IndusInd Bank Limited (INDUSINDBK) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to IndusInd Bank Limited Q1 FY '22 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Sumant Kathpalia, Managing Director and CEO, IndusInd Bank. Thank you, and over to you, sir.

Good evening, and thank you for joining the call. I will start with some macro commentary and then go into bank-specific details. With the second wave of COVID-19 pandemic gradually subsiding in quarter 1 and easing of mobility restrictions, our recovery in economic activity is taking shape, which would become more visible over the second quarter of financial year '22. Higher frequency data suggests that activity levels improved in June from the bottom made in May, and the recovery has continued in July. The adverse economic impact of the restrictions imposed this year is likely to be limited in comparison to the national lockdown last year. A supportive policy environment characterized by an accommodative monetary policy and expansionary fiscal policy stance aimed at driving investments, rollout of vaccinations, flexible and adaptive business models, leveraging on technological innovation, along with strong global economic recovery, have made a better setting in 2021 to deal with the ongoing once-in-a-century pandemic. We estimate India's real GDP growth could be around 9% this fiscal year. The outlook on growth, however, will be dependent on possibility of subsequent [ weights ]. We are also watchful of inflation scenarios in India and among major advanced economies and consequent implications to the monetary policy. Now coming back to the bank-specific commentary. In quarter 1, during the quarter, we were focused on health and safety of our employees. We, being part of essential services, have to balance between customer convenience and safety of our employees. We conducted vaccination drive, and over 40,000 or 70% of our employees in the bank are either -- and our MFI subsidiary have received minimum one dose. We aim to cover entire employee base with both doses in the next few months. The learnings and the digital adoption from the first wave ensured seamless business continuity. Deposit mobilization continues the [ pace ]. Our deposit growth was strong at 26% year-on-year and was entirely driven by retail deposits. CASA ratio also improved to 42.1%, with CASA growth of 33% year-on-year. Our cost of deposit at 4.97% has fallen below 5% mark for the first time in our history. We have further reduced our savings and fixed deposit rates by 50 basis points this quarter and should help lower the cost of deposits further. Our dependency on certificate of deposits and market borrowings has come down and is absolutely negligible now. [ Cautious ] disbursements. Our loan growth was at 6% Y-o-Y. Our domains have begun a growth journey in quarter 4, however, got interrupted due to the second wave. We have already seen uptick in disbursements in vehicle and microfinance for the month of June. On the corporate side, the portfolio realignment is behind us. And we have been -- we have seen a growth of 10% Y-o-Y and 2% quarter-on-quarter with the underwriting -- within our underwriting framework. Scaling up of new initiatives. We remain focused on scaling up affluent, NRI and merchant-acquiring business. Affluent touched a deposit base of INR 33,400 crores, growing at 7% quarter-on-quarter, and an AUM of INR 55,000 crores. NRI deposits are now at INR 27,500 crores, growing at 40% year-on-year. Our merchant acquisitions through Bharat Financials kept pace despite the lockdown and scaled up to 200,000 merchants now. Asset quality. The collection gained momentum since June after a temporary blip in May due to a nationwide lockdown. Overall collection for June was at 96% for the month. This has further improved in the last few weeks with the recovery in the -- with recovery in the activity levels. The impact of wave -- second wave so far on our portfolio has been lower than what it was in the first wave. Maintaining profitability of the franchise. We maintained a strong PPOP margin at 6% despite the weak operating environment. Our NII grew by 8% year-on-year, in line with the loan growth. Fee income grew by 18% year-on-year. We also reduced costs quarter-on-quarter by 1%. This, in short, maintaining a healthy operating margin. We have maintained comfortable PCR at 72% and increased surplus contingency buffer by INR 450 crores to INR 2,050 crores or 1% of loans. Capital adequacy. Our capital adequacy improved to 17.57% from 17.38% last quarter. The falling risk density and improving ROEs ensured the capital consumption is optimum. We have sought approval from shareholders for all forms of capital and borrowing. This is just an enabling resolution, and there are no equity fundraising plans in the near future. We are comfortable with the CET ratio of 15.59% and a CRAR of 17.57% as of June 21. CRAR, including quarter 1 profit, is 17.89%. Before I go into the financial highlights for the quarter, I wanted to share my views on key business metrics of growth, asset quality and digital evolution. Growth. Our growth in deposit at 26% have been strong for the past several quarters. This is as per our strategy of liabilities leading the asset growth. The growth is driven by retail deposits, and we remain committed to the PC5 ambition of retail as per LCR of 45% to 50%. We have also lowered cost of deposits by 108 basis points since I took over and to see further decline with rate cuts announced in the quarter. Our loan growth was 6%. We took a cautious [ pause ] in retail disbursements in quarter 1. The disbursements have already started improving in most of the segments we operate in. Corporate book, too, has started growing again after the debulking exercise. We thus see growth improving here on every quarter, and we will back ourselves to achieving the PC5 ambition of 16% to 18% growth. This, of course, is subject to the subsequent COVID waves and how economy performs, which could result in a few percentage points movement here or there. Now I'll come to the asset quality. Our portfolio of expertise, vehicles, microfinance and diamonds contributing 45% of the book are performing better than the market as disclosed in the investor presentation. Corporate slippages have also been range-bound for the past few quarters. The unsecured retail, that is cards and personal loans, have also done well in the second wave. Our SMA-2 book was at 47 basis points as of June 1. We are thus comfortable on the portfolio quality. We will, nevertheless, maintain relentless focus on collections. Our collections were impacted during the early part of the quarter due to accessibility issues and customers started clearing overdues from June, particularly in high subsegments like vehicles and microfinance. As a result, we saw slippages of INR 2,772 crores as well as upgrades of INR 845 crores during the quarter. The slippages net of upgrades were at 0.9% of loans. The mix of slippages is 38% for vehicles, 24% for MFI, [ 22% ] in other retail and balance 15% in corporate. Our restructured book as of June is 2.7% as against 1.8% of loans in March. With the incremental 0.9% of restructuring, only 0.4% was from fresh requests from under the May 5 circular issued by the RBI. And the balance of 0.5% was from the corporate accounts already under implementation as disclosed in the last quarter report. The restructuring is done for customers with good track record and will become viable post restructuring. We thus don't expect large delinquencies from this book. The credit cost would -- should even be smaller and well within the surplus provisions we can carry given the strong collateralized nature of the book. Our ECLGS book remains small at INR 4,640 crores, of which ECLGS 1 is of INR 3,040 crores, ECLGS 2 is of INR 1,600 crores and negligible from ECLGS 3 and 4. We have been conservative in our coverage ratios and building surplus provisions. The second wave outcomes are broadly in line with the expectations. And thus, we don't see a major risk to our credit cost expectation for the year, subject to any subsequent COVID wave and materially negative outcomes in telecom. Digital launches. While Digital 1.0 was about seamless digital onboarding and servicing journeys and employee enablement, as we look into the future, there are 2 clear shifts that we see happening. Banking is becoming more and more frictionless and invisible, and it is critical for the bank to be where the client is and embed itself in the customer's lifestyle. Customer experience and customer obsession will define competitive advantage in the long run, and we need to move away from being product-centric to client-centric. Towards that end, bank has created a Digital Centre of Excellence and is taking a comprehensive view to deploy new-age digital platform and build end-to-end digital client value proposition. This includes reinventing the experience layer by building end-to-end digital stacks with omnichannel capabilities across deposit, lending, payments and wealth; API orchestration and management through microservices-based stacks which enable high degree of agility and ease and flexibility of integration with various partners, making the bank ready for API banking and open banking or platform banking. A recent example of this is EasyCredit by the bank; modernizing the core stacks by moving to cloud-native microservices-based API-enabled core stacks which enable a high degree of scalability and reliability; robust data engineering and data science framework, which, as we move into cloud-based data management and working on advanced analytics and machine learning-led capability across use cases to drive client persona specific engagement, risk management, pricing and wallet share increase. Overall, this year, we should see our vision on the Digital 2.0 being implemented. We have created a Digital Centre of Excellence, taking a comprehensive view to deploy new digital-age platforms and build end-to-end digital value proposition. We are focused on 5 areas, namely: one, EasyCredit for unsecured retail loans; digital ecosystem for vehicles, particularly in the used car segment; merchant solutions; differentiated payment and finance solutions for individuals; SME trade and credit stack. We'll keep you updated on the progress of these 5 initiatives. Now coming to individual businesses. Vehicle finance. Our all vehicle finance categories have seen strong growth in quarter 4. However, the industry volume dropped in quarter 1 due to the lockdown. Within vehicle categories, commercial vehicles were affected the most while passenger vehicles did reasonably well. The tractors and construction equipment have continued good traction throughout the pandemic period. The dealership started opening up from June and are already seeing pickup in the demand. On-the-ground inquiries and discussions with manufacturers indicate that volumes are recovering. All the vehicle categories other than the MHCV should see disbursements getting back to pre-COVID levels in this month itself. MHCV disbursements are likely to come back by the festive season later this quarter. Quarter 1, as such, is a seasonally weak quarter, and we expect part of the loss growth to be recouped in the rest of the year. With focus on collections and lower disbursements, the overall loan book grew by 3% Y-o-Y. Collections slowed down in the month of May but rebounded nicely to 97% in June. The collections were supported by higher economic activity and unlocking compared to the first lockdown. Our portfolio continues to perform better than the industry as shown by the credit bureau disclosure. First, restructuring was implemented on INR 650 crores of the portfolio, which was much lower than the restructuring of INR 2,450 crores due to the first wave. The request for restructuring has started falling and fresh restructuring in the second quarter should be comfortably lower than what we saw in the first quarter. Of the total restructuring, overall, around 80% has come from the MHCV and 3-wheeler segments. As mentioned earlier, in the -- as mentioned earlier, the contact incentive segment such as luxury buses and auto rickshaws require support in this one-off crisis. Balance 20% is spread across all vehicle categories. Vehicle finance has long vintage and strong collaterals, which should keep slippages from restructured book range-bound and credit losses even lower than that, for which adequate contingent provisions are in place. As freight availability continues to improve every month, we expect collections and delinquencies to normalize by September, paving the way for fresh vehicle demand. The fuel price increase does put pressure on the freight earnings in the short term. The industry has always worked on a cost-plus margin and was able to pass on the increase in the input costs. Microfinance. Bharat Financial has maintained industry-leading performance. The second wave so far has been no different. We continue to work closely with our customers to ensure they normalize their financial incomes. Rural areas of the country did see higher COVID spread in the second wave. However, there was a marked change in the lockdown approach. State governments across the country kept a minimum 4- to 6-hour open window every day for essential services and goods movement, which provided necessary support to our customers. Within Bharat Finance, we have vaccinated over 80% of the employee base with minimum one shot and expect full vaccination in the next few months. This should help us navigate the subsequent development of COVID with much more comfort. Better accessibility, higher activity levels and working closely with our customers ensure stable collections in spite of the wide drop-down in May and intermittent drop-downs in June. Our collection efficiency as of June has been 89%. The collection has improved further in July so far to mid-90s. The slippages during the quarter was INR 674 crores or 2.6% of the portfolio due to accessibility issues during the early parts of the quarter. As the accessibility and the collections improve, we saw customers clearing up dues, resulting in upgrades of INR 443 crores or 1.7% of loans. The slippages, thus, net of upgrade were INR 232 crores or 0.9% of the loans or [ 1 ]. We have conservatively fully provided for the NPAs. Apart from this 0.9% net slippage customer -- apart from this 0.9% net slippage, customers with INR 500 crores of portfolio or 2% of the book have been booked restructuring during the quarter, and we'll see implementation happening in quarter 2. This is how COVID plans out. We have done negligible restructuring in the first wave due to availability of moratoria. Amongst the key states, collections in Bihar, Orissa and Maharashtra were above the average, while Kerala, Karnataka and West Bengal are coming up with a lag. We have also maintained traction on our new initiatives. We scaled our Bharat Money Store from 51,000 to 75,000 during the quarter. These stores provide financial transaction points at a walking distance within the village where we have presence. We have also scaled up merchant acquisition to 200,000 merchants from 170,000 merchants last quarter. With focus on collections continuing in parallel, we are cautiously looking at scaling up new customer acquisition. The credit demand in rural India remains strong. We are sourcing fresh customers in districts where collection efficiencies are strong. We remain watchful and expect to reach 50% to 75% of the normal acquisition run rate in quarter 2. The month of July has seen better disbursement and collections both compared to June. Of the retail assets. This contributes to 17% of the overall loan book and includes secured and unsecured retail assets. The book performed significantly better in the second wave, validating our tweaks in the credit underwriting. Slippages in the unsecured loans were at 2.8% as against around 8% in the first wave. Slippages from the secured loans were at 1.4%. The overall slippages from this segment were at [ thus ] around 2% of the loan book. Incremental restructuring in this book was immaterial. The collections have maintained good momentum, and June collections was around 95%. In credit cards, spend rebounded after a small dip in May. The spend -- June spends, at INR 1,838 crores, were in fact second highest in our history. We have tightened our origination criteria, and this is reflected in delinquency being less than half of what we had in the first wave. We have gained market share by a number of credit card customers during the quarter. We see the traction continuing and don't see any impact due to the recent RBI actions on payment of network providers. On the secured assets like loan against property and business banking, we have been cautious as the SME segment was subject to external shocks and with limited balance sheet strength. We are now comfortable picking up selectively and utilizing the GST information and [ credit bureau ] during the COVID period. We expect this segment to start -- now start growing each quarter after being stagnant for the past few quarters. Corporate bank. The corporate bank has started growing again and with the underwriting realignment and sell-down of the large loans reaching completion. Our large corporate book grew for the first time, showing 2% quarter-on-quarter growth after being on the rundown since I took over. The quality metrics in the terms of improving rating profile, shorter duration and granular exposures continue to drive our underwriting. Average rating profile of the corporate book has improved from -- to 2.68 from 2.92 Y-o-Y, which is equal into A rating. This is also reflected in the lower capital consumption. Our corporate fee, too, has started growing again after realignment towards the annuity base fees. Transaction banking and trade-driven fees contribute more than 2/3 of the corporate fees. Investment banking fees are moving towards pure advisory rather than balance sheet driven. We are fortifying our product offering in advisory space through talent acquisition and partnership with the ecosystem. Investment banking fee for the quarter was at INR 67 crores. Slippages during the quarter were INR 421 crores. This included one real estate account of INR 270 crores. I had mentioned in the previous analyst call, there is a resolution under progress, and we expect full recovery in the current quarter. Slippages outside this was small and spread across multiple accounts. In quarter 3, we had highlighted restructuring of INR 2,200 crores, which was invoked and under implementation. Of this restructuring, [ INR 654 crores ] was completed as of March 2021. We completed additional INR 1,122 crores during the quarter. That completes restructuring on the corporate side as the deadline was June 30. This backlog of restructuring contributed bulk of the increase in the restructuring during the quarter. We are very comfortable with the corporate restructured book given the resolution under way, and we expect very limited flows from restructuring to NPA. The corporate banking franchise has responded well towards the realignment and now has started the growth journey. The bank has all the key ingredients in terms of quality of talent and product, marquee relationships, along with surplus liquidity to drive agenda of growth at reasonable risks. We have also enriched our corporate mobile app to enable our corporate clients to transact seamlessly and conveniently. Through the app, our clients get one of the best trade services, including status and regularization of outstanding import and export transactions, initiate local and cross-border payments and [ we upload the stock statements ]. We now offer our corporate clients a full capability of digital stack for account win and transaction initiation. Gems and jewelry. This part of my commentary has not changed since I took over and continues to be so in this quarter as well. The book grew 4% quarter-on-quarter, and there are no NPAs on restructuring in this book. The diamond demand from the U.S. and China has been buoyant with opening up of retail stores, and we see momentum coming back in other key markets as well. This helped pickup in the working cycle utilization and driving 4% quarter-on-quarter growth. We do recognize in the long term, the competition for diamonds will be from the change in customers' spending habits. This is already reflected by the global credit demand from the diamond segment today at half of what it was 10 years back. Our approach in diamond is to finance working capital for generations of pedigree manufacturers. This is not a long-term project finance business requiring visibility over the next 20, 30 years of demand. If demand weakens any year, our portfolio has run down automatically with hardly any asset quality implications. Our growth aspirations are in line with the global demand -- diamond growth outlook. Overall, on the asset side, slippages and restructuring have been lower than the first wave, and we expect this to remain this way unless the pandemic returns. The collection efficiency continues to improve every week. The vaccination drive from the country in general and our employees, in particular, should reduce intensity of subsequent waves. Large sections of our portfolio has already resumed growth journey, notably in secured retail, microfinance, corporate and segments of vehicle finance. MHCV segment should also come back within the festive season. We have lost a couple of months' growth. And a part of this should get recouped during the rest of the year. We, as such, don't expect any material changes to our PC5 growth ambition as stated earlier. Now coming to liabilities. We have been relentlessly focused on retail deposit mobilization and saw continued traction in quarter 1. Deposit grew 26% year-on-year, driven by 33% year-on-year growth in current and savings account. Almost entire growth in deposits came from retail deposits as per LCR growing from 57% Y-o-Y and 10% quarter-on-quarter. With strong deposit flows ahead of loan growth, our CD ratio improved to 79% from 83% quarter-on-quarter. Certificates of deposits are maintained below 3% of overall deposits. Our cost of deposit at 4.97% saw a reduction of 6 basis points during the quarter and 108 basis points cumulatively since I took over. We have cut our savings account and fixed deposit rate by 50 basis points and should further support improvement in the cost of deposits. Our affluent business continued strong performance. Our deposits from this segment grew 7% quarter-on-quarter to INR 33,400 crores. The business also achieved a fee of INR 70 crores despite the lockdowns. Our NRI business grew to INR 27,500 crores, up 7% quarter-on-quarter and 14% year-on-year. Our market share has improved to 2.52%. Our growth was achieved despite there were no NRI homecoming this year due to pandemic. We have maintained our overall average LCR at 143%, and our running surplus cash balances and excess investment of over [ INR 54,000 crores ]. With this significant liquidity, we must let go borrowings, which are down 17% year-on-year and 4% quarter-on-quarter. The borrowing mix has improved towards long-duration sources with finer pricing. Overall, on the liability side, we continue to scale up our retail deposit base along with the reducing our cost of deposits. Share of retail deposits as per LCR has improved to 40% from 31% during the year. We remain confident of taking this into -- in high 40s as per our PC5 ambition. Digital traction. Our digital sourcing mix remained strong across products, including 96% for savings, accounts 93% for fixed deposit and 90% for insurance and investment business. And nearly 50% of personal loans and credit cards are originated digitally. Digital transaction mix has also improved to 92% from 86% a year ago. Nearly 2/3 of our service requests are now processed digitally straight through. During this quarter, we refreshed India's mobile app with cleaner interface and response time improvements. The new app has been appreciated by clients. And 85% of the users who tried the new app have rated it 5 star on the App Store. As a result, bank overall mobile app rating has improved to 4.0. The mobile app user base has increased by 37% and transactions by more than double year-on-year. As mentioned earlier, we progress our agenda on Digital 2.0, with the first of the launches through IndusEasyCredit. This offers an end-to-end digital journey for instant personal loans and credit cards. This is a microservices-based cloud-native API stack, which can be leveraged across sourcing channels. The entire process from sourcing, underwriting, KYC and disbursements happens in real time in a matter of a few minutes. The cost of processing as a consequence per application is expected to reduce by 85% to 90%. The microservice-based fabric gives it the agility to integrate ourselves with partners and ecosystem, [ largely ] making it ready for open banking and API banking. We expect to achieve the next milestone under Digital 2.0 with the launch of Indus merchant solution stack. This will be a digital-first proposition for small merchants and retailers. It is a unified stack for small [ retailers ], bringing all the payment, lending and banking needs under a single umbrella. Indus Bank regards data as a critical business source, and we are continuously working to harness, augment and organize data using advanced data management practices available. We have invested significantly in our data warehousing and analytical capability to drive both greater user engagement as well as to drive decision-making in terms of identification of fraud, enabling real-time underwriting and driving contextual personalized engagement and campaign. This is helping us to drive customer transactions, relationship value, traction and digital -- with digital partners as well as optimize risk cost. Overall, as mentioned earlier, we are working on 5 key digital initiatives for this year and should augment our growth journey. Before I go to the financial performance, I'd like to spend a minute on sustainability. Our Planning Cycle 5 strategy revolves around improving sustainability of the organization. While traction on financial metrics is well covered, we have also progressed on the nonfinancial effects. Broad areas that stand out in terms of our commitment to sustainability are focused on sustainable finance commitment and sustainable operations. In sustainable finance commitment, around 42% of the bank's total lending book today constitutes a sustainable finance. This includes climate, green finance and social finance, supporting livelihood, health care, education, et cetera. We are committed to increasing capital allocation here and to read this to 45% by 2023. This also goes through external assurance certificates provided by Big 4 audit firms. We have robust environment and social risk management system, which [ assesses ] the ESG risk in all corporate lending proposals. This also outlines a negative ESG list, which we will not finance. All medium- and high-risk ESG risk lending proposals require an ESG Committee approval. Regarding sustainable operations, the bank is committed to reduce its carbon footprint by 50% by financial year '25 over the baseline of financial year '20. The bank has already, during financial '21, reduced its intensity carbon emissions by 23% over the baseline emission of financial year '20. Bank has committed to be -- to entitlement of only ESG-compliant vendors. In existing vendors today, around 45% are compliant, and we are targeting 80% compliance. For a more inclusive organization and a diverse workforce, we're increasing women participation in the workforce from 18% to 22% and laying out several HR initiatives to increase, encourage and support women network. We have 3 green buildings already and have committed to all our pioneer branches will become green and plastic-free. As a result of these efforts, we are the only Indian bank to be included in the S&P DJSI Sustainability Yearbook for 2021. The yearbook showcases select organizations who have progressed well on sustainability aspects. It includes 21 Indian companies, and we are the only Indian bank amongst them. IndusInd Bank was also ranked 57th out of 914 global banking services companies assessed by Refinitiv ESG rankings. The bank was rated 78 over 100 by Refinitiv ESG ratings for excellent ESG performance, commitment effectiveness and high degree of transparency in reporting material ESG data publicly. IBL has also received the highest score amongst top Indian banks by market cap. For the sixth consecutive year, the bank retained its top position in Carbon Disclosure Project by securing highest band A, and being the only bank in India in the band A rankings. Now coming to the financial performance for the quarter. Quarter 4 witnessed a steady operating performance with NII up 8% year-on-year and operating profits at INR 3,185 crores, up 9% year-on-year. Our PPOP over loans was maintained at 6% in a tough operating environment. Our yield on advances was stable during the quarter. However, yield on assets fell by 8 basis points due to higher surplus liquidity. Our cost of funds was stable at quarter-on-quarter. As a result, our NIM for the quarter was at 4.06%. We carried incremental INR 12,000 crores of liquidity over the previous quarter, which impacted the NIM. Other income grew by 18% year-on-year. Client fees were lower as expected in a seasonally weak first quarter and also due to the pandemic. Strong treasury income of INR 575 crores against INR 273 crores in the previous quarter absorbed this one-off impact from client fees. We contained the operating costs, which were down by 1% quarter-on-quarter. Our cost-to-income ratio improved slightly to 40.5%. Now coming to provisions and some quality -- asset quality indicators. We continue to follow conservative provisioning approach. Our provisions for the quarter were at INR 1,844 crores. We have conservatively fully provided for the unsecured microfinance loans. Our GNPA increased marginally to 2.88% from 2.67% last quarter, and net NPA was at 0.84%. We have maintained strong PCR at 72% after factoring in slippages from the second wave. We have around INR 2,050 crores or 1% of the loans as surplus over provisions not counted in PCR. Total loan related provisions are at 3.6% of loans or 123% of the NPA. Our PAT continues to show a strong upward momentum, growing 10% quarter-on-quarter. Even though we have made provisions conservatively, profits for the quarter were at INR 1,016 crores. Our CRAR improved to 17.57% from 17.38% with lower risk intensity quarter-on-quarter. Overall, I believe we are getting comfortable on liabilities each quarter. We expect deposit momentum to continue with focus on reducing cost of deposits while maintaining the retail acquisition run rate. On the asset side, we have seen areas of domain expertise continuing outperformance in a tough environment. The corporate asset quality has held up well with changes in the underwriting policy. We expect the collections to return to normalcy by September and incremental restructuring to be range-bound. Most of our asset classes have already seen signs of growth, and we will back ourselves to achieve the PC5 growth ambition as economy recovers. We have been upfront in taking provisions and expect these to downtrend unless COVID resurfaces. The strength of our operating profit should now start reflecting in earnings and ROE. With this, we can start the question and answer.

[Operator Instructions] The first question is from the line of Suresh Ganapathy from Macquarie.

Yes. Sumant, just 3 quick questions. One is on this deposit growth and loan growth gap. So deposit growth is running at 25%, 26% and loan growth is at 7% in Q2. We have seen a decline also in loan book. Of course, I understand it's a COVID second-wave impact and stuff. But at some point in time, this gap needs to be corrected because you're now also running excess liquidity. Can we see, say, over the next 18 months deposit growth coming down and loan growth really picking up so that we have a more, what I would say, a steady-state balance sheet?

Yes. Suresh, absolutely a valid question, and we are also now seeing deposit growth coming. We have reduced our rates of deposits by 50 basis points in savings accounts and about 50 basis points in term deposits. And now we are as competitive as any other banks. Of course, we're not at 3.5% on a [ smallest ] year. We are at 4%. So we will also get there. Number two, I think if you look at our portfolio, Suresh, we have 49% of our portfolio in businesses like vehicle finance, microfinance and diamonds. While diamonds has done well and grown 4% quarter-on-quarter, and it will grow at 16% to 18% year-on-year, I think the microfinance business, we were very cautious in the quarter 1 because of [ COVID ] and we were focused on collections. I believe the demand is there, and we have already seen growth in that area coming up this quarter. And -- but we are focused on existing customers, and we will be at 50% to 75% of our normal acquisition run rate in 2 bank lines right now. On the vehicle finance book, I think we started seeing the growth in June. I think the April and May were very bad. And of course, June also had intermittent drop-downs. I think in July, except for 1 or 2 states, I think the business has started coming up, except in MHCV. And you will see us getting back to the run rate which we had already delivered. I think -- so that's on the business. I think on the corporate bank side, I think we are seeing growth. I think we will grow maybe a little bit higher than the industry, but we have seen growth coming back. And on the SME and the MSME side, we were cautious, but I think we've now accelerated now with the COVID playing out and the credit bureau data updated. I think this is time for growth, and we will see growth. Overall, we still feel that we will continue to do -- we will continue to be at 16% to 18% CAR, and we are not taking our foot out of the pedal. I think we will continue to deliver a 16% to 18% CAR over the next 2 years, and we are committed to that growth. Also, our CD ratio will be around 85% to 90%.

Okay. So all that should help margins. Okay. The second question or rather the last question is, your credit cost is, for this quarter, for example, the way we calculate is around 3.5% and your ROA has been around 1.1% for this particular quarter on an annualized basis you are talking about. So what do you think would be the longer-term sustainable credit cost once all this COVID thing normalizes and you reach a very steady state? Where do you think both credit costs as well as ROA is heading for you guys?

Suresh, you must see what we have done. And I think this is very important. I thought it is better to upfront provisions when I took INR 450 crores of additional provision. And I did not use any earlier provisions, and I kept the provisions ongoing, and we maintained a provision of INR 2,050 crores. I continue to believe that that will help us in the long run. And I think that -- if you look at our credit cost last year, which was 3.7%, Suresh, 2% for BAU cost and the balance, 1.7%, was the one-off cost which we had to take. We are therefore taking that. In my view, I think we should be less than 2% credit cost, and I continue to believe a normalized run rate of credit cost should be 160 to 190 basis points with the type of provisions which we carry. And I think that is where we should settle down plus/minus 5 basis points or 10 basis points here or there. But I think we should be -- and that is the stable credit cost for the bank. And I think we should be in the ROA upwards of 1.6% if we have to be a bank to be returned with 1.6% to 1.7% in my opinion.

Credit cost, your ROA is going to be 2.1%. I hope you've done the math. You're going to have the best ROA in the sector. So therefore...

But I don't think our credit cost can be more than that.

The next question is from the line of Kunal Shah from ICICI Securities.

So overall, when we look at it, the SA balance uptake, that has been quite strong also even on a sequential basis. How much would that be in terms of the average balances if you have to look at it because it's a pretty [indiscernible]?

There is never a disconnect between the average and the ENR. There is never -- it may be INR 1,000 crores or INR 1,500 crores here or there. There is never a difference on the SA balance because it's not made up of multi-deposits now anymore. What we had, we've lost it already. So please understand our SA balances. That is why the LCR will show a movement. Otherwise, my LCR would not show a movement. Have I answered your question? Yes?

Yes. Yes. Yes. Sure. Yes, got that. And secondly, in terms of the fee income. So if we have to look at it in terms of the overall disbursements as you were highlighting in April and May would have been slow, would it be fair to assume that retail disbursement would have been down by almost like 35% to 50-odd percent on a sequential basis? Or how would that be if I were to look it [indiscernible]?

It is not the right way to look at it. If I look at it, you have to go business by business. And I think that is where you should see the disbursement. So I think if you look at the disbursement, I think if we had, on the CFD, which is the vehicle finance, about a 45% decline in disbursement. If you look at MFI, we had about a 40%, 50% decline in disbursements. I think if you look at our, what we call, retail, I think our disbursements declined by almost 35% to 40% during that time.

Yes, sure. So just coming to this question in terms of the strength of the fee income, I think the way we have been highlighting that it's quite granular and very broad-based. So when we look at the sequential decline, that is still like 20%, 22-odd percent across most of the line items when we see, be it in terms of the loan fees and other. Okay, one trade is holding on. So do we see that, okay, overall in terms of the fee, now it should be relatively better than the balance sheet growth?

So right now, yes. I think at some point, I'll tell you the -- to get a -- if you press the pedal on the microfinance, the fee is only 60 basis points to 100 basis points. If you press the accelerator on LAP, which we are not growing, I think it's about 60 basis points. So I think loan fee may not grow. But our ambition has always been that the fee growth will exceed the loan growth always. And if you look at our fee, consumer banking fee constitutes to about 48% to 49% of our fees, about 21% comes from corporate banking and another 31% comes from trading. I think that mix will have to change towards 52% coming from consumer banking, around 21% to 22% -- corporate will remain between 21% and 22%, and trading income will go down as you see sequentially in quarter to about 22% to 23%. So I think it's much more granular. It's much more, now and here, transaction-based, and I think that's the fee which we like. So fee growth -- to answer your question, fee growth should ideally be greater than the asset growth.

Sure. And one last question in terms of the data point. So if I heard you right, you said 2.8% slippages in the credit card or unsecured portfolio. So this is healthy growth because when I look at the increase in the credit card GNPL, that itself is 2.8%. Maybe that would be after the write-offs and all.

You [ haven't taken ] to get that number. What you have to look, Kunal, and you are right, I think we start with PL. So you have to take both the books, and we have not written off anything in card. So the overall portfolio, the slippages are at 2.8% card NPL. So you have to take PL into account. Yes.

Sure. Sure. So this INR 2,300 crores, I understand 600 is MFI, and how would be the further breakup of -- sorry, if I have to look at it, of the INR 2,300 crores in retail, what would be the breakup of that?

On the...

Retail.

INR 2,300 crores?

Retail slippage.

Retail slippages.

Oh, okay. So you have...

You mentioned MFI.

No. No. We have INR 2,762 crores of slippages. INR 2,342 crores in retail slippages. I think the way to look at retail slippages are as follows: INR 1,060 crores in vehicle finance; MFI is INR 674 crores; unsecured retail is INR 248 crores; and secured retail, including MSME, is INR 359 crores.

The next question is from the line of Prakhar Agarwal from Edelweiss.

Yes. So just in terms of write-offs, if I were to look at write-offs, which segment is this coming from? So we have mentioned that probably credit cards, we have not written off anything. Is it...

No. No. Let me tell you what we've written off. So I think we have written off INR 938 crores, out of which CFD, which is vehicle finance, is about INR 384 crores. Secured retail is INR 130 crores. Unsecured retail is INR 135 crores. Microfinance is INR 100 crores, and corporate is INR 188 crores.

Okay. Okay. In terms of -- secondly, in terms of microfinance, if you could just tell me what is the power book and how is the movement being in power book?

So let me tell you, I think I can only tell you certain data, and I think it's not fair for me to give you. I think we have evaluated our book completely, and our CRO went and did the full valuation of the book right now. I think we have INR 500 crores in restructuring as of now. And if you look at -- I think you will see a normalized flow going forward after the restructuring happens in the book. And I think it will get into the normalization phase, unless and until we get the third COVID wave coming up. I think as long as the accessibility is there, most of our customers are paying customers, and we do not expect any subsequent losses, which are as an outlier in the industry. I think what may happen is there may be some flow-through in -- from the 90-plus which is there, which is also not very high as of now. Yes, the x-plus and the 30-plus book is a little bit high because people out there only pay 1 or 2 installments at a time. They cannot pay 10 to 12 installments. So the 30-book gets cured over a period of time. And that's not a number we disclose, but it's a book which is -- I can give you the comfort that the 60-plus book is well within what we want to achieve. So as for our leading bureau, I think if you look at our -- and it's in the investor presentation. And I think as of May '21, if 100 is the index, we are at 30 DPD, 43% of that index; in 60 DPD, 36% of that index; and in 90 DPD, 31% or 31 basis points of that index. So if you just look at it -- and these are disclosures, which we've given in the investor presentation, which is as per the credit bureau data.

But that credit bureau data is as of May. How is the thing moving June and July?

So it's much better. In fact, June has been much better and July is much better. So I told you our collection efficiency on microfinance is 89%, has moved to mid-90s now. And there were 3 states which were actually affecting us. And these were states like Kerala, West Bengal and this thing, Karnataka, and where I think 24% of our book was there, and we had a collection efficiency of around 83% to 84% there. Overall, we are at 89%. As you take out these rates, our collection efficiency was 92% to 93%.

Perfect. Just one last question. In terms of your MSME also, what we have been reading is that probably the performance or the [ timing ] of this order book has been related to better [ offsets ] across the board. How is your sense in terms of dealing with them? And second is in terms of your ECLGS, are you seeing some pressure points? Or probably you don't expect anything material out of the period, even though it is a smaller number.

On ECLGS, I told you that we've done a very small book of INR 4,646 crores, yes, which we have -- and the outstanding is INR 4,402 crores. And we have not seen any regular which have come from the ECLGS. I just saw about INR 20 crores or INR 25 crores, which were in the SMA-1 or SMA-2 bucket. I don't remember that. But that is all what I saw on the ECLGS book as of now. I have not seen anything. I don't know, Ramu, would you like to comment? I have not seen anything.

Yes. I think there is a monitoring of 12 months. That would also come into play, so quarter 2 to quarter 3. But we have not seen any trends on the, actually, main account, where only 20% is [ GP ] as of 80%. So those are not [ slim ] other than SMA would be higher. So we're closely tracking that. We'll see the quarter 2 and quarter 3 when we see it.

So on the main account, it's performing well, and we are not seeing any such stress coming out on the main account right now. That's what Ramu is saying. I hope you heard him. I didn't understand your first question, if you can just repeat that.

I was just asking about your outlook on MSME. So when we started with this cycle, probably there was a lot of concerns on MSME part of the book, wherein what other banks have also been highlighting that performance has been relatively better than what they initially anticipated. How has our experience been in on that side of the book?

So let me tell you, unsecured book on MSME, not advisable to do. Let me be very open and candid about it. I think the secured lending, you'll see the commercial vehicle segment. You will see our business banking segment. You will see our LAP. I think we are doing very, very well in all these 3 segments. And I think that part of the book is performing. Wherever it's secured, we are doing well. In our business, we have a very, very INR 400 crores or INR 500 crores of portfolio in the BBG segment, which are in the clean business loan segment. We've never grown that book. It has not done well.

Okay. So just one last data-keeping point. If I look at your presentation, so there are small corporates that's showing at INR 4,000-odd crores. Last quarter, it was around [ INR 5,300-odd crores ]. So is there any reclassification or what has brought that decline in that particular line?

Prakhar, there was some issue in reporting last quarter. We had corrected it later on. The year-on-year numbers are comparable. If you check the last year same quarter, which should be the same. There was an issue last quarter.

The next question is from the line of Gaurav Kochar from Mirae Asset.

One data keeping question to start with. What was the NII reversal for this quarter?

NII reversal. We'll get back. I don't have that number right now. I'll get back to you, Gaurav. I don't have that number right now.

Okay. Okay. The next question is on the recovery and upgrade. So I mean on the upgrade line, I can see some INR 627 crores plus INR 218 crores, so roughly INR 845 crores. Are these the loans that are repurchased and hence upgraded? Or these are the...

No. No. No. You can't -- no, no, no. Restructured is different from upgrade. So out of this, our right -- a large part of upgrade came from the microfinance industry where I think what happened -- that's why we were not able to access the client at all in April and May, mid-April to May. And we have weekly installments. So the 5 installments when it becomes huge, it goes into the NPA bucket. Yes, and it actually went into the NPA bucket. So that is where it happened.

Okay. Okay. So these are pure upgrades and not restructuring.

No. No. No. Not at all. Restructured, you cannot move it as an upgrade. How will you show it as an upgrade? I'm not able to understand. We've not -- we've shown NPA restructured and restructured.

Okay, sure. And on the recoveries, I mean, the INR 543 crores in the consumer side, which segment did it come from largely?

Okay. So I'll tell you, CFD contributed 20 -- sorry, recovery?

It's largely because of the sale to ARC for...

No, I'll tell you what happened. There is a sale to ARC of INR 400 crores and [ INR 189 crores ] of recovery. So that's the number. Sales to ARC is actually INR 364 crores and recovery has come across the board smaller amount, and MFI was INR 79 crores. Sale to ARC was INR 235 crores in CFD, and secured retail was 150 -- INR 100 crores to INR 110 crores.

Okay. Okay. Got it. And sir, on this recovery and upgrade front, how confident are you on your slippages for this quarter? How confident are you that you'll be able to recover this in the next few quarters?

So if you look at on commercial vehicle, my strength comes from what I'm seeing of the data. The clients slipped into a 90-plus DPD. He does not want a restructuring. He wants to pay the installment. More than 25% of the book already is less than 60 DPD. But it cannot pay all the installments right now. So I think on vehicle finance, we are very, very comfortable. On MFI, we've seen recoveries. As and when -- Kerala and Karnataka is opening up. So we will see recoveries this quarter on this. On the card, we've pressed the accelerator. We've seen recoveries, and it will start coming up. I think LAP, we are collateralized. So I think it takes time for the recovery to happen because the [ surfacing ] notice takes about, say, 12 to 18 months for it to get resolved. So I think we will start seeing recoveries very soon. In my opinion, I think next 2 to 3 quarters, we will have a substantial portion of recovery coming up.

Sure. That's helpful. And any full year slippage guidance for FY '22? Will it be lower than '21? Is it fair to assume that? Or will it be on similar lines?

See, I can't give guidance, Gaurav. That's not my -- not correct. I think on the portfolio, if you look at it, if the COVID 3 wave does not come through, we have then provided -- and we believe that our clients -- and we will get back to normalcy very, very soon if our collection starts happening. And I think the month of July is a testimony of an open month and a successful month, where if the city is open and if the districts are open, we're able to do collections. The issue is that trucks don't fly on the road or buses don't fly on the road. There is no way the client can give you the money. Because the guy survives on everyday tariff. So I think that's the issue which we face, exactly the same in MFI. On card NPL, I think the collections are already coming back, and I see normalcy coming back very, very soon on that. We've already, in COVID, do much better. I think it will only improve as we go forward.

Sure. Sure. And sir, last question on the telecom exposure, what is the total provision that we have made? And do we intend to make more provisions on that account?

See, you have to look at, first of all, the telecom exposure is still under discussion. Having said that, I think that we have followed a very conservative policy all the time. If you look at our COVID provisions, and you call it COVID, you call it contingent, it's INR 2,050 crores. Even if I take the worst-case scenario, today, I have an excess provision, which I'm carrying forward in that book. And I think -- in addition, I have INR 150 crores of extra telecom provision, which I provided. We will see how this provision carry goes off, and we will continue to create more conservative provisions if required. I do not expect that we will need provisions in the funded exposure side, not in the non-funded side as of now. And I think I'm saying on behalf of the Reliance Telecom exposure and what I've seen of it, I think we would be very safe within our provision framework to manage that exposure within the -- within what we have created, and we will create going forward smaller amounts, not this large amount, but smaller amount. We should be able to manage it. That's all I can tell you.

Okay. Got it. Got it. And sir, just one more data-keeping question. On the restructured book, the -- have we disclosed any separate provisions that we made on the restructured book? Or it's part of the INR 2,050 crores...

It is part of INR 2,050 crores provisions always.

The next question is from the line of Adarsh from CLSA.

Yes, sir, one data-keeping question. Can you just break out the existing restructured book as it stands today?

Yes, sure. Adarsh, yes, so if you look at the total restructured book, it's INR 5,650 crores. Within that, CFD is around INR 3,100 crores, secured retail is around INR 330 crores, unsecured retail is around INR 380 crores, MFI is INR 70 crores and balance is corporate.

So more than INR 5,000 crores of our restructuring is between corporate, whichever you know the 2 accounts or the 3 accounts we've told you already. And INR 3,089 crores is the restructured book on the CFD, where we are very, very comfortable.

Got it. So when I think about the book, right, and while we had some slippages in CVs and MFI, it's better than some of the NBFCs. When you look at the overdue buckets that we've had, do you get a sense that if the trend that you are seeing in July that continues in August and September in terms of collections, you get closer to normalized slippages in 2Q? Or because there are higher SMA-1, 2 buckets, you'll probably see a normalization only in the second half.

See, it depends on business. I think if you look at vehicle finance, I think with the type of stress these people have gone through, I think you will see a major part of normalization in quarter 2, but it can extend in certain segments like MHCV or tourist buses into quarter 3. So part of it may -- a subsegment of MHCV may get into quarter 3 and quarter 4 because I think tourist buses will take time to come back, or 3-wheeler segment, which is a very different segment, may take time until quarter 3 or quarter 4. They have to see a normalcy period before they start seeing that Because they work on -- they are daily earners, to a large extent, and that has to take some time to come back. That's number one. On the MFI side, I think we are -- we have already said that there is a portion of the book which is there. I think it will come to a normalized run rate now. But I think there will be a restructuring of about INR 500 crores to INR 600 crores, which will happen. And post that, the normalized run rates will start happening. Restructuring on MFI, we will take 70% to 80% provision. We are not going to keep, on a restructuring, a very less provision. We will take it and keep it aside. So I think that's what we will have to do, and I think that's already induced and that will come in the restructuring. And so that's what it is. On the credit card, as well as on LAP, I see the normal flows happening now going forward. And in fact, you should start seeing recovery as a consequence of that.

Okay. And my last question, Sumant, is on margins, right? You did mention that signed term costs have gone down or you've cut it down by 50 bps. Does that broadly allow you to get down to less risky segments and how the mix would be or some of it would accrete to margins as we go along?

I think we've always said our margin, our net interest margins, will be around 4.15% to 4.25%. I continue to maintain that we will not exceed 4.25% because we have a corporate book which we want to grow and want to balance our corporate book with the retail book. I can increase my margins to whatever. I think we've been consistently saying that we want to maintain our book at 4.15% to 4.25%. That's number one. Number two, I think the cost of deposit is also a message which is being said that the bank is now highly liquid and its ability to attract retail deposits have increased. And I think we are now in a stable environment on the granularization of liabilities. I think it does not always translate into profitability. And I think profitability is a measure of a lot of things, how your portfolios are built up, how do you want to balance your portfolio. And I think we will continue -- like I've said before, I think we must continue to maintain a PPOP of 6%. 5.8 -- we've always said greater than 5%, but we are at 6% right now. Our credit cost should get range-bound at certain point to 160 to 190 basis points. The bank should not have -- this type of business should not have a credit cost of more than 160 to 190 basis points. And that is why we -- I'm very comfortable with the provisions which I'm holding, and I'm very comfortable in what I'm saying as a consequence. Don't please extrapolate the current credit cost into the 4 quarters because that's the wrong way to do it. Yes, things can change if there is a COVID 3 wave or the economy goes down to a large extent. And that will not happen.

The next question is from the line of Shagun Verma from Goldman Sachs.

This is Rahul here. Someone asked -- just a few questions. This question has been asked in different ways, and I'm going to ask it my way. On the CV side, how much stress has been recognized, CV plus the bus segment that you're operating? You tried to answer in the previous question also. But just trying to think about a lot of slippages have been recognized in the last 2, 3 quarters. Some segments have still not really come back in the last 6 months or so. So how much stress has been recognized? How much more could we see absent, of course, the third wave?

Yes. So I have -- there is no better person than Partha who will tell you this. Partha, would you like to own the CV segment? Do you think there are more stress to follow and -- or in the CV segment and specifically, on the diesel segment, if you can give a story. Rahul, this is Partha talking now.

Unless the third wave really impacts as big as the first or the second wave, more particularly the second wave, I think the worst for the CVs or except for only one segment, the passenger segment -- passenger vehicle segment alone, especially the long-haul, the interstate buses and other things, which used to be the best of segment in -- best of commercial vehicle segment, is undergoing -- I mean virtually, there has been no movement for the past 1 year. We -- I'm really keeping my fingers crossed how long it will continue. It might take another 3 months. It might take even longer. It could -- even if the government gives permission for them to ride, people may not -- people may be very reluctant to sit next to each other for some time. So for that, I don't think there is any issue. That portfolio by itself is about -- close to about -- anywhere about 5% of my total overall portfolio, which has been restructured. And there has been -- the substantial portion of them, they have been paying despite the fact that they have not been earning. These persons have deeper pockets. Except for this particular segment, I do not see any other segment getting affected in the longer term or the medium term. I would rather -- if we cross this quarter the same way as July, from next quarter onwards, I think there will be a complete reversal of whatever has happened so far.

Just one more small follow-up. What's happening to the resale value of this passenger segment -- transportation segment?

Resale value is very, very difficult to mention, Rahul, primarily because there are -- people have not surrendered nor the courts are allowing us to repossess. It is -- in today's context, there's not much of vehicles which are available nor new vehicles which are just sold in this particular segment. Therefore, I do not see -- foresee any new passenger vehicle being sold by anyone of the manufacturer for some time. This will still have a certain amount of market, and this is a specific trade in which a person will -- some other person will come in and take over. It will be more of a loan takeover rather than vehicle sale in this particular category, I suppose. Today, it is too premature for us to gauge what should be -- what would be the resale because things will start forming up only by September.

Understood. Understood. Got it. Just on CDs, whatever we know in terms of the backdrop, economic backdrop, et cetera, what are you seeing? And of course, this segment hasn't really seen any meaningful uptake on the new CD side. When do you think would be realistic for us to even think about some revival of CDs? Government and provincial CapEx program has been continuing. But do you think that's going to be helpful? And on the other side, dedicated [indiscernible] is coming up. So just trying to understand over the next 12 to 18 months or so, how do we think about the CD cycles in terms of the volumes?

This particular question probably requires a very long answer, but we will speak sometime later, Rahul. But having said so, I'll give you a bird's eye view of whatever. See the CD segment, we cannot paint everything in the same brush in the sense that the tipper segment is doing extremely well. Therefore, there's a huge amount of pent-up demand. Goods, in particular, have also been -- there are certain segments in the goods segment which are doing fairly well. But excess capacity in this segment has been long drawn, and it has been there for quite long. Therefore, the market has pent-up -- I mean there is a certain amount of pent-up demand. There is -- it is -- what is slowing down is the COVID effect. As soon as COVID effect pans out, I think, reasonably, I would say that from the quarter starting October, you will see uptick. January quarter should be fairly good. And the next year, according to me, should be extremely good year for the commercial vehicle industry.

Got it. Just 2 more questions, 2 for Sumant and the team. Sumant, you've done a good job, I think, a good job on the liability side. Health care, et cetera, has improved significantly. You started cutting this, et cetera. Now of course, the market is what it is. But when you think about the market share gains, volumes will, of course, grow at whatever rate. But how should we think about the market share gains across different retail products over the next couple of years? How are you thinking about it?

So I think if you look at -- and I'll talk about the retail asset side of the business. We are on credit card. Credit card, a very negligible player at 1.62%. At that, we will go to about 2.2%. I don't think we have any ambition to be more than that as a player. We will -- our ambitions are to grow, at best, to INR 10,000 crores. So we don't have that ambition to be a very large player on the credit card side on the unsecured side of the book. I think on the vehicle side of the business, you'll note that in commercial vehicles, we are at 12.5% to 13% market share. It depends on which segment. On medium and heavy, we are at [ 12.6% ] market share. On the LCV, we are now at about 13.5%, 14%, aiming to be 16% market share and by the end of the year, going to 20% market share maybe. So I think that's a challenge which we are going after. And I think that's a segment which is growing, the LCV segment. And I think that's the segment which we want to go. On the microfinance side of the business, we have been -- always been 12% to 13% market share. And I think we will continue to be at 12% to 13% market share. But we will diversify microfinance into a very different model, which is a merchant-acquiring business, which we have talked a little bit, but we can talk about it later. But I think there's a huge opportunity on the merchant-acquiring side of the business where we believe that this business can make a very differentiated revenue model on its own. I think that's the business which we will take. But I think we'll always be between 12% and 13% market share. On diamonds, we have 25% market share today. And I think we will continue to grow the diamond business. And I think this business never -- it doesn't grow on -- it grows on transactions. Please understand, it will have a growth of 16% to 18%. It's not a 30%, 40% [ AGR ] business. It will never grow. It's a working capital turnover and a cyclical business, and we are fine with that. On BBG and MSME, we are at 2.8%. We've always said we want to be a 6% to 7% market share in PC5, and we will achieve towards that. On corporate, we are almost 1% market share, and we'll continue to be at 1%, 1.2% market share. That's our strategy. We will continue to focus on our domains in a nutshell. We will continue to gain or maintain our market share in our domains. I think new areas of expertise, affordable housing and merchant-acquiring business, we see a rapid growth in the -- these businesses. And credit cards and all will continue as a business to support the bigger businesses of the bank.

Understood. Just the last question on the vehicle financing slippages, if I got it right, you said INR 1,060 crores. Can we get a breakdown between CV, LCVs and the rest?

Yes. Right now, I don't have it, but you can talk to us independently or we'll upload it in the investor site.

Ladies and gentlemen, that will be the last question for today. I will now hand the conference over to Mr. Sumant Kathpalia for closing comments.

I think while closing the -- I just want to say that we had -- during our calls and during our meetings, we had said that we will have a INR 2,000 crore of restructuring, and we will move the gross NPA, plus minus 20, 25 basis points. And I think we've stuck to our guns on that. I think -- while, yes, I agree the asset growth has been a little bit slow, but I think it was important for us to consolidate ourselves on the asset before pressing the accelerator. The type of businesses we are in, we have to be careful in when we press. And I think there is a time for growth. I thought the time was quarter 1. We, unfortunately, got stuck in COVID. What I see of quarter 2, and I think I'm very positive in the way I'm seeing it -- of course, some parts of the vehicle finance business are -- the commercial and the -- the medium and heavy commercial vehicles may take time, but the light commercial vehicle, the tipper segment and all have started coming up. The personal vehicle segment has started to come -- tractors were always [ doing ]. So I see growth happening in our business now. And I think we remain committed to what we've said, 16% to 18% CAGR. I remain committed to what we've said on the credit cost. I think we are committed to it. We've got extra provisions. We will be able to manage the funded exposure of Vodafone also. If it comes within that, we are well provided. I can assure you, this month, to take care of that. Of course, if the guarantees are getting booked, we will review and see what has to happen. And we will be upfront in taking the provision, and we're very conservative in taking the provisions. We will not defer it to 4 quarters or 6 quarters. We will take it within that quarter or within to 1 or 2 quarters. I can assure you of that. I think the bank is well set. The bank is well positioned, and the bank is highly and have structurally corrected itself in the corporate side. Very well positioned in the domain specialization and at new areas of domain coming up because of the digital business and capability, which we are building. I think -- I can only say the good times are here to stay now. And I think we've seen the bad times, and I think the good times are back. So thank you for your support. And if you have any questions, we'll be able to answer it. Or you can contact [ Sinrujeet ] or me at any point of time, and we'll take the call to answer all your questions. Thank you.

Thank you very much. On behalf of IndusInd Bank Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.