. So the employee costs reducing in this quarter, which is also actually a March quarter, what could be the reason? And going forward, are we going to maintain that INR 3,700 crore, INR 3,800 crore per quarter? Or is it going to be lower in the coming years? So that -- because INR 586 crore our wedge employee cost is lower in this quarter. This, along with another point is that that the operating expenses have gone up in this quarter by INR 522 crores. So offsetting each other to some extent. And another point is that income going up is there is a handsome recovery from the written-off account, very good recovery, of INR 1,567 crores as against INR 667 crores in the last quarter. So, can we have the individual explanation or some details on these 3,4 numbers on the profit and loss accounts so that to have a clear idea for going forward, where do we stand?

Ajmera ji [Foreign Language]. Yes, as you observed, there will be a reduction in my operating expenditure, particularly at distant expenditure. So this is due to the discounting rate successes, last year [indiscernible] March 2025, discounting rates was 7.07%. And this year, it was 7.875. So due to that overall liability we estimated earlier was provided higher in the earlier quarter. And due to that, there was final liability, which was on a lower side. So this was the impact of [indiscernible]. Now as far as the PW recovery, which is close to INR 1,600 crores in the quarter as compared to INR 666 crores in the last quarter. I mean we have the telling [indiscernible] group accounts, which was settled during this quarter, and the income of INR 658 crores was booked during this particular quarter. So these 2 factors. And what was the third one, sir, last?

Employee cost has reduced and operating expenses have increased.

In Q4, this trend is always there, sir, operating expenditure budget because the allocated and the provisions which are made in the Year-end is always -- there is a gap of INR 200 crores, INR 300 crores, it is always there in Q4, sir. We see the [indiscernible] trend, if you look at the quarter-wise index.

There is a little now looking at the current geopolitical situation in the West Asia water situation, Pandey sir, how do you see -- I mean, is there any stress again already started building up? Or in this first quarter, do you feel that there will be some stress because even in this quarter also the fresh slippages have increased to [ INR 2,023 ] as against 160 in the last quarter. And secondly, even though SMA 2 numbers have come down, but SMA 1 numbers have almost doubled. So do you see that any kind of the abrasion -- I mean this war effect may be there in this coming quarter or the running quarter?

Sir, we actually -- we are very closely monitoring the entire West Asia all these things. And -- as such, we have not seen anything very unusual up till now. And we are also monitoring what is the inward remittances flow last year and this year. We are also monitoring import numbers and remittances, total [indiscernible] remittances. We are also monitoring where it is has not helped and other things. So what we have seen is that there are 2 things, 2 things are impacted like one is the energy [indiscernible] sectors where gas, commercial gas and all -- so those particularly industries, they suffered a bit like [indiscernible] and on. And a few more places are there, which we are actually based upon the energy, the energy sectors. The second one is that remittance overall also has come down. But up till now, we have not seen anything. And at the same time, when this all these things happening, let me share with you the Government of India and there is a bank. Both have come forward and try to put the cushion with the initiatives, which they have taken. Now we are in that and even let me share with you, we have a data also, which I can partly view -- on the scheme on [indiscernible] quarter, we got around 306. -- just I'm saying that status of [indiscernible] application, that is credit that scheme for exporters to provide 100% credit guaranty coverage. In that [indiscernible] INR 700 crores. And on the other side, where the RV also came with the trade release measures, extension of PC, extension of port shipment and conversion of acute interest. So we have received only 5 -- applied 59 people, only applied 35 applications in PC extension, for shipment only in FIT, only [indiscernible] so we have not seen anything. So the preliminary figures, what we are observing that as of now, is not giving any very adverse or very critical signals. [indiscernible] We have moved a lot portfolio to SMA-1. So I think it is a better signal that from SMA-2, we have moved to quite a lot by recovering the installment and we have moved to a better composition of the Stage 2, like 1, I think which is 30 to 60 days. So it is a better proposition. And over to you.

Next question comes from the line of Mahrukh Adajania with Tara Capital.

So I had a couple of questions. Firstly, there are corporate loans have grown 9% Q-o-Q. And then if you see the sector corporate, the certificate of deposit beta, which is available for all banks, then our CD mobilization was also very high compared to other banks during the quarter. And our LCR is now on the U.S. And margins have also fallen more than what we had guided for. So, what would be the strategy going ahead? Would you continue to pursue profit growth even if it's low yielding, what about deposit mix -- and given that LCR is, would you rather focus on margins? Or would you, from now on, focus on growth if you had to choose one of the two?

See, we are choosing growth with quality, number one, and use profitability. Now I think in my initial address, and I think when Mr. Ajmera was asking, I have made it very clear that though you cannot see those growth in these numbers, but INR 35,000 crores of IBPC at a very lower rate, which we have shed off, number one. Then around INR 30,000 crores to almost INR 60,000 crores, INR 65,000 crores of such advances, which we are no yielding. Otherwise, how we would have achieved the entire NIM, which was 2.91 to 2.7, which is only 21 basis point reduction there. It would not have been possible if in case what you are saying it would happen correct. So we have actually tried. Now coming to the CD. The CD is almost in the same range, which we had the earlier year. So you have seen like the series which are based, but then there were maturities also which has to be replaced. So for a bank, we have an internal sort of a ceiling limit where key CDs, MFDs and other things in the same fashion. So that is the reason we have gone with the CDs. So we have gone within that range. And that was actually we were getting a better rate during the days. Otherwise, actually, if you see, we have marked the most of our requirement during the January, February onwards, not much in the March. And there, we could get. Otherwise, March was really heated up market if you take to deflate or late. So that is why we are very cautious about the NIM, about the profitability and about the quality of the asset. And like going forward, we would like to maintain our -- the around 13% to 14% credit growth and around 10% to 11% -- and also wondering when you ask about the -- we have raised in between, I'm sure you must be aware around INR 3,000 crores of infra amount in between. And that is also -- it is a person actually, the subscription was very huge, but then we were cost conscious. So we have not gone beyond a certain asset over range, and we have cut off at INR 3,000 crores only. So probably in the coming years, once everything is stabilized who we will be finalizing internal going to the Board and other things. And then we will be coming up with the entire capital and bond issuance in the plan with the market. So I think it was like growth, certainly, we'd like to grow industry plus something. Number one, profitability even in the last 6 months, and quality, you will see that we are continuing the same quality of the whether corporate book or a retail book, which we have given in our investor presentation -- on [indiscernible] though the [indiscernible] and above is the prime customer, but we have continued with [ 700 and ] above. And the BBB level also, we have given the figure. So we are continuing that. We also have around [ 50,000 to 60,000 ] of a book pipeline with the site large corporate. So I think with that we are sure going forward, but then we will not be compromising on the quality and also on the profitability.

Got it, sir. So sir, any margin outlook you would have for Q1 and for the full year?

Yes. See, now we have seen the last NPC also. And this stance has been continued in the same levels. Now keeping a new, the macroeconomic scenario and the stance we have taken. If we continue like this, so last, I think in December and midway somewhere, this [ 0.25 ] for cut was there. So which is, if you see has not been reflecting in our figures, though around 53%, 58% is based on the [indiscernible] benchmark. But even then if you see the new, it has been quarter-to-quarter, see it has been from [ 2.76 to 64 only ] 12 basis points, not the entire. So I think there, from here, keeping in the same thing, we expect that we will be maybe moving positive from here and will be defending at this point of level.

Okay. So you will be able to maintain margins at 2.64?

Yes, we would like to even better it.

Okay. And that would be driven by, sir?

See, if you see very clearly that in the last quarter also, the CASA has increased from 32.51%, which was our CASA percentage in the month of September and which have increased to 35.21% as of March. So certainly, when you shift on deposits to the CASA and you shift to your well deposit [indiscernible] term deposit. And you can see the growth in both the sectors, both the parameters. So certainly, it will help you to build on the positive side on the mean. And then not only that there are other factors also, when you better [indiscernible] discussed and make your relationship management, the quality of asset, you're right. So those things also help you. And what we have underwritten the quality is there. But certainly, the rate and other things which we are charging, I think that is also held up. So going forward, we will be bending upon this. And the deployment of funds in most effective way. I think that is the main thing which we would like to tell.

Got it, sir. That's very useful. And also if you could explain the increase in MSME slippage in the fourth quarter? And if that's just a one-off and nothing -- and how it will pan out in the next few quarters?

So I think MSME you see the lot is sort of a flat only, I think, from [ 4 to 4 to ] something levels, I think sometimes sell this only. So it is almost flat, but then there were like a few cases only which has impacted. Otherwise, up till now, whether it is a West Asia or in our book, we have not seen any much of the impact on our book and quality. So going forward, we -- actually, we would like to reduce with the recoveries, which are already NPA in either of the these 4 sectors, sectoral which you have asked, and that is why we have built a very team even now centralized that even below INR 1 crore sort of a portfolio will be monitoring from the central office level. So I think the core recovery, I would talk about, we will be trying to improve it much a much further from here onwards.

Next question comes from the line of Jai Mundhra with ICIC Securities.

Sir, my question is also broadly similar. You said that we'll focus more on growth along with quality and profitability. The profitability focus is clear. I mean we have elevated ROA. So that is well appreciated. But sir, what I wanted to know is when you assume charge, Union Bank was one of the few banks which was not too much concern on the loan growth, but they were blending name or consolidating a liability franchise. And hence, NII was growth was very miniscule because you are not growing as much also. Then you put shift in the loan growth trajectory. But still, the NII growth is similar. Third quarter was a good quarter in the sense that NII increased but this quarter again, while the growth has been 6%, but NII growth has been flat. So is there any part out strategy or this is this market force driven that you will keep going on the loan growth on quality and the NII outcomes will be dependent on the market competitiveness? Or do you have some visibility on the NII growth also?

Yes. Actually, we would like to improve what has happened around 25 basis points, there was a cut in -- I think in the midway of the December, which has conveyed to along the entire benchmark rate linked loans. So that is what you have seen a big dip on on from [indiscernible] on a quarter-to-quarter basis. And that is where you can -- you are seeing flat. But then we are doing 2, 3 things. One is the new work upon the average advances and the average figures on both assets and liability side. And that's the reason we are ranging towards that. It has to be better than the earlier one. So I think there, we are thinking that how to build the M&A growth also and also to keep the quality and as well as the profitability impact. So it is not like that we are maybe writing -- underwriting very good quality, but underwriting very low-margin loans or maybe the second one, if I would say that we are underwriting a bit lesser one and then charging more. No. That's why I said that growth, yes, that is the first key thing, but at the same time, profitability and the quality, we would like to maintain and grow in this space. But then going forward, we would like to have -- because as of now, everything is settled, like till we have a further scenario on inflation and further scenario on rate cut and other things. So from here, again, we'd like to defer and move it better that you will be seeing in further quarters.

Okay. Sure, sir. And sir, you have given a recent disclosure on the bulk period? So on in the December quarter or in the March quarter, there was a lot of -- there was a sharp spike in the bulk deposit rates could you quantify, sir, what was your blended bulk deposit rate and ballpark number will also do? And has that started to come off in a significant way?

Yes. See, if you see the -- like we test upon the last quarter. So then I said that treasury, we have shown by, I think I told around INR 15,000 crores or so. And now you see it is INR 25,000 crore. So what happens is that you start trying to reallocate the portfolio. So it is shifting from one to another. Anything between the portfolio we try to build it from now to better mining portfolio like IBC, which we have shared out another thing. So what we did, that certainly when you are having a good growth in the advances side, so certainly, you need to raise deposits, so we raise in between INR 3,000 crores in [indiscernible] and the other things which I shared with you. Allow with that, we need the deposits so that we are comfortable range, a good range on the CRM, NCD ratio. So that was a key thing in mind, and that is why most of the deposits we raised during the January itself. And so that we knew that probably going forward in the month of March, probably nobody was aware that how it will behave, market will be here [indiscernible] deepen and not a and the other issue. But then you can tell the blended rate in quarter. So on a bulk side, the blended rate for the quarter was a little less than [indiscernible]. So around [ 7 ], we can say.

And that has...

So it all depends upon the market. Currently, the April month, there are not a lot of activities happening in the market on the CD front as such. So current level are a little lower than the March that is there.

Okay. So sir, the reason why I'm asking was this, if I tell you, let's say, bulk deposit rate on an average at [ 690 ], our yield on advances is [ 7.98 ], which is the total, the corporate will be even lesser. So does it make sense to do this corporate lending when we have to raise bulk at 690 and maybe lend at [indiscernible], I don't know which -- whatever the lower than 7.98 number because that increases absolute amount of NII, but the [indiscernible] is the margin. So that is the question is.

Yes. I think I would give you a very good the scenario, that's where is actual scenario. You are thinking that entire which is raised at 6.9. So if you ask what is your blended rate on the bulk deposit, you are only [indiscernible]. So we have told only on the bulk deposit not the entire. Now there is a CASA in the CASA and written term deposit increases around huge, I think, more than [ INR 10,000 crore ]. And then if you see the blended cost on debt must be around 4.7 levels. So this is an increment there. I'm not saying it is a total. Now there is a total huge portfolio. So my CASA itself is stands around [indiscernible] now if you add retail-term deposits, how much percentage basis -- of the total deposit 79%. So my RTD and CASA is around 79%. So certainly, I save the cost there. But to maintain the growth and maintain everything, it has to be bleed with the [indiscernible] And maybe sometimes in that, there will be a different scenario. There may be between INR 3 crores to INR 10 crores because retail term deposit, say, only below RBI guidelines of below INR 3 crores. But the to -- now there will be rate before is [indiscernible], margin and all those for 3 months, 9 months, 10 months, period, 1-year period, which may be at 550 and around 6%. So I think how you correlate to the news is on the total portfolio, and that is what I just wanted to pull forward. that this particular quarter, which we took from first of January to this, this is somewhere coming reblended in, but the the deposits which we have shared, around [ 70,000 ], then age it was a different rate, but the March particular piece, which we have to have the maturity was around [indiscernible] levels as amended rate.

Right. Understood, sir. And if you can share, sir, a few data points if you can help with the loan mix by benchmark, EBLR, MCLR bill and AFS reserves? And how much is the change versus last quarter?

Which raises?

AFS.

[indiscernible] 54% is my external benchmark portfolio.

And the PBL and MCLR is how much?

36%[indiscernible] .

AFS reserves movement?

What is AFS business? Can you clarify is what exactly you want?

Under this new investment classification, the MTM hit on AFS has to be...

Got it, got it. Mr [indiscernible]

So from December, it was around [ 800 ] or so increase in AFS sure in this cohort.

So you have seen an accretion there? Is it?

No, no, it's a negative figure.

Okay. Sir, I have a few questions if you -- yes, understood.

It is a reduction of INR 800 crores, correct? Yes.

And how much is outstanding amount now, sir, is in the balance?

Outstanding outselling is negative [indiscernible].

Okay. I have a few questions, if you want, I can ask them now or I can come again. I wanted to check with LCR guidelines. Have you canopied the new LCR under the new guidelines what would be your LCR, let's say, 1st April? Or what is your sense of the...

We have calculated and -- the negative impact is around INR 14,000 crores and [indiscernible] around INR 21,000 crores. So INR 7,000 cores a passive impact.

Next question comes from the line of Param Subramanian with Investec.

Firstly, I wanted to ask just to clarify one again on NIM. Is there any one-off or seasonality or any sorting in the margin quarter-on-quarter? Or you are just saying it is mainly the mix and the December rate cut?

It is basically a December rate cut. It is much lesser than the rate cut.

Okay. Okay. So [indiscernible], can see the interest on Reserve Bank of India balance that is down. That is mainly the decline in LCR, is it -- just clarifying on that number. So that number is down INR 500-plus crores on a Y-o-Y basis.

But I think I am not very sure on that.

Okay. I'll take that offline. And there is no impact on the RBI NOP circular at all for you, either interest or other.

Yes. Actually, we have kept ourselves very cautious during this defective time. So we were not taking long range costs. So our exposure was only [ 30 million. ] So we were much below [ 100 million ] and etcetera. So zero impact on that.

Perfect. Okay. Sir, and then on the PSLC and also the private share. I'm just coming to questions together. Sir, on the PSLC, see, this year has been soft, fee income. But you used to approve or INR 2,000 crores, right, on an annualized basis? Should we get back to that run rate next year?

So see, last time actually, we had a complete period of that. That is why the amount is also INR 800-plus crores. This time, we started PSR in the month of -- so we could book, I think, INR 120 crores, INR 80 crores, something like that. And this -- then this quarter, it was very hardly any period left for 31st of March. So we already book this time also. But then the total amount was less. So that is the reason because number of base debt functionality is there. So -- there's a reason that then we would like to continue on that.

So we should be able to do INR 1,000 crores-plus? Which was your number in last year?

Right now, it is not a real asset because the entire portfolio has to see in SMS and other things, and then we will take it on. But yes, we will want to deploy this year.

So, okay, perfect. And lastly, on credit cost. I think a very good number there. So 23 basis points for the year. Do you think it is sustainable, right?

So right now, coming to the credit cost, we are not seeing anything very adverse or as of the [indiscernible] so that if you see the credit equity, the SME is same level as [ 3,800 levels ]. That's one in to operate that portfolio. And also if you see INR 25 crores and above, almost [indiscernible] is the BBB above. And if you see the prime customer, which has taken [indiscernible], but we've taken 700 now since [indiscernible] another [indiscernible], which is around 99%. So I think the economy is like you know the core metrics and the other way, it is the quality is in front of us. So we are not seeing anything to go right, but then we always say for comfort even because we don't do aggressive it is better to get the better figures. But then we say around 1% is keep as an in-general guidance for the year.

Okay. And the INR 700 crores has nothing to do with any pressure you are seeing that you have made this -- is it primarily for CIL transition?

Yes, maybe see always be the regulator, everybody says that in good times, if you have money to you, keep aside and say it. So simply, we have kept aside not in profit, not in capital and See, it may not be used for year 2 absolutely. So then just kept the cushion, it is kept because we do have -- because other than that, also our net profit is in comfortable range, and we are giving dividend of 5%, that is INR 5 per share. Then I think that is the reason we have kept it aside for a better strengthening the line sheet of [indiscernible]

Next question comes from the line of Jayant Kharote with Axis Capital.

Just one question. What level of LCR are you comfortable with? If it falls below 110 are you okay to operate at that level?

See, actually, what has like the reserve then guidelines is of 100 and then Board fixed guidelines are there for each and every bond for us also, there is both fixed more fixed first figure and then the reach. So -- but as I see, there are likely 2 things which are -- we would not like to reach these 2 figures. So we are above that 7%, 8% level. And we actually -- on a rolling basis, we can for next 1 or 2 months. And then we take the deposits and the real resources accordingly.

How much would the INR 7,000 crores add to the...

[indiscernible] So around 3% it works out for an LC for our bank.

Which means that the pace which you are consuming, if you are not able to match deposit growth in a quarter or 2, you'll have to slow down on loan growth?

There is no question of not matching the deposit growth. See, what is you have the money in your pocket. Why you will go to ATM and [indiscernible]. You will first use what you have in your wallet and what you have in your pocket. So the same thing we did, that is what actually since we do we are sharing with all the -- on the press and is that -- and we see -- I will give you only 4 figures. In the March '25, CD ratio was[ 77 ]. Now, we are in [ 80.5 ] or some level. So it is 3.5% up, number one. And number 2 is that our LCR requirement was a bit more earlier because we have actually seen each of the items and then we could move from LCR, the attempts like financial institutions. [indiscernible] but we have more from financial to notation, even if we have taken the [indiscernible]. So that has reduced our LCR that has moved to loan side. Now the third comes the [indiscernible] we had -- now you can see in our presentation also, non-SLR portfolio reduced. So certainly, we have moved on a better opportunity on the loan growth. This is the third point. Fourth point is, then again, you have infrastructure on in other revenues, we have raised INR 3,000 crores. Then again, we have revenues of refinance, we are positive with our portfolio. So the thing is that suppose now with this [ 2.67 ] growth, there is no breach in LCR. There is no break in here. And then my CD ratio is very good. Most of course, listening to ARM, if we increase by [indiscernible] basis points, then we take INR 50,000 crores where it will go. It is state of impact my CD ratio to 74%, 75%. So the question is really very simple that when we take it will need not be, so I think need to -- but now, again, you see in the third quarter, we are not taking -- we have shed up much more -- but in fourth quarter, we needed because of the growth happened [indiscernible] side. Though we have taken INR 3,000 crores in [indiscernible] because the growth was good, which is evident in our figures [indiscernible] -- so then we have generated. So actually, there are 3 things. One is to offer the rate. So people have offered even [ 8%, 7.9% ] during the -- so they have got it. But then we try to take the deposits during January, February itself. And then we continue because we were very confident on the written term deposit book and the CASA growth, and we could achieve it. So rather than going to go deposit, we could achieve this side of the -- so now going forward, this cannot be every time. So certainly, you will see the growth in the total deposit. It will come from CASA. It may come from retail term deposits and it may come from the [indiscernible]. So I think going forward, see, average time, you cannot manage the book on allocation and other things. So the thing is that at least first, are you aware of from where it is [indiscernible] where it is deployed. So now with this -- that is why the last March '26, you can see rate deposit in the series. So we as the resource.

Just to reconfirm, you have 8% above your comfort [indiscernible] LCR Yes.

Yes.

Next question comes from the line of Ashlesh Sonje with Kodek Securities.

Sir, firstly, on this prudent provisions which you have created, can you just highlight that after the creation of these prudent provisions, where are you on the easy shortfall number now? Last quarter, you had shared a number of about INR 4,200 crores roughly. That is one.

So on the same INR 4,300 crores and that is -- that last time also said, we will be comfortable on that. And what our guidelines come at appropriate time, we will decide in the Board. And accordingly, we will go ahead with the approach. But then since this figure is with us, this amount was with us, we thought of keeping a site, maybe [indiscernible], maybe maybe for circumstances. There is as of the regulatory guidelines, and as per the Board decision, we would like to then use it. Otherwise, we would like to keep it as a strengthening of the balance sheet.

Understood, sir. But after the creation of this INR 700 crore buffer, the ECL short for number should decline ideally, right?

It will not be decline because this is a separate look -- so we have made a very clear which is not impacting our Trotto capital or net profit. It is just simply kept. So it is like you know, we have just kept it for any entity any [indiscernible] like yet.

Understood. Sir, just 1 follow-up on that. What is the total standing buffer of standard asset provision that you're carrying now?

Total standard asset provision is close to INR 3,000 crores.

And second question I asked on my side. Yes. Sir, second one on the -- sorry to harp on the loan growth and margin side. If I look at the credit rating mix of your corporate advances, which you have shared on Slide#8, it seems like the share of and above advances has increased by 2% Q-o-Q. So it's clear that you have not only grown the corporate advances, you've also grown in better quality corporate advances. However, this seems to be different from the stance which you had conveyed last time that you are shedding lower-yielding advances. How should we understand this change the shift in [indiscernible]? What caused it?

I could not get it. See, we had IBPC of around INR 35,000 crores, which is not there. So that is point number one. And then we have -- when you sanction, you have STL,you have long-term loans, you have short-term loans, then sometimes like you will give for 7 days, 10 days, and it will range them out [ 5.50 to ] depending on the corporate and to [indiscernible]. There we are we these 2 we have reduced. So we have now tried to convert short-term into long terms and other things. And from that, we have to build in so that we become more profitable, but at the same time, not to compromise on the quality.

Okay. Sir, to just start the same question differently. Would you look to shed some more of your low-yielding advances going forward?

It is a retinal phenomena, and we are doing day in day out. And wherever we are in a position to get the opportunity. So that is the reason that actually we have sanctioned more disbursed more in the portfolio to chains happening, you will not see that much big growth there, but then the things are good. And certainly, it is a normal level and will do, wherever possible.

Understood, sir. And just one last clarification. Do you deduct the dividend payout from the net worth in the March quarter itself?

Yes. The remaining total is only taken in net worth.

Sorry, come again, sir I could not hear you.

So the amount of dividend proposed is around INR 3,800 crores, we have deducted and remaining amount we only taken into my capital portion.

Next question comes from the line of Parth Gutka, with 361 Capital.

Can you just let me know what is the portion of the MSME book, which is covered under CGT?

We'll come back to you on basis.

Okay. Okay. And my second question is, sir, why a large part of the growth within MSME would have happened since second half of Feb and March, what were the conversations with the borrowers because at that time, the war had already started -- so what were the conversations in terms of order inflows or cash inflow at that point in time?

[indiscernible] There will be some people who are asking for some extension of bills, which has been tinted. -- because everybody was only the war was really developing actually. So everybody was also waiting for that presented decisions are going on. Wherever it is there, they are also hand-holding them. And we are trying to support those MSMEs with higher period for those things we are doing.

Okay. Okay, sir. And just my last question, have you seen any of the risk filters in March for the MSME?

No, No [indiscernible]

We'll take the last question that is from the line of Dixit Doshi with Whitestone Financial Advisers.

Just a couple of things. Firstly, what is the return of pool now -- and if we see this year, the recovery from return of account was INR 4,000 crores what kind of recovery will this number sustain next as well?

Not to -- if you are looking this around [ INR 71,000 crores ] actually. And most of them around [ 45,000, 46,000 ] are under in NCAP it is pending. With regards to recovery in return of accounts, we are trying it whatever is available, we are just seeing that. And most probably the same trend will be coming in the current year.

So what will be [indiscernible] Okay. And my last thing, one last thing is, so whatever you have communicated throughout the call, is it fair to assume that kind of the NIM has bottomed out in this quarter and with 13%, 14% loan book growth, what we are targeting for next year, the NII growth will be similar to the loan book growth?

[indiscernible] is the same.

Okay. So we can grow our NII as well in line with the advances growth because this quarter, it was lagging.

Yes, it was likely because because it was [indiscernible].

So considering that as of now, the rate cycle is, let's say, a status quo. Our NII growth should be similar to the advances?

Yes.

Thank you. Ladies and gentlemen, that was the last question for today. We have reached the end of question-and-answer session. I now hand the conference over to the management for closing comments.

So thanks to all the participants on this call and we hear to you a lot as we work upon your questions and even if you can see what sort of things we are doing, depending upon the quarries and wherever you have accounts and then we try to try to inform you what we have done and how. So that's the reason that we think of keep on improving day by day, week by week, month on month. So that is the endeavor and thanks to all of you for participating in this ananlyst call. And yes, going forward, we would like to to better at, like we said in the earlier quarters, and we continued so. And going forward also, we'll continue to make it better. Thank you.

Thank you. On behalf of Union Bank of India, that concludes this conference. Thank you for joining us. You may now disconnect your lines.