Kotak Mahindra Bank Limited (500247) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the Kotak Mahindra Bank's Q2 FY '22 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Uday Kotak. Thank you, and over to you, sir.

Thank you very much, and good evening to all my analysts and investor friends and colleagues. As we come to a crucial 18 months in the post COVID era, it is -- at this stage, it clearly looks like we are moving from a pandemic to an endemic, something which all of us as human beings are beginning to deal with and accept more and more as a part of our regular lives. We are also seeing that there's a very significant change across many of us. And just as an example, we are doing this in the conference room here with my team here in a physical meeting after quite some time. So we are adjusting to what I would call as new next normal or never normal, whichever way we want to define our present and future to be. As we make this change, the big question around us is global macro and domestic macro in terms of how we see the way forward. Looks like on the global side, we are coming towards the end of the very, very easy money policy with the beginning of potential taper by the U.S Federal Reserve between now and the next conference call as things look today, and a gradual increase in interest rates sometime in 2022 calendar. On the Indian side, too, the bond yields have begun to move up. And in the last 20 to 30 days, there has been a reasonable movement in the bond yields from the short end to the long end. The short end, of course, you've seen the 1 year, our treasury bill, move up by 22% during like -- in the last few weeks, as also the 10-year, which is now around the [6 35] range. Again, a movement of 15 basis points. And it's belief that this will be a gradual, but very steady increase, not anything dramatic. So with a macro situation, which is still growth-oriented, some of the commodity prices, like oil going up, I would still see of the view that economic growth is very much on. The Indian recovery, as I look at on the economic side, has been significantly faster than what any of us would have imagined in May or June. And I'm keeping my fingers crossed that this festival season, we are able to manage without any significant damage of what is a worry of a potential COVID 3.0. However, with this good backdrop of a turning economy, I would just like to turn my focus to Kotak. When I look at Kotak in the 18-month period starting March, April 2020 into September '21, I see, on reflection, our approach at the early stage of the pandemic was that of an event we have never seen before, and someone who we have seen for the first time in our lives, which is true, and therefore, an unknown, unknown. And we did turn cautious in the early stage of the COVID cycle. The first 6 months post the pandemic coming in, which is April to September period, was a period where we, at Kotak, had moved into significant caution on the asset side, including on unsecured retail. Coming October last year, we began to feel more confident, but were still wanting to move in the area of secured loans and secured assets, and still cautious about unsecured consumer retail in view of the potential risks out of the pandemic and the risks costs and the stress costs coming out of the bank. One of the first product, which we started doing more aggressively in the months of November, December were home loans. And we did take a position reasonably, aggressively on the price of home loans. And as we started gaining more confidence, we also took a decision to significantly up our game on hiring. Around January, February, we took an oath that we will start hiring significantly, combined with being a little more open at that stage, even on unsecured retail. And as we started gathering that courage, we saw the beginnings of COVID 2.0 in April and May, and which again put us innovate some standard in our wheels as we were going down the path. The big difference between COVID 1 and COVID 2.0 is we did not stop our desire to start hiring. And if you look at the speed at which we have added employees, we have added between -- we've added nearly 10,000 employees in about a year's time. And in the last quarter itself, that is July to September quarter, we've added to the bank alone about close to 4,000 employees. So our acquisition engine for people, a decision which we took some time in January, February, which we should have implemented more by around May, June, but got delayed because of COVID 2.0, started coming on board in July, August 2021. And we have continued with that significant focus on building capability, building our engine and getting our growth engine race up. And fortunately for us, this time around, the growth has come back to the economy in July, August, September, and we were in a much better position than in the last 18 months of the cycle. And come around August and September, more in the second half of August into September, we began to see our advances and growth looking better. As a result of this, I'm happy to come back to you and say that our quarter-on-quarter growth in advances at the bank has been about 8%. And if I add credit substitutes, which is credit investment instruments, the quarterly growth is about 9%, which on an annualized basis, turned close to 36%, of course, of a lower base from last year. But we have seen our growth engine [ equally ] August, September and into the festive season, begin to show significant traction, more than we have seen probably in the last couple of years. Because if you would recollect, this slowdown of our growth engine is particularly on secured retail even before the COVID pandemic. Therefore, we come into this with greater capacity with a significant ability to grow off a relatively small base of our bank. And we also come on the back of a significantly higher confidence in the quality of our existing book, whether restructured or not. And on that, I'm happy to share with you that our restructured loans, which includes COVID 1, COVID 2 and also MSME, all 3 put together is a total of 54 basis points or 0.50% of our entire loan book. And obvious consequence of this is that anything other than this structure book has obviously been reflected in our NPL book, with the obvious implication on interest income because moment it goes into the NPL bucket [it cuts the integeral line without idea ]. The other remaining thing that we're seeing in our book at -- it is a much smaller historical unsecured retail book is our credit costs are running at back to around 63 basis points. And we see the overall existing book, including the credit cost in very good control. We have all -- this credit costs and the restructured book includes our entire ECLGS book as well. And I just wanted to share this with all of you. But when we come into this within August, September, which is showing us significant muscle on the growth engine on the loan side and the asset side, we are coming into this with the confidence of a very solid, high-quality low credit cost and a relatively low restructured book, combined with a very strong liability franchise, which we are now nearly close to 61% on current and savings account. Our current account engine has fired extremely well. It's grown to -- between the 30% to 35% range over the year, and it's continuing to fire pretty well. We are looking at ways and means to further push our savings deposit engine. But keep in mind, through this period, we have sharply dropped our savings deposits rate, though we have still hired some of the other banks on that. But we do believe that with some friction coming out of this drop, we now see an ability to be pushing our savings deposits engine also faster as we go forward. Therefore, if I look at overall the asset and the liability side, the asset side engine is revving up. We are sitting with significant liquidity. If you look at our LCR ratios, they are about 150%. Therefore, we have a lot of room with surplus liquidity on our balance sheet. The asset engine has just begun to crank up in the last couple of months. Our liability engine is on an extremely strong foundation, and we believe it will continue to grow. This is the overall situation with reference to the bank and its asset and liability position. At the same time, we are almost very enthused with our many engines on the capital markets side. We've had a really remarkable period and we continue to run with a very strong pipeline on our equity capital markets business being able to really work for some of the finance companies coming into the market. And that engine is continuing to work in the third and the fourth quarter of the current year. Similarly, our both retail and institutional equities engine, the franchise is also gaining strength and some market share. Our wealth management business is getting new customers and deepening the franchise. And of course, our asset management business has also shown a good growth on AUM as we go forward. Therefore, all the businesses around the market side also and what I call lean to investments are also working -- are in a very robust position. On the insurance side, we were the first to recognize the problems coming out of COVID 2.0, recognized it in our June quarter. We are now seeing normalization of that begin to happen in the September quarter. And we genuinely believe we are adequately provided on the life risk side as we go forward. So when I look at the situation, I would like to believe that the unknown, unknowns of the pandemic, which is what we started with 18 months ago, started gradually getting our arms around risk and return to acquisition, which we are today, there is reasonably greater confidence in our team here to now even further push the growth engine from the time which we -- as I said, August, September onwards, which we have seen, continuing to at the same time build the franchise, the brand and go out there and grow our customer businesses at the same time. I'm also happy to report that we have closed 2 transactions, which we think are strategically important. One is buying the portfolio of Volkswagen Finance, demonstrating our openness to go out there and acquire stuff, which makes sense for us and creates value for us. We also made an investment in [ KIPL debt] which is another -- just below 10% investment because we believe some of those spaces, both in the financial infrastructure space and consumer tech space are spaces, which we continue to be excited about. We believe we have a very strong capital position to be getting bolder as we go forward on a sensible basis without risk. And I just feel we are at a good point in this time and look forward to a period of more stable and sustained growth, and genuinely hope that we don't have any surprises coming in from the COVID pandemic turning into an endemic. With that, I'll request my colleague, Jaimin Bhatt, to take the presentation forward. Thank you.

Thank you, Uday. So I want to just take through the bank's standalone numbers first for this quarter, which is September 2021 [indiscernible] in the first quarter of this year. Our net interest income is at INR 4,021 crores, which compares with what we did the same period last year at INR 3,897 crores. While they're talking about the fact that we've had advances growth during this period, which is on Y-o-Y basis of [ 42.7% ]. We've seen a lot of the growth in this quarter, which is coming during the almost end of the quarter. In addition, of course, the advances have grown up. The investment portfolio has actually declined on a year-on-year basis. And to that extent, that's the best. Also importantly, we've seen the growth of the advances happening in areas, which are mortgages and secured payer activities, which are lower linking to that extent that [indiscernible]. The fees and distribution income during this period, we've seen a robust growth, which we've locked this period at INR 1,419 crores. And that income has happened most on the distribution area as well as on fees [indiscernible]. Distribution here is not just by the regular interest [ on an insurance segment ] but we've also had a very sharp rise in the syndication fee basis [indiscernible] comprising the regular activity on service charges on loan, on credit card related and other areas have continued to grow well and reached about [ 25% growth on levels of this segment]. On the overall cost -- on the employee cost, we ended this period at INR 1,177 crores compared with INR 990 crores of last year. Last year, of course, we had taken some small cuts, and to that extent that was -- which was restored thereafter. And as we take note in the [in the second part], we've taken a small hit on the ESOP related cost in this quarter. The nonemployee operating expense will be closed at INR 1,536 crores last year -- in this quarter. Last year of same period was a subdued period as activity levels had dropped significantly. And to that extent, the last year's cost [was indiscernible]. This quarter, we've also seen expenses going in areas, which are investment committed in a lot of the areas like card-related costs, brokerage expenses, or acquisition costs had gone up. The marketing and advertisement areas and other area where we've seen [ possibly not ] and recovery-related areas [ which have gone up ]. If I look at a 2-year period, which is the same period for FY '20, the operating expenses have actually seen a growth of about [ 50% provision]. Our provision for this quarter, we've taken a total of INR 424 crores, which includes INR 385 crores of advances. The large part of the investment provision is on account of investment [indiscernible] settlement of deliverables. On the asset quality, the gross nonperforming assets overall, we see drop in the quarter from INR 7,932 crores to INR 7,658 crores, which would take the GNPA from 3.56% as of June to 3.19%. And the net NPA, which was at 1.06% in September as against 1.28% a quarter earlier. Our slippages during this quarter have been at the gross level at [ INR 793 ] crores, but we've actually seen recovery in an [ upgrade ], which are higher than that during this quarter. As Uday mentioned, restructuring on the COVID-related stuff, we are total, both under COVID 1 and COVID 2, the total restructuring is at 0.21%. And our restructuring under the MSME segment is another 0.33% of our overall [ advances ]. The credit cost is at 63 bps for the quarter and [ as against] of the quarter 1 at 133 bps. SMA2 is continuing to be low at INR 388 crores as of September 30, which is both which are borrowed, which are outstanding of this more than INR 5 crores. We're continuing to have no sales to ARCs during this quarter. Our balance sheet overall [crossed INR 4 lakh crore mark]. And as Uday mentioned, our LCR average for this quarter at 153%. Capital adequacy is continuing to be extremely strong. We closed at 23.1% overall with Tier 1 of 22.1%. And as Uday mentioned, this is on the back of robust growth from the advances at 14.7% for the year and 8% for the quarter. Our Capital & Reserves towards the quarter as the bank standalone at INR 67,000 crores with a CASA of 60.6%. I request Shanti to take up with some of the digital orders, which we have made.

Thank you, Jaimin. I will start with our digital strategy and initiatives. Our digital strategy continues to be centered around our customers. Last time, I covered our digital acquisition and engagement strategies across our platform of saving, lending, payments, investment protection followed by AI [ settlement ]. This continues even during this quarter. We continue to invest in and enhancing our technology stack and platform, which is the backbone of our digital strategy. We continue building scalability, agility and resilience in our core tech infrastructure, including cloud for agility. In the application side, we have upgraded platform to be able to offer new features and customize solutions, thus enhancing the whole experience for our customers. In the digital channel, we continue to revamp our DIY, particularly in automation journey, providing a seamless, frictionless and convenient ability for our customers to transact. This investment in our technology stack will be a continued journey and will [ become ] a base for our digital platform. Mobile cost has always been a key strategy. In the last 2 years, we upgraded our mobile app significantly by providing customers more functionalities and greater choice across banking, payments, loan, cards, investment and insurance. By integrating shopping and lifestyle, we are now well into the journey to be a super app. Our customer-centric experience and functionality has allowed us to be consistently amongst the top rated banking app in both iOS and Android. Mobile transaction volumes have shown a 138% Y-o-Y growth. UPI transactions booked [industry ] and merchants have almost tripled now, 2.9x Y-o-Y over this quarter. The app enables the customers [50+] financial products and loan products and provide with wide range of payment product including QR, BillPay, Recharge, et cetera. To the key feature of Pay your contact, which we launched last quarter, we've added the ability to send gift to your contact and this has been [ revolutionary ]. Pay your contact has seen rapid adoption with about 3.8x transactions in September versus June. The shopping mall in the app came out of a 14 categories with e-commerce to customers with 15 live merchants. We added some more in Q2. This is a focus area, and we will add many merchants over the upcoming quarters. eCom transactions inside Kaymall grew 1.7x Q-o-Q. And the shopping and the grocery categories actually doubled too. We're aiming to serve our customers in vernacular languages on digital, and enable the top 4 used features in Hindi, [ Marathi ]. We are working towards Mobile 2.0, which is a state-of-the-art mobile platform in experience and our vision of the super app. Mobile 2.0 aims to personalize and customize the banking experience for customers and users who have full control to customize the app to suite their requirements. The app will be built with a screen using new-age cloud-based technologies without compromising on security. And even noncorporate customers will be able to use the app without opening an account for everyday payments, bill payments and shopping. Ecosystem. The strategy on ecosystem is in 3 parts: Orchestrate [indiscernible]. We are -- I already talked about the shopping mall, which is orchestrating our own ecosystem. We are building ecosystems for investments and insurance, which will be launched in the upcoming quarter. We are rapidly expanding fintech partnership network, and we keep experimenting on use cases and business plans. The Connected Banking partnership allows us to do banking within the platform with selected partners, and the initial update is promising. We plan to leverage regulatory network of Account Aggregator and OCEN for retail and MSME [ lending ] in the upcoming quarter. Retail Assets. We have been investing [indiscernible] end-to-end customer digital journey across retail assets to offers including home loans, credit card, personal loan, MSME. This will significantly enhance our retail assets' customer experience layer, engagement and friction-free delivery of products and services. This is across all our categories of customers, existing and customers through partnerships. Both DIY and [digital journey ]. All of this will go live in a phased manner across Q3 and Q4 of this fiscal. We launched WhatsApp as a service channel for various asset products in Q2 and have seen a significant uptake in usage. Merchant acquisition. Our new key focus area for Kotak. This business model has been changing given the multitude of payment options, both the digital transaction growth in UPI and end to end. We invest in the path on delivering a complete this year of free services with the launch of our merchant app, Kotak.biz, in Q2. Kotak.biz app accepts on both merchants for payments, collection services digitally, serve them digitally and deliver targeted offers in multiple banking and value-added services. We're upgrading our acquiring and payment collection [ in terms of the 4] of the merchant strategy and committed to delivering the [indiscernible]. We intend to scale the business, including through partnerships. We have partnered recently with Pine Labs for leveraging their existing network of merchants as well as new acquisitions. Corporate Banking. We have upgraded our transaction banking to expect on transforming customer experience in trade and cash management products. We introduced many features, which are industry first. Our aim is to provide a superior digital experience and enhance market share across the non-individual customer category. Some highlights. We launched the paperless end-to-end seemless trade service. Customers can do many things and transact easily through it. A WhatsApp Bot with a 3-click single window payment experience, which is an industry first. Payment+ CMS solution for HNI -- savings first, which is again the first in the industry. We have a pipeline of upcoming initiatives, which we launched in the next 2 transactions. Digital transaction highlights. Mobile will continue to be our key strategy and drive transactions digitally as well, 97% of savings volume transactions were in digital or non-branch modes. Now the deposits and lending. As Uday said, this quarter saw a return to normalcy right across market, acquisition, products and transactions. An average savings deposit growth YTD Y-o-Y to 11% and current account 32%, the term deposits 22%. The purpose continues on granular customer growth across digital [indiscernible] continue to contribute significantly to our digital customer acquisition. That's my thinking on [ 5 million ] transactions as of September 30. Our CASA ratio was at 60 point -- yes, 28.5 million customers. Our CASA ratio was at 60.6% as of September '21 versus 57.1% in Q2 last year. CASA and TDs below INR 5 crores comprised 90% of deposits versus 91% in Q2 last year. Swee deposits were at 8.3% versus 7.7% in Q2 last year. And the cost of savings is at 3.69% this quarter versus 3.87% in Q2 last year. Our asset profitability was strong across retail asset products led by home loans, LAP, working capital, business banking, personal loans, credit cards and consumer durables. Fee income showed good growth across insurance [indiscernible]. We've increased our market share in issuance of FASTag to 7% for September '21 on a monthly incremental basis. We are happy to share with you that we're the first bank to receive an approval for income tax, GST and central excise, which is direct and indirect taxes mainly after the opening of agency bank like [ UI ]. In October, we've also received approval for the pension business for all central government employees. We are working on anything at integrating our tech platforms and will be launching it too. Now to lending. Consumption denotes a good uptick in the quarter. All our retail lending products showed robust growth in volume [indiscernible] quarter 2. This helps us big market share in many products. The consumer bank. The consumer asset aggregate level grew 20% Y-o-Y and 10% quarter-on-quarter. Mortgages. We are a [best ever corporates ] quarter on fresh volumes for both home loan and LAP. Like Uday mentioned, we launched the [ price ] leadership campaign [indiscernible] of 6.5%. This has helped us acquire quality customers, strengthen our market share and widen our distribution, which will be the focus area. Personal loans. We had a strong quarter on volumes, with September being an all-time high. We see stabilization of this in this space and have scaled up our new customer acquisition, both in traditional and data-led digital channels. Cards. We saw a strong momentum in card spends this last year, making it one of the best quarter. We have stepped up our investments in marketing alliances and attractive offers across e-com physical partners. We are likely headed for one of our best months in card acquisition in October on the back of our upgraded tech stack. We announced and have entered into a full brand partnership with IndiGo, the market leader in aviation. With travel coming back, we hope to leverage this partnership significantly for our card business. So [indiscernible], one of the best quarter and the strong demand across physical and digital distribution in our tech stack, we intend to scale in this space through relationships with key partners and a strong data-led digital business. Working capital and business banking. The segments on increasing price demand with better business volumes and expansion of [ capacity ], aided by strong new client acquisition as well. Portfolio quality is holding well and better than pre-COVID, 85% of the book qualifies for [ PFM ]. Our focus remains growth by expanding distribution footprint, multiple and deeper channels and technology [indiscernible]. We launched healthcare financing in this quarter. This is a growing segment, and we see multiple opportunities too. Collection. Our key metrics are back to pre-COVID levels and in some cases even lower. During this quarter, we launched a fully digital DIY collection platform. This enables [ loaded gullible ] customer to pay their little installments in a nonintrusive manner. Apart from being customer-friendly, this platform will also help us bring down our collection costs [ in the cost ] bucket. We continue to invest in technology, analytics and capacity enhancement to grow our consumer app. I now request Kannan to take you through the commercial bank business highlights.

Thank you, Shanti. I will start off with commercial vehicle finance business. Commercial vehicle sales improved during the quarter as compared to the previous quarter, and so was the demand for finance -- commercial vehicle finance. Deployment of vehicles and capacity utilization of vehicles were better during the quarter. Loan availability is also improving. However, increasing diesel prices continue to impact the viability of the operators. Collection efficiency on demand has improved during the quarter and is as good as normal times. Intercity passenger transportation as well as tours and travels are showing early signs of improvement, though the school bus segment continues to be impacted. Demand for construction equipment finance continues to be good, mainly driven by government and mining contracts. The end of the monsoon season should lead to improvement in the deployment of equipment and better cash flows for equipment owners. Collection efficiency again here during the quarter has been good and is back to normal times. Demand for tractor finance has been good, helped by another year of good monsoons. A good harvest is expected to ensure robust cash flows in the rural agriculture markets. Collection efficiency during the quarter for tractor finance has been much better than the previous quarter. In the agri SME segment, demand for credit has been good, aided by good monsoon, stable agri commodity prices. Collection environment has improved. And collection efficiency on demand is back to normal times. Micro finance disbursements and collections have shown an improvement over the previous quarter. Collection efficiency on demand has shown marked improvement as compared to the previous quarter and is almost close to normal times. I now hand it over to Manian to take it forward.

Thank you, Kannan. I'll just take you through the corporate banking segment. As you can see, we've been talking about corporate banking and SME as separate subsegment within the corporate segment. So if I look at corporate banking, I will draw your attention to the credit substitutes at the bottom of that table. So if you look at the combination of corporate banking and credit substitutes, on a Y-o-Y basis, it has grown at about 17.5% and the Q-o-Q number is close to 11%. And if you look at the SME business, on a Y-o-Y basis, it has grown at about 24%. And on a Q-on-Q basis, it has grown at 8%. So we have seen good demand, and our ability to price has been good through this period and investing reasonable traction in both the SME side as well as the corporate banking side on the asset side of the business. But more importantly, I think some part the business has been quite wholesome. We have seen very, very robust growth in our PBT lines as well. [ DTM ] has been a triple-digit growth. [ FX ] has been quite strong. And our transaction banking business has been quite robust through this period. Both our custody business has been extremely strong during this period and current account other than custody has been remarkably robust. Of course, the transaction banking business has been driven by significant investments we are making in our digital, and like Shanti mentioned, that there are several first in the industry products will be launched. And we are seeing significant traction in the transaction banking business. Of course, the spread towards the later part of the quarter were slightly under pressure. But with interest rates rising, I think while we see some pressure on spread, I think in the ultimate end, it will give us better ability to price. The pricing power will get better. But broadly, we've been able to maintain spreads in the business through the year and through the quarter as well. The asset quality has held up quite well. Actually, almost negligible slippages and -- both in the SME as well as in the corporate segment. In fact, even the SME business, I can probably count the number of accounts in one hand of mine [indiscernible] costs also have remained extremely good, and the costs have remained good. Overall costs have remained good. And a good mix of fee as well as asset income has ensured that we have maintained a heavy after-tax return on equity on this business and is always our focus. I will now hand over to Mr. Jaimin to take you through. Thank you.

Let me take the quick run on the consolidated numbers. This quarter, we closed the consolidated profits at INR 2,989 crores, which is a far higher than what we did in the same period last year, which is INR 2,947 crores. Of course, significantly better than what we did in the previous quarter, which we have locked at INR 1,806 crores. We talked about the bank closing the quarter at INR 2,032 crores. The nonbank activities, therefore, has brought in 32% of our post-tax consolidated numbers for this quarter. This quarter has seen the 2 capital markets activities, Kotak Securities and Kotak Capital, record profits. Kotak Securities closed the quarter at INR 243 crores of post tax profits, while the investment bank had INR 58 crores of post-tax profits. Kotak Prime on the back of good recoveries has dropped in INR 240 crores of post-tax profit for this quarter. The other NBFC Kotak Mahindra investments coming up at INR 89 crores of post-tax profits. The life insurance company, which had a negative number in the first quarter, thanks to increase in claims, has got to a profit of INR 155 crores for this quarter. Those lower than the previous period, it has got into a positive zone compared to what it was in the previous quarter. The mutual fund entity is getting a total contribution of just below INR 100 crores for this quarter. We've got the overall advances at the group level also going up by 14% and for the quarter at 8%. Our total capital at the group level now at INR 89,600 crores. We've added capital to some of our businesses, which acquired that, which included the general insurance company, the alternate assets, as well as our pension fund activity. And we now have a book value of about INR 449 crores -- INR 449 per share. I request Gaurang to take up the life insurance.

Thanks, Jaimin. For Life Insurance this quarter, gross written premium grew by 21.4%. New business premium grew by 30.7% Y-o-Y compared to overall industry growth by 5.8% Y-o-Y. Most importantly, overall, our clean experience in this quarter was in line with the excess mortality, which we provided at the end of Q1. And in terms of our experience on -- in terms of our experience in investment bank of credit business, the term business -- individual mortality risk business. The individual and the group term businesses, the experience has been completely developed. So we don't have any provision relating to that. But in terms of our credit term business, still due to delay in reporting claims, we have to carry some provision, which we believe we are adequately provided. In case of our AUM, we have grown by 31.3%. Our profit for the quarter was INR 155 crores against INR 171 crores last year. And our solvency ratio continues to be strong at 2.61% -- 2.61x. I'll now hand over to Jaideep to take over the presentation for us.

Thank you, Gaurang. At Kotak Securities, the top line for this quarter is INR 613 crores, which is compared to INR 516 crores in the corresponding period last year, and INR 571 crores in the quarter ended June '21. The PBT for cash for this quarter is INR 325 crores, which is compared to INR 266 crores for the quarter ended June '21, and INR 315 crores for the last quarter. The PAT is at INR 243 crores, which was INR 199 crores in the same period last year, and INR 236 crores in the previous quarter. Our cash market share for the quarter ended September '21, is at 11%, which was 9.6% last quarter and 8.7% in the previous quarter. Some flavor on how the markets have behaved -- that the equity markets have behaved over the last few quarters. The cash daily volume in this particular quarter has been at INR 50,000 crores per day. The same number was at INR 56,000 crores in the previous quarter, and INR 46,000 crores in same period last year. Not so much of a difference in the cash market space. Similarly, in the futures market, this quarter has been at about INR 81,000 crores per day. The previous quarter was at INR 83,000 crores a day, whereas the same period last year was at INR 74,000 crores. The big jump has happened in the options market. The options market for this quarter is at INR 30 lakh -- [ INR 30.4 lakh crores ] of volumes per day which went INR 14 lakhs in the last quarter and INR 11 lakhs in the quarter at the same period, a big jump in the options space. I'm excited to inform that beta testing has started on Kotak Securities in retail trading engine in the last 2 weeks. We should see some traction happening in the months going forward. I'll now hand over to Manian for the investment banking business.

Thank you, Jaideep. The investment bank is having its best ever year. Of course, I'll just also mention that the Kotak Institutional Equities, which is reported within Kotak Securities is also having a great year, both in the secondary side as well as in partnership with Kotak Mahindra Capital Company's investment bank for the primary business. Apart from the fact that Kotak Mahindra Capital Company remains the go-to banker for the IPO business, we are seeing a good pipeline of advisory business as well, and we expect the advisory business also to do well in the current year. And of course, you have the names there. We are there in most of the large new [ A company ] business as well as the traditional businesses. So we have seen extremely good traction in the business and the numbers, of course, show up. The profit after tax in the quarter is INR 58 crore as against INR 14 crore last year. In the H1 this year, we have already crossed the entire year's profit last year. Much more than that actually. So continues to remain good and the pipeline continues to be good. Thank you. Sorry. I will also take on -- take KMIL. Kotak Mahindra Investments Limited is an NBFC, 100% on the NBFC. The primary business we run here are 2 kinds. One is the real estate -- corporate real estate business, the developer financing business and the structured products business. So on the corporate real estate business, we are seeing robust pipeline. And in fact, the asset quality in this business, contrary to what we thought at the beginning of COVID, has been extremely good and robust. And it has given us confidence to build this business. And we are now getting far deeper into this business. And we are getting entry with new customers and large customers. On the structured products business, of course, it's almost a no NPA business, and that continues to grow. And the outcome is, of course, there, you see the quarterly PAT is INR 89 crore as against last year, this period, this was INR 74 crore. And in the first quarter this year, it was INR 71 crore. So we are seeing good traction. And the net NPA position looks good. And we continue to be focused on growing these businesses. Thank you so much. And I will hand over to Kannan to cover Kotak Mahindra Prime.

Kotak Mahindra Prime had a profit after tax of INR 240 crores during the quarter. This is a comparison to the INR 79 crores of profit after tax, which we had in the previous quarter. Disbursement during the quarter has been much better than the previous quarter, though disbursements have been impacted by the supply constraints faced by manufacturers. Collection during the quarter has been much better, and collection efficiencies are almost back to normal times. During this quarter, Kotak Mahindra Prime acquired the car finance portfolio of Volkswagen Finance. It brings along with it, apart from the portfolio, 30,000 quality customers into our fold. I now hand it over to Nilesh to speak about the AMC performance.

Thanks, Kannan. Good evening, friends. Let me take you through our asset management business for the quarter ending September '21. Our total average assets under management grew 41% year-on-year to reach INR 2.71 trillion. Our equity assets under management, supported by market bonds, grew 67% year-on-year to reach INR 1.28 trillion. Our total average AUM market share reached 7.4%, an increase of 50 basis points over last year. Our equity average assets under management market share increased by 50 basis points to reach 5.4%. Our effective average assets under management growth continues to outpace the industry. We continue to serve investor requirements by launching both active as well as passive strength, focused on local as well as offshore markets. Our profit after tax grew 15% year-on-year to reach INR 97 crores. Our total assets under management across mutual funds, PMS, offshore, insurance and alternate assets grew 40% year-on-year to reach INR 3.81 trillion. Our relationship value across wealth priority and investment advisory grew 54% to reach INR 4.63 trillion. I will hand it over to Jaimin Bhatt.

Thank you, Nilesh. We will be open to taking some questions to come from the analysts.

[Operator Instructions] The first question is from the line of Kunal Shah from ICICI Securities. As there is no response from the current participant, we move to the next question from the line of Nilanjan Karfa from Nomura.

So one quick question. I mean, obviously, the current account engine seems to be firing quite well. Would you want to ascribe what exactly have we changed because when there are multiple engines that have worked over the last couple of years. I mean, earlier it was savings. Now, it seems to be -- the current accounts seems to be doing well for the last 3, 4 quarters. So any color there? And would you -- is it more related to, let's say, the IPO market or tell something more out there?

Yes. So the current account story is split into 3 parts in my view. One is, of course, the core retail engine is also doing well. That is also growing in a robust way. And as I mentioned, the second part of the story is the corporate. We have seen significant traction on the back of transaction banking in the corporate segment as well. And the third is, of course, the custody story, which also I mentioned. So all 3 segments have grown. Yes, of course, the fact that capital markets are good helps our custody business. So there is some element of that. But having said that, noncustody current account has also grown fairly robustly.

Okay. And this should be despite the 10% threshold that RBI circular had mentioned?

Yes...

Anything specific that you are doing, which is helping us?

No. So it's always a combination. So like I said, in the corporate side is this transaction banking, which works. On the retail side, we are focused on branches in current account data. And Shanti, you would like to add anything on the retail side, please go ahead.

Yes, Manian. So on the retail side, also, as Manian has said, we have seen robust growth. And we really sort of started bundling value-added services along with just current account, including our cash management solutions that I talked about and other value-added services. We focused on activating our existing customers much more actively on transaction. And all that has given us a result to us from the NTB. So even in the retail space, the focus is on bundled offering value-added services and, of course, lending when we look at the current account.

Yes, I'll just add that since you asked the RBI circular part. We have managed the circular part in a way that our losses are not significant. Yes, there are -- there is a bit of a loss, but that is, of course, relating to these numbers. But largely, we have been able to plan in a manner that we have lost very little of our book in cases where we could do a fairly exceeds the 10% we have done it. And this has been a process of over the last 6 months. We have managed it in a way that are -- in fact, I think our gains will be more than the losses.

And I think if I have to add in addition to what Manian and Shanti are saying, year of efforts on the current account sweep product is a differentiating factor at Kotak. So not many people are comfortable allowing sweep product on a current account. We have been offering that for a very long time. And therefore, -- I think it's inception. So there is a natural respect attraction for our current account customer where the ability to earn interest by getting automatic sweep in and sweep out about a certain threshold. And then also our ability to get more sticky current accounts and grow them is one of our differentiated proposition, a proposition we did not start opportunistically, but started ever since we became a bank. Therefore, obviously, in the early days, when you are wanting to grow current account, a sweep product naturally cannibalizes on the current account stock if you have a stock. But since we started in the current account with 0 stock, we continue that all the way for the last 18 years. And therefore, it is a much more engaging and sticky product for customers to engage with us on current account. And if you look at our sweep product, it is 8.3% of our total deposits. For a current account customer who would otherwise get 0 interest on his current account. By using sweep above threshold is actually benefiting and it's a superior customer proposition, which is now helping us also on the total stock.

Right. Can I extend probably this question quickly? But this will be a function of then the liquidity and the interest rate scenario, right? I mean, obviously, that probably, given the way you explained this, that would have a larger bearing beyond...

No. My point to you is -- for current account a customer making any interest earning is better than 0. Therefore, whether it's liquidity, low interest rates, high interest rate, if a current account customer gets 0 all the while, but has the ability above our threshold to sweep. He or she will always prefer that because if he -- we are making something in addition to 0 [indiscernible].

Sure. Sure. No, that point is well taken. Great. And how did we do -- obviously, there is a strong growth push that has happened. I mean, that was, I guess, a long time coming. But we did probably need to sacrifice a bit of spread for that. Would this continue in the next -- going forward, is there some change in strategy behind that? Or this is like a run rate kind of thing that you want to look at?

No, I think you've got to look at the mix. If you look at -- when we got into COVID, we have been cautious on unsecured retail even before getting into COVID. And we continue to be cautious on unsecured retail all the way up to end of June quarter because COVID 2.0 came in. Therefore, if you look at our quarter-on-quarter growth, even in unsecured retail, 10% growth in unsecured retail, which is 10% flat, okay? So we have maybe of a very small base. One of the reasons why you see, in the last 18 months, we've had a change in the mix because the stock of unsecured retail kept on going down and the secured fees become larger. That, obviously, the mix has an impact, especially where loan growth for the 18-month period was subdued, has an impact on earnings. But now, at a much lower rate of mix, the rate of growth, both in secured as well as unsecured retail is now running up. Therefore, overall, as a bank, we have growth in the quarter, including credit substitutes at 9% flat for the quarter. If you look at our credit card quarter-on-quarter growth, it's about 13%. And we have a much lower engine. We are picking it up and really making it grow faster. If you look at our consumer durable financing business, on a very low base, we have grown quarter-on-quarter at 76% flat. So we are now adding the help to our mix, albeit of a very low unsecured retail base, combined with a continued aggression on secured.

Right. I'll stretch this a bit and then last also ask this third question. So I guess, we are cautious on our unsecured retail.

We were.

We were. Okay. So now incrementally, that caution is behind us, right?

Right. If we have grown 10% quarter, flat, that's 40% annualized, no?

Right. Right. Okay. Okay. And the data keeping...

And more importantly, we think now there's a much better quality of distilled modeling, which we have, through which we can lend more aggressively than we could in the past.

Sure, sure. Okay. Understood. Data keeping question. The quantum of slippages and recoveries and upgrades, please, in an absolute rupee...

I've mentioned that in this quarter, we had gross slippage. I mean it's a gross slippage, I'll come to it in a minute, that's INR 1,293 crores, against which we have a recovery and upgrade of INR 1,350 crores. And when I say gross slippage, it includes people who slipped during this quarter, but also recovered during this quarter. If I adjust for that, the gross slippage -- the slippage will come down to below INR 1,000 crores.

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

Team, congrats on great set of numbers. One question that I had was, you do indicate higher billings is to now lending. The environment looks good. Just wanted to understand if you go back to historically benchmarking growth or certain signs of the market and all that. Given our low base, would you say that the equation can drastically change going forward? Probably some of it showed up in this quarter and...

I would give a -- I would like you to -- withouth sort of giving you a quarter type forward guidance, I would like you to look at, and something which we have put up as a chart in our Annual General Meeting, giving whole history of Kotak post global financial crisis, and you may want to see it. I'm not giving you any forward guidance. In global financial crisis, before the crises, and in the early stage of the crisis, Kotak was extremely conservative. And then you can see the start about how we really got the engines revved up. Our approach, I need to be very clear is that when unknown, unknown hiccupped, our natural tendency is to understand the risk before we jump into the water, okay? Now 18 months ago, we did not understand COVID pandemic. Maybe we were not smart. We did not actually understand the nature and the impact of this pandemic. And maybe give it some opportunities. Who knows. History will be the best judge. But as you get your arms around what this risk means and how the pandemic is becoming an endemic and what we get a certain level of comfort, we are not well understanding the risk, we are getting more comfortable and this is exactly where we are.

Got it. And second question is on cost income. Obviously, when business momentum goes up, some costs come in. But the cost ratios have kind of gone up, not comparing this to COVID lows, but otherwise, if it's kind of high at 46-odd percent. What's the trajectory as the loan book is builds up?

One thing I would like to put some very clear objectives on our game plan. I'm clear, whatever it takes for us to rev up our customer acquisition engine with the front-end cost, we will take it and we will take it aggressively. The cost may build up now, but customer acquisition engine both -- including a much faster physical and digital engine, we will spend. We are clear that this is a battle for ownership of the customer, and this is a battle not a quarter-on-quarter battle. Similarly, if we have to spend money for front-end growth of our businesses, including for the advances growth of the retail, and that means higher front-end cost, we are very open and ready to take the cost. That does not mean we are not focused on productivity, but we are making a distinction between ongoing operating costs, what is cost related front end for growth. And we are ready to take the front end cost for growth rather than worrying about quarter-by-quarter battle. I hope I'm giving my message about when you look at our cost to income, you have to consider certain base level of costs, which is for running the shop. And second for growth on customer acquisitions, technology and digital and a much faster canvas. So we are very clear. We have the very big advantage, vis-a-vis, the best of banking, or fintech, or consumer tech, call it by whatever may you want, we are a small 2% market share player. And this is the time for us to be taking on whatever it takes, including the cost from getting our immune up. Therefore, we have people often ask me, are you worried, "oh, so many players coming from consumer tech, fintech, banks getting more aggressive?" I said that [indiscernible] I am a 2% player. There's 98% of growth. And all that we need to focus on, where do we take the 2% up to. That's all that we need to do while keeping our nature conservatism with reference to risk and results.

And I'll just squeeze in the last question. The last couple of years, we've seen like tremendous amount of cost benefit. Sometimes obviously, there's a lot linked to franchise, but some of it is also linked to slower growth, right? When you don't grow the network doesn't really need to give out a lot of money today as a retail TDs and all that, right? As you ramp up this, do you see that pressure come up? Or how do you respond to this?

With reference to our liability franchise?

Liabilities, and the cost of liabilities because let's say, right, we hardly had any need to accrete TDs over the last couple of years with that. So...

At this stage, we have great confidence in our liability franchise and the engine. And it is up to us. Now keep in mind, yes, our power liability engine has slowed down. But keep in mind, there was a significant friction when a bank, which was giving 6%, starts making correction. We think we have passed the friction stage.

[Operator Instructions] The next question is from the line of Saurabh from JPMorgan.

Sir, just two questions. One is how should we think about your net interest margins. So you have excess liquidity on the book, that is 153%, but the incremental growth will probably be in lower-yielding segments as well. And that's reflected if you look at your core sweep of it's still flat quarter-on-quarter. So how would you think about the NIM trajectory going ahead? So that's the first one. And...

My position is pretty clear. I'm looking at the windshield in front, not the rearview mirror in terms of what my 3, 4 players [indiscernible]. We have very clearly said, and including you can see the early signs on that number, we are not only growing secured as you have seen. And I said this is very recent, August, September. Before enacting, we've grown 9% flat for the quarter, which is 36% annual. There are 2 important points. One is, we are at the advantage of base, okay? Second is the fact that we were very light on our part, which is reflecting in our set numbers, okay? Our past position is very high as reflected in our spread numbers. We have been very cautious on unsecured retail, therefore, in the mix that has gone down. We started first with a more aggressive positions on secured retail, particularly home loan. But we now actually feel as the pandemic moves endemic, we think we've got much better ability to analyze the data and we are getting significantly more comfortable with unsecured retails as we've showed 10% growth in this quarter in unsecured retail, flat, that is 40% annualized always of a much smaller base. And the second important point, which you need to keep in mind, in addition to secure home loans and unsecured retail is our business banking, whether it's working capital the banking in our consumer bank, or in the SME business, it is beginning to fire. And therefore, my approach to this is I -- whatever is the rearview mirror of last 18 months is a rearview mirror. We did get a little side step by COVID 2.0 to be honest, which just as we were revving up our engine may particularly end April to middle end June sort of brought up a little out of where we thought it will be. Frankly, we did not expect such a vicious 2.0. We now believe that, that has delayed us like few months, but the engine is ready to go. And August, September are good.

Got it, sir. That's clear. The second, sir, is, obviously, you've given a lot of details on your digital this time. I mean, can you just quantify what is the technology spend maybe in terms of what percentage of revenue, what you are investing in this business or any absolute amount?

I think we will give you that at the right time. I think my request to you is, as I've said to the earlier question, we are going to grow our front-end costs, for customer acquisition, digitization and technology because we think that is the future. The front-end costs will continue to be aggressive, but we are in a business of growing our customer franchise at a much faster pace. And at some point of time, we will share it with you when we change where we've seen some sort of stability.

Okay. Sir, but if you benchmark it to, let's say, Tier 1 private banks, would you be in line as a percentage of revenue? Or will you be higher?

I'm saying I am very clear, my future is consumer tech. My consumers -- my future is fintech. My future is maybe other private banks. My future is any [indiscernible] bank. My future is some unknown players. I have to be out there in the battle of the customer without any constraint by benchmarking against any one category.

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

Yes. Congratulations for a good set of numbers. So in terms of the home loans, so we have this rate offering. But even if you can explain in terms of building the capabilities with say, so is it more in-house or we are getting aggressive even in terms of the outsourcing that is happening because there is a good enough growth, which is happening on the home loan side?

Shanti?

Yes. Yes. So if you're talking about distribution of home loans, I think we are -- our internal channels, our own customer base, we work with external partners. And given what's happening in the market, both what's happening from a demand, the good pricing, low interest rate, we've been able to get business from all around. We have scaled our teams. We have scaled our internal capacities and thus, we are able to grow the business. The important thing is with this price, we're getting very high-quality customers, which can then become holistic banking customers. This is one of the gates we have opened and that's what it is.

So in terms of the new customer acquisition, which we are doing on the asset side, how much would be like say, already existing relationship with the bank on the liability? And so what is the potential to further cross-sell, both on the asset as well as on the liability side? So that is why I was getting to. So we are seeing a good growth all through on the asset side now. But what is the kind of profile. Is it like a new-to-bank? Or is it like say the existing customers when we are cross-selling?

See, it is different for different products because like I told you, we are on a growth phase in almost all the products. It can range anywhere from 25% to 50% in terms of new customers, but it ranges in home loans. I would say that anywhere -- we are getting a reasonable amount of NTB customers, new-to-bank customers.

Okay. And what would be the proportion of the outsourced and maybe in terms of the DSAs outside of our own branches and other networks?

Broadly, our own internal contributes anywhere still about 55% of our sourcing and the balance comes from the external partnership.

Okay. Okay. And secondly, in terms of, say, where we have extended ECLGS facility, can you give maybe -- I think it's been almost like, say, 8, 9 months into that, but how are we seeing the behavior of those customers?

Kunal, I think you may have missed the early part. If you look at our stress numbers, that includes flow-through into NPA from ECLGS customers, if any. And our overall restructuring on COVID accounts is both COVID 1 and 2 put together is 33 basis points, plus 21 basis on SME restructuring. And our credit cost is 63 basis points. So all -- this includes all flow-through in stress between restructuring and NPA...

Yes. So NPA and restructuring is good. I was just trying to gauge in terms of on ECLGS side post 1 year.

Kunal, if any ECLGS is getting into trouble, it will show in one of those two places.

Okay. Okay. So there is nothing like say there is no payment holiday or something and it will get reflected...

[indiscernible] we can put up, either it is in restructuring or it is in NPA or it's in SMA2. Our SMA2 number also we have shared. Our SMA2 number is also shared with you.

Yes. Okay. So there also -- so this takes into account everything. Okay.

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

Most of my questions...

Mr. Varma, if you can speak closer to the handset, please. Your voice is inaudible.

Yes. This is Rahul here. Can you hear me?

Yes, Rahul, we can hear you.

Yes. Thanks, Uday. I think most of the questions have been answered. But again, sorry to deliver on this OpEx point. So clearly, I think Uday, of course, good to hear that the outlook is looking better from the growth standpoint on the loan side. But on the OpEx side, when do you see the inflection would start getting reflected in the numbers on the operating leverage? And which are products you think could drive that. Is it going to be mortgages, which is what I think the focus seems to be at this point of time? Or is it going to be a combination of, let's say, consumer retail, various parts of it? Just trying to think through because like you also admitted that the OpEx, if needed, if you willing to spend. But at some stage, the leverage would be [indiscernible].

Hello?

Hello?

Okay. I'll ask my colleague, Dipak Gupta. Can you Kunal -- sorry, Rahul, can you hear, Dipak?

I unfortunately cannot hear him. I can hear you, though.

Yes. Dipak hasn't started talking that's why you can't hear. Okay. Rahul, basically, when you have growth, there will be some costs which will come upfront, and they will be investment costs. So as -- and then as for the time period, which grows high, these upfront costs will keep coming. So I think it is not easy to look at a leveling off level until you see growth itself leveling off. For example, if you are growing home loans at a certain percentage, yes, your operating costs will keep hitting you. And if that growth rate continues, those costs will keep hitting you until your level of growth, right? It's the same also on the liability side. While we keep on acquiring new digital customers, there is an upfront cost. And as growth rates are high, those costs will keep coming up. And it's very difficult for you to disaggregate the investment costs from the run costs to arrive at through what point of time you're going to level off. I think for the time being, I think let us just concentrate on the growth, yes? And as long as we are convinced that this growth is profitable, it is positive contribution. I don't think the cost, which is an investment varies away.

Thanks, Dipak. Just a small extension to that. So the PPOP ROAs, which is, of course, this quarter took a bit of a knock. Should we say that we kind of hit the bottom end from here, things should start getting better on the PPOP ROAs?

No, it will get better because you see your ROA to some extent also depends on the mix in a certain period of time, yes? What you see as ROA just now is the mix of this quarter, yes? As the unsecured piece starts catching up, the SME piece starts catching up, we will see that mix change reflecting in the ROA appropriately.

Understood. Understood. So one last question. So when you look at the mortgage piece on a stand-alone basis, just your spread seems to be pretty healthy just doing simple math would be easily north of 3.5% to 4%. Is this a comfortable threshold for you all to grow this portfolio? Or it could be even lower than that?

Are you hinting that telling Shanti to reduce the home loan rates further?

Kind of. Yes.

Rahul, all that I can say is in case you are looking for a loan, with the interest rate scenario, which you must be a better judge of this could be as good a time as any. So grab it as soon as you can.

Before it hits November. No, but jokes apart, I think the splits are reasonable for what I call an acceptable ROE, yes, given the growth opportunity and the customer proposition, yes? So I think...

And if I can add on this, we are actually quite surprised at the pace of inflow of demand for home loans, which we are getting.

Yes. So Kunal touched upon how much was in-house and how much was outsourced. That's now there is an overflow. So it's a very healthy sign really.

Got it. Just one last point just to wrap it up. In the previous quarters, around previous calls, I think, Uday, talked about the inorganic opportunity, which is out there and bank is always open. But as you look forward in the next few quarters and years, is it going to be more driven by organic now given that the outlook is getting better for you all? Or you say it's a fair mix of organic and inorganic?

Rahul, I think we're quite open. Having said that, we have a reasonable view about having [indiscernible] inorganic. And should it be appropriate, we will look at that opportunity in all seriousness. And we will do what is right. And the 2 are pretty independent in terms of our plan, how to think about the future. Obviously, the common thing is we care about getting customers.

Understood. And then on the consumer retail side, I presume more so?

No, we are also open to consumer retail. We also like customers in business banking. You've seen us, we are very focused on our business banking customers. They also help us in the liability side -- on low-cost liability. So we like -- also a whole stream of services income which come from that. Therefore, we like consumer. We like business banking customers. And on the other side, we believe the wholesale banking business is transforming much closer to the market side, which is where we are well adjusted for the market's opportunity along with the wholesale banking business, including that capital market business. So we manage our storage versus distribution well.

The next question is from the line of Jai Mundhra from B&K Securities.

One, sir, if you can quantify the ECLGS outstanding number that we have at the end of this quarter. And would it be fair to assume that 8% quarter-on-quarter growth that we have is more or less -- it will also be applicable to the people who had taken ECLGS borrowings at the beginning who are in the beginning?

Number is INR 12,300 crores -- close to INR 12,300 crores of ECLGS loans outstanding will be that, right? Yes. And like Uday mentioned earlier, we aren't seeing any difference in the behavior of that portfolio, vis-a-vis, the normal portfolio. If at all, it is behaving better in most products. We are just now not seeing -- so it's not such a big item to track separately is the way we look at it.

Yes. Because, sir, it would be a substantial portion of your loan book, right? So INR 12,000 crore is the ECLGS disbursement only. The corresponding loan book would be at least 30%, 35% of our loan book. And so it is reasonable to believe that this portfolio is also growing in line with the overall number?

No. If you look at it, it doesn't mean that [ INR 12,300 crore into 6 ], that's not the right way to do it because a lot of people who would have taken ECLGS have not necessarily increased their exposure. So if you look at INR 12,300 crore is the ECLGS amount. The absolute exposure to these entities would be of the order of about INR 55,000-odd crore.

Right. So even, sir, INR 55,000 crores is around 20% of your book. So there is not too much of a difference between this portion of the bank and the rest of the book.

No, that's right.

And I think we again, highlighted that if there was any issue in that book, it would flow into our restructuring or into our NPA and credit costs. We have given the details of all our restructuring -- SME restructuring, total cost -- total restructuring book in SME is 21 basis points. And our NPA numbers are already with you in our presentation. And our credit costs have also been shared with you at 63 basis points.

Right. Sir, the only exception could be, sir, that these -- because initially, there was a 12-month moratorium on this particular facility. I understand that there was no moratorium on the existing facility. So maybe that could -- I mean, the entire outstanding may be out of moratorium only in this quarter. So maybe...

On the primary outstanding of loan, there was no moratorium, right? The moratorium was on the 20% lending that was there. So you're still saying the primary loan on ECLGS. If he was not able to pay that it would already show up in our NPA.

Right. right. So no. So that clarifies. The second point is, sir, if you can comment while the loan growth has been very strong, even on Y-o-Y, Q-o-Q, the same has not been reflected in the NII on Y-o-Y and Q-o-Q. Part of this, I think you have explained that part of that is because of the mix. But is there any -- if you want to sort of provide some more clarity there because I...

Growth has started in August and September. So NII takes time to make.

Just I would add two points. One is you rightly said there's a mix change. The growth has happened much more if you're comparing on a Y-o-Y. When we looked at credit cards and all, while the quarter that has a positive number, the Y-o-Y number is actually negative for both the unsecured pieces. So that does impact. So the mix is much more in favor of the lower-yielding fees. The third thing, NII is also comprised of not just advance. NII I also compliance of what you make on investments. As I mentioned, while the advances have grown, the investment book has actually shrunk from a year-on-year. And to that extent, the earning assets has grown only about 5% during the year-on-year period.

Understood. And the last data points question, sir, if you have the RWA number for the stand-alone bank. That is it.

Give me a minute I will. As of the end of September will be [ INR 2 lakh, 83,000 ].

Ladies and gentlemen, that was the last question for today. I now hand the conference over to Mr. Uday Kotak for closing comments. Over to you, sir.

With that, I thank all of you for spending time, and I wish each of you a wonderful Diwali and New Year, and look forward to meeting you in both in the summer as well as the calendar new year, soon. Thank you.

Thank you. Ladies and gentlemen, on behalf of Kotak Mahindra Bank, that concludes this conference. Thank you all for joining us, and you may now disconnect your lines.