State Bank of India (SBIN) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to State Bank of India Q4 FY '22 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Pawan Kumar Kedia, General Manager, PPR from State Bank of India. Thank you, and over to you, Mr. Kedia.

Thank you. Good evening, ladies and gentlemen. I'm Pawan Kumar Kedia, General Manager, Performance Planning and -Review. On behalf of the top management of SBI, I extend a warm welcome to all joining us today on SBI Q4 FY '22 earnings conference call. On the call today, we have with us our Chairman, Mr. Dinesh Kumar Khara; Mr. C.S. Setty, Managing Director Retail & Digital Banking; Mr. Ashwani Bhatia, Managing Director, Corporate Banking and Global Markets; Mr. Swaminathan J, Managing Director, Risk, Compliance & Stresses Assets Resolution Group; Mr. Ashwini Tewari, Managing Director, International Banking, Technology and Subsidiaries; Mr. Alok Kumar Choudhary, Deputy Managing Director of Finance; Mr. Shiva Om Dikshit, Chief General Manager, Financial Control; and Mr. Charanjit Attra, Chief Financial Officer. Before I request our Chairman sir to give a brief summary of the bank's Q4 FY '22 performance and the strategic initiatives undertaken, I would like to read out the safe harbor statement. Certain statements in these slides are forward-looking statements. These statements are based on management's current expectations and are subject to uncertainty and change in circumstances. Actual outcome may differ materially from those included in these statements due to a variety of factors. Thank you. Now I would request our Chairman, sir, to make his opening remarks. Over to you, sir.

Thank you. Good evening, friends. Thank you for joining this conference call before a long weekend. It's a pleasure to connect with you all again in better circumstances, the effects of the pandemic having been effectively addressed through the acquisition drive of epic proportions. I thank all of our stakeholders, including our customers, shareholders, analysts, employees and the broader ecosystem for being supportive of our efforts and initiatives in our journey. So take this opportunity to express my heartfelt gratitude to our shareholders and our financial market participants who have supported the bank through the challenging times in the recent past. The recovery of the global economy was hampered in Q4 of '21 due to the resurgence of Omicron variant, which led many countries to reinforce lockdowns, COVID restrictions and other containment measures, which actually disrupted economic activities and supply chains. More recently, the situation in Ukraine has further weighed down on the global trade dynamics and has led to swelling of oil and other commodity prices. The domestic economic scenario has also been affected by geopolitical events. [indiscernible] the financial year '23 GDP growth forecast to 7.2% from the earlier guidance of 7.8%, while possible upside could emanate from the sustained domestic demand, [indiscernible] on CapEx, a normal monsoon and healthier corporate balance sheets, the heightened geopolitical tensions do pose outside risk to the GDP growth. Amid these extraordinary global and financial challenges that the Board has faced in financial year '22, the bank has again delivered good outcomes in business profitability and asset quality parameters. This is a vindication of the flexibility and strength of our operating model and the stupendous efforts put in by the team in State Bank of India. This has helped us to close financial year '22 with robust results, which account our commitment to maintain our leadership position and set the goal on maintaining the momentum in financial year '23. I would like to highlight a few key areas of our performance. The bank has clocked highest-ever profit of INR 31,676 crores for the financial year '22, which is an increase of 55.2% over financial year '21. The return on asset at 0.67% has witnessed an increase of 19 basis points while ROE at 13.92% has increased by 398 basis points over the previous year. The bank's deposit and advances grew by 10.06% and 11%, respectively, in financial year '22, which in absolute terms works out to INR 3.70 lakh crore and INR 2.79 lakh crore, respectively. Our retail personal book at INR 10 lakh crore is growing at 3-year [indiscernible], and we have also maintained our leadership position in home loan and auto loans. The bank's NII for financial year '22 has shown a Y-o-Y increase of 9.03%, while NIM for domestic official stands at 3.36%, that is 10 basis points higher than March '21, reflecting the bank's resilience during a challenging year. As far as asset quality is concerned, the bank's gross NPA and net NPA as of March '22 were at 3.97% and 1.02%, respectively, which is an improvement of our financial year '21 numbers of 4.98% and 1.50%. The slippage ratio for financial year '22 is 0.99%, 19 basis points lower than March '21. The bank's ability to bring down the net NPA around 1% is a result of focus and continuous retention in this area. We have been able to contain the credit cost at 0.55% as against 1.12% as on March '21, an improvement of 57 basis points we have seen in this particular area. We have been constantly calibrating our lending strategies to maintain the quality of loan book, which is reflected in our corporate exposure with 89% of the book being in investment grade. The book continues to remain well capitalized with CET1 ratio at 9.94% and capital adequacy ratio of 13.83% against a regulatory requirement of 8.6% and 12.10%, respectively. The bank has also been able to keep the RWA's to total assets below 50%, indicating the quality of the portfolio. Our journey toward digital leadership continues. We have been witnessing increasing digital adoption by the bank's customer, and now more than 95% of the transactions are routed through alternate channels. The adoption of YONO has significantly increased with registration costing INR 4.83 crores. YONO has created a significant value for the bank, and we are now moving towards YONO 2.0 with many more advanced features. Amongst bank's overseas offices, nine foreign offices and subsidiaries have gone live with YONO global. I'm happy to announce equity dividend of 710%, that is rupees 7.10% per share. We are aware of the areas where we need to improve our performance further with economic activity continuing to improve and the resultant higher credit offtake, the bank is aiming to increase its market share and advances. We are also focusing on current account deposits to improve our CASA ratio. Our long-term goals are very clear, and we are committed to maintain our [indiscernible] in the industry. Now before I conclude, I thank you all for your continued support to the bank. We are proud to be part of SBI and consider it as a privilege to be able to contribute towards the growth of our economy and the bank. We remain committed to reward your trust in us with superior sustainable returns over the long term. And I wish everyone good health and a very happy weekend. The floor is now open for your questions. Thank you very much.

[Operator Instructions] The first question is from the line of Mahrukh Adajania from Edelweiss.

Sir, I had a couple of questions. Firstly, what would your -- could you give us a breakdown of your loan book by benchmark rate?

Well, almost about 74% of the loan book is linked to MCLR, EBLR or CIBIL.

Correct. But how much is EBLR? How much is CIBIL?

See, when it comes to CIBIL, it would be about 11%. And MCLR is about 41%. And the external benchmark rate is about 23%.

[indiscernible].

[indiscernible].

Got it. Got it, sir. Sir, kind of my next question is on small loans. So a lot of PSU banks have seen big slippage in small loans, below INR 5 crores. So any geographic pressure that is visible to you there? Any experiences you can share?

No. Actually, as such, I would say that our even smaller loan book also, it has actually improved in terms of its NPA percentage as compared to what we have seen in the past. So I think we have not seen any such trends. And even in the restructured book also, which we have particularly as far as SME is concerned, the book was about, out of about 32,000, out of 30,000, which is our current outstanding [indiscernible]. But we have seen the NPA ratio of just about INR 720 crores, which is actually much better as compared to the general trend, which we are seeing.

If I can add, Mahrukh, we have witnessed net decline of NPAs across the retail [indiscernible], number one. Number two, even among the SMEs also, the run rate of our slippages is lower than what we had pre-COVID. The third piece, what you asked, there is no geographical concentration of any of these loans. I think we are not witnessing any such [indiscernible].

Got it, sir. Sir, and in terms of restructured of INR 30,000 crores, so that is OTR 1 and 2 over and above that any past restructuring scheme? Or this includes everything?

It actually includes everything.

1 and 2.

Yes, it's actually 1 and 2, and 1 and 2 is put together is about INR 30,960.

INR 7,000 [indiscernible].

INR 7,000 is earlier book.

But there's no overlap in the two?

No, no, no.

Okay. Okay. So it's INR 30,000 plus INR 7,000. And would you be able to quantify your slippage from ECLGS and what the outstanding is currently?

ECLGS outstanding is about INR 32,000 crores now. The slippages are less than 2% so far.

Got it, sir. Sir, my last question is if you could highlight your outlook on CapEx, corporate CapEx for your bank, and I also see pickup in [indiscernible] textile and petrochemical loans on a sequential basis, that's working capital related or something else?

See, as far as what we have observed is that our working capital unutilized limits are about INR 2 lakh, 76,000 crores. And when it comes to the working capital utilization has improved. Actually, unutilized events are just about 46%. So I think as compared to almost 50% unutilized limits as at the end of the last quarter, the situation has improved. And when it comes to the term loan, the unavailed limits are just about 19%. So that also is actually showing that this is a very healthy trend. Apart from that, we have some kind of visibility of the proposals, which are being processed by us. So I think that way -- that is a broad picture as far as the corporate book is concerned. And that is -- that is very clearly reflecting the kind of uptake, which we [indiscernible] like to see going forward.

So just to add over there, the unutilized limits at the end of December were in excess of INR 3 lakh, 10,000 crores that has actually come down to [indiscernible] as the Chairman said. The unavailed term loan also, which used -- which was in excess of INR 2.1 lakh crores is now down to INR 2 lakh crores. So the growth in the corporate book that you've seen, a very big chunk of that has happened in the fourth quarter.

The next question is from the line of Mona Khetan from Dolat Capital.

So firstly, I wanted to check the segment-wise breakup of slippages of the INR 2,800 crore slippage.

Segment-wise breakup of?

Segment-wise breakup was INR 2,845 crore is the quarter 4 slippage. It was INR 1200 crore in corporates, it was INR 1200 in agriculture. The remaining is retail and SMEs.

Okay. So this includes one of the large retail accounts then?

No, because one of the large corporate accounts -- one of the large corporate account is part of this, which actually, we have provided for fully now.

Correct. We have provided for it fully last quarter. It's the same account?

Yes. That's right.

Okay, sure. And secondly, when I look at the yield on advances, there have been -- unlike most peers, they have been stable Q-on-Q in your case. So any color on that?

Well, see, the yield on advances as of now is stable. And going forward, I expect that it should improve because our 74% book is linked to external benchmarks, whether it is [indiscernible], it is EBLR or it is MCLR or it is CIBIL. So in case of rising interest rate scenario, it will lead to a situation where it should actually improve.

Sure. My question is pertaining to the fact that despite the sequential rise in your corporate book, your yield on advances have not been impacted. So what really is helping?

Actually, part of it is also attributed to the kind of interest rate scenario, which is obtaining at a material part of time. And for a good part of the financial year '21, '22, we had a scenario like that. So that is the reason why perhaps it has not moved as it should have on account of increase in our quarter.

Yes. Here, of course, I can add that just take the example of the loan book that is linked to the tables, which is currently 11% of our total book. If you look at the movement of table rates, just in the last week, the 91-day CIBIL has moved about 100 basis points while the price action has happened in the first quarter of this year. Where we started the product, the CIBIL rate was at close to 3.3. Today, the 91-day CIBIL, a couple of days back was at [indiscernible]. So if any [indiscernible] now onwards, whenever the repricing happens.

Got it. Got it. And just finally, for the restructured book, what percentage of the book has the moratorium ended and the billing started?

Among the home loans, the monetary ended. In all cases, the moratorium has started from April.

For the entire restructured book?

Yes, which actually somewhere around about INR 15,000-odd crore, which means about 50% of the book the moratorium has already ended, and also repayment has started. And even in the home loan book, in particular, we have seen a situation where the people have started repaying even as per the original repayment schedule. So which means that they are not really awaiting the restructuring. Again, I would like to draw your attention to the fact that it is still attributed to the stabilization of the cash flow. So the stabilization of the cash flows, we are observing that people have started keeping the loans, which [indiscernible].

Sure. That's very useful, and all the best.

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

Sir, wanted to ask on the investment depreciation. This quarter, we've seen a INR 2,060 crore of costs. Is this the MTM hit on the -- since the yields went up? Or is this something related to the security receipt-related provision?

In fact, security receipts, it is part of it is on account of the security receipts, and we have only provided for outstanding in the security receipts. I mean maximum component is coming from there.

Okay. Okay. Sir, anything else that could come up on the securities receipt provision in fiscal year '23? Or do you think...

No, that's not fully provided. As of it is fully provided, if at all some new security receipts come, then only we'll have to look at it. Otherwise, as of now, it is fully provided.

Okay. Okay. Got it. And sir, with the yields -- the benchmark yields have started to move up. Is that now going to affect the bond portfolio in a way in this quarter, maybe if not the last quarter?

If out of about INR 14 lakh crore of treasury is our AFS book is about INR 4 lakh crore?

INR 5.6 lakh crore.

INR 5.6 lakh crore. And there, our duration is 2.08 and that is -- majority of that is HTM. So they are actually HTM should, with the increasing yields, we should be benefited. And overall, let us see how really things pan out and because it was all valuation is done at a part of time. So how would [indiscernible] material day, that we'll have to wait and watch.

Right. Sure, sir. Sure. And on the -- I mean, just wanted your thoughts on this. In this quarter also, there was a negative net slippage for us. The BAU credit cost was zero. The entire credit cost could be attributable to the higher PCR that we opted for. Going forward, in fiscal year '23, given we are in the middle of, say, a benign credit cost environment, how do you see the credit cost for this year, given that we're already sitting on high PCR, 90% to be precise, if I include the OCA accounts. And we also have some for provisioning of INR 30,000-odd crores. So what are your thoughts on the credit cost for fiscal year '23?

See, we have set the boundary condition for ourselves as if credit cost is concerned, which is 1%. And our effort and endeavor is to keep it as low as possible. So I think that's how I would like to respond to this question.

Okay. Sir, in a COVID year with 2 waves, we did around 90 basis points, including some restructured-related provisioning. Is it fair to assume we can do better than this in fiscal year '23?

Yes. Actually, we all operate in a macro, which is always uncertain. So it's very difficult. That's why we have set a boundary condition. But I mentioned that our effort is always to minimize it. So I mean we cannot really visualize those uncertainties. So that is the reason why we are -- I'm unable to go beyond this.

Sure. Sure. Sure, sir. And just last question, if I can squeeze in. This year, we observed fee income has been weak for even the large private peers. Anything that you can talk about whether because of the growth that -- I mean is it that growth is coming at the cost of some fee income, both on the...

Fee income, there are one very important lever, which I would like to highlight your attention -- draw your attention to is on the Forex income, which you see that it has gone up by almost 24% and similarly, the cross-selling income went up by about 32%. So I think we feel that there's a huge opportunity which exists and we will be looking at really striking this opportunity going forward.

Sure, sir. And I was talking about the processing fee, sir. That has seen a decline...

So I think we -- of course, last year has been a little separate when it comes to new proposals. And hopefully, if at all, this year, the kind of expectation, which we have in terms of the corporate credit to grow, perhaps we hope to see better numbers there.

Okay. Perfect. Perfect, sir. All the very best.

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

So first, sir, with respect to again, Forex. I think you drew the attention to Forex, but what is actually leading to this kind of growth in the overall Forex and how sustainable this year because this quarter has been quite significant, INR 1,500-odd crores coming through that year?

There is a sharper focus on the Forex guidance, which is emanating from our retail outlets.

Okay. So this would be more granular and there is no one-off and broadly you can...

I can assure you there is no one-off. It is broadly spread out. It's very broad-based.

Okay. Okay. So now this is more sustainable. And one of the OpEx side when we look at data, particularly [indiscernible] and the digital expenses that has gone up sequentially as well as year-on-year. So what is actually leading to that? And this is -- is it like the upfronting of the cost? Or again, this trajectory will also continue?

Which one is it?

INR 2,800 crores. ATM cards and tech expenses, that's almost INR 2,800-odd crore significantly up both on year-on-year as well as quarter-on-quarter basis.

I think predominantly, [indiscernible].

We are changing the [indiscernible].

No, that is not reflected here because we have a breakup price [indiscernible].

Let me have the breakup look into and just 1 sec. Well, actually recurring expenditures, which are all very operational in nature, and the major component is ATM interchange expense, which is there about INR 1,531 crores.

Okay. INR 1,500 is the ATM [indiscernible].

Yes, that's right.

Okay. Okay. And on investment provisioning, last time, there was INR 8,600 crores of SRS, which were unprovided to the extent of 13%. Now that we have provided, I think, INR 1,000-odd crores would be coming from SR markdown and INR 1,000 crore would be the M2M on ESS?

No, it is not M2M. We have actually a conflict. We have debited the P&L and provided for it. There is no M2M.

Composition.

Composition.

Composition, yes. SRS now outstanding is about INR 1,980 crores, and that is well provided. So the investment depreciation largely is coming on account of the [indiscernible] charges. The balance [indiscernible].

[indiscernible] for the quarter. And the remaining part comes from some of the provisions [indiscernible].

[indiscernible].

No. Sorry, I couldn't hear that. Yes.

Yes. So I said that INR 2,400 [indiscernible] and the remaining [indiscernible].

Sorry to interrupt you, sir. This is the operator. We are not able to hear your audio clearly, sir.

So about INR 2,000 crore is on account of SRS and also whatever NPAs were there, we have provided for those NPAs, too.

Okay. Okay. Got it.

The next question is from the line of Rakesh Kumar from Systematix Group.

So a couple of questions. Firstly, like have we sold anything to ARC this quarter? And is there -- is that number getting reflected in the NPL recovery this quarter?

Yes, we have done sales and that is reflected in the recoveries. And quarter 4 was eight accounts and recovery was INR 297 crores. And for the whole year, it is 23 accounts. The recovery is INR 1,188 crores in all. And the cash was INR 1,105 and the [indiscernible] INR 83 crores. That's for the full year.

And secondly, sir, like we have written back contingent provision also this quarter. And as you mentioned just now that close to 50% or perhaps I couldn't hear it, almost all the accounts of restructured book has started billing. So if there's a remaining account being where the billing has not started, so what is the status of those restructured account now because now we don't have any contingent provision left?

No, no [indiscernible].

It's not written back. The contingent provision [indiscernible] COVID has now been applied to the [indiscernible] additional provision for restructured book. Restructured book requires 15% regulatory provision. We have made additional 15%. So the contingent provision has now been made a specific provision to these accounts as a prudential measure. Otherwise, [indiscernible] the book does not warrant any additional proceeding, but since there was a contingent provision that has been made now as provision applicable to the restructured accounts and additional prudential measure [indiscernible].

Yes. Got it. So thirdly, just on this credit growth thing. So like was there a stronger credit growth number in the last fortnight? Or if you can help us with what is the daily average, your growth number and credit because -- so P&L account, especially on the interest accrual side, it is not looking that great, if we consider the sequential number. So if you can help us on the credit growth number on the daily average basis for this quarter or maybe on the last [indiscernible].

It is -- I can only say that it is not really one-off, which has been seen in the last quarter or on a particular day. It has -- it spread out and it is -- this is something which I can say. But as far as numbers are concerned, we'll try to get you. And the reason why perhaps it is not seen as a P&L [indiscernible] and interest income is concerned because you would probably appreciate that towards the last quarter of the last financial year, interest rate environment was quite benign. So that is one of the reasons. The growth probably is not commensurate as far as the interest income is concerned. But nevertheless, as well as the growth part is concerned [indiscernible] one of you have the numbers?

INR 154,000 crores [indiscernible].

Yes. It has been equally spread out. It is not that it has happened only on a particular day, INR 1 lakh 54,000 crore worth of disbursements have happened in the last quarter. And -- but it is spread out across the quarter. And also, it may not be out of place to mention that I think in the past also, we have been talking and I have indicated in the past also that there was underutilization of the working capital and non-availment of the term loan. So some of them also got rid in the last quarter, so [indiscernible].

And sir, WCL, which is unitized INR 2.7 trillion. What is the risk rate on that, sir?

It should be at the usual risk -- 89% of the corporate book into the investment grade [indiscernible]. So majority of that would be include that kind of category.

The next question is from the line of Ashok Ajmera from Ajcon Global Services.

And congratulations and compliments to you, Khara sir, once again for the fantastic performance of the bank. I think on every parameter, I mean, your guidance and everything you achieved for the quarter as well as the whole year. Having said this, sir, I've got some data points and some information and a few comment. Sir, our on-base credit, domestic, is INR 54 lakh, 6,451 crores. Can I know the number of the nonfund-based facility, which is sanctioned and again, which is there on the non-fund-based, sir?

Thank you very much, Ashok Ajmera. I will get you the number relating to the non-fund base. I don't have that number readily available with me. Actually, the domestic advances is INR 24 lakhs, 6,000 crores. But if we add the foreign book also, it is INR 28 lakh, 18,000 crore.

Yes, yes. Okay. I'll take that later. Sir, some comments on your core lending space because last time, I think we discussed something about this that you are very aggressive on that and you enrolled many partners. So can you give the color of the -- I mean, how much have you achieved the co-lending?

Co-lending, we have started, but in the early days, there are always some knick-knacks, which need to be addressed. So I would say that last quarter was more like that. Perhaps we'll see the upside coming from the co-lending in this year.

On 31st March...

[indiscernible]. Co-lending, we have entered into partnerships mostly in the last quarter of financial year. And we are putting up the integration -- technology integration and settlement accounts, escrow accounts currently. So I think it will pick up now. It was not much in the last financial year. But our target for the current year is at least INR 10,000 crores is what we are aiming to 15 to 16 [indiscernible].

That's what I wanted to hear that you have some targets. Sir, my next is on NPL like for the last 2 quarters, we have been discussing. And I think now it might materialize in the current quarter. So where do we stand now? What is the current effect and how many accounts are going in for first phase and how much is the amount? And can you give some color around that, sir?

As of now, the number of accounts identified are those 15 accounts. It's about INR 50,000-odd crore. So that is for the system as a whole. And the -- it's progressing, as you are aware that it involves various stages so -- which is as of now at that stage. Hopefully, in the current quarter, we should [indiscernible] to see some activity on this particular account.

Sir, coming to this again, future group and in the retail growth and [indiscernible], where do we stand the provision-wise, both loan book and the investment book?

100% provision already made, sir.

For both the [indiscernible] as well as the...

Absolutely. On the debt and on the -- the debt and investments book. Book is fully insulated from any future shock.

Sir, one question is extended question on the same treasury. Now with the interest rate hardening, I mean, the way these things are going, the inflation is going up, rupee is weakening and there's a pressure. How much further basis point, which we can easily absorb in our AFS book? I think you said INR 5.61 lakh and INR 2.08 in the maturity period. How much more supposed 50 basis points, 70 basis points, we can absorb easily without actually booking the losses?

I would not be sufficient to answer this question. We'll have to -- and [indiscernible], all this is a function of a movement of yield on a particular day when this is all assessed. So this is very difficult to really predict as now. But yes, as I mentioned that we have already ensured that our HTM should be strong enough, and we are worried on that because we have committed to move investments from HTM to AFS on a particular date. That aspect hasn't already done that. So that is something which is within our control that we have already taken care of.

[Operator Instructions] The next question is from the line of Nishant Shah from [ Acko General Insure ].

Yes. Sorry, all my questions have been answered. I don't have any further questions.

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

Sir, a couple of questions. One on growth. The SME growth sequentially was a little weak. In fact, the book was flat. But when we compare it to peers, we've seen them grow at a fairly positive. Can you just make some comments on the space? Is there a lot of pricing pressure? Is there a lot of competition? Or any other reason why the book may not have grown this quarter? That's the first question. The second one is on margins. Whatever your outlook from here, you have a low [indiscernible] ratio, so there should be some benefit of that but there's also likely to be some pressure on deposit rates, et cetera. So what is the outlook? These two questions, sir.

Yes. SME book, of course, I think if we compare with March '20 to '21 moment, as compared to that, it has [indiscernible] is stronger. So I would say that going forward for us, we should be efficient to see even stronger growth coming in SME segment. We are actually -- structurally, we have strengthened our delivery process in SME in the last 1 year. So that should help us. And it has actually -- I would say that it is still -- they're [indiscernible] that process also. So that should help us see better numbers in SME. Yes, yes, yes.

If I may add here, we [indiscernible] in SME. In SME we have larger companies also which will not qualify SME is a part of our portfolio. If you see [indiscernible] annual growth of almost 30%. So I think it's a very large [indiscernible] growth. And [indiscernible] mentioning a lot of initiatives in terms of changing our technology platform, cluster-based planning and to gearing of the relationship manager on the ground. Several initiatives have been taken. I'm sure we'll go to [indiscernible] sustainable at the current financial year.

And sir, any comment on the pricing here?

Pricing, I think we don't visualize any pressure on pricing as far as our SME book is concerned.

Okay. And the second question on NIM?

Second question, NIM, I think, generally, typically speaking, the kind of trend which we observed, the deposit interest rates move up with a lag. And considering the fact that our 64% top -- 74% of the book is linked to MCLR, EBLR and CIBIL. So we should be patient to see an improvement in NIM.

[Operator Instructions] The next question is from the line of Prashanth Kumar from Sunidhi Securities and Finance.

[indiscernible] so sorry, but on the loan processing fee, on Q3, it was around INR 9 billion, and it jumped to INR 15 billion. So [indiscernible], in Q3, is there any waiver or something?

So generally, what happens is that the renewal of the loan -- renewal of working capital happens towards the last quarter. So [indiscernible] there's always some kind of a concentration towards the last quarter. So that is the reason why our last quarter has seen growth as compared to quarter 3 in the loan processing charges, but that there is nothing else to explain for this.

Okay. Okay. And on PCR ratio, sir, it has improved to -- on the 75% and expanded. And as you mentioned, the restructure book and other slippages, you also going down, and restructured book are also performing well. So what is the reason still you are increasing PCR? I mean it is -- on the -- on credit cost, if you could give some color?

See, one, of course, we don't have a situation like the aging provision, et cetera, et cetera. So that is one thing, which is there. But PCR, nevertheless, as a matter of policy, we have decided that we will insulate our balance sheet from any potential shock, which may come. So that's why at the earlier sign of the risk, we are trying to see that we should adequately provide for success such kind of delinquency, and that is something that is the reason why we do it. So 75% is there. And also, if we look at the corporate PCR, even excluding offer, stands at about 93%. So we don't want our balance sheet to be exposed to any kind of risk. That is the reason we are practicing this.

One last on deposit and general insurance. It has increased from INR 14 billion to INR 16 billion. There is -- sequentially, there a huge jump. So is there any missing -- I mean, deposit also has increased around 6% sequentially. So it may be some impact on this, but the jump is high. So is there any -- I'm missing on that calculation?

[indiscernible] essentially the [indiscernible] and general insurance is insurance of our aspects also. And you would have seen in the previous year, in general, the cost of insurance has gone up. So it has reflected in that.

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

I have two questions.

Mr. Mundra, we are not able to hear your audio. Sir, please increase the volume of your device.

Yes. Is this any better?

Yes, please go ahead.

Yes, sir. So sir, the first question is on deposit cost and LDR. So if I calculate our domestic LDR, is around 61%, which is clearly suboptimal. And at the same time, if I were to see our deposit rates, historically, I believe SBI was the price setter and with other private banks having some spreads over SBI deposit rate, which currently does not look like the case. And at the same time, we have deposit -- we have the domestic LDR at 61%. So if you can comment as to -- if you want to bridge this and normally of lower LDR as well as slightly higher deposit rate? Or how are you thinking on this?

The issue is that maybe as of March, it was 51%, but today, it [indiscernible] 62.6% [indiscernible] play. Credit deposit ratio, we are seeing. So we could find kind of a growth, which we might have to see in the loan book. So I think maybe at a point of time, we took a call in terms of dividing the term deposit rates and that went to 1- to 3-year duration. So that is something which we did, and we just wanted to be ahead of the curve, and that is something which has done. But I think on a quarter-on-quarter basis, it may not really reflect the right picture. Once we have a 1-year time period, it will probably look normalized.

Our deposit rates have not -- either lower or we are [indiscernible].

I'm not really very sure the reason for your impressions, but nevertheless, this is where we stand.

Okay. And secondly, sir, we had announced $1 billion line of credit to Sri Lanka, right? And of course, that country is in financial stress. Is that $1 billion is on our book? Or this is just a government assistance? Is there any risk to SBI because of this thing?

This is guaranteed by the Government of India.

On our book. So on our book, but guaranteed by the government of India.

On our book, but guaranteed by government of India. [indiscernible] on us.

Sure. And sir, on corporate growth, right? So this quarter, there has been a healthy 10%, 11% quarter-on-quarter corporate growth and also recent on a Y-o-Y basis. Is this more seasonal? Or you think SBI outlook on corporate growth has changed a little bit? I mean, so in the last few quarters, we were saying that we will pick and choose, or are you seeing slightly better opportunities now? How should 1 look at it, the corporate growth jump?

See you would have observed that 89% of our exposure to corporates are into the investment grade. So there is no compromise as far as the underwriting is concerned. Secondly, what I mentioned in terms of the unavailed working capital facility, which used to be as high as about [ 50% ]. Now it has come down to about 44% kind of a number. So I think to that extent, there is a definite improvement, and in terms of the working capital utilization. And similar, the situation for the unavailed term loans. So these are some of the things, which is a function of the capacity utilization and part of it also when it comes to working capital utilization will also be on account of the upside, which is seen in the commodity prices. So I think I would say that it is not one-off. To my mind, it appears to be sustainable.

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

Sir, two questions. One is on this [indiscernible] recovery. So what would be your expectation going ahead? And actually in relation to the power sector book, do you think that the resolutions pick up now given the situation of power assets in the country? And the second is just want to reconfirm my understanding. So on this -- if you have a yield increase, you obviously spread in the depreciation but there should be an offsetting impact to some extent on the employee provision. Was my understanding correct?

Well, as far as the impact on the power sets, and I think there should be a patient to face better value, but let us wait and watch how everything's pan out going forward because very often when it comes to the foreign capital, there are certain limitation for supporting the thermal powers. So that is something which I would like to mention. But yes, nevertheless, I think the plants would be seen in performance and which might perhaps with some interest on the potential [indiscernible]. So that's how I understand. And your second question was relating to?

OCA.

OCA recovery, actually, we could have about INR 7,800 crore. And going forward, maybe you would like to comment?

So generally, our run rate on [indiscernible] employees is about INR 8,000 crores to INR 10 crores. And there also would be -- we would be targeting a similar number.

Okay. And sir, the second question on the investment -- so you have an investment depreciation, but let's say, for this 50 basis point increase, how much of these will [indiscernible] provision?

No, actually, earlier, it used to be like that, but no sense [indiscernible] when it comes to the pension liability and the [indiscernible] liability, those funds are now managed by our SBI funds management. So that's a separate [indiscernible]. It is not managed by the bank. So it will not pay the [indiscernible] to offset.

The next question is from the line of Jignesh Shial from [indiscernible].

Just a [indiscernible] for me, what do you see [indiscernible]. There have been eight accounts sold at INR 297 crores during the quarter, 2 years, and full year '23 accounts at INR 1,188 crores. Is that number correct?

Yes, right. ARC sales, percent on sales. Quarter 4, eight accounts, amount realized is INR 297 crores.

Yes. And full year '23 and INR 1,188 crores?

INR 1,188 crores, you are right. That's the ARC in rupee.

And it isn't fully provided now?

Not necessarily, but much of this would have been earlier provided and [indiscernible] there was any provision right now that has been accounted for. But this could be a different category of accounts.

And second, you continue to lean against what we were [indiscernible] it earlier. Now we are keeping it against restructured accounts. Is my understanding correct?

Yes.

Yes. Yes. The COVID provision nature is there or it is against the restructuring accounts. That's it.

Can we quantify these ones?

The additional [indiscernible] for the restructured accounts [indiscernible] [ INR 1,900 crores ] [indiscernible].

And just -- can you give us some brief details about how the business happens [indiscernible] more details about the rooms sold or customer [indiscernible]? If you can give just a brief about that during the quarter and the full year?

Almost for INR 26,000 crores -- INR 26,000 savings make accounts are being opened on a daily basis [indiscernible]. And when it comes to the major fund sales, this has been about INR 1,548 crores, about 11.36 lakh policies. [indiscernible] insurance policy we have sold to, you know? And when it comes to our PFO personal loans, which were disbursed during the quarter, they were about INR 6,500 crores. [ Krishi Agri ] bonds, which we sanctioned were about almost INR 13,000 crores in the quarter. The ACC accounts, which are renewed to, you know, were almost 2.35 lakh accounts, which were good.

The loan book is INR 25,000 crores.

Loan book, overall, is about INR 25,000 crores with the help of you.

The next question is from the line of Roshan Chutkey from ICICI Prudential Mutual Fund.

Firstly, this other provision, EBITDA, INR 1,495 crores, what is this relating to?

Part of the [indiscernible] also. Just 1 sec -- just 1 second [indiscernible] INR 1,400-odd crores. Sorry. Can you please repeat your question?

On Slide #22, you have this other provisions, right, of INR 1,495 crores. What is responding [indiscernible]?

Part of it is for the nonfund base, and just 1 sec. I'll just give you the difference. Yes, it is all nonfund-base.

[indiscernible] And of the investment depreciation of INR 2,061 crores, how much is related to MTM?

It's not MTM. It's on account of the security receipts.

Mostly after.

Okay. And where do you have MTM-related provisions?

There was no MTM provision as on 31st of March.

The next question is from the line of [indiscernible].

You said that about 41% of the book is MCLR. Could they make up by tenor of the MCLR, as in how much will be 1 year MCLR and how it would be less than [indiscernible].

I would not have that [indiscernible], but...

The bulk of it is 6 months MCLR, which has become the price mark.

Okay. That is good enough. Second, given the increase in digital and related transactions, how soon do you think it can start reflecting meaningfully in operating efficiency numbers in terms of cost to income?

Yes, I think it's going to be an upward ongoing effort. And as of now, about INR 25,000 crore worth of raises is in terms of cost of sourcing, et cetera, is much lower as compared to the overall book, which is actually much bigger. But I think where it might take some more time. But yes, of course, it's a step in the right direction. And I would like to add that for a bank of our sales, we don't have a choice of only having the digital. We have to have the digital model. So that is something that should work.

[ It's about 10% ] of the overall [indiscernible] book. But as it scale...

Yes, it we are -- we'd like to have as much as possible because it is a frictionless channel, which is in book. And we'd like to see that it improves even further. Almost [ INR 15 crore ] worth of people having joined the resource users. Hopefully, with the value add which is coming, many more will also come.

Sure. Last question, sir, is for the express credit loan product. What do you think is your potential target customer segment to which you can sell that product? And how much of that have you already penetrated in terms of number of individuals?

This express credit product, which is revolving basis also. [indiscernible] matures, it is not that those customers were not aware. They will again...

[indiscernible] what you can. I think every quarter we keep talking about this. The other -- [indiscernible] the corporates has impacted customers. And we have a universe about INR 1.75 crore as we speak and is growing, the CSP customer base. And our current penetration of express credit is just about 27%. As [indiscernible] mentioned, it's not to be that we have still unexplored kind of customer segment being enhance the salaries and all other things also contributed in terms of growth. So just to address your question, I think the [indiscernible] is just about 27%. We are further improving the penetration level and also adding to our customer [indiscernible] customer base.

Sure. So that is 27% of INR 1.72 crores. Is that right?

Yes, sir.

The next question is from the line of [indiscernible].

Just two questions. On Slide 18, we have this total provisions of INR 3,629. Does this also include provisions that we have on security receipts, which is 75 9? Or is this outside that?

So that is outside that. That is on the MTM [indiscernible] that is the provision for the investment -- investment depreciation.

Okay. Okay. Okay. And sir, second question obviously, savings rates have come off quite significantly. In what conditions do you think SBI may have to start raising savings lately?

I think we have not yet taken a call on this. Maybe we'll wait and watch how things really pan out and how the competition moves. And accordingly, we will be taking a call.

Right [indiscernible] delve deeper. I mean, would we be able to specify what is the cost that you actually incur on having a savings account for [indiscernible] [ 2.5%] [indiscernible] cannot move up. [indiscernible].

[indiscernible] allocated the costs like that, so...

[indiscernible] must be remembered that savings bank account is [indiscernible] level, and our ability to sell in [indiscernible] is there. It's hardly about operational cost [indiscernible]. And from that perspective, we have something.

Okay. Sir, meaning, basically, which has to be more competition driven and not [indiscernible] interest rate?

Yes.

The next question is from the line of [indiscernible].

Just one question. On the segment [indiscernible] the retail [indiscernible] operations not dropped significantly during the quarter...

You are not very clear. We are unable to really understand what you are seeing. Can you please be very nearer to the mic?

Yes, that's one. Yes. Am I audible now?

There's some echo.

Just on the segmental breakup that you have shared with the exchange filing, the retail banking operations income has dropped sharply during the quarter from around INR 6,900 crore in Q3 to around [ INR 450 crore ] in Q4. So what was the reason for this?

Segmental revenue, maybe we can respond to this offline.

Offline.

Offline. Yes. We will -- I'm not having those details with me. Maybe I'll ask my [indiscernible].

Got you. Yes, that's all from my side.

Thank you. Ladies and gentlemen, we are short of time. I would now like to hand the conference over to the Chairman, sir, for closing comments.

Thank you very much once again for taking out time and to be with us in that [indiscernible]. All the very best to all of you. Stay safe. Stay healthy. Thank you.

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