Indian Bank
NSE:INDIANB
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
396.9
608.8
|
| Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
This alert will be permanently deleted.
Indian Bank
You don't have any saved screeners yet
Good evening, everyone. We have with us today, Indian Bank top management represented by MD and CEO, Shri S.L. Jain; and Executive Director, Shri Imran Siddiqui; Shri [indiscernible] Kumar and the other management. We would request MD sir to briefly touch upon the key highlights of the first quarter FY'23 results and the outlook on growth, margins and asset quality. Over to you, sir.
So good afternoon. Welcome to the earnings calls of Indian Bank for the Q1 FY'23. As far as our business is concerned, our business has grown by 9% Y-o-Y and the business deposit has grown by 8%. And the CASA has grown by 8%. It is on the strength of current deposit growing by 14% and [indiscernible] 7%.
Advance has grown by 9% on the strength of RAM credit growth of 12%. RAM is retail again, MSME, which is 61% of our book. Under RAM, retail has grown by 14%, 1-4. Under retail housing loan has grown by 11%. Auto loan has grown by 22%; personal loan has grown by 32%; [indiscernible] loan has grown by 42%. Likewise, in agri, we have grown by 13%. So crop loan has grown by 9%. Under crop loan, [indiscernible] loan is 53%, that has grown by 16%.
Asset credit has grown by 35% under the investment criteria, and MSME has grown by 8% and the MSME medium has grown by more than 25%. So that is business side. As far as our profitability is concerned. Our operating profit has grown by 4% Y-o-Y, but sequentially, it has grown by 30%, and net profit has grown by 3% Y-o-Y, but sequentially grown by 23%. The net profit has grown on the strength of NII growth, which is 13% on Y-o-Y and 7% on Q-o-Q.
In addition to NII growth of our noninterest non-treasury income has grown 37% Y-o-Y and Q-o-Q, 17%. In the non-treasury noninterest income, the fee income has grown by 35%. Recovery in bad debt has grown by 15%. ForEx income was 133%. PSLC, 17%. So all overheads income had grown in double digit or even more. And that growth in express moderate and as a result of OTS has grown and our NPA has grown. As far as asset quality is concerned or gross and net NPAs coming down sequentially quarter-after-quarter, quarter-after-quarter. It is at 8.13% against 8.47%.
Likewise, NMPA has also come down from 2.27% of last quarter to 2.12%. And the PCR, provision coverage ratio, has improved from 87.3% to 88%. As far as our collection efficiencies considers, it is 94%. It is against 95%. And our SMA 1 and SMA 2 has come down from 0.9% to around 0.61%. So -- and the capital position is 16.51%. If you add the profit of the current quarter, it is 40 bps more 16.91%.
Slippage in the quarter was around 2,885 and around 50% of the slippage is from the restructured book. Under the corporate measure slippage is in the retail, future group and one sugar account, one government account which money has received in July. So this -- as far as our RWAs are concerned, our A and above rated company increased. And you see our RWA has decreased from 65% of the credit a year back to around 60%.
Our cost of deposit has declined by 3 bps to 3.85%, yield on advances have grown by 16 bps and as a result, our NIM has grown to 3.10%. Cost in ratio has also come down substantially to 41.94% and ROE is 14.18% and ROEs, 0.73%. So all the ratios are showing improving trends. This is the sum and substance of the current quarter. And the real growth was by 4% and 3% on Y-o-Y because of the treasury contribution.
It was last time INR 605 crores as against INR 105 crores. And likewise, the MTM provision was INR 56 crores. Last year, it was INR 236 crores. That gap has been paid by core operations by increasing NII and other income. Now I'm open for questions along with me, our ED, Imran Ji, our Senior and corporate GMs and CFO.
Thanks for the brief deck. Sir, first thing, basically, I wanted to check like the outlook on the growth, which has been slightly lower than what we have seen versus the peers. And secondly, is the outlook on margins and asset quality. And then I think we can take questions from the participants.
So credit growth, we are growing 9%. But in corporate side, we are negative by 2%. But if we were corporate, every quarter, we are adding INR 2,000 crores to INR 3,000 crores every quarter from September to December, December to March, March to June. Considering all this, our growth for the year as a whole should be around 10% plus/minus 2% can happen. And our growth is mainly in the land sector. And our growth was low because in the first quarter, there was a interest dislocations, and we are interested in a good return on our advances. So because of the rate issues we have grown in this sector more.
So good to hear your focus on profitability rather than growth.
This is reflecting in our ROA and ROE.
Certainly. Sir, secondly, your outlook on asset quality.
Our gross and net interest continuously declining. And considering our SMA position as on 30th June collection efficiencies. By the end of the year, we expect that our gross NPA should be around 7% and net NPA should be below 2%.
Yes. Sure, sir. We can start taking the questions now. Mr. Ajmera, you have first question. Please go ahead.
And real good complement to you, sir, for giving such a fantastic result for the bank, and especially, on the treasury operations, where every bank is facing a severe problem and they are going in negative, we are still plus in the treasury, though income has come down. So sir, my first question, sir, or observation or question you may call it anything from your side, some comments.
Going forward, where do we stand on the -- our investment book or treasury brands, like both if you take the trading profit, and also, the MTM on the AFS and HAM, and in the remaining 3 quarters of the year, how much [indiscernible] maybe 25 basis points to 50 basis points? And what is your guess about it? So my first question is around the investment and treasury.
Yes. As far as or treasury book is concerned are around INR 185,000, and of which AFS is around INR 53,000 crores, and a modified duration of AFS is of 1.91. Now we have the valuation of INR 30 crore, 7.45%. Today, it is 7.30%. So virtually, on the current rate, there is a write back. There is a write back.
And going forward, we expect that bond yield should be in the range of 7.25% to 7.75%. So as and when the yield is going beyond 7.5%, we are making investment as and when it's coming down between -- from 7.30%, then we will be selling this off position. So based on the market, we will be taking a call. But going forward, the interest rate seen between this. Then there will be a right way.
Sir, our non-SLR book is INR 38,000 or over INR 38,000 crores, any provision or any pressure there on the non-SLR we are fully covered for any kind of losses, mark-to-market or anything in non-SLR corporate...
In a non-SLR measure, security receipts of [ INR 1,500 ] fully provided and rest [ INR 18,000 ] deferrals recapitalization bond and all. So there is nothing more here and for provisions concerned.
Sir, coming on the restructured book there now with the COVID restructuring and other things. Now the payments have already started now the installments and the interest payment from all these accounts. What is our experience on this?
And then SMA1 and 2, I mean, going some of that because you have the standard asset restructured. So where do we stand on the recovery efficiency on the structure book especially those restructuring, which were done very special differentiation under COVID. And what is the total amount of...
Yes, yes. Actually, we have done the restructuring of INR 22,000 crores. As on date, the standard restructure book is around INR 16,580, which is around 4% of our book, right? And as far as retail is concerned, it is absolutely doing good, retail and agriculture and corporate, actually, 2 or 3 big accounts have slipped. And therefore, there is a slippage in that. But the remaining -- I think we are more or less safe. Only the stress is in the MSME sector. that is appearing in our SMA 1 and SMA 2. So how this MSME book will be behaving, we are monitoring this MSME book.
The total size of SMA 1 and 2, even below INR 5 crores also?
Our SMA 1 and 2 in the -- I will tell you that we commercial efficiency in our instruction book is around 88%, right? And SMA 1 and 2 is -- in retail, it is only 0.13%; agriculture, 0.41%. The issues is 2.78% in the MSME. But you see in MSME, what we have done, we have given GECLS, we have given the COVID restructuring. So what happens in this process, now the economy itself is improving. So slowly, slowly, they will come out. So we expect that there's not any major slippage on these accounts. And all other portfolios are wellbeing.
Sir, my last question in this round of questioning is on the employee cost, which has come down as compared to many of the other banks. Here, it has come down in this quarter by almost about INR 400 crores. So is it a onetime or is it going forward, we are going to have the book of -- I mean employee costs every quarter of only INR 1,540 crores?
No, the point is that INR 400 crores last time, we have provided onetime this pension provision. That was a onetime item. Otherwise, why cost is around INR 1,200 crores per quarter. So with INR 4,800 crores and INR 350 crores or so is the [ IAS 15 ] so INR 1,400 crore. So that around INR 6,300 crores to INR 6,500 crore should be the cost.
If the moderator permit, just last one question, sir. on this credit growth only which you had answered partially. Where do you see the growth coming from? And what is your idea of increasing now when the things are looking a little better as you have said to increase respondingly or comparatively the corporate book a little faster than what you are basically guiding or targeting them?
Can we not look at little for a bank of your size, which is already crossed [indiscernible] more than INR 10 lakh crores of vision? Can we look at little higher income? Where do you see this credit coming in? And what are the sanctioned pipeline?
So you see, the RAM side, absolutely no issue. Corporate credit you see from October to December, December to March, March to June, every quarter, we are growing INR 2,000 to INR 3,000 crores. We are having around INR 19,000 crores of term loan sanctions in hand, INR 14,000 crores of working capital utilization. And last quarter 2, we have sanctioned around INR or 100 crores.
And the proposals are coming from the road projects. The proposals are coming from the city gas distribution, proposals are coming from the cement, proposals are through textile, proposals are through NBFCs, proposal are through power sector. So these are the major sectors where we are getting the proposals.
But the issue is that you should get a better pricing and margins. So we are basically margin conscious. And if we are getting a good return on the transaction, we'll definitely increase. So therefore, considering all this thing in view, I've given the conservative side -- guidance of a 10% rate.
We have next question from Jai Mundhra.
Sir, you have given recent disclosure on restructuring loans. I just wanted to check how much of the restructuring standard accounts out of INR 16,600 crores, how much of their -- how much of those are already out of moratorium and have started billing?
My point is INR 16,000 crores, moratorium is no more there, moratorium was in the last year. Some moratorium in the cover of the. But to my mind, major part of the book is the billing as start. The major part of the restructuring book.
Okay. And secondly, sir, on your yield on advances, right? So it has increased in a sizable manner Q-o-Q. So a, I just wanted to check, is there any one-off? Or you have managed to pass on the yield transmission or rate transition? Or how should one look at it?
So my EBLR linked advance is around 42%, first. And RBI has increased the report at 40 bps and then the 50 bps. 40 bps in May, which we have passed in June. Even the June also partially we passed. And third one NCR also we increased in the month of June. So putting all these three effects. And second, we are more aggressive in the retail side where margins are there. So considering all these things, there is an improvement in margin. And corporate, you said corporate is very competitive, very, very competitive pricing.
Right. So in your case, sir, if EBLR, let us say, RBI hike the report on 3rd, 4th May, the EBLR linked loan will reprice almost immediately or there is a reset period, maybe 1 month, 2 month, 3 months? Or how does the contracted rate, the new rate -- when does the new rate reflect? Would that reflect within 2, 3 days? Or this could take some 1-month, 2-month?
So we will pass on immediately in EBLR in 1 or 2 days' time. But wherever we have given somewhere in some transaction, it is given in the next month. As a majority of the transaction, we are clearly writing that we will pass on immediately.
Okay. Understood. And last two questions, sir. First is on your tax rate, right? So last few quarters, we were having negative tax rate as we had accumulated losses. This quarter, there is some positive tax rate. So how should one look at it? And what should be the full year tax rate one should assume?
Yes, you see because of [ novel ] commissions, we were getting the benefit of carry forward losses of as well Allahabad Bank. Now in the last call, I told you that in the current financial year, the tax credit will be available partially. So what the tax credit available considering this and based on the accounting standard for a year as a whole, we have worked out the tax liability. It will be around 10% of the PPP in this financial year.
Understood. And last question is, sir, if you have the ECLGS number, total sanction total disbursed outstanding and NPA in that book, that would be very useful, sir.
The ECLGS is around INR 8,000, INR 8,000 crores. And in the NPAs last quarter, ECLGSs around INR 112 crores or so, but we have provided fully. And total NPA ECLGS book is around INR 400.
So out of INR 8,000 crores outstanding, around INR 400 crores is the NPA, roughly 5%?
Right.
Sir, one more question which has come in the chat box gain related to your lower tax rate that we have seen during the current quarter. So the question is basically how much carryforward losses that we have under the income tax act? I think on the balance sheet, we don't have much losses, but yes, income tax that we will have?
So why calculated tax provision for a year as a whole, what will be the possible income of the bank for the year as a whole and what will be a carryforward losses. Calculating everything in mind and based on accounting is under 25, we have calculated our tax liabilities. And accordingly, it works out.
But sir, anybody would know basically the CFO and basically what of accumulated carryforward losses that we had?
Sir, that we'll let you know.
Sure, sir. Next question, Mr. Ajmera.
Sir, my second round. May I ask you what is the advances total breakup in terms of the interest rate, the fixed rate, MCLR, EBLR, so that we can get some idea of what is the breakup of the total credit, total advances of the book bank group. What is the...
Total credit, around 40% to 43% is the EBLR, around 45% is MCLR remaining on fixed rate or staff advances or overseas and versus.
And while the EBLR comes into effect immediately, the MCLR takes some time. So what is the time lag so incase we see the [indiscernible] 2, 3 days, the increase rate...
Actually, MCLR calculation popular is dependent on your cost of deposit, right? So slowly, slowly, the deposit rates are increasing. And based on the increase in the deposit cost and the formula MCLR works out. So what happened, we were 87.30%, and we have increased from 1st July -- 1st June, 7.4%; 1st July, 7.55%. So 10 plus 15bps, 25 bps we have passed on. Now we'll take a call for today or the next MCLR because it is decided on a monthly basis.
Means, the lag period may be 140 days, depends on what day it is announced?
Actually, not 1 month. It depends on your deposit cost. Suppose by 1 year deposit was 5.10%. And now it has increased to say 5.30%. So as and when, I will increase the deposit rate. So we are not increasing deposit rate from 5.1% to 6%. So based on the available liquidity in the market, best to the competition in the market, we are taking a call on the deposit rates.
We can assume that almost 50% of the book is with immediate effect and 50% may have some entire credit defect.
So MCLR -- again, MCLR linked [indiscernible], somewhere, it is a 1-year MCLR, somewhere it is a 3 months MCLR. Somewhere, it is a 6-month MCLR. And so it will come for repricing over that period.
And sir, my -- on the recovery front, the recovery from the return of accounts and various other recovery like asset recovery and construction company, which is getting delayed quarter-after-quarter. I think it should materialize in this quarter. So what is that book size -- how much loan is going to go in the first tranche of the INR 50,000 crores if it is not revised?
And how much gross NPA -- so that we can have the idea of gross NPA coming down? And secondly, is there any other ways which you are trying to sell these -- your loan book to other asset recovery companies, if not NARCL or any kind of sales by -- because the gross book comes down. Gross book can come down only by these means only, and what is the recovery target from the return of accounts in the remaining quarters of the year?
So I'll confirm. What happened, initially, 8 accounts were identified in the Phase 1. Out of the 8 accounts, 3 accounts, we already resolved. So remaining is a 5 account. Around INR 1,200 crores. Again, in the second phase, around 8 or 9 account of INR 1,300 crores. So INR 2,500 crores.
Out of INR 2,500 crores, first we are having 100% provision. Second, out of INR 2,200 crores, maybe around INR 2,200 crores is already fully provided in return off. So whatever money we will be receiving will be a gain. And your third question of yours is about the recovery number.
So you see in FY'21, we recovered around INR 5,500 crores. FY'22, we recovered INR 7,200 crores. In FY'23, we internally decided to recover INR 8,000 crores, this INR 2,000 crores per quarter. we recovered INR 2,000 crores in the first quarter. So likewise, second, third and fourth quarter, we will again recover [ INR 6,000 crores. ]
We can have the similar kind of recovery scenario.
Yes. Yes. We will have the similar.
And sir, those 2, 3 accounts, which were there like [indiscernible] they're all now fully future, and they're all fully provided for now 100%. You had any -- how much of the exposure is the exposure on Srei?
Srei, INR 1,800 crores fully provided.
Sir, it's a broad declared account.
It is fully provided. Even we are providing last few members.
So there is no more...
Sugar account also, we have fully provided. SR, also, we have fully provided. Pension also we have fully provided.
Pension in this special family pension, this thing -- it is I think carry forward for now for few years...?
No, no. Fully provided last year.
That's great, sir. I think that impact will not come in the future profitability now.
No, no. So everything has been provided here.
Sir, now the only concern is that the free float is very less in our stock, actually because of the I think government holdings. Is there any plan of the holding to bring it down so as to make it little more free stock available in the market in the coming...?
My capital adequacy ratio is 16.5%, is against 11.5%. And the profit -- if I add a profit of this quarter, it is 16.91%. So we are much above the menu of regulatory part. So capital-wise, we are comfortable. But in any way, we are having an enabling provision from our shareholders in the poll about raising of capital. So we'll take a call during the whole year depends on the requirement of the funds and the market conditions.
Really, you are doing very well. I mean, we have been seeing the results of some of the other banks but you have performed exceedingly well.
Sir, we have one question in the chat box, particularly again on your deposits. And that's basically that what are the challenges that we are facing in deposit accretion? I think your deposits declined quarter-on-quarter. So what was the reason for that? And what are the basically strategies to mobilize deposits going forward, where basically you're seeing a lot of competition from the peers as well.
So of course, that deposit has declined from March to June, but that is -- major call is in the government deposit that it happens in the government deposits last quarter, money comes. And the first quarter, the part is been exponential automatically, your deposit will come down. But what as an organization, what we have done?
So in December, we came out with a tablet banking. So through tablet, we can go to any institution and open account. In the last quarter, we have opened around INR 80 lakh account as against INR 2 lakh account of the last year. And 40% of these accounts are being opened through tablets. Now we are -- we have done -- even the current account also, we are starting opening through the tablets.
What will happen then we can go to the any institutions and open the account of any organization and go to accounts. And in addition to that, we are having a number of schemes for mobilization of saving deposits and our current deposits. We are focusing on the education institutional scholars. We are focusing on a number of things for increasing deposit.
But as far as our domestic -- our saving deposit and CASA is concerned for domestic deposits, it is maintaining around 42%, near to 42%. And even in the government accounts also, we have opened the SLA account last quarter, we opened 55 more accounts. So 155 accounts we are having. 1,200 accounts we opened for governments institutions and all for getting that to [indiscernible]. So we are focusing on that.
Okay. So that itself will drive you basically the deposits or you need to raise the deposit rates as well?
No, deposit rates are decided based on the market conditions as well, liquidity and the market conditions because we should be relevant in the market, but we don't want to be a price leader in the market for deposit.
Sure, sir. Sorry, we have a next question coming from Sonaal.
I have a couple of questions. Firstly, what was your SMA 1 and 2 above INR 5 crores in the corresponding quarter last year? So I'm referring to June 2022 -- 2021 quarter.
That I'll...
June '21.
June '21. In addition to that you can ask.
Sir, what is the overall between your standard restructured book and SMA 1 and 2 above INR 5 crores?
So at over [ INR 16,580 ] crores of restructuring book we are having. Out of this, INR 7,400 crores in retail here the collection efficiencies 90 plus. And if you see that even the slippage from this book was around INR 187 crores last quarter. And likewise, in agriculture also, INR 1,000 crores of restructuring book, we are having.
And here, the collection rate price 86%. Over MSME restructuring, we are monitoring [indiscernible]. Basically, this is the area we are -- we have some kind of [ stage 3 ] there because of economy of the -- first, we have supported them. Now, the MSME, which were capable has come out from -- even from the SMA 1 and 2 as well.
Sir, my apologies, but my question was a bit different. What I was trying to get was what is the common number between your SMA 1 and SMA 2 above INR 5 crores and you are standard restructured so that we don't double count the number? That was the purpose why I was asking this.
So SMA 1 and SMA 2 include restructuring SMA 1 and 2. So there is no double counting as such. So this is the total SMA 1 and SMA 2.
And you have a standard restructured book. So what is the common number between the two is what I'm trying to understand?
Common number between?
Standard restructured book and SMA 1 and SMA 2?
Sir, I'm just repeating whatever SMA 1 and 2 we have disclosed includes restructuring.
Yes. That's what I'm saying this is a double counting. So if we add the restructured book in SMA 1, SMA 2, it will lead to double counting. I'm trying to understand...
Okay. Understood. Understood. Okay. Out of the [ 0.63, 0.61 ] SMA 1 and 2, how much is on account of restructuring?
SMA 1 and 2 is INR 1,896 is SMA 1 and INR 1,055 is SMA 2 out of restructure.
And if you could give us a SMA 1, SMA 2 above INR 5 crore number for the last year in the same...
That we will provide you.
Sir, how is the underlying total SMA 1, SMA 2 movement? Is it on the same line as of SMA 1, SMA 2 above INR 5 crores?
It is on the same line. This is the collection efficiency on the same lines, sir. So automatically, it is under same line.
We have next question from Sushil Choksey.
Congratulation to Indian Bank management great results. Sir, my first question is our dominance in southern states where service economy and manufacturing both are doing well. So in view of that, what is the best optimistic CD ratio I can see in the bank?
Presently, our CD ratio is around 73%, right? So that's really, we would like to maintain the ratio at -- last quarter, it was 70%. So it should be around 73% level.
You don't think with so much of PLI scheme and so many manufacturing businesses coming specifically on auto ancillary, solar and other things in southern states and just around your headquarters. Your dominance with the presence with southern companies, CD ratio can exceed 75%, 76%?
So my point is that you say that deposit in the first quarter has come down. So we are focusing on the deposit more in the second quarter and try to maintain 73% of the CD ratio, even 74% also it can happen.
Sir, with southern economies, more saving-oriented economy, what is different that our CASA ratio is not improving?
The CASA ratio, we are growing at 8%, 9% the way our deposit is growing. So -- and you see from the last 2, 3 years, when the novel commission started, we are -- slowly, slowly, we are increasing it. This year, we are focusing on increasing CASA ratio, therefore, this tablet banking and we are going to the customers for [indiscernible]. We are focusing on that.
But the integration bank and your current bank or a homegrown for you. So how does the synergy and benefit work for you better?
Yes, it is working better. Sir, that is reflecting in the growth in NII, sir. That is reflecting an improvement in ROA, it is reflecting in growth in ROE, it is reflecting in growth in cost income ratios in all places, it is reflecting.
Sir, what's your outlook on international business, digital expenditure for future growth strategy digitization? And how do you see retail business growing in your bank over a period of 2, 3 years? And outlook on [indiscernible]...?
Good question, sir, you are asked about the digitization. A lot of work is going on the digitization. In the last month, we came out of the pre-approved personal loans, we have already launched. We have already pre [ ACC renewal ] for digital. Shortly, we are launching that gold loan, home loan, top-up, MSMEs, [indiscernible] loans, 4,5 journey's we will be launching in between today and on our foundation day, that is on 15th August.
And after that, also every quarter, we are working on that 6 or 7 new journeys we will be launching. So that is one part of our digital side. And the other parties, you see on mobile banking has increased 75% in 1 quarter. So we are focusing on our mobile banking. And as a result, whole digital transactions have improved substantially.
In HR side, also, we have done a number of changes, performance management system. New system has brought in and implemented in the bank. And in IT infrastructure, we have done a number of things. We are in 1,000 digital banking champions, right? And we are having this middle way through, which we have started doing API integrations, omnichannels, we are -- so a number of things are going on in the digital side in the bank. So the result of which will be seen maybe after 6 months to a year -- 6 months after -- for each and every segment.
Sir, they have gold loan outlook?
So gold loan. Gold loan, we are growing 16%, 17% in the agri side and 42% in the personal loan side. What we have done around 421 retail shops we have upgraded in the last quarters. These branches are doing gold loan only. So because there are huge opportunities there in southern part. So we are focusing on that, focusing not only in Tamil Nadu, even Kerala, also.
Sir, your growth is approximately at a CD ratio of 73% maintained or 74%. How much do you see growth coming out of retail and how much out of corporate banking?
So point is that we'd like to maintain our RAM 61% plus-minus 2% here. And in corporate also, but we are margin concise. So if we are getting good return, we will grow.
Sir, and what's your outlook on credit cost on the optimistic side?
The credit cost of the bank is around 2.02%, right? And here, because of the 100% provision, we have made for sugar account or even future accounts and all. Going forward, what we see because the SMA 1 and 2 has come down, so slippage will come. So our credit cost for a year as a whole should be lower than 2%.
Sir, that is on -- you are guiding very conservative. When you provided 100% on all the NPAs, are you estimating that your losses are going to accrue from some other SME assets, which you're forgo or it is you wonder credibility and outperform the market.
You are 100% correct, sir. We should be conservative by giving guidance. We should be able to deliver better than this.
Next question we have from Dixit Doshi.
Actually, most of my questions have been answered. Just one last question, any outlook on the NIM, we have improved very nicely to 3.1% this quarter. So how do you see it going forward?
You see our NIM, our book is 42% is in EBLR, right? So -- and in an increasing interest rate what will happen, your assets will be repriced first and the and the liability for loss. And the liability and then the deposit rates is also increasing in the market, right, in the 1-year deposit 2-year, 3-year deposit. So considering this in view, we are the -- view that we should be able to maintain our margin of 2.91% of the last year. It can be better than this, but we should be able to protect that margin.
Our next question, we have from Manish.
Sir, my question is around your MSME loan. So if I look at your SME book, almost 25% of your book is stressed. So can you give some qualitative comments on, is there any specific MSME cluster where you are witnessing this kind of a pressure? That's one.
What is your -- the average yield on MSME? That's the second part. And third is, what's the ground level feedback on your MSME customer right now? Are they facing any major issues in terms of the margins, is the cash flows coming back to the pre-COVID level? So some color on MSME side, that would be useful.
So I request Imran Ji, who is in charge of MSME to answer.
Our MSME generally, after COVID -- most affected people were the MSME. But after this improvement in economic conditions, the MSME slowly coming out of stress. Even our SMA book in SMA 1 and SMA 2 has come down and MSME from previous quarter. And regarding -- none of the specifics sectors, mainly this hospitality and all were under more stress. But across the board, the MSME was under stress.
But now what we are doing now, we are running a campaign to improve our MSME book in INR 5 crores and above because there we get better margins. And there the quality of asset is also very good. In our recent campaign, we have mobilized around INR 7,500 crores proposal. And out of that, INR 2,000 crores has already been sanctioned and INR 500 crores is already been disbursed. And the kind of yield we are getting in MSME is around 8.5%. So going forward, we will be having a better asset quality in MSME.
So if I heard you correct, you mentioned 8.5% yield on MSME portfolio, correct?
Yes, roughly, roughly. 8.5%.
And out of your MSME restructured book, is the moratorium over? Or are there still customers under moratorium?
Majority is over.
Majority of the account, yes. And in addition to that, in MSME, we are also focusing on cluster-based financing, where the NPAs are. So we are living a number of clusters, roughly 37 clusters they are already having. Their NPAs are comparatively low. So we are focusing on that.
And do you expect the kind of mortality you have seen in MSME in this quarter to continue in next couple of quarters? Or you think those are largely over?
Where the MSME is behaving and the way the economy is improving, right? So -- and these MSMEs they've survived, sir, in the last 1 year, 2 years, 3 years. So we hope that going forward, the slippage should come down.
Jai, you have a next question.
Sir, if you can specify the sector of the government loan account which slipped during the quarter and it has already been upgraded in the quarter?
One account -- one trading account of INR 200-odd crores, which we have provided 100%, and if the money has received in July, so it will be upgraded, it will reduced and provision will be returned back. It is closed, fortunately it is INR 226 crores.
Okay. And secondly, sir, if you have the number for restructuring book, which is legacy restructuring or MSME restructuring, which is outside of this COVID INR 16,000 crores. There was some small amount which was there last year, last quarter, if you have that amount which is outside.
It should have very small account the majority of these accounts would have been covered in the COVID part. In any case, it is a very, very small amount.
Understood. And then, sir, if you have the PV01 of the treasury book number AFS book?
It is around [ INR 8.1 lakhs, INR 9 lakhs ] or so. And [ Satish ]...
Crores. Crores.
[ Satish Ji, ] our GM, Treasury is on the line.
Sir, our PV01 is INR 8.80 crores.
Sir, we have one question in the chat box relating to your -- I mean, there was a government comment basically there, again, looking for consolidation. So what is your view on that?
This is a government call. As far as our bank is concerned, considering our -- we are the best in terms of ROA, ROE, cost income ratios and all. So remaining call is to be taken by the government.
Sir, basically, so can you be an acquirer again?
Lately, there is no such moves, sir. Not in our knowledge, but we are growing, we are growing. Our NII growing, profits are growing. The 88% PCR, we are having. So bank is on the growth part.
[indiscernible]...
Yes. Yes, as ED, Strategy will speak.
Our MD was also explaining you the way we have been growing, and in all parameters, bank has done good performance and the ROA, REA, REO. And our cost NPAs coming down or net NPA is coming down, our NIM is improving, our cost of deposit is under control. our cost-to-income ratio is also coming down.
So and we are very conscious and mindful of the bottom line as well while giving corporate advances. And we are aiming to grow in the same fashion our loan growth in maybe [ Iran, ] may be corporate. We intend to maintain the same percentage going forward. And whatever future liabilities that all have been taken care during the current quarter or the earlier quarters.
So -- and initiatives also, we have taken all digital on the lending platform or for the liability side platform. So bank is ready for the future growth also. So I believe the guidance given, we'll be achieving all those guidance. And next quarter, we will see a better performance in the current quarter.
Yes. Thank you all analysts and investors.
Yes, thank all participants. With that, we will close the call. Thanks a lot.
Thank you.