Ladies and gentlemen, good day, and welcome to South Indian Bank Limited Q1 FY23 earnings conference call, hosted by Antique Stock Broking Limited. 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. Prabal Gandhi from Antique Stock Broking Limited. Thank you, and over to you, sir. Yeah, thanks, Michelle. I welcome everyone. On behalf of South Indian Bank management, we have Mr. Murali Ramakrishnan, Managing Director and Chief Executive Officer, Ms. Chitra H., Chief Financial Officer, and other senior management on the call. Without further ado, I'll hand over the call to Murali, sir, for his opening remarks, after which we can open the floor for Q&A. Thank you, and over to you. Good morning to all of you, and thank you for joining us for the South Indian Bank Q1 FY 2023 earnings conference call. We are joined by my colleagues, Mr. Thomas Joseph, EVP and Group Business Head, Sales, Mr. Anto George T., Head HR and Admin, Mr. Sanchay Sinha, Head Retail Liability, Ms. Chitra H., CFO, Ms. Minu Moonjely, GM Credit, and Mr. Senthil Kumar, GM Recovery, and Mr. Ritesh, Treasury. Let me start with the key highlights of financial performance for the quarter ended June 22, 2023. Bank had declared quarterly results with a net profit of INR 115.35 crores as against INR 10.31 crores during the corresponding period of the previous year. Costs have grew by 17.92% year-on-year from INR 25,725 crore - INR 30,335 crore as of June 2022. Provision coverage ratio increased to 70.11%, which was 60.11% last year. Overall, GNPA improved to 5.87% from 8.02% as of June 2021. Net NPA improved to 2.87% for this quarter from 5.05% as of June 2021. Following the robust collection drive, our SMA-2 portfolio has come down by 48% on a year-on-year basis. We have built a new book of INR 27,787 crore with better underwriting, which is reflected in the GNPA close to 0.02% for the new book and SMA-2 book of 0.24%. Let me now take you through the other operational and financial performance of the bank. The total business for the bank increased by 7% and stands at INR 1,50,900 crore as of June 30, 2022. Advances grew by 10.95% year-on-year to INR 64,704 crore, backed by total disbursements of INR 12,548 crore during quarter ended June 2022. The details of disbursements are as follows: corporate, INR 7,595 crore, predominantly to A and above corporates; gold, INR 2,978 crore; business segment, INR 939 crore; other retail, INR 1,036 crore. The share of A and above rated large corporates has improved from 56% as of June 13, 2021, to 88% as of June 30, 2022. We have nil slippages to NPA in our new corporate book. Gold is a segment which has been consistently growing for us. Our disbursements year-on-year was INR 9,653 crores, with an average LTV of 77.8% and a ticket size of about INR 1.32 lakhs. Gold loan book grew by 28% year-on-year to reach INR 11,961 crores. Personal loan is the other segment where we are seeing good traction since the launch of pre-approved PL in September 2021. As on date, our PL book had crossed INR 1,100 crore mark. Credit card is another growth area, which we launched during FY 2022. By June 2022, we had issued more than 100,000 credit cards, with monthly average spends of INR 21,344. The total book as of June 2022 for credit cards stood at INR 330 crore. As far as SMA is concerned, we are seeing good uptick in disbursements month-on-month over past few quarters. We are cautiously growing this segment with monthly disbursements of more than INR 300 crore, as against average of INR 175 crore for Q1 FY 2022. We expect the economy to pick from the current situation. A healthy economic growth and government spending towards infrastructure sectors will help credit uptick in coming years. Our aim is to grow loan book by double-digit in FY 2023. Coming to liabilities, our core deposits grew by 8.8% year-on-year to INR 86,460 crore. CASA deposit increased by 18% year-on-year to INR 30,335 crore, predominantly due to continued improvement in SA business, which grew by 18% year-on-year to INR 25,457 crore. CASA ratio continued to improve and increase by 399 basis points year-on-year to reach 34.39% of the total deposits as of June 30, 2022. While deposits declined by 63% year-on-year to INR 1,736 crore, in line with our strategy. NRI deposits continued to grow and is at INR 27,598 crore. It contributes to 31% of our total deposits. Low-cost NRI deposits grew by 10% year-on-year, INR 9,086 crore. The bank saw robust growth of 22% year-on-year in our NRI remittance business during the quarter. Our investment book was at INR 23,489 crore, split into HTM of INR 19,122 crore and AFS and HFT of INR 4,367 crore. Last year, Q1, the M duration of the investment book was at 3.13, which we cautiously reduced to 2.57 as of June 2022. The bank booked income upfront during the last year first quarter, and as of now, that opportunity doesn't exist. The fresh slippages was reduced by 48% year-on-year from INR 879 crore during Q1 2022, INR 435 crore during Q1 2023, which was within the overall guidance. The overall restructured book stands at INR 2,198 crore, of which business segment is INR 1,319 crore. Personal segment is INR 308 crore, and corporate is INR 571 crore. The bank holds standard and restructured provisions of INR 590 crores. Gross NPA ratio improved by 215 basis points from 8.02% as of June 30, 2021 - 5.87% as of June 30, 2022. During the quarter, the bank recovered or upgraded INR 235 crores worth of NPAs. The net NPA ratio improved by 218 basis points from 5.05% as of June 30, 2021,- 2.87% as of June 30, 2022. Our endeavor is to bring GNPA below 5% and net NPA closer to 2% in FY 2023. The bank reported net profit of INR 115 crores in Q1 2023, mainly due to improvement in net interest income and reduction in provisions on account of lower slippages and better recoveries. Net interest income for the quarter increased by 11% year-on-year, INR 603 crores. Net interest margin improved by 19 basis points year-on-year to 2.72% in Q1 2023. The sequential growth in CASA has led to improvement in CASA deposits by 61 basis points year-on-year to reach 4.35%. We endeavor to reach NIM of 3% in FY 2023. Non-interest income was INR 246 crores as against INR 204 crores during Q4 FY 2022. Our core fee income increased by 41% year-on-year, INR 128 crores. Overall, provisions decreased by 72% year-on-year, INR 139 crores in Q1 FY 2023. The reduction in provision was mainly due to lower slippages and better recoveries. Our PCR improved by 10% on year-on-year basis from 60.11% - 70.11% as of June 30, 2022. Our aim is to further improve PCR to 75% in FY 2023. PCR, excluding write-off, improved by 13.63% year-on-year from 38.97% as of June 30, 2021, - 52.6% as of June 30, 2022. Our overall capital adequacy ratio continues to be robust, with 16.25% as of June 30, 2022. The Tier-1 ratio stands at 13.62% as of June 30, 2022. We are hopeful that the momentum in disbursement and collections will continue in the coming quarters to achieve the desired targets. With this, we open the floor for 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 phone. 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. The first question is from the line of Aditya Doshi from Chanakya Capital. Please go ahead. Hello. Hello. Thanks for the opportunity- Hi. And good set of numbers. First, my question is regarding, we have reported in segmental, reporting that we have booked a loss of INR 81 crore in wholesale book. So just wanted to understand what led to that. Second, a lot of private, large private banks have been talking about mispricing or dislocation of pricing in corporate book, and, we have had some growth in our, corporate book across, major segments of more than INR 100 crore, INR 25 crore-INR 100 crore. So just wanted to know if you could give a qualitative color on that. And third, we have a good run rate in, other, banking operations in segment. So just wanted to know what led to that growth. These are my questions. Thank you. Yeah, the first question, first, I want to take that, some banks have reported about the mispricing in corporate, et cetera. I frankly need to get into details of what exactly they are talking about. But as far as we are concerned, we knew exactly what we were doing. So, we, for each of our corporates, we, whenever we negotiate for any transaction, we look at the credit rating of the customer, the kind of facilities they have with existing banks, and the kind of facility which they are seeking from us, and whether we are in a position to price it appropriately, and whether that pricing will be acceptable to them. So every single transaction which we have done have been done with the discussion, combined discussion of business team with the treasury team. And since we had for a major part of the year, we had also had a lot of surplus funds with us, because as you know, when we were restructuring the entire advances book as well as the bank, we were going slow on asset growth. We were wanting to grow quality assets only, therefore, we had surplus. Since our liability franchise continues to fire and our CASA franchise was continuity firing, we had surplus funds. So we were always looking at the opportunity cost of deploying these funds in the next best avenue available. Therefore, for some of the short-term products, like a three-month or six-month kind of thing, which anyway is based on bidding whenever it comes to large corporates. So we, if you price it appropriately, if you win, get the bid, then we get to take part. If you don't win the bid, we don't get to take part. So our pricing is clearly based on the opportunities available, and every pricing decision is being taken after thorough discussion on the alternate avenues available. So this is as far as the pricing of corporate book is concerned. And, the reason why we continue to pursue, opportunities in the corporate space is that we see a lot more opportunities which can come up once you start engaging with the large corporates. Because there are enough and more businesses to come through them in terms of vendor financing, dealer financing, funding of their, key resources, funding of the wealth of the top executives, et cetera. So there is a whole lot of benefit which comes by dealing with the corporate. Therefore, we'll continue to see this as a big area, because this year I believe that the opportunities will be more in the corporate banking space. Since, the post-COVID, SME and retail are still recovering from the shocks. And also the rates were pretty low, for both these segments, not really priced to the risk. Therefore, we are cautiously building them, especially the lab as well as the higher end of SME segment. Therefore, we will, we will see the, opportunity panning out, and we will, do appropriate action. This is as far as the question on the pricing is concerned. Yours, the overall operating guidance, as I, as we, we continuously articulating, we would want to grow the overall... See, last year we had a growth of only 4% in our asset book, and year before, last it was a degrowth. So we are- and we also had more than INR 4,500 crore of slippages over the last two years. The whole endeavor was to set the, processes right, set the products right, to put the teams in place, to make the teams get equipped with the skills to handle these products. All this has taken time, and now we are in a position to sort of settle down in this, and we are now looking at growing each of these businesses, right? Therefore, we have set ourselves an ambitious target of double-digit growth, which is in tune with what market could grow for this year. So our growth, we would want to grow in all the segments, the only criteria being quality assets across all product segment, irrespective of whether it is from retail or corporate or SME. However, having said that, if there are opportunities, one-off opportunities keep coming in any of these segments, we will definitely tap those opportunities to make use of the available funds. Your first question, I didn't get the question. Can you repeat your question? Sorry. Yeah, yeah. Sure, sir. Got it. In the segmental results, we can see that INR 81 crore reported loss in wholesale banking. INR 81 crores? One second. Just a second. The INR 435 crores of slippages which we experienced this quarter, this includes two specific corporate accounts. One is a retail outfit, and the other one is a Delhi-based company. For both of these, there is a provision which we had to do, and that, that, that is amount to INR 81 crores. Okay. And, These two are taken off. If you look at it, look at the slippages; it's close to INR 310 crore, which is very much in tune with what we did, what we experienced even for Q4. Yes, yes. Yes, sir. Thanks. Got it, sir. And my third question, sir, regarding wholesale and other banking operations, even with this year compared to year-on-year. So just wanted to know what's the traction going on there? Sorry, in comparison to what? If you see the segment-wise result, the other banking operations, we have reported INR 94 crore compared to last year, INR 54 crore. So what led to that growth? Can we get back to you? Because this is, these are all specific things which we probably need to, we can't give it in one single answer. We will get back to you specifically on this, because this, we need to give you proper details. So right now, that requires some work to be done. Okay. Thank you. Sure, sir. Thank you, and all the best. Thank you. A reminder to all the participants to press star and one to ask a question. The next question is from the line of Ravindra, an individual investor. Please go ahead. Hi, sir. Congrats for the wonderful results. So we can see the turnaround. But we need the clarification saying, like, can the provisions remain in the similar lines, or if there is a chance of increase or not? This is my first question. And so initially, there was a lot of challenge in the corporate loans bank model strategy from corporate to retail loans, and again, due to the COVID, again, we are moving to the corporate. So how often this, why frequent change in the strategy and all? What is the guarantee that we will not get the, again, the corporate loans challenges again? And what is the underwriting standards which have changed from the previous team to your teams, sir? We can see, the new book is performing very well, but what are the challenges earlier, and what are the credit underwriting standards which have changed, sir? Yeah. So first one is with respect to Provision. With respect to provision, see, quite frankly, the expected, we expect the slippages to be, we are conservatively saying that it will be 2%, 1.9%-2%. Provision, we would want to curtail it within INR 1,000 crore for the full year. This is much lower compared to what we actually had provided for in the last two years. This is more a guidance than anything. We would obviously endeavor to provide as much less as possible by doing good recovery and collection. As far as the fees, there is no shift in strategy or anything. We continue to... I've been saying that we will continue to work on quality assets, irrespective of the segments, et cetera. Clearly, what ailed this bank in the past was lumpy exposures to corporates, and where these corporates were also not that well-rated corporates, and there were... And also probably the period, the economy, the period in which these lendings have been done were also the period when many of the banks which had focused on corporate went into problem. So, but how are we taking care of that? We have been continuously reiterating that whatever we are onboarding today are all very well-rated corporates, and my composition of the corporate book, if you look at it, it is 85% A and above. So to that extent, and we go by rating given by a very well-reputed rating institution. To that extent, to that extent, we will... continue to be focused on onboarding quality assets. So, therefore, while having said that, definitely this being one of the, I mean, since the exposures, typically, the corporate will be of a larger quantum, we will continue to exercise caution to closely monitor as how those accounts are behaving, et cetera. I'm happy to say that in the INR 27,000 crore of new book which we added, of which the corporate is also a, a substantial portion, I must say that there is hardly any slippages into NPA. So zero slippages into NPA as of now. But having said, it's about 21 months since we started building a new book, we'll continue to exercise caution. In the corporate book also, the nature of the corporate book is some of them will be short term, some of them will be medium term. To that extent, short term, as you know, it's bill discounting, those kind of things, and so we're a well-rated corporate, the probability of default in three months or six months or nine months is not going to really alter much. So, and they have an impeccable track record. We deal with such corporates where the track record has been impeccable. So therefore, we are pretty sure of, who we are lending to and how we are lending. Wherever it's a long-term exposure, we also look at the kind of players who are taking part, the kind of appraisal which has happened, and we look at the end use of the funds for which it is going, and what is the track record of the corporate in terms of how well they've executed the projects in the past, et cetera, and what has been their track record in completing projects and time. All that is factored when we assess a project loan for any corporate. So, the way we have tightened our underwriting, we have done tightened underwriting across all product segments, including corporate. To that extent, if you look at, specifically, if you want me to quote a few things, for example, in SME, we closely look at the CMR ranking of the SME, which is a new CIBIL. Not new, it's about two years old now, two, three years old, where they give a ranking of CMR for SMEs from one to 10, one being the best and 10 being the worst. And they constantly come up with data to say, what is the probability of default for CMR 1-5, and what is the probability of default for six to 10. So, whenever we onboard any SME customers, we closely look at what is the CMR ranking, apart from doing our own appraisal. We have a go, no-go criteria, we have an appraisal criteria, and we do a proper analysis of whether the cash flows are sufficient for the entity to service out. As far as retail is concerned, we have used credit models to build with the help of bureaus, and we are using benchmark a property of default, which you would want to have. And we are also continuously monitoring this portfolio by drawing vintage curves to track how well the portfolio is performing as we age the book. So, yeah, as far as corporate is concerned, a detailed appraisal keeps happening and we do a benchmarking, we do peer comparison, we do the market news about this. Every quarter, our risk team does a industry outlook of which are the industries which are stable, which are growing, which are degrowing. So whenever we take exposures in an industry which is stable or growing, we, we give higher weightage in the rating criteria. Wherever it's a degrowing industry, obviously, it will carry worse weightage in the rating criteria. So all that we factor when we look at exposures for corporate. So overall, I would say that heightened focus has been given on onboarding quality cases. So that's, that's the way I would probably put it. Yeah, sorry, what's your next question? I forgot. Yes, sir. The final question is, so gold loans, so pretty much they are risk-free, right? And, so banks, including the South Indian Bank, I think, we're charging around 8% or less than 10%. So but how the similar gold loan is charged more than, like, 15%, maybe 20%, by the, NBFCs and all? And why can't we, increase our, yield on those, gold loans by doing better marketing and onboarding the, more customers on the gold loan? And, and also, sir, so- This discrepancy will always be there. There are segments where NBFCs will have a humongous advantage. They are all single product entities, and obviously, their ability to therefore garner a customer or the ability to quickly turn around, their ability to accept a few deviations, all that is quite possible when it comes to dealing with the NBFCs, which are so focused on single product. So this differential, if you look at it, it, it existed since ages. So I mean, if you look at many, many business segments, there will always be differences. There are commercial vehicle, used commercial vehicle charged by NBFCs at 22%-23%. There are banks which charge at 13%-14%. There are NBFCs which charge a used car at about 22%-23%. There are banks which charge about 11%-12%. This differential will always exist. See, the single product NBFCs have the ability, they are regionally strong players, they will put more people. They don't mind putting some 15 people in a street. We cannot afford to put such people in a bank, given the cost structure, et cetera. So there will always be this territory, which is clearly earmarked for where NBFCs can play a role, where banks can play a role. I mean, we should not think that we can compete with them, and we need to compete with them by putting that many resources. It may not be viable, and it's also there is a risk also in that. See, as a universal bank, we don't want to get stuck with only one product also failing for us. We need to be diversifying our risk, and we need to ensure that we under... Go grow in all segments, because economy, at the end of the day, has got huge options for, opportunities in various segments. So, therefore, I would, I would not really like to compare ourselves with the NBFCs and say, "Why can't we charge more?" I mean, they have, they, they play their game, and we need to play our game. As far as we are—as long as we are concerned, if we are clearly pricing our product correctly and if you are taking care of the fraud risk, which is inherent in a gold business, and operation risk, which is also inherent in a gold business, so long as we take care of that, I think we are running our book fairly well, and we are happy with the way we are growing. Currently, my gold book, gold loan book is growing quite well, and we are, as the price keeps increasing in the market, we are also continuously repricing our gold book, and we are seeing whether it has got any impact on the elasticity of the volume. That also is holding now. ... Fine, sir. Finally, so can we expect a double-digit ROE in this FY, financial year, sir, or at least, like, near to 1% ROA, can you guide on that? I think you guided for 3% NIM. I don't know if we crossed that, or how about ROA and ROE, sir? RO, no, ROE and ROA, if you recall my strategy document, I said that we will reach double digit in March 2024, and ROA 1% in March 2024. This was even before we experienced the COVID one impact and COVID two impact, et cetera. After our impact of all this, we actually shifted the entire strategy by one year. So technically, we were wanting to reach these levels by March 2025, but I, I'm sure I will reach all these levels much before. As I'm talking to you, my ROA has improved to 0.4% now, and our ROE has improved to 7%. So we will certainly our aim is also to reach double digit as ASAP. But in the hurry to price it aggressively, we should not lose the purpose for which we are taking the stat route to really build a solid book, which is quality. And, you know, quality assets don't come cheap, so they need to... You need to price them appropriately. So we will have to maneuver both these very well to ensure that we create a good, solid performing book, which continue to earn more and more money for the bank. That's the. So I will definitely make use of the opportunity to reach it ASAP, but it's important to put the building blocks right and grow it correctly while working on these benchmarks. Fine, sir. Fine, sir. Because these parameters are very much necessary to raise the capital, because at current price, we cannot raise the capital. If you want to just raise some INR 1,000 crore, we need to dilute our equity 100%, right? So this is not at all a good price to raise capital. So, fine, sir, all the best, bye. Well said. Thank you. Yeah, I do agree with you. Well said. Thank you. Thank you. You may press star and one to ask a question. The next question is from the line of Suraj Das from B&K Securities. Please go ahead. Yeah, hello, sir. Thanks for the opportunity. I have a couple of questions. The first question, sir, if you can give us the breakup of the new book in terms of, you know, various segments such as corporate, retail, business loan, and agri. What would be the rough breakup of the new book? I think it was. I read it as part of the my the thing. 64, see, corporate as-- For this quarter, we have disbursed a total of INR 12,548 crores, of which corporate is INR 7,595 crores. Gold is 2,000- I was asking, I was asking more of from the outstanding point of view. Disbursement, sir, you have mentioned in the slide, I can see that. But out of INR 27,787 crore, which is the outstanding new book, let's say, as of June 30, 2022, what would be the breakup there? And if you have it handy. If you ask me, see, INR 27,000 crore, I'll just give you a rough number. INR 27,000 crore is the new book, which we added. So it's about, about 40, my total asset book is about INR 64,000 crore. So it is constituting about, about 47% of, the total. So it's on the book is about 40, roughly about 47%. Just hold on for a minute, I'll give you the breakup of, this, composition. Just a second. Sure, sir. What I'll do is we have worked it out, but right now it is not handy with me. We'll send it to you. Sure, sir. Sure. And sir, the second question was, I mean, as you were saying that your focus, I mean, is on obviously quality names or quality exposure rather than, I mean, any segment particular. And there, I mean, since you are also, I mean, the large corporate book is growing and you don't find it any challenge here. I just want more flavor in the large corporate book in terms of, let's say, sir, how much would be your working capital exposure there vis-a-vis term loans? And, what would be the, you know, average ticket size there, vis-a-vis, let's say, previous year or, what are the key industry or segments where you are, you know, seeing the good traction in the large corporate book? If you can give any, color or flavor here, that would be great. Yeah. No, before that, I'll first answer your earlier question. We just got the breakup. So out of INR 27,000 crore of new book, agri is about INR 9,557 crore, which includes, gold also. Business segment is about INR 2,400 crore. Corporate is about INR 9,927 crore. Retail is about INR 5,459 crore, adding up to INR 27,342 crore. This is the composition of the new book, in terms of breakup. So your next question is basically on, you are asking about term loan and working capital. Is that the question which you are asking, breakup of that? Right, sir. So what would be the rough breakup there? Yeah, yeah, I'll, I'll give you. See, the total, if you look at the total corporate corporate loan, we have about INR 18,600 crore is the corporate book as of quarter one end, of which, CC is about INR 2,200 crore, term loan is about INR 13,000 crore, pre-shipment is about INR 945 crore, post-shipment is about INR 314 crore, domestic bill is about INR 2,038 crore, adding up to INR 18,603 crore. This is a breakup of the corporate book. And as I'm talking to you, I'll give you also the breakup of the SME book. Just a second. SME book is concerned, the total book is about INR 18,372 crore, of which, CCOD is about INR 9,118 crore, term loan is about INR 6,200 crore, pre-shipment is INR 284 crore, post-shipment is INR 31 crore, domestic bill is about INR 2,680 crore. So this is a breakup, and, I can only tell you that, you know, in terms of, incremental growth in both the corporate and, SME, SME, as you know, is more and more of granular. Our average ticket size in SME continues to be, less than a crore. To that extent, we are continuing to focus on granular segment. If you recall, I have always been saying that SME has got two segments, one up to INR 100 crore of turnover, where the average ticket size will be up to INR 2 crore, and the one above INR 100-INR 250 crore of turnover, where the average ticket size will be about INR 8-INR 10 crore. We are going a little slow on the higher ticket because that can, you need to do a good appraisal, and any slip there will cause a lot of damage. Whereas, on the lower end, given the fact that we have built a great model using McKinsey, we are using that model to underwrite fresh lower-end SME cases. So with that, the new book of SME is also behaving exceedingly well. The challenge is to continue to work on the old book and build an overall book, which is of good quality. All right. Understood, sir. Understood. Thank you so much. The second question is on the treasury side. So, sir, on the slide number eight, the treasury and forex income is shown as INR 4 crore, while as the breakup of the treasury and forex income that is there in slide number 10 is INR 36 crore. That, and this includes the depreciation on investment. So, so, if I calculate it, so that will be roughly INR 32 crore of MPN that you have, you know, received, you have took a hit in this quarter. Am I correct? Yes, yes, SR, SR provisioning, yes, was there, which is, you know, that the SR book, whatever assets which we sell it to ARCs, the SRs which get issued, they are all booked as investment book. To that extent, there will always be SR provisioning, which will keep happening depending on the rating institution's assessment on the ARC's ability to recover. So I'll just give you, you are right, that the net final investing is INR 4 crore, is what we had shown. If you look at the breakup of the income, we made ten crores in GSEC, we made about four crore in MF and equity put together. We made an exchange income of INR 18 crore, therefore, total forex, we have done about INR 18 crore, and there is a depreciation investment of INR 32 crore, which is towards SRs. Okay, understood, sir. Understood. And, sir, how much- Compared to previous quarters, et cetera, we are actually started seeing good traction in SRs also. Now, with the way ARCs are working on recovery, we believe that traction will happen more and more in the SRs. Understood, sir. And, sir, what would be the rough breakup of the loan book by benchmark? Let's say, how much of the loan book will be linked to EBLR, how much would be linked to MCLR, and all, and, and what would be the, you know, frequent, reset frequency for the, EBLR as well as the MCLR book? Yeah, I agree. See, out of the 64,000 crore asset book, which we are talking about, MCLR linked is about INR 21,250 crore. Base rate linked is about INR 587 crore. Fixed rate is about INR 19,557 crore. EBLR linked is about INR 19,000 crore, and others are INR 4,218 crore. In all, it's about INR 64,000 crore. When it comes to MCLR, et cetera, we do the revision as on MCLR revision date, which we keep for holding ALCO at regular intervals. As far as the benchmark rates are concerned, reference rates are concerned, as and when there is a change announced by regulators, we hold ALCO, and the increase in rate gets passed on to the customer from the first of next month. Earlier, we had it for the first of next quarter, but then we subsequently, looking at the way the frequency are going to happen, we sort of moved it to first of next month, it will get implemented. So that, and also the, obviously, the new pricing, et cetera, we are ensuring that we quote, as, with the expectation that if the disbursement happens within so and so time, it will be this rate. After that, anyway, depending on how much repo rates, interest rate increased based on regulators' guideline, we will suitably alter the rates. As far as the passing of the rates in terms of deposit is concerned, we obviously as part of ALCO we discuss that also, and we continuously reprice our deposits, and we have repriced even our FCNR deposits due to the in order to make use of the opportunity available for next four months, where CRR, SLR, SLR, and CRR won't be applicable. We have also increased our FCNR rates, et cetera, to raise mobilized funds. So this is something which we'll anyway continue to keep doing. I believe that, over the next one year, we expect the rates to be further increased by regulators, at least to the tune of 70 basis points - 100 basis points going forward. So we will carefully watch them, and we will also price our thing accordingly. But what we are doing, what we do experience is in that higher-rated corporates, especially AAA corporates, et cetera, they clearly renegotiate. They don't accept the full passing on of the rates, so there is a renegotiation which keeps happening. So if you want to be in that transaction, then you need to price it appropriately, which is in line with what other banks are offering to them.... Right. But, sir, from that point of view, I mean, your guidance of- Sorry to interrupt, Mr. Das, I would request you to rejoin the queue, please. Sure, sure. The next question is from the line of Rajeev Agarwal from Sterling Capital. Please go ahead. Thanks for the opportunity, and good set of numbers. Hello? Thank you. Hi. Yeah. Sir, we are primarily a south-focused bank, so what is the strategy going forward to expand in other parts of India? Can you just elaborate on that? See, as of now, the strategy as far as the brick-and-mortar office is concerned, we will definitely be going slow on that because for two reasons. One is, we believe that the future of banking anyway is more and more towards digital. Therefore, digital offering clearly has no boundaries. In that sense, so long as we are able to service the customer and we are able to collect and recover, clearly bounded geography is not a big constraint coming in the way. Having said that, we continue to keep looking for opportunities to open brick-and-mortar offices in the areas where we are not represented. This comes out from some of the branch consolidations, which we keep doing. Whenever there are two branches which are very close to each other, when we feel that businesses can be consolidated, we release license from there and use that license for opening up a location where we are not represented earlier. So in the full year of FY 2022, March, end of 2022, we opened about nine new locations across the country. And this is something which we do it as a more like, not as a strategy, but more like, to ensure that, you know, we are represented well in across locations. But, once... This year probably will be the defining year for us in terms of, stability in our, performance, et cetera. We will definitely, look for, you know, wanting to be present in more and more locations, once we, get to see how the traction for the full year goes. Because we have just come out of, negative growth of year before last and 4% growth in the last year to double-digit growth this year. And you know that our capital position was also not that great two, three years back. Now, we are fairly, comfortable at a 16.25%. So my thought was not to really fritter away capital by investing in newer and newer branches when we can get more and more from the existing branches, and we get more and more from the resources. So that's a continuous process. We will do that, and we will evaluate, maybe, during the year to see whether we need to open more, in the coming years. Yeah. So, and one more question, and then these nine locations are in new cities. Which are those cities? Oh, I can, I can send you that. Okay, okay, and I will mail you that on that. And so this collection efficiency, this again, has dipped in this quarter. So where we are seeing less collections in which segment? No, no, no. No, no, collection efficiency has not dipped. See, the more and more you recover from the bad cases, thereafter, it's what is due for the month only you need to collect, right? Okay, okay. So, It will only be 100% maximum. Therefore, to that extent, yes, that extent it will be. Yeah, I'm not saying that we have reached that stage, but I'm saying that, see, you should also compare quarter to quarter. See, quarter four recovery and collection cannot be compared with the quarter one recovery and collection, number one. You look at quarter one of last year to quarter one of this year, we have definitely shown improvement. And I am also happy to say that with the more and more of overall portfolio book getting churned with a high-quality book, the customers are expected to pay on due date. We don't want the collection team to accumulate some dues and then go and show 100%+ collections. That's not the objective anyway. The objective is to collect the dues. You know, even before we ask for the dues, the money should come. That should be the quality of the customer. But even if that is not happening, with a little bit of a soft follow, we should be able to collect the money. So that's the endeavor. So obviously, we will improve our collection. I'm not saying that 90% is ideal. We should definitely collect whatever is due. So we will definitely... You will see that improvement anyway, coming quarters. But Q1, in my view, has always been little lower than the rest of the quarters. So this INR 3,799 crore, this INR 3,000-odd crore NPA, gross NPA in the old books, how, roughly how much would we have recovered money, actually? So that's a difficult question to give a full number. What we are actually, see, the way we work it out is that you have a gross NPA today of 5.8%. So we would want to continuously work on improving the gross NPA and the net NPA and PCR. These are the metrics by which we measure how well the traction is happening in the quarter-over-quarter impaired quality book. So, as I'm telling you, we are at about 5.87% in gross NPA, which we want to move towards 5% by the end of the year. Net NPA, which we are currently at about 2.8%, we would want to move towards 2% by the end of the year. PCR, which we are currently at about 70%, which we have improved by 10% over the last one year, we would want to reach 75% by the end of the year. So this is including write-off. Excluding write-off, which we are currently at about 52%, we would want to cross 60% by the end of the year. So the endeavor is to keep working on those, and many of these resolutions of some of these cases are also dependent on environmental factors. The legal system, dependent on legal system in India, depends on courts going, it depends on IBCs resolving few cases, et cetera. So it hinged on many things, and therefore... Even where it is wholesale banking, etc., we need to see whether we will be able to sell off those assets, which he has collateral at a price which is acceptable to us. So it's a continuous effort, which keeps happening. What I can tell you is, in terms of recovery and collection, we ended the year of March 2022 with 200-250% growth over the collection and recovery for the year before last. And that same level of collection and recovery is what we want to do this year. In the first quarter, we have done close to INR 220-INR 230 crore of recovery from NPA and other INR 70-INR 80 crore of resolution which has happened, but this is without any big account getting resolved in Q1. We expect some resolution of big accounts to happen in Q2, Q3, etc. With that, we hope that—for the full year, we would want to work at least INR 1,200 crore-INR 1,500 crore of upgrade and recovery. That's the way we would try to clean up. If you look at SMA-2, that's another indication to look at. If you look at SMA-2 for one year back to what it is today, we have brought down by almost 48% of our SMA-2 book. Our endeavor is to pull back SMA-2 - SMA-1, and then to zero, and also to not relate the SMA-2s to slip into NPA. I do a weekly review of this collection and recovery to ensure that we pull back the bad accounts, and we also not let bad accounts slip into NPA. So it's a combination of many things which will work at place. So, and you will see the improvement of that happening. We have already seen improvement from 8% - 5.8%. We would want to certainly work towards improving it further to 5% at a first milestone, then hopefully we'll bring it below 4% over that period. Oh, that is, this improvement is showing. And one thing, one last question- Mr. Agarwal, I would request you to rejoin the queue, as there are many other participants who are waiting for their turn. Okay. Okay. Okay. Thank you. Thank you. Thank you. Thank you. The next question is from the line of Sushil Choksey from Indus Equity Advisors. Please go ahead. Congratulations for the stable results, sir. Thank you, sir. Thank you so much. Sir, what is the aspirational CD ratio if I take a 12-month or a 24-month outlook in the bank? Sir, we are currently at about 72%. My first milestone is to reach 75%. I would want to reach it by the end of the year, aspirationally. That'll be the first milestone. I don't want the endeavor going beyond that right now because, as you know, it depends on how we manage both the liability and asset franchise. At the same time, the stable growth of asset is also required, and the stable growth of liability is also needed to be in place. So I would be happy. We were at about 68, 67, 69%. We have now crossed 70%. We were at 74% also, but as I am experiencing this year, that with the rates increase, et cetera, happening, we'll have to really see how the absorption of assets happen as the economy pans out. So my goal is to reach 75% by the end of the year. Linking to that, where do you see CASA and outlook on investment book in view of the volatility with the Fed meeting outlook, which will be announced today? How are we placed on that? Second thing, government's new scheme on NRE deposit. Major banks are trying to drive a big South Indian Bank, and mainly southern banks have a good hold on NRE deposits. So what kind of measures to attract, reasonable cost money to increase our CASA as well as FCNR deposit? Excellent. Excellent question, sir. Sir, as far as CASA is concerned, we have got, I just want to tell you that we have four channels which we fire for CASA. One is retail, the second one is tax, third one is government banking, and fourth one is NR. Sir, first let me touch upon government banking. We have got the agency license, we got it last year. And in fact, among the banks which were issued licenses last year, we were the first one now to make it operational. We are already up and running in our customs duty collection, et cetera, and we have started seeing traction happening. I mean, this is just the beginning. Of course, the endeavor is to clearly move towards collecting direct taxes and collecting GST. All that will hopefully help us to get a one day or one day, float, et cetera, for fairly large sums of money in government. TASC, if you look at over the period, during COVID period, many of the institutions had challenges in collecting fees, et cetera, from the students. That traction we have started. In fact, we are quite seeing good traction happening in, task, contribution to CASA. So that again, is firing for us very well. As far as retail is concerned, CA, current account continue to be a challenge for us because that, clearly is, like every other bank, we also face ups and downs, some volatility there. Savings bank clearly is, on the rise, it's growing. And NR is a very strong franchise for us. 80% of our NRI business is concentrated in Middle East. But I have been recently in Middle East and met with all the exchange houses, met with our team, met with the high net worth customers, et cetera. The way we have created our image in terms of service and in terms of our presence, et cetera, is very much appreciated there. And we are also in talks with a couple of very leading exchange houses to improve our remittances from Middle East, et cetera. Having said that, 20% of our NRI business also comes from rest of the world, and we are in tune with the new regulations to say that whatever we can raise through FCNR will not attract SLR, CRR. We have also repriced our FCNR deposits. The endeavor is to capitalize on this window of opportunity and see how we can beef up our Forex resources. Having said that, this also would help us in sort of pricing our loans, especially for large corporates, where there is a pressure on pricing and foreign currency linked to pricing. Wherever there is natural hedge available for corporate, it will help us to be in the market and continue to do transactions with them. So that's how I see the overall thing. What percentage of our balance sheet spend would be utilized towards digital transformation of the bank over a period of two to three years? ... So right now, I won't venture a percentage, but what we are actually seeing is that we have already completely digital in credit card offering. It's an end-to-end digital, right? From acquiring customer to fulfillment, to issuance of card, to transacting card, everything is happening digitally. PL, we have already enabled everything to happen digitally. Home loan also, we have enabled everything to happen digitally. But we need a platform for doing end-to-end fulfillment of this. The platform we have engaged with the Nucleus to set up the platform. That is getting a bit delayed due to attrition issues in the IT industry and due to other factors. So we hope that it will come into force in by end of Q2 or early Q3. Once that is in place, anyway, our rule engines are ready, credit engines are ready. So then the entire offering can be done from sourcing into, yeah, up to collection and monitoring, et cetera. We can do completely platform. This is retail platform, Nucleus. Same way, we have engaged with the Newgen for SME platform. And again, SME, we have used McKinsey to develop a credit model for us, and once the platform is in place, we will offer the end-to-end offering of the loan through Newgen platform. Already, supplier and vendor financing, we are using a platform for doing those businesses. And with the new treasury system coming in, we can offer variety of our treasury products also digital. So all in all, the products which we are focusing on currently, all of them can be done once these platforms are in place. But having said that, we are not waiting for them, we are continuing to grow these businesses. But once these platforms are in place, our, and our ability to turn it around will be faster, ability to price it will be much better. And obviously, our ability to monitor, et cetera, will also be much, much superior, because we can take out the entire data and do a data science. Our data science team can do a complete analysis of the portfolio, et cetera, for better reviews. So you can ask me, then the plan, the treasury, and second thing is aspirational cost to income of last five years has been average around 50%. Do we get there in short term or they are medium term? That will be. That is one C which will take some time for us. Out of the six Cs which I articulated, cost income is one area which will take some time, because this can work to the advantage of bringing it down from current level of 62% - 50% level, which is the aspiration level for me. That will happen only with the income really going up, and that visibility of that will we get to see only this year, because this is the first stable year after two years of complete disaster in terms of economy and in terms of our own portfolio challenges. Congratulations, and all the best for the financial year. Thank you, sir. Thank you so much. Thank you. Thank you. Thank you. The next question is from the line of Mayank Kulkarni from SBI Life Insurance Company. Please go ahead. Yeah, hi, sir. Thanks for the opportunity. So, like, out of our restructured loans, what would be, amount which will be still under some kind of moratorium? See, out of the restructured book, COVID one, ECLGS one is the one where moratorium has been already over. ECLGS two onwards, the moratorium is still in place. We will get to see the repayment of them only from this quarter onwards, quarter two onwards. So we have a total restructured book of INR 2,400 crore, I mean, which includes everything. We include as MSME restructuring, COVID-one, COVID ECLGS, et cetera. All that is part of this. And INR 2,198 crore is the... Of which COVID one is about INR 710 crore, COVID two is about INR 1,032 crore, and all others are about INR 456 crore. So the INR 710 crore is the one where repayment has started. COVID two, we will start getting to see the repayment from this quarter onwards. Okay, that's very helpful. And we have an SMA two book of INR 1,100 crore. So, whether there would be overlap between restructured loan and SMA two book? Mayank, we cannot hear you properly. Can you please repeat? I would request you to use your handset. Yeah. Yeah, sorry, repeat your question, please. Yeah, like, we have SMA two book of, SMA two loan book of INR 1,100 crore. So what would be overlap between restructured loan and SMA two book? No, no, no. SMA-2 book has got mix of everything, mix of retail, SME, SME, and corporate. I mean, it's a composition of the book. It's an overall SMA-2 book of the entire portfolio, right? So it has got a mix of everything. Yeah, so is there any overlap between restructured loan and SMA? Just hold on. I can give you the breakup of it. Just hold on. Sir, restructured will not be part of that. Restructured anyway is standard restructuring. It will not appear in any of them. I mean, if that is your question, then it doesn't come there. Okay, okay. And, like, we are working on, like, underwriting, like, using, having a rating model for SME and retail segment. So for SME, we are taking McKinsey model. So that is a work in progress or that has already been implemented? Already implemented. And, uh- We have done a pilot, then we scaled it up to another regions, and last roll-out is going to happen now. And on, Out of 18 regions, nine regions, we have already rolled it out. On retail side, on non-gold retail loan? It's done. It's implemented fully. Same, McKinsey model? No, no, no. Retail, not McKinsey. It's Experian. Okay, okay. Last question, in our granular SME segment, what would be average LTV? LTV? No, you are asking average, I mean, ticket size will be about INR 760-770 lakhs. Our collateral cover, generally, we, at the lower end, we generally take 100%+ kind of collateral cover, apart from the primary security. Okay. Okay. Yeah, that was helpful. Thanks. Thank you. If you're referring to installment loan, we don't do much of installment loan in lower-end SMEs. It's all working capital. Okay. Okay. Thanks. Thanks a lot. Thank you. The next question is on the line of Sagar from Anand Rathi. Please go ahead. Hello. Hi, sir. Thanks for the opportunity. Just one housekeeping question. I missed the part where you gave the breakup of the loan book in terms of EBLR, MCLR, et cetera, if you could. Thank you. Thank you. As that was the last question for today, I would now like to hand the conference over to Mr. Prabal Gandhi from Antique Stock Broking Limited. Thank you. Thanks. Thank you everyone for joining in. Murali, do you have some closing remarks? Yeah. No, I would like to thank all the participants who took their time out of busy schedule. I know there is another conference today from a very large bank, and despite that, I think I really appreciate people who have taken part. If any of your questions, which you could not have a chance to ask, please do not hesitate to write to us. We'll be happy to share answers with you. We would like to give as much detail, and we would like to be as transparent as possible in spelling out what exactly we are doing and what is working for us, what is not working for us. So thanks a lot and take care. Have a nice day. Thank you. Thank you. On behalf of Antique Stock Broking Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your line.