Union Bank of India (UNIONBANK) Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to Union Bank of India Earnings Conference Call for the period ended September 30, 2026. The bank is represented by the Managing Director and CEO, Shri Asheesh Pandey; Executive Directors, Shri Nitesh Ranjan; Shri Ramasubramanian S.; Shri Amresh Prasad; and other members of the top management. [Operator Instructions]. Please note that this conference is being recorded. I now hand the conference over to Mr. [indiscernible], Deputy General Manager. Thank you, and over to you, Mr. [indiscernible].

Thank you, sir. Good afternoon, ladies and gentlemen. I, [indiscernible], Head of Investor Relations, welcome you all to the Union Bank of India funding con call for the period ended September 30, 2026. The structure of the con call include a brief opening statement by our respected MD and CEO and then the floor will be open for interaction. Before getting into the con call, I will read out the usual disclaimer statement. I would like to submit that certain statements that may be discussed during the investor interaction may be forward-looking statements based on current expectations. These statements involve a number of risks, uncertainties and other factors that cause the actual figures to differ from the statement. Investors are therefore requested to check this information independently before making any investment or other decisions. With this, I now request our MD and CEO for his opening remarks. Thank you, and over to you, sir.

Am I audible to coordinator?

Yes, you are. Please go ahead. Thank you.

Thank you. So thanks to Mr. [ Sahi ] and the coordinator, and good afternoon, everyone, and it gives me great pleasure to welcome all of you to Union Bank of India, our bank financial results announcement for the quarter ended 30th September 2026. With this, I have also concluded my first year in the bank and happy to interact with you for the last 4, 5 quarters. So before I take you through our performance, first of all, my best wishes on the today regards to [indiscernible] and all festivities, which are lined up in the month of October and November. With this, let me briefly set the context and share a few remarks. So let me begin by saying that in Q2, '26, '27, our country, our [indiscernible], our economy and the banking sector have continued to demonstrate remarkable resilience despite persistent global headwinds. This is supported by strong domestic fundamentals, product macroeconomic management and timely policy interventions. We need to acknowledge that the half year '26, '27 was deeply affected by West Asia conflict apart from El Nino effects and AI-led restructions with various channels of impact on our macro and market via oil prices, overall inflation, trade linkages, logistics capital flows and market movements. I would like to acknowledge the consistent support extended by the government of India as well as our regulated [ Reserve Bank of India ] [indiscernible] mitigating the impact of external disruptions, [indiscernible] securing and supporting businesses, particularly [ MSC ] have helped. There's our confidence across the country and their financial system. The [indiscernible] policy major to attach [ dollar ] flows including the [ FCR and ACV Schibsted ] liquidity within the banking system. As a result, the banking sectors continued to demonstrate strength with credit system credit and deposit growth standing at around 19.4% and 17.8% Y-o-Y, respectively. Against this backdrop, our bank, the Union Bank has also shown a sustained pickup in business growth. We continue to execute the strategic priorities that we have consistently highlighted in our various interactions. With a sharp focus on aligning our advances growth with overall banking system, while staying cognizant of long-term business sustainability, profitability and stakeholder value creation in an uncertain macro environment. [ Friends ], as we have interacted earlier, we have very clear defined strategic pillars and efficiency, robustness, quality sustainable growth, profitability and customer centricities of doing business for both customers and employees. Let me [ drill ] in between all the 5 pillars. With the efficiency, we clearly mean the proper capital deployment, technology deployment, the even resource development, building efficiencies in banking operations. So creating efficiencies in whatever we do, how we can create the efficiencies. When we talk about [indiscernible], it is a good compliance culture in a bank, not an instance based and strong cyber security posture, resilient monitoring systems, quality credit book and so forth so on. So third is the quality and sustainable growth. So we pursue and we have been talking on this topic that how -- when growth will couple with the Union Bank business, how the quality will be maintained. I think this reasons give some color on that as well. The next point is profitability, yes, when we talk about profitability, and so interacting with various [indiscernible] people, investors, analysts, we come to know that there's various points which we can which we can showcase. So one was the core [ ROA]. So this time, our presentation, PM shows what is the core return on assets. That is excluding the and the treater income. And similarly, [ ROA RWA], which is one of the good parameters to discuss upon is also the showcase. So if you see the last [indiscernible] is customer centricity with the ease of doing business for customers and employee sport. So when we are compiling -- I mean combined all these 5 pillars, we are working upon the same and today's result is in line with those pillars. So while maintaining as far as the various things which are the best as far as the [ Union Bank ] is concerned, like profit, like [ ROA], like the stress [ S111], which is the lowest in the bank up till now in the history after the automation. Similarly, the ROE and the NIM, which has rebound well from 2.64 levels to 2.8. So I think we have given a very clear picture that how things -- there are certain initiatives which we have taken last quarter, which we have also showcased probably I am very sure that the presentation and this presentation, you all are having with you. So at Union Bank of India, our commitment remains anchored in our guiding principal business first and compliance always. We aspire to be a trusted partner for our customers, investors, regulators and other stakeholders while contributing meaningfully to the Indian banking ecosystem. Equally important, our workforce of over 74,000 employees continues to embody our engineering philosophy, actually no such a bank, good people to bank with. In fact, some of the transformational initiatives we undertook this year, such as Union [ Sudarshan], we are all developed in-house. So I think this is very, very important. It is the state of the art, unique in the industry and at the minimum cost. And I think the shortest period of time will be 6 to 7 months this entire infrastructure and the unit is -- I will detail it shortly. I'm also pleased to share that during the quarter, the bank received 7 prestigious recognition. One is in the [indiscernible], our Union Bank has got the price from the honorable [ home minister ] [indiscernible] in the event held in mid-September in [indiscernible]. And another is the secured third rank in the overall [ East 27 ] performance ranking among the stars public sector bank, reflecting our continued focus on customer centricity, operational excellence and digital transformation. Let me in a brief cover up on the financial performance. So profitability, net profit for Q2 INR 5, 537 crores, registering a growth of 3.3% Y-o-Y. [ OP ] is INR 8, 108 crores, reflecting a robust growth of 19% almost, 18.99 precisely as consistently communicated to investors, and there was a question that if you grow and we to take deposits or maybe various questions that whether the [indiscernible] will sustain. So we improved further from the last quarter of 2.60 to 2.86 and remain above the full year FY '25, '26 level of 2.70. With the negotiation of reprice cycle, certainly, we believe it will be constructive to the banking industry and to us also, which we can tell you we fund that. Additionally, the CRB, let me acknowledge, complement the Union Bank of India, who came with this perspective. And it is not only the liquidity or maybe the dollar inflows to the Indian economy. But I think the major benefit is the A&M because our almost 70% is the 5-year term. So it is giving a very good sustained resource for next 3 to 5 years. So coming to our profitability, return on FS is 1.38%, which we have eased further up. Return on equity at 17.21% capital position, we stand at 17.9%. CET1 is 1.05. I think almost most of the part of CRR is based upon CET1. And these levels provide significant growth headroom while maintaining strong resilience against any external shocks. Asset quality, gross NPA declined by 87 bps Y-o-Y to 2.42%, net NPA improved to 0.42% down by 13 basis points Y-o-Y. PCR remains strong at 95.20%. Our credit cost contained 21 basis points, reflecting disciplined aging standards effective recovery of first despite persistent geopolitical volatility. The improvement was supported by a sustained moderation in [indiscernible], [indiscernible] improved to 0.72% compared with 0.91% in the corresponding period last year. Yes, the gross [indiscernible] during the quarter stood at INR 1,909 crores, which were more than offset by reduction of INR 3,086 crores by the recoveries and upgradations. Coming to the deposit and liability franchise, our deposits grew by 6.8% Y-o-Y basis. And the CASA ratio is stable at 35%, improving significantly from 32.56% a year ago, demonstrating the success of our ecosystem banking initiative, which we have talked many times during our interaction. On a year-on-year basis, our combined RTD and CASA business is what we say is our first priority, is nearly grown by INR 1.11 lakh crores, registering growth of 11.41 percentage. Also, if we take the color of our deposit, the share of various components, so CASA term deposit increased to 80.3% from 77% in September '25. So let us talk about average to terminal deposit ratio, which [ removes at ] 99% which is very, very good and corresponding if we take CASA to term average to deposits is around 95%, 96%. So let me say that the bank, which we build efficiency -- to build efficiency. We are working on average figures. So let me reiterate that, yes, your bank, Union Bank like is working upon the average figures rather than much of the terminal figures. So our global advances continue towards a healthy momentum at 18.53% Y-o-Y domestic advances grew by 17.36% and coming to term, which is global level 55.45% we have domestic is 57.43%. And if we take the impact of [indiscernible] of INR 33,000 crores of [ IPC], which [indiscernible] and also some of the low-yielding assets, I think the actual growth is more than 20%, 21% in that range. So retail advances grew by 9.24%, MSME by 22.39% and this is the way in which we are going for a sustainable growth in various quarters to quarters. So as a green shoot in private sector CapEx, we are so the next phase, of course, the credit growth in economic activity, whether it is data centers, our AI infrastructure, nuclear, renewal power and conventional sectors like steel manufacturing, I think these are picking up including pharmaceuticals. So this is giving a good sort of comfort to be bankers that going ahead as well. There is a good phase of credit growth and economic activity. So coming to the region ahead for Union Bank of India, the journey ahead is not only about growth. It is equally about transforming the way we operate and serve our customers. As we move in [indiscernible] short-term uncertainties, our focus remains only on long-term sustainable growth and strategic transformation. We are pursuing this transform through a balance combination of intelligence, automation and human oversight. Various in detail in [indiscernible] comprehensive -- so actually, to all my friends who have joined my request is in our website and various temporally will find project [indiscernible], known as Project [indiscernible], which encompasses, I think, 9 pillars. I think very, very different from last 15, 20 years, which you would have seen, any bank coming with various RFPs. So this RFP is covering 9 pillars and what sort of 5 pillars we are talking. The same sort of pillars are being talked in this RFP as well. It is unique in its sense. And certainly, it will create not much impact. But let me tell you, friends, we are already working on this, which we have showcased in our earnings presentation and two of the pillars which we thought initially are already completed in which Union [ subduction ] is one. And other pillars, which even show 90% -- sorry, 9 pillars there is the work already done. So it is not that we are waiting for any consultant or any to come and start the program. So from moving from one pillar to nine, in many of them, we are somewhere from 20% to 40% of the work is already done. So actually, we are very poised to complete the project, which is, I think I would request all of you to see Section 3 of Page 35 in that RFP. So the objective is straightforward to move from reactive management to proactive and intelligence-led banking and managing the [indiscernible]. Another [indiscernible] of our transformation generally is robotic process automation. And they are high-value [indiscernible] rule-based activities to be executed automatically with [indiscernible] speed, consistency electric. So we are now close to 100. We have now -- we started this, and now we are almost close to 100. But by March '27, we expect to cross maybe newer around 200. And by next March, not this we want to cross somewhere 400 to 500 processes. I think that will give a lot of ease of doing big, a lot of accuracy, consistency and customer service. I think that is the whole purpose of this. We also have a cross-functional team in the concept of [indiscernible], which is prioritizing various operational technology-related issue, is functionaries and we are improving day-to-day processes. We also have a stable central reconciliation. Actually, it is also part of RFP. But let me brief you that this is [indiscernible] by unit is aged by [indiscernible] almost more than 300 people working over there, our in-house and also some of the outsourced. But the entire reconciliation because once we become robust, it will lead to business, which is what correlation we have seen in our bank that if we improve in the compliance and assurance function, it has a direct impact on the business growth. So I think that is where we are moving into that direction. I would therefore say that Union Bank of India [indiscernible] building the necessary capabilities, strengthening our data architecture, enhancing workforces and creating the right balance between technology adoption and human oversight. In conclusion, I would like to express my use attitude to our customers, shareholders, investors, Board members, my Board has really helped us, [indiscernible] and all other stakeholders for their continued customer support. And I would also like to [indiscernible] we continue to all our investors. Whenever we had interaction, you have always [indiscernible] gave solution to include that in our to-do list, where we -- from quarter-to-quarter, month-to-month, we have tried to improve upon those. So I think I get it to all of you for being with us and giving us a lot of sullen for improvement as our India or [indiscernible] into next [indiscernible] group, the banking sector is well positioned to support this transformation and your bank, Union Bank of India is determined to play much meaningful role in this journey. We will continue to combine resilience with innovation scale with efficiency and technology with human judgment. So thank you, and over to you, [indiscernible] thank and over to coordinator and all the investors for the interaction, please.

Shall we open the line for questions?

Yes, please.

[Operator Instructions]. The first question comes from the line of Ashok Ajmera [ Chen ] from Ajcon.

Thanks for giving me the opportunity, Congratulations, Asheesh, sir and the entire team of the Union Bank of India for the fantastic set of numbers, sir. In fact, you have this presentation beyond the numbers and the presentation you are verbal communication of more than 20 minutes now has really given the great highlights about the bank and what the bank is going to do even in the future also, which is one of the best opening remarks so far in the 4, 5 banks who have declared their results. My compliment to you, sir, for the same. And you have, in fact, clarified most of the questions which were there in the minds of analysts like me. I have a few observations and some few data points and some information and some action plans on some of the items, which I will just narrate. Sir, the credit growth has come back now in the bank in the last 1 year of your tenure. And before that, the 4, 5 quarters, I mean, all those shortcomings are removed and the bank has again come back and brought it to old glories. But going forward and even looking at these numbers also, the deposits are still a little bit lagging in spite of the opportunity of raising the deposits by way of this U.S. -- u.S. dollar dispensation by the RBI, CNS and other things. So -- and that is making our CD ratio also very, very high, one of the highest 88.13%. So on that front, what do you think like this kind of CD ratio is okay or it may go or whether you still feel that the deposit growth needs to be accelerated to match your credit growth? This is my just first question, and I would welcome your answer, sir.

Sure. Thanks a lot, Ajmera [indiscernible] for your quarries. And we always take your quarries as an improvement and to further how to make the bank more better. So coming to the deposits, as you said, in our case, is lagging. So certainly, these last 2, 3 quarters, we are in the discussion. And let me tell you that earlier, our deposit growth used to be either negative or it was below 3% this time at 6.8% and almost 7%. The -- we are not [indiscernible] to deposit. So I will give your reply into 2, 3 pillars. One is our first priority is CASA and RTD, no doubt in that. So we have actually garnered INR 1.11 lakh crores of in these 2. So this is our priority for sure, and we are maintaining 35% around, even from June to now INR 10,000 crores of CASA is there which is a sluggish period if you see June and September and from December and March, it is a period where most of the funds are released as far as the various budgets are concerned. So we have taken. Now the question is that resources -- we are sitting at almost 18% of the CRAR and more than 16% of the CET1. So we do have a very good leverage. The most important, I believe, the parameter to see the deposits and credit growth is the LCR and the [indiscernible], our presentation is 120% average we have maintained in the entire quarter, which clearly shows that we are 20% more than the prescribed regulatory guidelines. [indiscernible] is also on a much, much comfortable side. So absolutely, we have not faced any issues on the liquidity. So we have maintained very well. Then next is what other resources are available to the bank for raising the funds for deploying into the credit. Those are refinances from various refinances, the infrastructure bond, the ESPS, certainly, we are not looking for [ QIP ] as such and the [indiscernible] the other things, [indiscernible] to capital. These are also the funds which are subscribed but will not come into the deposit, which will remain into the system and which you can deploy for a better quality of the credit growth. Now I think when we required, we increased from 2.5% to 6.8%, 7% range. So certainly, I will assure all that absolutely, that is not an issue. So when we increase from 2% to 2.5% to 7%, then also we have maintained our revenue and all the efficiency ratios. Now coming to the U.S. dollar. Since beginning the last quarter as well, when it was asked to us, we were really clear that we aim at EUR 2 billion to garner and the specials in the scheme of U.S. dollar [indiscernible]. We actually [indiscernible] 2.25. So absolutely, that is not an issue and our total all-in costs, including everything, is around 7 and 43 bps on is the margin -- 40 bps -- 40-plus bps is the margin with our foreign branches. I think we are well within cost into that. And coming to the CD ratio, we always say that for -- let us see that domestic CD ratio or loan-to-deposit ratio is something different and the global is something different. Global is always higher and domestic is always lower. So if you take the domestic, we are at around 84%. So we always believe that somewhere between 80% to 84%, 85% is a quite comfortable range. Subject to it is not very specific, some range for every 1 size fits for all. It is for the various banks to banks and their capital structure and the other efficiencies ratios. So we have well within the range of all the ratios, all the liquidity ratios we have -- we are well within the range of 84%. And that's the reason that you can see that this time only after listening to the analysts, which all of you, they subjected us that why don't you come with a core ROA because the treasury income has gone down like anything, almost 50%, 46% precisely has gone down because of the market condition, you all know much [indiscernible]. I believe that the core ROA has moved 41, 42 basis points to 1.06%. And the ROA in general 1.38. And [indiscernible] is also one of the figures, which generally people told that why the Union Bank is not shown where you are having the very good. So it is at 2.48 levels. So I think that all the investors that we are in the credit growth and to support that credit growth whatever deposit growth is required or maybe the raising the money in terms of infrastructure [indiscernible] or a green bond or tariff, tied to or anything, we will be going for it to fund that and we'll be substantially covering the liquidity ratio as decided by any of the participants in the industry.

[indiscernible] sir, you very well explained it. My sir, second question is on the total impact of the ECL provisioning and especially with the yield [ hardening ] and there will be, I think, STM mark-to-market also will have to be provided for. So what is the revised number of the ECL and the impact of the ECL overall in the -- how many basis points it can be over a period of time, coupled with that, the benefit of the rate hike or recent rate hike by the RBI. How many basis that can offset the overall ECL impact, like maybe the profitability may increase by 7, 8 bps point because of the rate hike, which is going to be factored in. And already, whatever the report -- reporting the credit -- I mean, loans are there, the rates must already gone up whether the deposit rates are not going to go up matching soon. So overall, what will be the impact? And how are we prepared for the ECL provisioning, sir?

Yes. [indiscernible] earlier also, we had shared the ECL impact on us. And somewhere in the range of INR 5,500 crores we have said will be the impact of ECL of Union Bank of India. But I'd also like to add here that since the quarter of March, we have till now added around INR 1,000 crores of additional buffer in provisions, 700 we did in March, 100 in the quarter of June. And this quarter also INR 200 crores we have kept as a additional provision, which as of now appears to be that we'll be able to use for the ECL provision. So that is INR 5,500 crores is our total estimate. Of that INR 1,000 crores we have already provided for right now. INR 5,500 crores we look at from the impact on the we have around, I think, INR 8 lakh crore of RWA. So from that perspective, 70% -- 70 basis points early impact on CET if we absorbed separately, but we are also looking at our profitability numbers for quarter. So 1 quarter profit itself is quite sufficient to bear this ECL provision despite RBI has been given multiple years. The second part that you asked about the impact of the bond yield, I think these are very moving parts. First is that as on date, the balance sheet, what is the impact on ECL, which has shared, remaining things are moving. But something really positive, something will be negative. For example, as you said, that the bond will obviously impact the valuation of the bond. But at the same time when the interest rates are rising, and you are very much aware that it will first give us advantage in terms of increase in the net interest margin. So I think these moving parts, they offset each other generally. So should we, at this point of time, should be taking INR 500 crores as the possible impact of ACL, of which bank has already created a buffer of around 1.0.

Yes. Just to supplement, Ajmera, we talked about in my as we talked about 5 pillars. Actually, what our [indiscernible] saying is absolutely to, in today's dynamic world -- destructive world, are these things will be happening somewhere are there other [indiscernible]. So certainly, if you have to be robust enough to absorb the shock and keep moving your business and profitability with robustness and sustainability. So in a sustainable way, probably, I think we need to work upon those 5 pillars, which we are working. That is what actually we also [indiscernible] to say that these are the things which will keep on happening. Sometimes it will come down, it will move up. But the thing is that now if you see our presentation today, the [indiscernible] income has gone down by almost 45%, 46% but [indiscernible] fee income has increased by 22.9%, that is almost 23%. So we are actually concentrating on very, very core business of the bank and to build the robustness within the efficiency from the core business itself.

I think there is some disturbances. Hello?

Yes, over to you.

Sir, your views on this drought impact, sir, now the conditions are deteriorating on the range on [indiscernible] front and the droughts are being declared in every state, drought conditions. So how do you see -- have you taken that into consideration? Started working on it that how may it impact our business either from the normal recovery front or from the additional credit expansion front. So how the drought conditions are going to affect? And how are we going to take us this situation, sir?

So actually, drought will not [indiscernible] our bank, but will affect banking industry. So it is right now, we are not seeing any adverse impact on that. Let's see what happened in the next quarter. But yes, the government is also very proactive and we are taking the measures for protecting that whatever the government initiative will be taken, we will be participating in that. And previously, also, whatever the debt [indiscernible] or whatever the government initiative has been taken, we have actively participated in that. So as such, we do not see any adverse impact on our balance sheet.

Next question comes from the line of Mahrukh Adajania with [ Tara Capital].

Congratulations. Sir, a couple of questions. Firstly, on savings deposits, the growth has been very good. Are there any institutional deposits here or they are all retail? Are there any [indiscernible] institutional deposits?

Yes, it is mix, but we are actually much targeting on the premium savings account and the salary accounts. So we have seen almost 1.8x sort of an increase in these 2, 3 parameters. And institutional, I would say that there are some government accounts, which are to be opened on a larger scale in the saving bank on the per [indiscernible] as per the mandate of the various state and central government, so comprise that as well. So that -- it includes both on the retail part in savings as well as [indiscernible] on the institutional part. But the [indiscernible], we do not have the bigger chunk, say, say, some INR 5,000 or INR 10,000 crores in saving of some distributors like that. We do not have. So it is basically for your query, I believe we should take that mostly it is retail and even if it is institutional must be in a lower range of amount only, not the high and very high rate.

Got it. But any quantification how much is institutional?

As of now, like not keeping that data. So if you want this, we can interact offline. But overall, savings bank deposit growth was 12% and overall CASA growth was 14.7% Y-o-Y. So I think we can give separately. See, I would tell you that there are certain the punches accounts and on the rural development, ground level block accounts and all those are there, which we are seeing as an institution.

Got it. Got it. That's so helpful, sir. Sir, just one more question. I know it was asked earlier, but because bond yields are sticky, what will be the onetime impact of valuation of HTM when you transit to ECL, right? Because that impact onetime is reversible. That's why we want to know the quantum. I know for that bond deals have to stay high if they come off, then there's no impact, but just asking.

Yes. See, we have worked out something first that on the Stage 1, Stage 2, Stage 3 at that around INR 5,500 crores order amount is going to come. Now there are 2 other parts. One is on the staff and other is on this HTM. But see, there are certain clarifications and other things are there, which are under discussion at various some workshops are also happening. So we have also kept some adviser or consultant on this [ OSC ] and all those things. So we are working upon and all the banks are in discussion with that. But one thing which I would Madam Mahrukh, I would like to give a comfort to you that what sort of things will come now a bank is in a position right now to -- I would not say the abort or something could get us understand that the way each the banks, the industry itself is generating the profit and the sound business in terms of GNPA, NNPA, ROA and all those things. particularly if I take your union bank, then all the things are on a very positive front, positive side. So I think we are in a position to absorb those things without any much hiccups. That is much comfort level. But specifically, if you are asking, we have won out -- we are onto various permutation combination as far as the various interpretation and understanding. But it is not prudent right now to come up with those figures because still is under discussion. And there are a lot of shops happening and also all the [indiscernible] all are discussing. But at the same time, as an investor, I certainly feel that you should have a comfort level on your bank that whatever, even the other side of the scenario also, we are in a position to absorb it very softly going forward.

And my final question is that would you have any comments to offer on potential M&A in PSU banks?

That is the same [indiscernible] like you are hearing. I also don't know much. Sometimes, I also ask investors what exactly are you hearing. So we don't have anything, but -- when we talk in my test, we would have had the 5 pillars. So the thing is that our social focus is that quarter-to-quarter, how to take the bank into the next level of robustness. [indiscernible] in terms of all the 5 pillars. Now I'm not restricting the robustness only on the compliance and assurance and other things. But on [indiscernible] if you build really on those 5 pillars, so certainly, maybe this year, next year, next to next year, 5 years, we do not know the disruptive the one which we are living in, what is going to have end then. But at the same time, we know one thing that how to make the bank more better and robust so that any eventuality, any disruption, any shocks, any adverse shops, we really position to the [indiscernible]. Mahrukh in the meantime at the breakup of the savings portfolio. So overall, the growth Y-o-Y was INR 40,278 out of which 75% detailed saving growth, 30,027 and only 25% was into saving growth, INR 10,249. So the growth is very sticky because this already comes from the retail portfolio.

Next question comes from the line of [ Jai Prakash Mundra ] with [indiscernible].

I have a few questions. First is answer on core ROA, right? So you've given core ROA for the first time. I believe as you -- we have removed treasury and TW recovery, but it looks like the interest on IT refund we have also deducted [indiscernible]. Then the understanding correct? Or I mean apart from treasury and PW, is there anything else also which is not there?

[indiscernible] TW recovery and treasury, these 2 things we have renewed.

Okay. Sure. And sir, now on the write-off amount, Actually, sir, if I see our last 2, 3 years slippages have reduced materially the write-off amount we have done at around INR 3,800 crores in first half. I just wanted to check, sir, how much of would this be a management driven? And how much is because of the timing of regulatory time line? I mean how much is prudential and how much is time line driven? And the reason why marketing is if, let us say, if you're focusing on core ROA, then bank can actually reduce the write-off amount because the recovery from write-off anyway is not getting accounted in core ROA. And to reduce write-off, then actually, you can save on credit costs. So that is what I was trying to understand of this first half write-off, how much is prudential and how much is time-driven?

Yes. See, you can answer the -- because see, why let us understand [indiscernible] that how various [ parameters ] mean to us and mean to others. Here, when we are saying core are aware now, actually, we are trying to -- when you start building the efficiencies, you want to be more robust, resilient. And so you create and try to benchmark again your own standards. So when core ROA, we have taken, it is not like the [indiscernible] not to write off and all those things. It is very, very clearly that we are continuing with the same unmet which we are continuing the last half year, not this one. The last we had one bigger account, that is why that we have moved towards more. But if you see the last 2 quarters, we are continuing with the same run rate. And we have told very clearly that our target is around as far as the TW write-off is concerned, recovery in TW is [ consent ] for the full year. And the total recovery, we want to be more than us. So certainly in that range of INR 10,000 or INR 12,000 crores certainly, we are aiming. And this return of also, we are aiming in the same range. The treasury income, which has [indiscernible] probably will continue. That is the reason that the ROA is 1.3%, which has increased even there is a decrease of 46% in treasury income and the one or 2 accounts which we got resolved through NCLT route in the last half year of '25, '26. But in the same time, all the 3 ROA now we are monitoring the score and the general ROA and [indiscernible]. So I think that is not an issue that where we have to write off or not to write off that the things of [indiscernible] the balance sheet -- once you are good enough on the -- now you can see that almost all the parameters in Union Bank, particularly. We are at the highest levels, whether the net profit or operating profit whether it's ROE, ROA and all the other things. So even then after that only, so not impacting anywhere, we have taken out INR 200 crores this quarter and added to additional provision. So it is now INR 1,000 crores standing strong in our balance sheet. If I take that, the GNPA comes around 0.3 levels and the PCR goes to more than 96%. So I think there, where we are coming from, and this is what we are depicting and we are discussing it here that our purpose of benchmarking ourselves is a bit different and trying to improve from there. Over to you, [indiscernible].

Right, sir. Sir, okay. So let me ask you, sir, this credit cost we have given is 21 basis points which is a reasonably stable number and a benign number. But going ahead under ECL, you will have a little bit bump up in standard asset provisioning. Would you believe that -- I mean, could that jeopardize the core ROA of 1% level. How do you see the rising standard assets provisioning because under ECL? And could that have a bearing on core ROA that we have?

Yes. See, [ ACL], which we talked about is around INR 5,500 crores, which we are now discussing and talking about last 1 or 2 quarters. And as we told, we are comfortable in that INR 5,500 crores. Now other 2 things, I think let us see other 2 parameters. One is the lowest of the SMA figures in Union Bank history after [indiscernible] commission. It is, I think, [indiscernible]. So about INR 5 crores. Yes. So I think that is the where it is the lowest the credit cost, [indiscernible] cost, both are lower. And let us see one more thing that there is a good credit growth. Now your credit growth you are seeing in the terminal figures. Because now most of the channel we have done, and we are doing -- still we are doing. But then most of it we have done. So if we take that charting that is IBC, [ 76,000 ] taken out then some almost INR 50,000, INR 60,000 or INR 70,000 crores, low-yielding assets, we have taken it out and all those things. The credit growth is quite so more than 20%, 21%. But at the same time, if you see the figures on the retail side, our 700 and above CIC score has moved up from last. So I think I'm only saying last 1 quarter. But you can see our quarters that has moved quite up. Now coming to INR 25 above external ratings. So almost 94%, 95%, I think that is also improved last quarter. So these 2 figures shows that we are underwriting quality assets, number one. Number two, the monitoring is really very good, using technology, analytics and feed on the street and building the culture where we create good quality assets and at the same time, profit our assets. So that is the reason that, again, it has improved, core [ RO ] has improved from, I think, 41 or 42 basis points. from last quarter. And now we have started monitoring it. Now coming to the impact of [indiscernible] if it comes, we will be in a position to take care of it. That is where -- and we still -- we have 2 [ road ] quarters left. So I think we are in the right direction. We are in the right track, and we will in a position to certainly help them out those situations.

So actually, my question was not very clear, sir, this actually no problem at all when you transition. My question is, sir, on a recurring basis, right now, credit cost is 21 basis points. Under because now the stage 2 assets will need more provisioning than under IRAC, so standard assets provisioning will go up. Do you see that core ROE can --

You are asking on incremental basis correct?

Yes, sir.

Yes. So actually, that is all data in discussion and in working. So as we move close to the March, I think we'll be knowing all those figures. But by chance that the first itself on a transition date say, 5,500-odd in using can be plus/minus something here and there. So even that, we are in a portion to take it forward swiftly. So I think ongoing also will not be much issue because even on go will depend on the actual SMA figures, restructuring [indiscernible] and all these figures only. So that is why I was trying to tell you that even ongoing incremental as well in a [indiscernible], but the actual figures is still to be won out these are discussions happening at the industry level [indiscernible]. And that is what I told when Ajmera, I believe he was asking me or Mahrukh, I'm not very sure. I think Ajmera [indiscernible] and he asked. So there are various discussions happening and was clarity comes. So then I think the figures will be fit. But at the same time, I think we are in a position to move safely where the onetime as well as we believe that with these figures, ongoing will not have much of the impact.

Right. Understood, sir. So that is clear, we will await as and when we get more clarity. And sir, secondly, on growth, right? So now we are doing reasonably well. We have stepped up on growth. What is your sense, sir, where would we be ending the year? Would it be a -- last time, I think you said we will be slightly above system. Does that still continue? Or what is your outlook on growth with respect to industry. Industry is also now in 18, 19. We are also 18, 19 -- what is your sense, where should we end the year?

As far the system credit growth, we'll be moving as per that only.

All right. And sir, anything on the bulk side, we have seen slight increase in the bulk deposits. Now this is the entire book has been reset, right? So you do not have any material issue in growing the bulk deposit because previously, this quarter, we were actually [ shedding ] a little bit of bulk. Now should bulk deposit be business as usual? Is that the understanding? Or there was some opportunity where in new increased bulk and going ahead, bulk may still be lower? What is your thought process?

See, the [indiscernible] span definition is now above or about INR 3 crores. So that we generally turn it as a bulk deposits and below INR 3 crores as per RBI description, which is a retail time deposit. So bulk deposit even in today's world, when you finance infrastructure projects and within which you give an LC, say, 60%, 70% of the total term loan. There also I see 10%, 15% margin is there, various bank guarantees are there, it is in that. So generally, let me tell you, but doesn't mean that you are going for a high cost or maybe a differential rate and all those things. It means about INR 3 crores. So we are going to accrue and certainly, when we see the credit growth to be in line with the industry, we will fund it first through retail and term deposit CASA and retail term deposits than various other channels and certainly deposits now comes the bulk, let's say, above INR 50 crores or INR 100 crores, INR 200 crores. So we are also thinking that. But at the same time, [indiscernible] used to take even INR 2,000 cores, INR 4,000 crores, INR 5,000 crores from single party, but that we have reduced. So now we have bifurcated. So sometimes we take 300, 400, 500 various maturities, various -- and certainly, I'm going back to my annual commentary, where the financial institution we are trying to avoid. So still we are continuing with that. that financial institution, we don't prefer much, but nonfinancial institution, we take it. So we -- from 2%, 2.5%, we have moved to 6.87% growth. So we will be moving in that line only as far as the deposition.

Next question comes from the line of Sushil Choksey with Indus Equity Advisors.

Congratulations to Team Union Bank of India for excellent performance and greetings for the festive season. Sir, my question is India Prime [indiscernible] 2047. Union Bank and Indian banking system needs to transform for the new initiative, new businesses, which are emerging in the globe, and India also needs to catch up. The trade businesses for the new initiatives led by hydrogen GPUs data center and many such EV mobility, value chain, solar value chain. I'm not talking about module but value chain, such businesses. And some of these businesses are commenced by our new entrepreneurs who are technology and we are backed by [indiscernible]. Our financial on certain individual investors who have given the initial capital. Such transformation of businesses are emerging well. How are we placed to garner business in such segment and what initiatives we take to understand this business to grow well along with that?

Yes, I think very pertinent question, Sushilji. And certainly, when we have to meet all of us the [indiscernible] of 2037. We need to be in that league and that moving into that league needs understanding of the new lines, new initiative of businesses. So certainly, as of now, Union Bank is quite good to clear in terms of renewable energy, solar [ BSS], that is battery storage systems and all and the data centers and other things, we are already on, we have even underwrite some good sort of paper and we have even down sold. So almost, I can give a color to you that almost, I think, the last 9 to 10 months, 11 months, we have underwritten almost INR 90,000, INR 85,000 crores of the good papers, and we have down-sold. So that is the way in which we are moving. Now coming to the -- some more new [ streams ] which are coming in like [ hydrogen], like the new players. So these are the new things which are coming in and we are also doing employee skill development plans. So certainly, we are trying to engage with the various rating agencies because they are somewhere better in understanding that is understanding the model, understanding the projections and understanding the various other factors to underwrite. And we are also working upon this automation, it will take some time, obviously that how we can have external data. So still, we are using, but mostly it is not very automated, but then we are going through AI and other things where we can use all these data points across the world to do the proper assessment of the proposals. So most of the things which we said we are into those lines of underwriting, which other banks are also doing. But then our bank is also doing it nicely. But coming to the [ hydrogen nuclear ] and a few other more things, we are analyzing. Actually, we are in discussion with some of the partners even in this line of business. We have also been in discussion with some of the rating agencies of the [ one class ] that how they see these businesses, how they rate these businesses because they also rate having the same parameters, and we also do the appraisal assessment on the same basis. So jointly, we are trying to have some idea and some models with them. So I believe your question, and I would not only say socially. When we talk about 2047, we only will not talk about the corporate. But let me tell you, the business is particularly commercial banks, commercial banks, public sector banks. We maybe -- probably will see the UPI and ULI joining hands and moving into the automotive system of analytics, automated system of the cash flow system of the credit dispensation and the monitoring and otherwise, having the growth rate, particularly to meet the 2030, 2035 and 2047 objectives would not be that much easy. So that is why, again, that [ Sudarshan], which we told you that and not only to you, but I would invite all the investors who are listening to this con call that in BAM, you are invited to see this union production stream and now we are also working on many things. And one [ RFP ] is already there, which you can see. But we are working upon some more things. I would not divulge right now. But as we move forward by next 1 or 2 months, 3 months, you will be seeing some initiative where we are working to build the capabilities in the credit [ agitation], I will use the word rather than credit sanction, credit [indiscernible] and credit disbursement and credit monitoring. So I would use a better word as a credit administration how we can better entire ecosystem so that the disbursement happened fast credit growth happen as fast to make 2047, but at the same time, quality is maintained, which is most important for any of the regulatory entity.