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Canara Bank Ltd
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I, S.K Majumdar, CFO, Canara Bank heartily welcome all our investors and analysts for this call. Today here, we have with us our MD and CEO, Sri K. Satyanarayana Rajuji, Sri Debashish Mukherjeeji, Sri Ashok Chandra and ED Sri Hardeep Singh Ahluwalia. All 3, these are present. And we also have with us members of senior management with us. How do you like to do that, Raju sir, would you like Mr. Raju to give a brief presentation and then start or straight away where you want to start?
So good afternoon, everyone. On behalf of Antique Stockbroking, we welcome you all. So we have on the Canara Bank management team, Mr. K. Satyanarayana Raju, MD and CEO, sir, Mr. Debashish Mukherjee, Executive Director; Mr. Ashok Chandra, Executive Director; and Mr. Hardeep Singh Ahluwalia, Executive Director; along with senior members of the team. Thank you, sir, for giving us this opportunity to host the call. Without further ado, I hand over the call to MD, sir for his opening remarks. And post which, we can open the floor for any query. Thank you, and over to you, sir.
So good evening to all of you, all the well-wishers investors and analysts. June for the quarter June current year, or the Canara Bank global business has grown year-on-year at 9.38% and stood at to INR 20.80 lakh crore. Our gross advances have shown a 13.27% growth year-on-year and stood at INR 8.87 lakh crore. We have recorded our highest operating profit and net profit with a profit year-on-year growth rate of 15.11%. Our operating profit stood at INR 7,604 crores and our net profit has stood at INR 3,535 crores, with a year-on-year growth rate of 74.83%. This high operating profit and net profit is possible with our net interest income growth of 27.72% year-on-year and stood at INR 8,666 crores. Our RAM credit -- so grown at 12.89% year-on-year. It is in line with our total advances growth so that we could maintain our cost -- the corporate and the RAM, the percentage of 45% and 55%.
Our gross NPA has come down to 5.15% with a year-on-year decline of 183 basis points. Our net NPA has come down to 1.57% with a year-on-year decline of 91 basis points. These 2 things we could achieve and with our PCRs crossed at 88%. This is an improvement of more than 350 basis points.
Our RAM sector growth that led by our gold loan has improved at 30%, almost recorded a 30% year-on-year growth and stood at INR 1,29,800 crores. Our retail credit has grown at 10.64% and our -- within this retail credit, our housing loan is the major component, which has grown at year-on-year 13.64% and stood at INR 85,884 crores. Our return on equity it has now the reach to the 22.95% with a year-on-year improvement of 662 basis points. Our cost-to-income ratio has gone down to the bottom almost is the best in the so far in the last several years that our cost to income has reached to the 43.61% with a year-on-year improvement of 115 basis points.
Our return on asset almost reached to the 1% and stood at 0.99% with a year-on-year improvement of 34 basis points. Our CRAR is maintained continuously above 16%, whereas the peer banks are at 14% to 15%. Our net interest margin, NIM -- the last year, the cumulative NIM is 2.92% as against that our NIM in the current quarter, we could maintain 3.05% and these are all the few features what we could share with you.
And now the open [ as is ] open for you for interacting. I'm having with -- along with me our Executive Directors, Sri Debashish Mukherjee sir and Ashok Chandra and Hardeep Ahluwalia. Now it's the word [ as ] is open for the interaction, sir. We are open for answering any of your queries or the clarifications.
Okay. So we have our first question from Mona Khetan.
I just have 2 questions, sir. So firstly, on -- so I just wanted some more clarity on the gold book, which stands at about INR 1.3 lakh crore today. So how much of this would be agri versus non-agri? What would be the yields here? And if you could just give some color on what sort of network is also enabled? The branch network is enabled for gold lending versus a couple of years back.
Yes, Madame. Actually, gold loan portfolio, our average yield is around INR 8.80 lakh crores. In action to that, whatever it is an interest yield, whatever I'm speaking about that. Our total out of this is majority is from the agriculture lending. The reason is our composition of the branches is 60% is in rural and semi-urban. The urban and metropolitan or gold loan contribution is comparatively is less. There we are getting on an average around INR 7,000 crores is under the retail and INR 4,000 crores to INR 5,000 crores under the MSME. These 2 are there, if you remove that, the remaining entire portfolio is agriculture. How we are able to establish this growth is just doubling that in 3 years. That is, we have identified certain pockets where we felt that there is a very heavy potential is there. And we have identified such almost 500 near to the 500 jewel loan shops.
We created within the branches a separate cells and it is equipped with the staff and the machinery, these jewel loan shops have been given with the quality testing machines. And these people will be exclusively for delivering the gold loan product. So that has helped us in -- actually, the gold loan, whenever you want any customer comes, that comes for the -- raising the loan against the gold only when it is an emergency.
So the [ TAT ] matters for the growth, that [ TAT ] we address it by creating an exclusive counters in various branches. Not only this 500 branches and other, almost 1,500 to 1,600 branches also separate counters have been created to address this and to promptly respond to the request of the customers. That has created a confidence among the public and whatever the growth is there, now it is a walk-in growth matter.
Okay. So while you said majority of the book is agri gold, what would be the percentage, if I may understand better?
That's what matter around 85% will be the agriculture gold, madam. The reason is the majority of this gold loan portfolio we raise we see from the -- our 60% of rural and semi-urban.
Got it. And when I look at your network of 9,600-plus branches, how much of it is enabled for gold lending, if I may understand?
No, actually, over 9,200 branches are retail branches, sir. And almost more than 6,000 branches are opened for that lending to the gold. But the gold loans in the north sector is minimal because there it is picking up will be it's taking, but there is a growth. But when you look at the volumes from the South India and the North India, there is an ample difference. But the majority of the business, what we are getting out of this INR 130,000 crore is, around 80% is from the South.
Got it. And just one final point on this. So if I have to look at 2 to 3 years back, what would be the network against the INR 6,000 crore, which is today gold enabled for you?
Almost 100%, we doubled that network madam. It was around the INR 3,000 crore, now we increased it to INR 6,000 crore.
Got it. And just one last thing on the provisioning side. So apart from your PCR provisions and on NPA provisions and general provisions on standard assets, what else do we hold on the prudential side, if anything? Standard prudential provisions?
No, actually, whatever the stipulated provisions beyond that, generally, there are under the regulatory requirements, based on that only, we follow that provisioning. But NPA within this quarter, whatever the quarter we are telling that in this, we have provided more than INR 800 crores beyond the requirement. The stipulated requirement more than that INR 800 crores, we have provided that to strengthen our PCR.
And every quarter, almost we are doing that to strengthen our PCR. But historically, our PCR compared to other peer banks we are at lower side. So we want to, till we reach at par with other banks, we continue to provide these additional amounts every quarter to see that our PCR crosses 90%.
We have our next question from the line of Mahrukh Adajania. [Operator Instructions]
Hello, sir, can you hear me? Yes, Sir, so my first question is on your margins. So your margin has improved slightly in the first quarter, but your deposits have not grown because your liquidity is good. So when your loan growth actually picks up in the busy season, and you will have to mobilize much more deposits, how do will your margins behave? Will you be able to maintain margins given that yields will now be stagnant? Or will margins fall if deposit mobilization increases?
Madam, you are aware about that our CD ratio earlier, it was only 73%, and we can -- there is a scope to go up to even 78% and we have given in the starting of the financial year that our CD ratio, what we are looking at is the 75%. And we are moving on that with keeping that our -- we expect that our credit growth will be much higher than our deposit growth. And the first quarter-on-quarter also, our deposit growth is madam is there around 1% to 1 point above the 1%. It's not that the first quarter, there is no -- there is a growth in the deposits, but that has impacted that. So the -- whatever the high cost of deposits, all our existing cost -- existing deposits have been repriced. And there is no such pendency at our level. So our interest expenses already reached the peak at that level. But future whatever the growth still in our existing system, there is a cushion for us to expand our CD ratio. That is a one plus point for us.
The second plus point is we have taken enormous number of initiatives targeting the CASA. On the first working day of this current financial year on April 3, we have taken several initiatives aiming only for the focus on the CASA and the liability products. This CASA, we have introduced first time in India that targeting a salaried class by offering a term life insurance from INR 1 lakh to INR 6 lakh depending on their gross salary in the form of 4 products, the silver, gold, diamond and the platinum. And our earlier before commencing this product, before launching this product, our entire bank, the salaried class customers were around 11 lakhs, but by introducing this in the first quarter itself or last 3 months, we got a traction we could onboard more than 3 lakh, 10,000 customers who has opted Canara bank accounts as their salary disbursing accounts.
The second one is nonsalaried class. We also introduced a select product with a free of zero charges, and that is also for non-salaried class in especially urban and semi-urban areas, that has got a good traction, and we could onboard in the last 3 months more than 70,000 such -- these accounts, our balance will be a little high.
And those customers have opened more than 70,000 to 73,000. And we also introduced a relationship manager concept from first to July onwards in 5,000 top savings bank concentrated branches covering 80% of high net worth individuals of our bank.
So this also, we feel that it will support our CASA efforts in the coming quarters. You can look at that the Canara Bank could maintain even under such circumstances that we could maintain further deterioration we could not see in the CASA because in savings bank, even quarter-on-quarter, we could see more than 1.5% growth. The overall CASA, it is stagnated in the last quarter. But if you look at the savings bank, growth is around 1.68% growth is there in quarter-on-quarter. These initiatives, in addition to that, whatever the term deposits growth, and we also launched the recurring deposit aiming for INR 1,000 crores target, several initiatives have been taken. These things will compensate our interest rate expenses. But I agree with you that there is a stress on interest expenses, but we are confident that we can manage our NIM at 3% and a little above the 3%.
Okay. That's so helpful, sir. So my next question is really on loan growth. So you think you'll be able to maintain 13% loan growth or it could get higher in the busy season on a year-on-year basis?
So from my side, madam, from bank side, we have given a guidance that this year, we show a growth of reasonable growth of 10.5% in the loan growth. But when I interacted last time with all of you, we have told that we informed you that then we are expecting the credit growth will be between the 12% to 14%. Generally, we all aware that in the first quarter, the credit growth will be little comparatively sluggish when you compare with the remaining quarters. But in the first quarter itself, in the domestic credit, we have shown more than 3% growth even if you take that 3% into 4 quarters, we are -- what we have promised is already achieving it. The remaining is we are -- this much I can tell you that whatever the growth rate we have shown to you that will be a minimum growth rate.
Okay. Sir, sir, I just have one more question on PLCs. So PSLC income usually comes in the first quarter or did it come through all quarters because it's big, obviously. .
No, no. Generally in every year, PSLC in the first quarter, you get a higher margin. So generally, the banks prefer to take the advantage in the first quarter. Second quarter, something will be there, but not in line with the first quarter.
Okay. And third, fourth, nothing much, right? So this is...
So nothing much. Nothing much. Very nominal amount.
Okay. Okay. So this is kind of reflects the full year PSLC income also?
Yes, madam, definitely.
We have our next question from the line of Sridhar Sivaram. [Operator Instructions]
Yes. Sir. I have -- my question is more to get some guidance from the management on how we should look at the numbers for the current financial year. One is operating profit, you've grown at 15% roughly in the first quarter. Is it fair to expect operating profit growth somewhere in the range of 15% to 16% for the full year? And the second one is on the provisioning, roughly about INR 2,700 crores of provision for the first quarter. Should we expect around INR 10,000 crores full year provisioning number?
Sir, one is, first, the -- operating profit. Operating profit last year, we could show 20%, sir. But this year, because of that high interest rate regime, and the interest expenses for mobilizing the deposits, there is a stress on our margins. That's why we could show only 15.11%. We expected that in the current quarter also, the stress will continue on the interest expenses. So the next -- we may, in the liquidity once in the system liquidity improves, in the third quarter and fourth quarter, we may see slightly decrease in these interest expenses. So we expect that at this moment, in double digit, we are confident that we can manage the double-digit growth. But our endeavor is to maintain that what the present growth we have shown that. The second one is regarding the PCR. The second one is the PCR, the provision coverage ratio.
No, I asked the absolute growth INR 10,000 crores full year number?
Yes, sir. Actually, definitely, what's the actually if you look at the compared to peer banks, our provision coverage ratio was historically low but now we could recoup to the major extent, but still there is a gap between the Canara Bank and the other public sector peer banks. There is a gap for to fill that to strengthen our balance sheet. That's why we are in initial stages also, we have given a guidance to you that we will continue to, every quarter, to strengthen our PCR. In that direction only, we are providing this INR 2,400 crores or INR 2,500 crores, whatever is there. It will continue until we cross that 90% PCR, sir.
So sir, based on this, roughly, is it fair to expect that we'll reach somewhere in the INR 15,000 crores to INR 16,000 crores full year PAT number?
Sir, the first quarter, we have given you INR 3,535 crores. And you can look at our last maybe 11 quarters or 12 quarter growth, what we are showing. And quarter-on-quarter also, you can look at that what we are showing is. So that graph gives you a clear picture on that. You just look at that -- our net profit is 1 year back, it was 2022. Now we are 35%, 35%. Every quarter-on-quarter also, we are steadily growing. And we expect that the next 3 quarters also, we will continue this steady growth with absolute numbers. Let us see that whatever we have given the guidance, we will be much above than the guidance.
Sir, my last question is on the dividend policy. Last year, you paid INR 12 dividend. So that's roughly about 20%, 22% of the profit. Is that a number consistent we should expect even for the coming year?
Yes, sir, actually, what the being a public sector bank, we are supposed to announce a minimum 20% of our net profit as our dividend. So it depends on how much we give the dividend depends on my net profit. But we continue to give that minimum 20% dividend every year.
Okay. So then if all goes well, your dividend could be in the range of INR 18 to INR 20.
It's left to you, your imagination.
The next question would be from the line of Jai Mundhra. [Operator Instructions]
On your pricing?
Jai, your voice is not audible. Still not very clear. Can you like come a bit closer on the handset?
Any better now?
Jay, you asked the question, we'll try to understand.
Sir, my question is on repricing -- of your corporate loan would like [ INR 4 lakh crores ] say . How much of that should be in the quarter two [indiscernible]?
See, what I understood is you asked about the corporate credit growth -- repricing of the corporate. Corporate repricing is also has completed almost 80% of that whatever it is there. And because many of these corporates, where the short-term loans are there, there only our pricing is the concern. All the long-term loans, the pricing has been taken care initially also. In these short-term loans, we already taken care 80%, and we are continuing to repricing that. You can see that, that is reflected in our average yield on advances. Our average yield advances as on date is 8.4%. It's in the highest so far in the last several quarters. That is continuing. And we -- while even future taking up the proposals because the ample scope is there, growth is there. Demand is there. We have seen so much traction in the corporate side also. But whilst funding our pricing also is making our decision in favor of that. So that's why we are selective both in the security side, the rating side as well as in the pricing side. This attitude, this approach will continue in the future also.
Okay, sir. My question is, sir, if you look at the yield on advances, while they are up as per investor presentation, but I think the Q-o-Q, they have only increased by 5 basis points, right? Because the March number that is shown in the presentation is for full year FY '23. So what I was trying to address of the INR 4 lakh crores loans of corporate loans, how much is yet to reprice in maybe second quarter? So you said 80% has already...
That's what sir -- sorry, 80% has been repriced. The remaining 20% will be there because most of the corporate lending is MCLR linked, sir. Our total assets may 52% is MCLR-linked. Within this 52%, already 80% has been repriced. And the remaining 20% is it will be repriced whenever it comes for the annual resetting.
Understood, sir. Sir, coming to your ROA guidance, right? So this quarter, we have said we have delivered 1% and we are guiding for 1% for full year. However, if you see this quarter of around INR 4,800 crores of pretax profit, we have around INR 1,500 crore plus coming from PSLC, which should declined significantly as we go ahead in the year. So what is the offset, sir? I mean, how would you recoup the loss from -- or the loss of income from the PSLC going into the next quarters?
If you look at the last 2 years or 3 years balance sheet, sir, in the June, our major contribution will be PSLC compared to their OP as well as the NP. The same tempo has continued in the current quarter also. But with the same background last 2, 3 years, also September to March, we could show that a minimum 15% growth rate both in the OP and a good growth consistency in the net profit also. The reason is quarter-on-quarter, you will get a better revenues in different, different areas. First quarter, we might be dependent on the PSLC. But the second quarter, because already the stabilization has happened in the first quarter itself, we have seen the 3% growth in the advances.
Of course, which might have happened majority in the June quarter, that's why the first quarter we might not have got the benefit out of NII. But the second quarter, since already INR 25,000 crores, absolute numbers advances have increased and this more and more disbursement what we look at that. Partly, we wish to compensate with the interest income, sir. The remaining partly, the first quarter, generally, you look at that the recoveries will be comparatively lower than the other quarters.
Look at the March quarter, we could recover the technical written-off fees around INR 2,200 crores as against that first quarter, we could recover only INR 790 crores. So there is a huge scope on that. We have a book of almost INR 66,000 crores of written-off accounts, which -- the first quarter, why the attention will be less is the majority of the staff members will be transferred, their positions are changed. Many people will be in the stabilization area.
But when it comes for the second quarter to fourth quarter, the recovery under the technical written-offs are the before or loss asset, whatever is where the 100% provision has been made, there the recoveries will be very high. The third one is a fee income, sir. Fee income also it contributes quarter-on-quarter. There is an increase, at least a 9% to 10% every quarter. And the first quarter, generally, it will be less. So these are all the options we have on that.
And with these options, what we are expecting is we could maintain whatever we have shown the growth in the current quarter. The same thing can reflect in that. It's not that we totally dependent on PSLC.
Understood. And was there any...
May we ask you to please come back in the queue? We have a lot of participants waiting. Sorry for that. Okay. The next question. Jai, we would request you to please come back in the queue. The next question would be from the line of Mr. [ Saket Kapoor ].
Hello, sir, you can hear me? If you look at your interest on balances with the reserve bank, that has been at a highest number of INR 1,109 crores. So what should be passing in going ahead from this line item and also, sir, on the others, there is a figure of INR 474 crores under the interest earned. So what is the composition of the same? And what should we read into it going from these two line items? And one more question, yes, sir.
Our CFO is there. He will answer your question. But actually, let me clarify to you onwards, he will tell you that the other interest income is worth whenever you want to invest the CBL or anything. This interest in which the amounts will be captured on this. Whenever you have surplus liquidity, you will invest on overnight or some those things, CBL want all those things. That's actually the amount we capture it. Generally, it carries on the same level of quarter-on-quarter increase, whatever it is there. It will be on those 1,100 crore to INR 1,400 crore, that's the range, generally, it will happen. So now the CFO, so you can speak to.
As our MD has said that if you see that, that is quarter-on-quarter also, last quarter, it was -- it is consistently showing an improvement over the period. It was INR 1,100 crores, INR 1,500 crores, INR 1,100 crores last quarter and INR 1,500 crores this quarter. So it's a component, as you yourself said, it's a component of interest on call money and deposit with banks, reverse repos, CBLO. So this is a figure which we feel that it will be almost consistent. I think it should be above INR 1,000 crores which we expected to garner maybe a bit more also in the medium term. This much only we can tell you. There is not much apprehension there and even if there is a shortfall here that should be compensated by interest on advances.
CFO, are both the figures that is [ INR 11,000 crores or INR 4,000 crores or something ]?
No, no, no. I am telling you that I am only giving a figure of interest on...
Telling that. Is clubbed both and he has given that answer.
Okay. And this will be a consistent number going ahead also?
See, when you have a surplus liquidity, we use that for this head of account. If you don't have a surplus, that means this money will be diverted to disbursement in the loans, then that will earn much more than that. That will reflect in the interest income.
Okay. And this -- you mentioned about pressure on the yields going ahead. And that is because of our liability side...
Let me clarify to you. It's not on the stress on the yield, sir. I told you that to stress on the margins because of the more interest expenses. .
But the net, yield will be lower if there is a higher interest expense there.
That's what, sir, even that with that, whatever the initiatives we have taken already against the first question, I think I answered that how many initiatives we have taken on the CASA front to garner the more low-cost deposits. With that to that, we are confident that we can manage at a 3% and a little above.
A small point, and then I'll come in the queue. Firstly, sir, for this year, we are looking at NIMs above 3%. We closed last year at 2.9% and this year, I think...
Last time cumulative, it is 2.92% as against the guidance of 2.90%. This time, we have given a guidance of 3.05%. We are confident that we will manage -- we will maintain above 3%.
3 point?
That's what a 3.05% you have given the guidance. 3.05%, we have given the guidance. But we are confident that we will maintain above 3%.
The next question we have from the line of Pritesh Bumb. [Operator Instructions]
Two questions from my side, just needed EBITDA from the ECLGs. How much is the book and how much were the NPA from that book, if any?
Last time when we shared with you, we were at a very raw calculation, sir. Sir, you are asking about GECL? We have sanctioned actually INR 21,000 crores out of that INR 19,000 crores was disbursed debt. As on date, the balance outstanding was around INR 13,400 crores odd. Out of this INR 800 crores has slipped to NPA.
Okay. Sir, and the restructured number as well sir, if you can give that outstanding...
Restructure everything, RF1, RF2 and MSME restructuring, everything earlier, it was INR 23,000 crores. Now it has come down to around INR 16,000 crores, out of that INR 3,400 crores were NPA.
Got it. Sir, our SME book also quarter-on-quarter has moved up. Anything to read into that? It's about INR 3,400 crores from...
SMA always, you should look at not a sequentially basis, year-on-year basis only, you should look at that. Because the generally in the banking industry, not just first quarter in the banking industry, the transfers, [Foreign Language] seasons will be there. The first quarter, little less will be there. But you look at the slippages in the first quarter of last year, it is INR 3,940 crores, whereas against that the current year slippage is only INR 3,482 crores. INR 3,400 crores. If you look at only SME 01 and 02 is higher in the first quarter, is it generally happens. In the first quarter, agriculture NPAs reflect more because the sowing season starts only from the June 15, and it will be available up to the September 30.
All these loans, which falls due for the renewal from the first of April to June, that will come for the renewals only in the June 2 to the September 30. Then automatically, this pressure will come down. Little pressure will be the -- is there already in MSME, which we are focusing and well within our appetite. What we have given that if you look at that the percentage also total SME, 1.29%, it has come down to 1.11%.
So this total SME 1 is number of agri, which you're saying it's moved up because of that...
You're looking at SME 1. That is the quarter-on-quarter, it has increased to INR 3,482 crores now. The majority is from agriculture and MSME. The agriculture generally, the first quarter may that will start renewing that limits. If they supposed when the due date is over, it reflects in the SME 1, SME 0 and 1. Once it has been renewed, that account will go to the standard asset. The farmers will come for renewals generally from the June 15 onwards. And the current quarter, that will be drastically has come down -- will come down. There is no such threat on that.
Thank you, Pritesh. We have our next question from the line of Ashlesh Sonje. ] [Operator Instructions]
Just one question from my side. Do you see there is a need for you to raise term deposit rates over the next few quarters to garner term deposits?
No, sir. Literally, there is not required because our retail term deposits is growing. You just look at that almost today as on date, we have already grown 2% of that from April to now, we got almost INR 8,000 crores incremental growth in the retail term deposits at this current rate of interest So when everyday almost, we are seeing more than INR 150 crores additions to my term deposits in the retail term deposits. When that is accumulation is there, that is enough to meet my requirements because I already told you that our CD ratio, we have ample cushion. That cushion, we want to use it for effective utilization of resources.
Okay. Sir, in that context, where do you expect your quarterly cost of funds to trend over the next few quarters?
See, that's the present liquidity unless otherwise in the market liquidity improves, the rate of interest on term deposits may not come down. In the current quarter, we don't see any such a softening of rate of interest because in the 1st of July onwards, little we have experienced a little softness in the June month and May 15 onwards to June 30 and we could replace a major part of our bulk deposits with a little lower rate of interest.
But again, we are seeing that July 1 onwards, the rates are a little tightening, and we are -- the market rate is a little high. So unless the liquidity in the market improves, the present to high rate of interest on the term deposits will continue. We don't see any change in the current quarter. Maybe the December quarter and March quarter once the liquidity and the system improves, the rate of interest may be a little softer.
Okay, sir. And just one last data keeping question. Can you give a breakup of your slippages across segments for the quarter?
Yes, sir, you can look at that around INR 1,300 crores, INR 1,380 is MSME, sir, around INR 800 crores is agriculture, INR 600 crores is retail and around INR 400 crores is mid-corporate.
We have our next question from the line of Rakesh Kumar. [Operator Instructions]
So sir, firstly, the question was related to the recovery of written-off loan number which is INR 796 crores in the Slide #16. And then we have some other figures given on Slide #28.
INR 891 crores somewhere it has been given INR 891 crores somewhere it has given INR 796 crores. The reason is where the INR 796 crores, the book balance, where the remaining amount, INR 100 crore is the interest on the technical written-off accounts. So total together, when it comes for there, it is INR 899 crores, you said the book balance because the profit may you can book directly that this was the slot they have shown under this slide is only our recovery towards the book balance, sorry, technical written-up sir.
Okay. So is there anything in the interest income line also coming from here?
Yes, sir. The interest income.
How much is that number, sir?
The balance is are INR 899 crores, minus INR 796 crores...
Minus INR 796.
INR 1.3 crores.
Correct. And sir, this gain on FX gain number is like what is happening there? Could you get this slightly elaborate? There is quite a lot of volatility in that number. FX gain income number.
Sir, we have our treasury head with us. So Mr. Janardhana Rao. You unmute and speak. So otherwise, Mahesh?
Yes. Actually, this number you are referring to is the June '22 number, which is INR 952 crores, and you are asking that you INR 236 crores. This is what you are asking, I believe.
Correct, sir. And like what is the underlying situation?
Underlying transaction -- sir underlying transactions are the foreign exchange gains, which has happened. This has reduced because of the spreads in the exchange transaction, which has come down usually because of the U.S. interest rate hikes. So if you see June 2022, the premiums were at the highest. And presently, the premiums are at the lowest. So this is the number which reflects that. So from now on, we expect that the premiums to go up. So this number should go up technically from now on.
In March, we have gone to the bottom. But now in the current quarter, we have seen slightly increase. We expect that this increase will continue slowly.
So in the FX transaction, sir, when will we like the value part is changing or there's any like change in the total transactional volume also for us?
So it doesn't depend on purely on the transaction volume. If you see the volume would have been remained more or less constant. This depends on the gain which you get out of the funds deployed in dollars. Get premiums.
Got it. Got it. Got it. Understood Yes. So thirdly, sir, on this staff cost, have we started making any provision for the terminal benefits obligation because...
Terminal benefit always, it will be provided quarterly, sir. There won't be any complacency on that. The staff benefits even beyond that, we have moved and November onwards, actually, the base revision is due further revision last November onwards. So first to 5 months, we have provided INR 70 crores per quarter. Almost to INR 350 crores, INR 350 crores to INR 370 crores, we provided.
But this quarter, we have provided beyond that almost we have taken INR 115 crores per quarter, that means we have provided an additional INR 350 crores only towards the wage revision, expected wage revision by the bipartite settlement whatever it is going to enter into the IBA and the trade unions effective from last November. So total more than INR 700 crores. Now as on date within these 8 months we have provided already.
Okay. And anything for pension, gratuity, leaves?
We would request you to please come back in the queue.
The pension whatever the funds actually is whatever we are supposed to provide. Everything has been taken care quarterly.
The next question is from the line of Nihal. ] [Operator Instructions]
The quantitative number looks quite bad. My question is on the quantitative side, what the company is doing to track customer retention, customer satisfaction and encourage transparent banking. But just to take an example, my father passed way 3 months back, and he was an employee of Canara bank and even after 3 months, his account has been freezed and my mother is waiting for the terminal compensation. So this is just example in the case of an Canara bank employee.
So my request to Nihal, can you send it to my mail that what all the details, sir? Because we created an MD Secretary itself for a personal mail on that. And there are certain -- people are working on that and myself is personally monitoring. And one more thing for customer address resolution first time in the bank, we have created a vertical and is now presently headed by a general manager. We are paying so much attention on that to give a best customer service to the possible extent for an improved -- consistent improvement on that. You also might have seen that whenever you go to the branches, there is a huge change on the even ambiance, even the basic facilities, it is to be required for the customers. The third one is from July 1 onwards to take care of retention of customer only, mainly the retention of customer is aimed for that, the relationship manager concept, why we brought it. That in 5,000 branches, we introduced it where we felt that the savings CASA concentration is available.
And with these 5,000, we have identified the top 200 customers of that particular branch. And with this, we are covering 80% of our top SB individual balance outstanding. So our SB individual balance outstanding is around [ INR 2,60,000 ]. And with this, we are covering almost [ INR 2,10,000 to INR 2,15,000 ] in their accounts. These customers have been now here afterwards, we are providing personal relationship manager concept and whom we have marketed to them that has been displayed in the -- our website itself for genuineness.
And from head office itself, we have written a directly letters to their respective individual customers. And there afterwards, we are also taking several initiatives on the customer redressal systems. We are onboarding a complete, comprehensive with the customer relationship with software, whatever it is there, which is under the process of procurement. Once the CRM package is introduced, this retention will be much more closely micro level, we can observe these things. And whatever the inconvenient cause to you, I'm extremely sorry for that, Nihal. If you can send the details to me, I will take it as in personally and see that it is addressed immediately.
Sounds fine, sir, if you can add such -- that would be great to drive customer retention. And second, [indiscernible].
The next question is from the line of Sushil Choksey.
Congratulations to Canara Bank team and management for excellent results. Sir, my sheet indicates that we are very conservative in whatever we are speaking order, and it's -- I'm happy to note that we'll outperform. Sir, can you throw some light on some initiatives which you have taken over last 1 or 2 quarters, whether it's technology, subsidiary listing, the road map optimist has taken over Can Fin Homes, Canara Robeco and various other initiatives, the technology tie-up was in the news about IBM, we're rolling out a big deal.
The second thing is outlook on treasury. At the terminal end of the year, where would you be on the gross NPA and net NPA and credit loss because I think we may be getting to a single digit that is below 1% on the net NPA.
And based on technical recovery, where would you see our end of the year kind of numbers.
Sir, first, I'll touch upon that NPA ratio gross NPA, we have given the guidance at 4.50% and the net NPA, we are told that it is 1.20%. But definitely, by the end of this quarter, we will be below then that whatever the guidance has been given. That much I can confidently say to you. Regarding the initiatives what we have taken, the technology side. Let me share it with you, sir. I'm very happy to share with you that the Canara Bank has been ranked #1 consequently, second financial year by the MEITy Ministry of Electronics and Information Technology based around that ranking, the rankings will be happened on both public sector and private sector, total 47 banks.
Performance will be taken into account to on various parameters like how their digital journeys are happening. How their digital transactions are happening, how their merchant onboarding is happening at rural or Northeastern or various areas. Based on this, they rate the banks, the marking for 100. And last year also, previous year also, the Canara Bank has rated #1. And this year also, we continue to be rated just recently. 10 days back to only the MEITy has come out with their ranking and the Canara Bank has continued its #1 rank.
The second one, what I want to share it with you is the transparency in our onboarding the -- any vendor management. The vendor management, the onboarding last continuously 2 years, Jan Portal, the Canara Bank is the highest, the procure through Jan Portal promoted by the expenditure ministry. That shows that whatever our internal investments, what we are making on our new initiatives are a capital expenditure that we are most transparent bank on India among all private and public sector banks.
And as you have told rightly that the news item is the IBM are Canara, which gives INR 3,000 crores worth of contract that has been almost to finalize, sir. The results have been announced that it is in the process. And not only this, sir, we have gone for the RFP for end-to-end digital lending, which is already almost 2 final stage for selecting that. Then continuous CRM package, the customer relationship management package. Then the co-lending package. This is also it is there. And the onboarding, the video KYC. This also is there on that. And several such initiatives, we are going on that.
We are the bank though we have been identified on the third instance that for introducing the CBDC. But to onboarding both customers as well as in the merchant side, we are the #1 bank as on date in India, sir. The CBDC, our app is well received. Our mobile app ai1, in the July, the after 15, if you can look at that, that this is the highest rated public sector, any mobile app that we got on the public -- the Play Store the Google Play Store or whatever the Play Store it is there, that rating has happened at 4.506. And we are the first banker who has the -- our RuPay credit card has been integrated with the UPI payments.
We are the first bank. We are coming out with our self-help groups ones and offers dual authorizations through the [ basis ] points. We are the bank, we are very active on NCMC. There's a commutation [Foreign Language], whatever the mobile cards, what you are using your existing RuPay cards will be replace that your existing RuPay card can be used all wherever NCMC integration is there in the -- all railway metro, railway stations, metro journeys are even transportation areas and all. And we are the first banker who has onboarded bill payment to for the woman customers across the board like that many technical initiatives we are taking.
Our MEITy ranking continuously the second year that shows that our -- whatever the efforts we say less, but we do more that has been proved once again in the technical technology front. In the business front, in the first quarter itself, we have taken several initiatives. Like already we told that innovative products, we have launched in CASA to attract the customers, we are launching one bank, one call center that is a 1030, 1800, 1030, this call center through this call center, 24/7, 365 days, 35 services can be availed in 12 languages that has been created. That has helped us a lot to reach the customer. The one more is -- we are very active in spreading the QR code and the audio systems to the merchant establishment.
We are targeting for the street vendors where the Prime Minister, PM SVANidhi the beneficiaries are there. Those beneficiaries, we already covered more than 1 lakh such customers have been provided with this QR code and onboarding them on the digital transactions. In this amount, 11,000 people have been given the first time in the public sector banks that audio system has been introduced and provided to the customers. And these initiatives will continue in future also. Both are the service -- the voice of the people who comes to the branch, we are giving innovative products. The people, the younger generation who does not want to come to us for them also, we are aiming and introducing so many new products. There are several new other products on the loan side as well as in the CASA side, targeting the targeting sectors, women as well as the younger generation.
But those products are in research side. We have completed that. Still it is to be in the UAT we may launch in the next quarter. And regarding the treasury, I request our Mukherjee sir to say on that. A little -- he will share it with you. That's what is going to be by the end of this year, whether we are expecting the same returns or any increase in the returns under that.
You forgot about, sir.
No, it's fine. Thank you, sir. With regard to treasury, as you are all aware, it is market driven. And because of these rising yields at the present scenario, things are not doing as much as we would expect. But in the days to come, when some yields decrease, there, we are going to -- we are poised to make some better profits. So that is with regard to the treasury. With regard to the treasury, I would like to mention a few more points that -- during June, our portfolio MD is comfortable at [ INR 4.74 crores ]. AFS MD is comfortable at [ INR 3.45 crores ]. And then our PV01, AFS and HFT is INR 7.81 crores.
Portfolio yield is -- has increased from March '23 to 6.85%. Overall, a healthy portfolio, which we are going to carry forward in the coming quarters as well.
Choksey, sir, you are asking something?
Yes, sir, either you said the other can answer outlook on subsidiaries and the road map, which you have already decided or working on.
That, sir, our -- we have actually subsidiaries and associates and regional rural banks total together 13 are there in our bank. All of been this June quarter, we displayed already that everybody is earning the net profits. No subsidiary or associate is incurring any loss on that. And these profits are also showing a steady growth on that. You are saying that Can Fin Homes, whatever the market has reacted. We have taken several initiatives on the growth side and all those things. And I'm sure that Can Fin Homes will continue to work contact. The remaining 2, we have promised -- we have given a guidance to the stakeholders that the Canara HSBC and the Canara Robeco that we have initiated to come out of that public issue, IPO. And the action has been just started.
It takes a minimum 15 months or 15 to 18 months. We expect that the next year -- next financial year, in the second half of the next financial year, these 2 companies may come out for the IPO. And again, I shared with you that our credit card in the division, we would like to shift it to our own 100% and subsidiary. Further, we identify our Canara Bank financial services, but that there our Canara Bank computer services, CCSL where our share price -- our shareholding is only 69%. We have already written to the remaining 3 stakeholders to -- for purchasing of -- we expressed our interest to purchase that remaining 31% stake that negotiations are on. We are hopeful of getting it completely by the -- I think, around in the next quarter, sir.
Sir, my last question is that we have proved our number from last quarter on ECL provision much lesser than what you had spoken, sir. That would be icing on the cake. So can you highlight that number?
Yes, sir. Actually, initially, last quarter, whatever we have shared, that's a rough calculation on very initial stages. But there afterwards, we saw some clarifications. We also reworked on our calculation undone. It has come down more than 50% of what we actually last time shared with you. And there was a further tuning. Now it has come down to their own effect is only 2% to 2.25% of effect. And now further, we have onboarded consultant on that to further guide in this regard once the -- he will be with us for that next 1-year period until that is implemented, sir, so that we take his expertise in further reducing these things and we are sure that we will be in line with the other banks, and it will be around only 2%.
This would be our last question for the day. I request MD sir for his closing comments.
So thank you so much, sir, for everybody. Whatever we thank to all our well wishers and the investors and all. With your great support, we want to continue our steady growth. We are very much peculiar about the consistency in our growth and that consistency will reflect in all our key parameters in quarter-on-quarter. We assure you on behalf of all the entire top management that this consistency will continue in the coming quarters too. Thank you very much, sir.
Thank you, sir, for giving us this opportunity to host this call. I request everybody to sign off.