Ladies and gentlemen, good day and welcome to State Bank of India Q1 FY 2023 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. Sanjay Kapoor, General Manager, PPR from State Bank of India. Thank you, and over to you, Mr. Kapoor. Yeah. Namaste and good evening, ladies and gentlemen. I am Sanjay Kapoor, General Manager, Performance Planning and Review. On behalf of the top management of SBI, I extend a warm welcome to all joining us today on SBI's Q1 FY 2023 Earnings Conference Call. On the call today, we have with us our chairman, Mr. Dinesh Kumar Khara, Mr. Challa Sreenivasulu Setty, Managing Director, International Banking, Global Markets and Technology, Mr. Swaminathan J, Managing Director, Corporate Banking and Subsidiaries, Mr. Ashwini Kumar Tewari, Managing Director, Risk Compliance and SARG, Mr. Alok Kumar Choudhary, Managing Director, Retail Business and Operations, Mrs. Saloni Narayan, Deputy Managing Director, Finance, Mr. Pawan Kumar Kedia, Chief General Manager, Financial Control, Mr. Charanjit Surinder Singh Attra, Chief Financial Officer. Before I request the Chairman to give a brief summary of the bank's Q1 FY 2023 performance and the strategic initiatives undertaken, I would like to read out the safe harbor statement. Safe harbor provision. Certain statements in these slides are forward-looking statements. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual outcome may differ materially from those included in these statements due to a variety of factors. Thank you. Now I would request Chairman, sir, to make his opening remarks. Good evening, ladies and gentlemen. Welcome and thank you for joining this conference call. I start by thanking all our stakeholders, including our customers, analysts and employees, for their unstinted support and trust reposed in us. I also express my gratitude to our shareholders and other financial market participants who have supported and valued the bank through the challenging times in the past few quarters. The effect of the pandemic has subdued to a large extent, thanks to the government's massive vaccination program, with doses administered to more than 200 crore persons, an astounding milestone. The economy is almost on track with resumption of air travel and removal of other containment measures by most of the countries. However, the volatile geopolitical situation still poses a downside risk. The Indian economy remains resilient despite global headwinds, resulting in rise in inflation, surge in crude prices, increase in commodity prices, and disruption in supply chains. The global output has contracted in the second quarter of this year owing to the downturn in China and Russia. RBI has already raised the repo rate by 140 basis points this financial year to bring down the inflation. In its most recent monetary policy statement on August 5, 2022, the RBI continued to remain focused on withdrawal of accommodation so as to ensure that the inflation remains within the target while supporting growth. Further hike in interest rate and resultant tightening of liquidity can't be ruled out to tackle higher inflation, increased commodity and energy prices, which are putting pressure on global supply chains. The increase in urban consumption, improvement in rural demand and agriculture and the likelihood of a normal monsoon will help the economy in gaining traction going forward. The government's CapEx program and improved capacity utilization will support investment activity. The economic activity has continued to move forward as per the data available for the first quarter of financial year 2023, despite global risk. The GST collection at INR 1.49 trillion in July 2022 has been the second highest ever, remaining above INR 1.4 trillion for the fifth consecutive month, showing the strength of the economy. I now present some of the key highlights of our performance in Q1 of financial year 2023. The balance sheet size of the bank has crossed the milestone of INR 50 lakh crore, which is a reflection of the continued trust and faith placed on us by our esteemed customers. We are committed to adding value to our stakeholders by continuously improving our product and services. As regards business, the bank's advances grew by 14.93% and deposit grew by 8.73% on a YoY basis. Our international banking witnessed a robust credit growth at 22.39% on YoY basis, 15% in dollar terms, and deposit growth at 30.63%, 23% in dollar terms. The net interest income has increased by 12.87% YoY, and net interest margin has increased by eight basis points YoY to 3.23%. The non-interest income has declined by 80.44% YoY, mainly because of MTM losses. This has resulted in reduction in operating profit by 32.79% YoY. However, the core operating profit after excluding MTM impact has increased by 14.39% YoY. The MTM losses have also impacted ROA of the bank, which has come down by nine basis points YoY to 0.48% and ROE of the bank, which has declined by 203 basis points to 10.09% due to consequent decline in net profit. However, if we recalculate the profitability after excluding the MTM losses, the notional ROA and ROE would be 0.89% and 18.57% respectively, which is on the expected lines and on track of our medium-term guidance. Our AFS book stands at INR 631,530 crore as on June 30 2022, with 60% in G-Sec, SDLs and 23% in highly rated corporate bonds. We saw a hit on account of MTM losses amounting to INR 6,549 crore. We do not see any actual loss in this book and as the rates soften, the MTM losses will be recovered. During the year, we have the redemption of INR 84,000 crore from the AFS book, which will also bring down the MTM losses. Further provision of 1,503 crore were made for the investment depreciation during the quarter. The momentum in retail advances continues to show a growth of 18.58% in Q1 of financial year 2023 on YoY basis. Corporate, SME and agri advances have shown a robust growth of 10.57%, 10.01% and 9.82% respectively on YoY basis. Our leadership position in home loan continues. The individual mortgage portfolio for the bank has the best Q1 performance ever. The home loan application registered a three times jump. Sanction in value terms doubled over the same period last year. The individual mortgage portfolio registered its highest quarter one growth of INR 13,425 crore despite industry witnessing a hike in interest rate from the historical lows. The home loan portfolio grew by 13.77% on a YoY basis. As far as asset quality is concerned, the bank's gross NPA and net NPA as on June 2022 was at 3.91% and 1% respectively, which is an improvement of 141 basis points and 77 basis points respectively on YoY basis. The slippage ratio for June 2022 is 1.38%, which is an improvement by 109 basis points YoY. We have been able to contain the credit cost at 0.61% as against 0.79% in June 2021. The net NPA of the bank has been brought down to 1%, which is a result of focus and continuous attention in this area. We have been constantly trying and ensuring to maintain the bank's loan asset quality. The digital leadership journey of the bank is continuing. More than 96.6% of the transactions are now routed through alternate channels. The registered users on YONO have already crossed 5.25 crores, a big milestone and which has created a significant value for the bank. 65% of the new savings accounts are opened through YONO. We have now more than 100 online marketplace partners for YONO. The bank will soon come out with YONO 2.0, with many more advanced features and functionalities. The bank is leveraging its analytics in a big way for taking forward its strategic goals. We have totally revamped our contact center, which will add lot of value for the bank and create a superior customer experience. host of services will be available for convenience of the customers relating to account inquiry, statement of account, debit card-related services, digital banking and other miscellaneous services. It will also be used for pre-delinquency reminders, soft recovery for NPA accounts, early bucket collection outreach, proactive outreach for digital handholding, besides some routine banking inquiries. With the economy picking up, we see growth in credit offtake to continue. Our focus is also on increasing the CASA ratio with more emphasis on growing our current account book and to maintain our leadership position in savings and deposits. With increase in credit offtake, we will better utilize our liabilities to improve the key ratios. These outcomes demonstrate the resilience of the bank supported by our constantly improving process-oriented culture, the expertise and the vision of our leadership teams and the quality of employees amidst the present volatile geopolitical situation. Before I conclude my opening remarks, I would like to thank you all for your consistent support to the bank. We remain committed to reward your trust in us with superior sustainable returns over the long term. My team and I are now open to take your questions. Thank you. 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 telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press star and one to ask a question. The first question is from the line of Mahrukh Adajania from Edelweiss. Please go ahead. Hello, good evening. My first question is on international loans. We do have a breakup of domestic corporate loans in the presentation, but there's a strong growth in international loans as well. Which are the sectors that have contributed to international growth? Say maybe the top two to three sectors, which is it the oil companies borrowing? Which are the sectors? Actually, when it comes to international book, our major growth would have come from the syndicated loans. We would not have the sector-wise per se, but nevertheless, the growth is essentially coming through. I think we can come out with some kind of a details relating to whether it is syndicated loan or it is trade finance. Those kind of details we can certainly provide. But majorly it is coming from the syndicated finance. Trade finance. Also trade finance. Also trade finance. Syndicated loans and the trade finance are the two major products in which we have witnessed a growth. These are the geographies where these syndicated loans have come in from. I would also like to mention that both the places, USA and U.K., both the places have got decent trade finance growth also because there are many platforms which are available, which helps us in sort of really ensuring that we underwrite decent loan growth from this particular product. Yes. Sir, I'm asking because other PSU banks have also seen a very sharp rise in international loans and this has been happening in general for the segment for the last two to three quarters. Suddenly, why has there been higher focus on overseas loans because they are growing faster than domestic corporates? No, I'm unable to comment about others, but as far as we are concerned, we had introduced a factoring product about a year and a half, almost two years back. That is something which has helped us to participate on various platforms which are available in USA and U.K.. I think that is one of the major reason for the growth which we have witnessed in the international banking group. I think we had witnessed similar growth last year also. If you look at it, our growth in dollar terms is actually 15%, when it comes to the international book. Okay. Sir, most of the incremental growth in this quarter will be syndicated, not trade finance. Is that a fair assumption? Yeah. We will take it. It could be syndicated. It It could be syndicated. It could be syndicated as well as trade finance. Okay. Both would be kind of equal. Yeah. Okay. Sir, the other question is on provision. The standard asset provisions are negative and the flowchart that you give on the breakdown of provisions that are not reckoned for calculating net NPAs, that stock of cumulative provisions has also declined sequentially. Has there been a drawdown of existing provisions via standard asset provisions negative during the quarter? Just one second. Sure. Just one second. Let me get the details. Yeah, sure. What's the question? What is the question? There is actually the write back of INR 1,295 crore, which is essentially attributed to....... It's a combination of.... It's actually a combination of write back. Write back taken from provision for COVID restructuring, which is essentially attributed to the reduction in the exposure under the restructuring and additional normal provision of INR 300 crore were made for the credit growth. Net of that is actually getting reflected here in INR 1,295 crore. Okay. Basically there was a write back of INR 1,595 crore. Yeah. Because of COVID restructuring. Yeah. I mean, drawdown. Okay. Okay. My last question is on personal loans. What would be the maximum and average ticket size, and what will be the share of private versus government? This excess credit, the average ticket size is about INR 5.97 lakh, is the average ticket size. Out of this, it 95% is given to the customers who are maintaining the salary accounts. When we look at this 95%, almost about 85% would be for the government employees only. The remaining is for defense forces, government employees and the quasi-government would be about 90%. Out of this 95%, 5% would be large corporates, which are well-rated corporates. That's how it is stacked up. Got it. The maximum ticket size would be? About almost INR 6 lakh. 5.97 is average. That is average. Okay. That's the average. That is INR 20 lakh. That's the average. Maximum will go up to INR 20 lakh. We have actually recently launched another product which is RTXC, but which has yet to really grow well. There, the maximum ticket sales can go even up to INR 30 lakh. But as of now, our maximum ticket sales will be in the range of INR 20-25 lakh. Got it. Sir, my last question on this thing is that the business development expenses are the highest component of other operating expenses by value. These agents will be sourcing what loans? Xpress Credit or some other loans? I'm assuming these are DSA commissions. Actually, when it comes to various acquisition expense, it is essentially on account of the home loans. Home loans are the one, and also the PSLC certificates which we buy. For that also, whatever, I mean fees will, I mean, whatever premium is paid, that will also come under this. Got it. Thank you. For Xpress Credit, we are not using any of the outsourcing agents for Xpress Credit. Okay, sir. Got it. Thank you. Thanks a lot. Thank you. Next question is from the line of Chintan Mehta from Dolat Capital. Please go ahead. Yeah. Hi, sir. Good evening. My first question is on slippages. If you could share the breakup of slippages and if there was any one-off in terms of interest reversal this quarter? Breakup of slippages you need. Yeah. Just a second. See, when it comes to the breakup of slippages. Breakup of slippages are essentially about INR 9,700 crore, which is coming from SMEs, INR 3,000 crore. Agri is about INR 2,700 crore. First segment is INR 2,353 crore. Which actually add up to INR 8,070 crore. Then CAG was INR 320 crore and CCG was 1,335 crore. So that's how it is. Out of that, we have already recovered INR 2,800 crore, already has been recovered till now. Okay. Were there any one-offs in interest reversal from, say, the agri book or something? No. There is no one-off. Okay. Sure. What was the reason behind the decline, sequential decline in margins? Sequential decline in? Margin. Net Interest Income. As far as last quarter was concerned, we had some INR 600 crore worth of income tax refund, which was i nterest on income tax. Interest on the income tax refund, which is not available this year. Okay. This quarter it is not available. Sure. Got it. Secondly, on the reset of EBLR loans, so what is the basis of these resets? What is the time period of resets? Sorry, I could not. On what basis are the EBLR loans reset, the repo-linked loans reset in your view? Actually, it happens on the first of the quarter? Following month. First of the following month. See, most of our EBLR loans are repo linked loans. Okay? Right. Suppose the repo is at increase this month, any day of the month, this month, and first of the subsequent month, the reset date is reset. Okay, sure. Got it. Just finally on the double B and below book, we noticed that there was a rise in the share of double B and below book from 11% to 13%, Q on Q. Anything? If you could give some color on it, what is leading to the increase? Yeah, majority of them are the state government loans which are not rated. That is the reason why this kind of a behavior is seen. Okay. There was a rise in state government loans, essentially. Not really. Actually, if you look at it has come down from 14% to 13%. But double B and below are essentially those are the loans which are there. Okay. Sure. Just finally, on the retail and SME, you know, how is the underlying demand and do you see any risk to it from the elevated inflation levels? See, we have till now when it comes to retail, we have not seen the demand tapering off. We have a decent visibility of the demand, and I hope that it will continue. When it comes to SME also there is a reasonably good pipeline, if I may say so. This year in Q1, perhaps after many, many years, we have seen the SME segment witnessing a growth. That way I think it is, I hope that we'll continue to see the decent trajectory of growth in the SME segment too. Sure. Thank you. That was very useful. All the best. Thank you. Thank you. Thank you. Next question is from the line of Jai Mundhra from B&K Securities. Please go ahead. Yeah. Hi, sir. Good evening, and thanks for the opportunity. The first question is regarding your savings account rate. SBI savings rate is linked to repo. Now with yesterday rate hike, the SAR rate by formula is, I mean, almost similar to the floor of 2.70% that we offer. Just wanted to check, is it safe to assume that incremental repo rate hike would now be flowing to the savings account card rate? Is that safe to assume? No, I think it is not the right assumption because our savings rate is not linked to repo. Your mic is on. Yeah. Maybe if you can access. Yeah. More than INR 1 lakh, it is linked with external benchmark, but the stipulation is that it will be 2.75% below the repo rate. Under these circumstances, even if the repo rate becomes 5.40%, then minus 2.75, it comes to 2.65%. It is still more than the desired number. Right? We are giving 2.70% up to INR 1 lakh. Technically, by going by this formula, we should have reduced this number to 2.65% or even below. Because we value our franchise, that is why we do not use this formula to the disadvantage of people. Even if repo has been enhanced, the rate will remain same. Right. No, the question is, sir, incrementally and now that your formula-derived rate and your floor of 2.70 are almost similar, there is only five basis points gap. Whatever incremental repo rate hike should one assume that, you know, the savings account rate will also be reflecting that. No, I think we will be very mindful of our company. Yeah, please. See, 2.70 we have been giving irrespective of whether it is 1%, INR 1 lakh or more deposit. If we had gone by the formula, then this for more than INR 1 lakh, the rate would have been lesser than 2.70. We have already been incurring 2.70 in the entire balance. Even now, despite the incremental increase, this cost is not going to increase. Neither it will reflect in the savings bank interest rate. Even going forward, right. Do you- Yeah, yeah. Even going forward at this rate, this, increase which has happened in- No. Is going forward in case repo rate is above 5.45 also, then what happens is the question. Yeah. If the repo rate, we can always calibrate the spread according to what the actual demand would be. Understood. Second question is, sir, on EBLR. In last three months or less than three months, there is a cumulative 140 basis point rate increase and the card rate on all floating rate loans on retail SME, they clearly would have increased by 140 basis point rise. Do you think the credit demand is healthy enough to absorb this increased 140 basis point rate? Or do you think that, you know, irrespective of 140 basis point rate hike in EBLR, the effective interest charged to the customer could be lesser than 140 basis point on a floating rate? I think this is a part of the market dynamics. We are taking a call, but nevertheless, the kind of trend which you have seen, we don't envisage the demand tapering off even if because, you know, actually when it comes to the retail loan book, it is directly linked to the actual number. Uh-huh. When it comes to the corporate loan book, it is all linked to the various benchmarks and also spread over whatever the benchmark is. Risk premium over the benchmark. That's how it is worked out. When it comes to the final pricing, the risk spread accordingly gets adjusted depending upon the risk appetite and the market dynamics. That's how really it works out. Understood. Last two things, sir. If you have the ECLGS number, outstanding disbursement and NPA there. Yeah. ECLGS we had INR 32,000 crore was the total amount in both restructuring one and two. It has already come down to about INR 28,000 crore. Out of this INR 28,000 crore, this INR 4,000 crore worth of reduction is about 2,000 crore, I would say, essentially on account of the repayment and INR 2,000 crore is a NPA which has happened. This is about restructured, right? I was asking on ECLGS. ECLGS also I think INR 41,000 crore was the total disbursement. 1.9% is it? Yeah. Lastly, sir, the credit growth it is running at 15%. QOQ it is also healthy, but it looks like that part of that is because of the low base of last year on YoY basis. Sir, how confident you would be to sustain this 15% growth for the rest of the financial year? I'm quite hopeful. The reason behind is kind of a term loan and also the underutilization of the working capital, which is all aggregating to almost INR 5 trillion, and the pipeline is almost about 1.2 trillion. I'm quite hopeful that we should be in a position to sustain this in the subsequent quarters. Right. Finally, the last question. Sir, sorry to interrupt you. Can I request you to please come back in the queue? Sure. Thanks. Thanks, sir. Thank you. Next question is from the line of Kunal Shah from ICICI Securities. Please go ahead. Yeah. Hi, sir. Firstly, on this decline in yield on advances on a quarter-over-quarter basis, in fact, we have hiked MCLR. There would have been EBLR-linked loans as well, plus, sequentially, the growth is largely from the retail side. What is actually leading to this decline in yield on advances? Is it like more competitive rate pressure which is coming in on the corporate and the SME front? With the revised EBLR, how should we see the trend in next couple of quarters? I think sequentially perhaps may not be a right way because normally towards the end of the financial year, there are multiple other channels of revenue which are available for various accounts. Maybe that may not be the right way and that is the reason why we are comparing on a sequential basis. On a sequential basis, it is an improvement. Actually, if we look at it, I mean, YoY basis it's an improvement, though sequentially it looks like to be a reduction. Because invariably, we have seen that year-end there are multiple other sources which actually are the yield enhancers. Okay. How should be the trend maybe with this EBLR hike and the MCLR hike? How should we look at it from here on, yeah? We hope it to be improving going forward. I think July onwards it will. July onwards it should start looking up. Yeah. Yeah. Because up to June. If you look at this graph also, you will probably see this. This trend line also very clearly indicates June is low and it does peak towards March. Quarter after quarter it went up, so it's a similar situation. We hope that we should be efficient to have a similar trend or maybe better towards the in the coming quarters. Sure. Overall, in terms of the deposit growth, I think it is slightly below the system average as well now. Definitely in terms of the hikes, our hike on the deposit side has been lower compared to that of the other private banks. What would be the stance out there? Is it like still 69%, 70 odd% of CD ratio is comfortable and we can further allow it to expand without tweaking too much on the deposit side? Would that be the call, or maybe we will see some action on the deposit rates as well to maybe garner the higher deposit mobilization, yeah? We are very closely focusing on the NIM and within that boundary condition, if at all we'll get a chance to shore up our deposit, we'll certainly do. Nevertheless, as of now, our CD ratio is at about 63%. If we look at the redemption which will happen during the current financial year, both from our AFS and HTM book, it will be almost at about INR 1.5 trillion. We will be very closely looking at couple of variables. One, of course, as I mentioned, the availability of liquidity. Second, we will be very mindful of our franchise into the liability sector. Also thirdly, that what are the deployment opportunities which are available and the price at which we can deploy this money. These are some of the variables which will be kept in mind for deciding the interest rate increase in the deposits. Sure. One last question on miscellaneous income. There is a recovery from OCA, but still miscellaneous income is significantly down. What is the element which is actually leading to that? In fact, on an average it used to be like INR 2,000- 3,000 odd crores and this time it is only INR 475 crores. Miscellaneous income is essentially. There is a sharp decline both year-on-year as well as quarter-on-quarter. No, actually. We see that. Miscellaneous income also will have a situation where Q4 would normally have the kind of dividend income which we get and also derivative is other component. These are, I mean, last year we had a dividend income of about INR 500 crore, but this year it is negative. Also, when it comes to recovery in written-off accounts, last year we had a one-time recovery of INR 4,692 crore in Kingfisher Airlines, which is not there this year. That is the reason why this is behaving like this. Okay. Okay. Derivatives also would be a part of it? Yeah, derivative is the other component. Some knock on derivative which would have been there in this quarter? Yeah. Okay. Yeah. Okay. Thanks a lot. Yeah. Thank you. Next question is from the line of Adarsh from CLSA. Please go ahead. Hi, sir. Congrats on good numbers. I have two questions. First on margins. When we were having the last quarter.... Sorry, your voice is not very clear. Can I request you to speak through the handset? Okay. Hopefully this is better. Just checking on margins, our outlook presented last quarter was that, given how things are panning out, margins, which is 22%. If you can just update, how do you see the. Okay. Just a question, sir. What would be your margin outlook incrementally? We are hoping it to be in line with the kind of trend which you have seen in the past, and also what we have already recorded till now. Sir, is there a change? Because if you go back to Q4, clearly the margin outlook looked a lot more stronger. Is there anything that you are seeing in the market which makes you believe that, margins now should be, like, flattish rather than going up? No, I think I would rather expect the margin to improve from 3.23%. Got it, sir. Second question is on capital. While we are better than regulatory requirements, growth has certainly picked up in the last few months. Do you anticipate that bank may need to shore up a little bit of capital now, given how well the stock has done and, number two, growth is certainly holding up a lot better? See, we have already got the approval from the board for raising 81 and 82, worth about INR 11,000 crore. In the current, in fact, in this month itself, I think we have already redeemed about INR 2,000 crore. About INR 9,000 crores is incremental, which will be available, which we'll be using. I think, hopefully, we'll be very closely watching the situation, and if need be, we will look at the options, what all can be tapped to see to it that we have adequate capital available. Sir, what will be the threshold to consider equity raise because we are close to 10%. Many banks operate at better CET1s and obviously the growth is better than what we've seen in the last few years. What is the threshold when you would think about, you know, seriously looking at equity raises? Well, actually, we have got a couple of other options, but we have not really deliberated at the board level, so it will not be in order for me to really share those plans in this call. Got it, sir. This is helpful. Thanks a lot. Thank you. Thank you. The next question is from the line of Abhishek Murarka from HSBC. Please go ahead. Yeah. Hello, good evening, and thanks for taking my question. Just a couple of data-giving questions. What is your PCR right now? It's about 130%. Okay. Currently, how much excess liquidity would you be carrying? I know you said that there's about INR 150,000 crore of redemption coming from the investment book. Apart from that? No, no. Excess liquidity will..... About 36% SLR of about INR 3.8 lakh crore. We have enough buffer. Sorry, I think you may not have been able to hear me. I was on mute. We have sufficient liquidity in terms of our excess SLR, number one. Right. Number two, I think, there is about INR 83,000 crore worth of AFS portfolios coming up for redemption this year, the rest of the year. I think, there should not be any problem in terms of funding any credit growth which is likely to happen. There's absolutely no liquidity concerns, even if the liquidity in the market tightens. Yeah. How much excess SLR did you say? Excess SLR is about 3.8%. INR 3.8 lakh crore. INR 3.8 lakh crore. Okay. In fact, we have got a total redemption from HTM and AFS aggregating to about INR 1.5 lakh crore. Right. There's enough liquidity. Which is actually coming up in the current financial year. You could actually hold off any increase in TD rates for a while this liquidity gets deployed. That is what I was trying to understand. That's a very nice call. As I mentioned that, you know, deposit is a franchise also, so we have to keep that in mind. Nonetheless, what you mentioned, that very clearly reflects that we have got the muscle power, if at all we so decide. We always explore all the ways of raising the resources, not necessarily the deposits, as we said. Deposits, of course, as Khara mentioned, we have 22,000 branches. Obviously, you know, our deposit mobilization will continue. Got it. Just a couple of questions on Xpress Credit. One is what would be the mix of new versus repeat customers there? Broadly these, you know, higher NPAs in the quarter, that would have come from, given you have 80%-85% government or quasi-government, that would have come from that same cohort, right? No, actually, this is Xpress Credit NPAs. I would say it's more of an aberration because whenever some of the state governments are unable to pay some salary at a point of time. Mm-hmm. You know, it really turns out to be NPA. But as and when the salary gets paid, it gets adjusted also. That would be the scenario. About your other question relating to how much would be the new versus how much would be the existing, we will not have that data right now available with us. We have not looked at it from that lens. Okay. Every time some customer wants to roll over an Xpress Credit loan, what would be the rules around that? How much would we have to pay back or something to roll over? It all depends upon what is their salary and depending upon that we are extending. It's a EMI/ NMI ratio which we really look at it. Okay. Okay, I'll take it offline, sir. Thank you. Thanks for those clarifications. Thank you. Next question is from the line of Ashok Ajmera from Ajcon Global Services Ltd. Hello? Yes, Ashok. Ashok Ajmera. Hi, sir. Sir, while we appreciate, sir, that the operating profit, but for this MTM losses would have been INR 19,302 crores. Does it mean that we can assume that the operating profit for the whole year of the bank would be around in the range of about INR 78,000-80,000 crores? Number one. Let us hope so. Let us hope, Let us hope, Ajmera sir. Secondly, sir, this is a loss on sale and revaluation of investment, this INR 6,549 crores. What is the component, I mean, of the loss which you already booked and the MTM on the revaluation out of this INR 6,549 crores? It is actually on account of MTM. Okay. We have not really incurred any loss. It's all revaluation. Okay. Heading only says that the loss on sale or revaluation of the investment, isn't it? That is a format, so that's why it is mentioned like that. Yeah. Yeah, no, I understand. I understand, sir. Sir, now going forward, now with this 50 basis point again further rise, what do we expect on the treasury front going forward in the next three quarters? Any estimate of, you know, further likely MTM or how much we are cushioned for further MTM losses on the treasury front, sir, including the trading profit we have made? We are cushioned for 5.45%. 5.75%. 7.4%, 7.45%. Sorry, 5.74%. - No, no. 7.45. If I may say so, the way the situation stands, you would observe that yesterday when the rate hike was there for 50 basis points, the yield moved up from 7.10 to 7.30. That is something, I mean, if I read into that kind of a trend, you know, even if the next hike happens from RBI, which will be somewhere in September 28-30, it's too early to say that what will be the interest rate hike because they normally get guided by the inflation trajectory. If at all past is a guide for the future, we have seen that about two and a half months back, the inflation was trailing at around 7.9. From that level, it has already come to about 6.7. What will be the situation from now onwards? If at all the past trend continues, then one may expect the inflation to be within 6%. Who knows if at all it is something, it may not really lead to any kind of interest rate, but it is all subject to various assumptions. Having said that, as I mentioned, we have already booked the MTM losses to the extent of 7.45%. We hope that we should not have any more such instances for providing for the depreciation on the AFS book. Okay. Sir, coming to, sir, this provisioning, we said that we have taken the benefit of some of the buffers of the provisions which are there in this quarter. How much buffer is left, which can be utilized in case the higher provisions required in future, like, you know, the write back. That INR 7,800 crore is the provision which is available for the restructured assets so that can always be used. Whatever we have used is essentially wherever the repayment has happened. To that extent only we have used. We have not used otherwise. INR 7,800 crore is the additional provision for the restructured accounts. Yes, got you, sir. Sir, on the advances front, credit front, our credit growth, especially in the domestic book, is muted. If you take the corporate book, except that, yes, international book is grown very healthy, where the margins are but very less or limited. Going forward, when you say that we are aiming 15% of the growth, it means in the next three quarters, including August now, which is going July, August also, we may grow our total credit to about 12.5%, for the remaining three quarters now? We hope so because when we, if I look at the underutilization of the working capital limit in the corporate accounts, which is almost as high as over INR 2.5 trillion. Similarly, when it comes to term loans, which are unavailed, it is also to the extent of over INR 2.5 trillion. The proposals in pipeline are about INR 1.2 trillion. That is how it is stacked up even if the term loans will not start availment immediately or may not get disbursed immediately. Still, I expect that we should have a situation where we can easily think in terms of growing to the extent of about INR 2.5-3 lakh crore into the corporate book. We are at about 8.75% as far as the corporate book is concerned, so that is the kind of expectation which I have. If at all that comes and the kind of growth which you have witnessed into the retail side, that I think will continue. Even SME also we have started seeing the traction and the pipeline is also there. I think all put together, I expect that there should be a decent sustainable growth in the remaining three quarters. Thank you. Sajina, I'll request you to come back in the question queue for a follow-up question. The next question is from the line of Nitin Aggarwal from Motilal Oswal. Please go ahead. Yeah, hi. Good evening, everyone, and thanks for the opportunity. Sir, this quarter, like many other PSU banks, have reported controlled treasury losses, and some of them have reported profits as well. Just wanted to check if we have done any transfer of securities from AFS to HTM during the quarter. If related to it, do you think that the mix of AFS portfolio, which is like still looks high, needs to be reduced given how the rate cycle is playing out? No, we had done the transfer of securities, but unfortunately, we could not avail the benefit. Soon thereafter, there was a 40 basis point increase announced by the RBI, which led to the yields moving up. We really could not take much of benefit. We did, we went for the transfer of securities also. Okay. Now also, I mean, as of now, we have got a decent headroom available in the HTM and whatever securities are maturing in AFS, and whenever we are buying new securities, we are only putting in the HTM book. Right. This mix of AFS, sir, which is 42%, does it seem like comfortable or any thoughts around reducing this mix? Sorry, what? I'm sorry, I could not get your question. The mix of AFS investments in the total investment book at over 40%. This number seems comfortable, or have there been any thoughts to reduce this number also? Yeah, if I can respond, sir. I think we have adequate room in the HTM portfolio. Maximum of 23% is what we can put in HTM. Our strategy would be that whatever maturing, you know, portfolio is there, it would be directly going to the HTM. See, primarily, I think most of the credit growth will now be funded. The investment book may not grow as much as it has grown in the past two years. Even if we have to invest, I think we have adequate room to move to HTM. To answer your question specifically, I think our AFS portfolio probably will be coming down. Yeah. Otherwise, also, if you look at the industry level numbers, the advances book is growing at about 14% and the deposit growth is at about 8.4%. Which very clearly means that the treasury book of the banks will not probably grow as it has grown in the past. Right, sir. Second question is like, typically we have seen that in line with improvement, stark trajectory from Q1 to Q4, our credit cost also improves. Now in this quarter, we have reported a credit cost of 61 basis points. How do you see the trajectory now going ahead for FY 2023 and any color for FY 2024? Actually, you know, when it comes to macro, though we keep on reviewing it very closely, but there are always the element of uncertainty, more so in the current kind of a scenario. Nevertheless, our effort will be to bring it down to the extent possible. I mean, be rest assured. We'll not be in a position to give any kind of a guidance on this particular aspect. Okay, sir. Thanks. Wish you all the best. Thank you. The next question is from the line of Ayushi Shah from Individual Investor. Please go ahead. Hi, sir. Congratulations on a great quarter. Sir, you in the beginning of the presentation, you mentioned that you were planning on increasing your CASA book by focusing on the savings account part of things. Sir, I just wanted to get an overall idea about, like, how exactly do you plan on doing that? Because, like, there are, there's such intense competition in the market going on right now. How do you plan on ensuring growth? We will be trying to beat out the competition. Sir, basically by raising rates? No, no. We are actually digitally something which is actually growing very well. Almost about 65% of our accounts are getting opened digitally. Which means that we are in a position to offer the convenience to the customers. Also the kind of product bouquet which we offer it is complete in all respects. There's no reason for us not to be really sharing the mind share of the customers and gaining their accounts. CASA is one of our focus effort, and we will continue to strengthen that going forward. Maybe Alok wants to add something. In CASA, what exactly if you find last couple of years, there was a huge increase in savings bank deposits as well as TDR. On the ground it was being considered that whatever is coming is fine. But with competition intensifying, we have also now told, communicated to the ground that CASA has to be a priority and that is why on a daily basis, the opening of accounts as well as increasing contact with the say premium customers or high value customers so that they can deposit more and they transact more in our accounts so that the balances also increase. It is two-pronged. One, acquisition of new valuable customers so that we open accounts where there is higher possibility of increase in balances. Number two, with whatever customers we have, making relationship more rich so that the balances in the account increase. We'll also try to increase products per customer so that the stickiness as well as the float around it, that also improves. It is both, acquisition strategy as well as relationship strategy, which will lead to better CASA. Okay, sir. Sir, that is very good to hear. Sir, is there any guidance about, like, the CASA ratio that you would have for the coming, two to five years? See, in this case, what we'll do is we understand the importance of CASA. Everybody in the bank understands. The endeavor will be to increase as much CASA as possible. We have our internal benchmarks or internal aspirations as to where we should go. There is a single structurally as a bank. We are a bank where people trust a lot. They bring a lot of term deposits to us and the growth rate of CASA as well as the growth rate of TDR is normally a bit skewed because we have higher growth in TDR because of customer trust. Percentage may not increase much, but in absolute numbers it will surely increase. All right, sir. Thank you so much and all the best. Thank you. Next question is from the line of Anand Dama from Emkay Global. Please go ahead. Yes, sir. Thank you for the opportunity. Sir, again, a question on the treasury front. We said that basically there is a redemption of about INR 1.5 trillion of investment. Whether that could lead to higher realized losses going forward, number one. Number two is that, so what is the status on our investment fluctuation reserve? Where does it stand? Do we have a shortfall over there and whether that is also to be made up for going forward, leading to higher provisions over there? See, when it comes to INR 1.5 trillion, which I mentioned, this is a redemption which is due in the normal course in the current year. Which means that we will not book any loss in this redemption process. It is actually something which we don't have any such NPA in the book as of now. That is one thing which will happen. The second question is relating to, sorry, I missed out the second question. Investment Fluctuation Reserve, sir. Investment Fluctuation Reserve. We are in the process of.... What is the outstanding in the IFR and is there any shortfall over there? No, no, there is some shortfall, but we are actually building up that shortfall also. Okay. What will be the quantum of that shortfall if possible to share? Sorry. There's a board approved guide path which is in line with the RBI directions and we are strictly following that and we will try and see that gets...... During the current financial year. That gets completed in the current financial year. Sir, any quantum basically, what's the kind of shortfall that you have? I will not have that number, but.... I think the number is available in the balance sheet, but we can share with you. Yeah. We will share with you offline. Sure, sir. Secondly, on the OpEx front. Our OpEx certainly has been lower, whereas most other banks have been reporting very high OpEx during this quarter. One benefit that we have is the staff cost, which is largely stable. How about the other OpEx? Whether we will have a meaningful branch addition over next nine months and that will lead to a higher OpEx during the nine months going forward. When it comes to our employee cost, et cetera, is given. There is not much which can be done. Yes, of course, we are trying to shore up our income so that our cost income ratio gets addressed. In that direction only we have been given approval to set up the new subsidiary, which is operating support subsidiary. The intention is that this subsidiary will help us in reaching out, or rather supporting our rural branches to garner quality business and also to ensure that the renewal, et cetera, also happens on time. This is something which it will put to use and which will help us in reducing the NPA in the agri sector and also will help us in booking the quality business which is available in the rural economy. This is what the plan of action is, which will eventually address the cost income issue. Thank you. I'm very close to come back in the question queue for a follow-up question. The next question is from the line of Jignesh from InCred Capital. Please go ahead. Yeah. Hi. Am I audible? Yeah, please go ahead. Yeah. Okay. I have the same, you know, question, one on, you know, your margins basically, which has basically come up on a sequential basis, though I agree that YoY business, it has been pretty high. I mean it has improved. What trajectory basically you are seeing it up for the full year, though you have already indicated that you will see an improvement happening. If you can give some guidance and the roadmap, how we are seeing it up, the improvement will be coming in. That is one. Second, obviously on the growth front with, you know, the rate hike already being there and inflation remaining high, do you remain confident that the growth will be, you will be able to, you know, benchmark it, but where, what exact would be the momentum and which areas you think will be a better one as the growth will be coming up, retail, corporate or international book that you are seeing it for the next three quarters? You can give some clarity on it that would be really useful. Thank you. The trajectory as far as the NIM is concerned, I would say the kind of trend which you have seen in the past. Mm-hmm. We expect to be a repeat of the similar trend going forward also, though we are starting at a little higher base as compared to where we were last year in Q1 of financial 2021. As far as your second question relating to which are the areas of focus. Mm-hmm. I think, irrespective of the interest rate hike et cetera, which has been talked about, our retail engine is continues to adhere to its promise. We hope that we will have a decent growth in the retail going forward as well. Rather, when it comes to the corporate growth, we are quite hopeful this year we'll have a better traction in the as far as the corporate book is concerned. Even SME also is one of the special focus for the bank. You would have observed that, we have moved up in the SME from about INR 2.20 trillion to about INR 3+ trillion. It has already moved. This is all we are getting into supply chain finance and some kind of balance sheet lending also, but we are very mindful of the risks which are inherent in the SME. We are ensuring that we should underwrite the best of the quality of SME also. I would say that retail, corporate, SME, all will grow. As far as agri is concerned, our focus is going to be high-value agriculture. Our focus is going to be SHG financing. This will be our focus so that the agri book should also improve in terms of quality. That is what our endeavor will be. Okay. All right. Thank you, sir, and all the best. Thank you. Next question is from the line of Vatsal Shah from Jefferies India. Please go ahead. Thank you, sir, for taking my question. Just two bits. First, sir, on the SMA-1 and 2 loans, the balances have gone up from INR 3,500 to about almost 7,000 crores. Could you just help us understand what is the reason for this? Can you say again? Yeah. SMA-1 and SMA-2. Sequentially, he's talking. Yeah. Okay. Sequentially, you are saying. Yes, yes. From 3.5 to 7,000. Of course, you know, out of the INR 7,000 also, if you will, really look at it, we're gonna pull back a significant component. SMA. Just one sec. You have the number also, no? Yeah. SMA, essentially, invariably, we have seen that in Q1, there are always some peculiar behavior which we see, and that is one of the reasons why sequentially it looks on the higher side, but almost about INR 2,000-odd crore has been pulled back out of this. If at all we look at that INR 2,800-odd crore, then actually it comes almost in the same range as it was as on December 2021. That's how I mean, that partly explains the behavior. Sir, second question is on the interest on tax refund for the March quarter. Could you please clarify what was the amount in the previous quarter? INR 600 crore was the amount, interest on tax refund. Yes. For the March quarter. Yeah, for the March quarter. Perfect. Thank you, sir. Thank you. Thank you. Thank you very much. Ladies and gentlemen, due to time constraint, that will be the last question for today. I now hand the conference over to Chairman sir for closing comments. Thank you very much to all the analysts who are taking out time on a weekend, on a Saturday evening. I wish all of you the very best. As we have explained that our endeavor is to keep on delivering better outcomes. Hopefully, it will be the scenario going forward. For the situations which are actually beyond our control in terms of G-Sec, et cetera, we have to play in the broader macro and our effort will be to navigate through the turbulent times in the most professional way. Thank you very much. All the very best. Thank you very much. On behalf of State Bank of India, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.