Indian Bank
NSE:INDIANB
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Indian Bank
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Good evening, everyone, and welcome to Indian Bank's Fourth Quarter FY '22 Results Con Call. We have with us today, Indian Bank top management, including Mr. S. L. Jain, the EDs, CFOs. We would request first, sir, to talk about the recent results briefly, and also, provide some outlook for the next year, particularly in light of the current macroeconomic scenario, touching upon the points like growth margins, asset quality, outlook. Over to you, sir.
Thank you. Welcome all investors and analysts in this post result con call. As far as our business is concerned, our business has grown by 9%. The business has grown on deposit by 10% and credit by 6%. Under deposits over saving, deposit has grown by 8%, current deposit by 14%. So CASA has grown by 9% and we are maintaining around 42% CASA ratio. Our credit is basically grown 11% in RAM which was earlier, at 58%, now, at 61% and this engine is doing well. And this RAM growth 61% is back on the retail credit growth of 15% [ tier ]. Housing loan has grown by 13%, auto loan has grown by 15%, personal loan, 42%, jewel loan, 25%. And in agri, we have grown by 12%. Crop loan has grown by 6%, but 65% the crop loan is jewel loan, which is growing at a rate of 14%. Investment credit has grown by 46%. Agri allied is growing 88% and infrastructure or regular processing is growing by 13%. So all segments of the agriculture credit is growing -- assets here are growing 22%.
MSME, we have grown 6%. Under MSME, micro 5%, small, 6% and medium, (sic) [ 9% ]. So this entire RAM, all segments of the RAM are growing at a healthy rate and that is by 11%. Well, 60% of -- 1%portfolio is growing at 11%.
Corporate credit foresee our result for September, December and March. It was September to December, we have grown by INR 3,000 crores. From December to March, of course, here is between INR 1,600 crores. But after adjustment of technical write-up, which is around, again, INR 3,000 crores. So 2% per partner, so 8%. So considering all this, we have grown 6%, but 61% is -- 61% is RAM, which is growing 11%. So 11% of 61% is around a 7% growth comes and 2%, 2% every quarter on corporate, so 8%. So put together, we are expecting that minimum, we should grow 8% to 10% in the next financial year.
Now, coming to the profitability part. Year-on-year, as was discussed, our net profit has grown by 31% from INR 3,005 crores to INR 3,945 crores. Our operating profit has grown 16%, and we have made the entire provision of pension of INR 465 crores in the -- this financial year only. Our NII has grown 7%. Our noninterest income has grown by 22% and noninterest income has grown on the [ stand ] of recovery of bad debt from INR 600 crores to INR 1,600 crores at 161%. Fee based income has grown 8%. ForEx income has grown 70% and PSLC commission has grown 39%. So whole year -- or the strength of our operating profit and net profit growth is increase in spread and increase in noninterest income and expenditures remain more or less flat, we have, of course, provided INR 465 crore entire in the last financial year and INR 403 crores in the last quarter.
If you see the quarterly performance of past '22 vis-a-vis March '21, our net property showing is minus 42%. The main reason is that last year, we have met the deferred tax credit at the last quarter of the financial year. And from June '21, we have changed our accounting policy and on a quarterly basis, we are doing. And therefore, it is showing as a negative 42%. But if you see the PBT, profit before tax, it is growing by 3%. But if you exclude this onetime provision of INR 403 crores, so even the PBT itself is growing [indiscernible].
And the operating profit is 15% after considering this pension, otherwise, it would have grown by 31% or so. That likewise in the last quarter also, our fee-based income is continuously growing. ForEx income has grown from INR 165 crores to INR 274 crores and PSLC from INR 107 crores to 42%. So from a profitability point of view, it was a satisfying yes. [indiscernible] income to the NPAs, our NPAs has come down from 9.13% of the last quarter to 8.47% in past quarter. Likewise, net NPA has also come down from 2.72% to 2.27% and PCR improved from 85% to 87%.
The slippage in the last quarter was around INR 3,300 crores, of which INR [ 1,000 ] crores is in corporate, but here is one big retail account of INR 851 crores. Otherwise, our recovery was good, it is against a total slippage of INR 3,300 crores, recovery was INR 2,800 crores. And this breakup of the slippages, you can say retail is INR 477 crores, agri is INR 417 crores, MSME is INR 1,431 crores. So INR 2,325 crores and corporate 973 crores. So that is a slippage. Now on capital side, we are comfortable. We are having 16.53% capital. It is against 11.5% of the regulatory requirements. So we hope that our generation will take care of our capital requirement for growth in business.
As far as SMA numbers are concerned, it was 0.93% for INR 5 crores and above in December, we are at 0.92% of the -- more or less on the same quarter. As far as restructuring book is concerned, we are having INR 18,000 crores of a restructure book, which 4.42%.
So the question regarding margins segment, our margin has improved year-on-year basis from 2.85% to 2.91%. And of course, in the last quarter, it has come down slightly. It is because of interest reversal and less number of days in the last quarter as compared to the December quarter.
Going forward, as we are having a 42% CASA, we are maintaining the CASA at 42%. And we are having liquidity because our LCR is around 169%, so we have a adequate liquidity, but we'll take a call, full interest rate on deposit based on the market and as and when the situation so arise. But on the asset side, or 44% of our asset is in a repo-link. And with the increase of repo, naturally, the interest income should increase. So considering this and also, considering this, if at all we need to increase our deposit rate, it will have a lag effect. So the income side will get a benefit against our liability side, so we should be able to protect our margin or our margin should be in the same range in the next financial year.
Now, I'm open for questions.
Yes, thank you, sir for the detailed update that you have given. I'll first ask Mr. Ashok Ajmera, I think he has raised his hand to ask a question. Ashok, you please go ahead. But please restrict your questions to 2 or 3 maximum.
Good afternoon, Jain Sahab. Excellent results, good net profit increase in the quarter-to-quarter, also, from INR 609 crores to INR 984 crores. Asset quality has also improved. Sir, having said that, I have a few observations in some data point in question, if you permit me, sir.
Sir, you had stated last time that there is a need of the hour is to focus the consistency in growth in business and enhanced income. So sir, coupled with that, you have also said that INR 84,000 crores of tensions are in pipeline, INR 22,000 crores in that last part, since you had reviewed. But if you look at the advances growth, I mean, our corporate advance book is, I think, flat. Only the RAM is a little bit of increasing. So sir, on that, what are your views for the coming quarter or maybe, coming quarter itself, why only a target of only 8% to 10%? Why don't we go to 12% to 14%, sir, when you are having a good capital adequate? This is my first question. And if you can -- sorry, or shall I...?
So you -- we can take your second question also, sir.
There are -- Sir, on the credit cost also, last time, we had stated that 2.55% credit cost, which was there. If you remove that 1%, which was in one big account, it should have been 1.65%. But now in this quarter also, it is 2.15%. So our credit cost is not coming under control. This is my another observation. And if you can throw some light on that.
Coupled with that, NARCL, out of the total 34 accounts, you had stated that 8 accounts were identified, but out of that 8 also 3 were resolved, and only the 5 accounts now will go to NARCL. So where do we stand today when NARCL might be in the current quarter, now it starts taking these loans from you? What is those number of accounts or the amount, which will go to NARCL which will give some information on our gross NPA side? These are a few questions, but I have some more. So please, if you can just give your answers for that.
Yes, sir. So one was regarding that credit growth in the corporate side, of course, [indiscernible] is growing. And I told that it will grow further. So the pattern [indiscernible] I told you INR 3,000 crores every quarter we are growing. For a fact, even in the last quarter, there's a huge liquidity in the system. In the sum of the loans where interest rates are not at sustainable level, and we were having more gain or more income by deploying to some other stores than we have preferred to deploy that and more interest income and more spread than putting our money in the unsustainable rate of interest. That was the main reason. Otherwise, we are having a huge sanction ahead. Today also, we are - last quarter itself will be a sanction around [ INR 26,000 crores ] new loan -- INR 36,000 crores.
And we are in a partially disbursed loan also INR 8,000 crores. You had told that why you are telling the credit growth was 8% to 10%. So this is a minimum, which we should get. And now, you see the inflation when the commodity prices are increasing, actually, working capital utilization will increase, so we should be able to grow more than that. But this is a minimum to my mind.
The second point is about the credit cost you talked about. So last quarter, this quarter also, we have provided for a big account also around [ 90% ] of that big account which has slipped this. So that is why this credit cost is increasing and you see our -- that net NPA has come down substantially to INR 8,800 crores from around INR 12,000 crores over the last year. So going forward, that producing requirement should be less.
Sir, NARCL. Sir, some...
Yes, NARCL out of 8 accounts, 3 already been resolved. 5 accounts hopefully in this quarter, this should be transferred to NARCL and our exposure is around INR 1,200 crores or around 90% of this has already been written off.
90% is written off. Sir, my one last question is on our investment book, sir. We have got an AFS book of INR 41,931 crores. Now, the interest rates hardening up. How much it -- because so far, we have done well. I mean, on the investment, if you see on the segment-wise, also there is a good income of INR 1,645 crores in this quarter. So now going forward, with such a large AFS book, where do we stand now, sir, have we taken the advantage of in the last couple of days -- I mean a couple of weeks of this AFS? Or we are still holding on? And what are your views for this quarter on the investment side?
Our [indiscernible] is very active, sir. We have taken advantage of that also. And while we are protected up to 7.40% of [ yield ]. So as all did, we are not having any provisions on account of that, since we have changed our portfolio in the first week of April itself.
As far as your point, the income was INR 1,600 crores of last year in trading profit, how this income will be in the next year? So you see, we have increased our revenue streams. You see our ForEx income has grown last year from INR 2,200 crores over last year, we are at INR 1,600 crores, so around INR 500 crore reduction in trading profit in 2022 is against 2021. But INR 300 crores, we have compensated by -- of ForEx income. So this -- We have -- We will be having the income from other streams as well going forward to compensate this kind of income.
In addition to that, we will be having income by way of spread also because now the interest rate has increased, and we can deploy our money at a better rate.
Just a articulation is around INR 18,000 crores of restructured book. How much is the COVID restructured in this, sir?
This INR 18,000 crores is a COVID restructure, sir. This is 4.4% of our book.
These are COVID restructured?
Yes.
Thank you, Mr. Ajmera. [Operator Instructions]
Sir, meanwhile, I had one question related to the asset quality. So this quarter, again, we have seen, across banks, the SMA NPAs have been on a higher side. So why -- what is the reason for that? And so is also the case for agri NPS?
Secondly, any resolution pipeline that you have going forward? Because I believe the larger account, which was supposed to slip, which is future retail has already slipped in the current quarter. So now going forward, how do we see our overall asset quality outlook?
Yes, sir, asset quality, basically, the 2 basic things is one is your -- what you call that collection efficiency. So collection efficiency is 95% quarter-on-quarter, it is increasing. Second is our SMA 1 and 2. So SMA 1 and 2 is at around 0.92% and 0.93%. And the slippage is well -- mainly comes in the MSME book -- here also, in the MSME book. So part of the slippage has come from the restructuring book, part of the slippage is other than restructuring book. And if I go deeper into the restructuring -- the slippages, half of the restructure is in a small account, micro account -- micro account. Of course, they are -- mostly we are covered under the CGTMSE and somewhere we are covered under the ECLGS. So loss driven demand will be less [indiscernible] , but -- and part of the restructuring has come from the SMA. So you see the commodity prices have increased, right? They need more money and the demand is not there. So that end in the first month January with the Omicron and other issues. So because of that, there is a slippage, but we expect that part of this money, we will be able to recover in the current quarter.
And sir, any lumpy resolution that you're expecting in next 6 months, like in [indiscernible] is or any of that?
Yes. Q3 [ peak ] account where we are expecting that we'll get a good money. And [indiscernible] is a big amount, big account where we can get a good amount. And other -- there is other 3, 4 accounts, we have the resolution, CoC has already approved the resolution and as and when we'll get that approval, we will get money.
Okay. Sure, sir. So we have next question from Jai. Jai, please go ahead.
I have a couple of questions. First is, sir, again, on MSME right? So the general expectation was that we have restructured some of the borderline cases. And of course, ECLGS money has also been given to those. So just wanted to check, sir, why is that MSME slippages are rising for the last, maybe, 2,3 quarters and this quarter is even bigger. Are they coming from accounts which were restructured earlier or had ECLGS dispensation? And now that they are supposed to pay from restructuring or ECLGS, is that causing a bit of a pain there?
Yes, sir. This -- the slippage has come really from this INR 1,400 crores of slippage, right? So INR 600 crores comes from the micro and small account or from the SMA books. So you see, there was a Omicron issue, there were the demand issues, there -- the increase in commodity prices. Of course, we are supporting them, but these are the 3, 4 major reasons for their slippage.
As far as bank is concerned, bank is concerned, we are hopeful that we'll cover, we can recover weather part of this slippage in the current financial year. And also, wherever the accounts would not be recorded, we have a [ CCTV ] coverage in that even the ECLGS covered.
Right. Sir, if you have the quantum that out of this INR 1,400 crores, how much was the loans which were earlier restructured or had ECLGS dispensation? Just to understand the quality within restructuring or ECLG's book.
So out of INR 1,400 crores, maybe, around INR 350 crores or INR 400 crores are from the restructuring book of last year within this COVID...
Right. And any movement from ECLGS book, sir?
So basically, ECLGS, we have given for 20%, right?
Right.
So out of this amount, up to 20%, maybe, 15% or 20% is for ECLGS. So that amount we'll receive from the ECLGS [indiscernible] .
Right. But sir, I mean just to understand this, if you have given 15%, 20%, but when it accounts slips, then the entire INR 100 will slip, right? So...
You are right, 100% -- entire. But as far as the loss given [ demand ] to the bank is concerned, I'm talking from that point of view. And wherever they are, we will go for restructuring also. They need some support. Still since the account has become NPA even then, we will do restructuring EBITDA by....
Correct. Okay. And sir, we used to share this SMA book for every loan account, I mean, below INR 5 crores, also. If you have that number, maybe you can read out the retail, agri, MSME, corporate, including the below INR 5 crore ticket size.
But what we have done, we have compared over this disclosure vis-a-vis others and in par with the industry vis-a-vis we have just INR 5 crores and above. Otherwise, these number we will provide, no issue at all.
Okay. Understood, sir. And secondly, sir, on a slightly, let's say, 12 months horizon, if I look at last 2, 3 years, we had a loan-to-deposit ratio, which was slightly nearer about 75%, pre-COVID. And we used to maintain that for a reasonable amount of time. Now, that has dropped to 65% roughly, which is around 1,000 basis point decline. And clearly, there is some excess liquidity, et cetera. But what is your thought process on LDR? I mean, where do you think the...
LCR.
Yes. No, no, not the LCR, sir. Loan-to-deposit ratio. Yes, sir. So which is earlier was 75%, it has now come down to 65%. What is your sense that where it could stabilize? Because clearly, it is at the bottom right now.
So our CD ratio is not 65% sir, it is 70%. It is 70%, and going forward, it is likely to increase, sir. Because then, we will have a more credit up to vertically [indiscernible].
But I think if I am concerned...
Earlier, it was 73%, 74%, 75%. So particularly, when you are getting the deposit at lower rating, you can deploy other places and get some return, then we take deposit, also. Because whatever money we take, we should be able to deploy it either in the ForEx market or a credit market that we should be able to earn.
That is why this will be 2%, 3% here and there.
Okay. So then -- Okay. And last 2 things, sir. One is for tax rate for FY '23, how should one look at FY '23 tax rate? Would it still be a negative number?
That tax rate -- this year, '21, '22, we were having the accumulated losses, right? For '22, '23, we will assess our position. Very soon, maybe, in the next quarter when we file our income tax return, but some of the benefits, we should be able to get prior to the next financial year as well.
Right. Okay. And just lastly, this earlier, this MSME restructuring scheme, right? How much is that, sir? I mean, if I were to include the -- adjust for the overlap, apart from INR 18,000 crores of COVID restructuring, how much is the earlier CDR and MSME scheme?
Sir, it is very difficult to say, because these accounts have been restructured. There are 2 kind of disclosures basically banks do as per RBI guideline, that is restructuring as per the 3 circulars, right? Including the COVID restructuring where we have to show even the LTE account as well, where we have shown INR 4,000 crores, right? And the second disclosure is INR 18,000 crores. So that the INR 4,000 crores includes NPS as well, right? And RP 1 also, so there is a huge overlapping there.
Right Okay. Understood. Sir, I'll come back in the queue.
Yes, Sir, I think Jai was referring to the CD ratio, which is global CD ratio, about 65%, 66%. And I think you were referring to the domestic CD ratio, 70%.
Yes. So we have next question from Dixit. Dixit, please go ahead. [Operator Instructions]. Yes. I think he is not answering. Dixit, please go ahead.
Yes. Can you hear me now?
Yes.
So I have 2, 3 questions. Firstly, as the Chairman sir mentioned, you mentioned that we are having a comfortable capital adequacy of 16% and looking at 8% to 10% growth target and our gross NPA, net NPA also coming down. So what was the requirement for raising equity of up to INR 4,000 crores? Because INR 4,000 crores is a big sum for a bank like us. So that was the first question.
You see our credit outstanding is INR 415,000 crores. And we are told that we'll grow around 10%, so INR 40,000 crores. And our -- generally, the RWA comes around at 65%, so around INR 30,000 crores, right? So at 11.5% is our capital requirement, so INR 3,400 crores or INR 500 crores. We have -- last year profit was INR 3,900 crores. Keeping this in mind, we have told that our generation will be adequate to take care of our growth, so why this INR 4,000 crores. This is an enabling provision we have taken approval from the Board and will take approval from the shareholders as and when the opportunity arise in the next financial year, we will go. So this is only enabling process.
Okay. And also you -- as and when the need arises, you may...
Otherwise, every time you have to go for AGM, EGM and everything.
Okay, okay. Because we are as half of book value is over, raising such a large amount will be very decremental.
This is the enabling provision, sir, and -- if the situation so arise, otherwise, you have to undergo through the AGM. AGM is a long run process. And suppose here we are having AGM immediately after our results. So this is -- this will give us an opportunity to take approval from the shareholders.
Okay. Now, my next 2 questions. One is what is your guidance for credit cost for FY '23? And if you can just again elaborate on the future retail accounts. So how much is the outstanding and how much is the provided?
So from the credit cost point of view, you see -- So our net NPA has come down substantially, right? So 30% has come down from the March '21 level. So naturally, our additional provision requirement will be less in the next financial year and therefore, our credit cost should come down. But how this will pan out in the full year, it is very difficult to say. But considering the present situation, it should come down. Now, the second point in the future we talked about, we are having INR 851 crores of outstanding and we already provided for around 89%, 90%.
Yes. Thank you, Dixit. Next question, we have from Mona. Mona Khetan, please ask your question.
So my first question is on the restructured book. If you could give the breakup between our various segments, agri, MSME, retail, et cetera?
It is very much there in my presentation, madam.
Okay.
It is there in the presentation, entire category-wise, retail, agri, MSME -- we have -- you can see the slide #34/51.
Got it. And just again, on the restructured book. So what percentage of the loans are today out of moratorium and have started billing, if you could give some sense there?
Okay. The exact percentage that has come out of moratorium, let me tell you exactly, I'm not having today. Maybe, around, let's say, 50% may come out from the moratorium.
Okay. Okay. And while you've mentioned about INR 18,000 crores of restructured book under OTR and another INR 4,000 crores or so under MSME restructuring. If we include all this...
There's overlapping madam, there is overlapping.
Yes, exactly. So you mentioned a number of INR 20,000 crores last quarter. How much would this be ex of any overlaps this time?
So I told you this INR 4,000 crores includes tranche 1 restructuring, tranche 2 restructuring and RP 1.0 restructuring. The 3 restructuring and the PA and NPA. That was one disclosure. Second disclosure, this INR 18,000 crores is only RP 1.0 and RP 2.0. So by default, RP 1.0 is in both side. Second point is that, NPA is also added in that disclosure. So that is why I told major part is overlap and our NPA.
Okay. So if I have to get some sense on the standard restructured book, it will be fair to take a INR 18,000 crore kind of number?
Yes, INR 18,422 crores.
Okay. This will include large part of the MSME book also that is standard restructure?
Right, right.
Under the relief scheme.
Right.
Okay, sure. And how much -- where would we stand in terms of the total ECL disbursement so far?
Yes. Total ECL disbursement is around -- I guess that is on Slide #7, INR 10,596 crores.
That is the total...
Yes. And present outstanding INR 8,983 crores.
Okay. And just finally, so from your presentation, it looks like just a broad number in terms of what has slipped from the restructured book, it seems that 8% to 9% of the loans over the year have already slipped from the restructured book. Is that a fair understanding?
No, no. I'll clear the understanding. Maybe, around 5% of the loan, except this big loan, is retail, around 5% to 6%. I'm just telling you how -- you see that slippage is INR 1,785 crores, right? Of this, corporate is INR 851 crores, so remaining is INR 934 crores. And our restructuring was around INR 19,000 crores, right? INR 19,000 crores plus INR 21,000 crores. So INR 21,000 crores out of this INR 21,000 crores, INR 934 crores has slipped, so around 4.5% only.
Okay. And including the retail group exposure, it will be around...
So if I have to compare INR 934 crores with RAM restructuring, it is around INR 18,000 crores and INR 934 crores, so around 4.5% to 5%.
Got it. Okay. Thanks a lot, that was useful.
Next question we have from Mahrukh. Mahrukh, please go ahead.
My question, sorry to be repetitive, but what was your ECLGS slippage during the quarter?
So ECLGS slippage -- of the total slippage was INR 350 crores for the ECLGS.
Okay. So what you mentioned as restructuring, that was the ECLGS slippage. Okay.
But madam point is that in MSME, we have given 10%, 20% also. So if the account has slipped automatically, it includes ECLGS as well. So point is that whatever slippage we are showing, it includes ECLGS slippage and INR 350 crores is that component.
INR 350 crores, is that 20% of the ECLGS, that way?
Yes, yes. [indiscernible]
Okay. Okay. Got it. Got it. And sir, the other question is how much incremental [indiscernible]
That, we have not calculated madam, how much incremental. This we are not calculating because money [indiscernible]
[indiscernible]
But you see, our yield just increased if you see, part of our investment yield has increased, right? And our -- yes, madam?
I just wanted your clarification on what is the fresh provision on retail this quarter, so on future retail.
So this account is we are having a balance of INR 851 crores, and we are having a provision of around 89% or so. So this account is part of the provision we were having when the account was restructured, because as per the restructuring guideline also, you have to keep 10% also as a provision. So incremental provision or FITL provision we might be heavy, that will continue.
Sure. Sir, we have one question which is from the chat box, and that is related to your accumulated losses. So can you provide a figure of like what's the amount of accumulated losses that you have on the balance sheet now?
No, we are not having any accumulated losses, sir. IB continues the same profits.
No, sir, basically, the past losses coming in from Allahabad Bank.
That we have already adjusted, I think, 1.5 years back by debiting to the [ same regional account ].
Okay. So the tax benefit that we continue to get, it is primarily because related to this DTA, right, which was created on the back of accumulated losses?
Yes, that will become the provisions of erstwhile Allahabad bank.
So, sir, what is the DTA figure on the balance sheet?
Today, we are around INR 3,400 crores.
Okay. So that means that we will have a lower tax rate even in FY '23?
In part of the year, we should.
Okay. Sure. Sir, second question, which has come in the chat box is related to your SME book. So that's a broader industry question. Is that how is the competitive intensity shaping up into the MSME space with most banks now talking about getting into this space aggressively. So if you can just talk about on the competition side in the MSME space. And what kind of yields are you generating in that space that's also...
Actually, in MSME space, we are aggressive in some front. One is a cluster financing. We are having 59 clusters, and there, we are growing in double digit, and the NPL level is less. Because of the one -- the 59 plus, and we are planning to add 24, 25 more customers and clusters. And we came out with a cluster-specific scheme. This is one area.
Second area we are aggressive is in rice mill or dal mill, agro processing, where the customers which are making continuously profit, right? And having a relationship with us or who had [ worked ] with us in the past, we are trying to bring them back based on our best schemes. Second, we are aggressive in that front. Third one is that retail trade and all, which is a part of now MSME, we are also aggressive in that.
Sir, another question, which has come in the chat box is related to your staff cost during the current quarter, which seems to be very high. So what is the reason for the higher staff cost during the quarter?
So yes, I told you in the first beginning that we have provided the total family pension cost in the last quarter. So that was around INR 403 crore. In fact, INR 465 crores is total cost on account of family pension. In September quarter, we provided INR 31 crores, in December quarter we provided INR 31 crores. Because as per RBI guideline, we can amortize over a period of 5 year maximum. And remaining INR 403 crores, we have provided in the last quarter and that is the reason our staff cost is showing an increasing trend. If you adjust this, it is more or less on the same level.
So we are done with this family pension thing.
Yes, that is done, so we are not carrying it any forward. No liability there, so balance sheet is ready for future again.
Sure. Next question we have from Ashok Ajmera. Yes, please go ahead.
Thanks for giving me this opportunity again. Sir, one. All data point, the advanced credit figure as per the presentation is INR 415,625 crores, whereas the balance sheet, it is INR 389,186 crores. So the difference of INR 26,439 crores, whereas our net NPA is only INR 8,848 crores. So what is the different figure? Can -- if the CFO...
I can tell you, I was a CFO earlier. So the remaining part is basically as per banking resolution act provision is to be deducted from the gross advances. And that is why it is not showing in balance sheet. The balance sheet, we are showing is a net number.
Yes, sir. But that is also not exactly -- anyway. I mean, there may be some minor small -- okay.
Minor is FITL sir. I can tell you minor also.
Sir, my next question was that we have acquired some loan account of RBD INR 465 crores, retail INR 2,230 crores, MSME INR 1,566 crores and 10% is retained by the person from whom have we bought. So what is the credit quality of these accounts? And secondly, what is the cost of acquisition of these accounts? This loan book?
Yes, basically, that is RBI has allowed co-lending, right? So in co-lending, some percentage remains with the originator and 80% or 90% comes to the bank. So here, we are doing cherry picking sir, based on the CIBIL score, based on the customer's behavior and we collect the account details.
So it is account acquisitions or it is under a co-lending arrangement? I mean, generally, in co-lending, it is 20/80, and these are for the fresh loans which are given by those companies under the co-lending. This is actually if you look at the...
Okay, okay. So this is one arrangement. Second one is a pool purchase. We do pool purchase also. In pool purchase also we do cherry picking based on the CIBIL scores.
And generally, what is the cost of acquisition of this -- I just want to compare that if a bank...
Yes. Yes. So as you see, it depends on customer what kind of loan we are taking and what is the current market rate. And supposing a housing loan, right, we -- our interest rate between 725 to 750 CIBIL score, 6.8%, 6.9%. In the same CIBIL score, we will be able to take from other originator for us whether we do direct or we do indirect, we are making the same margin.
All right. Sir, I'll take this offline because I just wanted to understand. Anyway, sir, in case of SRs, we have outstanding SR of INR 3,210 crores fully provided for. What is the expectation of recovery from these SRs in next -- I mean, in the coming year? Is there any good chance of some assets getting realized and we get good money from this SRs?
This is actually, every time we -- based on the NAV, we calculate, right? I think last year also INR 644 crores of SR has been redeemed. So account to account, SR [indiscernible].
Okay. on the non-SLR front, we have a corporate bond of INR 10,402 crores. I believe they are all AA or -- AA rated corporate bonds, INR 10,402 crores?
Yes, generally, we prefer AA even for bonds, right? So some banks bonds, some distributions bonds, this is a treasury operation that we keep on buying. Wherever we are getting a better rate we buy.
Any provision made on that?
No, sir.
Except the standard. And there is one other non-SLR, INR 509 crores. What it could be then and other SLR this thing.
Just -- this can be a CP or customer -- let me check. Let's get the CPO account.
CPs, also must be A-plus rated?
Yes, yes. We will provide you separately, maybe CPO. It was INR 2,080 crores in March, but has come down to INR 500 crores.
And this ARC sale, that INR 90 crore benefit which we got, I think we have reduced it from the provision as per the note. Any plans for further sale to ARC other than NARC?
Yes, sir, we identified some of the accounts, right? And so we will come out with our rate and everything. This year also we will be selling, maybe, around INR 300 crores, INR 400 crores.
That will be a better proposition than to give to NARCL.
Sir, whatever is better we go for that. In NARCL first we identify these accounts, right? So in our case, also, this 9 plus 9, 18 accounts, first these accounts will go, then we will decide about the new level of account. So this is one part. Second part is smaller accounts. Smaller account, if we get an opportunity, we'll recover.
Some approximate idea of how much gross NPA is going out from this ARC sale in the coming year?
Yes, 87% of our book is provided for. So sir, we are having 13%. And some of these accounts, even technically written off. So how much will be technical return of account and how much will be from the gross NPA at the time of getting it only, we'll be able to tell.
Congratulations, sir, again. You also declared a good dividend of INR 6.5 at 65%. And I hope that you stay on the positive track. And I'm mainly concerned about now the credit -- of course, this temporary period is a new -- is a blip actually, this Russian-Ukraine war and what is happening around globally. But it may be a temporary phase of maybe 1, 2 months, 3 months. But overall, I think our economy is going to grow. And I think there can be a lot of opportunity to grow your book also.
Yes, sir. Yes.
Sir, we have one question in the chat box related to our SME slippages. The investor want to understand what percentage of our -- or basically, in absolute terms, what came in from the ECLGS, what came in from the restructured pool? And how much was the fresh slippages, mainly in the MSME?
Okay. Our MSME slippages are INR 1,431 crores, right? So INR 364 crores have come from the restructured book, sir. And that -- maybe, around 15% or so maybe from the ECLGS because 20% also, we have given for ECLGS. So remaining from the...
Okay. And so what was the reason for this first slippages being so high, somewhere about, I think, INR 1,000-odd crores? Or maybe, INR 900-odd crores?
Yes, the major slippage has come from the micro, less than 10 lakh segments, around INR 600-odd crores. And because of -- you see, because of the situations of Omicron or increase in prices or less demand, there were number of factors.
Okay. And so now we should not see any further slippages from MSME book?
[indiscernible] in the business...
No, I'm talking...
Or India to [indiscernible].
So basically, the way we have seen -- so we have seen INR 1,000-odd crores of fresh slippages, I think that's very high amount, right? So that number will come down...
That is why I told you, part of the amount we will recover in this current quarter.
And sir, basically, what -- how basically are we going to recover? Is it going to be some kind of legal recourse that we would take? Or basically, these customers are the ones who are on -- basically just who have paid at the end of 31st March, how it is going to be recovered?
For recovery, sir, a follow-up is one way. Second one is somewhere, they will sell -- because of liquidity, they could not pay in March, they can pay in April, May or June. That can be the reason. And upgrades takes place sir. Upgrades are always take this -- if you see the performance, even 25%, 30% always upgrade takes place.
Okay. Sure. Next question we have from [indiscernible].
Yes. I had a small couple of questions. One is, sir, on yield, if I see quarter-on-quarter, the yields have dropped by 19 basis points. So if you can throw some light on that, why would the yields drop so much?
So there are 2 reasons, sir. One is in the March quarter, the number of days are less than the December quarter, like 2 days. The one factor is that. Second is there is an interest reversal of around INR 58 crores on account of NPA. These are 2 reasons, and that is why the yield has dropped.
Okay. Understood. And secondly, sir, if you can show the PV01 for our AFS book. And where are we -- I mean, as of March, when we had reported INR 165 crores of MTM, when -- I mean, what was the benchmark at which we did the valuation? Was it like the March end or this was something else?
No, we -- the evolution has been done in March end. In April, we have the churning of the portfolio as we do from HTM to AFS or AFS to HTM, right? And then the MTM will come in your AFS book. So as on date, we are not having any depreciation.
Sir, in case -- sir, what is your PV01 if you have that number for AFS book?
It is less than 10 lakh, 9 lakh plus something.
Okay. And sir, hypothetically, if let's say yields were to go down -- go up by 50 basis points and you have IFR -- I think you are fully compliant on IFR at 2%. Could you draw down from that or that would need explicit RBA approval?
We can draw down, but we have not drawn down last year. So we are having the 2% full amount we are having in that.
No, no. So going forward, sir, would drawdown need explicit RBA approval or you can do it without...
No, no. As per guideline, you can do.
Understood. Yes, sir. And sir, if you can refresh the guidance on slippages and credit cost. I think I had missed out in your opening remarks.
So credit cost presently is at 2.25%, right? But credit cost depends on your existing NPA and the price slippage. These are 2 major factors. I told you that our existing net NPA has come down 30% from the March '21 level because of that, there was an increased credit cost. Last year, because of these 2 NBFCs accounted and this one big account that we have 2 NBFC where we have made 100% provision. In this retail account, we have 89% of our provision. So there is a higher credit cost. But going forward, it should come up. But exactly, number will depend how this current year will pan out.
Thank you, Jain. Mona, do you have any questions?
No thanks, Anand.
Okay, sure. Sir, we do not have any further questions. So yes, I think one question which has come in the chat box is related to your AFS portfolio. So what is the duration of our AFS portfolio?
Currently, the duration is around 2.1.
Okay. And how much of that...
It was 2.52 as of 31st March, which has come down to 2.1.
Sure. And sir, another question is about your security receipts. So in fact, in some of the banks, we had seen that banks have taken a big hit on the security receipts in the current quarter. So what is your sense over there? How, basically the...
Our all exposure in security receipts are fully provided for. Fully provided for.
So our net SR at this point of time will be 0?
Right, right, sir.
Okay. Sure, sir. I think we do not have any further questions. Maybe, if you can have some closing remarks, then basically we...
Thank you. Thank you all analysts and investors for continuing interest in Indian Bank, and we require your continuous support. Thank you.
Yes. Thanks, sir. Thanks, all participants for being on the call. Have a nice evening. That's it. Thanks a lot, sir.
Thank you.