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

Ladies and gentlemen. Good day, and welcome to the Kotak Mahindra Bank Q3 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, Mr. Kotak.

Thank you. And good evening, colleagues. I wish you all a very happy new year. And hopefully, 2022 calendar, you'll see the end of COVID from being a pandemic to an endemic. I'm very happy to share with you the financial results of Kotak Mahindra Bank on a consolidated basis, we have had a profit after tax growth of 30% year-on-year. And I'm extremely happy to share that our business model of concentrated India diversified financial services is working well. As you know, we are in a broad range of financial services, which includes banking, securities, asset management, investment banking, insurance and financing. And you see a very strong growth across the different segments of financial services. As you are aware, our group also owns 100% economic interest in all these businesses. If you look at the mix of our consolidated profits, the bank contributed 63% of Q3 FY '22 consolidated profits, and we look forward to a broad continuing performance of the overall consolidated profits of the bank. Coming specifically to stand-alone banking, I'm happy to share that we are going for growth. Growth in our advances is 18% year-on-year and interestingly, 8% Q-on-Q. Our consumer bank grew at 29% Y-o-Y and 10% Q-on-Q, which is nearly 40% annualized. So the overall advances engine is now working well. Another significant step in our growth trajectory is the step-up in our customer acquisition. We added 21 lakh customers in Q3 '22, versus 8 lakh in the same quarter last year, a nearly 3x growth in new customer acquisitions. As you can see from -- we are focused on growth, even if it puts some pressure on operating expenditure in the short run. Another very important aspect is -- Yes. Another important aspect of our performance is asset quality. And we are quite enthused with the outcome at the end of quarter 3. At the bank stand-alone, our annualized credit cost on advances is now 35 basis points, of course, excluding the reversal of COVID provision. The slippages for the quarter are down to 0.3% of advances. In fact, recoveries and upgrades are much higher than the slippages and the standard restructured fund-base outstanding under all trade works COVID 1, 2, MSME resolution framework is 0.54% of the advances. So we are actually seeing a significant improvement in the asset quality and the quality of our balance sheet. Next, and this is an important item as we see interest rates moving up. The overall duration of our fixed income bond book is at a low of around 1.5 years. Having said that, we have a very large part of our fixed income book which is not in HTM. As a result of which, in the Q3, we have taken a mark-to-market provision through the P&L of INR 484 crores on this account. But going forward, with a relatively low duration of our fixed income bond book in a rising interest rate environment, we feel our bank is very well positioned from a risk matrix point of view. Further, as interest rates move up, we believe strategically, a high CASA ratio of 60% will be very, very handy. And all this is in the backdrop of our NIMs now at 4.6%. Also important, if I go back to the consolidated numbers. Our return on equity is now at 15%, keeping in mind despite a high capital adequacy of 24%, including the profits, of course, for this current year, we're at a very high capital adequacy of 15% ROE, and also, if you look at the nature of risk we carry on our balance sheet, we think it's a very measured and well moderated and structured risk we are carrying. So all in all, we think we are well geared for 2022 and beyond and happy to continue with the strengthening of our broad financial services model, and we believe different engines will fire at like parts of time, and that is the core strength of our business model. With that, I will now hand over to my colleague, Jaimin Bhatt and thereafter to other colleagues to take you through the various aspects of our financial performance. Over to you, Jaimin.

Thank you, Uday. Let me start with the consolidated numbers. And as Uday mentioned, we closed this quarter with a post-tax profit of INR 3,403 crores, up 31% growth for now on a Y-o-Y basis. And as we can see, the bank contributed for this quarter, 63% of the overall profits of the bank -- of the consolidated entity, which is down from 71% in the same period last year. As Uday mentioned, we own 100% of our subsidiaries, and a number of our subsidiaries actually do not need the capital, which goes with growth of their businesses. But nevertheless, each of the segments in the subsidiaries have actually grown pretty well in this period. The lending entities, which includes Kotak Prime did pretty well in terms, on the back of improved collections also coming in after taking the hit on account of the increased provision requirements point to the RBI change. So Kotak Prime ended the current quarter with a profit of INR 254 crores as against INR 149 crores a year ago. The other NBFC came as also again talking a profit of INR 111 crores. The capital market entities going on the back of voluntary in the markets, Kotak securities recording of INR 270 crores profit and the investment bank, which is KMCC, bringing in a record INR 103 crore profit. They've been engaged in several market deals during this period, both on the IPO and the advisory side. Life insurance, which had a negative first quarter this year have clocked in INR 247 crores this quarter compared to what it did a year ago which was INR 167 crores. The mutual fund business is bringing in close to INR 150 crores post-tax profit this quarter to an extent, helped by some investment gains in the trust company, which is a pretax level of INR 46 crores. As I mentioned, the end period at the consolidated level with a capital adequacy of 24.5%, which includes Tier 1 sale of 23.7% of pretty healthy ROA of 2.6% at the consolidated level. At the bank stand-alone level, as we spoke about, the post-tax profit ended with INR 2,131 crores, which is about a 15% growth on a year-on-year basis. Our net interest income grew about 12% on a Y-o-Y basis and about 8% on a Q-o-Q basis. On the back of Advances growth, which came at 18% Y-o-Y and 8% Q-o-Q. If you add the credit substitutes, the total growth of credit has been at 20% on a Y-o-Y basis. And the growth has come across the board in the consumer segment, the commercial segment and the wholesale segment, which my colleagues will take you through as we go forward. The net interest margin on the back of a high CASA of 59.9%, again continuing to be pretty healthy at 4.62%. Our fees and services has continued to be a good growth area, a 33% rise on a year-on-year basis coming on the back of improved revenues, both on the distribution front as well as in the general banking area. As I talked about the Mark to Market book. We have -- our bond book duration is at 1.58 years, but a large part of our book is in non-HTM. Our HTM portfolio is 38%. As a result, the non-HTM book, we have to take a Mark to Market hit as of the end of December on the back of the rise in interest rates. That has meant that we've taken mark of INR 484 crores on the MTM loss for this quarter. We have seen the employee cost go up this quarter on the back of family pension provision, which came out of the bipartite settlement which the IBA entered into with the bank units. That has demarket of INR 100 crores for this quarter. And again, as Uday talked about, we have continued our push for growth, and that has meant continuing to have expenses in certain areas. Apart from growth of employee cost, this has meant rising costs on the customer acquisition side, both on the liabilities and assets. We also had increased advertisement and promotional costs as well as cost increase in the whole extent. And as we saw the customer increase this quarter at 21 lakh is significantly higher than what we did a year ago, which was 8 lakh. Our asset quality has improved for this period. Our absolute GNPA went down from INR 7,658 crores to INR 6,983 crores. Our slippages during this quarter was all of INR 750 crores, where against that, we saw recoveries and upgrades of over INR 1,000 crores. And this is the second quarter in succession where we've seen slippage is lower than recoveries and upgrades. Our credit cost down to 35 bps without taking the COVID write-back position. Our SMA2 continued to be low at INR 298 crores. Our overall restructuring, again, we've been careful. And if I look at the standard restructured book, whether it was through COVID-1, COVID-2, MSME resolution framework all put together is 0.54% of our overall book. On the back of improved realization on the problem assets. We took stock, and we have written back COVID provision of INR 279 crores. We continue to carry INR 1,000 crores of COVID provision on our book still. And our overall provision numbers today are higher than what we see as the GMP number. So after all this, we end the quarter in the bank with a post-tax profit of INR 2,131 crores, which is about 15% higher than the same period last year. I would request Manian to take up the corporate bank assets up, please.

As we usually do, let us look at the corporate assets in 2 parts, the SME part and the regular corporate bank side. On the SME side, as you can see, the momentum of growth continues. Y-o-Y growth is about 21%. Our NPV acquisition remained robust through the quarter and we can see this momentum carrying forward. On the corporate side, you need to look at the number along with credit substitutes that is reported there. So if you look at the combination of the assets have gone up from INR 77 crores, INR 581 crores to INR 86 crores, [ INR 659 ] crores with some of the two. That's close to 15.5% kind of growth. So overall, the segment, the corporate and SME together have grown at about [ 16.5% ] Y-o-Y. In the case of SME, while the MTV was good, we also saw some small uptick in the utilization number. However, we are not yet seeing any pickup in term loan kind of products, and we are still seeing traction on the working capital side. At the top end of the corporate, which is the conglomerate Growth has been driven more by credit substitutes than by advances clearly, Advancing growth is muted. But the combination of the 2 were quite healthy. And even there, we are seeing growth driven more by working capital than by long-term loans. Even the next rung of corporates, what we call large corporates. They seem to be following the trend that the top end corporates and conglomerates followed, relatively, we have seen uptick in the credit substitute side there as well. In times like this, when pricing pressures are high, we find credit substitutes as a better method to do some of these lending. Overall, within corporate bank, NBFC as a segment saw some uptick again probably because mutual fund trade funds were not available as a source to them and they came back to banking sector for borrowing. On the CRE side, while we remain cautious on the commercial side, we have seen very good traction on the residential real estate and you can see the Q-o-Q on -- Q-o-Q on this has been significantly better than Y-o-Y, the residential real estate side. And it is more than 80% of our new disbursements are on the residential sector. Between the sub and the bank, I think this segment trended has revived, and we see growth going forward. Of course, we are keeping our focus on the top end, and there are a lot of new customers we are able to add in this segment. Apart from this, our focus on transaction banking continued. We went live on our online trade portal. We created a new CMS platform and migration of customers onto the new platform is in progress and is progressing quite well. Several new features were launched during this last quarter. And overall trade FX CASA and BCMC, all the non-risk revenues have done quite well through the quarter. We are also our custody business during these times when there has been an IPO, [ sing-of IPOs ] has also done extremely well to help our CASA growth. Overall, the health of the business remains good, the ROE and risk adjusted returns, RAROC remains good, and the asset quality, of course Jaimin already talked about, remains quite healthy and in all segments of the business, and we look forward to good momentum carrying forward. Can I hand over to Kannan.

Thank you, Manian. I will start with the commercial vehicle financing business. Heavy commercial vehicle sales further improved during the quarter as compared to the previous quarter. Capacity utilization in the Goods Transport segment was better than the previous quarter. Cash flows for the transport operations was better due to a combination of better utilization, lower fuel prices as well as stable freight rates. Our disbursements are in line with the better performance of the vehicle sales. Passenger transportation, staff transportation and school of segment continue to be impacted. [ Election ] efficiency on demand in this business has been good during the quarter, which means better than during the previous quarter. Demand for construction equipment is good, both in the growth and the mining segment. It continues to be good, driven by government contracts. Demand for smaller equipment at the retail level has been a bit muted during the quarter. The retail customers, the smaller customers have been impacted by the long rise cycle and hence, addition of new equipment is a bit slower there. Capacity utilization of equipment, again, has improved over the last couple of months, which should lead to improved cash flows for the entire industry as a whole. Collection efficiencies on demand against your has been good and it's as good as normal times. Factor sales during the quarter has been better than the previous quarter though lower than the same quarter last year. Total cash flows continue to be strong, although a bit delayed in parts of the country due to the prolonged monsoons. Our disbursements on the fact of an asset as being good, and we continue to maintain our leadership position in the segment. Strong cash flows should lead to continued good demand in the coming quarters. [ Election ] efficiency on demand has been good again in the segment. On the Agri Finance segment, demand for credit, both working capital and CapEx in the Agri SME and the Agri value chain continues to be good, aided by good monsoons and increasing commodity prices. Collections during the quarter has shown an improving trend as compared to the previous quarters and is closer to normal times. Our microfinance equipments are grown as compared to the previous quarter. Demand for credit from micro and small entrepreneurs continue to be strong in the markets in which we operate. Collections in the market, we operate are improving and collection efficiencies are as normal times. I will now hand it over to Shanti to take you through the consumer banking, please.

Thank you, Kannan. In continuation, I will start with [indiscernible] -- consumption to a good uptick in the quarter being a festival quarter -- all our retail lending businesses showed robust growth in Q3. This helped us gain market share in many products. As a consumer asset aggregate level, we grew 29% Y-o-Y and 10% Q-o-Q. This is on the back of a 10% Q-o-Q growth in Q3. Mortgages, we had our best-ever quarter on fresh volumes for home loans, a price leadership campaign of 6.5% during the festival season helped us acquire quality customers and strengthen our market share across all the customer segments. We continue to strengthen and widen our distribution in this very key focus business area. As the business momentum picked up, we also saw good volumes in [ LA ]. We saw a pickup in some commercial, but more an industrial property purchase for [indiscernible]. We continue to consolidate our market share. Mortgages grew at 38% Y-o-Y and 12% quarter-on-quarter. Unsecured rating, start with cards. We had one of our best quarters on cards with acquisition at 3.9 lakh cards. Bulk of the sourcing has been from existing customers. We rolled out attractive offers to our customers in marketing alliances across e-commerce and physical partners across the country. Kshitiz campaign and brand ties to Apple and OnePlus has helped us deepen our engagement with our customers. We operationalized our co-branded partnership with Indigo. We continue to invest in technology, distribution and strong product propositions to grow in this space as nimble. We had our best ever quarter with monthly originations at 1.7x pre COVID levels A large part of the new loans is sold digitally. We saw increased demand as normalcy returns from segments like weddings, home, renovation, travel, et cetera. We have scaled up our new acquisition in both traditional and data-led digital space. We migrated to our new sales force platform for origination in this quarter in Phase II, our DIY and STP journey will go live in the upcoming quarters. Consumer Finance, one of our best quarters thanks to the effective premium demand across physical and digital distribution. We continue to stay in this space through widening distribution and relationship with key partners on the strong data-led digital business. Overall unsecured retail business saw a Y-o-Y growth of 12% with a strong quarterly growth of 16% on the back of 12% Q-o-Q growth last quarter. Working capital and business banking, which quarter saw an increase in credit demand due to better business volumes and CapEx demand from select pockets. Export segment continued to see demand from specific market clusters, we focused on new quality client acquisition, both in the secured and unsecured space in the MSME segment. 85% of the book qualifies for our priority sector. We will continue to grow in the MSME space like fund, distribution sector, multiple and deeper channels and technology in the bone. Collection, our bounce rates and revolutions continue to be better than pre-COVID levels. As we shared last time, we launched our digital customer and collections platform where we saw higher customer adoption. And over time, this should help us reduce our collection cost. We have invested significantly on the customer and consumer assets business across distribution, technology, data and analytics and aggressive customer offers and propositions. We will continue to invest in this space. Now to deposits. Average savings deposits grew year-to-date Y-o-Y 11%, current account at 32% and Sweep term deposit 20%. The focus on acquisitions, as you saw, the aggressive customer acquisition continues on granular retail customer growth across digital and physical channels, and 811 continues to contribute successfully to our digital customer acquisition. The bank had 30.7 million customers as of December 21 versus 25 million last year. Our CASA ratio was at 59.9% as of December '21. Our TD below CASA and TD below INR 5 crores comprised 88% of the deposits. TD Sweep deposits was at 7.6%. Our cost of SA was at 3.5% this quarter versus 3.81% in Q3 last year. Our asset cross sell, up in Q3 through the channels were very strong across all retail products, both in consumer and commercial asset space. Fee income showed good growth, including in insurance, investments and brokerage. We have increased our market share issuance and issuance of cash tax to 10% for December '21 on a monthly incremental basis. We launched a co-branded debit card with a during the quarter, and we are seeing increased customer edge. Now to the digital part of our strategy. As outlined in the previous quarters, our digital strategy and initiatives are centered around our customers across acquisition, engagement and service and across our value proposition of savings, lending, payment, investment protection powered by AI. We continue in each of the aspects of technology, infrastructure, applications and BI customer trends towards availability, agility and demand. In the digital channel, we will be going live with all our key consumer assets DIY SCP journeys in the coming quarters, providing a seamless frictionless and convenient experience for our customers. And this investment in our tech stack will be a continuous journey and a backbone for digital strategy. Mobile Surf has always been a key strategy. The last 2 years, we upgraded our mobile app significantly by providing customers more functionalities and a greater choice across banking, payments, loans and costs. In Q3, we launched many functionalities across assets, payments, lifestyle protection interest. Our customer centric experience and functionality have allowed us to be consistently amongst the top rated banking apps in both iOS and Android. We have seen significant increase in monthly average users, which is down 37% Y-o-Y. Transaction volumes, which has grown 126% Y-o-Y, and value, 53% Y-o-Y through our mobile banking channel. In retail assets, we have been working on enabling mobile first and Q3 launched several functionalities across home loans, cards and rebank to the entire loans module in the app, making it easier for access to customers. On the payments side, UPI transactions have grown 3x December '21 over March -- over April 21, including P2P and P2M transaction. Pay Your Contact continues to see rapid adoption, and we got a 6.6x below transaction in December versus April this year that was when we had launched this. In merchant acquiring, we embarked in the path of delivering a complete repay of free services with the launch of our merchants at Kotak.biz in Q2. This helped us onboard merchants for payment and collection services digitally served them digitally and deliver our targeted offers on multiple banking and value-added services. In Q3, we enriched the digital onboarding by extending it to our existing current account customers and added new cultures. We have gone live in our partnership with [indiscernible] to increase our merchant acquisition footprint and service the merchants. To help our merchants in managing the cash flow better, we have introduced the same-day settlement in this quarter. And we, in this quarter, continue to leverage our partnership with Pine Labs from new acquisition ecosystem. The strategy of ecosystems in [indiscernible] partner, participants. In Q3, we added new 4 new partners in Kaymall, including Myntra in the in-app shopping mall. In Q3, we continued building on our API stack of partners. We have 391 APIs live. As of now, we have 298 registered partnerships, some key names include Pine Labs, Vivifi, [indiscernible] amongst others. We are rapidly expanding our fintech partnership network and our experimental new cases and business models. We plan to leverage the regulatory network of account aggregator and open for retail and SME lending in the upcoming quarters. Now to the corporate and bonus banking stack. We have upgraded our transaction banking to expect towards transforming customer experience in trade and cash management products, trade portal. We launched a paperless end-to-end seamless trade portal, creating significant differentiation to meet our customers' [indiscernible] need, Customers can transact for outward remittances, import, collection, export LTs and collection will be going live with an ingot remittances and [ 4 ships ] financing. We have seen active adoption by customers and have received very positive. We migrated 14,000-plus customers to our new CMS portal to simple to operate with superior interfaces and customer experience. We offer full stack digital capabilities on host words and API transition buses. This has created a significant differentiation in meeting our customers' needs. On the transaction banking side, we introduced many services with enhanced -- talk about some corporate mobility active point. So 17 plus lakh transactions, which is a 46% Y-o-Y growth for YTD December. We introduced BBPS clip, a new feature in BBPS, which speeds up the transaction processing with a one click journey. We introduced CMS 24/7 for corporates via APIs and the advanced payment architecture, allowing them straight through processing. We introduced paperless supply chain financing on E-way bill data verification. We partnered with a fintech for international acquiring in sponsorship across other transaction to help us provide a superior international payments make to key e-commerce customers. We will continue to invest in the text for a superior experience for our business banking customers. Digital transactions to mobile continue to grow across the process lending service and transactions, 97% of our savings volume transactions were in digital on non-branch mode even in this quarter. I now request Varun Shah to take you through the insurance listed highlights.

Thanks Shanti. Let me take you through the financial performance of Kotak Life this quarter, a quarter with more normalized environment for life insurance business. Our gross income premium for the quarter increased to INR 2,108 crores from [ INR 2,023 ] crores in the previous year, showing an increase of 15.5%. We continue to maintain a balanced product mix between participating and nonparticipating products, general mix of agency and bancassurance and also between the individual and group business. Individual APE growth for the quarter was 31.6% against the private industry growth of 27.5%. Group business for the quarter was up by around 28% on the back of protection business growth of over 60%. Overall, clean experience continues to be in line with the excess mortality claims we have seen over in June . We can adequate provision to cover future expected claims if something arises out of Omicron. Overall, a INR 600 crore excess mortalities for the year, net of reinsurance that has been the rate from which it was taken. Our net worth has crossed INR 4,000 crores, with strong solvency margin of 2.66x. Now I hand over to JB to take the presentation forward.

Thank you, Varun. The top line for Kotak Securities is INR 656 crores for quarter [indiscernible]. This is comparable to INR 613 crores from the previous quarter and INR 474 crores for the same quarter last year. The profit before tax for this quarter is at INR 359 crores. This is again comparable with INR 325 crores for the previous quarter and INR 245 crores for the same period last year. And the PAT for the quarter ending 31/12/21 is INR 270 crores. This number was INR 243 crores for the quarter ending September '21. And for the quarter ending December '20, it is INR 184 crores. We clocked a market share of 1.4%. -- in the cash segment for the period -- for the quarter December 31. This is a tad lower than 11%, which we got in September '21. Some sense of the market CD. The total daily volumes for this quarter was at [indiscernible]. How did this option market was at INR 37.3 lakh crores, cash at INR 51,000 crores and Q2 at INR 92,000 crores. The growth has been the biggest in the auction space whereas cash and futures have seen marginal or flat kind of numbers. I'd also like to share some information on some of the digital initiatives taken at Kotak securities. At the DIY journey of account opening for accounts Kotak securities has been enhanced significantly. We've reached a level of an account being opened in close to 6 minutes. The second big thing which we introduced in the quarter was a pre-login application of IPS, which were allowed to be done, which is not there in previous quarters. This made a reasonable difference to our market share in the IPS space, and we see that going ahead as well. For derivative trade the launch of the next platform has helped a lot in the stability of the platform and a reasonably large enhanced customer journey and experience. We launched our new trading website with the latest technology stack with cutting edge in U.S. From a service initiative, a multi-legal chat box in 9 languages, a 15 service options were launched, and we migrated our telephone into cloud with their multilevel IVR capability enhancing customer inbound call. With this, I'd hand over to Manian to talk about the industry.

All right. Yes. Kotak Mahindra Capital company, crossed for the first time in 3 profit often of over INR 100 crores this quarter. It was partly -- it was involved with marquee IPO transactions in the market, and we remain a go-to bank -- go to investment bank in the ECM side of the business. So what is more -- even more important is that our advisory business is also in very good shape, and we have built a good franchise on the advisory side. In fact, even on advisory, we should end this year at close to record levels. Last year was a record year. This year, again, we put and almost at the same level. So the Investment Banking business, both on the ECM side as well as on the advisory side, since you in good shape, and we have mentioned some of the market transactions there for all of you to see. Coming to Kotak Mahindra Investment, this is a company which is largely into real estate, real estate lending business, corporate real estate lending business or structured corporate lending transaction. As you can again see the -- this has grown significantly. I made an earlier comment on good momentum on the real estate lending side. And part of the real estate gets done in the bank and part of it gets done here. As you can see, robust growth here of close to 30% in the asset book, which is driven by residential real estate transaction as well as some other structured corporate lending business. We have also been able to maintain balance sheet quality here. And as you can see, the net NPAs have dropped to 0.4%. Basically, our lending policies in terms of focusing on cash flows and the right security and choosing the right projects has really shown results here. In this NBFC, we have been also able to reverse COVID provisions to the extent of INR 700 crores given the fact that some of our assets which were stand where in the -- at risk have actually been recovered. I'll now hand over this to Kannan to take you through Kotak Mahindra Prime.

Thanks, Manian. Kotak Mahindra Prime had a profit after tax of INR 254 crores this quarter as compared to INR 149 crores in the same quarter last year. Disbursements during the quarter has been better than the comparable quarter of the previous financial year, but continues to be slightly impacted by supply constraints faced by the manufacturers, elite during the quarter has shown further improvement and its collection efficiencies on demand or closer to normal times. During this quarter, Kotak Mahindra Prime acquired the retail car finance portfolio of Ford Credit. I now hand it over to Nilesh to take you through the presentation.

Thanks, Kannan. Good evening. Let me take you through our asset management business for December 21 quarter. Our total average AUM grew 32% year-on-year to INR 2.87 trillion. Our equity average AUM supported by market bounce back grew 67% year-on-year to INR 1.41 trillion. Our total AUM market share increased to 7.4%, and our equity AUM market share increased by 40 basis points to 5.4%. Our SIP registration as on December 31, '21 were INR 9.1 billion and SIP inflows for the month of December were INR 6.65 billion. Our SIP book and average AUM growth continues to outpace industry. We continue to serve investor requirements by launching active as well as specific funds focused on local as well as offshore markets across debt, equity and commodities. We also remain focused on ESG investing as India's first segmentary to United Nations principle of responsible investing. Consequently, our profit before tax has grown 20% year-on-year to INR 146 crores excluding nonrecurring gains of INR 46 crores. Our total AUM across mutual funds, PMS offshore insurance and ultimate assets grew 23% year-on-year to INR 3.86 trillion. Our relationship value across wealth, priority and investment advisory grew 73% to INR 6.49 trillion. I will hand it over to Jaimin Bhatt.

Thank you, Nilesh. Friends, any questions, clarifications explanation, the whole team is here.

[Operator Instructions] The first question is from the line of Rahul Jain from Goldman Sachs.

Just a couple of questions. First on the provisioning policy. So the reversal that you have done. Can you just elaborate and explain the thought process? Is it led by the recoveries and upgradation that we had? Or you generally feel that the kind of work is behind us? And from here on, it should be a more normalized portion in the future?

Sure. Now looks like this. Yes, we saw the realizations have certainly continued to improve. The gross accretion of NPA has slowed down and actually the realization upgradation is continuing to increase quarter-on-quarter. The restructuring requests coming lower as well as the fact that we saw the SMA2 numbers very much in the control. So we follow the process. And if you look at the background of how the position on COVID was created, it was based on a set of accounts, which had gone for moratorium and whatnot. A lot of those accounts which are under stress actually have -- are no longer with us. They've actually paid up all their views into what is due at that point of time. So continuing to carry some provisions on that was something which we were not necessarily required, especially on the back of what's happening on the market with respect to collections. So we look at the overall thing, and we've not taken up -- taken back all of what is possibly we felt at this stage, also considering the fact that there is the way Omicron which is way going on in the market. But though it is less virulent, we did keep a cushion for that. And as we've seen as against what we had [ 12 79 ], we will continue to keep INR 1,000 crores at this stage. And of course, we'll keep taking stock of this repeatedly.

Just a follow on. Given that now we are focusing even on the unsecured businesses, which generally have a higher loan losses through the cycle. Let's say, a year out or 2 years out as this book start to become more meaningful, subject, of course, your growth trajectory. Would we then take provision as and when it sort of happens? Or you think building a buffer from now on would be in more prudent.

I would like to say while we are growing the unsecured book, the unsecured book even today, like the unsecured retail, which is your credit cards and personal loans, business loans, consumer durables is still about 5% of my advances book. Even that is growing on a lower base, if that is the -- newer thing goes bad, -- we certainly end up providing that and our provision requirements or as a policy on the unsecured is far more aggressive than what the regulatory requirements are. So we'll take those rates if it comes. But right now, it's looking fine.

Great. And just squeezing one more question, more on the franchise side. So the customer addition has been pretty impressive. Can you just talk about the customer profile that you're onboarding? And also in the home loan business, is it all organic? Or you've had some balance transfer business also coming into the bank? That is it from my side

Shanti?

Yes. So as far as customer acquisition is concerned, we continue to attract a lot of millennials and people in, let's say, from 35% to 40%, but we are not restricting any customer. So across our channels, whether it's physical, digital, 811, we go and look for customers who across all segments, but we are seeing a flow like acidifiers, 25 to 40 is a good range to sort of look at the customer profile. On the home loan side, I don't know what you call inorganic has balanced offer, but that is also acquisition for us. What balance transfer has always been about 30% of our business historically as well as now. But we continue to see the primary market business flow is very strong. Manian had talked about the fact that residential sales have been really good, and we see that in the demand in our home loan business. So we have a combination strategy of primary market customers signed ready-made property, secondary market sale and balance transfer, it is a mix of all of this.

The next question is from the line of Sumeet Kariwala from Morgan Stanley.

Congrats on a strong quarter. I wanted to get some perspective on loan growth in the current cycle from a 2 to 3-year perspective. So there are 2 subsegments that I'm trying to get some views on. Those is on corporate banking. And if I look at Kotak bank this time it's very differently placed in the same stat there was a sharp improvement in funding franchise and one could -- one maybe is a better place to accelerate growth in corporate banking. Also digital capabilities will be a key differentiator. So should one expect that as pricing normalizes, which will happen at certain terms. This time Kotak bank would see much more market share gains in corporate banking. So that's part one of the question.

Okay. So Manian?

Yes. So is that -- you said that's part 1. Is there a part 2?

Yes. We on unsecured loans, maybe I should do it after reply if that's fine.

Okay. Okay. Fine. Manian, do you want to go for this first?

Yes. Sumeet, we have always stated that as -- if risk return tradeoffs work well. We are always open to growing the corporate book at the case that the market offers the opportunity is. Our key metrics has always been the right risk return trade-offs. Our relationships are fairly wide. I don't -- we have a fair presence in most corporates right from the top end to medium-sized corporates, our coverage and the presence is fairly wide. And we are fairly confident if the secular growth in the corporate credit requirement goes up, we will be able to capitalize on that. And as I mentioned, we -- our transaction banking franchise is also growing very well. And Shanti also took you through a couple of slides there in the corporate, we have used our new digital products, new online total new CMS platform, all of that is making a lot of difference and we are quite confident that we can grow this franchise if the market opportunity arises to react. Yes, Sumeet your second question?

. On unsecured loan growth. And if I look at Kotak banks market share in unsecured with present loans and [indiscernible]. There is some moderation of the past 3 years and maybe likely so because the [indiscernible] not cool. How should we think about this loan mix -- unsecured loan mix going forward and compare this to some of the large private banks, totally relatively lower. So over the next 3, 4 years, should we expect a meaningful jump? That will be my question.

I will ask my colleague, Dipak Gupta to really specifically answer on unsecured retail and the mix overall as a part of our strategic going forward. Dipak, would you want to give a shot at it.

Well, in there is no number which one has all one is trying to do is a great opportunity within our existing customer base. We have engaged with at this point of time, maybe a small percentage of that customer base, and there is a massive opportunity for us to use analytics can expand the base through the unsecured side. And that is what we are after, and if we will progressively done. And remember on the unsecured side, there are 2 separate sides. One is your unsecured which really is the personal loan and the consumer durable financing and the business. That's one type of thought unsecured. The other side is really the credit cards. And that's a very different opportunity because that is not just a pure lending opportunity. It's a very significant payment engagement and for some of them unsecured opportunity yes. But it's a very significant engagement opportunity. So we drive all of that. And I'm seeing we are using fair amount of analytics combined with some amount of experimentation to drive that.

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

Yes. Question is on growth again. I just wanted to understand the last few years, we've been -- we've consolidated and now we have benefits of cost of funds and lower share. Good or system credit be a constraint for us or we are at a point where that 1.5x or the multiple is, we'll be comfortably consistently growing above that and under what circumstances you would want to put the break again?

I think I'll take that question. We feel actually we are coming into a sweet spot. I think our base case has been moving into endemic from a pandemic. We are very light in terms of the current risks we are carrying on our balance sheet. We don't have baggage. We have finally begun to get our analytics pieces in place. Our digital engines and a lot of the technology initiatives which was started coming in place actually in the first half of calendar '22. So between now and June 22, a lot of our technology and digital initiatives on the lending side are also coming into place, and we actually feel that it's a good place to be. Our risk management skills are something we have got reasonable confidence in and as the cycle goes, as inflation comes back steadily, as interest rates start going up, with the positioning on our cost of funds and everything else, we have the ability to have an accelerator going. And I want to very clearly say that we are not constrained by the market size of the credit growth in the marketplace. We will be constrained by our -- what we think is the right parameters. And because as long as those parameters of our matrix segment, we will go to whatever it takes to grow our loan book and assets.

And the second question is on the OpEx side, right? If you just absorb most large banks, including the there's been a pickup in OpEx partly due to the low base, partly do with business momentum coming back. So there's some accelerated tax spend as well, right? So if you take 2 to 3 years' time with adding tech and spend in various projects. What would be and with accelerating growth? Would you still expect cost income to moderate or you come to a point where cost income for our industry, for us remains where it is in spite of better growth?

I think ultimately, cost to income will get corrected, but we are very clear at this stage. There are 3 clear engines which we are growing. First is on retail loans, okay? And there are front-end acquisition costs. Just think about a home loan. And if there is a field for acquisition or distribution to be paid a home loan, which has average life of 7 -- 6, 7 years or 8 years, though the loan, maybe 15 years, average life is 7, 8 years. We're paying the fee cost upfront and the banking regulation you have to take the full distribution pick at the point of time you underwrite the loan, and that doesn't bother us because we are driven by underlying value creation, not necessarily what in does to my pre-operating profit in the third quarter that is not something which is the basis on which we take decisions. If we believe substantively, it is going to add value, we are ready to take this process upfront. But that is one. Second, I think you've got to keep in mind we have dramatically increased our customer acquisition from 8 lakhs in the last year same quarter to 21 lakhs in this quarter. And we see that engine continuing to fire. Again, that takes front-end cost. And we, of course, are very focused on economics of our acquisition cost on customers. We think the acquisition cost upfront is not something which is going to differ us as long as we believe the underlying it economics are strong. Therefore, that is point number 2. And point number 3 is -- with the opportunity in the marketplace, which is coming in with our overall balance sheet metrics. We will drive growth, and we believe the cost-to-income ratio will be an outcome rather than a target. We think about getting the right outcomes, which will include a cost-to-income ratio because a lot of our costs are fronting. And also keep in mind that as we get more and more digitized. The actual straight-through processing digital lending transactions will ultimately reduce the effective intermediation cost as well. But these 3 or 4 parameters are what is going to drive us. And in simple language, first is really -- I think the front-end cost for asset growth are something we are ready to take. Second is we are growing our customer base at a very high speed, keeping in mind unique economics versus content costs. Digitization will ultimately mix into 2 journeys significantly lower operating costs; and fourth, cost income for us is an outcome, not a target.

Thanks Uday. And I'll just squeeze in one last question. The last 2, 3 years as our liability franchises improved in cost of funds like come down. This kind of having advantage of growing slowly. So the pressure in branches to a resort financial resources have been low, right? When you get to high growth from [indiscernible] now run rate is north of 20% growth, we need to raise more kind of money, right? Puts more pressure offer more NTVs at some point. So how does that equation change from almost 0 growth, no growth, getting to 20%, 25% growth that adds to some pressure on margin their cost of funds, both an absolute and relative basis so.

No, I think we are confident about our liability franchise and the strength of it. And that does not mean we can afford to the complacent. We are driving the liability engine. We know where are the gaps as we speak, and there is a significant internal focus, energy and introspection going on how we get that liability engine firing much faster as we go forward. And we are quite confident that we will get our execution on that as well, including digital is a very key part of our medium-term strategy, even on the liability side.

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

Yes. So in terms of the growth, maybe in terms of the capital allocation or in terms of the opportunity, now almost home loan and less is equivalent to where the corporate banking is. And both of them are equally competitive. Okay, we were hearing that latter part of growth is coming from NBFCs and most of them are doing it. So when we get to the RAROC or maybe even in terms of the cross-sell opportunities in corporate banking as well as with the home loan customer which would be the preference and where should we see a relatively higher growth mode of it's coming in from the home loan and lab, we have scaled it up. But here on, how should we say between what these product segments?

Kunal, let me just reiterate it to you, yes, home loan and lap in absolute stock terms is high. But on a growth rate basis, there are other pockets which are also catching up significant pace. If you look at our unsecured retail, go off a small base is growing at about close to 15% Q-on-Q. That's been on a very small base, but that is catching up pace. So yes, the mix is still very low, which enables us to grow at a much faster rate. And that does not mean we don't like home loans. We like it a lot. We like the wholesale banking business, and you have to look at houses for costs, risk-adjusted returns. And with our mix of 60% CASA, our cost of funds is a significant competitive advantage, I would like to believe probably less in class. And we will hammer that cost of funds advantage to get significant customer engagement and produce our risk-adjusted returns in totality. And keep in mind that in the COVID period 2020 a lot of our assets were actually in treasury assets, which were earning 4%, 4.5%. And as that mix changes to even 6.5%, 6.6%, 6.7%, it's still a significant mix change in favor of improving NII and NIMs. So we think we will be able to get the right mix. And one of the most important things we have learned in risk management is -- if you get a risk adjusted metrics on a well-balanced portfolio with high focus on individual product segments, the outcomes can be significant and sustainable while being dramatic as well.

Sure. But currently, which one would be giving us a better return, if I have to look at say, home loans and corporate banking at this juncture on a RAROC basis.

Corporate banking. Kunal let me also give you this. So on corporate banking, when we look at returns and home loans, we look at customer returns. For example, in Corporate Banking, as Manian mentioned, in addition to the spread in the lending business, it makes significant flows on foreign exchange, transaction banking, deeper customer engagement, translating into our broader relationships, including with our investment bank. So there are a whole host of linkages in the corporate banking business beyond just the lending product, trade is another very major part, current account growth. All that is deeply interconnected and integrated to the lending piece of the corporate banking. And therefore, I would request look at some of these engines customer returns -- similar for home loans, we think home loans is one of the most sticky products in a customer's journey and the ability to cross-sell a variety of products to a home loan customer is also a significant opportunity. A home loan customer who has got a core mortgage is a safer customer to add a credit card or a personal loan. Our home loan customer who has an engaging bank account that again gives us a deeper engaging relationship with that customer. So we look -- we are getting significantly more focused on customer engagement and customer returns in addition to making sure that the product makes economic sense.

Sure. And secondly, in terms of the ECLGS pool, how the behavior has been -- so it's been 9, 12 months. So if you can highlight any risk or we are seeing a much better collections equivalent to the overall portfolio? How is the overall behavior out there?

Manian, do you want to go for this?

Yes. No. So the ECLGS portfolio, we are not seeing any significantly differential behavior compared to our normal portfolio -- and there is, therefore, no perception of any enhanced risk coming out of the ECLGS portfolio.

Sure. And one last question in terms of investment portfolio, given the size and the movement in yield, the NOK seems to be slightly on a higher side. So have we protected ourselves for any further movement or maybe -- or maybe have we reduced the duration during the quarter and it was relatively higher in Q3? How should we look at it? And maybe any further movement of 30, 50 days, how could be the impact now on?

We've put down on paper what our duration is. We've put down on paper what are HTM, okay? We have put down our balance sheet in front you. It is pretty straightforward that the pain is behind, and we are actually in a pretty comfortable zone as we go forward. Of course, it depends on the amount of yields before, even in a 1-year paper, if the yields move up 150 basis points, there will be some impact, but at a duration of around 1.5 years, we think we are in a very sweet spot in a rising yield environment with a CASA ratio of 60%.

[Operator Instructions] The next question is from the line of Gaurav Kochar from Mirae Asset.

Just extending the question that Adarsh asked earlier regarding pressure on NIMs, if the growth comes back, just wanted your thoughts around SAP and especially in the last 18 months, ever since we've cut down on rates. I mean, the SA collection has slowed down a bit. So -- and given that we have been spending on tech and on liability acquisitions in the last 18 months. What kind of outcome do you expect from this? Given that in the last 18 months, the SA collection hasn't been look very -- I mean the growth has tapered off a bit. So outlook on SA in the next maybe 2 years? And in that context, if I look at your growth in overall balance sheet, which is 2.5%. So it seems optically because the overall growth in interest earning assets has been lower than loan growth, there was a positive uptake on margins. So going ahead, given that some part of excess equity is gone, how should we look at margins? Should we assume that the deposit growth would broadly mirror the loan growth and hence, could have some impact on margin? Just wanted your thoughts around.

I'll answer the second first and then ask the first to be answered by Shanti. So on the second question, wonder if -- the way you need to look at it is we have gone for what I call as an asset mix change in the last 12 months. The asset mix was -- First, when COVID hit us in April 2020, we loaded up on fixed income government securities assets, okay? And of course, there were lower yielding and we were carrying a huge amount of surplus liquidity. We are now -- it's a very clear mix change, it has gone into customer assets and loan assets from treasury assets. So that's a change has taken place. So you may not see the same level of growth in the balance sheet as you see in advances because it's a mix change in the asset profile, which we are carrying. So that is point number one. And that actually is a big positive for our earnings and spreads because even if you take the lower steel assets in that trend on the retail side, which we say a home loan, 4.5 asset is moving to a 6.5 assets and has a very simple mix change which is happening. And we're still carrying, as you can see, 130% to 140% and because we're still in a very comfortable liquidity position even now. Now as far as your first question is concerned on savings accounts, I will ask Shanti to answer that and give you a perspective what we are doing as we go forward. Shanti?

Yes. Thank you, Uday. When we dropped up 6%, we sort of dropped it off in a relatively short period of time. And is it takes time to replace the value proposition for the customers, like many other banks have. And if you saw some of the OpEx, we have sort of stepped up our engagement through of proposition, [indiscernible], Flipkart, Amazon, et cetera, which is increasingly engagement to the customer. So the increase in engagement layer is something that we have stepped up. It has taken us the last 6-7 months to build it and we are well on that challenge. Yes. Last year, our new to bank customer acquisitions was impacted because of COVID, but that has stepped up, and we have again gone for very aggressive acquisition, which is what to do, we missed out the pickup we would have got last year than the NTD as I call it, which we have restarted the program. The third thing is that we are still very largely retail focused and we don't have a large institutional business, that particularly the government business. I do now know agency back has extended to all. We have got approvals for GSP, for CBDT, for PTS and a lot of other things. So we are building the whole government business model including at the wholesale in the retail end to be able to sort of support the group to take part to the strategy. Our retail model continues with aggressive acquisition, but deeper engagement to replace to 6%. Second is really the aggressive NTVs, which will build value over a period of time. Focusing on building the institutional business now with the agency business having opened up. And these are some of steps that would sort of focus on getting us back to SA growth, which has been relatively slower in the last 3 quarters.

Understood. Okay. And then next question is on the MTM loss. Just wanted to clarify, is there any provision of security receipts from a down of secure you see in this quarter? Because that number of INR 484 crores, taking 62% AFS with a duration of 1.5 doesn't add up to the investment portfolio?

Jaimin.

The INR 484 crore doesn't really have any SA-related risk that's entirely coming out of the normal [indiscernible].

Okay. Because if I look at FY '21, the entire profit from treasury was INR 270 odd crores. And in this quarter, the loss is around INR 484 crore, which is almost 2x of the profit last year. So -- the other thing a little higher. Has the modified duration changed versus FY '21 for this book as a result of which the loss seems high? Or just wanted to --

I think we have definitely moderated duration. That is clear, okay? We have moderate in duration.

Okay. No, my question was if the duration was high in FY '21 and moderated, ideally the loss should have been lower?

But it has been moderated over time in the last few months? Okay. So that is -- so obviously, the rate started going up as you know, October, November onwards. So we have moderated the duration. We have taken that call. And second, I think you got to keep in mind that there is a concept of full-to-par, if I bought a security, say, originally, government-issued security of 7% coupon and last year was trading at 4.5% there's a pull-to-par impact while the NII on that comes in my top line. So that pull-to-par impact is also a part of the MTM provision. I hope you get the point that security was not at a premium security is bought at a 4.5 yields. The security is not at a premium to par. So the premium to par has to be marked down on that security, which is also a part of the reason why INR 484 crore has happened.

The next question is from the line of Abhishek Murarka from HSBC.

Yes. Good evening, everyone, and congratulations for the quarter. So 2 questions. The first is on starting with the cost of SA that you've reported, it's down 19 bps Q-o-Q. I'm assuming this is the impact of the SA rate reduction that you probably did around October. But how much more repricing is there to go in the SA book? That's one. And the second part is you've been -- you raised your TD rates a bit -- and generally, your concentration of deposits is more in the less than 1 year and 1 to 3-year bucket. So how soon or how much time can pass before it starts showing up in your cost of funds and your cost of funds start going up?

So first of all, on SA, now the rates we have are a uniform 3.5. We believe that if you look at some of the larger banks, they are at 2.75% and 3 at less than INR 50 lakhs. So we believe that as interest rates start moving up, we don't need to increase our SA deposit rates particularly since our lowest is 3.5%. There are banks at 2.75%, there are banks at 3. So we think the pressure on SA in terms of just rate will not impact us for a while. That is point number one. In terms of our need to be doing anything on SA. And I think on TVs, we are quite comfortable with your PD, you just have to do -- I mean, our view is that 10 to 20 basis point pricing difference and we start getting reasonably good flow on TDs when we need to open the tap and appropriately. We were also -- I mean, just to share with you, we have taken significant fixed rate refinance on some of our liabilities in the last 3 months. So at about a maturity of 2 to 3 years. So some of the institutions. So we have actually taken a conscious decision in the last couple of months to step up on our refinance -- of fixed rate refinance from the institutions on the book. And simultaneously, the duration of our bond book has also got significantly lower. Because we think we are reasonably comfortable on managing margins and getting growth. And also keep in mind that even if there is some shift in the mix of our loan book, one from treasury assets to customer assets; and second, is some change in the mix of unsecured retail. That will also be taken to our [ minds ].

So what you're essentially saying is that you've got enough levers to keep NIM at 4.6 and that should be a...

I'm not saying that. I'm saying that we've got enough levers to have a very good management ability.

Okay. Okay. Understood. And my second question is on fees. I just wanted some granularity on this other fees. So the reporting is minus INR 132 crore and the loss in NTM was INR 484 crore. So that gap of INR 350 crore. What are the components of that gap?

Jaimin?

Yes, I'm sorry, I didn't get you on...

What are the components of that? One thing you want to explain is that provisioning.

Okay. I'll come to that. So there would be things like there'll be prop activity relating to the whole area of fixed income as well as the derivative side. So that's the fixed income price -- the other income would also include what we sell on the priority sector certificates. There are pockets where we have excess and we actually trade in when we buy, there would be an expense item, but the entire gross amount of what we sell is sitting in the other income, that would be a positive number. And also, there are stress asset division buy themselves assets, so there is some income coming from the asset division. So if you look at the corresponding number in the previous year, the minus 132 was something like 170 positive. So 132 negative is after we hit up INR 484, so it will be on that count.

Does dividend also like that?.

That is not exempt from subsidiaries in this quarter.

Yes, but it would come in that line

If it would come in that line, yes. I mean there will be something if you look at a 9-month number in quarter 1, but not in this quarter.

And ForEx and derivative income also comes there.

That will come, yes. That's correct.

The next question is from the line of Nilanjan Karfa from Nomura.

Broad 2 set of questions. One is on IPO financing. Now that's something that's going to go away from March onwards. Could you talk about how -- I'm guessing that's a reasonable part of the book and definitely you see both margins and income. So how are we trying to sort of mitigate that impact if any? Does that also have some kind of impact on your overall deposits or average deposits? So that...

Manian, do you want to answer that? You said one other question. So go ahead.

No, I can take it later.

So as you know, RBI had asked bank-owned subsidiaries to not do loan against shares and IPO financing of that. And therefore, there is no IPO financing drop built into these quarter results, they have been stopped in the main bank or its subsidiary. The associate company, Infina does IPO financing that comes in the consolidation as part of the [ engine profit ] being comp-related into this. Otherwise, the main bank and its subsidiary there have no IPO financing business.

It's not their currently at all?

No, not at all.

Okay. Okay. But does it impact on the deposit side also because of the way it is easily structured?

No, not too much. Nothing significant.

Okay. Okay. Right. Second..

As you know, IP business has moved to term deposit model is If you know the money line in terms of deposits and very short- term deposits. So it doesn't have too much indication on the deposit.

Right. Okay. Second cost question was back to the unsecured piece that you are talking about. I mean you say a smaller player, but the market is also very well penetrated, right? How do you think you are going to gain market share? Is it going to be more organic? Is it going through more penetration and already we are continuing a lot of costs. So is that something that will continue over the course of next 2, 3 years?

Once again, I'll ask Dipak Gupta.

That given our small base, I think it is pretty comfortable to grow from that small base. And like I said earlier, we are really looking at the role on securing essentially from our existing customer base. And within our leasing customer base, our penetration on the set side is expected to be yes. So it's basically means that we don't really have to go out to get the growth which we are -- so I don't think it's a problem there.

Dipak, just wanted to clarify, I mean It generally said that our salaries franchise is a little there. So at least the market perception is the salaried unsecured piece is something that where you earlier margin and have lower losses. Are we sort of disadvantaged on that front?

That's a misconception. That's the misconception. Yes. We have reasonable new salary accounts, which keep coming in and the stock of salary accounts is a -- but unsecuring not only to corporate salary customers of -- which are acquired through that -- there are large customer acquisitions, which are happening, which are salaried customers with their corporate salaries with other bank also.

Okay. Okay. Fair enough. And that's a question to Jaimin. Could you clarify at least either now or any time in the call, the items of MTM provision on IFRS, the trading or treasury gains and recovery from return of items. These 3 is for the last, let's say, at least on a Y-o-Y basis or at least previous quarter as well. And net interest margin and total deposits on a consolidated basis?

Sorry, I can share that with you separately on a next session.

Ladies and gentlemen, that was the last question. I would now like to hand the conference over to Mr. Uday Kotak for closing comments.

Thank you very much. Colleagues, we have spent nearly 1.5 hours. I really appreciate your time and very frank and candid discussions. And I do look forward to hopefully, a better situation in the post Omicron period as most people seem to be getting it. And the current mortality of that is much, much lesser than any other earlier forms of COVID. I do feel that we are getting into 2022 with new risks and new opportunities. And there are some things which are changing. And from a Kotak point of view, is there 3 most important things in terms of our driving for the future, it is customer acquisition and customer experience, which is point number one. Second is a significant investment and growth in the technology piece. And the third and I think the most important is getting the right talent for a new future in financial services. And with all Q3 are very major focus areas and I would like to share with you that we are moving in all these 3 areas at great speed. Thank you very much, and have a wonderful weekend and goodbye.

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