Ladies and gentlemen, good day, and welcome to the Q2 FY25 earnings conference call of the Karur Vysya Bank. We have with us today the management team of KVB, represented by Mr. B. Ramesh Babu, MD and CEO, Mr. J. Natarajan, Executive Director, and Mr. Ramshankar, CFO. As a reminder, all participant lines will be in listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. B. Ramesh Babu, MD and CEO, to take us through the highlights of the quarter gone by, after which we will open the floor for questions. Over to you, sir.
Thank you. Thank you very much. Good evening to all of you. On behalf of Karur Vysya Bank, I welcome you all for our bank's earnings call for the quarter two of the financial year two thousand twenty-five. We trust that you, your colleagues, and family members are keeping well and are in good health. We have uploaded our financial results along with the presentation on our website, and I hope you have had a chance to go through it in detail and ahead of this call. I am pleased to mention that the bank continued to have another strong quarter of performance built on our guidance of three metrics: growth, profitability, and asset quality. Bank's performance indicators are in line with our guidance, and the bank is seeing consistent and steady growth.
It is encouraging to note that our team was able to sustain the growth momentum witnessed in the first quarter, and I am confident that the same will continue in the ensuing quarters. The bank's total business stands at one lakh seventy-six thousand one thirty-eight crore. As on thirtieth September two thousand twenty-four, we were able to sustain the growth impetus created during the first quarter as our total business registered a growth of 4%. The advances stand at eighty thousand two ninety-nine crore, and deposits grew to ninety-five thousand eight thirty-nine crore, with a growth of 3% and 4% respectively. We have been guiding in our earlier calls about our focus on inclusive growth from all verticals with respect to advances. I am pleased to share that the same is being sustained in the RAM verticals, with 5% quarter on quarter loan growth.
Commercial advances clocked 6% growth. Retail advance and agriculture advances grew by 4% each. Retail growth was predominantly driven by mortgages, which grew 10% during the quarter. Housing loans grew by 3% and jewel loans by 7%. Our BNPL book remained flat during the quarter. Agri jewel loan book grew by 4%. Corporate book has de-grown by 4% during the quarter, mainly due to lower availments in certain seasonal sectors, lower disbursements, repayments, and of course, as I always say, wherever the pricing was not conducive enough, so on our own, we have exited those accounts. Deposits growth remains one of the key focus areas for the bank, and you are aware that the bank side initiated various strategies for deposits growth, including establishment of sales acquisition channel for both term deposit and CASA growth.
Our total deposit growth was at 4% during the quarter. Depletion in balances in existing CASA book has resulted in growth of only 1% sequentially. Term deposits grew by 5% during the quarter. We had indicated in the last call that NIM would be above 4% levels till first half of the current year. I am happy to say that the NIM for the quarter is at 4.11%, and for the half year it is 4.12%. Our continued journey on shedding away low-yielding corporate advances on one side and focused more on better yielding, granular, secured advances in RAM and prudent treasury operations have helped us to retain above 4.1% levels of NIM during the quarter, in spite of eight basis points increase in the cost of deposits.
The cost of deposits increased by eight basis points, and the yield on advances reduced by two basis points sequentially. Yield on investments increased by two basis points during the quarter. Based on our historical pattern of renewal of deposits and fresh deposit acquisition, we expect moderated rise in the cost of deposits by 10 basis points in the next quarter. Yield on advances is expected to be flat, and yield on investments would be the similar range for the second quarter. Considering all these factors, and without taking into any policy rate changes, we expect that NIM will be around 4% in the next quarter. We have achieved ROA of 1.72% in this quarter.
We had guided that our effort would be to ensure ROA is above 1.65 levels, and we are confident to maintain the same going forward also. Our gross slippages during the quarter continued to be under control at INR 181 crore, which is 0.23%. On an annualized basis, it comes to 0.9% of our loan book. With our continued close monitoring of accounts, we are confident that we will continue to keep the ratio below 1%, as guided in our earlier calls. Our efforts on recovery of technically written off books is continuing to yield results, as we have recovered a sum of INR 180 crore during the quarter. Due to lower slippages, recoveries, upgrades, and write-offs. Our gross NPA has come down to 1.1%.
We expect that we will continue to maintain at below 2% levels, as advised earlier. For the quarter under review, we have provided INR 155 crore towards NPA migrations and INR 10 crore towards standard assets, and reduction in restructured assets provision by INR 9 crore on account of reduction in balances aggregating INR 156 crore, which is 0.78% of our advances on an annualized basis. Apart from this, we have provided prudential provision of INR 25 crore, as was done in the previous quarter. Our net NPA has come down to 0.28%, and we will continue to maintain net NPA at less than 1% of our loan book. Our standard restructured loan book is further reduced to 0.79% of our loan book, and we hold a provision of 39.85% of the standard restructured book.
The BNPL book balance is at 1,030 crores as at the end of September, that is, which comes to 1.28% of our portfolio, and it is performing well. Our overall unsecured portfolio, including the BNPL, comes to 2.04% of the total advances. Our MFI portfolio, which we started just two years back and we have started taking a baby steps in that, now stands at 298 crores as at the end of 30th September 2024. We are taking very cautious approach in this segment. We have tied up with three business correspondents who have this sort of an expertise in this as partners, and we will be mindful in growing selectively in states where position is relatively better.
Our establishment costs were INR 357 crore during the quarter, increased by 7% sequentially, mainly on account of AS 15 actuarial provisions, which were up by INR 13 crore compared to previous quarter due to steep fall in the discount rates. Operating expenses were at INR 358 crore, sequentially gone up by 7%. Our cost to income ratio is at 46.72%, and we will continue our efforts to peg it within 50%. Our CRAR, as per Basel III, continues to be healthy and is at 16.27%, providing a comfortable headroom for growth. Our liquidity coverage ratio continues to be well above the regulatory requirement of 100%.
Bank added one branch during the quarter, and the setting up of the light branches is in progress, and the first set of such branches are expected to function in the third quarter of this current year. Our endeavor is to continue the current momentum in the next half of the year. As planned, we are mindful of the challenges, particularly on the liability side, and are taking every step to increase the low-cost funds, which would also help us to improve the margins. I am grateful to all our investors, analysts, and stakeholders for the confidence and the continued support, which we will reciprocate through our better performance in the days to come. Now, I'll be glad to respond to your questions.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will take a moment while the question queue assembles. Ladies and gentlemen, you may press star and one to ask a question. A reminder to all the participants, you may press star and one to ask a question. The first question is from the line of Jay Mundra from ICICI Securities. Please go ahead.
Yeah. Hi, good evening, sir, and congratulations on a great set of numbers. So first question is on your loan growth, right? So we can see that you have been following a profitable loan growth approach, and we have been growing, you know, 20% YOY in retail, agri, MSME, but the total growth is slightly constrained by degrowing corporate book. And from the last time when we had spoken, from then to this quarter, there has been a little bit moderation in the systemic loan growth. What would be your assessment, considering, you know, the approach that you have taken? And then, would you still be comfortable growing 15% above, or how should one look at it?
Yeah. Thank you. Thank you, Jay. Jay, if you look at it, the question is the composition of the deposit growth. So still, we find that the CASA book, as we planned, it is not growing at the same pace what we planned. Till such time that composition comes up, so it will not make much sense to raise a deposit at 7.6%, suppose a senior citizen is there at 8.1% also we are taking, and many of the corporates, if they expect between 9-9.25% and all. So 8.1% CRR, SLR, credit cost, standard asset provision, operating costs, with all these things, it doesn't make much sense rather than just bloating the book and top line growth. So that's why we would just want to wait and watch.
Another point I want to say, so it is interest rate sensitive, that is elastic as far as corporate is concerned. Suppose the rest of them, why we are fueling the growth in rest of the RAM segment is if you reduce the momentum there, getting back the momentum from the whole team will become absolutely difficult because it's granular and many people on the ground, they are working on that. Whereas corporate is concerned, it is interest rate sensitive. The moment you are able to offer a better rate, so you'll be able to come back. I'll just give you an example.
Our NBFC portfolio, which used to be 8.5% of the total book at a point of time, now it has come down to around 5% plus. 3% we have brought it down, many of the NBFC is there. Suppose tomorrow if you have a reasonable amount of money, the 3% of this INR 80,000 crores itself comes to INR 2,000 crores odd. So that way, growing should not be a problem, but we want to be conservative seeing the position. The moment we get a hold on the CASA book, it is growing there and all, so we will release the pipe towards the CIG also.
Right. No, no, understood, sir. So yeah, so that is, that is understood. Secondly, sir, is there any? There were media reports or, you know, is there any? I mean, you've not given the gold loan book, total gold loan book. At least I could not figure out from the presentation.
No, no, we have given a slide on the gold loan. So at 26%, you can see that we have mentioned saying that last four years, how the gold loan is moving, what is its LTV, what is its SMA, everything has been provided.
Slide number 15, yeah.
Slide 15, if you look at it, so we have given Jewel Loan portfolio, SMA, LTV, everything is there in that.
Right. So, okay, sir, is there any difference in the agri gold loan and non-retail gold loan growth? Are you seeing anything, any trend change there?
Yeah, yeah, we are able to see that, particularly in the first quarter of this year. So we could see some sort of a non-agri jewel loans also coming up, but it got slightly reduced in the second quarter. So that's the first quarter was a good quarter for the jewel loan growth. So the second thing also, we will grow in the jewel loan growth. We are not disputing that, but our intention is to focus on the core. Otherwise, once we totally move into non-agri growth there, the set of complacencies may come up and all, we may not grow in the core products. So that's why we wanted to grow in a balanced way. And one more thing also, two to three years back also, this question was coming up: How much is the amount of the gold loan up to your total portfolio?
Three years back itself, we have given an indication that we would like to go up to around 30%, because too much of concentration in a particular product also is risky. Now if you look at it, 25.1 has become 26 now. Because not only agri, other side also we are coming up and all. We will grow in that. Demand-wise, there is no problem because RBI has also issued a circular on the thirtieth. Many of the compliances we are in line with and all, so we will grow in a measured way as far as the gold loan is concerned.
Sure, sir. And sir, I have some housekeeping question. If you can highlight the LCR percentage for the quarter and the number of staff?
LCR is 128% now, and number of staff now comes to more or less, because we have taken many of the street on street, and particularly for the liabilities, those who need to be at the lowest level. Likewise, in the counters also for the deepening the book also at the lowest level. So we have taken a set of people. It comes around nine thousand five hundred, something like that we can think of now.
So, sir, the LCR 128, on reported basis, right, there is a dip from last quarter. Whatever, let's say, change in the methodology, I mean, was there any change in the methodology? And if that was the case, is this now sorted that, you know, or do you think there could be any other changes in that also?
Jay, Ramshankar here. It has been fully sorted out. It started in last week of June, the revised methodology, and this full quarter, it has been fully on the revised methodology only. It will actually vary. For example, the 128% on an average basis for 90 days. Two days back, if you see latest, it's 135%. It varies there and it will start depending upon the composition of the HQLA, high quality liquid assets. It keeps on varying, but it is sorted out fully.
This should not be any constraint for your growth or margin, right? I mean, LCR optically falling from much higher level to 128. Could this have any bearing on the growth or margins?
Hey, that's what is a tightrope walk for everyone. In fact, we need to keep in mind all these factors and all. Accordingly, we need to go for our planning. That's it. We are. In fact, every vertical, including treasury, we are aware of this, how we need to plan our ALCO is also on the job. Accordingly, we are planning.
But the 128 is a sufficient cushion, and room is available for growth.
Right. No, no, of course it is, sir. So, yeah, thank you, sir. Thanks and all the very best, sir.
Thank you. Thanks, Vijay. Thanks.
Thank you. The next question is from the line of Roshan Chutkey from ICICI Prudential Mutual Funds. Please go ahead.
Yeah, thanks for taking my question. I just want to understand how is the situation in the textile sector among MSME customers, if you can give any view around that?
Yeah. Now, again, so compared to two to three years back, because up to COVID, post-COVID, it was doing very well, spinning and all. Later, there was a lull because external factors were creating a problem. Now, if you look at it, slowly the position is improving. I will not say that the limits have been used sufficiently and all these things and all, so the fact that in few of the locations, they are placing the boards that we require people, these sort of a thing. And second thing is, absolutely everything is happening in-house without much outsourcing, and they are able to manage. So their order quality and their margins are relatively much better compared to others. So spinning mills also, those with 25,000 spindles and above, so they are there and all, their order book is good, they are able to manage well.
And below 25,000, they need to still wait for some more time. Otherwise, overall, if you look at it, the position which was there prevailing one year back has improved now, and they are hopeful, saying that in the next six months the position may further improve. So next thing is, as far as our accounts are concerned, you would have seen that the worst times also we have passed through more or less. So, that way, the portfolio what we have is reasonably well that we are managing and all. We are continuously engaging with these customers to know what is happening on the ground.
Thank you, sir. That's all from my side.
Thank you. Thank you.
Thank you. The next question is from the line of Anand Dama from Emkay Global Financial Services. Please go ahead.
Sir, congratulations on great set of results. So, first question that I have is related to the higher other income. So what basically is the treasury gain during the current quarter, recovery from return of it, if you can tell?
So recovery from return of 181 crores.
Okay. And how much was the treasury gain?
Small amount, okay. Trading profit, we had around INR 23 crores.
Okay. So bulk of basically, it's like, you know, recovery from return of accounts seems to be on a higher side for us during the current quarter. Do you see this sustaining over the next two quarters?
No, so, Anand, I'll respond on that. You see, these are the efforts we have been making for the last two to three years. You must be knowing that. So there are external factors are also involved. So unlike a normal loan growth and deposit growth, we cannot give a dotted line response saying that is what we'll be able to do, but our efforts are on. But on the whole, if you look at it year- on- year, the numbers are coming up. It can be one quarter, it may be more, and second quarter, it may be low. But overall, as far as the year is concerned, the ROA, what we have given a guidance, we will be able to do that. That's the first point.
Second point, we didn't take much advantage of that additional recovery of write-off what all has come up, because if you look at it, the provisioning what we made, around sixty-five basis points on the, for the written-off assets, if you look at it, it has come to that, and in the normal course, if you look at it, with our 0.28% of Net NPA, that much of provisioning is not required. For a standard asset, if you had to make on an average INR 10 crore-INR 15 crore per year, we had to make, and migration, something we had to make, and these things are required. Restructured, already 40% is already provided. There also doesn't require. So what we thought, when good times are there, when these sort of something comes up and all, instead of taking that as a profit, so to...
We need to strengthen the balance sheet and all, we have additionally provided there. So that way, additional what all we have got, that has gone into the provision, we didn't take much benefit of that additional write-off what we have got.
Okay, that's good to hear. Secondly, your loan book is actually growing at a much more faster pace. All these loans that you are basically mobilizing right now, is one source loan or you have a tie-up over there that where basically,
No, no, no tie-up. It's all set into a set feet on street. Our people, what all they are recovering, that's coming from that. No question of any outsourcing. These things are not there at all. Everything internal team, what they are doing, that's the growth.
Okay. And sir, what is the typical ticket size of this LAP and what is the yield that you're generating for this LAP book?
Yield is more or less 9.5 plus, we will be getting it. Ticket size, I need to look at it. Our CFO will come back to you on that.
Okay. And bulk of this LAP is being generated in the Southern India or like.
Majority in Southern India. Majority Southern India, correct.
In India, again, in Tamil Nadu, right?
No, not only Tamil Nadu. Tamil Nadu, Andhra, Telangana, Karnataka, all these are there. But one more thing, just to provide some more comfort to you, Anand, I just, I'll share some points with you. At a point of time, three, four years back, what we were doing, actually, we were relying on the legal, some expert outside of here, legal is there, and panel lawyers and the valuers we were doing. So we thought we need a third eye to look at. Tomorrow, at the time of disposal of these properties, we should not be caught unaware. So we have internally created a technical evaluation team, wherein a set of people who have experience, they sat there, and at divisional office levels also we have put engineers there and all. So what all we had to give for a valuation, so no one has a discretion.
On a round-robin basis, that goes to the valuer on a surprise basis, and what all it comes, it will be vetted at the local level, at the divisional office level, it will go to centralized cell also. They will also look at these things and all comparable valuation elsewhere, what all is there, legally, other things are okay. After seeing all these things, they will clear it. In the process, we are declining many cases. So we took a call saying that maybe it may not result in a business growth, but it'll be safer now, so that tomorrow, if issue comes up and all, you are unable to dispose of, the purpose will not be served. So that way, we have strengthened this mechanism and the different checks and balance at different levels to see that the enforcement is really will work.
Sure. That, that's great. Thank you.
Thank you. The next question is from the line of Abhijit Vara from Axis Mutual Fund. Please go ahead.
Yes, thank you for taking my question. Sir, I have a couple of questions. First one is, in the other topics, the growth rate has been 25%, around 25% for the last couple of quarters. I know you have given guidance on cost to income, but specifically on this, do you think this growth rate will continue or, it will moderate?
No, in fact, there are two aspects I need to share with you. There are a few costs consciously we thought of spending. One is we are strengthening our IT and information security. So we, because we cannot take any sort of a risk on this, so more than what is required and all, we started actually spending on that. And the next thing is we have got for an ambitious plan for having 100 branches this year, and last year also, 35 branches we have opened, before last year we have opened. And the additional cost of these branches, what all we have opened, started kicking in. And the next branches, what all are there already, the furniture and fixture is all coming up. And so we have front-loaded the staff members also for these branches.
Once everything is ready, if you do not have the staff, you will be paying the rent, you will be stuck. So those staff are also more or less ready that way. With all these things, some sort of a costing is coming. The value of all these things you will be seeing over a period of time. But few more things also we look at it, because when we are spending on these things, naturally, over a period of time, depreciation also will kick in, and DICGC, all these things are there. So with these things, if you look at it, overall, we are having a control on this, but we will still try to see which are the cases where expenses we can control further.
One more point. No, it is not a justification, just for the sake of clarity, I want to say. You see, last year, more or less, around INR 1,000 crore of corporate, we have brought down the portfolio. And this year also, if you look at it, INR 6,700 crore has been brought down. So INR 1,700-1,800 crore it has brought down. In addition to that, had we grown in the corporate in these two years, another INR 1,300 crore would have come. INR 1,300 plus INR 1,700, INR 3,000 crore of assets, because of the constraint on the CASA, we are forced to release. And as and when the position improves, we will be able to getting them back.
So that way, it also had a bearing in the denominator, that base effect is at seven to eight basis point, that also is creating an issue. Overall, if you look at it, so we are focusing more on the rest of the ratios currently than on the cost of assets. So if you are able to earn on the spending, what we are doing, okay, we may have to spend it, but your point is well taken. We will keep that particular point in mind, how to have a decent cost effect.
Right. Right, sir. The second question is, what is the total potential provisions, or floating provisions the bank holds? And, do you include it in PCR calculation? Just for clarification.
Yeah. Last quarter, INR 25 crore, this quarter, INR 25 crore. That way, it comes to INR 50 crores. This is the floating provision.
Potential.
This is potential provision we have. Floating provision is concerned, last year, what we have provided, four quarters, 25 crores each we have provided, so that 100 crores is still there that way. And whether for the PCR purpose it is there or not.
The floating provision, we don't take potential provisions we take.
Provision will be taken, and all floating, we are not taking it.
Right. Okay. And so in the retail portfolio, just one observation is this quarter, the bulk of the write-offs have come in from retail portion itself, retail portfolio. So just wanted to understand what are these loans?
No, no, I'll just tell you. No, no, it is a deep cut. If you look at it, now, what happens, you know? You look at our total gross NPA itself has come down to 886 now.
Right.
Earlier, when we were having money, what we did, so first of all, we focused on the corporate. Majority of the corporate book, what all is there, we have provided. That is the reason, if you look at it, so the corporate is concerned, not to be yet to be provided is a very small amount. So next, that way, we are going step by step with other verticals. So that way, this quarter, we would have taken few of the accounts in the retail. That doesn't mean saying that these are absolutely unrecoverable accounts. That is not an issue at all.
Okay. Sure. Last thing, do you provide loan book guidance and deposit growth?
Deposit growth. Earlier, we have given the standalone with that. 14%, we have told them, saying that annual growth, but if you look at it, the complexion of that. Overall, it now comes to 14%. But if you look at it, as far as the RAM portfolio is concerned, more or less 18%-20% we are growing, because that is an engine which has to propel the bank to take forward. If that engine stops, it will become difficult for us.
With these constraints on the liabilities also, we are more or less managing to take the RAM book at that 18%-20%. That continues. If at all we have a big leeway and we are able to get a reasonable cost of deposits, then we will revise our guidance and all. We'll be able to take it forward. Particularly, as I said earlier, growing in CIG, it requires relatively lower effort compared to the RAM book. So that is the reason, once lower cost funds are there, we will reopen the tap of corporate.
Sure. Appreciate your responses. Thank you.
Thank you. Thank you.
Thank you. The next question is from the line of Prabal Gandhi from Ambit Capital. Please go ahead.
Hello, am I audible?
Yes, sir.
Hi, audible, audible. Please go ahead.
Congratulations, sir. Sir, my first question was, we have been shifting away from the corporate segment, but our loans are not reflecting that. They have been stagnant from last three, four quarters. Why is that?
First point is we need to revise the statement. We are not getting away from corporate, okay? It is lying low at this stage. As and when the composition of the liabilities comes back to the normal state, we may go back to the corporate. That is not an issue that way. And yields, if you look at it that way, you see more or less the RBI rates, what all are there, they are more or less stagnant now. So under these circumstances, when there is no change, MCLR is concerned, the cost of deposit, what all is there, will be automatically passed on. So EBLR is concerned because when there is no change in the repo rate, you will not be able to increase that one. So that's the reason there's a limitation beyond which you will not be able to do that.
Overall, if you look at it, if you are able to maintain these yields at this level, I can give a part of the credit to the reduction in the corporate also. Otherwise, the yields would have come down. One more thing I'll tell you, when we are in the competitive market, getting every loan at 10% odd may not be possible. There can be a mix of loans in different... Suppose agriculture is there, it can be 9.5% only. There can be agriculture, 9.25%. But I cannot take it in isolation.
The agriculture will be reckoned for the purpose of my PSL. If I go and buy the PSL, I have to pay 2% there. So indirectly, I'm getting 2% plus 9.5%, 11.5%, I'm getting. So the composition advantage, whichever bucket it grows, depends on that. So despite the growth in lower yielding, wherever something is there, because corporate to some extent we have lost, overall, we are able to maintain our yields.
Got it. Sir, what are we doing to improve our fee income? That also has sort of remained there despite increasing the share of retail loans.
I agree. The fee income, there are different components there. Now, earlier, corporate, we were doing the fund-based. Now the focus, what we are trying to do is, so we have reoriented our focus and our corporate banking unit started focusing on the non-fund-based business. So overnight, if you have to shift the gear, it will take some time. Otherwise, boys, they are on the job, first thing. And second thing, the third-party income. Third-party income, which used to be pretty low in the bank, but overnight, again, you cannot press the accelerator button, it will lead to mis-selling and all. So a lot of effort we are making on that. So that way, we are trying to double that income every year. This is coming up. And third thing is, there can...
There is a hit to some extent, because corporate, if you grow aggressively, the processing charges, what you get will be pretty good. Because you are not growing in the corporate at the rate at which you have to do it and all, so you have to make it up in the retail segment. That's why if you look at it overall, compared to last quarter also, the overall fee is up, despite not getting relatively the same amount of processing charges from the corporate, which you are getting. Our focus is on that. So various heads, what all are there, it can be guarantees, third-party income, LCs, all these things, we are working on that. We will see what best can be done and all, how to maximize.
Sir, and how do we improve? How are you measuring productivity at a branch level and employee level with this? This seems to be. You explained that there are some costs involved, which will come down, but how do you measure the productivity at the employee and the branch level?
Yeah. We have a very structured way of metrics is there, which covers for each branch around 40 parameters. So we will give the target, and based on that target, the score will be given there and all. The consolidated position of this for a 100-mark score, which comes, and each branch will be rated based on the centum score of 100 marks. Now, many of the allowances, what they get, they are linked to the score, what they get. If someone is not getting the minimum score, what they are supposed to get, they will not get. This will be reckoned for the purpose of their rating also, year-ending, what the rating they get it, half yearly they get it and all, and it will be useful for the promotion, it will be useful for the transfer. All these will be reckoned.
So likewise, at the year-end, if you are paying ex gratia to those who are overperforming, these metrics, what we have created, it works well, and absolutely it has been stabilized. This is dynamic, and every quarter will be changing depending upon the priorities, what bank has, and all those corporate priorities which board feels or management feels. That will be detailed into this, century score model and all, and everyone in the branch will be knowing on these lines. So that way, we have a robust, laid down and tested mechanism for testing the productivity of the branches.
Got it. Thank you, sir. All the best.
Thank you. Thank you.
Thank you. The next question is from the line of Rakesh Kumar from B&K Securities. Please go ahead.
Yeah, hi, sir. Good evening. Quite a good set of numbers this quarter. So just had a couple of questions, sir. So firstly, sir, on this risk profile of the corporate banking book, sir, in the slide number seventeen, so there is some fluctuation between A and A one and double B book from September 2023 to June 2024 and coming to September 2024. So is this just a volatility for the time being, or how we read this double B composition coming to 28%, approximately? If you can help us, sir, please.
Yeah, absolutely. You see, there are different circulars which have come from Reserve Bank of India, particularly on the NBFC, for different risk weights on the capital risk weights. So we looked at all those things, and what we thought, actually, if you are confining to triple A accounts, the yields what you get and the capital risk what you are maintaining, all these things are not commensurate. And second thing, the deposit cost at which it is growing, the margins are getting squeezed day by day. And many of these corporates with triple A, so they ask for the finest rate, otherwise they can raise the money elsewhere in the market. So that's why we took a call earlier, when actually we had a big problem with the corporate.
When the retail engine was not efficiently functioning at that time, so we parked majority of our resources in the triple A, double A and all. Later, what we thought, when we have strengthened our internal monitoring mechanism, relationship managers, service managers, credit analysts, with all these things, we thought, now we are better placed, because we have further granularized the portfolio also, the same slide what you are quoting. Other side, if you look at it, the percentage of the above 150 also has come down to 2.20, 2.2%, and the average ticket size is at 36 crore. We thought we will be able to take relatively better, that is a risk where the pricing and yields are better.
So that is the reason we were selectively moved to few of the double B-rated accounts also, overall, so that the margins can be maintained. But with all these things also, we can look at it, our risk-weighted assets movement, more or less, it is at 56, 54. That's the only running and all. It didn't cross the roof and all, it has not gone to 65 and 70. So within the overall profile, what all is there, we are managing total risk, and this is only a tactical shift, what we have made to see that the yields improve and where we can manage the risk, those sort of exposures we have taken.
Very nice. Very nice, sir. Thank you. So just one question, if I, if I could ask, this question is pertaining to this gold loan, jewel loan book. So in the non-agri segment, we approximately have INR 900 crore in MSME, if I, if I'm correct. You can correct me if I'm wrong, sir. So how that book is growing for, the non-agri jewel loan in the MSME book, MSME segment?
No, no, let me be frank with you. That is not a focus area for us, because if someone comes, an MSME customer, he wants a gold loan, so we cannot deny that one. Our focus still continues on the core MSME only. If you open the tap on that account, so this growth in the MSME only will come over a period of time. We'll forget the core original MSME. So that is the reason we may be focusing on the retail side and on the agriculture side. MSME is just like someone, a requirement is there, he has come. Being the banker, you need to honor, you have honored it.
Yes. Thank you.
Yeah, one second. Actually, just one correction I just want to make. One question was asked on the CRAR, whether prudential provisions and floating provisions are considered. I had mentioned that prudentially, I just want to correct myself. We don't take either of them. We don't take prudential provisions. We don't take floating provisions also. Only NPA provisions are considered for CRAR.
CCR.
I just want to clarify.
Okay, good. Good. Yeah.
Thank you. Ladies and gentlemen, we will take that as the last question. I now hand the conference over to Mr. B. Ramesh Babu, MD and CEO, for closing comments.
So thank you all for the compliments, what you have given, the encouraging words. It's the guidance and encouraging words have brought us to this stage. We will try to meet your expectations. And once again, thanks for taking out time and showing interest in the investor call and asking these questions. So from the entire team, KVB, seasonal greetings to all of you, and Happy Diwali in advance. Thank you all.
On behalf of Karur Vysya Bank, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.