Hi. Good afternoon. On behalf of Antique Stock Broking, we invite you to Canara Bank Q1 FY 2023 earnings call. Joining us today, Shri LV Prabhakar, MD and CEO, Shri Debashish Mukherjee, ED, Shri K Satyanarayana Raju, ED, Shri Brij Mohan Sharma, ED. Without further ado, I will hand over the call to Mr. Prabhakar for his opening remarks, after which we will open the floor for Q&A. Over to you, sir.
Very good afternoon, and my sincere thanks to all the investors for the support they are giving to us. Regarding the Q1 FY 2023 results of Canara Bank, we have concentrated on four verticals. Let me tell you the internal thing. First one is Q1, generally, the credit growth will not be so impressive. What we thought is in Q1, we have to take the opportunity to attract all the clients and to show a decent credit growth so that in the coming three quarters, the credit growth, which is significant in Q1, will give many advantages to the ratios in the coming quarters. Accordingly, we work strategically and we focus on RAM, we focus on Corporate. RAM, as we said, 55% ± 2%, and Corporate 45% ± 2% we'll be maintaining.
In Q1, we maintain the RAM of 56% and a Corporate of 44%. Growth credit will have grown by 14.4%. Corporate, 14%. RAM, 14.85%. We are of the opinion that we want to continue this good growth journey under asset side in Q2 also. Second one is we are very conscious about the ratios of GNPA and net NPA. GNPA compared to YoY, it was reduced by 152 basis points. Now it stands at sub-seven. That is 6.98%. Net NPA, it was reduced by 98 basis points YOY, and it now stands at 2.48%. In Q2, we are working to bring the gross NPA, net NPA figures significantly down. Coming to the income side, we have focused on non-interest income and also interest income.
Non-interest income has shown a decent growth of 25%. Out of this, again, we have concentrated on fee-based income also, which has also shown a decent growth. Interest income, the repo increase of 50 basis points we have passed on to our customers in Q1, whereas the remaining 50 basis points we have not passed on, and it has been passed on on 7th July. Whatever interest increase is there, that advantage Canara Bank will be getting in Q2. We have also ensured that whatever additional exposures we are taking, majority of the exposures will be under A and above category. Because of which we have observed that 78% of the weighted accounts is under A and above category, which used to be 69%. B B and below we have reduced to 11%.
Apart from that, operating profit, we want to have a minimum growth of 15%. Our target was 15%, we have achieved 20%. Now the amount is INR 6,606 crores. With the controlled provisions, net profit, we have crossed the benchmark of INR 2,000 crores, and we are confident and we will work towards the direction to sustain this INR 2,000 crores figure going forward. YoY, there is a growth of 71%. Other few landmarks in the last quarter, gold loan, we crossed INR 1 lakh crores. Housing loans, we are growing at 16%. Retail credit, 11.56%. Apart from this, capital, in spite of growing at 14.4% in credit, we still maintain a CRAR of 14.91%. Our annual will be in Q2, we'll be crossing 15% CRAR.
A week ago, we have already raised AT- 1 bonds for INR 2,000 crore at a coupon of 8.24%, which is one of the best in the recent times compared to the public sector banks. ROE, we have projected 15% for March 2023, whereas today we are already at 16.33%. ROA, we are at 0.65%, and in Q2 we are working to improve this percentage to an attractive level. With these few observations, now I open to my investors for any questions so that we can answer. Along with me, I have my Executive Directors and CFO and other top officials here. Over to you, sir.
Yeah. Whoever wants to ask a question can press the raise hand button on the app. We have our first question from Mr. Ashok.
Yes, Mr. Ashok, we are unable to hear you.
I think it's a problem with Ashok's line. Very, very hazy.
Can you hear me now?
Yes, very clear, sir. Please go ahead, sir.
Sir, my compliments to you, sir, for giving the fantastic results and meeting all the guidelines and targets. Quarter one is so good, and then you are promising a statement that you want to grow 15% of the operating profit. It means it could be about INR 7,600-INR 7,800 in the next quarter, which gives us further confidence. Sir, having said that, I have got. Of course, I have been observing Canara Bank working. You are extremely doing well. I have a couple of questions and observations. Sir, on the restructuring front, you know, COVID restructure and our total restructure book, now that moratorium is over, and you must have started already seeing the regular recovery and the amount coming in. Could you throw some light on that on restructured accounts, where do we stand today when the repayments have already started?
What is our experience, and how much percentage of this out of the money which was called or which was expected, what is the efficiency, collection efficiency of that out of the restructured account?
Sir, as you have seen the slippages from the restructured is also a part of the overall slippages, which you have shown as INR 3,600 crores. Our anticipation is out of the restructured book, 10%-15% bound to be NPA in small ticket loans. As we have seen in the overall slippages, the slippages are at INR 3,600 crores, which includes the slippages from the restructured book also, which is about 10%-11%. This is already anticipated, and this includes a cumulative slippages since beginning. As on thirtieth of June, this is there.
Going forward, we expect that there can be another 5%-8% slippages in the existing portfolio, which will be within the overall projections of what we have given that the slippages will be maximum INR 15,000 crore for the full year. Percentage wise if you ask, I think it should not be more than 15%-18% of the total restructured book. Regarding the collection efficiency, under these things we are observing it is 91%-92%.
Okay, sir. My second question, sir, is on the credit side. Of course you are growing very well and you have a target of, I think, 45% on the corporate book. What exactly, I mean, what are the ventures in pipeline and what kind of projects are from which industry or segment this credit inquiries are coming in, where, you know, like we can establish that, yes, that one credit. Because the situation overall is still not very conducive today also again, the international, I mean, the problems are happening locally also. Where do you see this credit demand coming in, from which segment industry and can you throw some light on that, sir?
See, as I said, our credit growth will be spread over under various sectors. For example, Retail we are growing at 11.56%. Agri and Allied Term Loans and the CC we are growing at about 18%. MSME we are growing at 13%. Corporate, we are growing at 14%. Put together overall is 14.47%. This going forward also we will maintain a balanced growth in all the sectors. Why I'm telling this is if at all in any quarter, if there is an unforeseen issue in any of the particular sector, my other sectors will take care about my growth. That is the basic purpose with which we are saying that our growth should be there in each and every sector. Coming to corporates, as you are interested.
Corporates, as I said, we are very active in infrastructure, especially HAM, which is one of the fastest advances as far as the existing repayment and the scheme guidelines are concerned. We have already underwritten projects worth INR 50,000 crore under HAM project, which will be disbursed quarter on quarter as the progress happens in the HAM projects. Second one is we are very active in NBFC finance, which are all AAA and A A, not less than that. We are having good proposals, and we have already sanctioned funding in steel. Nowadays, to have good growth in housing, for example, our housing is growing at 16%. To have the raw material, we are selectively financing real estate projects of housing. We are active in housing also. Engineering we are financing. Construction also we are financing.
We have seen 26% growth quarter-on-quarter, it is about 8% growth in construction activities. In chemicals and chemical products also we are active. Basically, not in one sector or in one scheme, we want to have a spread over. However, the corporates we are very choosy. As you have seen, our rated portfolio is about, A and above is about 78%. B B and below has come down from 18% to 11%. Book is very good. We don't see any immediate stress in any of the books as far as corporate is concerned of Canara Bank. Growth is widespread.
Sir.
Mr. Ashok, I would request you to come back in the Q&A. We have other participants are waiting for their turn.
On NBFC front, sir, can you throw some light, sir? How are you placed on the NBFC for co-lending, for onward lending, and also the pool buyout? What are your views on that, sir? What are our plans on that front?
Yes. Point number one, pool buyout. No, we have not taken. Why means, as a bank individual, I am able to show excellent performance on the disbursements. I have not gone for any pool purchase. Without that, this is the growth. Second point is co-lending. Yes, we are interested to some extent in co-lending, but however, our emphasis will be on lending by ourselves. Hello? Hello?
Yes, sir. We can move on to the next participant.
Yeah, please.
Yes. We have Mahrukh next. Yes, Mahrukh, you can go ahead.
Yeah. Hi. Hello, sir.
Hello, ma'am. Very good afternoon.
Good afternoon, sir. Good afternoon. Sir, I had one questions on credit growth. Basically your global advances have grown very, very strongly. Which sector would that be? I'm sure it's India linked, but in global advances, which sector would that be? Again, in steel b ecause of recent government measures, we hear that some of the CapEx has been rolled back. Why is the growth in infra scheme so strong? Because these are sensitive sectors, and which part of infra is growing? What are the capacities in steel that have grown so much in the quarter? Also in NBFCs, would they be power NBFCs?
Ma'am, one by one I will answer. First, regarding the overseas credit growth. June 2021, our overseas portfolio was INR 23,000 crore, which is insignificant as far as the overall advances is concerned. At that time it was about INR 6.84 trillion. Now from INR 23,000 crore, we have come to INR 35,000 crore out of my loan book of INR 7.83 trillion. Percentage wise, it is not still it doesn't make much impact. Having INR 35,000 crore, 40,000 crore of loan book overseas for a bank like Canara Bank is very small. Percentages, the growth is 52% as you see, and quarter-on-quarter it is 18%.
Still we are not happy with this one because unless until we have at least INR 1 trillion overseas gross advances, it doesn't make sense for Canara Bank. We are in that direction. Now, coming back to what type of advances we are doing in overseas. As you said, these are all 90% India-linked, triple-A rated companies. AA rated companies, at the most AA rated company, and 10% is foreign banks and foreign institutions also, which are also highly rated. This is the exposure which are taking as far as the overseas are concerned.
Which sectors?
Let me check.
Which sectors?
In this, as I said, these are all AAA-rated Indian corporates as well as public sector undertakings also. Not under one sector, it is under various sectors.
Like two, three sectors if you could name, whether it's oil, tea, infra, cement.
See, yeah. It is, I can say it is a public sector AAA-rated company in power financing, and also infrastructure financing, and also financial institutions and banks. Some Indian corporate who is a very good corporate under steel, he has also raised funds abroad from our bank. Coming back to India, domestic credit, as we say, we have taken A and above rated corporates under these various, what you call, sectors and purposes. As I said, it is not only steel, we are growing in all the sectors. Second point is, if you see my risk-weighted assets, it is 69%, which used to be 74%, 72%, 79%.
Now we have such a good portfolio where the risk is very well under control, and I can say this 69% of risk-weighted assets may be one of the best in the banking sector.
Got it, sir. Sir, in terms of NBFCs, would these be power finance NBFCs?
No, ma'am. It is spread over. Not power finance. It includes that also.
Okay, sir. Thank you, sir.
Thank you, ma'am. Thank you.
Thank you, Mahrukh. Request all participants to limit their question to two so everybody can get a chance to ask. Next we have, Mona Khetan. Go ahead.
Hello, am I audible?
Yeah, ma'am. Please. Good afternoon. You can go ahead, ma'am.
Good afternoon, sir, and thanks for taking my question. Also, sir, please, what is your reset period for the EBLR loans? How soon does it get reset?
Generally it will be minimum three months.
The first repo rate increase happened in May, so the first impact for you was around June for that first 50 basis points.
Yes.
Okay. Got it.
No, first one is 40 basis points, then 50 basis points . 40 basis points is first w hich we have passed on, whereas 50 basis points we have passed on to the customer through 7th of July.
Okay. The first one was passed on in June?
Yeah, before June, ma'am.
Okay. Sure. On the restructure, which you mentioned that, about 10% or so has slipped. The outstanding today would be about INR 18,000 crore. Is that a fair understanding?
Exactly correct, ma'am. 10%, if you see, if you take, it will be about INR 1,800 crores. I said it is a cumulative one.
Right. Right.
Putting together all the quarters.
Right.
During the current quarter, whichever is there, it is appearing in that INR 3,600 crores which you have shown. It is a part and parcel of that.
Right. About 5% also has slipped in this quarter, because another 5% had slipped earlier.
You can take around 6%-7%.
What percentage of this book has started billing by now, that is, out of moratorium?
Ma'am, our estimation is at the most cumulative, maybe about 18%-19% it may slip, where 11% is already booked. The rest left over is about 8%-9%, which we are expecting and which we are making provision for that. That we are already prepared how to handle that and to recover that amount. The guidance which I have given in the beginning of the year, that overall in full year our slippages will stick to INR 15,000 crores and recovery will be more than that. All these restructured amount we have taken into consideration, we have factored in within that INR 15,000 crores and during the current quarter the INR 3,600 crores includes that amount also.
Sure. I also want to understand what percentage is totally out of monitoring and the billing has started for the restructure.
Ma'am, now everything is started, ma'am. No moratorium is -- there is no moratorium.
Under the restructured loan?
Yes. That process is over. Now installments have started and our collection efficiency is somewhere about 90%-91% under this.
Sure. The Future Group exposure was this recognized as NPA in this quarter?
Yes, ma'am. As last time, as I said, because we were getting repayment, it was not classified as NPA in Q4 of FY 2022. Whereas during the current quarter, we have. This INR 3,600 crore includes Future Group, where the exposure is about INR 1,240 crore roughly.
Sure. It is fully provided by now?
100%.
Thank you, Mona. We'll move on to the next participant.
Thank you.
Mr. Jay Mundra.
Yeah. Hi, good evening, sir.
Sir, good evening. Thank you. Thank you very much, sir.
Sir, I have a couple of questions. First is on your capital, sir. The absolute amount of common equity capital that has gone up by around INR 1,700 crore. Does this include the, you know, proportionate net profit or there is some DT adjustment?
No, you are correct. It includes major portion, is our net profit.
Okay. Understood. Secondly, sir, you have mentioned that you will be raising some capital, debt capital, right? Just wanted to double check, is there any plan for equity capital raise for the residual nine months?
This year? No.
Right. Understood. Secondly, sir, on your loan yields, right? There is a dip in the loan yields. Is there an interest reversal component which is driving the loan yields lower? Because otherwise, we should be seeing a loan yields getting higher, right? If you can explain what could have led to lower yields on a sequential basis.
Two things. 38% of my portfolio is linked to RLLR. As on 30th June, we have passed down only 40 basis points to our customers. The remaining 50 basis points increase in repo rate we have passed down to our customers only on 7th of July. Two reasons. First one is we don't want in June quarter itself to load our customers with 90 basis points additional interest. Point number one. Point number two, during June quarter, we have increased the deposit rates to retain our customers, taking into consideration the inflation that is available at that point of time. However, during the current quarter, that is Q2, the 50 basis points of repo is already loaded and cost of deposits which we have increased in the earlier quarter is continuing and no further increase we foresee in the coming one month.
Whatever NIM or the yields you are seeing at 7.03% under advances will increase in the current quarter because we have passed on that amount and there is no reversal of interest in any of the accounts because no big account has slipped except the Future Group.
Right. Would Future downgrading would have some chunky interest reversal?
No, not much was there because in that, INR 1,200 crores, about 50% roughly was under debt and 50% was under NPI Investment. That is why it is not there. Only thing is the interest which has to be passed on to the customers, knowingly well we have not passed on because June quarter we thought that it is very sensitive quarter where we have to give some breathing time to our customers. Hence, we have loaded the 50 basis points on 7th of July.
Right. No, sir, if that was the case, then it should be flattish, right? If you have not, you have only been calibrated in.
Yes, yes. Another point is if you see the churning of my credit portfolio.
Okay.
INR 40,000 crore worth of advances we have given to triple-A rated company in the Q1. INR 40,000 crore.
Understood. Last question, sir. I'm sorry, last two questions. If you have MTM, you have given treasury gains, which is very positive surprise. If you can bifurcate into treasury gains and MTM loss, if you had.
Yes. Mr. Mahesh, are you there? Mr. Mahesh?
I think someone has to unmute him.
Yeah, one minute.
Yes, sir. Sir, shall I answer, sir?
One minute. Sir, Mahesh is our General Manager in charge of my treasury. Please, Mahesh.
Sir, you asked two questions. Is the profit what you have seen, INR 889 crore, including the depreciation? Yes, it includes the depreciation. That means we have booked more amount of profit than what is declared. We have some depreciation on books, but whatever INR 889 crore declared as a trading profit includes the depreciation booking.
If you have that number, sir, what was the depreciation?
It is around INR 360 crores.
Last question, sir. If you have the slippages.
Sir, here one minute. If you recollect our earlier interaction last quarter. You were asking about the Q1, how much depreciation, how much depreciation losses will be there in treasury. At that time we said it will be INR 250 crore-INR 300 crore.
Right.
We have ended up at INR 360 crores, exactly near to that.
Right. No, no. Congratulations, sir. It's very, very positive surprise.
Thank you, sir. Thank you. One more question, sir. We were asking another thing.
Yeah, last question, sir. If you have the slippages for the quarter, breakup of slippages for the quarter Agri, Retail, MSME, and
Yes. INR 3600 crores out of this, INR 800 crores is corporate. Out of INR 800 crores, INR 600 crores is Future only.
Right.
INR 600 crores is agriculture, around INR 700 crores is retail, and INR 1,500 crores is MSME.
Understood. Great, sir. Thank you and all the best.
Thank you, sir. Thank you.
Thank you. Next, we have, Deepak.
Yeah. Thank you very much, sir. Sir, am I audible?
Yes, sir. Very good afternoon. Deepak, please.
Good afternoon. Sir, I just wanted to understand that going forward, how do you see the bond yield investment loss or MTM loss going forward?
Mahesh? Mahesh, Unmute, please.
Yeah. Yeah, yeah.
Yeah. Go ahead.
We expect the 10-year to be broadly in the range of 7.25%-7.75%. Given the portfolio of our size, we believe if the yield continues to be upwards, I think we may see in this particular region around INR 100 crore-INR 150 crore of MTM losses. We have sufficient profit to cover those MTM losses, so we should not see any major losses from treasury side from our side.
This INR 100-INR 150 crores per quarter you're saying?
No, if the yields moves again to 7.75% levels. Otherwise, presently I am covered.
Okay. Understood. I got that. Sir, I just want to clarify, operating profit you want to grow by 15%. Is that what you mentioned earlier in the call?
Sir, operating profit 15% minimum we are targeting because there is a reason for that. If a bank makes 15% operating profit, I can pay 15 days PLI to my 87,000 employees, that is for us it is a minimum because we have to pay PLI. However, this quarter instead of 15% our OP growth is 20%. With the interest income and non-interest income and the growth which we are seeing in the assets and other things, I think maintaining this percentage going forward, we hope to maintain 15%+ .
That is on a YoY basis, on annual basis, right?
Quarter-on-quarter basis. That is YoY. You can say YoY.
Y0Y, right?
Yeah, yeah. YoY. Because quarter-on-quarter already we are at 6.52%. YoY will be every quarter we'll be maintaining 15%. We are working in that direction.
Fair enough. That's great to hear that. Sir, couple of more things. Now, even on the growth side versus the guidance that we have given, we are quite surpassed, right? In terms of actual number of 15% versus 8% which we are looking at, right? Are you looking to revise upward the guidance that we have given earlier?
See, as I say, guidance is for us, it is a minimum benchmark. Above that it can go to any extreme depending upon the availability of the good proposals and also how the economy is doing. In Q2 we observe that the economy will be doing good, and the way in which we are getting the inquiries regarding the new investments, I think we should be in a position to do better in Q2.
Sir, your guidance for better than first quarter?
Guidance if you ask me again, I will say it is, it will be a double-digit growth. At least a double-digit growth.
Okay. Fair enough. My final question is.
Deepak, I request you to come back in the Q&A. We have other participants waiting their turn.
Okay. Thank you.
Thank you.
Thank you, sir. Thank you very much.
We have Rehan next. Rehan?
Yeah. Sorry. Am I audible?
Yes, go ahead.
Good evening, sir. Congratulations on a good set of numbers.
Good evening. Thank you. Thank you very much.
Just a couple of questions. Thank you for shedding light on the slippages. Just to go to last quarter, have they been provided for the slippages that was made last quarter, especially with regards to Future Group? I think about INR 500 crores was what was not provided for last quarter.
Yes. Last quarter we have provided 60%. This quarter we have made 100%.
Okay. My final question.
Last quarter it was not NPA, it was a standard. Even then proactively we have provided 60% last quarter, and this quarter we made 100%.
Right. Thank you, sir. Sir, my last question is what would be our bank exposure to maybe say the top three borrowers as a group, maybe top three groups?
See, we have prudential limits, wherein there is a fixed limit for a group and fixed limit for individual. We are well below that fixed limit, which was decided by the board. We'll be between that limit. You can multiply that with our, what you call, existing book for you.
Okay. Can you shed some light on the number?
It will be somewhere about INR 10,000 crore-INR 11,000 crore.
Okay. Thank you, sir.
Thank you. Thank you very much.
Thank you. We have the next question from Pranav.
Can you hear me?
Hello. Yes, please.
Yes. Sir, I just have two questions. First is that, as you said that the interest rate increase has been passed from 7 July , and then there is a deposit rate increase also. Should we expect the new Q2 to go up by 10 basis points next quarter?
Sir, our 38% of my loan book of INR 7.83 lakh crores is linked to RLLR. 50 basis points on this 38% of my loan book will be booked for, what you call, full month minus seven days. That is about 83-84 days we'll be booking. Accordingly, you can anticipate what will be the quantum that will be charged in addition to what we are charging today.
Right. That's the calculation that I'm doing. That's why I think that we need to actually go from here.
Yeah. As far as yield is concerned, we want to be more than 7.10%. Today we are at 7.03%. We want to cross 7.10% minimum.
Right. Also in the provisions, there is an item of INR 1535 crore of non-performing investments. During the previous conversation, you alluded that there is some future book, future investing. Is this a little large because such a large.
Yes. In this we have provided 100% for three investments. One is Future Group, about INR 630 crore. One account was there, which is a telecommunication account. Here we have provided 100%. One sugar industry, which is about INR 245 crore. Put together only three accounts where we did 100% provision.
All that is from investments, non-performing investments.
Hello?
I'm referring to a specific sub-item where it is non-performing investments. Provision non-performing investments, which is INR 1335 crores.
Yes. Yes.
How is
Yes, it is an investment and fully provided.
Okay, sir. Okay, sir. Thank you a lot, sir.
Thank you.
Thank you, sir. We have Praful next.
Hi, sir. Good evening. Am I audible?
Hello, good evening. Yes, sir, please go ahead.
Congratulations, sir, on a great set of numbers.
Thank you, sir.
Sir, just want to get your outlook on the cost of deposits from here on. How do you think they move over the next six months for the banks?
Sir, as far as the movement in deposit cost is concerned, mostly it will be linked to the inflation. In the sense, suppose inflation if it cools, even if I don't increase the rate of interest on deposits, I'll get deposits. If the inflation doesn't come down to 6%, I think to compensate my depositors, because they will not deposit money with me with new interest rates, so I may have to increase the deposits going forward. If inflation doesn't come down. As on date, we have already increased the deposit rates in Q1 itself, and I think that will take care coming two months. In September, we may take a call depending upon the situation which will be existing at that particular point of time. In Canara Bank, we have one philosophy, sir. We want to take care about my depositors, keeping with me the long-term relationship. We don't want to charge our borrowers on a higher side to pass on some benefit to them and to make a decent profit.
Yeah. Yes, sir. What a spectacular growth. Yes, sir.
We want to be a win-win situation, and we want to build confidence in the customers that instead of good times or bad times, Canara Bank is with them. That only will help us, going forward, to be one of the best banks in India.
Got it. All right, sir. Okay. Thank you, sir.
Thank you, sir.
Thank you. We have next, Dixit Doshi.
Yeah. Can you hear me?
Yes. Good afternoon. Please.
Yeah. Sir, one clarification and a couple of questions. Firstly, you mentioned that we don't need any equity capital this year, right?
Yes. Equity, we are not going to raise this year.
Now my second question is, you mentioned that in this provision, almost INR 1,500 crore provision was for the non-performing investments. Are there any non-performing investments still to be written off?
You see, 9% when I said, I said one major account is Future Group, which is about INR 640 crores. Second one is a telecommunication account, equal amount, and one is a sugar industry, about INR 245 crores. Three accounts very big, total provision, and in this we see a good scope going forward to recover the amount from these accounts.
Yeah, you know, are there any more installments, any other client or customer?
No. No.
Okay. My last question is regarding the gold loan. You know, from last many quarters we have been performing extremely well in gold loans. What we have done differently for such a growth in gold loan? Is there a, if my understanding is correct that during the merger of the bank, you know, some of the branches we have rationalized. Have we opened any dedicated, you know, gold loan centers and which is leading to this growth?
Sir, gold loan, let me tell you the secret. It is hard work and confidence of the customer. Only these two things will help us to increase the figure. Because we started two years ago, as you said, amalgamation. Amalgamated figure was about INR 54,000 crore. Today it is INR 1 lakh crore. Even June 2021, the figure was about INR 80,000 crore. Today it is INR 1 lakh crore, INR 20,000 crore increase. This progress you can achieve only and only when all your staff members are involved. This is not one-man job. This is a very cumbersome job where each and every staff member has put in best efforts, which you could do in Canara Bank. That is how the figures are increasing in gold loan.
Second one is we love to continue this growth and also to consolidate the performance which we are making under the gold loan.
Okay. Thank you, sir.
Welcome.
Thank you. Next we have, Bhavik Shah.
Hello.
Hello.
Oh, hi, sir. Thank you for.
Hi, sir. Good evening.
Good evening, sir. Sir, I just have two questions. Sir, one would be, what would be your liquidity coverage ratio this quarter and/or average?
You see requirement is 100%. We are above 125%.
Sir, you mentioned we disbursed around INR 50,000 crore for HAM projects. Sir, what would be the indicated yields there?
Sir, it is INR 50,000 crore for HAM projects what we have sanctioned, and the disbursements will be going on, and there is no question of negative yields. Total is positive yield because there are two components in this. We get very good interest. It is 8%+, and the processing charges which we get in these proposals is really significant because of which, if you see the Canara Bank fee-based income, it is growing at 18%. The amount is INR 1,577 crore per quarter, which is a very decent income.
Okay. Sir, broadly, sir, what will be your yield on AAA corporates?
Yield on corporates. See, if you take bifurcating to AAA, the yield will not be much attractive, but we will be earning from that. It is a mixture of everything. AA, AAA, A/ B and o verall, particularly as you have seen, the yield is at 7.03%.
Okay. Understood, sir. That's it from my side. Thank you, sir.
Thank you, sir. Thank you very much.
Thank you. Next we have, Manish Ostwal.
Congratulations, sir.
Thank you, sir. Thank you.
I have just one question. What is the yield on the gold loan side?
It is 7.20%+
What is the Q4 yield for gold loan, sir?
Q4. Yeah, it is +7%.
Okay. Thank you. Thank you.
Thank you.
Yes.
Yeah. Next we have, Shailesh Kotak.
Hello, sir. Good afternoon.
Good afternoon, sir.
Yeah. Sir, firstly on the P&L provision, I see there is an item of provision reversal of about INR 650 crore. Can you just elaborate on that, please?
Mr. Majumdar, he is my CFO. I request him to answer. Mr. Majumdar, please.
Sir, there are some reversals. First is Future Group. We last time only made provisions of around INR 315 crore when it was with a standard asset. This quarter has slipped. That reversal of that provision is around INR 315 crore. Then there are that FITL reversal, standard reversal of INR 163 crore. Delayed RP reversal of around INR 100 crore.
Bajaj Hindusthan, which has slipped to NPA, which was restructured under S4A, in that we are holding provision of around INR 74 crore. If you add up, it will come to exactly what I said.
Here, whatever these reductions we have done as what you see , because of the efficiency brought out in FITL and also in restructured accounts and proactive provision that we made in future, those things we got it reversed and accounted for in the NPA provisions.
Understood, sir. Thanks for that.
Thank you, sir.
The second question is on the employee expenses side. With the yields going up, do you see any reversal coming from the retirement, the provisions for the retirement benefits, either in the first quarter or and then going forward in the rest of the year as well?
Sir, as far as employee benefits and employee staff cost is concerned, one point is the number of staff is not increasing in Canara Bank, because at the most whoever retires we are replacing them with a new blood. The new people who joins, generally the payments will be less compared to the people who are retiring. As far as salaries and other things are concerned, we are going to have a comparable position.
Regarding the provisions, because of the yields, there will be some impact, positive, but INR 3,400-INR 3,600, we expect that we want to pay some amount to our staff. So expenses will be around this range only. Even if we get some benefit from the yields, that will be adjusted somewhere in the staff cost.
Understood, sir. Lastly, if I look at the SR, there seems to be another lockdown in this quarter as well.
Security receipts, as I said, some INR 200-300 crores every quarter we will be doing, and it's a continuous process and some SRs also we'll be realizing and recovery also will be done. It's a continuous process in the bank.
Understood, sir. Those are all the questions.
Thank you, sir. Thank you very much.
Thank you. Next, we have Gaurav Jani.
Yeah, thanks. Am I audible?
Yeah. Very good evening.
Good evening, sir. Just wanted to understand, firstly, as to, you know, we have our staff depleted at Can Fin Homes. Any fresh findings after the audit has been concluded?
Sir, we have completed the inspection in all the 200 branches, and some irregularities and some deficiencies, process deficiencies were observed, which were addressed to a larger extent. Subsequently, about INR 2.3 crores further frauds in about 23 accounts were found, which was 100% provided. Now we can say that Can Fin Homes is one of the best subsidiaries we are having since we have screened everything and addressed the loopholes.
Sir, no. Just wanted to also understand that generally, you know, due to what reasons do we have our staff on deputation at Can Fin Homes?
Yes. We have four top executives deputed to Can Fin Homes, wherein one executive is totally controlling and monitoring the inspection aspect. Because we in Canara Bank, we believe in one thing, that is compliance first, business next. We want to have Canara Bank as well as all my subsidiaries 100% compliant with the regulations with 0% tolerance as far as that is concerned. That is why we posted our staff in all our subsidiaries, including Can Fin Homes.
No, sure, that helps. Just, sir, wanted to understand historically, due to what reason would we have deputed staff at Can Fin Homes, and when was that?
See, there are two things. First one is we want to give our expertise to all our subsidiaries, which can be done through our staff, so generally we depute. Second one is they also can contribute along with the others whom we take from the market. These are the twin benefits which we see as far as our subsidiaries are concerned. Since I am the chairman of those companies, so generally I like to have some people of Canara Bank in all my subsidiaries.
Sir, sure, sir. Last question, sir, a small one. Actually, last time, when did we depute the staff at Can Fin Homes before this episode?
Before this also, a DGM used to be there since beginning. Our DMD is our staff only. Deputed MD was in government.
No, sure. Apart from that, we also have three more people this time around, right? I just want to know that.
Yes, yes. We increased the strength. That's correct.
Okay. Well, thanks. That's it.
Thank you, sir.
Thank you. We have our next question from Pritesh.
Hi, sir. Afternoon.
Hello, good evening.
I had a couple of questions. One is,
Mm-hmm.
Basically, you've done a very good job on the PSL side. I see that PSLC itself has contributed about INR 850 crore. Can you just give two data points on that? One is what commissions generally we get on that. I mean, if I look at it's coming to about 2%, is it a quarterly phenomenon and do we sustain that kind of PSL?
See this PSLC, if you see last year, we earned about more than INR 900 crore. Definitely, generally, our aim is whatever we earned in the subsequent quarters, we earn more than what we have earned earlier. This time, the current quarter itself, we have already earned about INR 840 crore. Still we are hoping to book some profit in the Q2 also.
Sure. We see that.
This is every year phenomenon, as long as RBI doesn't change the criteria.
Sure, sure. Second question was on MSME side. You said that there were about INR 1,500 crores of NPA from MSME, which is about like 40%-50% share of the overall slippages. Where do we see it stabilizing? It will come down. Is it going to stay in MSME? What are the issues still there under the MSME side?
If you see historically, INR 1,000 crore- INR 1,200 crore, generally every quarter in MSME, it slips. Subsequently INR 400 crore-INR 500 crore will be recovered or upgraded. It is a continuous phenomenon, not for this. This time maybe around INR 200 crore- INR 300 crore, maybe more. Otherwise, MSME, we have to make a, what you call a provision to absorb these slippages and also to recover. That is why in Canara Bank, we have a separate S-team who handles MSME stress assets. Our recoveries also go under this MSME NPA codes. This is a continuous process.
Will it be fair to assume that large part of these also will have restructured book?
Yes. As I said, about 11% of the restructured book cumulatively it has already slipped. It consists a part of that also.
Okay. Anything from ECLGS coming in?
That is hardly 3% cumulative.
3%?.
3%. It's only 3%.
Okay. Last question will be, if you can give the CASA breakup between CA and SA for this quarter.
CASA, as you have seen, we have grown at 8.8%. Generally Q1 for CASA it will be a bit challenging because i nstitutional deposits which we get from the government, here we are a very significant player. In March, the government will be giving huge amounts to absorb the budget, and the next budgetary allocations and funds will be flowing to some extent in Q1, but a significant extent from Q2 onwards. This quarter we are expecting minimum double-digit growth under CASA.
Yeah. Can you give me absolute number of CA and SA this quarter?
In this INR 3,61,000 crores, about INR 40,000-INR 45,000 crores will be current. The remaining will be same story.
Sure. Thanks.
Thank you very much.
Thanks. Thank you. We will take that as the last question for today, and, again, hand over the call to Prabhakar Sir for his, closing remarks. Over to you, sir.
Yeah. I request my Executive Director, Sri Mukherjee Sir, to give the closing remarks. Please, Mukherjee Sir.
Thank you, sir, and we thank all the analysts for you know, this Q&A session, which was very interesting. Now, as you have all understood, the Canara Bank is in a growth path and we are showing this on a quarter-to-quarter basis in all the aspects and nuances of banking. Be it deposits, be it advances, be it recovery and be it profitability and asset quality. In all these aspects, we have been doing well quarter-on-quarter, and we propose to do it. Now, so far as the guidance which we have given for March 2023, that will remain as it is. As our MD sir has said that we would definitely like to surpass that. In some of the parameters, even in this quarter we have surpassed.
We want to keep it on a conservative side so that we keep on achieving them. With our growth, we will not you know stop our growth because of these guidances. These are only guidance. So far as the closing remark is concerned, we would definitely for Q2, we will go for our advances growth, the asset quality growth as well as our you know PCR. That we will also strive to you know reach our levels of 85% as early as possible. Regarding the CRAR, we would like to improve it further by improving the credit density. These are the things which you are aware bank is doing quarter-on-quarter, and we would continue to do so. Thank you very much.
Thank you, sir.
Thank you.