U.S. Markets closed

Edited Transcript of UNIONBANK.NSE earnings conference call or presentation 14-Nov-19 12:45pm GMT

Half Year 2020 Union Bank of India Ltd Earnings Call

Mumbai Nov 29, 2019 (Thomson StreetEvents) -- Edited Transcript of Union Bank of India Ltd earnings conference call or presentation Thursday, November 14, 2019 at 12:45:00pm GMT

TEXT version of Transcript

================================================================================

Corporate Participants

================================================================================

* Monika Kalia

Union Bank of India - GM & CFO

* Rajkiran Rai Gundyadka

Union Bank of India - MD, CEO & Director

================================================================================

Conference Call Participants

================================================================================

* Amit Kumar Singh

Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst

* Bhavik Shah

Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst

* Chintan Shah

Elara Securities (India) Private Limited, Research Division - Associate

* Jai Mundhra

Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst

* Mahrukh Adajania

IDFC Securities Limited, Research Division - Director

* Rakesh Kumar

Elara Securities (India) Private Limited, Research Division - VP and Analyst

* Sneha Ganatra

Subhkam Ventures - Analyst

================================================================================

Presentation

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

Good day, ladies and gentlemen, and a very warm welcome to the Union Bank of India Q2 FY '20 Earnings Conference Call hosted by Elara Securities Private Limited. (Operator Instructions) Please note that this conference is being recorded.

I now hand the conference over to Mr. Rakesh Kumar from Elara Securities Private Limited. Thank you, and over to you, sir.

--------------------------------------------------------------------------------

Rakesh Kumar, Elara Securities (India) Private Limited, Research Division - VP and Analyst [2]

--------------------------------------------------------------------------------

Thanks, Ali. Welcome to you all in the Union Bank Q2 Results Conference Call. We have on the line Union Bank top management led by Mr. Rajkiran Rai G., Managing Director and CEO. And with him, there is the entire senior management on the call. Without much ado, I would like to request CFO, ma'am, to give the disclaimer statement. And thereafter, we can start the call. The presentation will be given by MD sir, and thereafter, we can start the Q&A. Over to you, ma'am.

--------------------------------------------------------------------------------

Monika Kalia, Union Bank of India - GM & CFO [3]

--------------------------------------------------------------------------------

Good evening, everyone. 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 results to differ from the statement. Investors are therefore requested to check the information independently before making any investment or other decisions.

Thank you. Over to you, sir.

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [4]

--------------------------------------------------------------------------------

Good evening. It is my pleasure and privilege to welcome you all to Union Bank of India Investor conference call on financial results for quarter ended September 30, 2019. It was an eventful quarter marked by a series of reforms announced by the government. The reserve bank also lowered policy rate to support growth. The government announced a major reform in banking, consolidating 10 nationalized banks into 4. Union Bank of India chosen to play role of anchor bank in this amalgamation with Andhra Bank and Corporation Bank, 2 great south Indian banks. There will be opportunities about as we build on strengths of each other.

Coming to bank financials for quarter ended September 2019, Union Bank continued to progress well along the directions we shared at the beginning of quarter. But for provisions on account of divergence on NPAs, the financials indicate a sustained gain on efficiencies. Our domestic advances rose 2.5% over last year, while share of RAM sectors in loan book stood at 57%.

The CASA share in deposits stood at 33.8%. At operating level, net interest income rose to INR 2,906 crores, an increase of 15.36% on sequential basis, while fee income grew 25.8% on a sequential basis to INR 605 crores. Yield on advances improved by 8 basis points sequentially to 7.89%, while cost of deposits rose by 5 basis points to 5.66% on June 2019 quarter.

Net interest margin rose 23 basis points sequentially to 2.35%. Cost-to-income ratio improved to 44.7% compared to 46.2% during previous quarter. The bank noted an operating profit of INR 2,240 crores during Q2, an increase of 18.7% sequentially and 22.3% on annual basis. The provisions, however, stood at INR 3,434 crores, which resulted in loss of INR 1,194 crores during the Q2. The provision coverage ratio rose by 189 basis points to 67.8% as at end of September 30, 2019.

There was slippage of INR 4,219 crores, which is distributed across the loan book. The bank has noted marked gain in recoveries. Recoveries, including observations stood at INR 1,303 crores compared to INR 770 crores of previous quarter. The bank received INR 11,768 crores in equity capital from government this quarter. Our CET ratio has accordingly improved to 11.46%. Friends, bank financials are reflective of overall development in the economy. Economic growth has moderated as consumer demand weakened. Several quality measures have been announced, which is a mix of both supply and demand side measures, which should feed through linkages and help growth recover. It will take a couple of quarters before positive gains start reflecting in financial, with improved credit offtake and better loan servicing. Union Bank is prepared to harvest new opportunities through efficiencies driven growth.

In my Q1 con call, I had shared the excluding 1 major existing account, our delinquency ratio for the FY '20 shall be 3.5%. Similarly, our indicated credit cost of 2.15 factoring expected recovery and provision rate back into larger accounts under NCLT. There has been a good development in that [existing] account, while regulation through NCLT have not materialized.

Accordingly, we are revising our guidance. The revised guidance for the financial year '19, '20 is credit growth to be 7% to 9% and deposit growth to be at 9% to 11%. NIM about 2.25%, delinquency ratio of about 4.5%, credit cost around 3% and PCR at around 70%. Cost-to-income ratio around 46%. Gross NPA is around 14% and net NPA below 16% by March 2020.

Thank you. Now we are open for questions.

================================================================================

Questions and Answers

--------------------------------------------------------------------------------

Operator [1]

--------------------------------------------------------------------------------

(Operator Instructions) The first question is from the line of Mahrukh Adajania from IDFC Securities.

--------------------------------------------------------------------------------

Mahrukh Adajania, IDFC Securities Limited, Research Division - Director [2]

--------------------------------------------------------------------------------

I had a couple of questions. Your delinquency guidance, does that include that HFC? Or it's without that HFC?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [3]

--------------------------------------------------------------------------------

It is with that HFC. But it is strictly in October.

--------------------------------------------------------------------------------

Mahrukh Adajania, IDFC Securities Limited, Research Division - Director [4]

--------------------------------------------------------------------------------

Okay. So it's already slipped in Q3. And is that true of other banks or only your bank?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [5]

--------------------------------------------------------------------------------

It depends. Some of the bank, it may happen in November. Because we have serviced this account up to 5th of July. Okay? So it will depends on when is the next to due. Suppose if sometimes there is no due in the month of July. So, actually, it did not happen in October. So then -- because it's 90 days on the due date since we are serviced up to 5th of July. There are no case up to this October. After that, because in my case, actually, there was a due in the month of July, so which cost 90 days. So that's why -- so it maybe -- in another 1 or 2 months, it will slip in most of the banks.

--------------------------------------------------------------------------------

Mahrukh Adajania, IDFC Securities Limited, Research Division - Director [6]

--------------------------------------------------------------------------------

Okay. Then sir, today, there was an article in the paper, in one of the paper, Financial Express, that banks, you and State Bank had red flagged the account and then the consortium may declared it as fraud. Is that true at all?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [7]

--------------------------------------------------------------------------------

First part is right. First part is right. Red flagging is right. But then fraud declaration is a process actually, like we are waiting for the final report of KPMG. After that, the committee of creditors will take a call based on the facts given in the report.

--------------------------------------------------------------------------------

Mahrukh Adajania, IDFC Securities Limited, Research Division - Director [8]

--------------------------------------------------------------------------------

Okay. And it will be full fraud, right? As in, if it's classified as fraud, the whole amount will be classified as fraud or only a part of it?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [9]

--------------------------------------------------------------------------------

This will be interesting discussion. We are already, like mentioning about this, that in this case, the full amount may not be declared as fraud. Because at the NBFC, it has got a loan book like banks. So now loan book is their assets. So because some of the loans, what they are given may still get -- maybe treated as fraud or -- like because of the revenues and other things like other issues. So why all the accounts should be classified as fraud? I think that is what the logic we are trying to see, but this ultimately depends on the regulator. So whether the -- bankers are weary around this logic that because it's a loan book, why all the loan book, all the assets should be declared as fraud? So this is a partial -- the thing that's what we are looking at. But let's see. Because it's ultimately like, depends on how RBI will view it.

--------------------------------------------------------------------------------

Mahrukh Adajania, IDFC Securities Limited, Research Division - Director [10]

--------------------------------------------------------------------------------

Okay. But you've discussed this with RBI? Or you are yet to discuss it?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [11]

--------------------------------------------------------------------------------

We are flagging it at various forums in this particular case. Because this has got implication on many other accounts, so a call has to be taken. But we are flagging it at various forums.

--------------------------------------------------------------------------------

Mahrukh Adajania, IDFC Securities Limited, Research Division - Director [12]

--------------------------------------------------------------------------------

Got it, sir. Sir, on the other question, I also [witnessed] higher delinquencies of 3.5% to 4.5% is because of the bond or other accounts as well?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [13]

--------------------------------------------------------------------------------

It is really the bond.

--------------------------------------------------------------------------------

Mahrukh Adajania, IDFC Securities Limited, Research Division - Director [14]

--------------------------------------------------------------------------------

Okay. And sir, the other thing is on your telecom exposure, your exposure to Voda Idea.

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [15]

--------------------------------------------------------------------------------

No.

--------------------------------------------------------------------------------

Mahrukh Adajania, IDFC Securities Limited, Research Division - Director [16]

--------------------------------------------------------------------------------

Okay, sir. All right. And just in terms of your power exposure, there's been a lot of negative inflow on power demand. So is that going to affect existing resolution? How much your power resolution that you are expecting in the third quarter? Or in the...

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [17]

--------------------------------------------------------------------------------

You see, one resolution happened in the second quarter. That is GMR Chhattisgarh. Okay. We are looking at maybe 2 resolutions this time on Prayagraj and the 1 (inaudible). The (inaudible). I don't think -- see, this lower power consumption may be a bit of seasonal thing. So because, see, what happens, these are certain indicators, unless you see it as a consistent 2, 3 months data. So it will be giving you wrong this thing because this may be because these comps are not buying power. So that also can be one of the reasons because of their financial position. It doesn't indicate the power consumption in the system has gone down. So let us see. Maybe 1 more month of data will give us some idea. But I don't think it will have a -- because these are very temporary things. It's a cyclical thing. I don't think it will have a long-term effect on the resolution, which is already in the process.

--------------------------------------------------------------------------------

Mahrukh Adajania, IDFC Securities Limited, Research Division - Director [18]

--------------------------------------------------------------------------------

Okay. And so just 1 last question. In terms of your slippage, what could be the key account that slipped this quarter?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [19]

--------------------------------------------------------------------------------

Top 3?

--------------------------------------------------------------------------------

Mahrukh Adajania, IDFC Securities Limited, Research Division - Director [20]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [21]

--------------------------------------------------------------------------------

I don't think we give the names. Actually, the names we don't give. But then there are -- the top 3 accounts are in the range of INR 300 crores plus kind of thing.

--------------------------------------------------------------------------------

Mahrukh Adajania, IDFC Securities Limited, Research Division - Director [22]

--------------------------------------------------------------------------------

[So all] mid-sector?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [23]

--------------------------------------------------------------------------------

I can give you one more information. Like, the total corporate slippage out of this was INR 2,080 crores, 2-0-8-0, out of INR 4,219 slippage up this quarter. Although the [8] accounts are about INR 100 crores, which constitute INR 1,700 crores. There is 1 textile. There is 1 NBFC, then 1 engineering firm and few trading accounts, and it is mostly on that. One infra -- so it is spread across. So the biggest account is around INR 330 crores kind of thing.

--------------------------------------------------------------------------------

Mahrukh Adajania, IDFC Securities Limited, Research Division - Director [24]

--------------------------------------------------------------------------------

Okay. And the textile account?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [25]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Operator [26]

--------------------------------------------------------------------------------

(Operator Instructions) The next question is from the line of Bhavik Shah from B&K Securities.

--------------------------------------------------------------------------------

Bhavik Shah, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [27]

--------------------------------------------------------------------------------

Sir, what could be the SMA-2 number for this quarter?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [28]

--------------------------------------------------------------------------------

SMA-2 number for this quarter is INR 13,186 crores.

--------------------------------------------------------------------------------

Bhavik Shah, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [29]

--------------------------------------------------------------------------------

So the -- so of the total ICA signed, what is the exposure? And what is the standard exposure?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [30]

--------------------------------------------------------------------------------

The total ICA signed actually are 23 accounts. I'll give you the amounts. Our amount outstanding is INR 10,770 crores. So out of that, only 3 are standard amounting to INR 3,690 crores. Others are already NP. 20 accounts, INR 7,151 crores is NP.

--------------------------------------------------------------------------------

Bhavik Shah, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [31]

--------------------------------------------------------------------------------

Okay. So then can you just broadly give the sector which these 3 account are?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [32]

--------------------------------------------------------------------------------

Yes. 2 are power. And 1 is in infra. 1 is infra.

--------------------------------------------------------------------------------

Bhavik Shah, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [33]

--------------------------------------------------------------------------------

And sir, any -- some key recoveries that happened this quarter?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [34]

--------------------------------------------------------------------------------

Not a big one. Not a big one. I think one settlement was GMR Chhattisgarh. But for that, it is only a small [quantity].

--------------------------------------------------------------------------------

Bhavik Shah, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [35]

--------------------------------------------------------------------------------

So what was the GMR Chhattisgar recovery amount that you received?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [36]

--------------------------------------------------------------------------------

Total reduction is INR 490 crores. So in the thing totally. But there was a write-off involved in that. So our provision amount is INR 235 crores.

--------------------------------------------------------------------------------

Bhavik Shah, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [37]

--------------------------------------------------------------------------------

And sir, we saw a sharp rise in earnings this quarter. Could you give color on that?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [38]

--------------------------------------------------------------------------------

Yes. Actually, I think maybe operating efficiencies have improved across if you look at it. So I think, more or less, I think -- there may be one item on that bond reversal.

--------------------------------------------------------------------------------

Monika Kalia, Union Bank of India - GM & CFO [39]

--------------------------------------------------------------------------------

81.

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [40]

--------------------------------------------------------------------------------

81. 81. And it will be to the extent of INR 90 crores...

--------------------------------------------------------------------------------

Monika Kalia, Union Bank of India - GM & CFO [41]

--------------------------------------------------------------------------------

INR 180 crores.

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [42]

--------------------------------------------------------------------------------

INR 90 crores for the quarter. So you know what happened? Because this quarter, we are in a loss. That INR 90 crores per quarter payment, what happens is it gets to the -- like, we debit it to the reserve. So that may be one. But then -- still, like, the growth is very visible on the net interest income side and the NIM side.

--------------------------------------------------------------------------------

Bhavik Shah, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [43]

--------------------------------------------------------------------------------

Okay. And sir, 1 more question. Sir, are (inaudible) PCR is at 82.3%. So I just wanted to know the 3 [NCLT] accounts that are getting resolved, this is where a first team and other industries? Or are these more than 100% total accounts? Or how is it?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [44]

--------------------------------------------------------------------------------

I don't think we are [provided] 100% in these 3 accounts.

--------------------------------------------------------------------------------

Bhavik Shah, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [45]

--------------------------------------------------------------------------------

So how much the [FRC] provided?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [46]

--------------------------------------------------------------------------------

Yes. That is provided to the extent of...

--------------------------------------------------------------------------------

Monika Kalia, Union Bank of India - GM & CFO [47]

--------------------------------------------------------------------------------

50%.

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [48]

--------------------------------------------------------------------------------

That is provided to the extent of 50%. Others are full [lakhs]. Yes. Others are full.

--------------------------------------------------------------------------------

Bhavik Shah, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [49]

--------------------------------------------------------------------------------

Others are (inaudible) is full?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [50]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Operator [51]

--------------------------------------------------------------------------------

(Operator Instructions) Next question is from the line of Sneha Ganatra, Subhkam Venture.

--------------------------------------------------------------------------------

Sneha Ganatra, Subhkam Ventures - Analyst [52]

--------------------------------------------------------------------------------

Sir, you mentioned on the slippages, when you have considered the [bond] into the delinquency. Even in your credit cost also you have considered it?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [53]

--------------------------------------------------------------------------------

Yes. Not as a fraud.

--------------------------------------------------------------------------------

Sneha Ganatra, Subhkam Ventures - Analyst [54]

--------------------------------------------------------------------------------

Okay. Not as a fraud. And just wondered if...

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [55]

--------------------------------------------------------------------------------

Because if you declare the fraud on those, we have 4 quarters to be spread. So actually, we have done a 15% provision this quarter already. It will reflect in the standard asset provision as of Q2. So we already done a 15% provision on the [bond].

--------------------------------------------------------------------------------

Sneha Ganatra, Subhkam Ventures - Analyst [56]

--------------------------------------------------------------------------------

Okay. So how much is the total exposure in this one?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [57]

--------------------------------------------------------------------------------

It is around 2,300 fund-based.

--------------------------------------------------------------------------------

Sneha Ganatra, Subhkam Ventures - Analyst [58]

--------------------------------------------------------------------------------

Okay. Okay. And non-funded?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [59]

--------------------------------------------------------------------------------

Yes. There are like non-funded, maybe around 200.

--------------------------------------------------------------------------------

Monika Kalia, Union Bank of India - GM & CFO [60]

--------------------------------------------------------------------------------

100.

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [61]

--------------------------------------------------------------------------------

200. But then anyway, that is subject to crystallization. These are guaranteed issue. Outstanding is 161 non-fund.

--------------------------------------------------------------------------------

Sneha Ganatra, Subhkam Ventures - Analyst [62]

--------------------------------------------------------------------------------

Okay. And just wanted to know, apart from the bond, any other new sector or new [agreement] of stress we are -- in which we are emphasizing on the slippages front?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [63]

--------------------------------------------------------------------------------

NBFC is not. NBFC, the legal has gone, and this has gone. So the legal is already factored into 2. Okay. So this is one where are -- we are not seeing a default in any of the other NBFCs. And we don't foresee any problem.

--------------------------------------------------------------------------------

Sneha Ganatra, Subhkam Ventures - Analyst [64]

--------------------------------------------------------------------------------

Okay. And on the recovery side and the -- how do you see the overall recoveries and the upgrade for the second half?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [65]

--------------------------------------------------------------------------------

Second half will be -- generally, you see in second half, we do very well. Recovery and upgradation last year was around INR 6,500 crores. Last year. And that also happened in the second half, more than anything. Now if you look at this year also, the first 2 quarters, they're just crossing INR 2,000 crores. So in a normal recovery, we expect at least the INR 3,500 to INR 4,000 crores recovery in the normal course. And maybe another INR 3,000 crores from the NCLT cases.

--------------------------------------------------------------------------------

Sneha Ganatra, Subhkam Ventures - Analyst [66]

--------------------------------------------------------------------------------

Which will total INR 6,000 crores recovery, right?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [67]

--------------------------------------------------------------------------------

And we are closing -- actually, we are expecting up to INR 9,000 crores. The NCLT, actually, you'll see this major resolution. We are expecting anything between INR 3,000 crores to INR 4,000 crores. And our normal recovery should go up to INR 5,000 crores. That is what we expect out of that. Because we didn't have much in the NCLT in the first half, actually. So that -- so we have done about INR 2,000 crores recovery upgradation in the first. So second half, it can be more than INR 3,000 crores.

--------------------------------------------------------------------------------

Sneha Ganatra, Subhkam Ventures - Analyst [68]

--------------------------------------------------------------------------------

Okay. And then we expect the resolution from the HR front there, it has been structured today?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [69]

--------------------------------------------------------------------------------

So from Kotak, that order is expected any day now. Before 18, it will come.

--------------------------------------------------------------------------------

Sneha Ganatra, Subhkam Ventures - Analyst [70]

--------------------------------------------------------------------------------

Before 18?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [71]

--------------------------------------------------------------------------------

Yes. And remember, because that issue of secured credit to unsecured credit card discussion is going on. We are expecting it as -- like, the final judgement from Supreme Court.

--------------------------------------------------------------------------------

Sneha Ganatra, Subhkam Ventures - Analyst [72]

--------------------------------------------------------------------------------

But sir, we are expecting final judgement before 18th November?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [73]

--------------------------------------------------------------------------------

Yes.

--------------------------------------------------------------------------------

Sneha Ganatra, Subhkam Ventures - Analyst [74]

--------------------------------------------------------------------------------

Okay. Got it. Okay. And overall on the credit growth side. And what would be the focus in there?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [75]

--------------------------------------------------------------------------------

Production is around 7% to 9%. We are fairly confident in the first half. It is not that good. We have grown about 2.5% only. But then this quarter, already, we are seeing uptick. Because I was a bit constrained by capital also until September. So only last week of September, we got the capital. But by the time, now we have a lot of sanctions in place. So hopefully, we may be about 5%, 6% growth by December and between 7% and 9% by March.

--------------------------------------------------------------------------------

Sneha Ganatra, Subhkam Ventures - Analyst [76]

--------------------------------------------------------------------------------

Okay. And the margins are maintained at similar levels?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [77]

--------------------------------------------------------------------------------

Actually, meaning that we are projecting at 2.25%, even though personally, I feel it may go up to 2.35%, but we would like to watch 1 more quarter before revising that. So 2.25%, we are holding on as of now. Okay.

--------------------------------------------------------------------------------

Operator [78]

--------------------------------------------------------------------------------

The next question is from the line of [Prakash] from Ernst & Young.

--------------------------------------------------------------------------------

Unidentified Analyst, [79]

--------------------------------------------------------------------------------

I wanted to understand, I mean, how was the credit optic during this festival season, there in government but always these loan and there was some (inaudible) union bankers and sanctioned INR 3,000 crores to INR 4,000 crores. I mean what kind of customers are we getting in which sectors this loan sanction cycle?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [80]

--------------------------------------------------------------------------------

Okay. Actually, when I mentioned the INR 3,000 crores to INR 4,000 crores, that was in the first outreach. Then we have 1 more. So if you look at that 2 or 3 those days -- around like around those days -- we have about INR 12,000 crores of sanction. But it includes some of the NBFCs and large corporates also. So it is more on the MSME side, actually. Our 3 tours basically is intended to give you a signal that banks are ready to lend to the right kind of borrowers. So that's why, like (inaudible) program we conducted across. But then there is no compromise on the quality of advances, that I can assure you. Because in our case, actually, we have a centralized credit processing even for agriculture and MSME. Retail, anyway, it is back up in processing. So quality standards are assured but then we saw a good uptick. See, my retail growth, about 15%, indicates that retail is growing at a good pace.

--------------------------------------------------------------------------------

Unidentified Analyst, [81]

--------------------------------------------------------------------------------

And what was the average ticket size?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [82]

--------------------------------------------------------------------------------

Difficult to the thing, like maybe we will try to give you that data. We have not done that because we need to take the corporate or profit and then -- but generally, it is about INR 1 lakhs, INR 2 lakhs range. And MSME, generally, because we do more of the commercial vehicles like commercial vehicles, so it can be around 8, 10 lakhs, it will be around that. But then anyway, we'll give you the data required.

--------------------------------------------------------------------------------

Operator [83]

--------------------------------------------------------------------------------

The next question is from the line of Mahrukh Adajania from IDFC Securities.

--------------------------------------------------------------------------------

Mahrukh Adajania, IDFC Securities Limited, Research Division - Director [84]

--------------------------------------------------------------------------------

Hello again. So I just wanted to check off inquiries. There was some discussion around [NIMs] earlier also. But specifically, actually, the yield on loans has also been moving up. So what would explain that? Because in general, people are worried about external benchmarking and pressure on lending rates, but for most banks, Indian loans has actually gone up in the second quarter sequentially. So what explains that?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [85]

--------------------------------------------------------------------------------

Actually, one is, if you generally look at the numbers, earning assets have moved up. The gross NPA numbers are remaining almost stable. So whatever is happening, like the earning assets are moving up. That is one thing. Second, pricing-wise, actually, we could really price our loans better in the first quarter, second quarter. Because of the -- like a lack of competition from the bank. So whatever we did, we could price it better. So -- whereas in Q3, I will not say that because now, many banks are in the picture. The NBFCs are requesting for much lower rates now. So that's why I said I had to watch Q3. But then Q1, Q2, we could price our loans better. So I think that explains.

--------------------------------------------------------------------------------

Mahrukh Adajania, IDFC Securities Limited, Research Division - Director [86]

--------------------------------------------------------------------------------

Okay. But -- okay. So basically, the discounts were lower? Or...

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [87]

--------------------------------------------------------------------------------

Yes, discounts are lower. We could price our loans better.

--------------------------------------------------------------------------------

Mahrukh Adajania, IDFC Securities Limited, Research Division - Director [88]

--------------------------------------------------------------------------------

Okay, sir. So on the other question I had is that, what is non-fund exposure that an NBFC would have as in you have some...

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [89]

--------------------------------------------------------------------------------

Earlier guarantees issued, maybe on some other context, I also need to check, but not a big amount, I think INR 161 crores, INR 170 crores. You should -- it might have been issued for some purpose earlier.

--------------------------------------------------------------------------------

Mahrukh Adajania, IDFC Securities Limited, Research Division - Director [90]

--------------------------------------------------------------------------------

Okay. And so...

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [91]

--------------------------------------------------------------------------------

We do with [HVR], I don't know. I need to check because -- see what happens? This is a very old account with us. We were the lead bank even though my exposure is not that big, but then traditionally, this is our account which has grown with that. So there will be certain guarantees given earlier. We need to check so...

--------------------------------------------------------------------------------

Mahrukh Adajania, IDFC Securities Limited, Research Division - Director [92]

--------------------------------------------------------------------------------

And sir, just also on your telecom exposure. Also, I wanted to check the same thing, that -- what does the non-fund exposure in telecom represent? It's not guaranteed to what spectrum charges, right? What is it?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [93]

--------------------------------------------------------------------------------

The nonfunding telecom is mostly to the government, I think. I'll come back to you on this. But then anyway, my case, I don't have exposure to these accounts, what you are looking at.

--------------------------------------------------------------------------------

Mahrukh Adajania, IDFC Securities Limited, Research Division - Director [94]

--------------------------------------------------------------------------------

Correct, correct. I understand. Just on...

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [95]

--------------------------------------------------------------------------------

This guarantees revenue should do [duty] only because generally, that is what they need. But I'll confirm that.

--------------------------------------------------------------------------------

Mahrukh Adajania, IDFC Securities Limited, Research Division - Director [96]

--------------------------------------------------------------------------------

Okay. Sir, and my last question was on the ICA. So what is the progress? Have you been able to -- or have banks collectively resolved any account under the ICA?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [97]

--------------------------------------------------------------------------------

[Not really]. I see the progress is there. But then I think the resolutions are yet to happen. But then geomarkets in the (inaudible) what happened under us.

--------------------------------------------------------------------------------

Unidentified Company Representative, [98]

--------------------------------------------------------------------------------

It is after ICA.

--------------------------------------------------------------------------------

Operator [99]

--------------------------------------------------------------------------------

The next question is from line of Jai Mundhra from the B&K Securities.

--------------------------------------------------------------------------------

Jai Mundhra, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [100]

--------------------------------------------------------------------------------

Sir, first on this provisioning divergence, if you can explain what has led to a sudden provisioning divergence? I mean yes. So I mean, you would -- it looks like you under provided. So what were the technical reasons which led you -- which led RBA to conclude that you have provided less?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [101]

--------------------------------------------------------------------------------

Okay. We had INR 8,587 crores for provision divergence, which led to the losses during this quarter, actually. The -- and we absorbed the whole thing this quarter. So this actually, basically, out of that, almost INR 1,000 crores came in 3 accounts. Okay. Now out of these 3 major accounts, 2 accounts security value RBA reduce it to 0. And 1 account, they shifted the NPA date backwards. Okay. So these are the -- like, I think that is true -- others are smaller ones, 3 major accounts.

--------------------------------------------------------------------------------

Jai Mundhra, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [102]

--------------------------------------------------------------------------------

Sure. And sir, I believe you also mentioned about fraud exposure. So is this a new -- I mean, is this pertaining to existing NPA, in particular, to Bhushan Power? Or this is some other accounts which has now been tagged as fraud?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [103]

--------------------------------------------------------------------------------

It is Bhushan Power plus more accounts, and the provisioning activity done. So what we have done is about INR 1,200 crores, Actually, generally, we used to absorb more provision in the same quarter, generally. So this is the first time, we are using the target dispensation to spread it to a full quarter. Because, actually, you see there is 1 more reason doing the -- like the (inaudible) because the Bhushan Power, what we mentioned, there is a provisioning gap also, which will kick in March, as of otherwise, also (inaudible) collection. So we do that, come other results. And it is come in the front also. So as per the rule, if the (inaudible) in the demand, then that has to be factored. Then I will not give the full quarters figures. So Bhushan anyway, by March, have to complete their provisioning, whether it's fraud or not. That's one part. But then we are also expecting a resolution in that account.

--------------------------------------------------------------------------------

Jai Mundhra, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [104]

--------------------------------------------------------------------------------

And as we now provided 100%, sir. I mean (inaudible)...

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [105]

--------------------------------------------------------------------------------

Yes, they're all under 50% provision.

--------------------------------------------------------------------------------

Jai Mundhra, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [106]

--------------------------------------------------------------------------------

Okay. And sir, do we also have a portfolio pool exposure?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [107]

--------------------------------------------------------------------------------

Yes, it is about [800].

--------------------------------------------------------------------------------

Jai Mundhra, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [108]

--------------------------------------------------------------------------------

So what is the outlook there, sir? And then there were some -- now you have got the Supreme Court extension of -- they would be servicing, but what is your sense? Would it remain?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [109]

--------------------------------------------------------------------------------

No issue. Actually, doing well.

--------------------------------------------------------------------------------

Jai Mundhra, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [110]

--------------------------------------------------------------------------------

Okay. And so you mentioned about this reliever, that it has good, but there was a change of management there, right? So what has happened? Actually, the new -- there was some technical lag, or this is NPA even after management change has happened? Or that has not happened?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [111]

--------------------------------------------------------------------------------

The management change process is going on. And then the process change process going on. So that is not completed because all the creditors have not yet approved that. That why meanwhile, it's slipped because of some other reasons. Yes.

--------------------------------------------------------------------------------

Jai Mundhra, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [112]

--------------------------------------------------------------------------------

So, let's say, next quarter, if the change of management actually happens, what happens to this the account then?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [113]

--------------------------------------------------------------------------------

Account may be upgraded.

--------------------------------------------------------------------------------

Jai Mundhra, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [114]

--------------------------------------------------------------------------------

Okay. Or you may have to take some work and then approve it right?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [115]

--------------------------------------------------------------------------------

That, we will see. Actually, like -- there's not much [haircuts] to post actually, hopefully. There is some resetting. Basically, portion of the loan gets into a long-term, then there is a provisioning requirement.

--------------------------------------------------------------------------------

Jai Mundhra, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [116]

--------------------------------------------------------------------------------

NPV loss?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [117]

--------------------------------------------------------------------------------

Yes. NPV losses provision will be there.

--------------------------------------------------------------------------------

Jai Mundhra, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [118]

--------------------------------------------------------------------------------

Sure, sir. And just 2, 3 things, sir. One is, what is this standard effect provisioning of INR 570 crores?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [119]

--------------------------------------------------------------------------------

Yes, we have done provision to the one housing because as of Q2, ended on a standard effect. So we have made a 15% provision on BHFS. So that comes under standard as a provision. Hello?

--------------------------------------------------------------------------------

Jai Mundhra, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [120]

--------------------------------------------------------------------------------

Yes, sir?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [121]

--------------------------------------------------------------------------------

Yes. And there was a one more account that we could not reverse the provision because of RBA guideline. Account is upgraded. That is [geomarket], so where we have very high level of provisions. So we are not allowed to reverse state, actually. We have to take permission. Even with the standard, but then that continues to be -- the project continues to be there.

--------------------------------------------------------------------------------

Operator [122]

--------------------------------------------------------------------------------

The next question is from the line of [Sandeep Trankan], individual investor.

As there's no response, we move to the next question from Chintan Shah from Elara Capital.

--------------------------------------------------------------------------------

Chintan Shah, Elara Securities (India) Private Limited, Research Division - Associate [123]

--------------------------------------------------------------------------------

First, one question on the deposit side. So you said that the volume growth has been around 11% during on Y-o-Y, during the quarter. And while the credit growth has been quite sluggish, around 2% or 2 percentage. So any reason for growing the product at such a higher base? And this has also led to the loan-to-deposit ratio at 11 quarter loss. So any insights on that?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [124]

--------------------------------------------------------------------------------

No, this actually -- see, there is a good TAM deposit growth despite cutting rates. Actually, we can't say no to depositors. We stopped taking bulk deposits and those things. But then the retail deposit growth was very good. So as a banking institution, we can't say no. But we have had the rates, we are taking at a much lower rate now. But then growth was bad so we had to take it. But then we -- like, credit growth is expected this quarter.

--------------------------------------------------------------------------------

Operator [125]

--------------------------------------------------------------------------------

Next question is from the line of Mahrukh Adajania from IDFC Securities.

--------------------------------------------------------------------------------

Mahrukh Adajania, IDFC Securities Limited, Research Division - Director [126]

--------------------------------------------------------------------------------

Yes, sir. So a few follow-up questions. So here on the united (inaudible), why can't you reverse the provision?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [127]

--------------------------------------------------------------------------------

The RBI guideline says, even if it becomes a standard asset, the provision level has to continue until that initial monitoring period, actually.

--------------------------------------------------------------------------------

Mahrukh Adajania, IDFC Securities Limited, Research Division - Director [128]

--------------------------------------------------------------------------------

Okay, that's one year? What is it?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [129]

--------------------------------------------------------------------------------

I think it is almost 1 year, yes.

--------------------------------------------------------------------------------

Mahrukh Adajania, IDFC Securities Limited, Research Division - Director [130]

--------------------------------------------------------------------------------

Okay. So you will be able to reverse it after 1 year?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [131]

--------------------------------------------------------------------------------

After 1 year. That's the way I understand it, as the provision has gone up.

--------------------------------------------------------------------------------

Mahrukh Adajania, IDFC Securities Limited, Research Division - Director [132]

--------------------------------------------------------------------------------

Okay. Okay, got it, sir. But do you just reallocate it? Earlier they are specific, now it has become standard.

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [133]

--------------------------------------------------------------------------------

It is provisionary standard, I guess so. Yes.

--------------------------------------------------------------------------------

Mahrukh Adajania, IDFC Securities Limited, Research Division - Director [134]

--------------------------------------------------------------------------------

Got it. Got it. And the other question I had is, that the -- in terms of the module, so what is the timeline of integration that you are seeing?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [135]

--------------------------------------------------------------------------------

See -- actually, till now, there is no clarity on the date. But more or less, we can assume that it can be 1st April. So the indications are around that. And we are working with that date in mind. So that is a likely date.

--------------------------------------------------------------------------------

Mahrukh Adajania, IDFC Securities Limited, Research Division - Director [136]

--------------------------------------------------------------------------------

Going into your SMA-2 watch list, what would be the key accounts? So we know the HFC, but what are other sectors and what size of accounts?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [137]

--------------------------------------------------------------------------------

On the SMA-2 side, actually, we have a few corporate accounts. So it is on the -- there are 2 accounts on the power side, then there are 2 accounts on the infra side, but not very big exposures. And we are not expecting that they will slip also. So they come conversely there. And then SMA-2 is more on retail and MSME, actually. But then we are confident that they may not slip.

--------------------------------------------------------------------------------

Mahrukh Adajania, IDFC Securities Limited, Research Division - Director [138]

--------------------------------------------------------------------------------

Got it. Sir, on the pre-standard account and the ICA do all the 3 belong to a single business group?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [139]

--------------------------------------------------------------------------------

No, no, no.

--------------------------------------------------------------------------------

Mahrukh Adajania, IDFC Securities Limited, Research Division - Director [140]

--------------------------------------------------------------------------------

They don't. They are different. Okay.

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [141]

--------------------------------------------------------------------------------

That is right.

--------------------------------------------------------------------------------

Operator [142]

--------------------------------------------------------------------------------

The next question is from the line of Amit Singh from B&K Securities.

--------------------------------------------------------------------------------

Amit Kumar Singh, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [143]

--------------------------------------------------------------------------------

Sir, I understand that the model effected on those people. But how soon are we expected to get this for

operations?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [144]

--------------------------------------------------------------------------------

That process has started actually, like, because we need to engage evaluation specialists and all that. So now then, the RFP process is complete, the Japan lend process is going on. So I think -- because this process takes about 2, 3 months, at least. Yes, 2-month at least. The process has started.

--------------------------------------------------------------------------------

Amit Kumar Singh, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [145]

--------------------------------------------------------------------------------

So by end of December?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [146]

--------------------------------------------------------------------------------

No, maybe January.

--------------------------------------------------------------------------------

Amit Kumar Singh, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [147]

--------------------------------------------------------------------------------

Okay. And sir, the new [financial] Mudra book outstanding, is it definitely INR 6,900 crores? So I was...

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [148]

--------------------------------------------------------------------------------

No, no, no. That is MSME book. Mudra book is below INR 7,000 crores.

--------------------------------------------------------------------------------

Amit Kumar Singh, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [149]

--------------------------------------------------------------------------------

And sir, what about (inaudible)?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [150]

--------------------------------------------------------------------------------

12% in Mudra.

--------------------------------------------------------------------------------

Amit Kumar Singh, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [151]

--------------------------------------------------------------------------------

And sir, (inaudible) to that number, (inaudible) around INR [13,300] crores. So what would be the corporate SMA-2?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [152]

--------------------------------------------------------------------------------

The corporate is INR 1,800? INR 1,800. The corporate INR 1,800 excluding the (inaudible) account.

--------------------------------------------------------------------------------

Amit Kumar Singh, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [153]

--------------------------------------------------------------------------------

Okay. So (inaudible)

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [154]

--------------------------------------------------------------------------------

(inaudible) SMA-2.

--------------------------------------------------------------------------------

Unidentified Company Representative, [155]

--------------------------------------------------------------------------------

Yes, Yes. Excluding the (inaudible) account.

--------------------------------------------------------------------------------

Amit Kumar Singh, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [156]

--------------------------------------------------------------------------------

And sir, [also] assuming one number if you can give, the corporate is in there?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [157]

--------------------------------------------------------------------------------

It is. We've not started giving it. Only thing I can tell you, that it is lower than last quarter. SMA-0 and SMA-1 has come down. SMA-2 went up, and basically, because of the chunky accounts. So -- and generally, like, I don't foresee any problem there.

--------------------------------------------------------------------------------

Amit Kumar Singh, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [158]

--------------------------------------------------------------------------------

Okay. And what would be the overlap between the SMA-2 and your standard ICA that you mentioned?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [159]

--------------------------------------------------------------------------------

I think they are not in SMA-2 as of now.

--------------------------------------------------------------------------------

Unidentified Company Representative, [160]

--------------------------------------------------------------------------------

(inaudible) Do I see a minute? That 3 accounts? (inaudible)

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [161]

--------------------------------------------------------------------------------

One of the power companies, SMA-2, maybe about 700. But then, we are not expecting that to slip.

--------------------------------------------------------------------------------

Amit Kumar Singh, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [162]

--------------------------------------------------------------------------------

Okay. Answer just 2 more questions. Sir, firstly, agriculture has been higher this quarter, so weaker levels?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [163]

--------------------------------------------------------------------------------

Yes. Actually, this was expected because -- like there are a few states that it happened and there are other issues. But then, I think that has peaked out. Peaked out. I think this quarter, we may not see that kind of number. Because slippage was INR 990 crores, which is one of the highest in a few quarters actually. So actually, I don't think that will (inaudible).

--------------------------------------------------------------------------------

Amit Kumar Singh, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [164]

--------------------------------------------------------------------------------

Sir, Mudra slippages, so that would be classified under MSME, right?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [165]

--------------------------------------------------------------------------------

Yes. MSME will be under there. And Mudra will be under there. And Mudra will not guarantee (inaudible) So you're not at full loss proposition. So recovery process will be on and will be and then the guarantee cover.

--------------------------------------------------------------------------------

Amit Kumar Singh, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [166]

--------------------------------------------------------------------------------

So (inaudible) on a constant then? Sir, how much of the total amount is (inaudible) of NPA?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [167]

--------------------------------------------------------------------------------

(inaudible). Everything will be NPAs, full amount will be NPA. But once it becomes NPA, we go for that guarantee cover. So I think about 75%? 75% of the amount is received by the guarantee. But then that takes a year plus, recovering that. Yes.

--------------------------------------------------------------------------------

Amit Kumar Singh, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [168]

--------------------------------------------------------------------------------

And sir, so will be [GNPA] of Mudra last quarter approximately?

--------------------------------------------------------------------------------

Unidentified Company Representative, [169]

--------------------------------------------------------------------------------

That number, I do not have.

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [170]

--------------------------------------------------------------------------------

For Mudra. Mudra overall NPE is 12%. The 1 number I can share with you. So it is close to 8% as of March. Now it has moved to 12%.

--------------------------------------------------------------------------------

Amit Kumar Singh, Batlivala & Karani Securities India Pvt. Ltd., Research Division - Research Analyst [171]

--------------------------------------------------------------------------------

And the last question, sir. So does biparted real time settlement that we have been increasing quarter-on-quarter? Sir, what is a high consumption that we have factored in? Or is it 10% or 8%.?

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [172]

--------------------------------------------------------------------------------

We are factoring about INR 20 crores. I think we have not factored that number. I mean, I think...

We're doing some assumptions here, It may be like last -- last settlement was...

--------------------------------------------------------------------------------

Monika Kalia, Union Bank of India - GM & CFO [173]

--------------------------------------------------------------------------------

It will be around 8%.

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [174]

--------------------------------------------------------------------------------

It may be around 8%, but then we are not very sure. I think this question we'll keep, and offline, we'll tell you.

--------------------------------------------------------------------------------

Operator [175]

--------------------------------------------------------------------------------

That was the last question in queue. I now hand the conference over to the management for their closing comments.

--------------------------------------------------------------------------------

Rajkiran Rai Gundyadka, Union Bank of India - MD, CEO & Director [176]

--------------------------------------------------------------------------------

Thank you very much. I think this quarter, even though we declared losses because of this provisioning required because of the divergences. But otherwise, if you look at the operating efficiencies, they are steadily going up. So we are expecting that we'll be very consistent in this parameter. So -- and then we are also expecting some major resolutions out of the NCLT in the next 2 quarters, Q3 and Q4. With that, I think, with some write backs which are expected, hopefully, that additional provision requirements, which may kick in can be balanced off. So we are definitely looking for better quarters in Q3, Q4. So -- and like -- if you look at the way the interest income is growing, so I think it's a very, very positive signal. And we are also positively looking at credit growth. So a number of functions which are on-hand, in the process of disbursement, some of the portfolio buy outs happened. So I think this quarter, definitely, we'll look forward for a better growth. And we'll end the year -- we did growth of between 7% and 9%, close to 9% rather than 7%. This is our expectation.

So thank you. Thank you very much for participating.

--------------------------------------------------------------------------------

Operator [177]

--------------------------------------------------------------------------------

Thank you very much. Ladies and gentlemen, on behalf of Elara Securities Private Limited, that concludes this conference call for today. Thank you for joining us, and you may now disconnect your lines.