Please note that this conference is being recorded. I now hand the conference over to Mr. Souvik Roy, Head, Investor Relations, The Federal Bank Limited. Thank you, and over to you, sir. Thank you, Sagar. Good evening to all of you, and welcome to our earnings call to discuss the results for the quarter that went by. I'm sure you all had a chance to go through the results deck, reviewed them well, and also heard our post-results press con, in which our MD has probably answered a lot of questions already. We have had a strong year of performance, and we have delivered on most of our aspirational return ratios, with the right consistency on earnings while maintaining a very good balance sheet as well. During the year, we also maintained, the right growth trajectory, if you have seen, in our deck, of course, across all our focused business segments. We scaled up the branch network as we crossed a milestone of 1,500 branches, and that's almost a 10% increase in our network. We exited the year with an all-time high annual profit. Our total business crossed INR 460,000 crore, and our balance sheet also crossed a milestone figure of INR 300,000 crore. The last quarter in particular, as MD already mentioned during the press con, was operationally one of our strongest ever. Some of the numbers, as mentioned in the deck, we did give a call-out there, had slight wrinkles due to a one-off impact on account of certain wage-related matters. I'm sure most of you have noticed that and, you know, made the right calculations already. Our margins did expand marginally, but it did, and our asset quality continues to remain pristine. With this, I'll hand over the call to our MD, Mr. Shyam Srinivasan, who's also joined by the entire senior team. Thank you. Thanks again for joining, and over to you, sir. Thanks, Souvik. Good afternoon, everybody. I think Souvik mentioned the high points of the financial outcome. I'll just draw our attention or take us back to March 2023, when we had our investor analyst day and spoke about our outlook and our aspirations over the- Yeah, yeah, I can hear you, sir. I can hear you. Over the two- to three-year period. One of them was to ensure, if you all recall, or many of you may recall, we talked about the three Ns that are non-negotiable. One is around NPS improvement, second is around NPA being best in class, and the third is accretion in network. And those are obviously driven outcomes, but driven by meaningful improvement in our return ratios. So I'm happy that in FY 2024, along those lines, we did deliver. While Q4 reported net profit is INR 906 crore, it did have the one-off impact of the pension effect of about INR 160 crore. So barring that, I think the quarter was quite along predicted lines. Growth has been consistently good. Expansion in the margin is beginning to trickle through, even though the cost of deposits seems remains elevated, that's because of the pivot in business. But at the scale we operate, it takes a while for margin expansion to happen while the cost of deposits remains high. But the trajectory return has happened, and we believe that going into FY 2025, that should sustain. Operationally, a strong quarter like Souvik pointed out, but I just want to call out the remarkable consistency and quality of credit is something that we are very proud of. And Q4 was particularly you know exaggeratedly good. I've said this in three, four earlier calls, so it looks like it's a repeat. But in Q4 in particular, our slippages were lower than the recovery and upgrade, and the recovery and upgrade didn't have any one-off chunky cases that came through. It's more the structural, granular, regular, accounts that sort of recovered or upgraded. So on balance, the year that went by was strong. Our outlook going into FY 2025 remains quite confident. We are entering 25 with some industry-level you know, tailwind and headwind, I would say. Tailwind in terms credit growth looks quite promising. There is demand that is consistently good across business model, across business segments. Deposits are growing, but deposit, the, the quality of deposit, the cost of that deposit, structure is something that we have to deal with. In particular for us, thankfully, our footprint expansion across the country has played out well. You may have noticed our rate of growth of our CASA in the geographies that were not traditionally our stronghold is now, you know, in the mid to high double digits. Sorry, key high teens, and that's something that we are confident of keep keep, you know, sort of that trajectory up, while we deal with some structural changes that have happened in how the non-resident flows come in. Flows are coming in, but it comes in in the form of term more than savings. So I think we enter FY 2025 quite mindful of the business model that we're pursuing, the commitments we've made in terms of cap our return ratios. ROA expansion, we've guided for about 4-5 basis point improvement every sequentially every year. I think for the seventh year on trot, ROA expansion has moved up. We are now, correcting for the one-off, would have been a strong quarter, but full year was 1.32 in ROA. Previous year is about 1.28. I see that expansion continuing into FY 2025 and beyond. So those are our opening words. As usual, we have the entire senior team, who'll be happy to take calls, take questions, and, give insights wherever you guys want to. So I'm opening, opening this up, operator. You can open it up for questions. Thank you. 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. Okay, I think we can start. We already have few in the queue. The first question is from the line of Mahrukh Adajania from Nuvama. Please go ahead. Yeah, hello, sir. Good evening. So my-- I have three questions. So the first question is on your recovery upgrades, which are almost at an all-time high for you, so congratulations for that. But, would there be an impact of these recovery and upgrades on the NII? Because a lot of PSU banks take some amount of recovery income through the NII. So was there, any interest, recovery interest income in the NII? And then if there was, what was it last quarter or some comparison like that? That's my first question. Yeah, go ahead, complete the questions. I'm sure between Venkat and others they'll take answer. Sure. Then the second question is on fees. So, if you see on an annual basis, your fee growth other than investment profit is strong. You're now at just a little under 30%, other than investment gains. But the problem is that just like in the fourth quarter, there's been some softness. So while the card fees have been strong, para banking has been softer, and you know, there's a lot of movement across segments. So any longer-term guidance we can get on fee income and what drove the YoY growth and the QoQ growth in the fourth quarter to look a little softer than earlier quarters, if there's any seasonality or any reason, and how what growth do we build in in the next year or so? Does it be 25% up or what? And then, so the third is on OpEx. So if you exclude the employee provision from your annual OpEx, right, of INR 1.62 billion, you still have a growth of around 25%, a little higher than 25% year-on-year. So is that, is, will that run rate continue, or how does it moderate from here on, on an annual basis? These were my questions, sir. Okay, all useful and good. On the fee income, I think, it's, no, I don't believe you can sort of sequentially plot it and say this will go ahead, but a YoY basis, anything between 20%-25% is very much on the card, and we believe FY 2025 will also see that kind of momentum. Q4, you did see pickup in card fee going up, loan processing fee going up materially. But, you know, some of the lines like para banking were slightly lower, but that's only a, you know, sort of modest change versus the sequentially previous quarter is much higher. Q3 was a little higher than Q4. Otherwise, it's been on trajectory, you know, around INR 50 crore-INR 55 crore or INR 60 crore. So you could. We believe the core fee income growth, roughly about 20%-25%, is something that minimally what we will do. We will seek to do it even higher, without any one-off. The one-off should hopefully be positive and kick it up higher. So that's on the fee income. On the first question on recovery upgrades, yes, when recovery and upgrades happen, certain degree of interest, interest income benefit also comes through, because the URI benefit also comes through. And on the third question was on, sorry, remind me the third question. OpEx, growth. Yeah, yeah, go ahead, Venkat. Maybe you can take the microphone. Yeah. Thanks, Shyam. Mahrukh, on the OpEx growth, if you exclude the staff cost, one-time impact, the growth levels will probably be around the same, considering the fact that we'll continue to invest in new branches. Our investment in technology will continue at pace, and, there'll be a small uptick in the staff cost with all these recent changes also, which will come through next year. So a combination of all this will see the OpEx around the same levels. But what is important to note is that, the branches which we are investing, you know, you'll notice that the payback is now getting faster. It's approximately 18 months. Of the 75 branches we opened in last year, FY 2023, almost 55% of them, about 40+ branches are already, are now profitable. It's encouraging to see that the pace at which we are able to make the branches productive is faster. But having said that, we will continue to be investing in these areas, as we believe that this will be the drivers for the strategic levers which we have outlined in terms of NII growth, CASA and distribution. Thank you, sir. That was very helpful. Thank you. Thank you. The next question is from the line of Rikin Shah from IIFL. Please go ahead. Thank you for the opportunity. I have a few questions. So the first one is on the restriction placed on the co-branded credit card. May I check what are the corrective actions which are underway, and how soon do you expect that to resolve? So that's question number one. Question number two, an extension of the first one. If you could help us think through the financial impact of the same, right? While it's the proportion of that credit card book is less than 2% of the total loans, the card fee income has been growing at a very strong rate of 50% YoY, and even the digital personal loan, which we believe is the cross-sell to those customers, has been growing north of 50%. So how do you think about that going ahead? The third question is on the yields. So, if we look at the increase in the yields since the rate hike cycle started, the yields have gone up around 150 basis points in total for you, which is the least amongst most of the banks, and this is despite we having the highest share of floating rate loans. So, is there any pressure points in some of the segments that we operate in, or are we pushing on growth at the expense of profitability? That's the third one, and the fourth one is on the asset quality. If you look at the provisioning part, there was expected to be for AIF related provision in 4Q. Has that come through in fourth quarter? In the presentation you have mentioned there is some reversal of provision even on other purpose loans. If you could elaborate, what is that? Those are my questions. Thank you. Okay. Shalini, you want to go on co-brand? Sure, Shyam. Thanks. On the co-brand credit card, as rightly indicated, we have paused the co-brand credit card. We are in the process of working through the details of what RBI has requested us to look at. And you know, we work through most of the details that needs to be done. In the next few days, we will be going back to RBI and presenting our plan, indicating where the corrections have been made. If all goes well, RBI should be able to allow us to resume. I can't give date, timeline as to when RBI can come back, because we're actually dependent on RBI's review thereof. In terms of financial implications, you know, as you indicated, its contributions from an overall asset perspective, cards is really small in its overall perspective, and there are other products that are able to kind of lift the potential slack that will come from non-availability of credit cards or the co-brand cards. In the fee income side also, as Shyam referred to when he was answering the question from Marukh, we do expect that the fee overall fee income will continue to keep up with. Cards will definitely, you know, whatever we didn't get on credit cards will get compensated by other products. On personal loans, we referred to that also. Our personal loans are not necessarily tied into our credit cards, although personal loans, the books that we have built have two kind of fundamental pillars. One is cross-sell to our existing savings bank customers who've been with us and you know who we can assess through various means from a credit perspective. That's one part of the book. The other part of the book is new to bank customers who are coming in for a personal loan so through our digital lending partners. So summary of kind of way we put together is we don't expect too many too much of an implication either on the balance sheet or on the fee income. We will be going back to RBI, and if all goes well, I'm sure they will bless our assumption very shortly. Thank you, a couple of clarifications, please. Sure. When you say that, the corrective actions are underway, would the partnership with OneCard continue or, this is something, wherein you can- Oh, we- and fix it? So for us, you know, all our partners are critical, and, you know, we've been as much as the partner is invested in it, we have also invested in it. We will be going back to RBI with corrective actions on the partnership, so we do expect that, you know, the corrections we have taken, RBI should be able to clearly confirm, you know, discussing that we will have with RBI when we are ready. Just to add, I think the question was, will partnerships continue? I don't believe either the regulator wants us to stop partnerships and/or we are looking at that direction. Certainly when we started out our fintech partners and where we are now, a lot of evolution has happened. We have learned, they've learned, regulations have changed. Now we are continuously readjusting to it. But the fundamental objective of expanding reach and digitally using partners has not evaporated. The scale, size, quantum will vary based on how much filters and how much guardrails are there. But structurally, we are not saying we're going to shut out our partners, unless there's a regulatory requirement to do so. Hopefully, that won't happen. Got it, sir. So OneCard should be able to share the customer, transfer the customer data back to Federal Bank and give away that data access? Unfortunately, what gets reported, written about is all conjecture. It's never the full fact, right? It's not like we were lax about letting somebody else take our data and so on and so forth, but there were some additional firewalling that had to be done, additional controls that have to be put in place, and those are effectively happening. Got it, sir. Shalini, if you could just give a number as to what kind of cross-selling do we do to the credit card customers for personal loans. That number would be helpful as well. Like I said, both our credit, you know, both our credit card proposition and our personal loan proposition are currently cross-sold to our customers, to our savings bank customers. We honestly don't do much of a cross-sell between the two. I don't have the number readily available, but it's not a very large number. Our cross-sell is primarily to our savings bank customers. Got it. Okay. Thanks for first two questions. The remaining two. Yeah, just we've got longer, so you remind us the question three and four again. Question number three was on yields, I think, Shyam. Correct. The increase in yields of, you know, between the repo rate hike and... Right? That was the question number three on yields. Yeah. Yeah, I think I'll take that. On yields, the expansion, like you pointed out, is more modest than it has been for some other banks, which it may be, I think we have to understand that our structure of how we do business is, we don't trade risk for growth. I've said this for 14 years, and I'll say it for the remaining five months. We are very clear that we will do business from segments that we can manage well, and our credit costs have held admirably because of that. So to that extent, ability to go and demand, command extremely high, you know, sort of readjusting to prices is not that easy. Within that framework, our expansion has been quite considerable, keeping the risk profile in mind. So as we pivot more into the newer, higher yield businesses, which we are, you are seeing through these last four quarters, once the businesses like credit card, microfinance, personal loans, commercial vehicles are kicking in better, we are seeing the yield uptick in the blended margin increase. And I believe as we go into FY 2025, that will get little more pronounced. So we have to deal with a rising cost of deposit situation, which thankfully, I think is moderating at this point in time. As we do that, our business pivoting into the higher yield businesses, combined with our repricing wherever possible, without compromising on risk, will see pick up. But yes, I agree, the yield pick up that you may have wanted us to see may not be fully playing to, but our overall ROA and ROE commitments are factoring in for all of that. That's why the blended rate of growth we are committing for, and we think we are honoring that, delivering it, and hopefully, deliver even higher in the quarter ahead. Got it, sir. And then the last question on provisioning, AIF and reversal in other purposes. There was no AIF provisioning in Q3, nor in Q4. Okay. The reversal for other purpose that we saw in the PM? Yeah, the other provisioning of INR 67 crore reversal that you saw was, we had taken an extra provision in Q3, which now has been reversed out, and that has hit our income line. Because there were some excess fee charges that had to be reversed, that were not crystallized, so we took the hit in Q3 on provision line, so the profit was correct, and that has been corrected in Q4. So you'll see a reversal in provision line, but corresponding hit on the other fee income also. Got it, sir. Thank you for patiently answering all the questions. Thank you. Our next question is from the line of Nitin Aggarwal from Motilal Oswal. Please go ahead. Yeah, hi. Am I audible? Yes. Thanks, sir, for the opportunity, and congrats on a good result, sir. So a couple of questions. First is like on the recoveries taking it forward, like, what has really driven this strong recoveries and upgrades this quarter? Is there any one-off in this number? Nitin, I said it upfront, there were no one-off, no chunky gains. Raj, if you're on the call, you can come back, but none of them, Nitin. Okay. Yeah, completely. So there are no chunky calls. This has been completely granular and all the regular recoveries in upgrade. Okay. Second, sir, is on the succession planning. Like, if you can talk about where are we on that, and, by when do we plan to submit the names to the RBI? Any progress, if you can comment around that? Thanks, Nitin. Yeah, the board is, you know, set up the search panel. The search panel has been doing a great job. They have gathered a good slate of candidates from outside, inside. They are processing through it. I do believe, in the next week, fortnight, two weeks, three weeks, they will be able in a position to share with RBI. And once it goes into RBI, you know, the process works, and they'll do their due diligence. That will take us on between three and four months for clarity around who the candidate is. But at this point in time, it's going well. We are quite encouraged by all the developments. Okay. So the other question is on the branches. We have been opening branches at a healthy rate, and this quarter, like, we have opened at a very accelerated pace. So how are we looking at, in FY 2025, the pace of branch expansion, and related to it, how do you see the cost-to-income ratios moving from here? About four years back, just coming out of COVID, we had said, and 3 years back, we'd like our expansion to be between 5%-7% increase in network every year. This year was closer to 10% because we saw some opportunities, and we were willing to put in that extra energy to get that going. So we think FY 2025, we will do certainly between 5%-7%. If PNL can accommodate, we will do a little more. But the consequence of that, like Venkat said, that break even is turning to be faster. And if that stays, because those are businesses that are microfinance, gold loans and deposits, then maybe the business case for expanding it will be higher. But I would think in FY 2025, about 100 branches minimally. More than that, depends on what kind of PNL space we have. Sure. And sir, lastly, one observation on the business concentration. If I look, the deposit concentration has been inching up, like, over the last two, three years, and it has, like, almost, say, doubled in last two years. So, generally, as the bank gains size, this is either in control or it improves. So why is it so, and how do you really see that internally? Sorry, I didn't get the question, to be honest. Sorry, this is in respect to the deposit and the advances concentration, one of the slides in the presentation. Uh? Wherein the top 20 depositors' concentration has been, like, on a rise. And if you see, like, the trend over the last two years, this number is going up significantly. So how do you really read that when there is no harm as such? This number is still pretty much in control, but how do you read this trend internally and any level that you will want to watch out over here? Nothing to comment on, Nitin. There's nothing, at least in our dashboard, nothing shows anything that is alarming or change in direction. If we are going at term deposits, which is the trend of the market, then there will be some kind of concentration, but largely customers who are consistent. But apart from that, honestly, there's nothing to add as an insight here. We still would like to be granular, but retail in nature. Sure, sir. Thank you so much, and wish you all the best. Thank you, Nitin. Thank you. The next question is from the line of Param Subramanian from Nomura. Please go ahead. Hi, good evening, and thanks for taking my question. First question is on provisioning. So we've, this year, the standard asset line, standard asset provisioning line has seen INR 200 crore of write-backs, and I'm assuming it's coming from the restructured asset provisioning reversal. So just try to, you know, get a sense on, you know, what is the PCR we have on the restructured assets, and we are seeing INR 200 crore of reduction in this restructured portfolio every quarter. Is that something that will continue, you know, going over the coming years? That's my first question. Yeah. Outlook for FY 2025 looks consistent with 2024, Param. Shyam, what is the provision cover we have on the restructured portfolio? Has it changed through the year? Raj or Venkat? Yeah, we are maintaining the regulatory minimum provision, Param, so we are well above that for the restructured part. It's close to 10%, is it? Because, I remember it used to be 20%. 15+. 15+. Okay. Okay, fair enough. And secondly, again, on the provisioning, so because some of these, you know, unsecured portfolios have become, you know, have grown quite a bit like credit cards, and they tend to be higher credit cost businesses once they get seasoned. Do we see any upward delta on credit cost as such going into FY 2025, or would you like to put some outlook on credit costs going into FY 2025? If you normalize for FY 2024, overall credit cost is about 24. Is that correct? 24 basis points, full year? 23, yeah. 23, right. I've said that that is low, but I'm happy that that low may not dramatically alter and shift up. But, yeah, you could argue that somewhere around 30 basis points is what we would push and try, try to deliver in FY 2025. But that's the, that's the run rate. Fair enough, Shyam. And one last question, again, on the corrective action you've taken on the partnership. Is there, o n the Fintech partnership, is there any OpEx that one should expect related to that? Yeah, that's my last question. Not significant on OpEx, right? It's only a model of where data resides, how it's accessed, who holds it. Up to that extent, we don't believe there's any cost impact should be there. Okay, fair enough. Thanks, Shyam, and team. Thank you. Thank you. Thank you. The next question is from the line of Kunal Shah from Citigroup. Please go ahead. Yeah. Hi. So firstly, just with respect to fee income on the general banking charges, so is it like, we need to add this, INR 62 crore-INR 67 crore of reversal to it? Or, there was no impact in this quarter and, that fee income was also in Q3 itself? No, no, the reversal is from the fee income in Q4. General banking also there is a similar gap on a quarter-on-quarter basis of INR 60-odd crore. So is that the impact? Yes. Okay. So last time we just made the provisioning of 62, maybe the other provisions were almost like INR 62-odd crores in Q3. So last quarter, we merely made the provisions out there, and was it booked in some other line item, maybe in OpEx or so, and this quarter we are doing it in, say, more of a fee income and reversing the provision. How, how is that happening? Yeah. Last quarter, provision was made. This quarter, the provision has been released, and fee income has been hit by that amount. Okay, okay. So 62, 62. So ideally, when we look at it in terms of the fee income, it should have been near INR 680 crores-INR 690 crores odd. Yes. For this quarter. You see charges for three preceding quarters were in the region of about INR 100. Yeah, yeah, that's what. So that INR 60 crore is need to get aired out there. Okay. Okay, and secondly, in terms of the overall OpEx, so last quarter also there was some provisioning towards the wage revision. This time it is towards the retirement benefit. So we need to adjust almost like, say, INR 200-odd crore in the employee cost, just to make sure that the entire wage provisioning impact gets over, and that should be the normalized level of employee cost for full year FY 2024, just deducting INR 200-odd crore? Yeah, that's correct. Yeah, it's approximately around 200. So 162+ there were some arrears and all which we had, and there were a lot of other, new, things which had come in with the wage agreement, so we factored all of that. Yeah, so if we have to look at it, ideally, the normalized OpEx for FY 2024, in terms of be it either cost to assets and where should we see it settling, if you can just guide in terms of how it should move in FY 2025? FY 2025, excluding this one-off impact, you know, we should look at similar levels. I would add probably another 5% more to the OpEx cost. Okay. Okay. So 5% to the overall OpEx cost? Overall OpEx, yeah. Okay. Okay, got it. And there were no one-offs during the year on the overhead side? In the overheads, there was, no, no major one-offs. No major one-offs. Like I said earlier, the spend on branches, technology, all of them- Yeah. Have been happening, which will continue as well. Yeah, so more business related without any one-offs? Yeah. Okay. Okay, yeah. Thanks, thanks, and all the best. Yeah. Thank you. The next question is from the line of Mona Khetan from Dolat Capital. Please go ahead. Yeah, hi, sir, good evening. So firstly, you mentioned about this ROA expansion, continuation by 4-5 basis in FY 2025 as well. So given that, you know, credit cost will ideally normalize at higher levels, and, there could be some headwinds to margin with, you know, interest rates, maybe declining and the impact on floating rate loans. So, what, according to you, would be the key levers, with the assumed expansion here on? If you rewind two years, one year, three years, which is between, the credit costs are low, you don't have much space left. How will my ROA expand? You have seen ROA expand over the last three years. So we've always maintained it a little bit, a few basis points here. We don't have one silver bullet which will change the narrative. For new expansion by a few basis points, credit cost holding well, efficiency gains, the income growth should be the driver of this. Okay. Sorry, you guided for credit cost of around 30 basis for FY 2025, if I got it right? Yeah, in that, in that range. Yeah, yeah, yeah, you're right, in that range. Got it. And just finally, there was on this OpEx growth guidance that we talked about in the previous question. So, X of the INR 200 crore one-off, what we are saying is OpEx could rise by about 5% year-on-year. Is that what I understood correctly? Yeah, excluding the 162, you have to break. See, there are costs which are directly proportional to business growth. That will continue to rise in line with business expansion, but the other overheads and OpEx costs, overall increase will be curtailed within a 5% of the Q4 et cetera budget. Got it. Okay, thank you so much. That's all from my side. Thank you. The next question is from the line of Saurabh Kumar from JPMorgan. Please go ahead. Sir, just one question. On your current accounts, normally, you know, you see seasonality in Q4, you are flat. I mean, is there something happening there? No particular answer. Actually, I'm quite pleased it didn't show any swing, because usually it tends to bulk up at the end of the quarter and fall off. I'm pleased that Q4 didn't see anything, and nor have we seen any fall in Q1. So it's a more sustainable outcome, I would believe. Harsh or Shalini, if you want to comment. [crosstalk], go ahead, yeah. Yeah. Yeah, sure, sorry. Yeah, more on the substantive things, right? We have been increasing and focusing on current account balances, but there's no bulk up that is happening. The current account balances average is showing certain things. Yeah, just to add to what Harsh says, our entire kind of focus has been that on an average is what we measure ourselves on. So we don't, I mean, we don't see too many month-end or quarter-end or year-end, kind of spikes, you know? Okay. Got it. Thank you. Thank you. The next question is from the line of Pritesh Bumb from DAM Capital. Please go ahead. Hi, sir, good evening. Two questions from my side. One is on the retail gold loans. This quarter also, we've not seen any material growth, despite gold prices being up, our LTV being stable. Any strategy on that? Because this is one important piece for our high-yielding growth strategy. Is that true, Harsh, sequentially we- No, it's not. 27% book growth. Yeah. Sequentially, it grew 6%. I think that's why I'm talking about the retail gold. Retail gold, which is separately shown in the investor deck, retail gold loan growth. Okay, retail gold. Okay, if I recollect, it was 4540-4572 or something like that. Yeah. It was flattish, like, 1% odd quarter-on-quarter, despite gold prices being so high in the last quarter. So anything on that? So nothing specific over here. Harsh here. Nothing specific over here. We have been tracking the entire overall portfolio. We've been monitoring the LTV. We do not encourage top-ups just because the gold prices go up, because it tends to hurt us when the reversal happens. So that's, that's there. So from that point of view, we've been monitoring it. Our organic growth was robust. The one which you see in retail has a mix of both, which the organic growth should, should grow, robust growth over there on the, on the retail gold side. But, your question on can retail growth happen, I think there is certainly an opportunity, but there is a pricing game there. People are tending to try, shift, and take share there. So it is not as easy as it appears, but certainly, yes, there's an opportunity. What I see is that the ticket sizes is falling quite sharply, and it's from about INR 40,000 to about 30, below 30 now. So just wanted to check what are we thinking on that side? Yeah. Since we are all giving you an answer which is kind of, you know, not very researched, it's best we come back to you. Got it. Second, sir, you mentioned about the, partnership, correction, in terms of co-branded. Are we taking a corrective action, if any, in the other partnerships as well, lending or otherwise, apart from the co-branded cards? Let me help you with this. We have, on the lending side, on the credit card side, two material co-branded partners. One is, OneCard, and the other is Scapia. And the others are more the deposit side into which we cross-sell. On both these things, the corrective actions are happening. On the personal loan side, they are really not, impacted by this process. So on that sense, all our fintech or partnership, any partner, we are subjecting it to the same level of scrutiny to ensure that gaps, if any, are addressed. Got it. And the last question was, basically, our retail share of deposits slightly dropping from few quarters, and bulk has been now at about, I think, 20%. So any gap there we want to put in terms of how much we can go to in terms of bulk deposits and retail deposits? I think I mentioned it earlier when one of your colleagues asked it. Yes, we are at, probably at the top end of it, around this number is where we will be. Sir, given that this is more likely a top end, the retail term deposits are quite high in terms of reach, where do you see our cost of funds? This quarter also, we've seen 20 basis points up. So how do we see that going in FY 2025? Venkat, do you want to comment? Yes, Shyam. Yeah, i n terms of cost of funds, you know, while we are seeing how the market is and the demand for deposits continues to be quite tough, while we will see the pressure on deposit pricing, and there will be some impact of that translating. What we are trying to mitigate that is, with, you know, the yield side, as mentioned earlier by Shyam and others, working through the mix and making sure that we're able to, you know, maintain the NIMs, either at the current level or improve it. So we will see the cost of funds moving up marginally, going ahead, at least for the next couple of quarters. Got it, sir. Thank you, and all the best. Thank you. The next question is from the line of Rakesh Kumar from B&K Securities. Please go ahead. Yeah, hi. Thanks a lot, sir. Slightly, so broader question. So one thing that for this quarter, the calculated, term deposit cost has not increased. So correct me if I am wrong or if there is a flat number on the term deposit cost. For this quarter, TD cost has gone up. I don't know how you arrived at a calculated number being flat. Last quarter, it was 7.06, cost of term deposits. It has gone up to around 7.25. Okay, so we have calculated on the, based on the, quarterly average balances. But thanks, sir. The second thing, sir, like, if I see- That's what translates to the cost of funds, right? Because savings is pretty much flat. True. True. So what I was looking at is that, you know, like for the last three years, like, you know, whatever increase in credit yield has happened, that has largely happened with, you know, the increase in credit risk weight that, you know, credit risk weight density that has increased. Now, with this, like, you know, and like, you know, we have around 25%-27% of the loans which are on the fixed rate basis. So, and with the 170 basis points, 135 increase in the cost of deposit, we have transmitted around 155 basis points, you know, in the credit yield. So is there any scope to further enhance the margin at this level without increasing the credit risk weight? It has to be account, portfolio by portfolio managed. Besides that, we have to look at, we are looking at opportunities to find how we can hedge some of our portfolios to ensure that we are in a falling rate environment, reasonably well protected. We believe we are getting to good success on that account by managing it through a multiple levers as opposed to just one that may be very visible. So it has to be seen as, we slice the book, the entire INR 200,000 crore into multiple buckets, find opportunities for each of them, and all of them are in play. So, net-net for margin, how do you see that, you know, giving these numbers, like, for the last three years, or maybe, maybe after May 2022, when the, you know, interest rate cycle rises started? If we see since then, now, how do we see the, you know, the margin panning out? I thought I mentioned in the earlier part of the call, we think that 3.20 should impact about 2-3 basis points this financial year. Understood, sir. Understood. Thank you. Thank you so much, sir. Thank you. Thank you. The next question is from the line of, Jai Mundhra from ICICI Securities. Please go ahead. Yeah, hi, good evening, sir, and thanks for the opportunity. I have two questions. Yeah, first, I think it was asked a little bit earlier on yield. So apart from the loan mix change, and maybe the, you know, the usual MCLR pricing, is there anything else which could help on the yield side? Maybe if there are a few loans which are hybrid or maybe, you know, which may convert from fixed to floating, is there, is there such meaningful quantum of such loans? Venkat, you want to go? Venkat or Harsh? I thought I answered the earlier part. That's why I think one of you maybe I missed saying something. No, I think pretty much summarizes what we plan to do, Jay, and there isn't any other, you know, silver bullet which we have. It's all about looking at portfolio mix change, pushing through, you know, or cutting the tail on low yielding. So a combination of all this only will help us ensure that we maintain the yields. I'll just add a few points here. What we are looking at, which we are articulating, is increasing the focus on the high-yielding businesses, which we have spoken about. But even within each business vertical, the focus is shifting more towards one which will give us a higher yield. For example, Wholesale banking, you clearly see a shift from the share of commercial banking increasing, yes, I mean, corporate banking. Similarly, in commercial vehicle, you'll see a shift, more increasing share on used commercial vehicles. That in corporate banking, we're looking at increasing the share of supply chain businesses. In corporate banking, again, we're looking at leaving out those very finely priced assets where there is no reciprocity. So this is a combination we feel which will help us in terms of pushing up the yield in general, apart from focusing on the high-yield businesses. Sir, just to add to that, again, as Harsh and Venkat has alluded on the retail side also, if you look at kind of home loans and slice it into parts like just regular home loans and loans against properties, we've, we've expanded our presence in the loan against property market, where the margins tend to be a little better. Within the auto loan segment, we're gradually increasing our, you know, entry into the used car segment. Within business banking, for example, we're granularizing our portfolio because at the lower end, you can get slightly better pricing. So there's no silver bullet for it, as I think we've all, I think many, many actions taken, and you'll see the kind of, you know, the improvements on the yield coming out of all these multitude of actions. Right. And if you can, highlight the loan mix by benchmark, I mean, by MCLR, EBLR, fixed rate, you have that handy? It's mentioned, it's 51% is EBLR. 57 is fixed, 52. Yeah. 51 point something, and 27 is fixed. And, 7% is MCLR. Sir, the rest of them is for linked staff loans and base rates. Yeah. Shyam, I think patience on your deposits, right? So if I see the NR deposit has grown only by 8%, whereas the overall domestic deposit has gone up slightly higher, and the overall deposit growth is 18%. I, I remember that, you know, that there was not too much difference on the NRTD and domestic TD, few quarters back. I wanted to check, is there any significant difference between, you know, blended NRTD and domestic TD, and, you know, what, what is the reason that NR deposit is growing at a little bit slower pace or much slower pace? Yeah, deposit rates are the same across whether it's domestic or NR. I think we've been mentioning for a few calls now post-COVID, the nature of how NR remittances and behavior of remittances converting into deposits has materially changed. Remittances have gone up, and our share has kept pace, but the remittances are not translating to deposits, either. Not either, our hypothesis as follows: It's getting- it's being used for paying off debt. That's why credit quality is improving substantially, even in Kerala. One, setting up new businesses, because many of them are probably returning and setting up some shop here. And for consumption, like family wedding, marriage, school, college, whatever, right? And the last is, the non-Middle East NRI remittances, probably have not moved much, and it's probably getting into FCNR, and we are not a big FCNR player because rates don't necessarily work in favor. Rupee deposits coming in, rupee remittances coming in are continuing to be vibrant. We are seeing a larger share of it, but unfortunately, they are not transferring it to deposits directly. Indirectly, it will, because it creates commercial activity and it comes back as deposits. Directly, it doesn't go into deposits. Which is why, so five years back, we started dialing up our outside of this norm business, and those are tracking quite well. Understood. That is helpful. Sorry, I have two more questions. One is OpEx. I think earlier you mentioned that, you know, X of this INR 200 crore of staff cost, which is one-off, the growth should be 5% only. But then you sort of qualified that by saying that the usual, business as usual costs will still be there. And so if you can help us understand what's how should one look at the OpEx growth for maybe one, two year, that would be helpful. Venkat, do you want to go? Sorry, I didn't get the last part of the question. What did you say? How should we look at our OpEx, increase in the year ahead, years ahead? Yeah, two years, again, it's dependent on our strategy on investment in branches. That is one main part. For FY 2025, the current outlook is we will probably look at, like Shyam said, another 100 branches to be added. The technology, IT spends as a percentage of OpEx, we are now close to around 6.7%, and that's an area where we'll continue to invest, and we would like that to be closer to around 8% of OpEx. So in the next FY 2025 and even FY 2026, early part, the current outlook is investment in these two will continue at pace, at the same rate at which we have been doing. On staff costs, if you exclude the one-off, like I said, there will be, I would put another 5% increase on a year-on-year basis, and the other fixed costs would be around capped at max 5% increase. But the variable costs related to businesses would continue to be in line with business growth. As long as it's, you know, positive jaws, we'll continue to invest those. So overall cost, the controllable cost, staff cost, would be about 5% more than the current Q4 exit rate. Sure. Last question, sir, if you could highlight, is there any impact on the capital because of the new investment guidelines which were implemented with effect from April first, regarding HTM and AFS reclassification? Thank you. No, nothing at all. Nothing? No. No accretion, no impact, right, and- Nothing material, nothing significant. Thank you, and over to you. Thank you. The next question is from the line of Saket Kapoor from Kapoor & Co. Please go ahead. Yeah. Namaskar, team, and thank you for the opportunity. Firstly, about the treasury part, under the segment revenue, so what explains the dip in the profitability? If you could give some understanding on the same. Yeah, last quarter, we had the Fedfina listing gain, so that is not repeated in this quarter. That's the same difference. Okay. And, sir, in your opening remarks and also during the call, sir, Shyam, so you mentioned about, we are looking for a 25% growth in the NII, the net interest income, for FY 2025, 2024- Fee income, not NII. Fee income. Fee income. Yeah. Okay, and what would be the NII trajectory, likely, the growth in the- This year we grew 15, our credit grew 20. We would like to be better on both counts. But, you know, we just have to work through this cost of funds challenge. But yeah, in that zone. Okay. We are very likely to remain in this trajectory, what we have performed for this financial year? Improve slightly. We will improve slightly. Sir, on the cost to income ratio, where should we stabilize? This quarter was, I think, an aberration. No, this quarter is an aberration. We were looking to be, last year was 49 and change. We were looking to be in that 49 or better, but some of these costs have come and, impacted us. So I think FY 2025 should be back to about 50 odd% and then improving from there. Okay. And two small points. Firstly, on the dividend payout part, sir, I think so we have done the fund-raising exercise also earlier, so I think so we are very well capitalized. What have been the factors on which we have decided the payout to be lower than 10% of the EPS for this financial year, sir? And then one closing remark from Shyam, sir. So we are looking to preserve capital as we grow. We think we should be able to strike a sort of a sensible balance between plowback and also reward shareholders. So the board, in its wisdom, has taken the decision to recommend a 60% dividend ratio, second dividend. Because as you mentioned, rewarding your investors and shareholders, if you take the trajectory of the market cap change over the years, I think so it has been subdued in comparison to the other listed banking space. So that was a very brief understanding on how well when you see the market cap or the type of P-to-book book value that the stock should trade going ahead. These are a few of the parameters which investors also look in terms of the payout ratios also. And lastly, sir, Shyam sir, your terms come to end, as you alluded earlier, also five months, and we have seen that in many of the banks, the people, the personnel have tried their hand at other small banks. So can we look forward for your role and some other small banking entities who are also scouting for experienced people like you or veterans like you. And we can see you in other, in being in other entity or altogether, or is it curtain down for your career in the terms of being the MD? What's the thought process if you would like to share and any message to us, sir? Thank you, Kapoor Saket. We'll talk on September 24, 2024. Till that time, I'm in the street, and I'm enjoying the street. Correct. Yeah. Okay, sir, thank you. And for shareholder value creation idea, sir, I think so, please dwell on the metrics. I think so our banking, our bank, is lacking on that behalf, on that count. That's our kind of feedback. Thank you, sir. Thank you. Thanks. Okay. Souvik, we are just left with couple of minutes before we- Yes, sir. So, Sagar, I think one more question, and then we can wrap it up. Sure. So the next question is from the line of M.B. Mahesh from Kotak Securities. Please go ahead. Hey, hi, and congratulations on good results. Just one question. Just a comment, if I've missed it, on the OpEx, it was up from INR 850 crores to INR 950 crores. I don't know if you made a comment on it. That's it from us. We didn't comment on it, but I think Venkat alluded to the overall investment in technology and branch expansion as primary drivers of expansion of cost. But, is that high? Because these are branches. Mahesh, typically in Q4, we normally see an uptick in the other OpEx, so it's in line with what we have seen. It will normalize in the first two quarters and then again pick up. Because there were some one-offs which, not one-off, some IT spends which normally happen, whether it's an annual renewal or some infrastructure purchase, which gets charged off. That usually happens. It's a timing of the renewal as well, which happens. So it's, Q4 is usually the quarter where you see a higher IT spend. Okay. Oh, perfect. Done, done. Thank you. Thank you. Uh, yeah. Ladies and gentlemen, we would take that as the last question for today. I would now like to hand the conference over to Mr. Souvik Roy for closing comments. Thanks, Sagar, and, thanks, everyone, for taking time and joining us on the call today. I hope we have been able to, address all your questions, if not most. If any questions, remain unanswered, please feel free to reach out to our IR team. We'd be more than happy to, you know, take those questions on a one-on-one basis and offer further clarification. Going ahead, we definitely continue to, you know, drive, this calibrated, profitable growth, and, our focus will definitely remain on market share growth as well. Souvik, one second. Good evening, everybody. Thank you. I just wanted to point out that our stalwart in the bank, Ashutosh Khajuria, after almost 13 years and various capacities, is retiring as of business close this evening. He'll be associated with the bank in some advisory role, but his formal terms end as of today. So join me in congratulating and thanking Ashutosh for an exemplar support and performance in the bank. Thank you. Thank you. Thank you, Ashutosh, sir. Thank you for all these many years of amazing service to the bank and to everybody. Thank you so much, and with that, ladies and gentlemen, we sign off for today. And also, I also wanted to add one more thing. Sure, sir. Our senior colleague, who heads HR here, is moving to another bank as an MD, and it's a proud moment for Federal Bank, so I have to compliment our colleague, Ajit Kumar, for that. Yes, sir. Thanks, Ajit, sir, as well. Ajit, sir, if you're on the call, thank you. Thanks again, sir. Thanks, everybody. Bye. Bye, everybody. Bye. See you all after even a, probably a better next quarter. Thank you. Bye-bye. Thank you. Thank you. On behalf of The Federal Bank Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines.