Bank of Baroda (BANKBARODA) Q4 2026 Earnings Call Transcript

Good evening, everyone, and welcome to the analysts meet for Bank of Baroda's financial results for the quarter and year-ended 31st March, 2026. Thank you all for joining us. We have with us today our MDN CEO, Dr. Devadat Chand, and he's joined by the bank's executive directors and our CFO. After brief introductions, we have a presentation on the results with the highlights of the performance, which our CFO will take you through. Followed by opening remarks by Dr. Chand, and then we will start with the Q&A session. Chand, sir, would request you to begin.

Thanks, Firouja, and all my analyst friends. Very good evening to all of you. I think you will be busy today because three banks announced their financial today. So thank you so much for joining. And just to introduce the management team, I am D. Chand, MD and CEO, Bank of Arora. With me, Mr. Lalit Tiagi, he's the executive director. He looks after the corporate credit, the international banking, and more importantly, the treasury with him. We have Mr. Sanjay Mudaliar. He's the executive director. He looks after the IT function of the bank and including the retail asset, which is, again, a large book as done today, apart from a couple of other platform functions. Then we have Mr. Lal Singh. He's executive director. He looks after the SAMB vertical, which is a stress asset management vertical. including HR and also the MSME, the department, also a part of his portfolio. We have Madam Binawaith, she looks after the operation of the bank, the CCO reports to her, including the risk management, many of the platform functions, including the compliance and control audit, and also the retail liability, which is again a large franchisee for the bank. And we have the CFO, Mr. IVL Sridhar. So, he has been there for a couple of quarters interacting with all of you. With this, I hand it over to Filija.

We will now have the presentation. Sridhar sir, I think you may be on mute.

It's my privilege. Good evening, everyone. It's my privilege to present before you the financial highlights of Bank of Aurora for the quarter and financially rented 31st March 2026. As at the end of 2026, the bank's global business volume has crossed a milestone of 30 lakh crore and stands at 30.78 lakh crore, registering a YOY growth of 13.9%. Our global advances have grown by 16.2% YOY, with domestic advances growing at 14.5% and international at 24.4%. Within the advances book, the bank has continued to focus on RAM advances. Our organic retail book grew by 17.9%, agriculture by 20.7% and organic MSME by 15.6%. Corporate loans have grown by 11.2% YOY. Within the retail segment, we have seen smart growth across the portfolio with auto loan by 20.6%, mortgage loans by 19.3%, home loans by 14.6% and education loans by 10.9% and personal loans by 8.7% YOY. In terms of deposit growth, our total deposits have grown by 12% with international deposits growing by 7.5% and domestic deposits by 12.8%. The domestic CASA deposits have grown by 9.8% and term deposits have registered a growth of 14.8% by OI. As of March, 31st March, 2026, the bank's domestic credit deposit ratio stands at 83.4%. The CASA ratio stands at 38.9%, up by 45 bps. Quarter-on-quarter. With regard to our quarterly profit metrics, our operating profit for the quarter stands at 9,069 crore, registering a growth of 11.5% YOY. The bank has adopted new mortalities for arriving at the age 15 liability, which led to an increase in the employee cost by Our net profit for Q4 2026 stands at 5,616 crore, registering a growth of 11.2% by which is the highest ever quarterly net profit. Return on assets remain consistently above 1% at 1.15% in Q4 2026. Return on equity stands at 17.27% for the quarter. For the full financial year, FI 2026, our operating profit stands at 32,259 crore. Our net profit for FI 2026 stands at 20,021 crore, which is the highest ever net profit. Return on assets remain above 1% at 1.06% in FI 2026. Return on equity stands at 15.39% for FI 2026. With regard to... Key ratios, our yield on advances stands at 7.44% for the quarter and 7.71% for FI 2026. Bank's cost of deposits for the quarter stands at 4.78%. It stands at 4.87% for FI 2026 as against 5.10% in FI 2025. With regard to our net interest margin, it stands at 2.89% for the quarter, Registering a sequential improvement of 10 bps. It stands at 2.89 for the whole FI 2026. Now we come to our asset quality, which continues to remain robust. Our GNP ratio has improved by 37 BIPs YOY and stands at 1.89%. Our net NPE ratio is below 1% at 0.45% and improvement of 13 BIPs YOY. Our provision coverage ratio including TWO is comfortable at 93.94%. Our slippage ratio for Q4-2026 has reduced by 11 BIPs YOY and stands at 0.89%. Slippage ratio for FI 2026 also reduced by 6 BIPs 500 to 0.72%. Credit cost per Q4 FI 2026 has increased to 0.76% as ignised 0.44% in Q4 FI 2025 due to the prudential floating provision of 1,500 crore made by the bank during the quarter. Credit cost excluding the floating provision would have been 0.32% for the quarter. Credit cost for the full financial year stands at 0.46%. Again, the credit cost excluding floating provision would have been 0.34% for the full year. Coming to our SMA and collection efficiency, our CLIC SMA 1 and 2 as a percentage of our standard advances reduced to 0.18% as of March 26, as against 0.33% for March 25. Our collection efficiency, excluding agriculture, remains robust at 98.9%. In terms of our capital adequacy, our capital position continues to be strong with CET1 at 13.16%, TIR1 at 13.64% and overall CRAR at 15.82%. Our quarterly average LCR remains healthy at approximately 127%. Bank has declared a dividend of Rs. 8.5 per share subject to requisite approvals. Thank you.

Thank you, sir. Transa, over to you for your opening remarks. So you're on mute.

So, thanks, Siddharth, and to all my analyst friends. Let me make a couple of qualitative comments on the financial that you announced for this year and also for the quarter. I think we have a very strong growth both on the balance sheet and also on the profit and loss. A couple of numbers that we see on the balance sheet. This year, we crossed the league of 30 lakhs plus kind of a business, and the business stands at 30.78 lakhs total of business on 31st March. At the same time, couple of other milestone that we see on the financial is that we cross 20,000 crore of net profit for the standalone entity, and the profit becomes 20,021 crore for the financial year. And the profit for this quarter 5,600 possibly is the highest in any quarter for the bank for many years, maybe for the decades. On the advances side, although our guidance was 11 to 13%, but in terms of the percentage that we have announced is the global advance growth of 16.2% and the domestic advance growth of 14.5%. At the same time, the deposit side, we have seen one of the best quarter, which again, a couple of quarters, we have seen our deposit not catching up to the growth in advances, The deposit growth is almost 12% full global deposit. With the CASA at 9.8 and the saving growth at 9.1, I think these are the numbers which maps very well with regard to our focus on low-cost deposit and our focus to grow on the CASA because we last many years were focusing on the CASA deposit and we have, I mean, improved on the services side, product side, bundling of products so as to improve on the CASA front. Both the growth of advances and deposit, if I see this is the best quarter and last 10 quarters. So, I mean, we have seen the journey of banks, the journey of the industry for last 10 quarters in terms of growth percentage, but our number or the percentage growth in this quarter has been the best in last 10 quarters. On the profitability front, the NIO growth has been positive, and you would have seen a number saying that the increase in interest income has been higher than the interest expenses. That's something in earlier quarter, slightly it was going negative in terms of the interest income not growing up to the extent of the growth in interest expenses. So, I mean, this quarter, I mean, the trend is different on the interest income growth has been higher than the interest expenses. Consequently, the NIEM is at 12,494 crore, which is a growth of 8.7%. Good morning, everyone. The NIM domestic at 3.04 at the global area 2.89, and this NIM percentage is also higher than that of last quarter. As the CFO said, on the employee front, because of the hardening of the yield, the obligation under AS15 has gone down, but at the same time, the bank decided to migrate to the new motility table where there is an additional liability requirement of 520,000, which you have provided for. So, I mean, the employee cost that you would have seen, including AS15, the trend is in line with the system, what other banks also would have announced. A couple of numbers in terms of the operating profit of more than 7,000 crore. I mean, we are announcing this more than 7,000 crore operating profit for last 14 quarters, and this quarter it is 9,069 crore. The net profit were announcing more than 4,000 crore for last 13 consecutive quarters. Similarly, the ROA of more than one, that is one of the guidance number we have, that we are having more than one for last 15 consecutive quarters. The increase of the book value, which is again one of the fundamental factors in terms of what you look as an investor. It has improved from 148.8 rupees from March 23 to 251.7 rupees in March 2026, an increase or incremental addition of book value to the extent of 102.90 rupees. Asset quality has been one of the best as far as the numbers are concerned, the GNP at 1.89, the NetNP at 0.45. Both in terms of the slippage ratio and also the credit cost. The credit cost full year is 0.46 as compared to 0.47. Both within our guidance range. I think the asset quality and in terms of the PILIC data in terms of SMA 1 and 2, more than 5 crore also, it has gone down from almost from 0.36 to 0.18. So with this, I think the asset quality has been one of the good as far as we are concerned. Secondly, a couple of initiatives that I want to highlight before you is that the bank recently raised a 10,000 crore of green Infrabron. This is the first in India to raise a green Infrabron, and the response was 3x of the amount that we wanted to mobilize. We have outstanding green deposit as on today to the extent of 1,899 crore, and I think by far is the highest deposit in the system. I have also announced this time that we are going to raise capital in the form of 81 and tier 2 to the extent of 6,000 crore in this financial year. I will also remind you an earlier announcement wherein we announced that the bank would be keen to raise 8,500 crore of equity capital over a medium term that is up to FY28. So, in terms of capital raise, it's almost like we have the, what you can say, not pipeline but a room to. Raise 14,500 crore consisting of 8,500 crore pure equity and 6,000 crore of 81 and tier 2 for this year, 26-27. Let me recreate a couple of guidances normally we give. The loan guidance we are upsizing from the earlier guidance of 11 to 13 to 12 to 14% considering our performance. Subject, the global headwinds doesn't impact big time to the Indian market. The deposit growth is from 9 to 11 earlier. It has been upsized to 10 to 12%. The name we achieved 2.89 this quarter, but we are slightly looking at a probable repricing of asset liability by projecting at 2.75 to 2.95 for the full year. The ROI continued to have more than one. That is what we had earlier guidance also continued to have the same guidance. The slippage ratio also we still keep it at the same level of 1 to 1.25 and the credit cost below 0.60. So these are a couple of guidance I think important for you. With this, I am done with my opening remarks. We will open for question and answer.

Thank you, sir. If you have a question, please raise your hand or you may also type your question in the Q&A box. We will start the first question with Rikin Shah. Rikin, if you can please unmute yourself.

Good evening, sir. Thanks for the opportunity. Just two questions. First one, you know, on your reported global yields on advance and cost of deposits, both have moved down, and the cost of deposits have gone up, but the margins are higher. So presumably, that's due to some interest on IT refund. So while I do acknowledge that you've called that to be core in the past, but if you could just quantify the amount of the same, that's number one. Second question is specifically on cost of deposits. So, if the global as well as domestic cost of deposits have marginally gone up in this quarter versus the last quarter, so how is the outlook on this? I'm fair to say that the TD repricing is already done for us completely and only the cost of deposits move. And the third and the final question, sir, is on the OPEX, two moving parts, as you pointed out. Now, with this mortality rate change, how should I think about the ongoing OPEX going on, employee expenses specifically?

Okay, thanks, Rikin. Coming on the margin and particularly the yield on advances in the first-up deposit, I think the denominator for both the things are different, right? Whereas the NIM takes care of the full on the asset side. So the spread and margin are different. So we should not compare the spread and margin because that would give a different picture. At the same time, I do agree there is a line item with regard to the IT refund. And earlier also I said, because since we have a large, I mean, the provision on the IT, we keep on getting this as a normal flow. It can be higher or lower in a particular year and precisely for that reason, although we had a 2.89% NIM for this quarter, we projected at 2.75 to 2.95. So that accounts for any volatility that may be because of the IT refund. But for me, the NIM is one that's a core NIM and what we announce the NIM is the core NIM. So that is with regard to, I mean, we should not get confused with the spread and margin because margin computation is different than the spread.

Fair enough, but would you like to quantify, sir, the interest on IT refund in this quarter? I think last quarter it was about 300 or 400 crores.

No, actually, we don't have a number. I don't have a number. You can offline get a number. But again, on the same thing, I reiterate because there are significant refunds coming every year that we have seen. And the amount can be higher and lower. And precisely for that reason, actually, I've given a guidance, lower guidance at 2.75. Got it, sir. But whatever amount that's very insignificant to the overall, I have an income base of almost 1,26,000 crore. So in that way, that's not very significant to impact on the margin. Cost of deposit, you are right. I think it's getting sticky at this point of time. So, if I compare March, about December. Although the cost of deposit, as far as we are concerned, is one of the lowest in the At 4.78, I think we are one of the lowest in the market on the cost of deposit, but going by the liquidity scenario prevailing because suddenly in the March quarter, the geopolitical issue came big time and which is still persisting. So in that way, my sense is that the cost of deposit is going to be sticky. Maybe there is a scope of realigning on the asset side, but as in today, I don't see a cost of deposit further going down at the current scenario if the liquidity continue to be the same like it is as in today. So in that way, slightly mindful of the repricing effect of the asset rather than the deposit because deposit whatever has been fully repriced as in today based on the current level. On the motility, I think the CFO will be the right person. But before that, madam, anything you want to say on the cost of deposit?

No, sir, because I think it is likely to remain at the same levels because it will be elevated. March quarter, we saw a slight increase in the cost of deposits, and it is likely to continue for this quarter as well because we don't see it coming down in any time, at least for the next three months.

So, Mr. CFO, can you just address the modality table and what is the benefit?

Yes, sir, actually the one-time impact that we have taken due to movement in immortality is 520 crores. This is one time. Going forward, the recurring impact will be very negligible.

Got it, sir. Perfect. Thank you. And sir, if I can just add on one more question, you know, in the SBI call just prior to our call, they were alluding to some scope to improve the yields on advance as the corporate borrowing moves from the T-bill to the MCLR. Is this something that we can also possibly do or is that a likelihood or a positive kicker on yields on loan going ahead?

That's why I said actually, when I said the deposit is TK, that is the only scope for us to realign the asset pricing, right? When the rates were really low, many MCLR-linked loan got reprised with the external benchmark, more particularly TB. With the elevated, I mean, the rate structure which is prevailing because of the geopolitical issue, I think there is a scope for realigning that portfolio, and that is what actually our strategy to look into those pricing very closely. Got it, sir.

Thank you.

The next question is from Jayant Karute.

Thank you for the opportunity, sir. My question is on the ECL guidelines that have come through. You have been in the past transparent about the impact. I think you've called out around 18 BIPs, sort of a steady state impact. Is the final guideline to your earlier calculation tallying with it? Is it better than that or could it be higher than that? That's the first question.

Thank you very much for that. Actually, earlier it was a draft guideline, so it was possible to estimate or guesstimate those impact, right? So now there is a final guideline. So what is our stance is that unless and until we compute fully on that, it's not proper to quantify that at this stage. But my sense is that whatever guidance we had given earlier, it would be aligned to those numbers. So I'm not expecting any significant change with the earlier, I mean, although that was a more of a. Tentative calculation in that manner, but we want to see the real impact and then possibly articulate better and that would be a proper to articulate rather than. Giving any number at this stage. So that's what actually I said in the media meet also, and I'm seeing it.

Understood. The second question is on the trajectory of margins, while I understand your full year guidance is in that 2.75 range, is it fair to assume it will first move down and then move up in the second half given the near term pressure on deposits and given the asset repricing strategy that you're trying may take a while before it shows up on yields?

You are right. One thing that we are assuming for this quarter at least that the cost structure is going to be sticky. I mean, as I said, the cost of deposit for the moderation going by the current scenario, we're not looking at. So the only way the NIME we can manage with regard to realigning the asset pricing and that would be one of the key focus as far as our management work is concerned. But at the same time, why slightly we give a conservative number because this IT refund is a flow which is although a continuous one but it can go up and down in every quarter and that depends upon the refund order that we get. So keeping everything in mind, so we have given a slightly conservative guidance on the lower side. Not necessarily it would happen in the Q1, maybe at the later quarter, but that all depend upon how do you do all this, what you can say, math together so as to protect the margin.

And I assume, sir, the 2.75 is the lowest number X of IT refund. That's why you kept that all four quarters together.

I think we should not be reaching this lower threshold of 275.

Even with zero IT refund. That's why you're confident. I'm saying that's why you are trying to have

some estimate of the IT refund for the full year based on the orders and the seasonal or whatever the past trend. So best on that is that.

Understood. Lastly, on the incremental OPEX, I do understand, is there any revision on employee wage because of the yield movement that you have taken in this quarter?

No, the AS15 impact already articulated by CFO. I think CFO, can you just go ahead with your AS15 impact? So, that is the only OPEX that maybe slightly you may be interested to know.

Actually, the mortality tables which we have adopted are the latest tables. With that, the one-time increment in the AS15 obligation is around 500 in particular. That we have fully absorbed in this quarter. Going forward, the recurring impact will be negligible. Regarding your question, I think it pertains to the base settlement, which is still not a due.

Thank you very much and all the best for you. Thank you.

Thank you. Our next question is from Kunal Cha.

Hi, am I audible? You are audible, Kunal. Please go ahead.

Yeah, thanks for taking the question. So firstly, when we look at it, the increase in bulk deposits, which have been there, and I think the earlier question on cost of deposits, I think it would be also the factor of bulk deposits getting raised, which was almost like, say, 14% quarter on quarter, and 25-26% year on year. Maybe a few quarters back, we had seen an incident wherein all of a sudden, we reduced both the bulk deposits as well as the wholesale portfolio at one point in time, and we saw a significant reduction in the balance sheet size. At any point in time, would again, we be pursuing that in terms of the margin management or ROI management exercise, if you can just clarify that. So that's the first question. Second question is on floating provisions, 1500 odd codes. So this would be towards ECL transitioning, I believe. And how much more do we plan to create it further? Is it like maybe, so obviously credit cost was much higher during the quarter, including this floating, but would we see that continuing for a couple of more quarters and on recoveries from return off again compared to our guidance? We saw a substantial increase. There seems to be some one off account out there. But otherwise, in terms of the guidance for F527, do we continue to maintain 750, 850 crores? You alluded to most of the other parameters in guidance, but this time you are not given it for recoveries. So just would want to reconfirm that as well.

So thanks Kunal. You said right with regard to, we said earlier, maybe two, three years back that we want to reduce the dependency on bulk deposit. When I said dependency, at that time bulk used to be almost like, I'm talking about the total deposit as a percentage was almost 23, 24%. And we went down to almost a level of 17% at some point of time, maybe two, three quarters prior to this. Having said so, because of bulk deposit dependency here, the balance sheet size has not actually was, I mean, degrowth, I mean, the balance sheet continued to grow strong. The strategy was to replace the bulk with the low-cost deposit. And there we have been doing consistently well for last many quarters. And in this quarter also, you would have seen our saving growth is 9.1%. And you can compare with many banks who have declared and what is the growth they do have. So the strategy has really worked in terms of focusing on the saving and that's why. We have one of the highest CASA percentage within the PO banks. I mean, currently also it is almost at 39% and you have the comparison available so you can make it out how the strategy works. On the balance sheet, we have grown significantly, but in the same time, we could able to change the bulk percentage from bulk to low cost side. For the March quarter, particularly the geopolitical, what has happened, there was a liquidity possibility, the loan growth has been very at a 16.2%. So you need to be there in terms of managing both your liquidity at the same time. Maybe you need to mobilize a bit of a deposit, both from the bulk and CD together. We have a component of CD in the bulk, the number that we see 3,20, or 3,21. So CD, as you know, these are again slightly the duration less with a cost also lower than the double deposit because typically the deposit is a one year deposit. So in that way, the bank is managing the liability, I mean, the liability profile in a manner, which is again, optimal in terms of liquidity, optimal in terms of pricing, optimal in terms of margin. So that we have been doing since long. And I think there's something a project positive trajectory of the bank for last We have many workers in use now. On the floating provision, the provision has been created typically to buffer the balance sheet for any extraordinary scenario, not for tagging with any ECL provision per se. This floating provision cannot be touched unless and until there is a regulatory approval for that. So it's basically buffering the balance sheet strength to create floating provision rather than tagging with any. Particular ECL impact. If ECL impact is to be taken in the books directly, we will take it in the books directly without touching the protein provision. So, I mean, these two are not linked to that, but obviously, yes, any headwinds that can create both globally. Also, any such headwinds, I mean, because of the geopolitical issue, we are mindful of offering the balance sheet in terms of creating balance sheet strength. Third, with regard to your set, right, the TWO this time has been. I mean, higher as compared to because normally we give a normalized guidance of around 750-800 crore. This time, obviously, March quarter is always a productive quarter in terms of slightly making your efforts more in terms of recovery and that has resulted into a higher recovery, particularly from TWA. And I will continue to have the same normalized guidance of 750-800 crore. Mind it, my TWA book is almost 62,000 crore. So, estimating any such recovery quarter to quarter, I think it's an appropriate number.

Would there be a chunky account of 500-700 crores in recovery this quarter?

There are many, actually, it all depends upon when the resolution happened and when you recover money. There are legal processes, NCLD processes, multiple such things. So purely pinpointing that it can happen in a quarter, it's not possible, but then we are hopeful because the kitty is quite 62,000 is quite a large number.

No, no, I'm saying in Q4, was there any chunky account of 500, 700?

Not, not, not, not any chunky one. It is a, I mean, mid-size, some of the exposure, which has mid-size, maybe.

Okay, got it. Perfect. Yeah. Thank you. Thanks. And all the best. Yeah.

Next question is from path. Good path. You can please unmute yourself.

Yeah. Hi, sir. Sir, what was the LCR as of the March end?

It is 127%.

Okay, and of this recovery from TW of 1400 crore, has some amount gone to the interest income line item?

It is so, yeah. So, the accounts with the interest income and also on the recovery on that. So, roughly around 100 crore has gone to the interest income on this.

Sorry, sir, I missed the amount.

100 crore has gone to the interest income part.

Okay, okay, sir. Okay, sir. Thanks a lot.

Next question is from Ankit Bihani.

Yeah, thank you for the opportunity. So my first question is on the growth and deposit growth guidance. So still we are expecting loan growth to continue to outpace deposit growth going ahead. And given that now, how much buffer do we have on the LCR front now? And what would be the comfortable LCR that we would like to maintain? And my second question is again on the interest on IT refund. While you call out it as a contribution to core NIMS, but this number is very volatile. And do you expect this to sustain perpetually because somewhere this has to come down, right? Because in our calculation, I think it is contributing around about 10 to 15% towards your ROA. So how long your interest on IT refund can continue?

Okay, so first thing you talked about, LCRI answered. Secondly, on the IT refund, let me, on growth outpacing deposit, look. On a sustained basis, you have the capital, right? So you have a lot of other alternative resources where you can take refinance, you can raise bonds. So we as a bank clearly focus on creating a stable resource base, a lot of deposit base. So while maintaining, even you would have seen the CD ratio almost at domestic around 83 point something on that. Very improved vis-a-vis last quarter anyway on the CD ratio. So, the growth percentage, the base of deposit is a larger base as compared to the base of advances that is 0.1. Secondly, in a scenario where banks are holding like a bank like us holding more excess SLR, any deposit we raise need not be put that into SLR because the entire money can go to deposit and that is what a scenario we are seeing in many last couple of years where because you are holding excess SLR. The money incremental deposit, we are raising a state going into the advances. So in that way, I think this gap of two and a half, 3% is sustainable one in terms of growth of advances and growth of deposits. So that covers the advances outpacing deposit. At the same time, obviously, bank would like to augment the resource base and want to grow higher on deposit. Interest on IT refund, earlier also I said, yes, it's a line item, which is as part of clearly as part of the accounting, but can be volatile. Yes, so I do not estimate with regard to what is the year this year, what is going to be year next year. These are all, I mean, based on the actual tax refund. So that's why accounting for the estimate, we give a margin guidance. And that's why having achieved 2.89, also I'm giving a guidance of 2.75 to 2.95, accounting for the same amount of money which you got this year, possibly may or may not be in the next year, based on the available, what is the refund that we expect and that your issue is, I mean, covered in the margin guidance, that is what we typically don't get into quantifying, because it's a line item always there in the income as part of the normal accounting norms, so then why should I segregate that amount as a different amount? Yes, it is volatile, I do agree, but then we account this estimate in terms of how much we are getting this year in the margin rate.

Lastly, how long this can continue? Like one year, two year, three year, four year, whatever you can say.

Look at that tax rate.

Yeah, I'll give you guidance next year again. So as far as this year guidance, I'm very clear that there is going to be a good amount coming, right? So next year, suppose I see there won't be any money, then I possibly won't account this and give a different guidance. So my guidance for tax refund is based on this only one year. So, perpetuality we'll discuss maybe in the next year.

Okay. And so, lastly, on the ECL front, I think I missed out on the answer of yours there. So, any quantification on what could be the impact and how could our credit cost run rate move on implementation of ECL?

So, that is what we said earlier. Actually, look, when the draft guidelines was there, actually, it was able to estimate or estimate with regard to the likely impact. And that we articulated in terms of actually Absolute number also in terms of percentage, both on the CRR and also on the credit cost, but having issued the final guidelines, it won't be proper to, without really running imputation, transaction-wise, difficult to say with regard to any quantification. We'll do that, but we'll do it slightly once we implement and then have a number, possibly one quarter number coming very clear on that. So I'm not articulating any number, but my sense of them today, when I look into the final guidelines and the draft guidelines. It will not be off track from the number that we estimated earlier. It will be aligned to those numbers, but actual, I mean, once you slightly implement a transaction level and get a clear picture, at least for one quarter, it will be a question to quantify everything on the ECR impact.

The last quarter, did you guide that the current cost run rate could increase by 18 minutes? Yes, I am able to recollect correctly.

I mean, possibly you have to recollect, right? I can't recollect. But whatever we said, I think my sense is that it is not going to overshoot significantly. Okay. Thank you for that.

Thank you. If anybody has any questions, I'll just repeat, please raise your hand or you may type your question in the Q&A box. The next question is from Rikinshra.

Hey, thanks for, you know, taking my follow-on question. So, this is relating to the SLR, right? So, we do disclose the domestic SLR, which is about 3 trillion on our balance sheet right now, which has just not changed in the last 3-4 years. So, as a proportion of the NDTL, it has come off very sharply, and it's about 17% right now because I have only the total NDTL, not the domestic NDTL. My question to hear is that how much scope do we have further to, you know, or how much excess SLR is still left on the balance sheet for us to keep optimizing? That's number one. The number two is, you know, until now, we were able to, you know, bring down the SLR, excess SLR via surrendering a lot of the securities in the OMO or the switches. The likelihood of the same is probably low going ahead. So even in the event, if there is no OMO, would you be willing to liquidate it in the market? And thirdly, just as a philosophical level, isn't it a better idea to lock in bonds at the higher yields right now, sir, rather than lending to the corporates and home loans at the similar rates? Of course, there will be some amount of capital charge and credit risk also involved.

Right, the treasury management, the bank is running one of the largest book, actually, we are amongst the top three or four in terms of holding. So at some point of time, the SLR holding was almost 26-27%, but subsequently, as of today, it is around 22.5% or 23%. It goes on floating. But while managing this SLR, it is not one way that we surrender. I mean, we sell or we put that on OMO. We keep on buying at different level as part of the market condition. So, whenever we feel the levels are elevated, we get into the market. So, it's a churn happening, maybe 1-2% on the SLR is a continuous churn that happening in terms of buying and selling. So, in that way, it's always an optimization game rather than a single selling that SLR and make profit. So, in that way, I think we are managing treasury well in that way. And I think that something is part of the treasury management because the trading profit comes out of all this churn. It's not necessarily you sell only your book and make profit, you have to buy and sell, and then only you can make profit. So our strategy on that would continue. But in terms of a comfort range you want, because see, the advantage of XSSL is that it generates liquidity, right? That's the very important or important purpose of running XSSL. And that helps in liquidity, right? So that's very clear. So bank would like to, now as against 18%, you are at 22%, that means you are almost running 4.5% XSSL. We like to operate at a threshold of maybe 3-3.5% at all point of time. Because the purpose is not only an investment in terms of generating profit, the purpose is also generate liquidity at the right time in case you require to. So I think that would be one of the strategy as far as the bank is concerned. Mr. Tiagi, anything you want to add on this?

Yeah. So, sir, actually, apart from this, we also wish to have a comfortable LCR. And that's where the XSSLR also helps us in maintaining our comfortable LCR post stream.

Sir, the choice between, you know, locking in the long-term bond deals at reasonably decent rates right now versus growing aggressively in the home loan, corporate, and auto loan, where, you know, the risk-adjusted NIMS or, more importantly, one adjusted for the capital RWAs, how do you think about it?

So, thank you very much. So, sir, actually, I reckon both instruments or both markets are different. So, investment yield, investment holding achieve different objectives and remaining in the loan market, whether it is home loan, whether it is corporate work, whether it is MSME, they are different. And loan books gives us, loan customers gives us deposits also, other cross-sell opportunities also. So it's not straight through interest rate we look upon when we land in home loan, car loan, or corporate segment. We also look at the holistic relationship and also we expand the bank's various product profile. So, I mean, and, you know, different liability profile meets these different asset book objectives.

Perfect. Thank you, Tiagi sir and Chan sir.

The last question that we will be able to take today is from Jay Mundra.

Hi, good evening, sir. And congratulations on your term extension. Sir, I wanted to check on your capital raising plans. Is that on track? And how soon can this be?

Thanks, Jay. Thank you very much. Capital, already we have announced actually 81 and tier 2 for this year. I mean, I'm talking about 26, 27. We have announced that we will be raising 6,000 crore, but in case you don't raise, then it can also go to the subsequent year because we have used award if expedient on that. Earlier, we announced an equity raise of almost 8,500 crore to be as an enabling provision to raise by FY2028. So we can raise that money in any year up to 28. So almost 14,500 crore is the plan raise of capital, both from the equity and also on the 81 tier 2. Which is slightly, I mean, it can be on the this year or subsequent year. So we have taken a medium term plan of FY28. Beyond this capital also, we normally keep raising InfraBron and other, those are also part of the resources where you have to announce to the exchange. So those, if there is a requirement to do that, because sometimes we look at the duration of your liability book as a whole. And somewhere we find that because we compute the duration of asset also and the gap between duration of asset full book. I'm not talking about only investment. So in case you want to tweak something as a asset liability management purpose, we keep raising long term resources also. So it's all the ALM management that would decide whether we need to raise long term resources in the form of infra bond and other bond. If that be the source, then it will announce to the market at that point of time. But it is already announced approved by the board which are enabling 8500 equity, 6081 in tier two. Right. Sure, sir.

And sorry, the capital raised plan of 8,500, that is also on track, right? I mean, you have a decent, very strong CVT one, but still, despite that, that plan is on, right?

Yes, it is on. It is always on table and it will depend upon the time at which we really want to tap it actually based on the market conditions. And the requirement of capital for the bank for different, I mean, any scenario going forward, maybe a geopolitical or anything, if there is a need, will raise it immediately. But then it's an enabling that is applicable till F528.

Right, sure. And sir, do you have a number for blended bulk deposit cost for last quarter? Because I believe bulk deposit rate would have started to cool off. Or qualitatively, if you can comment, you know, how much, let's say the blended bulk deposit rate would have come down for you.

Jay, I don't have data on this in case you want, we can offline provide you, but the issue is that actually I was just giving you context in one of the earlier conversation, wherein in two, three years back, we had a larger percentage of bulk as a percentage of total deposit, mind the denominator, because people compute in a different way than get confused on this. So it was almost 25, 25% at some time, and we reduced that to 17% of total deposit a couple Quarters back. Now, as you know, the liquidity scenario in March quarter is always a different scenario because of the geopolitical inducing bit of a liquidity, I mean, tightness. So then from 17, it went to 19%, but still below 20%, which is my normal, what you can say, the guidance with regard to multi-posit. So we'll continue to optimize based on the need for liquidity, need for the growth on the asset. At the same time, the pricing impact also will be mindful while doing this. So it's overall concept of liquidity management, unique management that decide how much bulk we need to have.

Right, sir. And sir, do you suspect any increase in the term, retail term deposit rate in the near term? Because I think a few banks have started to increase retail TD rate. But what is your sense on that?

See, I am not predicting any increase in deposit rate. But one thing I have said that the cost of deposit, which we are one of the lowest in the system, if you look at the numbers of 4.78. That's going to be sticky in the sense I'm not expecting that to go down further.

Sir, I think that number may not be very comparable because we have a 20% plus share of overseas.

I'm talking about the domestic. That's still below 5, not many banks below 5.

Right. Sure.

Please complete. In that way, uh, I mean, uh, sticky means, uh, I'm not expecting to go down, actually going up would depend upon the liquidity scenario in the market.

All right. And sir, have you made any PLI provision for this year in the quantum of that performance linked incentive?

Yeah. We have made provision for that actually, we made provision. Sorry, sir, how much is the quantum?

And you follow this. I'm sorry, sir, if I could get the quantum for PLI,

500 CR, okay, sure.

And this, this is now you, I mean, where is it in the staff cost or this is in some other provision because I think there's still under mitigation, right?

So it is under staff cost.

Thanks a lot, Chandra, and all the questions.

The very last question is from Kunal Shah.

Now, thanks. Thanks for the follow up. So particularly on the overseas exposure, almost two like 60 or 1000 crores of a book. So maybe if you can just clarify in terms of the profile, particularly two aspects, one is directly Middle East exposure. And second is how much is trade related. And there has been there have been trade disruptions which have been there. So any risk because today it's almost zero NPA in overseas exposure, do we see any risk? The risk of the NPA coming up over two to three odd quarters.

Look, overseas, I mean, the trades are normally up to 20% because we don't allow trade book to significantly go up because there is a, the trade has a fine pricing, because there's also impact on me. So I think on a percentage basis, the trade is below 20%. Exactly. If I know more, I can give you because that's what we prescribe for. Overseas to continue doing business. Remaining exposures are mostly on a local syndication that particularly some of the markets were very big over there, like US, even Gibbs City has a big market, and they are all global syndication where we participate with high street bank in terms of taking those exposures. Big books in US, Australia, even Singapore for the matter, and all those. So I think as of today, there is no impact in terms of their asset quality on this. Particularly Middle East, yes, we do have exposure because Middle East, we have a large retail operation over there, and then the outstanding can be in the range of around 50, 60,000 as on today, but that's again spread over multiple countries, which are again, some of the countries are A-rated as on today. So, the direct impact of this, I mean, all those countries, right, the regulator also, they have announced some kind of a measures like the ECLGS we have done in India, so to sustain their operations. So, real impact will not get to know once and until we just see, but as of today, there is no concern with regard to asset quality, because these are the corporates having quite a strong balance sheet. And our large percentage of exposure are local syndication, which are global local syndication We have market names in the book. And they are very big. Some of them are Fortune 500. So I don't think any challenge as on today with regard to the global international group. But yes, particularly in this operation, we need to be slightly watchful for a couple of quarters.

Sure. And how much ECLGS 5.0 withdrawal are we expecting? Maybe the drawdown benefit which we might take up. So we participated last time also quite actively.

So I think our book is 1,60,000 is an MSMA book, and roughly 55-60% is the working capital, and taking almost like everybody won't go up to 20%, maybe on a 15% scale, I think 12,000 plus would be an amount that will be disozing on the recent years.

Got it. And one last question. If you look at auto loan, the growth is quite strong. We are seeing many of the PSU banks offering a very longer 10 odd product, seven years, nine years, and that too at a very competitive rate. Okay, do we see some risk coming up? Because obviously, there is a depreciation which happens after four, five years, there would hardly be any value left out there. So why so much of aggression from PSUs on auto and same with home loan in terms of competitive rate? When do we see PSUs lowering the aggression in these two segments on the rate side?

I don't see a PSU outlook here, but as far as the bank is concerned, we'll continue to grow on an auto loan. The reason being, look, auto loan is not a productive asset to generate revenue. I mean, it's based on the cash flow a person is having from which he pays the money. So our selection of borrower in terms of auto loans are more looking into cash flow, salary class, where we have done a bulk transaction, means bulk tie-offs. So, I think in that way, the growth has been good, and as of today, whether I track the stress book or the GNPA percentage, I think these are all benign and very, very small at this point of time, because possibly the ability of the cash flow to support the payout is still continuing the same way. So, going forward, in case there is anything that we see at an elevated level of risk over there, actually, we do portfolio review every quarterly on all the books. And these are all being done at a very senior level, board level committee, and also anything we see a incipientness in this sector, which I don't see as on today, and then possibly we'll have a look. But as on today, my guidance will continue the same way like we're continuing on Autodesk.

Okay, thanks. Thanks for patiently answering all the questions. Thank you and all the best.

I will now request CFO to please give the vote of thanks.

I would like to extend my sincere gratitude to all of you for joining us today for the announcement and discussion of our financial results. Should you have any further questions, please feel to reach us to me or to our investor relation team. Thank you once again for your time and continued support. Have a great evening. Thank you.

Thank you very much. Thanks. Thanks a lot.

Thank you, everyone.