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Canara Bank Ltd
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Good afternoon, everyone. Thank you for joining in. On behalf of Antique Stock Broking, I welcome you all for the fourth quarter earnings call of Canara Bank. On the management side, we have Sri L.V. Prabhakar, MD and CEO; Sri Debashish Mukherjee, ED; and other EDs.
Without further ado, I would hand over the call to MD sir for his opening remarks, post which we can open the floor for Q&A. Over to you, sir.
Yes. Thank you very much. I express my sincere thanks for all the investors who are participating in this interactive session. Let me brief the highlights of the performance of Canara Bank as on 31st March 2022.
We have concentrated on credit growth. We projected that there will be growth of 7.5%, against which the actual growth is 9.77%. The credit growth is widespread. There is growth in retail, growth in agriculture and allied activities, and MSME. Apart from this, there is a growth in corporate also. So put together in each and every sector, we ensure that the growth should be about 10% Y-o-Y growth.
Regarding deposits, we concentrated on CASA. Savings bank has grown by 12.22%, and CASA has grown by 11.5%. Retail term deposits, it has grown by 5%. And bulk, we would like to control, hence the growth was only 2%, which we expected.
Regarding the asset quality, as we have forecasted, we continuously strive to reduce the gross NPA and net NPA in absolute terms as well as in terms of percentage. Gross NPA at the beginning of the year was about INR 60,000 crores. As on date, it has come down to INR 55,000 crores. In percentage terms, it was 8.93%. As on date, it has come down to 7.51%.
Net NPA in absolute terms, it was about INR 24,000 crores. Today, it has come down to INR 18,000 crores. In percentage terms, it was at 3.82%. Today, it is at 2.65%.
Provision coverage ratio 2 years ago, Canara Bank is to have about 69% this year. Today, we are at 84.17%. And in credit cost also, we have control, and it is at 1.75% as on December [ 21st ]. And as on 31st March, it has come down to 1.53%. Slippage ratio, quarter-wise, it has come down to 0.38%.
Regarding the income, we have concentrated to increase the interest income and also other interest income, simultaneously focusing on noninterest income also.
Y-o-Y as on March, NII has grown by 25% and because of which the operating profit stood at INR 6,202 crores, showing a Y-o-Y growth of about 18.8%. Net profit, it was INR 1,666 crores for this quarter, showing a growth of about 65%.
CRAR, last quarter, it was at 14.8%. Now it is at 14.9% after excluding about 23 basis points, which is relating to the dividend payment amount. And this time, Canara Bank is happy to confirm that the Board has recommended 65% of our paid up capital as dividend. That is INR 6.50 per share.
Global business, we have crossed INR 18.27 trillion. And this financial year, we are projecting that we'll be crossing about INR 20 trillion business.
With these few words, now we would like to take questions from the investors. Thank you very much.
[Operator Instructions] Our first question is from the line of Mr. [ Dhaval ].
Yes. Sir, am I audible?
Please.
Yes, you are. Yes, you are.
Sir, I had 2 questions. First is on the sort of comment around Can Fin Homes. You made a comment that the governance issue in the company, and frauds were detected. So just wanted to understand the quantum of the fraud. And also I think management in their call mentioned about some 37-odd accounts from one branch, the IT documents are forged. So just wanted your perspective and size of the fraud and what steps have we taken to address that? So that's the first question. And then I'll come back to the second question.
Second question, please? Yes, you can ask your second question also.
Okay. Okay. Yes. So second question was, sir, on the growth for next year. I just wanted to understand on credit growth, what is the outlook on corporate credit for next year? And what's the sort of pipeline around that?
And also if you could sort of give some perspective on sectoral level, where are you seeing corporate credit demand? So that was the second question.
Let me answer your second question first then first question next. Regarding the credit growth, we are projecting about 8%. However, we are also targeting at least minimum 10% credit growth in the retail and RAM sector.
Regarding the corporate, the growth which we are projecting is more than 8% since we have already achieved 8% growth in the corporate side. We are very active in HAM projects, infrastructure projects, then steel, even to some extent in power. And then we are also active in health sector.
So the growth we are seeing, not in one sector, in various sector spread over. And apart from corporate, as on date, our loan book consists of about 57% retail and 43% corporate. Why I'm emphasizing this point 57% of RAM and 43% corporate is even any one sector doesn't perform well, the other sectors still compensate but at the end of the year, we will be in a comfortable position to exceed our projected credit growth of about 8%.
And last year, that is last financial year, credit -- corporate credit growth was at 8.27%. And we feel that with the number of inquiries and also the demand which we are observing in CapEx, we will be comfortably achieving a growth rate of more than 8%.
Now coming to the Can Fin Homes. In CNBC, I did not say it is corporate governance. I said in the best interest of the corporate governance, we have conducted the inspection. That is the word.
And the origin is there was a whistleblower complaint, which we have received from the NHB. Then it was discussed in the ACB and Board. And then to find out the reality and also to plug the loopholes and to strengthen the company, an investigation was done wherein about 37 accounts were found to be fraud, amount is less than INR 4 crores.
Since some accounts have come, so the Board has decided that why not we verify the other accounts for weaknesses, if any -- for the weaknesses, if any, to be addressed immediately and to strengthen the company, create loan portfolio. Canara Bank as a financial conglomerate is committed to support all its subsidiaries, including Can Fin Homes, and also it wants to have highest standards of transparency and also highest standards of corporate governance. Thank you very much.
Our next question is from the line of Ms. Mahrukh.
I have a few questions. Firstly, what is the total interest reversal during the quarter? I mean, and why are the slippages high?
Ma'am, if you see the slippages, fresh slippages are about INR 3,600 crores. And our recovery, cash recovery is about INR 3,157 crores, including recovery of [ accounts ] plus upgradation of INR 842 crores amounts to about INR 4,000 crores. So fresh slippages of INR 3,600 crores is less than the recovery of INR 4,000 crores.
And in this particular INR 3,600 crores, the composition is: agriculture, it is about INR 600 crores; MSME is about INR 800 crores; and retail is about INR 600 crores; and remaining amount is other sectors. So basically, the slippages are from small accounts where we have found some weaknesses. Those things have been classified as NPA.
Coming to a linked parameter, which is SMA-2 and SMA-1 you can find out from the slides that outstanding of the loan accounts above INR 5 crores in those accounts, SMA-2 outstanding as on 31st March is about INR 2,300 crores, which is 0.27%. And SMA-1 is INR 3,700 crores, which is equal to 0.43%. So both the things put together, it comes to only 0.70%. So slippages are under control, and it will be under control going forward. Thank you, ma'am.
So sir, I just wanted to know [ if there's still lumpy ] corporate slippage but on the breakdown -- so because a big corporate account has slipped from [ any bank ], did it slip for you in the previous quarter? Or what is the status in the retail sector?
No, ma'am. Corporate accounts have not slipped. I think you may be interested to know about the Future Retail, if I am right?
Yes. Yes.
Yes. Yes. Let me tell you, ma'am. Today only, we have received about INR 227 crores in that account, Future Retail. And our outstanding is hardly INR 1,200 crores, wherein we have provided in spite of standard account 60% as provisioning. So that in Q1 FY '23, there will not be any, I would call, significant requirement of making provision. Is it [ what you wanted ]?
Yes, sir. Sir, on the interest income, can you address, sir? I just wanted to know the interest income, why has it declined quarter-on-quarter, margin fallen quarter-on-quarter?
Ma'am, if you see the interest income -- interest income Y-o-Y if you see, there is a growth of about 8.6%. But quarter-on-quarter, there is a minus of 1% because of 2, 3 things.
If you see my asset portfolio of related accounts, AAA -- AA and AAA portfolio, it has increased from 65% to 77%. Last year being COVID year, we are very conscious of taking exposure in high-rated accounts with low risk. Naturally, when you go for high-rated accounts, the yields will be a bit less. However, this thing is confined to only 43% of the corporate whereas in retail, we are getting sufficient what you call interest income. So going forward, we see a good traction as far as the interest income is concerned.
And already increased our RLLR rate by 40 basis points, which will be effective from tomorrow. And MCLR, in all the buckets, we have increased by 10 basis points, which would be effective from tomorrow.
Got it, sir. Sir, what will be your book linked to MCLR and to RLLR? What proportion domestic...
Ma'am, RLLR, our book is to the extent of about 34%. MCLR is about 50%. So about 84% of the book starts giving us higher rates.
Got it, sir. Sir, would you expect margins to improve on the overall?
Ma'am, NIM, if you see, we have projected about 2.80. Actually, we are at 2.82, and we are projecting 2.90, 2.90.
Got it.
That will be minimum.
Got it, sir. Sir, and my last question is just on the bond portfolio. Sir, what is the cutoff yield on the bond portfolio beyond which you start making aftermarket losses?
Ma'am, for your information, the portfolio which our treasury holds in the bond will not be getting a, what you call, depreciation more than INR 200 crores to INR 250 crores, not more than that.
[Operator Instructions] Our next question is from the line of Mr. Nitin Aggarwal.
Sir, on this growth front, now we are guiding for a slower advances growth in FY '23 than what we have reported in FY '22. So why is that so because general impression is that FY '23 growth should be better than what we have seen in '22? So your thoughts around this, sir.
Sir, if you see the guidance which we have given last year, credit growth, we said it will be about 7%. But in reality, it is 9.77%. So what we project is the minimum that we are supposed to achieve.
So as I said, in 57% of my portfolio which is RAM the growth will be more than 10%. And corporate also as on date, we are at 8%. And we expect that this will also grow at a rate of about 10%. But however, as a minimum, what you call a guidance, we have said that our credit book will grow at 8%.
Okay. And -- but then, sir, on the similar lines, if I look at the CASA guidance, that at 38% looks aggressive in a -- especially in a rising rate environment. How like fair it is to achieve this number?
Yes. Regarding the CASA percentage, if you see the CASA growth, it is 11.5% every quarter. And if you see the savings bank growth, it is about 12%. But the percentage of CASA, historically, Canara Bank was having a lower percentage. And it used to be about 30% 2, 3 years ago. Every year, we are increasing by [ 22% ]. And now we have come to about 34.88%. And going forward, we projected 38%.
This is a percentage. Why? Means this year, we want to grow more aggressively in retail term deposits. And wherever we get good rate even we want to take up some bulk deposits also. So percentage-wise, growth of 2% will still be significant. However, CASA Y-o-Y growth will be ensuring minimum 12%.
Okay. And sir, the other question is on the NCLT resolution-related recoveries that you reported, which is on Slide 35. So if I just look at the average recovery per account, that number seems to be quite small at around -- a little around, say, INR 2 crores, INR 2.5 crores range. So if you can indicate as to how the recovery rate overall is trending, what was the overall exposure in these accounts and how much has been the recovery? And is this similar recovery rate is what you expect from the upcoming resolutions in the coming quarters?
See, whenever we talk about NCLT accounts, in my opinion, I think we should not [ club ] each and every account and have an average, no. It should be taken as small accounts, medium accounts and large accounts because historical reasons, small accounts, you may have security. In the larger accounts, we may have a less security.
So the percentage if really you want to analyze, it should be bifurcated into 3 different categories and also secured and unsecured, then more scientifically we'll be in a position to understand. However, with the past experience, what we see is at least there will be a realization of about 35% to 40% as far as the NCLT accounts are concerned.
Okay. And sir, lastly, on the treasury front, you mentioned [ INR 250 crores ] of MTM losses. Just to clarify, is this as per the bond yields where they are today? And also if you can share the duration of AFS.
I request my Executive Director to kindly respond to this question.
Yes. As our MD has said just now that based upon the portfolio which we have right now and the way in which we have arranged that portfolio, even in this rising rate scenario, the impact -- negative impact with regard to the depreciation we expect would not exceed about INR 250 crores. So that is what we feel our estimation on the treasury depreciation.
And to add to what Mukherjee has said, if you see the last year performance, in the beginning of the year, everyone was of the opinion that this time, the banks will not be able to make good profits by sale of investments. However, in Canara Bank if you see the quarter-on-quarter amount which the treasury has earned as on March, by sale of investments, we have earned about INR 523 crores.
Last quarter, it was INR 320 crores. Before that, it was INR 1,133 crores. In June, it was about INR 647 crores. Put together, it is about 2,000 -- put together, it is about INR 2,593 crores, which is a decent amount. And we continue to earn in this range. Thank you, sir.
Our next question is from the line of Mr. Ankur Gupta. Okay. Our next question is from the line of Mr. Sridhar Sivaram. Okay. I think there is some problem with his line. We'll move our next question to Mr. Deepak.
Am I audible?
Yes, you are, please.
Sir, I just wanted to understand in terms of credit cost, I think you kind of give an indication of 1.4% as compared to 1.53% we have done in FY '22. And 1.4% is what we are looking at in FY '23. So in the absolute level, INR 11,000 crores is the trade point that we're looking at in FY '23?
Yes because this time since in SMA-1 and SMA-2, the loan accounts with outstanding more than INR 5 crores is very insignificant. That is it is about 0.7%. We don't see any big accounts slipping going forward. Hence, whatever slippages will be there, it will be in the small accounts, which is natural and which can be properly handled. So that is why we are projecting a slippage ratio of a challenging one.
Okay. Understood. Understood. Yes, that's a fair point. But in terms of are we -- we are expecting a big jump, right, from 4.5% to 0.7% rate with minimum increase -- with the minimum improvement in our credit cost. So what will drive our ROA improvement?
See, we are projecting ROA will be at 0.70%. Again, let me tell this will be the minimum benchmark for us. This is not the maximum one. So as in the last year, we projected 0.40% and actual 0.48%. This time, what we are projecting 0.70%. That will be our minimum benchmark for -- as far as ROA is concerned, and we are confident of achieving that.
Okay. Okay. Because currently, I think this year, we are at about 0.48% rate. So...
0.4% annualized and quarter was, if you see, it is better than this figure, what is it currently.
[Operator Instructions] Next question is from the line of Mr. Rakesh Kumar. Okay. I think there's some problem with his line. We'll move to our next question from the line of Mr. Mani.
Sir, thank you for the dividend of INR 6.5. I'm holding almost about 40,000 shares.
Thank you, sir.
It translates to almost about INR 1 crore. Here, I would like to stress, sir, huge amounts are spent at CSR for donation to handicapped people and the needy with the bank. It's a great initiative. And they also run a home for the destitutes. And bank has got about 75,000 retirees, of which maybe about 200 or 250 pensioners may be having handicapped -- wholly handicapped dependents. This detail is not available in the bank. The data is not available in the bank.
And approximately about INR 72 crores is spent for the insurance, medical insurance for the serving employees, whereas these handicapped dependents are not covered under the medical insurance scheme for the retirees. So even if as a corporate social responsibility, bank wants to cover them under this scheme of this IBA that the bank may have to spend only about 20 to 25 lakhs on the whole. If your good selves can look into this because nobody is having any idea how many retirees are having handicapped dependents. So if your good self can help these parents.
And for your information, sir, many of the handicapped dependents -- parents of handicapped dependents have got only one prayer that the offspring should die before they die because they don't want these people to be left in the lurch. So your goodheartedness will be appreciated by one and all, sir.
Thank you, sir. Your session is excellent. We really keep it in our mind. Thank you, sir.
Our next question is from the line of Mr. Sridhar Sivaram.
Yes. Sorry, last time I had some issues with the line. So my question is on the tax rate. Last year, we had almost 37% tax rate. Should we expect a normalization of tax rate for the current year? And if so, what sort of rate should we expect?
Yes. 1 minute. I request my CGM, sir, who is handling the accounts. Please answer that.
I'm [indiscernible], the CGM here. At present, we are paying the higher rate of interest of 35%. At the moment, we found that this rate is advantageous to the bank because of the accumulated loss we got for the merger. At the appropriate time, we have a plan of shifting to the new tax regime.
So should we assume 35% for the next year also, for the current year?
No, I have to take a decision at the appropriate time. So I cannot commit now, sir.
Okay. Sir, my second question is on the guidance that you -- of around INR 7,000 crores, INR 40 EPS, you have given a guidance. If I work backwards, it looks like you are guiding for a total provisioning of close to INR 15,000 crores. If I add that, your operating profits will also grow at 10% from INR 23,000 crores to about, say, INR 25,000 crores, which looks slightly on the higher side.
So can you give some guidance on the total provisioning number, the provisioning for NPA and the others? And is my working correct?
So there are 2 points. One is your assumptions are based on the OP that is going to be there, which we are telling it will grow at 10%.
Yes, I am taking a very conservative number based on what you have guided.
Yes, yes, yes. Here, let me share one important information to you, sir. As for the IBA agreement, if the staff has to be paid 15 days PLI, which we are doing, which we did in the last year and which we paid this year also, there should be a growth of minimum 15% in the OP Y-o-Y.
So I expect that every staff member wants to take 15 days PLI. Accordingly, everyone will strive to achieve an OP growth of about 15%.
And regarding the provisioning, sir, as you have seen in the last 2 years, we do aggressive provisioning to make the balance sheet very strong and to keep the balance sheet ready for the future. This is the reason why in the last 8 to 9 quarters, if you see, every quarter, there will be continuous growth in all the financial parameters without any downward trend. And we strongly believe that going forward also, we have to make the balance sheet strong. And for example...
We were hoping for a 5-digit number of profit for the current year because of the way the trajectory was going. And it looked like you have a very high provisioning number already, but it looks like we may not get there. But is it that you're underpromising and over -- you will perform better?
No. I will share some figures. From that, you can get the conclusion. Last year, our net profit was about 2,550. This year, it is INR 5,678 crores. It is almost more than 100%, 120%.
And regarding provisioning also, if you see, we are already at 84%, and we are projecting 85%. The third point is, for [ example ], future account is that it is a standard [indiscernible] rate in our books [indiscernible] rate as on 23rd of Jan. Even then we have provided 60% to that account.
We -- our philosophy is we want to be ready for tomorrow by making sufficient provisioning today. So that is the philosophy with which we are working. And it is giving excellent results and because of which today, the Board is in a position to declare dividend also after a long period. And I think this will -- going forward, this will give good dividends because of this approach. Thank you, sir.
Sir, my last question on the dividend. Your dividend absolute amount is about 20% of the profit. Should we expect a continuation of that going forward also?
Sir, 2 years ago, when I addressed my, what you call, investors, I said we are working hard to take care about the investors, staff and the stakeholders. And we are of the opinion that we have to give maximum to the investors and the staff and the stakeholders.
So our philosophy will go in that direction. And accordingly, I think -- we hope year-on-year, the things should become better and better. That is the philosophy, sir.
Our next question is from the line of [ Mr. Alan Lenta ]. Okay. Our next question is from the line of Mr. Pranav. I'll take the next question from the line of Mr. Gaurav Kochar.
Am I audible?
Yes, you are, sir.
You are audible, sir.
Sir, my question is with regard to the slippage in this quarter. If I look at the gross slippage number, it was elevated. Last quarter, the net slippage number was very small. But even if I look at the net slippage number, this was high sequentially. And you're saying that Future group was standard. So any other corporate account that slipped in this quarter apart from Future group?
Sir, if you see the fresh slippages, it is about INR 3,600 crores. And these INR 3,600 crores, sir, about INR 800 crores is from the MSME sector. About INR 600 crores is from the agriculture sector. And about the same amount, INR 500 crores to INR 550 crores is on the retail, which are all small accounts.
So whenever we identify any weakness in an account, we would like to classify it as NPA so that it can be cured at the earliest whatever sicknesses are there. So that is the reason because of which even if you compare with the last March '21, where the slippages were INR 14,000 crores because of various reasons. This time, the slippages were only about INR 3,600 crores, out of which we are hopeful that in this current quarter, 25% to 40% of this will be either recovered or will be upgraded.
Sure. And sir, upgrades and recoveries target for next year, total recoveries?
Sir, first target, our target is always we target for recovery should be more than slippages. For example, fresh slippages this time, it was about INR 3,600 crores. My cash recovery is INR 3,157 crores, and upgradation is INR 800 crores, which is equal to INR 4,000 crores. And we are expecting that during the current quarter, minimum INR 15,000 crores to INR 16,000 crores of recovery will be there, both in big accounts and small accounts.
Okay. Got it. Got it, sir. And my next question is with regards to Can Fin Homes. You highlighted that you sent a team from the bank for detailed audit. Any findings from that audit? Or that is a part of the 37 fraud accounts that you disclosed?
That is the initial audit. We absorbed some irregularities. And the important one is about 37 accounts were identified as fraud. Amount is less than INR 4 crores, which is already provided and reported to NHB.
And now the Board has decided that with the same internal team and also with the statutory auditors, there can be further checking of the existing accounts. So that if any irregularity is there, it can be addressed immediately. And it is an ongoing process.
Okay. Got it, sir. And sir, last question if I can squeeze in. On the Can Fin call, they did highlight that Canara Bank has [ deputed ] 3 people in the risk function and audit function and one in the admin function. So apart from this, any other action that the bank will take with respect to Can Fin Homes?
See, Canara Bank will always take proactive steps depending upon the situation or as situation warranted. And Canara Bank is committed to support Can Fin Homes and all its subsidiaries in terms of providing know-how, in terms of giving support, or if required, in terms of capital also. So we are, as a sponsor, we are there to support all our subsidiaries.
Our next question is from the line of Mr. Pranav.
Can you hear me?
Yes, please.
Yes. Sir, I just wanted to have a little bit clarity on the slippage guidance that you have given. So slippage guidance of 1.75%, don't you think it is on the upper side as compared to, say, FY '22, when it was 1.7 percentage?
I can say it is not a upper side. Why we have then this 1.75%, we will not be crossing this. It can be less also. It may be -- it may end up at 1.5%, also 1.3% also. But for the public, we want to say that this is our tolerance limit to which extent it may go.
Right, right. And that is a gross slippage. So next slippage can anyhow be negative if your recovery and upgrades are [ above ]?
Yes. Yes. Yes, sir. You are right.
Okay. Okay. So that's the first question. Second question is, can you just spend some time on explaining the treasury income? So treasury income, as I understand, there will be some interest, and then there will be some AFS and then this treasury income that comes in the other income is the sum of the 2 items. And now if you see, even in this quarter, you have not reported negative. So is it safe to assume that this number on a net basis will be in the same range of minimum INR 300 crores to INR 500 crores?
Mr. Mahesh, are you there? Yes, Mukherjee, please.
Like we said just now, we do not expect any very drastic change in the depreciation levels in the treasury. Our AFS duration is around 2.3, which is a very healthy duration we can say.
So with this, we are in a position to manage the risk in the treasury, which due to this higher rate regime, interest rate regime, which we are facing, so it won't be as good as what it was in this last financial year. But it will not show much drastic lowering of the treasury income also.
Like we said, we are totally aware of the depreciation levels which our treasury book will undergo, which roughly would be somewhere in the range of INR 200 crores to INR 250 crores.
Right. Right. What is the other item in this income like minus 200, and then there will be some plus, right?
Can you please repeat?
Yes, yes, yes. So I'm saying, so even if that is minus 200, treasury income that comes in the other income will have some other components, right? It's just not AFS MPL.
No, no. It will have its other components as well, like it had it this time also. So profit on exchange transactions and other things will also be there. They will also contribute like it had contributed. We are totally talking about sale of investments or the core treasury functions, what I was telling you about that. But there are other avenues of income which will help boost the treasury income like we said.
Right. So if I do just match by the guidance given by you, the 10% or 8%, 9% growth in credit and 10 basis points increase in NIM, which will account to somewhere around 13% to 14% increase in NII and obviously, other income factoring in what income you are saying and obviously taking operating expenses, your guidance of profit looks very, very conservative.
I think it can be 30%, 40% higher. Am I wrong with this conclusion? Because 1.4% of NPAs would have been INR 10,000 crores max. And if I just pin in all the other data that you have guided, then this EPS looks very conservative.
Sir, this is our minimum benchmark, which is -- which will always be conservative. And going forward, as we declare the June results, revising the forecast also, sir. Guidance will be revising on upper side.
Okay. Okay. Sir, the tax rate of [indiscernible], about 30% will continue for how much?
Sir, as long as it is beneficial to us. Till some more quarters, we'll continue with that. Once the carryforward losses are [indiscernible], then naturally, we may take a call to shift to the new tax regime.
Right, right. Sir, any guidance on how many quarters will that continue?
Only going forward, I'll be [ pushing ] to say, sir. As of now, I think it's difficult for me.
Perfect. Perfect. And just to repeat last question from my side...
Sir, please.
Yes. Out of INR 1,000 crores Future exposure, INR 200 crores payment. We have received that INR 600 crores already we have provided. So there is almost nothing to be provided hence forward. Is that right?
Sir, we have provided 60%, 6-0 in Future. So 40% is leftover. Generally, our philosophy is to make a provision as far as possible. So we may do in this quarter remaining amount also.
And in fact you said also, you have received INR 200 crores, right? So INR 800 crores...
Yes, today, after excluding INR 227 crores, which are received, now the balance is INR 1,200 crores roughly.
Our next question is from the line of Mr. Bhavik Shah.
Sir, I just wanted to know what would be your liquidity coverage ratio this quarter?
Sir, as on date, it is 125% LCR.
Okay. And sir...
Now -- yes, please.
No, sir. Go ahead, sir.
As on date, it has increased to 140%, sir. As on balance sheet date, we are about 125%.
Okay. And sir, why has this drastic movement been because of deposits or -- from 120% to 140%?
[ This outcome ] RBI has given this latest on 19th April, some MSF [indiscernible] has given for HQLA. That is also there.
Okay. Okay. Understood, sir. And sir, one more thing. Also, I wanted to understand how has the slippages been from the restructured book? And what would be your outstanding restructuring number?
So restructuring book is about INR 14,000 crores as far as under the Resolution Framework 2 is concerned, and about INR 5,000 crores under Resolution Framework 1. Put together, it's about INR 19,000 crores to INR 20,000 crores.
We are observing about 4.5% as slippages. And in this restructured book, now the -- in our Resolution Framework 1, the repayment is up to 95%. And in Resolution Framework 2, the repayment is about 85%.
Our next question is from the line of Mr. Abhijeet Sakhare.
This question is on the investment provision. There's a INR 1,000 crore hit that you've taken. This relates to the security [ received book ]?
Exactly correct, sir, because it has crossed to 8 years. So we have made 100% provision.
Okay. And then there is a INR 1,500 crore, which is still pending there. So that would also get marked down consequently.
It will take some years. Not immediate, sir. It will take some years. Immediately, there may be around INR 300 crores to INR 350 crores, which if at all required to make the provision in the full financial year.
And sir, on the G-Sec book, the impact that you're sharing, potential future impact, what are you looking at in terms of the cutoff yields when you're calculating that number?
We are -- that is -- our outlook is somewhere around [ 7.50 to 7.60 ]. That is what we expect.
Okay. Sure. The second question is on the slippages, if we just reduce -- if we deduct all the retail, agri, SME slippages, we still have INR 1,600 crores of corporate slippages. So trying to understand if this is like really spread out across a lot of accounts or if there is any large accounts still sitting there?
Large accounts at the most is about INR 150 crores or INR 120 crores, not in 4 digits figures or not in higher vertical, I can say, 3-digit figure. [ It's a spread over 1 ].
Sure. And sir, last question is a clarification on the pricing of home loans, for example. So when we increase the RLLR 3 basis points, how are we -- are we doing anything on the spreads as well? Is that being retained? Are we cutting it? How are we dealing with the spread on top of the RLLR tweaks that we are doing?
As far as RLLR is concerned, we have increased 40 basis points by maintaining the spread as it is.
So there's a straight 40 basis point impact on the...
Yes, yes. And a portfolio of about 34% of my loan book.
Our next question is from the line of Mr. Dixit Doshi.
Yes. Can you hear me?
Yes.
Yes, I can hear you.
So most of the questions have been answered. Just one question. So looking at the growth that we are targeting for FY '23 and also the recovery and upgradation we are targeting, is it fair to assume that in FY '23, we will not require any fundraising?
Sir, as on date, we may present a CRAR of 14.9%. I can comfortably achieve a credit growth of about 10%. However, our philosophy is to strengthen the balance sheet and strengthen the capital base as far as possible.
And since now that Canara Bank is in a very strong footing, we can raise at a very competitive rate AT-1 bonds and Tier 2 bonds Equity, we are not looking as of now. So AT-1 bonds and Tier 2 bonds to the extent of about INR 9,000 crores, we may raise. And this will be taken to our Board in the coming -- in the next Board. And once the approval is there, then we'll be coming to the market.
Our next question is from the line of Mr. Jai Mundhra.
I have 3 set of questions. Sir, first on Can Fin. So if you can suggest what is the course of action here. In the interim, will the current MD CEO stay or there could be a potential change of management there? And also, it looks like the amount of fraud is not that material considering their balance sheet side. So what is the thought process there?
So I will break up this question into 2, 3 parts. One, with regard to the stay of MD and CEO there at Can Fin Homes, you see at the present moment, we do not foresee any change. That is number one.
Number two is with regard to this whistleblower complaint as we have been explaining you, this has been forwarded by NHB. So we had to pay a lot of attention and seriousness on that, which led to discovery of certain fraud accounts, amongst other irregularities, which we have already taken ratification action on them like provision of the fraud accounts and et cetera, et cetera, on the irregularities.
Now as our MD, sir, was telling you -- telling the other participant that is, we have -- since we have found out certain irregularity, we wanted it to be more broad-based. So that is the idea with regard to what, as we said, that we have appointed the central statutory auditors of the company to themselves verify and see the books so that it is made more strong in the near future. So that is what the basic idea with which we have worked in this area.
Understood, sir. Second question is, sir, on your corporate slippages once again. So out of INR 1,600 crores corporate slippages and your SMA-1 plus 2, right, that still remains more or less similar. So what quantity of this SMA-1 plus 2 number then you have INR 1,600 crores of corporate slippages? And you still have, let's say, INR 1,200 crores spending from future.
So how should one look at this INR 6,000 crores of SMA-1 plus 2? It looks like it does not show the real riskiness in the book. So how would you tie that up?
Sir, as far as corporate is concerned, regarding this SMA-2 and SMA-1, which accounts to about 0.7%, this is the hopes. And regarding the slippages of INR 3,600 crores from which we said that, excluding retail, MSME, agriculture, this is other small accounts, small businesses and others also.
And excluding this, the corporate, there is no big account. Even if it is a big account, it is about INR 110 crores or INR 120 crores. So put together, in a full quarter, the slippages were about INR 3,600 crores, including everything. And the SMA-1 and the SMA-0, where we are projecting about INR 6,000 crores, there can be some slippages but not significant slippages in the current quarter.
Right. Sir, what I was saying is that last quarter, we also had a similar number, which looks very small, less than 1%.
Sir, last quarter was 5,000 -- last March, we had about INR 5,000 crores compared to this March, which is about 0.7% in SMA-2 and about INR 10,000 crores in SMA-1, which is about 1.47%. Put together, it is INR 15,000 crores. Cost was about 2.17%. It was a big ticket last year.
So I was comparing, sir, so slippages of INR 1,600 crores in corporate is clearly for this quarter. So maybe I was comparing versus last quarter. There is not too much change in the SMA-1 plus 2, and we have...
Total INR 1,600 crores is not corporate, sir. In that, again, there are small businesses. And retail also to some extent, where they are not corporates. And corporates, when we say INR 100 crores, INR 150 crores, such accounts are 1 or 2 only.
Okay. Good. And third question is, sir, on capital and tax. So one is we have accumulated losses of INR 18,000 crores plus, which we have set off. Despite having that, it looks like we are still paying accounting taxes whereas one other PSU banks when they shifted to new tax regime or without shifting to new tax regime when they had a cumulative loss, they were still showing negative taxes. So why are we not showing tax provision write-back when we have accumulated losses? Or if you can explain that?
Yes, as already informed by our MD and CEO, as long as advantageous to the bank, higher tax regime -- we are continuing with a higher tax regime. I confirm that as on today, it is advantageous for us to have a higher rate of tax because of the reversal of the whatever the carryforward loss. So when this advantageous with the new tax, we are really going to shift.
No, no. So I am asking, sir, when accumulated losses of INR 18,000 crores, why are we still paying taxes?
Sir, see, the accumulated loss is not a static. Every time, it is reducing also. I can only tell the advantages as on today with the higher rate of interest. The tax paying also it is advantageous. Totally, overall, it is advantageous to the bank.
Sorry. How, sir? How paying tax is advantageous?
I will -- you can come off the line, we can explain.
Sure, sure. Okay. And lastly, on IFR, sir, Investment Fluctuation Reserve, it looks like RBI had asked bank to provide at least 2% of IFR. And it looks like we did not -- we have only done some 1.7% something if I look at the last annual report. So...
It is fully provided now. It is fully provided. It is fully provided.
Next question is from the line of [ Ms. Niha ].
Plans of selling of any subsidiary, which is on the fundraising plan?
Ma'am, could you please be a little louder?
Just wanted to know any plans you are planning to sell any of your subsidiary. And second question is, any plans to raise the capital considering the growth which we are targeting?
Madam, to answer your first question, at present, we do not see any necessity for any lowering our stake in any of our subsidiaries for the present, that is number one.
With regard to raising of capital, as our MD had very clearly stated that regarding the growth which we are envisaging in credit is not necessary for us to raise capital on account of that. But for strengthening the balance sheet further, we may come out with some plans for raising capital, which we will separately take up with our Board of Directors in the coming months and get their permission and then we will announce them.
One more thing. During the fourth quarter, we have seen a higher substantial fee income. Can we expect the same trajectory to continue in the coming quarters on the fee income side?
Fee income. You see, our endeavor is always for maintaining the fee income. Of course, the contribution of treasury would be less. But at the same time, the fee income by way of commission and [ LCBG Commission and other, our bancassurance business, government business, service charges, et cetera, we would continue the same level of income so far as the fee-based income is concerned.
This would be our last for today. I'll now pass on the mic to MD sir for his closing remarks. Sir?
Thank you very much for all the investors for giving us an opportunity to clarify if any doubts out there and also to project our future guidance.
Today, really, we're happy as our Board has kind enough to declare the dividend for which we have worked hard in the last 2 years to take care about our investors, about our staff and about our stakeholders. We expect this same type of support and cooperation from you all people. Thank you very much.
Thank you, sir. On behalf of Antique Stock Broking, I thank the Canara Bank management for giving us the opportunity to host them. Thank you, everyone, for joining in. Goodbye, and have a good weekend. Bye.
Thank you. Bye-bye.