Gentlemen, good day, and welcome to the AU Small Finance Bank Q3 FY24 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Prince. Thank you, and over to you, sir. Thank you, Sagar, and good evening, everyone, and a warm welcome to AU Small Finance Bank's earnings call for the third quarter of FY 2024. We thank you all for joining the call on eve of the Republic Day. The format for today's call will be similar to last few quarters, where we will start with the operating remarks, opening remarks from the senior management of the bank for the first 20 minutes -25 minutes of the call, and we'll then follow that with 30 minutes -35 minutes of question and answer session from all the participating analysts and investors. To start the call, we'll have our founder, MD, and CEO, Mr. Sanjay Agarwal, share his thoughts on third quarter FY 2024 overall performance of the bank. He'll be followed by our Executive Director, Mr. Uttam Tibrewal, who will also share his thoughts on the business highlights for the quarter. Besides them, we also have some senior members of the management on the call today to answer any questions that you may have. For the benefit of everyone, and so that we can all have a participation, active participation, I'll request everyone to kindly restrict the number of questions per participant to two and join back in the queue in case you have additional questions. With that, I'll now request our Founder, MD, and CEO, Mr. Sanjay Agarwal, to start today's call by sharing his thoughts on the bank's performance and his strategic outlook for the bank. Thank you, Prince. Good evening and [Foreign language], to everyone. I'm pleased to speak with you on the eve of 75th anniversary of our national Republic Day, and want to express my sincere gratitude to all of you for your presence today. Before I share my thoughts on the bank performance and strategic outlook, I would like to take the opportunity to thank each one of you for your unwavering support and confidence in our bank, which motivates us to continue it with you every day. As you know, building a truly bank is so difficult. I'm sure by now all of you have heard everything about the global macroeconomy on multiple calls, so I will not go much into the details. However, I will share my perspective on the whole India euphoria and the opportunity that it presents, and then why I think this era belongs to India. Our honorable Prime Minister's vision of India at 2047, by when we complete 100 years of independence and aspire to be Viksit Bharat, is truly inspiring for an entrepreneur like myself and the opportunity and the scope for execution it provides to an institution like AU. I'm really excited about this period of growth, and it coincides with our own philosophy of building AU forever. The first phase of our forever journey, that is AU at 2027, is the foundational period of first 10 years of our banking journey. Post that, I strongly believe that AU will be a significant contributor and beneficiary of this India story. Coming back to India story, there are not many trends that are available, but my - in my opinion, five significant trends which we are witnessing in the Indian economy and the social environment, have the potential to have a fundamental impact on our journey. First, the recent structural and regulatory changes and growing adherence to the rule of the law will have long-lasting impact on the overall governance and transparency in this country. Second, as the world become more digital, the tech acumen and knowledge that we possess as Indians has the potential to change the Indian dynamic in the next 25 years. Third, the entire MSME space will create their own niche, and we are already seeing some initial trends of how the formalization of MSME is helping entrepreneurship. Fourth, our capital market is poised for long-term growth and with a wider participation. Financial products are at a new high, but can innovate a lot more on the back of penetration. Fifth, and most importantly, India is a vibrant democracy, and the way we are handling ourselves and resolving our issues one at a time is commendable, bringing harmony and acceptance at all levels. As India redefines himself and becomes more purposeful and gets a [uncertain] for his democracy, knowledge, execution, and consumerism, I'm very confident that AU will be one of the institutions that will play a lead role in this journey. The first seven years of our banking journey has remained absolutely on track and completely seamless, guided by a strong regulatory framework, which we followed in letter and spirit. During these foundational years, we have built a safe and sound bank, delivered good results consistently, built robust senior management team, and have protected interests of every stakeholder, be it regulator, customer, employee, shareholder, or society at large. Our focus has been steady first on every parameter needed to build a sustainable and complete bank. Be it deposit franchise, retail and commercial banking, digital banking, transaction banking, payment infrastructure, tech architecture, leadership development, compliance and governance, asset quality, customer focus, cybersecurity or even ESG. Every aspect has been covered. With operationalization of the recently received AD-I license and on completion of the proposed merger with Fincare, the bank will be in position to offer all products to all categories of customers, be it domestic or cross-border... or be it bottom of the pyramid customer or Ultra HNI. Against this backdrop, I would like to share my reflection on our performance in the third quarter and certain operating highlights of the bank. Our Q3 results remain in line with the anticipated outcomes, driven by the persistent dedication of our team. This quarter makes a significant milestone for your bank, with our balance sheet crossing INR 100,000 crore. Our deposit registered 31% year-on-year growth, crossing INR 80,000 crore mark. We have also used securitization on a strategic tool to diversify our source of funds and use our capital efficiency. Gross of securitization, our loan book has also crossed the milestone of INR 75,000 crore mark. As you would have recollect, about six-seven quarters back, we had pivoted our entire strategy to a deposit-led asset franchise, something which industry has started talking about now. We have been good enough in reading the evolving landscape and started prioritizing sustenance of the business model, making it more acceptable to our stakeholders. Over the last 24 months, we have worked on every aspect that the industry is currently debating, be it reducing the CD ratio, calibrating our asset growth to the follow deposits, shedding wholesale deposits, avoiding going aggressive on unsecured loans, not partnering with fintechs solely for origination, setting strong governance standards or focusing on farmer financing and financial inclusion. The current quarter saw our deposit book grow by 6% compared to Q2, and CASA deposits increased by 3% quarter- on- quarter. More importantly, our savings account balance grew by 8%, whereas our retail term deposits grew by 5% during last quarter. Our CASA ratio is at 33%. CASA plus retail term deposit is at 64% of our total deposits. A consistent effort is being directed towards reinforcing CASA and retail term deposits, notably through enhancement in our product offerings, services and brand, steering away from the sole dependence on interest rates. But let me also admit that our current account franchise built out has not been extended to what we would have liked, partly because limitation of the platform, partly because of excessive competition in that zone. But now we are working hard to relook at our strategy around the same, and expect that operationalization of AD-I and Swadesh banking will support our CASA strategy. Elevated interest rate continues to be a market variable, driven by tight liquidity and the regulatory requirement of controlling inflation. This is impacting the overall industry, and thus, cost of deposits remains a challenge. It has led to a 78 basis points increase in cost of funds in the first nine months and 20 basis points in the current quarter. At the same time, we operate a high-yield customer segment, and thus there are limitations to increasing the disbursement yield without compromising on the asset quality. We have still managed to improve our disbursement yield by 38 basis points on YTD basis and continue looking for more such opportunities. This has resulted in our margin contraction by 6 basis points, with an overall net interest margin at 5.5% for the quarter and 5.6% for the last nine months of this year. As observed in past cycles, the presence of fixed retail book and market segment will be advantageous when interest rates undergo a reversal. Our loan portfolio demonstrate robust growth, increasing by 6% on quarter-to-quarter basis. This growth was sustained by surplus liquidity buffers and notable demand for credit. Our emphasis on asset is centered on prioritizing yield and adherence to our underwriting filters. Uttam will provide more insight on this. Gross NP increased by 7 basis points, quarter-over-quarter, reached 1.98%. This marginal GNP increase in the quarter can be attributed to low base effect, as we have securitized approximately INR 2,700 crore of loan assets in this quarter. On the overall portfolio, gross of securitization, our GNP increased marginally by three basis points to 1.3% from 1.8% in the previous quarter. Repayments during quarter was around INR 403 crore, against INR 350 crore in quarter 2 FY 2024. Credit cost net of the recovery for the quarter normalized to 62 basis points, with an 18 basis points contribution coming from credit card book. As our credit card book attains a size and gets seasoned, the credit cost for the same is also getting normalized and coming in line with the industry average. Overall, asset quality remains within our range, as we are not seeing any signs of stress build-up or any specific pockets of warning signals. However, some transactional impact was seen during the quarter in enforcement of collections, with state elections immediately following the festive season in two of our biggest markets, Rajasthan and MP. This led to lower resolutions and recoveries during the quarter. Cost to income ratio is within our guided range. Our focus on investment to build a full stack bank like credit card, digital initiatives, AD-I license and transaction banking, wealth management, brand build-out, and upgrading our tech capabilities will remain our key priority, and we'll keep investing in them. Merger of Fincare, which is on track, and I'm delighted to inform you that post securing the shareholder approval, we have also have now received CCI approval earlier this week. We now await one final approval from RBI. This merger will provide us with a wider distribution of and higher margin products and opportunity to diversify assets, customer base, and geographic presence. In terms of future outlook, we are focusing on our tech and innovation. We are continuously enhancing our tech ecosystem and digital properties. Migrating our tech to cloud, expanding our data centers, building our data warehouse, and developing analytical workbenche s remain some key projects that are being progressed. I also believe that our focus on tech is also giving us desired results and creating our own space in this competitive zone. Our pace of customer acquisition has got a significant boost due to our digital products, with the possibility to acquire more than 1 million customers next year. Our next focus area in the tech segment is AI, which we are excited about and which I think is critical for our next phase of growth. HR and people practice remain key focus area for me personally, as I feel banking is a people's business. I am fortunate that entire senior team has a common vision, and it's quite strict and aligned to the overall purpose. In these seven years, we put our best foot forward and already working on many initiatives to nurture our talent with partners like Korn Ferry and Egon Zehnder, with a keen focus on their learning, training, motivation, retention, career path, succession planning, and other such areas. We are working to build a pool of talent to take forward our forever journey and create a human capital for the bank for generations. We have been focused a lot on efficiency and productivity of our people, and recognized, reorganized the business groups under five businesses, with leadership aligned at every level. Similar nature of businesses were brought under one umbrella to align them with a single objective and avoid any transition gap. All this, along with various automation projects, has resulted in a significant productivity lift for our on-ground sales, credit, and operation team. This has resulted in a relatively stable manpower over last eight quarters, despite the business growing at 25% CAGR on both advances and deposits. In the end, I can assure you that we are committed to build one of the most trusted and finest banking institution in this country. We aspire to be a full-service bank for our customers and need to manage multiple stakeholders. Sometimes that is our own cost, but it brings sustainability to the franchise. And while we are building for the future, we are also delivering consistent results, while also continuing to lead by example as the largest SMB. On our various investment avenues, sales start yielding profitably from FY 2026 and will help us unlock operating leverage. Our size and scale will give us an advantage beyond 2027, and we are strategically preparing ourselves for that phase. In closing, I stand before you today not only as a CEO, but as a custodian of your trust. I assure you that we'll continue to push the boundaries of what is possible to create sustainable value and to deliver on our promises. Our path may be challenging, but I am confident that with your unwavering support, we will triumph. Thank you once again for joining us. Over to Uttam for the further operational highlights. Thank you so much. Thank you, Sanjay. [Foreign language], and good evening, everyone. Wish you an abundance of health and happiness, and my wishes for the 75th Republic Day of our great nation. I will now share an update on the operating highlights of our key businesses for the third quarter of FY 2023-2024. India's story has remained strong despite global headwinds, and the Indian economy continues to grow, with all leading indicators being in the positive range. During the third quarter, the festive season provided momentum to consumption, and the overall demand remained robust across segments. However, tight liquidity and global risk, including geopolitics, continue to pose threats to trade flows and commodity prices and warrant caution. We continue to remain watchful and agile as we move forward. Let me start with an update first on our digital banking business. As a tech-led bank, our core focus is to identify digitally native customers, offer them differentiated products, and engage them using state-of-the-art digital application and service platform, providing them convenience and branch-like experience digitally, thus providing them value along their entire life cycle with us. The collective deposit balance of the video banking portfolio now exceeds INR 1,500 crore, with over 4.5 lakh customers. Our digital savings acquisition saw an uptick of 30% quarter-on-quarter. Additionally, we had introduced digital current account offerings in the previous quarter and are pleased to report that we have scaled to over 3,500 accounts in this quarter. We have also now added corporate salary accounts to the video banking platform in this quarter. With the help of our all-inclusive video banking solutions, available 24/7, we are now serving over 1,000 customers every day, with 400+ services. I'm also happy to inform that we have crossed 26 lakh registered users on our super app, AU 0101, registering an 11% quarter-on-quarter increase, with monthly active users growing by 8% to over 14 lakh. Moving to merchant acquiring business. We have added 2,200 point of sale and with first activation rate of 50% in this quarter. As the overall transaction value grew 17% quarter-on-quarter to INR 575 crore, average ticket size also grew by 15% and contributed to 37 lakh transactions in Q3. Updating on our co-brand credit card business. During the quarter, we launched our first-ever co-branded card with a leading travel partner, ixigo, providing us access to more than 15 crore users, largely based in their Tier 2 and Tier 3 locations. Overall, our credit card business at 8.3 lakh cards has not only helped in doing cross-sell to our existing customers, but has also become a robust channel for customer acquisition for the bank. This festival season, we continued with our annual shopping brand bonanza under the brand of Heart to Cart, which was live across all platforms, including Amazon Great Indian Festival, with total spends of over INR 2,200 crores. Now moving on to our liability franchise. Overall deposits crossed INR 80,000 crores in this quarter, with 6% quarter-on-quarter growth. We continue to focus on building a retail and granular deposit franchise through high quality customer acquisition. During Q3, our banking programs, AU ivy, AU Royal, AU Platinum, made up 44% of our total customers. Similarly, the share of higher variant current account was 35% of total acquisition in Q3 FY 2024. Our PPC currently stands at 1.7 and 2 for savings and current account respectively, with 58% savings and 68% current account customers being transacting with us on a monthly basis, indicating a healthy customer engagement. Our drive towards customer acquisition and engagement were complemented by the second season of our Badlaav Humse Hai campaign, with Kiara Advani as brand ambassador. Our latest campaign, Soch Badlo aur Bank Bhi, reached 10 crore people through TV, print, radio, cinema, and digital media. As per Kantar Brand Track Survey, the campaign achieved 80% recall among our targeted audience, and importantly, a 50% lift in brand consideration. Our green deposit program, Planet First, launched in Q2, has received strong initial support from customers, raising INR 200 crore deposits till now. We are deploying this money in green projects like solar power, electric mobility solutions, et cetera, making a humble beginning in contributing to India's net zero mission. Last quarter, we created Swadesh Banking Group to strengthen our banking services in India's Bharat, by unifying rural branches, BOs/BCs, financial and digital inclusion, and small and marginal farmer lending under one umbrella. This leads to greater collaboration and innovation to design products and services tailored to the unique needs of this niche segment. In this quarter, we launched three differentiated products for this segment, namely, Swadesh Savings Accounts, Swadesh Current Account s, and Kisan Savings Accounts. Let me touch upon our cross-sell initiatives. Cross-sell of assets to branch banking customers was INR 890 crore during Q3, as against INR 598 crore in Q2, showing a growth of 49% on sequential basis. In insurance, our total distribution increased by 23% sequentially, with total business growing from INR 158 crore in Q2 to INR 194 crore during Q3. In our wealth business, our recently added referral offerings like PMS strategies and differentiated AIFs, allow us to offer a complete basket of products and helps us to serve our high net worth customers better. During Q3, our investment AUM has reached to INR 521 crore across 1.6 lakh customers, registering an AUM growth of 50% quarter-on-quarter. Moving on to our asset franchise. We maintain sustained disbursements across our retail product segments, which are wheels, micro business loans and housing loans. Our loan portfolio, including securitization, has crossed INR 76,000 crore, and our flagship products, Wheels and SBL, have crossed a significant milestones of INR 27,000 crore and INR 20,900 crore respectively. Let's start with our Wheels business. This quarter, the vehicle industry sold 70 lakh units, showing 10% growth year-on-year and 29% growth quarter-on-quarter. Strong quarterly growth was visible in the two-wheeler and the passenger vehicle segment, with 37% and 10% growth respectively. In Wheels business, this quarter, we have disbursed around INR 4,500 crore against three thousand six hundred crores in Q2 FY 2024, registering a 23% growth quarter-on-quarter at an IRR of 14.57%. Our average ticket size remained around INR 5.3 lakh on disbursements. As on 31 December 2023, the total loan portfolio of Wheels One stood at INR 27,000 crore. With the increase in seasoning of book, GNPs maintained at 2.6%. Further, all disbursements for auto loans and two-wheelers were made through the Wheels One app, a digitized process based on Salesforce platform and FICO BRE. Moving on to our micro business loans. As on 31 December 2023, our loan portfolio stands at INR 20,900 crore, with a portfolio weighted IRR of 14.80% and a GNP of 3.1%. During Q3, we disbursed INR 1,600 crore and a total of INR 4,400 crore in nine months period between April to December, with an average ticket size of INR 12.6 lakh. Now let's look at our housing finance business. Loan portfolio of our home loan business at the end of Q3 reached to INR 5,400 crore, with quarter-on-quarter growth of 8%. The average ticket size on this book is INR 12 crore at a yield of 11.57% and gross NPA of 0.06%. Our total disbursements in Q3 stands at INR 579 crore, with YTD disbursements of INR 1,700 crore. Shifting to our commercial banking. The commercial banking portfolio grew by 47% on year-on-year basis to reach INR 16,386 crore as against INR 11,179 crore as on Q3 FY 2023. Commercial banking did fund-based disbursements volume of INR 3,000 crore in Q3 FY 2024, of which business banking and agri banking accounted for 61% of business. GNP for commercial banking stands at 0.40%. Business banking active limits stands at INR 13,500 crore, and the gross advances are INR 6,800 crore, showing year-on-year growth of 56% and sequential growth of 11%. Business banking recorded a disbursement of INR 1,000 crore in Q3, and GNP stands at 0.52%. The agri banking business has now reached INR 5,200 crore, with GNP of 0.30%. This quarter, we saw fund-based disbursement of INR 783 crore, with a growth of 23% quarter-on-quarter. Under our FPO financing program, we have now supported funding needs of more than 1.5 lakh farmers via 406 FPOs, including 130 new FPOs added during this quarter. Additionally, in the current quarter, we have financed 17 new renewable energy products to farmers under the Pradhan Mantri Kusum Yojana, taking the total renewable energy financing for agriculture to INR 177 crore as on December 31. Summing up, the liquidity deficiency and competition among banks has pushed deposit rates further up. We continue to closely monitor the competitive landscape and execute our strategy of building a retail, granular, sustainable deposit franchise. We will continue to consolidate and enhance our inclusive banking efforts and augment digital inclusion. We believe that the unique positioning of the bank to identify wide spaces across geographies and customer segments and execute on those opportunities will help us continue to grow sustainably. Furthermore, concentrated efforts are being made to enhance the share of wallet through cross-selling of current accounts, savings accounts, QR, personal loans, and credit cards to new-to-bank customers and existing bank customers, fostering stickiness. We will continue to exercise a strong level of prudence as we plan for the coming quarters with uncertainty around interest rates and inflation. The outcome strategic initiatives collectively position us for sustained growth and amplified market presence. I'm eager to share many more positive updates with you in the coming quarters. Till then, stay safe, stay healthy. Thank you. Over to you, Prince, to take it forward. Thank you, Uttam, sir, and thank you, Sanjay Ji. Sagar, we can now open the floor for questions. Sure. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone phone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets only while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. The first question is from the line of Bhavesh Ratilal Kanani from ASK Investment Managers. Please go ahead. Thank you for taking my question. This one is on the disclosures on the 31st slide, Provisioning Summary. Basis the disclosure of net credit cost and excluding credit card credit cost, those numbers essentially imply that probably your credit card business annualized credit cost is around 6.5%. I wanted to verify that, and if that is the case, where do we see it stabilizing? Is 6%-6.5% level, which is comfortable to us, and any directional, you know, out to give, want to give? So, Bhavesh, before Mayank, you know, can answer the details around that, let me just... First, the number is confirmed. You're absolutely right, that broadly the credit cost on the credit card book in this quarter is in the range that you mentioned. You'll appreciate that the book is getting built out, and, you know, it's very early days, and credit card is known to be a high credit cost business, but a highly profitable business as well. Now, while we have started seeing the credit cost, as the book is getting some sort of a maturity and size, you know, you just understand that it's just less than three years since we have started operations. The profitability have also, in some ways, started showing up, but of course, we are not yet at a level where we can, you know, say that the ROE of the book is more than the credit cost. But Mayank, you want to add anything in terms of the future outlook? So, good evening, Bhavesh. Adding to what Prince said, yes, the credit cost is around this percentage only, which you mentioned, but since we are, we are in the third year only, and we could see the trends coming across. So trends are more or less stating that they are getting stabilized and on the reducing. So we, we are, we will remain under this trajectory only, and this is what the nearing to the industry average also. So this is on the credit cost. And future aspect is we are building our term book, and we are, we are confident that we will build that to some certain more extent in the coming year, so that will also support us. In the fourth year, we'll be able to give more guidance on the profitability piece. ... Wonderful. Thanks, Mayank, for that. The second was on the, you know, industry-level scenario on the term deposit and liquidity, as well as deposit mobilization in general. If Sanjay sir could share his thoughts on these aspects. Oh, yeah. So thank you, Bhavesh. So I think I commented on my narrative is just that this is a very tough environment. You know, liquidity is a challenge, but, overall, we have performed very well. You know, we have done INR 80,000 crore of deposit, last quarter. You know, our CASA is around 33%. Our retail plus CASA is around 64%, you know. Cost, of course, is not actually in our hand because market is too competitive, you know. Every bank is looking to build their own deposit franchise, so there is a war on the rate, right? But we have managed it through, you know, raising, CASA, retail deposits, wholesale deposits, also have done securitization. Overall, we, we remain in absolute control of things, you know, barring the cost of money. You know, it's not easy to build eighty thousand crore of deposits on a SFB platform, but team has done phenomenally well in last seven years to be at this stage. You know, we have built lot many hooks, you know, like you're talking about credit card. Credit card in last two years has given us tremendous visibility, a tremendous recall values, tremendous brand build-up, right? So I think we are, we are doing around well. We are doing around credit card. We are doing around our whole payment systems, app, you know. So overall, you know, the purpose of entire bank is to build a deposit, right? And so we have- we are really focused to build a deposit franchise first, and then, of course, an asset-led around it, you know. And then we have done it, you know. I'm saying this from last maybe now, good two years, that, you know, we want to be a deposit-led, asset franchise. And, you, you would have seen our CD ratio, which is now touching even below 85%, which is one of the best in the industry. So of, of course, you know, I'm very happy the way we are building up. You know, of course, another three years more, where we want to be known as retail bank of this country, so absolutely on course for that. Just, one clarification. When we talk about intensity of competition, do you see risk of, hikes in term deposit in the industry? You're already seeing that, right? You're already seeing that, you know, would have read or would have attended every call, you know, so every CEO is looking to build more deposit-led strategy now. So, I won't say that I would be surprised that, you know, if there would be a hike in rate from here onwards in terms of competitiveness around bank only. But, your bank is in very, I would say, in a safe zone, because our CD ratio is 83-84, and our CASA is around 33, you know. We have already getting our... We are not, we are not be there on the market for every deal now, right? So we know what to, what to take, what not to take. And, Yogesh, you want to add something? Okay. So, Bhavesh, from liquidity side also, we are pretty comfortable. We have LCR of 128% as on December. Additionally, we have very high quality non-SLR liquid book, which is also available in range of INR 4,000 crore -INR 5,000 crore. So in liquidity also, as a bank, we feel so we, we have that opportunity where we can leave some of high-cost deposits, actually. Yeah. So just to add on here, Bhavesh, because, you know, we have lot many hooks now, you know? We are not operating only on the interest rate or, you know, better interest rate in terms of offering, right? We have lot many other things to offer also. So I'm seeing that, you know, bank is getting lot much traction now, you know. We are getting more deals, you know, we are getting more, I would say, customer attention also, right? So in that sense, you know, we are getting more, more, more deals so that we can choose that, you know, what, which one to take, which one not to take, right? So, so overall, of course, the rate is very competitive, the market is very competitive, but, we are sailing through. Wonderful, sir. All the best. Thank you. Thank you, Bhavesh. Thank you. The next question is from the line of Renish Bhuva from ICICI Securities. Please go ahead. Yeah. Hi, sir. So just two questions from my side, one on the credit cost side. So now, you know, since given we are scaling some of the new products, like credit cost, which sort of impacted the overall credit cost in this quarter, and maybe post-merger, we have MFI book as well. So historically, you know, we have seen that we've been able to, you know, sail through all the credit cycles with, let's say, average 80-90 basis point of credit cost. But now, given we are entering new products, you know, with MFI coming in, what should be the normalized credit cost, you know, for AU, going ahead? Yeah. So Renish, you know, good question. So I, because, you know, you would be seeing that there is an extra provision in this quarter, but I just want to tell everybody there that, ex credit card, our, credit cost is around 55 basis points, around about. So which I believe is normalized for the secured book, you know. Already as Mayank commented, that 6%-7% credit cost on the, credit card is there, so we want... We, we would like to say that it's a normalized kind of credit cost on credit card. Barring, you know, these two products, if you want to say me about the microfinance, we already commented that we want to really even out that whole provision by providing at least 3% credit cost every year. This year's, you know, credit cost on microfinance book is very low, but as soon as we get that book merged with us, we really want to provide the even out kind of credit cost, which is roughly more or less 3%. So I think we would give you a better guidance by next April once we get entire thing in place. But I would say the you should assume that, you know, the normal AU book should give you that this kind of credit cost, which is 0.5%-0.6% range, and maybe 6%-7% range of credit cost of like credit cost, and of course, 3% on microfinance book. So I won't say that we, we are surprising it, you know, because we were coming out from the COVID time. It was a very good time for a good two years post-COVID. So what now things are evening out, so I think we should believe in this kind of credit cost as we move forward. Got it. But one point- Yeah. Credit card. Renish, just one point on the credit card- Yes. For benefit of everyone. You know, like, while we earlier also mentioned about 6%-6.5%, and, you know, going in lines of the industry, I think another thing we need to also keep in mind is the industry also sees a decent amount of recovery on the written-off book, because credit card typically has a very stringent writing-off policy. Like, we provide 100% on 120 DPD, and write it off- Right. On 180 DPD, right? However, the book is still building up, so while we have started writing off from previous quarter, you know, in a decent, decent number, it's still not built up to a stage where we can start seeing recovery in a meaningful manner. I think as we, as, Bhavesh Bhai also asked earlier, as we move to a more normalized setup, probably in a couple of years from now, while there will be a 6%, 6.5%, 7% kind of credit cost, which is there in the, as per the industry, there'll also be recovery, which will start coming up, and probably the net credit cost would also follow what is there in the industry. Just to, you know, put that point. Got it. No, so, so, you know, so just to get a sense, let's say, going ahead, you know, given our focus is the way we want to build the deposit franchise, you know, credit card, credit card, of course, you know, will be one of the key products, you know, in overall scheme of things. So naturally, you know, let's say that focus will continue on credit card, and with MFI coming in to meet the overall PSA requirement, you know, we have to also grow the MFI book as well. So going ahead, your secured plus credit card, plus MFI, you know, will be a new normal book for us. So, you know, from that perspective, should we, let's say, assume 1% plus credit cost for the entire AU business, or how internally, you would like to look at it? No. So, Renish, you know, as we already commented, that our microfinance book won't be more than 10% of our overall loan asset, you know. We want... We do, we don't want to build more unsecured book. You know, it will be another maybe 10% kind of range where we are looking for. So I won't say that, because of this initiative, there would be an extra provision, because these are also high-yield assets. You know, once microfinance book coming in, they will have, they have a NIM of around 10%, right? So, so that will, that will take care of extra provisionings, right? You know, credit card, once it gets stabilized, you know, it will have more positive impact on us. So I don't think that it's right to see in a one way, one with one eye that, you know, the credit cost will just go up. The revenue will also go up, right? Got it. I think I would... I'm just saying that on a secured book also, my entire credit cost is around 0.3, but we provision around 75% of our NPA, right? So that makes us 0.5, 0.6, right? Otherwise, the entire credit cost is very less. So, the real credit cost, right? Because it's a provision which hits you, right. So I would say that, you know, we have already guided you on our whole philosophy around how we want to provision it, you know. Let us be by April, you know, we'll be more clearer, you know, how we really want to build ourself for next three years around the unsecured piece, credit card piece, or maybe around microfinance piece. Then we'll be able to tell you that, you know, what type of credit cost you should take in your calculation. Got it. Got it, sir. Please very inputs are just- As of now, I would say that this 0.5 and 0.6. As per what we thought through, right? You know. Yeah. Got it. Got it. So just one clarification on the other interest income part. So, you know, when I look at the, total, securitized quantum for Q2 and Q3, it is broadly similar at around, INR 2,500 crore+. But when we look at the income portion, you know, this quarter's, income is significantly higher, INR 180 crore odd versus, INR 75 crore odd. So what is, you know, what am I missing here? I mean, is there, there is some NIM expansion significantly on the securitized book, or how is it? Yes, Vimal here. So as mentioned on slide number 19, our overall securitization book has been increased, Sorry, sir, I'm not, I'm not able to hear you, sir. Sorry to interrupt, sir. You're sounding a bit distant from the mic. Is it fine now? Better, sir. Yes. So as mentioned on slide number 19, our overall securitization book has been increasing, and we have securitized around INR 5,700 crore in last two quarters. The income on securitization book was getting recognized with a lag of n plus one basis, as per the underlying legal structure of the SBU. However, the interest expenses was getting booked in the same quarter.... So now we have followed the matching principle to recognize both interest expenses and interest income in the same quarter to remove any lag impact. Lag impact. Okay. This, yeah. Got it. This is the reason. Income will sustain at around INR 2,500 crore. So then this INR 180 crore or other income will also sustain, right? I mean, is that the fair assumption? Depending on how exactly the securitization book builds out, and it is going to build out- Exactly. as part of a funding and diversifying strategy. So you can assume that, you know, depending on how we go ahead in future quarters, because it's not only about securitization in that month, the previous book is also building up, right? So now our securitization book is about INR 8,500 crore. So there is a larger income recognition that's coming in through that. Got it. Got it. Got it. Okay. Okay. Thank you, and best of luck, sir. Thanks, Anish. Thank you. Thank you. The next question is from the line of Kunal Shah from Citigroup. Please go ahead. Yeah. So the first question is on, Sorry to interrupt, may we request you to use the handset mode because your voice has a bit of an echo. Yeah. So I was just saying, with respect to your entire strategy of deposit-led loan growth. So now almost the deposit growth is 31%, but still we are growing at 20%-21% odd. And if we look at it right from March till December, in fact, the incremental CD ratio is 80% odd. In fact, this quarter, incremental CD ratio was hardly 50% odd. So when do we see maybe, like, we are comfortable, and now maybe we should resort to a lesser amount of securitization because deposit growth has been quite strong? Yeah. Kunal, very important question, but you know, very early days, you know, we have worked strongly on our deposit franchise, and that is why, you know, I'm, I'm emphasizing again and again on a 10-year story of AU, because these are the foundation years. You never know, you know, how customer react, how market react, you know, how the competition reacts. So our objective is to be really more deeper, more retail, more closer to customer in every sense. You know, we want to make AU as one of their preferred banks, right? And that is why we are doing everything, irrespective of, honestly, we, we don't see much on the, cost side, because that is needed in this year's side. It's not easy to build a retail franchise in this country, right? So I would say that, there is a narrative from the other stakeholders also, the whole regulatory framework also, where we, we need to calibrate our growth also, right? So based on that, we have to balance ourselves, you know, but we don't want to compromise on our deposit growth, you know. We just want to do it, you know, based on the whole... Of course, we keep track on the cost, but I think, you know, as of now, you know, the kind of competition we are seeing, you know, the kind of India story is being unfolding in next maybe five, 10 years, and we really want to play a very important role in that. So, so that is why we are too focused on our deposit franchise in every aspect. So of course, the CD ratios and all those things are the outcomes, right? But at that, at the general trend, at the general operating time, you know, we don't see this way that, you know, our CD ratio is too good, let's not raise deposit side, or, you know, let's do more asset side, you know. Because we are a concurrent kind of organization, where people come and just the money with you, and we have to accept it, right? So I think it's a very good sign that, you know, we, we are having this kind of ratio which you just described, and that is the whole secret, right? That is the whole success, right? In my opinion, where we've been preferred by customers as now their banker, right? So Kunal, I think, little bit here and there, but I think we are absolutely on track, and we are managing it. Of course, we will not securitize just for the need of securitization. It's other factor also which works, you know, to manage that securitization, and so that's the whole story. Yeah. Yeah, so not agree completely on the deposit side. Yeah, absolutely, it's a great growth. The only thing was, does it now provide a cushion in terms of securitizing relatively low compared to what we had seen over past two, three quarters? Given that we are at 20% loan growth, would we start following that stance or- Kunal, Kunal, I just want to interrupt here. By the March end, you will see this growth in the range of 26%-27%, because there was some base effect because of December 2022. But you will see our growth on assets on book will be around 26%-27% by end of this March. Okay. Perfect. Secondly, maybe the overall yields are still down 10 odd basis points. We have been talking about incremental yields. The mix shift is clearly happening in the on the AUM side, but still not entirely getting reflected, and we are seeing that given the fixed rate, we should be positively poised. But somehow I think this 38 basis points incremental yield completely getting offset by the exchange, plus 20 basis points kind of a decline. So if we exclude this entire securitization income, would there have been the pressure on the margins to the extent of 30 odd basis points during the quarter? And then how comfortable we would be with maybe you have lowered the guidance and said, like, we will be at the lower end of 5.5 for the full year, and we are at 5.6 for the first nine months. Does that suggest that we'll settle much lower getting into Q4? Of course, if you add on math, you know, the data which you are describing with you there, but, you know... We are running a bank, right? So there are many vectors that support us. There are many challenges which makes us, you know, difficult on our math side. So we are balancing it out, you know, and I'm happy to say that, you know, we're still in this tough time, you know, because the kind of market we are in as of now, you know, it's tough to actually incrementally build better rates. You know, we are pushing our vehicle team, and they've already done, you know, maybe around 40 basis points, and incrementally they are doing better yields, you know. SBL business does not allow space because we are already around 14.75%-15% kind of rate. It doesn't allow, you know. The commercial banking space still is on more on floating, you know, than a fixed. Housing book does not allow you to give much space. You know, we are around 11.25% there. And of course, sorry, 11.6%. And then, of course, the personal loan space, we are around 18%. So already we are at the rates which, you know, which makes us comfortable. You know, beyond this rates, you know, we don't want to compromise on the asset quality. And we are growing at 25%-26% in our asset also, right? So I think we have to be little patient here, you know, because these are a tough time, and this kind of interest rate scenario, you know, we are just balancing it out through various means, you know, and showing you the best kind of decision-making to make your balance sheet very stronger, right? So I think it's, there are a lot of ifs and buts, but I believe that, at our end, you know, we are putting our best foot forward to balance it out. And, uh- Sure, thanks and all the best. Yeah. Sorry, could I just one last point? The NIM in any case, when we had guided for the full year, I mean, it was guided for the full year, right? The quarter-on-quarter, because we knew that because of securitization, there are impacts. You know, sometimes there is a lag recognition of the income because of the underlying SPV structure and the legal documentation. And that is why when we guided, we guided for the full year, and it was assumed that for the full year, securitization income would be part of that, because, again, that interest income or the net interest income on securitized book is added to the entire NIM calculations. Yeah. Honestly, while the cost of funds have gone, you know, the way it has gone, whatever we had guided for NIM, we are very much in that range, irrespective of the cost increase on the deposit side, right? Or the cost of funds side. True, true. Oh, okay. It would have been the same case, right? Yeah. Yeah. Got it. Okay, yeah. Thanks and all. Thank you. Thanks, Kunal. Thank you. The next question is from the line of Shubhranshu Mishra from PhillipCapital. Please go ahead. Hi. Thank you for the opportunity. Just looking at the credit card slide page on slide 44 and just matching it up with the kind of credit cost that's been discussed in previous questions. This just seems out of whack. You know, the 75% issuance to new to bank customers, that's like very high even on a global parameter. Even the closest competition, which does new to bank, would be around 50%, and the average limit per card is around INR 1.74 crore, which would be easily around 50%-60% more than the industry average. Basis that, the kind of credit cost that we are speaking of at around 5% or 6% looks absolutely benign. What's the case here? We do not have a risk management team at all in credit cards, or what are we doing here in credit cards? This looks absolutely outrageous. Mayank, do you want to add on something? Yeah. Yeah, Shubhranshu. Shubhranshu- Also, if you can speak about the cost of acquisition per card. That's all. Yeah, Shubhranshu, I'll answer all your questions. I'll take the first question from the limit side. So, Shubhranshu, on the limit side, if you see, you must be comparing this limit with the average limit of the industry, whereas the industry portfolio has built in over a year, which is last five, six, seven years, the cards are moving there. We have issued new cards to the customer. So if you see and compare with the new cards issued in last two, three years, you'll see us much more closer to the industry. This is the first. The second is on the 75% issuance to the NTB customers overall. So more or less in the industry, the cards around 60%-70%, cards are issued to the ETB customers, but that is the phenomenon of the top few issuers. Rest of the issuers, like, our close competitors, they are also issuing cards to the new customers, though the percentage varies from bank to bank. On the last question on cost of acquisition. Cost of acquisition depends upon the NTB versus ETB and the channel from which you are acquiring the customers. Our acquisition, you see, we have all sort of multi-channel acquisition, which gives us some space to lower our cost of acquisition. And it also depends on how much we will scale and from which channel we want to scale. We built the multi-channel distribution, so we can scale it as per the cost of acquisition we will think of or desired cost of acquisition we want to build the business. What's the blended dollar value of ETB versus NTB? Blend, a blended number would be helpful. It is close to INR 2,000. This is ETB? Both. Blended. No, no. What is ETB and NTB, blended cost? ETB is existing-to-bank customers. We already have the acquisition of customer available with us. We just give them the card. This is their already relationship with us. NTB is new-to-bank customers.... Okay, I wanted them individually. That's fine. I'll probably come back in the queue. That's fine. Okay. Yeah. Thank you. Thank you. The next question is from the line of Manish Shukla from Axis Capital. Please go ahead. Yeah, good evening, and thank you for the opportunity. Just sticking to card for once, if I look at the segmental yield, the differential between your home loan yield and credit card yield is only 40 basis points. Capital allocation, I mean, capital requirement rather, will be probably 3x. And yet on a YoY basis, if I compare both the books, they have ballpark grown about INR 1,600 crore. I'm just thinking that from a return on capital perspective, how do you all thinking of card business? Where do you think you need to take a call, whether it makes sense or doesn't make sense? Because at 12%, you're probably will be on the lower side as far as credit card yields are concerned. So, Manish, hi, this is Prince here. Now, of course, there is a large fee component in the entire credit card business, right? So while home loan only has a, you know, typically an NII business with some processing fee, credit card has a equally strong, fee business, as is already reflective in our other income that you can see. However, we do take your point, and I think Mayank will add, Yeah. Views on that, that our overall yields are very different. I'm sorry, but Prince just two points to point there that, I mean, I appreciate the higher fees, but the credit cost delta, as we can, as we are seeing, is also significant, and I'm sure OPEX delta is quite high. So I'm not sure if fees is negating the OPEX and credit cost delta between home loans and credit cards. Manish, I'll add to what Prince said and make it more clear, try to make it more clear for you. When we say 12% in credit card, credit card is a fee, is a business which also builds our term books in it to get yields and make, let the customer stick with us and give a, make a interest earning book for us. We are quite new to this business as of now, and we are, from last one year, if you see, we have built our term book from almost 8-9% to 17-odd% this year, and we will close it around 20% in this financial year. And this, if you see with the, with the larger issuers, the term book goes beyond 30%. So your interest earning book becomes, gives you a larger portion on the overall, funds, or the ENR which you have deployed in the market. So, over a period of time, you'll see this is also improving a lot as, as our term book, will start building, towards 30%, sort of. Sorry to halt you, Mayank, but during the tenure in which you are talking, the term book has gone up. Yield on the book has actually gone down at a time when interest rates are high. So even that math doesn't help add up, right? If you look at YoY yields, the yields are down on credit card book. Yeah, Manish. So, there is also one regulation which has come over the last one year. It states that you cannot charge interest on interest. So that has come in, credit cards in the past years, which has reduced the yields. Will you be able to quantify that, please? So I'm saying there is a regulation. No, I mean the impact of that regulation. Right, Manish. Yeah. Okay. Manish, I'm hearing your view and you know, the other participant also, but, you know, you have to give us some time to really showcase our whole purpose around credit card business. I think we have done well enough, you know, to create that buzz around the franchise. So there are other benefit also. And of course, what Mayank is just explaining, that there are some regulation change, and this industry is being watched by, you know, everybody, from regulators to other things, you know, you know about it. So but I'm very pretty sure that, you know, we are absolutely on track in terms of our guidance. And, more and more, I think I'm not... You are not aware, so you will be asking too many questions around credit card business. It is still a very small business for us, but by next call, you know, you will find our more strategy in place, that how we want to build and why we want to build and by what time we'll get a BEP. Sure, sir. One last question. On cost to income, you suggested that FY 2025 might be similar to current levels. So on a standalone AU Bank, excluding the merger, when do the cost synergies start kicking in and we go to less than 60%? Sorry, sorry, Manish, can you, can you repeat? On cost to income, your commentary suggested that FY 2025 cost to income will probably closer to where we are right now. When does the standalone bank cost to income? Manish, I, you know, I can understand your question now. So I would say that that is why I'm saying to you that if you go back in the history of Indian banking, it's not easy to build bank, you know. It requires some patience, it requires some more detail out of every aspect, you know. That is why we are saying that first ten year is the foundational years for AU's journey. You know, we have done everything, you know, in terms of building our asset to this level. It's not easy to build 80,000 gold deposits. It's not easy to build INR 100,000 crore balance sheet in first seven years, and with this kind of track record, you know. So idea is to really go more and more in terms of holistic approach, you know, where you build a bank which is likable by the customer, right? Customer should like you, because if customer doesn't like you, or customer doesn't have visibility of AU, then they won't transact with you, they won't bank with you, you know, and then there, there won't be anything, right? So our entire piece, whether our initiative around digital, our initiative around credit card, QR code, even the so, so AD-I license, you know, it requires a lot of investment, time, effort, and everything. But I think everything is being done with lot, much sincerity, lot, much detail out- ... so that we are on the right path. So I think you have to give us another maybe three years to really come out with any kind of specific, you know, leverage expectation, right? Because, you know, the inflation is there, you know the competition is there, you know that lot many new things are coming up every day, every night, you know. So we need to be responding to those facts, right? So that is why, you know, I'm consistently saying to you that, it's a 10-year journey. The first 10 years are very foundational years, you know, and people need to support us. And we are doing... I think, I think we are doing everything right in that context, you know. If you really see, you know, barring some mishaps here and there, you know, we are absolutely on track. Sure, sir. Understood. Thank you for the opportunity. Thank you. The next question is from the line of Param Subramanian from Nomura. Please go ahead. Yeah, hi. Thanks for the opportunity. First, my first question is on the interest income on securitization. So if I understood it correctly, you have booked both last quarter's interest income from securitization as well as this quarter's, both in this quarter, right? That understanding is correct. Yes. So what last quarter would have got built, so it generally happens with a lag of one month, as we said. This is the underlying structure of M+1, so you're right. Okay. Okay, that part is clear. Also the one month. Not for the- Yeah. So last quarter it was not recognized. It pushed into Q3, and this quarter, securitization has also been recognized in this quarter, right? Absolutely. Absolutely. Okay. Okay, okay. Fair enough. And my second question is, again, coming back to the credit card portfolio. So if I understood correctly, sir, based on the disclosure you've made, the credit card provisioning in this quarter is about INR 50 crore, there or thereabouts? The provisioning plus write-off all put together would be about INR 45 crore. INR 43 crore-INR 45 crore. INR 43 crore-INR 45 crore. Prince, so that INR 43 crore-INR 45 crore is about, you know, INR 180 crore annualized. If you go back to last year, the credit card book, or the base of the credit card book was about INR 1,000 crore last year. That suggests a pretty high credit cost on the credit card book, right? Of course, on a moving base that has grown like 2.5x, over the last year, you know, the credit cost looks lower. But if you look at it from a base-adjusted book, you know, it looks like it's 17%-18%. So isn't that very high compared to our comfort levels? Yeah. Param, Param, just, just hold on. See- Yeah. I think we have been talking about credit cards a lot, right? Just for everyone's benefit. We have very clearly articulated that credit card is a business, and everyone knows it, including yourselves. That credit card as a business on a steady state basis, even for the larger peers who have been doing this business for multiple decades, have a top-line credit cost of anywhere around 6%-7%, and then there is a recovery angle of 1%-1.5%. So it's a business which is known to have a 5% kind of credit cost and a 4%-5% kind of ROA. Now, fortunately, unfortunately for us, we are too young in this entire business. A credit card book's actual colors will start coming in once you've built up a 20 lakh, 18 lakh -20 lakh kind of card base. Right? Right now, all we are doing is just adding cards, and that's where the limit comes into play. That's where the suppressed yield comes into play, because ultimately you're calculating, to answer earlier question, you are calculating your yield on the outstanding book. The outstanding is, book is growing much, much faster because we're issuing newer cards. Last year I started my card base at about 500,000. Before that, I was 170,000. I have already reached about 850,000 cards today, right? What is happening is we are in a build-out period. Also, the fact that for the first two years, if you go back and see our credit card cost, the credit cost, it wasn't that high because the book was still being built out. Now that we have got some seasoning, the cards that probably would have sourced about six months to nine months back, some amount of credit costs have started coming in. However, there's no recovery in it. So just allow us some time, and which is what Sanjay articulated, as well as Mayank articulated on the call, that this book will need to be built out, and once it's built out, it is not going to be any different than any other player in the industry. At least we don't have any reasons to believe so far. This is whatever numbers we have seen internally, right? Okay. I would just request, allow us some time to build this book. Fair enough, Prince, but, but we've grown this book, like, 20% quarter-on-quarter. Are we, like, still comfortable growing it at this pace, or should we, you know, as investors, be looking at a moderation in the pace going ahead, you know, as this pace, as you, you know, pointed out, the book is seasoning and, you know, the credit costs are catching up now? No, fair question. Fair question. And in fact, this question was asked to us when the, you know, the entire circular also came up around, unsecured lending. Please understand, and, I mean, through you, I want to, you know, send this message or request everyone to understand that I am not... My credit card business is a liability business. It is not an asset business. I don't really have a choice. The reason why we are building a credit card, the reason why I'm building a QR code, the reason why I'm building a personal loan, the reason why I'm building a wealth solution, is to support my liability franchise, right? The earlier question that why NTB is higher. Again, the NTB is higher because I'm using this credit card as a hook to acquire a urban and metro customer like yourselves to come and join the bank as a customer and then try and cross-sell you as a liability product, right? Similarly to the liability customers who are joining in from Mumbai, Delhi, Bangalore... You, I can't really offer you a car loan at 8.5% today because my cost of funds don't allow that, right? But I do need you as a customer, right? All the HNI customers. So what is the product that I can sell you? I need to sell you a credit card. I need to sell you a personal loan. And that is why, please understand, these businesses are not being built from an asset perspective as currently, and hence, I don't really have a choice in terms of the pace at which they are getting built up. If I want to build my liability franchise, then I need to offer these products, and accordingly, the growth rate will be more determined by liabilities than my asset strategy. On asset strategy, I'm very, very clear that it's a secure asset book that I'm driving, which has a credit cost of anywhere around 50-60 basis points, and that has come down. It used to be about 1 percentage point or 90-100 basis points. But as we have de-risked the book, as the commercial book has got built up, as the home loan book has got built up, the credit profile has become better and better, and hence, we are now getting the benefit of that credit cost, right? So I mean, in summary, I think some of these businesses, we don't really have a choice if I really want to build a franchise. And that's all we are saying again and again, that it's a 10-year... It takes 10 years to build a bank. Give us time till 2027, have a slightly long-term view, because if you really want to build a retail franchise in India, you will need to do everything that is needed to be done to ensure that you are able to attract the customer, or at least you make yourself in the first three banks in any customer's mindset. Yeah, absolutely. If a customer wants to open a bank account, he should be in his consideration set. I'm sorry to give that long answer, but the idea was to just put a context to the whole thing. Yeah, yeah. Very clear, Prince. Thanks. So in a way, we should be looking at, you know, credit card as a sort of customer acquisition cost, if you will. That is, you know, my takeaway. But- Absolutely. Just quickly. Yeah. So, but just quickly, you know, in the past, you've highlighted that, you know, FY 2025, we should see breakeven of the credit card business. Now, in the light of, you know, like, you know, the previous participants also mentioned that the yield is moderating and now we're seeing credit costs inch up. Do you want to revisit that or, yeah, you know, on the credit card business specifically? Yeah, that's it from me. So, Param, I think we'll be more specific in our next call, but if you ask me as of now, I will hold on to my statement that we might want to break even next year only. Yeah. By last quarter. Yeah. We had said end of last quarter, one or two quarters- Yes Here and there, but broadly, we are on track. Broadly, we are on track. Yeah. Perfect. Perfect. Thanks a lot, sir. All the best. Thank you so much. Thank you. The next question is from the line of Madhuchanda Dey from MC Pro. Please go ahead. Hi, good evening. I have a slightly- Sorry to interrupt. Ma'am, may we request that you use the handset mode? Yeah. Hi, yeah. Hello. Yeah. Am I audible now? Better now, ma'am. Yeah. Hi. My question is slightly long-term. As you rightly alluded to, you know, the buildup phase of the bank, and we are in the seventh year. So, given that there's a buildup phase, given that there's a slight change in your strategy now in favor of the high-yielding book through the acquisition of this small finance bank, which is predominantly into unsecured. Given this entire context, how should we look at ROA trajectory in the next three years for the bank? Hello? Thanks, Madhu. And again... Yeah, hi. Hi, hi, Madhu. And again, you know, a long-term question where, probably it involves merger, as you rightly said, and there'll be dynamics around that in terms of how much we want to grow our MFI book, what kind of credit costs. We need to understand that book much better. So that's where we are again and again saying that allow us probably April quarter or this quarter, for us to come back with a more clearer strategy, because by that time, assuming regulatory approvals come through, we'll have a much better clarity on the merger and the numbers around that. But having said that, look at our past trajectory. I think in the last five or six years, we have been doing all these investments, right? And we have been going through external shocks. So we converted ourselves into a bank in 2017. We have been building out the entire franchise. Some 5,000 people went to now 29,000 people. We got tested by pandemic and everything else, which required us to put more liquidity, more provisions. But still we have kind of delivered a 1.6%-1.7% kind of ROA across on an average basis, right? So I don't really think that should materially derail, right? But yes, allow us some more time and probably because merger is a significant event, which can have positive impact definitely in our view. So give us some more time and let us come back to you. But you would have thought through this before, taking, embarking on this, step, right? So if you could share some of those- Sanjay, this side. So you are, you're absolutely right, Madhu, you know, because, you know, sometimes we don't want to be very specific on our numbers. But I would say that, as you know, that we have already crossed INR 100,000 crore balance sheet. If this mergers go through, then, you know, we'll be around INR 125,000 crore by March. Then, you know, if even we grow by 25% every year, you know, we are doubling our balance sheet in three years. So we know where we are going, but there are lot many variables in place, right? You know, what happened, how the interest rate cycle will be there in the next three years, no, no one knows, right? ... we know that our credit cost won't be surprised anybody because that's our forte, that's our expertise, you know, and I already commented on our overall credit costs on different books, you know. We know how well we will be distributed across India. You know, we know that in our credit card business, QR code business, personal loan, all this business, well business, will eventually get profitable, right, in the next three years. So there are so many things, so but we don't want to comment, you know, any specific, you know, the ROA guidance or, you know, ROE guidance because our track record itself is so strong that, you know, we are around 1.7, 1.8 in last six, seven years. You know, we already delivered you around 14%, maybe 15% ROE in last seven years. So that's the strong indication that there are better days ahead, you know, because there are not much challenges now left, you know, except interest rates cycling, right? So I would say that, you know, give us some more time in terms of specific guidance, you know, because that guidance requires lot more calculation around so many variables, you know, because it might just happen, this will happen, otherwise, it will be like this. Or what are our perspective on interest rate, you know? So that is why we are looking for some more guidance, and that is why we are saying that if we are able to pull through in the next three, three years, this kind of data, this kind of product, this kind of size and scale, which haven't been done by any bank in the past, in my opinion, in the first 10 years, you know, and being an SFB, being an SFB, so well diversified, you know, in terms of everything, right? So I think that is the way we want to push ourselves that, you know, there would be a case, there would be a quarter where some data here and there for some time, but in the long term, AU remains absolutely on track, and we want to become one of the best retail franchise for this country. Thank you very much, and all the best. Thank you. Thank you. The next question is from the line of Arvind R from Sundaram Alternates. Please go ahead. Thank you so much for the opportunity. Sir, like I would like to understand, you know, like, you have given, like, a operating expense breakup this time, like, on, in investments that are made in credit card, QR and video banking. I would just like to understand, like, could we like, you know, look for the similar run rate, you know, whatever we have, in this nine` months of FY 2024 into next year also? Like, do you see, like, you know, a slightly higher, you know, run rate required in, in the next year? That is my first question. In slippages, if I take as a ratio, like it has inched up a bit, like, is it only because of credit cards or any other portfolio is also, you know, contributing to it? That is my second question. And, you know, ROA is like at 1.5%, this quarter, but what do you think could be the levers to, you know, improve in the subsequent quarters? Thank you. Second question was on credit cost. Slippages, right? Yes, slippages. Yes, yes. So, you know, Pranav, sorry, Arvind. See, as far as slippages is concerned and the credit cost is concerned, I think we, Sanjay Ji did allude it in his speech, that typically, you know, what happens is, in a festival quarter, generally, your self-employed customers and merchants prefer to, you know, use the money, cash in the business, and which happens every year, honestly. And after that, generally, you have a good recovery coming in because the festive season is good. Generally, you have good cash flows. The only challenge this time happened was the festive season was immediately followed by the state election in two of our major markets, like, Rajasthan and MP, right? Yeah. These two broadly contribute, you know, almost 40%-50% of my business, especially in Wheels and SBS, right? So what happened is, during that election period, there's a model code of conduct which is there, and which kind of hampers the entire security enforcement or a collateral enforcement process. To that extent, what you'll see is the slippages hasn't really grown, right? From INR 345 crore, the slippages have gone to about INR 349 crore. It has gone to about INR 103 crore. But more importantly, the recovery has not really happened the way it is expected to happen in Q3. And, accordingly, there was reductions as well did not happen in the same way. And to that extent, the existing NPAs buckets moved, and we had to provide, because we have a very conservative provisioning policy, even on a secured book. Like on a 90 DPD, we provide 25%, but 180 DPD, we provide 50%, right? So to that extent, I think it's more of a one-off, in this particular quarter, especially for Q3. See, Q1, Q2, we generally see this phenomena. Q3, generally there is a pullback. So I would say this is a more of a one-off, and Q4, hopefully, should be much, much better as we get a full quarter to, you know, do the credit recovery. Right? Sorry, and what's your first question? Sir, like, I wanted to understand, like, you know, the run rate, you know, similar run rate, do we—can we expect, for investments in credit cards and QR and video banking, whatever you have provided in the presentation now, like, in terms of absolute number or like in terms of percentage, if you can give some color on that? Yeah, yeah, hi, Arvind, Kunal this side. Hi. So in terms of the operating expenses on the new investment, as we have already articulated that we will stay invested in the new bus- new investments, largely around credit card, QR, video banking. So the expenses which you can see over the slides which you are mentioning, so we'll remain kind of in this growth range only. I think it's around 55%-60% of jump in these invest me- in this cost, and this will remain like this for the next year also. Second point that apart from these expenses, we are, of course, business as usual will go as is. Apart from that, we are focusing more on productivity and efficiency, and we are trying to control our employee costs and other related costs. Absolutely. Which is visible in the- Yeah. ratios also, right? If you see, apart from the new businesses, the other ratios hasn't really gone up very significantly. In fact, has come down or stayed there, despite the business growing on a year-on-year basis. Yes. Yes. So you, when you mentioned, like, it would grow, like, you're talking about the growth would be in the similar range you are saying? Growth in, this new investment. No, because we need to invest in brands. We need to invest. So credit card is upfront cost. Yeah, yeah. The moment you issue 1 lakh credit card, straightaway acquisition cost. So, those things will continue. We don't really see that changing course. Sure. Like, my final question is on levers which are available. Like, since, you know, cost of funding is going to be tough for some time, and, you know, like, you know, having a bit of pressure. I'm just trying to understand where would the, you know, levers be to improve ROE? Which time period you are looking for, Arvind? Sorry. Which time period you are looking for, Arvind? Which time period of levers? So, like, you know, for us, we are already at quarters and quarter-to-quarter, sir. Quarter-to-quarter. I was looking at third quarter of FY 2024. No, I don't think because as we are already commenting that we are little looking long term, you know, these are tough times in terms of interest rate cycles, you know. So I won't say that our quarter four would be very different what we have done this quarter, you know? But in the long run, next three years, you know, you will see our credit card becoming profitable, our video banking becoming more productive. You know, we, you'll see our AD-I license coming in, you know, giving us other income, like what we are seeing now in insurance income that has been stabilized. After the merger, you'll have the high-yield book, you know, that it will allow us a better NIM, because of that book, you know. After even we put the even out provision there. So let... There are lot many levers in next three years, right? You know, and that need to be counted in a quarter-to-quarter basis. And our track record shows that we are... What we've done, you know, is always, always given a push to this franchise to the next level, you know? Yeah. Sure, sir. Thank you. Thank you so much. Thank you for patient answering all those. Thank you. Thank you. Thank you, Arvind. Thank you. The next question is from the line of Ashlesh Sonje from Kotak Securities. Please go ahead. Hi, team. Good evening. First question is on the investments towards digital initiatives. Within that, the expense towards credit cards, QR and video banking, that has gone up sharply, both YoY and QoQ. Can you just qualitatively detail out which are the main cost heads within this? Not, not no numbers, but just what kind of costs go into this? But, Ashlesh, I think we have been disclosing these numbers, you know, every quarter. Yeah. For all- No, I'm saying that, that INR 17 crore, that INR 170 crore in this quarter, which went towards credit cards, QR and video banking, what are the main expenses within this? What kind of costs does this include? Right. It's, it's predominantly credit cards, because, as I said, the moment you issue credit card, one fresh new credit card, you straightaway have a upfront impact of whatever acquisition costs that Mayank was saying, at anywhere around INR 2,000-INR 2,500 rupees per credit card is a upfront impact, right? Okay. So you'd say credit card acquisition would be a big charge within this? One of the biggest chunks. One of the biggest chunks. Understood. Okay. Of course, last quarter, we also did a lot of branding as well. Understood. Okay. And secondly, can you just remind how we are accounting for the securitized book? Specifically, what part is recognized as interest income and interest expense, and what part is recognized as non-interest income, if any? So everything is... Whatever we get in securitization on a net basis, because it's off balance sheet, right? So whatever we get on a net basis goes into the interest income line, under other interest income, under the P&L. Okay, so there is no, nothing which goes into non-interest income? No, no, no, absolutely nothing. Okay, perfect. Thanks. Barring, you might be getting some servicing fee, which is very small residual. Understood. Thank you. Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to the management for closing comments. Yeah. Thank you, Sagar, and thank you everyone, for participating in today's call eagerly, and we look forward to your feedback and views. In case you have any further questions, kindly reach out to the IR team, and we'll be more than happy to, you know, respond to your queries. Thank you so much, and have a good Republic Day. Thank you. Thank you so much. Thank you. On behalf of AU Small Finance Bank, that concludes this conference. Thank you for joining us. You may now disconnect your lines.