HDFC Bank Limited

Good evening and welcome to HDFC Bank Limited Q1 FY22 earnings conference call on the financial results presented by the management of HDFC Bank. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after a brief commentary by the management. Should you need assistance during the conference call, please signal your operator by pressing star then zero on your test phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Srinivasan Vaidyanathan, Chief Financial Officer, HDFC Bank. Thank you and over to you, sir.

Okay, thank you, Aman. Although we see some queue building up, but we'll get started so we can move on. Good evening and welcome to all. Appreciate the participants calling in today and engaging with us. Firstly, we'll go through some background, environmental update, and then we'll get into the business highlights, and then we'll go to the results. Let's start by placing on record our appreciation and thanks to all staff and associates for steadfast and tireless focus on meeting customer needs in the midst of this pandemic, particularly in this quarter, which was for the most part impacted by COVID second wave. There were several thousands of staff who were diagnosed with COVID. More than 10-12% of the staff and all the staff and their families need special admiration and thank you. We had less than 1000 staff vaccinated at the beginning of quarter. Since then we have done over 370 camps. We have also tied up with multiple hospitals to allow vaccination. We now estimate that more than 80,000 staff have had at least one dose of vaccination. During the quarter, activity indicators released for the month of April and May were downbeat. This is I'm talking about the economic activity released were downbeat, reflecting the impact of the rising COVID cases and lockdowns. High frequency indicators such as power demand, auto sales, PMI slowed sequentially in April and May. Rural demand has got by two wheeler sales, tractor sales, rural unemployment rate also took a hit. So this time around, compared to the first wave, the rural was also in the tick of this COVID. However, in June, the economic activity improved in line with easing COVID-related restrictions, lifting of lockdowns in various states. This provides a backdrop of the activity in the quarter, which was mixed for most of the quarter, where almost, call it two-thirds or 35, 40 days of effective work that could happen. Otherwise, the business was muted for the rest of the time period. While GDP numbers for Q1 might look upbeat due to low base, the sequential growth is likely to contract. FY22, our in-house views that it would be 9.1, brought down from little more than 10% that we talked about three months ago. CFE headland inflation steady at 6.3, and our house views that it will hover above six for the next two, three months needs to be seen, but we do expect RBA to continue. towards supporting growth and keeping monetary stands accommodated. During the quarter, equity capital markets saw muted trends as compared to the previous quarter as private issuers through a mix of IPOs, rights, QIPs, and block streams raised little more than 24,000 crores versus equity raised of 70,000 plus crores in Q4 21. Retail participation in IPOs has been strong during this quarter. The equity fundraising pipeline both in public and private markets continue to be robust. During the quarter, we were mandated for five IPOs, including one IPO where we were appointed as left lead merchant banker. Fundraising through the Indian bond markets was approximately 1.25 lakh crore in the quarter, which was 49% or so lower year on year. Our bank is ranked number two for Q1. Our association, now getting to some business highlights, our association with the CSEs is helping us offer cost-effective services in semi-urban and rural, the urban scope model where every CSE is mapped to a branch to service. As of June quarter end, we have signed up approximately 1.71 lakh village-level entrepreneurs, of which 1.12 lakhs are onboarded as business facilitators. In the month of June, We launched a new straight-through process journey for consumer durable products at the VLE centers. It empowers VLEs to issue sanction letters based on customer's eligibility. This removes the bank's intervention and enables the VLE to do end-to-end processing of the loan. We have launched our chatbot EVA for the VLE-specific queries. Through EVA chatbots, VLEs will learn about the products and services offered by HTFC Bank which in turn will improve services offered to the last mile customer. Healthcare initiatives that we talked about in the past is building, bank is building COVID portfolio in line with the RBA announcement of extending loans for medical equipment purchases, stockists and so on. Hospitals are being funded for their investment in vaccination efforts. We have successfully activated the patient EMI and CC and DC credit card, debit card programs at more than 200 hospitals. On the retail branch banking front, we focus on launching a unique initiative that takes need-based selling to the next level. Immediate next best action is an artificial intelligence tool that studies the customer transaction patterns and digital behavior and is able to correctly pinpoint the financial need of the customer in the contextual relevance to suggest product and timing. It provides real-time triggers to the arms on customer transaction patterns and digital behavior The initial trends are very encouraging with a 6x higher probability of the customer to pick the product based on analytics than the traditional process. One of the significant digital enhancements that helps in greater customer service is the walkout working journey. This is a revolution in servicing the needs of the customer. It aims to make servicing of the customer instructions paperless through the use of Bickley link and two-factor security authentication even if the customer is not active on the net banking. Paperless Journey was recently launched for a few of the services, and in due course time, it will cover many more customer instructions. On the digital front, I want to give an update on the digital front. UPI transactions by count, both P2P and P2M in aggregate have sequentially grown 5% to 65.7 crore transactions, and over prior year, it has gone up by 2.4 times. On a similar basis, UPA transactions by value, both P2P and P2M, have sequentially grown by 11% to 1,65,000 crores and over prior year it has gone up again 2.4 times. For the quarter, in terms of the value, our P2P market share is about 10% and P2M market share is about 14% on the UPI. Mobile banking and net banking users have grown year-on-year by 31% and 21% respectively. Transactions count has seen a growth of 103% year-on-year on mobile banking and 39% for net banking. We continue our focus on telechannels for service, sales, and relationship. During the quarter, telesales channel grew 400% in business over Q1. Understandably, with a lot of lockdowns and this channel is the only active channel that on a remote basis could be easily operated, relatively easily operated. On the payment business, you know, the bank has got 14.9 million cards in force, right, at the end of June, with the market share for cards in force at about 23.8% May number, right, slightly dated, May 21 number. Bank share in receivables stands at about 56%, right, The market share in issuing card spends stands at 28.5% as of May 21. Within issuing spends, the bank analyzes retail spends separately, which caters to a large customer base, which the bank has managed to build over the years, and the bank continues to focus on deepening the relationship. The data coming from the network franchises spends per active card for the bank is 1.4 times higher than the industry. Average ticket size of the transaction is 1.2 times higher than the industry, which reflects the strength of the franchise and the depth of our customer relationship. In retail spend, we've grown 53% year on year, right? And lower numbers of credit card customers are now revolving. So the revolving balances are down, right? Because understandably, Jimmy will probably talk about our credit actions and understandably in the market there is a shyness as you see that card spending is down overall. As given the prevalent COVID scenario, bank is cautious in extending the credit. Another important information, why we look at retail spend as opposed to a total spend, which is the retail spend plus the business cost plus the commercial cost. That's what many people in the market see. based on published data, but we analyze retail spend separately. There is a reason why retail spend is more important. About three fourths of the bank's credit card customers hold a deposit with us with aggregate balances amounting to 5X the card outstanding. That's the 5X the card outstanding is the deposits that are made available to us by the card customer. So it's very important to analyze the retail spend and the retail card relationship as opposed to a generalized total card spend and the total card relationship. Merchant acquiring. The bank has 2.3 million acceptance points as of June with a year-on-year growth of 24%. Acquiring business volumes, including credit, debit, UPI, direct pay for the bank, grew by 75% year-on-year for the quarter ended June. In this time of social distancing, the bank has continued its focus on digital payment solutions. of various order, various payment factors. As per RBA data, previously I was quoting certain things on retail spend through the franchisee data. Through the RBA data now on acquiring, the bank's acquiring market share for April stands at 50%, 50.5% versus 44% in April last year. On the retail assets, a book grew by 9.3%. Arvind Kapil will talk a little more in terms of how where we have gone through in the quarter and how we are picking up momentum on that as we are coming out of the wave two and how we are strengthening the digital solutions for customers on that. On the wholesale segment, paydowns have increased during the quarter as corporates deleveraged. However, the bank continues its progress in gaining market share due to diligent adherence to sales process. Wholesale credit growth largely from PSUs, and we continue to provide liquidity to quality and relationship-based NBFCs for on-lending as well as for PSL. Jimmy will allude to a few things as we go. Commercial and rural banking business largely impacted in April and May due to localized lockdowns, but picked up in June. We'll have Rahul Shukla talk a little about how that's coming along now. Collections, as we mentioned, were mostly stalled with the advent of wave two COVID, stalled this momentum as it was picking up in March, but from April and May, it stalled that momentum of pickup that we were seeing. This is reflected in the bank's portfolio as we face severely curtailed collection workflows during the quarter due to restrictions of personnel on the field and both concern health and safety concerns of our staff as well as the customers. I do want to cover a few sentences on the society and community. As its key ESG commitment, the bank pledged during the quarter, as you would have read and seen, to become carbon neutral by financial year 3132. The bank has three-pronged strategy to achieve its objective to become carbon neutral, reduce consumption, transition to renewable energy, and offset carbon footprint. The bank has set clear targets on its environmental and social responsibilities, which include improving the gender diversity ratio, developing a green bond framework, and emission reduction targets. On the community front, the bank has set goals that are aligned to the sustainable development goals of the United Nations and will track progress on this front. In response to the challenges brought forth by the second wave of the pandemic, the bank has stepped up its work on upgrading health infrastructure facilities, setting up ICU facilities, oxygen plants, and distribution of nutrition and hygiene kits under COVID relief. An amount of 100 crore has been committed towards this. Now some kind of a balance sheet strength at a high level before we go into the micro details. COVID, as I mentioned to you, significantly impacted the franchise, but still about 1.64 million new liability relationships were opened in the quarter, and an increase of 40% over the same period in the previous year. Deposit growth, 13.2%, strong contribution from retail, which grew by 16.5%. Advances growth increased by 14%, 14.4%, with a strong momentum and build coming from commercial and rural banking, which grew by 25.1%. Liquidity is consistently strong at about 126%. Capital adequacy, 19.1%, and CET1, 17.2%. We did build some contingent provisions during the quarter. The floating and contingent provisions totaling 8,000 crores helps in de-risking the balance sheet. We continue to originate loans in conformity to our proven credit models. We'll cover credit as we go. I want to provide once more context. Some people joined late, so I'm going to give a context again and then get into micro details. We will get into details, but as I mentioned in the beginning, COVID wave 2 had significant impact with people health concerns. Various bank activities were curtailed for almost two-thirds of the quarter. About 35 days to 40 days, we could count where there could be certain things that could be done, otherwise significant curtailment. Lower product sales, including retail asset bookings, reduced card spends and revolvers, reduced collection activities, in summary impacting interest income, slippages leading to interest reversals and provisions, etc. Cold wave tools behind us for the most part and subject to and subject to We're hopeful of a benign COVID wave three, which again, subject to the benign COVID wave three. We see these are most part timing or temporary. We see buoyancy. As we go in this call, we'll have our frontline businesses describe their current experiences in the market. Let's start with revenues. Revenues grew 18%. Net revenues grew 18% to 23,297 crore. driven by advances growth of 14.4% and deposit growth of 13.2%. Net interest income for the quarter was at 17,009 crores, which is 73% of net revenues. It is up 8.6% over previous year and a tad lower than 1% over previous quarter. The core net interest margin at 4.1, prior was 4.3, prior quarter was 4.2. Net interest income sequential growth rate is impacted by approximately three percentage points due to lower yielding asset mix, including lower cards, revolver balances, higher interest reversal due to delinquencies, and a higher mandatory cash reserve ratio, which got implemented late March, the higher CRR. Net interest income year-on-year growth rate is impacted approximately by six percentage points due to lower yielding asset mix, including lower cards, yield and revolver balances, higher interest reversal due to delinquencies, and a higher mandatory cash reserve ratio. Now moving on to other income. Total other income at 6,289 crore was up 54% versus prior year and lower 17% versus prior quarter. Again, the impact of COVID on a sequential basis. Fees and commission income constituting 62% of other income was at 3,885 crore and grew by 74% compared to prior year and is lowered by 22% compared to prior quarter across various retail product lines impacted due to the activities of sales and retail. Retail constitutes approximately 91% of this, so impacted due to the activity that was less. Effects and derivatives income at 1,199 crore was higher than prior year and prior quarter, reflecting pickup in activities and spread both sequentially and year on year. Trading income was at 601 crore for the quarter, prior year was at 1,087 crore, and prior quarter was at 655 crore. Some of the gains from investments were monetized in line with our ALCO strategy. Miscellaneous income of 603 crore includes recoveries from return of accounts and dividends from subsidy. I'll cover some of these more on recoveries a little later. Expenses. Operating expenses for the quarter were 8,160 crores, an increase of 18% over previous year. Year on year, we added 327 branches, bringing the total branches to 5,653 as of June end. We opened 45 branches during the quarter. On an average, one branch every alternate day. Many, many days were impacted, but still on an average, one branch every alternate day we managed to open. Branch opening has been impacted. We have approximately 150 branches in various stages of readiness to be opened soon as things improve. Since last year, we added 1,295 ATMs, cash deposits, and withdrawal machines, and 204 during the quarter. As of June end, we have 16,291 ATMs and our cash deposits and withdrawal machines. We have 15,687 business correspondence managed by common service centers, including 131 open during the quarter. The staff count increased by 7,651 during the last 12 months and is at 1,23,473. During the quarter, we added 3,380 staff. We brought them on board. Cost-to-income ratio for the quarter was at 35%, which is similar to prior year level. We anticipate the spend levels to increase driven by incremental volumes, sales and promotional and discretionary spends and investments as the activity, particularly on the retail assets front, pick up. As we said in the past, the cost to income ratio will be reverting to 38-39% in the short run once we are behind this COVID and the activities in the retail assets pick up, while our goal remains to bring this down again in the medium to long term. Moving on to PPOP. The pre-provision operating profit at 15,137 crore grew by 18% over prior year. Now coming to some colors on asset quality. The GNP ratio was at 1.47 of the gross advances as compared to 1.32 in prior quarter and 1.36 in prior year. GNP ratio excluding NPS in agricultural segment was at 1.3, prior quarter and prior year were at 1.2. Net NPA ratio was at 0.48 of net advances. Preceding quarter was at 0.4 and prior year was at 0.33. Again, net NPA ratio excluding NPAs in agricultural segment was at 0.42%. Prior quarter was at 0.39 and prior year was at 0.29. The core annual slippage ratio for the current quarter is at 2.54%. as against 1.66% in prior quarter and 1.2% in prior year. Excluding slippages in the agricultural segment, because we did have significant slippage even in agricultural segment in this quarter. Excluding slippages in agriculture segment, the slippage in the current quarter was at 2.2% against 1.61% in prior quarter and 1.17 in prior year. As you know, Two-thirds of our current quarter was impacted. That's part of what you're seeing here. We believe it will take next few months to get the missed collections to a regular schedule. Sale of NPA, 1,800 odd crores in the quarter. At the end of March, we had restructuring under the RBA resolution framework for COVID at about 60 basis points. At the end of June, restructuring one and two together is about 80 basis points. On the provisions, the core specific loan loss provision for the quarter were at 4,220 crore as against 3,153 crore during the prior quarter and 2,740 crore for the prior year. Total provisions reported were 4,831 crore as against 4,694 crore during the prior quarter and 3,892 crore for the prior year. Total provisions in the current quarter included additional contingent provision of approximately 600 crore. The reported specific provision coverage ratio at 68% as against 70% in the prior quarter and 76% in the prior year. There are no technical write-offs. The head office branch books are fully integrated. At the end of current quarter, contingent provision towards loans were approximately 6,600 crore The bank's floating provisions remained at 1,450 as of June 30, and general provisions were at 5,300 crores. As on June quarter end, total provisions comprising specific floating, contingent, and general provisions were 146% of gross non-performing loans. This is in addition to the security held as collateral in several of the cases. Looking at it through another lens, Floating and contingent and general provisions were 1.15% of the gross advances as of June end versus 1.10% in March 21 and 0.99% in June 20. Now coming to credit cost ratios, the core credit cost ratio that is specific loan loss ratio is at 1.46% for the quarter against 1.10% for the prior quarter and 1.08% for the prior year. Recoveries, which I mentioned it now, recoveries which are recorded as miscellaneous income amount to 14 basis points of gross advances for the quarter against 26 basis points for prior quarter and nine basis points for prior year. Recoveries were also significantly impacted for most of the quarter. Again, the COVID impact, it will take few months to get to a normal schedule to get the recoveries back onto track there. The total credit cost for the quarter annualized including the contingent provisions created was at 1.67% as against 1.54% in the prior year and 1.64% in prior quarter. PAT at 10,306 crores grew by 15.3% and net profit at 7,730 crores grew by about 16% versus prior year. Now some balance sheet items. Total deposits amounted to 13,45,829 crores, an increase of 13.2% over prior year and up 0.8% over prior quarter, which is an addition of approximately 1,56,000 crores since prior year and 11,000 crores in the quarter. Detail constituted about 82% of total deposits and incrementally contributed 30,000, 37, little more than 37,000 crores during the quarter. a growth of 3.5% sequentially, and almost the entire deposit growth since last year, 16.5% growth year-on-year. With our persistent focus on granular deposits, CASA deposits registered a phenomenal growth of 28% year-on-year, ending the quarter at 6,11,801 crores, with the savings account deposits at 4,26,000 crores, and current account deposits at 1,85,000 crores. Current account increased by 24% year-on-year. However, it declined by about 26,000 crores during the quarter, primarily because of wholesale sector. Savings account grew 30% year-on-year, or 98,000, little more than 98,000 crores, and sequentially grew by 5.6% or little more than 22,000 crores. Retail constituted about 88% of CASA deposit. Time deposits at 734,000 crores grew by 3.1% over previous year and 2% over prior quarter. Time deposits in the retail segments grew by 6.6% year-on-year and 3.7% sequentially. Time deposits in wholesale segment decreased by 7% year-on-year and decreased 3% sequentially. CASA deposits comprised 45.5% of total deposits as of June 30th. Credit deposit ratio was at 85% for the quarter, which is same as what it was in prior quarter. Prior year, it was at 84%. Now getting to advances. Total advances were 11,47,652 crores, an increase of 14.4% over prior year, and a sequential growth of 1.3%. This is an addition of approximately 1,44,000 crores since prior year and 15,000 crores during the quarter. As per internal business classification, retail loans grew by 9.3% over prior year and de-grew by 0.7% compared to prior quarter. Commercial and rural banking loans grew 25% over prior year and grew by 3.9% over prior quarter. Other wholesale loans grew by 10% over prior year and grew by 1.5% over prior quarter. Maybe Jimmy Jimmy Tata can give some color about the growth in the loans and the situation on the credit front. Sure, thanks Jeannie. Hi everyone. Thanks for coming this evening. I first just go through a little bit on the retail side. Discuss the credit philosophy strategy and the portfolio management. I'll come back a little later for the SME and the commercial and rural banking and the corporate side of it. So I think Srini's alluded to it already so I'm not going to talk too much but yes this has been a quarter where things were not the most orderly because of the second wave that hit us. you recall, just to recap for a minute, the previous discussions over a couple of quarters, we were talking about how the moratorium exit and the recovery of most portfolios up by December and perhaps the last of them by March. And we were pretty much back to the pre-COVID levels. So that was all very encouraging until the second wave hit sometime in April. The effective impact of this was of course on business, which I think Arvind and Rahul will have a little to say in a minute, but I'll just get on to how it impacted the portfolio. We found ourselves and our staff getting infected quite rapidly. So we took a decision to put safety first and we stopped going out on recovery calls, etc. Most of the work that was done during those two months was essentially on the phone, work from home and all that. So I'll come to the impact in just a few seconds. But it's only been in the month of June that we really have had the ability to start going out Well, this is all despite the lockdown, so where there are restrictions, you still cannot do it. I'm only talking about the self imposed restrictions over and above the other restrictions during the first two months. That said, I must say that the second wave two three differences between the second and the first wave. The second wave financially has been less severe health wise, of course, has been much more severe. if you look at policy not national policy as compared to the first wave again there was more of a prioritization on the health and safety initially and i think that it has been more selective in terms of you know not having nationwide lockdowns etc and the second wave so all this resulted in the financial impact not being as severe The peak bounce rates, for example, you know, have been lower than the first wave, etc. So that's the kind of backdrop in which we worked around. Just give two or three macro indicators on how things have dipped and then come up again because you'll see this moving as a kind of common theme to everything that I go in. If you look at the Google Mobility Index, It tanked very badly as one would expect in April and May. Very good recovery in June. And by the time we sit now almost on a daily basis in July, it's virtually recovered to back to where it was before. So that means like something like a March-April level. You look at the eBay built-ins. Now these start sending slightly mixed signals. The third one will send an even more mixed signal to you. So the E-Way bills have been on the increase again. You look at a June over May, again much higher, but still you're below the March levels over there, so that's not as good a story. And if you look at the Purchasing Managers Index, which is a good indicator of actual activity as it's happening, that has lagged expectations month on month, hasn't really panned up. So as I said, the macro signals also a bit of a Mix bag out to you so let's me get now straight to where we stand. The bounce rate essentially has held up in the portfolio. If you look at the zero DPD bounce rate, which essentially means people who are not in default on the date of the presentation. It has actually reverted back to the pre COVID levels despite the hits that may have happened in April and May. If you look at the overall bounce rate, it hasn't gone back to pre COVID levels, but there has been a pretty good recovery in the month of June. And if we go a little further into the month of July as well, there is a further recovery. So I think the trends on reversal and the speed of exit out from this are relatively encouraging for us. I'll add that this is across products and It essentially signals and I'm putting this bounce data out because it essentially signals that the inherent quality of the portfolio has not changed and it is the safety oriented decisions that could have had whatever impact that has happened over the first few months and the reversal trends seem to be quite strong. I must also put this bounce in context with the rest of the industry. If you look at the Nash data that gets published, you will notice that HDFC Bank has consistently had a 50% better bounce ratio and this is quite consistent. It was there even before COVID and it remains there after COVID. So the space in terms of the bounce data remains intact, which once again reinforces to us at least that the inherent portfolio quality has not been very badly affected. But now let me move into demand. So here what we are talking about as we define this as a presentation of a particular month collected and recovered during that particular month. This, of course, through May and April, as you will understand, slipped quite badly because we refused to go out. Although demand resolution is, of course, an early bucket, I think that you do have a lot of augmentative collection that takes place and you do need people to go out to hit those last two or three percentage points. It did suffer in the month of April and May. There has been a bright, if I can use the word recovery in the month of June, and I think the early periods of July continue to bring that particular point out. So here we are not really back to pre COVID levels, but we are. Well, on the way back to at least a March kind of level and March had almost caught up with the pre COVID levels may have just been a percentage shy or so. So in that sense with the best way I can indicate to you. The team does believe that over this quarter they will have cleared the list of the distance and manage the mean reversal that's required. There were high levels of infection emerging in the team around April and we obviously stopped performing. And that's why we stopped. We got a lot of people vaccinated. So it's not that we have compromised on the safety standards at all before moving out again. There has been a high level of vaccination. There's been a high level of, so we got people actually back into the offices, even for the calling, et cetera, and had people with the ability to go out So I think that this is relatively temporary and will reverse. While I'm saying that, I think there is one product line where I should point out a non-COVID impact item because we keep talking about how COVID has impacted things. So the commercial transportation has been hit by the diesel price hikes. And our previous experience also tells us that it usually takes a couple of quarters for people to manage to pass on these price hikes and cost hikes on to their customers. We expect in the current quarter, meaning the June September quarter. July, September, sorry that a fair amount of that would get passed on and in the quarter after that, particularly with the help of the festive season, I think people would manage to bring the bring things back on an even keel by passing on these increased costs. But this is an aspect where we will need to look at the developments in that particular product. Um, I think Srini touched a little bit on the restructuring in terms of where the levels have moved. I'd like to say a little bit on the restructuring in terms of how we have gone about it and how we are continuing to go about it because there is still some window left and I would expect a large part of the restructuring to take place before September. We rolled out across various platforms to make it as convenient as possible for people to apply. There will have been a minimal benefit of this in Q1 and you would expect to see some more of this in Q2 because we again had barely a month or so after the rollout to actually try and facilitate this. How we are going about this essentially is and because these questions do arise in people's mind and we do get asked as well, so might as well say it before it's asked. We do not restructure if viability is in doubt. We will take the pain and we will decide to move on with that. If people have lost jobs, we do take a slightly comforting view on this because most people who did lose their jobs would manage to regain employment as soon as there is some sort of revival and there are signs now that things are reviving. So once again, one would tend to restructure that kind of a loan. We noticed that there are a lot of people who are while delinquents staying in the same bucket. What this essentially means is they are managing to pay their monthly installments but are not being able to reverse the trend and catch up by making multiple installment payments. Restructuring here again seems to be relatively safe because the ongoing cash flow seems to be in order and So these are some of the just to give a little bit of an indication because we do get asked us, you know what we do and what we don't do. So I think that's perhaps the best way I can do it. It's much more complicated than this and it's much more case specific than this. So please don't take this as some very simplistic or you know product program driven method. It's rather detailed. But just to give everyone a flavor of what we do and what we don't do. I think the and of course going behind our mind is the fact two things which I'll come to a little later. I think one I just did touch upon myself. The bounce rates holding up and therefore the inherent quality of the portfolio remaining good. We do feel encouraged to be and we should in this environment be more compassionate and empathetic towards these kind of things. But we do feel encouraged to do this on a commercial level as well because of that. I think the second part to it is the, and I'll come to this a little later, the new portfolio is definitely holding up and for better quality than the historic portfolio. And that said, it's not such a new portfolio anymore. I've been talking of the new portfolio itself now for three, four quarters. So it's reasonably seasoned by now. Moving into the actual portfolio quality in terms of the collection resolutions now. So I spoke of the bounce, the demand, and now we move into the collection resolution. Here again, it's pretty much the same story and a little more exaggerated because those particular buckets depend much more on physical movement, which, as we said, was hampered. As soon as we got back into the physical game, the recoveries have been quite sharp. I if you look not just at June, but if you look at early July and we compare the early days with the early dates of several preceding months. It's once again even more encouraging for us, so the health first decision that we took is likely to get reversed by the end of the current present quarter in which we are in. this goes across products and across buckets so there's nothing on the downside to put out over there i must point out what i spoke to you about june about july might be a little too early because there are very few dates but the overall trend does remain in that particular direction recovery is again the same story june better than may and april and in Pretty good measure if I read some of the product level data over here, which we don't really put out in public, but significant improvements June over May and April over there. Compared to the two previous months and July once again looking more and more encouraging. So I think that kind of covers one part of the portfolio management angle. And you'll have seen a kind of theme over here that, you know, April and May were problematic because of the decisions that we took. Good recoveries across the board in all these things over the month of June, looking even brighter for the part of July we have covered up till now. I think the decision that we took, therefore, does seem to be vindicated. The portfolio does remain inherently correct and strong. And I think the decision that the bank took was very timely. I think it prevented a lot of lasting damage in various respects and has not really created a problem that cannot be reversed, which will happen. Again, Srini referred to the sale of assets and I'll just add again a little more on the operational side of that. So yes, as you mentioned, around 1800 crores this quarter. If you recall, it was a risk of short of 1000 last quarter. my uh my reason for putting this out just now is that you know this is going to be a consistent activity of the bank and i don't think it is also going to be a very standard value every quarter because the way it is computed is not to make it a regular feature we evaluate the portfolio during each quarter and we take a decision as to whether we believe we can have a more efficient collection through our own efforts over time or whether we should take the money available instantly and close the particular account. So each quarter, the amount that we sell depends on what we feel is emerging in those. These are rather detailed exercises. They take place virtually at a case-specific level, even for smaller granular retail assets. I think I just should put this out over there that this will continue quarter and quarter and the amounts need not necessarily be very consistent and regular. They will depend on what our view and commercial decision is with regard to collection at that time. That kind of puts clear to the portfolio management. I'll just take a few minutes in terms of the. policy and what's coming through the door right now, but I'll hand over to Arvind to really complete that piece. If we look at Bureau inquiries, you'll see you'll have noticed that across the industry that Bureau inquiries are going up over the last few months, but pleased to report to you that it's going up at a faster pace for us. That, however, is quantities, so let's get on to quality. Within what's going up in terms of inquiries, the share of HDFC Bank in these inquiries for the better rated bureau scores, if you take a 750, 760 kind of level, which everyone considers to be a good level. If you look at what's arriving in for HDFC Bank versus the rest of the industry on inquiries, In every single product, you will see that there is a higher level of interest in HDFC Bank amongst the better credit-rated retail borrowers, typically around 50% better, but there is a large standard deviation across products for this, so I don't want you to think it's 50 across every single product. But this once again is encouraging from the point of view of the quality of these inquiries coming in. The proof of the pudding is obviously in the disbursement. Inquiries are inquiries. So happy to report this. The same story over there. Compared to the pre COVID times, I think in every single product we've got. We don't put all this data out in public, but significantly in 33, 40, 50% better penetration into the highest scores across these. While I'm saying all this, I do want to emphasize that the reason I'm comparing to bureau is only because it's the only way we can make a comparison. We do much more than the bureau. For the bureau itself, we use multi-bureau analytics We have our own algorithms. We do a lot beyond. We have trade level diagnostics that we put into. There's a lot more that goes into it. My speaking about the Bureau comparative is only for that purpose, to give you a comparative. It's not really reflective of all the work that goes into our portfolio. I think I'd mentioned before, every single band of Bureau score, we would have a better than average portfolio performance investment. Do I have anything more to tell you? I think the other piece is the industry comparative on delinquency. Nothing very different to report from before across products. There is a significant differential between our delinquency and that of the market and the fundamental story of industry leading delinquency numbers remains over there. And I think that's all I wanted to speak to you, except that, yes, I alluded to it a little earlier. The new book is holding up well, and that obviously encourages us to move into a growth phase as the economy hopefully now turns and we don't have too much of a third wave coming on or anything like that when we're well prepared for these sort of things. But I think that's all I want to put out right now. And so, Arvind, why don't you?

Yeah, thanks Jimmy. Very good evening to all of you. On retail assets, let me start by giving you guys a quick sense from the last quarter. I think despite the seven to eight weeks of mobility restrictions across various states, I can fairly say that our teams have probably addressed customer needs through our contactless and digital lending solutions, which we beefed up after the last lockdown. The results, of course, the retail assets portfolio growth is showing around an 8% approximate over the June last year. If I had to give a sense during the same quarter last year when there was a kind of a severe lockdown, our retail assets portfolio actually de-grew by 3% to 4%. However, owing to the kind of agility and investments and contactless digital displays across retail asset products, And the capabilities that we've incorporated, the portfolio is kind of held on. But also. Been able to sequentially grow the portfolio very marginally over the March 31st 21. At this junction, let me take a minute pause and give you guys acclimatize you exactly with what's happening in the month of June. Give you a quick sense on whatever data there is on at an industry level. So if I were to look at the Bureau data at an industry level and look at the demand for retail loans in the month of June 21, it's almost restored presently to 80% of the Jan to March quarter, quarter four of the last year, which is I think I would rate it as an encouraging sign. At the bank, we have witnessed a very sharp bounce back in the demand for most of our key products, whether it's auto loans, unsecured loans, loans against property and home loans if i look at the industry data also on the vehicle side to give a quick sense because that's more precise as a reflection of the economy if you look at the cm data auto loans from quarter four of uh last financial year which is jan to march and if you look at uh the last quarter the it's a decline at an industry level of 31 percent and two-wheelers down to a 41. And I think of both the businesses we've gained, I have reason to believe we've gained substantial market share. Now with our portfolio mix, I do believe we probably have a fantastic opportunity here on to scale up both on top line as well as yields. In the unsecured loans, which is personal loan and business loans, we do believe we have a leadership position and we intend to capitalize this low delinquency portfolio with the increased sourcing contribution from higher income customers. And that's already substantially showing an improvement in our mix towards the better quality customers. We plan to focus a little more aggressively on certain segments, especially like the government segment. In auto loans, like I just mentioned to you, that in the last quarter, we have reason to believe we've gained a decent market share in the four-wheeler segment and think we are edging towards the leadership position which we like to capitalize over this financial year both in new cars as well as used cars because I think that gives a semblance of a better ease as well in mortgages homes and loans against property businesses we are originating and growing faster than the previous years if I were to take Any insights and share with you for the first 15 days trends for the month of July 21? As you see, bank is echoing the projection of almost 100% of pre COVID levels on the disbursement. And that gives me the optimism that the quarter two, which is July, August and September. We should be in a position to scale up rapidly on a growth rates. It also gives us the confidence that the plan set for the financial year, which we had envisaged during our original assessment before the surprise second COVID wave hit us, in my view, should remain unaltered. And our assessment and our belief is that we should be back on course to achieve the original financial year plans and should close the year on a solid growth for the financial year. So I think that should probably give you guys a sense on how the quarter was from how I see the financial year. Yeah, that's all I think. Thank you.