Good evening. Good morning to people in the U.S. First of all, my apologies for the delay in the call. This was due to the technical issues which we faced in uploading of the file to the exchanges. We had to have a press meet and then we are starting with the investor call, so my apologies for that. Thank you for joining this call. I will start with some macro commentary and then go into the bank specific details. At the macro level, as you all know, India is going through the second wave of COVID-19 currently. The economy was showing a healthy recovery to pre-COVID levels until the sharp surge of cases in April. All three sectors of the economy, farm, manufacturing, and services, showed good traction in quarter four. The second wave of COVID-19 is likely to impact the economic recovery in near term.
However, considering the vaccination drive at large scale and strategy to focus on local and regional lockdowns and micro containment zones as opposed to a national level lockdown, the impact on economic activity is believed to be limited and less severe compared to 2020. That has been the international experience, too, with the second wave. In our assessment of the current restrictions, we now see a full year GDP growth at 10.4% from 11% estimated earlier on a back of a slower quarter one. Scaling up of the vaccination drive from quarter one would eventually help deal with pandemic. The measures announced by the government and continued accommodative policy by RBI will support the overall economic growth. Coming back to bank specific commentary. I completed my first year as CEO in March. We faced some internal and external challenges during the year.
I can proudly say that the bank has come out stronger from these challenges. If we look at some parameters indicating the health of a bank, we are at the best levels in the last several years, if not the decade. We closed the year with capital equity ratio of 17.38%, surplus liquidity of INR 40,000 crore, credit deposit ratio below 85%, and strong traction on retail deposits, PCR at 75% with significant buffer provisions outside PCR, operating profit margins at 6% of loans, all at the best levels in the last few years. Coming to quarter four, and during the quarter, we focused on continued deposit mobilization. Our deposits saw handsome growth of 7% quarter-on-quarter and 27% year-on-year. This was led by strong growth in CASA of 11% quarter-on-quarter.
The growth was driven by retail segments, resulting in a retail as per LCR growth of INR 9,900 crore during the quarter. This was in spite of 50 basis points reduction in the headline rates. Our cost of deposits fell by 31 basis points during the quarter and year to date cumulative by 102 basis points. We continue to maintain comfortable excess liquidity with overall LCR at 145%. Asset growth. All three domains, vehicle, diamonds, and microfinance, saw strong disbursements during the quarter. Vehicle disbursement grew 30% year-over-year and 8% quarter-over-quarter, driven by a pickup in commercial vehicles. Diamond demand globally saw good recovery, resulting in working capital drawdown from assets. Microfinance too resumed a growth journey with 15% quarter-over-quarter growth. On the corporate book, we have been reducing our exposures in line with our strategy of granularizing the loan book.
We have largely achieved our sell-down objectives and the portfolio hereon to start showing growth. We remain cautious on unsecured loans. Overall loan growth for the quarter was 3% quarter-on-quarter and year-on-year. Asset quality. Our collection efficiency improved to 98% from 97% during the quarter. Of this, secured assets have higher collection efficiency and unsecured have lower collections than average. Our retail portfolios, including unsecured, saw a reduction in slippages. Corporate saw technical slippages where restructuring was under implementation as of March, and some of them are already upgraded. Corporate slippages, adjusted for such technical cases, were also down quarter-on-quarter. We have followed a conservative provisioning approach. We maintained our PCR at 75% despite technical NPAs in corporate. We have conservatively taken 100% provision on unsecured assets, including microfinance, even though we are already seeing recovery.
We have also increased our surplus COVID provision outside the PCR from INR 966 crore to INR 1,600 crore or 0.8% of loans during the quarter. Overall loans related provisions are 3.3% of the loan book. I will share further details later. Strong profitability of the franchise. Our NII grew 9% year-on-year and 4% quarter-on-quarter. Our NIM was stable at 4.13%. Our fee reached pre-COVID levels in quarter four, driven by strong retail fees. Retail fees crossed INR 1,000 crore per quarter for the first time ever. Our revenues were up 6% YOY while costs were up 2% YOY, driving operating profit growth of 10% year-on-year. Our revenues have now settled comfortably above INR 5,000 crore for the quarter. This has helped in improving our strong operating margin to 6% of loans despite lower corporate fees versus the past. Scaling up of new growth areas.
We continued scaling up our affluent NRI and SME segments. Affluent AUM crossed INR 50,000 crores, including deposits of INR 30,500 crores, growing 5% quarter-on-quarter, and delivered a fee in the quarter of INR 100 crores. NRI liabilities grew 9% quarter-on-quarter to INR 25,800 crores. We have also added 100,000 merchants by leveraging Bharat Financial network during the quarter. We have resumed our branch expansion, adding 100 bank branches and 40 digital outlets during the quarter. We will continue to invest in existing as well as new business to drive our growth. Capital adequacy. During the quarter, our capital adequacy was augmented by promoter warrants conversion of INR 2,000 crores at 1,790 per share, implying a significant premium to market price, which demonstrates promoters' steadfast commitment to the bank and belief in the management team. The warrant subscription and lower risk intensity boosted our CRAR to 17.38%.
Before I go into portfolio-specific summary, broadly on slippages and restructured book. During the quarter, we had business as usual and also technical slippage as detailed in the investor presentation. Our business-as-usual slippages were INR 1,930 crores during the quarter, which is lower than the performa slippage of INR 2,500 crores last quarter. The technical slippages were INR 1,899 crores. Out of this, INR 1,602 crores is already reflected in deductions as they have become standard, and the balance is happening also this quarter. The technical slippages occurred due to delay in closing the restructuring by consortium and also temporary operational issue, which was rectified in the same quarter. Bulk of these technical slippages came from two groups highlighted in the earlier quarter, one in retail and the other in the construction industry, where resolution is under judicial process.
Further details are shared in the investor presentation, and we can discuss this in the Q&A.
We also recognized proforma slippages of INR 2,538 crore of quarter three as the NPA sanctions were lifted by the Supreme Court of India. On restructured book, our restructured book was at INR 3,737 crore and stayed stable at 1.8% of loans as of March 2021. The mix of this book has improved towards long-vintage vehicle finance customers. During this quarter, we saw a few corporates opting out of restructuring. Due to COVID second wave, some additional vehicle customers, out of caution, opted for MSME restructuring, which was available till 31st March. Segment-wide contribution of this 1.8% would be vehicle 65%, non-vehicle retail 17%, and the balance from corporate banking. Coming to individual businesses. Vehicle finance. Quarter four saw strong traction on disbursements across the vehicle categories. Overall disbursements grew 30% YOY and 8% quarter-on-quarter. As expected, commercial vehicles bounced back nicely during the quarter.
The disbursements grew up by 54% year-on-year and 44% quarter-on-quarter. This segment too has now crossed pre-COVID levels. Our other noticeable segment showing strong disbursements were cars, up 24% year-on-year, utility vehicles, up 29% year-on-year, tractors up 44% year-on-year, and construction equipment 2x year-on-year. We remain cautious on three-wheelers due to low passenger freight and disbursements are much lower than historical averages. This segment, however, forms small part of the book. The overall loan book grew by 7% year-on-year and 1% quarter-on-quarter. We had low disbursements in the first half of the year. As the disbursements have now reached pre-COVID levels, they will start reflecting in the loan book growth from next quarter onwards and subject to how COVID plays out. Collections in the vehicle portfolio are slightly lower than the pre-COVID level.
The portfolio has consistently maintained its excellent track record and market leadership in all segments we operate in. In fact, almost 25% of the gross NPA customers are today at less than 60 DPD. They will remain in NPA till all dues are clear. We have seen higher flows in two-wheelers and three-wheelers, where livelihoods are impacted by COVID. These are typical service providers like autos, newspaper delivery, et cetera, who lost earnings. We allow these customers to slip into NPA and recovery should come out as COVID plays out. Restructuring was invoked on INR 2,446 crore of portfolio. This was maybe ahead by INR 200 crore against our earlier expectations. The MSME restructuring was available 31st March. Due to onset of COVID second wave, we saw some more customers availing this facility out of caution.
We have long vintage and strong collateral covers in this segment and eventual losses should be range-bound. While the lockdown poses a risk to freight transport, this segment has demonstrated to be the first one to bounce back as the economy reopens. Expectations of strong GDP growth this year and budget announcements on traffic policy and infrastructure spend augurs well for the vehicle industry. Microfinance. This is another area of domain expertise and has proved its mettle in yet another crisis. Incremental slippage during this quarter was INR 298 crores or 1.2% of loans. Proforma slippages in the quarter were INR 472 crores or 2% of loans. Overall the slippages of around 3% are lower than what we expected at the start of the year. We have also seen recovery from proforma slippages of quarter three, and this trend is continuing. Eventual credit losses, thus should be lower than expectations.
We have conservatively fully provided for all these NPAs. We remain watchful of any impact of COVID second wave and restrictions in some parts of the country. Overall collection efficiency in April is lower by 1% compared to March. This should bounce back as the restrictions are relaxed. We had seen similar trends in September last year when a few states had re-imposed lockdown. Strong traction on collections also enabled our credit card to align towards growth. We saw loan book growth of 9% year-on-year and 15% quarter-on-quarter. Loan book originated post initial lockdown now contributes 81% of total book and has normal collection efficiency of over 99%. This is a key metric to watch as the old book is running off and the traction on fresh disbursements imply improvement in the overall quality of the book in the next few months.
We are now fast-tracking our synergy initiatives, which took a back seat due to COVID onset. We are driving savings account and retail deposit penetration into microfinance customer base. We have crossed 51,000 Bharat Money Stores, and we scale this up further during the year. These financial transaction points across India will add meaningfully to the financial inclusion agenda that we are pursuing through BFIL and ensuring easy access of financial products to rural India. We are also leveraging our BFIL presence in Tier 1 to Tier 3 cities for merchant acquisition. We have onboarded 170,000 merchants to assisted digital group and are scaling this up to add 30,000 merchants per month. The product offers a seamless bank account, working capital, and payment solution. Overall, we are much more comfortable on the microfinance than we were six to 12 months back.
Like any other segment, COVID remains a key risk out here as well. Another good year expected for monsoons, rural spend by government adds to a comfort look. Other retail assets. This contributes 17% of the overall loan book and includes secured and unsecured retail assets. In quarter three, we had seen secured assets showing range-bound slippages, whereas credit card slippages slightly worse than expectations. In quarter four, the secured assets have maintained the traction while collections improved in the unsecured assets. In credit cards, the resolution and rollover rates are better than pre-COVID levels. We also saw credit card spend crossing 5% market share for the first time against a credit card market share of 2.4%. Collectively, these indicate good improvements in the quality of spend and card. We are fortifying our retail asset origination team.
There is, however, strong competition for secured retail assets in the market, and the rates offered may sometimes not justify risk onboarded. As the interest rates are seen to be bottoming out, we expect pricing sanity to return. We have been selective in our underwriting, both for pricing as well as COVID concerns. We are meanwhile growing our new growth driver. Affordable housing disbursement grew 10% quarter-on-quarter, and loan book grew to INR 1,800 crore, up 36% year-on-year and 8% quarter-on-quarter. We have reactivated our gold loan business in 400 branches, and this will be scaled up in coming months. The pilots on merchant loans through IBL as well as BFSL contribution is also showing promising results. Overall, we expect secured assets to resume growth, whereas unsecured to remain capped at 5% of the loan book. The asset quality trends are now at pre-COVID levels. Corporate bank.
I had outlined my approach of fine-tuning the corporate underwriting towards granular, secured, and annuity-based exposure. We created an empowered intervention through independent portfolio management unit. The transition to achieve this has been smooth and non-disruptive. In line with our strategy, we sold out exposures worth INR 3,500 crores during the quarter. Overall, in the year, we have reduced exposure of INR 9,000 crores beyond the scheduled repayments. These exposures didn't meet the concentration criteria, and there was no credit issue as such. We have broadly achieved our objective, and this exercise should be completed in the current quarter. Another focus was granularizing the corporate fee. We focused more on annuity fee rather than one-off transactional fee. Trade and FX fee now account for more than two-thirds of the corporate fee. Investment banking fees were subdued due to weak market condition as well as selective focus.
Overall corporate fee adjustment too is complete. Herein on they should broadly grow in proportion to their loan book contribution. We have disclosed a few additional data points in the investor presentation showcasing improvement in portfolio quality. This shows traction on aligning corporate book towards higher-rated, shorter duration, and granular portfolio. Average rating of profile has improved during the year. Our business-as-usual slippages was only INR 336 crores during the quarter. As explained earlier, we also had accounts aggregating to INR 1,900 crores, which were under restructuring or had technical issues. Bulk of these accounts are already standard with completion of formalities. Restructuring trends in the corporate book was quite positive. In quarter three call, we had highlighted restructuring of INR 2,200 crores, which was invoked and under implementation.
We saw significant part of these clients withdrawing from restructuring as the business momentum picked up comfortably in quarter four. This resulted in restructured books falling significantly to around INR 654 crore as of March 21. This shows resilient portfolio performance even in the current stressed time. None of the restructured books are in sub-investment grade. Portfolios in the sensitive segments such as real estate, NBFCs, continue to behave well, with no restructuring or SMA-2 accounts. A bulk of the realignment of the corporate book is now complete. All the segments are geared to participate in the economic revival. Growth will, of course, follow the revised underwriting approach institutionalized by the bank. We are extending our philosophy of building domains to corporate banks as well. We have identified segments such as MNC, education, healthcare, NBFCs, where we will build specialization.
This would help us give better risk-adjusted returns over long term.
We have also tactically are looking at co-lending opportunities with lenders in secured retail space. Gems and jewelry. This segment is an example of specialization in corporate banks. We continue to see no NPAs or even SMA-2 customers here. There was no restructuring invoked. Global diamond demand has bounced back to the pre-COVID levels. We expect the momentum to continue for a while. This has resulted in strong demand for Indian diamond manufacturers. On diamond loan book, our diamond loan book had shrunk in the first half as the working capital utilization went down due to weak global demand. We saw utilization levels in quarter four improving in tandem with the global upcycle. This book grew 15% quarter-on-quarter and should show decent growth in the coming quarters. Overall, on the asset side, we saw strong growth in disbursements in the areas of domain expertise, vehicles, microfinance, and diamonds.
These portfolios have better early delinquency profile versus the industry, and we have disclosed product-wise trends in the investor presentation. We are positioned to participate in other retail assets, provided we get good risk-adjusted returns. Corporate book adjustments are now behind us and should start showing growth every quarter. We are watchful of the COVID second wave and its impact on the overall economy. We are, however, as of now, comfortable with the PC5 growth ambitions stated earlier. Coming to liabilities. We saw acceleration in the deposit traction during the quarter. Deposits grew 7% quarter on quarter, driven by 11% quarter on quarter growth in current and savings accounts. Retail deposits as per LCR also grew by 8% and achieved over INR 9,900 crore per quarter run rate. This was despite the 50 basis point cut in the headline deposit rate.
With strong deposit flows ahead of the loan growth, our CD ratio further improved to 83% from 87% quarter-on-quarter. Our cost per deposit reduced further by 31 basis points during the quarter and 102 basis points cumulatively during the year. We will look for another round of rate cuts in the coming months and comfortable acquisition momentum despite the rate cut. Our retail fees crossed the pre-COVID level. This was, in fact, the best ever quarter for retail fees in our history. We saw good momentum in the distribution fee along with loan processing fee on the back of strong disbursements. We have also resumed branch expansion, opening 100 branches during the quarter. We aim to add another 250 branches during the year. Our affluent business continued strong performance.
Our deposits from this segment grew 8% quarter-on-quarter to INR 31,300 crore and AUM growth of 8% quarter-on-quarter to INR 50,900 crore. This business has also achieved a fee of INR 100 crore for quarter four for the first time. Our NRI business grew to INR 25,766 crore, up 9% quarter-on-quarter or 32%. Our market share improved from 1.9%-2.3% during the year. Market share was around 8% on incremental flows during the year. This was despite no NRI homecoming and also fall in remittances this year due to COVID. Borrowings have been selectively focused on longer tenure and attractive rates. An example of this would be recent funding from Proparco, a French development financial institution supporting our microfinance business. This is a seven-year facility at a very competitive pricing.
We have maintained our overall LCR at 145% and are running surplus cash balance and excess investment of over INR 40,000 crore. Technology. IT in IndusInd Bank continues to be the backbone supporting business and growth ambitions. The bank has made several significant steps in improving client experiences, including an all-in-one store in its mobile app, video Branch , video KYC, WhatsApp and Alexa-based servicing supported by natural language processing. IndusInd deployed a large-scale work-from-home setup for about 15,000 staff, including email and cloud with video collaboration. Several other digital applications now run off the cloud. The bank has adopted the highest standards of client data and transaction security. With a range of modern and sophisticated security tools, the bank has not faced security breaches, and it has been careful about controls and data protection supported by threat intelligence.
Recently, the bank has successfully implemented an early warning signal, which is an AI-based set of algorithms which measure the impact or risk to accounts, assimilating various market data and internal bank data. Digital traction. Our registered user base on the mobile app increased by 39% during the year. We were ahead of the industry in terms of transaction growth. User base on emerging channels such as WhatsApp Banking increased 3x to 2.3 million and is at par with large tier private banks. Bank is steadily moving on its digitally active user base, showed an improvement by 10% during the year on its percentage of mobile active user base. The digital platforms of the bank have started contributing to business during the year.
Bank acquired nearly two lakh client accounts non-assisted and completely digital via online journey undertaken by clients who visited the platform on the back of platform marketing, contributing 15% of the liability account acquisition. Bank is also launching a few new initiatives, including an end-to-end digital personal and SME loan and also a unified merchant solution app. Overall, on the liability side, we have maintained traction across the board along with reducing cost of deposits. We will continue to calibrate our rate cut strategy going forward. Share of retail deposits as per LCR has improved to 38% from 31% during the year. Retailization of deposits remains a cornerstone of our PC5 strategy. Coming to the financial performance of the quarter. Quarter four witnessed a steady operating performance, with NII up 9% year-on-year and operating profits at INR 3,129 crore, which was up by 10% year-on-year.
Our PPOP by loans improved to 6%. Net interest margin was stable at 4.13%. Our yields on assets fell by 19 basis points and cost for deposit funds fell by 20 basis points quarter-on-quarter. We carried INR 10,000 crore of higher liquidity during the quarter and also had an impact on NIM. Other income grew by 8% quarter-on-quarter and crossed pre-COVID levels due to momentum in core fees of 9% quarter-on-quarter, driven largely by retail fees. Retail fees at INR 1,015 crore grew 23% quarter-on-quarter and crossed pre-COVID levels by 10% year-on-year growth. Operating costs were up by 2% year-on-year and by inch of 5% quarter-on-quarter. Our cost-to-income ratio improved slightly to 41%. Coming to provisions. Our provisions for the quarter were INR 1,866 crore. We continue to follow conservative provisioning approach. We have fully provided for unsecured retail and microfinance loans.
Our GNPA has reduced to 2.67% from proforma GNPA of 2.93% last quarter, and net NPA was stable at 0.69%. We have maintained our PCR at 75%, despite some technical NPAs in corporate. We have around INR 1,600 crore or 0.8 of loans as surplus COVID provisions not accounted for in the PCR. We sold down some delinquent portfolios during the quarter. They were already very well provided and resulted in increase on the net security received by 20 basis point quarter-on-quarter. Total loan-related provisions are 3.3% of loans or 122% of the gross NPA. Our overall provision for the full year 2021 was at 3.7% of the loan book. Of this, almost half were either one-off or prudent in nature, such as contingent buffers, built up PCR ratios from 63-75, and from corporate NPA recognitions in quarter one.
The remaining provisions of less than 200 basis points were for business as usual, as well as COVID slippages, and should normalize going forward. We will also see 25 to 40 basis point recovery as well as from the prior slippages. Our SMA-2 book as of March 2021 was 31 basis points versus 39 basis points in December 2020. Our PAT, profit after tax, continues to show a strong upward momentum of growing 12% quarter-on-quarter, even though we have made provisions conservatively. Profits for the quarter were at INR 926 crores. Our CRAR improved to 17.38% due to promoter's warrant conversion and lower risk intensity quarter-on-quarter. Our RWA to asset ratio has fallen from 84%-75% during the year. Overall, I think we have navigated well in otherwise turbulent and came stronger than before. Couple of rating agencies too upgraded their outlook ahead of the scheduled review.
We have given an update on the progress on all key initiatives of PC5 in our investor presentation and can get into details in question and answer. We are now geared towards achieving our PC5 ambitions while keeping an eye on the pandemic situation. Some of the focus areas for financial year 2022 are as follows. Continued focus on collections. Our domains have outperformed the industry, and corporate slippages have been small post clean-up. We, however, remain focused on ensuring healthy collections in the wake of second wave. Broad-basing loan growth. We have seen strong traction and disbursement in our areas of strength. We are gaining market share in our domain, and these account for 45% of the loan growth. Growth will now be broad-based into the corporate, where realignment is almost over and secured retail products. Maintaining traction on liability.
Deposits should lead the asset growth and will be driven by granular flows. We are investing in both physical and digital infrastructure. We have already crossed 500 virtual RMs and will expand this further. We will add 200 branches during the year. New boosters like affluent NRIs merchant acquisitions are on track to scale up as per PC5 plan. Overall cost of deposits has been falling every quarter. We will do further rate cuts in a calibrated manner, improving profitability of the franchise. Our operating profit margins have been strong even in the tough last year. The provisions were elevated due to the prudent approach. Almost half of these are non-recurring in nature. As the provisions normalize going forward, it should start reflecting in earnings and ROE. These focus areas, of course, will be subject to how COVID plays out.
We have seen collections only marginally lower in April so far. The disbursement too got impacted due to lockdowns in few states. The spread of second wave and policy response have been different compared to the first wave. The economy is operating at a higher level compared to the first lockdown, even in the most affected areas. Interstate trade movement is also allowed. Vaccination drive is accelerating every month, and we will get further boost from higher participation by the private sector. These factors coupled with strengthened balance sheet, give us some comfort on executing our strategy of scaling up with sustainability. While we have lost a few weeks in this financial year due to COVID second wave, we remain committed to the PC5 growth ambition. We can now open the floor for question and answer.
Thank you very much, sir. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may please press star, then one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star then two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. To ask a question, please press star, then one. The first question is from the line of Abhishek Murarka from IIFL Capital. Please go ahead.
Yeah, thanks. Good evening, everyone. Just a few questions. The first one is regarding retail growth outlook. Of course, you said that because of the second wave, a few weeks have been lost, but the outlook still remains pretty strong. Just in the backdrop of relatively higher NPA, higher delinquencies and higher credit costs in retail, do you think it is proven to grow in this year? How are you approaching it? Specifically, if you can comment on the disbursement outlook in MFI, whether that will continue or that has been reined in for now because of the second wave. That's the first question.
Can I answer that first, Abhishek?
Yeah, sure. Thanks.
We remain committed to our domain specialization. We've said that, and if you look at our business, I think, in the microfinance business, I think we have outperformed the industry and our credit card, our gross NPA slippages are 3% of the book. We've just given that data. I think 100 districts are affected because of the interstate level lockdowns as of now. During these months, I think the accessibility is key on growth for microfinance business. I think we will have to wait and watch. Having said that, I think we have reduced our ticket sizes. We will see when the lockdown, if it gets opened and we are able to access these villages. There are other districts where we are able to do businesses right now, and we will continue to do that business. It's happening as we talk.
Yeah, the growth may be a little bit shade lower, but I think that's something which we are willing to live with. Having said that, also you must remember that the rural economy is doing fantastically well because of the good crop seasons, the farmer as well as the winter crop season, as well as there are good monsoons which are expected, which is also demonstrated by the tractor growth which is happening in the country. I don't think that we will not be able to do disbursements in districts where there is a lockdown and we have no accessibility because the center meetings cannot happen. In other areas, we continue to do the business because we are comfortable that this lockdown is not as severe as was the first lockdown is. I said that in my previous remarks.
On the vehicle finance business, I think if you look at our book, only 35%-40% of our book is now commercial vehicles, and the rest are scooter loans, car loans, tractors. I think the dealer showrooms are closed as of now. During this lockdown, it is difficult to access clients because the dealer showrooms are closed. We are waiting for this. The April month may be a very slow disbursement month, but I think slowly and steadily during the quarter, we'll have to wait and watch as it comes back. In unsecured, we've made our intention very clear. The book has de-growth, and we continue to say that unsecured, while we will grow, we will be very cautious and this will remain less than 5% of our retail book and of the overall book, and has remained less than 5% of our overall book.
Sir, quick question on unsecured. In credit cards, can you share the proportion of corporate cards that you would have?
We don't have. I think we do commercial card. The commercial card is a very tiny business. I think it's very small for us because we've not pushed that business so much. In fact, we have 2.4% market share on personal cards of the business. Our spends are greater than 5% of the portfolio of the overall spend. That is on the RBI side.
Okay, great. Sir, the second question.
Commercial card is a small business for us.
Okay. Right. The second question, sir, is basically on fees. If we see the growth in retail fees, would that be roughly in line with the disbursement growth? If retail fees have grown X, we can surmise that disbursement growth would also be X?
No, not at all. That is the beauty about the retail fees. Of course, you can link that in the commercial vehicle segment or in the microfinance segment. You can't link it in the Consumer Bank segment. In the Consumer Bank, you will see trade and FX, you will see general banking fees, you will see distribution fees. They are not linked to any asset growth of the business.
Okay, sure. Just, sir, finally, just I was squeezing in one more. In terms of yields, now the sequential increase in yields, is it just an outcome of asset mix change or is there something else over there which has led to the yields going up, both in corporate and retail?
Abhishek, last quarter, we had this reversal of INR 185 crores as you recollect. That's the main driver.
Okay. Got it. Right. Thank you, and all the best for the quarter.
Thank you. The next question is from the line of Jay Mundra from B&K Securities. Please go ahead.
Yeah, hi sir. Thanks for the opportunity. Sir, on the retail slippages, if I were to look at this quarter and the previous quarter, that is effectively most of the full year. It shows that the INR 16 billion and around the INR 21 billion, roughly around INR 35 billion-INR 36 billion is the retail slippages. If you can break that up into various products.
Let me give you the sector-wise slippages, and I think it is very important. I think on the vehicle finance business, we had a proforma of INR 502 crore, and we have incremental slippages of INR 687 crore during the quarter. I must give this clarification. I think what has happened, the honorable Supreme Court lifted its stay on the classifications of accounts on NPA on March 24th. Some of these clients did see that they get classified as NPA post that only, or the DPD counter will start post that. I think we actually followed the IRAC norms, and we classified them as an NPA, and as a consequence, they moved into NPA. 25% of this portfolio is in 30 or 60 DPD, less than 60 DPD today, and I think that is the reason.
The second thing which we did is on the personal vehicle side, which is scooter or car loan, we did not offer any restructuring. As of when we were convinced that the restructuring is not required in this segment, we rather take a hit if a client comes back. I think we will go through the recovery process, that is the way we wanted to do that. That is one of the reasons why the flows are a little high. On the secured retail side, I think there was incremental in quarter four of INR 226 crores. This came from business banking as well as the LAP portfolio. That unsecured retail was INR 383 crores, which came from cards, CL, business loans. I think that was the portfolio which came. MFIs, which is the micro, is INR 298 crores, which was there in quarter four.
That's the incremental slippages on quarter four. Is that up?
Yeah. That's helpful, sir.
Yeah.
Yeah. The second question is, sir, of this portfolio, as you have said that maybe you have said that the things are improving and the situation is mainly impacted in some 100 districts. Out of these four, five key drivers of slippages, where would you be more confident in terms of the slippages having peaked and where you would be slightly more watchful?
I think we have to be watchful because we don't know how COVID-2 will play out. I don't have a crystal ball to say how COVID-2 will play out and how it will affect the business. Having said that, I continue to remain very confident about my domain specialization businesses. Whether it's diamond, whether it's vehicle finance, or whether it's microfinance. I also am very comfortable on my large corporate business and the corporate side because I think you see the actual slippage on the corporate side incremental for the quarter is only INR 336 crores. If you go and see the data, and you would have seen the gross NPA data, you will see the whole accelerator. It's only INR 336 crores. Our corporate book has started performing very well.
Right. Sir, on slide 14, we have this chart which shows the rating breakup. Somehow, it would have been even more useful if you can tell the absolute amount in whichever form, because it is very difficult to compute the numbers that how much is double B and below or maybe triple B, how much is sitting. We have qualified that now we are sitting down on triple B, what is the number as of now? If you have that maybe ballpark number will also help the absolute amount.
I can only tell you that our A-rated book and above has improved by 500 basis points during last year. That's the number which I can tell you that we are focusing and our business disbursements are moving towards in that direction, which we said. Of course, we will do BBB-rated book because our diamond business continues to do on the BBB-rated book. I think on the BB, I can tell you either we will improve or remain stable.
It has slightly come down from 6% to 5.8%. If you look at the more chunky exposures they have given a disclosure in the investor presentation, wherein the triple B exposures have come down by 13%. Our top 20 exposures, funded and non-funded put together, has come down by 16%. The duration of the book greater than three years has come down by 24%. The composition of the fees, I think we mentioned it in the opening remarks as well, is largely composed of trade and FX, and the proportion of investment banking and the episodic type of fees has substantially come down. All the vectors are moving in the right direction, I'm sure we will continue that momentum. Just to give you a sense of the disbursements.
In the large corporate book, in the full year, the A and above rated clients, we had 81% of disbursements were A and above. In the last quarter, 95% were A and above.
Right. Just a clarification, this 5.8% is a percentage of corporate loan, or this is a percentage of exposure? I mean, meaning fund, non-fund, everything put together. I was just asking Sanjay sir, this 5.8%, what is the denominator? Is this the corporate advances or this is corporate exposure or the entire bank? I don't know.
Yeah. This 5.8 is of the corporate exposure, funded plus non-funded. Therefore it would be a much smaller part of the bank.
Right.
I think as you are well aware, of that INR 5.8, there would be approximately a little over one third, which is accounted for by one telecom account. I think when we see some progress, this number is going to dramatically come down.
Right. The last question from my side is the clarification. I think on the restructuring book, in the opening remarks, Sanjay mentioned that 60% is vehicle and 17% is non-vehicle retail. Just to confirm, how does that tie up with the slippages and the consequent restructuring and upgrade? This INR 1,600 must be sitting in the restructuring as well, right?
No.
Part of that, yeah, you're right. Part of the one slip has also got upgraded in restructuring. What you're asking on corporate large account of INR 600 crore. It was in the domain got upgraded also because it is OTR. It is a technical decision quarter till the OTR is cleared. Correct.
Right. What is the corporate restructure number then?
We just told you the corporate restructure number is about INR 654 crores.
That is the confusion. Ideally this number should be around 1,000, 1,100 or higher.
There is another number of INR 300 crore which is awaiting the OTR resolution because it's going through the process and I think the OTR approval has already come.
Yes, sir.
It will get upgraded this quarter from the NPA.
Okay. Okay, sir, thank you so much and all the best.
Thank you.
Thank you. The next question is from the line of Kunal Shah from ICICI Securities. Kunal Shah from ICICI Securities. Kunal Shah from ICICI Securities. As there's no response, we take the next question from the line of Nishant Shah from Macquarie.
Yes, sir. I had a couple of questions on the cards business. Earlier in the call you mentioned that the share of corporate or commercial cards is very little. Could you still just explain some of these conflicting data points? If I look at the RBI data, the monthly data which comes in, the average spend per transaction for you works out to something like INR 7,000-8,000.
I can't hear you clearly. I think your voice is breaking.
Is this better now? Hello.
Yeah.
Just on this cards business. If I look at the RBI data, like the spend or the transaction size for each of the credit card spends, it works out to something like INR 7,000-INR 8,000. Versus the industry average being somewhere between INR 2,000-INR 3,000. What explains this significantly higher kind of spend per card, spend per transaction rather? I would have assumed this would have been a function of the corporate cards business being a larger share.
Not at all. Corporate cards contribution to spends is not more than INR 150 crore to INR 200 crore. You can back that out if you want to. I think the real value for us is we have fee paying cards. We don't have any free cards. Not more than 3% of the book is free card. That is number one. Number two, if you look at our portfolio towards premium cards, I think it will be higher than the industry on the premium card. That is the reason why we are different on the industry, of course. The third reason is 75%-78% of our portfolio is self-employed business. That is a differentiator. Of course, there are risks associated with it, but it's also a differentiator because our spends are higher. Our revolve rates are around 54%-56% now.
I think our ROE on this business, in spite of these losses, last year was about 3% to 3.5%, and I think in good times it can even give 6% to 7%.
Understood. What would be the proportion of travel within the total spends?
Travel. How much would be travel?
Yeah. I don't have that much of data. I can put you to my card expert. I don't have category-wise spends on the data, but I can put you to my card expert and he can help you because I don't have that data right now. If I give you something, it will be guess estimate.
Perfect. Okay. Just one last related question. Would you be open to any inorganic opportunity in the cards business?
I've always said that we always acquire businesses which are complementary to our businesses and ROE accretive. We are very keen to evaluate opportunities which add value and are accretive to our businesses. As we said, unsecured business is less than 5% of our business, but if we get salaried customers and Category A class customers, as a consequence, we will be open towards acquisition, provided it meets all the criteria which we have laid out, which is accretive to our ROA, accretive to our customer base, the right customer base, That's where we will evaluate the options. Of course, the right pricing.
Perfect, sir. Thank you. That's it from me.
Thank you.
Thank you. The next question is from the line of Anand Bhavnani from White Oak. Please go ahead.
Thank you for the opportunity. My question pertains to the microfinance book. I just wanted to double-check. You said the slippages in the microfinance book for the full year were 3%. Did I hear you correct?
Yes.
Okay.
Absolutely right.
3% as of the denominator would be FY 2020 closing book, right?
It's about INR 25,000 crore and it's available in the investor presentation.
Great.
Our close was INR 473 plus INR 298 crores. Quarter four is INR 298 crores and quarter three when the proforma was INR 473 crores.
Okay, wonderful. Sir, you also mentioned that 81% of our microfinance book is post the lockdown. We have run down a significant part of the book and a lot of fresh loans have been issued.
Right. That happens in every microfinance business. The tenures are short.
Yeah.
What happens, and we've already run the 12 months, what had to come has come. Of course, there will be something which will keep on coming. I can't say that how the COVID, it runs down in 12 months. Every microfinance book actually runs out. The runoff factor is very high in microfinance.
Yeah.
If I can add one more.
A follow-up question on that. Am I audible?
Yeah, you are.
Yeah. Sir, what percentage of our microfinance customers would have opted for a top-up or net off loan?
We have a program for top-up, but I think it is very selective, and we don't do it. We first make sure that the client has repaid a book and there is a gap before we do any fresh disbursement. We follow that as a process. We don't, because it can be evergreening of the book. We are very careful about evergreening, and that is why Bharat Financial stands out against the others. We do not go and start giving top-up. We want the client to fully pay the loans and then wait for our cooling period before we start with fresh disbursement. This has been our strategy, this has been the philosophy of Bharat Finance.
Great, sir. Sir, do you have a figure handy as to what % of clients could have been given this top-up or net off loan option?
I don't know. I can check it up with Bharat. I don't think that it will be too much. Maybe INR 600 crores of book is there, INR 500 crores. There is nothing else. And that too, it has been given to clients who have an ability to pay issue. That's the book which we have.
Great, sir. Thank you so much.
1% or 2% of the book, but it's not evergreening. That's all I want to tell you.
Sir, that's very helpful. One, two % kind of figure is very encouraging, and it shows great discipline on your part. Thank you, sir.
Thank you. The next question is from the line of M. B. Mahesh from Kotak Securities. Please go ahead.
Hey, hi. Congratulations on a great set of results. Just a couple of questions from my side. One is, given the situation of the loan book from an asset quality perspective, how are you now positioning for next year in terms of growth? That's number one . Second one is, how are you now progressed on the deposit rates, and how do you see the convergence happening with the front-line banks out there?
Can you, Mahesh, repeat the second question? I just missed it. Sorry.
Sure. On the deposit rates that you have right now, you can see a pretty good flow, both coming on current account, savings account, as well as term deposits. Do you think you can take a slightly more aggressive stance on cutting deposit rates?
Watch the space, Mahesh. That's all I can tell you. I committed last quarter that we'll drop the rate, we dropped it. Now watch the space. I concur with you right now that I think we can look at easing of deposit rates in certain segments because I think we've already dropped 50 basis point. I think the time for transaction account dropping specifically in the savings account side has come up and I think you will see some dropping in rates. I've always said, Mahesh, one thing, that we will be about 50 to 75 basis point higher than the best-in-class in the industry. That you must have it in your mind because we are still growing retail. That's going to happen.
Growth.
Growth.
Financial year 2024.
See, Mahesh, as of now, I'm not going to change my PC5 ambition because I feel that This fear psychosis or the saying that everything is going wrong, I don't agree. I think, yes, we have issues. I think the country will get out of it. In my opinion, what we did when the COVID was out, I think, yes, there are learnings, but we came out of it very fast and there was a pent-up demand. We saw the movement in the book. In my view, I think we have to wait and watch. I don't have a crystal ball to give you the right figure.
I think there is an opportunity in this market, specifically in our domain specialization, specifically in the large corporate book, and I think you ask in the SME side, and I think we will capitalize on the opportunities and we will not let go of our market share in the domain specialization and we will not let go of our strategy on the large corporate towards working capital and near-rated paper. We will not lose deals at any cost.
Okay.
Of course, the investment banking business will suffer, and you've seen the result that we have slowed down that business, and I think that's going to happen during these times.
Sir, just one clarification. In this adjustment that you're doing on the corporate side, do you think there is further room for the reduction in your loan book yields on the corporate side?
The only thing I can say, Mahesh, when you get into working capital and what we've grown. See, when you see the book, you are seeing net off, sell-off, which we've done INR 9,000 crores. It's not that we've not grown. That is part of the run rate. The working capital loan was going at a very competitive pricing and it will continue to go at competitive pricing. What you are seeing is you've got to see the corporate in a different base because the fee business of the corporate and the trade and FX as well as the transaction banking fees have suddenly started showing up on the corporate banking. I think our ability to structure it well has led to that. I believe the way we are playing the game, I don't think we will see the wave which we've seen earlier.
These are granular disbursements. They are not bulky disbursements. We are not giving it at higher tenure. Like Sanjay said, our tenure has reduced dramatically and I think you will continue to see that book. Of course, we may lose a bit of yield and that's driven out of what the pricing in the market. I can tell you, of course, deposits will also fall. Secondly, if the movement is happening, and I've said always, we're already at 55%-57% retail and I think we have very good interest-yielding business and we will continue to be. As I've always said, we will continue to be at a NIM of 4.15-4.25. If I just grow my yield on the consumer, we can be 4.5%-4.75%. The corporate bank is where I want to balance the book and get the franchise.
Having said that, I must also say that I'm evaluating mortgage business because I think I want to balance my secured book more and more in the retail side. We will evaluate the mortgage business also by second or third quarter of this year.
Perfect. Thanks.
Thank you. Ladies and gentlemen, we take the last question from the line of Anand Bhavnani from White Oak Capital. Please go ahead.
Thank you for the opportunity. Sir, with respect to microfinance, what would be a top three states for us and what would be the % of book coming from those states?
I don't have the answer.
No.
Huh?
Emma is not here.
Emma, can you answer this question? Shalabh, are you there?
Yeah, Shalabh is here on the way.
Yeah. Hi, good evening. The top three states are Bihar, Odisha, and West Bengal. All put together, the three states, I think that was the question, right?
Yeah. What will be the individual % exposure of the INR 26,000 crore book in each of these states?
Yeah, all put together but.
Hello?
I can't hear you.
We don't give the granular data on the book at all. I think we've told you the states. We don't give granular data on each of these states as of now.
Yeah. Sumant, we are not giving the detail.
All together combined, all three?
At a very broad level, we have a state-wise cap, district-wise cap, even branch-wise cap on the amount that we can lend.
Can you give me the top three states together as a whole, how much do they contribute?
I think it will be about If you can give that detail. Can you give that detail, Sumant?
Yeah, please go ahead.
About 33%-32%.
Okay. That's quite helpful. When you speak about our product, our key product would be a two-year product. Is that the right understanding in the microfinance space?
No, no. It's a one-year product. Most of the people prefer one-year product, and we have weekly installments. It's a 50-week installments. We do have 18-month product and 24-month product that we offer to people who are taking higher loan amounts greater than 30,000 and stuff like that. Anybody who's taking a loan less than 30,000 is given a one-year loan.
What percentage of our book would be one year, 18 months and 24 months approximate split?
I don't think we can hit that number. I think we don't give those number. I just told you that we have about 81% of our book has got churn during this year, and we have a collection percentage of about 99% in that churn book.
Sure.
You can compute that.
Yeah. Sure, sir. Thank you very much.
Thank you. Ladies and gentlemen, that was the last question. I now hand the conference over to Mr. Kathpalia for closing comments.
First of all, my apologies again to have kept you waiting. This was not deliberate. This was a technical issue at our end, and it took time to resolve it. Having said that, I think we are committed towards becoming more resilient, much more stronger in our business, and I think that's the message which I wanted to give. I think if the COVID-19 plays out, we are committed towards pivoting towards growth. We still are committed towards the PC5 strategy and growth plans, and we believe that India will come out of this sooner or later. Having said that, if you have any further questions, whether you need more details on microfinance, I think we can do a one-on-one and get into details to each of these questions. Sanjay, me or Inderjit are available at any point of time to answer any of your issues.
Thank you so much for your time.