Bank of Maharashtra (MAHABANK) Q1 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to the Bank of Maharashtra Ltd. Q1 FY27 Conference Call hosted by Nuwama Wealth. 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 and then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Raj Jha from Nuwama Wealth. Thank you and over to you, sir.

Thank you, Sagar. Good evening, everyone. Thank you all for joining Bank of Maharashtra's 21FA 27 post-result conference call. From the management team, we have Mr. Nidhu Saxena, Managing Director and CEO, Mr. Prabhak Kiran, Executive Director, And Mr. Sushant Kumar Mohanty, Executive Director. We at the Nuova Wealth team are grateful to the bank for giving us the opportunity to host this conference call. Without further delay, I would now like to hand over the call to Mr. Nidhu Saxena for his opening remarks. Post that will open the floor for the Q&A session. Over to you, sir.

Thank you. And at the outset, I extend a warm welcome to all the investors for joining this investor call. June 2026, Q1 of this FY has yet another good quarter of business growth for the bank, wherein we have seen no major challenges around our asset quality, It is getting maintained at the same good, healthy levels. The stress in the loan book also is being well managed. There has been improvement around that. Our efficiency ratios, profitability ratios also have – is showing signs of consistency, and we continue to consistently maintain our performance over now past several quarters. Coming to specific numbers, we had, in my last interaction, shared the guidance number on around 15, 16 parameters. I'm happy to share that all the guidance around the growth parameters, the profitability parameters, asset quality parameters, profitability efficiency parameters, we are maintaining a performance in this Q1. Which is above the guidance numbers. Specifically speaking, total business, which was guidance of 16 to 17, we have grown year-on-year by 19%. 1,04,000 crores of businesses added in the past one year. Total advances against 18%, we have grown at 27%. 65,000 crores of advances have been added. Total deposits also 14. Against 14 guidance, we are 13 percent. The CASA within which has also grown year-on-year by 9 percent in percentage terms and 14,000 crores in amount terms. The RAM book versus corporate book, the ratio has been maintained at 63.37. Our individually, our retail has grown at 25%, AGRI at 30%, MSME at 23%, and corporate book also has a healthy 30% growth year on year. Gross NPA is maintained at the mass level 1.45% against our guidance of maintaining it below 2%. NNPA, likewise, against our guidance of maintaining less than 0.25% is maintained at 0.13%. PCR stands at a healthy 98.55%. Recovery performance in the Q1 also has been reasonably good. 709 crores of recovery has happened, within which cash is 490 crores odd, and upgrades are 208 crores. Our recovery from the write-off book has been 305 crores in the Q1. Our stress percentage also has come down in the overall loan book to 3.18%, which is 140 BIPs improvement year-on-year in the stress percentage. In terms of amount-wise also, the stress number has come down in absolute terms by 1,300 crores. The living SMA0, SMA1 plus SMA2, that book also has registered improvement of five basis points. It is now at 1.34% year-on-year. Coming to the profitability, operating profit has shown a healthy growth of 21% year-on-year with adding 547 crores. Our OP is 3,117 crores. Net profit for the Q1 is 2,020 crores, which is a year-on-year increase of 27%. The NIM stands at 3.85. It has been a reduction of 10 BPS, but we are healthy 10 BPS above our guidance number of 3.75, which again I would say is a decent number to maintain at this level. ROA at 1.9% is, again, an improvement of 10 BIPs year-on-year. Likewise, ROE has improved 165 BIPs year-on-year and stands at 24.65%. The cost of funds and cost of deposits, both have seen improvement by way of reduction by 25 BIPs and 22 BIPs, respectively. Our credit cost has also come down by 20 basis points and has remained within our guidance of maintaining credit costs below 1%. C-81 capital adequacy 15.56%, CRAR at 18.64% qualifies us to be well capitalized or adequately capitalized bank. I think these are the high-level information that I will share. I would like to take questions from investors, and then we would like to also keep adding some more inputs around the overall decent performance in the bank in the Q1.

Should we open the floor for questions now, sir?

Yes, please.

Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and 1 on their touchtone phone. 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 will wait for a moment while the question 2 assembles. Your first question comes from the line of Priyank Chida with Valium Capital. Please go ahead.

Hi, this is Valium and Priyank Chida from Valium Capital. What a fantastic start to FY27 Nidhu sir. First question, sir, our NII growth, which is net interest income growth has lagged. Our total advances growth of 27% versus NII growth of 14.5. And I understand as well as reconcile that PPOP growth, which is operating profit growth has been 21%, which is again higher, but still lagging the loan growth, which only means that NIMS have a bit compressed. And yet, they are higher than what you have guided. So just would like to understand, would you want us to only focus on operating profit growth, along with the higher, way higher loan growth, which is with the system level growth, which is also expanding and improving. So just guide us on how NII growth with loan growth would pan out for the full year, or do you want anything to call out as one-off?

So, while, if you look at the guidance, if you'd like to cancel this request, please press star zero again.

Sorry for that, sir. Yeah. So, I'll be audible to the investors, right? Am I audible? Yeah, sir, you are. Okay. There was a, I think, recorded message which played. Anyway, coming to the question, If you see the NII guidance, which was given as 15%, and the NIM guidance you rightly observed at 3.75%. What we have done in Q1, it is we have maintained both the numbers, and I think we are, as a management, as a bank, We are committed to the guidance numbers that we have shared, and we will, going forward, keep continuing to maintain these levels. Profitability and doing growth, not mindlessly or increasing your top line, has always been a conscious element in our growth journey. So we are always focusing on growth, which is a profitable one, where there is no compromise on the asset quality, and that's how we look at things remaining sustainable in the medium to long term. So, this year, to look at getting good interest income, overall profitability from the system, we have done a couple of initiatives which are different, and probably, I would say, pioneering it in the industry in our review mechanism with our field leaderships. So today, my risk management has developed a simple profitability dashboard, which gives a sense to my branch manager and the zonal manager as to if the incremental business in the quarter has happened at some rate, whether the profitability out of that incremental business has grown at the same level or at the higher level or at the lower level. So, they are very consciously tracking this top-line growth as well as the bottom-line growth, and that's how we have built the consciousness down to the branched level that in the individual accounts also when they are negotiating the pricings with the clients, they are ensuring that the negotiation is a smart negotiation. The negotiation leads to a price which the Bank of Maharashtra brand deserves to charge to the client, and we are very conscious about our good tact, good experience to the client, and sometimes we even try to see that clients happily pay a price for the good service or the turnaround time, which is a reasonable or a decent turnaround time. So, with every credit decision, we have built this consciousness around. So, we are also seeing probably in coming quarters, we will see that we are commanding good rates at the account level. The concessions in charges also are well negotiated, and that's how we will see our NII growth also is happening in the manner it ought to be.

Perfectly, we understood, sir. Definitely, there are a lot of operating level changes happening, and no doubt of that, when you guided for loan growth in FY27 at the start of this year, or meaning at the end of last quarter, the system level growth has been accelerating versus what you had guided at that point of time, and rightfully, even your advances growth has been accelerating in that manner. Would you want to revisit your guidance of 18% loan growth for the full year to the higher number and wanted, on the other side, wanted your observation on the current account balances. I understand that Q1 is usually weaker and it's usually, say, 10% softer than the Q4 or year-ending order. This time, it was quite a bit steeper decline that we saw in current account balances. I could not reconcile if there was a corporate loan growth happening. So, I thought that current account balances should have seen sharp increase. Any observations on that would be happy to hear.

Right. So coming to first your question on advances, advances, 27% growth, 3% growth out of this 27% growth is the contribution coming from the IBU, which today has become a sizable book for us, 8,200 quotes in almost eight to nine months is what we have built there. The 24% is, yes, a healthy growth. We are seeing traction in all the verticals, retail, agri, MSME, even the corporate is growing at a decently good rate. We are maintaining this kind of high double-digit corporate loan growth. For the last four quarters, I am seeing it is 17%, 18%, and this time it is almost 30%. So, this is what is going to continue. I would not like to look at, re-look at, revisit our guidance of 18% growth, but I think the way things are happening, it looks that we are able to perform likewise other plays in industry at a higher level, but we will maintain the guidance at 18%. As regards to the current account, it is not a major concern at all. It is just 2,500 to 3,000 dip in the overall. Current account book is not a very big size when you compare with SB book of 1.28 lakhs. Current account doesn't compare. It's a 3,000 crore of negative, and these things, fluctuations do come sometimes, but the way we are growing our CASA, which is today, CASA in this, despite this degrowth, has grown yoy 9%, and we have added 14,000 crores of CASA in our kitty. A lot of initiatives are taken around trying to see that it's added to the bank. Individual deposits, which are stable deposits, come and add to the bank kitty. We are the bank, which is also differentiated in terms of faster expansion. We are opening branches annually at the rate of 200 branches, expanding our footprints in the country. And all these new branches are being opened at potential growth centers of the country, very scientifically identified using a lot of PIN code level data. And these branches today are bringing us the stable deposits of individuals, including saving and current. And in terms of new offerings, new products that we are giving to our field, they are actually finding that differentiated options, which are not available from the other players, are being provided to them, which gives them the definite advantage and reasons for clients. To choose us over the other banks. Last year, we had done a product around and claiming it as global saving options brought to you in India by the bank, and that product has really brought a lot of traction, and it is going to continue to contribute in the core stable CASA. We also have looked at CASA for giving some technology support there. So our mobile banking application, which is a revamped application, which is now nine months around, it has spent the new version. And we have seen that the active registered users number in the old version from 2.75 lakhs. The number has crossed 14 lakhs three days back, and it is counting. So when you are getting more and more people onboarded on your mobile platform, we are seeing that the balances that are getting maintained in these individual accounts are also going up. And that's how a lot of technology, new product ideas are being given as support to see that the stable core CASA in the book.

And just last question, on Kotal, a slight increase, add-to-do waiver scheme, if you can confirm that. And additionally, with that debt waiver coming in, would you like to mention what can be the benefits and the P&L implications for Bank of Maharashtra? And one clarification required on the taxation rate. What should we assume for 2017? I remember we had utilized all the DTA last year. So, what explains the current lower tax rate, which is a percentage of BVT? Three questions. Sorry. Last. Thank you.

Yes. So I will take them one by one. Debt waiver is what I remember. So debt waiver, the scheme is still under formulation, but we have the covenants of the scheme and our eligible portfolio. We have rough numbers to share, and around 3,500 crores is an eligible amount in case of debt waiver. From the government, receivable to us will be 2750, and 260 crores out of this amount has to come from the farmers. That's what the scheme is. Max haircut to the bank is around the range of 450 to 500 crores. We hold already a provision of 1,700 crores in this debt waiver eligible accounts. There is also a T.W.O. of 1,100 crores in this debt waiver eligible accounts. So I think like the other banks, since we have a predominance presence in Agri, my predominantly book Agri, large part is also in Maharashtra, I think we stand to also benefit in this debt waiver scheme when we will see that the accounts which are identified, already there is a TWA book of 1100 crores and total overall provisions that I am holding is 1700 crores. So, any haircut we are taking is actually already provided for, and with TWA recovery that may happen out of this will also incrementally help my OP in that way. Of course, there is also one element which is for regular payments by farmers. The government has created a provision of incentivizing them, and 50,000 rupees per account per farmer would be given as the incentive in their SB accounts. So, we have our calculations. We may get some SB balance also in a significant number through this debt waiver settlement whenever that is coming. And, of course, it is expected to happen within this FY, definitely, the way things are moving. Credit cost also has come down against our guidance to maintain it below one. It has been 0.99% for this Q1, and which is a YOY 20 BPS improvement in this.

So, earlier also we said that our tax rate is on the OP basis, it is coming 13 to 14%, and if you are asking for PBT basis, then it is in a 16 to 17%, so earlier we also said that it has multiple levers, and now we are normal tax bucket rate, and that is on PBT basis, 16 to 17% is raised.

Sorry, I couldn't hear you clearly. What would be that benefit if you can help us repeat for a larger audience? Would it change for one year or would it remain for multiple years?

Sir, basically tax rate for the, we are getting the benefit of rural advances, since our major, most of the branches having rural advances, around 40% branches in rural, so that benefit we are getting under tax rate, and apart from that, benefits also, for benefits right off, we are getting the tax benefit, and apart from that, sir, DTA also is one of the factors impacting. So, considering all these sector over operating profit of OP basis, the tax rate will coming around 12 to 13 percent and PBT basis is coming around 16 to 17 percent.

Wonderful. Thank you. Thank you.

Your next question comes from the line of Akshay Badlani with Khotila Loswal. Please go ahead.

Thank you for taking my question. First question is around the lines of deposit. The CD ratio is now around, you know, 87-88%. So, how is the deposit growth going, you know, beyond the state of Maharashtra? And until what CD ratio would we be comfortable, given, you know, the growth has been very healthy? So, where would we be comfortable with CD ratio? And what kind of progress we have done, especially institutional deposits outside Maharashtra?

I will answer this question in two days. One is deposit growth you have mentioned, and I would like to give you a perspective that how we have done in this Q1, very consciously looking at the margins and what are the various sources, deposits that your branches are bringing from the individuals, the institutional deposits, government, corporates. That is coming to you. You have refinance also as an option. You have options to raise CDs also. So if you look at my deposit growth, the average deposit growth, what we have seen this Q1, we decided for some time we are not doing any fresh CD issuances. In Q1, I have with no CD rates in the Q1, while the PSB average is 11% deposit growth and minus the CD, because most of the players have taken the help of CD. So, 10% the PHBs as a group have grown, private banks, 14% is the deposit growth, and 11% is the minus CD, the core deposit time or demand deposits, they have grown. So, 3% more than that. So, we have grown 13% with no CD rate, CD rates in the Q1. So, if you see the way we look at it, CD is going to be coming with a runoff factor of 40%. It is by intrinsic short-term nature. Maximum tenor is one year. What we are doing is we are funding our credit growth entirely by deposits. So, we are not borrowing and funding. And this we are doing, why? Because we are very conscious about the margins. So, coming to the CD ratio, yes, CD ratio, you may see it elevated. My global CD ratio, because has a composition of IBU also, where we don't have deposits, where we are doing borrowings and lending. Look at the domestic CD is also 86. While we have, what we have done is for last, I think, now six quarters, I've been talking about this, sharing even the numbers. We have gone for a lot of refinance. And refinance, which in the last year was 14,000, 15,000 crores. We have almost 19,000 crores of refinance that we have taken. If I consider this refinance, my CD ratio is 81.99. So, refinance again, why we decided not to go for high-cost bulk deposit? The blended cost that we have experienced while we go for refinance is in the range of 6 to 6.5%. Now, when we are going for refinance, there is no CRR and SLR loading. So, we found that this is a viable preposition to raise resources for funding my credit growth rather than going for high-cost world deposits. And ultimately, the outcome is that we are conscious about the margin part of it. Having said this, CDEs, refinance, we also, yes, we are also mindful of this. We are tracking this number. We feel the high credit growth that is happening. We would not like to lose any new opportunity for growth. So we have other sources. Today, if you see the ecosystem, there is a clear marked shift of consumers moving to other asset classes. So if you keep depending always on individual deposits and bank plans to grow, I think there is high time we need to relook this. So we are very consciously analyzing this, and we are seeing a clear shift. People are going to other asset classes, SIP, mutual funds, and all those things. So your deposits are going to go down. So, refinance is option. You can do CDs. We also have a board-approved plan, capital-raising plan for raising equity, 5,000 crores for this FY. RBI approval is with us. Shareholders have approved. We have sent our request to the government, and the moment government approval is coming, we are good to go. So, any time, opportune time during this FY, to support our fast credit growth, we can raise equity also. While I'm adequately capitalized, I don't have an urgent, dire need to raise, to maintain, but this is how we are looking at. And to answer your question, last year, we are tracking these numbers because a lot of new branch openings are also happening. Okay. So last year, 21,000 crores in deposits we have raised outside Maharashtra. Out of our total growth of 43,000 crores in deposits, 21,000 crores contribution is coming from outside Maharashtra. So I think I have answered all your questions, sir.

Yes, sir. Thank you for that. And just one last question was around the OPEX. I think this quarter, you know, our OPEX growth has been around 8-9% against, you know, balance sheet growth of over 20%. So is this like a one-off in this quarter, or are we structurally seeing, you know, better operating leverage going forward?

Of course, if you are – there is a – see, today, the way we are growing, expanding in our national footprints, we need a lot of manpower to man these new branches. Today, two years back, our staff strength proved around 13,000 crores. We are now 17,500 crores – sorry, I'm sorry, 17,500 in numbers. And the way we look at it, any new branch that we are opening, if you don't adequately staff, you are also into the business of finance, and we should not unnecessarily open ourselves to any operational risk. So the minimum staffing that we feel is required is provided to the branches from the day one, and they are not just focusing on doing the transactions. They are also required to be making new customer acquisitions in the new geography, in the new PIN code that where we have opened our branch. So we rather like to staff the branch adequately, and that recruitment exercise is going to keep going on. What we have found that in the long or in the medium run, what we have seen, if you see my cost to income guidance has been to maintain it below 40. The way we are increasing our OPEX by opening new branches, recruiting staff, I was thinking with 37, 38, kind of 36, 37, 38 that we've been maintaining, we should try to maintain it below 40. But we have been maintaining a good cost to income, and large part is seen that whatever branches that we have opened, we are seeing the branches which were opened three years or more from now, all have turned profitable. Two years to three years, there was some data we had taken, so a significant percentage of branches have breakeven. So that's what we are seeing. When you are opening branches in the right locations, potential centers, potential growth centers of the country, you will see that new business will come fast and the branch will also break even fast. And the incremental cost that is coming by opening new branches, the revenue that they are generating, the profitability they are generating, it is more than offsetting the cost that we are experiencing in opening new branches, recruiting. So that's how we are into the growth story. We are not reducing the pace of opening branches or recruiting staff. We will keep doing the same pace as per the need. So maybe some staff OPEX cost would have gone up. But today, if you see the cost to income that I'm maintaining is a decent number. Many of the private banks also don't, I mean, they are around that, or at least I would say a guidance of maintaining below 40 is a decent cost to income to maintain, which we are maintaining.

Sure, sir. Thank you. Thank you for answering my questions.

Thank you. Your next question comes from the line of parts with 361 capital. Please go ahead.

Yeah, hi, sir. Thanks a lot for the opportunity.

So, my first question is, can you give some color why advances declined so sharply during the quarter? Sir, I think you'll have to read it again because advances growth has happened since. And we have, in fact, this Q1 has seen advances growth of 27% YOY. Sir, I'm talking about yield on advances. I did not hear that. Sorry, we heard advances. I'm sorry. Let me just look at that. So, yes, 8.57% 71 BIPs is what you are looking at. So there is, you know, MCLR reset we had with this rate cuts in the past FY, which were announced. So the full year effect, I would say, would have been felt by the, this, I think this time around, when we have started to cut the MCLR, you know, with MCLR. One of the reasons I decided to keep our NIM guidance at 3.75, we were expecting probably there will be further rate cuts, but now the way the West Asia crisis has come in and things have evolved, at least now discussions are not around any further rate cuts. It simply looks like for sure, and rather maybe there could be a review and you may see an interest rate going up. So, this is how, but I think we are very, very conscious in terms of profitability of the business that we are doing, and as I just explained with some example also, that at the transaction level, that sensibility we are trying to bring to our branches, that the profitability, Community is not a central office function alone, that central office verticals only do, and the field only focuses on the top-line growth, but now in their review, we have made this as an essential element of review, and we have also decided to quickly see how the first quarter outcomes are. Maybe I may even decide to allocate in their performance appraisals some weightage towards if they're doing business growth, how profitable the growth is. We will work out some mechanism around and assign them due marks towards increasing business and increasing business profitably. So if that kind of sensibility is going to come, I think we will see that in any case, bank is maintaining a good profitability, a healthy number, which is there. And one last thing, which I'd like to mention, see, gift IBU has been an addition in the bank eight to nine months back, and we have now 965 million of sanctions in the IBU, 8,200 crores of books. So, in the 8.57, what I have mentioned is the global yield. So, the domestic yield, if you look at it, is 8.66. So, which is only, you know, not 20 BIPs, it is 13 BIPs difference. But I think that's how we are very mindful and conscious of doing profitable business, both in the asset side and the liability side. Sure, and so my second question is how are you thinking in terms of the COVID provision buffer that you have? You had around 1200 crores last year and then we draw down we draw down some provisions. So, how are we thinking on that? And the follow up on the provision is we do not hold any provisions towards ECL.

Is that the right assessment?

So, see, provisions in terms of COVID book, I think we peaked around almost 1200 or something as a COVID provision in 2021 when we started to build this provision, and there was some 4000 crore of restructured book that we were keeping at that time, and now it has come down to almost 1,050 crores. So we almost have provision 100% of the restructured book, which is actually not required, as you rightly pointed out. But this is, again, a prudent way to provide for any unforeseen or featured delinquencies, is what has happened over the last three, four years. In terms of ECL, and this gives me only extra buffer and cushion, and we are always mindful whenever there are any high-level suggestions coming from the RBI also when Honorable Governor or Deputy Governor, they are speaking. For the last one, two years, I recall the broad nudge was that we are passing a benign phase, and these are the best times. But you need to keep yourself adequately capitalized. You need to create buffers and cushions, and that's exactly what we've been doing. But today, as you rightly said, with a thousand crores of the restructured book and equal amount of COVID loan provision, we don't need to really make that. But we have other avenues to utilize this, write back this, which we will be looking at gradually as the quarters are there. As regards to ECL, we already have, even when the draft stage guidelines were there, we had decided and we had made a provision of 255 crores. Today, in terms of ECL, our calculations are, it is 2,500 crores is the total provision that I may require to keep, maintain in a four-year period, up to 31st March 2031, Which gives me around every quarter 125. 125 crores every quarter I have to make for ECL. So for around two quarters, we have already done when the draft stage was there. And when the guidelines set in, I see no challenge at all in being able to create this extra provision on this ECL also. The ECL guidelines which have now been conveyed, they've also said that any provisioning you are doing is going to impact your net worth and not impact the P&L. So that change also is now seen, which I think going forward, ECL does not remain a concern anymore. Otherwise, also, it was not, and it does not with this final guidelines from the regulator, where it does not impact your PL, it is the net worth that gets adjusted with the provisions. Maybe I'd like to ask my CFO also to just add anything to what I said.

Sir, further with regards to this, also that RBI has changed the CRAR calculations, now the quarterly profit is also allowed for the taking the CRAR calculations and considering that the four-year part, we have to give the ECL impact on the CRAR. So, considering all these things, we are not saying that anything is required as of now and we are sufficiently having buffer provisioning also. So, considering that we are very comfortable on ECL side, sir.

Sure, sir. Thanks. And the last two questions, when I see the gross NPA across all your retail segments, housing, vehicles, education loans has gone up QOQ. And also within the MSME segment, micro, small and medium, the gross NPA has gone up on a QOQ basis. So, anything to read into here? That's my first question. And second is, what was the LCR at the end of the quarter, sir? Thanks a lot, sir. So, NPA, if you ask me segment-wise, while we look at the NPA amount, but the retail is 0.34 percent, Agri is 7.58, which is again has reduced from 9 percent in a couple of quarters back. MSME stands at 1.60, and total in the RAM is 1.23%. It's not a cause of serious concern to look at, and we'll just, but still, in amount-wise, have we changed? Yeah, it is sitting at 73 crores, it has gone to 150 crores. Okay. So whatever change I am looking at the slide, it is not something that we need to be worrying of. We are very, very conscious in new underwriting. In fact, whatever growth this bank we are registering in the last 12 to 15 months, we have stringent underwriting standards, benchmarks. There is no compromise on the quality, as I said earlier. We have stopped underwriting any segment loan, even a personal segment, where the TransUnion Sybil score, where we have benchmarked our entire underwriting in the bank, where the individual Sybil score is less than 681, which is the definition of Sybil TransUnion as a subprime category. So all our sanctioning in the past 15 months have been in the segment which are prime and superprime categories. We had even looked at the sanctions that happened in, say, home loans, which is one of the big categories. 50% of retail book comes through home loans. So home loans, after we set this underwriting benchmark, we had 23% of sanctions in 12 months in home loans were where the CYBIL score was 800 and above, and 750 to 800 CYBIL score, 57% sanctions in the past one year. You add 57 plus 23, it becomes 80% of new sanctions in home loans was from the prime and super prime categories. So we are very, very conscious about the loan book that is being created. All the segments, we have been very mindful about not achieving growth. Two parameters are important. The mantra is very clear. It has to be a profitable growth and no compromise on the quality. So whether it's a RAM book or the corporate book, we are very conscious on what new clients are getting added to us. This is what I would like to also share. LCR, on an average basis, we have kept a band of 115 to 120. On an average basis, it was 118% is what we are maintaining. Terminal LCR was 114%, but we feel that LCR between 115 to 120 is prudent to maintain, and you are able to see that a good deployment and interest earning is happening if you are maintaining the liquidity within this bank.

Sure, sir. Thanks a lot for answering all of my questions.

Thank you. The next question comes from the line of Suhani Goyal with ICICI Securities. Please go ahead.

Yeah. Hi, sir. Good afternoon. This is Jay Nundra. Sir, a few questions and before that congratulations, sir, on the study number. Sir, first thing on how on your yield Yield on advances and cost of deposit trajectory from here onwards, assuming there is no rate change, and I hear your commentary on the overseas and gift IBU business growth, but including that also, how should one look at the yield on advances incrementally as we go ahead?

Mr. Jay, thank you for the observation you made regarding the performance. Coming to your questions, while we see that the cost of deposits today we have improved, the reduction has been 22 BIPs, 4.38, and the focus is to get core deposits from the branches, And CASA is always the focus to get, and with a lot of initiatives around bringing innovative products, taking help of technology to help us get new business, within which the low cost always remains our focus. And with this new set of branches that we are opening, and opening in potential centers of the country, they are also giving me a lot of core, stable retail deposits, which we would like to have in our books. So, we haven't, actually, I don't have a number ready in mind to share with you, but yes, today when we look at our global book versus the IBU, today IBU book is 2-3%, but yes, I'm mindful of the fact that what you are going to get in domestic, in terms of profitability, domestic name, You will not get that kind of a name overseas. It is a very small part of our total book, 93 crores of loan book, and here is 8,000 crores. But IBU has also, in terms of optics, in terms of new opportunities to explore, in terms of getting stickiness of our corporate clients to remain with us for all their banking needs when they feel like raising ECB. Now, if they don't need to look here, their bank can help ECB raise also, and we have got a lot of traction already in this IBU, but I will not have any specific numbers, but we would like to maintain this yield and this cost of funds and deposits, and this is a very dynamic market that we are into, And there cannot be one specific way to do it in the remaining three quarters. We are very mindful, as I said, of the margins, the business and the profitability part of the business. So both asset side and liability side, we are mindful that we are doing and growing profitably.

I respect that, but what I was trying to understand is, if you think that cost of deposit is going to get higher, and you know, is there any lever with you to actually improve the spread on the yield side, enough so as to maintain the margin? So that is what I was trying to understand that if you if you think that cost of deposit, I got it.

If maybe a little bit, I did respond to this in some other question, that we are not expecting also any further rate cuts. Maybe if there is a rate hike, you may get to see in subsequent quarters. That also adds to your yield and other things. But I think we are very, I will not have any specific numbers, but today if you look at my, this is one thing, okay, let me share this with you. Tomorrow, my MCLR book today stands at 44%, and my repo-linked book is 53%. So, with this, tomorrow, if there is a rate cut, I can, I mean, sorry, a rating hike in the repo, I will immediately see a big benefit coming, because my 53% of loan book now is repo-linked. At some point of time, my MCLR book was 55-57. But now with this change scenario where my corporate has also grown and maybe the retail segments, retail MSME have grown handsomely and this retail repo link book becoming 53%. This is what I think will be something contributing in a big way for this. Then again, we have also, in the last two, three reviews in ALCO, we have actually looked at increasing MCLR, and we have done it also. So MCLR raise that has been cleared in our last two months ALCO, we will see that these portfolios of accounts in the next one year, As in when they are falling due for reset, we will see that the interest earnings at the reset, they will see a MCLR hike also. So these two things are something which will help us not see any further down, but the yield of advances may be going up only.

Sure, sir. I think that's been very helpful. Sir, second thing I wanted to address.

Sorry to interrupt. Sir, your audio is breaking.

The line is not clear. Jai, sir, we are not able to hear you at all.

As there is no response from the line of current participant, we will move on to our next question. The next question comes from the line of Ashleesh Sonjay with Kotex Securities. Please go ahead.

Hi, sir. Good evening. Sir, first question is on the ECLGA scheme. If you can share what is the amount of sanctions and disbursements we have done so far? And if you can also highlight if there is any specific product segment or borrower segment which is showing more interest in the scheme.

Okay. Yes. Our performance, I would say, has been decent. We have 6,700 crores of eligible portfolio under ECGS, within which we have already conveyed sanction of 4,500 crores. So, 65% of eligible portfolio has already been accorded sanction from the bank. Out of 4,500 crores of sanctions, 3,560 crores already stands disbursed. So, 82% of ECLGS sanctions are disbursed, and when we look at eligible versus disbursed, First, not 100% of borrowers would like to avail the ECLGS facility, but we still are pursuing to reach out to all the clients. 53% of our eligible portfolio has already been disbursed, so we are continuously reaching out. Our experience has been that while the MSMEs comparatively to corporates are more willing to look at this option and avail the emergency line, out of my 3,560 crores of ECLDS amount disbursed so far, 2,700 crores is MSME and 400 crores is corporate.

Sir, the second one is on the FCNR deposit scheme. If you can share what is the progress so far, and if you can also give some qualitative color on what are the processes, approvals, partnerships that are needed for mobilizing these deposits.

So, this is yet another opportunity which has come to the system to raise dollar deposits and get liquidity for your Indian operations. Well, initially the Reserve Bank of India guidelines and more engagements with RBI, They have also now issued FAQ, which has addressed all the issues and concerns from the bank's side, and all of the banks are looking, and even we are looking at this opportunity to see that what is the optimum or maximum mobilization that can come to the bank through this window. Initially, when we envisaged the product, the pricing or the rate that we were offering, we thought with the changes and clarifications that have been coming in the FAQs from the regulator, we should take an aggressive stance comparatively. So now we are offering for a five-year FCNR deposit a rate of 6.60, which compares us with the best offers that are available in the industry, definitely from the PSV space. And we are now working around the strategies, the ways to do the reach out as well, and see how maximum utilization or traction that we can build around this. Currently, the business mobilization already started, but it's a very initial state. I don't have a big number to inform, but since very consciously we have improved our initial rates to such high level 6.60, we definitely plan to make maximum use of this offering that we are doing. And maybe the following weeks, months, August and September, one may see major traction coming in from mobilization with all the banks, and we will also see that how best we can utilize the opportunity.

Understood, sir. And last question from my side. Your cost of deposits has increased by five basis points QoQ. Do you expect this to increase again in the next quarter also?

So, in terms of cost of deposits, year-on-year basis, they have actually sharply reduced. They have come down to 4.38 by 22 BIPs. There is also, if you see, we are also seeing a shift that my TD growth, the time deposit even from the retail segment, our TD term deposit growth is at 60%. While my total deposits are growing at 13%. So, a lot of our individual segment deposits are also taking benefit of the high interest rates that we sometimes like to offer to individual clients through our special schemes, limited period schemes, and we want to give them the options to remain competitive in the market. I don't wish my retail depositors to look at other banks for their getting returns on savings. So we like to give them decent offerings. While we are averse sometimes to high-cost bulk deposits from institutions, but for retail clients, so this is what we have seen. A lot of CASA has also converted to time deposits from retail segment as well, and which is Q&Q basis is what we have seen while the year-on-year 22 BIPs improvement came to us in terms of reduction, but the Q&Q, there is a slight 5 BIPs increase, and the reason I just explained, sir.

That is understood, sir. I'm just checking whether, because you get a visibility into the mix of incremental deposits that are coming, whether it is CASA or term deposits, retail term deposits, wholesale term deposits, you would also get a sense of what is happening on the renewal of your term deposits, whether it is coming at a higher cost. As a mix of all of that, do you think the cost of deposits has now kind of bottomed out and will only increase from here? That is the question.

I don't think because you are also getting to explore new avenues to raise resources. I think we must understand there is a clear shift among the household savings also have We have moved from banks or to other asset class through the SIP mutual fund, and this is an irreversible phenomenon. Even from the tier two, three cities, if somebody looks at the number of DMAT accounts that have been opened in the country, those numbers are clear indication to this shift, and people are willing to get higher returns, better returns, and not just depend on bank deposits. But yes, there is a trade-off, but they are willing to maybe take some higher risk, compromise a little bit on the liquidity part, which a bank deposit typically would offer. But this is how things are growing. So for your raising resources to fuel your growth, fund your growth, credit growth, you have to look at not only deposits, you have to look at other sources where you can. And so we've been doing a lot of refinance. CD is an option, but we have seen that it's a short-term measure and borrowing at some cost. Sometimes if it is not helping my margins and rather denting the margins, I would not like to do that. So refinance has been where our blended cost has been six, six and a half. We have done that significantly also, I would say. We also can now, I think, with a high ROE that we are commanding, we can look at some capital raising in the course of this year. We already have a board and shareholder approval to raise equity. At opportune time, we can even look at raising capital to fund this high double-digit growth that we are experiencing in the bank. And I would not like to lose any opportunity to not grow, and wherever the growth is a profitable growth is what the only requirement is. So these are the various sources that we will have to be mindfully watching and operating around them.

Thank you, sir. Thank you for the elaborate answer. That's all the questions ahead.

Thank you. The next question comes from the line of Abhishek Murarka, which HSBC. Please go ahead.

Hello. Hi. Actually, my question has been answered. So, thank you so much and all the best.

Thank you, Abhishek, for taking our time to come and sit through our call. Thank you so much.

Thank you, sir. It's a pleasure. Thank you.

Thank you. The next question comes from CA Dr.

Ashok Achmera from MatchCoin Global. Please go ahead. Thank you sir.

Thanks for giving this opportunity at the FAG end. So, sir, compliments to you sir for very steady performance in the first quarter of this financial year which was otherwise which is a difficult quarter. And many of the questions have already been answered in such a detailed answer which you are given. So, sir, I will just take up on the treasury operations In this quarter has contributed a lot in the profitability of 266 crore as compared to 33 crores in the March quarter. So, sir, going forward, how do we see the treasury working out, treasury operations and the profitability on that, which includes the profit on the investments and the, from the forex also?

While what you have noticed, Ajmeraji, let me thank you for commenting on the bank's performance, but this treasury income had a component of a one-time SR of 104 crores. So, this is what is the contribution. While we are looking at our Treasury income on a consistent basis, but this figure that you just mentioned has a large one-time contribution, which I thought I will clarify.

Sir, going forward, sir, in the coming quarters, do we feel some good income coming from the treasury matching even this one time also?

So, why is this there are some SRs and in this particular SR, this is not the final payment, you may see in subsequent quarters, but we have also improved on, we have got lot of We have a lot of skill sets at senior levels, and Treasury also, we have recruited people from other public sector banks, and I mean, I'm sure they will be, the idea is to see how smartly we are able to manage our Treasury operations, and while we don't give any targets to Treasury for profits, But, yes, there are a lot of ways to augment income from the activities that are happening in the treasury, and not only that we are not currently doing, but any possibility to have any incremental contribution to the profitability of the bank, yes, we don't want to lose out on any possible opportunities, is what I thought I would make.

Yes, sir, point well taken, sir. Sir, in the net worth calculation, I just observed that in addition to the profit added of this quarter, of the last quarter's last net worth, 488 crore rupees additional has been added. So, this has come from the reserves which has, which might have come from the AFS book or is it something else? This 488 crore net worth is increased beyond the profits.

Yes, sir. That is come from AFS reserve only. So, you have rightly pointed out, sir.

Okay. So, this fully has come from the AFS, this evaluation. Sir, on the SMA front, this SMA 2 in this quarter has increased from 56 crores to 208 crores. So, is it mean that this SMA1 which was 241 crore in the last quarter has turned into SMA2 and secondly, the overall gross NPA is also increased by about 188 crores. So, that must be below 5 crore, many accounts have done. So, are you are you sensing some kind of major stress in MSME or the lower below 5 crore accounts because of this geopolitical situations and the the on the waterfront between Iran and US and whatever disturbances are being created? How do you see spanning out in the coming quarters? Do you see little more stress coming into this and you are the CCL also people have availed. So, almost about 3,100 crore has already been, I think, availed by the MSME and the corporate book only. So, what are your views on this, sir?

Meeraji, there is one single government entity account, which you have seen as entered momentally in the SMA-2. It's not a problem at all. The money has to flow from the government, and that will be getting regularized. On the contrary, if you see, the stress in the loan book has come down both in percentage terms and absolute terms also. Year on year, if you see, 3.18% is my stress level, which is an improvement of 140 BIPs, and in terms of value, 1,300 crores stress level has come down. If you see the concern SMA 1 plus 2, despite this one government account, so SMA 1 plus 2 is 1.34 percent, which is also a 5-bit improvement. So one single government account has probably distorted the SMA 2 figure when you look at standalone, but overall SMA 1 plus SMA 2 also has shown improvement, and this particular account will get rectified. That's not a challenge that we have seen. Okay, sir, which is, how much is that one government account? Probably not proper to name the account, but. No, no, not name, but the amount. Okay, 87 crores, okay, okay. 87 crores, please say. Yes, sir, yes, sir. My last question is,

in this round, I mean, in this round means last round only. So, is on the, again, on the credit growth and And also the Kalsa Bank of Maharashti is known for the phenomenal credit growth and even now also if you look at the yearly basis it is 27%, 26.9%. So going forward, I think one question was asked earlier by somebody that would you like to revisit the credit growth target which is I think that 17-18% is generally happening in every bank, especially in this quarter onwards. So, don't you, I mean, think that a bank like Bank of Maristra, which is known for its credit growth, will again go into 24-25% kind of a growth in this financial year?

So, while what you say is correct, sir, the system is also seeing that, we have also seen that private capex or maybe renewable energy data centers, all these are emerging new areas, We have also been bullish on these sectors. We have marked them as bullish sectors, where we are bullish and we are participating. These are the growth sectors in the present system. So, if you look at corporate growth, year-on-year, we have grown in this Q1 as 30%. So, while we will see, keep this thing, also one differentiated thing that is with Bank of Maharashtra is that we are opening new branches annually at the rate of 200 branches. With every new branch that is getting functional during the year, for that particular branch, the base is zero. Any incremental deposit, any incremental advance that happens in that particular branch only adds up to the overall growth of the bank, and that is one of the contributing factors where we are continuously delivering industry-leading performance, more than what the industry average is. And this is not going to go down because our branch expansion plan is a five-year plan. So for the next two to three years, we will continue to experience this kind of credit growth. But I think we've and we also have marked some sectors as our focus sectors. So whether it's a vehicle loan among our existing clients where we are doing cross-selling to our MSME customers, large credit customers and doing big ticket as a product. If you see both in the MSME and non-priority retail segment, gold-owned, 13,000 crores have grown gold-owned year-on-year. If you see, it's a 75% YOY growth which is coming, and so these are also some product categories which are contributing to this fast growth. But I think at the initial of the year, my trend has been that whatever guidance we share, that becomes sacrosanct to us, and we would like to stick to that. And if we are over-delivering, I'm sure we are only giving confidence to you all that whatever bank has shared as a guidance, they are performing. So we would like to not, I think, change the guidance number.

All right, sir. Thank you very much, sir, and all the best. Thank you.

Thank you. Ladies and gentlemen, we would take that as our last question for today. I now hand the conference over to the management for closing comments.

So I think it was in my opening remarks, most of the points had been covered, and I must thank the investors who have asked a lot of questions around how we are doing and what we are doing. Maybe the OP, NP numbers, everything I've already shared, there's not much to share from our side, but I would like to thank the investors' community in general, our engagements, and you've been very supportive. Today, in two years' time, our FII holding has gone up from 0.39 to 6.08. The DII holding also likewise has gone up from 0.24 to 7.42, and in terms of number of investors in our Benfoss, it's also encouraging. We are completely committed to see that whatever commitments in terms of guidance that we are sharing, the bank would like to make sure that we stick to that. And this 7.42, which I just shared about the DII share, excludes the LIC, by the way. So that's how we have been getting the support, and we are committed to see that the guidance, as I just mentioned, we perform, and wherever possible we can over-deliver, we would like to do that. So thank you so much for joining the call.

Thank you, members of the management. On behalf of Nuamavik, that concludes this conference. Thank you for joining us, and you are now disconnected.