Q3 20/21

Jan 21, 2021

Ladies and gentlemen, good day, and welcome to SBI Card's Third Quarter FY 'twenty one Earnings Conference Call. As a reminder, all participants will be in listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. I now hand the conference over to mister Ashwini Kumar Tibali, managing director and chief executive officer of SDI Card. Thank you, and over to you, sir. Thank you. Good evening, everyone. On behalf of our company, SBI Cards and Payment Services, I extend a very warm welcome to you, and thank you for joining us today for the investor call on third quarter results of FY twenty one. I'm also joined by all my senior management here who are with their to answer your questions after the call. Hope you're all keeping safe. To start with, I wish you a very happy and prosperous 2021. The initiation of vaccination with the start of this fresh year has brought new hope along with the learnings of 2020. So 2021, indeed, is a special year, a year of new hope and aspirations. Before going any further, we would like to extend profound gratitude towards everyone, especially especially our employees who helped us sail through this unprecedented situation and the challenges of 2020 through their commitment and relentless effort. I also wish to thank all of our customers for supporting us and continuing their veterans with us during this difficult time. The business trends in q three have been encouraging. The credit card industry has registered a positive growth y o y for the first time in November 20 after the COVID disruptions in terms of spend. It is significant to note that SBI Card achieved this milestone of higher spend Y o Y a month earlier than the industry. The overall retail spend surpassed the pre COVID nineteen levels. Q three FY twenty one daily average spend was higher by 125% sequentially over q two and hundred and seventeen percent versus q four FY twenty. Spans have grown by 8% year on year to rupees $37,007.97 crores for q three FY twenty one. Our average retail spends have improved across most of the categories apart from travel and entertainment. Especially, the online spends have shown a significant growth. The online spends proportion in the overall spends has increased to 53.4% for the nine months of this financial year compared to 44.2% for FY twenty. Furthermore, what's happening to note that this unlock measures fell under way during q three, even the offline spends have gained momentum. And therefore, if you would note, about a quarter back, our online spend proportion was 54%. It has come down not in absolute terms, but in percentage terms because offline has picked up. We have steadily been growing our market share in terms of cards in force and spend. I'm happy to share that our market share for cards in force has grown to 18.8% as of November 20 from 18.1% in quarter three of last year. This is as per the last updated available. And for spend from YTD basis, as of November 20, it has grown to 20.1% from 17.8% in the nine months of the previous year. The cards in force has witnessed a healthy 15% growth. The cards in force currently stands at 11,500,000 as of q three FY twenty one from 10,000,000 in q three FY twenty. This improvement paves the path towards recovery of the business environment. In q three, our new account sourcing was at 918,000 accounts, which was 134% sequentially for q two and at 107% versus q four of FY twenty. In fact, in the month of December, we did almost 340,000 accounts, which is the highest run rate since beginning to the beginning to the date. Q three also witnessed some significant partnerships, which we've aimed, for instance, a partnership with JTM, which is a leading digital financial services platform, aims to cater the rise of next generation credit cards. Another significant partnership was with BPCL for the launch of BPCL SBI card obtained, which is a premium version of the existing card to offer a vastly differentiated and enhanced value to the master plan customer segment. Before I get to the financial performance of q three FY twenty one, let me take this opportunity to reiterate some key facts about SBI card's business and the environment. Our business fundamentals are robust. We have in place healthy and compliant financial and corporate governance principles, and this forms our core strength. We have continued to grow the business by leveraging our strength. The support of the parent is one of them and capitalizing on India's favorable economic and demographic changes, including its strong macroeconomic performance, rising influence, increasing consumer demand, rapid urbanization, and the growth of ecommerce platform. These are secular factors and would not change in the near term. We are continuously monitoring the external environment. Twenty twenty one is started on a positive note with launch of COVID nineteen vaccine, which may have favorable social economic impact. As this indicates the positive future outlook, we remain cautious and observant of the opportunities and challenges. Let me now take you through our financial performance for quarter three FY twenty one. On profitability, while the business environment continues to be uncertain and challenging, the company performed steadily and delivered profit after tax of 210 crores for quarter three FY '21 and 809 crores for nine months ending FY '21. The receivables have grown by 4% year on year to $25,007.49 crores in q three FY twenty one from $24,007.07 6 crores in q three f y twenty. This is the first time that the receivables base has outgrown the pre COVID levels. Total income for the quarter is at $2.05 $0.04 0 crores, which is largely flat compared to q three last year. And on a y k d basis, total income is at 7,235 crores. Increased business update in terms of new accounts and expense in quarter three required higher investments in terms of acquisition cost and cash back expenses. While the festival period of financial year '21 fell completely in q three, it is to be noted that festival has got festival period in the last year, overlap between q two and q three. So therefore, all the cashless expenses were taken in q three this time, and we believe that the benefit of business growth may follow later consistent with our business model. We're already seeing this happen in q three. Our enhanced focus on collections also required higher outlays. For quarter three FY '21, while our net revenues grew by 3%, the operating expenditure was higher by 7% driven by the factors mentioned earlier, which is the higher cashback cost and the higher collection cost, which led to contraction of earnings before credit cost of 3%. However, for the nineteen months of FY '21, we have a positive leverage of 8% leading to higher earnings before credit cost at 13% Y o Y. The credit risk situation continues to be impacted by macroeconomic variables surrounding us. Post COVID, the assessment of credit risk in the financial services has become complex and is also influenced by the RBI moratorium and the Supreme Court orders and NPA standstill effective August 31. To cover our sales of future credit risk, the overall management overlay stands at 1,113 crores as on December 20. This is over and above the base provision for rupees $9.40 crores. Our GNPA is at 1.61% compared to 4.3% at q two, and pro form a GNP including the SPSS Supreme Court stamp is at 4.5% compared to 7.5% in q two FY twenty one. Net NPA for the period, therefore, is at 0.56%, and pro form a net NPA is at 1.6%. The performance of RBI re resolution book was not available in the previous quarter. In this quarter, we have better information on that book. And as of December 20, thirty three percent of RBI book is delinquent between thirty days and ninety days. On this book, which is not yet NPA, from a provisioning perspective, we have provided the same stage three ECL levels. Further, the NPA standstill matter is still at the Supreme Court and is ongoing. And from a provisioning perspective, we continue to provide it at stage three ECL levels. The SC stands still book has caused a portion of a book not getting edited and being included in the pro form a GNP. If this situation remains the same, then SC stands still book will continue to adversely impact other pro form a GNP numbers for the next quarter. As in the normal course of business, this book would have been written off and moved out of GNP. For the quarter ended December 20, the return on average assets is at 3.3%, and the ROAE at 13.8%. For the nine months ended FY '21, the ROA is at 4.3%, and ROAE is 15.5%. On liquidity and capital adequacy, our liquidity position continues to be strong during quarter three. Our capital adequacy ratio for the period ended December 20 is 23.7% as compared to 19.2% at q three FY twenty. In FY twenty twenty one, our tier one ratio has moved to 19.8 from 15.4% at q three FY twenty. Our credit ratings remain excellent with a one plus and triple a ratings by Chrysler and Mikra for both short term and long term borrowings. These strong credit ratings have been recently reaffirmed by rating agencies and reflect our robust business and financial fundamentals. A recently implemented sustainability policy continues to strengthen our commitment towards a better society. Our digital intervention to paperless communications enabled the saving of over 1.96 lakh trees as part of ESG initiatives during the year. Our social interest our social interventions for community development remain strong. I would like to reiterate our business operations have continued during COVID lockdown, and we steadily started generating growth. We remain committed towards supporting our colleagues and customers who are remaining financially robust. Today, Akvaya Card is the largest corporate credit card issuer in India. This is our airport. Akira card continues to be the second largest credit card issuer in India, both in terms of number of cards outstanding and amount of credit card spent. We're also the largest co brand credit card issuer in India. Our availability with products and services supported by a strong technological background, advanced risk management and data and capabilities, customer centricity, values of trust and transparency, and strong lineage will continue to rise our growth. Thank you very much for your time. I will request the operator to please open the line for any specific questions you may have on the performance of the company. Thank you. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question, you may press star and one on the touch tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. Participants are requested to use handsets while asking a question. We request the participants to restrict to two questions per participant. Ladies and gentlemen, we will wait for a moment while the question queue is in place. Anyone who wishes to ask a question, you may press star and one. The first question is from the line of Deepin Mehta from Alexeya. Please go ahead. Yes, sir. My question relates to the surprising drop in the NPA, which is quite impressive. So can you give us some flavor as to why we are I mean, how we managed to reduce the pro form a NPA so sharply from in just three months' time? That's the first question, sir. Hello? Okay. So on the NPAT, actually, there's there's a mix of both. We have written off almost 652 crores during this quarter three. And also, we have managed to recover and resolve through the RBI resolution plan and other schemes, sum of almost more than 400 crores. So that is the reason why you see this sharp fall in the pro form a NPAs, including the Supreme Court standstill. I would, however, point out to the fact that RBI books, which is which is a much clearer visibility, so it's not NPAs. But in the next quarter, some portion of that might tend delinquent. So therefore, we have already provided for that. If you include all of that, then we are still better than what we were at previous quarter. So what would you like regarding? Right, sir. And my second question relates to operating costs, which have increased significantly quarter on quarter. So if you can just throw some light on that, sir, from November to 1348, sir. Yeah. So there are two elements to the operating cost, which and which we which I alluded to in my earlier comments. The first one is that the we have we have the festival season in this period, and we had two or three big campaigns. One was a Flipkart campaign, six billion day campaign, which is a six day campaign. And we also had other campaigns around the festival season. So a lot of those cashback offers, which last year was split between q two and q three. This year, for all, in the q three period. So you will see the as part of the operating cost, marketing cost and the cashback cost have gone up significantly. That is one. And this will help us going forward when this this spend, which has gone up significantly, will convert to EMIs and will release that interest income. So that's the first part. The second part is the collection cost, which have gone up significantly in both q two and q three because the collection machinery is all geared up and working on the account. In the coming quarters, this collection cost is also likely to come down because for those accounts which we have been trying earlier and which we have not succeeded in recovering, we are we are tampering away. We are only we we are not assigning it both to all channels. It is only limited and focused teams which will work on these assets. So therefore, these costs are both likely to come down to the normal levels in the in the quarter four and going forward. Nothing, anything else you wanna add? No, sir. I think you covered. Right, sir. Thank you, and and all the best, sir. Thank you. Thank you very much. The next question is from the line of Nishant Shah from Macquarie. Please go ahead. Yeah. Hi, sir. Congrats on the good set of numbers, the sharp improvement in asset quality. I had a few questions on the asset quality front itself. In the RBI, RE work, so just so I understand this correctly, no RBI restructurings are 600 crores or $6.01 3 crores this quarter. And $3.77 crores is the EMI funds received from the accounts which were earlier restructured. Is that correct? Yes. So you've given the block here. So if you Yes. So that block is slide 17. So if you I'll just repeat it for the for the benefit of everyone, and then I'll I'll answer your question. So if you recall, we were at two one zero eight crores as of September. We had a fresh booking of 613, so that took us to $27.21. Then we recovered because these are being paid. Not everything is closed. Some are closed. And but others are paying. And that that number is three seventy seven, and fine and that brought us to $23.44. So that's the RBI walk through. So the retail number, if you see, is people who have paid their balances and some have even closed it. That is the number. Okay. And this 37 number, which is 33%, I assume of the 2,300 crores. So these are the accounts within the 2,300, which are in $13.20. They have not slipped there, but have exit have exhibited some stress. And on that, you've already provided for 65 odd percent, provision coverage. Correct? That is as we as we as we as we provide on our NPS, the same proportion we provided. Yes. Perfect. Could I press you for the one to thirty day number within this twenty three forty four? So we have not declared this one to thirty day number. What I would only like to point out is that a significant portion of the book, which is close to the half the book is has paid all of our installments. Now we have not declared this number, so for me to disclose it in the call wouldn't be in order. But I think that 50% of the has put it almost all the installments. Three or four, whatever you want. Perfect. Yes. And yes. And a separate sorry? Nishant, technically, everything other than the triple seven is paid once. Okay? So it is all less than thirty days past. Yeah. Yeah. Oh, okay. Yeah. No. I was just hoping to see how many of them have paid each and every installment so far. Fair enough. That's helpful. And second one, question of your yields. So there's no kind of a sharp kind of a decline in the yields this quarter. Is the assumption right that this is largely because although this has been broadly same, it's because of the period and versus day leverage kind of, differential in the loan. Thanks. So the fees have come down actually for two or three reasons. I mean, last one is that we put to we still have a large proportion of the revolver book. Though they were delinquent, but the interest was still accruing, so therefore, we were we had a higher yield. Now a large portion of that is converted to the RBI resolution, which is at a much lower rate of interest. So as this book runs off, and you've seen this runoff of close to $3.75 crores in the in the point of three, and if you hold similar number, we'll have going forward as well. So therefore, as this book runs off and our EMI book, which is typically at 18 to 20%, that goes up, and the reward of behavior returns. Because we have to remember, 9% of the book, which was largely revolvers, suddenly went off and then had a much lower much lower yield. So therefore, that is the reason. And we hope that this will come back as this ratio reverts back to our usual ratio of transactors and and and the borrowers and EMI. Currently, the transactors are at at a slightly higher percentage of almost 33, which in the usual run used to be around 27, 28%. Got it. Perfect. And just one last question. I don't know if our competitors has been barred from acquiring new cards. Is that a material benefit, or is that nothing to bother ourselves with? So while we never comment on what the competitors are doing or what they've been exposed to, I mean, is there a very logical way to look at this, which is that if somebody with a leading market there is not posting anything, those customers who need those cards will will go to the alternatives, and which could be one which could be us or could be the other players as well. So in that indirect sense, maybe there could be some gain, but we don't look at the competition to decide our strategy. We we do it independently. Perfect, sir. Thank you so much. Congrats on good results. I'll come back in the queue for more. Thank you. Thank you, Nishanth. Thank you very much. The next question is from the line of Chairman Shah from RWC Partners. Please go ahead. Great. Thanks. Thanks for your time and great improvement in asset quality. A good surprise from you. Two two questions on my end is could you talk a bit on how these RBI restructured or the pro form a and peers in in terms of behavioral change, what you see when you go for collection? Why were they not paying in September and suddenly they started to kind of pay? I didn't I'm not undermining your effort, but I'm just trying to understand their at their level, how was the indebtedness and they were able to now repay? That's question one. I'll I'll go to question two in a minute. Yeah. So, gentlemen, thank you for that question. Actually, this is a very nice question. So in before September, what was happening is, one, that the RBID did not have a tool, We only had the easy payment time which are in house paying. And the other tool was restructuring, which would have left the amount to become NPL, therefore, the credit bureau score of a person. So people were really, very wary of whether to go in for a restructuring, which would qualify them as NPL. And once we got the tool, we restored these people. We told them that there is a proper way in which your credit bureau profile would stay protected, though the restructure flag will be up. And you get to pay at a very lower rate of interest, which is a fixed rate of interest, fourteen and sixteen percent. So therefore, that and then we pushed it very, very much. That really helped to bring around a lot of people who initially also had the thoughts that maybe they will get a significant relief from the court, and that company also came during October, November. So whatever relief had to come, they did come. So our maximum sourcing of RBI, if you if you ask me, happened in Sep therefore, November, December was very, very different. So all the bulk of it happened in September, October. So many of these people who are sitting on the sidelines, and they'll thinking that they would they're they would get a large waiver from the court or from the government. They realized that it is not gonna happen. And secondly, some of the people at least got time to resolve the cash flows while they got this time. So mix of those two, I guess. I mean, we have no clear answers because when we talk to the customer, they always ask for whatever concessions they can give them. Yeah. No. Okay. Fine. This is helpful because, you know, as in given the September, there were a kind of question marks on our sourcing, and we had probably gone too far to kind of, you know, get the customers and which is kind of showing up in numbers. But this is this kind of all is that concern. So that's that's very helpful. The other question was more on on on the growth and the spend. Just wanted to understand how the behavioral changes have happened on spends. Last time we spoke that once you gave the card, it takes about nine to twelve months to get activated. Is that change? Are people more kind of inclined to start to spend now given that, you know, this is trend in terms of digital payments, etcetera? And also wanted to get a sense on on this Google Pay linkage we got. Any what are the metrics we have seen since since the linkage and any any thoughts how we can kind of push the spend in even on the lower ticket items? Yes. So so on the spend side, see, we we have told in the last quarter and many of the calls that we saw a secular shift happening, which is the online spend increasing. So online spend has gone up to as high as 54% of the overall spend and 114% higher than pre COVID. We have seen this trend sustaining. The number for q three, as I mentioned in my comments earlier, was 53.5, and that is not because the expense have come down. It is only because the pause has started going up. So therefore, the offline expense have also started going up, and overall, the expense are back to pre over level. What has changed is in between categories. So while I'll give Girish the opportunity to explain, but I can high level tell you that categories like apparel, which was not a very popular online purchase, has gone up by as high as 539%. So that's a massive massive Y o Y shift. And similarly, there are other categories and on the activation, etcetera, I'll ask Girish to respond. Yes. Thank you, sir. So there are three key trends as was as we mentioned. One is the the the online spends continue to be above 50% plus. Secondly, as you see from q two to q three, the moment in point of sale point of sale was down 67%, and now it's down only 42%. So that's a very, very, positive moment in the point of sale. And this is despite the travel agent and that category is still down at 42%. Overall, we see a much pause coming up as close to what pre COVID level that it was earlier. The other piece which is very hearty to note is that the EMI conversion remains very, very strong. We see a lot of, conversion which we were seeing earlier from spends to EMI even though the department stores as a category and fuel as a category has seen a larger growth. But as a percentage of spends, we see that the EMI conversion remains very, very strong. The last piece is around, contactless and consumer behavior for online. More than now, one fourth of our transactions are contactless, and with 2,000 rupees going up to 5,000 rupees as per RBI guideline as a minimum, we believe that that should be very, very helpful because almost 100% of our cards that we subscribe is are contact contactless cards. And we also, as you were mentioning, the Google Pay partnership and postcard emulation technology that we have for our customers. So we believe that's that's gonna be give a flip. So, online, very strong. POS coming up. It has already picked up quite well. Travel, not there. We need to get once travel comes up, we will see further more growth in that category. And on the Google Pay piece, that's the question you asked. We are seeing a very good traction. We see more than now 50,000 plus transactions on a monthly basis on on the Google Pay platform. Good small ticket size, which is the category that we wanted to enter. Even as of now, not all customer all merchants are accepting card there because some merchants still accept only UPI as a platform benefit. Hopefully, as it grows, we will see the traction there, and it's growing month on month. Great. Great. I'll I'll go back in the queue. Thank you, gentlemen. Thank you very much. The next question is from the line of Mahesh Nabi from Kodak Securities. Please go ahead. Good afternoon, sir. I'm just kind of a a slightly long question, so just kind of bear with me as I kind of highlight this. If I go to slide number if I go to slide number 17, the the I'm just trying to understand how are you broken up this management over the provisions. I'm just trying to understand if you're right on this or not. Mhmm. If I minus pro form a gross NPS minus pro form a net NPS, I get a number of 2.9%. And if I minus the gross NPS and net NPS on a reported basis, I get roughly about 1% which is sitting there. So the difference between the two, essentially, is the provisions which you may have created for the management overlay plus the seven seven seven, which is there in the, thirty to ninety days of 60 on the 85% provision, that also is in the management only. Is that understanding correct? Yeah. So anything see, other than the NPA, which is which we have which is a declared NPA, everything else is a pro form a. So whether it's a Supreme Court standstill or the RBI RE, which we have provided, which is not yet NP also. So that is how it is. That's correct. His understanding. So So that's correct. Okay. So if I go with that if that line of thought, then, essentially, you have made roughly about, let's say, $5,480 odd crores pertaining to the device grossing latency and about 500 crores for the the Adi related provisions, seven seven seven. Is that right? Yeah. 65% of seven seven seven. So that comes to around that same number. Yep. So so, Mahesh, the only thing is 10%, in any case, one had So 55% will be the overlay. So around about $4.30 k. Correct. Correct. Okay. So that is it. Is it what if charge you have in value sheet is nothing. So you just have a little 100 course. Is that is that understandable? So there is after covering the SC standstill and RBIRE, there is still some provision available. It's but it's not much. Right? It will be it will be over 100 crores? It will somewhere around plus 200 crores. Okay. Okay. So this is yes. Yes. Yes. Just one last question. I just wanted to check, is there any possibility that we could start disclosing what is your profile of utilization based on latest customer segments at a later date? Is that a feedback? Because you still are studying as to which part of the portfolio is still the maximum set. This kind of payment from a from a from a, you know, a credit score perspective or from a utilization of that perspective, some incremental data out of them. Yeah. Maybe we don't disclose that, but on a generic level, we have been disclosing in the calls that the self employed and the category c, which is specifically MSME and smaller companies, that is the segment which has seen the maximum stress. In addition to this, there are cost set certain sectors like airlines and hotels and entertainment. Those sectors continue to be stressed. So whether they were in salary category or any other category, if they have a jobs problem, they're that that category is showing some stress. But last year, schools are self employed and category c. I mean, we call it category b now, but, again, we used to call it category c. So those are the sectors. Okay. Thanks a lot for this. Just one clarification from. The $7.07 7 crores, which is there, you you, started off with the restructuring exercise, and the customers did not even pay even one installment, or did they attempt to make some installment and they have kind of completely given up? How how should we really do it? No. No. No. It's not that the entire book I mean, they have not paid anything. Some of them have paid one installment from two. They they are delinquent for more than thirty thirty to 90. That's all. It's not that this book has not paid at all. That's not the case. Okay. So there is some some some evidence of an interest to pay? Correct. Correct. Oh, perfect. Yes, sir. Thanks a lot. Thank you. Thank you very much. The next question is from the line of Anuj Singhla from Bank of America. Please go ahead. Yeah. Thank you very much. Good evening, sir. Sir, first question, again, on Slide number 17. When I talk about the RBIRE book, can you confirm how many payment cycles we have seen in this book till date? And will it be fair to assume ex of the crores of book, which is kind of delinquent. The rest of the book is kind of seasoned, and we can expect that payment trend to continue. Is that a fair assessment? So that is largely a fair assessment because the why we have not disclosed these numbers, tracking numbers, but the bulk of the bulk of the enrollment happened towards the August, September, and sometimes something in November. I mean, November November sorry, October. So about as you see, the 613 crores, which happened after thirtieth August, that number, one was largely done in October. So that has been only about maybe November and December, two cycles. But prior to that, up till September 30, whatever is booked has already been three cycles. And, of course, September and all has been four cycles. So therefore, those were paid three to four installments together. And I as I mentioned earlier, without giving a number, that's close to 50%. So therefore, we can safely say that if somebody has paid three to four installments in many of these, have only a term of six months. So they would in the next couple of months, they would actually have paid the full thing. So from that perspective, it does seem that the book will continue to behave in a similar manner. However, since the economy outside is still a little uncertain, we cannot give a firm guidance as to this will continue. Our initial observation is good, and, hopefully, this will continue like this. Okay. Understood. And the second question is, again, this 9% of book, what is the tenure on maybe, you know, weighted average basis? We offer two plans, twenty four months and twelve months. So what is our weighted average tenure for this book? Do we have that number? I don't think we have to reach that. Is that we offer only twelve and twenty four months. So Somewhere in between. Somewhere in between. I mean, we don't have it readily available. But So, basically, what I'm trying to get at the drag on the names or the deals, when when can we expect that to normalize? That was the key intention. So when when we Please see. A couple of things are happening. One is that a lot of people are enrolled for, let's say, twelve or or rather twenty four months. They are paying upfront, and we have no penalty for paying more or earlier. Some of them are coming back and saying that you reopen a line once we pay upfront, etcetera. So we have seen all shares. So by I think we'll have a much clearer picture by quarter four, by which time, most of these people who have the money would have either paid up or settled, and we would have a clarity on that. At this point, our weighted average number would still be a little early in my view. Okay. Understood. And, sir, you also talked about the the receivable mix. The revolver has gone to a multi quarter low of 29%. How should we look at this number and corresponding yield trajectory when we look at maybe in FY twenty two? What kind of, you know, maybe uptake in December should we be expecting? Yeah. So two things. One is that we as I mentioned earlier, that we had lot of spend from the festival side in the in the quarter three, especially around Diwali and and that festival between the the and Diwali. That has converted to assets in the usual way that we have, and that is converting to EMI. So that will see the effects of that we'll see in quarter four. Again, during this time, the Republic Day sales, we are again partnering with Amazon, and we are seeing fantastic results, actually, much more than what we had budgeted for. So all of this is giving us hope that this spend will convert to the EMI. So EMI should trend back to the normal levels, which was around 30% or thereabouts. What was that number? It might have 32%. So we are hoping that from '29, it should trend back to maybe 30% plus in q four. And going forward, it should trend back to that original number. On the revolver side, actually, again, this right now, it's very, very low. But as we what our hope is that as these are very are people continue to pay up, and many of them actually have paid, let's say, six months installment, we are starting to reopen. We will start to reopen their line. And these are the people who used to revolve periodically, not always. And, hopefully, this all of these actions together and the new customers which we getting, which should start to get seasoned, they all of that will start to trend back the revolver number. Because if you add the RBI book, last portion of it was revolver earlier, plus the revolver today, we are we are back to 38%. So our hope is that as we are we are able to print down, we reopen cards, we get more customers. We will have that number, but this will the revolver book will probably get back to where it was sometime in the next next year. Not gonna happen very, very quickly. Yeah. Nobody there? Yeah. Sorry. I was on mute. Sorry. Can you hear me? Yeah. Sorry. Last question. Recovery is $1.25 crores is, again, very significantly higher y y q o q. Is it a function of the front loading of credit cost we have done and write offs we have taken? And so should we expect this number to remain elevated, given our focus on collection or and our write offs we have taken or, maybe in f I twenty two, we can we can see a elevated number on this. Is that a fair assumption, given that we've already taken the write offs, early in this cycle? Yeah. So it is a mix of both, actually. So one is that the write offs are higher. So therefore, the pool itself is higher. But you have to look at that in the business as usual. We we never had a 1% recovery rate. It used to be much lower than that. So therefore, the 1%, which is a which is an improvement over the previous quarter, actually tells us that the focus on recovery and the collection effort have also played a significant role. So both these things together, and our hope is to continue with this number till we have a significant pool of written off accounts to continue to extract and continue to focus on these customers. Anu, would you like to say something else? Sorry, ma'am. Your your voice is not audible. Sorry. Yeah. Just just hold on. Mean, we have the collection head here, so I would ask her to actually pitch in. Yes. So on account of collection efforts as well as the fact that there was a write off concept that's happening quarter one. So quarter one since the lockdown was there, and that title actually happened because it was So when the title has come, we have begun to actually extract from that and can extract better as in fact. So both have added to the company's agency to go up, and we hope that, you know, since the title has we have taken quarter three, which is higher. The fact that we need to to maintain this consistency in quarter four as well. Thank you. Thank you. Thank you very much, sir, and all the best. Thank you very much. Thank you very much. The next question is from the line of Anand Ganda from HDFC Mutual Fund. Please go ahead. Hello, sir? Yeah, Anand. Please go ahead. Sir, if you can give some color on your Ari, took on what the learning fee has in terms of what was what was the sort of category of customer who who who didn't pay or who took the restructuring, whether it's a preferred customer or salary? What was the utilization level on their cards? And was there any early signs that you could have noticed that these customers are are are a borderline customer or a a risky customer? And all this should the learning what we have, we can have we can share that, and what's the outlook on credit cost for next year? Given that, right, this year will be closer to 10 to 12% of credit cost. Should it go back to a normalized level of $66,000 credit cost next year? So, Anansi, subject to the economy because that is something we cannot predict. Hopefully, it will continue to improve and continue to be better than what it has been. Subject to that, the credit cost should be lower because we are cleaning up this year whatever was there. And as if the Supreme Court hopefully lifts this state, we will be able to clear up the book also as well. That's one. Second is in terms of whether these customers for border customers and whether they had any inclinations. I think I've mentioned in my earlier calls that almost 54 to 55% of these customers in the previous twenty four months had not missed anything. I mean, maybe missed a couple one installment at the most. So they were largely good customers. So the surprising thing is that while on a whole, the self employed segment and the CACB segment did see more delinquencies, there is no pattern to this that these kind of customers were likely to default. We we don't we don't see that pattern at all. In fact, in the last week, I mean, after three days of December, our most of the senior management team, full time employees, they were all out on the street trying to meet all the customers who are not paying up, whether they are in RE or any other segment, and we heard different stories. People had lost jobs, and they were struggling with education, struggling with the increase of their children. I mean, good good people who are middle class people, and people had gone to their villages. I mean, all kinds of shapes. So we really don't have a a visibility as to what we what the signals could have been on particular kind of customer. The learning is that we need to continuously be in touch with customers, continuously monitor them, and the portfolio that says look at all the alternate data, and that is the models we are building now to incorporate all the alternate data, which could be leading indicators rather than the default, then we get to know. So I think lot of learning in terms of what to do to monitor things. But in terms of if we could have guessed, these were the customer like to default? No. Because the credit scores are good. They were all paying well for the last two years, and and we we always consider that to be good customer. They still are. I mean, they're not shying away. They're not running away. They just have a situation. Sorry to interrupt you. Sir, may I request you to speak a little louder? Yeah. Hello. Sir, our our LGD assumption are 6566%. Despite this customer being good customer, good credit score customer, we still believe we will have an LGT of sales percentage, or do you think this LGT will come down for us? So as I mentioned, so this seven seven seven, it is not that all this entire book has not paid anything. No. Someone paid one installment. Someone paid half installment. Someone paid two installment also. Just that for as on thirty first December, they were overdue by thirty days or more and below ninety days. So, therefore, we don't expect this book to all go this, I mean, all all become delinquent and be written off. No. We we do believe that we'll be able to recover a part of this book. However, it's a matter of caution. We have provided this 65%. It doesn't mean that we believe that it will be 65% delinquent going forward. No. It's just a question and just to comfort that we have provided extra. If we are able to recover, when we'll use that provision as well? We have done that in q two and q three. Whatever we have written out, we are not whatever provision was released from recovery, we have not we have not written it back. We have used used it and kept it as an overlay, sir. Actually, sir, this time the other income was higher. Could be because of recovery, some return offset. If you can give any color of what sort of recovery can we expect going forward or or this this quarter, what we saw was a one off? So you saw the IB book. So $3.77 crores was recovered and resolved from that book. So therefore, the recovery is something we will continue to see going forward, especially from the IB book. Only at least, cancel is a little tricky because that is already a seasoned book and people have not been paying. So there, possibly, we'll have to have more of settlements and more of extraction rather than actually or legal rather than actually a recovery. Nannit? Okay. So I'll just add to what mister Thoreau said. $3.77 is the normal collection that we received from RBI. The other income that we see is the recovery from the written off account that we have collected, and Anur had spoken about it earlier about this. Okay. That's all, man. Thank you. Thank you, Anand. Thank you very much. The next question is from the line of Ajith Kumar from Ambit. Please go ahead. Hello, sir. Thank you for taking my question. Just one question. In one of the earlier calls, you had highlighted that you have tightened the credit criteria for self employed segment and sourcing from external channels. But the share of self employed segment in new sourcing has been consistently increasing in the last three quarters. It was 21% in one q, 22% in two q, or 24% in three q. So even within salary, the share of government and PHU segment in new sourcing has been coming down consistently in the last three quarter. Similarly, sourcing from external channels have also increased from last quarter. So why is this happening actually? Yeah. So you're right. The self employed proportion in the new sourcing has gone up from 21, 22% to 24%. Now out of this 24%, the open market is just 4%. 20% is from banker. And banker, as we have been explaining time and again, that banker is all prequalified to the Shikhar program, which we run, where the data this is certain qualifying criteria, like, let's say, the liability balances or how to do an account, etcetera, from the bank goes to the bureau. And after the qualification, then it comes to our executive and the bank executives who together market it. And that is and the performance of this segment in bank card is going out for the delinquency level. The bank card delinquency levels overall and also within the segment are far lower than what they are for open market. So while the proportion is going up, it is only in bank card, not in open market where we have cut down it cut down the segment significantly. So whatever tightening we have done, and those tightening remain in place as of now. Okay. And the share of government that is the segment in the new circuit within the southern part, that was that was also been coming down in the last week. Okay? I think that's marginal. That's not that's not very significant. In fact, what is also happening is that we are actually engaged with a lot of government agencies, government ministries, etcetera. This is an ongoing program. So we hope to have this back on. Not that of a conscious quality. Just because the health required has gone up a little bit, it it is small. Absolute number is going up. Okay. Okay. So in terms of share, in one q, it was 47%. In February, it was 42. In March, it is 38% actually. Yeah. I think this number because, see, the first quarter to one and quarter two, the sourcing itself was so low. So therefore and and since the approaches to various marketplaces, etcetera, were all closed, so therefore, all we were quoting work from government issue and all these different percentage incremental percentage was higher. But as the market opened up, as in q three, we had a full range. I mean, most of our places are open. So therefore, the incremental sourcing you see is is is higher in the central price category. But as we go forward, I think it will revert back to the overall thing, and which is also reflected in the cards in force. That is not changing too much. Thank you, sir. Thank you. Thank you very much. A request to all the participants, please restrict to one question per participant. If time permits, please come back in the question queue for a follow-up question. The next question is from the line of Shweta doctor Dhan from Prabhupada, Srinagar. Please go ahead. Thank you, sir, for the opportunity. You partially answered my question previously, but I I would just like to have some color on so you mentioned that, you know, increment in sourcing is now back to pre COVID levels from the open market channel. So what is the customer acquisition rate differential between banker and open market channel, if you can quantify that? Yeah. So that percentage comes at for this year, it has it has been in the range of forty two fifty eight. And and if you look at q three, it's 48 sorry. It is almost how much is that? 6. 48. 48 to 48. $52.48. That's a that's $58.05 21? Yeah. It is that's the incremental. That's the sourcing refresh. $48.52. So therefore but in certain quarters, it was pretty pretty skewed. So it has starting to revert back to the mean, which is used to be $50.50, but still bank has more. No, sir. So I think I'll split the question again to two two points here. You just mentioned in the previous question that it's getting back to the pre COVID level. Yeah. But then, you know, the the kind of you also mentioned that it transpires into better asset quality when it comes from Banca channel. So but if I look at your pre COVID numbers as well, your SBI sourcing was definitely slightly lower. So can you throw color on this? And secondly, what is the customer customer acquisition acquisition cost and the differential from open market channel and from the banker channel? So in terms of acquisition cost, clearly, banker is much, much, much, much lower. I don't think we have given this cost. Have you given this cost? We have not given this cost, but much lower. So so therefore, from an acquisition perspective and from a delinquency perspective, the Bankai channel source customers are clearly much, much better. Where we have an advantage in open market, I mean, we have been a significant open market player and we still are, is the fact that the sourcing I mean, what we do from open market are customers who are carded. So therefore, they spend more, they evolve more, and therefore, they are more profitable customers in a way. So we have a good mix of open market which gives us profitability, though the delinquency could be a little higher, and Banca, which is much lower delinquency and and also much lower cost. So we have this mix. The the challenge is to reduce the open market delinquency and increase the bank's expense and profitability. So that's what we are working on. Okay. Okay. So, secondly, as you replied with these questions, So you you mentioned that credit cost will be coming down in the following year. But if I remember your q two commentary, you had mentioned that credit cost would slightly remain at elevated levels in the second half of the year. So now that they are down almost to 12%, what could be the ballpark number as we exit this current fiscal? Some guidance there? No. No. We never give guidance. So therefore, we I can't give you a number. What I can tell you is that now you have one is that the supreme court's council book is there, which is a book we say that it's not a very performing book. So therefore, there, we'll have to have whatever notice we we need to we need to take. The the usual NPLs which accrue in the normal course of business, their delinquency levels are back to takeover levels, so in fact lower. So therefore, the NPA accretion will be lower than what used to happen earlier. And finally, the IBRE book, as we have shown this time, 33 are overdue by thirty days. Doesn't mean that all of them will go back. So, therefore, as a mix of all these three factors, I think our credit cost are going to trend lower. I will not predict because the economy is not known how this is gonna behave and or if something something might happen in the economy that we don't know about. But in terms of what we have, the stock of what we have, and the flow which is happening through the fresh acquisition, I think they'll we are reverting back to the mean, which is pre COVID level. It might take a quarter or two depending on the Supreme Court opening it up for us, but it's not gonna go up. That that's that's all I can say. Sure, sir. That that helps. Thank you. Thank you. Thank you very much. The next question is from the line of Kunal Shah from ITJ Securities. Please go ahead. Yeah. Hi, sir. So sorry. I missed out in terms of the outflow of this pro form a GNPL in terms of how much has actually slipped and what was the recovery and what is getting into the RBI item? So we have given all this on slide 17, Kunal. But just to recapitulate, on the RBI, we had twenty one zero eight in September. We are now twenty three forty four, and that had 613 crores of new bookings, but a recovery of $3.77 crores. So, Ari Ari, at the moment, 33% is overdue by more than thirty days, which is $7.07 7 crore, and we have provided at 65% for that book, though we believe that not all of this is gonna go back. The Supreme Court standstill is around that same number, which was, I think, six forty nine last time. What is it? 62 to seven 49. Yeah. Seven sixty two to seven 49. So it's not much change. We have recovered a little bit because we've not been able to write off anything. But that is a book which we believe well, I mean, the recovery of the extraction will be low. It is and therefore, this book, if we are allowed to, will qualify as NPA, maybe we'll we'll we'll ultimately write it off or second it. And then there's a usual NPA number, which we which we have already seen revert back to the pre COVID levels or even lower than that. So that accrual of fresh NP is is lower. So that that's the overall thing. Okay. So when we look at from the 7.46 to 4.51, the decline which is there, maybe that would have either been the new booking into RBIRE or recoveries, and there are no fresh approvals is what you are suggesting. So I wanted to work for this 7.46 to 4.51. Okay. So so, see, the 7.46 had two components. One was the NPA component, and the other was the r b s the supreme court's sanction at that point of time. Yeah. And now we have made a write off of 682 crores. 52 or 82? Sorry? $6.48 crores in this period. So from the book which was NPLs as of August 31, a significant portion which is $6.48 crores has been written off. And that is a reason for reduction. The other reason for reduction is the recovery which we have made, which is just short of 400 odd crores, which is a mix of both recovery, closures, all of that. So therefore, $6.80 $6.48 crores of write off and about 400 crores of recovery. That's that's the walk which you which you have in this. Oh, perfect. Okay. Got it. Yeah. Thanks. Thank you. Thank you very much. The next question is from the line of from DSP. Please go ahead. Oh, yeah. Hi, sir. Congrats on a good performance on the asset quality front. Just two questions. One is related to the EPP, you know, number that you shared last time. What is the update on that front and if we carry any provisions against that. And the second, I'll I'll ask the second question. Okay. Thank you. Okay. So the ETT book, see, we don't provide for that. That's about four and four and a half percent is the usual No. $505,100 Sorry. The book is 500 odd crores. Provision wise, I think we just called like a standard asset. Standard asset, which is about 1%. And, anyway, EBT is to book an EBT, you have to pay everything overdue. So anyway the account becomes current to be able to be king in ECT. So that is actually our standard book. And what we have seen so far from that book is that the payment are regular. So we don't have any concerns on that book. Oh, okay. And and the second quest sorry. Yeah. Go ahead, please. Yeah. Yeah. So and the second question is just a reconciliation of, you know so last quarter, on a pro form a basis, we had about 1,790 crore of gross NPAs. And this quarter, I think we have about 1,160 crores of gross NPAs. And you mentioned that $6.48 is the write off, 400 is the recoveries. And therefore, the implied number of slippage would be, like, 400 odd crores, 400 to $4.50 crores. Fresh and p a, you mean? Fresh. Fresh. Yeah. Yeah. It's about that number. Yes. You're right. Because that you can evaluate from that. Correct. Right. Okay. Thank you. Thank you, all the best, sir. Thank you. Thank you. Thank you very much. The next question is from the line of Harshal Dhunagarwal from Infina Finance. Please go ahead. Hi, sir. So so there's one data shipping question. The initial provision that we have on our book, which is at 8%, what will be the absolute number of that? 8% detail. Yeah. I didn't get the question. He said, what is the absolute number for that 8% detail, the last line? It's 8% of the overall outstanding. Overall outstanding. Right. So so so that would be placed around 2,000 crores? Yep. Yep. And and all these provisions that we have discussed for RBIRE, NPAs and EPPs, etcetera. So all those provisions would be part of this 200,000 crores. Right? Yes. Correct. Just to clarify, like you said, ECP is not any additional provision. ECP is provided as per the standard book. Okay. But but whatever provisions we have on that ECP, will will will be part of this? Anything in part. Yeah. Yeah. Yeah. Great. Great. Thanks. Thanks. Thanks, ma'am. That was all. Thank you. Thank you very much. The next question is from the line of P. Kothari from Tech Tech. Please go ahead. This is Prashant Kothari from Tech Tech. And my question was the market share gains that they're having, especially on the expense side, which has been quite phenomenal this year. Can you just help us understand what is leading to these gains? Are there any specific campaigns that you're helping us? And, also, on on the flip side, who are the ones who are losing it? And is it the private banks or is it the foreign banks who are who who's losing on that share of spend? Okay, Girish. You can answer that. So we are early on in the COVID period itself recognized that the spends are moving online. And given the technology and the analytics capabilities that we have built over a period of time in the organization, we we were able to figure out and see that the consumer behavior is changing. So, we started tying up with lot of those players where the consumer those consumers are going. Our offers on on online increased drastically in this period. In fact, we have done more offers in the COVID period than in pre COVID scenario. Also, if you see the data on slide 10, we we also recognize that there was a consumer movement towards not only paying, let's say, new categories. For example, insurance are the categories which is already there, but it just exploded during that period of time. So we capitalized on that and got that benefit. The other is, like, apparel as a category because clothing, now it was subdued in quarter two, quarter two, but quarter three, it suddenly picked up because and and people were unable to go to point of sale scenarios. And quarter three, the online sale of apparel in that category just fashion as a category just picked up. So we tied up with lot of those players and partners in this category. So that has helped. One, the market share being lost is basically either some players who are multinational and were their portfolios were very, very, dependent on travel as a category and we're catering to that. So, there are players who have lost market share in that, and mostly that are multinational. If you look at, a couple of Indian players have also lost market share, but, they would have lost because they would have blocked a large majority of their customers, and the balance customers were not active enough. So that would be the reason. Otherwise, it has it is restricted to people who are very, very biased towards travel as a category. The apart from market share, I think, what we have also done is we have targeted we utilize our capability to target customer one on one and has sent a lot of segmented offers during this period, which we we we have seen has also helped us not only in activating the customer, but also increasing the spend. I think you can look at the earlier data for November, which is the last available data. So for nine months or rather eight months, everybody has lost the in terms of spend. Everybody has shown a negative growth, but some has shown a less negative growth. And we are amongst those players who have shown a less negative growth. There are other players, both domestic and foreign, who have lost have shown more negative growth. And that's very shift then, largely because they were inclined more towards travel or or maybe some of them had blocked a lot of their cards from spending. That's the reason. So that's the first set of them with you. I think that this is all these games are not sustainable as those travel is kind of open up and with all these blocks which are being put in place are also released. You think you'll lose some market share going on? So something would definitely reverse. We cannot say that this is gonna continue. The only thing is that our our engagement with the online player and the customized offers, which we have been rolling out, and they have worked. So I think we have a little bit of a head start. So in that sense, while maybe this this thing not continuing the shape, we'll surely be more than what we were there. And as we continue to work towards more hyperpersonalization, I think we'll be able to sustain a lot of our game, if not the full one. Okay. Thank you very much. Thank you. Thank you very much. The next question is from the line of Kartik Rajeshwamand from BNP Paribas Mutual Fund. Please go ahead. Hi, sir. Congrats on a good set of numbers. Just on the non RBI RE book, how is the over thirty day overdue book compared to, say, last year? Has it come down, or is it in line? So the thirty day DPD book, which we haven't declared yet, but as I mentioned earlier in my comments, actually, it is behaving better than last year. So it is the numbers are lower than last year. And this is largely a result of the fact that one book got cleaned off a little due due to the moratorium blocks and those who ultimately did not pay. Secondly, And our credit filters, which we have tightened significantly twice over, once in May and then later on in October again. So those are also having an effect in terms of bringing on that delinquency level. So they are much, much lower than last year in all segments. Right, And just in in terms of the gross new additions in the last four quarters, it's close to 27 odd lags, and the the net addition is almost fifteen, fourteen and a half lags. So the difference is largely is it the NPA accounts or the inactive ones? Or should we read that? And is that number in line with normal years, or is it higher this time? So this is a mix of both. These are attrition, which is attrition is again both. One is people who actually request for a closure, which is which is a voluntary attrition, and those who whose account become NPLs and delinquent, and therefore, those customers go out to book to that is the involuntary addition. So that has gone up a little, but I think the traditional numbers, whatever they have been revert back in the next year. At this point, the attrition levels are slightly higher, especially in the quarter three. Understood, sir. Thank you. Thank you. Thank you very much. Ladies and gentlemen, due time constraint, we'll take the last question from the line of Manas Gurwan from Bernstein. Please go ahead. You. Line from your side and go ahead with your questions, please. Due to no response, we move to the next participant. The next question is from the line of Manav Gupta from Advocate Bulaks and Life Insurance. Please go ahead. Hello. Yeah. Yeah. Hi, sir. This do you could you help us with the list of the IIM Indore book? Sorry to interrupt you. Your voice is not coming clear. May I request you to come in a better reception area? Is it better now? Yeah. Yeah. Much better. Yeah. Just wanted to get a sense on the average tenure for the RBI RE book. Why I'm asking this question is because, you know, once this book starts running off, only then will you see your, you know, reversion to the usual revolver percentage of the overall spends. So could you give us a sense on that? And the second question is on the corporate side. So spends have bounced back pretty pretty well even though travel and and the, you know, the usual spend categories might not have normalized. So if you could give us a sense on what are the new categories of spends that are growing here for this to, you know, surpass pre COVID levels as well. Those are the two questions. Yeah. So the RBI, the average salary, we began this around eighteen months because twenty four months and twelve months were the two categories. However, as we as I explained earlier, we are we are seeing a lot of different ways of people are prepaying, people are paying in advance and closing the account or paying off some installments to get the card open. So we can see all of that, and therefore, it may not stay till eighteen months. That's our sense. We've already seen this book run off from 2,700 crores to $23.44. So almost close to $3.75 crores has run off in one quarter itself. Going by this logic, hopefully, the next six quarters, we should run this book entirely. But, however, we will wait. This is too early to actually determine decide on anything. On the second question of corporation, I'll ask Manisha's sales office. Thank you. Yeah. Yes. The corporate spends have risen, but the composition of the spends has changed. See, we are working with our corporates to look at new use cases, which are primarily around utility payments, online, you know, expenses, training, marketing expenses, online, tax payments done through the payment aggregators that has taken off in a in a big way. We're working with some of the good corporates, big corporates, you know, who are who are adopting to these corporate payment methods, and that's what has increased the quantum. So, yes, the TNE is low. The travel agency who buy airline tickets, that is low. But what we determine is b two b spends. Obviously, we remain pretty tight on the credit parameters for this. But that that is that is built up nicely. So when you look at the, you know, this quarter and the recent month is actually higher than the pre COVID quarter, so that is what is coming up. Corporate travel is still some months more months away because a lot of companies will continue to be, in our opinion, working from home for some more period of time. And international travel was happening on air bundles only. Though there is a recent media article which says the government is asking airlines to do domestic flights full capacity, but that has not got resolved. It's just a media item that was seen. So that will take some time to come back. And one more important thing is that our expectation is that these new use cases have have more governance to it. So it's not that this is for the time being the corporates are doing this because people who have the companies who've adopted this have been continuing to do the do this for the past several months, and we expect that to continue and the travel fees to come and add back. Sure. Sure. Just just lastly on the EPP. So just wanted to understand that, you know, in an earlier question, you you you kind of alluded to the fact that, you know, a customer has to pay all his over dues to convert his balance into EPVs. So, essentially, what is he converting here? Is he converting a large spend which he's incurred in this month? Or is is I mean, I just wanted to understand what is the conversion which is happening here? So if I can repeat the balance so everything that is overdue so if you have missed the last three payments, so, technically, you will have three minimum dues overdue. So you have to pay all the overdue amount, and whatever is the balance on the card, that is converted to installment at the lower interest rate. So so would he so say in your the past three months bills are due, would he have to pay the minimum dues on those past three months, or would he have to clear the entire balances on those past three months to convert into EBT? Minimum due because technically, the credit card was billed and the aging and everything works in minimum due. So he has to pay three minimum dues, becomes current, and then whatever is the balance is converted to him. Just paying the minimum due for That's the whole thing. Understood. Understood. Thank you so much. That will be all from my end. Thank you. You very much. I will now hand the conference over to mister Ashwini Kumar Kewari for closing performance. So thank you everyone for your comments and questions. It was a lot of insight, and we will prepare ourselves according to calls to come in in the coming days. I hope all of you have a very good evening. Thank you. Thank you very much. On behalf of SBI Cards and Payment Services Private Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.