Q4 20/21

May 21, 2021

Ladies and gentlemen, good day and welcome to SBI Q4 Meet, hosted by State Bank of India. As a reminder, all participant lines will be in a 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 Mr. Pavan Kadia, General Manager, Performance Planning and Review from State Bank of India. Thank you, and over to you, sir. Thank you. Good evening, ladies and gentlemen. I am Pawan Kedia, General Manager, Performance Planning and Review. On behalf of the top management of SBI, I extend a warm welcome to all joining us today on SBI Q4 FY 2021 earnings conference call. The call today, we have with us our Chairman, Mr. Dinesh Kumar Khara Mr. C. S. Shakti, Managing Director, Retail and Digital Banking Mr. Aswani Bhatia, Managing Director, Corporate Banking and Global Markets Mr. Saminathan Jay, Managing Director, Risk, Compliance and Stress Mr. Aswini Divali, Managing Director, International Banking, Technology and Subsidiary Mr. Alok Chaudhry, Deputy Managing Director, Finance And Mr. Charanjit Chattra, Chief Financial Officer. Before I request our Chairman to give a brief summary of the bank's Q4 FY 2021 performance Under strategic initiative undertaken, I would like to read out the safe harbor statement. Certain statements in these slides are forward looking statements. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual outcome may differ materially from those included in these statements due to a variety of factors. Thank you. Now I request our Chairman, sir, to make his opening remarks. Thank you. Thank you very much, Paul. Good evening, ladies and gentlemen. Thank you for joining this conference call. I want to start by thanking the support of all our stakeholders During these challenging times, our employees have worked tirelessly to support our customers. We also, of course, appreciate the support of our customers. In financial year 2021, the bank has delivered ROE of almost 10% with a slippage ratio of 1.18%. The net NPA is at INR 36,810 crores, which is 0.5 times of our Financial year 'twenty one operating profit. In addition to a PCR of 70.88%, The bank has additional provision of INR 25,376 crores at the end of financial year 2021. I would like to highlight that the bank has delivered almost a 10% ROE in a year When the credit deposit ratio is at a cyclical low and when the incremental credit deposit ratio was only 26% due to various one off factors. The bank has demonstrated its resilience in this challenging period. In the long term, the commitment of the management remains to demonstrate That this institution can deliver sustainable ROE of 15%. While challenges remains due to the COVID-nineteen and its The resultant impact, we believe that the bank can weather the disruptions and come out stronger. We won't give a time line for our ROE target in the current uncertain environment. However, we remain confident that the bank has enabled us in place to deliver 15% sustainable ROE over the long term. In our view, the recent past from 2016 to 2020 It's only a small period for a bank of our heritage of more than 215 years. We believe With the efforts of our team, we have put up that the period behind us should be a history now. We have used that period to further insulate the bank against visible and invisible risk, further strengthened our processes And have put in place long term value drivers like digital banking and stress assets, the resolution skill sets. We remain well capitalized with a CET ratio of 10.02%. Given the dynamics of our various, our competitive positioning And our value drivers, we believe our current capital and future internal accruals will be sufficient in helping us to achieve our long term growth and return targets. Further, we remain conscious that the cost of equity is a value driver of our bank, And we intend to minimize the same to maximize the value of our existing long term shareholders who have supported the bank in very challenging periods. We believe at our scale and the resultant complexities, we have been successful in balancing the requirement of all the stakeholders. Concluding my opening remarks, I would like to thank you all for the support to this institution. We remain committed to regard your trust in us with superior sustainable returns over the long term. My team and I are now open to taking your questions. Thank you very much. Thank you very much. We will now begin the question and answer session. The first question is from the line of Madhu Patazania from Hilara Capital. Please go ahead. Congratulations. My first question is on your interest reversal. So what was the total interest reverse in Q4, including interest on interest? Yes. As far as the interest reversal is concerned, we reversed about INR 2,127 crores during the quarter as the performance of previous Otis was stamped as NPA. So and also interest on interest component is somewhere around INR 830 crores. Okay. So both together around 30,000,000,000? Yes. Okay. And the other question is that in the Actually, if we reckon That component, the number which actually is the NII for the quarter will actually look to be an improvement of 4.18% sequentially as against a decline of 6.08%, which apparently is looking like. Correct, sir. So my other question is on inter quarter netting. So in the Q3, we had recoveries of the 2nd quarter Performance slippages of around RMB 60,000,000,000. So was there any such intra quarter netting in the 4th quarter in the gross slippage number? The reason I'm asking is okay, yes, sorry. Yes, yes. Actually, since this was a year end closure, And so there is no question for us to account for any such recoveries as on 31st March. Okay. So this is the complete gross Number without any inter quarter netting? Absolutely. Okay, sir. Because the reason I'm asking is because if you try to subtract 9 months agree slippage from full year slippage, then it's kind of a negative number. Yes. Ma'am, these numbers actually, Abhil, NPS have come down. Okay. Got it, sir. And my third question is on April collection Efficiency, firstly, what is the total number of infected employees currently in the bank? Well, of course, the number would not be there with me rightly, but right now. But nevertheless, We have made some efforts. We have, as well as our own infrastructure is concerned, we have tried to convert them into the quarantine centers. Almost about 1,000 or such number of beds have been created as the quarantine centers. And we are ensuring that our employees Stay protected and for that we have also got the vaccination done. Almost about 1 lakh 10,000 plus Employees have already been vaccinated in the bank. So that's what the situation is. I'm sorry, April collection efficiency and even any color on May collection efficiency that you could give? Because the problem started after the 4th April collection efficiency is around 95%, 96%. So May is, we are not yet looking. So it looks like to be around the same as of now. But March would be what compared to this 95%, 96% in April? I think March was little better than this. 20 basis points more it was in March. Okay. So there has been no impact on the second wave on your collection efficiency? See, I mean, 20 basis point impact, which is there. And moreover, there's always some kind of a lag between the event and the actual collection. So that is something which Yes, we will have to wait and watch. Okay. So, sir, my last question is on express loans. We already have a book of 1,900,000,000,000. It's grown 8% quarter on quarter and 36% year on year. So it's a very sizable book. So can you give some more color In terms of number of accounts over which these loans are split and total percentage of government employees who avail these loans, including defense and also all government and government related employees, percentage and also the number of total accounts. It could be majorly government employees only. These are salaried accounts only. And also a very significant portion of that I would say that as I hear about 95% would be no, I think these are salaried accounts, Salaried account. 95% salaried accounts, that's where as government employees, about say, yes, around 50% of that would be the government employees. And 50% less of the corporate employees who have already done the account. Corporate salary package. Okay. Madhu, I think, Adir also we had clarified. Our focus on Express Credit would be on the Salary class and particularly those employees who have salary accounts with us under corporate satisfaction. And today, we have about 1.6 gross customer CSP account. And our penetration, if you take only our Just about 19%. So we believe that there is a potential to grow this book further. But yes, we are mindful that we have reached certain Based on what now, we may not be having 36% growth rate, slightly could be moderated to 30%, 31%. That is our and at least for the current year. Okay. So around 19% of INR 1.6 crores would be the total number of accounts in Press load. No, there could be some outside the corporate salary package also. Okay. When I'm talking to salary account, there are 2 types of salary card Where we have a tie up with the corporate where corporate salary package is offered to them. There are other people who have salary accounts with us. Based on their salary scales and on the arbiters' excess credit. No, there would be much better Potential, even beyond the CSPs, that is what I want. Even CSPs as a group, if you consider my potential target group, I have just got 19% penetration now. The number of accounts, Maruv, we can reach to Yes, we can separately give you how many Thank you. We would request the current participant to please come up in the question queue for any follow-up questions, as well as several participants waiting for their turn. The next question is from the line of Adarsh Parthampuria from CLSA. Please go ahead. Hi, sir. Thank you for taking my question. Pumbul, I've seen a great number. Question is on the Staff overall expenses, I see that as we had mentioned that the provisions on employee will now go down, But then the salary jump that we have seen from 7,000 to 9,400 is materially higher. Can you clarify, is this the run rate or are there some one offs in the salary expenses? So Yes. When it comes to the salary is concerned as 1 off, of course, we have paid the areas this year. So that is something which has gone out. And yes, so apart from that, We have got a significant proportion of a retireal benefits, which is pension gratuity and other benefits, which is there. And if we look at that number on a Y o Y basis, we have actually seen growth in Bayesian is a major component in this, which is 78.50%. And overall, the growth on a YOY basis is 12.26%. So the pension has witnessed a growth of about 2.55% and which is again a function of the interest rate movements. So that is something we have to go by the actually the advice. And other benefits have gone up by about 5.91%. So that is the how it is really stack up. And when it comes to the salary, personally, it has witnessed a growth of about 10.85 percent And the poison for employees have witnessed a growth of 12.28%. So that's how it is. Got it. But sir, I'll just stick to if you break up these stock expenses, again, when we try and do that, The core cash component of salary moved up from about INR 6,900 crores to INR 9,400 crores to INR 2,500 crores jump. Some of it was expected as cash payouts after the wage revisions have increased. But I believe this was not the increase that was expected, right? So I think if I remember correctly, in the last quarter, it was indicated that we see a 1,000 odd crore quarterly increase in the salary number. So I'm just curious if There is anything more or should 9,500 be the cash salary component going forward? In quarter 4, we have paid the ARIAR. So I think it would have some kind of a Carry forward in terms of if at all, positions would have been short or something that would have been accounted for. What? So on our leverage, the increase in salary bill is expected to be around INR 1500 crores. For a quarter? For a quarter. As compared to what it was in the first. Got it. And So the same question on overheads, there is a meaningful increase in overheads in the Q4. We did usually had a very tight leash Over the last few years on the overhead number, in this quarter that's kind of jumps, if you can just explain that as well. Yes, sure. In fact, as far as ORECs are concerned, the major jump is coming from the DICGC premium, which has gone up Because our deposits have gone up and the DICGC premium rates have also gone up. So that is the reason why there is a growth in The insurance component, which has gone up from INR 3,000,000 to INR 4,348 crores in the previous year to INR 4,348 crores. The other important area where it has gone up is business acquisition and development, which is essentially now a VC related expense. It used to be INR 2,548 crores in the financial year 2020 and in the year 'twenty one, it has gone up to INR 4,107. So which means that about 61% growth is seen there. So that is what is explained here. And just to understand this better, the Your impact of higher ECL this premium in insurance deposit insurance has come in the 4th quarter only. All of it gets paid in this pocket. It could be as and when the charges went up this year, but which At what point of the year? Yes, it is paid half yearly. So you will see the impact in September March. Got it. So the last thing, I want to check and this has been a very big positive surprise is D and B, Our retail has held up for the banks, right? We've made a point over the last few quarters as through COVID that a good part of our book is Salary to government employees. But in spite of that, the quality of the book has been Your 0.4% slippage in a pandemic year is extremely strong number. Just wanted to understand, Would you consider this a sustainable trend? Or how should one look at it? Because this is you're already very good on retail asset quality. And this year in a pandemic, it's been even better. So if you can just throw some light on that. Of course, So when it comes to slippages, part case is a function of the underwriting and second, it is also a function of the effort to recover. So I think when it comes to underwriting, we are not likely to dilute our standards. So that is something which will give us the edge. And going forward, We'll certainly maintain our efforts for the recovery also as we have been doing in the past. So I think going by these two major components, we Hope that we should be in a position to maintain this quality going forward also. Perfect, sir. Thank you and all the best. Thank you. Thank you very much. Thank you. The next question is from the line of Nitin Agarwal from Motilal Oswal Securities Limited. Please go ahead. Yes. Hi. Thanks for the opportunity. A few questions. Firstly, again on the OpEx, when you aim for 15% ROE, what levels of Cost income on cost of asset ratio, are you looking at in the medium term? Well, I have been maintaining that there are certain cost Rigidities which we have in our system will have to live with those rigidities. But nevertheless, Income is something which is a major focus for us, and we have already started working on it. And hopefully, going forward, maybe in 6, 8 months' time, you You will probably get to see some kind of an improvement in the income lever, which will help us in reducing our cost to income ratio. Ideally speaking, we would like to bring it below 50 And I would like to keep it at below 50 levels. Okay. And secondly, sir, on the cost of deposits, while cost of deposits has been coming off Quarter every quarter. But this time, the decline is a little more moderated. So but our cost of deposit though still remains higher than So what is the reason behind this and what sort of retracing benefits are we expecting there over the next couple of quarters? Yes. So as cost of deposit is concerned, you will have to probably acknowledge the fact that when it comes to Yes, there is deposit is a major source for many of the retirees also when it comes to the Income flows, and it is always a function of the inflation also. So I think for all purposes, we have a situation where, To my mind, as far as deposit rates are concerned, they have already bottomed out. Perhaps it may not go down anymore. But when it comes to franchise value, we have to keep that in mind and we have to also keep in mind the overall A very large community of the depositors were actually retirees. So with that in mind, there are certain considerations which you have to keep in mind. We'll try to keep the deposit rates at this level for some time to come. We have already when it comes To our term deposit rates, we have already brought it down significantly already. So I think to retain at that level, And we'll see that how long we can stay on at that level. Sure. And sir, lastly, like our SA numbers have been Vastly different from our closest PSU peers, while this has been so for very long. But just wanted to understand, is this any a function of the customer profile underwriting Or the way we do our monitoring and collections, which ensures us like the borrowers pay up in time. I'm just asking those, the gap is just too wide between us and the next best Yes, yes. In terms of asset quality, you mean, the retail No, SME number. SME numbers. Okay, SME numbers. Yes, sure. Yes, one sec. Yes, one sec. No, S7 numbers involve a very close follow-up, and it involves Yes, follow-up at different levels. So we have the follow-up teams, which are there in each of the circles when it comes to retail. And in fact, in the large corporate book, we don't envisage much of a challenge. Nevertheless, in the retail, particularly in Agri and SME, We have a situation where we ensure that people in the circles are in a position to follow-up And ensure the upgradations of SME tools. Sir, any reason that comes to your mind why the difference is so big Between us and the next PSU peers? See, there's not been a patient to comment about other PSU peers, but nevertheless, we are maintaining Making all possible efforts to see that we contain these numbers and bring it down. So which essentially means that a close follow-up is something Which is very much integral part. Sure, sir. Thank you so much. Thank you. The next question is from the line of Suresh Gankwati from Macquarie. Please go ahead. Yes. Thank you. So two questions. One is RBI had recently signed SBI for payment of commissions to employees. Can you just highlight what exactly was the issue? That's one first question. And the second is on growth, credit growth. I mean, how much of sir do you think is This is a demand versus supply issue in the sense that banks like you becoming a bit more conservative and therefore not Willingly disbursing credit? And also is it a function of the fact that demand is very weak in the economy and therefore the credit growth is so weak? Yes. Thank you, sir. Right. The first question relating to RBI fine to bank for giving commissions to And Faiza, I think that probably needs to be clarified a bit. We are the corporate agents and are distributing products of our JV Companies and in lieu of that we get commission, corporate commission. And out of the corporate commission, We have got a system in place where we are incentivizing our employees and that incentivization is not only for TV products only. That actually is a very comprehensive metrics which we have, which covers The bank's own product, recovery efforts and also third party sales, which is actually our JV products. So based on the evaluation through that mechanism, this kind of a I mean, incentivization used to happen. Nevertheless, since the regulator has find us, we have we pleaded before the regulator, but nevertheless, they decided we have gone ahead and paid for that. But as far as we are concerned, we have done it as per what the overall regulation and the boundary conditions We're at the middle point of time, but nonetheless, they're having fine. We have stopped doing any such kind of incentivization program. So, sir, just to interrupt, other banks also do this, right? They give incentives for cross selling and third party distribution. I will not be in a patient to comment on that because this is a view taken by the regulator for us and I can only convey the viewpoint and the standpoint taken by us in this Better. But so we respect the regulatory decision and accordingly we have started working in this point. Sure. Second question was relating to Credit growth. Yes, credit see the credit growth, I would like to mention here the corporate credit growth almost about the we had unutilized lines to the extent of 70% in the working capital. And also, when it comes to the term loans which you had sanctioned, almost for 28% of the term loans were not disbursed. So when it comes to utilization of lines, to my mind, it is a function of the demand. And then when the demand picks up, the corporates also start availing these limits. That is one factor. Other very important factor is, as large profits are concerned, there are options available to raise money from the debt market and the equity capital market also. And since these markets had were flush with funds, The corporates could find it easier to raise money from these options. So if at all We capture the evolution of our bond book. I would say that The corporate credit growth is almost around 6%. Okay. Okay. Thank you. Thank you. The next question is from the line of Aakriti Kapur from Goldman Sachs. Please go ahead. Yes, thanks. Good evening, sir, and everyone. I hope you all have been safe. So congratulations Mr. Thakkar, we would request you to please come off speaker. We are not able to hear you clearly. Is it better? Yes. Okay. Thank you, sir. So, sir, first on the restructuring potential restructuring of loans, which RBI has allowed, What do you think, I mean, what would be the potential pool of restructuring that we need to do, Particularly in the MSME portfolio? I think we'll have to wait and watch for some more time to come because what our last year's experience is, When it comes to restructuring book, we had a total restructuring applications worth about INR 17,852 crores. So how will it really how will the corporates or maybe the SMEs will really respond? We'll have to wait and watch. But nevertheless, we are in readiness to Offer them the support if at all they need it. And we have already put in place the structure. The policy is already approved and also put in place the structure. We'll be reaching out to all those who are eligible through various SMSs and e mails, etcetera. And based on their response, we've been efficient to take stock of the situation. So we are about to begin that particular stage, so it is too early for us to visualize what is the likely book which will go through a restructuring. Okay. But sir, if you look at last year's experience and this number of 17,500 odd crores, How much of this would be an account of MSMEs? And I guess we want to be we had also done it last year also something because of SME restructuring wheel has been there for Last year, out of the 17,852, about 200 crores was an SME. So but the last year and this year Magician seems to be a little different, but I think we'll have to wait and watch because normally what happens is that SMEs are also very mindful of the Fact that if at all they avail the restructuring, it will have an impact on their ability to raise resources at cheaper rates. And so I think we'll have to wait and watch and see that how situations are and maybe then only we'll be in a position to give some kind of a color on Got it. So, this SMA 1 and 2 data that we give, which is for loans more than INR 5 crores, Would you also be able to share some sort of a DTD breakdown for the retail and the MSME portfolio less than 5 years? I think below that would be the collection efficiency should be a good indicator. I don't think We will not be in a position to share below that, below INR5 crores. Collection efficiency being around 95%, 96% could be Derivative number, which can give some kind of color on the book. And also just to comment on what Harai is saying, Our collection efficiency is based on the fact that we consider 7 day overdue. DPD? 89 DPD. So the whole gamut of DPT is covered in this one single number what we are giving. And also it covers across the business segments. So I think that's a better indicator as you said, instead of actually getting into the DPD. And we've been consistently giving this number a bit follow-up. Just to understand, so you're saying this is 95%, 96% based on 89 day BPD? No. 7 days to 89 And this will also include agriculture, I guess. Other than Agree. Other than Agree. Okay. Agree is a seasonal repayment. Whenever there is a harvest, then only there is a repayment. Yes, I agree. Sir, one more question on the NARC, which has been operationalized as the media articles. Can you share with us what would be the broad contours, how much of portfolio that you will look to transfer? I guess you're already carrying provision. So will we need We are in the process of finalizing the accounts. But as far as Any more provisions to be taken, I don't expect. That is one. But yes, of course, we'll certainly be transferring the accounts. And we We are quite convinced with the concept and we are quite hopeful that it will be a very positive development when it comes to the resolution of the stress Got it. So I have one more question, but I'll come back and get to you. But if you allow me, I can ask. Yes, please go ahead. Yes, sure. Sure. Well, this is with regards to the investments in technology. So based on the NCPA data, our It will decline, seems to be on the higher side compared to the PL Bank. So how would you view that? And would it mean that we'll need to up our investment including hardware and data center, etcetera, etcetera. We are it's an ongoing process By that, we are quite confident of the fact that we have to keep on investing into technology and we have to make a very robust The database and also very robust systems and platforms, that is something which we are quite, I mean committed. And maybe I'll ask Mr. Ashneet Tiwari to come in who looks after So, let me just supplement what the Chairman said actually. She's right that the investment is a continuous thing. And we are all mindful of the fact that there is still a Our actions, especially UPI has really been setting all records in terms of numbers. So therefore, there was a lack of investment to in the infrastructure, which has now been done. And if you notice the latest figures which have come out in February March from RBI, there our technical declines have come down significantly from what they were in November December. So the Improvement has already taken place. And we are hopeful that the discontinuous investment and monitoring will be equivalent or better than we So the reason why I asked this question is because one of the large pharmaceutical brands, of course, all of us know, We were bound to onboard new credit card customers plus launch any more digital businesses. So Given that the number is on the higher side, do you think this is something that can perhaps impact us also? And in that regards, what measures can we take? Yes, I get your point. Actually, if you talk about our core channels, which is the YONO and the Internet Banking, so we had some issues in November, December where We had problems. But I can give you the data of May, which is not in public domain yet in the sense that we had zero downtime in Internet Banking since 20th May. And we had about some 13 minutes in unplanned downtime. So therefore, a lot of improvement has already happened in these channels. On UPE also, the technical declines have come down to below 1% for the latest available data. So we have seen improvement. Of course, we have to see whether that will sustain. So We are continuously working on this. And hopefully, we will not have an occasion where Our effort is to ensure that it remains sustainable. And whatever we have done In the recent past, we are strengthening these delivery platforms. We will continue to be very focused on ensuring A delivery which is without any disruption. Thank you. We would request the current participant The next question is from the line of Mahesh Ambhi from Kotak Securities. Please go ahead. Good afternoon. Just two questions from my side. What would be the this year, if you look at the We've had about 17,000 crores of recoveries from the NPL line and about 10,000 crores of recovery In the non interest income line. If you could just give us some color outside of the 1 NBFC, which is sitting there, what are you seeing in terms of your Discovery from the NPLreturn of pool. We I don't think we would have much of chunky accounts left Not now. But we will be actually resorting to NARC, we'll be resorting to The compromise settlements, etcetera. So but maybe I'll ask Swaminathan, yes, if at all, you can give some color on that. Just to supplement to what Chairman said, as far as the recovery is concerned more or less, the numbers would remain in line with what we had Cheap last time, but the only difference will be that, we were in the last couple of years, there were certain chunky accounts which got resolved. Today, the recoveries for this year and going forward will have to happen across many accounts. So we are working on those granular details, but also it will depend on How fast the second wave settles down so that our recovery efforts can get intensified. So at this point in time, we are not giving a Specific number for recovery that we are budgeting for this year, but maybe over the next 4 to 6 weeks, we will come up. Maybe as part of this Q1 call, We may be able to give you a guidance in this matter. Thank you. Perfect. So just one clarification here. This Commodity rally that you're seeing out there, has it resulted in a better interest for those distressed assets? Or Do you think it is an over expectation given the fact that these assets may have significantly deteriorated on the top? Absolutely. In fact, we have seen renewed interest. With this cycle getting better, we are we, in fact, got better realizations in a few accounts. And we are hopeful that this will This upside cycle will be beneficial to us in terms of improving the recovery percentage out of these test accounts. And there are interest coming in the brownfield assets. We are working on this and would like to make full use of this upside that is now visible. And my second question is on the net NPS. Today, your corporate book is carrying approximately 90% Coverage. Could you also tell us what would be that in terms of absolute amount, the net NPL which is the? Net NPLs in corporate book is almost down to INR8,000 crores. As a total net NPL out of INR36,000 crores plus, the corporate book is about INR8,000 plus. So this year, you would expect most of the slippages most of the provisions only for your retail and MSMEagree book. Is that a fair assumption? P. Vijay would be a major. Retail is also not much. Retail is also holding on well. It will be MSME and Agree will be just based to watch out and that's We are also very mindful in terms of keeping track. Perfect. And in that context, can you give now a guidance to provisions for next year or you think it's It's going to be challenging. Too early at this point in time. Maybe it will take we need to size up maybe another 4 to 6 weeks' time It will take for us to estimate the impact. We don't want to give any estimation or guidance, which we are rather believe in As far as promise is concerned, I would like to deliver better than the promise. Absolutely. Thanks a lot, sir. I'm done. Thanks. Thank you. The next question is from the line of Aditya Sinhanya from Enam Holdings. Please go ahead. Thank you. So I actually wanted to clarify on the provisioning question that Mahesh just asked. I understood from your TV interview that you guided that credit Cost could be similar in FY 2022 to FY 2021. And in that context, your credit cost mentioned in the presentation is 1.1%, Which is the Ninshia's provision number? No, no, I mentioned that it will be within 2%. This has been my guidance even in the 3rd quarter. Price has been my consistent guidance always. So I think our effort would be to keep it at 1.12, but nevertheless to keep it below 2. Ideally speaking, we would like to keep it at 1.12 where it is this quarter, but in any case, less than 2 by all means. So just in that context, if I could ask, you're already sitting at 70% provision coverage ratio And an additional buffer due to COVID with the strong corporate net NPS, the low corporate net NPS as well. So where would you expect such a large provision number to come from, if at all? As I just mentioned that SME and Agri Other areas to watch and that is something which we are ensuring that The quality should hold up. So the very important aspect is we are little unsure about the current COVID wave, how will it really pan out And what all impact will it leave? It may so happen that it may not leave much of impact. But nevertheless, I think we should be Be better prepared for any kind of a eventuality. Right, sir. Thanks. And just one more clarification, if you could talk about Any plans for listing of your subsidiaries, the General Insurance and Asset Management? We do have Plans, but much of it will depend upon how the capital market continues to evolve. And we will be very mindful. And At the appropriate time, we will be coming to market. Great. Thank you, sir. Thank you. The next question is from the line of Jaya Munra from BNP Securities. Please go ahead. Yes, Ayesha, thanks for the opportunity. Sir, A, if you can share the ECLGS loan that the bank has, Which the bank has disbursed. But more importantly, if you can share the outstanding loan, Which is linked to this ECLGS disbursement book. In a way, if you are keeping a track of the principal as well, And how that has moved? So, A, the ECLGS amount and the B, the principal which is linked with the ECLGS business. INR 25,000 crores is the ACJ Risk book, which you have created last year. No. But the difference Okay. If you are In terms of the overall exposure, which is linked to the DSPL, we don't have the numbers as of now. But you must also remember that DSPL repayment has not begun. So that will be from June onward. So how the DCL linked principal outstanding will behave, probably we'll come to know from June Right. DSCF is 20% of the exposure. So if it is INR 25,000 crores, you can do a reverse work, but that's not That's not a concern at this point in time. That will have to be looked at later. Right. But so broadly, that number should be 5x of the disbursed amount, right, assuming There is no significant repayment as yet. Yes. The repayment has not started. And some of them might avail the lesson. No, no. Some It was Magna of 20%. So, Rambati, some people would have drawn only 10%, 15%. But if you want a bar pass figure, I think you have Yes, 20% that's it. 5x of it. Yes, sir. And second question is, sir, on Of course, I think I will this question was asked earlier, but just to be very sure, I think we had also seen that in the PSU Bank, It looks like there has been some performance based incentive that has been given by at least few banks. Is that the reason why the salary Cash component has risen from INR7000 all crores to INR9400 crores or just the earlier as I mentioned earlier? So this was because if at all that has to be paid, that will be paid based on this year's results and we would have only made a provision for it. It would not have been cash out. So that would not have been booked like that. But nevertheless, as was mentioned, the INR1500 crores is the quarterly expense, which is expected. Right, sir. And the last thing, sir, on SMA book again, can the retail below 5 crores SME, I mean, Because other banks data suggest that the overall SME including 5 crore number is running into double digit number. I mean, Is that I mean, for SBL, you had clarified that you are not looking at the below 5 gross number, but Somehow any perspective, sir? Perspective on what? Yes. So I mean broadly as you said that 1 minuteus collection efficiency is a derivative. But just to be confirming that it cannot be a double digit number for us, Bill. So we are not if we can only reiterate what was said already, Retail is typically asset quality or DPD is depicted in the collection efficiency. 5 crore and above as per the colleague data. You want to comfort, we can confirm that it's not a participant. Right. Sure. Thank you, sir. All the best. Thank you. Thank you. The next question is from the line of Manish Shukla from Citigroup. Please go ahead. Good evening and thank you for the opportunity. The loan processing charges for the full year are up 20% loan growth is 5%. So why that disconnect? Sorry? No, no, the loan processing fee has gone up by 20%. Slide number 28, sir, while the loan growth is 5%. See, the point is that loan growth is actual availment. Loan processing fee is the limit, which I mentioned also that there is a availment of just about 70% of the limits have been utilized. And similarly, when it comes to term loans also, almost about 28% is an unutilized portion. So that is the reason that why the loan growth is appearing to be muted as compared to The loan processing charges. Yes. One more thing also, if I can add, is that loan processing charges are also collected on the renewals. That means without any new facility being given, even if the annual renewal is there, that also the loan processing charges will be there. But sir, in case of an annual renewal, the fees would have been there in your base last year also, right? Unless you're charging more on the same loan. In a way, yes. I think what Kevin has said makes that is the reason. Typically, in term loans, it's paid upfront, while the availment will be over a period of time. These two numbers cannot be necessarily related to each other. These would rather always be independent because it will be all Growth is the actual draws and that's the limit tension. Okay. And going to overheads, What is the exact nature of this business acquisition and development expenses? Because that has gone up 60% for the full year. This quarter, it is up 2.5 times YOY and Q o Q. Yes, because we have significantly ramped up our BC network. So that is the reason why this has gone up significantly. But is this for origination, for collection? Or I mean, where does on the business side? This is VCs are for carrying out operations. And since we have got a huge network of VCs, which we have added in last 1 year, And that is something which and also now we have started using them for collection purposes also, But that has been started only very recently. And this also includes the Home loan sourcing Pizza seat has been increased. Okay. I think other question, sir, is on the Loan book, now your retail loan book as of March 21 is larger than corporate. Obviously, retail has grown at a very fast pace over the past few years Compared to corporate. So how do you see the incremental shift happening for you between retail and corporate over the next few years? So the if at all, the economy will start growing at about 10% plus, 9% is something which is being talked about by various economists and we have a chance to grow at about 10%. The growth will come from SME and corporate. Okay. But in the absence of that, retail will still continue to grow faster? Retail will continue to grow because there is a scope, There's opportunity which is available and we would like to tap all that opportunity. Okay. The last Question, in your opening remarks, you talked about capital requirement over medium term, but where things stand right now for the next Year also, how do you see your capital requirements? If at all, let's say 10% of the asset growth, perhaps We can live with the current situation, but we will probably assess the situation once the COVID-two is behind us. And maybe that will be a point of time when we'll have a better visibility of growth and that will be a point of time when we'll decide about the capital. Sure, sir. The next question is from the line of Saurabh from JPMorgan. Please go ahead. Yes, sir. So three questions. One is why is the current account Number so high this quarter, both quarter on quarter and YY. The second is on this provisioning slide, I mean on the standard asset provision, There is a INR 4,900 crores of other provisions in the standard assets. What does it relate to? And generally, do you have a policy on how will you draw down on your standard asset provision? I mean, can we expect a draw down in fiscal 2022 against the SME slippages? And thirdly, can we just quantify the technology spend in the bank, both OpEx and CapEx? Thank you. Sure. First, I will take your question relating to Current account, we have opened, there was a sharper focus on opening up new current accounts In the bank and that is something which has paid off in a way and we have seen the kind of growth which we have seen. The second question was getting to can you please repeat the second question? Sir, this was on the 49 Standard asset provision. And the policy. Yes, standard asset provision actually, we have got is we We maintained 0.25 percent of our standard asset as a proven. So that is something which is there. And To use that, if at all those standard asset turn into impaired assets, then only those provisions are used, otherwise it remains as it is. No, sir. My question was on the 6,300 and the 4900, the additional provisions you have made over and above. 6,300, okay, fine. That is additional COVID-nineteen provision 6,300 and which we have kept, that is essentially to meet the contingencies if at all it arises. Now post COVID-two, that is 1 and 4,900 again, they are the other provisions. So weak standard provision plus the restructured provision to be kept on the COVID restriction that is implemented so far. Okay. So the deep standard assets plus the restructures? Yes. Standard assets, as per the regulatory requirement, various rates are maintained. We also maintained an additional provision in respect of structures identified as stressed. And then also now the new addition during the quarter is the restructured assets Under the COVID package. Okay. Okay. And sir, on the technology spend? Technology spend, just one sec. Yes, we will give you the figure. Give us few minutes. We'll just get the figures. Okay, sir. And just on this current account, one, sir, was it a benefit because of this RBI Circular in October or? No, no, not really so. It was essentially effort which was initiated for some time. And we have strengthened our CMP also cash management product facilities which we are offering. So current account is a function of various add ons. That is something which we are aware. Okay. Thank you, sir. The next question is from the line of Ashok Hajmeera from Com Global Services. Please go ahead. Good evening, sir. Please accept my Compliments on the fantastic number of results. In fact, you have brought the whole sentiment in the entire banking stocks and the financial Stocks up today, which is kind of result with the NIM going 3.26, car is 13.74 and some profit, good ROA of 0.48%. So my compliments to the entire team. Having said that, sir, I have got a couple of information points and some data points. Sir, in our note number 13, INR 830 crores is the interest reversal As per the honorable Supreme Court's order, so this entire INR 830 crores has been in this quarter only naturally because the order Came in March 21. So it means the interest which was charged up to the last quarter, that is December quarter also, everything has been reversed now in this quarter, Yes, that's right. Apart from that, there is unrealized interest also, which are about INR 2,100 crores, Which was also reversed. Yes. So that is again, in fact, a plus point as far as this quarter, otherwise the results Yes, I will give you the number. Interest reversal was INR2,127 crores during the quarter, apart from INR830 crores, which was interest on interest Component. It is on the question. The factor is that then the NII for the quarter has improved by 4.18% sequentially instead of a decline of 6.08%. All right, sir. Sir, this RBI has recently announced one COVID loan scheme, you know, they have 50,000 crores For taking at the report rate and then getting that benefit of 0.40 basis points if you again put the money back To the extent of the loan given. So whether the bank has come out with its policy for this COVID loan for the medical purposes? And if yes, Whether it is implemented and how much has already been sanctioned under this scheme or what the bank plans to do for the remaining period? Al Biratha, first of all, thank you very much for your compliments. And now the other pieces relating to this health infrastructure related COVID book, which is expected to be created and we have internally, we have thought of that we can create a book of somewhere around 10,000 We already have got some exposure to pharma sector, which is to this extent already, But we will be very aggressively supporting the hospitals and nursing homes who are augmenting their oxygen facilities. And also in the pharma sector also, if at all there would be demand, we're more than happy to support their initiative. Should we be considering the NBFCs also for the onward lending To be in this particular area? Yes, we are quite open because our base schemes permit us to do that also. So we'll be quite keen to support any such initiative. And what you mentioned was in terms of we may not avail the facility and the repo, but we'll be happy to avail the reverse repo facility and also The most important factor for us is the priority sector component. The priority sector is something which we are very happy to look at it. Yes. Sir, now coming to this credit growth for 10%, Sir, the corporate book as such is not growing much. I mean, the overall I think was just 6%. In the personal loan, the The slippages have come down from INR 4,507 crores to INR 3,287 crores in this year as compared to 20. But at the same time, the personal loan book have already grown. I mean, all the retail personnel, they are already growing and every bank is changing. So where do you see the basically the loan growth coming now in the 2021, 2022? And how are you so hopeful of Growing your book. I'm hoping that SME would be a good opportunity. Apart from that, even in the corporate sector also, See, corporates all these years had an option to go to the debt capital and the equity capital market Because the markets are flushed with liquidity for the reason that the West was not looking as good. Now having in the fact that in the West, practically, all the economies have vaccinated themselves well. So I expect that there will be huge growth opportunities there. So perhaps some money which used to flow in here, it may not be available. So that kind of liquidity may not be available In the system and corporates might come back to the banking system for drawing the funds. So that is how I look at it. Thank you. The next question is from the line of Nilanjan Prastha from Nomura. Please go ahead. Thank you, sir, for the opportunity. Probably a repeat of few questions. So on the ORCA this quarter, Can you confirm that we basically took in the Bhushan recovery, is it? Bhushan recovery was INR 4,032 crores, Correct. Accounted for in this quarter, right? Yes. Yes, yes, yes. Okay. Okay. Good. And just So all clarification. So in the note 17, that table is basically what we have implemented, right? And what is under application is at INR17.1,000 crores. So that's a broad difference. That's INR17.1 is implemented. Correct. And related, sir, I mean, you have already talked about the Wave 2 impact and that you don't want to hazard against. I can understand it. But every news flow does seem to suggest that Tier 3 onward impact has been particularly severe. Any initial feelers you have in terms of why it's such a humanitarian crisis? But any initial feeler about Can we specifically that agri and agri related retail, can that get really bad? And in that context, I mean, we had such a great performance. Why are we just carrying about 60 basis points additional other than standard provision, that's a 60 basis point additional provision. Would we I mean, should we not have taken in Maybe another 50 odd basis points. I mean, it would have given a lot of confidence around the balance sheet, sir. No, see the point is that the wave 2 is a bit of an uncertainty, which we are living through. And with what is being talked about is the Wave 3 also. So I would say that there is We have moved up on the learning curve. But nevertheless, the spirit cloud, the wave 2 is something which has Actually hampered the life for many. So that is something which is a call. So we are actually sort of going through a very, very uncertain phase right now. So because if at all we have got such kind of uncertainty, the better way out is to keep as much cushion as Possible to really tied over such uncertainty. I think as I mentioned that maybe by end of June, we'll have They have much better visibility. So that is a point of time when we can probably take a call. And in any case since as a philosophy, we believe in strengthening our balance sheet. We don't want to compromise on that principle. Sure, sure. So the broad feedback is that in June we'll probably take that call? Yes, June, we will take a call. Okay. And a quick data point, sir. Out of that 25,000 crore ECLGS, roughly how much was the ECLGS package 2? This is the best package 2. Just give me a minute. We will revert back to the We will tell you. We We'll just let you know. But in the meanwhile, there was one gentleman who had asked me about questions relating to IT CapEx and OpEx. IT CapEx spend is about INR1300 crores. The OpEx is about INR 5,800 crores. Thank you. We will discuss the current participant to please come back in the question The next question is from the line of Sona Pritan from Golub Capital. Please go ahead. Hi, sir. Good evening. So I have two questions. Firstly, in the corporate segment, your 9 month Pro form a plus reported slippages were around INR 3,000 crores and that has now increased to about INR 7,700 crores in the current quarter. So, is it fair to say that a large part of slippages during this quarter came from the corporate segment? And if so, Could you just throw some light on whether it's related to potential restructuring or in terms of the size of those accounts and the sector? Can you please repeat your question? Yes. So when I look at your 9 month pro form a slippages for corporate segment, pro form a plus reported They were about 3,000 crores in the last quarter, and that's now increased for the corporate segment to about 7,700 crores. So an addition about INR 4,700 crores in the corporate segment this quarter versus total fleetages for the quarter at about 5,600 or thereabout. So essentially, a large part of slippages during the quarter have come from the corporate segment. So just Some color there. Which slide are you referring to? No. She is referring to the 9 month limitation. 9 month limitation. Okay. Got you. Last quarter, in the Q3, the corporate was at 3,003, and this Quarter it is 7,000 quarter 4 is 6,558. Yes. About 3,000.2. How much was? I think we'll have to look into that. And as of now, we'll have to look into what are the accounts which have contributed to this. But though we normally we don't give specific accounts, but nevertheless, what was whatever was there, No worries taken care of. But nevertheless, let me I don't have the ready information on this. Okay. And secondly, on the restructured book, what is the so we have a restructured book of about 18,000 crore including potential restructuring. What is the kind of provisions that we hold against this? For restructured book cover requirement, we would be holding 15% for you. No, there's note number 7 Already restructuring implemented, note number 17 carries the restructured book as well as the provision, 11.26 against 6,005. Note Note number 17, not slide 6. Okay. Note. That's in the notes. And then for the remaining application for which the process is on, we have made a 10% provision Upfront. So they will become specific once the resetting package is implemented. Hope it's clear to you. See, just one on the restructuring again. So you've given a potential plus restructured total number of about 18,000 crores. So this includes the non COVID related MSME restructuring as well? Yes, the 17,850 2 contains all types of restructuring as the segment wise breakup is also available in Slide number 18. So you will see SME INR 2,118 crores there. Out of the INR 17,850 2, INR 6,125 is already implemented for which specific provision is already created. That's there in the note number 17. For the remaining 11,000 odd which is under process, a 10% provision is already created. That will become specific once the restructuring is implemented. Thank you. We take the last question from the line of Soumya Agrawal from Smart Karma. Please go ahead. Yes. Before Soumya asked, I think there was Question on the ECLDS. The ECLDS 1, we had disbursed 23,000 books. ECLDS 2, we have disbursed 200 Okay. Hi, good evening. Just want to understand some trends here since SCI is the market leader in the banking space. It's been widely come close that Agri Control has been the largely resilient segment amid the pandemic. But if I look at the fresh liquidate for FY 'twenty one, Almost INR 9,500 crores or 33% is coming from the average book. Even in terms of gross NPA, It is the most stressed segment at around 15% NPLs. So what experience is Telkoto me, if you could shed some light on this? See, the point is that, Agree, we have Traditionally, we have seen that how this book this particular book is behaving. But When it comes to SME, yes, of course, we have seen a very different trend. And we are not as far as concerned, I would say that It is the trend is more in line with what we have seen in the recent past, But maybe I'll request Mr. Shetty to have better color on this. Yes. I think your question, Last one also, I think many of the analysts have asked if the rural economy is doing very well and how is that how do you measure book is? If you see, much of the slippages have happened in the first two quarters in the current branch here. We have also explained that The agriculture fee changes happen for non renewal of the crop loan. So when you don't renew the crop loan, It will be classified as NCA. 1st 2 quarters, we were not able to do the strategies have been higher. Subsequent 2 quarters, not only that the Lockdowns have lifted. Our people were able to approach the villagers, farmers, and the rail percentage has gone up. So aggregate Slippages in the later two quarters has been much lower than the 1st 2 quarters. Again, it all depends on The composition of our advertising portfolio, out of 2 lakh crores, we have about 1 lakh crore crop loans and 70,000 gold loans, which is A safer portfolio for us. In these crop loans, it's a seasoned and as well as debt relief measures announced by the state government, It will impact the renewal percentage. The moment that debt relief schemes, like for example, Maharashtra, we have listed almost INR 5,000 crores of debt relief Where the NPE levels have dramatically come down during the current branch year. So it's all 1 quarter 1 year to another year, the Abiqueljet portfolio behaves differently. Last year has been that in the 1st two quarters, we had tough time in terms of crop loan deliveries, which had contributed to slippages. We were able to pull back some. We are still working on that, and I think the improvement in the agriculture portfolio is visible in the last two quarters. Hopefully, that will continue only as Chairman initially pointed out because of the smaller centers and villages are also getting impacted by COVID. There would be some stress on the agriculture portfolio going forward. Also, I would like to add the very structure of agriculture book is About INR 60,000 crores would be to SHGs also and normally they have got a Very good repayment behavior. So actually, it's 60,000 plus 40,000, which is gold loan. So there is not much of concern. The major concern is out of this 1 lakh crore. And there also, if at all, we succeed in doing the reviews And then the quality is not as much of a challenge. But yes, of course, COVID has restricted mobility. That is the fact which We need to keep in mind. And also this happens soon after the harvest when People have to go first, Swin. The review renewal happens around the same time. So actually, it is a seasonality. And if at all, if at the material point of time, If at all there are any restrictions on mobility, that causes problem in the agri book. Yes, please. Regarding the earlier question on slippages in the corporate book of 6,558, There was one account of 3,650, that was purely on technical reasons. So that will get into standard within this financial year itself. There was another chunky account also. There also, I think we will be able to recover. So out of the 6,500, 4,500 We'll move into standard within this year itself. Thank you. Due to time constraints, that was the last question. Okay. On behalf of State Bank of India, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.