Ladies and gentlemen, good day and welcome to Q3 FY 2025 earnings conference call hosted by Karnataka Bank. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Srik rishnan H, MD and CEO from Karnataka Bank. Thank you, and over to you, sir.
Thank you. Good evening to all, and a very warm welcome to our Q3 FY 2025 earnings call. I have with me in the conference our Executive Director, Sekhar Rao, our CFO, Abhishek Bagchi, our Chief Compliance Officer, Vinay Bhat, our Head of Credit, Ravichandran, our Head of Branch Banking, Jayanagaraja Rao, our Chief Risk Officer, Raghuram, and we also have our Company Secretary, who is Sham. We also have our Investor Relationship Head, Soham Roy, with me. Welcome to all once again. We also want to take this opportunity to wish you all a very happy 2025 and a great year ahead. As all of you know, the bank, we have been working with real renewed energy on the overall restructuring and transformation processes, really end-to-end looking to end this financial year 2025 on a real high note.
The bank has continued to see the progress in top-line growth with a lot of focus on retail and direct-to-corporate advances. This is a strategy that we had mentioned in the last two quarters, and it has started playing out now, along with a lot of mobilization on retail deposits. There are a lot of these process transformation projects which are underway, covering credit processes, national back office, which has been set up in Mangaluru. We have created the sales and the product organization, which are functioning well. We have opened two retail asset centers, one in Bengaluru and the other one in Mangaluru yesterday, and with three other locations which are being progressed. There is significant progress which has been achieved in each one of these projects, and we will hope to see the benefits in the upcoming quarters.
To support this growth, we have really enhanced our tech infra ops capacity, operational capacity, and all the enhancements that we had to do are in place. The commitment to digital and the tech focus has actually been reflected by the fact that our bank has won in this quarter, a couple of awards. I am just going to call out a few. The ET BFSI Excellence Award for outstanding work in leveraging data for growth, the ASSOCHAM 19th Summit Award for Best Innovation and Partnership Initiative, Samvaad 2024 Account Aggregator Ecosystem Award for Financial Inclusion. The bank actually created history by winning six categories of IBA, that is the Indian Banks' Association, Banking Technology and Citation Awards, held earlier this month.
The six categories are Tech Talent Organization, Best IT Risk Management Technology Bank, Best Fintech and RPA Adoption, Best Digital Sales, Payment and Engagement, and Best AI and ML Adoption. These are all very, I would say, good credentials to grow with, and this is a good reflection of the effort that the bank has put in terms of the investment to upgrade our technology stack and digital and the analytics part of it. The bank has been upgraded by ICRA 2 notches from A Positive to A+ Positive, and that actually will facilitate competitive rates for our bidding in the future as we go forward, whether it is Tier 2 or even certain forms of deposits. The bank is seeing a substantial improvement in book quality on the back of good collection and recovery efforts.
I will talk about the actual numbers as we go forward. This will continue to improve further with our transformation and our credit sanction and collection mechanisms. The bank has opened six new branches this quarter, taking the overall branch count to 937, and we plan to open about 10-15 new branches in this quarter 4. During quarter 2, I had mentioned very clearly that the bank had taken a step back to focus on book quality over quantity and over revenue growth. Now we are back on track as far as the growth trajectory is concerned, but in selected areas that will result in improvement to various metrics as we go forward.
The bank will definitely try to strike a balance between book quality growth and also hope to see the advances book grow by about 12% during FY 2025 on a consolidated overall basis. On the backdrop of lower GDP projections and the banking industry witnessing pressure impacting credit growth, lower CASA, et cetera, the bank continues to focus on our critical parameters. One is growth in advances for the segment that we serve, deposits, improvement in quality of our advances book, profitability, and of course, favorable returns to our shareholders. I will now start presenting the business highlights. The business highlight is that aggregate business turnover, as we call it, which is advances plus deposits, stood at a record all-time high of INR 177,978 crores. It is up by 10% on a year-on-year basis as against INR 161,936 crores as of December 2023 corresponding period.
The PAT has decreased from INR 331 in the corresponding quarter of last year to INR 283, and the decrease is explained by the fact that there are certain changes in the accounting policies and also the bank has been making, as you are all aware and I did mention earlier, accelerated provisioning that impacts PAT, and which we have continued in this quarter also. On a nine-month basis, the bank made about INR 1,020 crores of PAT compared to INR 1,032 crores for the corresponding period last year. The accounting change on treasury, which is essentially for the securities which are there in the AFS book alone. If we had taken it upon as per the earlier policy, we would have actually gained about INR 100 plus crores on that itself.
Which means that the bank technically would have made INR 1,020 crore plus INR 100, that's INR 1,120 crore for this quarter. This is, of course, applicable to all banks, so this is something that I needed to call out to make sure that on an overall basis, the bank is in a good place. On the gross advances side, the bank has started the engine again after the Q2 pause that we had taken. The gross advances stands at INR 77,859.75 crores as of December 2024. On a year-on-year basis, this growth is 11.6% over December 2023, and that was INR 69,740.97 crores. This is very much in line with the overall industry growth on year-on-year.
Our overall strategy on this gross advances continues, which is growing the retail, agri, and the mid-market, the RAM segment, where the growth was really led by retail, housing, gold loan portfolio for the bank. The net book accretion was INR 4,020 crores on a year-on-year basis in the RAM segment alone. The bank in the past, we had committed that we will reduce our exposure to low-yield large and mid-corporate loans that were opportunistic because, as you're all aware, sometimes, which was like April of last year, our CD ratio was in the mid-60s, and we had pushed it up to the mid-70s. We took an opportunistic tactical strategy there, where it was deployed into low-yield corporate loans, which were far more easier before our set up of our full-fledged wholesale and mid-corporate banking groups, which has been done right now.
We had to deploy it into low-yielding corporate loan, which is better than treasury from an earnings perspective and also the book growth. But right now we are doing a churn where very clearly the churn is reflecting in our overall story. We now have the regional sales and the credit structure that we have put in place for direct to corporate acquisitions from our mid-corporate segments. A ctually, this book will also increase, and I'll also let you know the progress that we have made. Overall, on a quarter-on-quarter basis, retail advances as per the RVA definition in Q3 have grown by 4%, and mid-corporate has grown by 1%, and we'll continue this momentum. During the last nine months compared to, let's say, March 2024, the retail advances alone has grown by INR 4,164 crores.
That's like in three quarters, actually, the retail book has grown by INR 4,164 crores. T he bank also has approximately replaced INR 750 crores of the loan, low-yielding advances, larger corporate or NBFC advances with the higher-yielding direct to corporate advances. Technically, the book, while it has not grown, but there is a churn in the book, which you've already seen. T hen as we go forward, when the actual acquisitions from the mid-corporate advances begin, and when all these are weeded out, we will actually see the book accretion also. On the aggregate deposits, the bank position stands at INR 118.52. Repeat, INR 118.52 crores as on December 2024. T his is a year-on-year growth of about 8.59%. T his from a December 2023 number of INR 92,195 crores. It is a good increase. CASA deposits stands at about 30.32% as against 30.82% in September.
But it is also notable that in terms of absolute growth in CASA, compared to the last year, December 2023, we have grown by 4.68%. This has to be looked at in the context of the industry, where the larger banking industry, there is an overall CASA deposit, which has been declining. From March 2022 position of 43.66%, it has declined to 39%. In Q4 FY 2024 alone, the share of the industry-wide CASA dipped by about almost 2.71%. That is like 271 basis. The trend is continuing. Having said that, we do have a strategy, and that strategy is also playing out where we are actually replacing a larger part of our bulk, so-called higher value deposits by retail granular deposits. This is a strategy that whereby the rates for the granular are card rates.
As a result, the bank has been able to kind of really shift the focus and focus on granular deposits of less than INR 3 crores. Bulk deposit as a percentage of total deposit in The Karnataka Bank has come down from 8.51% as of September 2024, that is the last quarter, to 7.06%, and this will continue to go down as we play out that strategy. Similarly, bulk deposit as a percentage of term deposits has come down from 12.31% as of last quarter to 10.18%. Just to summarize, while the market conditions remain as it is, our aggregate deposit growth, while it is flat, but we have seen the movement from bulk deposit to granular deposits. Retail term deposits, which is less than INR 3 crores, has seen a visible jump from INR 60,604 to INR 62,604.
This has been over the last quarter, which is a net Q-on-Q accretion of about over INR 2,070 crores. This is a good sign, and the retail engine, which is both the asset engine as well as the liability, is all being driven by the sales team, the branch team, as well as the digital acquisition. All the three engines are currently going on, and that is reflecting in a good churn. While it might not have a book growth on the deposits, but I think it is heading towards a very good mix as far as our overall liability strategy is concerned. The liability strategy is also being supplemented with new product development and launches. We are on track to launch a few more products in the last quarter of this year, the Q4.
We have on the corporate side, the supply chain finance program, which is about to be launched. We will also launch in this month the KBL Stri Savings Account, Flexi Recurring Deposit program, a family banking program, and we are also working on MSME app, which will also serve our MSME segment. Those are all liability-oriented mostly, except some of this, which is also asset-oriented, like the supply chain program. The net interest income for The Karnataka Bank, which currently for this quarter was INR 792.78 crores. While there is a decrease, but there is also an explanation. The decrease was about 4.21% compared to the year-on-year figure of INR 827.6 crores. Having said that, if you really look through this, the fundamental reason, while it can be that our cost of funds and cost of deposit has increased, which is a market phenomenon.
But there is also from September because of the RBI regulation, we are not charging interest and we are charging a penal charges. So the interest element of all of our various charges that we are levying to the borrowing customers used to be part of NII, but that has come into the other income. Just to kind of give the perspective with the numbers. The NII deduction due to this change in the accounting and in the charging mechanism from interest to penal charges for Q3 FY 2025 alone, which is this quarter, was alone INR 24 crores and INR 38 crores for the nine-month period because of the September and October event that we started with. So if you exclude this, the NII would have remained more or less stable on a year-on-year basis. NIM, that's the next one, the net interest margin.
The net interest margin stands at 3.26% for the nine-month period versus 3.59% for the nine-month period. This has decreased, but fundamentally due to the increase in cost of funds and cost of deposits. But also it is a fact that there is another part, which is the reclassification of the penal charges that I had talked about. So had we actually included this under the NII and then the NIM calculation on a nine-month period, actually, our NIM would have become 3.31%. So technically, we're maintaining the NIM more or less at the same level despite the pressure on the cost of funds.
But with our improved focus on higher-yielding retail and direct-to-corporate deposits on a combined basis, we expect that this will get eased out a little bit as we move into the next few quarters, and we expect that the NIM would improve by at least about 10 - 20 basis points, depending on the kind of churn that we are doing in the corporate low-yielding loans as well as the retail loans that we are booking. Coming to the loan yields. Our strategy continues, as I said earlier, about replacing the bulk opportunistic larger advances to PSUs and larger companies to direct to corporate and retail advances.
There are two RACs that we have set up already, the retail asset centers, where we have started deploying corporate DSAs as our business partners, and we do have dealer and builder tie-ups and the retail engines are running at full steam, at least in this location, which is Bangalore and Mangalore. We will do it in three other locations in the following quarters. W ith lot of these product launches that we have planned in Q4 and thereafter on the high-yielding segments like mortgage, vehicle loans, educational loans, and so on, we will see further traction as we evolve. So our strategy of replacing low-yielding NBFC advances with direct-to-corporate advances will also continue. That will also result in better yields. So considering the potential churn, we expect that there will be an overall portfolio loan yield increase of at least about 20 - 30 basis points as we go forward.
This is, I guess, the strategy that we had already outlined in the last couple of quarters, along with some investor conferences and one-on-one meetings that we have had, and we continue to play this. Our CD ratio has gone up to 77.77%, which is a welcome sign. The fact that we are actually stretching the balance sheet as much as possible. There is still scope. We still can go up to 80%-85%, and we do have the liquidity coming from the deposit side also because the retail deposit portfolio is growing while the overall liquidity. Even as we speak today on a daily basis, we are surplus and treasury is lending into the market. Just for records, the CD ratio for the previous quarter was 75.34%, and for the last year, it was 75.64%, so that is the increase that has happened.
This part of the conversation that I am doing, the commentary, is the most important piece from The Karnataka Bank side, which is to improve the quality of our book. As far as the stressed assets is concerned, we have made some significant strides to improve the book quality. The gross NPA has actually improved to 3.11% in December 2024 quarter from 3.21%. That is like 10 basis points lower. The same was 3.64% as of the last year, December 2023 corresponding quarter. Similarly, the net NPA has also continued to improve. It has come to 1.39% as of December 2024, down from 1.46%, and it was 1.55% as of December 2023. Here again, we are seeing.
We have committed to the investors in the past, and we continue to stay with that commitment that we would become closer to three and closer to one as far as these two, which is the GNPA and the NNPA is concerned, by the end of this financial year and in the following quarter. This is something which will result due to a significant improvement in the overall NPA numbers. The details about the NPA movement are there available in our investor presentation with the details as the opening balance and the reduction and so on and so forth. Calling out the next important parameter on the stressed assets is the gross slippages. The slippages have come down, and this has come down to 0.4%, that is 40 basis points, in quarter 3 FY 2025 as against 8.8% in the quarter 3 of last year.
For the nine-month period ending December 2024, the slippages ratio stands at about 1.35% as against 1.9% for the nine-month period that ended as of December 2023. The target for FY 2025 would be that slippages will remain well below the 2% mark. Actually speaking, we could even do better as the quarterly slippages are coming down to about 0.4%-0.5%. That is something that we look forward to, and that is a very tight control because of our renewed recovery as well as our collection mechanism. Talking about recoveries, the recoveries for the quarter has been INR 101 crore and was INR 99 crore as of the previous quarter and as against INR 148 crore in the corresponding quarter of last year. Over the nine-month period, the total recoveries, including upgraded accounts, has been INR 382 crore.
There is also another element, which is the stressed asset book, which we have discussed in the past and presented, which is on our standard restructured advances. The bank has, you are all aware, post-COVID called out or during COVID called out INR 4,500 crores of restructured assets. That number has come down on a standalone basis without related accounts to INR 939 crores as of this quarter, December 2024, and as compared to INR 1,051.86 crores as of the previous quarter and as compared to INR 1,521.56 crores as of the December 2023 quarter. Including related accounts, which are actually performing, but on the other side, due to the regulatory requirement, we need to classify as restructured. The standard restructured advances, including related accounts, stands at INR 1,113.65 crores as of December, compared to INR 1,268.15 crores.
There is a reduction in this also and as against December of 2023, when it was INR 1,837 crores. One of the ratios that we would like to really tell all of you is that if you combine the GNPA plus the restructured asset as a total overall percentage of our gross advances, it is currently at 4.54% compared to the previous quarter of 4.89% and compared to 6.27% of the previous quarter corresponding last year. This is a significant improvement, and as all of you are aware, the restructured as well as the GNPA, we have provided for as per the prudential requirements that are there as per the regulatory requirements. The bank's PCR, which is the provision coverage ratio, including technical write-off, stands at INR 80.64 crores in December compared to INR 80.14 crores in September. This is including technical write-off.
The PCR [excluding technical write-off stands at 56.03% as compared to the 55.15% in September of 2024. As far as LCR is concerned, the liquidity coverage ratio, as of 31st December, we stand at 152%, up from 143.93%, which is actually good news, and also as against statutory target of 100%. The bank's cost of funds stands at 5.69% for the quarter compared to 5.58% for the previous quarter and 5.49% for the corresponding quarter of the previous year. But for the nine-month period, it stands at 5.61% compared to 5.36%. Definitely, there is a 25 basis points difference, and that is where the NIM is also under pressure, and that would get eased out by the growth in CASA as well as the retail term deposits as we go forward.
With our reduction in the dependence on the bulk deposits and replaced with retail deposit at card rates and the CASA buildup, we should see definitely improvement as far as the overall number is concerned. One of the other significant metrics that we need to let you know is the credit cost. The credit cost stands at 0.12% for this quarter, FY 2025, which is Q3, and as against 0.09% for the previous quarter and 0.25% for the previous year corresponding quarter. The total credit cost for the nine-month period has come down, and it stands at 0.32%, as against 0.67% for the nine-month period corresponding in the last year. With our continued control on slippages, the credit cost is targeted to remain lower, and we believe that we would be closing out lesser than 0.5% for the entire financial year 2025.
Cost to income, this is the next metric. For the nine-month period ended, the cost to income ratio stands at 56.93%. While we have had a lot of elevated costs one time related to investment in technology or whether it is a couple of other lateral recruitments and so on. I think we are stabilizing here. While the operating expenses have remained stable on a quarter-on-quarter basis, the increase in interest expenses is also one of the reasons that the cost of fund, the cost of deposit, again, combined with the decrease in the marketing, has impacted the cost-to-income ratio. The bank has taken multiple cost rationalization efforts to continue renegotiating on various commercials and keeping the operating expenses under check.
With the strategies to increase NIM and NII, as we talked earlier, I think the bank projects to have a cost-to-income ratio come down to about 55% in the upcoming quarters. This would actually stabilize there and then start coming down as we grow our income level as well. There are two other metrics as far as the bank is concerned. One is the ROE, which is the nine-month ROE stands at 11.96%, versus 15.18%. Here again, one, primarily due to our capital raise, as well as the fact that we have the actual financials which we have performed for the nine months. But we see that improving as we go forward. On the ROA part, the nine-month ROA stands at 1.14%. We were higher, but this is again a dip that is coming only from the overall performances.
This was about 1.29% in the nine-month period for the last year. But this is fundamentally because of the book growth that we are seeing, and we expect to close this financial year anywhere between 1.1-1.2, and 1.2 has been the guidance. I think we are well on target to kind of get there. We will see this improvement both in ROA and ROE in FY 2026, supported by continued accretion as far as the higher-yielding RAM segment, movement of balls to retail deposits, and also leading to improvement in NII and NIM, and also increase in other income. Last metric from today's commentary is on capital adequacy, CRAR. We stand at 17.46% as of this quarter. Tier 1 is 15.84% within the breakup, and Tier 2 is 1.62%, in comparison to 17.58% as of the previous quarter.
Here again, if you plow back the profits for the last three quarters, our capital adequacy would be anywhere upwards of 19%, 19.06% actually. But that's, of course, to be counted only after the audited balance sheets are done. As we speak today, I just want to conclude by saying that the bank has had a strategy on growth, the bank has had a strategy on transformation, the bank has had a strategy in terms of improvement in process, product, technology, capital, operational capacity, the people, leadership, and so on. All the investments have been done, and all of those transformative steps are playing out in their own tracks, but combined, put it together, we are actually getting there and we are seeing the trajectory change. As we say that in a hockey stick, we are actually seeing the trend where we are actually growing.
So it is like the kind of reverse hockey stick, and we are just kind of climbing from here. We believe that in the following quarters, we will be able to improve on multiple metrics, and that will result in positive and better financial outcomes. On that note, I wish to thank you all for your patience hearing, and we would request Yasasvi to throw the forum open for questions that any of the investors and any of the participants may have. Over to you, Yasasvi.
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 touch-tone 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 wait for a moment while the question queue assembles. We will take our first question from the line of Priyank from Valon Capital. Please go ahead.
Hi, Sri. My question is actually on the strategy on the loans as well as on the deposits. Now, quarter-on-quarter, if I have to actually judge because it is very difficult to judge on a nine months or even compare it year-over-year because
All the efforts that we are putting out now should be seen incrementally every quarter. Incrementally, this quarter we have disbursed, or we have a loan ending book of more than. The book has increased by INR 2,500 crore. The incremental loans have been into retail and large corporate, both equally. Now, if we are on the strategy to focus more on RAM, why the yields on loans have fallen by 18 basis points quarter-on-quarter, I believe we are looking forward for better-yielding retail loans. So that is question number one. On the same side, deposits. The cost of deposits has actually gone up by 10 basis points, and we are incrementally focusing on retail granular deposits. Just help me with these two very contrasting thought processes that I have come across.
Thanks, Priyank. I think there are two parts to this question. One is on the advances side. You are right that we have grown this quarter, and we have grown the quarter with a whole lot of improvement as far as the overall retail book is concerned. It is also a fact that there were NBFCs and the rest of it, which got paid out during the same quarter. As a result, while the number that we have put up, it has happened over the quarter. For it to play out for the full quarter would happen only in the following quarters. It does not happen immediately in the same quarter. The real increase in the NII would happen as we kind of get into the full three months as far as these loans are concerned because this is a continuous process. That is one explanation.
The second explanation is that this entire increase which has happened, which is between the previous quarter, Q2 and Q3. While it has happened, there is also a housing element within that. There is a breakup of the overall retail book which comprises of housing, mortgage which is LAP and the rest of the other products and as well as the vehicle and your gold loan. There are different yields as far as each of these are concerned. The mix within that also, we need to kind of really perfect it as we go forward because if you do much of housing, then the yield will be not as much. Then we look at a blended yield as far as the retail accretion, the RAM is concerned.
With our setting up of the RLPSCs, the whole process is getting streamlined location by location and we would actually start focusing on high yielding and making sure that our turnaround times and staying competitive on the rates both are balanced out and that is how we will kind of progress. This is a strategy which has just started and which will start playing out in full steam as we go forward. As far as deposit is concerned, the deposit number, while it is like we are running faster but staying at the same place because of the fact that we are relatively flat on the overall number.
The fact is that today you will have to look at that even a retail deposit in the market is also high in terms of the expectation because we do have retail deposits at 7.5% and a senior citizen product which is at 8%, which is the 50 basis points that we have to pay extra for the senior citizens. It is not as if that the bulk deposits are expensive, the retail deposits are relatively inexpensive. That is not the way. It is a fact that the retail term deposit brings in more stickiness because along with it comes CASA, along with it comes other benefits for other income. For instance, the third-party income that we have. In fact, the third-party insurance business, which is both life and non-life on the other income which is affected.
Actually, while it is not a significant number, but from a comparison between last year and this year, the entire target for this year has actually been met in November and December itself. Which means that we are running much in excess of the overall budget. We are doubling as far as that is concerned. There is a revenue that gets accrued for this relationship that we are building for other products also, which is the cross sell. The other last part is that as far as the mix is concerned, as long as the dependency on the bulk deposit is coming down, which it is in terms of the percentages, then what happens is that the granular stickiness and the funding part is assured as far as the bank is concerned.
We have actually had two flat quarters while many banks in the country have actually declined in terms of the deposit growth and many banks even this quarter have reported about 1.2%-1.3% per quarter in terms of the increase in the overall deposit number and that is not the case with us. We are moving ahead and we are actually churning and the real benefit of that again will start playing out in the following quarters. All that I am saying is that we do have a very conscious strategy both in terms of the quantity and the quality part which I actually alluded to earlier. This is something which we have taken stock of the entire bank. We have taken charge.
We have now got all the engines firing which is the branch, sales, product as well as the digital and we believe that we are on the right track to growth.
Perfect. Thank you for the elaborative answer, sir. My other question is actually, as per your notes, if you had to exclude the impact of accounting policy, our cost to income still would have been at 58.7% for Q3 while we had guided for, say in H2, we are looking for less than around 55% cost to income. So where are we and what has been the extra cost that we should take into consideration when it comes to Q3? Plus, would it be possible to kind of call out the one-time extra expense that bank would have done in these last nine months, which would not get carried forward going ahead, so that we know that kind of absolute cost that would come down. Of course, then the other cost related to the operating OpEx should, of course, get offset.
But then kind of a one-time extra expense from nine months as well as why the cost to income for Q3 is not headed towards where we would have thought of.
Priyank, great question. Just to kind of ensure that there is clarity on this. While our total, let's say, cost to income for the nine-month period is 56.93%. If you adjust it for a couple of items. One is that we had the recovery from return of accounts which is lesser than if we had taken into account some one times which are there, which is superannuation that we kind of created, et cetera. If I take that all out, actually speaking, the adjusted cost to income for the nine-month period is actually 54.48%. So this is something which we cannot say because these are all one times which we have incurred already.
To answer your question, there is a clear 245 basis points as far as the cost to income which is reflected in the books, which is due to these one-time efforts that have happened. The second?
You can maybe touch with CFO.
Yeah. We will also get Soham and CFO to give you the breakup of this. To answer your question, the adjusted cost to income would be 54.48%.
Got it. Just the last question on the recovery side as well as on the upgrades that are other than the normal upgrades. We have seen that trend decelerating at least on the upgrade side and even on the technical write-off book. I do not know if you have disclosed somewhere on this what is the outstanding book right now as on December end. Even on this as a strategy, we had doubled down on this to recover this book with a dedicated team. Somehow over the last nine months, we have just recovered INR 100 crores versus our thought of earlier recovering around INR 200 crores on the recovery as well as on the upgrades.
No, I think there are two parts to this. Recovery from technical write-off account and the general recoveries. The general recoveries we have actually done very well because the total recovery quarter on quarter has been much in excess of the number that you are talking about. The total recoveries for the quarter itself was INR 101 crores and for the entire nine-month period was INR 382 crores. As far as technical write-off book is concerned, the total book is about INR 3,250 crores and the pool. Yes, the recovery from technical write-off has been lower than the previous quarters and there were some accounts which the bank was targeting which could not fructify within the same quarter and that will come in this following quarter. That is one.
The second is that actually speaking, there are some efforts the bank is taking on this 100% provided for technical write-off book where we are working with some asset recovery agency and trying to look at some pools which can be given away. The second is that the bank is also looking at, and we have already appointed some collection agent because recoveries from the technical write-off book and from the regular NPA book of lesser than INR 1 crore, et cetera, the bank did not have the administrative machinery to do so. We have actually appointed collection agencies for doing this as well. While all of these have collaterals in the sense that we do have the security backing up even if it is a smaller loan, but the administrative process to do that is something that the bank did not do.
The bank focus earlier was only for the larger ticket prices and now we have started doing this for the entire pool through these two, three measures, which is working with asset recovery companies, taking this with collection agents and creating a collection mechanism for the granular less than INR 1 crore exposure as well.
Any number that you would like to call, just a clarification on this. Any number that you would like to call out that for FY 2025 last quarter or maybe for FY 2026?
We will get back to you separately on this, Priyank.
Thank you.
All right. Thank you so much, Priyank. Thank you for your question.
Ladies and gentlemen, in order to ensure that management is able to answer queries from all participants, kindly restrict your question to two at a time. You may join back the queue for follow-up questions. Next question is from the line of Manik Bansal from Master Capital Services. Please go ahead.
Good evening, Manik.
Good evening, sir. Am I audible?
Yes, very much.
My question is, as The Karnataka Bank has improved a lot on the quality aspect as we can see from the improvement in slippages and credit cost, right? What are the things The Karnataka Bank is going to focus so as to improve their NIMs and profitability further?
Manik, I think we already said this earlier very clearly that The Karnataka Bank's growth in advances will come from the retail and the agri and the mid-market segment and also the retail MSME segment as well. As a result, between the mid-corporate book and the retail branch segment, there will be a growth and there will be better yields. That is strategy number one. The second is that we are building the CASA book. There is a sales team, over 100 people who are focusing only on CASA outbound sales teams, and they are all staffed. The second part is that we do have the retail term deposit where they cross-sell an account opening, et cetera.
There is a full-fledged drive as far as new accounts being opened, and also to get the upsell and the cross-sell once the accounts are with the branch. With respect to where the sourcing happens, whether it is through the branch or whether it is through the sales teams, the branch takes charge of the relationship and then starts doing it. What we are trying to do is that we are essentially looking at playing out these two strategies as far as the growth numbers is concerned. There is also something which we are trying to do, is to release some bandwidth as far as our branches are concerned. There is a decluttering that we are trying to do to release bandwidth. The other is the national back office, which is a centralization that we have done, and whereby we have removed a lot of activities.
We have already centralized clearing, treasury operations, account opening, ATM and direct channels, et cetera. All of this is in the national back office, which we have set up in an exclusive building in Mangalore.
Okay. One more question is on deposit side. As we can see, there is a sequential growth of only 15 basis points. But if you see some big banks like HDFC Bank, ICICI Bank, they are able to garner some deposits. What could be the possible reason that they are able to grow their deposit book and mid-size banks like ours are struggling to attract?
I have not-
Because-
We are struggling, Manik. All that we are saying is that, we have a very conscious strategy as far as deposit is concerned because the bank has had a mix in the deposit, which had almost like 12% to 12% + on bulk, which was at higher rates. Over a period of time, in the last two to three quarters, we have reduced that. We have not been bidding. We have actually been growing granular as far as our retail deposits are concerned, while we are accruing, the accretion is higher on retail. But because of the bulk deposits going out of the bank, the overall number remains the same. But the mix is changing and that is reflected very clearly in the metric that I just mentioned in the earlier commentary.
We would start, see the number grow as we go forward to remain very much in target with the market of about currently this year, the total projection as far as the banking system is concerned on deposits is about 9% - 10%. I think, we will very well be in target to do that 8% - 10% of growth as far as the overall deposit is concerned from the INR 92,000 crores to the number that we are talking about.
Okay, just last question. What is the percentage of books fixed and floating? Thank you.
Our EBLR-based book is about 50% of our overall portfolio. T he fixed would be about, let's say, the MCLR would be about 15% to 16% and the balance would be more or less in the corporate deposit, which will be at the fixed rate.
Okay. Thank you.
Thank you so much, Manik.
Thank you. Next question is from the line of Rishikesh from RoboCapital. Please go ahead.
Hi, Rishikesh.
Hi, sir. Thank you for the opportunity. Am I audible?
Yes, very much so, Rishikesh. Please go on.
Oh, great. Thank you. Sir, can you just drop the year-on-year and quarter-on-quarter [audio distortion]-
Rishikesh, sorry, your audio is not clear. Please go ahead, mute mode.
Rishikesh, your audio is not clear.
Rishikesh? We will check his connection. Meanwhile, we will move on to the next question from the line of Yash Dedhia from Maximal Capital. Please go ahead.
Hi, Yash. Yeah.
Yeah. Sir, if I look at your performance in the last one year, I think, and we have been tracking all the peer banks also, so we understand the industry-wide issues. But I think your performance amongst all peers in terms of the yield of an advances drop or cost of deposit increase is probably the worst. This is despite around 1,000 basis points additional cost to income that we have taken. Sir, that was supposed to help us on these parameters, bring better advances at better yields and lower down our cost of deposit by getting us lower cost of deposit CASA, et cetera. So it seems that the execution on the ground is just not working, sir. So what is the problem right now? I am not talking about your bank performance.
If I just compare it across all the midsize private sector banks, why is your performance so bad compared to all the other banks?
Yash, just to kind of put things in perspective, you should not have this isolated view as far as the Karnataka Bank is concerned for the past one year because you need to look at the historical part. Prior to 2023, the bank overall deposit growth as well as advances growth was all at single digits. That is something because of the transformative steps that the bank has taken, management leadership changes at multiple levels and also making sure that the existing management integrated with the bank, the investments that the bank has made into technology for those transformative steps. It could be a particular situation where multiple other banks that you are looking at could have taken these steps many years ago. That is not something which we can go back into history.
We have started this journey, which is the revived journey from 2023 onwards. As a result, the 2023-2024, our gross advances grew at closer to 19%, and then the deposit grew almost closer to 13%. That is of course higher than the market. This year we are stabilizing and we are actually growing the gross advances by about closer to 13%. Then we are also looking at growing the deposit book closer to 10%. This is the way that this bank is playing it out. For the results on all the metrics to go through, including the quality, because the bank has inherited a quality issue also related to restructure book and a lot related to the GNPA, which was as high as 3.8% in the past.
All of those things, if you really look through, the improved parameters will happen gradually which the trajectory has started happening, the numbers are really showing up, and it is also a fact that it takes time to do this. This transformative journey if it has taken for multiple other banks 7-10 years, probably we will take probably lesser than 50% of that time. That is the way that we should look at from a positive aspect as far as Karnataka Bank is.
Sir, but on quarter-to-quarter basis, all these things are worsening rather than improving. That is my main concern. I agree that you might have inherited something which was very bad, but on every quarter, your yields on advances are decreasing, your cost of deposits, and it is decreasing more than the peers. That is my major concern. I am not even talking about what you have inherited.f
Yes, I am just reiterating this that you will have to look at it not on a quarter-on-quarter basis or specific parameter-to-parameter basis. You will have to look at this on a longer-term basis and also the strategies that we are adopting in order to kind of get there. This has to be on a longer-term basis and you will have to kind of look at it in a term whereby the strategies have to start playing out because this is a 100-year-old bank and we are going to celebrate our 101st year in the next about 15-18 days. This is something where a lot of relationships which are there for three to four generations, the customers are banking with us. But the technology investment that we have made is in the last about 18-24 months.
Also the fact that our digital footprint, our branch sales network, we did not have an outbound sales team as many banks that you are talking about may have had in the past. All of this has got set up in the last about 12-18 months. For all of this to start playing out, we need to incur some immediate costs, which is what we have done. Secondly, we needed some capital also, which also we have done. The headroom for making this happen in terms of the growth is something as a prerequisite which we have done, which is the capital, the headroom on operational and technology capacity, everything related to the people, and also the process product transformation, which we are going through. All of this will start yielding results in the following quarters, upcoming quarters.
Okay. On the NIMs, sir. Hello?
I think I have already answered the NIM during the earlier
No, the earlier guidance was 3.4% - 3.6%, sir, and now we have fallen to 3%. So what is the guidance going forward?
So 3.3%-
No sir, quarter is 3.02%. So what is the guidance going forward, sir?
Quarter is okay. Nine months quarter we have had pressures which I have already mentioned to you. You will have to look at it as a nine-month NIM. Nine-month NIM is at 3.31%. Also the fact that there is an adjustment because of the penal charges which also I have explained to you. Last but not the least, we have already given that in the investor presentation in terms of the overall NIM target, which would be 3.2% - 3.4%. That is the target for the guidance.
Okay.
All right. Thank you, Yash.
Thank you. We will take our next question from the line of Subhanshi Rathi from Anand Rathi. Please go ahead.
Hi, good evening.
Good evening, sir. My first question would be, what is the proportion of gold loans in the overall loan portfolio and what is the percentage of agriculture loan book comprises gold loans?
We would be about 10% of the overall book. Approximately I am giving you that on a book size of about INR 77,500, we would be closer to about INR 8,000 odd crores. So INR 7,000 - INR 8,000 crores. That would be about 10% approximately. That is on the gold book. The breakup of Agri and non-Agri within the gold book. Let me just pull it out and we will send it to you.
Okay. The next question would be with respect to the RBI regulations. Any discussions that have been held with the regulators regarding gold loans, particularly the LTV norms and the loan rollovers, et cetera?
Okay. One second. I will read out the agri and the non-agri part also. The gold loan agri is INR 6,450 crores. The non-agri is INR 1,260 crores. So that is the number. You are talking about the regulatory part related to LTV. All of the guidelines that are to be followed, we are in 100% compliance as far as the gold loan book is concerned.
Regarding LTV.
I am sorry, Subhanshi Rathi, you are not clear. Can you use your handset please?
Yeah, sure. I am asking about any discussions held with the regulators regarding gold loans, LTV loans and loan rollovers.
No, there is no any special discussion that we have had with regulator on this. Normal whatever is there as part of the normal inspection and audit, et cetera. It is something that happens on an annual basis.
Okay. Thank you, sir.
Thank you.
Thank you so much.
We will take our next question from the line of Amey Chheda from Banyan Capital. Please go ahead.
Yeah, thanks for the opportunity. Sir, can we say that the cost of funds have peaked out now? The reason I am asking you is that in your TV interview on December 12, right, you had mentioned that the cost of funds have peaked out and we have again seen a sequential increase in the cost of funds.
Yeah. I would think so. But of course, the market while we are not aggressive on the overall deposit numbers in terms of the interest rate that we offer even on the retail. There are banks which are offering 8% on retail deposits, term deposits, which we are still at about 7.5%. So that way, we still maintain it. But I think the whole market scenario has to be looked into, which is the rate cut that is widely anticipated and also the fact that the overall impact as far as the bank is concerned. T he last part is that we have to actually neutralize this by increasing CASA. The whole market is facing this CASA issue, but we are reasonably all right.
I would say that compared to many others, while the market has come down by 4%, as I said in the earlier commentary, we have come down by hardly 1.1% or 1.2% as far as the CASA is concerned. We are actually gaining traction there, and which is why we have deployed new products, we have deployed sales teams and deployed renewed focus as far as the branches are concerned on CASA.
Sir, on this NIM guidance of 3.2% - 3.4%, when do you think we can achieve that?
We will start seeing that we are already on a nine-month basis. We are at the 3.31%, as I mentioned to you, which is basically we will continue this and we will start seeing an improvement in the NIM as I called out earlier, which is a 10 - 12 basis and the real churn on the overall advances will happen, which will be in FY 2026.
Okay. What is your ROA and ROE guidance for FY 2026?
Yeah. 1.1 - 1.2 is as far as ROA is concerned and on the ROE we would want to kind of be in the 12.5% - 13% as we go into FY 2026.
Okay. Sir, just last one question on the loan book growth. Basically two, three quarters back, we were eyeing an 18%- odd CAGR for loan book because we were trying to reach INR 1 lakh crores in the next two years. In the Q2 call it got reduced to 15% to 18%. In December you had mentioned it will be around 13% and now it is again revised to 12%. What is leading to the continuous revised guidances on the loan book growth?
There is nothing. It is not an appetite issue or anything. It is just that we are doing this granular rather than having to do because the real jump last year happened because of the larger bulky loans that we had done, which we have now stopped. We do not do that again. We have seen INR 750 crores of repayment of some larger NBFC and bulk loans even this quarter. Having said that, the INR 1 lakh crore, we had committed to a INR 1 lakh crore which was in June of 2023 with a three-year outlook. That is like June of 2026. I think we still stay committed to that. The current outlook is that at about INR 77,500 crores, even if we grow about 4% - 4.5% now, we would easily cross INR 80,000 -INR 81,000 crores as of this financial year itself.
Building on top of that at let us say INR 81,500 crores if you grow about 14% year-on-year. The next year we will be closer to INR 92,000 crores and then the first quarter we will do another about INR 4,000 plus crores. We would be closer to INR 1 lakh crore definitely by June 2026 if not crossing INR 1 lakh crore.
Okay. Basically this is the guidance that has been revised. Just one suggestion from our side, right? Because I just suggest that we be more careful with our guidance because there has been a series of the guidance not being met. That was my suggestion. Thank you, sir.
Thank you. Point noted, sir.
Thank you. We will take our next question from the line of Anant Mundra from MyTemple Capital Advisors LLP. Please go ahead.
Hello. Yeah, thank you for the opportunity.
Yeah.
Sir, I just had one question. Why is there a difference in the net worth that is reported in the presentation versus what is given in the result? If I add the capital and reserves in surplus as given on page 13 of the presentation-
Yeah.
versus I think INR 11,320 odd crores, which is given in the result.
Okay. Allow us to check this, please. One second. CFO is wanting to say something. [audio distortion] We will let it check. Sir, we will get back to you. Can we just look at getting you the response on this, please?
Okay. Sir. All right.
Maybe it is a revaluation reserve. That is what they are saying. It is a revaluation reserve. It is a revaluation reserve is what the team is confirming to me. Is that INR 519 crores?
Got it. So that is okay.
Yeah. Okay. All right. Thank you.
All right. Thank you.
Thank you. We will take our next question from the line of Anand Dama from Emkay Global. Please go ahead.
Good evening, Anand.
Yeah, good evening, sir. My first question is primarily on our margin that we have seen the dip during the current quarter. I think you have already guided for the full year. The penal interest stuff is largely behind now on a quarter-on-quarter basis I have to look at it. Or there could be more impact because of that, number one. Number two is that, ideally, I think in the fourth quarter, we tend to see higher NPA formation. Third quarter versus second quarter was higher, and fourth quarter ideally should be higher as basically a lot of restructured loans slip into NPA. In that case, there could be some more pressure on margins that we might see in the fourth quarter. That is how it could be.
I am sorry, Anand, can you use your handset mode? Your line is not very clear.
Do I have to repeat the question?
The last.
Anand.
Yeah.
What you wanted to know. Just to confirm, one is that our overall mix of the loans and the fact that we are looking at the yield to increase by 10 - 12 basis points as far as NIM is concerned, that is something which we are well on track. That is the question number one that you had asked, and I do not see that as an issue going forward. I do not think that we are in any way revising that or saying that we will not be able to achieve. That is one. The second part, which is related to-
Margin.
margins. The fourth quarter. The fourth quarter is something that is always good for Karnataka Bank. One is that there are some charges and recoveries, that is the other income part which comes in. The second is that quarter four has been always the best performing quarter for us on advances as well as deposits because of our nature of our customers, because of some contractor segment, agri segment and so on so forth. Both sides of the balance sheet are positively impacted as far as the bank is concerned. We believe that we would actually be able to achieve what we wanted to do for the entire financial year. From that perspective, overall, we are still bullish on that aspect.
I think that my question was that, typically you were saying you are guiding that basically restructured book will continue to come down and that basically to some extent would flow into the NPAs. My question was basically the penal interest plus higher interest reversal on NPAs could keep the pressure on the margins in the near term intact. Though obviously there are other things like portfolio mix and all will help you, but in the near term, should we see the margins contracting?
I do not think so. The reason being that on a nine-month period also, we have not really come down drastically. One. Secondly, this margin improvement and the restructured assets actually has come down now compared to the earlier time. The number is actually on a standalone basis, restructured is only about INR 900 crores. The INR 900 crores also, they are all currently across all the monitoring period, and now either they have to standardize or we will have to recover through the collateral. They are all collateral-backed. I do not see that we would have any stratagems from those. The second part is that because of that, I do not see any margin-related issues as far as the restructured assets are concerned because we are kind of managing these two on two independent tracks.
Sure. Sir, any guidance in terms of PCR that we want to be there by year-end and maybe next year? What is our current LCR?
Our current LCR that I. First is the PCR. The PCR with technical write-off, TW is in excess of 80%, and 56.06% excluding the technical write-off. On a quarter-on-quarter basis, we are committed to kind of improving PCR by 1% every quarter, at least a minimum of 1%. As far as LCR is concerned, we were at 150%, if I have to look at the number. I do not see that as any pressure because we are quite comfortable there.
Okay. Sure. Sir, lastly, I think if the retail banking head is also there on the call, if you can basically spell out the retail strategy that you would be now looking at now that basically you have assessed things that are on-ground changes which have happened in terms of what kind of loan portfolio that you want to target. Basically, we would want to hear from him and maybe you can supplement.
Retail banking head Srinivas is not on the call, but I would request Sekhar to just [audio distortion] Executive Director because he manages that business also, so he will be in a better position to just let you know very quickly.
Yeah. Clearly, I think with what we have stated earlier, the focus is on growing the RAM segment. We have already seen green shoots in that. If you see the current year book, a significant part of our growth has come from out of the total growth of around INR 4,863, retail has grown by INR 3,261 crores. So that is a majority of growth has come from retail. Here, the strategy is to focus on tier 2 for retail. We want to be equivalent of the large bank for tier 2 locations, because tier 1 is already a taken space and the yields are also not very competitive there. We have a significant FI presence, agri and FI branches are there.
The strategy of the bank was, what you call, to set up branches in clusters in Karnataka in this agri and FI pockets. So we have deployed AFOs in these branches and we will see traction there. We have also set up retail asset centers and the first two have gone live. This is to improve ease of processing, improve turnaround time and the efficiency metrics. So we inaugurated the Bengaluru RAC yesterday, which is our second retail asset center. We plan to open five more. With that, for retail loan processing, we will have 10 centralized locations, I mean, five RLPSC and five RACs. So that is the strategy. Apart from that, we are putting in place a significant connected model, feet on street that our MD and CEO spoke about, improving the product mix. We have undertaken a major credit transformation exercise through a well-known consulting firm.
Through this, we have revamped the way we underwrite the credit policies for all our headline products. A combination of this, we are quite confident will yield results in the retail asset book.
Look sir, this is a strategy that we have heard last quarter as well. What we are talking about here is the product. Any development which have happened like on the vehicle financing, new tie-ups that you have done or you are taking up ahead in terms of lending more from branches, non-branches and so on.
Yeah.
If you can talk about the product line strategy, that will help a lot.
Yeah. There are two or three products that we have launched. In fact, commercial vehicle is one, where we have launched the products and that has taken off very well. We have launched a focus product for the student segment, in combination with the liability product, KBL Feast and KBL Genius. This is comparable to any and it is actually a kind of best-in-class product. We are there tying up with education consultant colleges because we have good presence in the market in that space and the response there as well has been good. As we speak, we have received approval from Maruti for a tie-up for their EV space, specifically. That is-
LCV.
Yeah. Then we have tie-up with the likes of JCB and also for the dealer ties for LCVs. In fact, a large number of Karnataka automobile dealers have been funded by us for their overdraft space. There we are extending inventory financing also so that our presence in the auto loan segment will improve. On the liability side also, we are coming up with women account, the family account and the bundled wealth management proposition where we are in the advanced stages of implementing a wealth management platform.
I hope you got the details on that, Anand.
Sure, sir. Thanks a lot.
Thank you.
Thank you. We will take our next question from the line of Saket Kapoor from Kapoor & Company. Please go ahead.
Hi, Saket.
Yeah. Namaskar, sir.
Namaskar, sir.
Yeah. Thank you for this opportunity. F irstly to sum it up, sir, although you have very elaborately explained us and given your views and thoughts on the way ahead, but taking into account the factors that are influencing the banking industry currently, and when we look at our interest expended part, that is not lying in commensurate to the increase in interest income. Firstly, sir, going ahead, for a year as a whole, since you have articulate tools to look at the nine months, how confident are we to match our operating profit for the year ending 31st March 2025 and on a comparable basis to 2024?
2024, we had closed it out with INR 1,306 crores.
Correct, sir.
Nine-month period, we had 1,032. The last quarter, if you look at the current, we are at 1,021 compared to 1,032.
We are hardly any difference because hardly some 10, 11 crores difference there.
Correct.
The last quarter is always the best quarter for The Karnataka Bank in the past. I think we are well-positioned to surpass the previous year number. Also the fact that you need to take into account that compared to the last year, the treasury income, which is on account of the AFS book, is not allowed to be taken into P&L by any bank as per RBI regulations effective April 1, 2024. On a nine-month period, that number itself is about INR 100 crores. On a 12-month period, the number could be anywhere between INR 115 crores -INR 120 crores. If you really look through that, if we surpass that INR 1,306 crores as of last year without having to take the treasury number, then we would be well in excess of that. That is, I think very, very clearly visible from our perspective.
Okay. Sir, and when we look at also as interest on balances with RBI, that income has gone up significantly. That has been doubled from a base of INR 17 crore to INR 37 crore. Last year the balance was only INR 18 crore. How is this going to plan out? If there are rate cuts that are envisaged, how will this line item going to get affected?
Basically, we are comfortable on liquidity. We have been lending in the market on a continuous basis, at least in excess of INR 2,000 crore to INR 3,000 crore per day. This is why the interest which is there, based on various forms of lending, which involves RBI, and that is how the interest income has gone up. Basically, this is part of our treasury money market operations.
Okay. Sir, what we investors would like to only get some understanding from the management people is that in the current scenario where deposits are becoming scarce and also costly, cost of deposit is going up and in tandem of higher, how confident are the mid-sized banks like KTK that they can look forward to grow profitably with the trajectory they have explained earlier? Since you have raised capital twice in the form of QIP and also used it very effectively in lowering the high-cost loans, but still the price at which the QIP were done, the current market cap and the enterprise value are significantly down, are significantly lower than what it was. What should investors take home, sir, especially in this current scenario of investing in the mid-sized banks like KTK, sir, which are in the transformative journey, sir?
I agree with you. I will only talk about the journey that we do and the market price is an outcome of that. This is not something that I would like to really comment on what the outlook as far as the price would be. Having said that, you need to look at strong multiples based on the position of the bank. We are growing the business turnover of the bank as of 2023, 2024 was at INR 145,000 crore. Now we are about INR 177,000 or INR 178,000 crore. Obviously, the top-line growth is there. The second part is that there are various metrics where the bank in the past had certain strategies adopted and which we are churning around both on the liability as well as on the asset front.
Those will yield results as far as profitability is concerned, and that is something that I answered to you earlier. Third is that based on this trend, the market has to decide the multiples and comparable with other similar peer banks or with other banks. This is the way that it works. I would really not want to look at an outlook as well as the price is concerned. But having said that, if we are strong on the fundamentals and the growth path and the execution strategy, I think the market will reward us.
Okay. Thank you, sir, and all the best for answering all the questions very elaborately and giving opportunity to everybody, sir. We hope for the continuity of the same, sir.
Thank you so much, sir. Thank you for your best wishes.
Thank you.
All right.
Thank you.
Have a good day.
Ladies and gentlemen. Yes. That was the last question. Sir, over to you for closing comments.
Thank you. I would like to thank the support and the interest in participation today, as well as in various other investor conferences as part of our overall engagement with investors is concerned. On behalf of the management team who is present here and on behalf of the entire Karnataka Bank workforce, I would like to thank you all and we hope that we will be able to stand up to your expectations in the following quarters and coming up quarters. Thank you so much.
Thank you, sir. On behalf of Karnataka Bank, that concludes this conference. Thank you for joining us and you may now disconnect your lines.
Thank you, Yasasvi. Thank you.
My pleasure, sir. Good night.