State Bank of India

Good evening, everyone. May I request Chairman Sir, MDs and DMD Finance to come on stage, please. So good evening once again and namaste ladies and gentlemen. My name is Sanjay Kapoor and I am the General Manager, Performance Planning and Review Department of the Bank. On the occasion of the declaration of the results of Q1FI24 of the Bank, it gives me immense pleasure to welcome the analysts, investors and our colleagues for an in-person meeting. I also extend a warm welcome to the analysts, investors and colleagues who have joined this presentation through our live webcast. We have with us on this stage our Chairman Shri Dinesh Khara at the centre, our Managing Director International Banking, Global Markets and Technology, Shri C.S. Satti, our Managing Director Retail Business and Operations, Shri Alok Kumar Chaudhary, our Deputy Managing Director of Finance, Srimati Saloni Narayan. Our Deputy Managing Directors heading various verticals and Managing Directors of our subsidiaries are seated in the first row of this hall. We are also joined by Chief General Managers of different verticals and business groups. To carry forward the proceedings, I request our Chairman Sir to give a brief summary of the Bank's Q1F524 performance and the strategic initiatives undertaken. We shall thereafter straight away go to the questions and answer session. However, before I hand over to the Chairman Sir, I would like to read out the Safe Harbour Statement. Certain statements in these slides are forward-looking statements. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual outcomes may differ materially from those included in these statements. Now I would request Chairman Sir to make his opening remarks. Chairman Sir, please.

Thank you. Very good evening, ladies and gentlemen. Thank you for joining the analyst meet post the announcement of the first quarter result of financial year 24. In July 23, IMF upwardly revised the 2023 global forecast to 3% from 2.8% in April. Immediate concerns about the financial stability have been subsided owing to the resolution of the US debt ceiling standoff and strong action by authorities to contain turbulence in US and Swiss banking. However, The recent downgrade of the US FFH over concerns of country's finances and debt burden could trigger bouts of financial volatility with risk of reactions from the market. Against this backdrop, Indian economy continues to exhibit stronger than expected growth momentum with robust domestic investment providing necessary support amidst weaker external sector dynamics. Looking ahead, real GDP growth is expected at 6.5% and financially 24%, aided by the government's thrust on infrastructure spending, traction in domestic demand, revival in corporate investments and healthy bank credit. Headwinds from prolonged geopolitical tensions and slowing external demand are the key risks to the outlook. On the banking front, Credit growth has continued to grow in double digits and became broad-based across sectors. During the first quarter of the financial year 2023-2024, all scheduled commercial banks' bank credit grew by almost 16% by YY and aggregate deposit grew at 12.9%. As demand for credit continues, we expect credit and deposit may grow up by 14-15% in financial year 2024. In the above economic backdrop, let me now highlight a few of the key aspects of the bank's performance in quarter 1 of the financial year 2024. I am pleased to announce that for the fourth quarter in running, we have posted our highest ever quarterly profit of 16,884 crores. Net profit for the first quarter increased by 178.2%. While operating profit at 25,297 crores increased by 98.37%. ROE of the bank for the first quarter improved by 74 basis point on YOY basis to 1.22%. And ROE improved by 1433 basis point to 24.42%. Here also I would like to mention that first quarter is very unique in its character. In the first quarter, one, we do not have the advantage of the carry forward of the recoveries of the previous quarter. And second, in the first quarter, there are, in the last quarter of any financial year, there are invariably various one-offs. So, to that extent, that also inflate the performance in the last quarter of any financial year. So, that is why we are comparing our performance on a YOY basis in the first quarter. So, I thought I will just put across the viewpoint which we have in this context. Most of the core profitability metrics have also improved sequentially. Net interest income for quarter 1 financially 24 increased by 24.71% YOY on the back of the improvement in yields and continuing credit off take. Domestic NIM at 3.47% has also improved by 24 basis point YOY. Non-interest income has increased by 421.73% mainly due to the MTM write-back as well as gains booked in derivative income. Our core income streams, fee-based income are steady and have improved by almost 4%. Operating expenses increased by 23.68% YOY. as we have started building provisions for the wage revision, which have fallen due from November 22. On the business front, the credit growth has been robust across all segments. Domestic advances grew by 15.08% by OI, headlined by detailed personal advances, which grew by 16.46% by OI, and corporate segment, which grew by 12.38% by OI. SME and degree segment also posted a healthy growth in the loan book. It grew at 18.27% and almost 12% driven by the growth in current account deposits and term deposits. Our foreign offices have continued to perform well with good growth in advances as well as in deposit. However, we have generally maintained some kind of pause in the international book For the simple reason that international economies, global economies are facing some kind of challenges and we would like to build up our book depending upon risk appetite in those economies. With regard to asset quality, our gross NPA ratio has come down by 115 basis point YOY and stands at 2.76% and continues to be at its lowest level in more than 10 years. Our net NPA ratio has also declined by 29 basis point and stands at 0.71%. Slippage ratio has improved by 44 basis point YOY and stands at 0.94%. The consistently improving asset quality is also reflected in our credit cost which stands at 32 business point and has improved by 29 business point YOY. We have a well-provided stress book with PCR showing improvement by 23 business point YOY at 74.82%. PCR including OCA improved by 127 business point YOY and stands at 91.41%. Here also I would like to add that when it comes to our loan book being healthy in quality, we are not required to provide for because for the simple reason, one, the quality of the book and secondly, we don't have the aging provisions which we need to provide for. On the restructuring front, our total exposure under COVID resolution plan 1 and 2 stands at 22,666 crores as at the end of financial year, first quarter of the financial year 24. The restructuring book has behaved well with about 11% of the current exposure falling under SMA 1 and SMA 2 category. We are holding sufficient additional provision against the restructured accounts. If you recall, We have been maintaining provision to the extent of about 30% as compared to 5 and 10% requirement prescribed by the RBI for such book. The bank remains well capitalized and our capital adequacy ratio has improved by about 113 basis point YOY and stands at 14.56%. CET1 ratio has improved by 47 basis point to 10.19% and both the ratios are well above the regulatory requirement. Herein I would like to add With the current capital adequacy, we can support the loan book growth to the extent of another additional 7 trillion. Digital continues to be an important customer acquisition engine for the bank across asset as well as liability products. During the quarter, we have sourced 63% of savings bank account and 35% of retail asset accounts digitally through YOLO. We have recently launched UNO for every Indian in which customers of other banks can now access and experience the seamless UPI journey on the UNO. Our subsidiaries have also consistently performed well and continue to create significant value for all the stakeholders and most importantly for the customers. Most of our subsidiaries are leaders in their respective segments. We will continue to nurture these subsidiaries and see them creating value for their own shareholders as well as the shareholders of SBI. To conclude, I would like to thank all of you for your continuous support to the bank. We consider it as a privilege to be able to contribute towards the growth of our economy. We remain committed to rewarding your trust in us with superior sustainable returns over the long time. I wish everyone here the best of health and happiness. My team and I are now open for taking your questions. Thank you.

Thank you, Chairman Sir, for the presentation. We now invite questions from the audience. For the benefit of all, we request you to kindly mention your name and company before posing the questions. To accommodate all the questions, we request you to restrict your questions to maximum two at a time. Also, kindly restrict your questions to the financial results only and no questions be asked about specific accounts, please. In case you have additional questions, the same can be asked at the end. We now proceed with the questions and answers session.

Yes, sir. I am Ashok Ajmera, sir, chairman of Ajcon Global. Sir, at the outset, compliments to you for the highest ever profit and the fourth consecutive quarter that every time we are making the higher and higher. My other compliments is on that we are sitting on a non-NPA provision of 34,955 crore which is almost about 152% of your entire net NPA which is keeping the bank well cushioned. Now having said that sir couple of questions rather your guidance on the number one is on the credit growth of course you said that some of the other parameters you know the figures should not be compared on quarter on quarter but you know year back figure become obsolete especially in the financial sector so we will definitely compare with the last quarter only so if you look at it that 0.25% and or 1.25% growth on the credit and Global credit has gone down rather about domestic book also has grown by I think around 1.4 or 1.45 percent. So going forward with this kind of 14-15 percent guidance, are we fully like having the sanctions and the proposals in the pipeline that in next three quarters we run 4.5 to 5 percent every quarter, the loan book? This is my first question, sir.

Should I answer?

Yes, sir. I will ask second.

Okay, fine. Okay, well, what you mentioned in terms of you should compare the credit growth on a sequential as compared to year on year. You know, when it comes to the economy, why there's a busy season and a lean season? there are certain reasons because our economy has got certain characteristics. So likewise, I still stick to my argument that first quarter we should compare only on a quarter-on-quarter basis, not on a quarter-on-quarter but on a year-on-year basis because the kind of situation we witness in the first quarter of any financial year are very different as compared to the last quarter. Now your second question when you are comparing the growth in advances on a quarter on quarter basis certainly my submission to you would be that there are reasons why we are not doing it and it is born out of what we have seen over the years. Now What you mentioned in terms of our ability to grow. Retail, personal, we have grown at 17% compounded annual growth rate for more than 3 years. And we don't see any reason that we will not be able to grow at this pace going forward also. And why I am saying that is because we are already seeing that when it comes to home loan sanctions, they are already The other very important component of the economy is the corporate sector. The growth rate which is envisaged for the economy is 6.5% and it is riding on the basic few critical sectors which are going to lead this growth. It starts from infrastructure where perhaps when it comes to the financial closers we don't see any competition when it comes to core sectors additional capacities being created there also for the financial closer we are the one who are the preferred banker when it comes to our ability to underwrite we feel quite confident. And that is, I would like to add that even as on date, we have got our pipeline to the tune of about 3.5 trillion, out of which about 1.2 are already sanctioned and another 2.3 are in pipeline. So, this is about the corporate sector. So, corporate sector is when it takes a lead. It shows up into all other sectors of the economy. The more prominent among them are the SME and the retail. Agriculture sector is a function of the weather gods and fortunately the rain, if at all we look at the long term average for the rainfall, it seems to be better than previous years. So hopefully we'll get to see a decent traction in the rural economy also, which will give us enough opportunity to support that growth. This is the broader economy. The next comes our ability to respond to such challenges. For last couple of years, we have been very mindful in terms of strengthening our structures so that we have the innovation to deliver. To address the detail, last year we added almost about 140 RACPCs. Almost about 140 RACPCs. We have significantly built the muscles of the bank for addressing the SME and that is something which you have already seen. Now, we are growing. Even this quarter, YOY, we have grown at 16% in SME. Rural, again, we have grown to the extent of about 12% to 13%. And many of you who are tracking the bank for many years would have seen that rural we were almost stagnant. And when we are growing there, we are very, very mindful about the quality of the book which we are underwriting. And that is the reason why from somewhere around 15% of NPA in the rural book, it has come down to 11%. And we are very clearly targeting this. to be in the single digit in this financial year. So I think our focus is when it comes to growth, we are very mindful that the growth should be in sync with our risk appetite and growth should not be reckless growth. That is something which I would like to add.

Sir, when you referred here of the competition, now with this grand merger of HDFC and HDFC Bank, which has become a behemoth now, and I think the credit book is also almost of our size or maybe I have not just compared.

I don't think so.

I think you are not updated. Not updated. Okay. So now that big bank now again is a private sector coming in. From the competition point of view, is there any particular working, any action plan to take on them with this change scenario?

They are focusing on the physical branch expansion. We are focusing on digital as well as physical as well as other channels. And as I mentioned that we are very mindful in terms of strengthening our structures on ground because when it comes to merger, we have also handled the merger of eight banks, not merely adding the balance sheets. It is ensuring the integration of the culture and also ensuring that the control structure is effective enough. So that is what my learning is from the mergers. But yes, of course, As a leading bank, we have to be very mindful of what the competition is doing and we are ensuring that we should stay ahead of the curve. Yeah, please. Sir.

Yeah. What is a bank? Mike, sir.

Yeah. So bank is basically people, right? Customers and the people who serve the customers. So if you see a state bank of India, What is the number of people who leave us every year? Hardly maybe a thousand people will be leaving us, right? What is the attrition in the market? The people who are going to serve, the marketing people, the servicing people, I don't want to quote the numbers, right? But if you can find that there is a behumat, I use the word behumat, I think that word suits us more. So with this, that people who are to serve the customer block, not living the same. And you are comparing with somebody or people where the main people who are going to serve themselves are at a very high rate of churn. So that is one. Number two, the number of customers we acquire as a bank. The number of customers we acquire is much more than what anybody else acquires. And the number of millionaires who you... the accounts are open, that is also more than 50% new customers are millennials, up to the age of 30. So both the sides, people who serve, they're a solid block, totally committed. And the number of people who repose faith in us, they are also quite large in number. So from that perspective, I don't think that there should be any challenges.

It's a point well taken, sir. Just one on the OCA. Just one other thing. Sir, you have given the split of the OCA numbers. 10-year-old, 5,300. 5-year-old, 68,400. And less than 5 years, 1,271 crore. Just a ballpark. Like these are all 100% provided for accounts. So what as per your analysis, since you have given a detailed analysis of the break-up, the aging wise, what can we roughly take as a recovery maybe in next coming 2-3 years, 5 years out of this 176,000 crores, sir?

The recovery in OCA is a function of the available security. So there cannot be any ballpark figure for which we can ascribe for the recovery in OCA. It is actually case to case basis and that is why our Stress Assets Resolution Group is now actually addressing how to make the maximum possible recovery from these accounts.

But any assessment of the because when this analysis is done the security also must have been No, that is what I am saying that it cannot be aggregated.

It should be more at a disaggregated level The approach will depend upon the security which is available in each of the account.

Thank you. Thank you very much. We will move to next one. Here please.

Sir, this is Anand Dama from MK Global. So my question was on margins. So this quarter if you look at on a quarter on quarter basis, we have seen a 27 basis point contraction in terms of margins.

Again quarter on quarter, let me just put across. When it comes to NIM, what will you do for the one-offs which you get on the last quarter?

Sir, agreed. But if you take out the one-offs, then still we have about 15-odd basis point contraction that is there.

See, again, I think you have to understand how the increase in interest rate will show up in the deposits, how the increase in advances will show up in the loan book. So there is always a trajectory which is followed. So I think it is not a linear way of really looking at the things. Anyhow, you please carry on.

So coming to your stuff, you know, YY basis, if I look at it on a full year basis, where do we settle in terms of margins when we... I expect that 3.47 would be our effort to retain this kind of a name.

Okay.

So, secondly on your slide number 15, basically the margins that you show over there, that I believe are like cumulative margins. So, there is a difference between what you show on slide number 22 and what you show on the slide number 15. Particularly in the first quarter, even if you look at the cumulative margins, it should not be different than what you show on the slide number 22, right? So, why is this wide difference between what you show on slide number 15 and the slide number 22?

What is the difference? It is slide number 22 also 3.47 is the name for domestic. And when it comes to... If you look at the whole bank, sir. 3.33 and 3.33 is there also. So last quarter was 3.37 over there. 3.37. I really don't know. 3.60, 3.60, 3.84. Anyway, you can reconcile this. Sure.

And secondly was on the PSLC fees. So we saw in case of Canara Bank, there was huge fees which actually came from PSLC. There are other banks also who are exploring the PSLC fees.

Any of that we have in terms of... See, actually our corporate is 10 trillion or so. So on a 15 trillion, we have to actually depend upon purchasing PSLCs. We don't have a situation like that. So they have some earnings, but if at all they will grow on the corporate side, maybe they may not have those opportunities going forward. But yes, of course, considering our book, which is about 33 trillion, Out of this 33 trillion, about 15 crore would be the corporate book and about 12 crore would be the retail book. And our rural is somewhere around 2.6 and SME is somewhere around 3.7. So that is the kind of a composition which we have. In any case, we have to, I mean, if at all, we grow at about 14% or so for our corporate book. then we have to look at – we may not have opportunity for organically growing in the PSLCs. Priority sector will have to look at PSLCs only. Okay. Thank you, sir. Or alternatively till there is a change in the definition of the private sector because today it is also being talked about can the solar be part of the private sector because we have about 40,000 book which we have done for the renewable energy itself and ideally speaking it actually qualifies for the private sector. Hopefully there could be some consideration on that.

Hi, Siddhant Dhan from Goodwill. So we are seeing a lot of products come on the savings account side, CASA side, the SA side where, you know, they're disrupting the market when, you know, like Kotak came out with their active money, IDFC and other small private sector banks are giving much higher rate of interest. So at what point, two years, five years, do you think that the bridge between the FD and the savings account will come closer even for public sector banks? Do you think that will happen? And secondly, you know, the interest rates in PSU banks and even for current account which is at zero is kind of hitting when inflation is higher. So are you seeing a gradual drop in CASA over the years? Will you see that?

Well, CASA, the behavior, if at all you will, these are the three stages in which CASA should be looked at. Not in this slide, I am just describing you otherwise. Pre-pandemic, the CASA used to be somewhere around 40% in the system. During pandemic, it went up to 44%. And post-pandemic, it is somewhere around 42-43%. This is the macro level picture of CASA. What you talked about the CASA and most of the SAF are various private sector banks like Kotak. it may be termed as CASA, but I would say that SA is actually termed deposit. So, from the cost point of view, that SA is actually termed deposit. It should not be looked at it. Yes, of course, we should be, we have to be very very cognizant of the car component of various private sector banks. And therein I would like to say that the current account market as such has undergone a change. Earlier significant portion of the current account market, almost 55% of the total current account market used to be government accounts. they started SNA, CNA, now they are thinking in terms of just in time, which very clearly means that the float which used to be available in current account in the past will no more be available. Having recognized this reality, what we started doing for about last six months plus, we have started focusing on the current account from trade, commerce, industry, trust, etc., etc., And I'm happy to share with you that between March, up to March, we were growing faster than any other bank. June, we were growing faster. Even July, we are growing faster. So we have, it's not that it's in the natural course. We have made certain efforts. We have tweaked our strategies. And that is something which is helping us. So our effort is going to be the CASA in the real sense of the word, minimum, lowest possible cost of resource. I'm quite confident that the initiatives which we have taken will further enhance and rather strengthen our position as far as CASA is concerned. But that macro cannot be ignored. And also the other reality to be seen is during inflation invariably we have seen that there is a trend to the term deposit. Money moves to the term deposit. And whatever increase in cost of deposit we have seen this quarter is essentially because last year in the second half of the previous year in certain buckets we had increased the interest rate. Whenever the renewals of those term deposits have happened, all that has been factored in already. And fortunately, last policy also there was no increase in the policy rates. We expect with the kind of inflation trends which are seen, hopefully there should not be any increase in the interest rates as far as the policy is concerned. So if at all that is the situation, then hopefully as far as cost of deposits are concerned, it should stable around this level for some time to come.

My second question is you know cross sales number are improving at around 17% but for a bank of our size and the subsidiaries we have it should ideally be growing higher. So have we considered like open architecture instead of closed architecture when it comes to cross selling?

You know typically speaking we have to be very mindful of the kind of customers who walks into our branches. And when we offer the product, we have to keep in mind what they expect. So our assessment of the ground level situation is customers who walk into State Bank of India's counters, they are looking at the product from the State Bank group. They are not looking at the product from any other entity. So that's how this is the strategy which we are following. But hopefully this number in the first quarter is not always all that great. We always know that insurance gets sold only in the last quarter of the financial year. So again, it's not a linear trend which you will get to see. Quarter on quarter, it will keep on changing. And last year, we had seen growth of about 30%. And I'm quite confident that this year also the growth will not be less than 30%. It will be rather more. Perfect. Thank you.

Next person, please.

Sameer from JM Financial. Thanks for the opportunity. So if I see other lines of fee income on a YOY basis, we kind of see a bit of sluggishness with respect to loan processing charges, etc. So how do you think the fee income lines move through the year?

Loan processing charges, of course, when we are looking at the quality book to be underwritten The market dynamics virtually forced us to do that and not that it is going to be there forever but yes of course it was I would say that it is more of a temporary situation. Okay and just secondly if you could provide the And also there was I think last year we had some one-offs also which was in the first quarter itself so that is the other reason why it is looking flat.

If you could provide the slippage breakup across segments.

Slippage breakup across segments. Yeah, I'll just provide it to you. Just one second. Yeah, our slippages were to the tune of about 7,659 crores. And retail personal was about 2,400. Agri was 2,300. SME was 2,400. And out of this, we have already recovered, pulled back about 700 crores in retail personnel, Agri about 300 crore and 600 crore in SME.

So the recoveries are in 2Q basically or in the same quarter?

Yeah, recoveries have happened in the month of July.

Okay, fair enough. Thank you.

So this is what I wanted to say because, you know, when we reckon slip, which is we reckon slip, teams on ground keeps on recovering and at times it is attributed to some kind of a cash flow mismatch with these entities. So we do get decent recoveries out of SMS.

Thank you. Thank you, sir, and all the best.

Thank you.

THANK YOU. NEXT ONE. NEXT ONE.

Yeah, Kunal over here from Citi. So particularly with respect to the growth in couple of sub-segments, one is in terms of the express credit. So the sequential growth is lower now. We are getting towards almost like 20% year-on-year growth compared to a much higher run rate. So what would be maybe any early delinquencies which we are seeing and your view in terms of RBI indicating to go a bit conservative on the...

Something like that. I'm actually, I thought that, let me jump into this issue right away. When it comes to excess credit, you would have seen the quality is perhaps as good as it used to be in the past. We have no challenge. I will repeat once again that 94% of our Express credit is given to the salary earners and they are the salary earners who are working with either state government, central government, central forces, paramilitary forces, public sector enterprises. Only about 4-5% is with the corporates. They are well rated large corporates. So we don't experience any challenge in excess credit. Whatever little GNPA you are seeing here is also essentially attributed to the fact that when people are not getting their salaries in some of the state governments, that is the reason why it is showing up like this. And apart from that, those who, unfortunately, those who are no more, they are the one who are contributing to this kind of NP otherwise there is nothing like stickiness in this particular portfolio and the other question which you had about growth is not tapering to about 25-26% there are reasons you know when we look at the leverage on the individual balance sheet in the economy that is somewhere around 25-26% so we feel that we will try to keep it at this level And maybe during festive season we will get to see some kind of blip in this.

Sure. And secondly, on corporate lending, so we have one of the lowest MCLR, but still when we compare, we have always highlighted in terms of the pipeline.

Unfortunately, people are quoting for term loan, they are quoting T-bill rates. I don't want to venture into such kind of luxuries, if I may say so, with more so when people, if at all people don't see interest rate risk. And if I see interest rate risk, I would rather be cautious than to be sorry.

Okay. And in terms of excess SLR now, what is the... We have got excess SLR to that, you know, about 4 trillion. 4 trillion. It's the similar number like last year. Yields. Was there any impact of interest?

No, it has come. Yields and advances have gone up. It is essentially on account of that. No, sequentially when we look at it... Sequentially, of course, you know, what will happen is that MCLR repricing will show up only when the renewal of the accounts happen. It will not be sequential.

So when should we ideally see that happening? Would it be Q2, Q3?

How should... So from 8.10 to 8.78, it has already come in, MCLR.

No, but 8.1 was full year. Again, if we go to 4Q, it was 8.8.

So it has to be seen in the full year basis. You see year on year. Again, you see year on year only. Thank you.

Next person, please.

Yeah, can you hear me? Yeah, this is Rati Pandit from Nirmalbhang Institution Equities. Thanks for the opportunity. We have seen that your international NIMs have gone up significantly and I also looked at the slide where you have given the split of the business and other parameters. So just if you could elaborate more a little bit on the business outlook over there and the margins.

International, we are very cautious. One, of course, because of the scenario in the global economies. One of the other reasons is that when we look at a book, international book, the India link loan which are seen lower is essentially on account of the fact that we had some oil companies had these revolving lines. So they have not availed and that is one of the reasons. But we are very, very mindful in terms of the quality of risk where if at all I may say so. We go for cherry picking in our international book. It is not like domestic book. And there we operate absolutely like a corporate bank and asset and liability both are priced. They are actually linked to the variable rates. So, we have already seen the kind of movement in the Fed rate, etc. So, software and Sonia, we see the kind of NIMS which we are seeing. But I would say that over a period of time, it will get normalized also. It will not remain at this level for rest of the year. This is one of...

I think one is of course the movement and reference rates moving and we are also focusing on the margins even if business is not coming up there is what do you see in lower growth rate what you have witnessed in the financial focus on growth in margins and the underlying reference rates moving is contributing to that as chairman said they are going to moderate as we go forward.

And usually what is the difference in the yields we get from India-linked and non-India-linked corporates over there?

ECVs are generally slightly better priced, that is India-linked. And the local, we normally focus on highly, we do only investment grade. So obviously the yields in the local loans are less.

And my second question is similar to repricing on loan what Kunal had asked. So what proportion of a book is fixed rate and significant part of it is already repriced and average tenner of same?

I think our floating rate which would be MCLRT will everything put together would be around 70%, 75% and 24% is fixed.

And average 10-year would be how much? One year ESET or?

Six months would be a significant portion in MCLR. EBLR is anyway repo link.

MCLR is 50%.

6 months and 12 months. Okay. That's it for me.

Thank you. Next question. Hi, sir. This is Vishal from UBS. So I'll ask you a why-oh-why question for you. On the overhead expenses, there is a decline of 48% in the business acquisition side. Is there something which has changed in terms of... No, I will just explain to you because earlier for the PSLC, whatever we had deferred, we had booked in the first quarter. That is the one reason. And this time we have amortized as per our accounting policy. That is one. Secondly, last year in quarter one we were not having provisions for the wage revision and which we have started doing it from the month of November onwards at the rate of November of previous year. So that is something. So these are the reasons. And sir, how much is the PSLC which got amortized? How much? I could not have that. We can give separately. We'll provide you separately. Okay, no worries. And another line, I think, item which is standard assets. So there is a reversal in that line instead of a positive number of 430 crores or something. So that reversal is on account of? Because these standard assets actually have grown. You know, QOQ also.

Any idea? We made some specific provision in the past and some of the accounts in the Q1 of the last year, which was not there this year.

So how much did we reverse? I am sure that the positive standard asset number, we would have reversed something bigger, maybe tune of 1500, whatever number that is.

Some of the standard asset provision which is held as a NADOC basis, even if it slips, for example, that gets reversed from the standard asset provision.

Also from the pivot restructured book. So what is the number ma'am?

Is that number there? Thank you. And if I may ask one last question on term deposit repricing and that's anyways the topic of debate. How much of our TD book is kind of repriced ones or any sense on that? Normally we had come up with some 500 days.

Mike. Mike. Every month the churning of TDR would be to the tune of 1.2 to 1.4 lakh crore every month. Now, depending on the rate at that particular point of time, there will be repricing. So, and most of the deposits, as you know, in the market, the people are quite savvy in terms of managing their interest. So, the deposits we used to hear of seven years, ten years, nobody comes there. So, people are mostly either in up to one year or one to two year, that kind of thing. So, you're seeing our TD book. So, almost in one year, the entire book gets reprised.

Thank you. Hi, sir. Param here from Nomura. Sir, on the corporate, you know, CapEx-led demand is concerned, both private and public sector. You know, how do you see that panning out, say, over the next year? And especially private CapEx, because we are in such a sweet spot, do you see that, you know, playing out, say, after elections or, you know, what's your sense on that?

Yeah. No, I think what I mentioned about the number, out of that... about 2.7 trillion is from the private sector and the remaining is from the public sector. So private sector is significantly higher than the public sector.

Do you see that building up going ahead?

Oh yes, yes, very much.

And sir, within your corporate book, the fastest growing piece that we can see is the NBFC book. Even for the sector as a whole, I think it's growing at 30% plus. So how do you see that? So that's the main driver. So do you see that sustaining?

Apart from that, we are also seeing growth coming in from the renewable sector. And also, when it comes to even the NBFC sector also, the growth is essentially happening in the well-rated NBFCs only and quite well-rated, I would say. And apart from that, infrastructure, road construction, etc., etc., there also we are seeing the opportunity. Infrastructure is one of the major ones. Going forward, we expect to see growth coming in from even from some of the steel and those kind of entities also.

Okay.

Thank you, sir.

Hi, sir. Nitin Agarwal from Motila, Losval. Two questions, sir. One is on the proportion of bank employees that are there on defined contribution. So how much that number is and how has it changed over the last three to five years? And what is the outlook on cost income ratio that we can have? If I look at the cost of core income ratio, we have been around 54, 55. And while you have highlighted many times in the past that bank has very limited levers to reduce cost income, but the other large private bank is now talking of a 30% cost income over a 10-year period. So how do you see the cost income ratio panning out?

For us, when it comes to defined contribution, that number has moved up by about a percent. It is not 60% are now into the defined contribution, about 40% are into the defined benefit. So, defined benefit number has come down by about 1% in a year's time. What you have asked in terms of how do we have to reduce the cost-to-income ratio, on that we are very clear that we will address it by ensuring up the income and also improving the productivity of our staff on ground. So that is something which we are very clearly focusing on and the cost-to-income ratio if we look at in the current quarter is around 50%. So I think what we have done in last about a year or so, it has started showing up. Digital sourcing is one lever. Our SBOS is another lever which we are leveraging. So all this put together will help us in addressing the cost-to-income ratio in medium term. You know, when it comes to other banks talking of, private sector banks talking of reducing to 30%, I would not like to comment on that. The kind of churning which they have, they should be actually worried about as compared to reducing their cost.

That's a very long-term 10-year guidance.

In fact, if at all churning continues at this pace, that should be a cause of worry for them. Because eventually all said and done banking sector is based on the knowledge.

Right sir. And if you can also share like what is the A15 liability that we have to provide for based on the wage hikes and any provision that we have made.

Actually as of now that has not been crystallized because the negotiations are still on. But however we have provided for at the rate of 10% increase. If at all they would have some visibility in terms of the actual number, we will be ensuring that we provide for the remaining amount also. Quarterly actuarial valuation we are ensuring that we get it done on a regular basis and whatever additional provisions are required that we keep on providing on a quarter on quarter basis. There is no deferral, it is all fully provided.

Okay sir. And so second thing I want to take your view on is like the branch count if you look at most private banks are expanding branches at a very aggressive run rate and PSUs overall have been more or less static in terms of the branch count over the last many years. So how do you look at expansion on that front in the coming years?

We are looking at expanding digital and even when it comes to physical we tend to add about 300 odd branches. in the current year, depending upon the potential where the branches are required. But yes, of course, we are not only looking at the branches and the digital, we are also looking at the BCs. We are understanding what the customer needs are. And accordingly, we are providing the vehicles, which will help us in serving them better. Yeah, please.

So see, how does narrative change? That was the normal narrative, right? and the physical branches which we had were supposed to be a kind of drag in terms of cost but now people understand the ecosystem understood that we are in a physical country where both physical and digital required so when you're already at 22,000 places with 78,000 CSPs which are many branches in some sort of course all the facilities will not be available So with this kind of footprint, what we are more interested in is deepening the relationship with the existing franchise and sweating the assets which we already have. So somebody is building an asset. We already have an asset, and we are trying to sweat it out. So our strategies will have to be different. Somebody who is already 216 years old with all systems, governance, et cetera, will have different priorities than somebody who is new to the industry and trying to make greater footholds.

Otherwise also our digital transactions are now about 87%. And when it comes to transaction outside the branch, there is about 97.5%. So I think we are ensuring that wherever there is a requirement, we must have the branch. But yes, of course, it's not a... I think each bank will have to have their own strategies. Perhaps the competition cannot guide each other's strategies.

Right, sir. Thanks a lot. We'll have one last question.

Hi, sir. This is Hardik Shah from Goldman Sachs. My first question is on deposit rates. We note that SBI is offering higher term deposit rates versus top private banks despite having a lot of buffer on the credit to deposit ratio. So, what are your thoughts on this?

See, as I have said in the past also, it's not uniformly we are offering higher deposits. We are offering in some buckets and the intention is that we intend to take care of our So we have to nurture our customers and we have to be mindful of our relationship with them. So that is the reason why. In some of the buckets, we increased, which actually addressed our commercial requirements also, ALM requirements as well, but not universally. Very mindful that overall how much impact it will bring in in terms of the cost.

Okay. And, sir, my second question is on home loans. Particularly, we have lost market share. Our YOY growth is lower than the industry growth. So, what are your thoughts on that?

See, home loans, again, You know, when you go for lending, you reduce the interest rate, you can increase the growth. I am not into that. I am accountable to each one of you quarter after quarter and for many, many more years. So, it is not, my life does not come to an end after one quarter. So, that is why I have to be very mindful, whatever pricing strategy I put in place, I should be in a position to sustain it.

Thank you, sir.

Thank you. We have a few questions coming in through the online webcast. Yeah. These will now be addressed by the chairman, sir.

First question is coming from Mr. Arun. He's asking, is there any plans to make AMC Venus go public? It's not on cards as of now. We may consider if at all there would be any fight need in future date. The asset quality is stable, but how do you see the balance of slippage and recoveries? As advised, as on 30th June, the fresh slippage is over to that, you know, 7,659 crores. And out of this, the pullback of more than 1,500 crores has already happened as of 31st of July, which is amounting to about 20%. And our effort and endeavor is to contain the slippages in the coming quarters. A question on deposit competition. The health of banking sector is strong and excess liquidity in the system has been used up. All banks competing hard for deposit. Will SBA look to compete and keep its current market share on incremental deposit? Our expectation is that the ASCB deposit should grow at about 12 to 13% and advances to grow at 14 to 15%. Our growth in deposit and credit is also expected to be almost on the similar lines. And we certainly don't experience that kind of pressure, which perhaps others have a credit deposit ratio. We still have enough value room available. And secondly, we have got excess SLR available to us. But yes, of course, we remain mindful of the interest of our depositors and we don't want to shortchange their interest. When can we see an IPO of SVMF already explained? Any plans for value unlocking in case of UNO app? For us, UNO app is a distribution platform. Maybe tomorrow some analyst might start asking when I use spinning of your branches. I think without branches, the bank does not exist. So when even private sector banks are thinking in terms of adding branches, no idea of spinning of UNO. Can you continue with 15% loan growth in financial 24? In all likelihood, yes. Can you please provide a breakdown of your loan book in terms of how much is fixed, floating, etc.? As indicated, about 26% is fixed and the remaining 74% is floating. Thank you.

Thank you, sir. I trust all the questions have been addressed. We'll be happy to respond to other questions in offline mode. Let me end the evening with thanking the chairman, the top management, the analysts, ladies and gentlemen. To round off this evening, we request you to join us for high tea, which is arranged just outside the hall. Thank you.