Tamilnad Mercantile Bank (NSE:TMB) Q2 2027 Earnings Call

0:00 Ladies and gentlemen, good day, and welcome to the Q2 and H1 FY 'twenty seven Earnings Conference Call hosted by Tamilnad Mercantile Bank Limited. This conference call may contain forward looking statements about the company, which are based on the beliefs, opinions and expectation of the company as on date of this call. These statements are not the guarantee of future performance and involve risks and uncertainties that are difficult to predict. As a reminder, all participant lines will be in a listen only mode, and there will be an opportunity for you to ask question after the presentation conclude. Please note that this conference is being recorded. On the call today, we have the following management representatives.

0:47 Mr. Salya Snaire, Managing Director Mr. Vincent Devasi, Executive Director Mr. Sanjay Kumar Goel, Chief Financial Officer. I now hand the conference over to Mr. Salyas Nair, Managing Director from Tamilnad Mercantile Bank Limited. Thank you, and over to you, sir. Thank you. Thank you very much, and thanks for attending this conference call from the Tamilnad Mercantile Bank. And I'm sure most of you would have already seen our results on the website and on the exchanges. The quarterly performance has been as anticipated. We have been maintaining the trend of growth that we delivered last quarter. We have actually exceeded that. And this is something that we have been doing it quarter after quarter for the past seven quarters, think, eight quarters where we have exceeded our previous performance.

1:43 And to delve into some of these highlights, very clearly the growth has accelerated and the profit is at record level. And when we look at the business growth itself, the total business grew 27.25% year on year, which is almost three times our own 10 CAGR of 9.41%. So this CAGR is also moving up on the basis of the rising growth. And this growth is highest year on year growth in the last eighteen years. So that's something that we are very proud of. And it's also 8% faster than the industry. So the delta today in terms of growth is 8% over the industry's growth that TMB has delivered.

2:33 And this growth has driven a strong net profit, the highest ever four fifty one growth, highest ever net profit. And that net profit has come out of the core business growth. These are not on account of the exception, these are largely driven by the core business, the core by a very strong net interest income. Apart from that, let me also say that the strength that we are adding to the balance sheet in terms of other measures is one of them we have taken is looking forward into the ECL norms that will come on the 04/01/2027. We have in anticipation provided fully SMA one and SMA two as per ECL NOPs.

3:26 I think that's something that we have done this quarter. If you recall, in quarter one of the current year FY 2017, we had also provided fully for the stressed non fund facilities. So that was last quarter, this quarter SMA one and SMA two, we have fully provided as per ECL NOx. And of course NPA, the gross and net continues to decline, the net NPA is at 0.14%, the capital adequacy is at 32.39%. The balance sheet has also moved up quite sharply by 24.49% year on year. And this has resulted in the overall growth and the profits has resulted in an ROE of INR 16.92%.

4:18 Quarterly earnings per share is at INR 28.49 and the shareholders' fund is today 12.53 of the balance sheet. Just to give you a little more color on the numbers itself, the total business stands at INR 130,237 crores, is up 27.25% and contributed by deposit growing at 25.49% as it stands today, which stands at INR 69,546 crores and advances up 29.32% outstanding at crores. Qatar grew about INR16.26 crores, ZAR28.96 crores. And on the earnings side, as I said, that the profit has been delivered on a strong net interest income. The net interest income for the quarter stands at INR $80.07 crores, up INR 35.17 crores.

5:20 The operating profit is INR $6.42 crores, operating profit after expenses, $6.42 crores, up 41.80%. As I said earlier, the net profit is regard as the highest ever this bank has clocked at $4.51 crores, up 42.09% year on year. And ROA, the return on assets stands at 2.18%, ROE 16.92%. So that's where we stand. Of course, when you look at the cost of income, it is 38.28%. That's where it stands as on September 30, unsecured exposure is a bare 20 basis points.

6:13 We have ramp focus continues. It stands at 94.33. The net interest margin is year on year up 36 basis, stands at 4.19%. Sequentially, it stands at we have lost 10 basis, it was 4.29% for and I did explain why it was 4.29% last quarter, the last one call. Profit per employee stands at almost 35 lakhs and that is up 36.45%. Beyond NPA 0.61% and net NPA 0.14%. The credit cost is at nine basis points, 0.09 and the slippage is again six basis points.

7:04 The TCR on book TCR is 77.49% and the overall TCR is at 96.61%. SME 0.12%, I repeat, zero included SME 0.12% is at 1.67%, which is that if you look at your NPL 0.61% and SMA of 1.67%, your portfolio at risk one day today, on September 30 was at 2.28%. As I said earlier, the stress NFP, we have provided 100% and SMA one and two, we have also provided 100% as per the ECL NOS.

7:50 So just to run through some of the numbers, Qatar at 16.26% is the growth. Term deposit, the total term deposit growth of 25.49% has been driven by the term deposit, which stands at almost 29%. And if you look at the number itself, I think the non callable deposits share in the incremental term deposit, the incremental term deposit for the half year stands at 7,570 crores, 40.62% of that came in the form of non callable deposits. As you are aware, non callable deposits are deposits, which cannot be paid before the maturity. So there's no prepayment of that.

8:40 So from that perspective, the deposit makes our Social Security that much more stronger. SNRB, we did about $51,940,000 not something that we can write. So overall, the SNRB deposit base for deposit growth has been 47.14%. So SNRB is not one of the better stories that we want to put on the table, it's just about $51,940,000 And the advances 29.32% riding on the Ram. If you look at the MSME, as I promised, has in stock and today stands at 23.62%. We also have the I think there's a lot of talk going on, on the gold loan portfolio.

9:31 The gold loan portfolio, we have put out our sensitivity on it at 20%, 3.13% of our gold loan will be above the market. It is just 3.13%. The portfolio LTV stands at 62.35%. The overall portfolio is at about 48%, almost stable. It was about 47 something earlier, it's about 48 now. Unsecured exposure remains minimal at 20 basis points. So when I get into some of the ratios, I'll just take it take you through some of the ratios. Firstly, Page, I just mentioned six basis.

10:25 Before I come to the ratios, let me also give you some color on the expected credit loss. We calculated we have done a calculation of the impact as of 09/30/2026 that comes to about INR384 crores. The due norms and expected credit loss would be INR385 crores. And I think if you'll check into the Slide 29, we have given a color of how we intend to tackle it. We are already our provisions were done this quarter, last quarter and the existing contingency provision together today covers almost 80% of that at INR 304.24 crores. So on the ratios, cost of deposits has moved up. Yes, one of the reason is that it is moving our share of term deposit. As you can see, the copper has moved up only 16.26%, where our term deposit actually grew close to 29%.

11:21 So it is having an impact on the cost of deposits at 5.85%. This was anticipated and we have tweaked our advances portfolio to cover for this increase because focus has been more on the resource security for our growth and we are anticipating that we did tweak the advances and has that also shows up in the annual advances, which has moved up to 10.32% from 10.10% earlier. Cost of funds is at INR 5,930,000,000, we have picked up almost 1,000 crores of refinance during the quarter at 7.5, it's also pushing up the cost of funds. And consequently, the NIM sequentially has come down about 10 basis.

12:11 But it's still on a year on year basis, it's still significantly 36 basis up. And credit cost, like I said, is just nine basis points plus Our calculation shows that the expected credit loss for the bank is INR385 crores. And like I said, the last quarter, we did provide fully 100% for the non fund facilities, which are under stress. This quarter, we have provided 100% for SMA one and two as per ECL NOPs. So, the total upfront provision that we have done for the ECL is INR 54.24 crores and along with the existing contingency provision available of INR $2.50 crores, we have a provision available of INR 309.24 crores against the INR $3.85 crores that is required to cover the expected credit cost, that's almost a provision of almost 80%.

13:16 I was also telling you about the cost of deposits, It has moved up 5.68% to 5.85% that is anticipated. When you look at your term deposit moving up almost 29% and the CASA moving up at a slower pace, 16.26%, the cost of deposit is past, but anticipated to go up. We did, like I said, anticipate and we tweaked our Advantages portfolio to guard against that and that is also having an impact on the advances portfolio been where it has moved up from 10.10% to 10.32%. Cost of funds at 5.93%, we did pick up some refinance in the quarter from TMB at about 7% to 7.5%.

14:03 The NIM consequently is at 4.19%. It's up 36 basis from on a year on year basis, but sequentially as the term deposit portfolio is improving, it has actually gone down about 10 basis points. Also, the credit cost our credit cost is at nine basis, capital adequacy at 32.39 basis and cost to income ratio, like I said, has consistently been moving down, trending down at standard 38.28%, PCR at 77.49%, that is the on book PCR. I can also tell you that our leverage and benefit of our LCR, etcetera are on a good footing.

14:53 Our leverage ratio against what is required to be done at 3.50%, our leverage ratio stands at 11.4... 11.99% and LCR is at... One second. He said 139.43% and NSFR is at 146.15%. We have also given you some color on where how the CD ratio can move forward to what extent we have cushion left and that's also there in the presentation if you refer, Page number 33, the CD ratio that is possible for us given the fact that our network today has 12.53% contribution to the balance sheet.

15:41 We can go up to a CD ratio of 98% and today the CD ratio stands at just 87.27%, which is better than what we did last quarter. The profit per employee has gone up 35% to INR35 crores. Business per employee stands at sorry, the profit per employee goes up to INR35 lakhs, sorry, it's not crores, it is lakhs, but business per employee is at INR25 crores. We did open nine branches in the half year that we are committed to open INR60 and the process is gone for the other branches to be opened. Year on year, we did open about 37 branches and 15 of these branches was opened outside the state of Tamilnadu.

16:29 And when we end the year, 60 branches, we hope to open 20 plus branches outside the state of Tamilnadu. So, think we have also given you some color of the kind of structural changes we are making in the presentation. I think you can go through that and there are questions we are here to answer that. So over to you guys. Thank you. You. Tim, shall we begin with the question and answer session? Yes, please. Thank you so much. Ladies and gentlemen, we'll now begin with the question and answer session. Participants are request to use handsets while asking a question.

17:22 Ladies and gentlemen, we'll wait for a moment while the question queue assembles. First question comes from the line of Darshan Deera with Invest Group. Please go ahead. Yes. Thank you for the opportunity to ask this question. Firstly, congratulations to the entire TMB team on a great set of results. Every quarter, you guys have been hitting out of the park, and congratulations for another quarter where you have been around the park. So my first question was on the split of the gold loans. Can you give the breakup between Agri and Retail? Agri and Retail, total number is 29 to 18. Okay. That's right.

18:19 Agree is twenty two seven zero... 2222000. Yeah. And the other one is 6,000. Okay. So, sir, $2,222,700 rupee, you said. Right? Yeah. Agree. Yeah. And the other one, the retail is at 6,084. Okay. Second question was, what percentage of our loan book would be linked to the repo rate, and when do we do the reset? Suppose the interest rates repo rates get increased, is it immediate, or is it is is it is it a lag of a water?

19:05 It is not immediate. 52% of advanced portfolio is repo linked and the repo, the pricing gets changed at the reset date. Okay. But you said 52% or 62%? 55%. 5%, five Okay. Got it. And... Next quarter, I think all the entire book will be reset. Okay. But just to give the break up, you said 52% is repo. What would be fixed rate? What would be the MCLR? The fixed rate would be about 2.85%, and your NPLR would be the balance. Just one sec, I'll give you.

19:55 I will not where is it? 44 percent. Okay. We also have a small portion of treasury linked. So 52? One, three and five. Okay. Got it. And this is... That's why I'm just saying that the rest of making up with the CenturyLink.

20:45 Got it. This... So you said the reset is not immediate. It happens whenever the... You know, as per the contractual reset date, and that will range from... Like, is it, like, usually on a fixed monthly basis or quarterly basis, annual basis, typically? It's quarterly basis. Quarterly basis. Got it. Got it. And one last question. So there's a slight uptick in terms of our unsecured portfolio. What type of loan is it? Is it like a credit card type loan or is it unsecured personal loan? No. No. It is neither credit card nor. It is we have given a loan to KLST's Electricity Board government. Okay. But it's unsecured loan. Okay. Okay. Yes, it's against the cash flows.

21:34 Got it. Got it. Thank you. That's all from my side and congratulations on a great set of numbers. Thank you. You. Yes. Thank you. Our next question comes from the line of Varun Dube with Share India Securities. Please go ahead. Good evening, sir. And once again, congratulations on strong set of numbers from your side. I mean, quarter on quarter, the company has been performing very well. But I remember, sir, last quarter when the good performance continued, your company had actually gone ahead and raised its guidance. So this time, should we, you know, expect a better guidance from your side because you have not said anything on the FY twenty twenty guidance. So what could be the advantage growth, so overall business growth and the deposit growth guidance for FY twenty twenty seven, would you like to revise it for us? Why don't... Okay. So what do you want us to do? I think we can so whatever we said the last time, maybe just to make keep you happy, we can increase the guidance by 1%.

22:33 Okay. Let me tell you, the second half, we are hoping to see the CASA growth continuing at the existing level, perhaps start a bit higher. So we are looking at anticipating a 17% kind of growth. But the deposit, we did give a guidance of 18% plus, right? If you remember, if you recall last time, did give an 18% plus guidance. And I think that I think now we are safely we can say that it will be 20% plus. The plus how much of that would be the plus how much that amount is something that we will see, but it will be 20% plus. And similarly, the advances growth, we are anticipating 22% plus. Again, the plus is what will interest you and that is what we will see how much of a plus we can achieve.

23:24 The numbers are the minimum. Okay, Got it, sir. No issues. I'm sure that your company would achieve better than what you said because since last two quarters, that was what the bank has been performing. So one more thing I just wanted to understand because your We are executing the last seven quarters. Yes, sir. Right. Right. That's it. Right, sir. So just wanted to understand one thing because the cost income ratio has been, you know, below 40%. I mean, is this because, you know, your branch opening target, the 60% you had has not been yet met. And in the second half, we would see, you know, the number of branches coming in, that would actually weigh the overall cost of income ratio. How do you see that? I think you are right in a way that you are 38.38% plus cost of income is something that we will not be able to defend going forward. It will move up because of you just you caught on to the right enough point here that there are branches to be opened and there is some investments happening on the IT space as well.

24:31 So it will move up, but we did mention last quarter that we will be below 45%. I think we will not be well below 45%, I think. Maybe there also we can reduce the upper cap by 1%. We'll be well below 44%. Okay. Okay, sir. Sir, one more question just wanted to understand. And in this SP and R deposit, what is the rate that your bank has offered? And what is the current deposit rate that you're offering? Mean, after the report is high, has there been any pass on to the customer? Yes. I think the report rate, the 25... Report, there's nothing that we do. We take... The report moves up 25 basis, it moves up to point five, the entire portfolio moves up to 5.5 on the reset days.

25:24 So the underlying benchmark moves up to 5.5, that 5.5 is actually implemented on the reset date, which varies for each customer as per the contract. Over a period of three months, the entire the benchmark gets repriced to 5.55, 5.25. So that's an automatic process. There's nothing that we do here. What were you asking? The rate of SG and A deposit for the bank has actually offered. SG and A deposits, we did make close to 51,000,052 million plus. And the rate there was because it was aligned to the kind of one deposit rate that we were gathering in that range.

26:18 But subsequently, we have dropped the rate after and it's back. I think it is back to, I think, 4.25% or something. What is the rate? SG and A rate today? One year is 4.25, right? Parun, I'll give you the exact number for that, the rate. Okay. The rate has stopped. Okay. Okay, sir. Thank you, sir, and congratulations once again, and best of luck in the coming quarter. Thank you. Thank you. Thank you so much. Our next question comes from the line of Mandini Kuntala with Blue Stripes. Please go ahead. Oh, thank you for giving me this opportunity.

27:04 Congratulations, sir, for the wonderful number. Here, my question is first one. Will the bank maintain the similar growth percentage over three to five years? Similar what? And my Sorry. Second question What was the first question? I didn't quite get it. You said similar what? Question was, will the bank maintain the similar growth percentage over three to five years? Okay. And my second question is because of increasing in price of crude oil, does it affect our bank in future possible? Okay. Whether we will maintain the current growth rate. What we are looking for is not a 20%, 25%, 30% growth.

27:50 What we are looking for is to exceed the industry growth by a certain percentage. Our own ambition is to exceed the rate at which the industry is growing and to exceed that by 4% to 5%. That is our long term plan. I think that's where the components of the bricks are being put in place. That's where It is so happened that this quarter, we have actually exceeded it by 8%. But going forward, on our sustainable path, I think, the next three to five years, that's the kind of number we are going we are looking. So, will not be 15%, it will not be 20%. It will be if the industry is growing at X percent, we will growing at X plus 4% to 5%. So that is the first answer to your first question. Second one, on the Oil, so far as yet we are anticipating a bit of it, but so far we have not been impacted by the oil prices as such, neither in our export credit portfolio nor in our existing MSME portfolio.

28:54 We have not seen the impacts as yet. Okay, sir. Thank you. Thank you. Thank you. Next question comes from the line of Bharat Gupta with HSBC Capital. Please go ahead. Yes. Hi, sir. Thanks a lot for the opportunity. So my first question is your yield on advances has gone up by 22 bps on a quarter on basis. What is led to... You know? Yield on advances has gone up. Yes. Tell me. Yes. So what is led to the sharp, you know, 22 bps increase in... On on yield on advances on a quarter on quarter basis? Let me also tell you that when we were looking at the we are still a bank not large enough, and we are in a position to finally manage both sides of the balance sheet, assets and liabilities, right.

29:53 When we look at when the growth started picking up and we were focusing on the Resource Security, which is generating enough deposit to finance that growth and we realized that we have to move it, we between Tata and the term deposit when we start focusing as much on the term deposits. Obviously, your cost of funds is likely to go up and it has actually moved up, if you say quarter on quarter it has moved up. So to offset that and to maintain the net interest margin at the level that we are comfortable with, we had to tweak the portfolio. And some of them that we have been tweaking a bit of the whole lot portfolio, we have tweaked it a few basis points up. We have also tweaked our MSME wherever possible in line with the market a few basis up. So we have been consciously trying to see how we can get that extra bit from the advanced. And that is paying off.

30:50 You look at it, the yield has actually moved up to 10.32%. This is a conscious decision to take care of the liability side where the churn is moving towards the term deposits. The mix is moving towards the term deposits. Yes. Okay. Fine, sir. And my second question is on the cost of funds again. It has again gone up by 23 basis points on a quarter on quarter basis and you just alluded to Apart from the fact that the terms of the mix is moving in terms of term deposit, incidentally, the term deposit for the bank went up almost 29% on a year on year basis, where the CASA put up fully support the growth was being maintained what we were having earlier, it was about 16% to 16.5%, 16.26%.

31:39 So but that's having an impact on the cost of deposit and you can see that having an impact on the cost of advances sorry, of funds as well. Apart from the deposit, you know, we were also been looking at some amount of refinance, which is coming at about 77.5%. So that's pushed up the cost of funds a little. Yes. Right. So net net, should expect NIMs to sustain around similar levels or anywhere between 4.1 to 4.2, you know, rather than at a higher range of 4.3? If you are looking at... If you are saying 4.1 as the first number, I think possibly we can we can look at that.

32:26 And I would say 4.1010% plus minus five basis is what we are looking for the rest of the year. Sure, sir. Sure. A lot, sir. And and and my last question is within the gold loan, what is what is the average ticket size that the bank operates at? Are we finding any sort of concerns within the asset quality within your gold loan portfolio? Yeah. The average ticket size is 2.66 lakhs, so it's fairly, you know, it is a wide spread. So it's 12 lakh plus of customers we have, right? It's quite widely spread. The ticket size is about 2.6. If you are looking at the website of it, it's something that is getting the attention of the bank on a daily basis. We have put in place systems, which will track each gold loan from an LTV perspective.

33:25 LTV that is when we talk of LTV, we are talking about principal plus interest accrued till that date. So on a daily basis, this is something that we do look at and there is a team that tracks it. And currently, we look at our when we have done the sensitivity for the recent no, for the presentation, if you can Page 14 will give you that. We have given that the price reversal of up to 20% is something that more or less the portfolio can sustain. 3.3% is if there's a cash and gold price of 20%, the share of the gold loan that will be above the market is just 3%, a little over 3%. So, it's a fairly resilient portfolio.

34:16 The portfolio LTV is at 62.35%. And in September 26, your SMA plus NPA together, I mean that is par portfolio at least one day is just INR28 crores. So, this is a portfolio that we are managing on a dynamic basis, because we are aware of the volatility in the gold prices. That's something that we are aligned to that and it is being managed on a daily basis. Sure, sir. Thank you. Thank you. Next question comes from the line of Jyoti Katri with Ambit Wealth. Please go ahead. Yes.

35:03 Thanks for taking my questions. A couple of things. I hope I'm audible. Okay. Firstly, I just missed on to your margin outlook which you mentioned. I'm sorry to interrupt you, Jyoti, but there are a lot of background noise coming from my end. Jyoti, anyway, I'll respond to your first What I just mentioned to the other I was that we would be looking at, yes, we focus on the Social Security, saw the cost of deposits moving up a bit, but we have tweaked our advances also in a similar fashion. We did end up the quarter with a 4.19% net interest margin, but going for the rest of the half year, going forward, we are anticipating we believe we did give a guidance of 4%, but we believe today that perhaps 4.10% plus minus five basis is something that we will be able to defend for the next half year.

36:01 Okay. Great. And Yeah.. Participants have left the queue. We can move to the next participant. Our next question comes from the line of Deepak Jay, an individual investor. Please go ahead. Hello, Am I audible? Yes. Thank you. Thank you for the opportunity, sir. And congratulations for the Q2 results. It's one of the greatest results in our history. Again, proved bank's ability to generate the transfer. So I'll come to my question. My first question is how much percentage is the floating loan in our loan book, sir?

36:49 Floating loan in our loan book would be something like 95%. Okay. And that floating loan book has two components, which is the pro linked loan and an MCLR linked loan. 52% of that is the pro linked or 43% there will be MCLR linked. And we have approximately about 130 odd pressure linked loan and the balance will be fixed rate, which is part of it is staff loan and part of it is loan against deposits. Thank you. Thank you, sir, for the detailed explanation. And my second question is, the bank facing current dispute is a small portion of the ownership.

37:35 In that case, it's affecting the banks giving any bonus or split or any equity increase further or that will not affect if you decided to give bonus or split for the... In near future or anywhere in the future, sir? Yeah. I think we we have given a bonus earlier. The only challenge before us at that point of time that we gave a bonus to a certain disputed categories of shares as well. So we never looked at the color of the disputed category shares, the bonus was issued to, for example, if it was under EDI's attachment, we actually get the share bonuses also to the ED. So I don't think that is going to come in the way of split of shares or in any manner. Having said that, I think we would like to look at that after I hope you know that that the Chaukros notice one case has been the plate Fibonacci come out with the order on the July 9.

38:40 And if you're checking our Slide number 42, we have given a disclosure on that, that now we have filed an application before the RBI to regularize the transfer of shares. And the same is under consideration. So going by what RBI says, will obviously regulator, whatever the regulator says, we will be 100% compliant of that. And that is also true for whatever call that they take on these shares, we will abide by that. We are awaiting the RBA's response. Sure, sir. Thank you. And my another question is, what is the insurance commission income for the bank, sir, in this quarter? Insurance commission, how much is INR 26 crores. In the six months?

39:26 Six months, it is not INR 26. How much is it? Insurance per se is about INR9 crores in the first half year, right? So it comes with the lag always. So that is where it is. Now having said that, I think this is something that we are zeroed in on the group. You will see a substantial increase happening in this. Yes. Okay. So my final question is, in past, we have very much technology CapEx. So how this yielding us now? What is the feedback?

40:12 How is the output what is the output for now? That's it from my side, sir. Yeah. Yeah. I think that's... Numbers, you know, you are in the seat. The technology and the automation of the processor is aimed at productivity increase. And it is it is it is that that is driving this growth that you are seeing on the table. Thank you. Our next question comes from the line of Sarvesh Gupta with Maximil Capital. Please go ahead. Yes. Good evening, sir, and congratulations on a very good set of numbers. So sir, first question on the NIM side. So basically, now you will have two opposing forces.

40:58 One is because you're growing at 20% plus, so you will have to go for more term deposits because CASA probably cannot grow beyond mid teens. Then the mix would be changed unfavorably in terms of term deposit, which is what we have seen. So deposit pricing overall will go up. But at the same time, there are positives also. First of all, your rate increase of 25 basis point and probably more going forward. Then also because banks are flush with SCNRB deposits, and they may not be looking to increase the deposit rates quickly enough.

41:44 So given these two opposing forces, do you see a decline in your NIM going forward because you are talking about 4.1%, which is, I think, already lower by 10 basis points compared to this quarter, which was lower by 10 basis point from previous quarter. Whenever we talk of a number, right, and if you look at the behavior of our numbers in the past against the guidance, the number is always the minimum. I think we will start to benefit from the from whatever you have stated. One, you have stated that term deposit rate at least in the short term is not likely to occur given the SNR funds that we have.

42:33 The tweaking that we've done in the portfolio has actually benefited us in the quarter two that will continue. The other aspect is that when we had a bit of a surplus, the surplus entered, if you look at our balance sheet, we had about 20%, little over 20 in the investment portfolio that has moved up close to 22%. That extra 2% that we had entered in the investment into the investment, which carries a much lower. The yield is somewhere around 7% as compared to about 10% plus or 10.3 of that 1%. So it's a 3% kind of number, which is also the surplus has also costed us in terms of NIM.

43:20 So when I said 4.10%, I had actually said 4.4% in quarter two that is a NIM that we maintained. Now I'm saying it will be 4.10 It is always the minimum and we only play on the plus, the extra on that. Okay. And secondly sir, on the term deposits that we are raising, what is the mix of the stock as well as the amount that we have raised in terms of bulk deposits, which is coming at a higher rate versus, let's say, our usual retail term deposit? Bulk deposit, I don't do we have the numbers straight away? What I do have the numbers straight away and which we have put in is from a source security perspective because bulk or otherwise, the rate of interest gets captured in the 5.85% that we did mention, the cost of deposit.

44:19 But from a resource perspective, the resource security perspective, we are also looking more and more at the non callable deposits, right? Today, in the incremental term deposits, non callable is 40.62%. So which means non callable are callable deposit fees, even term deposits can be prepaid. They ask for a prepayment, we will be obliged to give. From that perspective, is volatile. CASA is really highly volatile, but even term deposit has run off factor, But non tolerable by the very nature has no prepayment attached to it, which means it will be only prepaid on maturity. So that share in the overall term deposit is going up. But on the bus, you have the bus number?

45:09 Nineteen point percent nine is the total is the bulk deposit over in the overall total term deposit. And in this INR 7,570, how much is the bulk deposit raised? As I mentioned, it's 19% on the total deposit. Total deposit about INR 69,000 crores. In this, you have this 7,570, what is the bulk deposit component? You some. I'll get back to you on that, okay? Okay. And just finally, one question on the gold loan. Now because we have seen some softening of gold prices, so at the industry level from a risk mitigation point of view, are you seeing players trying to lower their LTVs to sort of safeguard their incremental book going forward?

46:14 Because if there is further of course, there's further sort of softening in the prices, then the risk portfolio keeps increasing. At the industry level, how are you seeing people behaving in terms of LTVs? Yes. I was just responding on the gold loans. I think this is something that the industry is worried and certainly we have been proactive on the TMB side. We have put in place enough systems that can track the LTV at the individual level on a daily basis. We have 12 lakh plus customers and at the individual level, if I take 10 lakhs, you can imagine the kind of systems we have put in place. And the tracking is on the principal plus interest accrued up to date. So that's the kind of tracking we do. And from that perspective, our portfolio LTV is 62.35% and our portfolio currently can tackle a price reduction almost close to 20%.

47:14 So that is the kind of fairly resilient portfolio. But you are right in a way that the volatility in the gold prices associated with the gold is the market is watching and it has reached $4,000 announced yesterday and it slightly come back today. But obviously, the market would have to drop the per gram rate in line with the prices that are moving in the market in whatever which direction is moving, the prices will have to be appropriately tweaked to tweaked in that direction. So currently the market is the prices are going down. I'm sure the industry will mark the prices per gram rate down in tune with that.

48:07 We have already done that. I think we have already in the last few days, we have reduced it by as much as INR800 crores. So this is something that we will it's a dynamic thing that we the point is to ensure that the gold loan portfolio stays resilient, robust. And let me also tell you that on September 30, our gold loan portfolio at risk one day is just INR 28 crores, is INR 0.10 crores. I'm talking about SMA one and two together. SMA zero, one, two and India together. Hello? Thank you. Next question comes from the line of Varun Dube with Share India Securities. Please go ahead. Thank you, sir, once again for taking my question. Just wanted to understand a few things, sir. I mean, you explained about the full loan prices impacting the world business, sir. But what about the impact of growth? Because states like Karnataka and the Pradesh, Maharashtra, they have declared growth. So what sense are you making?

49:08 And if any agro gold loan book will get impacted, you can throw some light on that. Yeah. Yeah. I think the growth can have an impact. That's why I said, no, that we have put in place a system to track gold loans on a daily daily basis. On an individual basis as well. And on account basis as well. And we have also apart from that, we had a asset resolution teams in our regions, there are 13 regions of us to take counter action in case at any level it goes the cushion gets reduced to 10%, which is the LTV, which is the principal plus interest, which is the LTV on the day touches about 90% of the market value on that day in our margin calls. We are also putting in place call.

50:01 These asset teams apart from the margin calls, even the looking at what is that call center you are making? Agendaq Agendaq AI call center for margin calls etcetera. So things are the I think this is a portfolio that we are managing dynamically with the view that any price drop doesn't hit us or hit us in any way, whether it is on the risk side or on the competitive side, it doesn't hit us. So we are geared up for that. Okay. But sir, it's not impacting the overall demand, right? And then in this loss condition... Didn't I think was continuous to be resilient. The demand continues to be bad.

50:49 Sir. Sir, one more thing, just wanted to understand, what could be the IRDI insurance impact on the overall ROA? Have you made any assessment, sir? Sorry, come again? The IRDI new loan, insurance loan impact on your overall CVT level or ROA, have you done any assessment of the... No, let me also tell you that this is an income stream that is being is only picking up, right. The first six months our share from the insurance is just INR 9 crores. Our commission that we earn from the distribution of insurance product is INR 9 crores. So what is going to be the IRDA impact right now? We will have only 20% impact because we are not more dependent on that. 20% reduction is there, but our incremental business will take care of it. We are already growing So at the impact is approximately 20%, which would have been more than made up from incremental business.

51:50 And as it is the number is fairly small at INR9 crores. Okay. 30 crores. Thank you. Next question comes from the line of Pat Goodkaw with three sixty one Capital. Please go ahead. Yeah. Hi, sir. So, sir, on on the disputed shares, you mentioned that you have made an application to the Reserve Bank, and and you are you are awaiting their response. So Yeah. So say, for example, you know, the Reserve Bank replies positively. So will that be the final verdict or will still have to go to other regulatory authorities to get their approval or get their clearances?

52:36 Let me tell you on the on the show cause notice itself. This order came out on the July 9, right? If it has to be appealed against, you have a sixty day window, right? And in that sixty day window, if you have an issue with the order, it has to be appealed. The bank has not gone for an appeal. Let me also tell you that EET also has not gone for an appeal. So within the sixty day window, nobody has appealed so far. So that appeal time got over by the ninth, I think sometime mid of September. But again, with the High Court intervention, can go for an appeal. You have another sixty days to go for an appeal. Right? Okay.

53:23 So far, neither the BD nor the Bank has gone for an appeal. So the case rested. That means the plate order, no appeal it starts, okay. Now having said that, on the regularization, because this is a FEMA issue that is involved, the regularization is only and only with the Reserve Bank of India. And it need not be referred to any other regulatory or nonregulatory or judicial agency. It rests only with the State Bank of... Sorry, with the Reserve Bank of India. Okay. Okay. Fair enough, sir. And this... It has been done. It has been the Reserve Bank of India, and they will take a call. Okay. Okay. Fair enough. And I think that we will abide by that call.

54:11 Sure, sir. Sure. Thanks a lot, sir. Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for the closing remarks. Thank you and over to you team. Yes. Thank you and thanks for participation in this conference call, investors conference call. And as I have said that this bank is in a transformation mode. We have brought in a lot of structural changes on the HR side, on the business process automation, on the IT side, all aimed at releasing the productivity into our system and that's getting reflected in the numbers. So we have delivered numbers that are quarter after quarter better than the previous quarter and our own guidance. And we will see we will continue to strive in investing in such productivity gains. As I said, what we have delivered in quarter two is the highest net profit that we have ever delivered and it is also the highest growth in the last eighteen years.

55:24 And we are committed to enough as much as possible sustained efforts. And like I said earlier that it is not a 25% or a 30 growth that we are looking at or a 20% growth or a 15% growth even. What we are trying to do is to grow faster than the industry. This year, this quarter we did that at 8%, the delta was 8% faster. And what we are looking on a sustainable long term is 4% to 5%, we want to grow faster than the industry. So thank you very much for attending this call. And like I said, profitable bank. We are committed to a robust bank. We are committed to a bank that delivers on quality, both in terms of our advances are doing and also in terms of our own customer service.

56:19 Thank you. Thank you very much. Thank you, sir. Ladies and gentlemen, on behalf of Tamilnad Mercantile Bank Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you. Okay. Yes. Thank you. Okay. Thank you, sir.