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Union Bank of India Ltd
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Ladies and gentlemen, good day, and welcome to Union Bank of India earnings conference call for the period ended March 31, 2022.
The bank is represented by the Managing Director and CEO, Shri Rajkiran Rai G.; and Executive Directors, Shri Nitesh Ranjan, Shri Rajneesh Karnatak, Shri Nidhu Saxena and other members of the top management. [Operator Instructions] Please note that this conference is being recorded.
Now I hand over the call to Mrs. Ranjita Suresh, Assistant General Manager, Investor Relations. Thank you, and over to you, ma'am.
Good afternoon, ladies and gentlemen. I, Ranjita Suresh, the Head of Investor Relations, welcome you all for the earnings conference call for the period ended March 31, 2022. The structure of the con call shall include a brief opening statement by MD and CEO, and then the floor will be open for interaction.
Before getting into the con call, I'll read out the usual disclaimer statement. I would like to submit that certain statements that may be discussed during the investor interaction may be forward-looking statements based on the current expectations. These statements involve a number of risks, uncertainties and other factors that cause the actual results to differ from the statements. Investors are therefore requested to check the information independently before making any investment or other decisions.
With this, I now request our MD and CEO for his opening remarks. Thank you. Over to you, sir.
Good afternoon, everyone. It is a pleasure and privilege to meet you all for Union Bank of India financial results for the quarter and year ended 31st March 2022.
The economy is on recovery path with activities surpassing pre-pandemic level across sectors. While GDP growth estimates have come off considering geopolitical developments, India is seen as the fastest-growing major economy in the world. Inflation concerns meanwhile have meant rising interest rates both globally as well as at home. In an era of external benchmark loan rates, the hike in policy rate will immediately reflect in the bank lending rates for home loan, auto loan and small business customers. Deposit rates will rise accordingly in due course.
Coming to Union Bank's business and financials for quarter ended 31st March 2022, the Bank has continued to post strong financials, and the total business have grown by 10.86% year-on-year. The total deposits have grown 11.75% year-on-year, led by low-cost CASA deposits, which have grown 12.40% year-on-year. The CASA ratio thus stood at 36.54%.
Total advances registered a growth of 9.60% year-on-year. The RAM sector noted 9.36% year-on-year growth. Within the RAM sector, the retail advances have grown 8.65%, agriculture advances have grown 10.80% and MSME advances have grown 8.56% year-on-year.
The net income have grown by 12.55% year-on-year. The net interest income stood at INR 27,786 crores for the financial year 2022. The global NIM stood at 2.94% for the year '22. The net profit stood at INR 5,232 crores during the financial year '22 as against net profit of INR 2,906 crores for the previous year 2021, thereby registering a growth of 80.05%.
Of asset quality, the gross NPA ratio stood at 11.11% as of 31st March '22 compared to 13.74% of the previous year. Net NPA stood at 3.68%, which was 94 basis points lower than last year. CRAR improved from 12.56% as of March 2021 to 14.52% as of March 2022. CET1 ratio improved to 10.63% as of March '22 from 9.07% of previous year. PCR also improved by 234 basis points on year-on-year basis from 81.27% to 83.61% as of 31st March '22.
We strengthened the collection capabilities by opening regional collection centers, dedicated call centers and feet-on-street model, combined with the skilled pool of staff deployed to reduce the stress portion of the bank on a continuous basis, thereby reducing the stress percentage substantially.
Bank has recovered approximately INR 16,300 crores on a gross basis during the financial year. To this end, Bank has initiated the process of digitization of recovery modules by launching project to Union sellers wherein it has created willful default classification portal, but we see repository, DRT and NCLT portals, et cetera.
The bank has reached total capital of INR 8,447 crores during the financial year '22, which is INR 1,447 crores of equity capital raised to QIP, INR 5,000 crores of AT1 bonds and INR 2,000 crores of [indiscernible].
Friends, I wish to share that Union Bank has achieved all of the amalgamation goals well ahead of time line. We could ensure seamless integration of people, process and products, thereby realizing cost and revenue synergies well intact.
We are much ahead in our digital journey with bank launching Project [ Sambal ], wherein we initiate digital bank within bank as UnionNXT app. A couple of days ago, we have also launched Trade nxt platform, an innovative, self-service solution providing array of trade finance services at customers' convenience.
Union Bank of India has also become first public-listed bank to go live on account aggregator ecosystem. These are just a glimpse into many initiatives underway as the bank transforms for the digital era.
Speaking in early outcome, 4 million new U-Mobile customers were added during the year '21, '22, taking total registered mobile banking users to 1.66 crores. More than 1/3 of the total leads generated during the year were through the Union Bank platform. There was [ 139% ] increase in the volume of UPI transactions, making Union Bank third among the [ PFPSBs ] in terms of volume of transactions. As several of our digital initiatives mature, it will accumulate in even better and faster growth ahead.
The bank is well poised for growth and profitability with all our own capacities and capabilities built during the last few years. As the economy returns to growth path, Union Bank will be put a beneficiary as well as driving the growth of new opportunities.
Let me reiterate the guidance for the financial year '23: deposit growth at around 10%; advances growth in the range of 10% to 12%; CASA ratio in the range of 37%; NIM to be around 3%; credit cost to be less than 1.5%; delinquency ratio to be less than 2%.
With this guidance, I conclude my opening remarks. We are grateful to the analyst and investor fraternity for their continued support and feedback that helps us to take informed decision in our journey towards efficiency and profitability.
We are now open for the question-and-answer session. Thank you.
[Operator Instructions] The first question is from the line of Suraj Das from B&K Securities.
Congratulations on a good set of numbers. Sir, I have a couple of questions. The first question is on the slippages side. So you have reported a slippages of total INR 5,600 crores for the 4Q FY '22, of which large corporate is INR 2,500 crores and MSME is INR 1,400 crores. So sir, my question is the corporate slippages, does it include any lumpy accounts? Or is it -- I mean, from where it is coming?
And on the MSME slippages side, sir, you have recorded INR 1,400 crores in this quarter and almost INR 7,000 crores for the full year. So what is the outlook for the next year on the MSME slippages side? Is it coming from, I mean, a restructured book or ECLGS book? Or I mean, what is the source of these slippages? Yes, that is my first question, sir.
Yes. There is one lumpy account in the large corporate, that is one retail entity you are aware. So that is a major chunk of this large corporate. Actually, our projections went a bit like haywire on the slippage because of this lumpy account slippage. So that's why like one big account, I think that is about INR 1,700...
INR 1,720 crores.
7,000 -- INR 1,720 crores, that is one account.
Regarding your question on MSME, MSME actually, particularly after the COVID and the restructuring, MSME was a sector which is maximum affected. Because if you see the other part, both retail and even agriculture is consolidating. MSME, we saw the enhanced slippage, but then that is also consolidating. This is -- I think now that also will start coming down because that's the confidence I get because of the SMA-0, 1, 2 position what we are seeing in the MSME. That has consolidated very well. The numbers are quite decent on the stress side. So the further chance of slippage in MSME is coming down substantially. Hopefully, the maximum stress in MSME is already recognized.
Regarding your question whether it is coming from the restructured book, small percentage of the stress book also has split, but it is coming from everywhere. It is not that there is a predominance on the stress book. Some percentage has come, but then it is coming from even the non-restructured book also.
Okay. Just a follow-up, sir. I mean you have given SMA-2 for INR 5 crores and which is only, I mean, 0.09%, I mean, can you tell us, I mean, what is the all-inclusive SMA-2 position would be as of maybe March?
If you can share that, Ranjan?
Yes. So we have disclosed that the INR 5 crore number, SMA-2 is around 0.09%, which when we compare to the previous year, March '21, it's quite below the 1% level it was earlier. Overall SMA-2 number is 0.66, again, which compared to the previous year much lower. And SMA-2 book also, last year, March '21, it was around 6.4, and it has come down to around 2.4. So SMA-1 and SMA-2 both together, they are just around 3% of the book.
That is all?
All the time.
It's not above INR 5 crores. It is the entire -- like entire domain of the advances, SMA-1 and SMA-2 is below 3%.
Understood, sir. Understood. And sir, what would be the total restructured book? You have given details on Slide #37 about COVID restructuring, that is 1 and 2. However, what will be the non-, I mean, overlapping MSME or, let's say, earlier CDR or SDR or whatever it is, I mean what is the total restructured book?
Actually, like in the COVID restructuring book, we have shown about INR 21,000 crores. This is actually initially restructured both on the restructuring 1 scheme and restructuring 2 scheme. The present outstanding in this book is around INR 18,000 crores. The rest is either closed or have become NPA. That is a balance in that book. On the MSME, actually, there was earlier restructuring scheme, where we had outstanding of about INR 2,000 crores?
Yes.
I think, yes, about INR 2,000-odd crores.
Yes, earlier...
Other than the COVID restructuring, there's only INR 2,000 crores of MSME which is restructured earlier.
Okay. Okay, understood. And sir, my last question would be on the ECLGS side. So it looks like, I mean, for the past couple of quarters, the ECLGS disbursement is increasing. So sir, I mean what is the guidance going ahead? Will it continue to increase? Or what is your outlook here? And what would be the slippages or, let's say, NPA percentage in the ECLGS book?
The ECLGS book is almost saturated now because all the schemes are almost complete and coverage happened. For us, we have around INR 15,000 crores of sanction. Around INR 14,000 crores was the total disbursement in the ECLGS book. And currently, outstanding will be around INR 11,500 crores.
And so far as the NPA is concerned, again, the NPA is quite low. Around 3% is the only NPA of the outstanding book. But if you look at the overall disbursed book, it is much below the 3%. So it's behaving quite well.
Okay. Understood, sir. If I have a follow-up, I'll come back in the queue.
[Operator Instructions] The next question is from the line of Nilesh Shah from Arrow Investment Advisors.
Congratulations on a fabulous set of numbers. I appreciate the fabulous presentation as well as we've gone through it. I have just one small query on the number of branches that have been closed. I think 442 branches have been closed. Obviously, I think there must be an overlap with Corporation Bank and Andhra Bank merger. So we have got some 9,000 branches now. So any plans to reduce the number of branches and go more on the digitization way in terms of what the new bank is, where people don't have basically branches, and they reduce the number of branches? So I just want clarity on the number of branches that the bank is targeting to probably close or reduce.
Actually, we have closed more than 700 branches because there will be certain procedures before we take it out from the number of branches on surrendering certain things. That's why the number is showing 400-odd. Actually, we have closed more than 700. We have targeted about 750 branches post amalgamation. These are the branches basically which were overlapping because on the same place, we had 2, 3 branches within 1-kilometer radius, that kind of thing. So that rationalization has happened, and we have almost completed that process. And it is a continuous process to identify branches which are -- like which can be closed and replaced by other leads.
Regarding your digital question, actually, we have started working on this last year that of opening all digital branches. Basically, these are very small 200, 300 square feet branches typically in malls and other kind of things. And in major metros, we have started opening that. They will all -- they will have support of the relationship managers there, but no like manual activity. It's all machine-driven. So we have started, and our experience has been very good because I think in metros, gradually, most of these manual branches, we may have a few, will gradually get replaced by the digital branches, which we are doing.
Added to that, [ all the metro malls ] made the announcement of digital banking units, about 75 of them are coming up on the next Independence Day. So that model was started by us earlier in the last year itself. And this actually is coming again from the government, so this will take it forward. Your point is right, particularly in metros, we will see more of these digital kind of branches, and maybe that will really help in bringing operating costs down as we go forward.
[Operator Instructions] The next question is from the line of Dixit Doshi from Whitestone Financial.
So firstly, you mentioned that the big retail account was -- exposure was INR 1,720 crores. How much is provided already?
Actually, this is one account actually for the group, our exposure is higher than that because all the accounts are not slippage actually because they may slip during this quarter. That -- actually, our provision for the group totally is 58.50%. We have made some aggressive provision in this group. Group as a whole, our exposure is...
2,152 -- almost 2,200 plus -- I think INR 2,700 crores investment book.
Including investment book, it is about INR 2,700 crores. And we have already made a provision of 58.50%. Since there is some recovery in this account subsequent to March, today's debt, there is about [ power ] will be about 60% -- 61%. As of March, it is 58.50%.
Okay. Okay. Now my second question is, you mentioned that we are targeting a growth of 10% to 12%. And also the way slippages are coming down and profits are going up and with capital equity of 14.5%, do we require to raise further capital this year or no requirement?
Actually, we will be going to the Board, but then I think we don't need to raise any equity capital. Even the AT1, actually, like all the calls are taken, and we have reached sufficient AT1 during the year, so the capital requirement for the next year, according to me, will not be that much, actually, maybe some bond raising. But equity, I don't think we may need to raise in the present circumstance because even that CET1 of 10.6%, we still have plans to reduce some more DTA -- even now my DTA is around INR 12,000 crores. There is a scope to reduce about INR 3,000 crores, INR 4,000 crores of DTA during the next year. That will further add to the -- our CET1. So I think we have enough cushions, and I don't think we need to raise equity.
Okay. Okay. And the last question from my side, can you give some guidance regarding the treasury income? How do you see it next year? And let's say, until what yield we don't require to any losses over there?
Treasury income will come down, there is no doubt about it. We can say, roughly, it can be half of what was there this year, roughly, I'm telling. But it will be adequately compensated by the interest income, which will go up. Actually, that is our assessment actually because our standard advances and average advances in the last quarter has gone up substantially. So the -- even the first quarter itself, it will be visible, the interest income and all that, that would compensate.
And the enhanced write-back from the provisions and all that should help because recoveries are like very much visible. A lot of traction in the NCLT and DRT cases now we are seeing. So that also will add to the other income part.
In addition to that, there's a lot of technology initiatives, particularly on the trade finance side. We are looking at doubling of our income there. So overall income level, we are hoping that we'll be able to sustain. But treasury, it will come down. And the mark-to-market, I think we have a duration of average around 1.2 on the AFS book. I think maybe we have saved up to 7.5?
75%. 25% is already we are in -- and we can cover up to 75 bps.
That is up to...
Yes, moment of...
From this point?
Yes, from this point.
From this point, another 75 bps by treasury team says they are covered.
The next question is from the line of Jai Mundhra from B&K Securities.
Sir, first is on your loan to deposit issue, so as of now, I think this is...
Sir, sorry to interrupt you, but your voice is breaking.
So sir, on your LDR fee ratio or, call it, credit deposit ratio, on domestic side, right, if I were to exclude overseas advances, then this is around 67%, 68%. And also in our guidance, you are saying that 10% deposit and 10%, 12% advances. I wanted to check, sir, what stops you from increasing CDR ratio from 68% to maybe 75%, 76%? And because we are a sovereign bank, at least if we can have slightly higher CD ratio. So wanted your thoughts on that.
Yes. See, on the credit side, any available opportunity, we don't let go. Actually, whenever there is opportunity to take exposure which fits into our risk perceptions and that fits into our norms, we don't let go any opportunity. You would have seen on the corporate side also, Union Bank has been very aggressive, and we have taken very good exposures. So we will not let go any opportunity.
So one way of increasing the CD ratio is reducing the deposits, so -- which we can very well do because actually like there is a way. But then we feel that we -- because actually, we don't raise much bulk deposit. These are all most of the retail deposits which are flowing. So we can't let go of these customers because in the long term, there may be a damage. So we continue to raise the deposits at a very reasonable rate from our regular customers. That's why we get a normal growth of deposit of around 10%.
So that actually skews our CD ratio because for a 10% deposit growth, ideally, it should have a 15% to 17% credit growth to improve my CD ratio. But then the credit side demand is not that high, but the deposit growth is stable, so that's why this ratio. But we would also allow to do 75% to 78% CD ratio. But right now, the situation somehow is not permitting me to do that. That is the ideal ratio, but then it may take some more time to reach them.
Sir, the line for the participant dropped. We move to the next participant. The next question is from the line of Ashok Ajmera from Ajcon Global Services.
Even at the cost of repetition, I would say complements to you for coming out with a very good set of numbers even during these circumstances. I mean if you look at the operating profit, the net profit, your NPA, gross NPA, net NPA, I think everywhere the bank has performed well and has come near to the targets which are given or almost acute.
Having said that, sir, I've got a few observations and some questions. Sir, we were talking about this one account of that retail account, where you said that the total exposure is around INR 2,700 crores and 58% or 61% is already provided for. But what we read is that this account has been taken to the -- had been declared by some lenders as a fraud account. I think something is in the courts also.
I don't think so, as well you may be getting it wrong. That is on the NBFC space you are talking.
Okay. So the remaining amount, INR 1,050 crores, which is still to be provided for, do you feel any need of that out of the provision in the coming quarter itself? Or it will not be required?
See, we are ahead in provisioning. Whenever the need arises, we'll have enough cushion to do that. While we have taken a bulk provision upfront, we had a cushion in this quarter. So we always take this proactive step to make a big provision in the beginning itself so that in the coming quarters, like we will not be under pressure. So like we have taken it upfront, so maybe in the next 2, 3 quarters, like the other NBFC account, we already reached the provisioning in the level of 86%.
86%?
Yes, so we have covered 86%. So like that, that also we initially took about 50%, 55% provision in the first quarter then gradually increased. Now we have reached a level 86% here also because these resolutions take time. To safeguard our balance sheet from any shock, we take these provisions upfront. And particularly since we had a very good quarter with good profit, we took a step to make a higher provisioning in this account.
Yes, sir. My second one is, sir, on the credit growth. If you look at only the quarter-on-quarter, we have grown our NBFC book from INR 17,280 crores to INR 19,150 crores, of course, including the housing finance, which is around INR 7,000 crores growth. So the remaining growth of about INR 11,000 crores has come from the NBFC space. So I believe they are all AA or AAA rated, though the breakup has been given. But in this quarter, is it the government back that you're seeing or AA, AAA NBFCs?
I think we have a presentation on that, Mr. Ajmera. One slide is there, you can see the quality of NBFC book. I think it is 98% to 99% on very, very high-grade NBFCs. So the quality is all high, and it [ constructs ] a major chunk of government, the PSU and top corporate bank with NBFCs. I can actually do that.
If you take out the -- no, at least let me have some -- a few more questions.
Can I request you to join back the queue once again?
But I think you're not doing the proper -- the thing, giving so much of time to the others. And when my turn comes, you are reducing the time.
Yes, one more question, yes. We'll take one more question from Ajmera, Ashok.
Sir, my question is on the -- next one is that on the recovery front, sir, we are coming quarter-to-quarter down on the recovery from the written-off accounts, which is coming down every quarter.
And my second question on the recovery only, that our annual recovery target of INR 16,000 crores, whether it has been met. And secondly, some color on the NCLT, some of the account last time, it was reported by [ Chandraji ] that out of INR 2,500 crores of the NCLT already approved, INR 900 crores was to be recovered in this quarter. So what is your status on the entire...
Yes, yes, I think recovery we have done very well. I will ask Ashok Chandra to answer your question.
Yes. First of all, the TW recovery, I will touch because you are concerned about that. Last year, entire TW recovery was INR 2,485 crores. And this year, it is INR 2,734 crores. So overall, if you see the entire financial year, TW recovery has gone up. And year-to-year, this is also previous years, also if you see, every year, it has gone up now. So that is the first thing that I think I would need to clarify that.
I was referring only the quarter. Anyway, sir, yes, of course, I take it.
Quarter order then -- see, sometimes quarter was around INR 300 crores in this particular quarter. But quarter, it varies because recovery you know, it doesn't happen in one particular quarter or whatever you estimate.
Now second point was that NCLT approvals are there and where the COC approvals have been there, see, as of now also, we have 102 accounts where the COC approvals are there and where the NCLT approvals are already there. And that both the segments put together, there are 60 accounts where the COC has approved, and it is lying in the NCLT for their approval. And that amount is INR 5,600 crores. And there are 42 accounts which have been approved by NCLT, and we are waiting for the resolution to happen. That amount is around INR 6,300 crores.
So both put together, we have around INR 12,000 crores, which is likely to realize in this entire financial year because the entire financial year is there for us to realize that amount. And since this is all in the advanced stage, we expect that, yes, these things should happen in this financial year. And you have pointed that INR 16,500 crores of recovery we have done, but that is on a gross basis because in addition to the cash rigor, what is shown that, plus upgradation, there is a recovery from return accounts and recovery on that, interest on NPA, all put together, we have crossed INR 16,500 crores of recovery for the year.
And definitely, congratulations to you on the whole entire year. If you take it, you have performed very well. All the best to you, sir.
Thank you.
And Rajkiran Rai G., I think probably, it may be -- we are meeting at the analyst meet maybe in the last time, but I wish you all the very best for your future endeavors, sir.
Thank you. Thank you so much.
[Operator Instructions] The next question is from the line of Jai Mundhra from B&K Securities.
I just got disconnected last time. So if you can also share how much was the MTM loss for the quarter and where is this being accounted for because I could not see that in the deck.
In the coming year, how much...
MTM loss. That is shown as a part of the other income itself. Per the new accounting now, there was no MTM loss. As per the accounting norms, it has to be shown in the other income only. But this quarter, there is no MTM loss.
There is no MTM loss. And so let's say now you would have pegged until 6.85, right -- sorry, 6.85, right, which was a March closing roughly?
Yes, yes, those are March numbers. But then actually, I think we answered it earlier also that even now actually, like we...
MTM positive as of now.
We are MTM positive as of now.
Our duration is 1.20.
Okay. Understood, sir. And sir, on your restructuring book, how much of that would have come out of moratorium as of now, roughly, just to understand?
I think we may not have that number to share with you. So I think we may not have that number. We may have to check. Because actually, the CLD is 1. Most of the accounts will be because there is 12 months moratorium. So this is all [ 12 months ] moratorium. If CLD is 2, like we had accounts with the 24 months moratorium, they will may be under this thing. But major chunk will be out of moratorium. But then it is only like estimate. I'll come back to you with actual numbers. But I'm very sure the past 12 months moratorium, and that period is over.
Right, right. And sir, if you have the loan mix to break through the loan book by MCLR...
Sorry, Jai Mundhra, once again, your voice is breaking terribly.
Yes, we got his question. I think, yes, 52% of our book is in MCLR, and that 22% of our book is in EBLR, and 10% under treasury building. That makes 74%, 84%, 85%.
Right. And the rest would be based...
Yes, rest would be BPLR and base rate.
Right. Okay. Last question, sir -- sorry, last 2 questions. Sir, one is, have we finalized how much is the family pension for us? Because...
Yes, yes, 1,900...
INR 1,902 crores.
INR 1,902 crores. And we have decided to spread it over 5 years. So INR 380 crores is booked to this year, remaining is amortized.
[ 15, 25 ], right?
Yes.
And last question is from -- it is around -- I think Nitesh Ranjan mentioned some 3% is from ECLGS. While this is a small amount, but have you started invoking guarantee? I mean how difficult could that be? If you -- have you done it or do you intend to do? Or what is the thought process there?
Invoking couple of guarantees of the defaulters?
No, sir. Invoking the ECLGS guarantee from government...
Oh, sorry. Yes, you are talking about the ECLGS. Your voice is breaking actually. Okay. Now actually, ECLGS I think guarantee location stage is yet to come. I think we are not ready to reach that level. But then I can assure you that sufficient funding has happened in that front. So as long -- like I think earlier experienced also on the CGTMSE and other things, so we will not have any problem invoking the guarantee and claiming the money. We'll not have any problem. Because I was in the Board of that fund also, so they are sufficiently funded and efficient also very -- yes, yes. So I don't think you would see any problem in getting the money from the guarantee fund.
The next question is from the line of Akhil from RoboCapital.
Sir, just regarding the tax rate that the company pays currently, for the past few quarters have been quite high. And this quarter, it's come down quite a bit. So I just want to know what is the normal tax rate that the company is going to pay going forward.
We are paying 0 taxes. Actually, what number you see there is a reversal of DTA. Actually, since we have a carryforward loss, so we -- actually our tax liability is not there. So we are using this opportunity. I think this year, we had -- we were sitting on a big chunk of DTA, which also gets reduced from our CET1. So that DTA, we are gradually reversing. Now actually, the final position at the end of the year is about INR 12,000 crores of DTA.
Why we are doing it is to move to the new tax regime, I will take a onetime hit. So we want to reverse this DTA. And like maybe by the end of the next year, we are able to reverse another INR 4,000 crores to INR 5,000 crores, then we will take a call of moving to the new tax regime. So this is a DTA reversal, it is not a tax payment.
[Operator Instructions] The next question is from the line of Mahrukh Adajania from Edelweiss Financial Service.
First, I just wanted to check one thing. Now for a lot of other PSU banks, there has been mixed big and small loans. MSME below 50 million loan. So what is really happening there?
See, it is again a question of monitoring, actually. That's why we decided to share our SMA-1 and SMA-2 number for the whole book, which is below 3%. We have a very, very efficient monitoring system and a collection mechanism. That's why our probability of getting there is very low. My SMA-1, SMA-2 book is below 3% for the whole advances book, so I don't foresee that problem for our bank.
Got it, sir. Then when will the ECL -- when can you start invoking ECLGS guarantees, after what time frame, within how much time apart from the press?
It is within 90 days of default.
Yes, that is within 90 days of the default we have to invoke.
Got it. And sir, given that your [ SNR ] duration is now so low below 1 year, I mean, what would be the loss on the most current year?
We didn't have any loss in the previous quarter. Mark-to-mark losses were not there in the last quarter. And we have sufficiently cushioned over some more increase in rates also.
[Operator Instructions] The next question is from the line of Abhijeet from Kotak Securities.
Sir, data questions, what was the interest reversal for the quarter?
Do we have the number, interest reversal?
I don't think there is any interest reversal during the...
Not there for the NPA, but we don't have the data.
But we'll share the numbers, right? No, not major chunk, but then just because when the NPAs happen, some reversals will be there. And we have not carved out the number. We'll give you.
Sure. And sir, just to double check, SMA-1 and 2 on the entire book, you said close to 3%. The last quarter's number was a little lower than 2%. Is that number correct?
No, no, no, last quarter, we have not disclosed the SMA-1. We have disclosed only SMA-2.
Okay. So I think that's about 1.9.
Yes, that is above INR 5 crores and all that. So now that has come down.
Okay. So that 1.9 from last quarter has gone to what number today?
0.6.
Understood. Sir, next one was that on the corporate book, the growth that you've seen on a sequential basis, if you can talk about the yields that this is coming in at because we are just trying to figure out the NIM contraction that has happened, how do we sort of interpret that number?
Actually, the 10% of the book which is linked to the T-bill, that is where the -- we saw the margin shrinkage. Basically, this is where the PSUs and some of the government agencies started borrowing at a T-billing rate, and many banks completed that. That is where the margin shrink. And now that is gradually going away, gradually going away. But the last 2 quarters, we saw that. So like quantify the effect, it will be difficult. But I think gradually, it will go away because already we are seeing tightening of interest rates in that space also.
On the EBLR front and MCLR front, we didn't see the margin shrinkage. Actually, this quarter, that will work to our advantage because already we have increased the prices, and the deposit cost will not go down that -- go up that fast. So we'll have advantage. So that 10% of the book is where the shrinkage happened.
And you're not tweaking the credit spreads, right, on the benchmark? Is it getting entirely passed through whatever changes that have happened?
On the EBLR, actually, I can't change the other parameters. Only the benchmark 40 basis points, it will go up straight away. On the MCLR side, this time, we have only factored the CRR impact because that's a negative carry. And the MCLR will go up when the deposit rates will go up. Other cost, we can't change overnight because there is a schedule for that, and RBI checks that. So operating cost and all that, we can't change that frequently. But then MCLR will -- have now factored the CRR impact, maybe gradually, the deposit increase, it will factor in. EBLR is linked to the U.S. report. At 40 basis point, it has already jumped.
Got it. Sir, just on this one, the reset period on EBLR is 3 months, right? So is it fair to assume that the 25 basis -- or 40 basis repo hike will flow forward with a little bit of a lag, right? That won't reflect...
There is no 3 months -- there is no 3 months there. It is immediate. Maybe some banks may have a policy, but in our case, it is immediate.
The next question is from the line of Arjun Bagga from Dolat Capital.
Sir, just one question regarding this retail account exposure. So I understand that we have around INR 2,700 crores of exposure to the whole group with provision of 58.5%. But I just wanted to check, there was another INR 1,720 crore number that's being discussed. Like what is that?
No, that was within that only, INR 1,720 crore number.
No, that is a slippage in the previous quarter. Because there are multiple accounts in that, so INR 1,720 crores was the corporate slippage last quarter. Remaining accounts are still standard within the group.
So I understand that like around INR 500 crores is still standard. Like because since I think INR 500 crores is the investment book, so INR 500 crores is standard, INR 500 crores is the investment book and INR 1,700 crores has slipped. Is that understanding correct, sir?
I will just explain you, in fact, other books are also -- those accounts have also slippage in this month, April month, except one account where exposure is INR 255 crores. So INR 2,700 crores, which is the figure we have given, in that, you can reduce INR 2,255 crores. Rest all...
INR 255 crores.
I mean, today, except INR 255 crores, everything has slipped now.
Everything has slipped. Sure, sir. This is very helpful.
That number is at INR 1,720 crores, yes.
[Operator Instructions] Ladies and gentlemen, we will take that as the last question. I now hand the conference over to Shri Rajkiran Rai G. for closing comments.
Thank you. Like always, your participation always helped us to look inwards and analyze better. So I thank you for everyone for helping the bank and also participating. So we have really turned around, and we are able to show very consistent performance. We have always stuck to our projections. And I'm very sure going forward also, the projections what we do will continue to deliver the results as per the projection. Thank you.
Thank you very much. On behalf of Union Bank of India, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.