Sure, Sir. Good evening, ladies and gentlemen. We welcome you all to Indian Bank's post-results conference call for the Fourth Quarter of Financial Year 2026, hosted by Emkay Global.
This call will be recorded.
From the top management, we have with us Shri Binod Kumar-j i, Managing Director and Chief Eexecutive Officer; Shri Ashutosh Choudhury, Executive Director; Shri Shiv Bajrang Singh, Executive Director, and Shri Brajesh Kumar Singh, Executive Director; and Ms. Mini T. M., Executive Director. I first I would request Managing Director Sir to briefly summarize the key highlights from the fourth quarter FY 2026, FY 2026 results and also provide strategic direction on growth, margins and asset quality for FY 2027, post which we will have a Q&A session. Over to you, Managing Director Sir.
Thank you, Anand Ji. My colleague on board, Mr. Ashutosh, Mr. SV Singh, Madam King, T.M. Mini. One correction, Mr. Brajesh Kumar Singh is not here. He's on some other meeting.
Okay.
Dear, dear investors, analysts, thank you for sparing your time and coming to the con-call of Indian Bank. I, if I summarize in result, I think it has been a decent year. Almost all parameter except cost to income ratio. We have done better than our guidance. Deposits has grown by 12.79%, and total deposits has grown by 12.29%. Advance has grown by 13.43%. CASA, which has been the challenge, CASA still we have grown by 10.85%. After a dip in June, inconsistently all three quarter, my CASA share has gone up. In September, it was 13.87%, then 39.08, then 39.67, 7%.
CASA, we have been able to maintain almost, we have given guidance of 40%, so 39.6%-39.7% almost we have maintained. We remain very cautious in raising bulk deposits. Of course, we have to, but we remain very cautious in raising bulk deposits. Advance has grown by 13.43% and primarily contributed by RAM sector. RAM has grown by 15.28%. Corporate has grown. Corporate last year, if you see my growth was only 3%. This year corporate also has grown by 9.19%. Within RAM, it is contributed primarily by retail, which is 18.72%, and MSME, which is 16.39%.
We have sanctioned around INR 6 lakh loan and INR 48,000 crore to MSME sector. Jewel loan remain our strength area, jewel loan also has grown very, at a very decent pace of almost 28% and reached up to INR 1.27 trillion. Coming to the efficiency parameter. Efficiency parameter net profits has reached for the quarter INR 3,103 with a sequential growth of 1.3%. For the year, INR 10,918 to INR 12,156 with a growth of 11.33%. Operating profit has touched INR 5,286 with QoQ growth of 5.21%.
If I talk of annually, it has gone from INR 18,998 to INR 19,916 with a growth of 4.83%. NII also we are INR 7,109, it has touched with a sequential growth of 3.09%. If I talk of annually, with a growth of 6.91% and has reached INR 26,915. Other income, we have seen marginal decline, sequentially, YoY 8.32% growth, primarily because of the impact on the treasury income. NIM, if you see for the quarter, it was 3.23%, if you see annually, it has come down from 3.41 to 3.24, so 17 basis point decline.
We have given guidance of between 3.15 - 3.30, so we have maintained that. ROA we have for the quarter it is 1.28. Q4 it was 1.28, if you see annually, in March it was 1.32 and March 2026, we ended at 1.31. Only 1 basis point decline in that. Return on asset for the quarter, it is 18.98%, for the year ended, it is 19.53%. Cost to income ratio, of course, cost to income ratio is one area where we have given guidance of, a ctually, we ended up. For the year, it is 46.03%, but we have taken post correction and cost-to-income ratio has come down from 46.90% in December t o 44.99 in March 2025. Provision coverage ratio is constant at 98.28. We are maintaining since December also, March also, for the year also it is same. Trade cost annualized for the quarter it is 0.47. Annualized it is 0.31. Then asset quality. Asset quality, it has gross NPA has come down from 3.09 to 1.98 with a reduction of 111 basis points. Net NPA from 0.19 to 0.15. Slippage ratio for the quarter it is 0.96, but if I talk of annualized, it is 0.85, which has come down from 1.11.
Recovery for the quarter it is INR 1,499. For the year it is INR 6,651. We have given guidance of between INR 5,500- INR 6,500. SMA of course I would like to highlight. I will start from March 2024. March 2024, my SMA was 15.59%, which came down to 18.06% in March 2025. Now it is 4.73%. Good work has been done by the department in on SMA front. SMA, if I talk of more than five crore, it is INR 922 crore only.
We have made some provision, although we are not seeing any stress because of RTC crisis, but we have made a provision of around INR 310 crore keeping this crisis in view. As I told you in the SMA data, we are not seeing any stress. This is purely prudently we have made so that in case something happens then we will have some cushion. During the year, we have sanctioned around INR 426,000 crore, taken all together retail, agriculture, MSME, corporate, with a growth of 62%. 62% growth there is in the sanction. Our corporate also, we have sanctioned around INR 1.31001 trillion. Corporate also around 62% growth we have seen. Maximum growth is in MSME at 81%.
We have a pipeline of INR 51,000 crore and not much of a stress we have because personal loan we don't have much, only INR 6,500. MFI also not much, INR 3,300. In corporate last year around INR 8,000 crore. exposure in NBFC, it has come down by around INR 8,000 crore. Out of that NBFC exposure in triple A, double A and A, it is around 99%, so majority of that is in triple A category. Coming to the guidance.
Guidance, we are giving deposit guidance of between 9%-11%, advance growth of between 11%-13%, CASA approximately we will maintain around 40%, CDR around 80%, gross NPA between 1.50%-1.60%, net NPA at the same level, I mean, less than 0.25%, you can say. Recovery, of course, as our pool is coming down, going forward this year also, if you see from last year to this year, it has come down by around INR 1,000 crore. It was INR 7,600, which has come down to INR 6,600. Giving guidance of between recovery between INR 4,500-INR 5,500. AUCA recovery last year also was good.
We have given guidance of 2,000 and actually we surpassed that. We are giving guidance of recovery in return of book between 1,200-1,500. NIM guidance also, see, I don't see further rate cut, but cost of deposit, I expect that it will remain elevated because of advance growth is outpacing deposit growth. I see some pressure on the NIM, that's why I'm giving guidance between 3.10%-3.25%. ROA also I'm giving some guidance between 1.20%-1.30%. Credit cost we'll maintain less than 1%. Slippage ratio we'll maintain less than 1%. Broadly, these are the things and apart from that, we have taken some initiative. Like I told in CASA, we have taken some initiative.
Because of that, we have been able to maintain CASA, almost maintain CASA share. Various product we have launched and two products we really have seen good traction. We are analyzing why other products have not taken off. In that time we have launched IndAspire for women because IndAspire we have seen good traction, we have launched IndAspire for women. IND-GIG CHAMPION for gig workers, we have launched a new product, so hopefully, we will see some traction in coming quarter. In very recently we have launched. Inoperative account we have around INR 34 lakh inoperative account. We have made them operative, and that has resulted in a total balance of around INR 4,000 crore.
Similarly, we are focusing on QR code and POS machine, et cetera, because float, I believe these, nobody now that, as financial literacy is improving and there is a structural shift. People are become investors, becoming investor instead of savers, so we have to rely on float. Salary account, we have added around more than INR 3 lakh salary account we have added during the quarter. Average balance, I would like to highlight, average balance if I see, average balance in saving fund, normal account I'm saying, ex-BSBD account. It has gone up from INR 30,000, which was last year, to INR 46,000. Similarly, in current account, average balance has gone up from INR 1.88 lakh to INR 2.64 lakh.
We are focusing on the strengthening of the relationship, deepening of the relationship. Of course, two challenge I will say for this year. Growth, I believe country, government and RBI, as you must be seeing in the newspaper also, they will take all measures to sustain the GDP growth. If GDP growth is intact, I believe credit growth will also be intact. If there is some headwind on the GDP growth, of course, then impact will come on us. Two immediate challenge I see is recovery. Recovery, of course, as INR 1,000 crore already it has gone down. This year treasury profit may not be to the extent it was last year.
There are also some good news. We have not booked very high profit in the treasury. That means we have not sold some good yielding security, so that may help us in. Passing through this stage. Now I will request Mr., my colleague, Mr. Ashutosh, to highlight about the digital initiative what we have taken during the year.
Thank you, Sir. Good evening, all. The digital business of the bank for financial year 2025, 2026 has grown by 63% and reached INR 2.72 lakh crore. The mobile banking customers has increased to 2.36 crore. The base has increased, and the mobile banking transaction has shown a healthy growth of 15%. That is 65.8 lakh per month the transaction is happening there. The digital adoption rate in retail and agri has reached to 97%. That means the loan, the retail and agri loan that has been sanctioned, that is 97% through digital channel. The bank is implementing 10+ AI and agentic AI-related platforms with the help of almost more than 160 FinTech partners.
When Saroj talked about the CASA, let me say last year we introduced a segment of customers, DVX. Those who have not visited the branch for quite some time, we have classified them. That particular category of customers are almost increasing, and it has reached to INR 22 lakhs. The base identified to move some more customer, that base is almost INR 1+ crore . In the digital aspect, we have done that. This year we have introduced a CRM platform. The CRM platform that we introduced is for retail. Now we are going to introduce for corporate. In that platform, the module also will enable service request and sales management.
This will not only deepen the existing relationship with existing customers, but also it will give a boost to acquire new customer based on this sales management. I would like to tell a couple of things that we have done during this particular financial year. We have digitized the corporate credit. The journey is almost complete. We are taking one step forward in our corporate credit journey that I will discuss with all of you. We have a partnership with POS aggregators, where we can provide POS machine to customer of other banks. We also introduced a new corporate website. We are strengthening our UPI app in UPI. The updated version will be introduced this financial year. We have introduced EFIRM solutions.
That is a real-time AI-driven behavioral analysis platform, which will help in curbing the digital frauds as well as money mule account. We have introduced IND Optima. That is our cash management services, where almost 150 + corporate customer has been onboarded. In the pipeline, I would like to also highlight some of the things. We are introducing a corporate ecosystem engine, which will help our relationship managers while negotiating with the customers. We are also planning to introduce an RFP creator because we produce a lot of RFPs for onboarding IT and non-IT vendors. We are also in the process of introducing in-invoice processing that will this will automate the receipt validation, approval, and payment of invoices. In CRM platform, we are introducing lead nurturing management.
We are introducing an intelligent document reader. This will help in our documentation post sanction. When you go for documentation, this will check legality of that particular document. Also with this EFIRM solution, this suspicious transaction reporting that we are planning to automate. Along with this, with our new gen contact center, we are automating the grievance redressal mechanism, which will reduce the TAT and improve the customer experience. Thank you, Sir, with this.
Thank you, Sir. Now we'll take up the Q&A. Request all the participants to use the raise hand option, and if you have a question, please unmute yourself. First question we'll take from Ajmera-ji. Ajmera-ji, please unmute yourself and ask your question.
Yeah, hello.
Yes, Ajmera-ji.
Good evening, Sir. Congratulations for yet another good quarter. As you yourself have also said, I can see also that you have surpassed almost every front except one or two on the guidance. That is commendable. Not only touched or this thing, but like in case of the credit also the growth is very good, 13.43%. Even in the deposit also, in spite of the various challenges, you have done very well, 12.29%. AUCA recovery in the entire year is very good, INR 2,508 crore. Of course, Sir, next year the targets you have reduced a bit than that. My compliments on that, Sir.
My first question or rather, I would like to seek your views and comments on this ECL guidelines. They have been finalized now and RBI has declared the final guidelines, which we were waiting for quite some time, and many of the banks had already started preparing for that and making some extra additional provisions also. In our case, in our bank, how is the preparedness? How much total hit we are going to get? Whatever the time has been given, I think up to 31st March 2030 or some people are saying 2031, how are we prepared to take care of this extra provisioning?
Just my first… Even though you are saying that even in this quarter also, you made INR 310 crore extra provision on the standard asset to take care of any eventuality, that is on the geopolitical situation in West Asia war. Can I have your views on this, Sir?
Yes. Thank you, Ajmera, Ajmera-ji. Coming to that, this quarter also, we have sold IBPC of around INR 6,000 crore, and we have opened 102 branches against we have set target of opening around 300 branches in three years. We are on track of that. Coming to your question to your ECL guidelines, Ajmera-ji, guidelines have come only yesterday, and few things they have added. Whatever we have calculated in the draft guidelines, I think impact will be little higher than that. However, we are in the process. Actually, the guidelines has come only yesterday.
We are in the process of calculating, which I think in a week or. See, I can give some number, but that will not be very relevant because ultimately next meeting we will start, say, "Sir, you have told this number, now you are saying this number." I don't want to create that situation. We will give you concrete numbers so that variation is minimum. Having said that, let me assure you, all of you, that impact is not going to be very huge, because we, as all of you know, we have been preparing in different ways, not in only in name of ECL, but we have been preparing in different ways.
We since last five year, we have been going through a very good phase, I will say benign asset quality phase. I don't see much of the impact in the, I mean, overall impact. As I told you earlier in the, in earlier call, that we will be able to absorb all the impact in one year. Now I'm saying now we will be able to absorb all the impact in, say, 6-9 months.
Oh.
Between 1-3 quarter, maybe.
Definitely.
That is what I mean, broad, broad, you can say.
Yeah. Okay, Sir. The point well taken, Sir. Sir, my another observation is on this slippage in this quarter, which has increased to INR 1,355 crore as against about INR 1,000 crore in the last quarter. Going forward with this kind of situation prevailing, you know, geopolitical, which impact might not have seen much in March, but in this quarter, in the coming April, May, June, we might have some impact on that. You also covered a little bit on this. I mean, first of all, do you see that it will make major impact if the war, I mean, goes on or I mean, there's total uncertainty on that.
How and how much impact do you see and from where it can come negatively, and how are we prepared to take care of that? That is my another, if you can just elaborate on that. Coupled with that, you know, the SMA numbers has drastically has come down. SMA- 2 from INR 4,309 crore to INR 922 crore, and SMA- 1 has gone just little bit, INR 700 crore only higher. Whether going forward, you know, both these questions are coupled, I mean, it's basically connected to each other.
Yeah. Thank you. Thank you, Ajmera-ji. First of all, if you see from the March, December, it has gone up, slippage. That is every quarter, if you see every annual March, there will be around INR 400 crore- INR 500 crore MOC. Hello?
Yes, yes.
This number has gone up basically on account of MOC.
Right.
That was also in the last March also there was around INR 500 crore MOC. This quarter also around INR 400 crore MOC. This March will always we have some MOC because that, because of that, slippage ratio will be higher. There, after that, one thing I can assure you, during the financial year, this number, of course, I mean, something very, I mean, something drastic happens, then I cannot say. But in normal situation, this number, slippage ratio will be better in all the quarters. Except March, again, there will be some MOC. Every quarter you can assume that the slippage number will be less than that, number one. Number two, coming to SMA. SMA reduction, I will not take any brownie point because two government accounts are there.
That is not in SMA- 2, that's why number has come down. So no brownie point for that. SMA- 1 increase has come because one account out of that is in SMA- 1, so SMA- 1 has little bit increased. If you see SMA, total SMA has really gone down. From last year INR 45,000 crore, INR 46,000 crore, now it is INR 31,000 crore. SMA number overall has come down. Stress, if we talk of the stress is not only from the VaR. Stress is already from the tariff point. That means from August you can say that t here is some stress in the system.
I believe in the resilience of the banking system and resilience of our economy. You must be seeing various positive response from all the Governors and various ministers that whatever required they will try to maintain the economic growth rate. If economic growth rate is maintained, I think the government will take some measure, and because of that I am not seeing much impact on the asset quality also. If at all, because already it is around 4-5 months, around seven months. If you take from August m eans four and three, seven months, almost seven months. Almost it should have started some incipient increase in SMA, so which we are not seeing.
Not seeing.
Hopefully, we will tide this time also without being impacted much.
Sir, now on the treasury also you touched on the treasury front, in this quarter also it has taken a toll. You know, the loss on the sale of the investment is INR 105 crore and then profit INR 99 crore minus the profit. Means treasury had a pressure on this as far as this quarter. Even in the last quarter also it was there little bit. You also said at the same time that going forward, we, since we have the, you know, higher value, higher yield, lower yield, higher income investments in our book. In this coming, in this current quarter, how do you see the treasury, you know, performing going forward?
No, of course there will be impact on the treasury, no denying. Impact only limited my point is, impact will not be very severe because we have not. If we have sold all the securities and has raise with the lower yield, then my impact would have been higher. Since we have not sold, so impact will be there, of course, but impact will not be as, I mean.
Severe. Okay.
As severe. Still I expect that around for the year I am saying, maybe around INR 1,200 profit we will earn through treasury.
Sir, your digital front you performed exceedingly well. In fact, there is lot of advancement. Ashutosh, Sir has, as usual, has explained very much in detail about the digital advancement of the bank. In the real term, whenever these journeys are completed and these digital products are put to the use, are we assessing the actual impact of the digital introduction or, apart from the surveillance and other things which doesn't directly produce anything, are we seeing any commercial, like, benefits? Is there any study done on that? The, like, the, you know, the kind of investment which we are making. Every bank is making huge investment on this.
Have you started measuring it, on the impact on the revenue on the positive side, and how much is that process has been put into the practice, Sir?
Very, very pertinent point, Ajmera-ji, I have also been saying that we are spending huge in IT. Benefit of that to the extent we desire is yet to come. That will happen as our digital adoption. Not only adoption, as people actually start using digital channel. Like for example, still, Yes, of course.
Yes.
If you ask, are we getting benefit? We are getting benefit. Like our 94% transaction are through digital channel. If they visit the branch, cost will be at least 5x higher. If a customer visit branch, cost will be at least 5x higher, plus we will have to keep more employee. We are taking benefit. If not directly, indirectly, we are taking benefit of that. As this adoption will, rate of this adoption will increase, just one data I'm sharing. Say digital FD. People come to branch for bank for making FD.
We have just try to push that why people are coming to the branch. There are certain set of people will, they will definitely come, so we don't discourage them. Those who can do transaction on their own, we are encouraging them to do transaction on their own. As when they will do transaction on their own, of course that will be cost saving to us.
What a, what a coincidence around this. I was sitting with a client in the just little before, in the afternoon only. You know, of course that is a private bank. So he was having INR 1 crore only in the current account. It's a small MSME kind of a client. So I said, "Why don't you stagger it and put it in the FD?" You know that that banker, that person came within 15, 20 minutes. They had come with it. On the spot online, he made three FD of INR 20 lakhs, INR 25 lakhs for different duration of 91 days to 1,271 days or whatever. On the spot, within five minutes, you know, the FDs were made, I mean, on the system only, we have seen.
Of course, effect-wise, qualitative, whether it would have been in the current account, it would have benefited more for three days to the bank. Like that's a different thing. Ease of doing business and, you know, these things are going to be. Only thing, you know, many of the bankers I am talking about is that, the time has not come when we start using some tools, putting some measurement that, you know, the profit or the advantage can become measurable.
We will try to.
Okay, Sir. Thank you very much, Sir.
It is in the backdrop of the mind, but quantification. One measure that I run in my mind, I just share with you that if you see manpower of the banks has remained constant over last five years.
Yeah.
If you see business of bank has grown by double or in few cases more than double. Of course, the benefit we are driving, it's not that benefit we are not driving. Only thing it is not quantified on paper. We'll definitely try to do.
Sir, you have become almost INR 15 lakh crores business bank just shying away with INR 5,000 crore- INR 6,000 crores only. Anyway, Sir, compliments to you. All the best to you.
Thank you.
If time permits, I might come again. Thank you.
Thank you.
Thank you, Ajmera- ji. Any other participant, if you have a question, please use raise hand option. We'll have question from Akshay Badlani. Akshay, please unmute yourself and ask the question.
Yeah. Hi, thank you for taking my question. My question was around the lines of, as you indicated, the cost of funds will be going up. Currently also it's going up. What levers do we have on the asset side, you know, where we could offset this? Or if there are certain set of, you know, segments where we can price our loans better going forward.
If you ask me very frankly, very few levers are left because, see, almost 50% of loan book is linked to external benchmark. You have hardly any lever on that. That only area remains a loan linked to MCLR. Because their cost of fund is inbuilt also. Only lever, that is the only lever, but MCLR is also formula-driven. You cannot do much. Only one thing remains. We take benefit of IT and try to, I mean, at least maintain CASA share, if not increase. Because CASA that will be the only thing because, see, bulk rate is very high. You cannot do anything with that. Since bulk rate is high, retail term deposit rate, we cannot reduce anything. That is the only that remains.
Asset quality. Asset quality we have to ensure that asset quality remains very good. Otherwise, NIM is also not there and there is issue on the asset quality, then of course there will be tough time.
Just then coming to asset quality, since, you know, our exposure overall in our loan mix, you know, to Agri and MSME sectors is high. Although we have created, you know, extra provision buffer this quarter, how do you envisage, you know, the situation, especially in both the segments which could be vulnerable, going forward, given the, you know, there could be inflationary pressure going forward?
Agri we don't have much challenge because majority of my Agri book is from jewel loan. Agri we don't see any challenge. MSME, of course, MSME if some stress come, which is, if industry is impacted, I will also be impacted. As I told, I think government will also do something. If something happens, then government will do also something. At least as of now, it is not reflected, as I told in SMA. Otherwise something must have, I mean, started inching up, at least in SMA. Not NPA, then SMA it must have started inching up. So far I have not seen. Believe, we will pass through this phase without being impacted much.
Okay. Sure, Sir. Thank you for answering my questions.
Thank you, Akshay. Next question we'll take from Jay. Jay, please unmute yourself.
Yeah. Hi. Good evening, Sir, and thanks for the opportunity. Sir, if you can quantify that you've said that the total SMA is INR 31,000 crores. If you have the number for SMA- 0, SMA-1 and SMA-2 separately?
Yeah. Thank you, Jay. Total SMA is INR 31,000. Out of that, SMA- 0 is almost INR 16,000. SMA- 1 is INR 9,000, SMA- 2 is INR 6,000.
Okay. Sure. Sir, I think, okay. SMA- 0 only has gone up. If I compare versus last quarter, then SMA-1 and SMA- 2, they have reduced. Okay. One is similar and two has reduced.
Yeah.
Secondly, Sir, on your growth. Last year at the beginning of the quarter, we also said 10%, 11% kind of a growth. We did, you know, if I look at this year, we ended at around 15% kind of a growth. You have excellent asset quality. Is less than 80% LDR. What is the realistic growth number that we should assess? Sir, 10%, 11%, 12% is actually lower than the industry. Are you okay with the growing lesser than industry or you want to be at least similar to industry?
This year also industry grown at 16%. I am okay with little bit, I mean, even if little bit slower than industry without compromising on the asset quality and NIM. My focus is of course growth, but NIM and asset quality should also remain intact. One thing why I'm giving guidance of 11%-13% in advance, let me tell you, around 16%-17% of my book is jewel loan. Last year jewel loan, because of the increase in price, we have seen good number. Maybe similar kind of growth we may not see in jewel loan this year. That's why I'm giving guidance of between 11%-13%.
Understood. Then the retail term deposit that should continue to improve, right? I mean, as of now, even if the repricing, bulk of the repricing is over, but still the cost of deposit will keep reducing only, right? Is that understanding right or not?
See, retail term deposit also we are not able to reduce any rate of interest on that. Bulk is at elevated level, you cannot keep very wide gap between retail term deposit and bulk. Because of that, even retail term deposit will remain at this level. Maybe few of the banks, if you have noticed in March, few of the banks have increased retail term deposit rates.
All right. Okay, sure. Sir, if you can quantify your AFS reserve, how much is the AFS reserve as end of the quarter and maybe quarter three? Just to understand how much was the swing.
Yeah, yes. Swing is December quarter it was INR 4,000 +, March quarter it was minus, it is - INR 200.
Okay. Around INR 4,200 crores swing, right?
No, INR 4,000 I told, sorry, INR 400.
Okay.
INR 400 to INR - 200.
Right. Right. Sir, total gold loan books, Sir, you have given the retail gold, but how much will be the agri gold and MSME gold put together, if you have that number?
One point two seven is the total jewel loan. INR 1.27 lakh crore.
Right. Okay.
Yeah.
Thank you so much, Sir. I will come back in the queue, Sir.
Thank you. Thank you, Jay.
Thank you, Jay. Next question we will take from Parth Gutka. Parth, please unmute yourself.
Yeah. Hi. Hi, Sir. Sir, my question is on the overseas advances. You know, last two quarters we are seeing phenomenal growth in this segment. Can you just elaborate on the same, you know, as in, this relating to which sector and from which regions? Yeah.
We have only two branches. Sri Lanka, hardly anything. Only Gift City and Singapore. We are participating basically in the syndicated loan and some trade finance.
Okay.
I mean, not any sector specific, but we are participating in syndicated loans, so from different sectors it are. Not any specific sector.
Okay. Okay, Sir. My next question is, what is the proportion of bulk deposits within the overall deposits?
Bulk and CD taken together around 18%-19%.
Okay. What is the internal threshold?
We have not kept internal threshold as such, but we will like to maintain in this range only. I mean, less than 20.
Okay. Okay, Sir. Thanks a lot, Sir. Thanks a lot for answering my questions.
Thank you, Parth.
Thank you. Next question we'll take from Akshay Badlani. Akshay, please unmute yourself. Akshay is not around. We'll take the question from Jayant Kharote. Jayant, please unmute yourself and ask your question. Jayant, request you to unmute yourself and ask your question. Jayant, we are not able to hear you.
You hear me?
Yeah, Jayant. Yeah. Yeah, audible.
Sorry about that. First question is on the asset quality. If you can help us quantify what is the total outstanding floating provisions that you hold on your book, contingent or floating. Then follow-up to that is the ECL requirement. I know you said that the number could be higher, but if you could help us, what was the initial assessment, at least, in the size? Why I'm getting slightly confused is you said the number may be higher, but then you said we will do it in three quarters and not four. Is it about the steady state impact or is it about the one time impact? If you can just sort of.
Yeah.
Give me three clarifications.
In NPA, in fact, we are not holding any floating provision. NPA, whatever account, we are making only a specific account-wide provision. Number one. Number two, see, while I told it is number is higher, when we make assessment of the ECL guidelines, there were certain things we have taken up with RBI. Based on that, we have made various scenario. Keeping these scenario in view, I have told that maybe we may need one year time. Now that final guidelines has come, and now we, with, I mean, almost certainty we can say, of course, number we are calculating. While there is some impact because STM book earlier it was not part of the draft guidelines. Now STM book has come. That's why impact will go up.
Overall impact, what we are saying, say worst-case scenario. From worst-case scenario, now it has improved. That's why I'm saying it will go up, but overall yearly, overall impact will be less as compared to worst-case scenario.
Sir, you also done some accelerated provisions, this quarter, right, related to the West Asia war. Including that, what is the total provisions that you hold outside your PCR?
They don't tell even me. My Chief Financial Officer is very hard nut. He does not disclose to me also.
No, you would have some idea because it will be needed in the ECL to offset the ECL impact, right?
They are giving only the impact. That to exact they have not given so far. We are working on that. Let us see.
Now, how much of this quarter at least can you call out of the provisioning this quarter was linked to NPA provisions and others were standard?
NPA, see, NPA will not help much. We have around this quarter around INR 500 odd crore we have made in the standard.
Great, Sir. Sir, second question was regarding LCR. If you could help us give your average LCR number and again, how has that been trending? I have a follow-up.
Yeah, LCR we are comfortable. Throughout the year we are comfortable. Because of the implementation of this new guidance from 1st April, there is a benefit of 4-5 basis point.
Where are you right now on the LCR?
LCR 127.
Average is 127%.
Average 127%.
At present we are at 123%-1 24%.
Average is 127%. At present we are at 123%- 124%.
Sir, just to add, if you are sitting at 127% and you will have 400%-500% which release, why then at such a high LCR when you are, you know, paying such high costs for deposits, why not operate at 115%, 120%, and it will help your NIMs?
Without taking name of the bank, one bank had to raise very huge sum at very high cost. I don't want to create that situation where, when everybody panics. A little cushion is always good.
What do you think is a fair number? What is a fair number that every bank should operate at?
I think around 150% to 120% we should have. Going below 150%, I mean, say, some event may entirely impact. Let me tell you, we are not making a special, a special, I mean, efforts for maintaining LCR. Whatever we have access in the SLR book, that is contributing to maintaining of the SLR. It's not like that we are specifically for this purpose we are purchasing SLR.
Great. Basically that's where you are also non-guiding for very high trading profits because you want to enjoy that on both on NIM side as well as LCR side.
LCR side.
Benefits of that bonds. Very clear. Actually, that is a good stated strategy. Thanks.
Thank you.
All the best for the next.
Thank you. Thank you, Jayant.
Yeah, thank you, Jayant. Last question we'll take from Ashlesh. Ashlesh, please, unmute yourself and ask your question.
Hi, Sir, and good evening. Sir, two questions from my side. First one is on the comment you made, prefer to prioritize maintaining margin and asset quality over just growth. Good to hear that. Sir, if I have to paint a scenario where over the next year the cost of deposit continues to inch up from this level, let's say by 20 or 30 basis points, how would you in that scenario maintain your margins? What levers would you have at your disposal? That is one. Secondly, you made the statement about ECL that you will potentially be able to absorb it over a period of 1 - 3 quarters. Does that mean that the ECL shortfall one-time number will be somewhere between 1 x- 3 x your quarterly PPOP? Is that the understanding?
That's good. I mean, you can make inference, that is a huge number gap. 1 - 3 quarter is a huge gap.
Yeah.
As Chief of Executive Officer, of course, as I told you, if cost of deposit keep on inching, part of that will be offsetted by increasing in MCLR because cost of deposit is also part of the MCLR. Part of that, of course, MCLR will also increase, start increasing. Then that will help.
Anything you can do on the asset side possibly change the mix further towards the better yielding assets or high pricing?
See, asset side, I, really, I mean, don't see much of the scope because, in corporate book definitely not. Something can be done in the segments, say mid segments you can say between. Again, retail MSME is linked to your EBLR. There also you cannot increase EBLR-linked assets. That book is also tied up. Only thing remains from some corporates between mid-segment corporation. That's why we are focusing on mid-segment corporates between INR 50 crore or INR 100 crore - INR 500 crore. There we can command little better price as compared to the corporates or retail and MSME. That area remains my focus area.
Understood, Sir. Second, one on that ECL thing. Just trying to understand the statement which you have made when you say we'll be able to absorb it in one to three quarters.
That is a that is used wide range. Let us see. I will come up. I will give numbers very shortly. It's not like that. We have some assessment.
Okay.
I don't want to give any number and then come back and say that, "No, no, it has gone up," or it has substantially come down. Either way, it is not right. If I give you a number and that number go up, it is not right for anybody. Either way, also, if I give number and then it come down substantially, that is also not right. That's why, it is too early. Only day before.
Understood, Sir.
Day before yesterday it has come.
Understood, Sir. Sir, just lastly, if I can squeeze in one more. Given that bond yields have increased over the past few months, does that mean that your provisions for AS 15 can decline materially over FY 2027?
I expect. Materially means, per quarter, if you are making, say, INR 800 crore to maybe INR 100 crore, you can save. You can save.
Understood, Sir.
Yeah.
Perfect. Okay, Sir. Thank you.
Thank you, Ashlesh.
Sir, one question which has come in the chat box, again, it is related to ECL only. Is that, earlier, basically you have said that about 1% - .5% will be the impact on the capital in terms of ECL. Now it would have gone up or down, whatever, like you may do the calculation. Does it mean that in FY 2027 itself you will absorb the ECL impact through P&L and you will not need any impact to be taken on the 1st April 2027 through net worth?
No, no. We will.
Is that what it means?
No, no.
Okay.
1%-5% I have told. I have told you we'll absorb in 1 year. That is what I have told. 1%-5% impact.
Okay.
Maybe somebody might make inference out of that. Of course, no. We of course, some impact will come in next year also, because entirely we cannot make provision in this financial year. Although we have four quarters, but still we cannot make entire whatever requirement is there. Some impact will spill over to the next year also.
Okay. Despite assuming, I mean, absorbing the ECL impact, you're still guiding about 1.0%-1.3% ROA?
In this year?
Yeah.
Yeah.
Sure. Do you expect some one-offs to come through? Like, you know, that you won't absorb so much of ECL impact this year itself?
No, no. No one-off. Normal. This year also, now we have, despite doing all these things, we have been able to maintain around 1.3%.
Sure, Sir.
Only challenge that treasury.
Last question we'll take, yeah.
Only challenge that treasury will not be there. Part of that will be compensated by, I mean, NIM de-decrease. I expect that it will not be as severe as last year.
Sure, Sir. Last question we'll take from Sushil from Citi. Please limit your question so that we can end the call on time. Over to you, Sir.
Good evening. Congratulations to team Indian Bank. Sir, based on current global environment, India may be better off and southern states are even better off because a lot of manufacturing, GCC, even textile has some stability and some other sectors. How is the pipeline visible on various sectors starting from renewable infrastructure, data center, MSME, and what is unavailed credit as of today?
We have around INR 51,000 crore pipeline. Out of that, sanction and unavailed is INR 34,000-INR 35,000. That is term loan only. That is the pipeline.
What sectors are attracting Indian Bank to underwrite businesses, Sir?
Two, three sectors, Sushil-ji. One, green, you see, already green are everywhere. Battery also, EV also, then solar power also. Transmission line also. I think this year, transmission line we will see lot of this government PPP. Then data center. Data center also we are seeing lot of demand in data center. I think last year road sector has been little slow, but we may expect this year some traction in the road sector.
Any color on MSME, specifically from southern region, which led by auto ancillary, textile, other manufacturing sectors like leather and resin south?
Textile, I think textile is struggling since last one year. Before that also textile was not doing very great. In fact, that has saved many of the textile companies. Since last two, three years, they were not doing very good. There are many I know many of the company, they are, they have not availed any of the working capital event. We have the company I know who has not availed working capital since their sales is not very good, Sir. So, leather also. The leather we don't have much exposure in leather, so we don't worry much on that front. Only a little bit worry we had for the textile, I think they have. So far they have tied away.
Being conservative, at the same time being prudent on quality, you are very comfortable where your growth is concerned despite challenges for this year. This is the summation of your Q&A.
Yeah, yeah. Yeah, yeah. Yes, yes. I mean, asset quality plus, bottom line is also important.
Sir, one last question to Ashutosh- ji. What is the digital budget for this year? As India is transforming, we also need to transform, processes are changing. What is our budget now for coming years on the digital spend?
Sushil, let me answer it in a relative manner. The budget will be more or less equivalent to the human cost. That means the salary and all those things we are paying to our employee. In that way, you can definitely correlate.
You will match the human cost in digital spend. That is what you mean.
Almost the employee cost will, it will be in and around that.
Sir, any signs on RAM specifically of some kind of indicative warnings that economy is having some impact?
RAM?
Specifically in April.
Not much of impact we have seen, Sushil- ji, because even otherwise SMA it would have started increasing SMA. Not much impact we have seen.
Sir, thank you for answering all my questions and good luck for the year to the entire team of Indian Bank.
Thank you. Thank you. Thank you, Sushil- ji.
Thank you, Sushil- ji. We will take that as last question. With this we come to the end of Indian Bank's post-results conference call for fourth quarter FY 2026. I now request the management to give their closing remarks, if you have any, Sir.
No, I think all the points have been discussed. Only thing as I told, we remain very cautious for the bottom line and asset quality. Growth, we are okay with 1%-2% less than the industry, so that is okay. This year also it is around 13.46%, whereas we could have sold even more because for the year we have sold around 23,000 of IBPC. We remain cautious of that. Two challenges as I explained earlier, two challenges this year see recovery and treasury income. We will be able to maintain whatever guidance we have been given. Thank you. Thank you all.
Sure, Sir. That's very helpful. On behalf of Emkay and the management of Indian Bank, I thank all the participants for joining this evening. Have a good day. Thank you.
Thank you. Thanks, Anand- ji. Thank you all.