The South Indian Bank Limited (SOUTHBANK) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to South Indian Bank Q2F527 Earnings Conference Call. 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 in the conference call, please signal an operator by pressing star and zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Aman Singh from ICICI Securities. Thank you, and over to you, Mr. Singh.

Thank you, Ranju. Good afternoon, everyone, and thank you for joining the call. On behalf of ICICI Securities, we welcome you all to Q2 F527 Post-Earnings Conference Call of South Indian Bank. From management side, we have with us Mr. Mahesh Mutlidhar Bhai, Managing Director and CEO, Mr. Dolphy Joes, Executive Director, Mr. Anto George, EVP and Chief Operating Officer, Mr. Vinod Francis, SGM and Chief Financial Officer, and Mr. Jimmy Matthew, SGM and Company Secretary, along with other senior executives of the bank. I will now hand over the conference to management for their opening remarks, post which we can start with the Q&A session. Thank you, and over to you, sir.

Good evening to all of you, and thank you for joining for the South Indian Bank Q2 conference call. I hope I am audible.

Yes, you are. Please go ahead.

So, we are joined by my colleagues, Mr. Dolphy Jaws, Executive Director, Mr. Anto George, VP and Chief Operating Officer, Mr. Soni, Chief General Manager, Vinod Francis, SGM and CFO, Mr. Jimmy Matthew, SGM and Company Secretary, along with other executives. So, let me start with the key highlights of the financial performance of the quarter ended September 26th. The bank The bank declared the highest of its quarterly net profit of 426 crores for the Q2 financial year FY26-27, registering a growth of 21% compared to 351 crore in the Q2 of FY25-26. The total deposit of the bank grew by 19% to 1,37,279 crore from 1,15,635 crore on a YOY basis. The gross advances of the bank grew by 19% to 1,09,517 crore from 92,286 crore on a YOY basis. During the last financial year, we had done a technical write-off of 1,163 crore. Excluding this, the YOY growth translates to 20%. Total business of the bank grew by 19% to 2,46,796 crores. Net interest margin for the quarter was at 3.33% which was sequentially up by 10 basis points on a YOY basis and the NIMP was up by 53 basis points. The bank was able to show a healthy growth in the average advances during this period with a growth of 20%. Bank declared a return of asset of 1.08% and an ROE of 12% for the quarter ended Q2 FY2627. The bank declared its highest net interest income for the quarter of Rs. 1,116 crores with a growth rate of 38% compared to 880 crores. Capital rate is 13.40 and the tier 1 ratio stands at 18.71% as of the half-year of September 30, 2026.

Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the touchstone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles.

The first question comes from the line of

Akshat Agarwal with Nirmal Pong Institutional Equities. Please go ahead.

Good evening, sir. Congrats on a strong set of numbers and many congrats on your new role. Wishing you and the bank continued success and greater heights under your new leadership. I have some questions. So firstly, credit cost increased to 60 BIPs on a calculated basis. And this looks mainly due to the strengthening of the provision coverage ratio to 92% from 81% prior quarter. So what was the relationally for the increasing coverage from a already very strong PCR? And if you could also help us with the non-specific provisions, including general provisions, floating provisions, or contingent provisions, aside from the specific piece here.

You see the banks, the lowest in the entire industry, and for the bank, it is one of the best you can. So, there are no costs of concern for the credit cost to be slightly higher than 0.09 to 0.12. There is no cost of concern at this point of time. But being conservative, we thought that this provision should be made. And these are not the floating provisions or the specific kind of provisions. These are all account-based provisions which have been made. So, there is no specific one-off provision which is created. I hope I have answered your question.

Right, sir. So, but aside from the PCR, do we have, like, the provisioning which would include the contingent floating or standard provisions? I mean, what would be that amount on a percentage basis?

We have not done that. We have not done any such provision. These are all provision for...

Right, sir. And is there any potential impact of the ECL-based provisioning? I mean, in the past, it has been mentioned that there's not much impact, but is there any change in that versus what we have been told earlier?

No, absolutely no. Whatever is the SMA, current SMA 1, SMA 2, and SMA 0 are one of the lowest. So, we do not have any concern in terms of the ECL provisioning at this point of time.

Right, sir. Secondly, on deposit, current account balances increased by 20% POQ. So, if we can understand what drove this sharp increase and how much of it is, you know, any attributable to any specific or one-off flows towards the quarter end, should we expect this momentum to sustain?

Yeah, so there is a little challenge which you are talking about. But otherwise, the group...

Thanks for that, sir. And, sir, on the potential implications of the draft bank assurance circular, if the bank has, you know, done some assessment and if we could get some understanding of how much impact would be there, like some banks have told that it would reduce by 50% to 60% of what they already had. And, sir, on the same fee income part, I mean, we saw recovery during 2Q after seasonally week 1Q on the fee income. So, should we expect further improvement over the coming quarters?

Third party, I am pretty sure that this momentum of fee income is likely to sustain in the bank. So, because there are no one-offs and these are core income which we have derived and quarter on quarter there is improvement. So, definitely, there is going to be improvement from the present position.

Thanks for that. And, sir, on the returns, I mean, if we exclude the additional 70 to 80 of provisions which would have strengthened the PCR, ROA would be around 1.3%, I mean, if we exclude that. So, with the potential for NIMS to benefit from the upcoming rate cycle And even exceeding 13.5% possibly. Would we have like a sustained ROA at like 1.3%, 1.4% level for the second half and for the next year?

Yeah, you are talking about immediate next quarter. See, if you exclude that provision, what you are saying, the number could be right, what you are saying. But, presently, the ROA stands at 1.10, and of course, our medium-term target will be to reach the 1.25 to 1.30, and obviously, our final, as a long-term target will be to reach that 1.5% mark. So, you are right in saying that if you exclude that, the ROA could be slightly better. Yes. In terms of NIM, we are at currently 3.33, and see, in the last few quarters, if you see, the NIM has been always on the upward trajectory. So, even the guidance what we have given was around 3.25. We have comfortably beaten it in the first half year itself, and it is a sustainable one because you see the net interest income which bank has. So, this is sustainable, and definitely our endeavor will be to move towards 3.40 to 3.50 in the medium to long-term price.

Lastly, sir, a lot of housekeeping questions. What was the retail and agri-book this quarter? It's not disclosed in the last quarter, and if we can also get retail gold book this and the last quarter?

Yeah, I think the retail

gold part, I understand the whole gold portfolio including the agree is disclos, but retail gold, yeah.

We'll give you the exact retail growth maybe subsequently, but I can tell you only one thing that we have a 60% of retail book and a 40% of agree book in terms of gold load.

And FCNR deposits in self-leverage we got this quarter, sir?

As far as FCNR, we are not a bank who has received the self-leverage part from that way, but we have got around 239 million, and out of that almost 95%, 96% is true, the direct deposit, not the leverage deposit.

Very well, sir. Sir, just last question. On the cost side, there has been, I mean, we have restarted the employees branches and technology investment. And with the rate hike, we would benefit from the operating income. So, should we see like a cost growth, you know, cost to income ratio going towards 50% next two years and cost growth remaining in single digit this year and early double digits next year?

I think we are right on that because we should see the cost to income ratio coming down to 50 going forward. But definitely there has been some cost implications, you are right, because of the employee addition and the brand expansion. There has been some addition to the cost, but I feel that the income part should take. We should be able to deliver what the expectation is there from yourself.

So, thank you very much for answering all my questions, and I will rejoin the queue.

Thank you.

Thank you. A reminder to all the participants that you may press star and want to ask a question. Next question comes from the line of Michael Putra with SB Ventures.

Mr. Putra, please go ahead with a question. Mr. Putra, please unmute yourself and go ahead with a question.

Since there is no reply from the line of Mr. Putra, we will move to the next participant. That is Punmejh Kantilal Shah from Hanumanth Holding Private Limited. Please go ahead.

Yeah. Good evening, sir. Thank you very much for giving me the opportunity. Can you, I am audible, sir? Yes, sir. You are audible, sir. Yeah. Thank you very much for giving me the opportunity to present before me, and congratulations for good set of numbers. And it's really, I mean, good start we are taking, sir, since you have just taken over from 1st of October. My first question is, how do you look the second two quarters, and are we any plans for raising the funds or things, because the NPA is also at the lowest level of the history of South India, what I understand. What is the coverage ratio and how we look forward, and are we any plans for raising the funds for the expansion of other things or tire bonds or something?

Thank you for the compliment. One of the lowest part in terms of NPA is concerned. But the second question is the raising of capital. Currently, the board has permits of tier two bonds. And we are currently not expecting a raising of capital at this point of time. Well, we are well capitalized at 19.40. So, at this point of time, we do not foresee any major capital requirements at this point of time.

Yeah, thank you very much for the answer. And what I personally feel, our capital also is a lower level. So, we have got the scope for even expansion or to raise the capital. We should not be having restriction. So that way, we are in a comfortable postage. That's what I feel.

At this point of time, we have the growth numbers in hand because if you see the historical averages, we have been growing slightly below the average or in line with the market averages. So our aim should be that shortly the capital requirement will come in picture.

Thank you very much for answering me, sir, and also we welcome you and you have started with a good beginning, Beginning, at least in the first quarter, or when we were taken off from 1st to October. So we welcome you, and it's all the best to you. Thank you. Thank you.

A reminder to all the participants that you might have a star and want to ask a question. Next question comes from the line of Aman Singh from ICICI Securities.

Hi, sir. Congratulations on the strong set of numbers. So my first question is, we have sequential improvement in yield on advances. So, I wanted to understand qualitatively if there is any incremental increase in corporate also. In yields in two of our main segments, which is corporate and gold loans, we have taken any price hike in both of those segments.

Yeah. So, the question comes in two parts. One, whether there is an increase in the corporate book in terms of yield. So, definitely because the corporate mainly it gets priced to the The RICO level, and currently the RICO has increased to 25 basis points, and mainly it is RICO or TBIC. These are the two aspects of corporate loan pricing. Both the aspects, if you see, for the last three months, there have been upticks up to the extent of maybe 25 to 30 basis points. So, to that extent, the new corporate bookings have started increasing. So, and also the general US, sorry, general US as well as the Indian yields have moved substantially up in the last few days. It has substantially moved up. So, that pricing is getting affected in almost all the corporate loan segment. And in terms of sustainability, I think we should do a little better. So, that is what I can say. And in terms of gold loan, at this point of time, the repo price, what is there, that has been passed on to the new loans. But we are not thought of increasing the spread at this point of time. So, if it is felt that there is a need, definitely the bank will not…

All right. And, sir, can you give me a split between EBLR and NCLR loan book of the bank and EBLR repo and T-Building separately available?

Yeah, so the total EBLR linked book will be around 43%. Out of that 43%, we will have the ratio will be 20 to 23, you can say approximately. That is T-Will and RIPO. And in terms of MCLR, it is very negligible. It is around 5%.

Got it. And the last question on growth or disbursement. Growth has inched up materially in this quarter. So, can you give some insight on which segments are driving this growth? Is it wholesale or there is some pickup in some retail segments as well in the disbursement?

The retail segment is currently outperforming the wholesale segment. I can tell you that, that there is significant amount of push happening and there is growth happening in retail side. So retail, when I say it is MSME, retail and then agree. These segments, there is uptick in disbursements, whereas that much growth is not seen in the wholesale segment.

Right. Just a clarification, you said EBLR book is 43% and MCLR is 5%. Yeah. So, it would be fixed. So, 50% book is fixed, is it?

Yeah. EBLR T-bill will be 47%.

Fixed is 47%.

Yeah. Yeah.

Got it. Thank you, sir. Thank you. Thank you. Thank you.

Thank you. A reminder to all the participants that you may press star and want to ask a question. Next question comes from the line of Karan, an individual investor, please go ahead.

Hello, sir. Can you hear me?

First of all, congratulations on a great set of numbers.

I just wanted to ask one question that what is the outlook and guidance on loan and deposit growth for the bank for FY27? And what is the medium-term guidance? And which segments do you expect to drive the major growth?

Yeah. So, in terms of guidance of 15% to 16% in terms of loans and deposits, I think we would like to stick on to that, but preferably it will be in the higher bucket of that guidance what we have given. So overall, we should expect around 16% kind of a growth. But one thing when I talk about 16%, the market growth will be the factor for our growth benchmark. If the market is growing at slightly above that, the SIB will try to do better than that. So that will be our guidance. But it's on business loans and MSME loans. So, this will be the order of priority. And we will not leave the personal loan segment as well.

Okay. Thank you so much, sir. Thank you.

Thank you.

Thank you. A reminder to all the participants that you might be a star and want to ask a question. Next question comes from the line of J.M. Mundra with ICICI Securities. Please come on.

Yeah. Hi, sir. Good evening. Thanks for the opportunity, sir. Sir, I wanted to understand broad strategy, right? Now, you have a decent full term and maybe beyond that also. The bank has come a long way in the last three years from maybe one of the highest net NPA to lowest net NPA. The growth was also earlier single digit and now at least the 2Q is above system. And all the while, you know, ROA have been maintained at more than 1%. I wanted to check, sir, you mentioned 15-16% loan growth and within which you will try to outpay system. Are you confident of doing that along with sustaining ROA at, let's say, the current 1.1% and even increasing that? So, I wanted to check on loan growth. Are you comfortable that now the bank will be at least doing similar to system or slightly ahead of the system or you believe there is still some loan mix?

61% range, 65% range for RAM. So, there is some more work to be done in terms of tweaking, but the system has started tweaking by itself. That is why the NIA has started. So, that will continue from the 1.1, which we are currently at, to 1.2. Maybe in a year itself, we should see that kind of a movement. You should see sequential improvement in these.

Sir, the growth reset that we say of 15-16%, that is even after including the thing that the corporate mix may, you know, come down by 300-400 basis point, right? So, the rest of the business has to grow actually much faster.

Generally, we have taken a target that we will be, the growth in retail will be much higher than what we are talking in the terms of cost.

Right. Okay. And, sir, with the OPEX, the last two, three years, I think the bank was a little bit, you know, I would say, spent thrift in doing, do you see a lot investing more in the branches or manpower or technology? Or do you believe this, you know, 10-12% kind of an OPEX is sustainable at least for the next two, three years, at least one, two years?

No, when highlighted that there will be more number of branches, bank has already opened around 11 branches in this last two quarters of this financial year. And if you can see the hirings also, there has been some additions in the hiring. So, we will keep up the pace because when we are opening the branches, we can't say that we will not hire the people. So, that will also inculcate you that there will not be any, you can say the ratios will Rather than saying that OPEX will not move substantially, but in line with the branch expansion, the IT also needs to expand and things like that. So, we will be in line with that.

Right. No, no. So, the idea is, will OPEX be faster than loan growth or will it be similar or maybe much lower than the loan growth? Gold loan, sir, what is your, so corporate, you mentioned that maybe the idea is to move to 35% share. What is your thought process? Because, you know, South Indian Bank is anyway great in gold loan, but you also have a very strong experience there. So what is your thought process as to how?

I'm pretty confident we are currently at 25% of the portfolio is under gold. So, the bank already is targeting to take it up to 35. So, I will stand by that as a first phase. Then, let us see how the industry evolves and then from there we will take on. But at this point of time, the focus will be to take it up to 30-32 levels.

Sir, this gold loan growth that is there, is coming across agri and retail or, you know, is this lopsided in favor of any of the retail or agri?

No, I think it is pretty much there in both the segments. I will put it that 60% of our gold loan book is coming from the retail segment and 40% is coming from the agri segment.

Sir, do you have the number for the split between retail and agri for this 26,000 crore portfolio?

Yeah, it is around 15,000 crores around in retail.

And now, differential, is there any yield differential in the way you charge retail, gold loan, and agri gold loan?

There is a minor yield differential in favor of retail. That means retail yields better than agree, you can say.

Okay, but that is like 25-50 basis point only, or is it like material? Yeah, yeah.

According to me, it will not be more than 25 basis point.

Okay. And what is the blended yield on gold loan, sir? Because I think this proportion is going to rise. So I was just trying to understand, what is the blended yield that you charge on gold loan?

It's closer to 10%, I can say.

Okay. Now, okay, so this is understood. Then the OPEX part is also good. And now, sir, your technology, your view on, because you have also come from digital, I mean, you have had very good exposure to digital and technology. A, do you suspect any major technological revamp or any tech exercise which may or may not involve OPEX but may reset some of the growth journey or you believe, you know, tech will be minor changes here and there and which will not jeopardize the ongoing growth trajectory.

It's been done in terms of technological advancement, that things are required, but as the tagline suggests, next-gen bank, so our endeavour to be to provide the next-gen technology to the customers, and also as a part of that new segment which is evolving is the artificial intelligence segment in the banking. So there we will be focusing slightly more, more efficiencies in terms of processes and projects. So that's where we will be tracking.

And sir, if you can, it's a request, if you can add some of the loan book on the fee income. So we have this 190 crores of fee, right, which is, sorry, which is a treasury forex, but what is this other 190 crores? Yeah, I will take it.

Good evening, Jay.

Am I audible? Yes, yes, sir.

Yeah. So, this miscellaneous income, this 190 cruise, that includes one of the major components is bank assurance income. So, that and the amount recovered from technically return of accounts. These are the two major components that comes into play of this 190 cruise. So, this quarter, for the amount recovery from technical return of accounts amounts to 73 cruise. And bank fees, sir? Bank fees, that will be ranging around, say, 30 to 35 cruise.

Okay, and we know the, I mean, difficult to at least look into FR28, but this 73 crores and 3035 crores numbers, these are broadly sustainable, at least for the next two quarters.

Definitely for the bank assurance. Bank assurance is sustainable. And for the recovery part, as we are already mentioning, for the current financial year, we don't find any major threat for that recovery amount. But going forward, it will be declining because the stock under the recovery is also getting exhausting. So, as you know, that our slippage is also on the lower side. So, that is good. But on an average, we expect that 50 goes to 55 goes to continue.

Right. Understood. And lastly, sir, any broad, you have any three-year view or roadmap, maybe this quarter or maybe next quarter, if you can provide a three-year roadmap, it will be really helpful. You have given some glimpse that, you know, over the next two, three years, You want to achieve 1.5% ROA, but if you have slightly more detailed vision, it will be very, very helpful to understand the future journey.

Yeah, we will take it and we will provide. We will give you shortly or maybe it should be available.

Thank you and all the very best, sir. Thank you. Thank you.

Next question comes from the line of Sandeep Joshi with Unify Capital. Please go back.

Yeah, hi, good evening. Most of my question has been answered. I just had a couple of data-keeping questions. So, within the movement of gross NPA, there's a reduction line item. I just need a break-up of that between recoveries and upgrades and write-offs. Would you have that on the handle?

Yeah.

Can you just come back on the question, Sandeep?

Yeah. So, within the GNPA movement, I want the breakup of reduction, which is 188 crores. I want the breakup of that between recoverings and write-offs.

Okay. So, the recovery for the recovery from the technical write-off is around 73 crores. And from the GNPA pool, that is around 55 crores. Then other cash recovery is also coming 58 crores. And the technical write-off, what we have done for the current quarter is 30 quarters. That is the credit card code.

Okay. Do you have same number for last quarter as well?

Last quarter, I don't have right now, but I can provide it later.

Sure. Okay. That was my question.

Thank you. Next question comes on the line of Path Kutka with 361 Capital. Please go ahead.

Yeah. Hi, sir. Thanks a lot for the opportunity. So, my first question is, on the cost to income, what are the steps that you will take to bring the cost to income down? That's my first question. And second is, within the cost line item, which line items do you think there are levers to bring those costs down going into, you know, for the next three to four quarters?

I think one of your earlier colleagues have told that this is a very ventripped bank. So I think there is no much to control in terms of cost as such because we are talking about the growth and we are talking about employee additions and branch expansions. So cost will be, we don't expect that it will come down, but it will be stable and the income part will outpace so that you will have the better cost to income ratio in front of you.

Okay, fine, sir. And the second question is, you know, what are the three key immediate priorities for you for improving the ROI of the brand for the next one year?

So, the short-term priority is that to continue what the previous management has been doing, which is the change of the mix, which we are talking about from the retail to corporate. So, I don't want to give you a number, but the overall scheme of things, what we want to do is that to shed the lower-yielding advances to increase it to the higher-yielding bucket. And that will be the first priority, which we would like to continue. And on a sustainable basis, the average advances should grow. Then only the income can be increased. So the portfolio mix change, the sustainable growth in the advances, and also the goal load.

Thanks a lot, sir. Thank you.

Thank you. Next question comes from the line of Tevesh Kayal, the Boring AMC. Please, Gavet.

Thanks a lot, Shwantran. Basically, our interest expenses growth over past two quarters have been around 5%. And if you see other peers from Kerala shouting there, so their interest expenses have been on the higher side.

Sir, can I ask you for a minute? I'm sorry, because there is a lot of echo in the call. Can you just reframe or can you just repeat?

Yes, my question is of the interest expense growth.

Interest expense?

Yes, yes. So, English extension growth for us has been around 5% for Q1 and Q2. So, and it has been on the lower side versus our peers. So, that is a good thing because I just wanted to give some color what has driven this. So, and we see that the bulk deposit times, the closing bulk deposit has short up in this quarter. So, how do we see it going forward?

Yeah. So, in terms of the pricing or the cost of deposit coming down is mainly due to the repricing effect which has taken place because last year, whatever contracted were at a very high rate. And now the deposit rate because of the liquidity has come down generally in the first two quarters. So that is one of the reasons for lower deposit cost which is coming up. And next is the bulk deposit which has increased. That was due to mainly the opportunity which was available because after the FNRB liquidity increase, the bulk deposit rates have been substantially lower even than the retail deposit rate. So, bank has taken some advantage of that and deployed it in a profitable manner. So, that is all that the work depositors interest.

Okay. So, our cost of funds shouldn't materially increase somewhere? No, no, no. That's as come as soon.

Thank you. Next question comes from the line of Saket Kapoor with Kapoor and Kampi. Please go ahead.

Yeah. Namaskar, sir. Hope I'm audible, sir.

Yeah, yeah. Audible, sir.

Yeah, so firstly, pertaining to this, that 190 crore other income number, I missed the calculation part, and what is the likelihood of the reoccurrence of the same, explaining the nature of the same?

Yeah, we know. So, as I already explained, this 190 crore, we don't find any one-off items for the current quarter. So, we expect that this is a sustainable part. Only thing is that one of the components that comes into this is the recovery from technical return of accounts. So, currently, we are having a range of, say, 50 to 55 pools, which we expect to continue in the coming quarters also. But over a period of time, maybe after, say, four to five quarters or six quarters, this amount is likely to come down because of the non-existence of the NPS stop. So, there we expect a slight decline over there. Otherwise, that will get compensated by the income increase in the other heads. So, definitely, this 190 close, we expect that is sustainable and is expected to increase because another major component is the bank assurance income, which we are steadily focusing on.

Sir, taking into account how we have closed H1 on a very high note, Q1Q also, the operating profit has gone up from $592 crore to $732 crore, and taking into account the improvement in the loan growth, what should investors expect H2B on account of the high base of what we have reported for H1, sir, in the very likelihood?

See, certain things like your gross NPA and net NPA, there are very little chances of us to reduce it further. So, in terms of that, there is very, see, we are at one of the highest net NPA. That means the lowest, best, you can say, the net NPA bank in the country. So, that may further reduction from there is very, very challenging. Same is the case with some of the items like SMA. See, we have been doing very good and the SMA has been coming down all along the last few quarters. So, maintaining that will be the great opportunity and challenge for us. We will be trying to do that. But having said that, all other business parameters, as I was mentioning earlier, we were either slightly below the market or in line with the market. There we have scope for improvement, which will overall improve the income components of the bank.

So, sir, taking into account the rate curve, which has changed now on the higher side, how likely will the interest income or the NNI likely to shape up for S2? And with the hardening of the yields, what portion of our treasury book will get impacted and what

was the impact for this quarter, sir?

Yeah. So, in terms of the major portion of our hit has been changed on the T plus one basis itself. So, as soon as we have mentioned earlier in some other reply that around 43% of our bookies EBL are linked and which is repriced immediately upon the change of report. And also another 25 to 30% of our bookies in terms of gold loan, wherein the pricing will happen even though not on D plus 1 basis, but new loans will be. There also we are getting the cost advantage. So all put together, you see, banks balance. The impact of the treasury in TTIF, hardening of the yield. So, the water given to the yields have hardened from 680 to was very little in terms of 0.19 towards currently at the end point, every basis point will result in approximately 1.1 crore to 1.1 crore, but it's not a phenomenon only for the president, it's for the entire market.

Sir, you mentioned every BIPs will be resulting in a 1.5 crore NPM for us.

1.1. 1 to 1.1.

1 to 1.1. And that was the same number for the September quarter also, since the movement has been from 6.80 to 7.10? Yes. 7.1.

Yes. Correct.

Okay. And other parameters like our NPL, you have mentioned that we are on a solid track and there is very little room to improve on the same. But on the NIMS part, what other levers are there for us or what should be the trajectory on the NIMS and the ROA that we may transplant going into the H2N and the way forward?

In terms of NIM, see currently we are at 3.33, wherein the guidance was at 3.25. So already we have crossed the guidance what we have given, and we believe that this repo rate what has hiked and the consistent churning what we are doing, the NIM should improve and move towards 3.36 to 3.38 levels in the shorter term. And of course, in the longer term, our 12 months or four quarters guidance will be around 3.45 to 3.50 issue day. So, that is what the guidance for NIM. And in terms of ROA, we are expecting that medium term, we should reach somewhere closer to 1.25, 1.30. And from there, we should move towards the higher level.

And lastly, on the liability franchise, how will that, our deposits are going to get repriced, or what percentage will come for renewal for H2, and what will be the likely impact on the basis of the cost to income because of the revision in these deposit rates also?

So, in terms of deposit rates, still we are at a lower level than what it was in the last year at this point of time. So, whenever we are expecting, generally our deposits are getting renewed in a year's time. So, if you consider that, I think these next two quarters may not have substantial repricing effect in terms of deposits. It's getting repriced at a lower rate.

So, in totality, the working environment provides an improved set of operating environment for the bank for going into… Absolutely correct. Absolutely correct. Thank you, sir. Thank you for your question. Thank you.

Thank you. The next question comes from the line of Apivak Singh, raise securities. Please go ahead.

Hi, sir. My question is on the broader strategy part. So, like you said, the focus will be on the ram segment, and you want to take the ram to 65%. But in the past, also, we have been focused on the MSME. But if you look at detraction, so there has not been much traction. The large part of the growth has always been driven by the gold loan. Even in this quarter, if you see corporate and gold, they contributed at around 80% of the incremental growth. So, what are the segments that we are focusing on within the RAM segment to drive the mix and to drive the growth for the school?

So, you are right that we have been talking about the segment change and the segment change is not happening. That is one of the concerns which you have raised. So, I agree that it's a challenge. It's not easy because you have to maintain the pace also. So, if you have to maintain the pace and then you have to change the mix, that means the retail should do much better. That means that other than RAM should do, sorry, other than corporate should do much faster than the corporate growth, which is not, it is in and around 40% of those MSME opportunities. And I am sure that the verticals what the bank has created in the past, the mid-corporate verticals, the MSME segmentation of credit, all those things should fire up going forward.

And, sir, has there been any changes made in terms of the structure of the branch or the underwriting strategy going forward? Because in the past two years, there have been a lot of changes done on the branch level. So, are we sticking with the same thing or are we looking to implement some new strategy?

Absolutely no change in the strategy what we have been doing. We will continue to do better in there. And we will not change the strategy what the structure or strategy will not be changing. Only thing is that wherever little bit tweaking are required, we will do that rather than whenever new MD comes and if you start changing the system, it changes the whole ecosystem. I believe in that line. So, I believe in strengthening the existing ecosystem rather than making a change to the ecosystem.

Got it, sir. And in terms of ECL preparedness, so how are we placed? Will the bank be able to complain on the very first term implementation or are we looking to take a glide path?

So, the glide path is provided. The only thing is that we will have to take a call. At that point of time, we will be taking a call, but at this time, it is too early for me to give a comment on whether we will be going for a glide path or otherwise.

And in terms of the total quantum of the requirements, any number?

It is not very substantial, that much I can say. It is not very substantial because you can see from my balance sheet itself because the SMA numbers are at the lowest, the net NPA numbers are at the lowest, provisions have been kept for all the cases wherever required. So, all these things, given these things, the numbers for ECL is not going to be very substantial.

Okay, sir. Thank you.

Next question comes from the line of Aman Singh with ICC Securities. Please comment.

Hi, sir. Sir, just a few clarifications. So, firstly, on treasury, as you understand, most of the treasury gains are being rooted, treasury loss from MTM are being rooted through AFS reserve. So, can you help me with what was the hit on AFS reserve during the quarter?

So, I'll take this question. So, AFS-Rustav, as on 30th September, we have a debit balance of 43 crores.

And, sir, what was the opening for the quarter? So, we can understand the impact in this quarter.

The impact for the current quarter was close to around, say, 52 to 53 crores.

52 to 53 crores. Okay. And, sir, just a clarification, the impact on the rate hike, yield hike, One basis point would be 1 crore. Is it on MTM gains or is it on NIR?

It is on MTM gains. Gains or losses?

Right. And so lastly, we can see there is some IDPC book that the bank still has. So what is your view on IDPC and GA? Will the bank continue to do that business or it would be gradually, it will gradually go down?

So, see, it all depends on what rate we contract. It's not that we are allergic to IBPC or not allergic to IBPC. It is not like that. But if it is making a business sense, we will continue to hold on to that. And if it does not make a business sense, we will be exiting that. But of course, it's a good number to currently, it's a good number which we have. So, it will be very difficult for us to entirely say that I will not hold any IBPC in the next quarter. That is going to be very challenging.

Got it. Got it, sir. Thank you.

Thank you.

Thank you. Ladies and gentlemen, that was the last question for today. We have reached the end of question and answer session, and now I hand the conference over to the management for closing comments.

Yeah, so on behalf of South Indian Man, I will request our executive director to...

I just want to... I heard most of the questions, so just to give a brief from my end is, yes, there has been the effort to change the advances mix is still on, and we'll pursue that for The numbers may not be very encouraging when you see that, yes, we have one risk point down from corporate share from 40% to 39%, and the retail agree and MSME segment has grown at 61% to the overall advance contribution may not be very encouraging. We are not really marginalizing corporate, but we are progressively improving the contribution of retail and MSME to the bank, and the bank's growth and earnings both. The objective is better balanced portfolio with stronger risk-adjusted returns. So going forward, yes, there will be marginal growth of retail, agree, and MSME as a contribution I have heard multiple questions on the OPEC side. So, yes, whether we will need to invest for growth, we will. I mean, that's a no-brainer. We have to go to the next level of growth, and we invest and then scale. So, there will be additional OPEX, but our intention is to ensure our operating profits will be always higher than the incremental OPEX. So, that is going to be there, and we will very, very closely monitor this and take whatever judicial steps we have to take towards it. That's about all from my end. Thank you very much.

Thank you all for joining us.

Thank you. On behalf of South Indian Bank, that concludes this conference. Thank you for joining us. You may now disconnect your lines.