Ladies and gentlemen, good day and welcome to the City Union Bank Limited Q3 FY 2024-25 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star, then zero, on your touch-tone phone. Please note that this conference is being recorded. I would now like to hand the conference over to Miss Margaret from Ambit Capital. Thank you, and over to you, ma'am. Good evening, and on behalf of Ambit Capital, I thank the management of City Union Bank Limited for the opportunity to host your Q3 FY 25 earnings call. We have the following members of management with us today: Mr. R. Vijay Anand, Executive Director, and Mr. J. Sadagopan, Chief Financial Officer. I will now hand over the call to the management, Mr. Vijay Anand, Executive Director, to walk us through the quarter. Thank you all, and over to you, sir. Good evening, everyone. Warm welcome to all of you for this con call to discuss the unaudited financial results of City Union Bank for the third quarter, financial year 2025. I thank my MD and CEO for giving the opportunity to get this Q3 call. I have been joined by my CFO, Mr. Sadagopan, in this call. The board approved the results today, and I hope you have all received the copies of results and the presentation. At the beginning of the year, we shared our expectations for the current financial year 25 as follows. With all the new digital initiatives supported by strengthened top and senior-level management, we express confidence to restore the credit growth on par with industry levels and go beyond. On asset quality front, the trend of reduced pledges, coupled with improved recovery, would continue for financial year 2025. We would reach between 1%-1.25% net NPA for the financial year 2025, and we would explore the possibility of improving the coverage ratio. It will also help us to maintain the CAGR. Our ROA is back to our long-term average of 1.5%, and it will continue. For the current quarter Q3, we are almost on track on our expectations, which we shared with you all earlier. We had registered 14.6% advance growth in Q3 FY 25 year-on-year, and our gross advances have increased to INR 50,409 crore from INR 44,017 crore in Q3 FY 24. As you are aware, we closed December 2022 with 12% credit growth, but growth decelerated in the calendar year 2023, and we almost closed December 2023 with 0% growth, in fact, 2% growth year-on-year. Our growth restarted in January 2024 and reached double-digit growth for June 2024. In the last quarter, we had registered 12% credit growth in Q1. We achieved 10% credit growth, and for the current quarter, we have achieved around 15%. Thereby, we had made a continuous double-digit growth for all the three quarters in the current financial year. As stated in our earlier calls, our improved efficiency level, aided by the digital lending process, is helping us in a better way to achieve our consistent credit growth. During the last one year, out of the total credit growth of INR 6,392 crores, 62% of the business came from core advances, while the rest is from gold loans. Once the retail vertical and other avenues of advances start supporting us further in terms of our credit growth, we hope the trend will continue, and it will also show the current growth level, in fact, of plus or minus 2% going forward. Our deposits have increased by 11% and stood at 58,271 crores for Q3 2025, as compared to 52,726 crores for Q3 2024. The CASA has increased by 5% year-on-year, from 15,359 crores to 16,132 crores. So far, the concentration in the calendar year 2024 was to get the credit growth on track, which has happened now. Parallelly, the efforts are on to take care of the deposit growth to support the required credit growth. Cost of deposits stood at 5.88% for Q3 2025 versus 5.67% in Q3 FY 2024. And for the nine-month period, the same was 5.78% when compared to 5.51% last year. Now, the asset quality. On the asset quality front, as we had stated earlier, the trend of recoveries continues to be more than slippages, and this trend is continuing. For Q3 FY 2025, the total slippages stood at INR 201 crore, while the total recoveries is close to INR 249 crore. Consisting of INR 203 out of INR 249 crore, INR 203 crore came from live NPA, and INR 46 crore came from technical write-off accounts, again resulting in negative slippages. As a result, our gross NPA percentage sequentially decreased from 4.47% in Q3 FY 2024. We further reduced to 3.99% in FY 2024. Again, we further reduced to 3.88% in FY 2025. Then we moved on to 3.54% in Q2 in FY 2025, and now we have further reduced to 3.36% in the current quarter, technically from 4.47% in Q3 FY 2024 to 3.36% in the current quarter. Similarly, our net NPA number had reduced to INR 702 crore, and the net NPA percentage is 1.242% in Q3 FY 2025, which was 1.62% in Q2 FY 2025 and 2.19% in Q3 FY 2024 last year. Overall, estimated total advance stands at 1.91% in the current quarter, which reduced from 2.03% in the last quarter of Q2 FY 2025. It appears that our strategy of not getting into unsecured retail is helping us in a big way to have a better asset quality, both in slippages as well as on SMA2 numbers. Even though the PCR with TW has hovering over and above 70% for the last few quarters, our PCR without technical write-off now is 59% when compared to 55% in the last quarter of Q2 FY 2025, and it was 51% in the last financial year Q3. So this means technically we have moved from 51% in the last year to 59% in Q3 of this year. PCR with technical write-off stood at 77%, which has improved from 71% last year. With technical write-off, we have moved from 71 to 77, and without technical write-off, we have moved from 51 to 59. Our interest income had grown by 12% in Q3 2025 and increased to INR 1,479 crores from INR 1,326 crores in Q3 2024. Our yield on advance stood at 9.81% for Q3 FY 2025, as against 9.62% for the same period last year. Our NIM for Q3 FY 2025 stood at 3.58% as compared to 3.50% in Q3 FY 2024. NIM for nine months financial year 2025 is at 3.59% compared to 3.63% in the corresponding last year. As discussed in earlier calls, the margin should be 3.60% with plus or minus 10 basis points. We hope to maintain the same trend as you might have seen in the last 50 to 60 quarters. 90% of the time, the net interest margin has always been in the range of 3.4%-3.7%. In the last financial year, that is FY 2023-24, we had lower operating profit due to lower business growth, and we had maintained our path with the help of improved recovery and reduced slippages. For the current quarter, our operating profit had grown by 20% and stood at INR 436 crores compared to INR 364 crores in the corresponding period last year. We have achieved a PAT growth of 13%, and our PAT stood at INR 286 crores for Q3 FY 2024-25, as against INR 253 crores in Q3 FY 2023-24. The PAT for nine months FY 2024-25 is at INR 836 crores, registering a growth of 10% as against the same period last year. Our next cost to income. Our Cost-to-Income Ratio for Q3 FY 25 is almost flat at 46.58% compared to 47.06% in Q2 FY 25 and 48.64% in Q3 FY 24. As said in earlier calls, the Cost-to-Income Ratio will be in the range of 48%-50% for FY 24-25, and we hope it will start going down once the retail business starts delivering results. ROA. Our ROA for Q3 FY 25 is at 1.57% compared to 1.49% in the corresponding last year. We are back on track with respect to ROA over 1.5% in the past few quarters and aligned with the desired level. ROE too has marginally improved from 12.57% in Q3 FY 24 to 12.64% in Q3 FY 25. As you are aware, we have a small portfolio of credit cards for our existing-to-bank customers. We found certain gaps in product offerings, and we have tried to align the same. As a result, we have tied up with Chennai Super Kings CSK for co-branded credit cards, and we are also in the advanced discussion with another franchisee. I'm sure with the proposed offerings, we will make us a preferred card partner mainly for our existing customers. We propose to focus credit cards mainly for our existing customers. Recently, our bank had won seven awards in the recently concluded Annual Technology Conference and Citations 2024 held at Mumbai on 24 January 2025. CUB has got awards in all the seven categories from IBA for the second year in a row. The IBA awards are aimed at rewarding best technology providers in the banking industry, encouraging competition in the banking industry to demonstrate their state-of-the-art innovative products, sense of purpose, and bringing huge value addition in best practices for serving clientele. Our bank was the winner in best digital sales, payments and engagement, best IT risk management, best fintech and digital payment index adoption, and best financial inclusion. We are the runners-up in the best AI and ML adoption, while we got a special award under the category best technology talent and organization and best technology bank. To sum up, we have crossed the industry-level growth, credit growth, which was eluding us for the last couple of years. We expect that to stabilize and move forward. Operating profit has also started showing growth in tune with the business growth. Now, we could see consistency across all parameters such as credit growth, net interest income, operating profit, PAT, NPA levels, and cost to income. The current level of credit growth was achieved from existing MSME core business and JL, coupled with digital lending process, and we hope it will improve once the avenues of retail start delivering results. Again, our strategy of not getting into unsecured retail has definitely helped us to maintain the asset quality, and we hope to maintain the same for the future. Now, our concentration will remain more focused on deposits front, which should support the credit growth going forward. Thanks a lot. And any questions, we are happy to take. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Again, if you wish to register for a question, please press star and one. Participants, you may press star and one to ask a question. The first question comes from Shweta Upadhyay from Asit C Meta. Please go ahead. Hello. Am I audible? Yeah. Yeah. Good evening, sir. So just one question on this new tie-up that you have done with this CSK. With this tie-up, is the bank now will be focusing more on the unsecured portion because the unsecured portion of our portfolio seems quite less, like around 1 or 2%. So with this tie-up, are we starting to focus more on the unsecured portion? And if yes, then up until what portion are we expecting to increase this unsecured portfolio out of the total loan book? Good evening. As I have mentioned in the commentary, we have existing customers who are using other bank credit cards. They are our core customers for the bank. We found certain product features which are not available, which made them to use other bank cards. We just want to fix that gap, number one. Number two, as I mentioned earlier, we are going to focus this card only for our existing customers. This means we will be around 90% for our existing customer base, and maximum we will be around 10% for our new-to-bank customers. We don't have any plans of getting into unsecured retail, personal loans, or anything as of now. And this card is mainly for our existing-to-bank customers. Okay. And so just one more question. Are we on track on the branch expansion that the bank has guided earlier? Yes. We are on track. And more or less, we should complete the financial year with whatever we have estimated. We would be around 850-875 branches as estimated at the beginning of the year by March 31st. And will this branch expansion be happening in Tamil Nadu and southern regions itself, or are we expanding the bank in other regions as well? We are majorly focusing on north and west as well. It depends on the market, what we are opening based on the data, what we receive. Wherever there is a good opportunity for us in MSME business. And we are focusing on north and west as well. It's not only based at Tamil Nadu. Okay. Okay, sir. All right. Thank you. Thank you. Participants, if you wish to register for a question, please press star and one on your touch-tone phone. The next question comes from Vatsal Parekh from Knightstone Capital. Please go ahead. Yeah. Hi. Good evening. So in retail, what are the products which we are looking to enter in and grow ourselves within? So as mentioned before, we are looking at only secured products in retail. We are getting into loan against property, home loans, affordable home loans, and micro loans. Flat. Okay. And we had also mentioned that for the northern part, we are going to appoint DSAs. So have we appointed them? And if yes, then how has been their response? So we have appointed, and we are in the continuous process. The test launch has already happened, and the human capital is already deployed in north and west. We could see some results in the pilot launch in Q3. I think we have started pretty decently with our expectations. So DSA appointment is a continuous process, which we are doing it, and we have already appointed the DSAs. Got it. And on the restructuring portfolio, so you had said that you are going to take an additional provision call after you will complete two years. So I guess two years have been completed. So have you taken any decision on that? 7,000? 7,000? INR 7,777 crores. We don't need required as of now for this. INR 7,777 crores. So you are not going to take any additional provision? We don't need as of now. Okay. Got it. And more or less, could you give any number to what growth are we looking at over the next two, three years? Just a range to build in. Two, three years is quite long, but still we would be around 12-14% growth. 12-14. Okay. Got it. And much of it will come through retail, right? No, no. MSME. No, no. The larger part of the growth. So we will go faster in retail, right? So that's we will do retail, but our focus on MSME continues. As we mentioned earlier, 2-2.5%, 2%-2.5% would be the retail contribution in the overall in the numbers for the year. So our focus on MSME continues. We don't have any change in our portfolio composition. Okay. Got it. Thank you. Thank you. A reminder to all the participants, you may press star and one to ask a question. The next question comes from Siddharth Rajpurohit from Yes Securities. Please go ahead. Mr. Siddharth Rajpurohit, your line is unmuted. Please proceed with your question. Thank you for the opportunity. So 2-2.5% retail contribution is what is the absolute level contribution that will happen in this year? On a total business? Yeah. The total advances of the total advances. 2-2.5% will contribution is the number what we are looking at. Contribution. Yeah. For FY 2026? Yes. Yes. Okay. And going forward, how this contribution will rise? It will be at 8-9% as we mentioned earlier in the next three, four years. Okay. And during the quarter, we have seen that sequentially retail traders or wholesale traders have come down. The advances have come down significantly in this segment. So are you seeing any stress in the low-ticket MSME or the wholesale trader side? No. After this Udyam thing, registration certificate, they will eventually graduate MSME. But are you seeing any stress in the low-ticket MSME space? We don't. We don't. We are not seeing that. Okay. And on the deposit side, sir, we have seen a sharp fall in the CASA segment. Also, there is a fall in CASA. But CASA has seen a sharp fall. Any specific reasons, sir? Yeah. As we said, that's going to be the focus. That's what we have mentioned in the commentary as well. That's going to be the focus for the year for Q4 as well. We will get this corrected for sure. There is some fluctuation. And government business, there are some fluctuations happening. We will get this corrected. And that's the focus area which we have mentioned in the commentary as well, if you recall. Do you guide any number in terms of growth in total deposits? Sorry, we lost you in between. Sorry. Sir, could you give any number for the growth of total deposits? It will take care of the credit growth. That's what we are looking at, basically. Our CD has to be around 85%. That's the number which we are looking at not at the. Is broadly matching the credit growth? Yes. Okay. Okay, sir. Thank you for the opportunity, sir, and all the best. Thanks. Thank you. Participants, you may press star and one to ask a question. Our next question comes from Sanjeev Damani from SKD Consulting. Please go ahead. Sir, good evening. The first question from my side is that do we do advances against gold also or not? Yeah. We give loan against gold. Yeah. So we have facilities in all branches to give advances against loan or only two branches are working like that? We have in most of the branches barring metro. Barring metro. Okay. Okay. Got it, sir. Secondly, sir, do we also advance construction advance to the builder also against mortgage of the development property? Yes, we do. We have a portfolio there. We also fund. Okay. And you said that you want to focus more on MSME. That means it is a secured advance always because you must be taking pledge of their properties, plant and machinery, etc. Exactly. Giving this kind of advance. Or do you also advance against inventory and finished product? As you mentioned, it's an MSME against collateral. Okay. Okay. So it is fully secured. Yes. Fully secured. Last question is about the tie-up. When you use the word that you have made a tie-up with CSK, means I mean, CSK is not into any financial. You have offered your cards for CSK employees. I mean, can we say like this? No, no, no. It's a co-branded credit card 'which we want to launch between CUB and CSK, both being the reputed brands. And we would like. We do not want to give any product features as of now. Maybe in a week's time, we will roll out, and you will get to know the tie-up again. Okay. So the CSK will do the marketing of the credit card, and it will be. We will come back to you within a week with a proper press release. More clarification will come about. We just signed the agreement today morning, and we will come out with complete clarity on product features, branding, everything within a week from now. You will get to hear from both CUB and CSK on this. Okay. And similarly, you are planning to tie-up like this with more organization where the card services will be provided by you, and there will be some sort of brand name along with the CUB's card. Okay. Okay. And the last question is about the fact that RBI has recently given some relaxation to increase the liquidity in the market. So how much benefit our bank is going to get out of it? We should be getting around INR 250 crore. Okay. So INR 250 crore will be more available with the bank to give advances. Yes. Okay. Thank you very much, sir. Thank you. Thank you. And all the best, sir. Thanks. Thank you. Participants, you may press star and one to ask a question. Our next question comes from Aman from Dolat Capital. Please go ahead. Good evening, sir. I have a few questions. First is, can you throw some light on your yield on advances? Why there is an increase and what's the yield trajectory you are seeing? Secondly, if I missed the special SMA2 number, and can you give me the breakup of gold agri yield and non-agri gold yield? So our yield on advances is 9.74 for nine months. 9.81 for the quarter. I'll repeat it. 9.74 for nine months and 9.81 for the quarter. This is on yield on advances. With respect to SMA2, we have 960.56 to be precise. SMA2 against 990 in September 2024. Gold loan yield. Our gold loan yield, you wanted between agri and non-agri, right? Hello? Yes, sir. 9.25 is for agri. 10.25 is for non-agri. Okay. Okay. And what's the yield trajectory you are seeing? The yield trajectory is going to be the same, sir. We don't see any increase. It's going to be the same. Okay. And what was any specific reason for increase in this quarter? We have been hovering around the same number, and it's just the fluctuation of plus or minus 10 basis points, what we have been seeing. If you see Q2, we are at 9.81, and we have continued the 9.81 for Q3 as well. In Q1, we had a dip that made us for the year 9.74. Otherwise, we have been hovering at the same number. Okay, sir. Thank you. Thanks. Thank you. A reminder to all the participants, you may press star and one to ask a question. The next question comes from Parth from Axis Capital. Please go ahead. Yeah, sir. Congratulations on the quarter, and thank you a lot for the opportunity. Just one question. With the introduction of the retail loans like LAP housing, do we expect an increase in the yield going forward, considering these loans will come at a higher yield than the pure MSME loans? No, sir. We don't think so because blended HL will pull it down. We, in fact, will compress. I don't see any change in the yield with the retail. Okay, sir. Thanks. Thank you. Thank you. The next follow-up question comes from Shweta Upadhyay from Asit C Meta. Please go ahead. Sir, just one question. If you can help me understand, how is the bank's cost of deposit higher than the total cost of funds? The cost of deposit for the quarter, and previously, if I see it stands at 5.88%, whereas the cost of funds is lower. It's at 4.8%. So cost of funds has all the liabilities. Cost of deposit is only the deposits. Tier 1 capital. Yeah. So ideally, your cost of funds should also include the borrowings, which comes at a higher cost than the deposits, right? Net worth. Yes. It's mainly because of capital raised, what we have around INR 8,000 crores, which is at a free cost. Because of that, the cost of funds stood at 4.88%. And when you compare to the yield, cost of deposit of 5.88%. So what would be the bank's cost of borrowing? The cost of borrowing is anywhere around 6.75% to 7.5%. It's mainly because of the refinance. We don't have any other side too and all. It's only from refinance. Okay. All right. Thank you. Thank you. The next question comes from the line of Athishay Choudhury from ICICI Securities. Please go ahead. Yeah. Hi, sir. This is Jay here. I'm sorry if this question has already been asked or answered. So I wanted to check if you had any impact or how do you view this RBI circular on gold loan, which has been made a little bit more stringent? How does this have that impacted growth in any particular way? And how do you see, have you had to make any changes in the product processes on both retail as well as agri side? We have been following this process for a couple of years. So this circular really did not impact us because in terms of process, in terms of LTV, in terms of data capturing, we have been strictly following this for the last 24 months, I would say. We are totally compliant. We don't see any issues on the business going forward as well. To answer your question, in fact, we are fully compliant already. And you did not have to change any product or maybe the LTV on agri or rollover or renewal for customers when it comes to renewal? Nothing with respect to LTV or anything. We may have to just add one column for end use of the loan. That's the only change which we have to capture. Otherwise, we don't need to change anything in terms of LTV or processes. Okay, sir. And sir, I mean, how do you look at the growth outlook considering maybe you have some confidence in LDR? And how are the new products that I mean, where are we on the launch of new products? And how do you see the overall growth momentum for the bank? As we mentioned earlier, we want to be at 85% in LDR. And we have been seeing 12%-14% is the growth which we are focusing on. We try to balance between these two. This growth predominantly comes from MSME/JL/retail. This is what the growth order which we are looking at. As we mentioned before, 2%-2.5% is the number which we are looking in retail. This is going to be our strategy, and there is no change in what we have planned or what we have discussed earlier. Maybe, sir, I mean, where are we on the launch of those products? Have these been commercially launched or I mean, if you can just elaborate there. We have launched retail. We have did a decent pilot in Q3. I mean, as we have said before, we had a launch in Delhi as well as in Mumbai. We have empaneled a couple of DSAs who started sourcing loan against property for us. As we mentioned before, we don't want to use DSAs or third-party sourcing for home loans. And we have also tied up with BC in Jaipur for affordable home loans. So we are on track on what we have planned earlier, barring one quarter delay. And this will continue to give results for us in retail. And MSME, our strategy remains same, and the growth is going to be the same as what we have projected. And overall growth, sir? I mean, how do you see FY 26 overall growth? That's what we said. 12%-14% is the number which we are looking at. Okay. And you're already past that number, right? I mean, as of third quarter, we are at 15. Past that number. Yeah. We are at 15, and we should not be yeah. We should be in the range of 12%-14%. That's what we have said. 1%-2% here or there is always there in this. Now with the retail coming in and adding, we should always be there. Okay. Sure. Just to give an additional line, we will be 1%-2% more than the industry. That's what we wanted to be. Right. Right. Appreciate it. Thank you. Thanks. Thank you. The next question comes from Apurva Parikh from Equirus Securities. Please go ahead. Yeah. Hi, sir. Many congratulations on the result, and thank you for this opportunity. So I have two questions. One is that let us say that in calendar year 2025, we expect some rate cuts to happen. How will this impact onto your product pricing with respect to primarily onto your two segments that you are MSME and agri? That is how we should consider that how the product pricing from City Union Bank will be communicated into the market and their impact onto your yield and cost of deposit. Now, because you have kind of some CASA and problem with particular projects in the recent past, if the rates go down, do you see some more intensification of the action with respect to retail or non-agri deposit? This is the first question, and maybe I'll ask the second question if you want. Okay. Our yield on 9.81 can drop down to 9.7. This is what we have projected. We expect 0.10-0.12 basis points. This is what the number which we are doing it yearly. It will convert a short-term discount. Okay. We will move down from 9.81 to 9.7. That's the number which we are looking at. All right. Sir, as you said that you're kind of focusing on expansion. However, on a quarter-over-quarter basis, your OpEx has remained flat. Now, on one hand, your employee cost has gone down. On the other hand, your OpEx has kind of returned. So how should we see this? Is there any operating leverage that you are missing or in this position right now? Yeah? No, sir. Actually, with respect to the establishment expenses, the actual valuation for Q3 was lower when compared to Q2. Because of that, there was a decrease in the figure of around INR 5-6 crores. You can just take it around INR 185 crores for the Q4. INR 185 crores. All right, sir. Thank you so much for this question. Thank you. A reminder to all the participants, if you wish to register for a question, please press star and one on your touch-tone phone. We have a next question coming from the line of Gaurav Jani from Prabhudas Lillladher. Please go ahead. Thank you. Congrats on a good quarter. Just one question. We are right now, at least past two quarters, we are at range of about 60-65 basis points. Once you reach the target level of PCR, what sort of credit costs do you end to such or normalize this? Hi, sir. Come back to you. We couldn't hear you properly, sir. If you can just close to the mic. Between the question and close to the mic, please. Yeah. Just a minute. Is this better? Yeah. Better. Yeah. Yeah. What I was asking is, after we reach a target level of PCR, right, so what sort of normalized credit cost are we estimating right now? We're at about 65 basis points. So yeah. Our credit cards will remain flat. We don't see any surge in this. So what you're saying is, sir, it would remain between 60-65 basis points? Correct. And we should also note that it depends on the economic cycle and depends on the slippage. We expect it to remain flat. Perfect. That was it. Thank you. Thank you. Our next question comes from Rakesh Kumar from B&K Securities. Please go ahead. Yeah. Hi. Yeah. Yeah. We can hear you. Yeah. Yes, sir. So just on margin front, sir, so now we are going to have some changes in the credit mix from 45% and external and transmission cycle. Rakesh, sir, your line is breaking in between. Is it fine now? Yeah. Yeah. Better. Yeah. Much better. Please go ahead. Yeah. So I was asking about margin trajectory, sir, because the bank is undergoing a change in the credit composition next year, and then we have interest rate cycle also. So how do we look ahead the margin trajectory in FY 2026? If we can give some rough guidance, it would be helpful. As we mentioned in our commentary, we don't see major change in the composition, and we would be around plus or minus 10 basis points from 3.6. 3.6. Okay. Okay. And credit cost guidance, you are saying credit cost will mostly around this level? Yeah. This level. Excellent. Got it. Got it. And targeted PCR number would be what number we are looking at? Targeted PCR number, sir? 60. We are looking at 60. 60. Sure. Understood. Thank you. Thank you so much, sir. Thank you. Thank you, sir. Thank you. Participants, you may press star and one to ask a question. The next question comes from Siddharth Rajpurohit from Yes Securities. Please go ahead. Thank you, sir, for having me. Can you guide on currently your recoveries and upgrades are almost equal to your slippages? So what timeframe will we see this phase? The slippage is lesser than recovery. We expect it to happen for the next two quarters, more or less. Okay. So for the H2 till H1? Yeah. Yeah. We can keep it as H1. And the rising cost of deposits, can it, what does it, the lower share of CASA, does it explain the rising cost of deposit? Yes. Yes. Okay, sir. And can you give the LCR number, sir? Average LCR for the CASA? 119. 119. Average. Yeah. Okay. Thank you, sir. Thank you very much. Thank you. Participants, you may press star and one to ask a question. The next question comes from Pritesh Bumb from DAM Capital Advisors. Please go ahead. Hi, sir. Good evening. Sir, just a question on fee side. Our fees to assets have been slightly growing over time, but what is the sense that it will go from here on given that the loan growth is still quite decent, but our fee is not that much fee to assets is not that much better? So anything on that? We don't see 5-10 crores is going to be the average jump, if at all. We see this as stable. And we have been almost on the same number for the last three quarters, and this trend should continue. Yeah. If I look at my number, what is happening? We were somewhere around 1.0-1.1 last year, then we moved from 1.1-1.2. Is there a trend that can still improve, or, as you said, that maybe we are only at about 1.2-1.25? No. As mentioned before, we will be in the same range between 1.2. The range of 1.2. Sure, sir. Second, sir, on the extension to that margin question, basically, if any upward biases we can see in margins or any product tweaking we can do for margins to move up in terms of where margins can settle, especially what happens in this February from the RBI side. Anything on that? We don't expect, as we mentioned before, the margin to go up for sure because assets get repriced quickly. So when the rate cut happens, the asset gets repriced quickly, and it takes at least three, four quarters for the liabilities to get that benefit for the bank. Hence, we don't expect that to happen. So it's going to be the same. We don't see. It gets converged short-term. So if it is going to be assets, it gets repriced quickly. So we don't have an option. If it is going to be liabilities, then we have to wait for three, four quarters. Hence, I don't see any scope in this. Got it. Sir, if you can not disclose this number, if you can mention how much is your EBLR, MCLR, and other benchmark books, if you've not disclosed, please tell me because I'm joining a bit late. See, as of now, the EBLR is around 45%, and the MCLR is around 30%, around 15% as fixed rate, and 5% towards the NPA, gross NPA. Sorry, EBLR is 45, is it? But it was reduced from 50 to 45 the current quarter. Because of the gold loan, non-agri portion mainly moved from EBLR to fixed rate. Okay. Gold loan has moved from EBLR to fixed rate. Yeah. Okay. Okay. Okay. Okay. Okay, sir. Yeah. That's it from my side. Thank you so much, sir. Thank you. A reminder to all the participants, you may press star and one to ask a question. Our next follow-up question is from Pritesh Bumb from DAM Capital Advisors. Please go ahead. Just forgot to ask, as you said, that loan growth will be still decent enough given that our margins will be a little bit under pressure when the rate outcomes happen. Isn't it prudent a bit to grow slower early on once the rate cuts start happening, you get a sense, and then maybe move up in terms of lending as a growth perspective? Any thoughts on that? We said margins will be stable for the year as a whole. We said margin will be stable for the year as a whole. Okay. Okay. So of course, year as a whole, because as you said, that it will be a lagged basis, right? Liabilities will reprice over time. Liabilities will get priced in two, three quarters, and assets get priced immediately, repriced immediately, and hence margin will become if you see for the full year, this is going to stabilize because of both the entries which are being done. One immediately, one within three, four quarters. Okay. Okay. Okay. So we'll continue to grow, but then you're confident that the margins will come back with a lag by the end of the year? Yeah. As mentioned in my commentary also, we will be around 3.6% with plus or minus 10 basis points. That's the commentary which we were given when we were discussing the results. And we will continue to maintain that. Sure, sir. Thank you so much. Thank you for clarifying that. Yeah. Thanks. Thank you. Thank you. The next question comes from Gaurav Jani from Prabhudas Lilladher. Please go ahead. Thank you again, sir. Just taking my question forward on asset quality, actually. So we do have some tailwinds, right, in terms of recoveries because of the earlier or poor stress right now. And assuming that within a couple of quarters, that normalizes, how is actually asset quality shaping up in your area of operations, specifically Tamil Nadu and the segment you created, which is MSME, right? So any sort of early signs of stress there and how are sort of credits shaping up? Yeah. That is it. Would like to have a qualitative comment from that. So as we mentioned before, for the next couple of quarters, slippages will be less and recoveries should be more. And as mentioned before, we will exit this year with 800 CR of slippages, and next year, we should close at 700 CR. Hello? No, sure. I understood that. I didn't mean in terms of numbers. I just thought how is the environment sort of tough, right? Otherwise, we are seeing sort of early signs of stress in some other segments in retail or probably not in MSME, but in retail. So any signs of stress in MSME that you're looking at? We will be stable for the first question, and we don't see. That's why we have given the guidance of 700 crores for the next year. And in fact, our SMA numbers have come down substantially. To be very precise, we are at 4596.75 when we are closed at December 2024. So overall, SMA is 012. These figures have come down drastically. In fact, our September book, SMA 012 was 5253. I'm saying both 012, this 5253 has dropped to 4596. In fact, both SMA 012 put together, now we are in single digit. Sure. Understood, sir. That is it from me. Thank you so much. Thank you. Participants, you may press star and one to ask a question. The next question comes from Aman from Dollop Capital. Please go ahead. Yeah. Yeah. So just a follow-up question. I missed on your earlier comment. INR 700 crores was of what guidance, sir? Slippages. Slippages. Slippages. Okay. Okay. This year at INR 800 crores. And next year, we will be looking at INR 700 crores as slippages. Okay. And the recovery guidance is intact, right? Yeah. Yeah. Okay. Yeah. Aman, sir, does that answer your questions? Yes. Yes. Thanks. Thank you. Once again, to register for a question, please press star and one. Our next follow-up question comes from Pritesh Bumb from DAM Capital Advisors. Please go ahead. On the slippages side, you mentioned INR 800 crores this year, right? We are at about INR 555 crores already. So does that imply that I'm not implying anything, but how do we see it in that sense is that it's still 250 crores of slippage? We have been averaging the numbers, and we have given the numbers as 800 crores for the year. All we are trying to say is we will be 800 crores and less than that. That's what we meant. We are at 550 crores, and the trend continues, and we don't see any spike in that. Okay. But because already 555, that means the implied slippage for Q3 was about 200. And if you don't even hit that number, if you are around 700 or so, maybe similar range of what H1 was. We normally keep it as 200 to 295 crores. That's the number with us. And that's the reason when we started this report, we said 800 crores we would be at. We just want to clarify that we will be well within that, what we have given it at the beginning of the year. Right. Right. Sir, the second question was in terms of recovery from written-off pool. What kind of a pool we have right now? And what we have seen is that there has been slightly lower recovery this time around in nine months. Any thought process on that? You said about recovery from normal slippages and normal GNPA to be intact as a guidance. What about the pool and how much can we get from there as well? We have a INR 1,400 crore book in the written-off pool. And our nine months actual is around INR 154 crores to be precise, and Q3 actual is INR 46.2 crores. Yes. Yes. Last statement I missed. Our nine months actual is 154.71 crores, to be very precise, 154.71 crores as recoveries. And for Q3, the actual figure is 46.23 crores. And we have been hitting 60-80 crores on an average per quarter. So we should build the same number going forward as well. Yeah. We can do that easily. Yes. Yes. That's the number which we are looking at. Got it, sir. And lastly, our cost to income has been relatively coming down. So this quarter also, I think we are down. And we are at about 46, I think. 47, 46. What do you see from here on in terms of cost to income? Do we see that it may inch up a bit and it may remain stable here? How do you think about it? So we have given in the commentary as well, we would be around 48%-50%. Our retail for retail expenses is to take off. So when the retail expenses take off, we will be at 48%-50%. And when we start delivering, it will come back. Increase the income or less? We have already incurred retail expenses. And we need to start getting money back for what we have invested. I'm sorry. You said you have incurred the retail expenses, and you're waiting for a? We are waiting for the output to happen. Okay. But what will it lead to, that 48%-50% type of a cost to income? Because it seems to me that there will be some more investments in terms of OpEx. So 48%-50% is the number which we are looking at in CIR. That's the number which we have been always being. That's right. Okay. Thank you. That's it from my side. Thanks for answering all these questions. Thank you. Thank you. Once again, to ask a question, please press star and one on your touch-tone phone. Ladies and gentlemen, as there are no further questions, I now hand the conference over to the management for closing comments. I now hand over to my MD CEO for the closing remarks. Good evening, everyone. And Dr. Kamakodi here. Thanks for attending this con call. I would like to probably close with a few closing comments. The Q3 had been a wonderful quarter. We are able to get back the growth which was eluding us for quite some time. As Vijay explained, we had some amount of reducing growth in the calendar year 2023 from about 12-13% to about 0%. In 2024 calendar year, it improved, in fact, from, let's say, 0% to 2% to almost the 15%, whatever we have seen. So the growth is back to industry level plus 2%, which is a very healthy sign. We hope we should be able to go ahead with that incremental growth, that 1% or 2% over and above the growth rate of the industry, as Vijay said. Now, the contribution of retail, as Vijay said, it's very minuscule. The entire growth has come from our conventional MSME, commercial trading, agriculture, gold loan business only. So some amount of, let's say, additional growth opportunities will be available from the retail portfolio for the next financial year, maybe adding about another 1% or 2% in the incremental growth. As he rightly explained, our focus will be more on the, let's say, secured front. The unsecured front will be very minuscule, particularly the credit card, whatever he said, will be very minuscule, particularly to our existing customers, and he also explained about our tie-up with the CSK and all. It is more to create a brand awareness, which will be helping us to, let's say, go forward with the co-branded credit card, per se. As he said, on retail front, we have been incurring cost. The return is yet to come. When the return actually comes in to our cost to income also will start moderating for the next year. There is a very good improvement in the asset quality, which we could see, particularly both in terms of the SMAs and also the slippage is getting into control. As we expected at the year beginning, we should be closing year, let's say, below the promised number of about INR 800 crores. As you all know, in the last two, three years, it reduced from INR 1,200 crores to INR 1,100 crores to INR 1,000 crores to, let's say, INR 800 crores sort of. Next year, it should be moderating further. The recoveries are also improving, where the recoveries are more than the, let's say, slippages. So incremental credit provisioning, whatever we are making, is more to increase the provision coverage ratio and decrease the net NPA. So initially, we shared that we should be getting to 1%-1.25% net NPA. We are also on track on that front. Be it the growth. Similarly, you might have clearly seen the operating profit, net interest margin, net interest income. On every parameter, there is a, let's say, stable and steady growth, whatever we had been, let's say, declaring in the, let's say, earlier quarters, pre, let's say, December 2022 or whatever. We hope to maintain the same trend. In fact, if you had a chance to look into last 50-60 quarters, for about over 90% of the quarters, our margin had been in the range of about 3.4%-3.7%. Few quarters, it was above 4%, and one or two quarters, it was below 3.4%. But as shared in the earlier quarters, we should be able to maintain the stable net interest margin that 3.6% plus or minus 10 basis points, as rightly pointed out by Vijay. When we enter into the decreasing interest rate scenario, there will be a moderation in the yield, but it will take a few quarters to catch up for the cost of deposits front. Though there could be some quarterly aberrations, year as a whole, we should be able to maintain at the same level in terms of margins also, so overall, the third quarter has almost got us back to, let's say, the period when we used to offer stable results in the past, that almost closer to the best quarters, whatever we had declared in the past, the Q3 numbers have come, and Q4 is also promising in the same way. We are not in a hurry. Fortunately, we did not go faster in unsecured retail and all, which has helped us to ensure that our asset quality is intact and also it is improving. Both in terms of gross and net NPA numbers, the numbers are decreasing. The recoveries are more than the slippages. And the SMA numbers are also, let's say, coming down in a stable fashion. Overall, across all parameters, whatever performance that has happened in the Q3 had been very stable and encouraging. We hope to see the same thing for the fourth quarter. Based on whatever we see, the next year, things should be even better with this overall background. Another thing is that you might have clearly seen the operating profit growth also showing better. So let's say the incremental provisioning, as we enter into sub 1%, let's say your overall net NPA, the incremental provisioning, let's say, requirement may also come down once we have crossed less than 1% net NPA and the coverage ratio also above 60% or whatever. You might have, in fact, seen the operating profit level growth for Q3 to Q3 is almost 20%, which is also very encouraging. So across almost all parameters, things have been pretty stable, and the growth and other momentum are back, and things are on track. And we have to, let's say, do some work in the liability side to ensure that our credit growth will not get hampered because of non-availability of deposits and all. But as you have already seen, those numbers are also almost converging. The CD ratio, we should be able to maintain at about 85%, and the LCR calculations are also around 119%, that level. So overall, things are encouraging, and let's say things are back on track in almost every parameter. Hope going forward, things should get better and better. And with this positive tone, I want to conclude this con call. As said in the past, the names of our contact persons are already given in the, what do you call, your MSR presentation. You can get in touch with those, let's say, our CFO, Mr. Sadagopan, or Mr. Raghuraman, or Mr. Jayaraman, or anybody for that matter, if at all you have any specific questions to answer. Thanks for your patience and supporting us. And this Q3 had been, let's say, a satisfactory quarter for us across all multiple parameters, and we hope the trend will continue for the near future. As of now, on asset quality front, things are looking, let's say, extremely good. The SMA numbers are also decreasing. The next year, the slippage looks it is going to be lower than whatever we have seen in the current year. Hopefully, let's say, if the reduction in the, let's say, reducing interest rate cycle starts, the things should be even getting better for the economy as a whole and for the growth for the future. Overall, I mean, it's a satisfactory quarter, and I hope things should get better and better as we move forward. With this closing remark, I once again thank you all and close this con call. Our support to Ambit Capital for arranging this con call, and as once again, thank you all. Thank you. 'Thank you. On behalf of City Union Bank Limited, we conclude today's conference. Thank you for joining us. You may now disconnect your lines.