Ladies and gentlemen, good day, and welcome to Bandhan Bank Limited Q1 FY 'twenty six Earnings Conference Call. As a reminder, all participants will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing then 0 on your touch tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Vikash Mandra, Head IR at Bandhan Bank. Thank you and over to Mr. Mundra.
Thank you, Neera. Good evening everyone and a warm welcome to all the participants. It's a pleasure to have you with us today as we discuss Bandhan Bank's business and financial performance for the quarter ending June 2025. We sincerely appreciate your time and participation. Today, we will take this opportunity to provide insights into our operational activities, significant achievements and challenges, as well as offer perspectives on market conditions, strategic initiatives, and any notable changes in our business environment.
To walk you through these details, we are joined by mister Parthakatim, name's agent and CEO, mister Dasan Kumar Kesh, executive director and chief operating officer, Mister Dasinder Kumar Babar, executive director and chief business officer. Mister Ravi Mantri, chief financial officer. Myself, head of investor relations, and our senior management team at Dun and Bradstreet. We are happy to answer any questions on or provide additional clarity on the current quarter's performance and our outlook moving forward. Now, I would like to invite our Managing Director and CEO, Mr. Patakatim Timbukhatir, to brief you all on the bank's performance. Over to you, sir.
Thank you, Vikash. Good evening, and thank you all for joining us today. On behalf of Bandhan Bank, I extend a warm welcome to all of you attending our earnings call for the first quarter of financial year twenty six.
We are pleased to have this opportunity to share our performance and insights for the quarter. Let me begin with the macro despite ongoing global uncertainty, the Indian economy continues to exhibit robust resilience underpinned by strong fundamentals and supportive policy measures. For fiscal year twenty five, twenty six, the RBI has projected a real GDP growth rate of 6.5% alongside a moderate average CPI inflation of 3.7%, reflecting a balanced and stable economic outlook. In fact, the as of today, the inflation rate is even lower. In line with its commitment to fostering growth, the RBA has implemented significant monetary easing, including a 50 basis point reduction in the repo rate in June 2025.
The cumulative cut since early February twenty five has been 100 basis points. Furthermore, the RBI has announced a phase reduction in the CRR by 100 basis points to be implemented between September and November 25 aimed at sustaining liquidity within the banking system. This sizable liquidity coupled with focused efforts on the transmission of monetary policy to the real economy is further expected to stimulate the economic activity of the country. A combination of moderating inflation, a generally favorable monsoon forecast, and the introduction of the new income tax relief is expected to collectively foster a positive business environment and bolster confidence in a broad based recovery across sectors. Taken together, these factors keep a strong foundation for stability in the Indian economy and is expected to stimulate economic growth by making borrowing more affordable and encouraging investment, particularly in sectors such as housing, micro, small and medium enterprises.
I now move to the performance of Bunzan Bank for q one f I twenty six. Before we begin the quarterly performance review, I would like to highlight that q one f I twenty six is not aptly comparable to q one FY twenty five, primarily due to the challenges we encountered in the EV segment, following changes in the guardrails at the industry level. Despite these headwinds, we are performing reasonably well when benchmark against our industry peers having microfinance in their books and other competitors with sequential improvement in our financial performance. Further, as highlighted in our previous communication, we anticipate challenges in the EV segment to persist in quarter '26 and based on an improving trajectory. In line with this outlook, our EV portfolio has had a gearing on both our overall growth and profitability in Q1 FY twenty six.
That said, we remain cautiously optimistic. Recent regulatory and monetary intervention, such as reduction in RWA for lending to MFI and NBFC MFI, as well as PSL related relaxation have been contracting for the sector, and we expect to witness a gradual and steady recovery in the EV segment over the coming months with a positive buyers emerging in the second half of the fiscal year. During the quarter, loan growth remained relatively subdued, largely due to the muted performance of the EV book. However, non EV book continued to witness strong growth momentum. Profitability showed moderate improvement, and we remain encouraged by the sustained strength in our key operating metrics.
The further of the the increase in the proportion of secured loan in our overall portfolio, alongside the healthy right in return term deposits have brought stability in both deposits and advances. These developments are contributing to a more diversified asset base and enhancing the stability and resilience of our balance sheet. In line with our guidance, we saw marginal improvement in key pages compared to the previous quarter, reflecting our continued emphasis on prudent asset quality management. Furthermore, our strong capital adequacy and comfortable liquidity position provide a robust foundation for sustained growth and improved financial performance in the quarters ahead. While my colleague and CFO, Mr. Rajiv Mansi, will provide a comprehensive overview of the financials, I would like to take this opportunity to highlight a few key developments and performance indicators from the first quarter of FY 'twenty six. As of 06/30/2025, the bank dropped advances to that 1 0.34 growth, registering a y o y growth of 6%. On the liability side, total deposits reached 1.55 lakhs growth, reflecting a growth of Y o Y growth of 15%, significantly outpacing the growth in advances. This reflects our strategic focus on strengthening our granular liability franchise and ensuring a healthy balance sheet composition. Retail term deposits demonstrated a strong momentum, growing by 34% Y o Y.
This performance underscores the increasing trust and engagement of individual customers and highlights the effectiveness of our distribution channel. Data deposits now account for 27% of our total deposit base. The overall share of retail deposits remains steady at 58%, indicating a marked improvement in both granularity and stability of our deposit base. We continue to execute our diversification strategy with steady progress. During the quarter, our secured book recorded a Y o Y growth of 29%, resulting in an improvement in the secured portfolio mix to 52% compared to 43% a year ago.
Maintaining asset quality remains the top priority. Paying cost for a moderate improvement sequentially, and we are committed to bringing them further down over the course of the year. During the quarter, we undertook technical write offs amounting to $1,047.04. Gross NPL stood at 5% and net NPL at 1.4%, while the CCR, the provision coverage ratio, including the technical write off, improved to 87.3% compared to 86.5% in the previous quarter. For Q1 FY 'twenty six, net total income stood at rupees $3,004.83 crores with an operating profit of rupees $1,006.68 crores.
The bank reported a tax of rupees $3.72 crores for the quarter. On an annualized basis, ROE stood at 0.8%, while ROE at 6%, which has a marginal improvement on a sequential basis. Our capital position remains strong, including Q1 FY twenty six profit. The capital adequacy ratio stands at 19.4% and Tier one capital at 18.6%, providing adequate headroom to support future growth. Our branch network expanded to seventeen fifty branches with the addition of 35 new branches during the quarter.
As the microfinance environment to stabilize, we are confident in our ability to leverage emerging opportunity. We will remain focused on prudent risk management, identifying new areas of growth, and further enhancing operational efficiency to drive sustained performance. In our previous communication, we highlighted the transformative initiative undertaken by the bank, focusing on various aspects to ensure a seamless integrated customer journey and an enhanced omnichannel experience. During this quarter, we have successfully enabled all 4,400 branches of the banking units to offer retail term deposits. I'm pleased to share that over 2,000 banking units have been activated and have begun raising retail deposits.
This achievement followed a comprehensive capability building exercise which involved 8,300 employees across 2,200 locations delivered to a combination of physical and virtual outreach. This initiative has expanded our retail liability hosting capability, allowing us to tap into new catchment and strengthen our approach towards granular deposit mobilization and liability. In the first quarter of FY twenty six, the bank undertook strategic measures to reduce the cost of deposits by lowering interest rates on both selling and term deposits. The interaction of the one bundled initiative has fostered greater synergy across department, culminating the successful execution of growth deposit growth together campaign across verticals, which helps generate nearly 4,200 growth incremental retail from deposits in just forty days. Furthermore, we launched the specialized products tailored to targeted customers to the elite segment, which are more than elite and elite plus savings account for the HMI.
Looking ahead, our focus will continue to be on a driving granular retail growth, advancing product innovation, and broadening our geographic footprint. On the collections front, we are pioneered the use of WhatsApp and reach communication service channels in real time to bolster our recovery efforts for missed informants. Following a successful pilot, we've yielded outstanding results. 88% of the messages were successfully delivered, and 80% of these led to recovery. We have now rolled out this initiative across all banking units nationwide.
The bank has made significant strides in enhancing its government and financial services. The bank is now live for collecting both direct and indirect taxes to multiple channels. We are integrated with the income tax portal for refund processing and enable central civil pension and railway pension disbursement across all branches. Additionally, we are partnered with the g one per month portal for digital life certificate and expanded our services for digital pensioners by the first platform. The Panic has also signed key MOUs including one with the Indian airport or soldier salary account and is in finance with the Hana and Mogadish government for conducting government business and managing state investments.
During the quarter, we have further strengthened our position by integrating with the Olysan and Rajasthan government system for account validation and reporting and executed an MOU with TPACO for centralized collection of employers' contributions. In the wholesale banking segment, beyond the strong growth in the secured loan book, BanA successfully closed its first debt syndication mandate for an existing client. This syndication fee marked a strategic step towards building a steady other income stream and positions Bank among one more sophisticated lenders in the industry. Our non point trade book reached to the 2,100 crore as of June 2025. We are expected to boost the income further.
We have also executed import and financing ForEx inflows and current account balances. Cross border remittance volumes are increasing, which is further strengthening our ForEx income potential. Our bank is strategically diversifying its portfolio with a strong focus on retail lending, particularly secured loan segments like housing loans, gold loans, auto loans, and commercial vehicle and construction equipment loans. Leveraging its extensive branch network and large customer base, the bank is enhancing existing customer relationship by expanding to new partnership. Emphasizing risk management, the bank integrate advanced analytics at every stage of the customer life cycle to ensure asset quality.
Investment in digital platform, PRA, and data analytics are improving customer experience and operational efficiency. Overall, we remain committed to building long term value through disciplined growth, strong risk management, and compliance culture, and continued investment in our core capabilities. These strategic pillars continue to guide our actions as we navigate the current market environment. With that, I now hand over to Rajiv Manshi, our CFO, to take you through the details of our financial performance. Thank you.
Thank you, Sengita sir, and welcome everyone to the earnings call. We now move on to the business performance for the quarter. I will walk you through the key financial highlights and provide an overview of how the bank has performed. We start with the advances. As of March 2025, the growth as of thirtieth June twenty twenty six, the growth advances stood at to be 1.34 lakh crores, reflecting a growth of 6.4% year on year.
And on a sequential basis, the growth advances declined by 2.5%, primarily due to a 7% contraction in our EV portfolio. The EV portfolio declined by about 15% year on year, reaching to be 52,812 crores. This decline was mainly driven by the strategic controls we have implemented in response to the elevated sectoral risk. On the other hand, the non EED portfolio, which now accounts for nearly 60% of total advances, up from 59% in the previous quarter and 51% a year back, registered a robust growth of 27% year on year. This strong performance was driven by continued momentum across our retail assets, wholesale banking, and housing segments.
Specifically, retail assets grew by 78% year on year. Wholesale banking saw an increase of 32%, and housing grew by 15 on a year on year basis. The growth in retail assets was mainly supported by sector products such as commercial vehicle and equipment loans, auto loans and gold loans. Aligned with our strategic focus on products, diversification and asset quality, we continue to strengthen our secured loan portfolio across housing, wholesale banking and retail assets. The secured book grew by 29% year on year and now constitutes 52% of total advances, underscoring the shift towards the most secure and diversified asset base.
From a business mix standpoint, our advances remain well diversified across the various segments. The EV group lending represented 25% of total advances, as well at 14%, wholesale banking 28%, housing 25%, and the retail assets stood at 8% respectively. In terms of regional consultation, our top five states, West Bengal, Maharashtra, Gujarat, Madhya Pradesh, and Girard collectively accounted for 58% of total gross advances compared to 59% a year back. Notably, West Singapore remains the largest contributor at 22.8%, a slight decline from 24.1% in q one s r twenty five. Moving to liabilities, as of June 2025, the total deposits stood at 1.5 lakh crore compared to rupees 1.33 lakh crore in the previous year, reflecting a healthy growth of 15%.
This healthy growth in deposits continues to outpace the growth in our advances, reflecting our strategic focus on balance sheet resilience and funding stability. We remain committed to building a granular and stable deposit base with a continued emphasis on retail deposits. Our total retail deposits, which comprise both Tata and retail term deposits, grew by 15% year on year. Within this, the retail term deposits demonstrated particularly strong momentum, growing by 34% on a year on year basis. The proportion of bulk deposits to total term deposits also reduced to approximately 43.6% compared to 46.3% a year ago and 45.3% in the previous quarter.
This downward trend underscores our continued focus on building a more stable and granular funding base. Tata deposits stood at 41,858 crore rupees, marking a 12% quarter on quarter decline. This decline was primarily driven by typical q one seasonality as well as industry trends. Further, the faster deposits were also impacted due to reduction in the savings interest rate implemented in April 2025, which led to reduction of some savings deposits and migration of a few balances into retail term deposits. The bank continues to play a strong emphasis on deepening customer relationships and expanding its expanding its customer base.
Strategic initiatives are underway to enhance our product suite, define refine our value proposition across segments, and improve the engagement to drive sustained growth in deposits. Our top five states for deposits, which is Westingall, Maharashtra, Uttar Pradesh, Odisha, and the NCT of Delhi, now account for 66% of total deposits. Westingall continues to be largest contributor, representing nearly 40% of the deposit base. I'll now move on to collections and the asset quality. The bank's overall collection efficiency, excluding NPS, stood at 97.7% for q one FY twenty six compared to 97.9% in q four FY twenty five.
Within the EV portfolio, collection efficiency for the month of June was at 97.7%, and for the full quarter of q one FY twenty six, it was 97.6%. The marginal decline in collection efficiency is primarily attributable to a procedure change related to the raising of installment demand on holiday. We have given additional information on collection efficiency in our investor deck, slide 19. On the asset quality improvement has got at the overall bank level declining to rupees 1,550 crores in q one FY twenty six compared to 1,748 crores in the last quarter. This improvement was primarily driven by the EV segment, whereby, this business in the EV portfolio moderated to rupees $1.00 $8.09 crores during the quarter, down from down from rupees 1,349 crores in the previous quarter.
Recoveries and upgrades during the quarter stood at rupees $3.01 9 crores, slightly lower than the 355 crores recorded in q four f y twenty five at the overall bank level. Additionally, the bank has undertaken technical write off amounting to rupees $1,000.47 crores during the quarter. Offset write off in the EV portfolio was rupees 952 crores as a result of the block NPA and the net NPA ratios were at 51.4% respectively. Slightly higher than the previous quarter, mainly on account of degrowth in the overall growth advantage that contributed to this increase. The PTR remains stable at 73.7% excluding the write off.
As guided in the last quarter's call, credit cost shows an improvement on a sequential basis. Credit cost including the standard asset provision for the quarter stood at 3.5 of advances, which was lower than 3.9% in the previous quarter. As of q one FY twenty six, the overall GPT pool for the EV portfolio comprising of s m l zero, s m l one and s m l two, stood at rupees 2,026 crores, representing 3.8% of the EVA losses compared to 3.4% in q four FY twenty five. The increase in percentage terms was primarily due to the sequential degrowth in the EV portfolio. On an absolute basis, the overall EV S and A book grew by rupees $1.31 crores quarter on quarter, driven largely by an increase of $1.45 crores in the SMS zero category.
SMS one remained largely stable, while SMS two witnessed a sequential improvement. The increase in the EV SMS zero book is primarily attributable to a procedural change relating to the raising of installment demand on holiday. We continue to focus on strengthening our collection infrastructure and processes with dedicated efforts to improve the overall asset quality of the EV portfolio. I'll now move on to the quarterly profit and loss statement. The net interest income for the q one f I twenty six stood at rupees 2,757 crores, reflecting a year over year decline of 8%.
NIM for the quarter stood at 6.4%, a decline from 6.7% in q four FY twenty five. This moderation was primarily driven by an increased proportion of secured loans in the overall portfolio, a reduction in the CV ratio, the impact of the recent repo rate cut, and the continued stress on the elevated strategies. However, the decline in LEN was partially offset by an improvement in the cost of funds, which reduced by 19 basis points on a sequential basis in this quarter. This improvement was supported by rate reduction on savings deposit during the quarter, which led to this improvement. During the first quarter of FY twenty six, the noninterest income grew by 33% year on year.
This was contributing by higher treasury income of approximately 250 crore fees from the sale of investment and income from third party products that grew by 73% year on year compared to the same period last year, reflecting our continued focus on diversifying revenue streams. As a result, our net total income for q one FY twenty six stood at rupees 3,483 crores, representing a year on year decline of 1%. Operating expenses for q one FY twenty six increased by 14% year on year to rupees 1,815 crores. This rise primarily reflects our continued strategic investment in talent, technology and infrastructure, as well as the impact of higher business volume in our non EV segments. The operating expenses to average asset ratio for the quarter stood at 3.9%, marking a sequential decline of 23 basis points.
Operating profit for the quarter was rupees 1,658 crores, nearly 6% increase sequentially. The bank reported a net profit of rupees 372 crores for the quarter as compared to rupees $1.00 $6.06 3 crores in q one FY twenty five and rupees 318 crores in q four FY twenty five. The year on year decline in profitability was primarily driven by a change in advances next to a higher secured elevated provisions, reflecting set in the EV portfolio along with the impact of taking the write off annotation during this quarter. On an annual basis, the return on assets stood at 0.8%, while the return on equity was at 6%, despite improvement compared to the previous quarter. Thank you for your patience hearing.
On behalf of management team, I once again thank you for participating in this call. We will now open up the call for questions.
Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press and one on their touch tone telephone. If you wish to remove yourself from the question queue, you may press and 2. Participants have requested to use handset while asking a question.
Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press pound and 1 to ask the question. The first question is from the line of Kunal Shah from Citigroup. Please go ahead. Kunal Shah, may I request to proceed with your question?
Yeah. Hi. Thanks for taking the question. So firstly, with respect to disbursements, maybe you have almost, like, 10,000 odd crores, which is down. If you can highlight in terms of how much is on account of the implementation of the AdRail two point o and how the rejection rates have moved and any particular geographical trends, if you can just indicate that And how much was because of maybe the conservative approach towards growing the EED portfolio?
So that's the first question. And second question, when we look at it in terms of the vintage analysis which you provide on the disbursements, which is on, say, slide 21. So when we look at it, like, even, say, disbursements of q one f y twenty five and q two f y twenty five that's rising compared to what we have disclosed maybe over a period that's now crossing almost, like, four odd percent. So in fact, it seems like after maybe twelve months kind of a vintage, we still see 4% slipping into NPA across the pools, okay, right, from 03/2002, maybe almost like q one of 03/2024 to q one of s y twenty five. So is that, like, this is, like, the general nature wherein we will keep seeing, like, 5% of NPS even from the recently written pools, or maybe there was anything specific to read into this. Yeah.
Hello. This is Vishal here. I'll take your question. The first part of your question spoke about in terms of the big bubble coming down.
First quarter, every year, there's a seasonality which gets the big bubble down. So this particular year, it has to compare it to the previous in the year, which we had in the '25. Our business is good. This first quarter at $10,007.00 8 for EV, and that number income corresponding was $13,007.21. So obviously, businesses are slower comparatively from because of the bad deal we've got implemented.
And these bad deals are very good at nature at a long term perspective, but obviously, there are things on the short term, there has been a growth here because of the vendor norms and in terms of the recent has gone up. Finally, you could see vendor norms and they do also that nobody is onboarding more than 60 d p d in their books and total and security. So there are two lines. On the second part of your question on on the vintage, if you see.
Sir, sir, just on this part, if if sorry.
I'm just this part, if you can highlight rejection rate trends as well, that would really help.
Sir, so 16 to 18% of our rejections are also coming in where there has been an overall industry default. So nobody is able to lend and 15 to 18% of these customers are not being given loans by anyone now. Considering the revenue of of this 16% population has moved towards 60 to the another. And if you spoke about the geography, for us, because we are more recent in competitors now.
We established in Tamil Nadu and Karnataka. Our discussion with Tamil Nadu, Karnataka, though it's a small base is also not growing out there. And some parts where we are trying to go further is also a little bit of entertainment, specifically the growth part of UP and digital. We have a few which are really not growing for us, and it's also two of the industries you see. On the part of your vintage analysis, if you see slide '21, we beat that 5.2 quarter four FY '24.
I think this, basically, because of the delivery issues in the industry, everywhere, everybody else also has worked their numbers compared to these NPS, other five and four. And I think this will keep on coming down because our recent book which is showing is coming out to be much better off of, you know, FY '24, a quarter four and FY '25, quarter one. So I I foresee that this will somehow will be in the range of 3% and not at the range of four and a half items in time to go.
Yeah. Okay.
But this this seems to be because of this average. Yeah.
Exactly. And I would like to further add that you see last year, q one was an exception. It was an exceptional performance for Bandhan.
So almost we could not also agree in that. Currently, the EV segment would reverse, and it will cause worry for us for that. So it it is where this year, I mean, if you look at the March, it was the NPS where at five point the two pages were almost 5.2 percentage for the year end. From there, we are actually coming down for the remaining because EV chipages were at being double digit for the rest. So there we are actually coming down.
Sequentially, you'll see there has been some improvement. But compared to a year on year basis, there would not be a several comparison because last year, it was completely an exceptional. Think the best q one the bank has ever had.
Got it. Got it. Yeah. Thanks. Thanks, and all the best. Yeah.
Thank you.
A reminder to all the participants, you may press and one to ask a question. Next question is from the line of from. Please go ahead.
Yeah sir, thank you for the opportunity. Sir, first question is on your s m a zero, where I think you said that you started billing on the holidays and that's the reason the SMA portfolio has gone up. Can you explain like how is that happening and what you invest in practice? It can be your SMA one and two portfolio actually going up now. So what explains that market moment?
Is it specifically stage like this thing or or or there is something more to it, number one. Number two question is that when do you see your 5% of the one month plus three postponed online, whether it could take another about six months for that postponed online. So then ultimately, theoretically, it has to go down to zero. Right? So when that unwinding will happen.
Okay. I'll take this question again. In terms of our estimate going higher, this number is primarily happened regarding the right our speaking and he was speaking on the holidays on demand, which was a requirement. If you were not doing earlier demand all holiday was being raised from March 31. And then we had four days in the month of April where we started raising demand for all all days.
And that's why you see there is a renovation on SMSB, which, however, is pretty much recoverable. That is not something which is too much for us to worry about. If you see SME one and two, largely they have been stable. SME one has been stable and SME two is in fact improved and in terms of the overall number, percentage wise is the same simply because that's for the easy thing. The only thing you understand.
The bank is gonna be. So So so our percentage of estimate two has remained flat and overall our book has of estimate two has come down in fact. It's been 4,800,000,000.0 compared to 510,000. And estimate, you know, like they explained for the four weekly holidays, we had one bill. It was for the first time, and that impact was mainly in the in Beijing or and to some extent in a time.
That is something which we have to live with for a one more quarter. And every month, we have been improving on that estimate number. It also had moved up further up, but we are trying to control it. And that number in times of previous to come to also come down from the current level. I think there's two supplement on that, Adi, zero.
That has continued to remain within SME zero. It has not moved on to SME one and SME two.
And as Vishal said, there are efforts in terms of how exactly that can be recovered. Okay. The structure is now changing in the ground also.
So we are also now started collecting the installment in advance. Number two is that yes, just want to tell all the investors to appear. So next the fifth quarter, September also, the Eastern part will be submitting the festivals and there will be a block holidays on account of the and others for the day. So we may see a a little bit more in the live in the estimated. But that's not a concern because these are all recoverable and as Ralee has said, they came in within the Internet.
And the second question was about your end user 5% of your moment plus 3% ID?
You see that 5% one month plus five is hardly any number. It's 2% today, and that is a very So one month plus month plus three. So you're seeing a one month plus three. That's that is 5%.
Now over the period of, I believe, next two quarters, these numbers will come down to sub two sub three number because now we are restricted the value from April. So whatever is remaining, all the next two to three quarters, because we have an actualization of eighteen month loan, either one year or two year. So I think between the next two to three quarters, it will come down to below 3% because we are not getting any onboarding new with one month. So we advise one month. Because we have got ninety days.
Yeah. Plus already, I just want to emphasize that today, as we stand, a 90% of our portfolio is one ten plus two. And 60% is only one ten, and one ten plus one is another 21 plus. So 81% is one ten plus 90% is one ten plus two.
Sir, and even in your retail portfolio, there is some increase in the NPS that we have seen on a quarter on quarter basis.
Obviously, why why it is far more higher? 2,700,000,000.0 going up to about 3.3. Your housing also, we have seen the NPS moving up from 7,200,000.0 in March 25 to about 8.1. So what explains the increase in the housing and the retail portfolio NPS?
Okay.
You have decide. On the retail portfolio, then the old book, which is like mostly the unsecured side, that is showing little test and we have no return of anything We we continue to afford to get the, you know, some collection from there. So that that recent update which is seen, it is only the unsecured book which we have done a lot of good collection during last one, one and a half year. And recent move to receive a vintage or the same kind of invoicing is showing a greater performance there.
So this is only the good which is beyond '22 and beyond. It's a card book. Right?
I think just to just to supplement on that, a large portion of the retail asset is really secure.
There is only a small portion within the field, which is the unsecured piece, and I think that's the the, you know, some bit of a in the 2021 team. It because of all the things.
Yeah. In in the This was from the housing. In housing too, we have witnessed that we hold the close, which which have settled down over there, certain geography specific also, which are, which did show the trend, but now the trends are lower.
Okay. Sure. Thanks a lot.
Thank you. Next question is from the line of from. Please go ahead.
Yeah. Hi. Good evening. I had a couple of questions. Firstly, again on the SME zero.
So given that, you know, these are very low income groups, there is a lot of certainty that it does not roll forward. Is that the right way to put it? Because they are low income. Right? So if I mean, usually, it's a difficult guess on whether they do roll forward or not.
So, that's my first question and my should I, okay, you you can answer them again. So we have got on the
EV segment, you have data proof that your SME one and two remains stable for us. While SME zero got slightly elevated in the month, same month itself is getting recovered. So collection you can you can see. So these are these are basically the holiday impact. Actually, the increase is that I will see as a So they don't know.
Just say that we have started this thing by collecting out from the holidays where we cannot take any collection, but the demands are there.
So obviously, many geography, if you see, there's a holiday and it might be full and not there for collection. Almost one sixth of the portfolio in that particular, you will think it will become a familiar. So this has an impact and then because of case like the Spendall and North East where we have a lot of present, so there are some certain festivals or other local festivals or something. Then it's that that obviously leads to same thing to in SME zero and it looks quite large for them.
But there's nothing concerned. So that is what I'm saying. That means there is no concern because these are recoverable and these are getting recovered. So what we are now trying is that we are trying to collect in advance. But if we require that, I will say, cultural change, not only for our firm, but also for the borrowers.
Because till now, they have been habituated to pay only on the due date or at the end of the period that is they extend the forty eight months to fifty two months. So now this change is actually happening. It will take some time to stabilize, but nothing as a matter of concern as far as SME zero is concerned. And SME two has come down, and SME one also it is more or less.
Okay. And my other question is that what is your general feedback on industry discipline? Of course, guardians have been implemented, but some players are again complaining about aggressive behavior of some other lenders. So what is your take on industry discipline and in that environment? Of course, you partly answered.
So, rather, in that environment, so when do you see your microfinance is what we need to be this versus scaling up?
So one thing I just said, while Vishal will tell about the industry perspective, that we are disciplined and we will continue to be disciplined. So the guardrail, we are following it very meticulously and we will continue. Let's see why it also it has affected the performance overall because more or less a major player, we are implementing the project for you.
Most yeah. Because I've been through all the most of the players are implementing the address.
So only means that the plus and minus only few few ones that the all all the actually players are aligned with the objective and they are making the changes.
No. I mean, aggression in relending is what I am getting at, not in terms of guardrails.
Okay. So let me take this one, and I'll supplement what and spoke about. See, for us, like, what we spoke, we have been disciplined from second April, Two point zero got implemented. We have been following very rigorously at the very much. A company trying to play aggressively.
In the long run, this may not be great for that particular entity. So so as a rule, what I'm saying is that association, I'm also working in terms of ensuring that the battery would have been designed. I'll follow on the ground by all the 82 regulated entities who have signed up for this. So there is also a report within the published by them every quarter, whoever is not being following the database appropriately. So it will all come up into life once this report is rolled out by the way, But having said all of this, whatever I get to hear from now, whatever has been entities who have signed up, everybody is calling to the discipline pretty much the way that is the.
So so then when do you see your disposals scaling up? I know that your growth will be slower than other segments, but still.
So I I think it will still take a quarter more for everybody to stabilize this gathering like I spoke earlier as well. 16 to 18% of the customers who are above 60 b b d, nobody will be able to link to them and all of us signed up to that gathering. So 16 to 18% customers, obviously, which are existing are no longer eligible for loans. However, having said this, considering the new borrowers which are coming up, because everybody now is trying to make their portfolio concentration and portfolio quality better, The focus has been there from the all industry players. However, the quarter two end up to you where the, you know, monsoon season gets over and the festive season kicks in.
But momentum also shift towards more dispersal and sustainable dispersal. So my guess is that maybe one this quarter more is more time frame for us to be more cautious and then quarter three onwards, the dispersal will step up. I it may not step up to the way it was set up with the 3040% compound annual growth. It will be in the region of 1015% growth from public loan.
Okay. Thanks a lot. Thank you.
Thank you very much. Next question is from the line of from CLK India. Please go ahead.
Yeah. Hi. Thanks for taking my question, and congrats on the quarter. Just a few follow ups on MFI.
Firstly, have you all or the industry hype MFI yield? Yield and processing fee? She couldn't pay. Then then what happens? Say on eleventh, don't you all go and collect it?
So let me tell you that earlier what was happening on a holiday, the demand was not being raised. But as you know that we need to we now being a bank. We need to comply with direct law. So the thing is that even on holidays, like, you know, segment also, we know we have to have to raise the demand. The demand is raised, but my people are not available for collection because that is a holiday property.
So earlier this loan was getting ballooned at the end of the period to a forty eight week loan would have become a 52 weekly. But now, we have to pay within a 52 week. We have designed and we have to pay on our own time. So what was that initially, the borrowers or even my people also on the ground, they were also not in the habit of culture of taking the payment in advance of the day. And so it was obviously becoming an estimated because it was getting collected on the next day, obviously, on on the next working day, you know, happen and stuff.
But now we are trying to get it connected a week advance for the day. That is our report. It will take some time to stabilize. Also, are exploring, of course, it is already we are not yet decided that whether we can do something similar to the bond market that will disclose a particular day, the next working day becomes connecting day for the year. But that is, of course, little bit difficult because this segment, as you know, the work from the factory, the system, the culture built over the year for the year.
So we are now majorly aiming that if we can connect a subscription portion in advance of the the information advance, then we can send the SMS zero. So that's why I said that, when we have block holidays do appear, like in September, we are attending that my SMS zero will come up because of the results we are is happening in celebrations and local holidays in almost some way still stay already. But, ultimately, this does not go to be a very much concern because election efficiency is more than 99%, and this won't also get recovered.
So I just add the So so if I make this Continue, Kiran, I'll just add rather here. I'll just add little bit more to what because it's just same.
See, in a in a normal retail loan, if it is, let's say, a housing finance loan, generally the bank will raise an SI demand and it will go and hit the savings account and recover from the account. In case of easy loan, our group meeting, the loan officer will carry a tag on any day and then show that you have got thousand rupees installment to be paid. Which means that if on a particular holiday, the loan officer is not landing into a group meeting or group meeting is not happening, the practice was that you don't raise the demand and next week you don't collect it. Now that we have now ensured that we are we are raising the demand everyday. That's number one.
But we have created two more practices. One is we have now launched our QR code capability, which means that the borrower can now pay online remotely as well. A b, we are also creating a practice of discipline that can we collect the money in advance if it is Monday installment, Monday being a holiday, can I collect it on a Saturday and request the borrower to keep the money in their savings account so that we can pull on a Monday? That is the second thing that we are doing. And the overall amount, if you see on the 53,000 crore group, the estimate zero increase is just about $1.50 crore.
So so these are all, like, collectible amount. So that's the that's the point about all of this.
Have I have I clarified, Actually, so okay. I understand that digitization will help it help collection. My question was, let's let's say, three months in a quarter, 12.
Okay. Let's speak it simple. The borrower pays every Monday. Now on one Monday, it was a holiday, so you all used to collect only 11 installments. Is my understanding correct?
Not 12 installments.
For those borrowers who are on the bank.
And the convenience. Exactly.
Correct.
Correct.
Okay. Okay. I thought on the next month, you would collect double. But we're sending it.
No. No. No. Are not we we were not raising demand. So, obviously, demand rate is 11.
We were collecting 11. Now we are raising 12 demand, and we are collecting either in advance a week before or if on that particular day, we are not able to collect. We have to go to following week to collect, and that's why that zero to six come in into play. And that is what we see, please understand. On a 52,000 per group, $1.40 50 per hour admission means point two seven point two is added up to date.
And that's why it's also if you see the SME one and two are not these people who have not paid us the point to 8% which is there are still paying us every every time. What they have not paid is a backlog of one week or two weeks. Whatever the. And we collect your week in advance, it doesn't become estimate zero. If it's paid the next week, then it's the estimate zero, but that's the same.
It's only the initial fees when this holiday is happening. There is a backlog to pay out. Right? Which is exactly why it's continuing in the.
But we don't expect that because borrowers in the habit of paying only on the day of the week.
Yeah. Or they're getting two weekly payments on the following week is also not in the And that's one of the reason that what it is. Some time to study.
I like what sir also spoke about in the month of September holiday, we get a profile date together at least in time. We'll have another spike up.
But like I said, it's just one more point to clarify, while QR code is there as a initial as a incremental initiative, the center meeting will continue. So I think that is the thing we'll have. Of course, yes.
Thank you very much. Sir, I'm sorry to interrupt you. Can I request you to come back for a follow-up question, please?
One more very quick question. It'll take thirty seconds. Just what's your trajectory on NIM if you can guide us?
So we will get more urgent as we know that we have just passed 25 basis points and now this quarter we are passing another 25 basis points. But two good things are there.
My only 50% of the advances will get affected because 5052% of my book has been in the fixed rate. So that's the advantage that I'm getting already. Number two is that my cost of funds, as I told you, Rajiv, I've already told that sequentially, because of the cut in the deposit rates, we have got a benefit of 19. This is point decrease in the cost of funds. And as and when the fixed deposit will be matured, this will be increasing because immediate effect is only on the setting time, not on the fixed deposit.
So that claim, a little bit will be compensated, but let me give a clear picture. Lean would be more than a day, and we have to put it up with additional business so that the quantum of profit increase. So four factors two things about, you know, like I said, the one is clearly the report effect. So, I mean, 45% of book sales rep only, and there there could be some bit of a impact. However, we have reduced our selling rate and we see the benefit of that comes in this quarter already, 19 basis points improvement in the cost of deposits.
And as we some deposits come for renewal, you will see benefit of that coming through in quarter three, quarter four. The third is on slippages. As slippages continue to come down, we should see a benefit or an offset happening on that particular front. And the fourth is as we are growing secure books faster than the EV book, I think that mix change will have an impact. So I think these four factors, we don't have a specific guidance, but I think these four factors what needs to be monitored.
Thank you very much. I request for all the participants. Kindly repeat to two questions per participant and join the queue again for a follow-up question. Next question is from from JPMorgan. Please go ahead.
Thanks for the call. Two questions. First on margins, as you just explained, if I look at the mix change on the asset side with more of secured and and less of EED, even in third and fourth quarter, with the FD effects coming in, do we still get sequential reduction in margin? So second quarter, definitely, margin goes down, if I understand you correctly. Does that continue in third and fourth quarter as well, sequentially?
That's first. Second, this increased competition of some of the players kind of gaining the gentleman's code and competing a bit aggressively. Which segment, which states do we see this behavior? Is there is it behavior in terms of credit underwriting standards? Is it in terms of ticket size?
Is it terms of pricing? If you could give a bit more clarity around how the competitive landscape is evolving despite the Guardian two point o. Thank you.
Maybe I'll take the first one on the NIM. I think, while I've already talked about the key factors which are there, look, I think you're right.
We should be able to see, I think, some bit of a compression further in the next quarter. However, we should be able to see some level of stabilization in the second half of this year because of the offset that we expect, especially in the slippage that should start trying to improve. So I think that is the broad strategy that we are looking at from a money perspective. But at the same time, there are other levers that we're looking at on how do we actually increase our other income, which you've already seen a 33% growth in this particular quarter that we've done. And any further opportunities that we see in terms of improving our cost of funds, Right?
Which will help because we are doing a lot of targeted push towards increasing our data mix as well. So there will be a multiple factors and years that we'll be using in terms of how do you update any sort of compression that comes through.
On the second question I'm understanding that, Raji, slightly more because the gap between your secured yield and your EV yield is quite large.
And, yes, we've got rate cuts and all of that has happened and hence, your cost of funds will improve. But is it enough?
Or as you said, you need a structural shift in much higher cost of balances and so on and so forth For you to even have a stabilization of NIM in second half, on knowing at least what we know and and and where the state of play is, a fair assumption is to expect further NIM compression in second half from second quarter level.
No. I'm sure. Maybe I can take that. So firstly, think on the EV, what we have guided the market is that we will be looking at growth on on I think on a moderate basis and the secure book will do on a faster basis.
The first quarter actually has seen a decline on a year on year basis. We expect that to start reversing out marginally the next quarter and then a bit more significantly the end call. So as the readable book continues to improve, we definitely get some benefit of that to happen. While we are clearly aligned towards improving our secured share and the secured mix over the next couple of years, We already made good headway. We already got 52% of our book as secured already.
So I think we're running a little ahead of time on that particular fund as we try to do. So we have a limit, and we have some headroom to be able to start growing our EBITDA growth as we are able to provide.
To Rajeev. So what you are saying is also correct that we are also focusing in the mix of deposits. So more brokers will be given from this quarter to run and buffer deposits.
Yes. It is right. We have tried within the last quarter for six deposits because we wanted some stability in our books and that we have been successful in the forty days. We could garner 4,200 course of incremental deposit for that. This quarter, the focus is on Tata.
We need to make up the mix change in the mix of funds. So as a when this Kapha will increase for the day, definitely, it will further reduce our cost of that. So it's two points on the other side of this. Just to add one, clearly, that people of our banking outlets, which are distributing this EV loan, we largely see that out of the problem in the largest sense, which means they will be going forward in business as usual. Of course, not grow at the pace considering that we have the targets to follow.
Second, clearly, the second half of the year is generally good for the industry, and therefore, we expect to see a significant uptick from here on. Now as far as the guardrail is concerned, our belief is that what we hear from the industry SRO is that most of the players and most of the significant and the large and medium players have implemented. Even that the last cycle of overheating really impacted the entire industry in a big way. Our belief is that people will follow the discipline and therefore we don't see that at least reasonably larger medium player will be there all of that. It will go forward soon.
So to that extent, that's that's our belief. That's what we get to hear from the. Other supplement, in terms of the numbers to get some flavor and color to this whole discussion, yeah, industry portfolio overall has come down by 14% overall. If you have to compare year on year. From March four lakh twenty four of of March twenty four of four lakh twenty four thousand, we are down to three lakh sixty seven thousand in May.
Do not take out of the industry or not published yet. That means 14% of the industry level has come down. In terms of active loan also, it's more than 17%. So it's not that anyone which has been hearing is aggressively doing. The only thing what has come out recently is in terms of the qualification criteria of sixty forty now, qualifying criteria.
So 60 can be micro for even NDSP, that is something that everybody has to work out for.
Sorry. Could you explain that a bit more?
I mean, if you watch out So, for like I said, the overall the industry numbers have come down. I have not heard heard from any particular player or geography where they have grown.
On the question of 60% on 40% qualification criteria is mainly for NBFC, NFI, who are now eligible to do non NFI loans up to 40%. So we have to now watch out for individual loans that may be coming into play rather than just sticking into microfinance loan. And and, basically, there would be institution who would like to grow the individual loan because there are no there. Okay. Only for microfinance loans.
So that's something and that's something for those entities to really figure out in terms of how do they want to build their group of individual or or or non microfinance level or non microfinance. Right. Is that clear or have you got the point?
Yep. I understood. Thank you so much.
Thank you. Thank you.
You. The next question is from the line of MB Mehra from Pota Securities. Please go ahead.
Yes.
So the line for the participant dropped, we move to the next participant. Next question is from the line of from ICICI Securities. Please go ahead.
Yeah. Hi. Thanks for the opportunity. First, a small clarification, Nishan. So, you said that now that the qualifying criteria has been changed, so there may be further tightness on the individual loan side.
Right? Not the group EV, but currently, you are parlance. The individual NFI loans. Right? Is that the understanding?
Yes. So there would be a maybe I I want Michelle was just telling that you see now NFI can do 40% non micro. So there will be a little bit of variation in the individual loan already. Like, we have a lot of bank in our book. So similar to that, that scheme subject.
Now, this particular loan, there are no guardrails as of now. The industry would also like to see that it does not save the same experience as microfinance loan when you give a large part of the lenders and borrowers became NPA. So that's what he was just indicating that maybe going forward, we may have certain credit for this segment too.
Correct. So, I mean, as if I understand, if I look at our EV book, while at the system level and the aggregate level for Bandhan, that EV book has been declining, but still the individual portion is still reasonably healthy.
Right? So, I mean, there is some some some some moderation you need if if there is a further tightness there. Right? Then there could be one outcome there.
So, sir, so so I would like to say that the individual loan book is behaving better than the overall group loan book, even in our side.
My only contention here was there are now qualification criteria for other entities being, like, spoke about aggressive net. It could be aggressive on the other parts of micro among micro group.
Right.
Because other entities will try to go because there are no guard rails there currently. So other means other has a lot of other business fulfillment including as well.
Right? That is how you you are seeing this.
Yes. So other is the right there, so they can now do 50% of online services. So there may be some sort of additional to book the individual there. That's what Correct.
Sure. And on the credit cost side, right, so has anything changed in the sense that while the slippages are lower and I think in the opening commentary, you had mentioned that, mean, you know, the credit costs are slightly lower, but still on improving direction. So, is there anything changing your thought process wherein you had said that first half will have relatively higher credit cost, and then it should start start towards normalization there going into the second half. Is there anything changes there or is it only the What we are our guidance, what we have told earlier remains the same.
So we I would say that trade cost will be remaining almost at the same thing in q one, but thankfully, and we have a little bit lower trade cost compared to March.
Got it. So that is a good indication. Q two will be a little bit better. Q three, q four, we are expecting further.
Overall credit cost of 2.5%, that's what the guidance we have given. We will try to maintain that. Actually, till now, that is our aim. We have not changed the time.
Yeah.
I think just to compliment, we have mentioned that we'll we'll be able to see some marginal improvement in q one compared to q four.
That is exactly what we're seeing as well. And that's the targeting expect margin improvement in q two, and then a more significant recovery of q three, which is the second half.
Right. And the recovery Okay.
Ma'amundra, sorry to interrupt you. I will please request you to come back for a follow-up.
Sure. Thank you.
Thank you. A request to all the participants kindly repeat to two questions per participant and join the queue again for a follow-up question. Next question is from the line of from Nomura. Please go ahead.
Yeah. Yeah. Thank you for the opportunity. I just wanted to understand that while the margins have declined 30 bps q o q, loan book has declined at around about two and a half percent q o q. What explains the net interest income being flat on a q o q basis? That would be my first question.
I think as I mentioned earlier, we actually have some improvement in the cost of funds. So our actions relating to the reduction in the savings account rates have led to almost 19 basis points reduction in the cost of deposits. And I think that has been able to help us in terms of, you know, reducing the thing, what we are seeing in the gross deal. The second thing is also, sequentially, we feel the shipping has come down marginally from roughly 1,700 odd crores to about 1,540 crores.
So we can give the maximum from $17.48 crores to $15.53 crores, and that lowest typically also passed in just a minute. Particularly more Alright. The changes that happened, sir, kind of also. And the margin is due to the cost of.
Okay.
As I mentioned earlier, so of the $15.50 crores, much would be from the? $1.00 $8.09.
From the EV segment, on the EV is $1.00 $8.09.
Okay. Thank you.
Thank you very much. Next question is from the line of Puneet from Macquarie Capital. Please go ahead.
Yeah. Hi. Thanks for taking my question. Just two questions on the easy asset quality front. So when I was looking at your vintage book, you know, I was surprised that in q four, it's like '25, I'm just seeing where you have given a disbursement of $151,000,000,000, and it shows, like, an NPA of point 1%.
Now I know it's negligible point 1%, but I just don't understand that if something is reversed in q four, if I was only five, and, you know, if he's not paying three installments, that just makes it, like, immediately empty after disbursement. How I know point 1% is negligible. Just but just one clarity on that. Is it a collection issue or what is that? Because it seems like this it's, like, it's the version q four, if I verify and it's been classified as NPS the next quarter.
So any clarity on that? Secondly, on on yeah. And so I'll I'll wait for this, and then I'll move on to the second question.
So I think I think your point is that it is largely due to some cross linkage and the NPL becoming due to that, which which is what is causing this. It's a fairly marginal aspect, and that's the deal something that they're focusing on the recording as well.
So there are JAN loans also here, because there is a JSAN. So JAN, we have a twelve month tenure loan for 50% of our loans. So six months have elapsed from Jan. So point one, some portion would also be from a January month loan could be. And like what Raju said, most of it is coming primarily from a cross linked loan.
Okay. So cross linked doesn't bring that back.
Cross linked. Some other other loan would go go default.
Okay okay.
So one person is there. Yeah. If there is multiple loans, one loan becomes 10 ks, the entire portfolio has to be there.
Okay. Okay.
But I thought we we have stopped. Okay. It's been done.
Could be Yeah.
As well.
It could be as well. It could be be linkage or any other loan linkage.
Got it. Got it. Yeah.
I get it. I get that. Also, when I look at, you know, this this this from the past two quarters, I look at the SME one and two and then, you know, when I transfer flow. So say, like, this quarter, the GNP has been constant and, like, 47 to 47 per book. And SME one and two last quarter was around 5.1, 5,200,000,000.
That makes it an average of ten, ten point three billion. We have written off kind of 10.5, our technical write offs were around 10 point 5,000,000,000 this quarter, which is assuming all EED, right, from the EED book. So is it true that the SME one, SME two, the entire flow is into the NPM, then we are writing it off? And this has been for the past two quarters. Am I getting that thing right?
Or if you could correct me if something is wrong with that.
So so I can I can explain that? So of the 10.5, almost 9.5 is easy. So last question is that. So typically, for anything that we look at in terms of a technical write off, it is for a significant level of vintage, which has been there.
So we first have a lot of recovery efforts that we do that that we do. And only after a considerable period has elapsed, there we look at what exactly needs to be written off. Right? So it's not it's not something that we think from where would I go to company. Could be, you know, at least a longer vintage of portfolio that we will get.
Thank you very much. Puneet, I'll request you to come back for a follow-up question. The next question is from the line of from Philip Capital.
Your investment is is has increased on a sequential basis. What explains that?
Sorry, Manish. Could you repeat that question?
Your email investment has increased on a sequential basis.
So the five year investment was declining on a sequential basis. There's a quite bit of jump on investment income. So the calculation is quite steep in a potentially declining, you know, in the current environment. So can you please explain that?
Yeah.
No. So that's that's that's so you see that's the in deposits because it's like advanced growth actually. So, obviously, the funds have been deployed in investment. But investments also, we are building up the trading book mostly. So if you lose this quarter also, we have made substantial fee income from the investment portfolio from the treasury portfolio.
Does that come because of Sorry to interrupt, sir. My if I look here in outstanding investment book that has declined on a sequential basis, my question was furthering here is on investment. So the calculated is on investment has increased by more 70 basis points on the sequential basis.
So what explains that?
I understand I can yeah.
Yeah. I can explain that. I think on a sequential basis, the we actually have not increased. It has slightly reduced from about 6.6% to about 6.25%. On an average basis, our investment book has actually gone up.
It's so I think period two, period end to period end, we might be seeing a reduction, but on an average basis, it has actually gone up.
Okay. Okay. Fine. You just come down.
Manish, do you have any follow-up question?
No. Thanks. I'm done. Thank you.
Thank you very much. Next question is from the line of Abhishek from HSBC. Please go ahead.
Yeah. Hi, everyone. Good evening, and thanks for taking my question. So the first question is on the EB disbursements that you are doing now, especially the group loan disbursements. Is it mostly to existing customers, or are you looking for open market acquisition, new customer acquisition as well? So what is the strategy then?
We are doing both. It's not that only we are mainly existing borrowers. 86, 87% is existing borrowers, and 1414% is coming from the new borrowers of whatever you have been discussing. And like I said, that is a good one for both set of borrowers.
Sure. Of course. But this eighty six eighty seven, is it now higher than, say, last couple of quarters? Or Yes. I think it be coming lower?
We've been doing 85. We've been doing 85. That's all that's existing model typically and running running 15% from the new model. And then the number is in three months and then.
Okay.
So and and in the beginning of the call, I think you called out a few geographies where you are not growing. And therefore, your growth is limited to just a few. Can you clarify where is it that you are comfortable to grow and where you're slowing down?
It's not like that. Our stronghold will remain East and Westinburg, Bihar, Assam, UPV.
And I call it company for them come to them. Right? So for us, growth is a very challenging in the market of coming out with all those political impingement as well. So that's where we want to go, but we are coming it up together. Other than geographic way, I can say more, know, the point you are the as you like, I think out of the 4,400 views, 3,100 are quite okay.
So there we are focusing the growth. So it is across geographies.
Alright. And more than two of the the two states, they had issues in the recent past. Obviously, the growth is taken place.
So So on a full year basis this year, in f I twenty six, what kind of disbursements are, like, the AUM growth are you targeting? It would still be, I don't know, 10% Y o Y or what are you thinking? How how do you see the trajectory?
I think it will be somewhere between five to 8% of growth for us in this year, FY twenty six. And because the first quarter has been muted and it has impact has gone down, I think the second one is in there will be later and we have to accommodate and compensate for the first half.
Yeah. What we shall mention of five to 8% is for the e b portfolio. Yeah. And of course, b portfolio.
Yes.
E b portfolio. And overall, then we should be able to target a 10% kind of growth rate for everything put together.
And then yes. Yes. No.
What are more I mean, more than that, we thought that non EEB is growing at much faster pace of almost 26, 27% as is. Well, 52 to 70% target is the gross target.
Okay. Okay. And and second question would be on cost of borrowing, cost of deposits actually.
Just on the term deposit repricing, can you give some sense of the duration of TD and how fast you expect the deposit rate cuts to start showing up in in terms of your overall deposit cost drop?
So I can say, yes, we thought that down the cost in the month of April. Most of the reason from the first. The effect of the reason we've been seeing, but some people get as of when they get natural. But in our case, the maximum you decide is the one year package.
So we can take next so within next March, I think we will get the full benefit of this red card on the from the notes. So those are maximum almost 60 to 70% besides in the one year target. So savings rate was reduced by almost 30 to 80 basis points, and we saw the impact immediately in the quarter itself, 19 basis point reduction overall on term deposit overall on the partial deposit. On this term deposit, I think 20 to 30 basis point reduction has happened in multiple buckets. Some we did in May, some we did in June, and I think we should see the impact from q three onwards.
Yeah. Okay. Got it. Thank you. Thank you for the answer.
Thank you very much. Ladies and gentlemen, we will take that as a last question. And now hand the conference over to the management for closing comments.
Thank you. We would like to thank all of you to join for this call and would hope that you continue to raise the trust of the bank. Thank you.
Thank you very much. On behalf of Bank, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.