South Indian Bank Ltd — Q4 FY26

South Indian Bank Ltd Q4 FY2025-26 Earnings Conference Call https://www.youtube.com/watch?v=gFMNq_WhVTk Published: 6 days ago

0:01 1 second Ladies and gentlemen, good day and welcome to the South Indian Bank Q4 FY26 earnings call hosted by ICA Securities 0:10 10 seconds Limited. As a reminder, all participant lines will be on listen only mode and there will be an opportunity for you to ask questions after the presentation 0:19 19 seconds concludes. Should you need assistance during the conference call, please signal an operator by pressing start then zero on your touchstone phone. 0:27 27 seconds Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Aman Singh Sad Singani from ICIC Securities. Thank you and over to you. 0:39 39 seconds Thanks Jesi. Good afternoon everyone and thanks for joining the call. On behalf of ICIC securities, we welcome you all 0:47 47 seconds to Q4 FI26 post earnings conference call of South Indian Bank. From management side, we have with us Mr. PR Shashadri 0:57 57 seconds Managing Director and CEO Mr. Doly Jose Executive Director Mr. Ento George chief 1:05 1 minute, 5 seconds operating officer and executive vice president Mr. Vinod Frances SGM and chief oper financial officer Mr. Jimmy 1:14 1 minute, 14 seconds Matthew SGM and company secretary along with other senior executives of the bank. I'll now hand over the conference 1:20 1 minute, 20 seconds to management for their opening remarks post which we can start the Q&A session. Thank you and over to you sir. 1:34 1 minute, 34 seconds You're on mute. 1:39 1 minute, 39 seconds Sorry. Um good evening uh to all of you and thank you very much for joining us. 1:45 1 minute, 45 seconds I'm sorry sir. Can you speak a bit louder? come near to the microphone. Is this is this better? 1:53 1 minute, 53 seconds Yes, sir. Please go ahead. 1:56 1 minute, 56 seconds Okay. Um, thank you very much. Good evening to all of you and thank you very much for joining us for the South Indian 2:04 2 minutes, 4 seconds Bank Limited quarter 4 FY26 earnings conference call. I'm PR Sadi, the U 2:11 2 minutes, 11 seconds managing director and CEO. I'm joined here by my colleagues that um were introduced earlier and two others Mr. 2:20 2 minutes, 20 seconds Central Kumar who's our head of credit and uh and Mr. Sony who is our chief information CIO. 2:30 2 minutes, 30 seconds Um see um at at the outset let me once again thank you all for being here with us today. We 2:37 2 minutes, 37 seconds greatly appreciate it. Let me start with the key highlights of financial performance for the financial year 2025 to 2026. 2:47 2 minutes, 47 seconds The bank declared its highest ever net profit for the year at,455 cr 2:55 2 minutes, 55 seconds uh and for the financial year 202526 which uh which implies uh growth of 12% 3:02 3 minutes, 2 seconds compared to,33 crores in the prior year. Total deposits 3:08 3 minutes, 8 seconds grew by 15% to 1 lak 23,346 crores from 1 lak 7,526 crores. 3:18 3 minutes, 18 seconds Retail deposits excluding bulk deposits grew by 15% to a lak and 20,16 3:25 3 minutes, 25 seconds crores from a lak and 4,750 crores. 3:31 3 minutes, 31 seconds Gross advances grew by 15 14.5% to 1 lak 274 crores from rupees 87,579 crores. 3:43 3 minutes, 43 seconds During the last financial year we had done a technical write off to the extent of 1,163 3:50 3 minutes, 50 seconds crores excluding which the year-on-year growth would be at 15.8%. 3:57 3 minutes, 57 seconds Total business for the bank grew by 15% to rups 2 lakh 23 cr 23,620 4:04 4 minutes, 4 seconds crores. Net interest margin for the year was at 2.91%. 4:10 4 minutes, 10 seconds The bank was able to show a healthy growth in the average advances during the period with a growth of 14%. 4:18 4 minutes, 18 seconds The bank declared a return 1.03% 03% and a return on equity of 12.76% 4:26 4 minutes, 26 seconds for the financial year. Net interest income for the year was at 3,437 crores. The capital adequacy ratio of 4:35 4 minutes, 35 seconds the bank at 19.66% with the tier 1 ratio standing at 18.76%. 4:44 4 minutes, 44 seconds And the entire tier one component is basically common equity tier one. 4:50 4 minutes, 50 seconds DASA amount increased by 17 a.5% yearonear to 39,621 crores. Division coverage ratio 4:59 4 minutes, 59 seconds excluding write off improved by 810 basis points yearon year to reach 79.87%. 5:08 5 minutes, 8 seconds And PCR including write off uh reached 94.10% at the end of the year. 5:17 5 minutes, 17 seconds Overall gross NPA reduced by 177 basis points from 3.2% to 1.43%. 5:26 5 minutes, 26 seconds Net NPA reduced by 63 basis points from 90.92% to 29%. 5:35 5 minutes, 35 seconds Slippage ratio for the year was at 72 basis points. 5:40 5 minutes, 40 seconds Let me take you through the financial performance of the bank for the quarter ending March 31st 2026. 5:48 5 minutes, 48 seconds The net profit for the quarter was 408 crores compared to 342 crores during Q4 FY25. 5:57 5 minutes, 57 seconds Net interest income for the quarter was at 915 crores. Operating profit for the 6:04 6 minutes, 4 seconds quarter was 581 crores. Net interest margin for the quarter was 2.95%. 6:11 6 minutes, 11 seconds The bank bank's return on asset for the quarter was 1.17% and a return on equity for the quarter was 14.49%. 6:22 6 minutes, 22 seconds Slippage ratio for the quarter not annualized was 15 basis points. Credit cost for the bank for this quarter was 6:30 6 minutes, 30 seconds low at three basis points. During the last financial year, our gold loan business grew by 46% and now stands at 6:39 6 minutes, 39 seconds 24,729 crores with an average LTV of 57.18%. 6:46 6 minutes, 46 seconds This number includes those portfolios that have been purchased by us and an average ticket size of approximately 2.71 lakhs. 6:54 6 minutes, 54 seconds Mortgage loans and auto loans are other areas of significant focus. On a year-on-year basis, we were able to achieve significant growth in mortgage 7:03 7 minutes, 3 seconds loans, significant growth in auto loans, and our focus on MSMA loans has ensured that our book has grown by approximately 7:11 7 minutes, 11 seconds 15% for the year. We continue to maintain the momentum in dispersements and collections and in and we hope that 7:19 7 minutes, 19 seconds the trend lines that we've seen thus far ens you know assuming that the environment is uh conducive 7:28 7 minutes, 28 seconds um ensures that we reach the outcomes that we would like to see. Uh our areas of focus as an institution remain 7:37 7 minutes, 37 seconds portfolio quality. We are very happy to note that uh uh the SMA 1 and SMA 2 numbers have continued 7:47 7 minutes, 47 seconds to improve. Slippage is at an all-time low. Shift from corporate to MSME and retail is visible in our balance sheet. 7:57 7 minutes, 57 seconds CASA balances have grown very very significantly demonstrating the quality of our liability franchise. There's a 8:05 8 minutes, 5 seconds material increase in branch productivity that we are able to see and which is reflected in the fact that retail and MSME businesses are growing. 8:14 8 minutes, 14 seconds Significant improvement in processes and systems have been uh have been realized. 8:20 8 minutes, 20 seconds Our focus on digital channels are helping us improve our business and operating efficiency. 8:27 8 minutes, 27 seconds This is the second year on in which we've delivered positive operating leverage. our focus on costs continue. 8:35 8 minutes, 35 seconds So whilst the environment has been difficult and growing revenues have proven to be difficult, we we've managed 8:42 8 minutes, 42 seconds to ensure that jaws that u you know from a from an operating efficiency point of view the jaws have opened up. With this 8:51 8 minutes, 51 seconds we'd like to open the floor for questions. 8:55 8 minutes, 55 seconds 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 the touchtone telephone. 9:05 9 minutes, 5 seconds If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use 9:12 9 minutes, 12 seconds handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. 9:33 9 minutes, 33 seconds We'll take a first question from the line of UNH Sha and individual investor. Please go ahead. 9:39 9 minutes, 39 seconds Yeah. Uh thank you very much sir for the giving me opportunity to give this uh concord to attend and uh congratulation once again for the good set of number. 9:49 9 minutes, 49 seconds your car NPA all have come to a very good set of numbers sir uh and also this 9:56 9 minutes, 56 seconds uh you know capital ratio and everything is in line. Sir my question is now sir that you know you have decided not to go 10:05 10 minutes, 5 seconds for you know for the second term or extension is there any search operation going for succession plan for the bank 10:12 10 minutes, 12 seconds or what is the new you know thing going on or how much time will it take or maybe internal person or some outside 10:20 10 minutes, 20 seconds search is going on if you can if I can elaborate or if I'm not too inquisitive I'll be happy if you can throw some light on this 10:29 10 minutes, 29 seconds the board is actively engaged um uh in u in the search process. I can confirm 10:36 10 minutes, 36 seconds that the search process uh is on and u the board is fully cognizant of 10:43 10 minutes, 43 seconds the need to ensure that this is done expeditiously and and names communicated to RBI within the time frame that is 10:52 10 minutes, 52 seconds required and I'm certain that the board would be updating shareholders as well 10:58 10 minutes, 58 seconds as investors and others at the appropriate point in time once once an 11:05 11 minutes, 5 seconds outcome has been reached. So I guess um the the process is to to to reiterate 11:13 11 minutes, 13 seconds the process is underway and uh we should expect communication from the bank uh 11:20 11 minutes, 20 seconds you know from the board through the bank at an appropriate point in time. 11:27 11 minutes, 27 seconds Thank you. Before we take the next question, would like to remind participants to ask a question, please press star and one on your phone. 11:36 11 minutes, 36 seconds Next question is from the line of Sid Kolapuri, a retail investor. Please go ahead. 11:42 11 minutes, 42 seconds Uh, hi sir. Uh, thank you so much for the opportunity um to you know ask a question. First of all, congratulations on the great 11:50 11 minutes, 50 seconds numbers. Uh, sir, I had uh the similar question uh to what uh the first questioner asked, but I also have 11:57 11 minutes, 57 seconds another question. I some other in the numbers the other income uh had some significant decline this last quarter. 12:06 12 minutes, 6 seconds So I just want to know what what is the reason and uh is there any like you know in future what are we going to do to 12:13 12 minutes, 13 seconds ensure that the other income is also uh consistent to the previous quarters. Thank you sir. 12:21 12 minutes, 21 seconds Um I'll request u my colleague uh our CFO to answer that question. Post his 12:28 12 minutes, 28 seconds answer I'll give you context on how we think that we can regrow or start growing that revenue stream. So over to you know thank you sir. 12:42 12 minutes, 42 seconds Am I audible? 12:44 12 minutes, 44 seconds Uh yes. Can you come closer to the microphone please? Yeah, hope I am audible now. 12:51 12 minutes, 51 seconds Yes, please go ahead. 12:54 12 minutes, 54 seconds So the deep in the other income is mainly because of the treasury uh because in Q4 due to the market conditions we were not able to generate 13:02 13 minutes, 2 seconds much income on the treasury segment. So in Q3 we had an income of around 77 crores. So that is almost n in Q4. So 13:11 13 minutes, 11 seconds that is a major element of deep in the rain. 13:17 13 minutes, 17 seconds We are uh thanks thanks. 13:22 13 minutes, 22 seconds Thanks you know to to further you know address your query. 13:27 13 minutes, 27 seconds We are branching out from corporate into the retail and MSME side of the house 13:35 13 minutes, 35 seconds and we are doing a lot of work to to broaden out the fee base that we have as 13:42 13 minutes, 42 seconds an institution and u the revenue stream that you can get non-interest revenue that you can 13:49 13 minutes, 49 seconds get on retail and MSME is significantly larger than what you can actually get on the corporate size And as that grows 13:57 13 minutes, 57 seconds out, we think that automatically uh the revenue streams here will improve. 14:06 14 minutes, 6 seconds Ladies and gentlemen, we've lost the management connection. Request you to stay connected please while we reconnect them. [music] 14:23 14 minutes, 23 seconds [music] 14:24 14 minutes, 24 seconds Heat. Heat. 14:29 14 minutes, 29 seconds [music] 14:35 14 minutes, 35 seconds [music] 14:40 14 minutes, 40 seconds [music] 14:44 14 minutes, 44 seconds [music] 14:53 14 minutes, 53 seconds [music] 14:59 14 minutes, 59 seconds [music] 15:05 15 minutes, 5 seconds [music] 15:10 15 minutes, 10 seconds [music] 15:15 15 minutes, 15 seconds [music] 15:18 15 minutes, 18 seconds Hello. 15:20 15 minutes, 20 seconds [music] 15:26 15 minutes, 26 seconds [music] 15:31 15 minutes, 31 seconds Hey. [music] 15:38 15 minutes, 38 seconds [music] 15:45 15 minutes, 45 seconds [music] 15:50 15 minutes, 50 seconds [music] 15:53 15 minutes, 53 seconds Ladies and gentlemen, thank you for patiently holding the line. We have the management team back on the call. 16:00 16 minutes Thank you. My apologies for the fact that we uh inadently had you know left the call. Um I was trying to explain 16:08 16 minutes, 8 seconds that the uh non-interest income drop that you saw was largely on account of the fact that treasury revenues uh were 16:17 16 minutes, 17 seconds very minimal during this quarter and I think that has been the feature across the industry and and I was al also trying to tell you that the change in 16:25 16 minutes, 25 seconds mix that we are looking at automatically increases uh non-interest uh revenue and we're also working on a whole bunch of 16:34 16 minutes, 34 seconds new solutions which will increase our uh revenue streams. 16:39 16 minutes, 39 seconds So our uh there's been very substantial increase in our FX revenue streams and in order to make that even more buoyant, 16:46 16 minutes, 46 seconds we are working on a new solution called TF online which enables our corporate and MSME customers to engage with us uh for all uh export. 17:02 17 minutes, 2 seconds Ladies and gentlemen, sorry we've lost the management team again. We're reconnecting them. Thank you. [music] 17:12 17 minutes, 12 seconds [music] 17:19 17 minutes, 19 seconds [music] 17:24 17 minutes, 24 seconds [music] 17:39 17 minutes, 39 seconds [music] 17:43 17 minutes, 43 seconds [music] 17:52 17 minutes, 52 seconds [music] 17:54 17 minutes, 54 seconds Ladies and gentlemen, thank Thank you for holding the line. We have the management team back on the call but please go ahead. 18:00 18 minutes Thank you. I don't know where everybody lost me but I just want to reiterate 18:07 18 minutes, 7 seconds that uh you know the the u reduction in non-interest income is largely a one-off 18:14 18 minutes, 14 seconds which is coming from the fact that treasury revenues have been less than buoyant during the quarter which is uh 18:22 18 minutes, 22 seconds something that has impacted not just us but has been a generic impact across the board and that the bank has um you know 18:31 18 minutes, 31 seconds a changing its product mix will enable us to increase revenues on this on this front and b there are certain specific 18:40 18 minutes, 40 seconds actions that we are taking with respect to uh our FX and trade platform which we are enhancing very considerably which 18:47 18 minutes, 47 seconds will enable us to engage with our customers uh on a nonfunded basis 18:58 18 minutes, 58 seconds that we we that significantly enhanced revenue streams. 19:06 19 minutes, 6 seconds Thank you. We'll take a next question from the line of J Praash Mudra from ICC Securities. Please go ahead. 19:18 19 minutes, 18 seconds Mr. Mundra, you can go ahead with your question. Yeah. Hi. Am I audible? Yes. Yes, Jay, we can hear you. 19:26 19 minutes, 26 seconds Yeah, sure. Sir, just a question on uh on while you mentioned that the board is 19:34 19 minutes, 34 seconds uh you know um um has taken the succession thing but any timeline as to what are the timeline and what are the 19:41 19 minutes, 41 seconds processes I mean uh when does the search completes and when does the uh name go to RB any broad timeline sir 19:51 19 minutes, 51 seconds uh J I think u the we are aware of um the fact that um uh RBI requires a 20:00 20 minutes certain amount of time uh for the approval processes. uh the board is cognizant of that and I am sure that uh 20:09 20 minutes, 9 seconds the outcomes will be you know the the process will conclude and letters will be written to the to the RBI in due week 20:18 20 minutes, 18 seconds in time for you know RBI to make its uh decisions and convey them to uh the 20:25 20 minutes, 25 seconds board in such a fashion that the new incumbent uh can be in position u uh 20:32 20 minutes, 32 seconds when required which is you know my term ends on the 30th of September then I expect that all of this will happen in such a fashion that the new interament 20:40 20 minutes, 40 seconds can be in position before or you know immediately after the end of my term so I think that's the that's the best I can 20:49 20 minutes, 49 seconds do at this point in time J there is uh little further information that I can 20:56 20 minutes, 56 seconds provide uh in this context sure no I think that that is what I uh wanted to know so thanks for 21:04 21 minutes, 4 seconds And secondly sir on gold prices and the portfolio impact right while the LTV uh I believe is very comfortable but that 21:12 21 minutes, 12 seconds is on the blended level right so I mean a 20% fluctuation in gold prices is not 21:18 21 minutes, 18 seconds a uh not a um I mean uneven unusual thing so uh how do you control uh the 21:26 21 minutes, 26 seconds LTV on let's say if the gold is 15,000 or 16,000 per gram and then suddenly or over month it comes down to maybe 13,500 21:35 21 minutes, 35 seconds types. So on the I mean what is the risk mitigation on the gold loan at the higher end of the when the gold prices are higher? Thank you. 21:46 21 minutes, 46 seconds I think it's a very good question. Uh so during the year we've had to understand how to measure this risk in gold. The 21:55 21 minutes, 55 seconds risk is basically price volatility of the of gold itself is the risk. 22:00 22 minutes So as a bank we've put together we are using the value at risk framework and we've built uh a mechanism by which we 22:08 22 minutes, 8 seconds actually measure this risk and using value at risk we can see you know periods of volatility and if we were to 22:16 22 minutes, 16 seconds stress test our portfolio for that period of volatility what is the portfolio that gets exposed as a 22:24 22 minutes, 24 seconds consequence and we have set caps on that as well and That's the mechanism by 22:31 22 minutes, 31 seconds which we are actually managing gold loan risk. Now we've had a situation I think 22:38 22 minutes, 38 seconds it was either in January or in February where gold prices uh you know came down all the way down to about $4,100 per ounce from a peak of 5,500. 22:50 22 minutes, 50 seconds And um at that point in time we had an opportunity to test uh the various 22:57 22 minutes, 57 seconds processes that we had set up actually. A uh you know the process of figuring out who are these customers whose margins 23:06 23 minutes, 6 seconds are have been eroded. be a process by which we communicate with these customers and ask them to repay or or 23:13 23 minutes, 13 seconds make margin payments to us so that they can restore the margin uh on the gold loan. I'm glad to say that you know a 23:22 23 minutes, 22 seconds very large number of customers made payments very very promptly. Of course, we didn't have to follow through and ask 23:30 23 minutes, 30 seconds the rest of the customers who who were impacted essentially because gold prices recovered thereafter. But having said 23:38 23 minutes, 38 seconds that, these are all tools that we have in place. Our experience on the margin calling front has been good and and that 23:47 23 minutes, 47 seconds is how we are managing it. So at a portfolio level, we have a value at risk metric which tells me how much risk I'm 23:55 23 minutes, 55 seconds running. So if we speak to trust movement of gold is x in the last 8 years or 10 years that in a 30-day 24:03 24 minutes, 3 seconds period 30-day war has been x and then we ensure that we set a cap and do not 24:10 24 minutes, 10 seconds exceed that cap. Now of course if the if the price of gold were to dip by more than that then there will be some 24:19 24 minutes, 19 seconds incremental hit to the bank and that is what we think can be addressed by the fact that we are in a position we have a 24:27 24 minutes, 27 seconds mechanism by which those accounts can be isolated margin calls can be made and our history is that we've been able to 24:35 24 minutes, 35 seconds get uh margins to be refurbished uh in a very substantial number of these customers. I trust that answers my your question. Uh J. 24:46 24 minutes, 46 seconds Yeah. Yeah. No sir, it does partially. I was also thinking that a few banks have told us that either they cap the uh LTV 24:55 24 minutes, 55 seconds not the LTV percentage but LTV rupees uh cr,000 let's say. So even if the gold prices were to go 16,000 per gram they 25:03 25 minutes, 3 seconds will cap at 11,000 12,000 or they will take moving average of 30 days anything of that sort or uh you know you have uh 25:13 25 minutes, 13 seconds like what you mentioned uh V uh sort of an approach for risk mitigation. 25:18 25 minutes, 18 seconds So we al already take a 30-day moving average. Okay. 25:23 25 minutes, 23 seconds And um we also in addition we apply something called a standard deviation. 25:29 25 minutes, 29 seconds So we apply a a proportion you know instead of applying one full standard deviation we either apply 50% or 25% 25:36 25 minutes, 36 seconds standard deviation to partially mitigate uh this risk. So to address volatility 25:44 25 minutes, 44 seconds we've tried to figure out some statistical method of doing it. But what I was trying to tell you was how we manage risk at a portfolio level because 25:53 25 minutes, 53 seconds ultimately if the price of gold goes from 15,000 to 10,000 and that is what has it has historically 26:00 26 minutes done historically let us say the maximum peak to trust has been 30%. 26:05 26 minutes, 5 seconds then we we can then try and model how much of my portfolio will be at risk and 26:12 26 minutes, 12 seconds then cap it you know at a VA level we can say that I want I don't want more than let's say 10% or 8% of my total 26:20 26 minutes, 20 seconds capital to ever be at risk that kind of measurement system is already in play 26:27 26 minutes, 27 seconds now of course the real life movement in gold can be very different from historical movement 26:35 26 minutes, 35 seconds And these metrics that we have used may or may not really hold out. But it is a it is the 26:43 26 minutes, 43 seconds only substantive method by which we can do this and we are quite you know we are tracking this very uh on a constant 26:51 26 minutes, 51 seconds basis and thus far our experience has been reasonably good. 26:56 26 minutes, 56 seconds Right. Well thank you so much sir for answering the question. I'll come back in the queue. Thank you. Thank you. 27:02 27 minutes, 2 seconds Thank you. We'll take our next question from the line of Darian Deora from Inquest Group. Please go ahead. 27:10 27 minutes, 10 seconds Yeah. Uh thank you for the opportunity. 27:12 27 minutes, 12 seconds Uh so my first question was on the write off that 1163 crores of of write off. 27:18 27 minutes, 18 seconds How was this accounted for? Can you just uh explain that briefly please? Sure. I'll turn this over to our CFO Mr. 27:25 27 minutes, 25 seconds Den Francis to answer this. 27:31 27 minutes, 31 seconds Yes sir. With regard to this write of 1,163 so these all these accounts have already 27:38 27 minutes, 38 seconds been 100%age provided tions has already been created. So we are doing the technical write off. It is not the actual bad write up but a technical 27:46 27 minutes, 46 seconds write off. So the there is no impact on the P&L but the only impact that comes in the PCR. 27:54 27 minutes, 54 seconds Got it. So this reduced your GNP GNPA but your NPA was not affected by this. not affected by the technical write off. 28:03 28 minutes, 3 seconds Okay. Uh I'm probably going to ask take this offline with you because I have some more questions around that. 28:09 28 minutes, 9 seconds Uh the other thing was uh regarding the gold loan book. Uh so 25,000 crores uh currently is your approximately the gold 28:17 28 minutes, 17 seconds loan book size including retail and agree. How much of this would be organic and how much of this is uh you know uh like portfolio buy out or go lending? 28:28 28 minutes, 28 seconds um a vast majority is organic our portfolio buyout and co-ending I don't have the exact number but I 28:36 28 minutes, 36 seconds suspect it'll be about 15% but we can give you the exact number uh subsequently it'll be it'll be let's say 28:43 28 minutes, 43 seconds 10% or about less than 10% 8 7 8% 8 to 10 and generally speaking like uh you know 28:52 28 minutes, 52 seconds this quarter for example what would be your total portfolio buyout you you would say like across uh across products. 29:00 29 minutes A total portfolio buyout across products is roughly in the order of magnitude of about 2,000 crores at the end of the 29:07 29 minutes, 7 seconds last four month. Um, and frankly from our point of view, you know, our our learning has been that we would prefer 29:17 29 minutes, 17 seconds pass through certificates to portfolio buyout. There was a point in time that where we privileged portfolio buyout for 29:24 29 minutes, 24 seconds the reason that um you know we had to demonstrate growth in the portfolio but now that we have our machinery is 29:31 29 minutes, 31 seconds working and all of that is happening um we are more inclined to do PTC's as 29:38 29 minutes, 38 seconds opposed to um portfolio buyouts because of the credit enhancement and the fact that um uh you know some of the 29:45 29 minutes, 45 seconds attendant problems that come with this are not present in that uh in that structure. 29:51 29 minutes, 51 seconds Got it. And uh you know just you know that kind of leads me to your uh my next question which is on the MSME. So uh any 29:59 29 minutes, 59 seconds update or any uh anything else you would like to share on the MSME uh in terms of the progress uh uh that we're seeing or 30:06 30 minutes, 6 seconds the traction we seeing the MSME has grown 15% year on year and 30:14 30 minutes, 14 seconds uh we are quite happy with it. But to give a more detailed answer, I will turn this over to my colleague GI Joe, the executive director on the board. 30:23 30 minutes, 23 seconds Yes. 30:27 30 minutes, 27 seconds Hi Darin. Uh this is Hi. Um so the primary uh narrative for 30:36 30 minutes, 36 seconds uh from the time we've started this MSN progress uh progressively directionally going towards acquiring more and making 30:45 30 minutes, 45 seconds a second more uh substantial in the MSM segment. We continue to uh focus on 30:52 30 minutes, 52 seconds better yield, better mix, better pricing discipline. 30:56 30 minutes, 56 seconds So uh we have gradually progressed towards 31:01 31 minutes, 1 second uh building uh MSN segment in growth supporting geography and markets and 31:10 31 minutes, 10 seconds that's quite visible in the shift if you look at the recent uh focus and how it has developed 31:16 31 minutes, 16 seconds uh that will continue and we intend to uh have concentrated resource allocation 31:26 31 minutes, 26 seconds and avoid width and go after depth in the geography where we have moved 31:32 31 minutes, 32 seconds recently and develop market and we are investing on in we are in investing on manpower etc. 31:42 31 minutes, 42 seconds Uh that is the way forward for MS deeper and not wider. 31:50 31 minutes, 50 seconds Got it. Got it. I appreciate that. Uh that's all from my side. Uh thank you so much and wish you all the best for FI27. 31:58 31 minutes, 58 seconds Thanks. Thanks. 32:00 32 minutes Thank you. We'll take our next question from the line of Sepi from Unifi Capital. Please go ahead. 32:08 32 minutes, 8 seconds Uh hi sir. Thanks for the opportunity and congratulations for this. 32:12 32 minutes, 12 seconds Sorry to interrupt. Can I use your hands please? 32:16 32 minutes, 16 seconds Um yeah. Uh hi to uh thanks for the opportunity. I had a couple of question. 32:21 32 minutes, 21 seconds Uh focusing on the loan growth. Uh so we have grown our loan group at a healthy rate of around mid 18th uh during this financial year uh despite the write up 32:29 32 minutes, 29 seconds of about more than thousand crores and the heavy lifting was done by gold loans. Um so in this context uh at what rate we intend to grow our loan book in 32:38 32 minutes, 38 seconds FI27 uh assuming gold might not contribute so significantly the way it did in 526. So that's the first question. 32:48 32 minutes, 48 seconds Yeah. Okay. 32:50 32 minutes, 50 seconds Uh thank you Sep. I um we think that we u at the very least we'll grow at the industry rate. So I mean going forward 33:00 33 minutes our aim is that if the industry grows at X we grow at X but we are a smaller institution and therefore you know 33:08 33 minutes, 8 seconds whatever be the vicitudes of the industry uh we should be able to carve a path for ourselves which is different. 33:16 33 minutes, 16 seconds So I am I understand that the current uh view is that next year's loan growth will be a little shallower than u last 33:25 33 minutes, 25 seconds year's loan growth. But having said that we are still aiming to get between 15 and 16%. But if the industry were to do 33:32 33 minutes, 32 seconds higher than that we we will match industry. 33:39 33 minutes, 39 seconds Okay. And so my second question is on the employee expenses. So and current expenses declined materially during this quarter. Uh so is was there any one-off 33:48 33 minutes, 48 seconds if so what was the nature and amount of that oneoff? 33:52 33 minutes, 52 seconds Yeah it was a one-off. Let me uh you know hand this over to uh without 34:01 34 minutes, 1 second yes. So this is the one of uh item that come up that is mainly with regard to the right pack what we obtain based on 34:08 34 minutes, 8 seconds the actual valuation. So that amounts to around say close to 80 crores. So this is uh mainly at the year end we go for 34:17 34 minutes, 17 seconds the actual valuation compliance with the accounting standard. So based on that we got a right back of 80 crores. 34:26 34 minutes, 26 seconds Uh okay fair enough. Uh next question is on the operating cost line item. uh I mean over the last 8 to 10 quarters you 34:34 34 minutes, 34 seconds have done a commendable job in terms of uh keeping the operating costs largely flat over the last 8 to 10 quarters. So 34:42 34 minutes, 42 seconds how we should think about the same line item over the next couple of years. Uh do can we expect a moderate growth uh in the operating cost line item or will it grow in line with the business growth? 34:55 34 minutes, 55 seconds Uh I think it's a very good question. 34:58 34 minutes, 58 seconds I think basically what our strategy so far was that we uh sort of sweat all our 35:06 35 minutes, 6 seconds assets as much as possible uh so that we can become more profitable and we become much more efficient uh but 35:14 35 minutes, 14 seconds there is an efficiency frontier I mean once you get closer to that efficiency frontier beyond that the efficiency 35:21 35 minutes, 21 seconds growth becomes more and more difficult so I think we've reached a point where uh expenses cannot be kept at this level 35:30 35 minutes, 30 seconds indefinitely and we will have to start uh doing a little bit of investment both in distribution um a little bit more investment in 35:38 35 minutes, 38 seconds technology and so on and so forth. So you will see expense growth coming uh forward uh but I we are hopeful that 35:46 35 minutes, 46 seconds that will be more than compensated for by revenue growth. So our aim is to ensure that we continue to have positive 35:55 35 minutes, 55 seconds operating leverage. uh we are very very thrilled that we've had positive operating leverage two quarters two 36:02 36 minutes, 2 seconds years running and we'd like to make that a third year as well which will then open up our pre-provisioning operating 36:10 36 minutes, 10 seconds profit and uh uh you know profits uh before and after tax as well. So I don't know if that answers your question. If 36:18 36 minutes, 18 seconds they have anything else in particular I'd be able to have happy to answer it. 36:23 36 minutes, 23 seconds Okay so that does answer my question. Uh my last question is on the credit cost. 36:26 36 minutes, 26 seconds Uh so your slippages are trending down and your net uh net NPA is now below 30 basis point. So in this backdrop uh how 36:34 36 minutes, 34 seconds should we think about credit cost on a sustainable basis over the next couple of years? Very difficult to answer that question. 36:43 36 minutes, 43 seconds Uh my own view is that we've seen the uh truck when it comes to credit cost. 36:50 36 minutes, 50 seconds Credit cost for this quarter was three basis points. I don't think uh the trading cost can be lower than this on 36:57 36 minutes, 57 seconds an organic uh on under normal circumstances. 37:02 37 minutes, 2 seconds Uh I think if anything uh both slippages and credit pass should trend upwards uh 37:08 37 minutes, 8 seconds especially given the geopolitical stresses that we see um emanating from the Middle East and elsewhere. 37:17 37 minutes, 17 seconds uh how much it will be what the impact will be very hard for me to have a view on and in fact I'll be honest with you 37:25 37 minutes, 25 seconds these are unknown unknowns and I I can't really tell you what they will be and if there is somebody who is able to predict 37:34 37 minutes, 34 seconds all of this then I think I would love to understand how they're doing it and what mechanism they're using but uh but right 37:42 37 minutes, 42 seconds now we are not seeing any material change in customer behavior here. I mean so far obviously the crisis is still 37:51 37 minutes, 51 seconds young uh and and it takes time for these things to flow through but our hypothesis is that 38:00 38 minutes both of these parameters will uh deteriorate for us not improve. 38:09 38 minutes, 9 seconds Oh sure thanks from my side. Thank you. 38:15 38 minutes, 15 seconds We'll move on to our next question from the line of P Gka from 361 Capital. Please go ahead. 38:22 38 minutes, 22 seconds Yeah. Hi sir. Thanks a lot for the opportunity. So my first question is uh now what would be the NIM drivers uh 38:29 38 minutes, 29 seconds going into FI27 uh uh you know so considering uh you know we we see a rate hike uh maybe at 38:38 38 minutes, 38 seconds the you know end of the calendar year or the fiscal year. 38:45 38 minutes, 45 seconds uh the NIM drivers for us are largely change in asset mix is the biggest 38:53 38 minutes, 53 seconds driver. So if we can get more larger proportion of our book to be retail and MSME automatically NIMS open up because 39:02 39 minutes, 2 seconds on the corporate side we are dealing with very very high quality corporates and there the nims are very very low. So 39:10 39 minutes, 10 seconds product mix change is the biggest driver of NIM. The other driver of NIM for us is going to be rate hikes. 39:20 39 minutes, 20 seconds So on the way down we were the most impacted institution essentially because of the fact that we give effect to an 39:28 39 minutes, 28 seconds RBI rate change on a T+1 basis. So if reporate changes today, we give effect to it tomorrow. 39:36 39 minutes, 36 seconds And uh so on the way down we hurt more but it also makes us u you know more responsible in trying to understand how to address that going forward. 39:48 39 minutes, 48 seconds So uh you know so but we'll also be the biggest gainers when on the reverse 39:54 39 minutes, 54 seconds side. So if if rates were to be hiked and we are hoping that they are sooner rather than later uh we will be a large 40:03 40 minutes, 3 seconds fairly substantial beneficiary of any such uh move. Uh the other thing that we're doing on the NIM side is basically 40:13 40 minutes, 13 seconds uh changing the way we measure and task our folks. So we we were more biased 40:20 40 minutes, 20 seconds towards the headline numbers in our goal setting methodologies in the past essentially because we used to be growth 40:28 40 minutes, 28 seconds challenged at one point in time and now that we are growing quite nicely. our target setting and goal setting uh 40:37 40 minutes, 37 seconds mechanisms have been changed to include revenue goals as a specific goal which means that there is pressure at the 40:45 40 minutes, 45 seconds front end to also you know price these uh assets more appropriately. So I think these are the two or three things that 40:53 40 minutes, 53 seconds we are doing um which will enable us to widen these n. So over the last two 41:00 41 minutes quarters our ns have improved by about what 15 basis points I mean six basis points in Q3 and nine basis points in Q4 41:08 41 minutes, 8 seconds and we don't uh as far as we are concerned these ns will continue to widen I mean we don't see any reason why 41:15 41 minutes, 15 seconds they should actually stop widening I also request 41:23 41 minutes, 23 seconds ven Francis to add his Yeah. So in addition to what our MD was 41:34 41 minutes, 34 seconds saying, another one more factor that can come in favor for us is the repricing of deposits because we have almost say 60 41:41 41 minutes, 41 seconds to 65 percentage of our deposits is due for repricing during the this financial year considering the average tenor of 41:48 41 minutes, 48 seconds our deposits. So that will also come in favor of us uh because of majority of these deposits having a higher prices 41:56 41 minutes, 56 seconds which has been contracted earlier. So that we expect uh to come in favor of us in addition to the reverse what uh our MD was mentioning. 42:05 42 minutes, 5 seconds Yeah. So so sure sir uh so you mean to say 60 to 65% of the deposits will come for repricing but this quarter if I observe you know your cost of deposits 42:14 42 minutes, 14 seconds have gone up by two to three pips if I'm not wrong. Yeah, correct. 42:19 42 minutes, 19 seconds Uh so so what is actually happening because uh you know uh still the deposits are yet to repricze and our cost of deposits is incing up. Uh so just trying to understand here. 42:29 42 minutes, 29 seconds Yeah. So here uh in this current quarter what happened is that we have slightly moved the deposit rate considering the 42:36 42 minutes, 36 seconds deposit growth. So uh if you see our deposit prices compared with the market rates we were little lower than the 42:43 42 minutes, 43 seconds other competitors. So considering that uh to have in some buckets to have the growth we have slightly repriced the 42:50 42 minutes, 50 seconds deposit rates and this has slightly resulted in the uh growth of uh cost of deposits by three basis point. But going 42:58 42 minutes, 58 seconds forward what we expect is that the deposits which have already been contracted at a higher rate in the earlier years that is yet to repric. So 43:06 43 minutes, 6 seconds that will be at a lower price at the current running rate. 43:11 43 minutes, 11 seconds Sure. Sure sir. And sir my uh second observation was uh the uh the non-resident deposits which you give in 43:19 43 minutes, 19 seconds the investor deck you know if I calculate that as a percentage of total deposits you know that has been coming 43:25 43 minutes, 25 seconds uh down so are you losing uh you know sort of market share in the non-resident deposits 43:36 43 minutes, 36 seconds um how total uh brings uh you know we do 43:44 43 minutes, 44 seconds have a representative office in the Gulf and our staffing there is small and their productivity has actually been 43:52 43 minutes, 52 seconds incing up quite considerably and uh I think we were uh the rate of 43:59 43 minutes, 59 seconds growth of our non-resident uh deposits u was uh has stepped up quite 44:06 44 minutes, 6 seconds considerably during the last year. So we grew non-resident deposits 12% last year as against 7% the prior year. So the way 44:15 44 minutes, 15 seconds we see it, we are actually growing year on year. Uh if we've lost market share and I'm not I don't have the market 44:23 44 minutes, 23 seconds share statistics with me. The SLBC will give us okay and so on and so forth but I don't have it readily available. 44:32 44 minutes, 32 seconds But it is quite feasible that we were losing market share at one point in time. But I think uh our performance during the last year has been 44:39 44 minutes, 39 seconds significantly better. I don't know whether there's a material change as a consequence of that in our in our market 44:46 44 minutes, 46 seconds share. Uh but rate of growth has stepped up quite considerably and that is visible uh in the numbers that we we've 44:54 44 minutes, 54 seconds shown you in page 21 of the deck. 44:59 44 minutes, 59 seconds Sure. And my last question is sir the impact of the one-time uh transition impact of ECL uh and and do we hold any 45:07 45 minutes, 7 seconds buffer uh uh buffer floating provisions uh for the se I will ask CFO we know the Francis to 45:16 45 minutes, 16 seconds respond yes so with regard to this ACL transmission currently we are not 45:24 45 minutes, 24 seconds holding any floating provision in our books so what we expect is that based on the current estimate we estimate any material impact over that mainly because 45:32 45 minutes, 32 seconds of few factors that if you see our numbers SMA numbers that is one of the uh is on a declining trend that is close 45:39 45 minutes, 39 seconds to 6%age of our total book so that is only the total SMA one and two numbers to the total portfolio uh to the total 45:48 45 minutes, 48 seconds loan portfolio and uh another factor is that uh if you can see that our portion coverage ratio which is currently at 45:55 45 minutes, 55 seconds close to 80%age so considering the existing credit quality and recovery at what we follow for the last two to three 46:03 46 minutes, 3 seconds years. Uh we don't expect any material impact due to this transition. 46:10 46 minutes, 10 seconds Sure sir. Thanks a lot for answering my questions. 46:14 46 minutes, 14 seconds Thank you. Next question is from the line of NR Jalan from BBC. Please go ahead. 46:22 46 minutes, 22 seconds Uh thanks for the opportunity. Uh congratulations on a good set of numbers. Uh so my first question is like uh we note that the old book accounted 46:30 46 minutes, 30 seconds for around 12% of the gross advantage as of FY26. Uh so when do you expect the old book to completely run down? 46:42 46 minutes, 42 seconds Some of these loans are I think uh uh working capital facilities with no I mean they do annually renew. 46:53 46 minutes, 53 seconds uh you know the way we are seeing this today is that the old book has become 47:00 47 minutes quite a small proportion of the total book and therefore maybe the distinction between the old and the new is perhaps 47:09 47 minutes, 9 seconds outliving its u its uh utility. Um so we are internally debating whether we need 47:17 47 minutes, 17 seconds to do this segregation at this point in time or not because our losses across the board are so low. I mean our 47:25 47 minutes, 25 seconds slippage rate for the for the quarter was only 15 basis points whilst a substantial sizable portion of that did 47:32 47 minutes, 32 seconds come from the old book but on an aggregated basis the slippage is so low that uh this distinction may or may not 47:40 47 minutes, 40 seconds be really important. So to answer your question, we don't I can't really predict when this is going to run off uh 47:50 47 minutes, 50 seconds because some of these are longer duration facilities. The term facilities will anyway amotize to term but uh I 47:58 47 minutes, 58 seconds suspect that a large portion of these are now working capital facilities and consequently it's harder for us to 48:06 48 minutes, 6 seconds estimate. The way we deal with this is that we reclassify an old facility as a new one. If you are giving enhanced 48:14 48 minutes, 14 seconds limits to them but in the event we are just maintaining those uh lines then we just we continue to pass them in the old 48:23 48 minutes, 23 seconds net. So it's an area of some debate within the bank as to whether we need to continue uh this distinction or whether 48:32 48 minutes, 32 seconds to uh you know look at the whole thing as one one bucket. 48:40 48 minutes, 40 seconds Understood. 48:43 48 minutes, 43 seconds Yeah. Got it sir. Uh and sir uh in the gross NPA movement uh the reductions have increased to around 13 billion uh 48:51 48 minutes, 51 seconds in Q4 versus 3 billion in Q3. Uh so what would be the break up between recovery and write off? 48:58 48 minutes, 58 seconds I will give this phone to my colleague without Frances to answer it. 49:07 49 minutes, 7 seconds Yeah, N with regard to the reduction in the gross NPA, one major factor is the technical write of what we have done in 49:15 49 minutes, 15 seconds the March quarter that amounts to 1,048 crores for the March quarter. 49:22 49 minutes, 22 seconds Okay. And balance is the recovery. 49:25 49 minutes, 25 seconds Okay. And this write off is basically technical technical write off, right? 49:28 49 minutes, 28 seconds It's a technical write off. Technical write off. Okay. Okay. Understood. 49:33 49 minutes, 33 seconds uh answer and sir as you pointed out that uh there is uh there is hardly any impact like it's not material the ECA 49:40 49 minutes, 40 seconds trans but on a steady state basis also as per your internal estimates there won't be um much of a material impact 49:48 49 minutes, 48 seconds that's correct sorry can you come back again so ECL transition impact there there are two kind of impact due to ECL transition 49:56 49 minutes, 56 seconds uh one is the one time impact and the other is on a steady state basis what would be the impact so I think you answered in the earlier call that the one time impact would be not material. 50:07 50 minutes, 7 seconds I'm asking on the steady state basis are expecting on the numbers. Yeah. So what we expect is that our asset quality will 50:16 50 minutes, 16 seconds continue to hold at this levels. Maybe maybe slight uh changes may happen in the future uh depending upon the market condition but we don't expect any 50:25 50 minutes, 25 seconds drastic change over there. So uh by depending upon that we don't expect any material impact over there also. on the study run also. 50:35 50 minutes, 35 seconds Okay, understood. Uh and sir, with respect to the MSME segment, uh there was a sequential decline in the numbers 50:42 50 minutes, 42 seconds close to 2% or uh there was a decline on a sequential basis. So any suggest you are witnessing on the MSME portfolio. 50:51 50 minutes, 51 seconds I think the decline is on account of write off. It is not decline in account of anything else. We are not seeing any 50:58 50 minutes, 58 seconds currency and no material stress that is visible at this point in time. We in the MSN segment our write off was 554 crores 51:08 51 minutes, 8 seconds uh and the dip is roughly about 230 or 40 crores. So there's actually a growth 51:16 51 minutes, 16 seconds quarter on quarter but having said that you know we are not seeing any significant stresses at this point in time. 51:25 51 minutes, 25 seconds Understood. And the last question from my side uh around 28 30% of the total deposits are from the NRI deposits of 51:34 51 minutes, 34 seconds this I believe uh uh the deposits from the GCT region was close to 80% uh in FY23. So what would be that number as of 51:42 51 minutes, 42 seconds FY26 and are you also witnessing any uh stress due to the West Asia conflict on the NR deposits uh per se? Yeah, that is my last question. 51:54 51 minutes, 54 seconds uh we are not seeing any stress uh with because of the NRI conflict. If anything, we are seeing a slightly enhanced level of activity when it comes to inward remittances and deposits. 52:05 52 minutes, 5 seconds Um the exact number as to what proportion of our NRI book is West Asia and what is not is not available with me 52:13 52 minutes, 13 seconds right now and we will um make it available subsequently. I mean I don't I'm not carrying this uh information at 52:21 52 minutes, 21 seconds this point. Sure sir. Thanks thanks for answering my questions. Thank you. Thank you. 52:28 52 minutes, 28 seconds Thank you. Next question is from the line of VU from Bandai. Please go ahead. 52:35 52 minutes, 35 seconds Yeah. Uh thanks for the opportunity and again congrats uh on good set of numbers. Uh so first question uh is basically uh uh you know if I see last 52:44 52 minutes, 44 seconds uh few years bulk of the growth uh has basically come from our existing branches. Uh so from next uh leg of 52:51 52 minutes, 51 seconds growth perspective do we need to add branches or uh would we look to continue optimize our uh existing network? How do you see it? 53:03 53 minutes, 3 seconds Uh it's a very good question. 53:06 53 minutes, 6 seconds uh we we've been u you know we uh we started out with high cost to income ratios 53:15 53 minutes, 15 seconds and our uh view was that we need to be become more profitable by sweating assets that we have and make them more efficient. 53:24 53 minutes, 24 seconds Our view is that we have now you know our total value addition from the branches have doubled over the last eight or nine quarters. uh there is 53:33 53 minutes, 33 seconds still some runway there and we can get more and that requires us to redo our processes and ensure that our systems 53:40 53 minutes, 40 seconds are you know even more efficient so that ease of doing business improves. So that thing we will continue to do. They're 53:47 53 minutes, 47 seconds also building out alternate distribution mechanisms. So earlier we were not working with market participants like 53:55 53 minutes, 55 seconds DSAs and all of that and now we've started uh and our digital offerings have also improved very considerably. 54:03 54 minutes, 3 seconds So we we launched a new uh digital offering called SIB Red which is a which 54:10 54 minutes, 10 seconds is a full-fledged digital bank in and of itself uh towards the end of March and we continue to work on uh more of those 54:19 54 minutes, 19 seconds kind of offerings. So our uh and we are building out fairly substantial digital asset which we didn't have in the past. 54:28 54 minutes, 28 seconds So for instance we have something called fincred credibles and we have an very active blog. Finccreds I think is one of 54:35 54 minutes, 35 seconds those entities which has a very large number of followers. I mean u uh sometimes I wonder as to how we've got 54:42 54 minutes, 42 seconds so many followers when some of the larger institutions don't seem to have u you know such kind of offering. So the 54:50 54 minutes, 50 seconds idea is to build more digital assets which gets us digital friendly customers to come there and that we can use as a 54:58 54 minutes, 58 seconds hook for uh originating business. So we are working on multiple things. We may have to start increasing our branches. 55:05 55 minutes, 5 seconds There are parts of southern India where our branch density is quite low. Uh so 55:12 55 minutes, 12 seconds we've been talking at the board level to grow branches in uh in Tamil Nad, Andhra Pradesh, Telangana, Karnataka, um Maharashtra, Gujarat and New Delhi. 55:24 55 minutes, 24 seconds These are the areas where we would like to increase branches. But we will do that very very deliberately and uh you 55:32 55 minutes, 32 seconds know while ensuring that the uh efficiencies uh that we have been able to gain in the branches uh we continue 55:41 55 minutes, 41 seconds to work on that so that uh we make our method of doing business easier for our people and we get significantly greater 55:49 55 minutes, 49 seconds throughputs from there because that's the only way to to grow in a manner where income and costs go grow commensurately. 55:58 55 minutes, 58 seconds So I don't know if I've answered your question. Is there anything else? I'd be very happy to answer it. 56:03 56 minutes, 3 seconds I I broadly understood the thought process but uh would it be right to conclude that from near to medium-term perspective uh branch expansion is not not going to be their focus area. 56:14 56 minutes, 14 seconds Branch expansion is not going to be the only method by which we're going to grow business. I mean there will be some expansion. If you see our numbers for the last seven eight quarters actually 56:23 56 minutes, 23 seconds branches have not grown. They've only shrunk. So we came down from 955 to 948. 56:30 56 minutes, 30 seconds So there will be some growth and but at the same time we will use every other distribution mechanism that is available uh to grow in a controlled manner. 56:40 56 minutes, 40 seconds Understood. And my second question is how do you see the uh you know the quality of customer franchise that we have today uh in terms of cross-ell 56:48 56 minutes, 48 seconds potential and how do you how do we see uh you know our preparedness today uh to sort of monetize this crossell 56:55 56 minutes, 55 seconds opportunity uh especially in the situation that our share of distribution income is still uh fairly low in our case. How do you see it? 57:06 57 minutes, 6 seconds When you say distribution income you mean income for us? Yes, third party product. 57:11 57 minutes, 11 seconds Some of that is also because of um um you know our own reticence to um to push 57:20 57 minutes, 20 seconds it very aggressively and um our belief is that we've been a very responsible institution. 57:29 57 minutes, 29 seconds Uh we've treated our customers uh well. 57:33 57 minutes, 33 seconds uh we've tried to sell products that we actually need and consequently we've turned out to be a very high trust 57:40 57 minutes, 40 seconds institution. That's our belief and we want to ensure that the trust that our customers have in us uh continues. Uh so 57:50 57 minutes, 50 seconds uh so which enables us to actually leverage our customer base and grow our balances quite nicely and I think that is reflected in the fact that we got 57:58 57 minutes, 58 seconds good kasa growth last year. uh and this kasa growth has been you know generic 58:05 58 minutes, 5 seconds growth across um all our regions uh all the states that we are operating in we've had very substantial growth 58:14 58 minutes, 14 seconds uh so I think we are in a good position to leverage the customer set we have a good quality customer set 58:22 58 minutes, 22 seconds um obviously there are certain types of customers that we wish we we had more like for instance salary savings type of 58:29 58 minutes, 29 seconds customers who work in large corporations where we are under represented. That's an area that we have started work on about 18 months or so ago and we are 58:39 58 minutes, 39 seconds hoping that we will continue to grow that. We are leveraging this base to sell internal products. So we sell uh 58:48 58 minutes, 48 seconds personal loans to them. Uh our total personal loan base is largely uh you know pre-approved sale to our own customers. 58:56 58 minutes, 56 seconds our our uh loss rate and loss experience on that book is very good. Uh so you know 59:04 59 minutes, 4 seconds we lose approximately 3 and a half to 4% uh where the spreads are 11 or 12%. Um 59:12 59 minutes, 12 seconds so I think we we are feeling reasonably confident about the quality of our franchise and more importantly we are 59:19 59 minutes, 19 seconds very happy about the fact that uh we've dealt with them in a mature manner and we we have a relationship that can that we can exploit as we go forward. 59:30 59 minutes, 30 seconds Thank you. We'll take a last question from the line of Deep Sha from NV Capital. Please go ahead. 59:38 59 minutes, 38 seconds Thank you for the opportunity uh sir for sleep. Congratulations on a great set of numbers. Deep can you use your handset more please? 59:45 59 minutes, 45 seconds Your audience is very low. Uh am I audible? Yes, please go ahead. 59:52 59 minutes, 52 seconds Yeah. So sir uh my question is slightly broad-based. Uh you like mentioned about your emphasis on uh product uh uh loan 59:59 59 minutes, 59 seconds exchange where you'll focus more on uh retail salience. So firstly I just want to understand if you have uh I mean a 1:00:07 1 hour, 7 seconds product mix target over like let's say a medium-term let's say 38% of our loan book is currently corporates right so I 1:00:14 1 hour, 14 seconds mean do you have any target where you or sweet spot that you'd like to uh achieve over a 2 to three year uh period 1:00:24 1 hour, 24 seconds uh we would like to bring our corporate book down to about a third of our total balance sheet 1:00:31 1 hour, 31 seconds uh within that also we have certain lower yielding assets which are basically u you know LC bills etc where 1:00:38 1 hour, 38 seconds we would uh we would like to bring that down so we do have a um an internal target that we are working to uh but I'm 1:00:48 1 hour, 48 seconds not uh I don't have it right here but I what I'll try and answer is in broad terms which is basically we want to bring corporate down and within 1:00:56 1 hour, 56 seconds corporate there are some segments which are specifically even lower yield which is this very short duration monies that 1:01:03 1 hour, 1 minute, 3 seconds we give to very highly rated corporate that again we want to bring down a little bit more so that the you know the 1:01:11 1 hour, 1 minute, 11 seconds corporate goes down from 38 to 33 and within the corporate the ultra short duration goes down from roughly 20 or 1:01:20 1 hour, 1 minute, 20 seconds 25% of our book down to perhaps 10% of the book. Now the ultra short-term assets have the advantage of providing 1:01:27 1 hour, 1 minute, 27 seconds liquidity buffers for us. But having said that the yield is so low that perhaps it's a good trade-off for us to 1:01:34 1 hour, 1 minute, 34 seconds to have. Now the difference that 5% on a portfolio basis we want to move to uh 1:01:42 1 hour, 1 minute, 42 seconds retail MSME and agriculture where the spreads are significantly larger. I don't want to go into specific details 1:01:50 1 hour, 1 minute, 50 seconds of where uh how much it'll grow but we do have those numbers internally but broadly that is what we're trying to do in the near term. 1:02:01 1 hour, 2 minutes, 1 second Thank you. Take a next question from the line of J Praash Mudra from ICAC Securities. Please go ahead. 1:02:08 1 hour, 2 minutes, 8 seconds Yeah. Hi sir. Sir sir uh quickly on uh this ECLGS scheme. So would it be fair to assume that your entire MSME 1:02:17 1 hour, 2 minutes, 17 seconds portfolio will qualify because uh all are MSME and even uh I mean the non MSME 1:02:24 1 hour, 2 minutes, 24 seconds I believe uh it is like MSME but those who are not registered with UDIAM will will that be fair assessment because I think the ticket size is kept at 100 1:02:33 1 hour, 2 minutes, 33 seconds crores. So all all MSME should ideally qualify will that be correct? That is true. 1:02:39 1 hour, 2 minutes, 39 seconds Okay. And sir if you can recall uh let's say the ECLGs portfolio I mean this is a great scheme and and and the results of 1:02:47 1 hour, 2 minutes, 47 seconds you know covid scheme I think is very very clear uh but if you can recall your experience if you had to devolve any 1:02:55 1 hour, 2 minutes, 55 seconds guarantee and how easy or difficult it is to redeem that guarantee from government that is number one um in terms of procedure and in terms of uh 1:03:04 1 hour, 3 minutes, 4 seconds did you claim any guarantee and did you finally get those uh guarantee that is question number one and the slippages in 1:03:11 1 hour, 3 minutes, 11 seconds ECLG ECLGs book earlier that was uh I mean let's say similar to bank level 1:03:19 1 hour, 3 minutes, 19 seconds slippages right in let's say FI 2324 period or was it lower higher uh that is the real question so a the slippages in 1:03:27 1 hour, 3 minutes, 27 seconds ECLGs was it similar to overall bank level or lower higher and how difficult or easy was it to claim the NPA or slip 1:03:34 1 hour, 3 minutes, 34 seconds is there okay yeah before I hand over this uh to Senil my colleague who Oh, he's not here. Oh, yeah. I'm still on the call. 1:03:45 1 hour, 3 minutes, 45 seconds Yes. 1:03:45 1 hour, 3 minutes, 45 seconds Yeah. Okay. Wonder. Wonderful. So, let me just sort of add to something on the on the new scheme. Uh Jay, I haven't 1:03:54 1 hour, 3 minutes, 54 seconds gone through the scheme and the terms of that scheme in detail. So whilst I believe that our entire MSME portfolio 1:04:02 1 hour, 4 minutes, 2 seconds will qualify, I cannot uh assert to that with 100% certainty since we've not uh you know done the full research associated with it. 1:04:12 1 hour, 4 minutes, 12 seconds Now Senel is on the call. He's an expert on the ACLGS scheme. So maybe he can answer your questions better than I can. 1:04:19 1 hour, 4 minutes, 19 seconds Senel, over to you. 1:04:21 1 hour, 4 minutes, 21 seconds So there are two parts uh to your question. One is with regard to uh whether the ECLGs portfolio behaves 1:04:30 1 hour, 4 minutes, 30 seconds differently from the core portfolio of the bank. We have to understand the ECJS was fundamentally an add-on to the existing portfolio. So case goes bad the 1:04:38 1 hour, 4 minutes, 38 seconds portfolio that is on the bank's book plus the ACL go together. So there's no fundamental difference between the 1:04:45 1 hour, 4 minutes, 45 seconds portfolio behavior only those that are not ECLC availed clients probably they were at a better footing on day one excel because they didn't have the 1:04:54 1 hour, 4 minutes, 54 seconds requirement to take the incremental risk but if you had to look at the portfolio per se whether there was a significant difference between those who never 1:05:01 1 hour, 5 minutes, 1 second availed and those who took I don't think there was a significant difference now the second part with regard to EC's claims see there are uh there are a set 1:05:10 1 hour, 5 minutes, 10 seconds of processes which they have been laid which need to be followed to the tea. So getting the first 75% I think generally 1:05:18 1 hour, 5 minutes, 18 seconds has been easy. The second 25% have been bit of a challenge because there are a few guidelines that are there with ECG 1:05:25 1 hour, 5 minutes, 25 seconds which is suppose you have to go for a settlement with a borrower that is not an allowed method of settlement under 1:05:33 1 hour, 5 minutes, 33 seconds the ECGs scheme. So from the UCB scheme perspective, unless you complete the legal process, you're not it's not 1:05:40 1 hour, 5 minutes, 40 seconds possible for you to get the balance 25% in place. If you do a settlement with the borrower, the first 75% that you've collected also needs to be given back. 1:05:48 1 hour, 5 minutes, 48 seconds So those I think are the are the challenges from the government credit enforcement perspective. If you had to look at the ECGC scheme or the other 1:05:56 1 hour, 5 minutes, 56 seconds scheme, OTS is allowed as a settlement model. So there has not been too much of a challenge per se wherever we have to do 1:06:04 1 hour, 6 minutes, 4 seconds settlements with borrowers we found it to be a challenge in terms of recovering from the guarantees otherwise I think from a process perspective if you 1:06:12 1 hour, 6 minutes, 12 seconds followed the process right I don't think they've had challenges on the portfolio I don't think we have had too much of a difference between the portfolios that 1:06:20 1 hour, 6 minutes, 20 seconds have a DCGS saying it way lower than what we thought would be the final hit that we have to take No, 1:06:29 1 hour, 6 minutes, 29 seconds dental. The only difference may be that the new scheme may be, you know, slightly different from the old ECLGs. So, we don't know. 1:06:37 1 hour, 6 minutes, 37 seconds Yeah, we haven't seen it fully. Yeah. Yeah. Sorry. Sorry, sir. Go ahead. 1:06:43 1 hour, 6 minutes, 43 seconds No, I was new scheme predominantly tries to target the airline segment and other than that the MSM segment. 1:06:51 1 hour, 6 minutes, 51 seconds See, we didn't have that bit of a stress on the portfolio at this point of time. 1:06:55 1 hour, 6 minutes, 55 seconds The earlier phase when we had to look at ECLGs one that was a phase when you know all the industries had a problem with regard to their business itself 1:07:03 1 hour, 7 minutes, 3 seconds significant draws significant challenges that is when the first one came in at this point of time if you had to look at underlying borrowers and the stress 1:07:12 1 hour, 7 minutes, 12 seconds levels I think we are at a much better footing so we don't know how much of a requirement will come on the ETS 1:07:19 1 hour, 7 minutes, 19 seconds the oil position itself sure and sir if you have any data questions that I wanted from Vinod sir 1:07:26 1 hour, 7 minutes, 26 seconds the break up of this 195 crores of other income and maybe for 760 crores which is there for the full year the other in the other income. 1:07:36 1 hour, 7 minutes, 36 seconds Thank you. 1:07:38 1 hour, 7 minutes, 38 seconds Yeah J uh one major item that comes into that uh particular bucket is that one bank assurance income and one another 1:07:45 1 hour, 7 minutes, 45 seconds one is recovery from technically of accounts. 1:07:49 1 hour, 7 minutes, 49 seconds I'll give you the breakup separately uh on something. Yeah sure. No, no issue sir. Thank you and all the very best sir. Thank you. 1:07:57 1 hour, 7 minutes, 57 seconds Thank you ladies and gentlemen. That was the last question for today. I now hand the conference over to Mr. P Shashadri 1:08:04 1 hour, 8 minutes, 4 seconds MD and CEO for closing comments. Over to you sir. 1:08:08 1 hour, 8 minutes, 8 seconds Thank you very much ma'am. At the outset allow me to thank uh all the folks who dialed into this call. We are very very 1:08:15 1 hour, 8 minutes, 15 seconds grateful for their time. We want to reiterate that we've had uh a very good year this year and a good quarter and um 1:08:24 1 hour, 8 minutes, 24 seconds you know it's it's been a period of consolidation. I think our balance sheet is in is in good shape. Our asset quality has improved very very 1:08:32 1 hour, 8 minutes, 32 seconds dramatically and we are in a we are well positioned uh to meet the challenges that the environment throws at us and we 1:08:40 1 hour, 8 minutes, 40 seconds think that u from a growth perspective we are well positioned to actually achieve the growth numbers that we've set for ourselves. Uh and uh we are very 1:08:49 1 hour, 8 minutes, 49 seconds thankful for all the help and support that each one of our investors have provided us and we wish them the very best going forward. Thank you very much. 1:08:59 1 hour, 8 minutes, 59 seconds Thank you. On behalf of ICIC Securities Limited, that concludes this conference.