Punjab & Sind Bank (PSB) Q3 2026 Earnings Call Transcript

The moderator for today's earnings call. I welcome and thank each one of you for joining us today for the Punjab and Sinbanks earnings call for Q3FI26. Please note that this conference is being recorded and all participant lines will be in the lesson only mode. That will be an opportunity for you to ask questions after the opening remarks by the management. Should you need any assistance during the conference call, please raise your hand on the Webex panel or press star 3 hash on your phone. I repeat, should you need any assistance during the conference call, please raise your hand on the Webex panel or press star 3 hash on your phone. I would now like to introduce the management of Punjab and Sindhbank. We have with us today, Sri Swaroop Kumar Saha, Managing Director and Chief Executive Officer, Sri Ravimera, Executive Director, Sri Rajeeva, Executive Director, and Sri Arnab Goswami. Chief Financial Officer. I would now like to hand over the conference to Sri Aroop Kumar Saha, MD and CEO of Punjab and Sindh Bank for the opening remarks. After which, we will have the forum open for the interactive Q&A session. Thank you and over to you, sir.

Thank you, Mr. Ganesh and good evening, everybody. I welcome you all on behalf of Punjab and Sindh Bank to the Q3 analyst conference call. For FY2526. The results were declared on 17th of January. And the results were also uploaded in the website. I'm very sure that most of you have been seeing the presentation and the bank's results. However, just to keep a brief snapshot of the highlights of the performance of the bank for Q3, I would like to mention the following. The total business of the bank stood at 2,49,499 crores and has shown a growth of 11.75% yoy. The deposits growth was 9.27% and stood at 1,39,202 crores. The advances grew by 15.05% and the same stood at group is 1,10,297 groups. In spite of the challenges of the CASA in the entire system, the CASA deposits also showed a moderately handsome group of 8.78%. However, one of the other important component of the liability resources The retail term deposits has been growing at a very, very handsome rate. And for the quarter ending December 25, the retail term deposits grew at 18.34%. In terms of the operating and net profits, the bank's operating profit for the quarter ending December 25 grew at 22.73%. And stood at 594 crores and for the nine month period, it grew at 30.18% and stood at 1639 crores. The net profit for the quarter increased by 19.15% and stood at 336 crores. And for the nine month period, it increased by 28.02% to 900 crores. The NII grew at 5.01% for the quarter. And 6.5%, 5-7% for the 9-month period. What is significant is that we are laying a lot of focus on core fee income, which excludes the treasury and the recovery and write-off accounts. And that traction continues to be positive. And for the quarter end at Q3, the... The core fee income grew at 28, nearly 29% YUI and for the nine-month period it is around 19.33%. Overall, the non-interest income grew at 50% YUI and 51.52% for a nine-month period. The asset quality continues to be significantly improved. The gross NPA now stands at 2.60%. And it shows a decline of 123 BIPs YOY, the net NPA of 0.7%, which is as per our guidance given that we should bring it below 0.75. And we have already achieved that guidance in December and we have brought it to 0.74, which shows a 51 BIPs decline YOY. The PCR continues to grow. And here again, the PCR on a YOY basis has increased by 270 BIPs to 92.23% with TWO. And without TWO, it has shown a significant improvement of 408 BIPs to 72.28. The slippage ratio continues to be at a moderate level of only 0.16% and it continues to decline. And the credit cost also is at a low level of 0.05%. In terms of the other parameters, as far as business is concerned, as we have been interacting with you for the last few years, we have been said that we would like to focus on increasing the retail agri MSME segment. And here again, in the December quarter, we have been able to show a consistent performance in this segment, and it grew at 21.94. The percentage to the total advances has now improved to 57.45% and we expect that this percentage will gradually go up and by the end of March 26, we should be at 60% and next year for the guidance which we have kept for this growth of LAMP percentage is 70% for the year 26-27. So we will continuously work on this, on the various segments, as you must have observed in terms of the individual segments. Also, the retail has shown a growth of 19.58% AGRI of 24.29 and MSME of 22.94%. So all around in all the three segments, a healthy growth and consistent growth. In terms of the capital adequacy, the bank continues to be have a good capital adequacy of 16.83%. If you add back the nine month profit. Which we have not added so far as per norms. If we add back the nine-month profit, it is at 18.01%. So just 18% overall. We showed that the bank continues to work on capital-optimized growth. In fact, the credit risk-weighted asset density. Which we call RWA density has also shown improvement from 61.18% to 58.64%. So overall, we believe that we'll continue on this capital optimized growth going forward as well. Cost-to-income ratio has also declined 378 BIPs YOY and standard of 60.84%. Return on assets is at 0.79%. We would like to take it forward, but at the end of nine months, we are at 0.79. We would like to take it forward, going forward to around 0.80. So these were some of the numbers in terms of the efficiency parameters. If you observe that the progress in the operating profit and the net profit at the bank continues to have a steady growth. In terms of the operating and net profits, if we look into from June 23 onwards, there is an uptick every year in the quarterly operating and net profits. The other areas of what I'd like to... In terms of slippages also, we find that the slippages also continue to decline overall, and of course, we have the significant. We had a retail, retail slippage of 34 crores, agri of 39 crores. MSME on a y-o-way basis, slightly increased, 94 crores, but we don't think that's a very worrisome area. And overall, the percentage gross NP amongst the three segments has also shown a significant improvement. In terms of the SMA 1 and 2, while the sequential Thank you very much. Sequentially, the total amount of SMA 1 and 2 has shown an uptick, but these are the primarily the two state government guaranteed accounts, which we have also adequately provided for in our internal books as a standard, but it is backed by state government guarantee. We don't foresee any immediate delinquency situation, but however, We as a precautionary measure and as per the norms we have significantly provided for in these two state government guaranteed standard accounts. Finally, as far as the futuristic outlook, we continue to focus on branch expansion, expanding our delivery channels through branches, brick and mortar, VCs, ATMs. We are also now decentralizing more and more in terms of operations. We have four new zones that are open during the year. Then zonal offices, another four zones are planned for the next financial year. We have now two FGM offices. We intend to increase it to... 5, increasing another 3, and also expansion of BCs to further to around 6000. In terms of the other areas which are very important for any bank institution today, innovation. We find that our digital journeys have streamlined. In fact, the digital home loans during the quarter of December, 40% share of the total housing loan sanctioned was digitally assisted. Similarly, for the digital car loans. 54% share was total vehicle loan that was sanctioned was either through digital STP or digital assisted journey. So that shows that it is picking up. MSME loans we have just launched, so it will take a bit of time to traction, but we find that initial signs are very encouraging. In fact, we also now launched the digital rooftop solar and A scheme under STP journey and also the digital commercial vehicle loans and by March we'll have a host of other new digital journeys on personal loan, gold loan, self-help groups, mutual funds. Second-hand car finance, educational loans. So these are all lined up at very advanced stages. We expect that by March 26, most of these will be actually implemented. A bit of one or two areas may spill over to Q1. But overall, the traction is that we will continue to focus on smart delivery of our products from the bank side. In terms of the customer protection, we all know that we are living in a very dynamic world. And therefore, we need to create multi-layer defense to protect our customers in terms of cyber-related frauds that happen. So we have taken lots of host of measures. We have integrated with I4C, Mule Hunter, the enterprise for risk management services also has been activated and much more and more activities are happening in that as we learn from the system. The FRI, MNRL of the negative risk of mobile numbers for enhanced due diligence are also being worked on. So we have been very, very conscious of the fact that we need to take all the mitigants that are required to protect our customers in various forms that are happening in today's ecosystem. In terms of future, of course, a lot of technology-driven interfaces are getting created for customers and also for bank staff through various AI-generated chatbots. I think these will all play its role in going forward. And with excellent CRM solutions, the audit systems have also brought in a lot of value to the bank. The security operations centers are also getting upgraded. The CASA back office is one of the very important things that the bank has taken, an important step. You know, there are a lot of new-use items float around the mule account process, so we had earlier announced that the savings accounts have been integrated. All the savings accounts were getting open through activation from the backend. Over one lakh accounts have been opened through that. That's the only channel for the branches to open. And now the current account and the non-individual accounts opening has also been made live recently. So we hope that by these robust measures on opening accounts, on customer acquisition, a lot of much more due diligence will be made. The activations will be done at the back end, which is through a centralized software system, and we expect that going forward these sort of risks that we carry in terms of the challenges of the ecosystem will to a large extent get mitigated. However, we never can be complacent. We need to continuously upgrade our systems and processes to mitigate the emerging operational risks that are coming. Forex businesses is also on the pipeline. The centralized Forex division is at a very final stage to be centralized Forex state finance solution is a very advanced stage. By March, we intend to complete the project and take the bank in the next year to a much more augment to increase our Forex business. In fact, we have also approached RBI for the GiveCity. And approvals, we we hope we are hopeful that we will get it sometime, but the at the present point, what the matter is that we have requested RBI for the formal process to give us an approval of the gift city. So if that is done, I think the bank will also get a lot of opportunity to do forex business sitting in India. A lot of other initiatives also being planned in terms of operational cost management, CRM led generation, AI driven features, mobile apps, etc. HR initiatives have also been taken to a very, I think when I joined this bank, a lot of questions came from the analysts that how are we building capacities. And we are now in a position where we have got the state-of-the-art processes to do this manpower, not only manage them, but also skill, reskill them through various tools, scientifically devised tools. So we are doing it in two phases. The first one has been implemented, and the second phase is under implementation, which takes the second phase particularly focuses on learning and development. I think that would be the key. The first part was on performance management system, target settings, appraisal tools, etc. Manpower assessment, succession plan. All these are primarily the first phase that has been now done. Now, the second phase is getting implemented. I'm very sure these will all give minerals to the bank in the going forward. A lot of various products have been introduced. And finally, if we come to the achievements of the bank, this is the guidance that we have been given. I think we have summarized the guidance in the last slide. And we find that overall, whatever targets that we are set for in terms of the financial year, we are all in track in all we have achieved in most of them and also in track in the gross NPA, which we are already at 2.60. And we are very sure that we are going to bring it to below 2.5 percent very shortly. So thank you very much for your patient hearing. Now we can open up the floor for the discussions. Thank you.

Thank you, sir.

We will now begin the question and answer session. Ladies and gentlemen, we will wait for a moment while the question queue assembles. I request the participant to limit their question to two per person and please rejoin the queue for additional questions. Anyone who wish to ask question, you may raise their hand by clicking on the raised hand icon on your Webex panel. For those who have joined us via audio call. And wish to ask question, please press star 3 hash. If anyone is having connectivity or audio issue, you may share your question on WhatsApp to us at 7738688746. I repeat, if anyone is having connectivity or audio issues, you may share your questions on WhatsApp to us at 7738688746. Before asking the questions, I request you to please introduce yourself and your organization.

Our first question is from the line of Ashok Ajmera.

Thank you for giving this opportunity, and congratulations, Sai Saab. Ravi sir, Rajiva sir, all the top management and the other management staff and the staff of the bank for a good quarter, a very good results in this quarter. If you talk about the operating profit also has gone up, the net profit also has gone up, a good growth in the credit also in this quarter of 4.48%. So on the whole, it's a very good quarter and my compliments to you all for the same. Having said that, sir, I got certain observations, some queries and some clarifications. So, my first question is on Basically, on the overall business and especially the credit and deposit growth. Now, whereas the deposit is at 7.26% in nine months and targeted to be around 8 to 9%, 8 to 10%, our credit growth target is 15 to 16%. Out of the 10.73%, we already achieved in nine months. So, with this kind of difference in the deposit growth and the credit growth, how are we matching our ambition of going for large credit growth of 15 to 16 percent? This is my first question, sir. If you can just a little bit elaborate on that. Though your opening remark was very, very, I mean, you elaborated everything, but some of these questions need some more clarification, sir. Sure.

Yeah. Thank you, Mr. Ajmera, for your kind words and a very, very appropriate question that you have raised in terms of the mismatch between the credit and deposit growth. And you have rightly pointed out that our credit growth is a bit higher comparatively to the deposit growth. Having said that, we will appreciate that in terms of the present situation that what we are in at this point of time, our CD ratio is around 79.24%. And what is interesting here is that while the pressure on the CD ratio may look a bit challenging in terms of managing the overall outlook of the bank's business growth. What I would like you to focus on is that though the total deposit growth is a bit less, our little term deposit plus CASA is, sorry, the little term deposit is growing at around 18% plus, and overall the credit growth we are aligning around 15% to 16%, right? And also, we are trying to, in terms of the various dynamics of the ecosystem, to protect our margins as much as possible. We are also very conscious of that and we are trying to do a dynamic, what we call strategically, strategically and dynamically we are trying to monitor that how do we fund credit in terms of the various resources that we have. So, one of the deposits is a very important resource for funding credit growth. So, what we are trying to do is this, is our LCR average, you know, liquidity coverage ratio. We feel that if we are able to handle, maintain a comfortable LCR. We can have a leeway in terms of the increase in the CD ratio so that we don't get choked in terms of our business projections. So therefore, we are doing a very calculated methodology of trying to fund our credit growth. We are not, because as the last quarter comes, the interest rates are getting hardened now, both on the retail, we have taken a lot of steps. We have rationalized our deposit interest rates, our savings bank interest rates, so these are some of the steps we have taken to maintain the margin. But going forward, we'll take a very quarter-on-quarter analysis. How do we handle this situation of the hardening of... Rates on one side and also the impact on the repo rate cuts that the Reserve Bank has done continuously. Overall, at the end of it, What I can summarize, my submission is this. We don't feel any challenge in terms of funding, our overall credit growth, and we expect, we are very confident that we will be able to maintain the guidance that we have been giving you. But on a quarter and quarter basis, these things will be monitored and going forward.

Yes, sir. The point is well taken, sir. But with a low NIM of 2.59%, I mean, it is continuously coming down. Which alternative source you feel can be cheaper than the deposit or Kasa so that you can protect your NIM also at the same time growing the advances to this level? So what are your views on the NIM going forward with this alternate method, with dynamic methods, which you are using to raise the funds and maintaining the LCR above a comfortable level of say 120 or so. So how do you, I mean, from where do you get access to the cheaper fund than the normal deposit?

Yeah, point well appreciated. If you see, there are two things here in the dynamics, in the dynamics of the ecosystem. While it is very difficult to really get a substitute of a CASA, which is the low cost resources. And the only option for us as deposit is very important is to go strongly on the retail term default. So that, let's say we have also done a lot of changes. While we are growing at 18%, what I'm trying to tell you is this, that in spite of the challenges of the deposit mobilization, we are still growing handsomely at 18% in spite of lowering the rates in the deposit buckets, in various deposit buckets. But The point to be what we have to, in terms of the name, if you see that in spite of the insignificant reduction in the repo rate cuts by the regulator, we still in the December quarter, we were still at more or less at the level of September quarter. So, that shows that the name going below a threshold has been, we expect that it gets bottomed out by the end of this quarter or maximum by the next quarter. And the alternative is. And the alternative is this that we price our products and we go into the segments of the asset side where we can really get a margin of 3 to 3.5%. And if you see our dynamics of our rating, credit rating, external rating, you will find that we have moved from the triple A's to the double A's. And overall, we are keeping the balance well. So, the AAA at one point of time was 19.49. It is at 16.60 now. AA rated was 22.38. Now, it is 26.43. So, this is where we create a room for us. And also, as we increase our… Retail Agri MSME growth. Now you find that earlier in our bank, the agriculture was not growing at any rate, which was to be boasted about. Now you find that every three segments, Retail Agri MSME, all the three segments are growing at tandem with each other. And these are the areas where we find that the margins are still possible. Because in the corporate world, we will not be able to compete with a low CASA base. It is very difficult for us to compete in the corporate world in terms of pricing of the good rated accounts. In fact, we have let go around 3,000 crores of corporate. We have shed 3,000 crores of corporate loan book just because we didn't want to. Uh, provide a repricing at a rate which is not convenient to us. So we have let go of those. But in spite of that, we are still growing a corporate book, uh, at a reasonable rate. So how do we balance our portfolios? It will be very, very important. And, but this is a challenge, uh, we will like to overcome through our various, so that's why we are saying that as we increase our retail agree MSMH to 60%, and maybe from next year to a, uh, to a very, very, The significant level of 70%, this dynamics will play out very, very. Solidly in favor of the bank in protecting the margins.

Yes, sir. Taking this, your point forward of rating and getting a higher yield or higher margin on the advances, what I see is that in NBFC and gold loan, there are greater opportunity at the same time with good security also. But when it comes to the NBFC, you know, we are still on AA kind of a thing where there is a small business NBFCs, which are even triple B minus also, triple B minus also, but their business is very, very secure. They are giving to low cost housing, average size is five to seven lakh rupees and not a single default and other things. But at the same time, we get very good returns. Maybe the interest from 9.15 to maybe 10.25%. So those kind of strategies should be re-looked. It should also be looked at. Similarly, for the gold loan also, I would just like to know the composition of NBFC and the gold loan and gold loan also, how much is the agriculture and non-agriculture and the kind of yield we are getting.

Yeah. So, first of all, from your first point is regarding the taking exposures in the NBFCs with the lower credit rating. We will take your feedback and we will look into that strategically in-house to see whether what we can do. I think it's a fair point that you have raised. And regarding the agriculture gold loan portfolio, I request Mr. Mehra to come in here.

Good evening, sir. With regard to the overall gold and portfolio of 4,800 crore rupees, 1,700 crore rupees is true coal ending, and out of that 1,000 crore rupees is in agriculture. And with regard to the yield in gold, somewhere around 8.85%.

How much, sir? Can you repeat it?

8.85%. 8.85%.

8.85%. Very good, sir. So that's what only I'm saying, sir, that in case of even some of this lower NPFC, where with a secured business, also, you can get a very good margin and can increase the profitability. Having said that, sir, Now, in the segment results, I was looking at the segment bifurcation because of this high profitability in the corporate book and the retail book of 269 crores, 390 crores. So overall what's coming was 863 crores. Out of that unallocated expenses of 270 crores has gone for the first time so high. As compared to 50 crore, 70 crore unallocated. So what happened this time that unallocated expenses had gone up to so much of 269.58 crores, whereas the segment-wise profitability, if you individually look at treasury, corporate, retail book, and retail banking, then it is 863 crores.

We'll reply. I think let me look into that. This is a fair point and I'll just look into it. My CFO will inform you separately on this matter.

Arnab ji will explain. Sir, my last question in this round is basically that the government account, you know, like you said that two state government backed, they slipped first SMA 1 and then part of that SMA 1 and SMA 2. And you need not worry and you have made some reasonable provision also, but is that those accounts are going to slip finally as per the IRAC norm in the NPA category or before that only they are going to be resolved?

See, these are these are systemic accounts. First of all, as of now, we don't foresee the accounts getting delinquent number one. And I can also tell you if they if they do so at any point of time, at present, we are having more provisions in a standard account than it is required in a in a substandard account. So we have built that cushion already. Okay, so, but we don't foresee those accounts, because in one of the accounts, we had an exposure of 1500 crores, exposure has come down to 1000 crores. Another account, we had an exposure of 1200 crores, it has come down to 627 crores. So, repayments are coming, albeit at a, not at a space that we like to have, but we don't foresee. Any immediate delinquent delinquency in these two.

Thank you very much, sir. I'll give the opportunity to others. But if time permits, I'll come back again. Sure.

Discussion and questions. Okay.

Thank you.

Thank you, sir. The next question is from Sunil Choksi. Over to you, sir. Good evening, Mr. Choksi. Hello, good evening, Mr. Choksi. We should see how you're there.

We can move forward.

Yes, sir. Yes, sir. Yes, sir. The next question is from Jay Mundra. Over to you, sir. Hello, Mr. Jay. Mr. Mundra, good evening. Are you there?

Can you hear me, sir?

Yeah, I can hear you. Please come in.

Sure. Yeah, hi, sir. Congratulations on a steady quarter, sir, and thanks for the opportunity. Sir, I have a few questions. One is, sir, this quarter we had a stable NIM almost and negligible credit cost. But still the ROA is below 80 basis point. All other banks, they are now well, they are very close or higher than 1% ROA. This quarter we had a negligible credit cost and still we are far off from 1% mark. Of course, it is a journey. It may take some time. But I wanted to know, sir, do we have an aspiration for 1% ROA and how soon, you know, can we reach there? Hopefully, the NIMS will expand and credit cost. May not be negligible, but I do not see any problematic thing on credit costs. So in your assessment, when can we, you know, reach that 1%?

Yeah, I think Mr. I think excellent question from your side. A very, very appropriate also, uh, you have actually. Already discussed how we have maintained the September quarter. The ROI part, the net profit actually, somebody please put it on mute, please. Others have, please put it on number. Yeah, Mr. Munza, can you hear me? Mr. Munza, can you hear me?

Yes, sir, I can hear you, sir.

So now the point, coming to the point of your ROA, see ROA is a component straight away from the net profits. What we have been building and as you rightly said that it's a journey. We would like the bank to move in a very, very steady and a very strong footing in terms of our efficiency parameters. So there is a lot of cushion being built up in the balance sheet in terms of our managing our portfolios. In fact, as I said, that in terms of the standard account provisioning, we have a ECL framework coming up in future. So we are building up in one of those two state government candidates. We are having provision of 30%. One of them is at 20%. So we are providing more than required, number one. We also see our increase in our provision coverage ratio is also increasing. And we have also built up cushions in that we are now, our aging provisions are as extended up to October 26. So we are building that we should be ahead of this at least by six months in terms of our aging. Why are we building it? Your question could be what was the, what was the, when the credit cost is low. What is pushing the bank to these sort of strategies? We are doing it very consciously, Mr. Mundra, first of all. And we would like that the banks, whatever assets that we are having and any semblance of stress in some form or the other, though we feel that we have a lot of other standard assets. We are in another standard asset which is a technical NNP. We are having provision of more than 80% in that. So all this, and we don't have too many of these accounts, but whatever we have, because of the size of the balance sheet is small for 1,000 crores of one corporate. And if that goes bad, it can have a massive impact on the overall scheme of things of the bank. So we are building it steadily and in terms of the futuristic ROA guidance, we think that ROA of 1% is surely possible by the end of March 27.

Sir, if you see in this quarter, you have made excess provisions and all along you have been, let us say, making some extra buffer. But this quarter, the credit costs are negligible, right? It may not become negative, right? Because so I was under the impression that if credit cost is negligible. Still ROA is only a very minor uptake. I am saying over the next five quarters, even if ROA, I mean asset quality remains steady, but your credit cost will not fall down below this level, right? So credit cost is not a lever anymore. From this quarter perspective, all you have to do is either improve NIM or fee or OPEX. Absolutely. There's only three, right?

Absolutely. Absolutely. You're absolutely right. Free income. Free income, if you see, as I was saying, the bank was not doing well earlier in core free income. Treasury and return off, of course, recovery rate of, they also contribute quite significantly. But those are also part of market dynamics. We are more concentrating on the areas other than these two big non-interest income. So our co-fee income continues to increase. A lot of stress has been given to stop revenue leakage, to promote third-party products, to increase non-fund business, and whatever. In fact, yes, in fact, in this time, we have also been able to generate some additional income through our sale of FOB PSLC. The PSLC component. We have contributed 25 crores, 21 crores in this quarter. So now with an agriculture thing picking up, the portfolio picking up, we think that we have a lot of scope for increasing the more, getting more and more income through these sort of methods. In terms of futuristic planning, we are now, we are going to very shortly implement supply chain financing. We're going to have cash management services by June. So some of the banks are generating lots of fee income through these methodologies. So I think your point is absolutely right. We need to improve them. And that's why I was talking about how we churn our assets book into the various segments and also increase our fee income to that. And hopefully supported by a good, sometimes good or sometimes moderate treasury. Performance because of the market dynamics and good recovery, and our slippages continues to be less and less, but our recovery. In NP accounts, it continues to be, a lot of focus has continues to be given. So in this quarter also we expect around 250 to 300 crores of recovery in the rating of accounts. We expect that. And if all that materializes, this will all add value going forward in our overall scheme of things. So we will focus on getting generate more and more NII, NIM, and other income from various sources.

And sir, are you also, have you migrated to the new tax regime or that is, you're still on the old earlier tax regime because we

have taken away or we have covered all our accumulated losses. So we will look now is the time has come for us to look into this subject. And maybe going forward, we will look into this. Yes. Now we have come to that situation.

And secondly, sir, on gold loan, right? So there is a 100% YOY increase in the gold loan. Is there any reclassification that in the sense that earlier you were having retail gold or agri loan, which has now reclassified from agri to retail or retail to agri, or these are all, I mean, like to like sort of a number?

Yeah, Mr. Mehra will take the call.

Actually, the golden growth is there. I just informed that we have done the co-landing part as well for golden. Last time we have done it, and 1,700 crores. So, because of that, that growth is there. And then there is no declassification among these three sectors in the gold.

I think, Mr. Bunda, as far as retail and agri classification, that's dynamics. But overall, what I'd like to say is that. The portfolio as such is growing both organically through our branch network and also through our co-lending. Co-lending has been doing exceedingly well. Our experience has been excellent so far. So we will promote more and more such models of financing both organically and inorganically. And so far, I think the quantum jump that you see are contributed by both the segments, both on the branch side and also from the pole ending side.

Thank you, sir.

Now we will begin to the next participant.

Next question we have from Mr. Sunil Sushil Choksi. Over to you, sir.

Hello, Mr. Chokshi.

Yeah, good evening.

Good evening, Chokshi sir. Good evening, and my congratulations are very good numbers for the quarter. Thank you. Sir, I was starting in reverse, going to your guidance slide, you have tick boxed everything except gross NPA. I know you would not revise, but if on a general discussion basis, what is... Likely to get further enhanced from where we stand. So why don't you elaborate? Because these are positives and we are not willing to change our guidance.

See, I think the color combination sometimes may be misleading. Okay, so I tell my CFO to be careful in the color combination. Why you have put it in a different color is that we have not reached that level. That's the other thing. We are going to be much better than what we have guided. I can assure you that.

No, no, sir, I sense in the numbers that your deposit growth is what the market is estimating and RBI is also forecasting. Your advances are doing very well. Your ramp, specifically second-hand car, solar, agri, housing, loan, all are doing well. Your gross NP has performed well. Net NP has performed well. PCR is stable. Recovery and upgradation, possibly you will far exceed the number of what you have said. Credit cost is minimal and slippage ratio is also under control. So I personally feel that your numbers, Outlook and bank. I just feel that if you can throw a better picture than what you are looking at aspirational on March 26, nobody is going to hold the gun that you have not achieved it. But if you think it is, what is going to, so your credit cost, can it collapse from FBRI, one or two notches, maybe your NIMS can improve far greater, whatever it may be, you may highlight that.

So, absolutely. I think I can clear the year in that manner. See, while we are objectifying that 2.5 is a reasonable guidance, I think we are looking at a number of 2.25 by the end of March. I think that is the number we are aiming. 2.75 or 2.25? 2.25.

Okay. Second thing is that what is our technology spend and human resource spend? Because we are moving on digitization, coal ending, branches, geographical expansion, new initiatives. So basically entire staff and technology is a must enabler. So what is that we are going to do different and what is that spend we can tell us?

Yeah, I think I have, while I was submitting my initial remarks, I did talk of the areas where we are working on HR front and amongst the other host of things that we are doing in various things. I think we have also worked very strongly on the HR front. On the HR front, particularly in terms of investment, basically we have taken the global consultant who is implementing the best of the HR practices, which is across all the banks, particularly public sector banks, and I think we are getting the best of the benefits. It is not a big cost in that way. And the overall in the package of things that we are doing, the entire cost is in terms of the engagement of consultant, whether you are taking any tools on the various tools that have been mentioned in the presentation, that it was 16 to 20 tools are being adopted or whether it is target setting, whether it is performance management, whether it is. Other areas. I think there we are investing in terms through a consultant more. So that's not a very significant number for us to really be worried about. But the point is, is that. On the HR front, and the second phase of the HR transformation that we are doing, it really talks about the leadership development. I think that's the key area which we will like to work on in the current six months. It's a six-month project that we are going to implement, and hopefully at the end of it, we create more and more skill assessments More and more tools for training purposes and engage staff members in a much more efficient manner. I can just give you one example in terms of capacity building. What we have done internally through AI chatbot is staff members normally are more used to reading WhatsApp messages and circulations that come through WhatsApp. And do not get enough, maybe time to read formal circulars in the bank's internal portal. So what we have developed is that we have created an AI chatbot in an internal circulation. Whether any staff member would like any query, whether it's a regulatory guideline, whether it's a board approved guideline, whether it's any SOP, he can just put a chat into that Aria bot, we call it Aria bot portal in our bank, and through that he can get an updation immediately with an immediate response through a system generated AI tool that has been utilized that will give them the immediate answer to a problem that he may immediately. You can immediately face at any point of time. So this is also on a small. Area which I have talked about and trainings is another area which are investing very, very strongly. We find that our, in terms of the total number of employees that we have, around 10,000 odd, we are now working on how many unique employees are getting trained every year. And that figure is also significantly increasing year on year. Earlier, a unique employee means an employee who is not giving multiple trainings. We are giving trainings to around 3,000 employees. Now that figure is ranging between 6,000 to 7,000. So it's nearly doubled. So a lot of investment is happening there also through our training colleges. We are opening a second excellence center staff training college, which we call as center of excellence on food and agro processing. It will be hosted in Chandigarh and which will give another Philip to our overall capacity building. Initiatives that we intend to take with power because we all realize that how IT and HR has to go hand in hand in the overall scheme of things for any efficient bank. So we are doing a lot of taking a lot of initiatives. Hopefully these will all. Give better results as we go forward.

So what is the digital spend and human resource spend likely to be additional on all these measures?

On the human resources spend. See, I can give you a snapshot that just to give you an idea of what you are trying to arrive at. In the last three years, we have an approved outlay of 900 crores in IT. Okay, I think that will give you an overall idea of scheme of things which will get utilized as we go forward. Yeah, please carry on.

Sir, your RAM is doing well. How well efficiently were able to market some other products including CASA to the same customer?

Yeah, so the next transformation journey that we have decided internally. Would be on the digital front, which is one of the key area of customer acquisition, whether it is on a liability side or whether it is an asset side. So the bank is internally working out and I think we'll roll it out by the end of the financial year next, which we may call PSB Unique 2.0. And which we will demonstrate to the external stakeholders that we also have the capacity to turn around a digital oriented customer journeys and with a great UI UX experience and overall make stickiness. The idea is having more stickiness from the customer perspective, more product per customer, a cross selling. So on the as of now, on the lending side, asset side, we are doing a lot of digital transformation in the lending side, but we like to have it a common platform where both the assets and the liabilities will be taken care through a very, very robust digital platform. So that is on the offering in the next year. We have taken a lot of steps in various areas. Now, I think it is now culminating for business purpose. The digital transformation will be taken forward. So we will be going through the process approvals by the end of this month or maybe next month. And then we open it up and we engage somebody which is efficient and delivers to the best of the apps in terms of the industry. So I think those acquisition journeys of salary stickiness and also will work. And one more thing, we are also much more focused on. Garnering as much salary accounts as possible. We have done a host of tie-ups with various state government organizations to build up this CASA portfolio in terms of salary accounts. And of late, of course, the Central Government Employee Connect program will be across all public sector banks, where central government employees have been advised by their nodal ministries to open all their accounts in a public sector bank only. So we will be, though it's a competitive market, but we think we can have a fair share in that. The defense salary account is playing out very well. Now, earlier we had a centralized major general who was the central defense banking advisor. We had one person. Now we have. Five persons on the ground to assist the major general at the center so that there is a lot of legwork required to mobilize salary accounts of the different establishments. And I think we have recruited them. They're already on the job. They're going places and we are getting a lot of positive feedback that going forward, we may make some significant breakthroughs in the defense. Accounts, salary accounts as well, because our package is one of the best, if not the best, it is one of the best in the amongst all the banks that offer the products to the defense people. So stickiness of customer would be important, giving them good UI UX experience, give them all the facilities under one mobile app to maintain accounts with us, have good credit card business, mutual fund business. So put them all together. And try to build a robust digital digital journey. So these will be some of the few points which will be taken forward in the next financial year.

Sir, my next question, what is the unavailable credit limits which you have sanctioned in recent months and what is the pipeline looking for the quarter, specifically on the corporate side?

I think on the corporate side, overall, if I see the sanctions in hand, the undisbursed portion, the proposals under consideration with a good NBG in principle approval given, which are going to get converted. The overall pipeline so far is 20,000.

Okay.

And this does it give you a color on any kind of sector or it is across? It is across. We are now getting into the, of course, NBFCs, we are there. But other than that, we are looking for good infrastructure, LRDs, real estate, good real estate projects if we get something, renewables, manufacturing. We are now getting into cement. We are getting good leads. Many of the big corporates, the cement manufacturing companies are in touch with us. And we hope that at least one or two of them will be converted in terms of our acquisition. So manufacturing is there a lot of state government entities who are doing well in the power segments are also bringing out new CapEx programs in their respective states. And we are also giving them line of credits or credit lines in those areas, whether it is Northeast, Central India, Northern India. We're getting it from across the country, Orissa, Andhra. So now our business expansion is really being taken forward in the geographies which we think are going to be very important. Today, whether it is the central part of the country, southern part. Eastern part of the country. So we are going to expand our business horizon across this. And that's why we are making a lot of visits. MDs, EDs are visiting them, meeting the chief ministers, top bureaucrats, meeting top officials, anywhere our MD or ED visits. We generate at least 5,000 crores of leads. That's the bottom line we have taken that if any MDED goes to a visit in a particular zone or business mobilization, that zone should generate 5,000 crores of leads. Otherwise, you don't go. Initially, people are hesitant. I think now it has picked up whether it is Gujarat, whether it is Chhaktisgarh, whether it is Urissa, whether it is MP, Madhya Pradesh, Karnataka. I think that's how the things are moving in the bank and I'm very sure as we move more and more, these will be converted in a better way. So then you need to accelerate your deposit, nothing more. Yeah, that's true. That's how we find an alternative way of funding and renting the LCR. But that situation has not come yet. Many banks of the CD ratio are already at 82, 83. We are at 79. We will work on that reway that we still have and then take a call. Of course, deposits will be very important. I agree with you.

Yeah, because five states itself amounts to 25,000. Sir, last question to you. You have been, you understand Treasury well. What is it today that rates are where it is and what's the outlook? Secondly, how do you manage cost of funds better than where we stand today in near quarters?

Yeah, in terms of the outlook, you know that the yields have hardened and a lot of dynamics are happening, particularly on the SDL front. We expect that the Reserve Bank is, I must be, I'm very sure the Reserve Bank is looking very closely on it. And there has been, I think the OMOs, subsequent OMOs may again come, and there is a lot of discussion going on that OMOs may be brought in. There was also, I feel that some of the SDLs, which RBI has experimented earlier in the OMO, they have not often done that. Maybe some SDL, because the hardening is happening in the SDL front more, the spread is increasing more there. RBI may consider as a measure to bring down the yields from that perspective. But the global situation is something is very dynamic. I don't expect immediate cuts happening in terms of it. The numbers, the GDP numbers are also holding on, which doesn't really trigger a... Any potential action by the monetary policy committee. So in the scheme of things, as we stand today, I feel that the RBI will have a wait and watch. We have a long pause maybe in terms of the overall guidance and take it every two months going forward. That's my on the Treasury front. And what was your second point? Cost of fund. Yes. Yes. On the cost of fund, we have brought it down. In fact, if you see our trajectory in the cost of deposit and cost of fund, we have taken a lot of steps and that is actually yielding a lot of results. We have, we have re... We have priced our savings very aggressively and we don't find any challenge there. Savings continues to grow. We feel that today is the stickiness of the customer which holds on to a, which holds the bank, which gives the bank savings accounts. So we have drastically reduced our savings deposit rates. We have drastically reduced our retail term deposits, particularly on the special schemes. At one point of time, we were giving as high as 7.45%. 5% in the retail term deposits in one of the brackets that has gone down to 6.60. And that if you see our sequential movement in the cost of deposit and the cost of fund, we feel that there is some positive development there. What you now need to do is increase our yield on funds and the yield on advances. So that is the work in process, you may say.

Thank you, sir. Thank you. Thank you.

Next question we have from another participant call-in user.

Dear participant, could you please introduce yourself and come up with the question? Good evening. So, we will move on to the next question, which is from Ridai Chauksi.

Good evening, sir. Thank you for the opportunity. Also, one very quick question. You earlier guided on our vision for a 1% ROA over the next few quarters. So, looking at your numbers, we have a very volatile and a much higher cost-to-income ratio versus majority of our peers. So, what is our vision in bringing this down? Because you spoke a lot about digitization and operations. So, where can we bring this down to and how do we move to that 55% target? And then, because this will also eventually help our ROI. So, what is your guidance here?

Yes, absolutely right. The only solution is to increase income. Cost is only a limited impact that happens in terms of reduction in cost. So, our entire effort, our traditionally our bank's cost to income issue has been very high. So, the only way is to generate more and more income out of our business models. So we expect that our idea would be if all the things work out to the way that we have planned out, I think by the end of March 27, we should be nearly around between 50 to 55%. I think that's the overall dynamics that we are working on. We'll try to phase it by three to four dips every year. And if you see our trajectory so far, we are holding on to that earlier it was 75. At one point of time earlier in the bank it was 72 also. So now we are able to maintain the 62, 64, 62 or 64 range. We expect that this range will come down. To round between 55 to 60, very shortly, not 58 to 60, sorry, and then move on to a range between 53 to 56 somewhere. It will start to stabilize. So another two years down the line, we should be having a much better cost to income ratio. The only way to do it is to increase income. And that's what I have been telling all along. And that's what we're trying to do also. If you see our income going up, our, our, Churning the balance sheet, etc., which I have already said. So that will continuously take this going forward.

Noted. Thank you very much. Thank you.

Thank you, sir. As there are no further questions from the participants, we now conclude this conference. Should you have any further queries, please reach out to Mr. Ganesh Hankarnaur at 777-386-88746. Or Ganesh at the rate conceptpr.com. On behalf of Punjab and Sindhbank, I thank each one of you for joining the conference call today. You may now disconnect your lines. Thank you. Have a great day.

Thank you. Thank you, Mr. Ganesh. And thank you, everybody.

Thank you, sir.