Ladies and gentlemen, good day and welcome to Kotak Mahindra Bank Limited Q1 FY 'twenty two Earnings Conference Call. As a reminder, all participant lines will be in the listen only mode And there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I would now like to hand the conference over to Mr. Uday Kotak.
Thank you and over to you Mr. Kotak.
Good evening, friends, and welcome to the call post quarter 1 results announcement by Kotak Mahindra Bank. The right place obviously to start with is The situation with reference to COVID, particularly in Q1, 2022. And as we are all aware, but I must say What happened in May 2021 is one of the most impactful periods in my living memory. And I've never seen anything like this ever before. And it was something which we could not have bargained or planned Irrespective of what our thinking was even a few months ago and effectively quarter One, we have to keep in mind that about somewhere between 30 to 60 days of the quarter were lost in the mayhem which happened in May 2021.
And that brings me to first my views on COVID. I think India is now after the shock of COVID 2.0 hearing itself in terms of getting better prepared for a potential risk of COVID-three point or should it happen. And therefore, at this point of time, I would like to believe with the combination of vaccination and actually a large number of people having had COVID and antibodies, My current view and obviously this nobody knows, no scientist has predicted well on this. My current view is Even if there is a COVID 3.0, I would like to hope and believe it will not be as intense or anywhere as intense as COVID 2.0. Therefore, our current planning is on the basis that yes, There is some risk of 3.0 coming, but the intensity of that will not be anywhere near as vicious as COVID 2.0.
Yes, there could be implications, there could be impact, there could be significant amount of job losses and therefore indirect demand impact on consumer ability to pay his loans and debts. But overall, I think we should not have as bad a situation going forward as we did in May 2021. And it is on this expectation that we are looking at planning our way forward. And this brings me to the whole area of economic growth and how do we see it. We certainly see the economy coming back and we can debate whether GDP growth for the current year is going to be 9%, 9.5%, 10%.
But this is broadly the range in which I would like to currently assume the GDP growth to be give or take around the 9%
Mark,
and it brings me back to how are we thinking at Kotak about growth. As I've mentioned to you a couple of quarters ago, We after getting the initial steer on the COVID situation, if you go back to our call on October 2020, We were clearly having a mindset shift towards a higher growth on the lending side. And if you looked at our quarter 4 On an annualized basis, quarter 4 FY 2021, we were running at an annualized growth rate of 18%. And I compared what happened in quarter 1 to a situation where we started going out From the home into the open and suddenly there was a big cloud burst We've made all of us rush back to have some cover over our head and that's exactly what happened in Q1 2022. I must also say that we are pretty revved up and ready with our engine.
We have made significant investments in technology and continue to do so. We have had a reasonably strong hiring cycle as well, which we have continued through this Q1 2022 and we actually believe that through this year we would be able to get to higher rates of growth on the lending. And Finally, the proof is in the pudding and we will see it as we go through this year subject of course to Not a very extreme wave 3. So this is how we look at the growth situation. We are getting we believe that there is an opportunity now also in many pockets because we see this as now A game changer certainly in our secured lending business, where we have now also seen opportunities going forward with a very light position in unsecured retail lending to be actually able to step up on our engine.
So we will obviously brief you over the next few quarters as we make progress on this. Going through the whole area of asset quality, the true picture of the book, Before I go into specifics of Kotak, I want to actually highlight to all of you We are trying to find meaning in very disparate kind of situations. Last year Q1 was a situation where there was a lockdown, people didn't know how it would work. There was a moratorium, therefore numbers could not speak. Then you look at Q4, which is the immediately preceding quarter.
Most people had started believing that we are coming back to normalcy. And then you had the COVID 2.0 Where the lockdowns may not be as have been as severe as lockdown 1, but you had much higher mortality and loss of lives As also potential risks to livelihood. Suppose when we try and compare Q1 2020, Q1 that is June April to June 2020, Q4 that is January to March 2021 and Q1 April to June 2021, I think it's comparing trying to compare numbers, which each of them have tweaks and unpredictability and volatility In being able to get a steady trend of what the underlying true situation of the economy and the balance sheets of individual entities will be. The true picture will come out, I think, over the next few quarters, which again is Further complicated by restructuring, which also will happen in the future quarters because the current Time line given by RBI for restructuring is up to September 30, 2021. In other words, very important for Each of us to have a deep dive in our respective balance sheets and there is no better way to know the truth than being deep into our own reality.
And therefore for the analysts and the investor community, the challenge is to be able to figure out the nuances of different players and to make sense and meaning through this extremely challenging inconsistent periods which you will be comparing with. And in that context vis a vis Kotak, I would like to inform that We of course had a very significant impact on our recoveries in collections in the month of May. We have seen Very steady recovery in collections, particularly from second half of June and it is looking much better even as we speak in the month of July. Going specifically to the quarter 1 that is April to June quarter, our slippages for the quarter were about INR1500 crores for the quarter. Last year, Our full year slippage was INR 5,500 crores and our slippage for quarter 4 of last year that is January to March 2021 Alone was INR 4,400 crores.
The immediately preceding quarter was INR 4,400 crores and it is now at INR 1500 crores for this quarter. Additionally, a very large proportion of this INR 1500 crores slippages in our case have been On account of secured assets, the number for unsecured assets is significantly small, Keeping in mind that our balance sheet on the unsecured side is also pretty small, which enables us to be very light from here on the unsecured retail side as well. I want to also talk about the fact that consistent with our conservative philosophy, Our approach to restructuring is very measured based on wherever we are convinced that by restructuring, It improves our ability to collect money and not forbearance for forbearance sake as the core to our restructuring approach. Similarly, We do not believe in selling our loans to ARCs nor do we believe in a philosophy of what is popularly known as flexi loans. So we continue with our reasonably clear philosophy with reference to recognition and we will continue to do so.
I would also like to share with you a very significant increase in our technology spend, which has started sometime around September last year onwards when we put up our plan for a very big boost to our technology spend and that process is going on in full steam. We are now about 6 to 8 months into it and we are feeling much better with the progress we are making on the technology side And we think a lot of development and action should get done through calendar 2021. And last, I need to mention about a very significant event which happened in the quarter 1, which is our subsidiary Kotak Life Insurance. By early in May, early June, we started getting a huge flow of claims from various sources in our life insurance business. And we had a board meeting by middle of June and immediately shared Kotak Life Insurance shared with the bank and we shared with the investors the fact that There was an abnormal increase in debt claims coming out post end April.
And we were the 1st of the block to alert the market that there is an issue and the claims I'm going to be significantly mortality claims are going to be significantly higher than at least what we had anticipated or planned for coming out of COVID 2.0. And this was something we were in I think on 15th or 16th June, we disclosed this to the market that there is an impending tidal wave hit, which has happened in the month of May. So for irrespective of what statistics may have reported on the debts, which happened in the month of May. Insurance claims, which is cash to be paid out is finally a real evidence Of the levels of mortality, which have happened to people who have been insured and the ratios were multiples of what any underwriting Could have planned for and significantly higher than the experiences of Wave 1.0. And we had given a profit warning from the insurance company, indicated a loss of between INR 225 crores to INR 275 crores against a previous year profit of INR 160 crores.
And we have finally reported today, Kotak Life Insurance loss for the quarter was INR 243 crores, making a delta move over last year's quarterly profit in the insurance company itself in excess of INR 400 crores. And that of course has impacted our consolidated earnings with this delta of INR 400 crores on an after tax business. With that, I will now hand over to my colleague, Jameen Bhatt to take this presentation forward. Thank you.
Thank you, Uday. As Uday mentioned, comparing the quarters this year, April, June was the last year April, June or even the Jan, March quarter of the previous year of 2021 is not exactly comparable because of activity levels and what we saw on the ground. Nevertheless, if we look at this quarter, as we said, we closed the quarter with an overall profit of INR 1642 crores, which compares to INR 1244 crores, which we did in in the same period last year. Our net interest income, we closed at INR 3,942 crores, which is about 6% higher than last year. On our other income, I'll split it between fees and other part of other income.
On the fees, the distribution fees I saw a jump of about 50% on a year on year basis and saw growth on most of the areas, whether it is syndication, referrals, distribution of mutual funds and whatnot. On a quarter on quarter basis, you will see a drop which largely comes from the fact that the Insurance commissions earned in quarter 1 are lower than what we did in quarter 4, but that's always a yearly phenomenon where quarter 4 shows up the highest numbers of insurance commission for any distributor. On other part of other income, which is non fees and services, where we got a total income of INR414 crores this quarter versus about INR 571, which we clocked in quarter 4. This year in this quarter, we were also held by some dividend which we got from the subsidiaries. In the previous quarter, we had earned some income from of BSL certificates which we had sold out.
On overall expenses, again, similar story where If you look at expenses this year, this quarter compared to last year Q1, they are significantly higher. But if you look at the activity levels of what was there in Jan, March, they're actually lower than what we did in the previous quarter. So on the employee cost, this quarter includes, of course, the increments which we went through in April, The variable pay which we paid out other than what was provided. And in the previous year, in the April, June quarter also reflected the fact that A number of senior managers had taken a salary cut in that period. Other expenses showing a rise over the last year, Again, reflective of what was on the ground, host of areas whether it is expenses related to credit card, expenses related to sourcing of loans, Brokerage, advertisements, recovery, all of them compared to last year would show a rise y o y, But almost all of them, again, if I look at the previous quarter, would be on a lower number.
So at operating profit, we did INR 3,121 crores for the for this quarter, which is about 19% higher than what we did same period last year. On provisions, we have taken a total provision of INR 935 crores this quarter, which includes INR 7.25 crores of provisions towards advances, which takes our credit cost to 1 133 bps for this quarter. If I look at the whole of last year, We had total credit cost other than COVID provision of about 84 bps. On overall asset quality, we had seen collections slow down in the months of April May, which led to slippages, which Uday touched upon. We've seen collections pick up in June and continuing in July.
But that did result in the GNPA going up to 3.56% as against 3.25% a quarter ago. And net NPA is now at 1.28% against 1.21 percent a quarter above. We have not dipped into any of the COVID provisions and we continue to carry the COVID provision of INR 12.79 crores as we had. The total restructuring as at the balance sheet date on account of COVID-one, COVID-two and MSME. All put together, we are at a small number of INR552 crores as at June.
We've not we continue to have no sale to the ARC activity. So we've not sold any NPAs to ARCs As well as we have not done any flexi loans or any of that type. Our SMA2 numbers for this period end at INR 430 crores as of June 30, 2021. Our overall advances growth has been 6.6% for the on a year on year basis, whereas If I include customer assets, we've grown at 8.6% on a year on year basis. Our capital adequacy again continues to be Pretty strong at overall level of 23.7% and Tier 1 itself at 21.7 percent capital adequacy at the bank level.
I'll request Shankri to take The digital slides and the deposit slides, please.
Thank you, Jenny. I will start with our digital strategy and initiatives. Our digital strategy is centered around customers with key focus on customer acquisition, engagement and experience. Let me start with acquisitions. We have a range of options in the digital acquisition process DIY, do it yourself, do it with you, do it for you.
This is catered to all kinds of customers. We have powered multiple engines of acquisition and acquired customers digitally across our platforms of Savings, Lending, Payment, Investment and Protection. We acquired about 5 black customers digitally every month, This is powered by extensive use of AI and image. We have one of the highest rated and high usage mobile app With over 200 features across each of these engines, which the customer can use, from making an FD to paying for bills, shop online, Apply for a loan, invest in IPOs amongst others, all with a few clicks. We introduced a new feature this quarter, Pay to contact, whereby customers of the bank can make UPI based payments to the mobile number of their friends, associates, merchants across various payment apps.
This has enhanced our payment stack significantly. We have embarked on building a new age mobile experience, mobile 2.0. It is designed to be a super app that will provide our customers personalized banking, payment, shopping and ecosystem connect experience. It will enhance customized offerings, ease of transacting and thus the whole experience. We have successfully migrated to our new net banking platform with over 90% of the retail customers adopting to this.
This is designed in the cloud and offers a 1 page banking experience. We will be launching an investment ecosystem and a new state of the art stock trading platform over the course of this year. Now let me talk about engagement. For all customers, Whether acquired through physical or digital, existing or new, we run extensive AI and MLNR data stack to make them personalized offers on loan products, payments, investment and protection. This is available omni channel, be it mobile, net, contact center, branch, ATM, etcetera.
In addition to the above, we have enabled DIY services across our voice and chatbot care and WhatsApp. We have seen significant adoption by customers of these channels for service. We have used APIs to integrate with providers in the ecom, OTT, travel, transportation segments to offer our customers a one stop experience, all in one app, and we will be enhancing this significantly in the next few quarters. Service is a very important metric for the customer and digitization of services and automation of all processes has been at the core of our delivery to customers. We have enabled STP for many of our service requests at the branch and in the mobile app.
And this better customer and have enabled 40 plus service options in WhatsApp. We remain committed to the journey of enhancing customer experience constantly. All of the above has been possible only because of investing and enhancing our technology stack, which today has referred to. That is the backbone of our digital strategy. In the infrastructure side, our focus has been to build resiliency and go to cloud for agility, flexibility and scale.
In the last year, we have invested significantly towards this. In the core applications, we have upgraded our platforms to be able to offer new features, functionalities and customized solutions to our customers. This includes risk and fraud protection for our customers. In digital channels, we have revised our DIV, DIY, SCP and automation, again enabling the customer to consume our products in a seamless, frictionless and convenient manner. This investment in our core tech Since I have moved to digital across payments, deposits, loans and investments, largely through mobile and we will continue with our mobile first strategy.
Now to business and trends. As Uday said, April and May were muted, but we saw a pickup in June, particularly the second half across markets and products. Our average savings deposit growth YTD YOY is 10% and current account 28% Suite TD 24%. Focus on granular customer acquisition continues and we continue significant acquisitions to the 811 platform. Our CASA ratio was at 60.2% as at June 21 versus 56.7% in Q1 last year.
Casa and TV's below 5 crores comprised 92% of deposits versus 90% in Q1 last year. Suite deposits was at 8% versus 7.2% in Q1 last year and cost of SAAT was at 3.73% versus 4.22 in Q1 last year. The bank had 27,000,000 customers as of June 30, 2021. Our asset cross sell was Strong led by Home Loans and Working Capital Business Banking, focus on distribution fee income continued in the quarter. On the lending side, Mortgages continue to be a key focus and in June we were back to around 80% of March volumes.
We continued our strategy on scaling home loans And our consistent focus on improving tax and write pricing has helped us grow our market share in this space. We also focused on higher penetration in the salaried segment, which showed significant growth. About 50% of the salaried segment comes through the DG Home Loan route. Mortgages across Home Loan and Labs will continue to be a big focus area. MSME, which is a working capital business.
New business acquisitions in June were better than pre COVID levels. Utilization in the portfolio was muted in the quarter, except for the export segments. We will continue our focus in building a quality franchise in the NF and E segment. On the unsecured lending side, we have done significant investments over the last two quarters in revamping our risk models and analytics setup. We have seen green shoots by way of increased acquisitions.
PL, June volumes were at about 80% of March, And we expect to be ahead of our pre COVID levels over the next few months. Cards, we have seen a Q o Q increase in acquisition numbers on the back of 4 new products Consumer Finance business had made strategic strides in the last two quarters, both in offline and online and is a focused business for us to build. As I talked about collections, just repeating. In COVID 2.0, our bounce numbers were largely stable. We did see some pressures on efficiency in May due to the strict lockdown.
However, June saw a pullback and July is looking better. We continue to invest in technology, analytics and capacity enhancements to grow our consumer asset businesses. I now request Kalan to take you through the Commercial Bank business highlights.
Thank you, Shanti. I will start with the Commercial Vehicle Finance Business. Commercial vehicle sales was lower during the quarter as compared to the previous quarter. Both disbursements and collections We are impacted during the quarter because of lockdown restrictions, closure of dealerships as also restrictions on movement of people. Unlike the last wave, non metro markets were also impacted.
Collections improved in the month of June as compared to April and May, and this collection trend continues in July. Capacity utilization for operators has improved in June and further include in July. However, difficulty in getting return loads and high diesel prices are impacting the viability. There's no perceptible improvement in the passenger vehicle segment. It continues to be a problem owing to restrictions in the amount of people.
The demand for construction equipment has improved in the month of June as compared to the previous months. And this again, this trend continues into the month of July driven mainly by government projects. Receivable cycles have got elongated and cash flows for the small and medium sized businesses are getting delayed a bit. However, collections in the month of June have improved as compared to April May, and July collections continues to do well, reflecting the same trend as we saw in commercial vehicles. Demand for tractors and tractors finance continues to be good.
Rural cash flows are less impacted. Our collections during the quarter for us and in general were impacted due to the localize shutdown of restrictions. June collections again was much better than April May. This trend of improving collections continues into July and there is Good credit demand in this segment of the business, in the Factor segment of the business. I believe SME segment has been stable.
The demand for credit And this segment has been good. Again, restrictions on movements had restricted our disbursement capability in the 1st 2 months, Let us improve in June and further improving in July. The collection environment in this segment of the business was stable during the quarter and further improving in July. Microfinance disbursements and collections We're again impacted during the quarter. Our collection efficiencies improved in the month of June as compared to May.
July shows an improvement over June and with a gradual relaxation of restrictions both demand for credit and disbursements are showing an improvement in this segment of the business. I'll now hand it over to Manin to take the presentation forward.
Thank you, Gandhan. Good afternoon. Let me take you through the wholesale side of the business. If you look at the wholesale side of the business, there are 2 parts To that, I would take it in 2 parts. The first one being the semi side and the second one being the corporate rest of the corporate banking business.
And I would like to look at the corporate banking business along with the credit substitutes there because there is a reasonable amount of fungibility that is happening today in the market. So let me first come to SME. SME, I think we are seeing extremely good traction already. But for the loss of about 30, 45 days in the Q1, this growth could have been even better. We are seeing good traction in acquisition of new customers and we see it accelerating from here as well.
In fact, we have put in Significant capacity enhancements in terms of sales and service to handle larger capacities, that team has been put in place already and Last part of it is already in place and rest of it will fall in place in the coming quarters. We've also been able to launch analytics based credit evaluation mechanism, which will help us improve the TAT and onboard customers faster. So this is an area where I would say that we see it accelerating from here immediately. On the corporate side, of course, as I said, if you take a combination of the corporate banking book and the credit of Stew's book, We have had a flattish quarter and a modest 4 odd percent growth in the book Y o Y. Here, of course, we are still not seeing big demand from corporates for New capacity creation and things like that, it is largely working capital utilization, which is just switching hand.
And obviously, that brings in its own challenges in terms of pricing, which we are seeing in the market. But our focus remains very clear that we maintain high asset quality and look for higher wallet share in corporates in a manner that our non risk income grow Definitely faster and significantly faster than the assets, and we can maintain a sustainable ROE in the business. Of course, credit costs are at all time low in this business and asset quality has stood up quite well. In fact, our transaction banking focus continues to be high and we have had significantly faster growth in incomes out of current account, trade, ForEx, DCM and products fee incomes of that kind. So on an overall basis, I would say that our income growth is Significantly higher than the quarter end asset growth, especially also due to the focus on transaction banking as well as Our focus on intra quarter assets.
Broadly, I would say, Health of the business is fairly good and we are confident that as credit growth cycle returns, we'll be able to capitalize on that. We continue being, as Uday said and Shanti mentioned for the Retail Bank, even in the Wholesale Bank side, we Continued to invest significantly in the transaction banking side of the business, especially on the technology side. In fact, over the last year, We have upgraded our trade platform and we have also upgraded last quarter our cash management platform That brings our platforms to state of art and it gives us a platform to build Significant customer experience and digital capabilities at the front end. In fact, capacity enhancement and building this side of the business is very, very key focus area for us. Our mobile app, specifically different from the retail bank mobile app, corporate mobile app continues to get good traction.
In fact, our transactions on the corporate mobile bank, corporate mobile app have grown by over 80%, and it continues to gain good traction and acceptance and is seeing good adoption. A word or 2 on the sectors. CRE actually CRE portfolio overall, the quality of the portfolio has stood up well without any significant negative impact on the portfolio. And while we are still a bit cautious on the commercial and Retail sectors. We are seeing very, very positive trends on the residential project side and we are Continuing to build that side of the business.
In fact, in the project that we have financed, The quarter 1 flow throughs of collections of these projects were 40% higher than the overall average of the last year and almost 3 times more than what it was in the Q1 of last year. So the projects we have financed continue to be showing extremely good sales And we therefore continue to want to build the residential project share in this business. On the NBFC segment also, We have found our of course, we have been present in the higher rated part of this segment, and our portfolio has stood up quite well. And in fact, within this sector as a subsector, we are focused on Housing Finance, which has done even better than the broader NBFC sector. And we continue to build that and we have also focused on building portfolio purchases in terms of PTCs and Credit substitutes in terms of MCDs to this sector, part of our credit substitutes have been built in this sector.
And we are reasonably comfortable with this segment just now and you can see the YOY growth there is somewhat significant. And overall on credit substitutes, of course, since I mentioned earlier, our credit substitutes have been built primarily in the NBFC and the high end corporate segment. And we believe that it makes More economical sense to build credit substitutes and build a loan book in some of these segments. So overall, I would say the health of the business is Fairly good and in good shape and we are quite optimistic about the outlook on profitability as well as growth from here. Thank you.
Can I hand it over to Jameen to take it forward?
Thanks, Mani. If I take the consolidated numbers, This quarter, we end with a consolidated profit of INR1806 crores compared to INR1853 last year. A large part of this drop as Odeh explained initially comes from the life insurance loss for this quarter, which is INR 243 crores as against A profit of NOK161 crores last year. Adjusted for the life insurance plus, we would have the consolidated number would have been Y o Y growth of about 19 plus percentage. Contributors other than the bank to the profitability, if you look at the capital markets, As against INR 175 crores in quarter 1 last year, the 2 entities, KS and KMCC, brought IN INR 278 crores of post tax profit.
The 2 NBFCs, which Kotak Prime and Kotak Investments, which had clocked in INR 101 crores of post tax profit in quarter 1 last year, got IN INR 150 crores between the 2 of them this quarter. The mutual fund and the trustee company put together, which was INR 71 crores 1st quarter last year, brought in a total profit of INR 107 crores in this quarter. Overall customer assets at the group level at INR 2,000 66,000 crores, which is up from about INR 2,000,000 crores, which we were a year ago. Realized the total capital and reserves at the group level now at INR 86,700 crores. Our consolidated capital adequacy overall at 24.9 percent and with Tier 1 itself at 24.1 percent.
And we end with a book value of INR 4 INR435 per share. I just request Gaurang to take up the insurance in case.
Yes. Thank you, Jamie.
Let me divide the performance for this quarter for Kotak Life into 2 parts, The business growth and claims. The gross return premium increased by 37.9% y o y. Individual new business premium grew by 8.2%. However, individual sales was down by around couple of percentages. We had a strong performance on the renewal premium, which is growth of around 46.7% year on year.
This is in line with our consistently top quarter and persistency performance. Group business also increased by 67%, so as our AUM had a healthy growth of around 30%. Now coming to claims. During the quarter, we posted a loss of INR 243 crores against profit of INR 161 crores in Q1 2021. This was mainly due to Increase in debt claims and extra modality reserves created to cover expected future claims.
NIM's net of reinsurance amounted to INR 5.62 crores against last year what we paid was INR 96 crores. So a little unusual quarter in terms of lockdown and other things last year, The claim was slightly lower reported. So this itself gives a delta incremental claim of INR 4.66 crores. It is important to note 3 things. Number 1 is that results around 31st March 21 were sufficient to cover claims received in Q1 for debts occurring prior to 31st March 21.
The real wave to This claim reporting started somewhere in the week commencing 21 April, that also later part of the week and lasted till maybe end of June. The second thing is that after writing off these losses also, our solvency ratio continues to be strong at 2 point 5, 7 times against the required solvency margin of 1.5x. And the 13, We have not made any changes whatsoever to our valuation rate, which is around 30th June. So whatever was the valuation rate At which results were calculated, we continue to retain at the same rate by June 21. Now taking you through the digital update.
Our digitalization strategies are focused on empowering distribution, engaging channels and enhancing customer experience. The post COVID environment has also hastened the whole process. Coming to the distributors, almost all advisers are now recruited with end to end digital process. The Boost application, which was launched for adviser performance and productivity management, is now further enhanced with persistency boosting solutions. Our Virtual Connect using CRM and KLI Mist, video conferencing app, significantly empowers distribution further.
On the customer side, digital onboarding of customer remains Very high barring 1 or 2 corporate agents, rest of all the contracts come on a digital onboarding, so in the digital way. More products are now available for online digital purchase. So we got more products on offer. We have introduced We approved digital offers for Kotak customers, which can very easily be enhanced to other distributors. On a customer service side, nearly 2 third of the customer queries and requests are served by the digital channels like WhatsApp, chatbots and portal services.
We have reengineered the IVR facility recently to add some more features of self servicing, Helping better customer experience. Almost 45% of our calls get replied by we are reducing the And lastly, data analytics continue to be a strong enabler. Firstly, for Crosssell to work for enhanced customer value and secondly, for early fraud risk identification while underwriting the new business. So I think we'll continue to focus on the digital side as the Broad tenet which you have seen through our presentation for Kotak Life. And with this summary, I And over to Zaidik to take the call forward.
Thank you, Gaurav. Good evening, friends. Kotak Securities achieved a top line of INR 571 crores for the quarter ended June 30, 2021. This number is compared to INR 4.59 crores for the corresponding quarter last year and INR 5.70 crores for the previous quarter ended March 21. The PBT is INR 315 crores for this quarter compared to INR 225 crores for the period ended June 2020 INR321 crores for the quarter ended March 31, 'twenty one.
The PAT for the quarter ended June 21 is INR 236 crores versus INR169 crores for the corresponding period last and INR 241 crores for the quarter ended 30 onethreetwenty 1. The ADV or the average daily volumes as we call it, have been consistently growing over the last few quarters. The retail average daily volumes from INR 9,57,000 crores in Q1 of 2021 is currently at INR 23,90,000 crores, an increase of approximately 2.3 times. During the same time, the volume for Kotak Securities has grown from INR 22,000 crores a day to INR 57,000 crores approximately. The growth in volumes over the web is nearly 2x of what it was last year and the growth on mobile is nearly 3x of the same period last year.
About 97% of accounts, which were opened in Q1 of 2022 has been digital. I will now hand over to Mandeel to take you through the performance of the investment bank.
Thank you.
Yes. Thank you, Jerry. KNCC maintains its leadership position in the IPO business. They have already done marquee transactions in the Q1 and The pipeline continues to be good. And on top of good ECM business, we are also seeing good traction And we have already concluded a few marquee transactions in the Q1.
And As I said, if the markets continue in the same pace, KMCC has extremely good prospects for the year and maybe I'll now hand over to Kanan to take you through the No. Okay. No. So let, KMIL sorry, I'll also take you through the KMIL, a subsidiary which is into real estate and structured product business. I have already talked about the CRE side of this business When I talked about in general about the CRE sector, that applies to this as well.
As you can see, the profit growth in the Our company has been quite good. The asset quality has been fairly good. And of course, the NBFC is well capitalized and we hope to capitalize on capital availability here to grow this business from here and we see the opportunity now in this business because of consolidation of finance providers in this kind of business. Additionally, other than CRE, the other business that this company is active is In the structured finance business, again, we see a great opportunity where
some of
these structured transactions which cannot be There are not enough people in the market doing this transaction and it gives us a Significant competitive advantage in terms of understanding of that business and ability to have the ability to do such transactions. So we see again, this is a business that we are quite optimistic about growing from here. Thank you. I would now hand it over to Kannan to take you through Kotak Mahindra Bank.
Thank you, Marniyan. Kotak Mahindra Bank had a profit before tax of INR106 Gross and profit after tax of INR 9 crores during the quarter. Disbursements and collections were impacted during April May. However, June saw an improvement in both disbursements and collections as compared to the previous 2 months. Collection efficiencies continues to show good improvement in the month of July.
Demand for car finance as well as disbursements continue to be good in the current month. With The environment improving, we hope to see a better quarter better quarters ahead both in terms of collections and disbursements. I will now hand it over to Nilesh to take you through the AMC performance.
Thanks, Kandan. Good evening, friends. Let me take you through our Asset Management business. Our Mutual Funds grew 48% year on year to INR 2,480,000,000,000. Our equity AUM supported by market bounce back grew 64% year on year to INR 1,090,000,000,000.
Our total AUM market share increased by 60 basis points from 6.8% last year to 7.4%. Our equity AUM market share increased by 40 basis points from 4.9% last year to 5.3%. This increase in market share is supported by good investment performance, new customer acquisition and customer penetration. Our SIP book and AUM growth continues to outpace mutual fund industry growth. Consequently, our profit after tax has grown by 51% year on year to INR 107 crore.
Our total assets under management across mutual fund, EMS, offshore, insurance and alternate assets has grown 32% year on year to INR 3,440,000,000,000. Our relationship value across Wealth Priority and Investment Advisory business grew 43% year on year to INR4.04 trillion. I will hand it over to Jaimin Pate.
Thank you, Nilesh. We will be open to taking some questions from the analysts.
Thank you very much. We will now begin the question Participants are requested to use handset while asking your question. Ladies and gentlemen, We will wait for a moment while the question queue assembles. First question is from the line of Daval Gada from Aditi Birlasad Life Insurance. Please go ahead.
Good evening, sir. This is
Raul Galla from Aditya Villas and Life A&C. A couple of questions. First question, if you could give some updates on Kotak's 811 app, the progress and EBITDA The transformation you've done in that business line item with respect to competition with a lot of other Banking or wallet companies or payment platforms. So that's question number 1. Question number 2, Your thought process on lipids is for the year F 'twenty two, looking at your SMA book And what are you picking up in the month of July in terms of collections or bounce rates?
Yes. First of all, I believe Digital is here at the core of how we acquire customers in a very significant manner. And we continue to be extremely optimistic about Our Kotak eight-one-one progress as a way of significantly scaling up our game. I think Shanti mentioned about the number of new customers we add. And I'll request Shanti to tell you some flavor on the progress we are making on 811.
Yes. Thank you, Hodei. I will do that. So first of all, 811 app is a part of the Kotak mobile banking app And we have made a lot of changes in the DIY, the journey for customer acquisition we have optimized and improvised. We are working on a transformation post on Mobile 2.0 as we said, and one of them is also What we are going to do on the journeys of date 1 month post landing, which is a separate landing page by itself.
So we are working on it, but we have optimized the journey. We have optimized the cross sell journey significantly. We have almost made most of the products. We have sashi eyed some of the products for 811 and we have optimized the cross sell journey for some of those, but more for later.
Yes. I think you will see some of those developments as you go through this year. I think at an appropriate time, we will share with you some of our plans or execution as may be appropriate. So coming to the second question is your question was on slippages, right?
Hello?
Yes, sir.
So on slippages, I think of course, quarter 1 we think is a significant aberration, thanks to what happened where We faced there were 2 aspects about what caused the slippages. 1, obviously, is linked to ability to pay. Secondly, I was linked to actually physical ability to reach out and collect. For example, A lot of people in the secured segment like the tractor segment or the commercial vehicle segment, a lot of them people continue to pay in cash. So, ability to go out and reach and actually collect was significantly hampered from end of April at least 1st or 2nd week of June.
And it is in that period that you saw significant slippages happen particularly in these two segments. And we have obviously made significant attempts to do voice, virtual, digital ability to collect. But some of this, which is where people pay in cash or including, say, in microfinance, the ability to go out and get customers to pay was significantly hampered. We also found another very interesting phenomenon. Many customers who actually had the money So hold us in the month of May.
We have the money, but we want to save it for potential risk of hospitalization and other things. And therefore, we have right now the ability to pay, but we want to postpone it. We saw some of that also happen. Therefore, our view is from these level of slippages, We should see a significant improvement in the quarters to come with a caveat that COVID 3.0 It is now nowhere as intense as COVID 2.0. And subject to that, I think I'm optimistic about a significant improvement in slippages going forward.
And again, as I mentioned at the beginning, a significant part of our slippages happened to be in the secured segment As a large proportion of this.
Sure, sir. Thank you.
Thank you. The next question is from the line of Nilanjan Kastha from Nomura. Please go ahead.
Thank you for taking my question. Just a little more clarity on the slippages that we saw in this You obviously mentioned, I mean, our book is totally secured, so it has to be mostly come from the secured. But Like in the industry data that we are seeing, would it be fair to say roughly 70%, 80% is Then retail, that's what has slipped in this quarter?
Yes, the bulk of the slippages are retail and commercial bank, clearly. The corporate bank is amazingly pristine. And on a relative basis, we are also seeing the SME Bank hold up quite well.
Would you want to point out which part of retail It has been a little more challenging. And I think I will tag this question and you partly answered while answering the tractor question. Roughly, I know how much of collections actually take place in cash across some of the segments in retail, I mean more particularly with the mortgage. So did at least in the Q1, did we see mortgage slippages, growth of home loans and home equity being slightly higher than let's say the full year FY 2021 in Kalarram Bank. So let me ask Let me first
say on mortgages, yes, there is a marginal increase in the quarter, but nothing dramatic. Tractors and commercial vehicles is where we saw the bulk of the impact and to a certain extent in construction equipment where people had an issue about getting money from state governments during the quarter. But I'll ask Kanan to specifically touch upon tractors, commercial vehicles and construction equipment, including on the cash intensity of some of those businesses. Kanan?
Yes. I think on the commercial vehicle and construction equipment side, as I mentioned, there have been slippages, but The good part of it is the bond spreads in July as we see it is as good as what it was in the Q4 of last year. So I think it's come back in June, July partly in June July, but yes, we had switages on those in the months of April May. The question is in construction equipment and CVs. Most of the payments are through the banking system.
But once the bounce happens, You need to reach out to the customers even to collect an instrument or collect by cash. So as Uday mentioned, we had a problem in reaching out to the customer And a lot of customers held back cash for enforcing medical expenses. So that thing happened. On tractors, while we have more than 60% of the people paying by instruments. But once the bounce happens again, you'll have to go and collect cash from them.
So more than 50% of the people would still pay by cash. And this was an area where we couldn't reach. And this time, unlike in the past, This time, the COVID spread was there in the non metro and rural areas too. So it was a combination of our employees getting infected not able to reach, Customers in fact were not able to reach and there were villages which had stopped people from getting into outsiders getting into the village. So we had a problem in reaching there, but June has been a very good month again in practice and the same trend continues in July.
So we are hopeful that we'll be back to for the 4 levels by about July August.
That's good to know. And sorry, if you can skip it in another question on the prime businesses, Again, it looks to be a very stressed quarter in terms of collection. Any sense then because at least the mid NPL definitely look like quite a limited just on a sequential basis. We speak
to both of the
year's perspective was it the year that was more stressed or is it the actual the VAT numbers?
No, no, it's not so much the deal. It's the on the retail side. It's again got to do with the same things which we discussed for Commercial Vehicle and Construction Equipment. Even on Prime, we had a problem in reaching out to the customers and we've seen resolution rates getting better in June July. So this is an impact of the April May inability to reach the customer.
Right, right. Okay. And a final question, even in the, I think, the March quarter, I had sort of checked on the deposit growth. And clearly this quarter, the average growth has sort of declined a lot. However, it looks like on When we look at the cost of savings that we had put out that has sort of flat lined.
So is it that we have reached a stage where It's become more organic savings recognition that is happening and we and just because we did not intend to grow it or go out and No other forms of deposits, not necessarily we will see, but other forms of deposits as well. Would that be a fair assessment?
Right now what is happening is there is a surfeit of liquidity, okay. And it's a constant balance in terms of what we pay for liability for the franchise versus the cost of the money. It is quite amazing that wholesale money Today, say on a 1 year deposit, they would cost around 4% or lower annualized. And most banks are paying retail depositors up to 2 crores between 4.75% and 5% quarterly risks. So if I make a difference of this, it is more than 100 basis points higher for the franchise.
And we have to be clear that we certainly would like to protect the franchise, but we want to keep on chipping away At our effective cost of funds with the CAFA ratio in excess of 60%. So We have to protect the franchise, keep on chipping away at our cost of funds. And I would also like to highlight to you But now we are probably amongst the lowest cost of funds in banking. This is despite us paying on savings deposits at an average About 50 basis to 60 basis more than some of our larger competitors. So despite a higher Cost on savings deposits, which we still have.
And we have a CAPA ratio, which helps us on the mix side to be able to have significantly low cost of funds and gives us great ability to carefully chip away without hurting the core franchise. This is what we continue to do step by step. Obviously, if you calculate our cost of funds for the March quarter versus June quarter, You would find a reasonable improvement even further in our cost of funds this quarter versus last quarter. While yes, a lot of the gains are in, we still believe that there is some chipping away, Which we will be able to do even as we start increasing our focus on the asset side, which we have already started doing.
Okay. Okay. So would that should I construe that, that you are a little more comfortable with the environment today? I mean,
Let me highlight to you a simple fact. Last year when COVID-1.0 happened, We froze everything including higher because we did not know how it would hit. Through COVID 2.0 And actually we started before that. We continued aggressively hiring people. And a lot of those people were on the technology side and for asset financing businesses and across the board, including different other aspects of the business.
We have not slowed down our hiring, which we picked up momentum starting October through March and through this quarter. Our number of people addition has continued through the entire COVID 2.0 period. And there's no better way of Communicating and saying that we are putting money to work by adding people to COVID 2.0.
Right, right. Perfect. Thank you, Bill.
Thank you. The next question is from the line of Kunal Shah from ICICI Geordis. Please go ahead.
Yes. Firstly, on ECLGS, the overall number of RMB 11,900 crores So, was it by March and it was roundabout INR 10,000 and there was incremental disbursements of INR 2,000 crores in this quarter under various schemes For me, there was hardly any disbursement during the quarter.
I think I'll ask Manan and Jamie to answer that question. And I again wanted to share with all of you that contrary to popular view, Our experience on ECLGS so far has been very positive.
Yes, sir. I was coming
to that in terms How do
you think this portfolio would behave given that second wave would have again disrupted the same set of customers who were impacted during the first wave as well? So at that time, maybe the viability which we would have thought about that would have further got derailed. So do we see the risk going forward to Maybe the reverse metrics were done earlier. If you look at our
slippages for the June quarter, there is Relatively insignificant movement in SME and Business Banking customers, which is where bulk of the CLG has happened. We have not seen any significant signs of stress in the April to June quarter of people who have taken ECLGS at least up to March. ECLGS 3, which you are now seeing, is also been included for other sectors. So I'll ask Maniyan first and then Jameen wants to share Your thoughts please?
Yes. So our The first one you see here are sanctions were made earlier and part of the disbursements that have happened later. So No significant new sanctions happened. There was a small amount, but not significant amount of sanction happened Both that and in fact on stress sector also, Demi has the
number, Demi you have
the number, right. Our sanctions are not significant in that.
Actually, if you look at
it As things stand now, like Uday said, SME and MSME, we have never seen any significant deterioration on the portfolio vis a vis the non TCGS portfolio in this period. Of course, in segments like Commercial Vehicles For that where there has been general deterioration, there has been a general deterioration here also. We aren't seeing that much dramatically differential deterioration yet.
Yes, I would kind of endorse that. But just coming back to your initial one, Kunal, If you look at March, our total disbursement was around 11,370, thereabouts, which will now move to 11,900. So it's about INR 500 crores of what we have dispersed in the current period. Some of it would be, as Manjal mentioned, What we have agreed last during the period before March, but the disbursement has happened now. So the overall incremental for this quarter is about INR500 crores.
Sure. Thanks. That's helpful. And secondly, for Mr. Kotak.
So on corporate Banking side, when we look at the other private peers, they are still seeing the growth. You alluded to the fact that now we have best in class cost of deposit, but somehow that traction in the better rate or the better rated corporate is not visible in terms of the growth for us. So how should we see it? Is it more in terms of holistic offering or maybe we are waiting? And secondly, in terms of your experience, given The situation in the economy, the stress which we are seeing in retail, do you think that, okay, corporate, which is currently very, very pristine, okay, that can continue?
Or we could See the flow through in the corporate stress with some kind of a lag of 6 to 9 months.
So I think again I'll answer it in a few parts. First of all, Corporates which have access to capital should be able to ride it through. One of the most interesting and differentiated parts of the cycle has been amazing access to capital even for weak sectors. For any business which has access to this capital actually has done I've been able to sustain and survive through this stress period. Any business which does not have access to capital We'll have challenges whether it's corporate or non corporate.
Now there are some sectors in even in the corporate sector, You have to make a judgment whether they will have access to capital, whether it's the telecom sector or hospitality sector or other sectors, will they have access to capital? If they get access to capital, they will sustain and survive. If they don't, there is an issue. So that is most important distinguishing picture Factor of COVID is how dramatically it has separated those who get access and those who don't. I would call it the haves and the have nots.
So that is one broad brush, which I would like to share with you. The second and the other important issue is That when you are lending to corporates, you just ask yourself the tough question And I'm giving you some mathematics. I mean, we are not giving you any rocket science. The Reserve Bank of India today takes overnight money from banks for its surplus at a daily compounded rate of 3.35%. You take a 1 year treasury bill, It's give or take around 3.75% to 3.8% yield.
Now instead of Putting money here, if you put money in a corporate loan, you have straightaway an additional cost of priority sector lending. After that, what is your return or ROE or risk adjusted Return on capital is a tough question you got to ask. And therefore, If priority sector lending is a cost, is it better to be doing debentures for those companies versus giving a lot? And we ask these tough questions and take the tough calls because finally the priority sector lending cost Is a cost which hits a bank over 3 to 5 years. So I can easily be short term in my approach, Grow my lending book by taking huge bets end of the quarter and show higher growth, but I will pay the price over 3 to 5 years by putting money at 2 point 5 Percent for 3 to 5 years.
And we don't want to get into that. We would rather do what makes business sense For a franchise today, a corporate will shop and take money from anybody, whether it's a bank or a mutual fund. They are going for the lowest rate. If To save 20 basis points, we will take the money. And public sector enterprises where a lot of lending has happened, they have auctions of bidding.
And some of the auctions Maniyan may confirm have gone at a lending rate for 90 days 120 days sub 4% Large amounts, INR 5,000 crores, INR 10,000 crores kind of lending banks have done. And they've been able to show a significant growth in their Loan growth, but it is not value accretive.
Sure. So maybe where the
issues are there definitely doesn't make sense, but on the maybe on the other.
When you look at the amount of growth which has happened, it is a We have empty 90 days, 180 days shops again, get it 20 basis points cheaper. If one is a bank who has given So, INR 5,000 crores or INR 10,000 crores earlier, they have no way of getting off the tiger because moment they do that, Analyst community will say, oh, next quarter, why is your loan growth slowed down? You're then riding that tiger.
Yes. Sure. So despite funding costs, maybe so what would actually lead to getting to the corporate? I don't think this Environment would change, PSUs will always have the upper hand in terms of this liquidity scenario. So when do we get it?
So The only
thing is we are taking a
call between the credit substitute and the loan growth. That's the only call, okay? But otherwise, in terms of loan growth, no, no. Can I come in?
Can I come in? Yes. So if you connect the dots on what things I said during my presentation, See, it's important to get growth is as important as asset growth. And I told you that Our income growth is significantly more, I said significantly more than our asset growth. So I think the corporate banking business has to be seen As a sustainable good ROE business and as long as your profits grow, you are okay.
And profits grow because of better wallet share on other products than only loans. Loans are most times at the top end of the corporate loans are the worst ROE product. So just correlating the corporate bank health with just asset growth is not the right way to look at it. At least in our view that is not the right way to look at it. As long as we can deliver growth in incomes and profits that's what matters.
And if I add on to what Maniyan says, I would much rather focus on growing in mid market and SMEs. That is where we would focus on our growth rather than the top end corporates or PSUs, because that is riding a tiger at poor ROEs and paying a price on priority sector.
And in some of these large corporates and especially PSUs, The more profitable part of the transaction banking business, unless you get a share of that, which is very difficult to get It doesn't come easily because it goes to the PSU banks largely. To make an overall client ROE, Radek, on a risk adjusted basis, return on capital employed for that customer asset Very critical. And so we look at this from overall profitability, not necessarily asset growth. So I just wanted to reemphasize that.
Sure.
Of course, it's
not that if we get assets at the right pricing and right mix of wallet, we will of course take it and our ability Get That is there. We are present in all relationships. It's easy for me to add INR 5,000 crores in a quarter If I just drop the price to an unsustainable ROE. But like Uday said, I'll ride a tiger which I will never get on. And culturally, the team gets into that kind of business.
Sure, sure. Got it.
And one last question in terms of SMA, if we have to look at less than INR 5 crores, how would have been the behavior given that Maybe as you highlighted major stress is in say retail and the small businesses. Would the trend be very different than what we see it in terms of the overall SME
Puneet? Puneet, the numbers which we give you are the numbers for SMA for exposure which are over 5 crores. Yes. What gets reported to Crillik? So yes, FMA 2 number would have gone up this period versus last period.
But last year, Getting to the fact that there was a moratorium and all of that, so anybody who had taken a moratorium that was a standstill agreement. So to that extent they were not counted as SME II. So yes, there has been a rise on that SME II overall from What was your last letter this year, but these are only for our 5 crores plus numbers.
And these are not comparable because moratorium period Delay was kept out of the SMA calculations.
Yes, true. Okay, okay. Thanks a lot.
Thank you. Before we take the next question, a reminder to the participants, please limit your question to 2 for participants only. You may rejoin the question queue if you have a follow-up. The next question is from the line of Saurabh from JP Morgan. Please go ahead.
Sir, two questions. One is, what will be your
average LCR During the quarter? So that's one. And secondly, on
your real estate book, you have INR 12,000 crores as per
your partner exposure, yes, if you
let down the LRD. And the parent bank is about 6,000. So is there a saying that KIML will have 6,000 for SEI?
I think, Jemin and Jemin, do you want to answer?
Yes, sorry. My if you look at LCR average, we would be Over 160% for the April June quarter.
Okay. Okay. So and what's your policy on HLS also?
I mean, if you can just kind of
This is at the bank level.
Okay.
Having said that, if you keep on getting liquidity flows, You have placed them somewhere. Yes. So I think LCRs at 160% is not a part of strategy. It's a part of necessity.
Okay. So as this comes down, hopefully, your earnings release will Will that be your expectation?
I beg your pardon, I missed you.
Sir, as the LCR comes down, we should obviously see some
Obviously, LCR rates will be lower than what we'll get in the lending market. LCR assets, HQLA assets Rates lending investment yield will be lower than what we can get in the lending market. The current NIMs of 4.6% are with 100 and 60% average LCR for the last quarter. Okay. Got it.
The other one, you're right. The If I take the exposure of the NBFCs, the 2 NBFCs on the CRE, it would be about 5,000 hours gross. And remind you the bezel disclosures are on exposure level, which therefore includes limits as well as non funded. The numbers we are giving right now on the is
in the accounts receivable as outstanding.
Yes. So I was taking the
front page only. So just one clarification. So why would you I mean the CI program, the NBST,
Will I speak mostly to a Tier 2 developer?
I mean, that's why it's currently investing.
So I think as Manyan mentioned, Kotak Mahindra Investments is a more specialized NBFC in real estate lending, okay, and structured finance. So that's the specialization the team has built, which is built in a focused manner in that company.
Okay. Thank you. Yes, but largely we are into Tier 1 developers only. There is a small exposure at Tier 2 level depending on the project quality, But otherwise, Nagi, our exposures are in the Tier 1. Okay.
And if you look at the net NPA ratio in Kotak Mahindra Investments, it's at a 0.34%, Jenny?
0.4% that's it, Sanjay. Yes. 0.6% in KML.
Yes, 0.6% in KML, net NPL.
Yes. Good.
Thank you. And they are all secured exposure, so LGDs are not likely to be high. Thank you, Sankhya.
Thank you. The next question is from the line of is Parameshwaran from Jefferies. Please go ahead.
Hi. This is Patel. Just a couple of things, D. C. 1, on the business banking and other credit SME type of credits, you've had a good experience so far.
How do you look at it from a growth perspective from here on? And even in this quarter, we've had Like maybe 4%, 5% or 6% decline between the consumer banking, the working capital and Business Banking Credit. Some of the other peers have still grown and maintained asset quality. Any Specifically to look at from the divergence that we have seen with you and the other
large lenders,
my first advice to you is be a little careful So, of 3 disparate periods you're comparing. You're comparing quarter 1 2020, which was a different COVID 1.0 versus COVID 2.0, which was a different period and quarter 4, which was a different period. And In some of our limits, including in working capital and SME, we found a significant number of Our borrowers actually credit money is in their overdraft accounts. So we had the limit, we had the exposure, but suddenly they dropped their exposure by sort of funding back as they sort of went into a shell in April, May. So it really depends on the nature of the borrower you have, what is the overdraft usage And my view is 3 disparate periods.
We're very careful of drawing trend analysis Behings on this, what I would call as, volatile comparable periods. More sustainable trends should be looked at over next couple of quarters before taking a view about how The trends are showing with reference to different players. That would be my strong recommendation and advice.
Understood. And just very shortly, any updates or comment on the RBI issue around The succession, etcetera, or too early to say?
No updates, no comments. When we have them, we will share.
Thank you so much.
Thank you. The next question is from the line of Manish Upla from Citigroup. Please go ahead.
Yes, good evening. If you were to benchmark your March discussments at 100, For the month of June, where would we have been with respect to March?
Damian, I don't think I have the numbers you have to spend.
I wouldn't have it. It will be different across different businesses, but I shouldn't have an overall number of hands.
Okay, sure. 2nd, you made a comment that ECLGS disbursements are generally bigger as well. I was just trying to understand what do you mean by that because I'm assuming There would be monetary and etcetera under those disbursements. So what parameters are you looking at therefore you can make that
If the guy is really under stress, he won't be able to pay on the interest, especially after COVID 2.0. And if I look at the slippages, at least in April to June quarter, Other than commercial vehicles, in general, the slippages in ECLG's portfolios have not been anywhere near as high as we've You've seen it the tractor portfolio and commercial vehicle portfolio. That's what I mean.
Got it. Right. One last question. Jennie, on the Q, This is the yield on loans have gone up. It's largely because of lower interest reversal or is there anything else as well?
No, Y o Y basis, if you look at the last quarter, the interest yields when we talk Advances, you go into the fact that because of that Supreme Court judgment, we had to take a hit of INR 110 crores in the last quarter. Yes. When you calculate your interest on advances, you would have taken the 110 out of that.
Okay. Got it. Thank you. Those are my questions.
Thank you. Ladies and gentlemen, this is the last question for today. I would now like to hand the conference back to Mr. Uday Kotak for closing comments.
I just wanted to first thank all of you for spending 1.5 hours with us. And just to share that for all our take, I hope That either there is no COVID 3.0 or if there is a COVID 3.0, it is milder. And if that is the way it is, I would like to say that the future is brighter. Thank you very much and wish you all Happy, safe and sound times ahead. Thank you very much to all.
Thank you. On behalf of Kotak Mahindra Bank Limited, this concludes this conference. Thank you all for joining. You may now disconnect your lines.