Ladies and gentlemen, good day, and welcome to the IDFC FIRST Bank Q1 FY 2023 conference call hosted by ICICI Securities. As a reminder, all parties and lines will be in a listen-only mode, and there'll be an opportunity for you to ask questions after the presentation concludes. Should you have issues during the conference call, please signal an operator by pressing star and then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Kunal Shah. Thank you, and over to you, sir.
Thank you, Mike. Good evening everyone present on the call. Today we have with us Mr. V. Vaidyanathan, Managing Director and CEO, Mr. Sudhanshu Jain, CFO and Head Corporate Center, and Mr. Saptarshi Bapari, Head Investor Relations, from IDFC FIRST Bank, to discuss their Q1 FY23 earnings. Over to you, sir.
Can you hear me?
Yeah.
Yeah. Hey, Kunal. Hi. First of all, thank you very much, Kunal, for organizing this for us. For all of you investors who have joined us this evening, thank you. I think in a way, you've been very patient investors with us. In a way, we've tested your patience, I think, over the last three years with one issue or the other. I think maybe I must say you passed the test and we tested you hard. I think that we've come a long way and now we can quite confidently say that the foundation is well built for the bank. We have a really strong deposit base, a 50% CASA. We're able to raise deposits quite comfortably now.
Of course, we even raised it during the period of COVID over INR 2,500 crore, so that should give us some confidence. The fact that we're continuing to raise strong deposits even after dropping interest rates is really heartening for all of us at the bank. Now, with the deposits, let me say that's one of the foundational items for a bank to be able to raise deposits, which we have now been raised. Now, on the lending side, frankly, we always felt that we already had a tried and tested model that has been running in the combined history of both banks put together, so to say, for close to 10 years now. You know, our loan book has been compounding over 30% for quite a long while.
That machine is holding up very well. Both the ability to disperse and more importantly, the quality of that lending continues to be strong. Later in the conversation, depending on where the conversation goes, we'll share with you specific indicators about how each of the items about the so-called through-the-door population, i.e., the quality of origination, quality of customers coming into the bank, we'll share that with you. We will share with you how the check bounce or how these customers are bouncing their checks or what the trend is on presentation. Number three, on presentation, if they return, we go and collect. What are those percentages? Number four, how are the in-vintage cohorts looking like?
We'll share all the data with you as the conversation goes, depending on your level of interest. Let me just say that all those numbers are looking very good, and that gives us a picture about that is directly translating into what the SMA numbers for the bank are. Again, the SMA numbers of what the numbers were, let me say, even pre-COVID, you know, people thought that, "Oh, how you coped with COVID?" You know, pre-COVID. We're not caught up. It's like better. SMA zero, SMA one, SMA two, literally product after product, segment after segment and at the overall bank level, they're all lesser. Now, naturally, if SMA is low then, you know, flow into NPA will be lesser.
We are quite confident and when we give guidance that our credit loss for this year will be less than 1.5% or when we guide for the retail NPA to become less than 2%, all of them have a basis. We've just not been saying it without basis. The short point is therefore that the asset quality numbers are looking quite good. The third item, if we move on from deposits, assets and asset quality, and this is the fourth item that comes to profitability. Now, as far as profitability is concerned, again, something is very significant about our bank.
I'm not sure how many of you have spotted it, but if you noted for the last three years, our loan book has not grown very much. It has grown by 6%, compounded three-year CAGR. I don't think people have really spotted that the operating profit of the bank, the core operating profit, that is ex-treasury, that number ex-treasury because we all know trading income is trading income, you know, it can't count on it. If you notice FY 2019, let me say, the annualized of the second half was pre-operating profit, both Capital First and IDFC Bank put together, post-merger annualized was INR 1,105 crore. Now, three years have gone by.
We've spent a lot of money building various capabilities and all that. Despite all that, our operating profit has risen to INR 2,753 crore, and that's grown at a CAGR of 36%. Core operating profit growing at a CAGR of 36% year-on-year, you know, feels good for us and gives us confidence in the business model we're building. The second thing is that last year in FY 2022 or FY 2021, our core operating profit, that is basically NII plus fees minus OpEx, that has risen by 44%. Now we are feeling within us that this number into FY 2023 should rise by another 45-odd% and our own internal modeling says that into FY 2024 this could rise by another 45%.
If the core operating profit starts compounding like this, I think it really augurs well for the bank. Now, after core operating profit comes the provisioning line, and then rest is straight P&L. I just take it in that way. Now, when we come to the provision line, you know, we have pointed out to you that despite the second wave when there was no moratorium and our provisioning norms required us to take the provision, despite such a serious first quarter of last year, our overall credit loss for the last year was only 2.5%. This year we are guiding for 1.5% and frankly we feel we'll meet that very comfortably.
Therefore, you know, this sort of a strong operating profit opening up for the bank if our credit loss is 1.5%, rest of the math we can do about what it will do to the ROA and ROE. Now I want to just therefore when we look at the ROA, I think one of the very significant events that has happened in our life right now is that the core, let me say the pre-provision operating profit last quarter, Sudhanshu was what, how much? Was nudging INR 1,000 crore. I think INR 980 crore. Sudhanshu will take you through when you see the numbers. So INR 986 crore, let me round it off to INR 1,000 crore, you know, with the permission for two minutes.
INR 1,000 crore of pre-provision operating profit for the bank is really fantastic, you know, gives me a lot of confidence and therefore even if you take a normalized provisions credit cost of 1.5%, it gives us lot of space for profitability. I want to take you back in time for two quarters to just tell you how much progress the bank has made that in the first 4 or 5 quarters of the merger of the bank, the issue was not provisions. The issue was bank never had profits, never had pre-provision operating profits. Provisions normally for every bank is like in the for any reasonable good bank is say 1.5% of average book. But our problem was that we never had the operating profit.
Therefore, for example, last Q1 of FY 2022 when the COVID second wave happened, at that point of time we had provisions, but we didn't have operating profit. Now, for the bank to have an operating profit of INR 1,000 crore is a very big thing because now we have the space to be able to take normalized provisions and be profitable. It is frankly our read that our bank will never post a loss again in its life. You know, I use the word, I'm carefully caveating that saying for the three months just because to be, you know, technically and legally right. Otherwise, genuinely, we don't think it'll happen again because now we have very, very strong operating profits.
Which means that our bank will continue to now compound equity, which we can very confidently and safely say now. Now, now that translates to return on assets. Now return on assets front, but just before I go to return on assets, let me just read out four numbers to you if that will help you understand this. The Q2 of FY 2022, our profit was, PAT was INR 152 crore. Q3 it jumped by 85% to touch INR 281 crore. Q4 FY 2022 our PAT increased to INR 343 crore. Now Q4 of FY 2023 our PAT has gone up to INR 474 crore.
By the way, let me share with you there is nothing in this income that you should worry about is it one time and all that, nothing material. That gives you a sign, that gives a color about where this story is headed. Now that translates to return on assets. When you translate that our ROA in Q2 FY22 was 0.37%. Q3 was 0.64%. Q4 was 0.77% and Q1 FY23 0.97%, let me round it off to 1% for convenience. Just think, see where the ROA has, you know, moving so fast upwards. It gives us confidence that there is no one time of sitting in this. It gives us confidence that this story can progress up for a while.
Many of you who've been disappointed with us saying that, "Oh, you guys are never making profit." You know, for those of you feel like that, I must say, by the way, if you look at it's not that 1% is greatly impressive. I mean, a good number should probably be 2%. The issue that what you should watch is not that 1%, it's a good landmark, but what is more important is the direction. You know, the speed at which it is getting fixed and it is getting addressed is something we should take note of. Therefore, for all of you who feel, in fact there's been a couple of global research reports who always look at us and say, "Guys, you're making no ROE.
Why should you be valued at 1.2x book?" I think they're fundamentally making a mistake because they're looking at today. We got to look 3%, you know, maybe two years forward and let me tell you'll probably surprise yourself. Now, the other thing is return on equity. On return on equity, it is basically that, our ROE in Q2 FY 2022 was 2.97%. Q3 2022, by the way, the, I'm talking sequential quarter, not like year-on-year and all that, just sequential quarter. 2.97% moved to 5.44%. Then Q4 FY 2022 has moved to 6.67. Q1 FY 2022 moved to, you know, 9% touch and go.
I hope it should not be a surprise for you know, when we say we'll guide at the Q4 of this year, one of you asked us this question what the ROE will be and I told you double digits. Our own sense is that we'll get there even before Q4. We like to probably advance the guidance. It's, you know, it's something like that. The short point is that, you know, some of you have been disappointed with our profit number. I must say that not that we had a choice because, you know, there were just so many lumpy assets to deal with. We couldn't push them under the carpet.
We had to deal with them, whether it was Vivaan, Alliance Capital, you know, some infrastructure loans, some, you know, South India-based companies, the unfortunate case of suicide. All of these are legacy accounts. We had one, you know, one retail, large retail chain on which we had an exposure. You know, that's been in the news the last few months, in the large legal fight. We had exposure there. That's also a legacy account. One after the other, we have dealt with every one of them. I can tell you confidently there's nothing left here. Now, for those of you who don't feel confident about it, you can watch the results for a quarter or two, you'll get the confidence.
With that, you know, the legacy issues out of the way, and the core operating profit, you know, opening up the way I described to you in terms of ROA, ROE, it shouldn't be surprising for you that our profitability is increasing. I can therefore say that we are looking forward to a very, very good FY 2023. We don't expect to give you any surprises. If you were within the walls of this office, you'd probably get a feeling that we are internally feeling very, very confident. I'm feeling very good about the upcoming year and maybe 2024, 2025, and so on, because I don't think there's any surprise left here. That's about it.
Thank you very much for taking the call today, and I request Sudhanshu to maybe throw some more color into the discussion.
Thanks, V. Vaidyanathan. Good evening, everyone, and welcome to the call. I'm happy to share the financial results of Q1 FY 2023 with all of you. The overall balance sheet size has crossed INR 2,00,000 crore in this quarter and grew by 19% on a Year-over-Year basis to reach INR 2,00,565 crore. Overall funded assets, which includes loans and advances and credit investments, grew by 21% Year-over-Year and 6.7% sequentially to INR 1,37,663 crore. Within that, the retail and the commercial book together grew by 36.8% Year-over-Year and 9.5% sequentially to reach INR 1,01,309 crore. Home loans registered the high growth at 61% on a Year-over-Year basis.
Mortgage book, which includes home loans and loan against property, now constitutes 33.5% of the overall retail and commercial book. The rural book, which includes funding to self-help groups, Kisan Credit Card, and small enterprise loans also grew strongly by 29% on a Year-over-Year basis. This segment is bouncing back strongly post the impact that was felt in wave two. Speaking of our credit card business, the bank has issued more than 1 million cards since we started this business in January 2021. The credit card book was INR 2,315 crore on June 30th, up by 183% on a Year-over-Year basis. Even the credit card spends have increased by 20% on a sequential basis. We are clearly increasing market share here.
With respect to wholesale assets, the non-infra corporate loans grew by 12% on a Year-over-Year basis and by 1% on a Quarter-over-Quarter to INR 23,970 crore. We will continue to grow this book in a risk-adjusted manner. The infrastructure book de-grew further and reduced by about 35% Year-over-Year and by 2% Quarter-over-Quarter to INR 6,739 crore, and now forms merely 4.9% of the total funded assets, as compared to 22% at the time of merger. From a risk standpoint, borrower concentration has also improved significantly. The exposure to top 20 single borrowers reduced from 16% in March 2019 to 9% in June 2022. Moving on to the liability side.
The CASA deposits of the bank has increased by 22% Year-over-Year to INR 56,720 crore. The CASA ratio is stable at 50.04% as on June 30, 2022. Average CASA deposits also grew by 10% on a Quarter-over-Quarter basis. Outstanding term deposits grew by 20% on a Year-over-Year basis. With that, the overall customer deposits grew by 21% to reach INR 100,288 crore. The bank had excess liquidity and maintained an average LCR of 128% during Q1, as compared to 136% in the previous quarter. This is still well above the regulatory requirement. The branch count now stands at 651 branches, along with 807 ATMs.
The bank opened 10 branches in the current quarter and has opened 50 branches in the last one year. The bank has substantially granularized the liability base since merger, as CASA and TD less than INR 5 crore stands at 83% as on June 2022. The bank has also successfully repaid high-cost legacy borrowings of INR 5,530 crore in last one year, including INR 2,775 crore in the current quarter. The total outstanding of such high-cost legacy borrowings stands at INR 22,406 crore as June 30, 2022. Moving on to asset quality.
The gross and net NPA of the bank improved to 3.36% and 1.30% as on June 30, 2022, as compared to 3.7% and 1.53% as on March 31, 2022, reflecting an improvement of 33 basis points and 21 basis points respectively. The decline in GNPA and NPA on a year-on-year basis was much sharper by 125 basis points and 82 basis points respectively. The provision coverage ratio including technical write-offs also improved to 73.16% at June 30, as compared to 73.29% at March 2022, and 61.06% at June 30 last year. The gross slippages for the quarter were lower by 20% on a sequential basis, and in fact, slippages net of recovery/upgrade were lower by 25% sequentially.
In the retail and the commercial segment, the GNPA and the NNPA came down significantly by 51 basis points and 22 basis points sequentially to reach 2.12% and 0.96%. We are happy to share that we are already trending around the long-term sustainable target in the segment of GNPA, as Vaidya mentioned. In the corporate book ex-infra, the GNPA at 3.67% and NNPA was only at 0.2%, as compared to 2.75% and 0.31% as on March 2022. This book also had a high provision cover of 97% as on June. The increase in corporate NPAs by 92 basis points during the current quarter is primarily because of loans to one large existing retail chain group that slipped into NPA out of the existing restructuring pool.
It may be noted that the bank has made 100% provision against this retail chain group on a prudent basis. Happy to report the overall restructured book as a percentage of total funded assets has reduced to 1.6% now, as compared to 1.8% last quarter. The SMA on the wholesale book is less than 0.5% of the book at June 30th. Even on the retail and the small business loans, as Vaidy a mentioned, the SMA position has further improved as compared to the previous quarter. Coming to the profitability, we are happy to say profit after tax grew to INR 474 crore from a net loss of INR 630 crore reported in Q1 last year. Sequentially also, the increase was from INR 343 crore to INR 475 crore, which is a growth of 38%.
This was largely driven by strong growth in operating income and lower credit cost. Within that, the NI grew by 26% Year-over-Year to INR 2,751 crore. The net interest margin was 5.89% for Q1 2023 as compared to 5.50% in Q1 last year. Fee and other income witnessed a strong increase by 100% Year-over-Year to INR 899 crore. Of course, Q1 2022 was a COVID-impacted quarter, and hence this increase looks a bit higher. However, even on a sequential basis, fee income has increased by 7%. The retail fees contributed 92% to the overall fee and other income, and it is quite granular. Fee income from loan and credit card was at 16% in Q1 FY 2023 of the total fees within the overall fees.
We have given more details around the fees break-up in the investor presentation. The bank had a trading loss of INR 44 crore in Q1 FY 2023 on account of sharp increase in market yields as compared to a trading gain of INR 393 crore in Q1 FY 2022 and a trading loss of INR 9 crore in Q4 FY 2022. Recognizing the heightened market volatility, the bank proactively tightened liquidity limits and reduced the book. The modified duration of the AFS and HFT book was lower at 0.84 years on June 30, 2022. Moving on to the core operating income, excluding trading loss, increased by 39% Year-over-Year to INR 3,650 crore, aided by strong NI and fee income growth mentioned below.
Operating expense grew by 31% Year-over-Year to INR 2663 crore in Q1 FY 2023 from INR 2032 crore in Q1 FY 2022, and was marginally lower from INR 2674 crore in Q4 FY 2022. The increase in OpEx on Year-over-Year basis was relatively higher on account of low base effect in Q1 FY 2022 due to the pandemic. The cost-to-income ratio excluding trading gains improved to 72.95% in Q1 FY 2023 from 77.16% in Q1 FY 2022 last year, and by 333 basis points as compared to Q4 FY 2022. As a result of the above, the core operating profit excluding trading gains grew by 64% Year-over-Year and 18% Quarter-over-Quarter basis to reach INR 987 crore from INR 601 crore in Q1 FY 2022 last year.
Provisions were also lower by 84% and 17% on a Year-over-Year and Quarter-over-Quarter basis respectively, and stood at INR 308 crore in Q1 of this Q1 FY 2023. The credit cost on a quarterly annualized basis as a percentage of average funded assets for Q1 FY 2023 was 0.9%, which is well within our guidance which was given for FY 2023. On a quarterly annualized basis, the ROA for Q1 has touched nearly 1% and ROE has reached 9%. ROA improved by 20 basis points, and ROE increased by 228 basis points from the previous quarter. On the last segment, with respect to capital adequacy, the bank has maintained strong capital adequacy and its
Capital adequacy, including profits for Q1 FY 2023, was at 15.77% as on June 30, 2022, with the CET ratio at 14.01%. The current quarter capital adequacy has an impact of 58 basis points on account of recomputation of off-balance sheet RWA, which is taken in the first quarter every year and then is static for the rest of the year. Even at 15.77%, the bank is well above the regulatory threshold and looks forward to grow the book in a profitable manner. Yeah. With that, we can move to the Q&A section.
Thank you. We will now begin the question answer session. Participants who wish to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to wear handsets while asking a question. Ladies and gentlemen, we wait for a moment while the question queue assembles. We have the first question on the line of Ishan Agarwal from Erevna Capital. Please go ahead.
Hi. First of all, congratulations to the management for once again delivering a performance which surpassing the expectations in most counts. My first question relates to the NII growth quarter on quarter. The NII growth quarter on quarter stands at around 3%. I think since the time of the merger, this is the lowest Quarter-over-Quarter growth in NII and maybe the first time decline in NIMs quarter on quarter. Is it because of lag in passing on the increasing cost of funds on the lending side during the quarter or is it structural in nature?
No, we have a lag in passing on, so this quarter we'll be passing it on, so this will get fixed.
Okay. Again, we should be on an upward trajectory from Q2?
Yeah.
Okay. Thank you. Going to the next question, provisions at 8 crore in the quarter look extremely low. That's around at 1% of the average book.
0.9.
0.9% of the average book. Are there any write-backs or runoffs in the provisions for this quarter?
No.
Okay. Again, you know, from this question, your press release mentions that the bank is well on track on its guidance of 1.5%. Should we assume that the provisions for Q2, Q3 and Q4 would be higher than 1.5% for the annualized credit cost to be at 1.5%?
No, that's a good question. You know, we don't change guidance just because we had a great quarter this time. Let's watch the next quarter. We don't see any reason why credit loss in subsequent quarters should go up materially. Our own internal sense is that we'll do better than 1.5%.
Could it be 1%-1.1% for the rest of the year?
Could be. That is a fair guess, but we don't wanna put it out because we don't want to lead up everybody down that road and just in case there is an odd blip on the side. Yeah, I mean, right now it's 91 basis points for the quarter, which we, I hope you'll agree it's probably very good for the-
Very, very good. Yeah. Yeah.
For the kind of yield we get on a book. Yes, we don't expect it to materially go up, but then we don't wanna change guidance based on one quarter.
Barring any unforeseen circumstances, we could expect it to be 1%-1.1%.
Yeah, I think so, yeah. That would be our internal guess.
Okay. Again, on the next question is actually on the OpEx front. OpEx has seen a Quarter-over-Quarter decline in absolute terms. How do you see that trajectory on OpEx for the next three quarters?
Every quarter will go up a little bit. You know, this quarter it didn't materially go up. You should expect that normal quarter-on-quarter growth should happen.
Oh, okay. Okay. In this quarter-
Different reversals and, you know.
Okay. It could go up, marginally every quarter from here on sequentially? Hello? Hello?
This is the operator. Can you hear us as the management?
Hello.
Can you hear me?
I can hear you, yeah.
Just give me one. We'll check with the management. One moment.
Yeah.
Over to you, sir.
Hi. Hello.
Yeah.
Yeah. You wanted my question on the operating expense front.
Yeah. Sorry, we cut out, so I don't know what stage we cut out. We want to say that normal quarter-over-quarter increase because, you know, there'll be more disbursals in the subsequent quarters and there's naturally more upfront payoffs and normal collection expenses, that kind of stuff. Nothing material, materially that should shake you as opposed to.
Okay. On the savings account rate front, so we are offering 6% on savings account balances above INR 10 lakhs. How much has it impacted our blended cost of funds on savings accounts? What would be that blended cost of funds right now on the savings account?
Yeah, blended cost of funds on savings account would be about 5%.
5%. Okay. Thank you. That's it from my side. Just a suggestion. Once you've shared the investor presentation, you do not need to read out the data points in the PPT during the call. That will maybe give us some more time to Q&A.
Thank you. We'll be careful next time.
Thank you.
Thank you, Ishan, for your comments and questions. Thanks.
Thank you.
Thank you. We have the next question from the line of Tushar Sarda from Athena Investments. Please go ahead. Can you hear us, Tushar?
Yeah, thanks. Thanks for the opportunity, and congratulations for great performance over the past 2, 3 years. Thank you. There's just one parameter of the bank which I can't get my head around to, is the total expense to assets ratio, which is almost at 5%, 6%. I think in terms of comparison, only Equitas Small Finance Bank is higher than that. Even AU Small Finance Bank is at 3.5, and the largest private sector banks are below 2%. Can you just help me understand this? Okay. If you don't mind, you have to answer one question of mine, then I'll answer your question. Yeah. Okay. What is the vintage that most of the banks you compare it with? No, vintage is there, obviously. Is it because of the vintage or is it? That's what I want to understand.
I understand. One factor I don't understand.
No, no, you answer my question.
You say you take all the big four banks. How long have they been operating? At least 25 years, 30 years?
Yeah, yeah.
When you put up a branch or an ATM, they take time to leverage. We are, for all practical purposes, you know, our 640 branches, we can call it, had an average life of maybe year and a half, two or three. They're not 20 years. The same branches you can imagine when you. You know, the one thing I think many people are not able to get their head around is to or not get the perspective, is that this is a new bank.
We put up infrastructure as if we are an established bank because we are. We are already a, you know, at merger we had a large loan book of INR 1 lakh crore with no retail deposits. When these branches really scale up from here over the next 10, 15 years, you'll find that naturally all the cost measures will measure up with every other bank. It has to. That's on the liability side.
On the asset side, again, I have to ask you know, I won't trouble you to ask me, but I'll explain to you that if you think of any of the large banks who've been around for 15, 20, 30 years, they probably have a very large mortgage book. The cost to assets on a mortgage book will be pretty low. We've just started. Our and most of our products are not exactly those low rate, long duration mortgages. You know, think of our products, for example, which are giving us, of course, better yield, which you can see in the NIM, but they also have relatively high OpEx business on the asset side.
Think of any product we have, let me say vehicle financing or two-wheelers or used car or new car or loan against properties, where it is low, or a strategic drift. Therefore the products would have a little higher OpEx on the asset side. Our branches and the liabilities that are definitely new and they've not lived the life of 20, 30 years like the other banks. As this a vintage of this bank plays out, they'll all normalize. I'll have a follow-up on this. That's why compared to AU Small Finance Bank also, which is, you know, similar kind of businesses, which is 3.5%, and Capital First has a history. IDFC may not have, but you obviously have the infrastructure and the history, right? Mm-hmm.
Your size is also big. It's not that your size is INR 20,000 crore and therefore the expenses will be high. You are at INR 2 lakh crore. You're one of the larger banks in that sense. That's why I wanted to because all other parameters, you tick the box fantastic. It's just this one parameter which Slow down. If you can explain a little more
No, no. Very helpful.
No, no, it's my job and I'll explain properly. I didn't mean to throw you off balance. Let me answer your question. On the assets, on the liability side, my answer is pretty much what I told you, that the branches are not yet scaled up.
If you think of a branch, for example, you know, per branch, let me say if you give us a longer vintage. End of the day, let's not forget, we are living, operating in the same country. We are hiring people of similar talent, similar cost structures. Our branches, what we pay for premises is similar. There's no reason our bank cost structure should be different than any other bank. They're all the same. At least all the leading private sector banks give or take in the same ballpark. It only and only on the liability side is only about scaling up, which will happen. I'm not troubled at all on that front. I hope you'll agree with me.
Just one clarification that I'm assuming INR 3 crore cost per branch to operate. Is that fair or is it more? Less. Let's call it simply two to two and a half crore, depending on. Out of 60 branches, around INR 2,000 crore you spend on branches, right? Out of INR 10,500 crore, that's the annual salary. We can do the math there, but I'm just saying that. You get the drift. Let's talk, just get the concepts out of the way. On the liability side, they will scale up like any other good bank and, because it offers slightly better rates, probably will scale a little better than any other good bank. Okay? Like any other bank.
Let me just say that asset side, liability side is easy to understand because same market, same cost structure similar. Now, on the asset side, the cost structures are definitely the product suites we have are definitely you know have a higher cost structure than. Let me take one of the large banks in the country. They probably have a INR 5 lakh crore home loan book. Okay. Which some of us, myself, maybe my colleagues here must have started like 25 years ago, maybe 20 years ago. By now it must have really scaled up to a really big piece. Obviously, if you look at our home loan book today, our cost-to-income ratio on home loan book is probably like 90% or something. Is that so?
Basically because it's, you know, I mean, particularly the prime home loan that we started maybe about a year ago. Because, you know, yields are just about 7x cost five or something, and then, you know, the costs are pretty low there and then, but OpEx, if today's OpEx, of course, we leverage it over the next 8, 10, 15 years, obviously the next generation, overall, the bank will get to see very low cost-to-income ratio on that front. But today, people who are building it will incur the expense and will have to live with the higher cost structure on that product, say in home loan, for example. Okay. To start with. It's weird. I mean, as years go by it'll all even out. Now let's talk about other products. Because we started.
As far as other businesses are concerned, let me say JLG business. They have INR 8,000 crore business there. It's fundamentally a high cost structure. If you take a car financing business, it's I think a used car one, a relatively high cost structure. It is true that our asset structures have a relatively higher cost and a liability-cost discrepancy which we just started. The third business we started is the credit card business. Now as we speak, credit card is loss-making. We incur, in other words, the cost-income ratio on credit cards is in excess of maybe 130-150%. Therefore all of these things tend to put a load on the cost-income ratios.
Honestly, I am personally not troubled about this because that's how businesses are built. If I run away from doing these things under investor pressure, then the bank will never get built. No, that's not my idea. My idea is to understand. I mean, this is opportunity for us to understand from management what is their take. I know that's not your idea, but I'm trying to explain to you that it's. Coming back to the point, therefore, some of the businesses we built are built for the future. Our job as leaders of the organization is to get the payback. On the liability side, I have no confusion in my mind.
Payback will happen if scale happens, and as we start doing cross-sell. We are, as a bank, we've just started this process of cross-sell. We were just a liability gathering machine until maybe a year ago. We have now put up the structures. We've enabled the people to cross-sell other products and services. We've tiered the customers. We are, you know, the tier one, two, three, four. We've done some, we are throwing up the necessary customer offers on the RM screen so that they can, you know, discuss the next, suitable product for the customer, et cetera. Our processes have just begun to gather steam. We are probably underperforming, not probably, we're certainly underperforming on the extent of, cross-sell we are doing to our customers on the liability side.
That machine is just gathering up, so that will solve some of the issue. Credit card will solve the issue, I mean, as it turns into profitability happen. As part of management, our job is to turn these. Once we set up the businesses and incur the expenses, our job is to now bring them to profitability. It's a phase where it will happen. You'll see it quarter-over-quarter. We'll share numbers with you. Over 3 to 5 year, what one should expect in terms of, you know, cost to assets? Not cost to income, but cost to total balance sheet size. No, if you come back to cost to income, you know, because of cost to assets, it actually depends on the line of business you do.
Cost to income, what do you think? You are at 75% today, right?
Yeah. Somewhere there.
You can see every quarter now, you know, if you take a Year-over-Year, it is coming down, it will still come down. You see, we have done the math. In our kind of line of business, if we bring down cost to income by 10%, our return on equity increase will jump by 5%. It will be phenomenal. That's the reason I ask this question.
No, it will come down. You watch this game. You just watch this game. It will come down. It has to come down because income will go up. I told you just to summarize. No, so I don't have any issues with all that.
I completely agree with you on that. Only this part was troubling me, that's why I wanted to know. No, no. With 75%, one should expect, say it will come to 50% or 60% ballparking 3-5 years. No, no, definitely. I mean, we won't be, we can't be at this number. We all set our cost to income, so to say. We think that definitely in the long run, we want to be certainly the mid-40s, but certainly we don't want to wait that long run. Even if you take here, say a 2-year window, we do think that by within two years, it should materially come down. You see our ROE has already touched 9%.
This is core and genuinely thought one time and all that. Even if we bring this, you know, we touch no other lever and just, you know, increase the, you know, just pay off the high cost legacy liability, that should give us about INR 1,050 crore. And when you reduce cost-to-income by other means we talked about, you should expect the bank to get to the mid-50s% in the long run, but certainly maybe mid-60s% in the next couple of years.
Okay, thanks. Thanks. I have just one more feedback for you. Yes. I'm IDFC Bank customer. Your new app is phenomenal, but the downtime is very high, so maybe you would want to look at it.
No, thank you. We are very aware of that. If this was, then that's fine. No, but thank you. Actually, we'll take it. No, so just before you go on. Since you said that, we are very proud that we put out a really good app, but on this issue.
Phenomenal app. I like it, but you know, when you want to actually do the transaction sometimes, in fact many times it doesn't work.
No, no. That's why I talked to you, just to tell you that if that was an issue you must have faced until a week ago for maybe two to three. Because, you know, it is a starting.
Even yesterday I think I faced some issues.
Yeah, yeah. Just on the launch. Now it is fully stabilized. I'll be surprised if you say that, if you tried today. It's unlikely.
Okay.
It already adjusted.
Okay. Thank you. Thank you, Sudhanshu. Thank you for answering my question.
Thanks.
Thanks. Bye.
Thank you. We have the next question in the line of Pritesh Bumb from DAM Capital. Please go ahead.
Hi. Good morning, sir. Just a medium-term question on how you look at deposits rates for us as we know that we are in the up cycle. Do we feel that we have to be a little ahead to raise the rates versus the industry? And if hypothetically yes, is there any room in the mix to keep the NIMs intact? That was the first question.
No, no plans really right now. Whatever it is, it is. I mean, as we speak, there is no such discussion going on within the bank.
That we'll be ahead of the market or we'll be like watching out basically, how do we see that? Because the CD ratio is still lower than, I mean, higher than the loan size. Do we feel that we may have to raise something ahead of the markets?
No.
Yeah. Pritesh, even on the CD ratio, yeah, it is relatively higher than other banks, but you need to note that we are carrying high-cost legacy borrowings, right? In the form of long-term bond refinancing, right? These were taken. This came to the bank at merger, right? While we have reduced these borrowings, but to that extent, the funding requirement was lower, right? If we include these long-term stable borrowings in the denominator then the CD ratio gets adjusted to about 80s, right? Once these sort of liabilities get paid off over the next 2-3 years and we sort of get deposits by way of replacement, then automatically this ratio should correct in due course.
Sure. Second part of the question was that do we still have room in our mix to increase NIMs from a yield perspective? If you also don't pass on some of the rates which are coming, hypothetically again. Do we see the mix, some, any mix changes we can do or to, you know, keep the NIMs intact or the NIMs moving up a little bit?
No, Pritesh, as you see our NIMs are quite healthy, right? It's at 5.9% in this quarter, right? We are seeing sort of rate increase which has happened, some difference more happened, right? As V. Vaidyanathan mentioned, we have not passed on the increase in repo rate to customers. That most of that benefit would start kicking in from Q2. We will be fairly comfortable in terms of maintaining NIM around the 6% mark, and we feel that should happen.
Sure. Second question was if you are disclosing, what will be our technology cost as a percentage of OpEx? Because some of the banks are disclosing this. Can we also have that number?
We have not specifically called out that number, but we continue to invest in technology, but we have specifically not called out that number.
Yeah. In the sense of if it be a higher number as a percentage of CapEx, I mean, is it material or is it not to worry about? Because just trying to understand, we have built the bank on the technology side for some time now. So do we see like the technology costs will slightly move down or, you know, in terms of plateau? So that's what I was raising.
Probably plateau from here, but you see actually, yes, first of all, our technology cost will probably be a bit higher. I'll tell you the reason also. Again, we should not forget the fact that let's think of any large bank who's been there for say 10-25 years. They'd already have a cash management system. If they launch cash management, they'll build it today. They'd already have a, you know, savings bank, you know, core process. They'd already have probably an app. We have to build an app from scratch today because we can't tell our customers that, you know.
Yeah.
Similarly, somebody's already built a, you know, a solution for current account management for their customers. We have to build today. The point is that there is certain set of expenses that the... Sorry, capabilities that an organization need to have, it is simply table stakes. The one thing we should not forget is that we became a bank overnight with INR 1 lakh crore of assets, right? With no banking license, with no, you know, just like a NBFC converting to a bank. Because both parties were just lending institutions. Therefore, some portion of expenses are simply just catch-up expenses where there's a system for building basic capabilities that others already have for 15, 20 years.
Now, second part of the capabilities are to build digital capabilities for being contemporary and staying ahead and all that stuff. We are probably incurring both, which is why you're probably seeing this. You should also see. I don't deny that, but it's just for you to understand, you know, this origin of this organization is very different than any other organization which is a small NBFC which got a bank license, which in this case it can scale up everything along with the, as the businesses grow. This origin is different. Let me also point out to you that expense or no expense, you see how quickly our story is building up from here in terms of operating profit. I read out the numbers to you.
Now the way our ROA, ROE is getting fixed, at a bank level, it should now set you thinking that if this bank starts normalizing its expenses like everybody else, where this game might head. I think it will look really very healthy. I mean, for us a 2% ROA is something that frankly is a bit an underball for our kind of bank.
Understood. Thank you. Last question was if you look at recent numbers of large banks, we've seen a solid unsecured growth in all the banks. Do you feel like you'll take a step back just to, you know, see how the market is shaping up? Because it seems to be getting overheated on the unsecured side or do you feel like it's not a problem yet?
No, we monitor indicators very, very closely. We look at two things. One is the perspective we get out of our experience and by watching the market. The second, data. What our data speaks to us. We watch it very carefully. We want to be very, very careful on this front. Our sense is that our general assessment is that secured and unsecured is one dimension. It is not the dimension. It's you know it's not God. Basically, it is just one way of looking at it. For example, we find that when we lend you know a personal loan to an Infosys or a Wipro or a Unilever or a good you know Caterpillar company frankly even through COVID there was no default on them. Many of them didn't even take moratorium.
That's unsecured, but it did very well. The point is that vis-à-vis when we say a two-wheeler business, which is secured but had trouble during COVID. Therefore, our job is not just to get, you know, evaluate these things bluntly by one dimension. It is to see the underlying profile of the customer that we are lending to. It's a very material point. The second material point is in terms of our own indicators. I'm sorry. One more thing is about cash flow. How do you evaluate them? If you evaluate them for the cash flow, you know, it behaves a particular way. End of the day, cash is paying you back, security is not paying you back.
I'm not saying it's an immaterial point that thing, but you should also just have another point of perspective.
Thank you. Very clear. Thank you so much.
Thank you. We have the next question on the line of Sagar Shah from PhillipCapital. Please go ahead.
Good evening, sir. First of all, congratulations for excellent set of numbers, actually. My first question, sir, has already been, I think, asked. I think a couple of things regarding your operating expenses, actually. As you have already spent in technology and, as you are guiding that actually as the income grows actually automatically, you said that our OpEx, on the OpEx front, automatically our income or income growth will be higher than your OpEx growth, and that would be a driver of the ROE, right? Am I right, sir? For at least the next year until May next year.
Sudhanshu, I think you have a question for you.
You are saying whether the income growth would surpass the OpEx growth? Is that the question?
Yeah. Basically, as you have guided for the next year for a double-digit ROE come up from the last quarter. For double-digit ROE, my understanding is, the two key growth drivers are, first of all your income growth, and secondly, your lesser OpEx growth. I just wanted to understand on that part. My first question is on this.
We do think both will play out. It's not one for the other. Our costs should operate from here. Secondly, income will grow. It's a very simple model. You know, if the retail book grows by maybe 25%, year-on-year, which is what we've guided and frankly, we feel we'll make it comfortably. We don't have to do anything. We don't have to put pressure on ourselves. We don't have to run extra hard. Nothing like that. It will just happen by itself, you know, in a very smooth manner. When that happens, automatically income grows to 25%. And we go straight to operating leverage. I mean, we are not stressed about this double-digit ROE.
Let me just tell you, we'll surprise you a little maybe ahead of time, but certainly fourth quarter RO-ROE, you can take it as a sure thing. I mean, sure meaning whatever you make of it, but we're feeling good about it.
Okay. Okay, sure. Second question was on your cost of funds actually. I wanted a color on your now by 20th July, you have changed the interest or you have reduced the interest rates on the SA and the SA accounts and the current deposit accounts. So your incremental cost of funds on blended borrowings and deposits, or roughly can say how much will it be, sir, going forward?
I don't know the exact numbers. Sudhanshu can answer, but let's talk in terms of delta. Then in the delta sense, frankly, our business model is built for these kind of cost of funds. We don't have to be like the Big Four, at their kind of rate of 3% or up to INR 50 lakhs and greater than 3, you know, greater than 350 lakhs by 3.5%. We don't have to be that lean here. We you know, fundamentally our yield is slightly better. Our origination is different. You know, therefore for us, we're comfortable with what we're paying right now. Even at that, we're getting a net interest margin of 6%. We're more than happy. We're not under stress to increase it also. We're happy with 6%.
Now it's a very simple game of just playing, just scaling up the book, nothing more. Just pay more than the others in terms of savings, which we will do. Frankly, we don't worry about it. If interest rates went up in the market by another 50 basis points, I mean, we won't bat an eyelid. We'll smoothly increase interest rate by 50 basis points. We won't think twice. For us, the model is very happy and comfortable. Not that I have any plans, as I said earlier, but we don't stress about these things because we're sitting on a margin level that is so strong. We still are yet to take out. We still have not, like I told you, leveraged the assets or the costs well. A lot of income waiting to be there.
Lots, lots of new businesses to be built. Data has to scale up. Wealth management will scale up. Cash management will scale up. FASTag will scale up. They will all give income. We have enough income sitting out there yet to be taken. A few basis points this side, that side makes no difference to us.
Okay. Got your point. Sir, next question was regarding your commercial finance portfolio. I think on the net debt, it has declined by around 8% quarter-on-quarter. Can you throw some color on the commercial finance portfolio? How do you intend to grow in that space? Basically, how do you look at that portfolio?
We like the business. We like the business priority sector. Sudhanshu, as his portfolio just points out to me, it's already grown from INR 2,000 crore to INR 2,300 crore in the last quarter. That's commercial.
Commercial finance book, that has increased from INR 10,144 crore to INR 10,679 crore on a sequential basis.
Okay. You didn't mean commercial vehicle, you meant commercial finance. Is that what you said?
Yes. Yes, yes.
It's a marginal increase on a sequential basis. Of course, on a year-over-year the growth is 13%. We feel that growth could be a bit faster in this segment in future quarters.
Just to correct myself, my apology, I thought you said commercial vehicle. That's why I read out something.
No problem, sir. Coming back to my previous question, sir. You had thrown the color on your liabilities, but can you throw us a number and what is your blended cost now on borrowings and deposits, sir? Blended cost .
Do you have the number?
Yeah. Blended cost is about 5.2%.
5.2%. You envisage that it will remain the same for the entire year and for even going further?
I told you not to bother about that too much. First of all, I'm not ducking the question. As of now, we feel that rates are what they are. We are comfortable. Like I said earlier, if yields in the market rise for any reason, we have no problem touching it by 20-25 basis points here or there. No problem at all. I told you the kind of margins sitting on, the kind of buttons we've not even pressed in the bank in terms of the fee income, the operating leverage that is yet to play out. Let me just say, for example, if the loan book for the bank retail side grew from INR 1 lakh crore to INR 1.30 lakh crore.
1.30% goes to 1.60%. We are not going to grow the OpEx 30-30%. The operating leverage sitting there. There are so many pools of buffer we're sitting on that this is a run-off item. It won't be the material thing. For us, we were very clear. We want the deposits what we want to have. We don't want to outprice. In a sense, we don't. We will just need it as much as we need. I mean, we'll take, we'll test the rate, pricing test the rate, but we just take what we want to take. At this point of time, we have, as we speak, there's no plan to touch it.
Just to add, even with the asset side, we may sort of increase the pricing, right? As markets have also increased pricing of certain products, we have also done so in Q1. To some extent, asset rate pricing will also happen, which will take care of the cost of funding fees.
Okay. Sir, my follow-up question was, have you utilized the INR 168 crore provisions that you had in your balance sheet, sir, for COVID-19?
Yeah. We have utilized.
In this quarter.
Yeah. We have utilized about INR 75 crore of COVID provision, and this was largely utilized for the corporate case, which I mentioned, had slipped into NPA during the current quarter out of the restructuring pool. We have utilized to that extent. We still carry a provision of about INR 90 crore as on 30th June 2023.
That INR 165, largely, you know, we told you there was one retail chain. In my opening remarks, I mentioned to you the retail chain, we had an exposure. We drew down on the COVID provision and settled that retail chain. We made it zero outstanding. Frankly, we don't see a need to use that COVID provision at all. Some time or the other, we have to release it. As of now, it's just there. I mean, we're not expecting next quarter's credit provision to be very much. We don't expect Q3, Q4, any of them to be. I mean, they're not, we feel, will be quite safe and low. At some stage, we'll take it out and release it appropriately.
Okay. Sure, sir. What is your exposure towards our that retail exposure? That corporate account?
Zero. Zero now.
What the exposure we had before?
INR 575 crore or INR 500 crore approximately. Maybe, I think 55, 65, 60. But it's all, it is a legacy account. It's not that, we could do much about it. The last three quarters or so, a couple of quarters, we've taken it out and made zero.
Sure, sir. Yeah. My last question, sir, was regarding your infrastructure portfolio. That infrastructure portfolio, I think it is still at around INR 6,700 crore or so. Now, are you confident of the existing portfolio or there are certain watch list accounts also in this entire portfolio?
No. If you see the numbers out of the book which we have, about 21% is currently a GNPA book, right? Where we have a net. This also includes one large ticket, big ticket which had slipped into NPA in last quarter. While we are getting recovery here in terms of the improved yields, right? We expect a resolution which could happen in the calendar year. But in terms of incremental stress, we don't see sort of any further stress built up on the infrastructure portfolio.
Okay. Yeah. Thank you so much, sir, for the details. Thank you so much. All the best for the future.
Thank you.
Thank you. We have the next question from the line of Asutosh Mishra. Please go ahead.
Thank you for the opportunity. My first question is, you know, just to understand, from the, you know, benchmark business loan, how much of our loan are linked to the EBLR and MCLR, and how much is rating and how the transmission is going to take place?
Yeah, thank you for the question. So we have a loans and advances book of about INR 1,30,000 crore. Currently about 37% of the book is linked to external benchmarks in the form of EBLR, T-bills and MCLR, and the rest is a fixed book. As we mentioned earlier, while we have passed on the repo increase to the new loans which were sourced after the rate increases by RBI. On the existing book, largely the pricing benefits will come in from this quarter. And the loans which sort of came for reset through the MCLR rule, right? Because we also increased MCLR during this period, that increase was passed on to the customers. As far as repo is concerned, largely the benefit will kick in starting Q2.
How much is repo and how much is MCLR amount in this 37%?
Out of the 37%, about 60% is repo and balance is MCLR, where the repricing would happen over three months to one year. Depends on the MCLR which has been agreed with the client.
The second question is that fixed rate book composition is relatively higher in our overall loan book. What is the tenor for this and how the repricing will move on this front? Because we are in a rising rate environment and to understand the length of treasury it will be very important to know that part.
Yeah. Again, if you see ours is a very diversified retail book, right? Like we do rural finance loans, right? Which is essentially a fixed rate book, right? There the pricing is quite healthy. The segment is quite profitable, right? So and, like, and there are certain shorter. These are again, not very long tenor loans, right? Similarly, we do consumer durables, this also runs off quite fast, right? This is also a fixed rate book. While we are not able to pass on the rate increase to the already originated fixed rate loans, we have, as I said earlier, made some increases in the incremental book which is getting sourced. That's. We feel still we would be able to sort of hold on to the NIM.
The NIMs are quite healthy, right? As we mentioned earlier, and we expect it to be around 6% even going forward.
Any number on the tenor of this loan book? Average tenor of the fixed rate loan book?
Yeah. As I said, it depends from product to product. Like CD average tenor would be about eight months or so. For a PL it would be about two years and so on. It varies from loan to loan, right? It would be difficult to spell out a blended tenor in terms of the fixed rate book.
Okay. Got that. Got it. Okay. My second question is that, you know, we are spending aggressively on advertisement across the channel. What is our, you know, customer acquisition, especially on the retail liability front, if you can put some light on that.
As you know, last year we did not grow the liabilities base very much. You know, the reason we were taking on too much of LCR and so we had to slow down deposit growth. From this year onwards, I think we are expecting the loan book to grow by 20-odd%. You know, that we need deposits. Therefore you might have seen some more activity out there in the marketplace in terms of advertisements, et cetera.
In that direction, only want to know whether we have seen, you know, new customer, you know, new account acquisition to go up substantially due to this substantial increase in our advertising.
It's not necessarily how many customers, you know, we get whether INR 1 lakh or, you know, INR 80,000 or INR 1 lakh or INR 1.2 lakh. It's, you know, that's not the material point. We think the point is actually the quality of customers we get. We are very particular about the customer quality we get. We don't have zero balance products and so therefore customers coming in at a minimum bring, say, you know, our requirement is INR 25,000 or INR 10,000, but customers usually bring in maybe INR 180,000, INR 1 lakh, INR 1.5 lakh in that zone. So therefore, for us, quality of customers is very, very, very important and we focus on that because then we can make good use of the infrastructure we are setting up. Okay.
Get a more meaningful relationship.
Anand Laddha is, he wants to know on the high-cost legacy bond book which we are carrying, what is your guidance on that? You know, how much benefit in terms of interest savings we will get from repricing of that, if you can guide us on that now.
Yeah. As we have mentioned in the presentation where these loans sort of fall off within next 3-4 years, right? On a blended basis, the average residual tenure is about two years. These loans are currently having a blended cost of about 8.75%, right? Of course, as I said, our cost of funds is about 5.2%, right? We feel that money is money, right? We'll be able to sort of replace these bonds, right, as they fall upon maturity, right? At a cost which would be in the range of 5%-5.5%, right? You can compute, right? That much of sort of relief will then flow through the PNL as and when it comes up.
You can do the math. Supposing, let's say INR 22,000 crore and then you say 8.8% minus. Don't even take 5.2%, even if you take it at 6% because like one of the earliest speakers said that you got to factor for a little bit more increase. Let's factor for it. Let's call it maybe even 5.5% or even 5.7%, just liberally speaking. That difference multiply, so that's 3.2% or so, multiply that by INR 220 crore, that's about INR 630, INR 640 crore. Post-tax, let's call it about INR 450, INR 500 crore. If you add, you get the drift. That is amount of order of magnitude of money in the P&L.
We didn't discuss ROE in a detailed way. Surprisingly, nobody asked it. You know, maybe your Zoom is improving. If you add that kind of, you know, earlier if you recollect, we used to call out three items.
Yes.
Okay. We used to call out credit card business launch, and we told you that it's losing money per quarter and all that. Second number we used to say was, liability branches. Third, you know, this time we're not even doing that. We're at 1% ROA, we don't need to twist and turn and make any, you know, we don't have to do that. You forget these two items. Let's focus on only one item, which is just replacing high-cost legacy liabilities. Because the first two you might argue that's your business, what as an investor, what I got to do with that? On this item of cost of funds, this is easy one, easy for you to understand.
You simply take our ROE of today, just add back this maybe INR 500 crore because of this reason, and when you see the ROE, this will surely go away. This, I hope there's no dispute on this one.
Okay.
That's how we are looking at, you know. A lot of people are. If you see one large brokerage report which is always bearish on us, they're just not able to believe that we can fix the ROE thing. They just go back to mathematical grid and call us, you know, they believe we should be priced as not worth it, to name one. I think when people get a little under the hood and see, not see ROA and ROE, but see the trajectory of where this is headed, and if somebody saw the underlying components that is driving this ROE, and if somebody saw the quality of the book that has been built, if somebody saw the quality of customer franchise we're building.
One thing we didn't talk about our obsession for customer first, you know, it's showing, reflecting in our products. You know, I'll talk about that later. If someone saw all the quality and character that has been built in the organization, then they will see what we're building, and unfortunately it'll show up only a few years from now, but it will show.
Thank you.
That was the last question due to time constraint. I would now hand it over back to the management for closing comments.
Thank you. No, frankly, first of all, thanks. You asked very detailed and very interesting conversations. We thank you for that and whoever's gone through on my system, or anybody else from our bank hearing the conversation, thanks for that. I must say that all of us in the bank, our senior management team, many more who are not on this call, you know, are all like working hard to build the bank and, along the way, build the necessities for a profitable bank. My second thing is that, we are building, you know, of course our ROE is on the table, but, in a real sense, we are building a really high-quality bank in terms of customer franchise.
There are many, many things we don't bill customers for because we believe that either they won't be able to see it. If people complain about something or the other, we take it rather seriously. We go back and fix the root. There are, in terms of features that genuinely customer-friendly, you know. As a shareholder, you may or you may not be impressed about the bank yet. I must say that anybody and everybody should be our customer because we genuinely give high-quality products. We don't, there are lots of fees and charges, et cetera. Left hand or right hand, we don't charge any of them. We are a good customer bank.
Now, third thing is that if you look one year ahead, my feeling is that you won't be disappointed.
Yeah. Thanks to the entire senior management team of IDFC FIRST Bank for patiently answering all the calls. Thanks all the participants for being there. Have a nice weekend. Thank you.
Yeah. Thank you, Kunal. Thank you, everyone. Have a great weekend.
Yeah. Thank you.
Thank you. On behalf of ICICI Securities, I welcome you to the conference. Thank you for joining us, and you may now disconnect your lines.