Please note that this conference is being recorded. I now hand the conference over to Mr. Jignesh Shial from Ambit Capital. Thank you, and over to you, sir. Yeah, thank you, Neelo, and good evening, everyone. On behalf of Ambit Capital, I would like to thank the management of City Union Bank for allowing us the opportunity to host Q4 and full-year FY25 earnings call. We have, along with us, Dr. N. Kamakodi, MD and CEO, Mr. R. Vijay Anand, Executive Director, Mr. V. Ramesh, Executive Director, and Mr. J. Sadagopan, CFO. I will now hand over the call to Dr. N. Kamakodi, MD and CEO of City Union Bank, for his opening remarks. Over to you, sir. Good evening, everyone. Dr. Kamakodi here. Warm welcome to all of you for this conference call to discuss the audited financial results of City Union Bank for the Fourth Quarter and year-end at 31st March 2025. The board approved the results today, and I hope you all have received the copies of the results and the presentation. The board of directors recommended a dividend of INR 2 per share on the face value of INR 1 per equity share at a 200% for the year-end at 31 March 2025, subject to the approval by the shareholders in the ensuing annual general meeting. Last year, it was 150%. We are glad to inform you that, based on the approval accorded by RBI on 14 February 2025, the board of directors of the bank had appointed Shri V. Ramesh as the Executive Director on the board of the bank, with effect from February 21, 2025. The process of obtaining the shareholders' approval is under progress. At present, the bank has two full-time directors apart from MD and CEO. Now, I hand over the mic to Shri Vijay Anandh, Executive Director, to discuss the details of the results. Later, we can go for the Q&A. Over to Vijay Anandh, please. Thank you, sir. Good evening, everyone. At the beginning of the year, we shared our expectations for the financial year 2025, which are 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 sooner and go beyond. On asset quality front, the trend of reduced slippages coupled with improved recovery would continue for financial year 2025. We said we would reach between 1% to 1.25% of net NPA for 2025, and we would explore the possibility of improving the provision coverage ratio. We also said our ROA would be back on our long-term average of 1.5%, and this trend will continue. Since we were taking the cost of digital lending retail business upfront, our cost-to-income ratio, we said, would be around 48% to 50% for the current year. Once the full benefits of digital lending and other initiatives transfer into the growth, the CIR will start coming down. For the current quarter, Q4 FY '25, we are almost on track on our expectations, which we shared with you all earlier. For FY 2025, we have registered 14% growth on our gross advances. We have increased to INR 53,066 crore from INR 46,481 crore for the financial year 2024. As we stated in our Q3 FY '25 con call, our growth restarted from calendar year 2024, and we reached a double-digit growth of 10% in June 2024. For September 2024, we registered 12% growth. In the last quarter, that is December 2024, we registered 15% credit growth. For Q4 FY '25, we have achieved 14% credit growth. In the current financial year, we had registered double-digit credit growth in all the four quarters, a feat achieved after FY 2018 to 2029. That is first time post-COVID. This growth we have achieved after we have decided not to renew IBPC to the tune of INR 1,100 crore, and we have also let go of low-yielding NBFC funding to the tune of INR 150 crore, which is approximately INR 1,250 crore of reduction in advance, of which INR 750 crore of reduction has come in Q4 FY 2025. Sorry, INR 750 crore. I'm sorry. INR 750 crore of reduction has come in Q4 FY2025. As stated in our earlier calls, with improved efficiency level aided by the digital lending process, we have restarted our consistent credit growth, and we hope that the current trend will continue for financial year '26 as well. Deposits. Our deposits have also increased by 14% and stood at INR 63,526 crore for FY '25, as compared to INR 55,657 crore for FY '24. The CASA has increased from INR 17,050 crore to INR 18,119 crore in FY '25. CASA to total deposit stood at 29%. In the Calendar Y ear 2024, our main concentration was to get the credit growth on track, which has happened now. In parallel, we have made efforts to take care of the deposit growth to support the required credit growth. As a result, our deposits have grown by 11% in Q3 FY '25 and 14% in Q4 FY '25, which is in line with our credit growth of 14%. Based on the same, our LDR or CD ratio stands at 84%. Cost of deposit stood at 6.02% for Q4 FY '25 versus 5.75% in Q4 FY '24. For the full year FY '25, the same was 5.85% compared to 5.59% last year. Asset quality. On asset quality front, our slippages used to be around 2% during pre-COVID, and it stood at 1.91% in FY 2019. During the COVID years, that is FY '20 and '21, this has increased above 3%, and it was hovering around the same level till FY 2023. Post-COVID, we have taken every possible measure to arrest our slippages, and we have started seeing reduction of our slippages from FY 2024, where it stood at 2.18%. We have said that we are aiming for approximately INR 8 billion of slippages for this financial year at the beginning of the year, and we have stuck to that, and we have ended up this financial year with INR 8.15 billion of slippages, which is 1.54% against 2.18% of last year. Apart from that, we have stated earlier the trend of recoveries is more than slippages. The same trend is continuing. For Q4 FY '25, the total slippages is INR 259 crore, while the total recoveries is INR 291 crore, consisting of INR 238 crore from live NPA accounts and INR 53 crore from technically written-off accounts, resulting in negative slippages again. The total recovery for FY2025 is INR 1,042 crore. The INR 1,042 crore is split into INR 834 crore of live NPA and INR 208 crore from technically written-off accounts, as against INR 1,031 crore in FY '24. Again, INR 1,031 crore is INR 816 crore from live NPA and INR 215 crore from technically written-off accounts. We closed gross NPA last financial year at 3.99%, and now we have closed at 3.09%, which is 90 basis points reduction from the last financial year. Similarly, our net NPA number has reduced to INR 653 crore in FY 2025, as against INR 899 crore in FY 2024, which is 1.97% in Q4 FY '24 a nd 1.25% in the current quarter, which is 72 bp s reduction for the year. Overall, SMA-2 to total advance stands at 1.10% in Q4 FY '25, as compared to 2.08% in the similar period last year. We could see substantial improvement in SMA and slippage numbers. In our Q2 FY '25 con- call, we have conveyed that we will try to increase our provision coverage ratio to bring it closer to the industry levels. PCR with technical write-off stood at 78%, which has improved from 72% last year. Similarly, PCR without technical write-off has improved to 60% for FY '25, which has improved from 52% last year. Our interest income has grown by 12% in Q4 2025 and increased to INR 1,533 crore from INR 1,374 crore in Q4 2024. For the full financial year FY '25, our interest income stood at INR 5,834 crore, as against INR 5,271 crore last year, registering a growth of 11%. Our yield on advance stood at 9.93% for Q4 FY '25, as against 9.81% in Q3 FY '25, which is an increase of 12 bp s sequentially. Our NIM for Q4 FY '25 stood at 3.6% as compared to 3.58% in Q3 FY '25. For the full financial year FY '25, NIM is at 3.6%. During the quarter, the bank has passed the benefit to the customer in line with the cost of 25 basis points reduction and repo rate. As discussed in earlier calls, our NIM is in the range of 3.6% for the past few quarters, and we hope to maintain the same trend with plus or minus 10 bps. If you look at the last 50-60 quarters, 90% of the time, our NIM had been in the range of 3.4%-3.7%. During the middle of the quarter, we have also decreased our savings bank rate by 25 bp s, and during the month of April, we have also reduced our term deposit rate in line with the reduction in repo rates. The benefits of rate reduction in deposits will start reflecting in the coming quarters. In addition, with respect to gold loans, we have migrated to fixed rate from floating rate, as we envisage decreasing interest cycle rate, and these measures will act as a cushion during decreasing interest rate cycle. The total other income for the year has increased by 21% from INR 742 crore to INR 898 crore. The insurance commission has increased by 79% from INR 55 crore last year to INR 98 crore. Also, the loan processing charges have increased by 67% from INR 93 crore to INR 156 crore. For the current quarter, our operating profit had grown by 25% and stood at INR 441 crore compared to INR 352 crore in the corresponding period last year. For the year as a whole, the same has increased by 11% from INR 1,516 crore to INR 1,679 crore. We have achieved a PAT growth of 13%, and our PAT stood at INR 288 crore for Q4 FY '25, as against INR 255 crore in Q4 FY '24. The PAT for the year FY '25 is at INR 1,124 crore, as against INR 1,016 crore last year, registering a growth of 11%. Cost-to-income ratio. Our cost-to-income ratio for FY '25 is at 47.77%, as against the expectation of 48%-50%. This is mainly due to some expenses we have planned for retail vertical in FY '24-25, which were postponed for the next year, that is FY '25-26. Hence, this year, CI R will be around 48%-50% and start reducing once the benefit of retail vertical starts showing results. ROA. Our ROA for the year FY '25 is at 1.55% compared to 1.52% in the last financial year. Our ROA for all the four quarters of FY '25 is above 1.5%, which is our long-term average. ROE stood at 12.6% for Q4 FY '25, as compared to 12.39% in Q4 FY '24. In our last con- call, we had briefed about our tie-up with IPL franchisees. We had signed agreements with Chennai Super Kings and Sunrisers Hyderabad for co-branded credit card and banking partner, respectively. We have done pilot launch in March, and we went live from April 25. We have been successful in creating and issuing the cards to the customers through a completely do-it-yourself journey without any physical interface or branch intervention. The journey is fully digital and paperless, and it is in line with our broader strategy to enhance customer service capabilities and operational scalability. By removing manual touchpoints, we are not only improving our customer convenience but also reducing the turnaround time and operational cost associated with onboarding. This progress is in line with our expectation, and this is in a slow and a steady manner. To sum up, we have achieved double-digit growth in all the four quarters of this financial year, and we have ended this year with 14% credit growth, which is broadly in line with our guidance given at the beginning of the year. Now, we have aligned with the industry-level credit growth, and we expect this level of credit growth to stabilize and move forward. We are making this assumption on as-is various basis, subject to current economic environment continues without any turbulence or geopolitical tension, we can improve growth by a few more points as well. The current level of credit growth was achieved majorly from MSME core business, gold loan. Retail journey has started from the second half of the last year, and we hope it will give a significant contribution to our credit growth in financial year FY '25-26. With our efforts, our deposit growth is also back on track and aligning with the credit growth. We have also achieved our long-term average numbers with respect to credit growth, PAT, ROA, and NIM. We have reached our desired levels of 60% PCR without technical write-off within this year. We hope to continue this positive momentum for the current financial year as well. In case we are moving away from the trajectory, we would update this on our quarterly results. Thanks to everyone. Open for questions. Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchstone telephone. 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. Participants, you may press star and one to ask a question. The first question is from the line of Sameer Bhise from Dymon Asia. Please go ahead. Hi. Thank you for the opportunity, sir, and congrats on a steady quarter in a difficult environment. Just wanted to kind of ask on the growth outlook. I understand you have done a reasonably good job coming to around 14% plus kind of a growth. If one were to look at FY '26, assuming that there is a more supportive regulatory environment with respect to liquidity and even the growth stance of the regulator, also, we are in a better shape with respect to the CD rate. Is there an upside risk to your growth expectation? Especially if the whole retail exercise kind of plays out the way we are expecting it to? If you see the visibility, we would be 2-3% more than the credit growth. 2-3% than the year where we ended currently? Systemic growth. 2-3% over and above the systemic growth. That is what we are looking at. Secondly, outlook on margins, can you just repeat if I heard correctly, around plus minus 10 basis points from the current level? Is that a fair assumption? Yeah. We are at 3.6. We will be plus or minus 10. As we spoke in the call, we have reduced our SB rate and TD rate. Eventually, we will start seeing this in the next two, three quarters. We will be in the range of 3.6 plus or minus as confirmed in the call. Sure, sir. Thank you. I'll get back in the queue. All the best. Thank you. Thank you. Participants, you may press star and one to ask a question. Next question is from the line of Dhaval Gala, from Aditya Birla. Please go ahead. Dhaval, may I request to unmute your line and proceed with your question, please? Hello? Yes, Dhaval. Go ahead. Hello? Yeah. Sir, if you could talk about outlook on margins for the next fiscal and also possible target of loan growth? Yeah. As confirmed, we will be around 3.5%-3.7%. This is what we are looking at. And 2%-3% more than the industry growth is what we are looking at. The visibility is good for the current year. You would also talk about incremental cost of funds and any change of SB deposit rate for your bank? No. Whatever we have done, we have reduced the SB rate. We have reduced the TD rate, and we are fine with this. These results, we will start getting into the next two to three quarters. All right, sir. Thank you. Thanks. Thank you. Participants, you may press star and one to ask a question. Next question is from the line of Mona Khetan from Dolat Capital. Please go ahead. Yeah. Hi, sir. Good evening. And congratulations on a good quarter. Firstly, on the EBLR loans, what is the reset date that we have? What is the frequency of reset? It's mostly a one-year loan. From the time the repo rate cut happens, in what period does the reset of yields happen? Is it three months? Is it one month? Yeah. We have passed out the rate cut of 25 bps in the month of February itself. For the second rate cut, probably in the first week of May, we are going to do it. Okay. It is more like an immediate reset in your case, or how does it play out? Yeah. Overall, we have around 48% of total exposure to EBLR. The first rate cut of 25 basis points, we have passed out. The second rate cut of 25, we are going to do it now. In this week. Got it. You have seen some yield improvement during the quarter. What has contributed to that? As mentioned in the call, we have moved out of IBPC, which was low-yielding, and we have moved out of low-yielding NBFC. If you see, from previous quarter to this quarter, we had a 1% dip. In spite of moving off INR 750 crore in Q4, we still had a 14% growth. Since we have moved out of the low-yield loans, our NIM became better. Okay. From a full year, these amount to about INR 2,000 crore? INR 1,250. Okay. INR 1,250. Got it. Just finally, on the key growth, which has been quite strong this year, do we expect it to grow better than the overall balance sheet even going forward, or what is the outlook here? It depends on the business. If the business grows, obviously, this will also have a good growth. Got it. Just one last thing. In the loan mix on slide 27, there is a PL personal loan of INR 1,200 crore. What's the nature of these loans? I understand these should not be unsecured in your case. What exactly are these? No, no. This is not unsecured. This is not an unsecured loan. This is a loan given to my existing borrowers on MSME under the personal loan headline, which are the collateral with us. Okay. Got it. That's all from my side. Thank you. Thanks. All the best. Thank you. Thank you. Next question is from the line of M B Mahesh from Kotak Securities. This question again on margins, where you said it is between 3.5% and 3.7%. Just trying to understand what would drive a 3.7% for next year? Mahesh, we have three types of things. One is MSME, we have JL, and we have retail. When I speak now, as we speak today, our fixed rate is almost close to 31%, which is a JL loan, gold loan. One, our MSME growth, our JL loan growth of fixed rate of X%, and our focus on retail secured, which we have already started clicking on double digits, is giving us a good growth. Over and above that, our deposit pricing, we have reduced our deposit pricing, as I said a couple of minutes before in both SB and TD. This is giving us an advantage. Hence, we are slightly able to predict this number. The question is mostly given the fact that there has been a rate cut also that you're doing on the other side. Just trying to understand what can possibly foster margin expansion based on the current mix of loan books that you have. It's only the fixed-rate loans that are available, is it? The fixed rate is 31%. The deposit benefit, I will get it only post two, three quarters, number one. Number two, our retail secured has already started achieving double-digit interest yield. And our MSME loans have always been doing well. When the deposit rate comes down after two, two, three quarters and my three engines started doing as per the expectations, then 3.5%-3.7% should be a decent number, I think. Okay. Perfect. Second question is gold loans is now doing reasonably well. This book will continue to grow at this rate, or you see that it can kind of slow down from these levels? I don't think so. I think we should be comfortable in growing this book at this rate. Okay. Perfect. Okay, sir. Done. Thank you. Thanks. Thank you. Next question is from the line of Jai Mundhra from ICICI Securities. Please go ahead. Yeah. Hi, sir. Good evening and congratulations, sir, on the results. I have a few questions. First is, this quarter, we had cut SA rate during the quarter, but still the cost of deposits have gone up. Was there any deposits repricing, which led to higher cost of deposit? Is it safe to say that the cost of deposits now have peaked because you have cut the SA rate and TD rate also? I mean, there is no more repricing disadvantage there? The cost of deposits is because of TD. We have cut the TD rate only in the month of April, number one. Number two, our SB rate also we cut only in the month of March. February, last week. February, last week. That is the reason why the cost of deposits is slightly higher. Right. There is no more, even if the TD were to reprice, I mean, there will not be any, let's say, I mean, you will be able to benefit only, right? Even if any maturity TD were to reprice, it will be repricing downwards only. Yeah. Mundhra, there are two things I am about here. Basically, the deposits, which are current fixed deposits, which are maturing today, when they get contracted into the new rate, there itself I am getting a benefit now. Incrementally, but as Shri Vijayanand said, it will be cumulatively giving us benefit. Already, the benefit has started. Basically, let's say two things we timed well. One is shifting the gold loan into fixed rate. When the rate reduction cycle started, we actually need not reduce the rate. Also, when the 25 basis point reduction happened in the repo rate, the final average yield reduction worked out about close to 10 basis points, depending upon the risk rating and how much of adjustment that happened in the risk premium and things like that. Because of that, and also, the cumulative effect of, let's say, Savings Bank, let's say, reduction and also the withdrawal of, I mean, to the previous question, why the cost of deposit increased. When we just before entering into the fourth quarter, anticipating a tighter market, we had gone for a special FD schemes of 333 days in tune with the market rate and, let's say, the bulk of the growth happened through the term deposit accretion, which has, let's say, that 12 basis point increase in the tighter average yield. When the older deposits getting matured now, we get that benefit on the reduced rate of interest in the term deposit today. It has potential to cushion the, I mean, particularly, you might have always seen whenever we get into the reducing interest rate cycle, the margins contract, and whenever we get into the increasing interest rate scenario, margins expand. Despite into the rate cycle where you have seen, let's say, two rate cuts, instead of the margins decreasing, it slightly expanded by four, five basis points, mainly because we timed it well. Some amount, I mean, you cannot make it with a surgical precision, but we are able to manage it at a reasonable, let's say, level. We are able to say with the confidence that the existing rate margins should be at the current level, plus or minus 10 basis points is what Vijay Anandh is conveying. Right. No, no. Sir, that is very helpful. Just that, so you mentioned this out of first 25 basis point rate cut, the blended yield, let us say, impact on the portfolio was around 10 basis points, right? This relationship should ideally hold up, right? In the sense that if RBI cumulatively cut 75 or 100. It is, let's say, you have, it is basically on the EBLR plus wherever you have given a strategic discount, wherever you have a risk premium, there are multiple factors getting involved. Finally, market forces take up. Right. Right. No, no. I am asking, sir, if there is a cumulative 100 basis point rate cut by regulator, then you should ideally have around. No, you can't say it is going to be only 40 basis points. Okay. What could be the range, sir? I mean, 40-60? It could be 50-75. Okay. Okay. Understood. Understood. Some land. Right. Right. Despite that, right, because the consensus is that. Yeah. One more thing to understand is, like some of the, let's say, every quarter, 25% of your, what do you call, credit, let's say, CC limits will get renewed. Whenever you renew it, you will be having a revised contract where, let's say, you will be resetting the rate. Right. That reset rate will depend upon the, let's say, the individual accounts rating, their individual risk assessment, and all such things, which, let's say, see that you have, let's say, some amount of lead and large factor in transmission. In the past, let's say, almost a decade back, we had seen a cycle when, because of surplus liquidity available in the system, the later rate transmission was even faster than the RBI rate. All these things are determined by the market forces and both at the overall level and also individual account basis. It's very difficult to have one-to-one, let's say, prediction. Another thing, if the rate cut cycle is relatively slow, say, for example, if 1% rate reduction, whether it happens in one half or one year or one quarter, it also plays a role. Multiple factors determine how fast the transaction happens. Let's say, for example, as you always know, only the which are directly involved with the 50% of your portfolio is, for example, is linked to the EBLR. Only that 50 has to have a direct relation of, let's say, the 25 basis point means the overall portfolio will have only 12%. Within that, you will be having a quarterly, what do you call, renewals for which the, let's say, there will be a reset of rates depending upon the individual risk weight and all. There will be some amount of, what do you call, lead factor or lag factor. You will find it, I mean, very difficult to predict precisely what will happen. Right. No, no. That is a fair point, sir. I can understand there are a lot of multiple moving parts. What I was trying to understand is this NIM guidance of plus minus 10 basis points is, you, of course, assume that there will be, let's say, which is widely anticipated, two more rate cuts, right? This guidance is not only the rate cuts which have been announced so far, but also assumes that RBI may further announce one or two more rate cuts, right? Two rate cuts. Assuming that, that is the guidance. See, the point is, if two rate cuts happen in one quarter, if two rate cuts happen in one half, or the two rate cuts happen in three quarters or four quarters, the impact will be, let's say, different depending upon how quick the rate cuts happen. That's what I'm trying to say. Let's say, whatever predictions we give is that we take an assumption that this rate cut will happen over the period of, say, next one year in a graded fashion. When whatever, let's say, yield cuts we have to take because of the, let's say, reduction in the repo rate and the benefit we get in the repricing of the term deposits, they will by and large match and compensate to a greater extent. Overall, let's say, yield will not go average from wherever we are, is our expectation, which we are going. Secondly, sir, on the growth, right? I mean, I wanted to understand what is the MSME growth in the sense that there is some change in the MSME reporting over the last one, two quarters or one, two last one year because of this MSME norms, etc. What would be MSME growth? And maybe if you have a number for disbursement growth in MSME, just to understand how effective is the new LOS versus what we were doing earlier. If you have any number for, let's say, fourth quarter disbursement versus fourth quarter of last year, just to get a sense as to how this new LOS is helping in terms of the fresh disbursement. Of course, the outstanding number is visible, but I wanted to check if you have any number on disbursement also. See, we had, let's say, total credit growth of about INR 6,500 crore for the current financial year. Perhaps the highest whatever we have recorded over the period of, I mean, in our history. Out of this INR 6,500 crore growth, about INR 4,000 crore growth has come from the MSME. For example, this should give you some idea. Definitely, the digital lending for MSME through our, let's say, Newgen Software, which was, let's say, guided by BCG last year and all, almost for the current year, it has helped us to accelerate our credit growth per se. Less than INR 7.5 crore, the decision is by and large now taken by the system with minimum manual intervention. That is now helping us to proceed further. Actually speaking, the outstanding MSME growth was 23% for the current, what do you call, financial year. Okay. MSME growth was 23%. Of course, the overall growth was 14% because we also took some IB?, etc. Disbursement growth must have been maybe 40-50%, right, in the MSME itself. I mean, just to get that 23% number? Yeah. The disbursement for the whole year, clap opening, hello, INR 9,000 crore? It's close to INR 10,000 crore for the, let's say, year. In that, you have in that, you will also have a CC portion which will be having a loyal utilization. You can't have one to one. That's why we don't discuss too much about that disbursement per se. We explain on outstanding basis. Sure. Sure. Sir, in this Newgen Software, if you have the rough number of green, amber, red, how is that progressing? Just to get a sense. Still, the amber portion is more. How we have made is that the red conditions are clearly given. When that red conditions are clearly given, they are washed out. On amber side, the tuning will take at least, I think, before the end of the Financial Year '25-26, that tuning will happen. Thank you. Jai, I'm sorry to interrupt you. I'll request you to come back for a follow-up question. Thank you. Next question is from line of Rakesh Kumar from Valentis Advisors. Please go ahead. Yeah. Hi, sir. I think this quarter, the quite critical part was deposit growth that you managed to report quite a strong number. Just wanted to know what is the strategy around that deposit mobilization that we did because we had to manage the earlier as well. What are the products on the asset side or on the liability side we had this quarter, or what is the kind of manpower that we had to manage or to slow this kind of deposit growth? What would be the strategy going ahead also? Because we are looking at similar kind of credit and deposit growth number with the earlier. If you can help us understand that part. Thank you. We started this year with the advances target. We wanted to have a good growth on advances. I think we were pretty decent. In Q3, Q4, we had dedicated structure for liabilities and we had a lot of tracks. We had the structure in place in sourcing the liabilities numbers. I think there were a couple of new arrivals, the new recruits as well. This has given a strong focus. We could have a dedicated structure and this has yielded the results, number one. Number two, what's going to be the future? As he said in the call, we wanted to keep the LDR at 85%. That's the number which we are looking at and our growth will also be based at the same. Hello? Got it. Got it. Next year, next fiscal year, we are looking similar kind of a growth number in deposit or because if I look at the real TD rate for the system, it is kind of high in the last four or five years. The real TD rate has to come down. It will have some repercussion on the TD growth number. Overall deposit growth number, we have similar number in mind as compared to credit growth number? Yeah. That's the point, is that we have already reduced the TD rate in April. We have kept a target of 85% in LDR. That's the number which we are targeting for the credit growth, what we are researching for this financial year. For the financial year. Got it. Got it. Thank you. Thank you, sir. All the best. Thank you, sir. Thank you, sir. Thank you. A request to all the participants. Kindly restrict to two questions per participant and join the queue for a follow-up question. Next question is from the line of Dhaval Gala from Aditya Birla, please go ahead. Dhaval, may I request to unmute your line and proceed with your question, please? Need to know response. We move on to the next participant. Next question is from the line of Akshay from HDFC Securities, please go ahead. Yeah. Thank you for taking my question. Firstly, the slippage is slightly higher for this year, for this quarter, around 2%. Would like to know the reason for that, from which sector it is coming from? When we started this year, we confirmed that we would be around INR 800 crore. We started with Q1 of INR 178 crore. Q2, we moved from INR 178 crore to INR 176 crore. Q3, from INR 176 crore, we moved to INR 201 crore. We were around INR 555 crore as of Q3. We had INR 800 crore. That is the number which we were envisaging for the quarter, envisaging for the year basis of prediction what we have done. We had a, yes, a reverse SMA -2 customer. We do not want to take any chance. We thought that when we have a room, we will just fill this. That is why we have moved it to INR 815 crore. We were well within the expectations and hence we made this move. Sure. Sure. The second question was around there is uncertainty regarding the global tariffs, global scenario because of the increase in tariffs. Has any of our within our MSME sector, since we have exposure to export-oriented companies, especially the textile sector, have we seen any sort of some disruptions in some of these sectors or any early signs of any stress building up here? See, currently, so far, first of all, we did not have significant exposure to the export-oriented units or whatever it is. It was in low to middle, single digit only. Within that, whatever is happening so far is, let's say, it is giving some positive, let's say, thing in the sense that, let's say, particularly the Coimbatore Belt, the textile exposures, for the last three or four years, they had the impact because of, let's say, the strong competition from Bangladesh. After the regime change and things like that, there was some, let's say, advantage for them. Currently, also, what you can say is that so far, it is better than what it was last year. Since the things are extremely fluid and how fast, let's say, they are going to get affected and all, only time has to say. What I can definitely say is that whether any significant improvement, they will have positive effect, but if it needs deterioration, they will not have much deterioration. To what extent supply chain impact will be there, whether India-Pakistan war will come, whether it will affect the thing, there are macro questions and all which we expect there should be, let's say, the existing situation will continue that you have tension always, but nothing on field, any change. This is what we expect. Thank you. Thank you so much. Thank you very much. Next question is from the line of Puneet from Macquarie Capital. Please go ahead. Yes, sir. Thanks for taking my question. Just one bit on the credit cost, this thing. We are expecting to increase our PCR in line with other private peers, right, around 70%. We plan to maintain our credit cost around the FY '25 levels, right? All else being equal, of course. Am I right? Sorry, I missed some of the opening comments. That's why. No, actually, in the beginning of the last year, we told we will be improving our, let's say, the what do you call? The average ratio. Average ratio Average ratio number. And the number that we were anticipating was, let's say, somewhere around the current level 60 only, which we have already done. You always, as of on "as is where is" condition, we don't have any specific number in our mind. We don't, let's say, make a call depending upon what is, let's say, happening in the market or whatever. Because the 70% coverage ratio, including technical write-off, is something which was there on the regulation which we had covered a long back. Post that, it's the call which you take depending upon how the, let's say, market progress and what are all the things you need. We made, let's say, so far, we have, without drastically changing anything in a phased manner, we are able to see about 90 basis point reduction in the, what do you call, your gross NPA number and about 70 plus basis point reduction in the net NPA number. We can proceed in the, say, either slow and steady fashion without compromising on the ROA. If you need to compromise on the ROA, increase your provision coverage ratio to a much higher level and all. That option we always have, we can take at any point of time. As of now, we think we will be proceeding on this level. Other decision, whether to go for, let's say, extra provision to reduce the, let's say, net NPA number, to what extent you need to compromise the ROA and have extra provisions and all, those choices we will be taking a call as the quarters progress. Okay. Right now, we are targeting stable ROAs with there is no target to improve. Yeah. Right now, we don't anticipate any, we sleep with the current level. With that slow and steady fashion itself, you have already seen, let's say, a desired reduction in the gross NPA and net NPA. You also need to factor in this is going to be financial year 2025-2026, going to be my 15th year, which is regulatorily permissible as the CEO. What is the net NPA number I want to hand over to the successor. We have to take a call as the way how we proceeded during the quarters. Got it. Your margins, the guidance, 3.5. Sir, if I'm not right, I heard that only 31% of the book is fixed. In such a scenario, sir, deposit repricing happens with a lag, right? For us, guiding 3.5-3.7 next year looks like an aggressive guidance given we have around 70% floating rate book, right? Any comments on that? That's what I explained in detail. You have multiple levers working. In fact, the expectations was even for us, we would have had a reduction in the net interest margin in the fourth quarter itself compared to the third quarter because there were multiple rate hikes, I mean, rate cuts. Still, we were able to scrape through because on, yes, on the yield side, you are going to have a reduction in the yield. As you rightly said, you have, let's say, only 30% in fixed rate. On, let's say, floating rate also, let's say, 25% of your CC accounts get repriced every quarter when they come for the renewal. In that 25%, it need not be that the same reduction in the repo rate is getting passed around because you renegotiate the rate depending upon the risk appetite, let's say, how you want to have a strategic discount, whether there is a surplus liquidity in the system. Many factors come into play. As I explained earlier, the 25 basis point repo, finally, the net impact on the yield was only in the, let's say, high single digit, not the 25 basis point as you may think, which was to a greater extent taken care of by whatever reduction in the savings bank rate or in future, the benefit you are going to get because every quarter, you are going to have 25% of your term deposits getting repriced. We had what you call special rates for term deposits for the last quarter, which we have withdrawn. The rate at which the current term deposits are maturing and at what rate we are now currently offering market rate in tune with the market rate we are offering for the, let's say, renewals. There is going to be reduction in the deposits rate. Similarly, to a greater extent, they will be getting offset by the reduction in the yield. They will be going in tandem. That is why we feel it may not be a surgical precision. That is what I also explained. In future, it depends upon how fast the rate of interest comes down. Say for example, everybody is factoring another 50 basis point reduction in the financial year. If the reduction of 50 basis point happens in one go, the market dynamics, circular liquidity, the system, so many things come into play. If we expect this 25 basis point reduction in stages over the period of next four quarters, we hope this is what we expect. Based on that, the existing margins with the plus or minus 10 basis point will hold its other expectation. Thank you very much. Puneen, sorry to interrupt you. May I request to come back for a follow-up question, please? Yeah, I'm done. Thank you. Thank you. Participants, kindly proceed to two questions per participant. Next question is from the line of Anand Dama from Emkay Global. Please go ahead. Yeah, sir. Thank you for the opportunity. I want to check, sir, how do you see the retail portfolio shaping up in FY ' 26 and FY '27? Because you've been very strong on the gold loan front, housing is also a strong forte. Which other new products that you are going to introduce or scale up? Number one, on people front, have you made any new changes? Have you hired some new team as such in the retail team as such? And whether that will have an impact on the overall cost in FY '26? I think in the initial comments, you talked about some increase in the cost. Is it more related to the retail business as such, or there is something more to it? Yeah, the cost was more on retail front. We said that we will be around 48-50% this year. Number one. Two, in terms of retail, yeah, our home loan has been pretty decent, and our LAP has also started picking up, loan against property. As I was speaking sometime before, on average, we started hitting a double-digit rate in terms of overall blended rate for retail. Our focus on LAP and HL will continue. Also, through our branch network, we are focusing on affordable home loans. This business is also giving us, we have just started this. This business is also, once it starts picking up, I think we should have the decent book in terms of retail. Broadly, the hiring is done. We have hired a sales head. We have hired the zonal heads. We have hired the credit risk heads for the zones. We also hired the feet on street. As mentioned multiple times, we do not have plans to go with third-party sourcing for home loans for sure. Broadly, home loans will be a branch sourcing. Only for LAP, north and west, and some part of south, barring Tamil Nadu, we plan to do a DSA sourcing for loan against property. Otherwise, AHL, it is broadly a branch-based strategy where the branch will sell the affordable home loans to their customers or new-to-bank customers with the existing retail setup. This is what is broadly on the retail plan. We will continue with our overall strategy of 95%-98% secured. We do not have any change there. The remaining would be a credit card and a small bit of PL if you want to give for our existing customers or salary customers, per se. Great. Sir, on your SME book, wanted to check, now that the rates have been cut, are you passing on all the rate cut to the customers, or are you trying to delay that by a few months by increasing the risk premium because the micro disruptions are certainly up there? You can always increase the risk premium. Are you doing anything of that sort? That is basically a reason why you seem to be more confident on the margins front, or maybe the guidance seems to be more optimistic as compared to what one would have expected it to be. See, as we explained, you may clearly see there are multiple levers. Say you have fixed rate for which you are not going to have any impact. You have what is EBLR for which the impact reduction will be immediate. For the, let's say, other floating, by and large, what is in MCLR, you will be getting only when it is coming for the renewal. The 25% of your CC limit will be coming for renewal every year. As we explained, a 25 basis point reduction in the repo, the ultimate impact in the blended yield of the portfolio was in high single digit. It was not into the double digit because of the composition of the loan book. Also, wherever we had given strategic discount even earlier, where some amount of, let's say, the interest rate concessions, let's say, benefit were given in the earlier contract itself. Whenever there is a reduction in the, let's say, EBLR comes, a part of that will be absorbed in that, let's say, the extra reduction that was given in the past. Taking everything into account for that 25 basis point repo rate cut, because of the composition of loan book with the fixed rate, EBLR, MCLR, or all different type of things, the net impact in the overall yield was in high single digit is what we faced. Sir, any reason for a sharp jump in the CEB and the other charges, the fee income in this quarter? We had basically one of the, I mean, in fact, it's a good question. There are two things which had, let's say, which was resulted in this. One, from the year beginning, we had, let's say, concentrated. I mean, I have been talking about this for quite some time, and we spoke about how we, let's say, came out of timescale-based increment and how we are going to change the incentive structure and things like that, and how concept of sales getting introduced, which was not the part of DMA of our bank. One impact because of change in the remuneration structure is this increase in the insurance income. So we could see, let's say, a substantial jump in the insurance income, which was hovering about INR 54 crore, let's say, the commission income we earned from the insurance third-party distribution in the Financial Year '24. We could get closer to just under 100%, about INR 97 crore or something for the Financial Year ' 24-25, which is a substantial jump. Similarly, we had, let's say, two, three years of lower growth in the core advances, growth and MSME and things like that. As the advances growth rate started picking up, particularly after the arrival of new gen based lending and other things, there is a substantial jump in the processing fees also. These two have resulted in a substantial increase in the commission exchange brokerage fee side of the bank. Sure, sir. That's very helpful. Thanks a lot. Thank you. Next question is from the line of Bunty Chawla from IDBI Capital. Please go ahead. Thank you, sir. Thank you for giving me the opportunity. Congrats on a good setup number. As you earlier in FY '25, you guided for the slip pages of INR 800 crore and net slip pages will be negative. If you can share similar outlook for FY ' 26, this net slippage as negative will continue for FY '26, and how will the slippage number or slippage ratio be in FY '26? We gave the number of INR 800 crore for the current financial year, which we closed at INR 815 crore. We are looking at— Sorry, sir. Bunty, can you please mute your line from your side? Thank you. We gave a guidance of INR 800 crore for the current year, and we closed at INR 815 crore. For the next year, we will be around INR 650-700 crore. That is the number we are looking at. In terms of provisions, we will also have D1, doubtful one to doubtful two extra provisions we will have for the year, which we may have to take. Otherwise, we are quite confident of recovery will be more than slip pages for the current year as well. To answer your question, INR 650 crore-INR 700 crore is the number we are looking at. Recovery will continue to surpass the slip pages. Number two, let's say the extra provisions depending upon the provisioning requirement and also in tune with the expected net NPA numbers. The provision numbers, as we have always mentioned, decisions will be taken as we enter into the quarters. Secondly, sir, as you said, the margins will be in the range of plus 5 to 10, 3.5-3.7, and cost to income ratio will be around 40%-50% kind of a thing. Any chances of improvement in the ROA? Or we are still going with the stability in the ROA at 1.5% for FY ' 26? That's it from my side. See, let's say we don't want to be too optimistic, overpromise, and under-deliver. Our earnest effort to improve that are always there, and we will be working for that. Thank you. Next question is from the line of Gaurav Jani from Prabhudas Liladher. Please go ahead. Thank you, sir. And congrats on a good quarter. Firstly, I missed Vijay sir's comments on shedding of lower rated, lower interest rate loans. Can you repeat that, please? I mean, which two segments would we actually shed? Yeah. See, I mean, what we explained was that for the entire year, that 14% growth rate was achieved after, let's say, exiting about INR 1,200 crore of Interbank Participation Certificate, low yielding, and also the INR 150 crore of low yielding NBFC advances. Out of the INR 1,250 crore, INR 750 crore happened in the last quarter itself. The interbank participation certificates and all, we had to enter, let's say, the previous year because we had to exit the gold loan agree portfolio, and because of that achievement of target and all, some amount we had to enter. We had to compromise on the yield that we had now exited. There are two things because of the two outcomes. One, we could achieve 14% growth despite, let's say, shedding about INR 1,250 crore of loan book. It has also helped us to have a better yield because whatever we exited were of, let's say, low yielding. In fact, about that INR 150 crore were around, let's say, 8-8.5%. That remaining 1,250 were about, let's say, 6-6.5% in that very low range because we had to regulatorily go for that to achieve our agree target in the previous year because of the to achieve the targets. Thank you for this. I just also said just an extension to this. Is there any more scope for reduction in this low yielding? I mean, given the fact that you're looking at further effects? We have opened up almost everything possible, let's say, to what extent renewals are coming, to what extent fixed rates are there, whatever these things are there. We don't anticipate any more, let's say, finally, it all depends upon the market dynamics and how we are going to have, let's say, how the rates pan out. As of now, at least on cards, we don't see anything to come down so far. Let's say, for example, we have about 2% of our portfolio from NBFC lending, which is about INR 1,417 crore, as given in the slide number 27. How that yield adjusted as we get into the, I mean, these are all basically corporate lending, and they will always have lower yield compared to your core advances. If the yield in that portfolio, how it gets adjusted because of the market yield and what are all the alternate options available for them, whether we will be better off by continuing those rate of interest because this corporate lending will be around 9% or even 8.5-9% and things like that. We will be able to have an average yield of the portfolio close to, let's say, 9.5% to even double digit, whatever it has come closer to that. Those calls are taken on a dynamic basis on a continuous thing. We don't have a target in our mind and all. We also never expected that we will be, let's say, totally exiting from all these things. One of the reasons is because we could do the gold loan better with better yield and also on agricultural lending and things like that. Sure. Thank you. Just last one from my end, if I may. You mentioned about the commission exchange and brokerage, right? Can you understand, was it also bulked up because it was Q4? Could there be a further normalization in the coming quarters, or is this the new base that you're looking at? See, let's say, on commission exchange and brokerage basis, the insurance income hike is perhaps, as I told you, the change of remuneration structure and some amount of change of, let's say, marketing campaigns which we took, we will be fine-tuning, and there is some more juice available over there. On the processing charges front, it will be the function of the credit growth. Understood, sir. That is it from mine. Thank you so much. Thank you. Next question is from the line of Arun. Independent Shareholder, please go ahead. Yeah. Hello. Can you hear me? Yeah. Yes, sir. Yes, sir. Thank you for taking my question. Actually, my questions are largely answered. One question I had on the retail portfolio growth. Are you looking at it primarily to grow in Tamil Nadu, or is it other states as well? Because I also saw you've done a fair amount of branch expansion recently. Is the focus going to be more on your MSMEs in the other states only, or will retail growth be there as well? To that, do you have a goal or target in mind on the retail growth? Sir, the retail growth is going to be across. It's not restricted only to South. Having said that, we have a decent presence in South, so whatever the business we are getting is at a zero cost. I don't have an acquiring cost, which is normally very high in retail. Our branches can fulfill this business. Having said that, our retail business is going to be in complete Pan India apart from South. We wanted to be 3% of our overall business on MSME business year on year. That's the number which we have in mind. To be precise, we are looking to exit this year with INR 3,000 crore. INR 3,000 crore should be the exit number for retail for this year, sir, as we speak. Currently, what is it, sir? Sorry, I don't have it open, but We should be around INR 1,000 crore as of now. Okay. Looking to grow it for FY '26 to INR 3,000 crore. Yeah. INR 3,000 crore should be the exit number. Okay. Thank you. That's all I have. Thanks. Thanks. Thank you very much. Next follow-up question is from the line of Jai Mundhra from ICICI Securities. Please go ahead. Jai Mundhra, may I request to unmute your line and proceed with your question, please? Yeah. I said that. Thank you. I wanted to check, sir, when did you move the Gold Loans from floating to fixed? And what is the outstanding fiscal year assessment? We moved on July from floating to fixed, the gold loan rate. Sorry, what was the next question? Sir, there are outstanding risk-weighted numbers, risk-weighted assets number. One second. 39,900. 39,900 crores. So overall risk-weighted assets. Yes, sir. 39,900. Is it audible? Yeah. Yeah. Audible, sir. Thank you so much, sir. Thank you. Next question is from the line of Ajit Kumar from JM Financial. Please go ahead. Thank you for taking my question, sir. Just one question from my side. I wanted to know your take on recent bill introduced by the Tamil Nadu government to prevent coercive loan recovery practice. I understand it is not applicable to RBI regulated entities, but any impact on your on-ground operation has been this past, and especially given Tamil Nadu forms more than 70% of your total business. Yeah, any impact f or you? Yeah. This law does not apply to RBI regulated entities. You are right, particularly for the banks. We do not anticipate any, let's say, issue because of this law. Any new impact because of this? Okay. Okay. That is it from my side. Thank you, sir. Thank you. Next question is from the line of Pritesh from Dam Capital. Please go ahead. Yeah. Good evening. Just two questions. One is on the branch expansion strategy. We have done a good branch expansion this quarter and this year. Next year, how do you target? I mean, where do you target, and how much are you targeting to increase the branches? See, we opened about 75 branches in the, let's say, current Financial Year '25. We had been consistently opening about 50 to 75 every year, except during the COVID years. This year, from 875, probably we'll be taking it to about another 50 to 75 basis points, 75 branches. If, let's say, things are favorable, we may also open a few more branches. 925 is what we are looking at? I mean, I missed that number. Yeah. 925-950. Okay. Okay. The branches will be incrementally outside Tamil Nadu, or it will be spread across depending? Yeah. Exactly. You might have seen incrementally, the non-Tamil Nadu branch numbers are increasing. Proportionately, the Tamil Nadu-based branches in terms of percentage is holding or coming down. We are almost reaching a stage of, let's say, exhausting the TN expansion. Incrementally, except for the unbanked rural and the regulatory to be opened branches, we will have, let's say, proportionately higher number of branches in the non-Tamil Nadu states. Got it. A question related to same. Basically, as we open more branches, the SA per branch number is coming down. We were doing quite decent a few quarters back, but we've seen that from last two quarters, the SA per branch is coming down. What is the strategy there? How do we improve our SA per branch number? See, there are certain, let's say, whenever we open a new branch, maybe for the first three, four years, till it comes to a stable number of, let's say, stable business, the number of people employed per branch will be after one manager, one officer, and about three to four relationship managers. It will be lower than the current level of average number of persons per branch. That number may look a little bit coming down. On the other side, we are in the process of, let's say, creating the sales structure. Partly, we have done, and a small portion is left under the sales structure itself. We are in the process of making that. In the beginning, we told, let's say, some amount of expenses. We expected in the last year slowly getting shifted for the current year also. Let's say, as we explained, maybe for another one and a half years, the cost-to-income ratio because of this additional, let's say, sales force and things like that, some amount of, let's say, the 48%-50% cost-to-income ratio will be there. Once that starts delivering results, when the income starts coming, you will start seeing the cost-to-income ratio coming down. Sure, sir. Thank you so much. Thank you for answering those questions. Thank you very much. As there are no further questions, I'll now hand the conference to Mr. Jignesh Shial. Please go ahead. Yeah. Thank you. On behalf of Ambit Capital, we are thankful to the management of City Union Bank for the detailed discussion. I'll now hand over the call to Dr. N. Kamakodi, MD and CEO of City Union Bank, for his closing remarks. Over to you, sir. Thank you, Ambit, for arranging this call, and thank you all for joining. Just to sum up, for some years, the credit growth was awaiting us, and we have now recorded firmly about 2-3% growth over and above that of the credit growth of the industry. We should be in a position to firm that up further in the current financial year. We are getting better visibility for the asset quality. We are seeing, let's say, the slippage ratio getting better. We are seeing SMA numbers getting better. We are seeing NPA ratios getting better. We hope these things will further get better in the financial year. With this, we are also seeing other income showing substantial growth, particularly from the third-party sales and the insurance and your credit processing charges. Overall, as I told, we are, let's say, entering into the year when the remuneration structures are seeing going forward. The productivity has to get aligned with that, and the things have to get improved from here. We hope the geopolitical situations do not deteriorate from where we are. On whatever situation we are currently seeing and on as-is various condition, the visibility for, let's say, a better year is there. With this positive note, I hope we should be having a Financial Year ' 25-26 even better than whatever we saw in the Financial Year '24-25. With these words, I once again thank you all, and let us complete this call. Thank you. Thank you very much. On behalf of Ambit Capital, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.