Bank of Baroda Limited (BANKBARODA) Earnings Call Transcript & Summary

Good evening, everyone. First of all, we apologize for the delay. So welcome to Bank of Baroda's analyst meet for the quarter. Today, we are joined by our new MD and CEO, Mr. Sanjiv Chadha, along with the Executive Directors, Mr. Murali Ramaswami, Mr. Khichi and Mr. S.L. Jain. We will start with a brief presentation, followed by opening remarks by the MD, and then we'll open the floor for Q&A. So [Audio Gap] our statement as [Audio Gap] what we have done is that we have added the numbers for all the 3 banks, and for December 2018, so that we make this quarter comparable with the last year same quarter. In terms of major highlights, the operating profit is up 8.5%. Noninterest income is up 28%, within which fee income is up by 10%, though we have a lot net loss of INR 1,407 crores because of higher provisions. The net interest margin is at 2.8%, which is up on a Y-o-Y basis. At the same time, the domestic cost of deposits is trending down, and it's up -- down by 16 basis points sequentially. The global advances are up by 2.7-odd percent. Retail loans continue to be the driver at more than 15%. The domestic CASA ratio is that almost 39% compared to 38% in the previous quarter. The gross NPA ratio has moved up sequentially to 10.43% from 10.25%. Net NPA is also up by almost 14 basis points to 4.05%. The provisions continue to remain high. We have kept it -- the provision, including TWO is flat sequentially. And in terms of percentage, 77.8% versus 77.9%, and excluding TWO it's marginally lower. Capital adequacy ratio is fairly comfortable. We have raised INR 3,397 crore in terms of AT-1 Bonds in the quarter. In terms -- this is again a brief snapshot. We've seen some of these numbers in the previous slide as well. Here, this is the progress in the quarter. What we do see is that the margins are flat, more or less sequentially for the entity, 2.81% versus 2.8%. At the same time, the cost of deposits are down from 5.02% to 4.86%. This is the aggregate business performance. You would see that the CASA deposits are -- domestic CASA deposits are growing at almost 9%, within which the current deposits are growing at 8% and savings deposits domestic are growing at almost 9%. This is the average numbers. Similar trend is playing out. The domestic current accounts are growing at more than 11.5%. Savings deposits are at 8.7-odd percent. This is the -- you can see the traction on a sequential basis, how the CASA deposits are building up in terms of terminal and averages both. This is resulting in lower cost of deposits. We have seen the domestic cost of deposits also down by 16 basis points on a sequential basis, which -- as is the case with the overall global deposits. This is the credit book. Retail continues to grow in share. We are at 20% compared to less than 16% (sic) [ 18% ] a year ago. So there's a large acceleration in the retail book as a percentage of the overall book. The book is getting more balanced. And on a sequential basis, as you can see, corporate book is more or less flat. Retail continues to gain share. Agriculture is also slightly up. So what we are seeing on a sequential basis, we are seeing an uptick in the credit and disbursals. This is the breakup of the retail loan growth. Auto loans are growing at more than 40%; education, 13%; home loan at 10% and overall retail is at 15.3%. This is the risk profile of the retail book. As you will see in terms of slippages or in terms of GNPA of the retail book, it is trending down on a Y-o-Y basis because the risk profile is -- continues to improve. This is the risk profile of the MSME book. Here, we are actually seeing some minor deterioration. So the CMR 1 to 5 ranking was at 75% for the entire book, it is at almost 72%. So there is some deterioration, and that's more to do with the stress in the overall sector. This is the rating profile for 5 crore and above, so largely corporate book. Here also, we are seeing that the overall incremental book, the quality is actually better at the margin. So the margin at which we are -- the marginal incoming book is actually of better quality than the average. So you're seeing at the margin, things are improving for the corporate book as well. And it's also -- since we are onboarding better quality or risk, it is leading to capital optimization in terms of risk-weighted assets. So that's the natural corollary to that. So that is why it is coming down, the risk-weighted asset in the corporate book. And this is the overall breakup of the NBFC book that we have. We are seeing an increase in the AAA book and a dip in the BBB and BB and below book in terms of percentage as well as absolute. And so there was this demand by most of the analysts. So we've added this slide, which shows the breakup of the NBFC exposure by large private institutions, by PSUs, backed by PSUs, which are central and state PSUs and private others. So that gives you a breakup of the overall NBFC exposure in terms of different buckets. And it just shows that the underlying quality of the book where it stands and how it is performing. So this is the overall yield on advances. There has been a slight downtick as should be the case because our MCLR is down by almost 50 basis points from where we were in [ March -- Feb, ] so at some point in time, it will show up in yield on advances. And since the MCLR is coming down, cost of deposit is coming down, the G-sec yields are coming down, treasury continues to do well. It has had a very good quarter in December '19 as well, which was the case in September as well. The overall duration is at 3.84 for the investment book. The yield on investment, of course, is coming down, which is the trend in the G-Sec market as well. And this is the international book. It is showing a pickup, as you will see that on a Y-o-Y basis, net advances are up by 14-odd percent. And there also CASA deposits are increasing, and we are shedding high cost deposits so, because of which the margins in the international book are also expanding. This is the territory-wise breakup, with 3 large territories we continue to [ indiscernible ]. It was in the last few quarters, 34% of the business is from America, almost 35% of the business is from GCC based out of Dubai. And then we have the European operations, largely led by London and then we have Singapore operations base for East Asia and Far East, which are 13%. This is the breakup of the overall international book. As you are seeing, there is an acceleration in new trade credit, whereas the LCs and advances against SBLCs are coming down. So that also explains some of the change in the mix as well as the fact that apart from ECBs, which are stable, we are seeing an increase in loans to India-related companies and non-India entities as well as local credit, so all of that is adding up to the book. This is the overall impact in terms of our strategy of rationalizing some of the international territories as well as discontinuation of LOUs as well as subsidiarization in U.K., which was a regulatory change. So the overall impact of that is INR 66,000 crore on the international book. But now, once that impact is running down, as you can see in the last 2 to 3 quarters, the book has started doing well. And as you would see that the yield on advances are going up, cost of deposit is going down and margins are trending up in the international book. On the financial inclusion piece, the bank continues to see increase in the average balance in the zero balance accounts, and that is adding to our CASA. So you'll see our market share in the PMJDY accounts is 2x of the market share in overall deposits. So we're doing well there. The percentage of zero balance accounts are only 9%. And we continue to benefit from the PMJDY account balance that we have in terms of overall CASA. Now comes the financial performance. You would see the overall, margins are pretty much stable at 2.8% versus 2.81% in the previous quarter. And domestic business, the margins are 2.88% versus 2.95%, so a minor change, not much. And this is the breakup of the overall operating performance. You will see the NII has increased by 9% because as we are shedding the high cost deposits and we gain more CASA traction, NII is showing a positive increase. Fee income is also up by 10-odd percent, which is a positive movement. And noninterest income, as we've already seen, the overall noninterest income is up 28%, so -- because of which the operating income is growing at 14%. Operating expenses seem optically higher at 19.5%, but they include the ESPS, which was booked in the quarter. If you exclude that, the operating expenses have increased at less than 13%, which is in line with the overall operating income. So operating income and expenses are in line if you exclude that one-off, because ESPS is one time, we're not going to do ESPS every quarter. So this is the overall interest income breakup. The total interest income has gone up, interest expenses are going down, as we've already gone through the slides because we are shedding the high cost deposits. And this is the breakup of noninterest income. As you'll see, fee income is increasing in each of the buckets, and that is a positive sign as well as the fact that trading gains in the quarter were up 28%. So that explains the total noninterest income increasing by 28% in the quarter. These are the operating expenses. You'll see salary cost has increased the most. But if you exclude the ESPS, the overall operating expenses are growing at 12.9% versus 13% plus increase in operating income. So we're going pretty much in line with that. And the salaries any which way is the employee cost includes the provision for wage increase. So that has already been incorporated. This is the operating profit. It's up by 8.5%. However, provisions are up by 54%. Provision for NPA is up -- at 47% to INR 6,621 crore. And that has driven the loss in the quarter. So the reason why it is up is the NPA [ flow chart ] will explain you that. We have had fresh slippage of INR 10,387 crore in the quarter, out of which INR 4,509 crore is on account of RBI divergence. So that is a large number, which has moved the overall fresh slippages higher. If you exclude that, then we are pretty much in line with how things were in the last few quarters. So no major surprise there. And recovery continues to maintain last quarter's momentum. And so is the case with upgrades. So we are seeing an overall closing balance of INR 73,000 crore compared to an opening balance of almost INR 70,000 crore. So the slippage ratio has been elevated this quarter, annualized run rate is 6.8%, and credit cost was also elevated at 3.9%. This is the provision coverage ratio. And on an overall basis, we maintained the provision coverage ratio at the same level as the previous quarter, 77.9% versus -- and this quarter is 77.8%. And excluding TWO, we are almost at 64% in both the quarters. This is the overall net NPA ratios. Slight minor acceleration is seen. And this is the breakup of the overall corporate, MSME, retail, agriculture, total domestic and there is international. So that adds up to the overall the contribution in terms of NPAs. So the explanation for INR 73,000 crore. This is the NCLT exposure. We have the overall NCLT [ markup ] at INR 50,000-odd crore, but we are very well provided at 89%. This is the asset quality. If you will see in September quarter, we had a far higher watch list. Now the watch list is at INR 10,500 crore. So there has been a reasonable reduction in the overall watch list, and 85% of the slippage in December quarter has happened from the watch list of September. That is why you are seeing reasonable decline in the overall watch list to INR 10,500 crore. This is the movement of SMA. So you'll see that there is the overall trend now is that it had surged in September, and we are seeing SMA2 portfolio coming down -- coming off and it's also visible in our watch list. The same is the case with SMA1 as well. This is the overall capital adequacy. We raised INR 3,397 crore through AT-1 Bonds in Q3, and we're seeing an improvement in our overall capital adequacy ratio in December. Tier 1 is at 11.45%. This is the shareholding pattern. Not much changes. There is the integration. So in integration, we've seen reasonable momentum in terms of the plan that we had chalked out. We are working on achieving and ensuring that the revenue and cost synergies are realized. We are -- already the corporate accounts have been migrated to Finacle 10, the single system, and we have begun with branch-by-branch migration. And the plan is being rolled out. And we are in that phase in which the branches are getting migrated, and we will see cost synergies playing out through network optimization in the coming year. In terms of IT, which is the core of the integration, we are seeing the CBS migration is in full swing. The payment system migration, which is a prerequisite for the CBS migration, is also in progress. And all of that is on track for the plans that we had laid out in terms of integration. In terms of strengths and initiatives. This slide, I think you guys can look at. I don't have to go through it. The branch network has expanded visibly. It remains where it is. And this is the international presence. I think in terms of our subsidiaries, we've seen reasonable momentum in the BOBCards portfolio now. We are booking reasonably better amount of cards every quarter. And you can see the spend every quarter is moving up. So the subsidiaries working on new tie-ups and cross-selling cards to our existing customer base. In terms of Baroda DigiNext, which is our own vertical. We are seeing an almost 40% increase in the overall fee income, and the transaction value and CASA acceleration is also happening. And same is the case with supply chain. We are seeing reasonable momentum and increase in terms of the overall business. This fintech also, we are launching new initiatives and continues to attract customers and acceleration in business. In shared services also the transformation journey continues, which helps the branches to focus more on customer service and sales are then processing. So that activity as well as progressing at the required pace. These are the consolidated financials. This is the overall capital adequacy ratio, it's almost at 14% for the consolidated entity. And these are the awards and accolades that we have won in the quarter. So on that note, I think the presentation is done. Sir, can we have some brief remarks from you and then we can open the floor for Q&A. Thank you.

Thank you. I'll make sure that they are very, very brief. First of all, thank you very much, and welcome to this analyst meet. Apologies again for the delay, and thank you for bearing with us. Especially warm welcome to a few familiar faces who I remember very well from my time at State Bank of India. So thank you very much for, again, making time and coming over here. I'm still new to the bank, about 3 days old. So in terms of my contribution to your understanding and my apologies, it will be a little limited at this time. But I do look forward to interaction with you going forward. But in terms of my understanding and general impressions, I think the one thing that has struck me after I've joined BOB is that as a general proposition, when you're looking at mergers, consolidation, it's a very complex exercise. It tends to be very disruptive. And very often, the bank's business as usual gets upset. The figures that you have seen, if you leave the Q-o-Q out because that has been distorted by the divergence issue, but if you look at the Y-o-Y story, then despite the fact that we actually are in a very challenging environment in terms of the overall macro economy and also in terms of the kind of growth rate banks are seeing, and be it that BOB had to spend a lot of management bandwidth, put in a lot of efforts in terms of making sure that the integration went smoothly. I think it is a tremendous credit to the team that we have here that we have figures, which look fairly decent in the areas that matter. The CASA ratio is growing in terms of the increase over the last 3 or 4 quarters. There's almost a 2- or 3 percentage point increase, which is very good, which means that the kind of CASA ratio that BOB on a stand-alone basis had a few quarters back, we are pretty much there in our journey towards getting back to that ratio. So if we say that, what has the consolidation achieved, you might argue that is the most obvious achievement that if we are looking at all parameters trending towards, what was the best among the integrating banks, the bank is well on its journey there. Also, if you look at some particular categories, for instance, car loans, where there is a growth of 43%. Now I think that is testimony to the fact that the engine of the bank in terms of a performing bank, in terms of a bank which can deliver customer service, that remains intact. In fact, has got strengthened. In terms of new initiatives, I think there is great credit to Mr. Jayakumar, who was very forward-looking leader and who has actually delivered great value to the bank in terms of new initiatives. So if we look at, for instance, the supply chain financing initiative, the fee income on that has doubled Y-o-Y. So a lot of these initiatives that were taken, the talent that has been inducted from the market where, again, BOB has been pioneering. I'm sure these are going to yield dividends over the coming years. So I'm very positive about the BOB story. And I hope that over the succeeding quarters, I'll have you here to share it with you. Thank you very much.

On that note, we will start -- if you have any questions, we can start with that.

Let me congratulate you for taking over [Audio Gap] This is indeed a very good bank, very fine. [Audio Gap] It is very heartening to note that you in your brief remark, have appreciated the work [Audio Gap] continuing the efforts of new initiative that in Navodaya, which he started in 2016, I think. And of course, the bank has got a lot of benefit from that. And in between the -- merger apart, otherwise, also a lot of. [Audio Gap] and various systems and other things which have been [Audio Gap] you said that you are just 3 days old in this bank, and I have been meeting you in the State Bank, and you know that a [Audio Gap] little inclination of always inquiring something, which is not there in the -- open in the either the presentations or discussions before. I would just like to [indiscernible] that this RBI divergence, which has been the major impact now this time in this quarterly results. Would you throw some more light on that? What was it? How it is dealt? Why it has happened? And what are the few chances further in future if similar kind of thing happens? So one is my immediate start first question.

So basically, RBI has given divergence on account of 2 reasons. One is that the shortfall in provision. The shortfall in provisions occurs because of the value of the security. The security deteriorates with the time. So these are just based on the difference in the security and that you have to provide, first point. Second point is some asset classification [ diverse ] maybe 3 or 4 because of interpretational issues in some of the circulars. So because of these 2 reason there was a divergence. During this quarter, we have provided for all the divergence, which they have suggested, first point. Second point, if you see the total number of our slippage is around INR 10,800 crore. So out of INR 10,000 crore, so close to INR 5,000 crore is on account of that divergence. And around a close to INR 2,000 crore is on account of a big NBFCs, right? And remaining INR 2,000 crores or 3,000 crore is agri, retail and SME and small INR 500 crore, INR 600 crore is the corporate side.

So what is now -- I mean you are looking forward. I mean if the trend is -- if you reduce the divergence figures, is going to continue to be on the sliding side, maybe another 15%, 20% lesser than what it is provided now?

So if you see our watch list, sir, it has come down from INR 16,000 crores to INR 14,000 crores, and INR 14,000 crores to this quarter, INR 10,500 crores. Yes. So that -- it means whatever was there, we have already classified. Of course, 3 or 4 accounts, which were not a part of that because of interpretational issue has been classified as NPA. But the fact remains, these 2 or 3 accounts are paying regularly, regularly. And they will be upgraded anytime in the next year. And amount is a big amount.

So what could be the percentage of this watch list of INR 10,500 crore, which can finally go bad. I mean as some idea about looking at the past performance or readings or analysis.

We are not having some undue worrying on account of this numbers, specifically because we are monitoring these accounts day in and day out. And some of these accounts perennially are paying 60 days, 70 days, but they are paying. So we are not having undue worry on account of that.

Sir, one last question on this. What is the scenario now going forward? The last quarter has been to some extent good in recovering from NCLT some of the cases, which have been resolved due to the court interventions. Going forward, how do you see those kind of some surprise positives, negatives, which we have already taken into consideration?

From the recovery perspective, of course, from the industry perspective there was a good recovery. But as far as BOB is concerned because we were not having exposure on Essar because we already sold it out. So in spite of that, our recovery continued to remain around close to INR 4,000 crores. Going forward, we are expecting a good recovery in 2 or 3 big accounts any day. And therefore, we are expecting a better recovery in the current quarter as compared to the last one.

And sir, coming forward now for the new -- I mean the business initiative or the business going forward, mainly the advances, Murali [Foreign Language]. Khichi [Foreign Language]. Of course, Chadha [Foreign Language] will give way forward now. So how do you -- from where do you look -- because -- look the business because presently what we are seeing is that the figures are almost flat or negative quarter after quarter. So -- and the major income is going to ultimately come from the lending business, all said and done. NBFC routes are limited now. In retail, also, there is a heavy competition. So we cannot all the time keep relying on the retail business only. So how do you see? And what kind of growth you look for the business in future?

You see our retail is doing well and corporate [ also is. ] When the industry [ assess ] corporate is negative, we are stable. We are not negative. And if you see our corporate, there is growth. Whichever disbursement which was there in [ NCV, ] it was INR 8,237 crores in the first quarter, second quarter is INR 18,994, third quarter is 26,321 crores, is on a growing trajectory. If we see the sanctioned also, which was [ INR 19,263 crores ] in the first quarter, INR 30,543 crores in second quarter, INR 34,011 crores in third quarter. And we have got undisbursed amount of INR 13,350 crores. Another INR 7,500 crores is there, which is yet proposal under process. So about INR 20,000 crores proposal, even taking at least 50% to 60% of this there, then also we can conservatively we can say about 4% to 5% growth we can do. And retail growing maybe 5% to 6%, we can [ conservatively ] get. But our target is 10%, but may be difficult. So with the -- and areas we are only concentrating mainly on good rated accounts, A, AA, AAA. And otherwise had existing renewal. And if you take our international, international, we are doing very well. International growth is there, mainly it comes from Australia. It comes from U.A.E, it comes from U.S.A, and syndicated loans we are doing well. That is the story as such. So corporate, we are in growing trajectory. And where it happens is, corporate also repayment is also happening quite huge now. If you see NBFCs also repaying. And we are not able to lend to NBFCs because they don't have fresh onward lending. Whereas -- and many of the NBFCs are not lending now. So until we can give only their [ indiscernible ] Second thing, [ indiscernible ] they should be pulled by your [ business ] another [ constitution ] which is, we don't have much big [ pool ] buy-outs also. These are the areas. With all these concerns, we are constant, and we expect at least 4% to 5% growth. That's...

Sir, your views of that? In future business growth? Or what do you think your perception? And how do you plan this bank to be going forward in the [ field up? ] I mean in the area of advances or the future growth of the business?

So I think you're absolutely right. If you're looking at what is the -- really the central challenge for all of us, it is how do you grow your loans in a matter and manner, which is risk mitigated so that your risk-adjusted return on capital is positive. I think that's a challenge we have faced over the last many, many years. Even when we have grown, there has been a cost to that growth, which has been a challenge for the balance sheet which you are seeing today. So to my mind, there are a few opportunities which are there. One opportunity comes from the fact that within the public sector banking space, there's a consolidation, which is happening. So that means that you have the ability to fund large exposures. You also have a little more pricing power as compared to what you might have had in the past. Equally, there are some banks in the private sector banking space, which actually are vacating the market. To that extent, I think if you're looking at the kind of share that a bank like BOB can aspire for when it comes to corporate lending that can be substantially larger than what it has been in the past. Number two, we look at the NBFC sector, which actually took a large chunk of growth away from banks. Now this challenge that the NBFC sector faces is, of course, unfortunate, but that nevertheless, opens up an opportunity for banks, not only in terms of taking a part of that business, which was accruing to NBFCs, but also working closely with them in a cooperative framework where you can actually through coorigination and such devices, address a part of the market. And so part of the growth should come to the balance sheet of banks. Third, when you're looking at the MSME market, I believe there are opportunities also there, particularly because a lot of technology solutions have now made it possible that you can lend to that segment, you can monitor those loans and also in a manner where less manpower is required. Because of the ticket size of those loans, doing it, the way we were doing in the past was simply not a viable proposition. Now it's becoming a viable proposition. And we have seen small business banks actually do it successfully. So I do think, again, that if we go look at things going forward, it is not that the possibilities are not there. We, of course, need to get our act together. But to my mind, there's considerable potential for that.

One, just observation on this international -- while going through one of the slide, the NPA has gone up from INR 7,500 crore to INR 10,000 crore in this quarter. So just suddenly caught my attention.

That is mainly one...

[ Only one ] that INR 2,500 crore in international.

That is mainly, sir -- that is not mainly due to [ record or others. That's going -- also, ] my colleague told interpretational issues, which should have been [ read ] as restructuring, which we didn't [ read. ] So that has become a divergence.

A part of the divergence?

A part of the divergence.

That's part of the divergence?

Part of the divergence.

Sir, I have a question on the NBFC sector. So if you see publicly available data, then BOB's exposure to 2 private NBFCs. One is that -- which is standard, not DHFL. So one is an HFC and one is diversified. Is around $1.1 billion, right, it's around INR 75 billion to the 2 top NBFCs. And there's still headwinds in the NBFC sector. There are inquiries. There are litigations. So how do you expect to -- or what is your plan of manage -- how do you plan to manage risks in the NBFC sector, especially relating to these 2 NBFCs, which are still standard?

See, as far as NBFC is concerned, as I told you earlier madam, we are -- our exposure is constantly coming down. And as I [ told earlier, ] we will go for coorigination only mostly. As far as major NBFCs, which are in [ indiscernible ] we are already provided, whichever is there already is NPA, whichever is there already the NPAs. We already have classified as NPA. And in watch list also, we don't have big [ chunky ] NBFCs. [ We don't have ] watch list also. [ So that way we don't plan and fresh ] NBFCs, we are not averse, we'll be giving [ fresh ] NBFCs, but it will be based on their corporate governance, based on their onward lending practices, based on their credit quality, rating, all those things, madam.

Whether NBFCs that are standard, would -- do they have higher risks now?

No, I don't -- well, from the portfolio, which we are having most of the NBFCs which are public financial institutions under a AAA rate, [ I'm having the list here, ] all are either AAA rated corporates or it is public financial institutions. So I don't think -- and I don't think -- though my exposure is [ 103, ] my outstanding is only INR 93,000 crores in the NBFCs. And if you see that these are all either public financial institutions or it is AAA or AA-rated corporates. So there's not -- nothing much to worry on our exposure to NBFCs.

Okay, sir. Sir, and in terms of the June 7 circular, how much of additional credit costs would you see on account of the circular in fourth quarter?

June 7 circular so far only 3 accounts have been resolved, right? And majority of our accounts, I've seen that we are having already -- either we have gone to the NCLT or we are having a provisions. We are having a -- even some of the accounts we are having 100% provisions. But we have signed around close to 20 ICAs.

Sir, the previous communication we were given the understanding that the divergence was out of INR 4,100 crore, almost some INR 1,475 crores was already provided. So the impact -- [ operation ] impact would be close to INR 2,600 crores. But here we see a little more. So can you please help me understand this portion?

What happens in divergence, they declare this divergence as on 31st March '19, or -- and during the year, the same accounts have also been downgraded. Suppose this account was earlier a D2 and NPA date was in October 15, in December, it's classified as D3, and it will attract the higher provision. So when they classify from the [ back date, ] naturally, we have to take provision as on a recent date.

Sir, in case of again this divergence. So any of these divergence account basically were from the erstwhile banks like, you know, Vijaya Bank and Dena Bank? Or is it all a part of Bank of Baroda?

Actually -- basically, most of the accounts are from BOB, but fact remains there are common accounts as well. The accounts are with Dena also then accounts are Vijaya also, right? So you can say major part is from BOB.

Major part is from BOB.

And there's 2 or 3 big account where the interpretational issues -- and I'm telling you, based on the record of recovery, these accounts will be upgraded sometimes in the next financial year because they are repaying us regularly.

Okay. Sir, these accounts are basically from which sectors?

One account is from chemical and one account is from the road sector, and they're paying regularly. Repayment is regular, is on date.

Okay, sure. Sir, anything on the resolution front that you can talk about? So one large account, which we already have is IL&FS where there is some signs of resolutions happening. And apart from that there are a lot of accounts, particularly in the power sector, where there is some headway happening in terms of resolution. So can we [ just really ] talk about some pipeline in terms of resolution with names and [ maybe ] possibly even exposures?

That is why we have entered into the ICA, and some of the accounts, even we are -- based on ICA in 2 or 3 accounts we have sold out, based on the [ indiscernible ] expression of interest from the public intent, based on the competitive bidding, and we realized our NPAs.

No, but basically, specifically into power accounts, if you can [ really ] talk about the exposure that you have and where you are seeing some resolutions happening? Leave the ICA aside, sir.

[ indiscernible ]

Nothing that you see as of now? Okay. Sir, question to Chadha sir, basically. You [ indiscernible] Retail in the past in SBI. You've seen the focus that Bank of Baroda actually had in terms of retail post Mr. Jayakumar joined in. And I'm sure that -- not that you have spent much time in the bank yet, but from outside the bank, what are the areas of improvement that you really see possibly for Bank of Baroda that you would like to bring in at least in the next 12 months or so?

So I think the most important piece would be that whatever the initiatives have been taken over the last few years, you need to build upon them because there is an investment time and then there's a time when you get the results. So it's very important, again, that you keep the momentum going. For instance, again, we mentioned supply chain financing, where there's been a very successful initiative which has been taken. Similarly, in terms of funding commercial vehicles. So these are areas where actually NBFCs had a very strong hold. So you have an opportunity to actually do loans and with better margin than was possible in the past. Equally, every new year opens up new opportunities. So I would believe that looking at the corporate -- so one -- of course, we look at -- we look at corporate loans chunky. They can always lead to distress. So you can actually be a retail bank. But to my mind, for a bank like Bank of Baroda, that's simply not an option. It is a bank, which is a national institution, and which, again, has not only responsibility to its shareholders, its employees, but also to the country. So therefore, it is very important that the bank participates fully in all sectors of the economy and the corporate loan part is a very important part of that. But at the same time, when you do that, you need to make sure that you do it in a manner where the risks are controlled. So along with the emphasis on corporate loans, which we would want to do, we also need to strengthen our risk management considerably as compared to where we are today. So I think there'll be a focus equally on growth making sure that we don't lose out on the opportunity which are there, but also make sure that we strengthen our systems, so that we do not have the same kind of experience, the consequences of which we are discussing today. There'll always be issues. There will always be new experiences, but it's equally important to learn from the experiences. So it would be my endeavor to make sure that whatever experience that BOB has had, both positive and negative that we learn from them and these shouldn't get strengthened thereby.

Sir, you have a separate subsidiary by the name BOBCards. Now SBI Cards has come out with an IPO. They have grown so big. Any plans do you have in your mind, basically for BOBCards, that you want to scale up this business [ ever? ] and it will take time but [ indiscernible ] do you have a plan?

So you're absolutely right. I think State Bank of India has made a great success of not only SBI cards, but of all of its subsidiaries. So when you do the analysis of SBI's business, I think the kind of value that you attribute on account of the subsidiaries is very considerable. And it is equally true that at BOB, we have not been able to have an equal success. But nevertheless, you're absolute right, the potential is there. And these subsidiaries, they would be, again, a matter of focus. And there we need to see how we can partner with like-minded companies to make sure that the competencies can be brought to bear on these businesses.

Can you please give the performance analysis of [ 3 ] verticals, mutual fund business, wealth management and the lending through credit cards, particularly collections and NPAs?

From the wealth management perspective, I'll share with you. We have a very ambitious target of almost seeing 70% growth on Y-o-Y basis as of March, and we are pretty much in line with that. We have a target of around INR 240 crores, vis-à-vis INR 140 crores last year. And by December, we have touched INR 110 crores on that. The next thing you said was?

Credit card.

Credit card business is still in the nascent stage. We have not been able to grow that as much as we would have loved to do it. But there has been a traction in the last 2 quarters, we have seen a pretty good growth. And now the credit card growth is basically being supplemented by my retail liabilities department, who are also taking it as a CASA enabler and marketing it. So in the last 2 quarters, we have seen a little traction, but still a long way to go on that front.

What's the size currently?

Currently, I think we have 0.5 million cards on that.

No, in terms of amount.

Amount is not very significant. It should be around INR 600 crores.

So you've shown over 40% growth Y-o-Y as per, I think, one of the slides?

Yes. That's it?

Mutual funds?

Mutual funds is included in that wealth management part. That is included. Wealth management would mean my life insurance, my general insurance, my mutual funds, et cetera. So that is...

No. [ indiscernible ] mutual fund, you also have [indiscernible].

Okay. Both mutual funds.

[Foreign Language] You're talking about the subsidiary part?

Yes, yes.

No. What I was talking about is the distribution part of that asset [indiscernible].

I was talking about both actually.

[Foreign Language] subsidiary, I'm not having the figures. I'll let you know the figures.

Okay. Then second thing is for Mr. Chadha, the previous MD onboarded lot of private sector, foreign bank veterans in the subsidiaries and -- as executives full time and also as consultants. Now what would be your view on continuing the tradition of experience or encouraging the hardcore bankers within the system?

So I think that the flow of talent can never be a one-way street. Traditionally, talent has flown from the public sector banks to private sector banks. And to that extent, public sector banks have done a huge favor to private sector banks. But at the same time, if you have to compare to any market, you need to make sure that even while you do supply talent and there's nothing wrong with that, there's equally an inflow of talent. And that's where I believe that Mr. Jayakumar was a visionary, and he also had the courage to do things which are not easily done in the public sector. So I would -- to my mind, I would want to build on that, make sure that BOB is possibly the best combination of public sector values and private sector talent.

Right, I think SBI has also that same system. [Foreign Language], lastly, I would like to come on the NPAs. The second NBFC housing finance company which slipped name like, IL&FS and [ DHFL ] were unknown, [ this is ] the Reliance Home Finance. You're a lead bank. Now that has slipped basically, apparently, they are saying it is because of huge divergence of assets to the [ group ] companies, although there is no fraud. But the point is that is a huge setback on the recovery process and that business. So what is the view about the business continuing? And whether you can be able to get the diverted assets back in the system, otherwise, it's unsuccessful?

Yes. But this company, basically, that we have signed the ICA. And based -- and under the ICA, they submitted the resolution plan. So this is a resolution plan we are working. So the one resolution plan they have given the improvement of the resolution plan, which we discussed in the lenders meeting we had around few days back. As far as this divergence and this part, this also we have discussed in the last meeting and some of the information we have sought from the company.

So the business is like stabilize and grow or it could be a big [ hit ] because you have not provided for full year?

No. We have provided as a substandard asset because it has been -- slipped last quarter. So we have provided 20% in this account, right? And we are working on the resolution plan. And we have to finalize this resolution plan before 31st March.

Before 31st March. Okay. All the best.

Are there any more questions?

I would like to ask the question about that stressed asset. So your watch list has been -- the number has been shown to us. So what are the sector which are majorly contributing towards this watch list, we wanted to know?

Sector wise, we have given. Yes, we have given that. Sector wise, let me show that slide.

Show that slide.

Actually, today because of the delay, we couldn't [Audio Gap] [ indiscernible ]

Yes, yes. But we will host on the -- our website?

Yes. we will.

Sir, if you can give the breakup of slippages in terms of retail, agri, MSME and large corporate.

Okay. So agri side, our slippage is around INR 552 crores, right? MSME, around INR 1,000 crore. Retail is INR 450 crores. Corporate is INR 5,100 crores. And international book is INR 3,300 crores.

Sure, sir. And sir, if you can talk about the ICA pipeline that you have where you have signed or are likely to get signed, only the standard portion. So you would have some NPA where the ICA is signed or being signed?

We have signed ICA for PA and NPA both, [ indiscernible ] right?

Correct.

So my point is that in -- we have to complete the exercise within 180 days. The flip side, if you'll not be able to do, then you have to make a provision or you have to refer to the NCLT. So in most of the cases, we are giving even 100% provision, right? So there is -- on the provision side, there is no major issue. But fact remains account to be resolved, account to be resolved. For that, we are working.

Sir, the accounts which are standard, what is that quantum because therein the provision would not be more than standard assets provisioning?

Standard asset -- standard, yes. The standard asset, within -- if the account is beyond INR 2,000 crores, [ then that ] account is [ irregular, ] then we have to go for ICA sign, right? So it's some of the account but we have seen, they are regularizing. They are -- within 180 days, some accounts are coming back as well. And some of the accounts are in the process of resolution.

And sir, there was a change of LIC table in terms of annuity. So have we also looked at that? And is there any implication in terms of the retiral provision for your bank?

We are continuing with the old table and all banks are still continuing with the same table. Nobody has changed. But this -- based on actuarial valuation, we get it revalued every quarter, every quarter. And then whatever is the shortfall, we provide.

Sir, what was the MSME dispensation during the quarter, as and when how much of MSME rules were restructured during the quarter?

We had a universe of around 43,650 accounts which were eligible for restructuring. Out of which around 33,000 accounts have been restructured till date.

What was the amount of restructuring during the quarter?

This was INR 1,300 crores, approximately.

This is community [indiscernible].

Sir, about the HFC account that has slipped this quarter, what is the provisioning we are holding?

Substandard as per RBI guidelines, we have to have 15%. But as Bank of Baroda, we are providing 20% for substandard.

And the INR 1,300 crores number you mentioned on the MSME dispensation and restructuring on that front, is that the outstanding amount or the restructuring we did this quarter?

This is...

Cumulative.

Cumulative.

Just to repeat, the INR 1,300 crores is the cumulative outstanding restructured book, right? Okay. On the corporate slippages, you said you had INR 5,100 crores from the domestic side and INR 3,300 crores on the international book, is that right?

Right, right.

So outside of divergence, how much is the slippage therefore, about INR 2,000 crores -- INR 4,000 crores?

Outside?

Outside of divergence book, you have about INR 4,000 crores of...

You see, this INR 10,300 crores is the number, right? So INR 5,250 crores was a part of divergence, right?

So INR 4,500 crores.

INR 5,000 crores something was the part of...

INR 4,500 crores.

INR 4,500 crores.

Outstanding...

And this is NBFC account, right? So one big NBFCs, that's INR 2,000 crores.

That's INR 2,000 crores.

INR 2,000 crores.

So you have another INR 2,000 crores outside of this?

Yes. That is in agri, SME, retail account.

No, no. I'm not talking about agri, SME. I'm only talking about corporate book slippages. Based on what you just told me, it's INR 8,400 crores. Outside of that -- within this INR 8,400 crores, I'm able to explain [ INR 4,500 crores ] of slippages.

Just a minute, just a minute.

INR 8,300 crores come from -- this is also corporate only...

Yes, yes, yes. But this is INR 5,100 crores.

Plus [ INR 3,000 crores ] international, corporate.

Yes. This is also international -- the point is that INR 10,300, right? What is your question, you tell me again?

Sir, corporate slippages we have INR 8,400 crores as per the numbers you gave, INR 5,100 crores domestic...

But this corporate includes international as well?

No, sir. No.

The corporate doesn't...

International is [ INR 3,000 crores ].

Okay. INR 7,000 crores is remaining, right?

Yes.

Out of INR 7,000 crores, INR 5,000 crores is corporate.

Domestic [ indiscernible ] your interpretation is correct.

My interpretation is right?

Yes.

So what is the INR 2,000 crores additional slippage then?

MSME and agri, others, and retail, minor.

Okay. I will take it off-line then.

Yes. Sure.

So if there are no more questions, we'll...

We will take it off-line.

Okay. So thank you so much for coming over. And we apologize for the delay. You can join us in the canteen for some snacks and can carry forward the discussion. Thank you.

Thank you.