Ladies and gentlemen, good day and welcome to Union Bank of India earnings conference call for the period ending March 31st, 2026. The bank is represented by the Managing Director and CEO, Shri Asheesh Pandey, Executive Directors, Shri Nitesh Ranjan, Shri Ramasubramanian S., Shri Sanjay Rudra, Shri Amresh Prasad, and other members of the top management. 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 touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ajay Bansal, Deputy General Manager. Thank you, and over to you, Mr. Bansal.
Thanks, sir. Good afternoon, ladies and gentlemen. I, Ajay Bansal, Head of Investor Relations, welcome you all for Union Bank of India earnings call for the period ending March 31st, 2026. The structure of the call shall include a brief opening statement by respected MD and CEO, sir, and then the floor will be open for interaction. Before getting into the call, I will read out the usual disclaimer statement. I would like to submit that certain statements that may be discussed during the investor interaction may be forward-looking statements based on the current expectations. These statements involve a number of risks, uncertainty, and other factors that cause the actual result to differ from the statement. Investors are therefore requested to check this information independently before making any investment or other decisions. With this, I now request our respected MD and CEO, sir, for his opening remarks.
Thank you, and over to you, sir.
Thank you so much, Mr. Bansal, and good afternoon and welcome to all the analyst investors and to this analyst call, analyst meeting. We had today audit committee and the board, and results are adopted by the board, and we had a press meeting. Just now from press meeting, we have switched to analyst meeting. Now, as you know, the current scenario, which was from January, February onwards, so macroeconomic environment has been influenced by ongoing global conflicts and war-related disruptions and other things. At the same time, the Government of India, RBI, has come forward to put up a cushion so that the impact is not much of that. We have seen various measures the RBI has come and also various measures the Government of India has come, and which has well taken in the market.
Now, similarly, if we come to Union Bank of India, all of you are aware that initially in last September, when we had a call and 28th or 29th of October and 13th January, we had for December quarter. I think the third time we are meeting right now. From there, we have moved a lot. We also placed our provisional numbers on 3rd of April to the stock exchanges. Initially, yes, we had a muted, not too many questions were also there from our analysts and press and investors on the growth side. Certainly, this last six months, we have made a good stride on the business front, whether it is a CASA, whether it is even a deposit or a retail term deposit, I should say, or maybe advances on all retail and MSME and the large corporate.
If you see the business of last six months, it has increased by INR 1,71,000 crore. The growth was around 6.56%. If you analyze, it comes about 25%. Sorry, it is about 13%. We could make it, and even our strategy was very clearly that we wanted to be more on a CASA. Yes, CASA is increased. If you see half year-on-year basis, it is around 2.7%, which has been increased. The second one is that, when we talked about the retail term deposit, because we were purposefully shifting from bulk deposit to retail term deposit. Put together it is INR 1,10,000 crore we could garner.
Here, if you see on the growth, the figures which we will be giving to you, the global deposits certainly you may feel around 2.72%, but then around INR 46,000 crore we raised alternatively. In which 25,000-odd amount, which came, we shrunk the treasury book so that it moved to lending book, number one. Number two, on the refinance and other things, around INR 18,000 crore, INR 3,000 crore infrastructure bond. If we add that INR 46,000 with the actual increase in the deposit, I believe there it gives a 1.29 lakh crore, which is almost above 9%. The thing is that we are very cautious about our cost. We are cautious about the means. We are cautious about, very clearly, about profitability, and that is why we are working on the efficiency parameter.
You may see that we are above ATCD ratio, much comfortable. LCR, 114, much comfortable. NSFR also much comfortable. All maintaining all regulatory and the liquidity and other guidelines. We are on the good footing. Now, this six months we could have a very good increase in business. If quarter to quarter only if you take, it is 6.52. If you take the global business, then certainly in totality, we're putting together asset and liability side, it is 4. If you analyze, I think it is coming around 13%. I think we could make it the headway in the last six months. With this background, we will come to the figures.
First of all, the board of directors have recommended a dividend of INR 5 per equity share, 50% of the face value for the year ended March 31, 2026, subject to the requisite approvals. Net profit of the bank stood at INR 18,697 crore and interest income of the bank stood at approximately INR 1.06 lakh crore. The business growth is around 5.78% YoY, wherein gross advances increased by 9.74%. Total deposit grew by 2.72% YoY, for which I have already told, if we take 46,000, the additional one which we have raised alternatively, then the total business grew by INR 23.85 lakh crore. With this, the RAM segment which we were focusing, it is 12.56% YoY, in which 16.75% growth in retail, 18.75% in MSME. The domestic advances, RAM advances is 57.49%.
The gross NPA reduced by 78 basis points on YoY basis to 2.82%, and net NPA reduced by 15 basis points on YoY to 0.48%. The strong capital ratios, the capital adequacy CRAR stood at 18.10%, increased from the earlier one. The CT1 ratio, which is important, its own money, is improved from 14.98% to 15.69%. If we take the return on asset and the return on equity, so return on asset is YoY is flat 1.25%, at the same almost levels. If you take the quarterly, the last quarter we were at 1.35%, this quarter we are at 1.36%. One more highlight, which I would like to give to you that this time, apart from this, we have kept INR 700 crores of an additional provision, general provision sort of, just as a when good time is there, it is always better to keep aside.
This INR 700 crore is not impacting either the net profit or it is impacting the capital. This we have kept and depending upon the situation whether ECL framework comes or whether this issue or anything, any eventuality. We haven't, last time our profit was INR 5,017 crores and now it is much better than that. Secondly, the dividend also last time it was INR 4.75, this time it is 5%. If we take the payout ratio, it is 20.61% or 65% levels. I think we have maintained all, and with this, I hand over to the coordinator for the Q&A for all of us. Thank you.
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on your 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. The first question comes from the line of CA Dr. Ashok Ajmera, Chairman from Ajcon Global. Please go ahead.
Yeah, thank you for giving me the opportunity. First, congratulations, Asheesh Pandey and the entire team, Asheesh sir, for a very good quarter. Because or rather I could say the last six months have been good for the bank comparatively as compared to the previous four quarter before that, and at least to a great extent we have covered as far as the credit growth is concerned, 6.07% only in one quarter and 9.74% for the whole year, respectable figure. Having said that, sir, but on the deposit front, even though in this quarter we have performed very well, 6.87%, but the overall for the year, the deposit is 2.72%.
Now going forward, though presently we are good at CRAR, but going forward with the kind of the growth, I would like to know the credit growth target also, as well as how are we going to match the asset liability if our deposit growth do not match with the credit growth, sir, going forward?
Okay. Thank you, Ajmera sir. As I said, this time also, if you see the 46,000. Actually, see, let us understand banking, that we raise resources and we deploy resources to productive investments, and we invest it whether in the treasury or in the loan book. Then we earn the interest income and the fee-based income related to the transactions happening. Now coming to that, if you see, we have raised INR 46,000 crores. In which the treasury, this is I'm saying not raised, but the resources which we have tried to build. Our treasury book was reduced by INR 25,000 crore odd, which we shifted. If you see the last year, the March 2025 levels, at that point of time, the CD ratio was around 77%. Now it is around 3.5% up.
The question is that whether the CD ratio we are very, very comfortable. Comfortable in the sense, very nicely regulated, but at the same time, very efficient above 80% level. Number one. Number two is that our LCR, NSFR, all liquidity ratios are very comfortable range. Comfortable in the sense, again, very efficient because last time our LCR was average 123%, but this time it is around 114%. We could reduce by 10 basis points on the LCR, which was on the excess side. I think what was the challenge, not the total deposit, but the challenge is on the CASA front and on the retail term deposit. If you see these two figures, as far as Union Bank is concerned, we have made a very good stride in that. Put together, I think more than INR 110,000 crore, which we have increased during this period.
Now the CASA, which was. Because see, again, if you see YoY, then certainly after March 2025 level, it was more. In September, it was only 32.51%. From 32.51%, we have come up to 35.21%. 32.51% to 35.21%. There is increase of 2.7 percentage points. I'm not saying basis point. That is the first key thing which is very clear from the working which has been done by the entire team of Union Bank, that we have tried and focused a lot on the CASA and we could achieve that. That is point number one. Secondly, we were very cautious to increase our retail term deposit because that is stable, point number one. Point number two, it has an LCR impact also. That is the reason during the entire year now, if you see our bulk deposit, we have shed off INR 570,000 crore.
That is a very clear thing how we want to churn. Basically exactly what we are doing is just churning a portfolio towards a better one. If you take the cost, so if I take this 70,000, then certainly I can say that they must be having the weighted average above 7%. When we talk of converting this to retail term deposit in CASA, my average cost would be somewhere 4.5% or maybe 4.75% level. Again, now I am just linking this with the February somewhere at 25, where from there and up till now, the repo has been reduced by 1.25 percentage points. If you see the NIM of our bank, which was 2.91%, has right now at 2.70%, that is only 21 basis points. I think this is the only thing which is helping us.
We always say that we want to defend our NIM. We continue saying that. That is what we tried. I think the last moment when there was increase in the G-Sec yield and there was increase in the deposits as well, and that was the reason. From here onwards, and if you see the last cut, which has happened in December, the entire 50 basis point was conveyed for the entire quarter. Also our, if you see the NIM from 2.76% to 3.64%, it is only 12 basis point. This is the reason, that cautiously we worked upon each parameter of the balance sheet, each parameter of our asset and liability.
Even on the credit side, though you are saying 9% good, but then there is one thing which is not coming forth is on the large corporate, we have INR 75,000 crore of IBPC, which is zero now. Number one. Number two-
Yes
It is around INR 30,000 crore we had, which is at below 6% levels, which is almost not there. Somewhere it has churned up with the new business. When it has gone out, some new business has come. If you add that, the team has worked well, and actually, if you see the figures, we have worked better than the industry average. Yes, the figure is figure. If you see the year-on-year basis, certainly you see somewhere this dip, but we are working upon the average, whether it is CASA, whether it is deposit, whether it is advances, whether it is RAM.
That's the reason our profitability has continued towards an upward trend, and that's the reason that even recovery, we are trying hard to improve, and that's the reason that we are having the profit of more than INR 5,300 crores. Even then, we have kept INR 700 crore aside for any contingency or anything. It is not like any dent or any suspicion on the books. We have already given in our presentation that our more than 95%, 99 I think is more than 700 CIBIL scoring retail and other portfolio, and more than 95% in triple B and above. I think that gives a color of the business also last six months, which we have done. I think this background, I think I could answer that going forward. You can expect the industry trend.
We will be meeting it, and we will like to be better than a bit more than that going forward in the coming years.
Can we expect it 13%-14% growth in the credit, sir, in the FY 2027?
Yeah. Certainly, I think we are on that line. Yes.
Sir, now coming to the profit and loss account. Our profitability, you have clarified that the profitability would have been much higher but for the INR 700 crore other standard provision which we have done, which according to you is just to take care of any provisions or ECL or other things, and nothing is to take care of any known account. That is good point, well taken. Sir, one other reason of the profit being little high is there is a reduction in the employee cost in this quarter of by about almost INR 600 crore. The employee cost reducing in this quarter, which is also actually a March quarter. What could be the reason, and going forward, are we going to maintain that INR 3,700 crore, INR 3,800 crore per quarter, or is it going to be lower in the coming year?
Because INR 586 crore our wage bill is employee cost is lower in this quarter. This, along with another point, is that that the operating expenses have gone up in this quarter by INR 522 crores. Offsetting each other to some extent. Another point is that income going up is there is a handsome recovery from the written-off account . A very good recovery of INR 1,567 crore as against INR 667 crore in the last quarter. Can we have the individual explanation or some details on these three, four numbers on the profit and loss account so that to have a clear idea for going forward, where do we stand?
Ajmera sir. Namaskar, Ni Ranjan.
Yes.
Sir, as you observe, there is a reduction in my operating expenditure, particularly establishment expenditure. This is due to the discounting rate factor, sir. Last year, 31st March 2025, discounting rate was 7.07, and this year it was 7.87. Due to that, the overall liability we estimated earlier was provided higher in the earlier quarter, and due to that, there was final liability which was on a lower side. This was the impact of establishment expenditure, sir. Now, as far as the PW recovery, which is close to 1,600 in the quarter, as compared to INR 666 crore in the last quarter. No, you have not mentioned. We have that Sterling Biotech group accounts which was settled during this quarter, and the income of INR 658 crore was booked during this particular quarter. These two factors. What was the third one, sir? You asked me.
Sir, employee cost has reduced and operating expenses have increased.
Operating expenses.
Other operating expenses.
Sir.
Other operating expenses have increased. Yeah.
Sir, in the Q4, this trend is always there, sir. Operating expenditures, the budget which was allocated and the provisions which are made in the year-end, there is a gap of INR 200 crore-INR 300 crore. It is always there in Q4, sir. This is the normal trend, if you look at it quarter-wise only, sir.
All right, sir. Sir, now looking at the current geopolitical situation and the West Asia war situation, Asheesh Pandey sir, how do you see, is there any stress again already started building up? Or in this first quarter, do you feel that there will be some stress? Because even in this quarter also, the fresh slippages have increased to 2,023 as against 1,660 in the last quarter. Secondly, even though SMA-2 numbers have come down, but SMA-1 numbers have almost doubled. Do you see that any kind of this aggression, this war effect may be there in this coming quarter or the running quarter?
Sir, actually, we are very closely monitoring the entire West Asia crisis, all these things. As such, we have not seen anything very unusual up till now. We are also monitoring what is the inward remittances flow last year and this year. We are also monitoring import numbers and remittances, total remittances, import remittances. We are also monitoring where it has helped, not helped, and other things. What we have seen is that there are two things. Two, three things are impacted, like one is the energy sensitive sectors, where gas, commercial gas and all. Those particular industries, they suffered a bit, like Morbi and all. A few more places are there which were actually based upon these energy sectors. The second one is that remittance overall also has come down. Up till now, we have not seen anything.
At the same time, when all these things happening, let me share with you the Government of India and Reserve Bank, both have come forward and tried to put a cushion with the initiatives which they have taken. Now we are in that, and even let me share with you, we have a data also, which I can share with you. On the scheme, Jan Samarth Portal, we got around 306. This I am saying that status of CGSE application. That is Credit Guarantee Scheme for Exporters to provide 100% credit guarantee coverage. In that, 210 are sanctioned and 180 is disbursed, around INR 700 crore. On the other side, where the RBI also came with the trade relief measures, extension of PC, extension of post shipment, and conversion of accrued interest. We have received only five.
59 people only applied, 35 applications in PC extension, post shipment only three, and FITL, which is only 14. We have not seen anything. The preliminary figures, what we are observing, that as of now is not giving any very adverse or very critical signals to us.
Sir, the last question in this round.
Coming to SMA-
Sorry for interrupting, Mr. Ashok Ajmera. Please feel free to ask a few more questions.
Yeah. Coming to SMA.
Hello. Yes, sir.
Actually, from SMA-2, we have moved a lot portfolio to SMA-1. I think it is a better signal that from SMA-2, we have moved to quite a lot by recovering the installment, and we have moved to a better proportion of the stage 2, like 1, I think, which is 30-60 days. It is a better proportion and over to you.
Yes, sir. Thank you very much, sir.
Okay.
Next question comes from the line of Mahrukh Adajania with Tara Capital. Please go ahead.
Hello. Good afternoon, sir. Sir, I had a couple of questions. Firstly, that our corporate loans have grown 9% QoQ, and then if you see the sector, corporate, the certificate of deposit data, which is available for all banks, then our CD mobilization was also very high compared to other banks during the quarter. Our LCR is now among the lowest, and margins have also fallen more than what we had guided for.
Which is where.
What would be the strategy going ahead? Would you continue to pursue corporate growth even if it's low yielding? What about deposit mix? Given where LCR is, would you rather focus on margins or would you, from now on, focus on growth if you had to choose one of the two?
See, we are choosing growth with quality, number one, and with profitability. I think in my initial address, and I think when Mr. Ajmera was asking, I have made it very clear that though you cannot see those growth in these numbers, but INR 35,000 crore of IBPC at a very lower rate, which we have shed it off. Number one. Then around INR 30,000 crore. Almost 60,000 crore, 65,000 crore of such advances, which were low yielding. Otherwise, how we would have shielded the entire NIM, which was 2.91%-2.70%, which is only 21 basis point reduction is there. It would not have been possible if in case what you are saying would have been correct. We have actually tried. Coming to the CD. The CD is almost in the same range which we had the earlier years.
You have seen the CDs which are raised, but then there were maturities also, so which has to be replaced. For a bank, we have an internal sort of a ceiling limit where we keep CDs and FDs and other things in the same fashion. That is the reason we have gone with the CDs. We have gone within that range, and that was actually we were getting a better rate during those days. Otherwise, actually, if you see, we have mopped up most of our requirement during January, February onwards, not much in March. There we could get. Otherwise, March was really heated-up market, if you take the deposit rate or CD rate. That is why we are very cautious about the NIM, about the profitability, and about the quality of the asset.
Going forward, we would like to maintain our around 13%-14% credit growth and around 10%-11% of. Also one thing, when you ask about the, we have raised in between, I am sure you must be aware, around INR 3,000 crore of infra bond in between. That is also, it is a part and parcel and actually the subscription was very huge, but then we were cost conscious, so we have not gone beyond a certain acceptable range, and we have cut off at 3,000 only. Probably in the coming year, once everything stabilizes, we will be finalizing internally, going to the board and AGM and other things, and then we will be coming up with the entire capital and bond issuance and the plan with the market. I think it was like growth certainly we like to grow industry plus something.
Number one. Quality. You will see that we are continuing the same quality of the, whether corporate book or a retail book, which we have given in our investor presentation on 700 and above, though the bureau says 680 and above is the prime customer, but we have continued with 700 and above. The triple B and above also, we have given the figures. We are continuing that. We also have around 50,000-60,000 of a book pipeline with the SME large corporate. I think with that we are sure of going forward, but we will not be compromising on the quality and also on the profitability.
Got it, sir. Sir, any margin outlook you would have for Q1 and for the full year?
Yeah. Now, we have seen the last MPC also, and the stance has been continued in the same levels. Now, keeping in view the macroeconomic scenario and the stance which has taken, if we continue like this. Last, I think in December midway somewhere, this 0.25 cut was there. Which if you see, has not been reflecting in our figures, though around 53%-58% is based on the T-bill and the repo rate benchmark. Even then, if you see the NIM, it has been quarter-over-quarter. I am seeing it has been from 2.76 to 2.64, only 10 basis point, not the entire. I think from here, keeping in view the same thing, we expect that we will be maybe moving positive from here and we'll be defending this point of level.
Okay. You will be able to maintain margins at 2.64%?
Yeah. We would like to even better it.
Okay. That would be driven by, sir?
If you see very clearly that in the last quarter also, CASA is increased from 32.51%, which was our CASA percentage in the month of September, and which has increased to 35.21% as of March. Certainly when you shift bulk deposits to the CASA and you shift your bulk deposit to retail term deposit, and you can see the growth in both the factors, both the parameters. Certainly it will help you to build on the positive side on the NIM. Not only this, but there are other factors also. When you better talk, negotiate, discuss, and you make a relationship management, the quality asset you write. Those things also help you.
What we have underwritten the quality is there, but certainly the rate and other things which we were charging, I think that has also helped us. Going forward, we will be banking upon this and the deployments of funds in most effective way. I think that is the main thing which we would like to tell.
Got it, sir. That's very useful. Also if you could explain the increase in MSME slippage in the fourth quarter, and if that's just a one-off and nothing, and how it will pan out in the next few quarters?
I think if MSME you see, almost it is sort of a flat only I think from 2.4% to 4.2% something levels, I think some 10, 15 basis points only. It is almost flat, but then there were the few cases only which has impacted. Otherwise, up till now, whether it is West Asia or in general our book, we have not seen any much of the impact on our book and quality. Going forward, actually, we would like to reduce with the recoveries which are already NPA in either of these four sectors, sectoral which you have asked, and that is why we have built a very team even now centralized that even below INR 1 crore sort of in portfolio we'll be monitoring from the central office level.
I think the core recovery I would talk about, we will be trying to improve it much further from here onwards.
Okay, sir. Thank you very much. All the very best.
Thank you. A reminder to all the participants, please restrict yourself to two questions. Next question comes from the line of Jai Mundra with ICICI Securities. Please go ahead.
Hi. Good afternoon, sir, and thanks for the opportunity. Sir, my question is also broadly similar. I heard you that you said that we'll focus more on growth along with quality and profitability. The profitability focus is clear, and we've defended elevated ROA, so that is well appreciated. Sir, what I wanted to know is when you assume charge, Union Bank was one of the few banks which was not too much concerned on the loan growth, but they were defending NIM or consolidating a liability franchise and hence NII growth was very minuscule because you were not growing as much also. Then you put a shift in the loan growth trajectory, still the NII growth is similar. Third quarter was a good quarter in the sense that NII increased 5-6% QoQ.
This quarter again, while the growth has been 6% but NII growth has been flat. Is there any thought out strategy or this is just market force driven that you will keep going on the loan growth on quality and the NII outcomes will be dependent on the market competitiveness? You have some visibility on the NII growth also, sir? Thank you. That is the first question.
Yeah. Actually we would like to improve what has happened around 25 basis points. There was a cut I think in the midway of December which has conveyed along the entire benchmark rate linked loans. That is what you have seen a bit dip from 2.76 to 3.64 on a quarter-to-quarter basis. That is where you are seeing flat. We are doing two, three things. One is we work upon the average advances and the average figures on both asset and liability side. That's the reason we are reaching towards that. It has to be better than the earlier ones. I think there we are thinking that how to build the NII growth also and also to keep the quality and as well as the profitability intact.
It is not like that we are maybe underwriting very good quality but maybe underwriting very low margin loans or maybe the second one, if I would say, that we are underwriting a bit lesser one and then charging more. No. That's why I said that growth, yes, that is the first key thing. At the same time, profitability and the quality, we would like to maintain and grow in this way. Going forward, we would like to have, because as of now, everything is settled. Till we have a further scenario on inflation and further scenario on rate cut and other things. From here, again, we would like to defend and move it better that you will be seeing in further quarters.
Okay. Sure, sir. Sir, you have given a decent disclosure on the bulk deposit. In the December quarter or in the March quarter, there was a sharp spike in the bulk deposit rates. Could you quantify, sir, what was your blended bulk deposit rate? A ballpark number will also do. Has that started to come off in a significant way?
Yeah. If you see when we touched upon the last quarter, so then I said that treasury we have shrunk by, I think I told around INR 15,000 crore or so. Now you see it is INR 25,000 crore. What happens now that you start trying to reallocate the portfolio, so it is shifting from one to another, and in between the portfolio also, you try to build it from low to better yielding portfolio, like IBPC, which we have sold off and other things. What we did that certainly when you are having a good growth in the advances side, so certainly you need to raise deposits. We raised in between INR 3,000 crore in T-bills and the other things which I shared with you. Along with that, we needed deposits so that we are a comfortable range, a good range on the LCR and NSFR, CD ratio.
That was the key thing in mind, and that is why most of the deposit we raised during the January itself. That we knew that probably going forward in the month of March, probably nobody was aware that how it will behave, market will behave, West Asia crisis, how it will deepen and not deepen, and the other issue. You can tell the blended rate. On a bulk side, the blended rate for the quarter was a little less than 7%, around 6.90% or so. Around 7%, we can say.
That has come down significantly, sir, as we speak?
It is all depend upon the market. Currently, the April month, there are not lot of activities happening in the market on the CD front as such. Current level are little lower than the March that is there.
Okay. Sir, the reason why I was asking was this, if I tally, let's say your bulk deposit rate on an average at 6.90%, our yield on advances is 7.98%, which is the total. The corporate would be even lesser, right? Does it make sense to do this corporate lending when we have to raise bulk at 6.90% and maybe lend at 7.50%, 7.20%, 7.30%? I don't know which, whatever the lower than 7.98% number because that increases absolute amount of NII but depresses the margin. That is the question there.
Yeah. I think I would give you the actual scenario. See, you are thinking that the entire which is raised at 6.90%. Since you asked what is your blended rate on the bulk deposit, you asked only the bulk deposit, so we have told only on the bulk deposit, not the entire. Now there is a CASA, and the CASA and retail term deposit increase is a huge, I think more than INR 110,000 crore. If you see the blended cost to me on that must be around 4.7%. This is I'm seeing incremental. I am not saying it is a total. Now, there is a total huge portfolio. My CASA itself stands around 35.21%. If you add retail term deposit, how much percentage basis of the total deposit?
RTD plus CASA is 79%.
79%. My RTD and CASA is around 79%. Certainly I save the cost there. To maintain the growth and maintain everything, it has to be blended with the fixed deposit. Maybe sometimes in that there will be different scenarios. There may be between INR 3 crore-INR 10 crore because retail term deposit we say only below RBI guidelines of below INR 3 crore. Then INR 10 crore-INR 50 crore. Now there will be various deposits, Jai Mundra, which are LC margin, BD margin and all those for three months, nine months, 10 months period, one year period, which may be at 5.50% and around 6%. I think how you correlate to the NIM is on the total portfolio, and that is what I just wanted to put forward, that this particular quarter, which we took from 1st of January to this is somewhere coming the blended rate.
The deposit which we have shared of around INR 70,000, then again, it was a different rate, but the March particular piece, which we have to have the maturity was around 7.70 levels as a blended rate.
Right. Understood, sir. If you can share, sir, the few data points, if you can help with the loan mix by benchmark, EBLR, MCLR, T-bill and AFS reserves, and how much is the change versus last quarter?
Which reserves?
AFS reserves.
I think 58% is
No.
Yes.
It is 54%.
That you can tell. Give or take right now.
54% is this.
Mundra, 54% is my external benchmark link portfolio, sir.
Sir, T-bill and MCLR is how much, sir?
36% is MCLR.
Okay. AFS reserves movement?
AFS reserves.
What is AFS reserve?
IFR.
Can you clarify AFS is what exactly you want?
Sir, under this new investment classification, the MTM hit on AFS has to be-
Okay
-adjusted under AFS.
Got it. Yeah. Mr. Kara, he will. Yeah. Yes.
From December, it was around 800 or so increase in AFS reserves in this quarter.
You have seen an accretion, sir, is it?
No. It's a negative figure, sir.
Right. All right. Sir, I have few questions. If you want, I can ask them.
It is reduction.
Yeah. Understood.
It is reduction of INR 800 crores, correct?
Yes.
Yeah. How much is the outstanding amount now, sir, is in the balance?
Outstanding is -INR 1,008.
Okay, sure. Sir, I have a few questions. If you want, I can ask them now or I can come back in the queue.
You can send us.
Sir, I wanted to check with LCR new guidelines. Have you calculated the new LCR under the new guidelines? As in what would be your LCR, let's say, 1st April, or what is your sense of the
Yes. We have calculated and the negative impact is around INR 14,000 crore and positive impact is around INR 21,000 crore. 7,000 crore is a positive impact.
Okay. This would mean.
Thank you.
How much, sir? Mr. Mundra?
Sorry for interrupting. Please rejoin the queue for more questions. Thank you. Next question comes from the line of Param Subramanian with Investec. Please go ahead.
Yeah. Hi, sir. Thanks for taking my question. Firstly, I wanted to ask just to clarify once again on NIM. Is there any one-off or seasonality or any such thing in the margin quarter-over-quarter, or you are just saying it is mainly the mix and the December rate cut?
It is basically December rate cut.
Okay.
The impact is much lesser than the rate cut.
Okay. Sir, one thing I can see is the interest on Reserve Bank of India balances that is down. That is mainly the decline in LCR, is it? Just clarifying on that number. That number is down INR 500+ crore on a YoY basis. Yeah, interesting.
I think I am not very sure on that, sir.
Okay. I'll take that offline, sir.
Liquidity will not impact.
There is no impact of the RBI NOP circular at all for you, either on interest or other?
Yeah. Actually, we had kept ourselves very cautious during this disruptive time. We were not taking long range calls. Our exposure was only INR 30 million. We were much below INR 100 million what that circular was.
Okay.
Zero impact on that.
Perfect. Okay. Sir, on the PSLC, and also your credit cost, since I'm just clubbing two questions together. Sir, on the PSLC, see, this year has been soft, PSLC fee income. But you used to accrue close to INR 1,000 crores, right, on an annualized basis. Should we get back to that run next year?
See, that last time, actually, we had a complete period of that. That is why the amount is also INR 800+ crore. This time we started PSLC in the month of Q3. We could book, I think, INR 1,280 crore, something like that.
Hundred and-
This quarter, it was very hardly any period left for 31st of March. We already booked this time also, but then the total amount was less. That is the reason, because number of days that functionality is there. That's the reason, but then we would like to continue on that.
We should be able to do INR 1,000 crore+, which was your number say last year?
Right now it is not. We will assess it because the entire portfolio has to be seen on SMS and other things, and then we will take a call. Yes, we would like to deploy in this year also.
Okay, sir. Perfect. Lastly, on credit cost, I think very good numbers there. 23 basis points for the year. Do you think it is sustainable, right?
Right now coming to the credit cost, we are not seeing anything very adverse because of disruptive situations. If you see the credit quality, the SMA is same level as 3.8 levels, SMA-1 and 2 of the entire portfolio. If you see INR 25 crore and above, almost more than 95% is the BBB and above. If you see the prime customer, which has taken 680, but we've taken 700 CIBIL score, or TransUnion and other bureau score, which is around 99%. I think quality-wise, this score metrics and the other way, the quality is in front of you, we are not seeing anything go wrong.
We always say for comfortably, because we don't go aggressive, it is better to get the better figures, but then we say around 1%, we keep as a in general guidance for the year.
Okay, sir. The INR 700 crore has nothing to do with any pressure you are saying that you have made this.
Nothing.
It is primarily for ECL transition?
Yeah. Maybe see, always the regulator and everybody says that in good times, if you have money to, you keep aside and save it. Simply we have kept aside, not in profit, not in capital. See, it may not be used for years together absolutely. Then it is kept as a cushion, it is kept because we do have, because other than that also our net profit is in comfortable range and we are giving dividend of 5%, that is INR 5 per share 50. I think that is the reason we have kept it aside, for a better strengthening the balance sheet of the bank.
Perfect, sir. Thank you so much and congrats on the quarter. Thank you.
Thank you. A reminder to all the participants, please restrict yourself to two questions. Next question comes from the line of Jayant Kharote with Axis Capital. Please go ahead.
Thank you for the opportunity, sir. Just one question. What level of LCR are you comfortable with? If it falls below 110, are you okay to operate at that level?
See, actually what happens. The Reserve Bank guidelines is of 100 and then board fixed guidelines are there for each and every bank. For us also, there is a board fixed trigger. First is trigger and then the breach. See, there are two things which we would not like to breach these two figures. We are above that, 7%-8% level. We actually, on a rolling basis, we calculate for next one or two months. Then we take the deposits and raise the resources accordingly.
Sir, how much would the INR 7,000 crore add to the
How much? INR 7,000 crore add to LCR. I think 2%-3%. How much?
5%. INR 2,200 crores.
Around 3% it works out for an LCR for our bank.
Which means at the pace which you are consuming, if you are not able to match deposit growth, in a quarter or two you'll have to slow down on loan growth?
No, there is no question of not matching the deposit growth. See what happens. Suppose if you have money in your pocket, why you will go to ATM and withdraw further? You will first use what you have in your wallet and what you have in your pocket. The same thing we did, that is what actually since beginning we are sharing with all the press and this. See, I will give you only four figures. March 2025, CDR ratio was around 77%. Now we are at 80.5% or some level. So it means 3.5% up, number one. Number two is that our LCR requirement was a bit more earlier, because we have actually seen each of the items and then we could move from LCR the items, like financial institutions. Non-factor was straightaway 100%.
We have moved from financial to non-financial, even if we have taken the bulk deposit. That has reduced our LCR. That has moved to loan side. Now the third comes the treasury. Now you can see in our presentation also, non-SLR portfolio has reduced. Certainly we have moved on a better opportunity on the loan growth. This is the third point. Fourth point is then again you have a infrastructure bond and other revenues. We have raised INR 3,000 crore. Then again we have a revenues of refinance wherever possible within our portfolio. The thing is that suppose now with this 2.67% growth, there is no breach in LCR, there is no breach in NSFR, and then my CD ratio is very good. Now suppose, listening to all, if we increase by 50 basis points and we take INR 50,000 crore, where it will go?
It will straight away impact my CD ratio to 74%-75%. The question is very simple, that when need be, take it. When need not be, I think no need to. Now, again, you see in the third quarter, we have not taken, we have shed off much more. In fourth quarter, we needed because of the growth happening in credit side. Though we have taken INR 3,000 crore infra bond because the growth was good, which is evident in our figures in the Q4. Then we have generated. Actually there are three things. One is the offered rate. People have offered even 8%, 7.90% and above also during the Q4, so they have got it. Then we tried to take the deposit during January, February itself.
Then we continued because we were very confident on the retail term deposit growth and the CASA growth, and we could achieve it. Rather than going to bulk deposit, we could achieve this side of the story. Now going forward, this cannot be every time. Certainly, you will see the growth in the total deposit. It may come from CASA, it may come from retail term deposit, and it may come from the bulk deposit. I think in the going forward, see, every time you cannot manage the book and allocation and other things. The thing is that at least first, are you aware of from where it is raised and where it is deployed?
Now with this, that is why the last March 26th, you can see we have raised the deposit, we have raised the CDs, so we have raised the resources.
Thank you, sir. Just to reconfirm, you are 7%-8% above your comfort level on LCR and CSR.
Yes.
Yes. Thank you very much, sir, and all the best.
Thank you.
Thank you. Next question comes from the line of Ashlesh Sonje with Kotak Securities. Please go ahead.
Hi, team. Good afternoon. Sir, firstly, on this prudent provisions which you have created, can you just highlight that after the creation of these prudent provisions, where are you on the ECL shortfall number now? Last quarter, you had shared a number of about INR 4,200 crores, roughly. That is one.
We are on the same INR 4,300 crore, and that last time also we said we will be comfortable on that, and whatsoever guidelines come at appropriate time, we will decide in the Board, and accordingly, we will go ahead with the approach. Since this figure is with us, this amount was with us, we thought of keeping aside maybe a ECL, maybe any other for circumstances where as per the regulatory guidelines and as per the Board decision, we would like to then use it. Otherwise, we would like to keep it as a strengthening of the balance sheet.
Understood, sir. After the creation of this INR 700 crore buffer, the ECL shortfall number should decline ideally, right?
It will not decline because this is a separate law. We have made it very clear it is not impacting our Tier 1 or Tier 2 or capital or net profit. It is just simply kept. It is like we have just kept it for any eventuality, any circumstances like that.
Understood. Sir, just one follow-up on that.
No requirement is.
What is the total outstanding buffer of standard asset provision that you are carrying now?
Total standard asset provision is close to INR 3,000.
Understood. Second question, last one from my side.
Yeah. Please go ahead.
Yeah. Sir, second one on the loan growth and margin side. If I look at the credit rating mix of your corporate advances, which you have shared on slide number eight, it seems like the share of A and above advances has increased by 2% QoQ. It's clear that you have not only grown the corporate advances, you also grown in better quality corporate advances. However, this seems to be different from the stance which you had conveyed last time that you are shedding low-yielding advances. How should we understand this change, sir? The shift in stance. What caused the shift?
I could not get actually. See, low yielding means we had IBPC of around INR 35,000 crore, which is not there. That is point number one. Now when you sanction, you have STLs, you have long-term loans, you have short-term loans. Sometimes like you will give for seven days, 10 days, and it will range from 5.50% to, depending upon a corporate, and to 6.10%, 6.25%. These two we have reduced. We have now tried to convert short-term into long terms and other things. From that we have to build in so that we become more profitable, but at the same time not to compromise on the quality.
Okay. Sir, to just ask the same question differently, would you look to shed some more of your lower yielding advances going forward?
It is a regular phenomenon, and we are doing day in, day out, and wherever we are in a position to get the opportunity. That is the reason that actually we have sanctioned more, disbursed more. In the portfolio, since churning is happening, you will not see that much big growth there. The things are on board and certainly it is a normal every bank will do wherever possible.
Understood, sir. Just one last clarification. Do you deduct the dividend payout from the net worth in the March quarter itself?
Yes. The remaining portion is only taken in net worth.
Sorry. Come again, sir. I could not hear you.
The amount of dividend, suppose there are deducted around INR 3,800, we have deducted and remaining amount is only taken into my capital portions.
Understood, sir. Thank you very much. Those were all the questions I had.
Thank you. Next question comes from the line of Parth Gutka with 360 ONE Capital. Please go ahead.
Hi, sir. Thanks a lot for the opportunity. Sir, please just let me know what is the portion of the MSME book which is covered under CGTMSE?
We'll come back to you on this, sir.
Okay, sir. My second question is sir, while large part of the growth within MSME would have happened in the second half of February and March, what were the conversations with the borrowers? Because at that time, the war had already started. What were the conversations in terms of order inflows or cash inflows at that point in time? Yes, that's my question.
Thank you.
He just told you the two- or three-year yield and the war.
Yeah.
Impact of war on MSMEs.
No.
What is the conversation you have with your customers who are going?
See, there will be some people who are asking for some extension of bills which has been sent. Because the war was only developing actually, so everybody was also waiting for that. Presently the discussions are going on. Wherever it is there, we are also handholding them, and we are trying to support those MSMEs with higher period for bills. Those things we are doing it.
Okay, sir. Just my last question, have you changed any of your risk filters in March for the MSME?
Which one?
Have you changed any of your risk filters?
No, no, we have not changed.
Okay, sir. Thanks a lot, sir.
Thank you. We'll take the last question that is on the line of Dixit Doshi with Whitestone Financial Advisors Private Limited. Please go ahead.
Yeah. Thanks for the opportunity. Just couple of things. Firstly-
Mr. Doshi, can you speak a little louder? We cannot hear you.
Yeah. Is it better now?
Yes, please go ahead.
Yeah. Firstly, what is our written-off pool now? If we see this year, the recovery from written-off account was INR 4,000 crore. What kind of recovery will this number sustain next year as well?
Written-off of pool, if you are looking at it, is around INR 71,000 crore actually, and most of them, around INR 45,000 crore-INR 46,000 crore, are under the NCLT. It is there pending. As regards to recovery in written-off accounts, we are trying it. Whatever is available, we are just seeing that, and most probably the same trend will be continuing in the current year.
Okay. Whatever we have done this year is sustainable next year as well.
Yeah.
Okay. One last thing is, so whatever you have communicated throughout the call, is it fair to assume that the NIM has bottomed out in this quarter? With 13%-14% loan book growth, what we are targeting for next year, the NII growth will be similar to the loan book growth?
Definitely our endeavor is the same.
Okay. We can grow our NII as well in line with the advances growth, because this quarter it was lagging.
Yeah, it was lagging because it was coming.
Considering that as of now, the rate cycle is, let's say, a status quo, our NII growth should be similar to the advances growth.
Yes.
Okay. That's it from my side. Thank you.
Thank you. Ladies and gentlemen, that was the last question for today. We have reached the end of question and answer session. I now hand the conference over to the management for closing comments.
Thanks to all the analysts, participants on this call. Certainly, we hear you a lot. We work upon your questions, and even if you can see what sort of things we are doing, depending upon the queries and wherever you have a concern, and we try to inform you what we have done and how. That's the reason that we think of keeping on improving day by day, week by week, month-on-month. That is the total endeavor. Thanks to all of you for participating in this analyst call. Yes, going forward, we would like to better it, like we said in the earlier quarters, and we continued so. Going forward also, we'll continue to make it better. Thank you.
Thank you. On behalf of Union Bank of India, that concludes this conference. Thank you for joining us. You may now disconnect your lines.