CSB Bank Limited (CSBBANK) Earnings Call Transcript & Summary

Good morning, everyone. Now the time is 11 A.M., and it is time to begin the 102nd Annual General Meeting of this bank. I request Bhama Krishnamurthy Non-Executive Independent Chairperson to conduct the proceedings of the meeting. Thank you, and over to you, ma'am.

Thank you, Sijo. Good morning, ladies and gentlemen. I am Mrs. Bhama Krishnamurthy, Chairperson of the bank. I am attending the meeting from bank's office at Andheri, Mumbai. I welcome all of you to this 102nd Annual General Meeting of CSB Bank Limited. This meeting is being held through video conferencing and other audio visual means. In accordance with the provisions of the Company's Act 2013 read with the applicable circulars issued by the Ministry of Corporate Affairs and the Securities and Exchange Board of India, extending permission for holding the AGM through VC or OAVM without the physical presence of the members at a common venue to transact the business as set out in the notice of the meeting. Our goal is to encourage maximum participation of members from various locations across and to provide hassle-free facility for our shareholders to vote and ask questions. We believe this platform encourage more members to attend and participate in this meeting without the constraint of locational issues. The bank has taken the requisite steps to enable the members to participate and vote on the items being considered at this AGM in terms of above said circulars and along with other provisions of the Companies Act 2013, SEBI listing obligations and disclosure requirements regulations 2015 and the rules made there under. A live streaming of this meeting is also being webcast on CSB's website. Before we start the main proceedings of the meeting, I request my colleagues on the video conference to introduce themselves. Sir Pralay Mondal?

Good morning, everybody. I'm Pralay Mondal, Managing Director and CEO of the bank. I'm attending this AGM from the bank office at Andheri, Mumbai. Thank you.

Mr. Madhavan Menon?

Good morning, everyone. I'm Madhavan Menon, Non-Executive Director of the bank. I'm attending this AGM from the bank's office in Andheri, Mumbai. Thank you.

Mr. Sumit Maheshwari?

I am Sumit Maheshwari, Nominee Director of Fairfax India on the Board of CSB. Good morning, everyone.

Mrs. Sharmila Abhay Karve?

Good morning, everybody. I'm Sharmila Karve, Independent Director. I'm also the Chairperson of the Audit Committee.

Mr. Sudhin Choksey?

Attending this AGM from my residence in Ahmedabad. I'm also the Chairperson of Stakeholders Relationship Committee of the Board.

Sir Sunil Srivastav?

Good morning, everyone. I'm Sunil Srivastav, Independent Director. I'm attending the bank's AGM from the office at Andheri.

Sir Sharad Kumar Saxena?

Good morning, everybody. I'm Sharad Saxena, Independent Director of the bank. I am attending the AGM from the Andheri office at Mumbai. And I'm also a chairperson of Nomination and Remuneration Committee of the Board. Thank you.

Mr. Biswamohan Mahapatra?

Good morning, everyone. I am Biswamohan Mahapatra, Additional Director, Non-Executive and Independent of the bank. I'm attending this AGM from my residence in Mumbai. Thank you.

I request Head Strategy and Corporate Legal, Chief Financial Officer and Company Secretary on the video conference to introduce themselves. Head Strategy and Corporate Legal. Mr. B.K. Divakara?

Good morning, everyone. I'm B.K. Divakara, Head of Strategy and Corporate Legal vertical attending from the head office of the bank in Thrissur.

CFO, Satish Gundewar?

Good morning, everyone. This is Satish Gundewar, Chief Financial Officer of the bank, attending this AGM from the Andheri office in Mumbai.

Our company Secretary, Mr. Sijo Varghese?

Good morning, everyone. I'm Sijo Varghese, Company Secretary, joining this meeting from head office of bank in Thrissur.

Thank you all. Apart from that, we also have the key executives of the bank joining this meeting through video conference from their respective locations. Mr. Ritesh Goyal and Mr. Ankur Kotriwala; Senior Partner of B.S.R. & Co. LLP, Chartered Accountants, Mumbai, Joint Statutory Central Auditors is attending from Mumbai. Mr. Abhay V. Kamat; Partner, Mukund M. Chitale & Co. Chartered Accountants, Mumbai, Joint Statutory Central Auditors of the bank is attending from Mumbai. Ms. Manisha Maheshwari and Mr. Arvind Bhandari, Partners, Bhandari & Associates, Company Secretaries, Mumbai. The secretarial auditors of the bank is attending from Mumbai. We have the requisite quorum present through video conference to conduct the proceedings of this meeting. Participation of members through video conference is being reckoned for the purpose of quorum as per the circulars issued by MCA and Section 103 of the Companies Act 2013. The quorum being present, I call this meeting to order. The bank has taken all feasible efforts under the current circumstances to enable members to participate through video conference and order the AGM. I thank all the members, colleagues on the Board, auditors and the management team for joining this meeting over video conference. This being the AGM held through video conferencing and other audiovisual means I request Mr. Sijo Varghese, Company Secretary, to take you through certain instructions regarding the participation at this meeting. Sijo?

Thank you, Ma'am. Good morning, everyone. Members may note that this AGM is being held through with a conference in accordance with the Companies Act 2013 and circulars issued by the Ministry of Corporate Affairs and SEBI. The facility of participation at this AGM through videoconferencing or other audio visual means s being made available for 1,000 members on first come, first serve basis. [Operator Instructions] Registered directors and key managerial personnel, register of contracts with the related party, body, corporate or forms or other entity, et cetera, in which directors are interested, certificate from secretarial auditors of banks, certifying that CSB Employees Stock Option Scheme 2019 are being implemented in accordance with the Securities and Exchange Board of India, in brackets, Share Based Employee Benefits and Sweat Equity, bracket close, Regulation 2021. Auditors Report and Secretarial Auditor Report have been made available electronically for inspection by the members during this AGM. Members seeking to inspect these documents can send their request to [email protected]. As the AGM is being held through with the conference, the facility for appointment proxies by numbers is not allowed. And hence, there is no proxy register for inspection in the said meeting. Members are requested to refer to the instruction provided in this notice or appearing on to be the conference page for a seamless participation through video conference. [Operator Instructions] Thank you very much. Now it is time for chairperson speech. I request Ms. Bhama Krishnamurthy to address the shareholders.

Dear shareholders. Very good morning to all of you. As we gather virtually once again, it is an immense pleasure and a sense of great pride and privilege that I'm welcoming all of you to the 102nd Annual General Meeting of our bank and addressing you for the first time as a chairperson of this esteemed institution which has weathered all the storms over a century of its existence and reported remarkable performance in the fiscal 2023. We very much appreciate your generous support that has led us to achieve this momentous milestone. And on behalf of the Board of Directors of CSB, I thank you for taking out time from your hectic schedules to join us for the meeting. I'm also delighted to extend a special welcome to those of you who have become shareholders of the bank since the last AGM held on September 27, 2022. Our journey towards transformation began in FY 2017 and successfully turned the tides in financial year 2020. Today, we proudly stand as a benchmark performer among the banks in similar categories and beyond. This was an exceptional performance supported by all-round progress on operational and financial fronts, despite facing consequential challenges, both by inflation and slowing down in economy across [Audio Gap] Our bank has proven its resilience in the face of uncertainty and our continued focus on sustainable growth and progress is a testament of our commitment to our shareholders. The global economic landscape has been challenging in the aftermath of COVID-19 pandemic and geopolitical tensions and has become a pressing concern for economies worldwide. This has resulted in a slowdown in economic growth and increased inflationary pressures, which has created a perfect storm of headwinds that threaten to unsettle economies worldwide. Central banks worldwide responded by tightening monetary policies to curb inflation, leading to a slowdown in major economies. However, thanks to the astute policies of the government of India and the prudent responses of the Reserve Bank of India, India has emerged as a bright spot in these adverse types. In tune with central banks across the globe that RBI had raised policy rates multiple times to contain inflation and protect the currency amidst global uncertainties. As a result, India's inflation rate has stabilized from its peak, and the RBI apart from putting a pause on rate hikes has been regularly taking cautious steps to contain the inflationary pressures further, while confidently predicting a GDP growth rate of 6.5% for the fiscal year 2024. Along with measures like the Production Linked Incentive program, the sustained emphasis of government on infrastructure, micro, small and medium-sized enterprises, MSMEs, and manufacturing sectors has led to continued robust development in all major sectors. The Indian banking system remains sound and healthy with strong capital and liquidity positions, improved asset quality, better provisioning coverage, along with improved profitability. In this period, the banking sector has witnessed robust credit growth and has reached the highest level since FY 2012. Speaking of our performance, I'm delighted to highlight the outstanding achievements of the bank in financial year 2023. The net interest income registered an impressive growth of 16% to INR 1,334 crores as against INR 1,153 crores, while profit after tax grew by 19.38% to INR 547 crore, resulting in improved earnings per share of 31.55 from 26.43 in the previous financial year. Return on assets has improved by 15 basis points and stood at an impressive 2.06% as on March 31, 2023. Although there was a slight decline in return on equity, which stood at 20.35% from 21.28% in the previous year, we are wholeheartedly dedicated to reinforcing our profitability and achieving sustainable growth. Despite the challenges posed by the environment of increased interest rate, we have achieved an all-time high net interest margin of 5.48% as compared to a growth of 5.27% in the corresponding previous period. Our commitment to contain asset quality has yielded remarkable results with both gross nonperforming assets and net nonperforming asset ratios improving to 1.26% and 0.35% respectively, as of March 31, 2023, from 1.81% and 0.68%, respectively, in the corresponding previous year -- previous period. Your Bank successfully, withstands the sustained phase and is currently transitioning from the sustained phase to the build phase, where our bank is laser-focused on product diversification, customer acquisition and expanding brand distribution network. We are focused on expanding our footprints, particularly in the northern and western parts of the country by opening more branches and attracting customers through the introduction of innovative verticals, services and products. Our investment in digitization has been transformative with a surge in digital banking users, testifying to our successful digital strategies. As we look to the future, we will continue exploring partnership opportunities with banks and fintech companies to further grow our fee income, enhance the customer experience and strengthen our market position. With more focus on technology, profitability, asset quality and human strategy, your bank can position itself for sustained growth and success in the coming years. Our bank continues to be committed to effective corporate governance practices for the benefit of all of our stakeholders, which is laid on the principles of fairness, transparency and accountability. We are committed to continuously embrace best practices in corporate governance at all levels. Our commitment to environmental sustainability and social responsibility remains unwavering. The integration of ESG principles into our operations reflects our dedication to the betterment of society. Through our CSR initiatives in education, health care and gender equality we strive to empower vulnerable communities, fostering inclusivity at the local and national levels. I am confident that our bank is well positioned for success in the years to come under the dynamic leadership of Mr. Pralay Mondal. I have complete faith in the current leadership's ability to scale up operations and position itself as a mid-sized bank with a Pan-India presence catering to a comprehensive range of services for customers in line with our strategy SBS 2030, that is Sustain, Scale -- Build and Scale up 2030. Before concluding, I extend my heartfelt gratitude to our valued customers, dedicated associates, trusted partners and well-wishers. Your unwavering support and loyalty have been the driving force behind our success. I also want to acknowledge the invaluable guidance and support of regulatory bodies, the Central Government and the state governments throughout our journey. Last but not the least, every member of our staff deserves special recognition. Their perseverance, hard work and commitment have propelled us forward and unlocked a period of immense pride and fulfillment for our bank. In conclusion, let us carry the spirit of determination and excellence forward as we embark on a journey of sustained growth and scale, driven by innovation and customer-centricity. Together, we will continue to create a bright and prosperous future for our bank and the communities we serve. Thank you all for being an integral part of this incredible journey of growth. Thank you once again. Thank you. Now I request, Mr. Pralay Mondal, Managing Director and CEO, to address the shareholders.

Thank you, Madam Chairperson. And dear shareholders, a very, very good morning again to all of you. On behalf of the Board of Directors of the bank and on my personal behalf, I take immense pleasure in welcoming you all to the 102nd Annual General Meeting of CSB Bank Limited. Sustain, Build, Scale 2030, as we call it, SBS 2030, is an aspiring 3-pronged strategy that our bank -- your bank has embarked upon since last financial year. It encompasses sustaining the bank's foundation and critical strengths, build a future-ready franchise and scale the bank to the next level of growth and excellence. The strategic priorities of this vision includes customer acquisition, product diversification, verticalization, tech stack improvement, increased footprints and sustainability. We can call FY '23 as a big year in terms of achievement in our SBS 2030 journey and the progress has instilled a lot of confidence in us to pursue the vision even more aggressively. The annual report for the financial year 2022-'23 is already with you and your bank did well, both in terms of topline and bottom line in FY '23. Most of the financial indicators like NIM, CRAR, ROA, NPA and various other ratios have shown further improvement during the year. Our endeavor is to maximize the wealth of the shareholders and that received a big boost and with substantial gain in EPS and book value per share. Before I deliver it on the bank's performance, I would like to touch upon the economic and banking environment in which your bank performed during the year '22-'23. Globally, the stability of the financial system is tested by high inflation, tight financial conditions and banking system fragilities. Geopolitical tensions and economic fragmentation are posing challenges to the macroeconomic stability. Markets are very volatile amidst rapid shifts in investor sentiments. Though the situation is gradually improving as of now, but the pace is slow. Indian economy is better positioned to navigate the global headwinds and has been stable and resilient as reflected in sustained growth in bank credit, low levels of nonperforming assets, adequate capital and liquidity buffers. Banks are posting strong earnings and robust credit growth with the strengthening buffers. Let me summarize the major highlights of fiscal '23 for CSB Bank. Your bank recorded the highest ever net profit of INR 547 crores in last FY, up by 19% Y-o-Y. The balance sheet is stronger and resilient as evidenced by elimination of all toxic assets, including the accumulated losses, making accelerated NPA provisions and additional contingent provisions which is almost 1.5x higher than the net NPA. As on 31/3/23, your bank is holding additional provisions to the tune of INR 170 crores over and above the regulatory prescriptions. The key performance highlights of your bank is as follows. Financial indicators and profitability. Strong operating performance, operating profit of INR 707 crores, up by 15% year-on-year. NII growth of 16% over FY '22 and stood at INR 1334 crores. ROA has increased from 1.9% to 2.06% Y-o-Y, up by 16 basis points as against the industry average of 1.1%. NIM could be maintained above 5%, with an improvement of 21 basis points over the last FY and remained at 5.48%. Average NIM for the industry was 3.7%. Cost of deposits stood at 4.38% and yield on advances at 10.92%. Noninterest income to total income ratio improved to 11.99% as against 10.80% for the previous FY. Cost-to-income ratio at 57.12%. On the business front, our total business was INR 46,000 crores with a Y-o-Y 25% growth. Deposit grew by 21% Y-o-Y as against the industry growth of around 10%. CASA ratio continues to be above 30% and is at 32.18% at the end of the year. Net advances grew by 31% vis-a-vis 16% industry growth. Gold portfolio registered a growth of 48% Y-o-Y. On capital and liquidity. Robust capital base with CRAR of 27.10% against the industry average of 17.10%. Low proportion of risk-weighted assets compared to the industry around 40.12%. Leverage ratio stood at 9.98% as against the industry average of 7.3%. Comfortable liquidity with LCR at 123% and NSFR at 155%. On the asset quality front, also we fared pretty well on all key indicators. GNPA of INR 263 crores or 1.26%, down by INR 27 crores or 55 basis points, respectively, on a Y-o-Y basis. Industry level GNPA correspondingly was 3.9%. NNPA of INR 72 crores or 0.35% with a reduction of INR 35 crores or 33 bps compared to last FY. NNPA for the industry stood correspondingly at 1%. PCR of 92.11% for FY '23 as against 89.65% improved our coverage ratio over FY '22 by 246 basis points. Credit costs continue to be in negative trajectory for all the 4 quarters in FY '23. On the Shareholder Return front. EPS improved to INR 31.55 from INR 26.43 for FY '22. Book value per share stood at INR 176, registering an increase of INR 32 Y-o-Y. ROE of 20.35% as against industry average of 12.3%. We have already published our Q1 FY '24 results and overall performance on both top line and bottom line was satisfactory. We could registered a growth of 15% in net profit and 24% in total business on a Y-o-Y basis in Q1. Gold loan business crossed INR 10,000 crore landmark. Asset quality ratios improved, GNPA of 1.27% and NNPA of 0.32%. And capital liquidity position continued to be very, very good. Key financial issues were strong. We carried forward the momentum of growth during the current fiscal as well. Among the other highlights, some of the key points. On investments in distribution, we continue to invest as a part of our growth strategy. In line with our branch expansion plans, we have opened 100 branches during the financial year, 45% of them in North and West to enhance our Pan-India coverage. Thus, we opened 100 branches for the third consecutive year in a row with a 70% increase in the number of branches from 411 to 703 since FY '20. We have 528 ATMs and CRMS together as on 31/3/23. We have plans to open another 100 branches this financial year as well. We have been investing in the people as well. As per part of our SBS 2030 division, we are aiming at building a future-ready franchise with complete product suite with proper vertical structure; and to achieve this objective we have to invest in the right talent, both at leadership level as well as at the front end. We have almost completed the leadership hiring. Now hiring from the front-end stuff is going on. During FY '23, we have added 2,100 plus employees and the employee count stood at 6,841 as on 31/3/2023. We have been investing in products, processes and verticals as a part of our scale strategy. In the year gone by, tremendous focus was on developing and revamping the products under the identified verticals to complete, and enhance our product bouquet. Policies, processes were streamlined in line with the industry practices. Bank has partnered with FPL Technologies to launch CSB One-card, which is a co-branded credit card, and we have just -- this quarter, we just reached a milestone of INR 100 crores there in terms of ANR. Product programs like Zenith, Elite, Prime were launched with attractive competitive features to attract better customers in terms of values to the bank. Current account variants like Smart Trade/Pro trade, ForEx Current Accounts were introduced by the newly set up TBG vertical, transaction banking vertical, with a result to revamp that trade ForEx business. Branch Service Quality Index Group, BSQIG team has been set up towards ensuring the right culture and mindset among the team members to keep customer centricity at the heart of our all initiatives. I truly believe that customer centricity and in the long run to build the brand, customer focus and customer service is the only way to build the bank, and hence, this vertical is very critical for the bank. Bank has contact centers with an objective of generating leads and customer service as well. On technology front, we are taking a big leap forward. Bank has made the strategic decision to replace its existing core banking system with an advanced and modern alternative, and we are steadily progressing on this count. Bank has embarked on building the new LOS, which is the loan origination systems, which is aimed at faster disbursement of loans. And that's key for building the retail assets businesses as well. Lead management system, which got launched in Q4 FY '23 helps the bank to capture leads for both assets and liabilities, and that is progressing pretty well. This system will help us provide business intelligence in terms of lead conversion and increased revenue. On enhancing the digital experience, bank has introduced contactless EMV card -- debit cards, and an end-to-end digital sourcing journey through VKYC for savings and credit cards. Right distribution, right team, right product, right process, right technology will help us accelerate the growth in the coming years. In our first year of SBS 2030 journey, we could sustain our core strengths and initiate the build phase, too. We are looking at FY '25 as a launching pad and to took out from all avenues as a true full-service franchise. It will be an endeavor to deliver upon the commitments to various stakeholders as we progress on our SBS 2030 vision, which will happen only with your wholehearted support and continued patronage. I take this opportunity to express my sincere thanks to our valued shareholders and customers who have the faith bestowed on us and the unstinted support extended throughout the journey. I would also like to acknowledge the valuable guidance and deep oversight provided by the Board at this juncture and every juncture for this progress in journey. I take this opportunity also to place my gratitude to the regulators, Reserve Bank of India, SEBI, stock exchange, Central Government and State Government for their guidance and support. I thank our senior management team for their execution capabilities and all the staff members of the bank for their committed hard work and determination. And we have a long, long way to go. FY '24 is a crucial year in the SBS journey. We will strive together to achieve the milestones set for the year, well ahead of the schedule. And we, as a management team, are committed to that. Thank you very much, and over back to Chairperson Madam.

Thank you, Pralay. The notice dated July 7, 2023, convening the meeting, the statement of profit and loss for the year ended March 31, 2023, and the balance sheet asset at date together with the reports of the Board of Directors and the auditors thereon have been in your hands for quite some time. With your permission, I take the notice convening the meeting as read. I now request Mr. Sijo Varghese, Company Secretary, to provide a summary of the auditor's report. Sijo?

Thank you, Madam. The Joint Statutory Auditors B.S.R. & Co. LLP Charted Accountants, Mumbai and Mukund M. Chitale & Co, Chartered Accountants, Mumbai; and the Secretarial Auditors, Bhandari & Associates, Company Secretaries, Mumbai are issued unqualified opinion in the respective audit report for the financial year ended '22nd, '23rd. Hence, summaries are not being readout at this meeting. There were no qualifications, observations or adverse comments on the financial statements and matters which have any material bearing on the functioning of the bank. The statutory auditors reports are available on to Page 171 of this annual report. Secretarial Auditors' report is enclosed as an annexure to report on the Page 117 of the annual report. Thank you. And back to you, ma'am.

Thanks, Sijo. As the notice is already circulated to all the members, I take the notice convening the meeting as read. Before we proceed, I am pleased to bring to your notice that as required under the Companies Act 2013, the bank had provided you all the facility to cast your vote electronically on all resolutions set forth in the notice. Members who have not cast their vote electronically but are participating in this meeting will have an opportunity to cast their vote through the e-voting system provided by CDSL. Members may please note that there will be no voting by show of hands. We shall now proceed to deal with the various business of the meeting in their order as set out in the notice of the meeting. We will open the floor for any questions by the speaker shareholders after all the resolutions are tabled. Item #1. Adoption of audited financial statements. The audited financial statements for the financial year ended March 31, 2023, including the audited balance sheet and profit and loss account as at that date, together with the reports of the Board of Directors and auditors have already been provided to the members. Item #2. Reappointment of retiring Director, Mr. Madhavan Menon. I invite the attention of the members to Item #2 of the notice. Item #3. Appointment of joint statutory auditors and fixation of their remuneration. I invite the attention of the members to the Item #3 of the notice and the explanatory statement on the item. Now we come to the special business. Item #4. Reappointment of Mr. Sudhin Bagwandas Choksey as Non-Executive Independent Director of the bank. I invite the attention of the members to item #4 of the notice and the explanatory statement on the item. Item #5. Appointment of Mr. Biswamohan Mahapatra as Non-Executive Independent Director of the bank. I invite the attention of the members to Item #5 of the notice and the explanatory statement on the items. The text of the resolutions, along with the explanatory statement are provided in the notice circulated to the members. If any member desires to ask any question pertaining to any item in the notice, he or she may do so now.

Now I will take questions from the speaker shareholders and invite the speakers who have registered. [Operator Instructions] The company secretary will now announce the names of shareholders who have registered as speaker shareholders one by one. Over to Company Secretary.

Thank you, Madam. Dear shareholders, thank you for joining our 102nd AGM today and for taking time to participate in it. Before we go live with the question-and-answer sessions, here are some point should you need for your convenience. [Operator Instructions] We plan to post a recording of this meeting on to the website of bank CSB, www.csb.com.in after this meeting. Members may note that as this meeting is being recorded. [Operator Instructions] Now we will move to the Q&A session. Kindly note that bank has received a request from 3 shareholders to speak at this AGM. [Operator Instructions] First shareholder is Mr. Vinay Bisnode -- Vishnu [ Bede]. Mr. Vishnu is holding 690 shares of the bank. Now I request Mr. Vinay kindly proceed with your questions.

Hello, are you able to hear me?

Yes.

Yes, we can hear you.

Let me start the video. Good morning to all of you. Chairperson, Ms. Bhama Krishnamurthy; CEO and Managing Director, Mr. Pralay Mondal; Mr. Madhavan Menon, other distinguished directors for today's AGM, company executives, fellow shareholders, a good morning to all of you. It has already announced I am Vinay Bede, a long-time shareholder and supporter of the banks speaking from Mumbai. Better net interest income supported by higher deposits, business income and net advances have resulted in higher net profit than the previous accounting year. It is pleasing to note from Pages 12 and 13 of the annual report on the KPIs as to how well business can progress with the new management, particularly with a good focus on the key parameters. I have listed out a few questions, sir and madam, just to understand the present and the future working better. And the questions are as follows, I will read the questions one by one. The questions, which can be answered at this meeting, I will take them. Other questions can be responded later on the week. The questions are as follows: Question #1. The steps we are taking to improve cost to income ratio? Because this is an important business parameter for us. The second parameter is on the digital banking. The question here is that, have we launched our own app for banking? And whether the app in case there has been an early launched or when it is launched, it should have a customer service option available, as Mr. Mondal mentioned at the outset that customer service is a key focus of our bank. please clarify on that? The third point is on the IT infrastructure. Whether our IT infrastructure is on-premise or we are on cloud or we are in a hybrid mode and plan to migrate progressively to the cloud? The fourth question is on the CapEx and OpEx spend on information technology. In the according years, financial year '21-'22 and '22-'23. Finally, a pre question. That has been -- should be top on the mind of all stakeholders and shareholders and that is the dividend. I have noted from the directors' report, the profit and loss account was minus INR 51 crores in '21/'22 has substantially improved to INR 348.53 crores in the last accounted year. The question now here is that, when did we last pay equity dividends to our shareholders? And whether next year, we should be able to position to pay dividend as per -- as per the dividend policy? We look forward to that very keenly. And of course, yes, I was mentioned here that Mr. Sijo Varghese and the secretarial team have been very supportive of me on 2 counts. One thing is that I had physical share, which I had to demutualized spending with me. So they are along with the registers lend external support, so that the shares are demutualized on time, and we're extremely pleased about that. And secondly, the support or that they continue to provide to us the shareholders, including the supporting of our participation at this AGM. Not take much of common time and will close with best wishes to directors and to the employees. Thank you for giving the opportunity, speaks.

Thank you, Vinay. So we will thank you for your questions. We have noted your questions and we will give you an answer at the end of session. Next shareholder, Mr. K. Bhardwaj. He is holding 1 share in the bank. I request Mr. Bhardwaj to go ahead with your questions. There's some connectivity issue. We will move to the next person. Third speaker is Mr. Rishabh Jain. Rishabh Jain is holding 50 shares of the bank. [Operator Instructions] So these are 3 shareholders registered for this meeting. So now we will conclude this sessions. Now I hand over back to the Chairperson for remark. So ma'am, we can just go ahead with this, we conclude the question and answer session from all the shareholders. Now I hand over back to Chairperson.

Thank you all. We received all the questions, all comments and observations from all the listed speakers and shareholders. Now those related to operations of the bank, Mr. Pralay Mondal, MD and CEO, will respond. Those questions related to audited financial statements of the bank. Mr. B.K. Divakara, Head Strategy and Corporate Legal and Satish Gundewar, Chief Financial Officer, will respond. And for those questions related to resolutions proposed, Mr. Sijo Varghese, Company Secretary will respond. I hand over to Mr. Pralay Mondal to take his questions.

Thank you, Chairman -- Chairperson, Madam. And thank you, Mr. Vinay Vishnu for your very good questions. So let me take one by one. On the cost-to-income ratio, as I said, as a part of our SBS 2030 vision, we will continue to invest into the bank in distribution in human capital, as well as in technology. I'll come to technology later on one of your later questions. And as we invest into this, while as you see that our operating income is going up, our overall balance sheet growth is much faster than the ecosystem. But we need to invest significantly into the bank to build a long-term scalable and sustainably scalable bank. And on that front, we added 46% people in the bank last year. We have added 100 branches, and we'll continue to add 100 branches or 15% of our branches every year. And there's a significant investment that is coming in technology and we'll continue to sustain that investments over the next 7 years. We -- and hence, as we see cost to income is basically a ratio, cost, if you look at and divide into 2 parts. One is cost, which is measured by productivity and investment, which is measured by payback period and income of course, the denominator, which is the result. We will have a little elevated cost to income for a while, and then it will start coming down over a period. And then you will see a glide path towards the lower cost to income in line with our SBS 2030 vision So that's the broad vision, which has been presented to the Board, and we have the blessings of the Board on that. On the digital banking, again, it's a very good contemporary question and something which the entire banking ecosystem is going through. As you know, that most of the transactions today in banking is happening digitally with the advent of UPI net banking, mobile banking and various other ecosystem banking, which is happening. On KYC, there are so many -- and on VKYC, for example, videos, all these things are happening today. And your bank is completely tuned on to building the right technology. We have created a separate digital vertical under Mr. Rajinder Singh and he is driving the digital marketing within the bank. So as our technology advancement happens, so digital will be more and more relevant for the bank over a period of time. And you also kind of touched upon the customer service focus, that has always been very close to our heart in the bank, and we will significantly enhance. I mentioned in my commentary, the BSQIG vertical, which we have set up, and we do understand that customers' expectation through digital is a lot higher today across all the segments. So we are working on building and making investments into the digital infrastructure in a significant way. So your bank, along with physical brick-and-mortar branches, will continue to invest into digital and that includes customer service, customer acquisition, app-based services, net banking, mobile banking and various other services in the ecosystem banking will do. Coming to your third question, very relevant again on IT infrastructure. So a simply stick way of putting it that the scale of the bank will happen on the back of significantly more agile and robust IT infrastructure. We are, as I said in my commentary, that we are implementing a new core system in the bank and that may take 15 to 18 months. And along with them, the surround system, whether it is LOS, LMS, API banking, the entire net banking, mobile banking, everything is getting revamped. We have invested into a very huge data center for the next 10, 20 years. And hence, the amount of conversation that is going on in the bank, in terms of structure thinking and our IT architecture is for a much more scaled bank. So to that extent, IT, if you ask me in terms of priority, for the next 3 years is probably the largest priority for the bank at this point of time, and we are completely enhancing our IT infrastructure to be competing in the market with the best in the industry. Coming to CapEx and OpEx. It's a relevant question. I don't have the data specifically with me at this point of time. What was FY '21-'22 and '22-'23. But what I can tell you is that CapEx, obviously, do not run through the P&L that year itself, it will run over a period of time. And hence, primary heat, which has been happening is also on the OpEx side, but CapEx investments -- significant investments happening on infrastructure, physical and digital and technology. And hence, CapEx investments will be significant in the next 2 to 3 years in the bank. And hence, we can see an escalated CapEx investment, which will give a payback period over the next 3, 4, 5, 7 years. On the dividend question, I would request Chairman -- Chairperson Madam to respond.

Mr. Vinay Bide, you have been our shareholder for quite some time. It is natural for you to expect a dividend. But for the present, we are conserving capital for expansion. Maybe in the coming financial year, based on Board decision, we will think of giving dividend, okay?

So if I can just add to that, as we always said in the past that accommodated losses were wiped out only last financial year. And as we entered into FY '23, we entered with an accumulated loss of INR 198.80 crores. And we ended the year, last financial year, cumulative accumulated profit of INR 207.3 crores. So given that perspective, now technically, we couldn't have looked at a dividend so far -- but now between the Board and the management, review will be done. And we will keep your requests as to this thing, and we will discuss it with the Board. And probably by the next AGM, we'll be able to come back with a response. Thank you very much.

So ma'am, I can't continue with the remaining.

Members may note that the voting on the CDSL platform will continue to be available for the next 30 minutes. Therefore, I request members who have not cast their vote to do so within the next 30 minutes. The Board has appointed Mr. [P.D. ] Vincent, Practicing Company Secretary, Managing Partner of SDJ Associates, Company Secretary, [ Skochi ] as a scrutinizer to supervise the e-voting process. Further, the results of the voting shall be declared and placed on the website of the bank within the prescribed time and in the manner as prescribed in the notice. The voting results, along with the report of scrutinizer would be intimated to the stock exchanges and will be uploaded on the website of the bank and on the website of CDSL. The resolutions as set forth in the notice shall be deemed to have been passed today subject to the receipt of requisite number of boards. We had 16 members participating in today's 102nd Annual General Meeting. Now that all the items of the notice of meeting have been discussed and taken off for e-voting, I hereby declare the proceedings as closed and pending declaration of results of the voting. On behalf of the Board of Directors, I thank all the shareholders for attending the meeting and for the kind cooperation assistance extended for the smooth conduct of the meeting. I'm also taking on record that the prescribed number of members required for constituting a quorum was present throughout the meeting. Thank you all once again. Thank you.