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Canara Bank Ltd
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Good afternoon. On behalf of Antique Stock Broking, we invite you to Canara Bank 1Q FY '23 Earnings Call. Joining us today, Sri L.V. Prabhakar, MD and CEO; Sri Debashish Mukherjee, ED; Sri K. Satyanarayana Raju, ED; Sri Brij Mohan Sharma, ED. Without further ado, I will hand over the call to Mr. Prabhakar for his opening remarks, post which we will open the floor for Q&A. Over to you, sir.
Very good afternoon. And my sincere thanks to all the investors for the support they are giving to us. Now regarding the Q1 FY '20 results of Canara Bank, we have concentrated on 4 verticals. Let me tell you the internal thing.
First one is Q1, generally, the credit growth will not be so impressive. So what we thought is in Q1, we have to take the opportunity to attract all the clients and to show a decent credit growth, so that in the coming 3 quarters, the credit growth, which is significant in Q1, will give many advantages to the ratios in the coming quarters. Accordingly, we worked strategically and we focused on RAM, we focused on corporate.
RAM, as we said, 55% plus or minus 2%; and corporate, 45% plus or minus 2%, we'll be maintaining. And in Q1, we maintained a RAM of 56%; and a corporate of 44%. Growth credit, we have grown by 14.4%. Corporate, 14%; RAM 14.85%. So -- [indiscernible] and we are of the opinion that we want to continue this good growth journey under asset side in Q2 also.
Second one is we are very conscious about the ratios of GNPA and net NPA. GNPA compared to y-o-y, it was reduced by 152 basis points. Now it stands at sub 7, that is 6.98. Net NPA, it was reduced by 98 basis points Y-o-Y, and it now stands at 2.48. In Q2, we are working to bring these gross NPA, net NPA figures significantly down.
Then coming to the income side. We have focused on noninterest income and also interest income. Noninterest income has shown a decent growth of 25%. And out of this, again, we have consolidated fee-based income also, which has also shown a decent growth. Interest income, the repo increase of 50 basis points we have passed on to our customers in Q1, whereas the remaining 50 basis points we have not passed on, and it has been passed on 7th of July.
So whatever interest increases there, that advantage Canara Bank will be getting in Q2. And we have also ensured that whatever additional exposures we are taking, majority of the exposures will be under AA and above category. Because we have observed that 78% of the rated accounts is under AA and above category, which used to be 69%. And BB and below, we have reduced to 11%.
Apart from that, operating profit, we want to have a minimum growth of 15%. And our target was 15%. We have achieved 20%. And now the amount is INR 6,606 crores. And with the controlled provisions, net profit, we have crossed the benchmark of INR 2,000 crores.
And we are confident and we'll work towards a direction to sustain this INR 2,000 crore figure going forward. And Y-o-Y, there is a growth of 71%. Other few landmarks in the last quarter. Gold loan, we crossed to 1 lakh crores. Housing loans, we are growing at 16%; and retail credit, 11.56%. Apart from this capital in spite of growing at 14.4% in credit, we still maintain a CRAR of 14.91%.
And our endeavor will be -- in Q2, we will be crossing 15% CRAR. A week ago, we have already raised 81 bonds for INR 2,000 crores at a coupon of 8.24, which is one of the best in the recent times compared to the public central banks.
Then ROE, we have projected 15% for March '23, whereas today, we are already at 16.33%. And ROA, we are at 0.65%. And in Q2, we are working to improve this percentage to an attractive level. With these few observations, now I open to my investors for any questions, so that we can answer. Along with me, I have my executive directors and CFO and other top officials here. Over to you, sir.
[Operator Instructions] We have a first question from Mr. Ashok.
Can you hear me now?
Very hazy.
Can you hear me now?
Very clear, sir. Please. Please go ahead, sir.
Sir, my compliments to you, sir, for giving the fantastic results and meeting all the guidelines and targets. [indiscernible] if you're good and then you have a promising statement that you want to grow 15% of the operating profit, it means it could be about 7,600 to 7,800 in the next quarter, which gives a further confidence.
Sir, having said that, I've got -- of course, I have been observing Canara Bank working, you are extremely doing well. I have a couple of questions and observations. Sir, on the restructuring front, COVID restructure and our total restructure book, now that moratorium is over, and you must have started already seeing the regular recovery and the amount coming in.
So could you -- can you throw some light on that, that on the restructured account, where do we stand today when the repayments have already started, what is our experience and how much percentage of this out of the money, which was called or which was expected, what is the efficiency -- collection efficiency of that -- out of the restructured accounts?
Sir, as you have seen, the slippages. Slippages under restructured is also a part of the overall slippages, which we have shown as INR 3,600 crores. Our anticipation is out of the restructured book. 10% to 15% bond to be NPA in small ticket loans.
So as we have seen in the overall slippages, -- the slippages are at INR 3,600 crores, which includes the slippages from the restructured book also, which is about 10% to 11%.
And this is already anticipated and this includes cumulative slippages since beginning. As on 30th of June, this is that. And going forward, we expect that. There can be another 5% to 8% slippages in the existing portfolio, which will be within the overall projections of what we have given that. The slippages will be maximum INR 15,000 crores for whole year, full year.
And percentage-wise, if you ask, I think it should not be more than 15% to 18% of the total restructured book. Regarding the collection efficiency under these things, we are observing it is 91% to 92%.
Okay. Sir, my second question, sir, is on the credit side. Of course, you are growing very well and you have a target of, I think, 45% of the corporate book. So what exactly -- I mean, what are the essential thing pipeline? And what kind of projects are from which industry or segments these credit inquiries are coming in, where like we can establish that [indiscernible] because the situation overall is still not very conducive today.
Also, again, internationally, I mean, the problems are happening locally also. But then where do you see this credit demand coming in from which segment industry? And can you throw some light on that, sir?
See, as I said, our credit growth will be spread over under various sectors. For example, Retail, we are growing at 11.56. Agri and allied term loans and CC, we're growing at about 18%. MSME, we are growing at 13%. Corporate, we are growing at 14%. Put together, overall is 14.47%. And this going forward also, we'll maintain a balanced growth in all the sectors.
Why I'm telling this is if at all, in any quarter, if there is an unforeseen issue in any of the particular sector, my other sectors will take care about my growth. That is all -- that is the basic purpose with which we are seeing that our growth should be there in each and every sector.
Coming to corporates, as you are interested. Corporates, as I said, we get very active infrastructure especially HAM, which is one of the safest advances as per the existing repayment and the scheme guidelines are concerned. We have already underwritten the projects worth of INR 50,000 crores under HAM project, which will be disbursed quarter-on-quarter as the progress happens in the HAM projects.
Second one is we are very active in NBFC finance, which are all AAA, AA, not less than that. We are having good proposals, and we have already sanctioned under steel, iron and steel. Now it is to have good growth in housing. For example, our housing is growing at 16%. To have the raw material, we are selectively financing real estate projects of housing. So we are active in housing also.
And engineering, we are financing. Construction also we are financing. You have seen 26% growth and quarter-on-quarter, it is about 8% growth in construction activities. And in chemicals and chemical products also we're active. So basically, not in 1 sector or in 1 scheme, we want to have a spread over.
However, the corporates, we are very choosy as we have seen, our rated portfolio is about -- A and above is about 78%. BB and below has come down from 18% to 11%. So book is very good. We don't see any immediate stress in any of the books as far as corporate is concerned of Canara Bank. So growth is widespread.
Sir...
Mr. Ashok I would request you to come back in the queue, please. We have other participant waiting.
On NBFC front, sir, can you throw some light, sir, how are you placed on the NBFC for pool lending for onward lending? And also the pool buyout. What are your views on that, sir? And what are our plans on that front?
Yes. Yes. Point number one, pool buyout. No, we have not taken. Why means -- as a bank individual, I am able to show excellent performance under disbursements. So I have not gone for any pool purchase. Without that, this is the growth. Second point is co-lending. Yes. We are interested to some extent in co-lending. But however, our emphasis will be on lending by ourselves.
Yes, sir. We can move on to the next participant?
Yes, please.
We have Mahrukh.
Yes. I had 1 question -- a question on credit growth. So basically, your global advances have grown very, very strongly. So which sector would that be, I'm sure it's India linked, but in global advances, which sector would that be.
Again, it's -- because of what happened about -- because of recent government measures, we hear that some of the CapEx has been rolled back. So why is the growth in infra steel so strong because these are sensitive sectors and which part of infra is growing? What are the capacities in steel that have grown so much in the quarter? And also in NBFCs, would these be power NBFCs?
Ma'am, 1 by one, I will answer. First, regarding the overseas credit growth. June 21, our overseas portfolio was at INR 23,000 crores, which is insignificant as far as the overall advances is concerned, at that time, it was about INR 6.84 trillion.
Now from INR 23,000 crores, we have come to INR 35,000 crores out of my loan book of INR 7.83 trillion. So percentage-wise, it is not -- still it doesn't make much impact. And having a INR 35,000 crores, INR 40,000 crores of loan book overseas, for a bank like Canara Bank is very small.
So percentage wise, the growth is 52%, as you see. And quarter-on-quarter, it is 18%. Still, we are not happy with this one. Because unless until we have at least $1 trillion overseas gross advances, it doesn't make sense for Canara Bank. So we are in that direction.
Now coming back to what type of advances we are doing in overseas. As you said, these are all -- 90% is India rated AAA-rated companies. AAA-rated companies at the most AA-rated companies. And 10% is foreign banks and foreign institutions also, which are also highly rated. So this is the exposure which we are taking as far as the overseas are concerned. Now coming to domestic...
Which sectors?
Yes, yes. In this, as I said, these are all AAA-rated India and corporates as well as public sector undertakings also. Not under 1 sector, it is under various sectors.
Like 2, 3 sectors, if you could name whether it's oil, steel, infra, cement?
Yes, yes. It is -- I can say it is a public sector AAA-rated company in power financing and also infrastructure financing and also financial institutions and banks and some Indian corporate who is a very good corporate under steel. He has also raised 1 abroad from our bank.
And coming back to India. Domestic credit, as we say, we have taken A and above rated corporates under these various, what we call, sectors and purposes. So as I said, it is not only steel. We are growing in all the sectors. And second point is, if you see my risk-weighted assets, it is 69% which used to be 74, 72 79.
So now we have such a good portfolio where the risk is very well under control. And I can say this 69% of risk-weighted assets, maybe one of the best in the banking sector.
Got it, sir. And in terms of NBFCs, would these be Power Finance NBFC?
No, ma'am. It is spread over, not power finance, it includes debt also.
[Operator Instructions] Next, we have Mona Khetan.
So firstly, what is your reset period for the EBLR loan? How soon does it get reset?
Generally, it will be minimum 3 months now.
Okay. So the first repo rate increase happened in May. So the first reset for you was around June for that 50 bps.
Yes -- no, first one is 40, then 50, ma'am. 40 bps is first which we have passed on. Whereas 50 bps we have passed on to the customers since 7th of July.
Okay. And the first one was passed on in June?
Yes, before June.
Okay. Okay. And on the restructured book, you mentioned that about 10% or so has slipped. So the outstanding today would be about INR 18,000 crores. Is that a fair understanding?
Exactly correct. So 10%, if you take, it will be about INR 1,800 crores. I said it is a cumulative 1 putting together in all the quarters. And during the current quarter, whichever is there, it is appearing in that INR 3,600 crores, which we have shown. It is a part and parcel of that.
Right, right. So about 5% or so, it slipped in this quarter because another 5 has slipped earlier.
It can take around 6% to 7%, give and take.
Okay, okay. And -- Okay. Sure. And what percentage of this book has started billing by now that is out of monitory?
Ma'am, our estimation is at the most cumulative, maybe about 18% to 19% is due slip, where 11% is already booked. The rest leftover is about 8% to 9%, which we are expecting and which we are making provision for that, that we are already prepared how to handle that and to recover that amount.
And the guidance, which I have given in the beginning of the year that overall in full year, our slippages will restrict to INR 15,000 crores, and recovery will be more than that. All this restructured amount we have taken into consideration, we have factored in within that INR 15,000 crores. And during the current quarter, the INR 3,600 crores includes that amount also.
Sure. I also want to understand what percentage is totally out of moratorium and the billing has started?
No, everything is started. No moratorium is -- there is no moratorium. That...
Under the reset period.
Yes, that process is over. No, installments have started. And our collection efficiency is somewhere about 90% to 91% under this.
Sure, sure. And the future group exposure, was this recognized as NPA in this quarter?
Yes, ma'am. As last time, as I said, because we are getting repayment, it was not classified as NPA in Q4 of FY '22. Whereas during the current quarter, we have classified these INR 3,600 crores includes future group, where the exposure is about INR 1,240 crores roughly.
Sure. And it is fully provided by now?
100%.
Jay Mundra.
Sir, I have a couple of questions. First is on your capital, sir, the absolute amount of common equity capital that has gone up by around INR 1,700 crores. So does this include the proportionate net profit or there is some duty adjustment?
No, you are correct. It is -- it includes major portion is our net profit.
Okay. Understood. And secondly, sir, you have mentioned that you will be raising some capital or debt capital, right? So there is -- just wanted to double check. Is there any plan for equity capital raise for the residual 9 months?
This year no.
Right Understood. Secondly, sir, on your loan yields, right? So there is a dip in the loan yields. Is there an interest reversal component, which is driving the loan yields lower? Because otherwise, we should be seeing loan yields getting higher, right? So I'm just -- if you can explain what could have led to lower yields on a sequential basis?
Two things. 38% of my portfolio is linked to RLLR. In -- as on 30th of June, we have passed down only 40 basis points to our customers. The remaining 50 basis points increase in repo rate, we have passed on to our customers only on 7th of July. Two reasons.
First 1 is we don't want in June quarter itself load our customers with 90 basis points additional interest, point number one; point number two, during the June quarter, we have increased the deposit rates to retain our customers, taking into consideration the inflation that is available at that point of time.
However, during the current quarter, that is Q2, that 50 basis points of repo is already loaded and cost of deposits, which we have increased in the earlier quarter is continuing and no further increase we foresee in the coming 1 month.
So whatever NIM are the yields you are seeing at 7.03 under advances will increase in the current quarter, because we have passed on that amount. And there is no reversal of interest in any of the accounts because no big account has slipped except future.
Right. So would future downgrading, would have some chunky interest reversal?
No, not much was there because in that INR 1,200 crores. About 50% roughly was under debt and 50% was under NPI investment. So that is why it is not there. Only thing is the interest which has to be passed on to the customers knowingly well, we have not passed on because June quarter, we thought that it is very sensitive quarter where we have to give some breathing time to our customers. Hence, we have lowered that 50 basis points on 7th of July.
Right. No, sir, if that was the case, then it should be flattish, right? If you have not -- you have only -- you have been calibrated in...
Yes. Yes. And another point -- another point is if you see the churning of my credit portfolio, INR 40,000 crores worth of advances we have given to AAA-rated company in the Q1. INR 40,000 crores.
Last question, sir. If you have -- sorry, last 2 questions. If you have MTM -- you have given treasury gains, which is very positive surprise. If you can bifurcate into treasury gains and MTM loss, if you had?
Yes. Mr. Mahesh, are you there? Mr. Mahesh?
Someone has to unmute him.
One minute.
Shall I answer, sir?
One minute. Sir, Mahesh is our General Manager, in charge of [ Teasury ]. Please, Mahesh.
Yes. Sir, you asked 2 questions. Is the profit, what you are seeing [ 889 ] is including the depreciation? Yes, it includes the depreciation. So that means we have booked more amount of profit than what is declared. So we have some depreciation on books, but whatever [ 889 ] declared as a trading profit includes the depreciation figure.
And if you have that number, sir, what was the depreciation?
It is around INR 360 crores.
And last question, sir, if you have the slippages...
Sir, 1 minute if you recollect our earlier interaction last quarter. You were asking about the Q1, how much depreciation, how much depreciation losses will be there in treasury. At that time, we said it will be INR 250 crores to INR 300 crores. We have ended up at 360 exactly near to that.
Right. Congratulations. It's very positive surprise.
One more question, sir. You were asking another thing.
Yes. Last question, sir, if you have the slippages for the quarter -- breakup of slippages for the quarter agri, retail, MSME and...
Yes. Yes. Yes, INR 3,600 crores, INR 100 crores out of this INR 800 crores is corporate, out of INR 800 crores, INR 600 crores is future only. Then INR 600 crores is agriculture, around INR 700 crores is retail and INR 1,500 crores is MSME.
Next, we have Deepak.
Am I audible?
Yes, sir.
I just wanted to understand that going forward, how do you see the bond investment loss or MTM loss going forward?
Mahesh? Mahesh, unmute, please?
Yes, yes. We expect the 10-year to be broadly in the range of 7.25% to 7.75%. So given the portfolio of our size, we believe if the yield continues to be upwards, I think we may see in this particular region around INR 100 crores to INR 150 crores of MTM losses, but we have sufficient profit to cover those MTM losses. So we should not see any major losses from treasury side from our side.
And this INR 100 crores to INR 150 crores per quarter you are saying?
No, if the yield moves again to 775 levels. Otherwise, presently, I am covered.
Okay, okay. Understood. Understood. And I got that. And sir, I just wanted to clarify, operating profit, you want to grow by 15%. Is that what you mentioned earlier in the call?
Sir, operating profit, 15% minimum we are targeting because there is a reason for that. If a bank makes 15% operating profit, I can pay 15 days PLI to my 87,000 employees. So that is -- for us, it is a minimum because we have to pay PLI.
However, this quarter, instead of 15%, our OP growth is 20%. And with the interest income and noninterest income and the growth which we are seeing in the assets and other things, I think maintaining this percentage going forward, we hope to maintain 15%-plus.
That is on a Y-o-Y basis or annual basis right?
Quarter-on-quarter basis. There is Y-o-Y. You can say Y-o-Y.
Y-o-Y, right?
Yes, yes. Y-o-Y. Because quarter-on-quarter, already, we are at 6.52%. So Y-o-Y will be -- every quarter, we'll be maintaining 15%, we are working in that direction.
That's great to hear that. And a couple of more things. Now even on the growth side versus the guidance that we have given, we are quite surpassed that, right, in terms of actual number at 15% versus 8% which we are looking at, right? So are you looking to like revise upward the guidance that we have given earlier?
See, as I say, guidance is for us, it is a minimum benchmark. Above that, it can go to any extent, depending upon the availability of the good proposals and also how the economy is doing.
In Q2, we observed that the economy will be doing good. And the way in which we are getting the inquiries regarding new investments, I think we should be in a position to do better in Q2.
Sir, then your guidance are better than first quarter?
Guidance, if you ask me, again, I'll say it will be a double-digit growth, a decent double-digit growth.
Okay. Fair enough. And my final question...
We'd ask you to come in the queue, we have other participants waiting in line.
We have Rehan next.
Yes, am I audible?
Yes, go ahead.
Congratulations on good set of numbers. Just a couple of questions. Thank you for shedding light on the slippages. But just to go to last quarter, have they been provided from these slippages that will [indiscernible] last quarter, especially with regards to future group, I think about INR 500 crores was what was not provided for last quarter.
Yes. Last quarter, we were probably at 60%. This quarter, we have made 100%.
Okay. Okay. And sir...
Last quarter, it was not NPA. It was a standard. Even then proactively, we have provided 60% last quarter. And this quarter, we made 100%.
And sir, my last question is what would be our tax exposure to maybe, say, the top 3 borrowers as a group, maybe top 3 groups?
See, we have prudential limits wherein there is a fixed limit for a group and fixed limit for individuals. We are well below that fixed limit, which was decided by the Board. So we'll be within that limit. We can multiply that with our vertical existing portfolio.
Okay. So can you shed some light on the number?
Generally, we -- it is -- it will be somewhere about INR 10,000 crores to INR 11,000 crores.
We have the next question from Pranav.
Sir, I just have 2 questions. First is that, as you said that the interest rate increase has been passed, I think, is from 7th July, and there is a deposit rate increase also. So should we expect the loan 2Q to go up 5 to 10 basis points next quarter?
Sir, our 38% of my loan book of [ INR 7.83 lakh crores ] is linked to RLLR. So 50 basis points on this 38% of my loan book will be booked for what you call full month minus 7 days. That is about 83 to 84 days we'll be booking. So accordingly, you can anticipate what will be the quantum that will be charged in addition to what we are charging, sir.
Right, right. So I messed the calculation that I'm making, that's why I think that could actually go from there.
As per yield is concerned, we want to be more than 7.10. Today, we are at 7.03. We want to cross 7.10 minimum.
Right. Sir also in the provisions, there is an item of INR 1.35 crores of nonperforming investments. So during the previous conversation, you alluded that there is some future group instrument [indiscernible]...
In this, we have provided 100% for 3 investments. One is future group about INR 640 crores. And 1 account was there, which is a telecommunications account, where we have provided 100% and 1 sugar industry, which is about INR 245 crores. So put together only 3 accounts where we did 100% provision.
And all that investments -- nonperforming investments. So I'm referring to a specific sum items, whether it is nonperforming indexes, nonperforming investment, which is INR 1.35 crores?
Yes. Yes, it is our investments and fully provided.
We have Praful next.
Am I audible?
Yes, sir, please go ahead.
Congratulations, sir, on a great set of numbers. So just want to get your outlook on the cost of deposits from here on, how do you think they move over the next 6 months for the bank?
Sir, as far as the movement in deposit cost is concerned, mostly, it will be linked to the inflation in the sense, suppose inflation if it cools, even if I don't increase the rate of interest on deposits, I'll get deposits. If the inflation doesn't come down to 6%, I think to compensate my depositors because they will not deposit money with me with native interest rates. So I may have to increase the deposits going forward if inflation doesn't come.
As on date, we have already increased the deposit rates in Q1 itself. And I think that will take care coming 2 months. And again, in September, we may take a call depending upon the situations, which will be existing at that particular point of time.
But in Canara Bank, we have 1 philosophy sir. We want to take care about my depositors, keeping in view the long-term relationship. And also, we don't want to charge our borrowers on a higher side to pass on some benefit to them and to make a decent profit as you've seen with all these things...
We've seen spectacular growth, yes, sir.
So we want to be in a win-win situation, and we want to build confidence in the customers that in spite of good times or bad times, Canara Bank is with them. So that only will help us going forward to be one of the best banks in India.
We have next [indiscernible].
Yes. Sir, 1 clarification and a couple of questions. Firstly, you mentioned that we don't need any equity capital this year, right?
Yes. Equity, we are not going to raise this year.
Okay. Now my 2 question is you mentioned that in these provisions, almost INR 1,500 crores provision was for the nonperforming investments. So are there any nonperforming investments still to be written off?
See, nonperforming, when I said -- I said 1 major account is future, which is about INR 640 crores. Second one is the telecommunication account equal amount. And one is a sugar industry about INR 245 crores. 3 accounts where we did total provision. And in this, we see a good scope going forward to recover the amount from these accounts.
Yes. But are there any more investments, any other client customer?
No, no. Okay.
And my last question is regarding the gold loan. So from last many quarters, we have been performing exceedingly well in gold loans. So what we have done differently for such a growth in gold loan -- and is there a -- my understanding is correct that during the merger of the bank, some of the branches we have rationalized, have you opened any dedicated gold loan centers? And which is leading to this growth?
Sir, gold loan, let me tell you the secret. It is hard work and confidence of the customer. Only these 2 things will help us to increase them in the figure. Because we started 2 years ago, as we said, amalgamation. Amalgamated figure was about INR 54,000 crores. Today, it is [ INR 1 lakh crores]. And even June 21, the figure was about INR 80,000 crores.
Today, it is INR 1 lakh crores, INR 20,000 crores increase. This progress you can achieve only and only when all your staff members are involved. This is not one-man job. This is a very cumbersome job where each and every staff member has put in best efforts, which we could do in Canara Bank. That is how the figures are increasing in gold loan.
Second one is we allow to continue this growth and also to consolidate the performance which we are making under the gold loan.
Next we have [indiscernible].
I just have 2 questions. Sir, 1 would be -- so what would your liquidity coverage ratio this quarter end or average?
See, requirement is 100. We are above 125.
Okay. And sir, so you mentioned we disbursed around INR 50,000 crores for HAM projects. So what would be the indicative yields there?
Sir, it is INR 50,000 crores HAM projects worth we have sanctioned and the disbursements will be going on. And it is -- there is no cost of negative yields, total is positive yield because there are 2 components in this.
We get very good interest. It is 8 plus, and the processing charges which we get in these proposals is really significant because of which, if you see that Canara Bank fee-based income, it is growing at 18%. The amount is INR 1,577 crores per quarter, which is a very decent income.
Okay. And sir, broadly, sir, what would be your yield on AAA corporates?
Yield on corporates, see, if you take bifurcate into AAA, the yield will not be much attractive. But we will be earning from that. So it is a mixture of everything. AA, AAA, A and B and D, C. Overall, put together, as you have seen, the yield is at 7.03%.
Next, we have Nimesh [indiscernible].
Congratulations on good set of numbers. I just want to -- what is the yield on the gold loan side?
It is 7.20 plus.
And what is the Q4 and Q4 yield for gold loan?
Q4? Yes, it is plus 7%.
Next, we have [ Kotak ].
Sir, firstly, on the P&L provisions, I see there is 1 item of a provision reversal of about INR 650 crores, can you just elaborate on that, please?
Mr. Majumdar, he is my CFO. I request him to answer. Mr. Majumdar?
Sir, there are some reversals. First is future, we -- last time only we made provisions of around INR 315 crores when it was with a standard asset, which this quarter has slipped. So that reversal of that provision is around INR 315 crores.
Then there are that FIPL reversal -- standard reversal of INR 163 crores, delayed RP reversal of around INR 100 crores and Bajaj Hindustan, which we -- which has slipped to NPA, there which was restructured under S4A, there in that we were holding provision of around INR 74 crores. So if you add up, it will come to exactly that what I said, that is future...
So here, whatever these reversals we have answered, as you see, because of the efficiency brought out in FITL and also in restructured accounts and proactive provision what we made in the future, those things we got it reversed and accounted for in the NPA provisions.
Understood, sir. My second question is on the employee expenses side. With the yields going up, do you see any reversal coming from the retirement -- the provisions for the retirement benefits, either in the first quarter or -- and then going forward in the rest of the year as well?
Sir, as far as employee benefits and employee staff cost is concerned, one point is the number of staff is not increasing in Canara Bank. Because at the most whoever it is, we are replacing them with a new blade.
So the new people who joins, generally, the payment will be less compared to the people who are retiring. So as far as salaries and other things are concerned, we are going to have a comfortable position.
Regarding the provisions are the -- because of the yields, there will be some impact, positive, but [ 3,400, 3,600], we expect that we want to pay some amount to our staff. So expenses will be around this range only. Even if we get some benefit from the yields, that will be adjusted somewhere in the staff cost.
Understood, sir. Sir. And lastly, if I look at the SRs, there seems to be another markdown in this quarter as well.
Security receipts, as I said, some INR 200 crores, INR 300 crores every quarter we'll be doing. And it's a continuous process and some SRs also we'll be realizing and recovery also will be deny. It's a continuous process in the bank.
Next, we have [indiscernible].
Sir, I just wanted to understand, firstly, as to we have our staff deputed at Can Fin Homes. So any fresh findings after the audit has been calculated?
Sir, we have completed the inspection in all the 200 branches. And some irregularities and some deficiencies, process deficiencies were observed, which were addressed to a larger extent.
And subsequently, about INR 2.3 crores further frauds in about 23 accounts were found, which was 100% provided. And now we can say that Can Fin Homes is one of the best subsidiaries we are having since we have screened everything and address the loopholes.
No, sir, just furthering that, so I just wanted to also to understand that generally due to what reasons do we have our staff on deputation at Can Fin Homes?
Yes, we have 4 top executives deputed to Can Fin Homes, wherein 1 executive is totally controlling and monitoring the inspection aspect, because we, in Canara Bank, we believe in one thing that is compliance first business next.
We want to have Canara Bank as well as all my subsidiaries 100% compliant of the regulations and not 0% tolerance as far as that is concerned. So that is why we posted our staff in all our subsidiaries, including Can Fin Homes.
No, sure. That has. But just, sir, I wanted to understand, historically, due to what reason would we have recruited staff at Can Fin Home? And when was that?
See, there are 2 things. First one is, we want to give our expertise to all our subsidiaries, which can be done through our staff. So generally, we do it. Second one is they also can contribute along with the others whom we take from the market.
So these are the twin benefits which we see as far as our subsidiaries are concerned. And since I am the Chairman of those companies. So generally, I like to have some people of Canara Bank in all my subsidiaries.
Sure, sir, last question, sir, a small one. Actually, last time, when did we recruit the staff at Can Fin Homes before this episode?
Before this also, a DGM used to be there since beginning. Our -- DME is our staff only. Due to...
No, sure. But apart from that, we also have 3 more people this time around, right? So I just want to know that...
Yes, yes. Yes. We increased the strength. That's correct.
We have the next question from Pritesh.
A couple of questions. One is, basically, you've done a very good job on the PSLC side. So I see that PSLC itself has contributed about INR 850 crores. Can you just give 2 data points on that? One is what commissions generally we get on that? I mean if I look at -- it's coming to 1%, 2%. Is it a quarterly phenomenon? And do we sustain that kind of PSLC?
See, this PSLC, if you see last year, we earned about more than INR 900 crores. So definitely, generally, our aim is whatever we earned in that subsequent quarter, we earned more than what we have earned earlier. So this time in the current quarter itself, we have already earned about INR 840 crores. And still, we are hoping to book some profit in the Q2 also.
Sure, so we see that...
And this is every year phenomena as long as RBI doesn't change the criteria.
Sure, sure. Sir, second question was on MSME side. You said that there were about INR 1,500 crores of NPA from MSME, which is about like 40%, 50% share of the overall slippages, where do we see it stabilizing? It will come down? Is it going to stay in MSME? Or do we see any -- what are the issues still there under the MSME side?
See, if you see historically, about INR 1,000 crores to INR 1,200 crores generally every quarter in MSME, it slips. And subsequently, INR 400 crores to INR 500 crores will be recovered or upgraded. It is a continuous phenomenon, not for this.
This time, maybe around INR 200 crores to INR 300 crores, maybe more. Otherwise, MSME, you have to make, I would call provision to absorb these slippages and also to recover. That is why in Canara Bank, we have a separate team who handles MSMEs trust assets. So our recovery is also good under this MSME NPA accounts. It is a continuous process.
Sir, would it be fair to assume that a large part of these also will have restructured book?
Yes. Yes. As I said, about 11% of the restructured book, cumulatively, it has already slipped. So it consists of part of that also.
Okay. And anything from ECLGS coming in?
That is hardly 3% cumulative. It's only 3%.
And last question will be, if you can give the CASA breakup, between CA and SA for this quarter?
Yes. Yes. CASA, as you have seen, we have grown at 8.8%. And generally, Q1 for CASA, it will be a bit challenging because institutional deposits, which we get from the government, where we are a very significant player.
March, the government will be giving huge amounts to exhaust the budget and the next budgetary allocations and funds will be flowing to some extent in Q1, but to a significant extent from Q2 onwards. So this quarter, we are expecting minimum double-digit growth under CASA.
Yes. But can you give me an absolute number of CA and SA this quarter?
In this INR 361,000 crores about INR 40,000 crores to INR 45,000 crores will be current. The remaining will be savings bank.
We will take that as the last question for today. And again, I hand over the call to Prabhakar Sir for his closing remarks. Over to you, sir.
Yes. I request my executive directors, Mukherjee sir, to give the closing remarks. Please Mukherjee sir.
Thank you, sir. And we thank all the analysts for this Q&A session, which was very interesting. Now as you have all understood, the Canara Bank is in a growth path and we are showing this on a quarter-to-quarter basis in all the aspects and nuances of banking, be it deposits, be it advances, be it recovery and be it profitability and asset quality.
So in all these aspects, we have been doing well quarter-on-quarter, and we propose to do it. Now so far as the guidance which we have given for March 2023, that will remain as it is. And as our MD sir has said, that we would definitely like to surpass that.
And in some of the parameters, even in this quarter, we have surpassed. But then, we want to keep it on a conservative side so that we keep on achieving them. And with our growth, but we will not stop our growth because of these guidance's. So these are only guidance.
So far as the closing remark is concerned, we would definitely -- for Q2, we will go for our advances group. The asset quality growth as well as our PCR that we will also strive to reach our levels of 85% as early as possible.
And then regarding the CRAR, we would like to improve it further by improving the credit density. So these are the things which you are aware, bank is doing quarter-on-quarter, and we would continue to do so. Thank you very much.
Thank you, sir.
Thank you.