Please note that this conference is being recorded. I now hand the conference over to Mr. P. R. Seshadri, Managing Director and CEO. Thank you, and over to you, sir. Thank you very much, ma'am. Greatly appreciate it. At the outset, let me thank all of you who've taken the trouble to join us in this earnings call for South Indian Bank for Q1 of FY 25. So thank you very much. I understand it's a very busy season when it comes to earnings being reported, and we really do appreciate the fact that you've joined us. I'm joined by my colleague, Mr. Dolphy Jose, who recently joined us as an Executive Director on the board, Mr. Anto George, who's our Chief General Manager for HR and Operations, Mr. Sinha, who's our Chief General Manager and Head of Distribution and Branch Banking, and Mr. Vinod Francis, who's the General Manager and Chief Financial Officer of the institution, along with a clutch of other senior executives. Let me start with a few of the key highlights of the financial performance for the quarter that just ended. The bank declared a net profit of INR 294 crore, which is a growth of approximately 45%, compared to the prior year. Total deposits grew by 8% to INR 103,532 crore from INR 95,499 crore on a year-on-year basis. I'd like to highlight the fact that current accounts and savings account balances grew very, very nicely during the quarter, which is a significant area of success for us for this particular quarter. Gross advances grew by 11% to INR 82,580 crore. Total business for the bank grew by 10% to INR 1,86,112 crore. Net interest margin for the quarter was 326, I mean, 3.26%. It is a tad lower than the prior quarter. However, I think we have been working very hard to ensure that the cost of funds are managed very tightly, and we do think that we have an action plan that can continue to address this issue as we go forward. Return on assets was 1%, and return on equity was 12.9% for the quarter. Net interest income was INR 866 crore, as against INR 808 crore in the prior quarter, that is Q1 FY 2024. Capital adequacy ratio, the bank continues to be very well capitalized. We ended with CRAR at 18.11%, and against Tier 1, common equity Tier 1, this is common equity plus the Tier 1 bonds that we hold, it comes in at 16.71%. CASA, as I mentioned, grew 7% year-on-year to 33.195. There is also a similar, almost a similar growth on a Q-on-Q basis sequentially. Provision coverage ratio improved by 390 basis points to reach 69.05%. This is excluding technical write-off and include. And if you were to include technical write-off, it improved to 79.22%. Overall, gross NPA reduced by 63 basis points, from 5.13% to 4.5%. But on a sequential basis, it remains static at 4.5%. Net NPA reduced by 41 basis points to 1.44%. On a sequential basis, there was a 2 basis points reduction in net NPA. Allow me now to take you through other operational and financial performance of the bank. The gold loan business continued to grow very strongly, now stands at INR 16,313 crore, sorry, INR 16,317 crore. Average LTV of 72.25%, excluding buyout, and an average ticket size of about INR 1.62 lakh. Gold loan grew on a year-on-year basis by approximately 13%. Home loan and auto loans are other areas where we've had some reasonable success. On a year-on-year basis, home loans grew 96%, and auto loans grew by 161%. Agri loans grew by 108%. The home loan book for the quarter stood at INR 5,138 crores. Auto loans stood at INR 1,741 crores. With this, I'd like to throw the floor open for questions. I once again thank all of you for being here. My colleagues and I will try and answer your questions as well as we possibly can. So allow me to request the operator to sequence these 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 Himanshu Upadhyay from Marigold Wealth. Please go ahead. One of the challenge for the bank historically was high cost to income ratio, and which we wanted to improve, okay? We believe we need to focus on NIM expansions. The target we set was 3%+, okay? Which we have been, quarter after quarter, able to achieve. But still our cost to income ratio remains pretty high, okay? On income side, what more can we do to improve our cost to income ratio? So some of your thoughts there will be helpful, and strategy on that part. Thank you very much. So what we are trying to do is to, you know, rebalance the portfolio. We currently have approximately 42% of our book in very high quality corporate assets. Because these are very high quality corporate assets, that too, on a very short duration type of structure, the yields on those are quite low. So the strategy that we have to improve NIM is basically to grow housing loan, auto loan, mortgage loan, and so on and so forth. These are retail or MSME type of products that we have to grow. A moment ago, I mentioned that home loan and auto loan had grown well. Home loan, for instance, disbursements for the last quarter were 96% over the prior year similar quarter. So YOY, we had grown 96% in disbursements. Similarly, for auto loans, we had grown 161% for disbursements. So loan origination on that front has increased. These are higher spread businesses, which will, over a period of time, increase the NIM that we have. And for that to happen, the structure of the balance sheet has to be in order. So similarly with agricultural loans, our disbursements had grown by 108% year-on-year. So these are very significant changes, but for it to actually flow through into our PNL will take some time, because those balance sheets have to grow. Disbursements do not immediately translate into growth, because there is also repayment that comes in. So over a period of time, as these disbursal values increase, these balance sheets will grow. These have larger margins than the corporate book that we have. So as that happens, automatically, the NIM will shift upwards, and that's what we are working to do, and unfortunately, that will take a little bit of time for us to achieve. We are trying to do it as quickly as possible by focusing all our attention on this business. But having said that, it is an endeavor that cannot be done overnight. It does take time for the structure of the balance sheet to be changed. Just follow up on this is, the mortgage business or home loan business, what we are trying to build, what type of segment are we focusing on? Because, in case of service oriented, we don't see that high a margins generally. So what would be the end customer whom you are trying to focus on for your mortgage business? And, with 3.23%, do you think that we will need to take it further to, let's say, 3.75% type of percentage, and, would that be the strategy for us? So we, in the short run, I mean, in the medium term, we want to get to about 3.5. So from 3.26, we want to get to consistently 3.5, and thereafter try and, you know, there's a lot of, asset mix that need to be changed for us to get to 4. But that will be a, you know, there has to be a glide path to this. So in the medium term, we're talking about, you know, a 6, 6 quarters, hence, we are hoping that we will get to about 3.5, and then have a glide path upwards. The asset category that you're talking about, housing loan, is actually a big category. There are these super prime customers who are working for, you know, super Cat A type of companies, for whom interest rate spreads on our current cost of funds will be nearer to 300 basis points. But then there are others, where the spreads will be closer to 400 basis points, and on the affordable housing end of the things, it will be closer to 600 basis points or so. So we are operating across this category, and we are hoping that it will land us with something like 400 and 50 basis points or so, which is a significant increase over the spread that we are currently getting on our high quality corporate asset book. So over time, this should nudge the, NIM upwards, but this will, it will take time as the balance sheets build up. Okay, thanks. And the second question is, we have old book, which is running down, okay? Can we assume that the next, which is around INR 22,000 crore, will be completely running down in next two years? And secondly, as the new book is getting built, currently we are seeing a very low net NPA and gross NPA. But can you give some seasoning aspects to it, that the book which was built three years back, what type of gross NPAs are there in that book? Because the base is continuously increasing for the newer book, and a lot of new loans are getting signed there. So how should we build our, or what is the bank business model if the new book is the base business for us two years hence? So with respect to the gold portfolio, actually it's been growing very nicely. So we have grown 13% year-on-year. So our balance sheet is now INR 16,317 crore. There are certain subsegments of the gold business which may be running down, but on an aggregated... Oh, it was not gold, you was talking about old, is it? Yeah, it was old, the INR 22,000 crore book. Oh, okay. I stand corrected. I heard you as gold book. So with respect to the old book, you know, this is a book which is winding down. So with any book that is winding down, you will see an increase in, as the portfolio matures, whatever loans are going to go bad, go bad, and then they stay there. And as there is no addition to the denominator, the with the increasing numerator, it leads to higher delinquency levels. So I'm not fully, you know, if you could repeat your question, perhaps I can- Okay, so, oh, my question was, the new book, which is continuously getting built now, and the base is, increasing at a quite fast pace, okay? So how should we model the NPA levels in that book, okay? And also, if you can give some seasoning of that new book, let's say, the book which was, built three years back, what type of, NPAs are in that book, which were, the new book which was built three years back? Some aging analysis and thoughts on that. Oh, that from the new book perspective. We are quite happy with the current performance. The book is roughly three years old. Currently, we have 37 basis points GNPA. We can go back and analyze which vintages these NPAs are coming from. We have very limited cases of items in the new book becoming an NPA on an infant mortality basis. I mean, these are aged loans that are going bad. So even if you were to look at cohorts and look at cohort by cohort, I think the outcomes that you will see will be good. Having said that, I do not have the data to answer that question straight away. We can try and provide you with this kind of information in our next investor deck, when we do bring it out for the next quarter. We'll try and give you further information on how the new book is performing, and how the impact, if you were to strip away the impact of the new bookings into that, how the numbers will look. So we'll try and see whether we can do that. Can you just hold this one last? Yeah. One last question. Can you give what is your expectation for the bank and the top three focus areas for improvement and growth in next two years? So we are working on two broad themes for the bank. One is to make our branches more efficient. So how do we allow our people in the branch? Because our branch is currently the only distribution channel that we have. How do we make the branches more efficient? How do we get them to be more receptive to our customers, and how do we get them to provide the highest quality of service to our customers, and consequently, we get more throughput from our branches? That is one key area of focus, and for that, we are working on a set of systemic system developments, which we hope will help us do that. So in our investor deck, we have the list of new systems that we intend to launch between now and February of next year. And, we think that that will substantially improve our capabilities to service our customers at the branch, front end. The other area of focus for us is to figure out how we can build digital assets, such that we transition from being a largely, physical-based institution, to one that is equally represented in the digital world, and thereafter to use these digital assets as a method of acquiring fresh customers and servicing fresh customers. So we've got two work streams that we are working on. One is on the branch side. We're trying to make the branches more efficient. There's a lot of detail in the deck on what we are doing there. On the digital front, we want to, A, create digital assets that can engage our customers. See, our customers, a majority of them are from the southern parts of the peninsula, and we think that we have a method of actively engaging with them appropriately. We want to use digital technology so that we can build relationships with third parties which can be seamlessly integrated. So we have set up a team that is intent on doing that. We've had two new relationships on the relationships that we can use to acquire liabilities which have gone live over the last quarter. Similarly, we want to build these kind of pipes by which we can acquire assets. So these are the two areas that we want to work on. From an aspiration point of view, the bank aspires to be an institution that is safe, that builds a balance sheet that is, you know, very high quality, ensures that the assets in the, in the balance sheet are ones that are, are those that are appropriate for an institution of our size, and where we manage our risk in a very, very tight manner. So as to return, you know, to our shareholders and others who are our constituents of this bank, reasonable returns as we go forward. At this juncture, that is the strategy and two key areas that we are working on. Yeah, thanks from my side. For further queries, I will join back. Thank you. Thank you. The next question is from the line of Mr. Arvind Datta from Marigold Wealth. Please go ahead. Hello, Mr. Seshadri. I've seen there's a marked improvement in the productivity metrics, be it business per employee or business per branch, that you've delivered, and it's been growing pretty good. So I wanted to know what is driving this efficiency, or what kind of strategy changes you've made in the branch teams, or any scorecard you've introduced for people to be measured upon? And second question is, what is your aspirational number for the ROE and ROA for the next two years? Thanks. Thank you very much for the question. Let me answer the first question, the second question first. From an ROE point of view, I think, in the current scenario, I think our ROE will remain at this 100 basis points level in the short to medium term. Sorry, ROA. ROA will remain at 100 basis points in the short to medium term, because for a structural shift in, in ROA to happen, the biggest change that needs to happen is that NIMs have to grow, and their, their revenues have to start coming up very strongly. And that will happen once the balance sheet structure starts, changing. So right now, we have a preponderance of, lower-yielding, high-quality assets, which even though the balance sheet does grow, revenues need not grow commensurately. So our strategy is to grow higher-yield assets, you know, in a controlled manner so that the NIM of the institution over time changes. But that's not gonna happen very quickly. The business per employee has increased because CASA balances have been growing and deposit balances have been growing, as well as our loan book has been growing. Now, the strategy that we are following there is that we've put in place a system called SIB Max. This is a method of measuring our branches for their throughput. So, you know, in the old days, the way we used to measure a branch was we used to look at what all they sold. They could have sold 10 accounts, 10 current accounts of a particular type, 20 current accounts of another type, 10 savings accounts of a third one type, 100 savings account of another type. Now, these are all disparate products, and it is very hard to figure out what the actual value addition from a sales point of view was. So, for the last two quarters, we've been measuring sales value addition, which is basically we are trying to figure out. We have created a program called SIB Max that awards points for any product that is sold. And, the points are correlated to the net present value that is created by the sale of that product, historical net present value that is created. At the branch level, we have set goals for the branch to how many points are required, and if they achieve more than those points, there is an incentive program as well. Most importantly, what this does is, it allows us to compare performance across branches, because it normalizes different products that are sold into one measurement metric, which is points. And therefore, branch A versus branch B can be compared, even though the two may be different. And we know, you know, how much value addition there is from branch A versus branch B. And I think that is one area where we are trying very hard to work on and push productivity from our branches. To a degree, it is working, and for the first time, we have a mechanism of, you know, tracking this, measuring this, and getting people to be aware of the level of value addition at the branch, which historically was not otherwise possible. I hope that answers your question. Yeah. Thank you so much, and all the best to you, Mr. Seshadri. Thank you. ... Ladies and gentlemen, good day. In order to ensure that the management is able to address questions from all participants in the conference, please limit your questions to two per participant. The next question is from Mr. Rohan Mandora from Equirus Securities. Please go ahead. I just want to understand, in the other income, the others line item of only INR 8 crore, what has spread there? Allow me to, you know, turn this question over to our Chief Financial Officer, Mr. Vinod, to give you the answers. Yes, yes. Rohan, this mainly related to some recoveries, what we had from the return of accounts, that amounts to around INR 60 crore. We have another PSLC sale income that is also amounts to INR 60 crore. Another, we have the recovery from the FLDG part, INR 27 crore. These are the major items that comes part of that other income, and rest are other, the regular, items that comes for at the bottom. Sure. And, sir, what were the total return of the pool right now, from which we can expect future recovery? Sir, the recovery that out of that INR 60 crore, the major recovery happened from the SR. So SR, we have the balance figure of around INR 41 crore remaining, that remaining to be provided. And the return of accounts total amounts to... One second, I will come back. It amounts to INR 1,820 crore. Sure, sir. And sir, secondly, on the AFS Reserve, what is the total AFS Reserve that we hold at the end of the quarter? One second, just allow me. It's around INR 2.18 crore. INR 2.18 crore. Sure. So just here, I want to understand the Investment Fluctuation Reserve that we used to create earlier, that thing has moved to general reserve. But incrementally, will we continue to create Investment Fluctuation Reserve or maintain Investment Fluctuation Reserve? How does that piece work incrementally? Sir, Investment Fluctuation Reserve, we are keeping as it is. Only Investment Reserve, what we have moved to the General Reserve. So we are looking at the Investment Fluctuation Reserve, that will be continuing. Sorry, sorry. If you could repeat that, Investment Fluctuation Reserve continues as it is? That will be continuing as it is. Investment reserve has moved to the general reserve. Got it. Got it. And, so the INR 2.18 crore that you're saying is the total AFS Reserve, net of all the movement that have happened? Correct. Okay, sure. And then on the agri slippages, there was an uptick this quarter. How are we seeing the traction incrementally? Allow me to answer that question. On the agri front, we, you know, we continue to work on the collection front to ensure that we moderate this. The agri portfolio, you know, across institutions, I think, is an area of focus to ensure that we maintain portfolio quality. We think that a reasonable chunk of the pain that we've had is behind us. There is still some pain to be had, but we are working hard on ensuring that we manage the flow through as we go forward. Sure, sir. Thanks. Thanks a lot. Thank you. The next question is from the line of Prabal from Ambit Capital. Please go ahead. What is it, sir? Yeah, please, go ahead. Okay. My first question was on fees. If you can explain why yield on advances went down and why was there a sharp jump in yield on investments? So yield on advances going down is because of interest reversals. Correct me if I'm wrong, Vinod. This basically occurred on account of the increased agri slippage. As you know, agri business, the accruals can go on for two years before the reversal of, non-accrual reversal or interest takes place. And since we had higher in, you know, agri slippage this quarter, that ended up, reducing the yield on advance, considerably. That is the key culprit, for this. Okay. Can you quantify how much was the reversal because of this? 15 crore. So the reversal on account of this is roughly INR 15 crore, as I'm being told here. Right. And any impact of reversal of penal charges across other products as per the- The impact on penal charges will come more from this quarter onwards than from the prior quarter, because of the nature of how this got rolled out. Correct. So deadline for new accounts is from now, and we think that over time this will start building up the impact. There will be an impact. We are trying to figure out how to minimize it, but it will flow through from this quarter onwards and not from the prior quarter. Okay. So would it be fair to say that yield on advances, say, for next few quarters could be under pressure for us, or it could see a limited upward going in? Sorry, can you please repeat that? We couldn't hear you. I was saying that, would it be fair to say that when these penal charges get reversed, our yield on advances could be under pressure for few more quarters? So basically, that is an area of concern, yes. The fact that the method of charging penal charges will change this quarter is something that we are aware of. And the reason why I'm saying that the impact will flow through from this quarter is that the RBI circular says that for older accounts, it goes live from this quarter; the newer accounts, it went live from the prior quarter. So because older accounts are the preponderant share of our total advances, that is why this quarter is where you will get an impact. Now, we believe that a reasonable share of that revenue, you know, we will be able to get back a reasonable share by a series of measures that we are in the process of taking. We don't think there is gonna be a very substantial impact. Let me, I'll turn this over to Vinod, who can, you know, perhaps give you a little bit more color on current penal charges and where we see this penal charge going as we go forward. Very feeble, I'm waiting off right now. Excuse me, there is some disturbance in the line. No, there's a background disturbance from the Vinod sir's line. Okay. Can you put him on mute, please, Vinod? Okay. Yeah. So with regard to the penal charges, of course, there will be some pressure on the income side going forward, because that is the intent of the true spirit of RBI circular. So, but however, what we are expecting is that, going forward, we should be able to recover by the pricing, adjusting the pricing also, we should be able to adjust that, loss in the interest income. So we are not expecting much impact on the same in the coming quarters. All right. And so when we are discussing about this pricing, so, it seems that your disbursement rate and repayment rate has increased this quarter, so have we reduced duration of loans or anything there that needs to be looked into? So the disbursement amounts that you see are largely driven by corporate disbursements. These are short-term loans that corporates borrow for periods from seven days onwards. And given the fact that corporate India has now reasonable liquidity, and given the fact that we were coming out of the busy season and et cetera, et cetera, we had significantly larger churn. So the duration of our portfolio on the corporate side has always been short. The duration on the retail and the wholesale, I'm sorry, retail and commercial, is significantly longer. So the quantum of disbursement that you see is driven by corporate disbursements, and maybe we should try and give them breakup of corporate versus other disbursements as we go forward. We'll try and include those data points so that you get a better idea of what those disbursements stand for. Sure. Sir, on yield on investments, if you can explain what led to the sharp increase in this? Yield on investment has gone up? Yes. Have gone up. One of the retail for increase. The reason for increase is very simple. If you see that the total book, we have allowed it to shrink, which is where the lower yield instruments matured, it came in. We stayed in other asset categories and did not build the investment book. So we're waiting for the appropriate time for us to build the investment books. Wherever we get opportunity to invest at an appropriate rate, we did, and thereby managed to get the yield on investments to go up. So there's been very active management on the treasury part, as is very visible from the size of the investment book. So this has been actively managed to ensure that the total yield to us is reasonable. Okay. And sir, just last question, on the business loans, the slippage run rate seems to be around INR 150-INR 160 crore on a balance sheet size of INR 15,000 crore. Is that a normalized run rate, or how do you see that run rate? So on the business loan front, the NPA accretion for the quarter was about INR 172 crore, which, if you were to normalize, you know, it's, it's on a balance sheet size of... You know, it used to be approximately INR 15,000 crore or so, so this run rate does look a little higher than where we would like this to be. Largely it is coming from the historic portfolio. And, it's also a sign that the portfolio by itself has, is aging, in the sense that the, the new book here is actually quite, is not growing as fast as we would like it. And consequently, we are, since the denominator is not growing, the, the percentage numbers look a little, wonky. This is an area of focus, and we are hoping that we can get growth back. We want to focus in areas where delinquencies and loss rates are low, so we've had discussions with the credit bureaus, et cetera. We've identified locations where portfolio performance happens to be good, and those are the areas we want to focus on so that we can grow this book, and over time, bring the loss levels to acceptable parameters. In addition, what we've done is, we've started building scorecards so that the small end of the business loans can be automated as much as possible. And thereby, you know, credit quality can be managed a little bit better, and we get more consistency on the credit quality side. So I trust that answers your question. And, sir, when you say, this was a historical portfolio, meaning how long? Because I guess, when Murali sir was there, in 2020, he also started implementing, all these scorecards. So it's been four years so. I mean, how to read into all these numbers? No, good question, good question. You know, it's INR 600 crore on a portfolio of about INR 15,000 crore, that's roughly a 4% slippage rate. It is, in our estimation, double of what we can afford, and for the portfolio then to stay profitable. The loss rates are continuing to come from historical books. These are not assets that have been onboarded from 2020 onwards. These are historical assets that were on our books, which are now not performing the way they are supposed to perform. An asset that is onboarded, it is hard for us to get out of that asset. It's a little easier to get out of assets on the corporate side, because there are other takers. But on the consumer side, on the business, small business side, given the small ticket size that you very often have with these loans, it is a little harder to do, because of the fact that monitoring of very small loans is done on a portfolio basis and not on an individual basis. And when you're looking at portfolio statistics, you sometimes miss out these individual cases that are going bad, and for you to exit loans, you have to do it before they become bad. So there are issues here. The good news is, the newer vintages are performing better. The older vintages are not. We are hoping that this will, you know, the flow-through into NPA of the older vintages that are of poorer quality will, you know, peter off at some point in time, and the losses will staunch. But there is some distance to go on that, so, you know, it will take us a little bit of time, before that happens. Got it, sir. Thank you so much. All the best. Thank you. Thank you. The next question is from the line of Rakesh Kumar from B&K Securities. Please go ahead. Yeah, thanks a lot, sir, for the opportunity. Question is very similar, sir, here. So what I was looking at that for this quarter, the total slippage number is around INR 340 crore and INR 341 crore. And if I look at, you know, last quarter, you know, presentation, we had a total old book of INR 23,800 crore, out of which 41%, 45% is basically A+ rated. So basically, 55% of the book where the slippage might be coming from, and also in this presentation, unlike corporate, slippage is zero. So basically, INR 341 crore is slipping from 55% of INR 23,800 crore. As you also said, that new book, you know, gross NPA number, is somewhere close to 37 basis or something like, you commented just now. Just wanted to understand, like, you know, is it the right understanding if the slippage is coming from the old book? Run rate seems to be very high. Okay, let me, let me just restate what you just said. Our total NPA for the quarter slippage was INR 341 crore. None of it was from corporate. Corporate is 40% of our balance sheet, 42%. So for the purpose of this argument, we'll say 40, right? Correct. So 60% is the rest. 60% comprises roughly INR 50,000 crore. From that, we have our slippage is INR 341 crore. So INR 341 crore times 4 is about INR 1,400 crore on INR 15,000 crore, so that is running at a significantly higher run rate, as you point out. Now, total slippage on the new book life to date, gross NPAs INR 223 crore. This is life to date. I don't have numbers for slippage this quarter on the new book. We will try and provide that to you as we go forward. But as you can see, the slippage is INR 341 crore, is significantly higher than the life to date slippage on the new book. So the new book slippage has to be perforce a significantly smaller number. Do you have the deck for the last quarter? It will have the last quarter number. Yeah. So we can, we just pull it out from the website, and we'll be able to give you the difference. So, okay, the slippage on the new book is INR 87 crore in this quarter, out of INR 341 crore. So the old book slippage was INR 254 crore. INR 87 crore on INR 60,000 crore is still a reasonable number. I mean, you're less than 0.5% or near about 0.5% on an annualized basis. So which I think is, and this has a vintage now, it is not, it's not a new book that came yesterday. It has been there for 4 years now. That looks okay. Now, INR 250 crore of slippage on INR 22,000 crore is a little bit of a challenge because it is 5%. But as you know, this is a book that is winding down, and the bad loans that, the loans that were to go bad have gone bad. The question is: how many more will go bad? It's a question for which we have very limited answers. But what we will try to do is try and give you breakup of all of this so that it becomes a little clearer for you as to where the slippage is coming from. Correct, sir. So, so the thing is that, you know, I was doing the similar calculation what you explained just now, that, you know, if you annualize this INR 341 crore - INR 87 crore for this quarter, or if you try to see what is the annualized slippage rate, and obviously this, you know, because as you said, that the INR 87 crore is from the old, from the new book, so that number I have reduced. So I am looking at 341 minus 87 into 4 divided by INR 23,800 crore, and of that, of that, only 55%, because 45%, the corporate book is not giving any slippage to us. So then this number is like, you know, mind-boggling, actually. Like, and also I am thinking that then this INR 23,800 crore number, which was there on March, it will take couple of quarters to run down, actually, and this kind of slippage rate will continue that way. So let me apparently, I have either I have misspoken or, there's a understanding error. So INR 87 crores came from a portfolio of INR 60,000 crores. That is the new book, right? There, the slippage rate is 0.5% or a little over 0.5% annualized, which is acceptable for a 4-year vintage book. So if I were to remove INR 87 crores from INR 341 crores, I get roughly 200- Two fifty-four. INR 254 crore. INR 250 crore, INR 254 crore on INR 23,813 crore. That is about INR 1,000 crore, 1,200 crore. No, INR 1,000 crore. So that will be roughly 4 and 4% in touch. So actually, could- Yeah, go ahead. Sorry to intervene, sir. Actually, we should not take this denominator as INR 23,800 crore because the 45%, which is A plus, is not giving us any, any slippage. Corporate slippage is 0. So of the twenty- So the corporate book, see, the old book contains the corporate book of the past as well, and it contains the new corporate. Majority of the corporate book will feature as new corporate, is my estimation. The old book perhaps contains more of the MSME and retail and agriculture and gold and so on and so... Or maybe not gold, because gold is short duration. So it will be MSME, agri, and retail and some mortgage loan, loan against property and so on and so forth. I don't think the high quality corporate is part of the old book. Now, that's a good question. We can peel the onion and show you what the numbers are. We don't have the data here right now, but in the next presentation that we make to you, we'll peel the onion and show you where the NPA is coming. Very clearly, the old book continues to build at a level which we don't like. We are doing our level best to do this. I must make one point very clear: Q1 of every year, we see seasonally high NPA slippage, essentially because in the first, in the month of April, we have a change of approximately 30% or 40% of our branch managers. They change at that point in time. It takes them time to settle down, and some of our collections, especially for MSME, is branch manager-driven. So if you were to look at the last 8 quarters or 12 quarters, you always find the first quarter has the highest slippage. This will normalize as we go forward. Okay, that is what we expect. So looking at this in isolation may not be appropriate, is the point that I want to make. Correct. Correct, sir. Thanks a lot, sir. Many thanks for the effort and for the elaborate explanation. Thanks and all the best, sir. Thank you very much. ... Thank you. Ladies and gentlemen, this will be the last question for today, which is from the line of Jai Mundra from ICICI Securities. Please go ahead. Yeah, hi, sir. Good evening, and thanks for the opportunity, sir. So just to reconfirm, I have one or two clarification and then one question. So what we said is that yield on advances has gone down, but yield on assets has improved because there is a higher delta on yield on investment. So is that the right understanding, right? Yeah. So correct, that is, yield on advances has gone down, and we have the yield on investments have gone up. Mm-hmm. Okay. If you have given any update on the affordable housing and the, you know, one or two new products that we had introduced recently or that we would like to introduce. But of course, you know, we had thought or last quarter we had said that we would want these products to be approximately INR 1,000 crore each. Is there any, you know, update on that, as to how that is shaping up? With respect to affordable housing, our progress is relatively slow at this point in time, Jai. We, we've launched the product. Unfortunately, we don't have a dedicated loan origination system through which it can be fed, so everything is manual. And being manual, it takes time for us to turn, loans around. So as of now, we do not have a significant, we've not made very significant progress, but we are hoping that a new system to address this can come in place by February of next year. So it's gonna take some time because we have a bunch of other things that we are working on. With respect to home loans, standard home loans, we are making very good progress. So, dispersal growth, is in triple digits or close to triple digits. Housing loans, Q1 of this year was 96% more than Q1 of last year. Auto loans was, 161% greater than, disbursements were 161% greater than Q1 of last year. So those are growing nicely, albeit on a small base. Agri also, we had significant success because there again, we had a bunch of new products which were agri-based products, which we think are of better credit quality. There again, we got a 108% growth in disbursements when compared to the prior year. So, we are making progress. Some of these new products are taking a little longer. We launched a product called GST Power in April, on the thirtieth of April, this year, which is in this, during this quarter. This we think is an industry-leading product. We've got, I think, approximately 1,000 applications, if I'm not wrong. And that is doing well. Yeah. In addition to this, the supply chain business that we've been working on also grew 36% year-on-year. So there's been substantial progress in many of these products. The effect of all of this will take time because the balance sheet size is large and the starting position of many of these products is small. So, you know, effect of compounding will only come over time, as you know, Jay. Right. Right. Okay. And sir, if on slippages, right, so I take your point that first quarter is seasonally weak, and the new book continues to do very well. But how should one look at the slippages? Is this, let us say, a new normal at like 350, 300 or, I mean, 350 levels, you know, barring seasonal variation, how should one look at the full year slippages in there? Full year slippage, we think will be INR 1,200 crore or thereabouts. I mean, that is where we think we should be. I mean, from the current information that is available and visibility that we have, we say INR 1,200 crore. So, which basically goes to show that 341 is a little bit of an outlier. So we think that we should be under the INR 1,200 crore number. Hmm. And this will include everything from restructuring also, right? I mean, there is no double- Yeah, yeah, everything, everything together. Right. Right. So in a way, so this is a seasonal thing, more or less. It looks like a seasonal uptick. Okay, so that is good. And lastly on OpEx, sir. So, you know, other banks commonly suggest that they are increasing OpEx, right? Across banks cohort. But here, you know, what we are trying to do is to cut or to contain OpEx on both staff and non-staff. So wanted to understand, sir, are we, you know, sort of underinvesting, or you think there are some, you know, easy avenues wherein you can cut costs and still not impact the usual business growth? Jay, your business strategy is dependent upon where you are, your own current situation. So had our situation been, you know, that our cost to income ratio was 45% or 47%, our approach to business would have been different, and we would have said: Okay, we are gonna invest, we're gonna put up new distribution channels, we're gonna do a whole bunch of things, so that we can grow business, which is from frontloading our expenses and revenues will come later... In our case, we are running well past 60% as cost to income, and consequently, our strategy also has to be moderated. So what we are doing is we are trying to invest in places where we can get disproportionate returns, and, you know, manage expenses very, very tightly. So our year-on-year expense growth is 15%. It is only quarter-on-quarter sequential, where we are flat. There has been a very significant growth in expense over the last few years. What we are trying to do is juice out those expenses. We're not saying we're not gonna invest. Our strategy on the distribution side is still evolving. We will have to change our distribution. We cannot remain dependent only on the branch. Perhaps the approach that we had, saying that, you know, we will build non-traditional distribution using digital channels, may not be enough. We may need to have other distribution channels, which will increase costs for us, but we'll have to do it judiciously and with time. We are not cutting those off, but our focus remains on managing costs very tightly, given our particular situation right now. Right. Sir, this 15% OpEx growth, is it, like, good enough to estimate for full year as well? No, no, Bhavin, I said 15-year growth. It is, fifteen year-- 15% growth on a year-on-year basis is what we have disclosed for this quarter. Last quarter expense and this quarter expense are roughly the same. There is not much movement, right? We, we, we will have some amount of, expense growth from here, you know, as we go, into future quarters. That is, that is driven by inflation on all the products that we consume. So I think there would be a... In our case, we are trying to maintain that, to monitor that and control it tightly. As you can see, our headcount is decreasing, which is the largest chunk of our costs. So, so doing all of this, we think that our total expense base growth for the year should not be more than 10%. At least that is the aim. And we want to grow revenues more than that, so that we widen PPOP. That's the, that's the whole plan that we have. Right. Right. Understood. So, yeah, so that is, that is all from my side, sir. Thanks a lot, and over to the operators. Thank you. I would now like to hand the conference over to Mr. P. R. Seshadri for closing remarks. Let me take this opportunity to thank you all for being here with us today. You know, we did have a reasonably good quarter. I think we are making progress on many of the strategic elements that we set out to do. We also welcomed a new addition to the board, Mr. Dolphy Jose, as an Executive Director. I think he brings a wealth of talent to our company, and we are very excited to work with him as we make this transformation journey for ourselves. Allow me to thank you all for being here, and thank ICICI Securities for hosting this conversation. Thank you very much. Thank you, sir. On behalf of ICICI Securities, that concludes this conference. Thank you for joining us, and now you may disconnect your lines.