Q4 20/21

Apr 26, 2021

Driven by our strategy of delivering granular growth and a clear focus on staying close to the needs and aspirations of our customers. Further, our efforts are also getting acknowledged by independent parties as well. During the quarter, Axis Bank was ranked number 1 and was the only domestic bank in the large corporate institutional coverage quality leader category at the 2021 Greenish Excellence Awards. We are also named the best digital bank in India by 2 publications, namely Financial Express and Asia Money. We continue on path of sustainable growth on Back of a positive change in culture, bigger aspirations among our employees and strong focus on execution. We are monitoring the macroeconomic situation and emerging health challenges of the COVID second wave in India. We have the requisite strength in the balance sheet and are well prepared for the future. We will continue to be prudent and bold. Before I go further, I would like to place and record my gratitude to all of my Access colleagues and our partners who have gone beyond the call of duty during the year. There have been exemplary in their commitment. Our ambition to build a sustainable and future ready bank is defined in the 6 focus areas within the GPS framework. 1st is strengthen the organization core and quality of our balance sheet significantly. 2nd, invest technology capabilities to deliver on our transformation plans. 3rd is act with relentless focus on making access digital. 4th, build granularity across all our business segments to drive sustainable growth. 5th, deliver strong operating performance with improvement and return metrics. And 6th is to create significant value among our key subsidiaries. Let me now discuss each one of them in further detail. Strengthening the organization core and quality of our balance sheet differently. Sustainability continues to remain the foundation of the bank's GPS strategy. In the last 2 years, we have taken concrete actions towards strengthening the core around policies, processes, controls and operations. Our risk management framework is more mature and broad based today. And this is reflected, for example, in the strength of our credit underwriting processes. This conservatism extends to our accounting policies as well. We have made significant progress on legacy issues with the promotion of BB and below book having steadily declined over the years. The quality of new credit organizations has improved with 94% of the incremental corporate sanctions in financial year 2021 coming from those rated A- and above. We have been proactive and prudent and we have built significant additional provisioning buffers with standard asset coverage ratio of 1.95%. The bank's strong balance sheet and healthy capital with CET1 of 15.4% and shows that we enter the cycle from a provision of strength. We have moved the needle on processes, controls and execution rigor. The results are evidence of this, though we'll be the first to admit We have more distance to cover here. As far as investment in technology capabilities are concerned, technology is at the core of future ready access we are building. The pandemic accelerated our technology investment plans. In the last 24 months, we have ramped up our OpEx and CapEx spends in technology by 79%. We are modernizing the core systems at speed, scaling up the cloud portfolio for supporting the Insta and real time business models and building resilience in our technology infrastructure as we respond to the increasing transaction volumes and the newer data lines of business. We have also shifted to an agile way of working with multiple pods and squads running the organization wide transformation programs. We have also made significant investment in the Business Solutions Group to deliver innovative technology solutions and build greater collaboration between business and technology. We started a multiyear technology transformation program this year that will accelerate our journey to place technology at the core of our future operating model. We have taken a cloud first approach for our digital banking platform. Our 50 plus initiatives on cloud is an evidence of an early leadership in this area within the Indian Financial Services sector. We use this capability during the pandemic to enable one of the largest work from home programs in this industry with over 20,000 concurrent users who are able to work remotely with access to all the bank systems. We have signed up with a leading cloud service provider to collaborate on core modernization, reimaging customer journeys and adopting global best practices in this area. We have also invested heavily in the areas of IT security and data privacy as we transition to cloud. In financial year 2021, we launched more than 220 high priority projects. We are broadly packing to plan with 85% of the expected work finished and more than 50% projects fully completed. We intend to invest significantly in customer experience through an optimal mix of tech and touch. The execution of these transformational projects remains on track with positive outcomes in the form of reduction in turnaround times, improved productivity and better customer. 3rd was around making access to data. Data for us is not about making incremental changes. We had set up a distinctive digital banking team with the objective of not only taking a fundamental relook and rematching end to end customer journey facing propositions, but also transforming the operations and building innovative capabilities in the bank, which makes us ready for a digital future. During the year, We made 16 of these initiatives live, taking the overall digital offerings to 28. Of the above offerings, many are industry first. For example, a cloud native loan management system, which has been built in house. We have also started seeing traction in the new account acquisition, Leveraging the video KYC platform, we have opened over 30,000 video KYC base sales accounts in March 2021 alone and over 1.35 lakh accounts for the full year financial 2021. On WhatsApp Banking as well, we have seen good traction with 5 lakh customers already onboarded in the 1st 2 months of launch. We have also launched a buy now, pay later product along with free charge. Customers can now enroll through a simple free kick process and spend at over 400 merchants both online and offline. We launched a couple of fully digital products on the ForEx front. Customers can now send outward remittances in 100 currencies from our mobile app fully digitally. Similarly, customers can also avail a Forex card from any of our digital channels. 4th was around building granularity across all our business segments. On deposits, over the last 2 years, We have reoriented the structure to drive rigor and rhythm, fill the product segment gaps and leveraged our distribution, including alternate channels to improve the customer acquisitions. These continue to reflect in the growth numbers. 1,800,000 new liabilities accounts have opened in quarter 4, up 10% quarter on quarter, taking the overall number of new liabilities accounts opened in financial year 2021 to 6,700,000. New savings and current account acquisition grew 12% and 7% quarter on quarter respectively. Average retail savings balances for new accounts were higher by 11% year on year. New salary relationships added during the year grew 55 percent to 2,700 plus names. The salary in our segments on a QAB basis grew by 24% 22% year on year, respectively. Our access virtual center, the ABC, where we have around 1500 virtual relationship managers, managing relationship with our customers, existing customers and their affluent and other programs. It was always an important channel for us, but has become more critical given the challenges of meeting customers in person during the pandemic. Our customers have embraced our proactive approach to this channel and we continue to make significant investments here. ABC expanded to 3 new centers across Mumbai, Andal and Calcutta during last year and is now present across the country with 6 centers and multilingual capabilities. We have plans to expand this further in financial year 2022. Today, we connect with more than 3,000,000 customers every month through ABC. As a result of rigor and rhythm across branch banking, digital banking and ABC, we have seen significant uplift in the sequential growth trajectory of our granular QAB deposits. SA and CA deposits have grown sequentially on a quarterly average basis by 4% 5%, respectively, for each of the last 6 quarters as against an average of 3% for the last 16 quarters. Coming to Advances. After many quarters, the growth in advances has come from all segments, retail, CVG and corporate. Focus, however, has been on quality growth across the three segments. The retail segment continues to see strong momentum with highest ever quarterly retail disbursements during quarter 4. Domestic secured retail loans grew 13% year on year and 8% quarter on quarter. Secured segments like HL, Lab and SVB continue to grow strongly with 45% QoQ, 51% and 42% Q on Q growth in disbursements respectively. The overall quarter 4 retail loan disbursements We're up 47% QoQ, which is over 6 times that of what we did in Q1 of last fiscal. Our home loan logins and disbursements for quarter 4 Financial year 2021 touched highest ever quarterly numbers driven by improved vigor and rhythm and reduced turnaround times as a result of project initiatives we've undertaken in the segment. Our deep geo strategy continues to progress well with focus on expanding reach in rural and semi urban areas. During quarter 4 financial year 2021, We enrolled over 6,300 common service centers, CSCs, taking the overall fee of the count to over 13,500. The disbursements on deep geo branches grew 111% year in year and 61% quarter on quarter. Overall, rural loan book disbursements grew 47% quarter on quarter, delivering gold and farm equipment loans. Our partnerships with agri corporates and rural local ecosystem and top equipment manufacturers for factories and other farm businesses is helping too. On the Commercial and the Corporate Banking segment, our CVG business is a strategic priority for us as we bet on the strength of the future of SME sector in India. It also remains one of the more profitable segments for us. We have spoken about 3rd program in CVG, Prajistan Cult, which aim to reduce friction in customer journeys and improve sales productivity within the CVG business. The results of the program is reflecting in our performance in this segment. Lean and digitally enabled process streams across Multiple customer journeys have reduced the loan approval time by 75% and improved the resource productivity by 2x, Further, leveraging the branch network and better collaboration between businesses, branch and operations team has resulted in 2x growth in originations from branch network. The granularity of the business is reflected in 18% year on year growth and the number of new customers added. On deposit, The current account deposits from CVG businesses grew by 27% year on year. In the Corporate segment, our focus has been to grow the book profitably, emphasizing on segments that offer high growth opportunities and better percentages down on capital. We also remain focused on further deepening our relationships with better rated corporates through our transaction banking offerings and leveraging One Access capabilities across the Access Group. The corporate loan book, including TLTRO, grew by 16% year on year and 9% quarter on quarter led by higher growth across our focused segments Like mid corporates, government coverage and NMC, they grew by 31%, 66% and 49%, respectively, on year on year basis, albeit on a lower base. During the quarter, we have added 337 new relationships, taking the overall relationship added in financial 2021 to 789. Our market share in mid corporate space is not coincident with our overall advances market share and growing this book remains a top priority for the bank. We have invested in building a strong team here, and we have created an operations playbook to deliver strong growth over the next few years in this segment. Our presence in the key business center have increased from 15 to 20 cities and plan is to expand further in financial year 2022. During financial year 2021, 62% of the loans in this segment were rated A and above. We have a unique opportunity to provide a complete range of solutions to Corporates leveraging our corporate banking franchise and the strong capabilities of our subsidiaries. During the year, the advantages of the One Access platform came to the forefront. Different businesses of the bank like wholesale banking products, trustee services, retail liabilities, burgundy private, Axis Securities And Access Mutual Fund came together to offer 1 Access solution in 21 Capital Market Deals executed by Access Capital. These coordinated efforts are differentiating our value proposition and strengthening our relationships with the clients. Moving on to our cards and payments business. If you refer to Slide 37, you will see that we have rationalized non profitable and high risk segment of commercial card business impacting the overall market share. Our new card issuances have started to grow from quarter 4 financial 2021 onwards, and we expect this to continue and will reflect the retail spend share going forward. During the year, the bank's partnership with Flipkart, Google Pay and FreeCharge resulted in sourcing of over 2 lakh credit cards that contributed to 21% of our overall card sourcing in financial 2021. Flipkart, Axis Bank credit card crossed 1,000,000 cards in February 2021. On the UPI space, the bank now has partnerships with all the major third party UPI apps in the ecosystem, including Google Pay and Adron Pay and phone pay with more than 186,000,000 customer VPs registered with us as on March 31, 2021. On the Wealth Management side, our Wealth Management business Burgundy continues to gain increasing traction with assets under management of INR 213,000,000,000,000 up 45% year on year across the regular and alternate investment solutions. Burgundy Private continues to scale up very well, up nearly 3x year on year to cross rupees INR 50,000 crores in combined AUM. We now manage wealth for 1666 families, up from 853 last year. As far as operating performance is concerned, in face of the adverse macro conditions in the first half of financial year twenty twenty one, the bank's financial year twenty twenty one NII growth of 16% And operating profits growth of 10% represents a healthy performance and demonstrates resilience of our operating model. This has been the outcome of our rigorous acquisition Execution of our GK strategy over the past 2 years and the initiatives are just highlighted in the earlier four themes. Puneet will provide details of the financial performance later. As far as the subsidiaries are concerned, we have spoken about our strategy to scale up our subsidiaries So they start contributing meaningfully to the bank's performance. Our subsidies continue to deliver industry leading performance during the quarter with total financial year 21 profits of INR 8.33 crores, up 75% year on year. If we analyze the second half earnings of these subsidiaries, it will surpass the 1,000 crores figure. The net worth and earnings of these subsidiaries have grown at a CAGR of 17% 57%, respectively, in the last 2 years, even as the bank's investment in these subsidiaries stood flat at around INR 1815 crores. During the quarter, we also completed Couple of transactions that will help us deliver stronger value to our customers from a life insurance distribution and retail Brokey businesses. We completed the Max Live stake acquisition earlier this month and now together with our subsidiaries, Axis Capital and Axis Securities, we own 13%, 12.99% stake in the company, we are now a co promoter. We have shared a strong business relationship with Max Life for over a decade now. We will have a stronger strategic alignment with MaxLives with this transaction that will make us more competitive in the fast growing life insurance sector. In Axis Securities, with the acquisition of CardV's customer trading accounts during the quarter, Axis Securities now has 3,600,000,000 customer accounts and is the 3rd largest player based on customer base. We see huge growth opportunities for us to activate these accounts and opportunity to cross sell various banking and financial products to these customers based on their needs. The broking revenues for Axis Securities grew 122% in financial year 2021 to an all time high. Its financial year 2021 pack was up 10 times And ROE improved from 15.5% to 41% in the last 2 years. Access Finance is poised for strong growth as a full service franchise offering retail as well as wholesale lending solutions across the lending spectrum. Over the last 2 years, Axis Finance has been investing on building a Strong customer focused franchise. In financial year 2021, disbursements grew 50% year on year, around 25% of the attributable disbursements are coming from retail now, with retail book at 27% of total loans. Wholesale book composition has also undergone a massive shift over the last 2 years with focus on real estate companies and cash flow back transactions. The Air Force book quality continues to be strong. No accounts are required were required to be restructured under COVID Restructuring scheme. Net NPA stands at 2%. Axis Financials Financials at 21 PA18 stood at INR 2.11 crores, up 9% year on year with ROE of 14.6% and healthy CR at 20.4%. Access Capital continued to maintain a prerequisite position in ECM and was at the forefront of revival in capital market equity during the year. It completed 52 ECM deals, highest ever in a year to top the ECM table for the 4th year. In financial 2021, PATHS stood INR 1.66 crores. ROE improved from 16.4% to 36.3% in the last 2 years. Access AMC. Over the last 2 years, our mutual fund business has strengthened its market position, invested in its leadership team and launched innovative products and equity savings portfolio including some global and sustainability team based investing strategies. Access AMG today is one of the fastest growing AMCs For the last 3 years, with average OEM growth of 42% 134% in financial 2021 and last 3 years, We have continued to leverage our distribution channels, including digital to acquire new investors and improve customer experience. ATC's AMC's full year path grew 100% to INR242 crores. And my concluding remarks, there is a trend of larger and better prepared players relatively doing better than others in almost every industry. In Financial and 21, banking was no exception to this trend. A disruption like the pandemic often redraws the baseline. We see this as an opportunity to invest and get ahead in the game. However, before I conclude, I would like to state that the spread of second wave of COVID As now intensified throughout the country, the interplay of the pandemic and mobility restrictions will, of course, have an impact on economic growth in the short term. We are hopeful this will be shuffled with coordinated action and support from all the relevant authorities. We also believe that our building blocks are firmly in place. The rigor and rhythm that we have inculcated in our working is leading to a positive cultural change in the bank. Our investments in technology, digital And multiple business transformation initiatives have set us on the right trajectory to deliver really high growth than the market across products and businesses. We are quietly confident about our future. With that, let me hand it over to Puneet. Thank you, Amitabh. Good evening, ladies and gentlemen. Thank you for joining us this evening. I'll discuss the salient features of the financial performance of the bank for Q4 FY 2021 as well as full year FY 2021 focusing on Operating performance, our capital and liquidity position, growth across deposits and loan book, Journey of becoming a more prudent and conservative franchise are asset quality restructuring and provisioning. We have consistently stated that this financial year Has been all about strengthening our core businesses and ensuring that our balance sheet is resilient across cycles. I'm happy to state that we've been able to deliver on both objectives. Amitabh spoke at length on the progress made on each of our businesses. My focus, hence, will be on our financial performance. For the full year full financial year FY 2021, our key numbers are as follows: NIM stand at 3.53%, Our Y o Y growth of 2 basis points, domestic NIM stand at 3.68 percent, a Y o Y growth of 3 basis points. Our NII stands at INR 29,239 crores, a YOY growth of 16%, Operating profits at INR 25,702 crores YOY growth of 10%. Operating profit margin stands at 2.74%. Cost to assets stand at 1.96% compared to 2.09% for the last financial year, reducing 13 basis points on a Y o Y basis. Cost to income at 41.7 percent, improving 80 basis points Y o Y. Credit costs at 1.87 percent, improving 28 basis points Y o Y despite FY 2021 seeing COVID-nineteen related stress and slippages. PBT stands at INR 8,806 crores, increasing 80% Y o Y. PAT stands at INR 6,588 crores, increasing 305 percent y o y. GNPA at 3.7%, declining 106 basis points And NPA at 1.05 percent declining 51 basis points. The PCR stands at 72.4%, improved 3.40 basis points from I OI. In Q4 FY 2021, we have made prudent additional loan loss Investment depreciation provisions aggregating INR1882 crores. This has adversely impacted the PAT And PBT for the quarter by INR 1409 crores and INR 1882 crores, respectively. The breakup of the additional provisions are as follows INR803 crores towards voluntarily improving the provision coverage of our CBD book from 58% to 80%, which aligns it with the higher PCRs we hold in other segments. The existing provisioning policy was fully compliant with the RBI directives. The changes made in the quarter relating to rates will now apply on a consistent basis on all future recognition of NPS. We have also adopted a rule based right of policy for loans in this segment. INR1079 crores towards security receipts. With this provision, the balance with this provision, the bank has fully provided for all security receipts on its balance sheet, I. E. The carrying value of security receipts on the balance sheet of the bank at 31st part 2021 is nil. Against the provisions made in the last two quarters on security receipts, the reported NAV of the security receipts Stand at INR 1393 crores. In this backdrop, we will discuss our Q4 performance. The reported NII for Q4 stood at INR 7,555 crores, representing 11% And a sequential Q on Q growth of 2.5%. Reported NIMs for Q4 FY 2021 stand at 3.56 with a Y o Y growth of 1 basis points. The impact of interest on interest penal interest waiver emanating from the Supreme Court judgment, Estimated basis, RBI directions and IBA input aggregate INR163 crores. This amount has been debited to interest income. Our fee income stood at INR 3,376 crores representing a Y o Y growth of 15% and a sequential quarter growth Of 16%. 64% of our fees come from our retail business, 36% come from our wholesale business. 3rd party distribution Fee increased 43% YOY and 41% on a sequential quarter basis. Commercial Banking business, which we've been investing in, Fees grew 26% on a Y o Y basis and 51% on a sequential quarter basis. Transaction Banking Fees grew 19% on a Y o Y basis. Forex fee grew 7% on a Y o Y basis. We have seen market share gains across Our FX letters of credit and forex flows. Trading income stood at INR789 crores, growing 198 percent WAY And 115 percent sequential quarter. The increase in trading profits for the quarter is attributable mainly to a sale of a strategic investment, which on which we recorded profits of INR299 crores for the quarter. Other income stood at INR503 crores, Flat on a sequential quarter basis. The recoveries from the return of pool on retail assets, which sit as part of our other Income improved 78% Y o Y. This gives us comfort that recoveries could hold up even if there were fresh lipids, though with the lag. Operating expenses for the quarter of INR 5,359 crores grew 8% Y o Y and 6% sequentially, 28% of the increase in cost on a YOY basis is on account of choices made for provisioning on the Social Security Code. The balance In operating expenses, growth YOY is attributed well to our higher business volumes and our investments in technology. Operating expenses to average assets stand at 1.96%. Cost to income for the quarter is 43.8%, lower 200 basis points Y o Y and 150 basis points on a sequential quarter basis. Operating profit for Q4 INR 6,865 crores, YOY growth of 17%, sequential Q on Q growth of 13%. Our operating profit margin for the quarter stands at 2.84%, improving 22 basis points on a Y o Y basis. Provisions and contingencies for the quarter, including INR1882 crores for CBD provisions and security receipts were INR 3,295 crores, declining 57 percent Y o Y and 28% Q on Q. The bank has neither made nor utilized any of its COVID-nineteen provisions for the current quarter. The reported credit costs for the quarter are 1.7%, representing a YOY decline of 107 basis points and a sequential quarter decline of 160 basis points. The more appropriate way of looking at the credit costs for the quarter is excluding the catch up provisioning on recognized NPS due to the change in provisioning rules of our CVG portfolio. The credit cost for the quarter excluding CVG provisions stand at 1.21%, representing a Y o Y decline of 156 basis points And a sequential Q o Q decline of 209 basis points. Annualized Q4 credit costs, net of recoveries From the return of pool and one time catch up CBD provision stand at 0.99% compared to 3.02% for Q3 FY 2021 and 2.34% for Q4 FY 2020. Profit before tax INR 3,570 crores, representing a sequential growth of 100 and 39%. Profit after tax INR 2,677 crores, representing the sequential quarter on quarter growth of 140%. The Y o Y picture for PBT at PAT is not comparable as we reported a loss in Q4 FY 2020 on account of our prudent COVID provisions. Annualized ROE for the quarter stood at 11.72%, a 2.4x increase on a sequential quarter basis. The strength of our balance sheet is reflected through the cumulative non NPA provisions, which now stand at INR 12,010 crores. The provision of COVID-nineteen related INR 5,012 crores, restructuring weak assets and other provisions of INR 6,000 98 crores. The standard asset cover defined as all non NPA provisions by standard assets stand at 1.95%, up from 1.38% at March 20. Our provision coverage ratio, all provisions for NPA plus non NPA provisions by GNPA Stand at 120% compared to 95% as at March 20. Our capital and liquidity position. The risk weighted assets of the bank at 31st March 2021 Stands at 64% as compared to 67% at March 2020. This improvement in RWA is reflective of the quality of the business being done by the bank. Our total capital adequacy ratio is 19.12%, our CET1 is 15.4%. Our CET our capital adequacy in CET1 improved by 159 basis points and 206 basis points on a Y o Y basis. The prudent COVID provisions we carry at March 31, 2021 provide us with an additional capital cushion of 69 basis points over and above the reported capital adequacy. Our average LCR for the quarter was 115%. Our excess SLR stood at INR 57,915 crores. On growth across our deposit franchise, on the savings side, we are focused on prismization and deepening Of our deposits franchise, and that has been playing out well. Amitabh has already spoken about in great detail. We'll request you to refer Slide 23 Of our investor presentation for further details. On the deposit side, we've taken a conscious choice not to renew FC and RB deposits that matured in the quarter. This has impacted sequential and Y o Y retail deposit growth by 3%. We prefer to focus on quarterly average balances instead of month end balances for our liability franchise. On a quarterly average balance basis, Casa grew 18%, Y o Y and 7% Q on Q. SAAR grew 17% Y o Y and 6% sequentially. SAAR grew 18% Y o Y and 10% sequentially. CASA ratio is 42.4% compared to 39.2% as of 31st March and 42% as of 31st December. Our retail deposits grew 16% YOY and 5% on a sequential quarter basis. The month end balances, As is expected in the growing franchise, show better trends than quarterly average balances on most parameters with Casa Growing 45% with Casa at 45% on an NAV basis, growing 373 basis points Y o Y and 175 basis points on a Q o Q basis. Our overall loan book excluding TLTRO Investments grew 12%, Y o Y and 8% sequentially, our granular retail assets and high quality large borrower relationships have been the key driver for our loan book growth. Retail advances constitute 54% of our overall advances. Domestic retail loans grew 11% Y o Y and 7% sequentially, 81% of our retail book is secured. Our corporate loans constitute 35% of our overall advances. The book including TLTRO grew 16% YOY and 9% Q on Q. 38% of our book is of a tenure less than 1 year And 85% of that book is rated A and above. The SME book constitutes 11% of our total advances. The SME book grew 13% on a Y o Y basis and grew 10% on a sequential quarter basis. The book characteristics are well diversified, 89% of it is secured and 71% of it is of a shorter tenure. We continue to see traction in our business Sourcing as is visible through our disbursement numbers. Retail disbursements grew 47% Y o Y and 47% on a sequential quarter basis, Driven largely by our secured business, the secured disbursements in retail grew 70% on a Y o Y basis. The secured retail disbursements for Q4 were 85% of our total disbursements. This translated to 12 percentage Better secured mix and disbursements as compared to Q4 FY 2020. This is not a 1 quarter trend. We have seen this play out Through all quarters of FY 2021, our branch sourcing on retail loans was at 59% for the 4th quarter. Wholesale disbursements grew 8% YOY and 48% on a sequential quarter basis. The commercial banking disbursements grew 147 percent YOY and 49% on a sequential quarter basis. The growth in our overseas corporate loan book is primarily driven by our City branch exposure, 95% of our corporate loan book is India linked and 92% is rated A and above. In FY 2021, we have taken actions across accounting policy changes, NII reserve additional provisions around COVID, Provisioning for estimated probable restructuring pool change in provisioning policy and provisions on security receipts. In terms of accounting policy changes, we implemented accounting policy changes in Q1 of FY 2021. The cumulative full year impact On the PBT is INR 232 crores on account of policy changes. We have assessed and do not anticipate any further tightening Of our provisioning rules or accounting policy changes in FY 2022 that could have a material impact on our reported number. NII reserve has been utilized in the current was created in FY 2021. COVID provisioning continues to stand at INR 2012 crores despite a 50% reduction in the stress as per assessed models as originally assessed last year at the start of COVID-one. The restructuring under COVID-nineteen resolution scheme is at 0.3% of our GCA. We carry provisions of INR 4.99 crores against these assets against the regulatory requirement of INR 79 crores. The provision cover stands at 26%. The segmental picture is set out on Slide 50 of our investor presentation. Security receipts, the bank holds Security receipts have an aggregate value of INR 16.81 crores, these are 100% provided. The one time impact of the change in CDG provisions Improved the PCR of that segment by 22%. Our asset quality trends are as follows: the gross NPA, net NPA and PCR Of the bank and the segmental gross net and PCR are set out on Slide 49. On a headline number basis, our reported gross NPA is 3 point 7 0 percent declining 116 basis points on a Y o Y and sequential basis. Net NPA shows Improvement at 1.05 percent declining 51 basis points and 14 basis points sequentially. The gross slippages for the quarter were INR 5,285 crores. In line with what we had indicated in our previous calls, Gross slippage ratio declined 175 basis points on a sequential Q on Q basis. Gross slippages in CPG and Retail moderated on a sequential quarter basis. Reported net slippages for the quarter are INR 1822 crores compared to INR 5,831 crores in Q3 FY 2021, translating to a net slippage ratio of 1.28%. The net slippage ratio declined 2 73 basis points The asset quality of Access Finance remains stable with net NPA of less than 2%. I will spend a little bit of time clarifying the restructuring that we have done. The bank has been judicious around restructuring loans under the COVID-nineteen resolution scheme. At March 31, 2021, fund based restructuring invoked by the bank Stands at INR1848 crores or 0.3 percent of our gross customer assets. Of the amount invoked to INR 623 crores has been implemented at 31st March 2021, Translating to a 0.1% of GCA. To clarify, the cumulative amount of restructuring that we could do It's capped at 0.3 percent of our GCA. The linked non fund based exposure for which there have been no change in original terms 1st one to any restructuring stands at INR 9.23 crores. On a segmental basis, the restructured loans are 0.6 percent For the Wholesale Banking Group, 0.14 percent for the Retail Banking Group and negligible at 0.02% for our SME book. Our restructuring over the COVID restructuring package under the MSME Team stands at a nominal value of INR335 crores. Collections ECGLS Outlook. The demand resolution for the retail portfolio was over 98% for Q4 FY 2021, improving substantially from September 2020 and was higher than pre COVID levels. The check bounced trends Stay marginally above pre COVID levels. However, the same month resolutions have improved due to our focused and strengthened collection efforts, both physical and digital. The investments we've made in collections in FY 2021, like building a 10,000 plus strong force will help us Better deal with any impact of COVID wave 2. With the Supreme Court dictating its stay on classification, We should be able to pursue legal recourse, especially on our secured retail portfolio. However, given the onset of Wave 2, we will monitor progress on this front. Overall, approach to ECGLS was conservative. The total amount disbursed under ECGLS was approximately INR 10,400 crores lower than our loan market share. We only granted ECJLS to our existing customer set post full credit assessment. ECJLS was given to approximately 26,000 customers across the bank. 99% of these customers were sanctioned under ECDL S1. We have chosen to identify the stress early in our portfolio, Use ECDLS and restructuring selectively and hence Redis' largest liquidation in FY 2021, which places us well as we enter FY 2022, subject to the extent of impact of COVID wave 2. The BB book, the fund based BB book, BB and below book as a percentage of customer assets stands at 1.09%, declining 28 basis points on a sequential quarter basis. 38% of the BB and Below book is rated better by at least one external rating agency. INR 4.19 crores representing 5.63% of the BB and below book could have been upgraded As it was proactively downgraded on estimated probable restructuring and the borrowers Aggregating this value did not seek restructuring from the bank. The average ticket size of our fund based loans across BBB+BBBBBB- is now down to INR 40 crores with no individual fund based exposure that is 4 digit crores. During the quarter, in aggregate, we collected 1404 crores out of our BB pool, upgraded 92 crores, INR 920 crores slipped and we further downgraded INR 961 crores into the BB pool. We will request you to look at Slide 50 of our investor deck for more detailed commentary around aspects of BB, net MP and restructure. As I close, allow me to re summarize the selling points for the financial year ended March 21. Our operating performance improved reflected in the PPUB growth And PAT growth of 305%, improving efficiency in our business reflected the reduction of our cost to average assets from 2.09 to 1 point Time 6, legacy asset quality being proactively dealt with reflected in full provision for security receipts, PCRs improving by 3 40 percent YOY basis, gross NPL declining 116 basis points And net NPA declining 51 basis points. Our prudence is demonstrated through the choices we continue to make to strengthen our balance sheet. The cumulative non NPA provisions stand at INR 12,010 crores. The coverage on gross NPA now stands at 120%. The standard asset cover stands at 1.95%. Our granular retail deposit book has remained resilient. Our granular deposits Growing at 16% and we continue to focus on quarterly average balances, our corporate book mix is improving Along with 94% of new originations being rated A1 or better and short term loans constituting 38% of our book. Amitav spoke at length about our subsidiaries. Our return on investment on subsidies now stands at 39%, Axis Finance Has a capital adequacy of 20.38 percent, a ROE in excess of 14% and will restructuring. We reiterate our stance of stopping specific guidance. I would conclude by stating that our balance sheet resilience is visible through Declining NPA ratios, improving provision cover and build up of non NPA provisions. We maintain that based on facts Today, the COVID provisions we hold are precautionary and are not reflective of the asset quality of our underlying loan book. We had taken a comprehensive accounting policy and provisioning rules with you in FY 2021 to get As to best in class practices, we do not expect any material changes to accounting policy or provisioning rules in FY 2022. We continue to monitor the progress of COVID wave 2 across India, track government and regulatory responses Based on our internal preparedness as on date, we believe that we shall be more nimble in responding to positive or adverse changes our operating environment provides. With that, I come to an end of my comments and we will be glad to take questions. Thank you. Thank you very much. Ladies and gentlemen, we will now begin the question and answer session. The first question is from the line of Marukh Ajania from Elara Capital. Please go Hi, congratulations. I have a couple of questions. Firstly, could you give us the breakdown of slippage for the quarter? And has the number for the Q3 and even for the Q2 changed for slippage? Puneet? Thanks, Baruch for the question. The slippages for quarter 3 have not changed The INR 7,993 crores number that we report is the slippages under IRAC. We have provided for it under IRAC norms. The slippages for the current quarter is INR 5,285 crores, 64% of that slippage is out of our retail book. Okay. Thanks a lot. And the other thing is that your core credit cost It's around 1.2% for the quarter. Could we expect that I know that there's a second wave, but since you've Provided an already changed accounting policies and tightened new loan sanctioning policies, Could we expect that to be a benchmark for the next few quarters? Maruv, thank you for that question. Like I specifically said, we are not providing guidance given the onset of Wave 2. We've consistently strengthened our balance sheet and the performance that You would see on the slippage as well as the provisioning front should give you a good indication of where our credit costs could be. Okay. Thanks a lot. Thank you. The next question is from the line of Kanal Shah Sir, from ICICI Securities, please go ahead. Yes. Thanks and congratulations for a great set of numbers. So firstly, in terms of the growth, last time, we highlighted that on the corporate side, there is a lot of competition, which is there. And maybe it is slightly margin dilutive and we are looking at that at all. So has anything changed in terms of particularly on the corporate side that is good So non quarter growth as well as the year on year. So should we say it is more technical year end effect or this is more kind of a sustainable Then maybe book which we have written on the corporate side. Rajiv? Yes. So if you look at what is happening on the corporate brokerage, as far as the sort of the mega corps, large corporates are concerned, There is a process of deleveraging that is in a sense playing out and there is an element of repayment, prepayment That is happening. It is certainly we've certainly seen that in Q3 and Q4 as well, maybe a little less so in Q4. However, what you're now also seeing with our corporate book is much stronger growth in some of the other segments. Amitav spoke about the strong growth that we are seeing on our mid corporate business, on our government business, As well as the new focus that we've brought to the MNC sector and that is sort of helping us in multiple ways. Yes, It is also it is 1, providing us with new business models that we are in a sense going after. 2, Is de risking the business away from the very large corporates. And 3, and most important, Amitabh mentioned the word granularity many times And the focus on building the mid corporate business as well as our SME business is a function of bringing granularity To our corporate book, the average ticket sizes on the mid corporate book, for example, for our existing customer is about INR 60, INR 65 crores, For a new to bank customer is about INR 30, INR 35 crores. And that is really the focus that we have on the corporate side, Building greater levels of granularity, build the SME book and the other businesses like the mid corporate businesses I just spoke about, It helps us in multiple ways, brings growth to us and growth to us at the levels of profitability that we are looking for and the levels of underwriting standards that we have set for ourselves. Sure. So maybe given this initiative and all, it's like at least if there is an opportunity, then we can keep on Getting them on the corporate maybe on the mid corporate and on the SME side. So that's going to continue for a while. Let me it's very important for 1 to realize also that like every other industry, There is consolidation of the corporate banking business, particularly among the large corporates in this country. And there are 4 or 5 Large banks who are participating in every one of those opportunities. We are one of those banks who are sitting at the table with each of those opportunities. Whether we want to take them or not is a choice that we are making based on pricing, based on underwriting, etcetera. So it is not as if we are walking away from some of the very large corporate business, absolutely not. We will continue to gain market share within that space, but we will support that through our new initiatives Around transaction banking to support Red Rock in that category. Sure. And last one on write offs. So the write offs have been quite higher and we said like it's more as per the rule based policy which we have. So how should we look at it? Are we done with the major part of the That right, also maybe the rules based on which we are there currently or we can see this kind of a similar run rate Going forward as when looking at what will we have currently? So, Kunal, The way I would request you to think about this is we get to a provision of 100% and then the rules kick in for A time based write off. So depending on the behavior of the underlying portfolio, you will see write offs come through pursuant to those rules On every reported quarter for us. The quantum will depend on incremental stippages, The stock of NPAs, the mix of the book, etcetera. Okay. But any way to gauge because this Got it. It was quite high. No doubt last quarter's spread is also the accumulation of a couple of quarters. But so maybe how should we exactly gauge that because it was almost equivalent to the incremental slippage? So Kunal, I think the way you would I would request you to think about this is For our unsecured business, we provide early. Like we said, we provide 100% on the 91st day. And consequently, by the rule engine, the write offs would happen earlier. By virtue of our secured business, the provisioning Given the underlying security, the provisioning happens on a time basis and that will get to 100% later and consequently get written off later. So It's going to be a function, like I said, of the product mix of TwistyPlays. And therefore, there is no ballpark number that we can provide For write offs, what I would say is there is no discretion left with the management team on write offs On the SME as well as the retail business. It's all rule based. Sure. Got it. Okay. Thanks a lot. Thank you. Before we take the next question, a reminder to all the participants, please limit your question to 2 per participant only. The next question is from the line of Anand Lada from HDFC Mutual Fund. Please go ahead. Hello, sir. Am I audible? Yes, you are, sir. Please go ahead. Hi. I had a couple of questions. I'll just repeat my questions And probably you can answer, Bhavan. So on slippages side, retail slippages, if I had to annualize for this quarter, they are approximately 4%. So, what is the retail slippages for the full year? Also, on the retail slippages, If you can give some color like what is the breakup between secured, unsecured? Within unsecured, what could be the breakup between PG and RECAL? And what we understand that we've been sourcing bulk of the unsecured customer from the whole internal customer. So is there any Color or understanding or learning which we can share. This is another PR bank, which is a leader in personal loan and credit card. We haven't seen that much dependence in those numbers. 2nd question, on the employee cost side, If I see the growth has been very strong. So is there any one off in this element? How should we read this? 3rd question, On the security received, NLP 5,800%, was it that you don't see any recovery chances in that, that's why I mean 100% Just sorry to say that we have been ultra conservative. So is there any rational for being so ultra conservative Just impacting our profitability for the full year and as well as our book value. So and can you help me with any reason for being so ultra conservative? On 4th question, on the non fund basis I will forget the question by the time we're done, sir. Let's see. Let us answer those 3 now. Okay, sir. Fine, thanks. Don't mind it. No, you asked us about the restructuring process. You asked us about the retail and stability a lot for you to answer. But I just do want to start By saying that, please understand that in case the retail revisions have happened because of COVID or what we went through in this last year, We did not rely on restructuring or the amount of restructuring which we've done on the retail side is minimal. So whatever has slipped had to slip because there was no other mechanism which we use to so called manage that portfolio. So that's why slippages are quite high. They have grown up, they have come down in the Q4 as we predicted, but there is nothing else in comparison to some of the other places you're referring to which is out there. Now Pareet, can you just give the numbers? And then we can talk about the security receipts. And Amit, if you want to add a little bit color on what kind of stupid business you receive. So let me take the questions 1 at a time. On retail slippages, the annualized slippage is 3.73%. We don't provide a product by product Slippage, but we did in the past say that there is a fair mix of secured loans in the slippage number. The unsecured slippage is dominantly coming from the cards book. So it's been digested and therefore One has to look at when you annualize, you're assuming that it is going to be continuous and consistent. No, that's not likely to be the case. Some of the CPGs are one time because that portfolio would have cleansed itself and moved on. Your next question was on employee cost and the cost growth. I will also add one more thing that we have not sold any portfolio to any ERC from a retail perspective. Just wanted to be clear. Less restructuring, no sale of any portfolio. Gurdwun? Yes. And just to contextualize that answer in Big raw terms, the total retail restructuring is 0.14% of the book. I think a good way to draw relevant comparator analysis would be restructuring plus ECD LS to retail customers Plus slippages looked at collectively to give you an apples to apples comparison on market book. Please do note that our restructuring and ECGS to retail is Negligible. The number has to be looked at on a like for like basis. On the employee cost, yes, we have one off items In the employee costs, you would recollect that we have taken provisions for the Social Security Code. The cumulative provisions on account of Social Security Code are INR 218 crores and those provisions Reflecting the growth of employee cost. The code isn't gazetted yet. And as I understand, we may be Probably the only bank that has gone ahead and made that provision because it's provision for past service. So that's the increase in employee cost. On security receipts, well, one has to look at how security receipts are originated and how they get serviced. We do both a quantitative assessment as well as a qualitative assessment of our security receipts. Like I said earlier, The quantitative assessment of our security receipts does provide us with a positive net asset value of roughly about INR 1400 crores. On qualitative assessment and the fact that we said we will strengthen our balance sheet and make it resilient across cycles, The provision has been made basis the qualitative assessment and make sure that we don't carry residual unknown risk into future periods. Fine. So last two questions, if you permit me. Hello? Yes, sir. Yes. Sir, on the gross NPA, if you can share the non fund based exposure to the gross NPA. In the retail book, sir, we had indicated that 4% of the retail book is international exposure. What it mean to which geography? And thus, this quarter recovery and upgrades are pretty strong. Any one off in this recovery upgrade? Go ahead, Puneet? So in terms of recoveries, upgrades, the BB book Had an average ticket size that was larger in the past and therefore recoveries could be lumpy, but no one off Recovery upgrade to call out. Yes, we had one large account that resolved itself in the current quarter. Otherwise, It is BAU. Your second question was non fund based facilities to gross NPA. It's a very small number compared to the overall GMPA tool. It should be less than If I know the number, it should be roughly about INR1800 crores of non fund based facilities attributed to the GNPA pool. And so on the retail book, 4th of them is international in that. So geography specifically it is like So on the retail book, it is basically it represents the Loans give it it is a grossing up of the balance sheet. We had FC and RB deposits and We have loans, so it's a balance sheet cross up. All of our retail book is domestic. It's only from an accounting perspective we cross up the two sides of the Thank you, sir. Thank you for giving me so much time. Thank you. The next question is from the line of Adesh Paraspuriya from CLSA. Please go ahead. Hi, Hamzal. This is a follow-up on the question. Historically, we've had a very high Because of daily stamping and upgrade and recovery that comes in with the slippages for retail, You did indicate a 3.7% number. Can you just indicate corresponding recovery and upgrade because that will give us a fair sense of the net number? Sorry, others, could you repeat your question? I could not Got it. I was saying that what is the recovery and upgrade percentage for retail because for our bank historically used to report the net retail slippages because of daily Temping, we had a very high churn of account getting in and getting out. So just one thing, the net slippages in the retail portfolio. Net slippage in retail is INR1324 crores for the quarter. Now if you can give this number for the full year? Adesh, I don't have it at the back of my head. I will circle back to you and give you that number. Second question is on the margins. So, Anup is The fact that last quarter we did have a large interest reversal, which would have been lower in this quarter. So what's It will be NIM performance because for majority of our peer banks, we've kind of seen a margin improvement of sorts. So Adesh, on a sequential basis, You've got to we reported last time that we had 8 basis points on account of interest on income tax refund. So if you back that out, we have a growth in our NIMs on a quarter on quarter basis. That's one reason why you're not seeing the sequential growth. And the other reason why you're not seeing the sequential growth is We've dialed up our average LCRs and given the nature of the instruments that sit in the H Q and A bucket, They typically have an impact on NIM for the quarter. So those are the 2 specific reasons why you're not seeing a While there is an improvement, we are not seeing as much of an improvement on a relative basis. Amitav, any views on outlook Given that corporate pricing is pretty weak, but rest of the segments are okay, any sense on how much because majority of the right Interest reversals are kind of behind us. So any sense on margin outlook vis a vis our long term aim? We are quite committed to continue to push our margins up from where they are. We have talked about that for us to get to The 18% target ROE, one of the levers we need to work on is NIMs and they need to be closer to 3.7%, 3.8 than where they are today. So obviously, this requires effort across all our businesses to get better NIMs. It also requires effort across our deposit transfers. It also requires effort from our side to reduce some of the negative carry we have because of PSL. So as far as being there across each of those dimensions and our Objective remains to get there. Now obviously, we have to ignore COVID-two, but otherwise, objective is to get there. And so we're working across each parts of our businesses is going to have an impact on margins either way to get to that level. Adesh, on the data point that you requested, The full year net slippage is INR 7,000 crores approximately. Thank you. The next question is from the line of Nilanjan Karthar from Nomura. Please go ahead. Hi. Thanks for the opportunity. So first question is on the incremental disbursals, which obviously look quite strong. So any color on Where we are originating, I mean, previously, we used to do almost probably about 60% of Same to the to one of our subsidiaries, which was subsumed inside the bank. But given The structure of the market, which is changing more digitization at various businesses, are we doing more businesses Internally or are we looking at more DSA based origination? And are we originating these businesses beyond like Tier 2, Tier 3. So any color on that will help? That's the first question. I'll take the second question later. Yes. So as we had mentioned earlier, our focus on growing business from our retail liability branches Continues. So just to give you some data point in the quarter 4, we originated close to about 59% of our retail assets So from the liability branches, for the entire year, the number was 58% compared to 47% last So we continue to originate more and more business from our retail liability branches. We also had mentioned earlier about our deeper Geography initiative, that initiative continues to scale up well and we've seen good growth coming in there, which is Almost 111 percent YOY and 60% Q o Q. So that remains our core strategy to mine more and more existing Bank database rely more on retail liability branches to originate customers and continue to expand our footprint in the deeper geographies. Okay. Second question is on going back to that asset quality on retail. I mean all banks currently do customer based assessment. So at 3.7% kind of what was mentioned, Sure. I mean, how much is it as a customer, maybe a credit card customer has slipped and therefore you had a home loan which slipped. Any color how that has behaved specifically coming out of this COVID-one and going into COVID-two? Related question, could you also have the net slippage on the SME which you used to provide earlier, both on Q4 and full year basis? And Niraj, give us a few moments. Why don't we move ahead with the conversation? We'll try and get you the data points that you've requested For next clip, it is Annette. Sure. The third question also, I guess, you will have to answer again, it's a question on margin. If I look at the overall portfolio, percentages or the mix has not changed between various products. In fact, Even secured, unsecured also there is only very marginal changes, whereas our overall cost of funds has actually declined quite substantially like What, 90 odd basis points? So there is beyond all these interest reversal, I mean, those are like 5, 10 basis points here or there. And I understand, I mean, we had discussed this LCR related drag at some point that would have come. But beyond that, there is still looks like a lot of softness on the overall yield on asset, is it? And I think that was the question I wanted to that was my sort of first question. Are we originating slightly differently different kind of assets Maybe because our underwriting policies have changed and therefore the yields are low. So sort of a tie up between question 1 and question 3. And therefore, what is going on? It has talked about reaching a number on margin. What is that margin number that you think is probably reachable maybe in 2 years' time? So it's not that this is something new. We have talked about the fact that For our 18% ROE target, we need to be between 3.5% to 3.8%, and we need to be higher end of the range to get there. And I said 3.7, 3.8 is what we are hoping to get to over a period of time. So that's something which we have shared quite openly. You also had a view that given the fact that there is not yet, there is some pivoting which has happened to the secured portfolio in this year gone by. Even if you pivot, it takes time for it to get reflected in the portfolio. As you rightly said, the more you pivot to secure, the margins tend to be slightly lower. But expect it to be a temporary phenomenon. I think there is a huge opportunity out there across the data asset classes. And we are focused on building up each of those businesses. It is the nimble play out as a combination, as I said, of a number of things. The product mix is one such thing. The deposit franchise and what kind of CASA growth we get and all of that will ultimately impact our overall and then over a period of time. So this which is one thing. So there are 7 major things at play here. We are working on each and every aspect in our own way. Okay. Nilanjan, the data point that you requested for SME net snippets for the quarter is INR 94 crores absolute and the full year is INR 6.90 crores absolute. Okay. And on that retail question, customer basis versus product basis, I mean, if you can give some color. Is it more like this? Nanjan, we actually don't comment on what is the linked exposure that's gone bad. Effectively, we put out a composite number. The way you may want to think about it is, yes, Some of our we've spoken about this that the cards linked exposure has gone back. So yes, there would be linked exposure That does go back, but we don't provide that detail. Sure, Puneet. Thanks so much. All the best. Thanks. Thank you. Before we take the next question, a reminder to the participants again. Please limit your question to 2 per participant only. Next question is from the line of Sourav from JPMorgan. Please go ahead. Sir, two questions here. One is on Slide 18, your Credit fees is up 40% quarter on quarter on the corporate and commercial banking fee. Look, Given the understanding government and in large corporates, the fee number is not very high. So can you just say what's driving this? And secondly, on the LCR, do you have a policy of what's the policy? You want to be in this 100% 10%, 120% range or And the player group obviously operates at a much higher number, 0% 2% sir. Thank you. Raj, you want to take the LCR question, please? I'll take both questions, Amitam. And I think to some degree, I'll try and answer Nilandjan's question as well because it's in a sense related. What we are doing on the corporate side, you got to look at that in the context of the current situation that we are in. If you look at credit growth is at 5%, deposit growth is at 10% and within that credit to industry Growth is flat. And so therefore, in that context, I think to be to have been able to hold Margins, I think, is a pretty good show. And it is I mean, I think it's just a question of time before the industry starts to I mean, we begin to see credit growth from the industry as well. And like I said, in an environment Where corporate banking is consolidated, there is a strong likelihood that the kind of margin pressure that we are seeing today will, to some degree, dissipate. But having said that, the way that we are thinking about it is, like I said, from a portfolio perspective, Yes, we want to participate in the relatively lower margin businesses at this point in time. But having said that, Because we recognize the fact that we've done some of this low margin business, we have to drive to get other businesses from the corporate for us to be able to deliver the kind of dialogue that we have set for ourselves at our segment level, at a corporate level. And that, in a sense answers the next question that just sum up in terms of why Corporate fees are growing. It's because of this renewed focus on fees. And remember that this is not The lumpy fees that we used to be known for, this is granular fees on the FX side, LCs, VGs, cash management and such life. We are underrepresented. We are so we are in a sense Getting to the natural market share that we should be in many of these products, in foreign LCs, In GST payments, in FX, even this quarter, we have gained market share and we will continue to drive that as we go forward. Sir, my question was on the credit linked fees actually, why is it growing 40 I mean is this at the base impact or something else? The fees that you're seeing there is an amalgam of Credit fees and that includes our LCBG fees as well. So that would be included in that and the growth that we are seeing On trade finance has been very strong for us. Okay. And on ACR, sir, what's the policy on the liquidity coverage ratio? So the liquidity coverage ratio, as you know, we are now back to maintaining 100% on a daily basis. Our internal limits are at 105%. Our ambition is to Stay between 115% 125% on a daily basis. Okay, sir. Thank you. Thank you. The next question is from the line of Manish Shukla from Citigroup. Please go ahead. Yes, good evening and thank you for the opportunity. So on wholesale, Rajiv mentioned that government, MNC and CBG are the key growth drivers. These three segments put together would be what part of the corporate book today? Would be about between 15% 20% would be the MC And government business and our commercial banking business is today about INR 70,000 crores. Okay, sure. The other thing is that there's a good growth in SME and CBG both, yet the RWA density keeps trending down. So how should we read that too? Manish, do you want to take that? Yes. Manish, the way you should think about it is, 1, if Like I said earlier, if retail growth is coming from secured and in more cases, depending on the type of market we originate, we do get A RWA advantage. So that's one part of the answer. 2nd, even in the SME business, our origination It's a better quality and where we have liquid collateral we are able to offset. And third is on the CRG business, On a rupee crore rupee crore basis, you see growth, but the composition is changing to higher rated corporates. And as we move up the credit spectrum, the RWA intensity declines meaningfully. So it's a mix of The product mix in retail and the quality of sourcing in the wholesale that is giving us this net effect on RWA intensity. Sure. Thanks. Really last question, Amit, that having concluded the NACS transaction, what are your thoughts around inorganic opportunities Is there now or over the medium term across the businesses that you have within the group? Well, as we have stated before, we'll continue to evaluate apologies as they come our way. And not this doesn't apply just to Access Bank, it applies to the subsidies also. We will be prudent and very deliberate about it. We don't want Use our capital for just for the Feko acquisition, but there are apologies which are level And we will continue to evaluate apologies as soon as they come out of it. So the current strategy remains similar. Okay. Thank you. There's one more question. Thank you. Thank you. The next question is from the line of Aperitik Akkal from Goldman Sachs, please go ahead. Yes, hi. Good evening, everyone. First of all, I hope you all and your families Safe. Two questions. Again, coming back to the write off numbers, sorry, Deliver, but this year, particularly the number that does stand out at about 2.2% of the loan book. Is it possible to get some more granular color across different segments, if you can provide as to how much was, Yes, in corporate, retail, SME, etcetera. Rahul, thanks for your question. I Hope all well with you, family and friends. I think on the segmental color, We don't provide a segmented color of our write offs. But what I leave with you as a leading thought is Our unsecured business gets provided faster than our secured business. And because we have rule based write offs, That will be the part of the book that gets written on faster than the secured book. So, thanks, Puneet. But would that be a majority part of This 2.2% number, because of the overall book, then it would imply a very large number of the unsecured that's getting written offs. That is the reason why I'm coming back to this, Amrata. So I think, look, 2 things. So if you look at how it will play out There are 2 effects at play. The first effect at play is we are coming off on the back of a corporate cycle And as those loans get provided through the books and as those issues get dealt with, Those accounts will get 100% provided for and move through the system. The unsecured book gets Provided for on an accelerated basis and that also moves through the system. That's how I would think that's how I would request you to think about it. I could just leave you with one additional color on this and not provide further details. For the current year, you could Use epoxy of 50% corporate, 50% retail on write offs. Fair enough. Just one more question, if I may. On this deposits and the LCR side, I remember when we Last time, it was a conscious strategy to keep NCR on the lower side. But now it Seems that the policy has changed 215 percent to 125%. So how should we reconcile the change of policy? And again, bringing in the margin element, as you move forward over the next couple of years, The expansion or the improvement would be driven by what the liability side or it will be more asset side? I mean, which part of the Your box will be more at play, keeping in mind the new LCR target that we have on mind. Thank you. So Rahul, maybe I'll start the answer on LCR and then request Rajiv to add on to this. I think there is no change in policy around LCR. We've consistently maintained that we will have a margin of safety We are above the regulatory limit and you would recollect that in the last financial year, the regulatory limit was downticked. We used the opportunity to optimize our balance sheet. Effective 1st April, the regulatory limit went up to 100%, And we have consistently maintained our LCR in that band of safety that we would like to operate in. So as the regulatory limit came back, obviously, our LCRs moved up in line with our safety, so margin of safety. Therefore, no policy change, just to clarify on that point. In so far As margins are concerned, I think we have both levers. The marginal cost of our deposits Versus booked cost of our deposits, we still have if we have a supportive interest rate environment, I think We should get some benefit there. All in all, I think we have both a product mix lever. You will realize that We have a set of fairly priced business that is growing, which is our mid corporate business, our SME business, Parts of our retail business. So the asset mix as well as the deposit repricing And all of the initiatives Amit has spoke about granularity, better Casa, etcetera, would be tailwinds To the name. Yes, there will be pricing pressure in certain segments and we've always called that out as a headwind. But On a net net basis, we will have to work on both sides, the asset and liability criteria to get our names to the target range Amitabh mentioned earlier. Got it. I think this is helpful and by the way good disclosure, so compliments to you as well team. Thank you so much. Thank you. The next question is from the line of MB Mahesh from Chorus Securities. Please go ahead. Hi. Two questions from my side. First question to Sumit. Sumit, when you look at your retail portfolio and compare that with the credit bureau data, If you could just kind of, Ravi, give us some color as to how are you positioned on each product where you are better or weaker? That's the first one. The second question is to Rajiv. Rajiv, if you look at your yield on the corporate book, Have you completed the repricing of the loan book completely? And the performance that you've seen on the current account side, Has that also fully reflects the changes to the guidelines? Thanks. You can add to Sumit if you want. Yes. Mahesh, so when we look at our portfolio and compare it with the view, and it's in line with the peer private sector banks, Both on the secured and unsecured side, that's been consistently there and we've been tracking it for a while. So it's Pretty much in line with what we see for the PSS. Thanks. And this is for both secured and unsecured? Yes, both secured and unsecured. There will be some amount of issue deterioration given the kind of restructuring each one has Followed, so it will be difficult to assess that, but we took all the as Puneet also mentioned, in terms of restructuring, wherever we Found that we were selective about it. We did a credit assessment before giving it. So to that extent, you may see some Differentiation in number, but we feel we are in line the data which we had prior to that shows we are in line with the industry. Perfect. Thanks. So as far as the current account circular is concerned, obviously, that circular is now 3 or 4 months old. The market is falling in line with that circular and so have we. As far as repricing is concerned, I'm not sure what exactly that means. In a sense, if you mean that If it is MCLR, then has it that is an ongoing or if because we don't have Much fixed rate assets, most of them are either linked to external benchmarks or to our MCLR and that repricing is ongoing. So not clear what you mean by repricing. What we see when you look at the SLR data that is given by the RBI is that The incremental book that is being written is still happening at a yield which is lower than what the fact book is carrying today. So just trying to understand as to whether there is further compression in use that we'll have to factor into next year as well. So this is not a new phenomenon, right? I mean, we've seen in an environment where Liquidity is this easy since April. Loan rates have been actually Significantly lower than bonds. And so therefore, even in that sort of an environment, NIMs have held up. You've got to look at it once again, you've got to look at this on a portfolio basis rather than individual transaction. Yes, There will be individual transactions which have happened at low or in some cases low margin as well. But you've got to look at this on a portfolio basis. And I think on a portfolio basis, yields are holding up. Okay. Perfect. Thanks a lot. Thank you. Thank you. The next question is from the line of Jay Munja from BNP Securities. Please go ahead. Yes. Hi, sir. Just one question from my side. Most of the questions have been answered anyway. If I look at your Core operating profit trajectory on Y o Y basis and similarly core operating profit trajectory Y o Y basis, I see that there is a lot of volatility there. So I mean it has ranged from so far I mean for the last 4, 8 quarters, It has ranged very wisely. Now part of that is because you have been very prudent in some of the quarters. You have taken some hit, It was on prudent basis even still operating profit line item. But I just wanted to check As you said that from FY 2022 onwards, there will not be any major accounting policy change, etcetera. And you have been building fair Fair amount of granularity and sustainability is the key theme. Just wanted to check your thought process On the predictability of the core operating profit line, yes, that is the question, sir. Yes, I think, yes, with the granularization of fees and The elimination of incremental impact on account of any policy change, yes, there should be Stability returning to the core people. Like I called out earlier, we've had exceptional expenses plus INR 235 crores of impact on account of policy changes that do impact it, yes. So all in all, we'd agreed with what you said That there should be stability in P pop and for P pop coming through in future periods. Sure, sir. Thanks. Thank you. The next question is from the line of Nitin Agarwal from Mubular Ooyaltyr Supply Chain. Please go ahead. Yes. Hi. Good evening. I have two questions. Firstly, are we done with the rationalization activity in the credit card segment? And what sort of incremental market share are we looking at in real card acquisitions? And related to it, in context of the card business, how do you look at the growth outlook and profitability construct of this buy now related product? And the second question is on MaxLise. From the Active being the co promoter of MaxLise and has taken on the Board also, so how will things change strategically? And what will be fair net of focus areas now? So first, let me answer the Max question, then we can pick up the card's question. Well, you've just joined the board. So we are, From a board perspective, we're going to get more involved in MaxLife in the next couple of quarters to come, very early to say what is going to change now. It is ultimately It has a very solid management team and it has been a very high quality board with them. So it's not that somebody will come and Start making changes just because we are there. Suneet, do you want to pick up the credit card question? Sure. So credit card is an important product for us. It is a profitable product. We want to grow it. We also are clear that this product, we want to grow largely on the ETB customers and also with our partners, which are Flipkart and Google Pay. So on these two sets, we will continue to grow this business. There have been Learning from past 1 year, but all those have been built in. And if you see if I were to give you a bit of a granular color, last year, almost 40% of our cards happened in JFM that is because we were bit calibrated in terms of opening up Roughly about 90% of the cards still originate from our ECB customer base. And this will be our focus Product for us, it's a strong engagement product. It's a very profitable product and we intend growing it in a manner that it meets our risk and return appetite. Okay. And on this buy now pay later product, how do you see this in terms of growth potential and Profitability cost in the long term. I understand it's very small as of now, but what sort of prospects do you look at for this? So while we have a large base of known to the bank customers, we have a large base of existing customers. We our little bank has obviously created this So capability through free charge, we obviously will work very hard to make it a success, but too early to start commenting on or the size and shape of this could be. When we are ready to kind of share that, we'll let you know, but right now it's a bit too early. Sure. And 2 data points, if I can ask, like one is we have mentioned that technology spends rising 79% over 2 years. So So if you can quantify this number. And secondly, the cumulative non NPE provisions that we have said 12,000 outflows, so barring standard provision, the Entire amount is available for use towards any excellency in FY 2022 or like a part of it is only available? Puneet, do you want to answer the second one, Vas? Sure. So of the INR 12,000 crores like we said INR 5,000 crores is COVID, 6,900 odd crores is weak assets plus standard assets. All of our provisions are rule based other than the COVID prudent provision that we carry. And consequently, depending on how the portfolio performs alongside the rules, there will be a top up or a top down of those provisions. We can't manage those provisions because the rules will drive the outcomes. So if we have Favorable outcomes of the rules, there will be a release of that provision. If there are unfavorable outcomes of those rules, there will be a top up to the provision. Okay. So that's your INR 5,000 crores are discretionary part of the total, wherein which is like what we can play with? There is no discretionary provision, even the INR 5,000 crores is created for COVID risk. We have previously commented on the fact that we would like to brief with our assessment of the outcome of COVID wave 2, Sustainably carry forward balance sheet strength. Therefore, I would desist from stating that these provisions are discretionary. There will be rules around which these provisions will be sustainably carried forward depending on outcome of the wave 2 assessment. Okay. And lastly, the technology spend number, if you can show that? We don't provide absolute numbers. The relative what I can say very certainly is There is no low base effect for which the percentage was quoted. There is a meaningful CapEx and OpEx That was incurred in the prior year. That has been topped up for all of the measures that Amitabh spoke about, Distinction, resilience, advantage. And the view that we have is we will continue to invest In digital, data and technology on a go forward basis. Okay, sure. Thank you so much. Thank you. The next question is from the line of Anand Dhama from MK Global. Please go ahead. Yes. Thank you for the opportunity, sir. I want to check the other retail portion that we give in The particularly the other retail book of about 8%. Can you provide some breakup of that? And does this include the business banking portfolio? And if yes, what is the amount? Could you just please repeat the question? Yes. So we have the other retail portfolio, which is about 8% of the retail book. So what is the composition of that other retail book? Does it include business banking portfolio? No, SBB is called out This is Puneet here. The SPB portfolio is called out separately. So our SPB portfolio, if you look at Slide 25 of our investor presentation is 5% of the total retail book. Others typically would be Our gold loan business, our education loan business, our loan against FD, those would be the dominant products that we have in the other segment. Okay. And sir, earlier on, we had said that we would have a strategy to scale up our business, particularly into commercial vehicles. So any thoughts over there? My apologies, if you could kindly repeat your question, we couldn't hear you very clearly, please. Sorry about that. Sir, I wanted to check, do we have any strategy to enter into CV business of Stedapat business, We are already doing that in a way. So we are into commercial vehicle and both Commercial Vehicle Land Construction Equipment segment and in Commercial Vehicle, our strategy has been to be Funding more of these strategic customers and that's by and large played out well even during the crisis time and we intend to grow that business. Can you sell out the portfolio? Pardon? So what is the portfolio size of this? So both commercial vehicle and construction Equipment combined are close to about 14,000 crore. Okay, okay, great. That is part of the incremental portfolio. And second, basically another question was about the SME growth. So this quarter, we have seen good growth, but going to the SME portfolio. Running into the 2nd COVID wave, don't you think that there is a lot of risk particularly into the SME customers with the self employed and the SME business is being impacted? And on the other hand, on the corporate banking front, where we are increasingly originating the Federated Corporates, but we are It's tightening our provisioning policy over there. Can you explain what is our thought process over there? So on the SME side, the best way to look at it is that It is a diversified portfolio across about 35 watt sectors and the business has been originated across about 120 odd centers across the country. Average ticket sizes would be in the vicinity of about INR 5 crores or so. So diversification is the best bet against this mitigation and that is really what the policy that we adopt. Obviously, in these times of COVID, even in 2021, Yes, with a little bit of help from the ECLGS schemes, etcetera. The portfolio has held it up pretty well and we continue to monitor it on a regular basis And as and when required, the underwriting teams would look at each proposal and if necessary, Titan as and when required. Okay. So as of now, we are comfortable growing in the SME Group? That's correct. Yes. And on the corporate banking, if someone can ask me a question. So on the corporate banking side, I think you've answered your question yourself. We continue to originate 94% of new loans at rating of A minus and better. And that is the universe that we will continue to build that portfolio around. There would obviously be it's difficult to get A minus and better in the mid corporate space. And so therefore, whatever BBB is a set we would do, would be within the mid corporate space. And there, once again, like I mentioned to you, ticket sizes for new to bank would be In the vicinity of about INR 35 crores, INR 40 crores and for existing customers would be about INR 60, INR 65 crores. There once again the focus is on granularity. So is that the key reason why we are tightening our provision policy because we are growing much into the government corporate. Is that the right interpretation? No, I don't think so. Hello? Amitaj, your voice was garbled, so you may want to repeat it. No, I'm just saying that all that what we have said is exactly opposite of the conclusion you seem to be hinting at, absolutely not. Provisions are what we believe is required to create a conservative, sustainable franchise and lot of them are rule based. So depending on the rules, Automatically, some of the provisions will get created and we have created a cushion accordingly. So no, it's we are not creating excess provisions because we're getting into mid corporate or things for that matter. Actually, you talked about SME. SME, our slippages have been the lowest over a very long period of time. So we have been continuing to improve our productivity and the credit risk underwriting across all part of our business. Okay. Sure. That's very helpful, Amitabh. Thank you. That was The last question, I would now like to hand the conference over to Mr. Puneet Sharma for closing comments. Over to you, sir. Janis, thank you for managing this exceedingly well for us. Thank you to all the participants For having spent your evening listening to our comments, we hope we've been able to answer all your questions. In case there are any further questions That remains unanswered at the end of this call. Please feel free to reach out to Abhijit, and we'll try and pick those up and get you the requisite answers. Thank you. It's been a pleasure interacting with you this evening.