Indian Overseas Bank (IOB) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the earnings conference call of Indian Overseas Bank arranged by Veritas Reputation. At this moment, all participant lines are in the listen-only mood and later we will conduct a question and answer session. At that time, if you have a question, please press char and one on the touchstone keypad. Please note that this conference has been recorded. I now hand the conference over to Ms. Sonali Pandey from Veritas Reputation PR. Thank you and over to you, Ms. Pandey.

Thank you. Good evening, and welcome to Indian Overseas Bank's conference call to discuss our financial results for Quarter 1 FY26-27 ended June 30, 2026. Indian Overseas Bank, IOB, headquartered in Chennai, continues to strengthen its presence with over 3,522 branches with around 3,691 AGMs and 13,401 business correspondents across India. IOB also provides services in four countries, Singapore, Hong Kong, Thailand, and Sri Lanka, with a trust of 46-plus million total customers in banks owned. All comprehensive suit of services spans personal, corporate, and agricultural banking, along with credit card, loans, and insurance products. Our financial results are available on our website and stock exchange platforms. Before we proceed, please note that today's discussion may include forward-looking statements subject to risk and uncertainties that could impact future outcomes. We encourage you to consider these factors when evaluating our performance. Joining us today are Ajay Kumar Shivastava, Managing Director and CEO, Mr. Joydee Thakaroy, Executive Director, Mr. Dhanraj T., Executive Director. We will begin with an overview of our quarter one performance, followed by a Q&A session. Now, I invite Mr. Raburam Malera, Company Secretary, Indian Overseas Bank, to present the financial highlights. Over to you, sir.

Thank you, Sonali. Good evening, all. I am pleased to present an overview of Bank's performance during the quarter ended 30th June, 2026. It's a proud moment for the bank today that the bank has reached a new milestone by achieving an all-time high quarterly net profit of Rs. 1,659 crore for this quarter as compared to Rs. 1,111 crore as on June 25 with 49.32% year-on-year increase. The bank has achieved the operating profit of Rs. 2,693 crore, registering a year-on-year growth of 14.21%. Regarding the performance of the bank for the quarter-ended 30th June 2026, the bank has achieved the business mix of Rs. 6,98,325 crore, recording a year-on-year growth over 17.72%. Casa, in absolute terms, stood at Rs. 1,54,415 crore, with year-on-year growth rate of 6.61%. Casa ratio domestic, as on June 2026, stood at 41.45%. Casa Global stood at 41.05%. Total deposits reached at Rs. 3,76,193 crore as on 30th June 2026, with a year-on-year growth rate of 13.72%. Total advances increased year-on-year by 22.75%, reaching Rs. 3,22,32 crore as against Rs. 2,62,421 crore as on 30th June 2025. Provision coverage ratio improved to 97.67% as on 30th June 2026, as compared to 97.47% as on 30th June 2025. Capital adequacy ratio stood at 19.36% as against a regulatory requirement of 11.50%. Net interest margin global for the quarter ended 30 June 2026 is 3.37% with an increase of 12 BIPs. As compared to 3.25% as on the last quarter, March 2026. Net interest margin domestics stood at 3.48% for the quarter ended June 2026 as compared to 3.35% for the quarter ended March 2026. With regard to the NPA management, GNPA, gross NPA reduced from Rs. 5,178 crore to Rs. 4,292 crore year-on-year basis. Net NPA reduced from Rs. 816 crore to Rs. 588 crore. GNPA percentage has reduced by 64 bps year on year from 1.97% as on June 2025 and reached 1.33% as on June 2026. Similarly, Net NPA percentage has also been reduced by 14 bps year on year from 0.32% as on June 2025 and it stood at 0.18% as on June 2026. Slippage ratio of the bank is reduced to 0.06% for the quarter ended June 2026 as against 0.10% as on June 2026. And with respect to the valuations, there is a significant improvement in return on assets which stood at 1.41 for the quarter ended June 2026 with 27 BIPs increase as compared to June 2025. With regard to book value per share, it improved to Rs. 15.79 for June 2026 when compared to 12.41 for June 2025. Similarly, improvement is evidenced in return on equity with 369 BIFs year-on-year. Currently, return on equity stood at 22.69 when compared to 19 for June 2025. Earnings per share for June 2026 is 0.86, which improved from 0.58 as on June 2025. This is all about the financial performance of the bank for the quarter-end of June 2026.

Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. Participants who wish to ask questions may press start in one at this time. The first question is from the line of Mr. Ashok Ajmera from Ajcon Global. Please go ahead.

Yeah, thanks for giving me the opportunity first. Compliments, Srivastava, Sop, Jaijitji, Nanand, Nanrajji, and the entire team of the Indian Overseas Bank for the fantastic results for even Q127. And you are just a whisker away from 7 lakh crore business. which will be achieved soon or might have already been achieved by now, and compliment that you met all the, I mean, parameters or the targets which are given, and even the, even in the current quarter also, there is a good credit growth of 3.77 percent, and overall annualized basis 22.75 percent, which is commendable. Having said this, sir, I've got a couple of observations and some questions. In the profitability, which is one of the highest now in the net profit, it was told just now 1,659 crore. The profit is also good at almost about 2,700 crore. There is a major component of PSLC commission of 863 crores. And good recovery, I mean reasonably good recovery of from return of account of also almost about 490 crores, fee based income is also gone up. So this PCLC and equally in the investment in the treasury book also the profitability is there. So that is the main major contributor of the this profit in this quarter. So, going forward, can you give some color of the, I mean, how are we going to close this FY27 as far as the profitability is concerned, whether the consistency will remain there in spite of this, some of these factors which may not be materialized in the coming quarters.

Thank you so much. Good evening, Mr. Jameeram. Good evening, sir. And both the ED are sitting with me along with my team. So, regarding this profitability, see, you need to look at NII also, interest, income, and expenses. So, NII, we have grown by 34.30% year-on-year. So, that itself is showing that out of operations, the lending activity and... Whatever you are doing on liabilities front. NII growth is one major part of driving profitability. And in addition to this, you talked about PSLC and recovery from technical return of account. These are routine activities. Every quarter it happens, if you remember. Earlier also, the same type of query was there that whether this PSLC income. Our recovery from technically return of account will continue going forward also. In fact, if you look at last eight to nine quarters numbers, these two parameters are there in all quarters. PSLC, sale income, and so this is part of the, what I'm trying to convey is that this is part of the integral part of non-interest income. And that will continue, of course, it is stable and it will continue going forward also. NII, of course, interest income is increasing, quarter on quarter, yen or yen. Going forward, I do not see any challenge in maintaining this profitability. And last 10 quarters, if you see the trend of operating profit and net profit, quarter on quarter, it is only one dimensional, that is increasing.

Yes, sir. Hello?

Yes, please.

Yes, sir. Sir, now, on the credit front also, this quarter has been good for almost every bank. Suddenly, a lot of demand has emerged, and there was some clarity in between on this West Asian war also. Again, that conflict started again. So now, going forward, number one, on that ECLGS, how much was our sanction and disbursement? Have you started seeing now any pressure again coming back to the smaller accounts or SME accounts on the recovery front or on the delinquency front? And what are the numbers of the ECLGS? If we can know that how many people have already availed it, how much is the amount of disbursement?

Yes, so ECLGS total universe from IOB side, whatever number of eligible accounts and amount is there, that is around 4,400 crores. And out of that, we have so far disbursed around 2,600 crores. Based on the requirement of the individual borrowers, and in terms of ECLGS, five requirements. So 2,600 crores is already done, 1,800 crores is expected to be done over next one, one and a half months. And demand is there, request is there. We are pretty sure that 95 percent to 100 percent of ECLGS disbursement. Will certainly take place by August 10 or September 1st week. And regarding West Asia issue and stress on any small borrowers or SME accounts, we have not seen individual cases are there. But as one product or one sector, this particular product or sector is struggling because of West Asia crisis. Earlier also, there was no such sign. And right now also we are not observing anything of that type.

Okay, sir.

Point well taken, sir. Now, on the ECL front, how are we prepared? I mean, are we continuing the same what was there in the last quarter that we will be in a position, I mean, the impact may not be that sizable and we will be able to take care of it without taking the benefit of those four years or so on the ECL. And what is the total buffer provisioning on that, sir?

Yes, so the same strategy continues. Our initial assessment or internal assessment, I will say, it is to the tune of 3,000 crores of additional requirement. Till March, we created a forward-looking provision for ECL only, 1,700 crores. This balance sheet, we have added 400 crores additional. So, again, 3,000 crores of probable requirement, we have provided already 2,150 crores. To meet this ECL provisioning requirement. And in coming quarters also, we will be equally making a provision going forward so that by the end of this financial year, the entire requirement of ECL years can be taken care of in one shot. And as part of our internal discussion, we do not intend to go for four-year dispensation.

Very encouraging, sir. Sir, last question in this, rather a data point, in our net worth, you know, which has gone to 29,256 crores in this quarter from 28,114 crores, there is an addition, in addition to the profit, there is an addition of 554 crores in the net worth. So, uh... Is it because of the AFS, some addition in the reserves, because of the re-valuation, I mean, because of the valuation of the, or the profit of the AFS book, or some other components is there in this 550, some DTA or some other thing, if you can.

Yeah, DTA we have done around 400 crores. Yeah, sorry, about 200 crores. We have done 400 crores.

Sorry, sorry, sir, I couldn't hear, sir. DTA?

DTA we have run to 196.65. That reversal has happened, plus one or two minor entries will be there. Nothing substantial, sir.

AFS, any... Addition to that?

Sir, MTM addition is there around 300 crores.

Ah, that is there.

That is also there in the book, sir, yes. And the results only? Negative impact of 500 crores.

Correct, correct.

Yes, yes.

It has come in the positive now?

Yes, yes. MTM is positive now, yes. By around 300 crores. Yes.

Best, sir. Very good, sir. Just last question going from this round is that, sir, your name is very good and increasing also. And one thing is that whether the consistent, it can be maintained in the remaining three quarters. And second one, sir, somehow I couldn't find out the SMA numbers. SMA 1, 2, 0, 1, 2, or SMA above 5 crore. Either I have missed the slides or so can you give some color on that, sir?

Yes, SMA is around 4 percent, total SMA. SMA 0, 1 and 2, I will give you separately the numbers, but total SMA is around 4 percent, and it is coming down because one month before it was 4.95, so we are paying attention to that, and the first question was, How about NIM? So, NIM, sir, last one year, if you see, we have been successfully maintaining NIM between 3.3 to 3.4. Earlier also, we gave the same guidance that it will be maintained at that range. And for June number, if you see our domestic NIM, it has gone to 3.48%. Correct. Yes. So, we are pretty sure that going forward also, sir, NIM will be in this range only, around 3.3 to 3.4. In this range, it will move. And SMA numbers right now, we are having, sir, so I can tell you, SMA 0 is around 1.78 percent. SMA 1 is 0.95 percent.

Sir, can you give, sir, an absolute number, sir?

Absolute numbers, yes, of course. SMA 0 is 5,733 crores. SMA 1 is 3,068 crores. And SMA 2 is 4,246 crores. So total SMA is 13,000 crores. Percentage terms is 4.05 percent.

But sir, it seems, I don't remember exactly, but I think this SMA 2 numbers have a little bit increased in this quarter. Isn't it?

SMA 2 as on March was 3646, of course.

Yeah, so around 6700 crore increase is there.

600 crore increase, yes. But if you look at percentage terms, March 26, March 26 was 1.20, now 1.32, yes. So 500 crore increase, yes, over March.

So, any concern, or it is already, I mean, regular?

Ashwira, sir, so SMA2 has increased by 500 crores over mass, that is correct. Total SMA, it has come down by 2,200 crores.

Yes, sir, yes, sir. So, any concern on that, the SMA2 numbers increasing, or they are now regularized by now?

Mostly it is regularized, sir. If you look at our slippage ratio, sir, if you map that with SMS, you can see that slippage ratio is 0.06 for Joule. March it was 0.11.

Yeah, it is substantially, it is almost 50% of March. Now, what I want to know, is there any government guaranteed account or anything out of this 4,246 crore? Or these are all...

May be part of that, not government guarantee, sir. I will say that CGTMSME coverage or CGFMU coverage from smaller accounts will be there. But nothing alarming, sir. Slicage ratio for last 10 quarters has been around 0.10, 0.12. Asset-wise, quality-wise, we are absolutely 100% sure, sir.

These are very good, sir. Very good performance. All the best to you. I think a lot of other people are in the queue. So, I'll jump off from here, and if time permits, I'll come back again. Okay, thank you.

Thank you, sir.

Thank you. Ladies and gentlemen, in order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two participants. The next question is from the line of Bimal Panchal from Bimal Panchal & Associates. Please go ahead.

Hello.

Yes, please.

My name is Vimal Panchal. We have approval of 5000 pros equity raising plans. So, what is the, which way are we planning, say, QIP, OFS, rights with the government making, not subscribing, or which way we are?

So, it is true that 5000 crores of capital raising plan has been approved by the board and we are in the process of obtaining all other statutory approvals before hitting the market and we expect that in this quarter it will happen. So, maybe in Q3 or Q4 depending on the Market conditions, we will go to the market, maybe in one or two, or maybe more than two tranches also.

And the method QIP OSS?

It will be QIP.

Okay, right, okay. Okay, thank you very much.

Thank you. Thank you.

Before we take the next question, we would like to remind participants that you may best RMR to ask a question.

The next question is from the line of Ashlej Sonjir from Quotex Securities. Please go ahead.

Hi, team. Good evening. Sir, a few questions from my side. Firstly, if I look at the yield, yield on advances has gone up by about 10 basis points QoQ. If you can just explain what is happening and along with that, if you can also share what has happened on the corporate, what is the strategy on the corporate loan book because that has declined 10% QoQ.

Yes, yield on advances has increased because of pricing issue, of course. And about 54% of the credit portfolio is linked to MCLR and 37% to RLLR. And because of good quality lending at labor pricing, yield on advances has increased. The corporate book, I will say that there is a pipeline of around 14,000 crores already sanctioned, and in different stages of disbursement, and we expect that corporate loan book also by the end of this year will grow by 12 to 13 percent.

Understood. Sir, but when you say the yield has gone up because of better pricing, can you elaborate a bit more of which segments you are seeing this? Exactly. And what is the response from the borrowers?

See, 80% of the portfolio is RAM, retail, agriculture, MSME. So this yield is coming from everywhere. Retail, agri, MSME, a part of it is coming from corporate also. So it's not only one area of product specific. It is uniformly spread across.

Sir, is it fair to understand, is my interpretation right that yield has gone up across all segments, or you are saying there is something else?

Yes, more or less, yes.

Okay. Okay, sir, the corporate advances which have declined 10%, would you have a sense of where the borrowers are going? Are they going back to the bond market or they are going to some other bank?

See, for IEOGIS, the 10% decline is because of one bigger account, amounting to around 10,000 crores, which we, in the first month of this financial year, in the month of April itself, since pricing was not matching, so we came out of that arrangement. And this corporate loan book of 10% decreases because of that. It's not the 10,000 crores of impact was more. But around 40% of that we covered in the quarter once. And after coverage of 40% of corporate loan book, this 10% negative growth is visible, which of course in this quarter it will be covered. And as I said, by the end of the financial year, we will be showing a growth of 12 to 13%. Having said that, if you look at the total overall credit growth, so year on year we have grown by around 22%. And quarter-on-quarter also, I think we have gone by 4%. That's it.

Understood, sir. Sir, is it possible to share which sector this exposure belonged to, this 10,000 crores exposure?

It was corporate, government account. Understood, sir.

Okay. Sir, secondly, the cost of deposits has also improved. It has declined by about 10 basis points QQ. Can you explain what has happened there as well?

We have focused on CASA very aggressively, and despite 13% or 14% growth in total deposit and 17% growth in retail term deposit, we have been able to maintain CASA about 41% on a consistent basis, and that is the only reason how cost of deposit has come down. We are not very aggressive in high rate of interest bulk deposit field. All along, we maintain around 6 to 7 percent bulk deposit for SEO out of total deposit of the bank. And that strategy that focusing on CASA and not too much of reliance on bulk deposit. So combined impact of these three, four strategies has resulted in reduction in cost of deposit.

Sir, one follow-up on that one. Is there any part of your term deposits which is yet to still reprice downward? Or all the repricing is already complete now?

All repricing done, already done, yes. Completed. Six months before.

Okay, understood, sir. And thirdly, if I look at the fee income for the quarter, it has grown quite handsomely, about 20% YY. Can you just explain what has happened here? The growth is quite good.

Two major components are, one is ESLC commission, second is sale on retail term deposit, third is processing fees, plus all other usual charges.

Sir, if I look at the presentation, I am talking about this component which was 476 crores, so the PSLC income is sitting outside that number.

Let me let me see the number icon.

What do you call exchange and commission, that number?

Exchange and commission, that is 90 crores you are talking.

It shows as 476 crores here.

476, exchange and commission, profit recovery, technical return of ESLC commission. 476 will be normal exchange and commission, LC commission, BG commission, non-fund business, plus locker rents, plus all other charges, demand drafts.

Sir, just trying to understand what has led to the growth here. It's grown about 20%.

See, base is low, so it's looking at 20%. If you look at the numbers, last year, June, it was 398. Absolute numbers, you see. From 398 to 476. The base is low, so it is 20%, you can see. But in absolute numbers, it is in that range only.

Okay. Sir, have you, in any of your loan segments, have you changed your fee structure in any manner? Materially? Processing fees or something?

Sir, at the time of sanction, whatever terms and conditions are part of the sanction. The same continues. In between, we do not change. Generally. Unless, until rating down, what did it happen?

Okay. Understood, sir. And lastly, if you can share what is the outstanding loan book which you have under CGTMSC as of now.

CGTMSC around that data exactly I am not having, I can share with you, but it will be around 15-16% of the total gain portfolio. Broadly, I am telling you.

Understood. Perfect, sir. Thank you. I will come back into the queue.

Thank you.

The next question is from the line of Aditya Mundra from MyTempleCapital. Please go ahead.

Thank you. Am I audible?

Yes, please. You are audible.

Yes, sir. It's actually one of a bookkeeping question. And thank you for the opportunity. Sir, so the book value per share that we disclose in our presentation. Is about 15.79 rupees on June 26. But if I calculate as per our network divided by the total number of shares, it comes to about 20.5. So, and then this is the kind of difference that we see in all the quarters and in all the time periods. When we disclose the book value, what is the kind of adjustment we are making when disclosing this book value?

Hmm, it will be, some adjusted value, some adjustment would have happened. Can I come back on that?

Uh, yeah, yeah, sure, sir. And, sir, just what would be our school year guidance on the...

It was not audible. Can you come again?

What would be our full year guidance for the growth as well as ROA, growth on the advanced side as the ROA number?

See, our creative growth, we are intending to grow at around 13 to 14 percent. And I always say that having said that this is the minimum we want to grow, beyond that also we will be growing, and last three years we have grown in the range of around 20 percent over last three years. 15 to 14 percent is the minimum we intend to grow. ROA is at 1.41 percent, that is we are very comfortable with these numbers. Internally at all point of time we want to maintain it above 1.20. So, going forward by end of this year, maybe we are looking at around 1.45, 1.46, like that, that number.

Okay, and from that, in your view, that could be largely driven by, because, will it be NIM driven or a reduction in OPEX driven because credit cost seems to have bottomed out?

It will be NIM driven.

NIM driven. Okay, and then that would be because of the mix change? Because again, on the mix side also, I think we are maximum on the RAM side. Already about 75-80%.

Yes.

Will there be more liability side then, cost of deposit reduction, or what would drive that NIMS, sir?

It will be, it will be both sides. It will be increase in interest income and it will be decrease in interest expenses. So both sides we have been working consistently. The same trend will continue, the same strategy will continue. And NIMS driven, ROA will be basically driven by increase or improvement in NIMS.

Okay, but you see a further upside because of the product mix. There could be some upside on the product mix, basically.

Yeah, product mix, it depends on the type of requirement in which geography. So that is a very dynamic thing. Our rally is around 80%. We intend to maintain around that level.

Okay, and there is no pressure going forward on the cost of deposit or the cost of fund size. In the sense that it should not increase from here at least. That's what we see.

For the stable future, yes, of course, I do not see any increase because we are not too much reliant on bulk deposit. So it's basically CASA driven deposit area we are focusing on. So I think it will be at that level only. Around that level.

Okay, just one second. Sir, I believe in the last quarter you had mentioned that some corporates, you classified as RAM, if I am not wrong. What would be the criteria of classifying some corporates as RAM, or maybe that's the MSME side of the corporates?

No, no, there is no definition or change in definition. The RAM sector also consists of big ticket loans in MSME and agriculture around 300, 400, 500. So, size-wise, they are equivalent to corporate, but classification-wise, they fall in agriculture or MSME. That is what I intended to say, as per Adria's definition. That was the point I was trying to make last time.

Thank you, sir. I will call back in the queue. Thank you.

Thank you. Participants who wish to ask questions may press char in 1 at this time. The next question is from the line of Kushal, an individual investor. Please go ahead. Hello, am I audible?

Yes, please go ahead.

Yes, the question was on fee income. In fee income, slide 7, there was a miscellaneous expense, which was, there is a huge growth, like a 423% QOQ. So, can you put a light on it?

Fee income?

In fee income section, miscellaneous income.

Miscellaneous income includes recovery from technical income and PSLC Commission is there, PSLC Commission Priority Sector Lending Certificate Commission, out of which it is mentioned here, no? We are talking about miscellaneous income. The second line is mentioned, out of which PSLC income. So these two are the major components in addition to processing fees.

Okay, and second question is on agriculture loan. How much agri-loan is backed by gold, and are we seeing any delinquencies, or are you expecting it?

So far, we have not seen any delinquencies in agriculture loan, and going forward also, we do not see any stress.

And on gold part?

Gold part will be broadly around 40% of the total portfolio will be agriculture given loan.

Okay, and looking at the loan book growth, last time, we said 13 to 14 percent loan book growth. Are we being conservative or what?

No, we are not being conservative. We are giving you that this will be the minimum we will grow. Last three years, the guidance has always been 13 to 14 percent, but we are growing in the range of around 2021-22 percent.

Okay, so are we expecting this growth pace to continue?

Yes, if everything remains normal, of course, you can expect that.

Okay, thank you. That's it from my side.

Thank you.

Thank you. The next question is from the line of Rana Aryan from V-Right Aryana Holdings. Please go ahead. Mr. Aryan, your line has been unmuted. Please go ahead with the question. As there is no response, the next question is from the line of Sumire Choksi from Indus Equity Advisors. Please go ahead.

Yeah. Hi, sir. Am I audible?

Yes, please.

Yeah, so firstly, my commendations on a good set of numbers. So, you know, just coming to two specific questions, I'll ask them together. So versus the rest of, you know, the pair set, you've seen our NIM, ROA, ROE in cost to income has been pretty good, right? And we've maintained that for a while. So aspirationally, because sir, you've achieved such a good level, what's your outlook for the next year or so in terms of sustaining or even bettering this? Because I believe, sir, you've reached a level which is quite good. So how would you seek to improve from that? It might not be the easiest challenge, but I'm sure you guys must be prepped for it. And second, sir, in terms of both the asset liability franchise on digital initiatives, how are we looking at, you know, growing both our asset and liability franchise in terms of digital initiatives specifically? Any new projects we are looking to initialize apart from our stack we've already built up for something else that you have planned.

Okay, so this NIM ROA and cost to income part, I will address that part first. Of course, the level where we have reached, I will say that last six, seven, eight quarters, we have been consistently maintaining and improving it also. And the strategy, whatever we have thought of, planned, we have been successfully implementing it. And going forward also, we will follow the same plan with maybe little change or some moderation wherever required. If outside world, there are no uncertainties, there are no challenges, all of a sudden unexpected challenges, if everything remains smooth and constant, Of course, these numbers you can see growth further going forward in next financial year. Otherwise, despite challenges like West Asia challenges, again it is looming last long. We are pretty confident that NIM will be able to maintain at around 3.3 to 3.40 because of our inherent strength and the type of efficiency we have brought into the system. ROI also around 1.4 to 1.5 we do accept in foreseeable two to three quarters going forward. Regarding assets and liabilities, digital side, of course, without digital, nothing moves in the system, in the banking system also. And so everything from assets side also and liabilities side, most of the things have already been shifted to the digital path. We engaged one of the... We have four consultants, three, four years last, and the entire digital product, processes, software, everything has got revamped to match with the latest expectations and requirements. So, as on date, around 96% of the total transactions happen digitally in the system. Across the counter, transactions are hardly 2 to 3%. And a lot of efficiency has come in through mobile banking, through net banking. Of course, UPI, everyone does. We have created production systems where people can apply for loan also sitting at home and sanction later they can get within 10 minutes on their laptop or mobile. Throughout the country, anywhere, anyone can get a locker allotted digitally in two minutes' time. Account opening, customer onboarding, whatever happens, around 75% of the onboarding happens digitally. So, lot of initiatives have been taking place, and digital is that area where we cannot say that whatever we have learned that is sufficient. So, every day is a new challenge, every day is a learning process, and we are on it, I can say.

Understood, sir. And just one more question, sir. I believe in the news recently, and maybe you would like to shed some color on this. I think in terms of our international operations, we received the IFSCA license for Gift City. So how are we looking at monetizing specifically more on our international ops as well? If you could just shed some color on that.

So we got this approval around three to four months back, and we have started the process of opening it. Maybe another two months, it will come into physical existence. We will start the process. And we are looking to build a book of around 500 million by the end of this financial year through this gift city branch. 500 million is the internal budget. Okay, sir. Noted.

Thank you so much, sir, for answering my questions. Thank you.

Thank you. The next question is from the line of Ashdesh Sonjay from Kotex Securities. Please go ahead.

Hi again, sir. Thank you for the follow-up opportunity. So I just want to go back and discuss the corporate loan book part again. Sir, if I go back to this 10,000 crores exposure, I'm sure you would have thought about whether we should continue the pricing competition. How did you arrive? What was the thought process in eventually letting it go? What is it? What is the objective function? What are you trying to maximize here?

See, we do not want to do any loss-making business, it's very clear. And for us, you look at the credit growth numbers, we have gone by 22%. That is coming from corporate, or retail, or RAM, or overall book. That is not material to that extent as to compared against that at what pricing we are going. Just for the sake of increasing corporate growth at sub-7% rate of interest, we are certainly not interested into that. And this strategy we are following over the last more than two years very, very successfully. So the idea is to maximize income. And at good price, where we have been able to match our cost of fund cost of the budget, we are lending. Subject to, of course, asset quality should be good and stress and all those things are not visible. Very successfully, we have been doing over the last two quarters. You can see slippage ratio. Hardly any slippage happens. That shows about the underwriting capabilities. Credit worth of 22% is happening. Color of money is same. Whether we are growing in corporate or retail or whether we are running from corporate or retail or MSME. Overall, NII is increasing, NIMI is increasing, ROA is increasing. So we are more focused on fundamentals. And again, I will come back to that point only that any loss-making activity where that business does not make any sense to us, we generally do not venture into that.

Understood. That helps. Friend, lastly, what is your plan on mobilizing FCNR deposits? How much have you mobilized already?

We have already mobilized, as on yesterday evening, 300 million. Since the time this dispensation came and we created a new product on FCNR. We are having four overseas centers, and we are having more than 4.5 lakh existing NRI customers. We are reaching out to them through personal contacts, through SMS, through mails. We are extensively using our overseas centers and the new customers. And as a result of this aggressive overreach, I will say, we have been able to generate round figure, 300 million as on yesterday. We intend to double it, maybe by the time this dispensation period, which is coming to an end in September. By September... We intend to double up to 600, 650 million. That is the plan.

Understood, sir. Perfect, sir. Thank you. That is very useful.

Thank you.

Thank you. The next question is from the line of Aditya Muntra from My Temple, Capri. Please go ahead.

Yeah, yeah. Thank you for the opportunity again, sir. Sir, regarding that difference in the book value which is disclosed and as per the net worth, should I contact, like, post the call or is there anything beyond that?

Good. We will get your number and we will come back to you.

So just one more bookkeeping question I had on similar minds. For example, like our cost of deposit is about 4.7% and our cost of funds is 4.85%. Generally, we observe with the banks is that cost of funds is typically lower than the cost of deposits. Any particular reason that we have a cost of funds more than cost of deposits, is there a different formula that we have for it? What, maybe do we do cost of equity also in that?

See, there is, we have seen many cases where cost of fund is higher than cost of deposit. And cost of fund includes borrowing cost also.

Borrowing as well as the equity cost?

Yes, cost of funds generally remains higher than cost of deposit.

In spite of the equity cost being at zero? Yes. Thank you. Thank you for that.

The next question is from the line of Rana Arian from V-Ride Ariana Holdings. Please go ahead. Hello.

Yeah. Congratulations to the management for a good set of numbers. In fact, very good set of numbers. My question is around capital raising and dilution outlook. I recently approved a plan to raise up to 5,000 crores by equity and 1,000 crores by tier 2 bonds. The government of India holds a massive 22.44% stake. So my question to you, sir, is what is the precise timeline for the 5,000 pro-requery range, and will this be excluded by QIP or a public offering to help satisfy, say, these minimum public shareholding goals? Over to you, sir.

Sir, it will be through QIP only, and we intend to... Go to the market, in maybe more than one tranche, in Q3 and Q4.

Okay. All right, sir. So, my next question would be around historic asset quality movements. So, the gross NPA felt about 1.30%, and net NPA at about 0.1%. So, this was supported by a tiny silver base ratio. Of 0.6%. So the question that I have is, what is the full year credit cost guidance for this coming quarter?

Credit cost for June quarter is 0.14.

Okay.

And we expect that for the full year, the credit cost should be around 0.35 to 0.40.

All right, sir. All right. Thank you so much, and have a wonderful time, sir. Thank you.

Thank you.

Thank you. Participants who wish to ask questions may press chat on one now. As there are no further questions, I would now like to hand the conference over to the management of Indian Overseas Bank for closing remarks.

Thank you, everyone, for joining the conference and expressing your interest by way of raising the queries on the numbers, whatever, set of numbers, whatever we have generated, quarter to quarter. And I have only to add here that we are very consistent. We want to be known as a very consistent band. Last 11 quarters of numbers, if you see, the things which are supposed to show positive growth, that is showing positive growth. And the areas, the numbers which are supposed to show negative growth, degrowth, it is happening accordingly. The consistency is the hallmark of IOB, and going forward also, I can assure you on behalf of the entire IOB team. That the same type of consistency will be visible going forward also. We intend to grow both sides by 13 to 14 percent, and as I said, that is the minimum. We are committed to ensure good asset quality, and slippages will be closer to minimum only, and the capital adequacy ratio of 19.36%, that is, against mandatory requirement, 11.50, that shows the strength of the balance sheet, and one particular thing which I would like to inform to all of you is that because of accumulated loss in the balance sheet, for last almost 12 to 13 years, IUB was not able to declare dividend. And I am very happy to share this information with all of you that those accumulated losses have been made nil by way of internal approval of net profit plus netting up by share premium. And in this financial year, we will be very happy to announce dividend, of course, in consultation with the board. Thank you for joining all of you. Thanks a lot.

Thank you, sir. On behalf of the board of directors and the management team, we sincerely thank you all for your participation and continued support.

Thank you. On behalf of Indian Overseas Bank and Veritas Reputation, we conclude this conference. Thank you for joining us, and you may now disconnect your lines.