Ladies and gentlemen, good day and welcome to the City Union Bank Limited Q4 FY 2026 earnings conference call hosted by Ambit Capital. 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 this conference, please signal an operator by pressing star then zero on your touch-tone phone. 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, [inaudible], 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 FY 2026 earnings call. We have along with us Dr. N. Kamakodi, MD and CEO, Mr. R. Vijay Anandh, 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. Dear all, hearty welcome to all of you for this investor call to discuss the audited results of fourth quarter in the financial year ending March 31st, 2026. I hope all of you have received the results and the presentation. As you all know, it has been 15 years since I was appointed as the MD and CEO of this prestigious institution with over 120 years of legacy. As you all know, as per the regulation in force, I'm completing the maximum permissible tenure of 15 years on April 30th, 2026, and I have to hand over the responsibilities of this great organization to my successor. Hence, with this investor call, I'm signing off and passing on the reins to my successor, Shri R. Vijay Anandh, who will take charge with effect from May 1st, 2026. This conference call is my 60th call to the investor community, and I am happy to see and interact with some of them since my first conference call. My thanks to all of you and special thanks particularly to those with whom we have been traveling over 15 years. At this juncture, when I look back on my long journey spanning over one and half decades, I could relish many moments which are kindling my joy and satisfaction. If I look back at the performance of the bank during my stint as the MD and CEO, I have done my best and feel satisfied with the level of progress the bank has achieved during this tenure. Of course, many more things could have been done, but, whatever that has happened in the 15 years is really satisfying. I would like to summarize a few, let's say, points, before I get into the progress of financial year 2026. During this 15 years tenure, the bank has achieved many milestone. If you look into the paid-up capital between 2011 and 2026 increased from INR 41 crore- INR 74 crore, about just under 2x growth, which we have achieved without diluting the capital, let's say, without burning the capital, without much increase in the overall paid-up capital, we have done that. We have seen the deposit during the 15 years increasing by 6x, advances increasing by 7x, total business increasing by about 7x, net profit increasing by about 6x, the number of branches increasing by 4x, the total number of staff members increasing by 3x, market capitalization increasing from INR 1,815 crore- INR 19,450 crore, which is about 11x our CAGR of 17% in this 15 years. The net worth of the bank increased from INR 1,007 crore- INR 10,459 crore, which is almost 10x increase with a CAGR of 17% during this period. I take this opportunity to offer my sincere thanks to various stakeholders by- Be it shareholders, customers, employees, regulators, and everyone who supported the bank and stood with us in this journey, which has happened during these 15 years. I also request you to offer this unwavering support to my successor, Shri Vijay Anandh, whom I am sure will take the bank to newer heights with your blessings and support, and I wish him good luck. Being the last quarter, since I'm not going to get this opportunity again, I will go through the numbers, and I will hand over the mic to my successor for sharing the outlook of financial year 2027 and beyond. I will be discussing with you the progress which happened during the last year. During this fourth quarter, two of our Independent Directors of the Board, Shri V.N. Shivashankar and Dr. T. S. Sridhar retired, had demitted their office on close of business hours of February 6th after completion of eight years tenure. On the Board meeting held on February 2nd, 2026, Board of Directors had approved the co-option of Shri K. Subramanian as Additional Director of the Board in the capacity of the Independent Director, who is a chartered accountant and a seasoned IT executive with expertise in various fields like information technology, including artificial intelligence, risk management and all. Shareholders have already given their approval for his appointment through the postal ballot. In the Board meeting held today, Board had inducted Shri R. Mohan as Additional Director. He's a known face and he had served the Board as the Non-Executive Chairman earlier. They will be strengthening the Board to take it to the, let's say, greater heights. If we look into the earlier con calls, we had shared with you our expectations for the current financial year, that is financial year 2025-2026 as follows. Like, we said, we will end up with high-teen growth for the financial year 2026, which will be over and above the industry level growth. The focus will continue to be in the areas of core MSME, gold loan and secured retail. We said our growth of deposits will be aligned with the credit growth with the focus on CASA and granular term deposits. We said the effect of CRR cut will have some positive bias in the fourth quarter along with the NIM levels holding up. We also said that the ROI is expected to be around the same level of 1.5% what we were having during the first three quarters. Our cost-to-income ratio will be in the range of about 48%-50%. We also shared our slippage for the whole year will be about INR 700 crore-INR 750 crore compared to about INR 800+ crore during the financial year 2025. By and large, almost all the expectations, whatever we shared with you in the earlier con calls for the financial year 2026 were met in the same spirit whatever we had shared with you. During the fourth quarter and year ended at March 31, 2026, we have registered one of the highest business growth like in the past decades, with the growth level achieving about 24% in the total business year-on-year. After the financial year 2013, this is the highest growth rate whatever we have done. In between, we had, let's say, we moderated the growth in a steady fashion, which helped us to, let's say, cross through so many currents which were in the banking industry in the last 15 years, like, by not participating in the, let's say, corporate advances, unsecured retail and all. In fact, one of the reasons, like say, when we feel, like say, satisfied with the way of progress in the last 15 years is not because I did something great or I did something innovative, or I did something new. It is more because we had successfully avoided many pitfalls, be it the, let's say corporate consortiums or infrastructure lending or unsecured retail and all, which had in fact, dented the asset quality of the entire banking system, and most of the banks got affected and we were very few banks, which stayed clear of those risky sectors and not getting affected because of the many, let's say, cyclones which are happening in the industry, and we were fortunate to go through that. The growth is also continuing in the same, let's say, areas and the composition, like be it, gold loan, particularly focusing on the agricultural gold loan and also through the secured retail or secured MSME and all. We have not yet, let's say, as a designator, we have not ventured into, let's say, risky areas with a lot of fluctuations and all. We were able to achieve this 24% growth, whatever we had achieved last year, purely through just focusing on the, let's say, areas which we had done in the past, like, say, staying clear of, let's say, any pitfall. That's one satisfying thing which has come. In fact, the secured retail of, like say, secured MSME or secured retail like, housing loan against properties and all, the verticals which we had created and all has, in fact, increased the capacity, helping. Helped by the Newgen and other LOS software with the processor set, and perhaps giving the feeling that the best of CUB is yet to come, and probably we'll be having many more milestone in the years to come under the leadership of my successor. We had registered about 26% advances growth for the Q4 financial year 2026, and it increased to INR 66,698 crore from the INR 53,666 crore compared to the same period last year. As explained earlier, this is the highest credit growth for our bank. We achieved this 25%+ growth rate after almost 13 years. As we said in our last few con calls, the growth is consistent starting from the Q1, and we had achieved double-digit, I mean in fact, Q1 FY 2025, and we had achieved a double-digit growth over the last eight quarters up to the Q4 FY 2026. In Q1 alone, our advances had grown by over INR 5,800 crore. For the full financial year, the incremental credit growth is INR 13,600 crore. As given earlier, our focus will be on core MSME, gold loan and secured retail, and we will continue with the targeted growth of mid-teens to high-teens with about 2.3% over and above the system growth rate, as we had been consistently communicating to all of you. On deposit front also, deposit growth matched with that of the credit growth. Our deposits had grown by 23% and stood at INR 78,308 crore for Q4 financial year 2026 as compared to INR 63,526 crore in Q4 financial year 2025 at the end of the Q4 in the financial year 2025. In fact, if you had observed the growth had been granular and through, let's say, both CASA and retail term deposit. We had in fact retired some of the, like, certificate of deposits in the fourth quarter, getting substituted by the, let's say, retail term deposits. Our average CD ratio for the financial year 2026 stood at 85%. The CASA percentage to the total deposits stood at 8%-- [3 8%], and it is the CASA growth is also matching with that of the growth. In fact, the average CASA growth is also very much favorable, like say, giving us the confidence that, like say, we can increase the growth by a few percentage point more than what we had envisaged during the earlier period. On asset quality front also supported us, which actually helped us to, like say, with the confidence, maybe go for some incremental, like say, higher growth rate compared to whatever we had communicated to you all in the earlier con calls. On asset quality front, the recovery is more than the slippage in the current quarter as well, which is the trend we have been seeing for the last several quarters. For fourth quarter financial year 2026, the total slippage is INR 199 crore, and while the total recoveries is INR 231 crore, consisting of INR 153 crore from live NPA accounts and INR 78 crore from the technically written-off accounts, resulting in reduced NPA figures. Our gross NPA percentage had reduced to 1.91% from 2.17% in the Q3 financial year 2026. The gross NPA has come below 2% mark after 11 years. It was 1.86% for the financial year 2015, and it has come to 1.91% in the financial year 2026. Growth, both gross NPA and net NPA, both in percentage terms and absolute terms, is reducing every quarter for the last three years on a continuous basis. When compared to the Q4 FY 2025, the gross NPA had reduced from 3.09%, which is about 118 basis point reduction. Similarly, net NPA percentage decreased to 0.68%, that is 68 basis point in Q4 FY 2026, compared to 1.25% or 125 basis point reduction resulting in 57 basis point on year-on-year basis. Our last con call, we had stated that our overall SMA, including our SMA zero, one, two put together, are in decreasing trend for the past few quarters. Total SMA numbers for the Q4 FY 2026 stood at 2.47%, compared to 3.68% in Q3 FY 2026, and 5.60% in Q2 FY 2026, showing sequential improvement, and that improvement is also quite substantial. Overall, SMA-2 percentage to total advances stood at 0.72% for Q4 FY 2026, compared to 0.95% in Q3 FY 2026, 1.34% in Q2 FY 2026, and 1.59% in Q1. In other words, in Q1 it was 1.59%, in Q2 it was 1.34%, in Q3 it was 0.95%, and currently it is like you are seeing it at 0.72%, and it's showing a sequential increase for the last, let's say, four quarters. We are seeing this, let's say, improved asset quality cycle and perhaps I can even say this is perhaps the best asset quality point in terms of both SMA position also in my last 22 years of stint in the bank. We are yet to see any impact of U.S.-Iran conflict and things like that. We are keeping the fingers crossed and closely monitoring the situation. So far, it has not yet started reflecting in the on the asset quality front in our portfolio, and in fact it is showing like, say, continuous improvement even after the onset of the conflict is giving us confidence. Anyway, we are keeping the fingers crossed and monitoring the situation closely. For the Q4 financial year 2026, provision coverage ratio with technical write-off stood at 84%, which improved from 78% during the corresponding period last year. As we said in our last conference call, we are improving our provision coverage ratio without the technical write-off every quarter, starting with Q1 financial year 2025 to bring closer to the industry level. For the current quarter, PCR without technical write-off improved to 65% compared to 60% during the corresponding period last financial year, that is FY 2025. Our interest income had also grown by 21% in Q4 FY 2026 and improved to INR 1,856 crore from INR 1,533 crore in Q4 FY 2025. For the full year ended FY 2026, our interest income improved to INR 6,870 crore as compared to INR 5,834 crore, that is 18% growth for the corresponding figure last year. On yield front, our yield on advances stood at 9.88% in Q4 financial year 2026, as compared to 9.73% in Q3 financial year 2026, showing a marginal improvement by 7 basis points. For financial year 2026, the same was 9.75%, again 9.79% in the financial year 2025. On the cost side, the cost of deposits stood at 5.6% for the current year compared to 5.57% for the Q3. As a result, our net interest margin stood at 3.87% in Q4. Compared to 3.89% in Q3, it is almost, like, say, hardly about 2 basis points ± and within the narrow band which we said last year during the earlier conference calls. For the year ended March 31st, 2026, the net interest margin is 3.74%, which is 14 basis points more than the 3.6% whatever we reported in the financial year 2025. We expect the stable net interest margin for the current financial year 2027, with almost like, say, in the same narrow band of maybe 5 basis points-10 basis points this way or that way. We hope to maintain that. What we have to now understand is that because of the changes in the calculations of the LCR, there are like, say, We are getting a lot of elbow room in like, say, even having like, say, even slightly increased credit-deposit ratio, which will be having some like, say, positive contribution to the overall margin. Vis-à-vis whatever potential like say increase in the cost or reduction in the yield which may result because of the changes in the economic condition because of the U.S.-Iran conflict or whatever it is. Some amount of elbow room is available there in managing that. The total other income for the financial year 2026 increased by 16% to INR 1,039 crore from INR 898 crore in the financial year 2025, with limited opportunities in the treasury profit. It has happened because of the compensating contribution through the other means like the insurance commission, processing charges, and other fee income. Our operating profit had grown by about 20% in financial year 2026 and increased to INR 2,014 crore compared to INR 1,679 crore in financial year 2025, which is aligned with the business growth. The PAT growth in the current quarter is INR 360 crore, with a 25% growth compared to INR 288 crore in the fourth quarter last financial year. Our current quarter PAT is the highest so far in a single quarter. If you look back a decade ago in financial year 2014, our PAT was, like, say, the annual PAT was INR 347 crore, and the current PAT is more than that. Like, say, it has happened over a period of time. For the year ended FY 2026, we had INR 1,326 crore against INR 1,124 crore last year, showing an 18% improvement in the profit after tax on year-on-year basis. Our cost to income ratio for the fourth quarter improved to 46.15% compared to 48.56% in the Q3, and 49.16% in the Q2 last year, showing like say about couple of basis point decrease. For the year ended FY 2026, the cost to income ratio is 47.93%, which is in line with our guidance of like say 48%-50% for the year as a whole. Our return on assets for the Q4 FY 2026 for the full year is 2.6%. Financial year 2026 is at 1.56%, which is on par with your long-term average growth over the 15-year tenure. If you had a chance to look into the consistency number over the last 15 years, except during the three years of COVID, for financial year 2021 and 2022, we had always been, let's say, about 1.45%+ almost in all quarters. At least about 10-12 quarters or so, it is above 1.5%, what we had demonstrated over the period of time. For your reference, the summary numbers are given to just give you a look. Overall, the 15 years had been rewarding and to a greater extent, satisfying. Though there were things could have been better and but the challenge has been to ensure that we don't get into any pitfalls and like say, we had to a greater extent navigated through multiple cycles. Be it like say, even during the 2008 global financial crisis, I was the Executive Director. I was part of the system. Then we had our the AQR gold price crash of 2014, demonetization, and the introduction of the GST. These things were affecting the core sector of MSME, which we were supporting, but we could manage that. The COVID was something which was unexpected, so in those periods, we had to do that. The digital transformation and all which had happened has started giving results. So far, so good. We have to thank you all in person. In fact, I'm coming to Bombay and we have arranged for a thanksgiving dinner tomorrow, preceded by the analyst meet, when I will be meeting all of you in person. I extend my hearty invitation to all of you to join in person tomorrow for the concall by 5:30 P.M. at Grand Hyatt, BKC. It will be followed by get-together and dinner. Looking forward to meet you all. Before we get into the question and answer session, I request our ED and MD and CEO designate, R. Vijay Anandh to share his expectations for the financial year 2026 to 2027. After that, we will get into the question and answer. Thank you, sir. Am I audible, sir? Thank you. Yes, yes, sir. Perfect, sir. In terms of vision for 2026-2027, with respect to advances, we should be 2%-3% over and above the credit growth of the industry. However, our focus on MSME will remain same. Gold loans and secured retail will be an additional enhancer. MSME proportion will continue to dominate with 55%-60%, followed by GL with 30%-35%, and remaining we are planning to do this through secured retail. We will focus more on branch-led business now that we have 1,000 distribution branch channels. Our business through third party on our overall bank book, we envisage to be only between 1%-2%. Hence, our focus on secured products will continue for the year. Our endeavor on CDR continues to be 85%-87% based on the credit growth. We are launching segment specific products for women and senior citizens, and we are also enhancing the product proposition in savings and current account. With respect to fee income to other income, we will be in the range of 55%-60% as like last year contribution of fee income to other income. The only thing what we see here is, normally we open the branches only on the third and fourth quarter of every year. Now, with the first month, we have opened 70 branches in the first month itself. We expect elevated operating expenses for the current year in the range of 15%-18% over the last year. This is about what we have planned for the year, sir. Yeah. I forgot to add this point of opening our 1000th branch. I'm happy to announce that today morning we completed the opening of the 1000th branch near our headquarters Kumbakonam. We wanted to achieve this milestone before I hand over my office. What we have done is that every year we open about 75 branches, and last year also we opened 75. We closed the year with about 950. For the 75 branches, about 50 branches we opened in the first month itself, in April itself. The remaining 25 will get opened towards the year end. The point is that like the same pace of 75 branches is what we expected to grow. As Vijay Anandh said, normally like we will have branches getting opened in the first quarter, and majority of them like coming close to breakeven in the first year and some of them slipping into the second year. There will be some changes in that thing. But overall on a macro level they are going to add for our increased distribution capacity, which I forgot to tell you. With this probably we can get into Q&A. Like for futuristic questions Vijay Anandh will answer. For the present and past, I would like to answer to that extent possible. If I'm not able to do justice, Vijay Anandh will chip in. 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 touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to please use handsets while asking a question. Ladies and gentlemen, we will now wait for a moment while the question queue assembles. Participant, you may press star and one if you wish to ask questions. Ladies and gentlemen, to ask a question, you may press star and one on your touchtone telephones. Our first question is from the line of Jai Mundhra from ICICI Securities. Please go ahead. Yeah. Hi, good evening, sir, and thanks for the opportunity and many congratulations and for the meaningful career at City Union Bank and driving the bank to a very impressive height and creating shareholders value. Sir, my first question is regarding gold loan, right? So far, the gold loan have grown at a much faster pace than overall loans, and I believe this is not an asset quality issue at all. I just wanted to understand the risk practices here, in the sense that, let's say in January, February, from the peak of gold loan prices, gold prices have come down by 10%-15%. How do we manage the risk management for those portfolio which have been originated at, let us say, INR 165/g of 10 g gold loan? If a gold loan was originated at INR 165, whereas it has come down by 10%-15%, how do you manage the risk in those portfolio while at the portfolio level, the LTV is very respectable, very manageable? See, thankfully we had the, let's say, experience of 2014 when you had a similar gold price crash, which gave us some sleepless nights. But ultimately we ended up in not missing much, but about had to book a loss of about INR 5 crore or something like that only, but we had to go through a painful process of auctioning and things like that. Keeping all those things into account, when the, let's say gold price crossed beyond, say INR 12,000 and things like that, we did not increase the per gram rate beyond that. When it went to that INR 15,000, INR 16,000 and all, we had continued to give at the range of about around INR 10,000/g. We had never crossed INR 10,300 or something like that. We have sufficient, let's say, cushion built into that, let's say gold loans which were issued when the share price was at that level. As we had higher, let's say margin, when we gave that loan. That is not giving us, let's say any concern at this point of time. Even if another 10%-15% crash, which is unlikely, let's say we will still be having, let's say, this is in addition to the RBI given let's say LTV margins and all. We have sufficient cushion at this point of time. That is not a concern at this point of time. I mean even irrespective of gold loan prices, you would have kept per gram gold lending at what you said INR 1,000, INR 1,100 at max, right? Yes. Not only us, almost the entire banking industry, it had the discipline and there was no undue competition or particularly rates. When you have, I mean, what goes up has to come down. That's something which we always let's say keep in mind. When the increase in the price was too sharp, we all had a wait-and-watch policy. I don't think any bank ever gave any let's say per gram rate beyond INR 11,000 and all. Even INR 10,500 was something just maximum, even at the peak level of INR 15,000, INR 16,000 whatever that happened. Okay. Great. Great to know, sir. Secondly, on cost of deposit and yield on advances, right? For this quarter, reported cost of deposit has increased by three basis points. Does this mean that, you know, if there is no change in the rates, in the deposit rates, card rates, the cost of deposits should start rising? You know, there is something which was unique to this quarter and next quarter we should still see cost of deposits moderating? How to look at cost of deposits movement? Have they bottomed? Yes. Now should they move up? Let's say there were some amount of fine-tuning. When we saw the advances growth rate increasing at a much faster rate, some amount of 10 basis points- 20 basis points- 25 basis points at that we had to fine-tune the rates to ensure that we get retail term deposits as usual with the inflow so that we are not stopping the credit growth for not having the deposits per se. What I have to say is that it gave us a sufficient cushion so that we could even retire the high cost, like, say what you call certificates of deposit and things like that. See the one thing what you have to keep in mind is that the 3 basis point, 5 basis point difference and all could happen even because of the variations in the average CASA rates and all. These are all too let's say finer things you can monitor and control. You have to just report whatever that comes into. What I can say is that there was no significant changes that happened in between to say that. In fact, that's why we could almost have incremental CD ratio of 100%. We can in fact let's say for the still maintaining liquidity coverage ratio, we can go for another INR 3,000 crore of advances without increasing the deposits at all. That much elbow room is also available. These sort of tactical decisions we take depending upon the day-to-day ALM and the regulations which are prevailing. Don't read too much into three basis point thing. What is available to you. It is very much on the table, that on one side you had seen the rates getting reduced by the central bank. At the same time, you saw the ten-year bond yields increasing. There was a dichotomous response with the, let's say, liquidity, market rate, bank rate and I mean, the rates given by the central banks and all. They are not, let's say, going in tandem, which they normally used to do during the normal, let's say, industrial, I mean, normal business environment because of so many changes due to the, let's say, U.S.-Iran conflict when you saw a lot of fluctuations in the flight of capital from one place to other. Like, there are so many factors which were happening. But even though, let's say, we had terrifying, let's say, fluctuations and signals in the, let's say, TV panels. The operating level, that was absolutely smooth, and we did not have any issue. How long this calm will continue, whether it will continue like this, or whether it is a calm before storm? Yeah, all these things depend upon how long the conflict goes there, whether you will have, let's say, higher inflation because of the oil prices and things like that. Other factors are there, but up to this, don't read too much into these 3 basis points-4 basis points and all. Right. Similarly on yield on advances, you know, there was a 25 basis points rate cut. Even for the last six or maybe 12 months, the yield on advances are only even on a YY basis is only down by 13 basis points. In the mix we had higher proportion of gold, so that is what may be helping. Have you passed on, I mean, I'm sure you have passed on the 25 basis points, and the MCLR book is also. Has that also been repriced? Assuming no change in the RBI policy rate, how should one look at the yield on advances in the future? You may remember, I think in the last con call, we said that the passing of the rates was completed somewhere in the month of December. If I remember correct, we specifically gave that, and that part is true. The incremental book, let's say for example, it's a new contract and the incrementally weighted average yield is, let's say, holding up. That's why we are able to have, as you rightly said, 30% of our book is in gold loan, which is in the fixed rate and non-agri gold loans are having even double-digit yields. Even though you have only that, mathematically speaking, only that whatever yield it will be only to that, let's say 65% of the portfolio or sort of. Incrementally the yields are holding up, and that's why we are able to see the margins holding to a greater extent. Right. You did pass on the rates, but you may have tweaked the spread, right? Is that also held, sir? Pardon. Repeat the question. I'm saying, sir, you would have passed on the rates, but the spreads you would have managed better, right? That is why the yields did not drop as much, apart from the gold loan and mix change. Exactly. That's why I said since 30%+ is on the fixed rate, maybe about remaining 70% you can perhaps take apart from the other loans and all, about say 2/3 would have had that let's say passing on. That's why and incremental whatever the INR 5,000 odd crore we booked in the second half, since we were able to let's say book at the with the enhanced incremental yield, overall, we are able to maintain the margin. Right. Sir, second last question on ROA, right? We have delivered very stable 1.5%, 1.55% kind of an ROA, and maybe 1.56% this quarter. When do we achieve the next level, sir? I mean, the growth is now come back very, very strongly. Margins, hopefully, as you said, should be more or less stable. When do we go to the next level? Let's say 1.7%, 1.8% ROA if, I mean, or what would be your sense for the next year, ROA will be? For technically speaking, it is a futuristic question for which Vijay Anandh should answer. Before handing over the mic, maybe I can say one thing. You have started seeing in your DuPont analysis, the operating profit margin has started holding up. We had to go for extra provision for NPA because we had. I mean, honestly speaking, somewhere around, let's say 2013, 2014, we decided to have our net NPA always above 1%. Because keeping it less than 1% was not giving us elbow room to maneuver things, and it was giving us extra mental pressure to, like, say, manage. That was reasonably good compared to the, like, say, peers in the sector. That was the time when AQR and all started, and the things were much worse for the industry as a whole, and we wanted to use that phase to have a higher thing. Now, since the industry environment has changed, when stage by stage we had to. As you know, during the COVID period, the slippage ratio increased by about 1% more than normally we used to have 2%, which has come down substantially. That too, in fact, increased to 3% during the COVID period. The data is already there with you. The recoveries were also not happening because the courts were not functioning. Because of that, last two, three years, we had to make substantial provision to continuously reduce the gross NPL and net NPL percentage. Thankfully, because of the, like, say, recoveries more than the slippages and also making more provisions, we are able to have the coverage ratio also improved. Since it has reduced, maybe, after it reaches further down, maybe we will get some extra elbow room. Even after making provisions for your ECL provisions and all, there will be some cushion, which can improve ROA. But it is not fair on my part to explain further. Over to Vijay Anandh, please. Absolutely, sir. I think, we should exit this year with at least 10 basis more in ROA, so we should be there between 1.65%-1.6667%. That's the number, probably we will plan basis the retail income deliverable and a little bit of cost to income coming down. That's the endeavor to get there. Okay, great. Great, sir. Last question, sir, on your association. One minute, Abhishek. As we are talking, looks like the ECL provision has come, a circular has come. Looks like it has now asked the banks to adjust in the opening balance itself in the reserve so that no impact on the PNL. Since we have 20%+ tied-down equity, like, say, I don't think we'll, like, say, the ECL provisioning requirement may not be there in the future, which is also good news, which we just are receiving. Go ahead, Abhishek. Great, sir. Sir, the last question is, sir, on your association, of course, after demitting the executive role, I mean, sorry, what is the plan ahead? Do you intend to be there as a non-executive director or, you know, that is not confirmed as yet? Or how do we see that transition, sir, if at all? Thank you. See, I mean, I'm like say honored by this question. Like say, it how like say in fact Board also like say expressed it asked me to like say ask for my comfort to join the Board in the non-executive capacity, which I have like say I said, I mean, I'm honored for that offer. It depends upon the regulatory comfort. Looking into the comfort of the regulator at appropriate time, a call will be taken in future. Whatever timeframe on getting the acceptance you have on the comfort of the regulator, we will be taking a call on this front. At the same time, Board has asked me to be, like, say, post relinquishing the post, they have offered me an honorary position as the Chairman of the City Union Bank Foundation, which is the CSR arm of the bank. To oversee the implementation of the CSR projects and all in recognizing the position. The same was offered to my predecessor also, and he continued. My predecessor and guru, Sri Balasubramanian. He continued as MD and CEO. When I took over in 2011 as MD and CEO, he was the Non-Executive Chairman of the Board. After he had to retire after completing his eight-year tenure or whatever the regulatory thing, the 75 years or whatever. After 70 years or 70. Regulatory, whatever, 70 years or whatever. Yes, 70. 70 years at that point of time. After that, Board offered him the position of City Union Bank Foundation, and he had relinquished that position to me. Post my, let's say, the laying down the office as MD and CEO of the bank, I'll be, like, say, I'm honored to take the position of Chairman, City Union Bank Foundation. Any non-executive in the bank or the Board and all, it depends upon the regulatory comfort. Once we get a positive feedback, we will take a call on that. Board will take a call on that. Right. Very clear, sir. Thank you, and all the very best. Thanks a lot, sir. Thank you. Ladies and gentlemen, to ask a question, you may press star and one. Our next question comes from the line of M.B. Mahesh from Kotak Securities. Please go ahead. Good morning, sir. Thanks a lot. It's been an amazing 15 years that you have given us, trying to understand the bank and the sector in detail. Just two questions from my side. One is, internally at the Board level, do you have an upper limit on how much of gold loans can the bank take, and has there been any change recently? Number one. The second question, when you look at the demand for SME loans that you're seeing on the ground, if you could just kind of give some color as to, is this just simply working capital utilization that is going up, taking advantage of raw material prices, cash flow mismatches? What is the nature of the demand that you're seeing on the ground? Are you doing much higher, balance transfers as compared to what you did earlier? These are my two questions. Thank you. Sure. Thank you, Mahesh. When you said you are trying to understand the bank, maybe I think in 15 years is a long time to understand. I think I hope you have, let's say that part is true because we have been interacting for quite some time, and thanks for all the support and interaction whatever we had. See, on gold loan, basically like, the 30%, 31%, 32% itself is like, say, we are almost at the upper band. Even if it is, you will not be able to take beyond a couple of steps also. Like, you need a limit for everything. Maybe there could be that 1 or 2 percentage here and there, let's say increase. Let's say it's not that, don't ask. You said you have upper limit at 30%. Why are you at 31%, 32% and all? That the 1 or 2 percentage fluctuations could be there, but when it crosses 30%, at least we have to take it with a pinch of salt is the approach which we keep for the gold loan, and this is something which we have to, like, say, accept. On the MSME front, it's the growth is because of the combination of all the factors which you mentioned. In fact, you may recall, when the RBI policy statement was given out, it in fact talks about the capacity utilization of the economy has in fact increased. I mean, which went to about 70% post-COVID. You will normally see capacity expansions happening in the like say when it crosses let's say 84%-85% and all you are able to see things reaching there. We could see let's say many of these units are like say reaching their near capacity level. They are going for expansion, the utilization of the CC limit and also transfer of balance transfer. All these things are happening. In fact when you compare that with the lowest SMA level which you are seeing particularly in this geography where we are having a significant portion of our exposure. It's a combination of all the factors which you mentioned. Just, one clarification. When will you start tightening the filters on underwriting? As in what will it take for you to decide saying that things on the ground is starting to get a little bit more riskier than before? Given that we know where the fuel prices are, and we know that there will be some impact on demand, what will it take for you to tighten the belt on that front? Okay. One numerical number will be your SMA numbers, first part. Second thing will be the anecdotal feedbacks which you get from the customers. See, day in and day out, like, say, even when I am at the central office, at least every day, like, say, we will be having not less than, like, say, four or five customer interactions when people who meet us will be of reasonably, maybe, not a very small one. They will be medium level thing and all. Even though we whether we sit in our office or we go visit the branches and all, and during the reviews, the anecdotal combination of feedbacks from the anecdotes which we get from our branch managers, from the customers we meet day in and day out, coupled with the SMA numbers what we are seeing, we will get a feel. That's how over the last 15 years, to greater extent, whatever I had felt during this interaction, I have shared with you all during the con call. The common sense says that you have to enter into the tougher period because of, like, say, your inflation or global prices or things like that. We are closely monitoring the situation, keeping our eyes and ears on the ground to get the feedback. Basically, like, but one thing which you have to proceed very clear is particularly the business loans, whatever we are giving, they like say for example, there could be finer like say changes in the filters and all. Whenever the filters which we are trying to fit is like every borrower we give, at least you should be convinced that like they have sufficient like say resilience to run through multiple business cycles. Maybe like the incremental cycles risk of maybe 1 or 2 percentage extra may come because of these economic cycles and all. The filters what we keep is basically the like say they are business cycle agnostic, because we need. When we give loan, maybe it looks the figures are rosy. Maybe six months down the line, if the economic cycle downturn, if at all it happens, it is going to affect all the existing customers also. The filter whatever we are we go with some extra caution, that is one thing. At the same time, we have to be very clear that unless and until something like what COVID happens and all, in other business cycles and all, the underwriting and all, like, we normally look into multiple business cycles and not just for like, one or two downturns through which you are passing through. Okay, sir. One last question. What proportion of your loans would now be covered under the CGTMSE scheme or any other scheme of the government? It's very minuscule. Jayaraman, do you have the data with you? I don't think it is going to be more than 3%-4%. You think it's not useful to take a cover today? No. See, there are. I don't think so. Yeah, multiple things. One, like say, when you ask for the most of the customers when you deal with, they are happy with giving extra collateral and taking loans with the lesser rate rather than paying the CGTMSE premium. Okay. Sorry, Jayaraman sir was saying a number. I just wanted to take a note of that, sir. Uh, the- Very small percentage. Yeah. Mostly around 2%-3%, that's all. 2%-3%. Perfect. Perfect, sir. Okay. Thank you, sir. Thank you. Our next question comes from the line of Soubir Samadder from Axis Capital. Please go ahead. Yeah. Hi, sir. Am I audible? You are audible, sir. You may proceed. Hi. Thanks for taking my question, sir. A few minutes ago, you said that with the new ECL regulations coming in, the banks would have to adjust through the opening balance itself and not through reserves, and hence not much incremental provisions will be required on the ECL front. However, the floor rates have been unchanged. I was wondering if at this point you would be more comfortable sharing your view on what would be the impact on the steady-state credit costs. That's all. See, fortunately this difficult question I have to pass and Vijay Anandh has to answer. What I have to say is that if you had a chance to look into that 15-year figure what we have given in our presentation, you can say. In fact, it is there in terms of like, say, credit cost post, what is that. The credit cost is there. Post after accounting for the recoveries from the return of assets, the net provision in 2010, 2011, it was 0.41%, 0.15%, 0.25%, 0.5%, 0.4%, 0.5%. It was 0.09% in 2024-2025, and 0.04% in 2025-2026 and all. Like, it is at the average that works out to about 0.6% or so over the period of last 15 years. Now with the, let's say improved underwriting, based on the AI and the improved, let's say, LOS and all, my expectation is that at least there has to be 50% reduction in this number in the next average of the next 15 years or so. But individual years, there could be aberrations as you move forward. Thank you. Our next question comes from the line of Suresh Ganapathy from Macquarie Capital. Please go ahead. Yeah, hi. Thank you. Congratulations, Dr. Kamakodi, for a very eventful stint at City Union Bank for the past 15 years, and best wishes for all your future endeavors, sir. It's been a pleasure knowing you and interacting with you. My question is to Mr. Vijay Anandh, the new CEO. Sir, what made you take this decision to join this bank? I mean, you've been with RBL for about a long period of time. You have worked in ICICI and other institutions. How do you see City Union Bank's culture here? How is it different from other organizations? Because you are, of course, stepping into big shoes now. We just wanted to know your perspective and your take, having spent now almost couple of years with the bank. It's been wonderful, sir. I've completed two years and it's almost 25 months. I think first of all, I hail from this town, and I come with 20 years of experience, and last 15 years I think I was in Bombay. From Bombay I moved to Kumbakonam. The major reason why I took up is when I was interacting with Dr. Kamakodi and the Board, I fully got convinced why should I be here. I think my wavelength, my passion of what I wanted to do was absolutely matching with where doctor wants to take this bank to the next level, how he want to take to the bank to the next level. I felt that getting into this 120-year-old legacy institute, which has an impeccable track record, and with the beautiful board, I didn't even think twice, for sure. Culturally, I know that I will fit because I hail from this part of the town and my mother tongue is, of course, same what I speak here. Combination of factors, I think, made me to move here for sure. Yeah. Suresh, just adding to what, thing. I think this question you should have reserved for the get-together tomorrow. It's a busy result season, sir, so I'm not sure whether I can make it. Yeah, for whatever it is, I mean, we just thought it'd be great to take his perspective and, yeah. True, yeah. I mean, his family and everybody is relocated to Kumbakonam. How is he handle those dynamics? Because these things are also at times important from fitting into the organization's perspective, right? Moving from Mumbai to Kumbakonam. Yeah. My parents stays in this part of the town, so. Okay. Okay. You know. Okay, cool. That's very clear. Thank you, sir. Yeah. Yeah. Thanks. Thank you. We have no further questions, ladies and gentlemen. I would now like to hand the conference over to Dr. N. Kamakodi for closing comments. Over to you, sir. Yeah. Thank you all for attending this call, and special thanks to Suresh, Mahesh and all, because Suresh and all, perhaps, we have been in touch more than 15 years. I think even I remember the, let's say, interaction we had in one of my, let's say, travel to, let's say, airport in the car itself. You all had been, I think, almost, I think, Abhishek, everyone, you had been supportive of us over the period of time and, because of you all, let's say, I had a satisfying, let's say, experience with the bank. I thank you all for all the support you have given, and I am sure you will be continuing with the same support to, let's say Mr. R. Vijay Anandh. I look forward to meet you all tomorrow in person, where we can discuss some more numbers. More than that, it's a get together time when we meet and exchange the good memories whatever we had over a period of time. I thank Ambit for let's say organizing this for over many years now. I once again looking forward to meet you all tomorrow in Grand Hyatt Mumbai by 5:30 P.M. Anybody, let's say who had not received the invitation or, let's say given RSVP, kindly get in touch with Mr. Jayaraman, whose number is given in the presentation. Or with Raghu, whose number is given in the presentation, and so that to confirm your presence, which will help us to organize things better. With this, I think I have completed big responsibility, let's say, and it had been, let's say, monkey is off my back. It's a moment of relief and because like over the period of time handling let's say things. I mean, I was in fact like let's say telling like had I known it is going to be having so much weight, probably I would have thought multiple times before taking charge. At that point of time, I was not aware that it is going to be so challenging and all. Your support and the God had given showered extraordinary blessings so that all the efforts whatever we took, we were able to see results. Now and then, a few times we had, let's say minor accidents and bruises, but there was no fracture or bigger injury. It had been very satisfying tenure. With that satisfaction, I once again thank you all and looking forward to meet you all tomorrow. Thank you. Thank you. On behalf of Ambit Capital, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.