Yes Bank Limited (YESBANK) Earnings Call Transcript & Summary

Ladies and gentlemen, good day, and welcome to the YES Bank Limited Q2 FY '21 Results Conference Call. We have with us on the call today, Mr. Prashant Kumar, MD and CEO; Mr. Anurag Adlakha, Group Chief Financial Officer; Mr. Ashish Agarwal, Global Head, Wholesale Banking; Mr. Rajan Pental, Global Head, Branch and Retail Banking; Mr. Niranjan Banodkar, Head Financial and Investor Strategy. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Prashant Kumar, MD and CEO, YES Bank. Thank you, and over to you, sir.

Thank you, and welcome, everyone to the quarter 2 results of YES Bank. Very happy to report a net profit of INR 129 crores as compared to INR 45 crores profit last quarter and as compared to a loss of INR 600 crores in the corresponding quarter last year. The entire -- the presentation on the results is in the backdrop of the reconstruction of the brand, which happened just 6 months back and also because of the impact of COVID on the entire economy. So I think what we have seen that not only bank is progressing very well from March 2021 -- 2020, when it was under moratorium, and also, we have seen significant improvement out of the impact of the pandemic in the entire economic cycle. So I think both of things are moving in positive direction. On the pandemic impact, what we are seeing that quarter 1 was definitely -- it was the worst, but in the quarter 2 month-on-month, there has been an improvement in terms of fresh business, new business, and also in terms of collection. And I think if we continue to move in that direction and if there are no negative surprises on account of pandemic, then we are quite hopeful that by the end of the current financial year, like now, we will be absolutely back to the pre-COVID levels. So I think if there are no negative surprise, we have to just write down this 2020 financial year. So -- but we are quite hopeful that we are seeing that kind of -- the issues in the system there by end of the current financial year, we would be back to the pre-COVID level. As far as bank is concerned, I think we are seeing a significant improvement on all the fronts. And we are also seeing that we are almost near to the corresponding quarter of the last financial year. In some of the aspects, we are better than the corresponding period of last financial year. So basically, like we see not only bank is able to register profits in second consecutive quarter, but on the liquidity side, also, we are getting very good support from our customers. And in pursuit of our deposit mobilization campaign. So today, like we are at INR 135,000 crores, which is 15.7% growth on quarter-on-quarter and 28.9% growth in the first half year. We have also seen a really significant growth in our CASA deposits, which is 20% for the first 6 months. Because of this good growth on the deposit side, our CD ratio, which was almost 164% as of 31st March, has improved to 123% as of 30th September. And because of this customer support, that we have been able to repay the special liquidity facility of INR 50,000 crores from Reserve Bank of India well before the due date. In our deposit mobilization campaign, not only we are seeing the growth on the term deposit side, but our teams have been able to contact the customers and able to open the number of CASA accounts, which is more than even the pre-COVID levels. So during the current quarter, we have opened 1.5 lakh CASA accounts, which is -- we did more than 1.4 lakhs, which we opened during January to March quarter of the last financial year. Our operating profit, there is a growth of 18.6% quarter-on-quarter, though if you just compare this with the last year operating profit number, it's a 25% decline. But if you exclude 1 item, which is profit for the sale of investment on the treasury side, we are better than the operating profit of the last financial year. We continue to have a very good control on the cost side. We have already engaged a global consulting firm to take care of the cost part. And there has been a 21% decline in our expenses Y-o-Y. Even on quarter-on-quarter basis, there is a decline of 4.5% on the expenses. And due to this, in the last 5 quarters, first time, our expenses ratio has moved to below 50%. I think that we'll continue to work on improving this expenses ratio further. And I think by year-end, we would be able to reach something around 45%. Although experience of a very strong operating profit, we have also made a significant provision related to COVID. So as of now, we have INR 1,918 crores related to the provision for the COVID, which is 1.15% of our total advances. And we are very absolutely confident that this provision would take care of any slippage or any restructuring of our accounts in the third quarter. The last quarter, we have also seen the credit rating upgrade from Moody's, CRISIL, India Ratings and ICRA. We continue to be having a leadership position of the technology side. So on the UPI, we are #1 in P2M transactions, 37% market share, continues to be #1. On the IMPS, we are the #1 remitter bank. For the convenience of our customers, we have also launched new digital products. So only last week, we have gone for our -- unveil of new Internet banking platform. I would request all of you to experience that Internet banking platform. And I can assure you, this will be one of the best in the industry. And we are getting very good comments, not only within India, but from abroad also. And the comments are like people have not seen such kind of Internet banking interface. We have also already started the Video KYC due to the current pandemic, where we have not been able to contact our customers. And that's why, during September, we have opened the highest number of savings bank account, which is 60,000, which is, again, is a record for our bank. And we have also started delivering loans on the digital side. So we have started the Loan in Seconds. So initially, we are doing the personal loans and the car loans. But slowly and gradually, we would start delivering all our retail products and the MSME Loan in Seconds. We are already there on the WhatsApp Banking. Our net profit of INR 129 crores and operating profit is basically more on the net interest income, which has improved 3.4% quarter-on-quarter. Our NIMs are improved by 10 basis points from 3% to 3.10%. Even noninterest income has grown by 13.9% quarter-on-quarter. And we are almost like -- if you see Y-o-Y, it's a 25% degrowth but if you exclude that 1 line item on the profit on sale of investment, so our noninterest income is better than the income of the corresponding period last year. And I would like to remind here that this year, we are not in that corporate business, and we don't have that kind of fee income from the corporate business. So even in the absence of that kind of business, bank is able to have the noninterest income which is better than the last year's figure. The provisioning, I was sharing with you, has already improved. We got a write-back of provisions of something around INR 560 crores from the sale of bonds in one of the housing companies, which we have already used to increase our provisions on the investment side in one of the large conglomerates. So our provision coverage ratio on the investment side now has gone up to 71%. And similarly, the operating profit, we have made a provision for -- on account of COVID to take care of our requirement during the quarter 3 and this provisioning requirement would not only take care of the regulatory provision on any slippage or restructuring of loan, but would also take care of any reversal of interest on these loans. Our net advances has grown by 1.5% quarter-on-quarter. There has been a reduction in our corporate book on account of our attempt for derisking the portfolio. But on the retail side, we have seen a disbursement of INR 3,764 crores as compared to just INR 424 crores last quarter. But I think it's a significant thing that this disbursement is even better than the last quarter of the last financial year, which was somewhere around INR 3,100 crores. And we are targeting to disburse something between INR 5,500 crores to INR 6,000 crores on the retail side and something around INR 3,500 crores to INR 4,000 crores on the MSME. So retail and MSME together in the current quarter, we are targeting to disburse something around INR 10,000 crores. So it's why I think that would give us very good income from interest as well as income on the fee side. Our liquidity coverage ratio as of September 30 is 107.3%. And if you see the LCR average during the quarter, this is 99.99%. Our EBITDA position continues to be strong. CET ratio is 13.5%. And overall capital is 19.9%. Our PCR has improved from 75.1% to 75.7%. And due to this, our net NPA number has improved from 4.96% to 4.71%. So I would stop here and would be very happy to take your questions or any queries.

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

Hello, sir.

Yes, hello, Mahrukh.

Sir, I had a couple of questions. Firstly, was there a standstill in September as in accounts that would have been [indiscernible]?

I think what she said, standstill in September.

Okay. So Mahrukh, the standstill in September is INR 2,391 crores, which would have otherwise slipped, but because of the [ we were able to improve ] points.

Okay. And sir, would you be able to quantify your BBB book that sounds [ diluted or ] [indiscernible]...

Sorry to interrupt, Adajania. Ma'am, your audio is not clear, your voice is breaking up.

Yes, can you hear me now?

A little bit better.

Yes. So sir, could you give us a breakup of the BBB and BB book, as in accounts [ which exclude B and below, and there was a mix BB below ]?

So I think, Mahrukh, still your voice is not clear. But if I like -- I'm able to understand correctly, you were asking for the -- our book on the rating side, right?

Yes, sir, the BB and the BBB.

Okay. So basically like, Mahrukh, if you recall, what we are doing, right, and instead of giving the rating-wise portfolio, we have already given the overdue position of our loan book. So like I was sharing that INR 2,391 crores is the standstill. And at the same time, the overdue book for more than 60 days is INR 4,050 crores and overdue position of between 31 to 60 days is INR 2,621 crores.

INR 2,621 crores?

21. And this is already there in our presentation, which has been there on our site, on the Page 16.

Okay. And none of this overlaps with each other, right?

Mahrukh, you're not audible.

None of these overlaps with each other?

Sorry to interrupt, Ms. Adajania, we're not able to hear you at all.

So that is all with each other?

Sorry, we are not able to get you.

Okay, sir. I'll come back.

Yes.

We'll move on to the next question. That is from the line of Jai Mundhra from B&K Securities.

And thanks for the improved disclosure, sir. So my first question is, sir, this overdue loans, which is INR 6,761 crores, is this the same as we have reported in the notes to account 14, which are enjoying standstill benefit? I mean the INR 6,700-something crores figure is there. Are these the same number or are these different number? I mean...

So Jai, basically, like if you see the INR 2,391 crores is extended, which would have slipped to NPA. In addition to this INR 2,391 crores, there is a INR 4,060 crores, which is overdue for more than 60 days. And similarly, there is INR 2,621 crores, which is overdue between 31 to 60 days. So overall, the total book, this total book is something around INR 9,072 crores.

No. So I got that, sir. I mean this is clear that INR 6,761 crores is about 30 days overdue. My question is, sir, this number, is this the same which is there in the [ BST ] notes for account 14 with says your number at INR 6,758 crores?

Jai, so just to clarify. So that is a subset of this total INR 9,000 crores. It's a subset of this total INR 9,000 crores, yes.

Right. Sure. Sure, sir. Okay. So in other words, SMA-1 plus 2 put together is INR 9,072 crores, including standstill.

Including standstill, you are absolutely correct. Yes.

Right. Sure, sir. Sure. And second, sir, by now, if you can provide some qualitative comment as to the, if you are getting restructuring requests especially from commercial real estate or some of the other sectors, if you can help us as to how are you seeing the restructuring business so far.

So, Jai, we are getting requests from the customers. So there are a couple of points. One point is in terms of whether those accounts qualify in terms of RBI scheme or not. That is one part. Second thing is that we would be strictly going with the viability, okay? So though it would not be like we are going to restructuring in a routine manner. So we are very careful in terms of not only they strictly qualify as per RBI scheme, but there has to be a viability also. So those -- but I think this is work in progress. And I think we would be able to finalize this part maybe another 30 days, 30 to 60 days.

Sure, sir. But any -- sir, any broad range that maybe the total restructuring for the bank should be within -- I mean, within -- as a percentage of loans, if you want to provide a broad range also?

No, no, I think it will be very difficult to comment at this point of time.

The next question is from the line of Suresh Ganapathy from Macquarie.

Just a couple of questions. One is on the liability side. I'm seeing that the corporate term deposits and CDs as a proportion of overall liability base has gone up from 36% as of the end of March to 44%. So actually, that has seen a sharper growth than any of the other categories in terms of proportion. So that's a bit worrying because we are also hearing in the market that a lot of PSUs are packing money with YES Bank. So just wanted to know what exactly is the truth behind that. The share has gone up, is there a cost to worry? Is it sustainable? That's question number one. The second question is, I mean, we just wanted to know what is the collection efficiency. So since you guys have not disclosed the total loan book under moratorium 1 or for that matter, 2, if I were to really see pre-March, what would have been the collection efficiency of all the loans versus what is the collection efficiency in September. So just to put this in perspective, my question is, INR 100 of monthly payments were due from all the borrowers in the month of September...

Yes, I understand that part. I understand that.

Yes. Okay. Yes. Sorry, sir, yes, go ahead.

No, no. Is there are any other question? Then I can respond to everything.

Yes, these 2. These 2 questions here.

Okay. Thanks, Suresh, thank you so much. And I think your observation on the liability side, so one observation is correct that the corporate term deposit share is 44%, which has gone from 36% as of March, and it was 40% as on June. But the second part that lot of PSUs are parking deposits with us, if that situation happens, I will be very happy. And I think is where you can take any such kind of connection, we would be grateful. But that is exactly not happening. But definitely, what is there, that if you see there has been a 29% growth in the deposit side in the first half year. Now getting 29% growth immediately after the bank was put in the moratorium and also because of the pandemic from the retail side would just not be possible, would be very difficult, it takes time. So if we need to rebalance our balance sheet quickly and have to repay the facilities, which we got from Reserve Bank of India, I think it makes sense to have the deposits from the corporate side also. But I think going forward, we are seeing a very good traction on the retail side. Like I was sharing that we have opened 60,000 accounts during the September and 1.5 lakh accounts during the quarter. So I think we are seeing a very good growth on the retail side. But definitely, now since we have reached to a situation where there is no need to, say, depend on the corporate deposits, so going forward, we are going to reduce our rate of interest both on savings side as well as on the corporate deposits so that situation would improve. Second thing in terms of collection efficiency. So you made a comment that we have not disclosed the moratorium number, either moratorium 1 or moratorium 2. It was purposely because I didn't want to confuse the market by giving a number because people were giving the numbers that they understand and we're in different kind of things. But definitely, on the collection efficiency, I can give you. So on the retail side, where the collection efficiency pre-COVID was something around 97%. As of now, September, we are seeing a collection efficiency of 89%.

Okay.

On the SME side, pre-COVID time, it was almost 94%, and we are seeing a collection efficiency of 83%.

83%?

83%, yes.

80%? Okay, 80%.

Absolutely. So we are very transparent in giving all these numbers. And on the wholesale banking on the corporate side, the collection efficiency is still lower. We are still computing those numbers, but that is still lower. So I think there are issues in terms of in the corporate on the real estate side, on the hospitality side, on the food processing, it will take some time because it is not like once the moratorium is over, everybody would be able to repay you. So I think there is -- and that's why these kind of accounts are there in the overview for moratorium.

Yes. Yes. So sorry. So just to understand this a bit better, so you're saying retail as of September is 89%, SME is 80% and corporate could be even lower. Let's, for a second, assume that the weighted average collection efficiency number is more closer towards, say, 75% to 80%. Then you are positive talking about the fact that 20% of your borrowers have not paid money and of course, currently, are shown as standard on your books, right? So that's a large number, Mr. Kumar, because my worry here is, even if 50% of them regularize the account, you're possibly talking about 10% not necessarily paying money, and that could be the potential addition to stress. Is my interpretation right in case the collection efficiencies don't cross 90% overall?

So Suresh, I would give you a different perspective about this. If you see the impact of the COVID and the first 3 months, the entire economy was absolutely at a standstill, okay? So out of that situation, we just can't expect that people would come to the bank and repay their installment. But then data are improving. So we are also seeing a positive direction in our collection efficiency, okay? So where we are seeing like on the economic side, there is a contraction in GDP. So if there is a contraction in GDP and if we expect it would not be having an impact on a bank, I think this will be a little unrealistic. So and -- maybe any bank who is participating in the overall inclusive economic development of the country, I think the impact of the economy would be definitely reflecting on the bank. But we are seeing a very positive direction in terms of our collection efficiency. And every day, this is improving. So it is not like the account to slip because the collection improved further in October, which we are seeing in the current month, then I think before slippage, the account would be upgraded.

The next question is from the line of Hardik Shah from SBI Mutual Fund. As there is no response from the current participant, we'll move on.

Hello? Am I audible?

Yes.

Yes. So my -- last question of my query was answered on the restructured base. I just wanted to understand, in the existing stress book, is there any traction in terms of recoveries? So we've already shared a number, which you have already recovered, but say, in a 1-year horizon or so, do you see any significant recoveries over there?

So I think the momentum, which we are seeing in terms of collection and also in terms of behavior of our customers, so things are in a very positive direction. And I think we would be -- if you see our standstill number, which was there in March, there is a significant improvement. And the similar traction we are seeing in the loan book across the sector. So we are quite hopeful. If there are no negative surprise on the economic side, then I think the quality of our loan book will further improve. And the incidence of the slippage would come down, I think, in a significant way.

Sir, I was inquiring about the credits that have already slipped and are in the NPA book. So some color on that.

Okay. Sure. So on the NPI and NPA side, so we were able to sell some of the bonds investment in a housing company. And there has been a write-back of provision to the amount of INR 560 crores. We have also seen a recovery of INR 350 crores from our existing NPA book.

And in next 1 year, do you see any of them close to resolution or somewhere close to recovery?

So I think in that part also, we are seeing the improvement and at least, it's very, very difficult to predict a exact number. Only thing which I can share with all of you that the current quarter would be better than the last quarter in terms of recovery from the stresses.

The next question is from the line of [ Sumit Mehta ], an investor.

I would like to know one thing, that how much percentages from your UPI income from your -- this -- from the whole income portion because you have a substantial 40% market share, if I'm not wrong.

On the UPI side, you are saying?

Yes, yes.

So basically, like on the UPI side, it is not a significant income, I can tell you. On the UPI side, it is more in respect of we don't see the UPI collections from the revenue side anytime. It is more in terms of how much customer data you are having because the movement, you are able to do the data analytics on these customers. So today, when the UPI transactions have already crossed INR 1 billion in 15 days, this 40% market share, you can just imagine what kind of customer data we are sitting in. And we have already set up the team to work on the analytics on this customer data. So I think going forward, this will be the real gold mine for us.

And my other question is last time where -- in your con call, you said that you are looking for -- you will get a permission from the RBI for a bad loan bank that's -- [ you wanted you to restrict your risk appetite ].

Sorry to interrupt. [ Mr. Mehta ], your voice is breaking up.

Yes, sorry. Can -- am I audible now?

Yes.

Please go ahead, [ Sumit ].

In the last con call, we had a thought that you are [ starting to be suspect a bad loan bank ]. So you have to go to get a permission from the RBI. So is there any progress in that part?

So I think, [ Sumit ], on that side, it's a work in progress. But definitely, there has been a movement on that side. So we are moving in that direction. And once that would come, we would be really happy to share with everybody.

Okay. And the last question is you have made around [ literally hundred crores of provision in the last 3 quarters for COVID ], I'm not mistaken. I mean all -- where is that on a full [ leased ] book? Do you need to make more provisions going forward? Do you see that kind of behavior of the customers?

I think how much we need more provision, I think.

So on the COVID side, right, [ Sumit ], if you see, we already added INR 1,900 crores (sic) [ INR 1,600 crores ] of provision and the book, which we had like disclosed overdue book of more than 30, 60 days. So suppose the worst-case scenario is everything slips. So INR 9,000 crores, this INR 1,900 crores would take care of regulatory provisions and also any interest reversal, okay? But it is not the case where everything would slip. I think we would be able to recover a substantial provision.

Yes, yes. As regards to your BBB book, will -- you mentioned [indiscernible] [ we need it from the customers' regular [indiscernible] take a default and not default testing ]?

Sorry, [ Sumit ], we have not been able to understand. Voice is cracking.

Am I audible now?

Yes.

Regarding your BBB book, BBB and below book, do we need to make more provisions going forward to see your customers using this?

Sorry to interrupt, [ Mr. Mehta ]. We're not able to hear you clearly at all. The next question is from the line of [ Nikhil Balani ], an retail investor.

Hello? Am I audible?

Yes, sir.

Yes, go ahead, please.

Yes. My question is around the provisions that we've done or we provided for previous loans. Do we still expect LGDs to be around 62% to 65% or do we expect any change in that going forward?

So I think, [ Nikhil ], if we see the loan book, which is under stress because of the COVID, I think adding the projection in terms of LGD may not be correct because we see...

No, sir. I'm talking about already provided for.

So already, yes, yes. So already provided, I think we are still seeing that kind of LGD as maybe around 65% to 70% because of the impact of the COVID, but not more than that.

Okay. I think one of the question was around the bad bank, and I think you've already answered for that. Sir, I mean, during our previous talks, you have also mentioned about capitalizing on your technology platforms and you might, in the future, look for an investor in that as well. So are there any -- I mean, is that going forward? Or are there any discussions going down on that as well?

So that is also something which we are, say, talking to, say, different stakeholders on this. But definitely, that will take some time. We are building up those capabilities and would like to definitely take it further going forward. But that is also something which is on our agenda.

Okay. Okay. And I think the previous speaker was talking about the BBB book. I think he was asking about in our BBB book, do we need to provide any -- I mean, do we need to provide more further provisions? I think that is what he was asking, probably. So if you could answer on that as well, please.

So I think we are not tracking that way. So like I was sharing, we see more in terms of the overdue position for the SMA-1 or SMA-2. Because sometimes, the ratings are -- may not be leading you to the right kind of situation.

Okay. Okay. I would. I'd like to take this opportunity to wish all of you happy Dussehra and happy Diwali in advance.

Thank you so much, and wish you and your family the same. Thank you.

The next question is from the line of Mahrukh Adajania from Elara.

Yes. So my question was, firstly, if you could quantify the profit on sale of investment, and then I had a few more questions.

The profit on sale of investment, which we are talking about, that housing company is something around INR 560 crores. Okay. But if you are talking about sale of investment on the treasury book side...

Yes.

So that is a separate thing, which I think we have already given.

If not, I've got your back.

Yes, please, Anurag, please.

Ten minutes.

So that is something INR 145 crores during the current quarter against INR 382 crores in the corresponding period last year.

Got it. And sir, there are many... [Technical Difficulty]

Mahrukh, you're in a very bad network area, we can't hear you. Your voice has just blanked out.

Yes, do you hear me?

Sorry to interrupt, Mahrukh, we're not able to hear you clearly.

Okay. Can you hear me now?

Yes.

Yes, it's better.

Yes. So what I was trying to ask is that there are many resolutions highlighted in some media reports. Could you throw a light on what resolutions or the stage of resolutions asset-wise? Because there are 1 or 2 other articles which involve YES Bank.

So unfortunately, Mahrukh, we don't give the commentary or the comments on the individual asset.

Okay. But what are the resolutions in progress in terms of quantum, as in the amount?

So we have a very large asset book. We are working on each and every asset, okay? So the only thing is that we need to see where the resolution and for how much it will happen. But definitely, what we can share with you that the current quarter will be better than the last quarter.

The next question is from the line of M.B. Mahesh from Kotak.

Just a few questions from my side. Sir, we started off March with about INR 15,000 crores in terms of stressed loans, which got reduced to about INR 7,800 crores. And today, we are at above INR 9,000 crores. Just if you could kind of reconcile what's happening in all these numbers? Because the movement seems to be -- between the quarters seems to be reasonably large. How should we look at this number?

So like -- if you just remember, Mahesh, like when we were talking of INR 15,000 crores, this was the position of 29 Feb, okay? So after that, there has been a -- so what we are seeing, like even the customers who availed the moratorium, and why we have not shared those kind of numbers in the market earlier because reason was like some people availed moratorium for 1 month, some people availed moratorium for 6 months, some for 4 months. Some people availed moratorium and repaid. So there was a huge mix up of data. So that's why we have not shared. So basically, that changes in number has come down to now INR 2,391 crores, okay? So INR 2,391 crores is something which would have split as on 30th September if the Supreme Court order had not been there. Similarly, on 30th September, we have also given the -- our overdue position of more than 30 days, in 2 buckets, 30 days to 60 days and more than 60 days.

Sorry, just one clarification on this. If you looked at 1Q, what could have potentially fallen into NPAs was about INR 7,800 crores, which has fallen down to INR 2,391 crores. That's a reasonably large movement that you've seen in 1 quarter. Just wanted to just check what's happening on this front as well.

So Mahesh, so if you look at it, I think there is a difference in the way you have to look at standstill for 30th September and what was standstill in the previous quarter. So just to give you an example. If there was an account which was overdue at around 29 Feb, from an RBI disclosure standpoint, where we were sitting, as on 30th June, where you almost had 4 months of time that has passed and therefore, it was the -- and that amount was standstill. But now that the moratorium is behind us, around 30th September, if I'm looking at what is -- what the number of days for which an account is overdue, from 29th June, I will start the meter of 1st September. And therefore, not entire amount will actually be 90 days past due as of 30th September given that now the RBI regulations are still are absolutely in-force, so they reverse the period. The reason the standstill is there is because when the relief was ordered, this is which we have not classified those accounts as NPAs.

So basically, you have to take that 6-month period out of the entire revenue. So if any account was, say, 45 days overdue as of 29...

Feb.

And it has now continued to be overdue in the entire September, then 45 plus 30 days. It would become 75 days overdue.

Perfect. Sir, if you recollect and if I recollect it correctly, you had indicated in the fourth quarter results that the initial assessment of the COVID and its potential impact on slippages would be about a number closer to 7% to 9-odd-percent for FY '21. Now as we stand in 2Q, where are you with respect to assessing the situation in terms of stressed loans?

So I think we would be within that number, which we have like given the guidance at that point of time.

Okay. So nothing new, sir. Like could you say that the impact of COVID has been largely negligible on the portfolio?

The impact of COVID is now coming down. So what we are seeing that even the account, which was a difficulty during the initial period, there has been a significant improvement, both in terms of their repayment capacity and also in terms of the billing days.

Perfect, okay. And just kind of ask 3 questions here. Last time, there was a third-party audit done on the potential recovery dates. Is there anything to reassess these numbers? Or do you think you want to kind of hold on to that number as it was?

We said that it's within that guidance.

So I think there's absolutely -- basically, we are not getting it because circumstances are now altogether different. So basically, what we are seeing, to be very frank with you, the customer who at that point of time was also estimating that bank may not survive, okay? And after seeing the significant progress, I think their behavior has changed now.

Okay. Perfect. So just 1 last question. On -- today, when you're going to the market, does the bank or its employees have to use State Bank of India as a footnote for acquiring deposits? Or as a stand-alone YES Bank, it's able to do so?

Say that COVID has [indiscernible].

Can you please again repeat?

I just wanted to check, when employees are there on the ground, I'm acquiring deposits out there. How much of the support of SBI is still helping you to acquire deposits? Or have you reached a point where customers are broadly okay of YES Bank as a stand-alone entity and the employees are able to get those deposits?

So I think you need to say a change in process, that SBI, their holding of 30% in our equity and the great State Bank of India and other banks has supported the reconstruction of this bank, I think that gives a lot of confidence to our customers.

Sorry, I was asking the reverse way. Is the institution still requiring the brand pull from the other banks to get deposits? Or have you reached a point where you think that without that itself, the bank can get deposits on its own?

No, just so -- I think we have already gone to our customers for deposits for YES Bank. But I think this fact that the State Bank of India is holding 30% equity is definitely giving a comfort to the customer.

We'll move on to the next question that is from the line of Manish Shukla from Citigroup.

After a long time, we've seen that on a quarter-on-quarter basis, the wholesale book has marginally improved in absolute terms. So is it fair to assume that from here on, the book will stay flat or grow and -- referring to the corporate banking book of, say, 90,000 -- INR 93,000 crores?

So I think as a bank, we would continue to explore all the opportunities, both on the corporate as well as on the retail side, which can add our asset on the quality side, okay? So we would be looking for those opportunities, and we would be definitely going ahead to take care of those kinds of a business opportunity. But definitely, our focus would be more on the retail and MSME. But any good, say, proposal from the corporate side also would not be ignored. I think we will be equally positive towards that.

Sure, sir. And thank you for the disclosures on asset quality. Now we have this about INR 9,000 crores, which is overdue [indiscernible] [ and public in mind ], and then you have a certain collection efficiency. So if you look at potential stress in your slippages as restructuring or destructuring, do you think it will be very much from this INR 9,000 crore book? Or do you think there are segments of the book outside of this INR 9,000 crores, which can also potentially get restructured or slip?

So Manish, we can't overrule that possibility also. It may happen. But immediately, we have not seen that part, okay? And the great things are improving at the ground level, so I think maybe even from this book, we would be able to save a portion of it.

Okay. Understood. On the deposit side, is it possible for you to share the average deposit growth for the quarter? We have the period end numbers, but can you share the other numbers?

Sorry, just a moment.

So I think that we can come back 2 weeks later. [ There is an invitation, Manish ].

Sure. Last question on OpEx...

Manish, sorry, you wondered what all of the assets and what the growth for the quarter, quarter-to-quarter? So average...

Average deposit growth on a Q-o-Q basis, yes.

19%.

Sorry, I didn't get you there.

19%.

19%.

1-9. 19%.

1-9. So period end is 11% -- sorry. Okay. So period end is 16% and average is 19%?

Yes, that's right.

Okay. Fine. Last question on OpEx. I mean absolute terms, the OpEx has been declined. From here on, does the OpEx grow in line with the balance sheet? Or there are still opportunity for you to optimize from where we are in terms of absolute OpEx?

No, I think there are still opportunities. We are working here. So as of now, if you see, we are negotiating with the landlords of all our branches, which has not been factored into our numbers. So I think the impact of those reduction would happen in the next 6 months. Similarly, the impact of the branch rationalization and ATM rationalization would also reflect in the next 6 months. So I think there will be a lot of opportunity still to have a reduction on the corporate.

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

Yes. So 2 questions. Firstly, on the deposit side, the way we are seeing restructuring and the CD ratio also coming off. So when do we start acting in terms of lowering the rate? So is there any benchmark which you can suggest in terms of when actually we'd see the rates coming down and narrowing down the gap with our peers? And second is if you can give some color in terms of this entire 6% of the book, be it standstill plus 30 to 90 day? In terms of retail, SME and corporate, how would this broadly look? Because currently, the way we are running on the retail and the SME, it's less than 1% NPA and 2% to 3% of the NPL. So how would be the broader breakup on this INR 9,000-odd crores kind of a book? Yes.

So Kunal, on the rate of interest side, if you see in the last 6 months, we have reduced our rate of interest on savings side by 100 basis points. And on the term deposit side, we have also reduced by 25 basis points. And depending on the market dynamics and our own position and the way our competitor offer the rate of interest, I think we will take this call. But I think we are at that stage where we need to drive on that part. Responding to your second question in terms of this INR 9,000 crores, so I can give you a ballpark figure. It is mostly from the corporate. So out of INR 9,100 crores, the corporate is something around INR 7,500 crores, MSME is INR 900 crores and retail is only INR 500 crores.

MSME is INR 900 crores?

Yes.

And retail would be only INR 500 crores?

INR 525 crores really.

Yes, so when you look at overall retail and MSME, given this COVID-led disruption, I think even if we add those to the GNPL numbers, would it be comfortable? Or maybe, in fact, there will be more to go going forward because, in fact, like at less than 1%, even if I add the INR 500-odd crores, that's not much. And even on the MSME, it's much lower. So do we see more risk on both the portfolios in terms of accretion of NPLs?

So Kunal, we don't see on retail and MSME side. Reason is that only we are seeing the improvement on the collection side. We are also seeing a better turnover in these accounts, specifically on the MSME. So I think on the MSME and retail, we are not worried at all.

Okay. And you said 80% is the collection efficiency in the MSME side?

On the -- this side, retail is 89%.

MSME. MSME?

MSME is 83%.

We'll move on to the next question. That is from the line of [ S Agarwal ] from Indian Bank.

Yes. Based on the LCR disclosure last quarter, your average retail deposit was around INR 52,000 crores. So what will be the number for this quarter? Second question is for your real estate sector, what portion of your portfolio will be under construction. And the third is, although you have raised a lot of capital, could we see a further capital raise in the next 1 year?

So I think giving answer to the first and last question, I think with 20% of capital, we should not go for any further raise, okay? And if you see our -- we had a very strong performance on the operating profit side, which is taking care of our credit cost because of the COVID, okay? So -- but I think as of now, we don't see any such requirement to raise capital. Niranjan, can you answer?

Yes, yes. Just a minute. On the real estate side, of the standard real estate book, around 1/3 of that would be in the form of ready inventory/[indiscernible] and the balance is 2/3 would be [ something related to the investment ].

So 2/3 of the real estate portfolio is not ready, you're saying? External...

Kunal, 2/3 of the central real estate portfolio confirmed that there's a section of which almost 1/3 of that would be affordable housing. And the balance would be middle or luxury line -- luxury.

Okay. And the average retail deposit number for this quarter?

What is it, average?

Retail deposit.

Yes, yes. For the year, it's about INR 51,000 crores.

INR 51,000 crores. So it has remained constant only. Okay.

The next question from the line of Rakesh Kumar from Systematix Shares.

So first question is with respect to the NPI provision, we have close to around 71% now. So what is the scope for further recovery from this number of around INR 6,500 crores -- INR 6,600 crore number? And are we planning to make further provision in there on the NPI?

So I think we are working on those kind of opportunities to have a recovery on the NPI side. So as of now, the 71% is, I think, sufficient to take care of the requirement. But our policy is that we would further increase it whenever we would be in a position to do that, but not on need basis, but as a prudential policy, we would take it further.

And there was like NPL recovery and upgrade of around INR 350 crores. So is there any one-off? Or this is the steadiest-state number?

No, this is a large number of accounts. It is not one year.

Sorry, sorry?

This is in large number of accounts, more regular. Yes.

Okay. Okay. And considering the other people, actually, the previous question also was on the equity capital raise. So my thought process was that kind of under-recovery that we have on demand saw on couple of loan category and -- so of the loans which were like the INR 9,000 crores number standstill and the overdue position, so like another 13%, 13.5% CET number and then like close to 5.5% number here. Do we really need, like maybe 1 year down the line, at this breakdown, another round of capital raise?

So I think that, that problem, we'll see at that point of time. As of now, we are quite comfortable.

The next question is from the line of Rohan Mandora from Equirus Securities.

Sir, if I got it correct, you indicated that you all look to do around INR 10,000 crores of disbursements in retail and SME in 3Q. So just wanted to understand, in this environment wherein the credit scores are not that accurate given the fact that many customers were under moratorium, so what will be our underwriting policy here? What will we look at while underwriting loans? And also, which are the segments which we are looking to lend to? And secondly, out of this, is there any complement that you target from, say, fintech partnerships on digital lending?

Working on the fintech partnership side, definitely. This is something we are always really excited and we'd really like to encash on the good opportunity. But as far as your first question is concerned, so I think we have been very selective in terms of our customers on retail and MSME. And this has been like is every day from the credit quality of the portfolio and the impact of the COVID on this. So I think going forward also, our teams are absolutely -- I think they have read how to get the good quality customers. Okay. So it would continue to make the quality. And believe me, it's not like we don't have the good business available in the market.

Sure. And sir, any target product mix, where we will be targeting on the retail side? Or where we are seeing opportunities right now?

So we are seeing that they're across, but definitely, our focus is more on the secured loans. So we would continue to have at least 90% fresh exposures on the secured side. So it is also in the vehicle loans, this is would be on the equipment finance. This is also in terms of as a consumer need, consumption need. But our focus is on the secured side.

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

So just one question. On our retail disbursals as well as the asset disbursals sort of are a, on a Y-to-Y basis...

Sorry to interrupt, Mr. Karfa. Sir, your voice is breaking up.

Hello, is it better?

Little better, sir.

Sir, I was asking about the disbursals on retail and SME on a Y-o-Y basis has just improved?

This was...

In line with the percentage, has the disbursement increased Y-o-Y, is that the question?

Yes. Yes, that's the question.

So it remains, quarter-on-quarter, there is a growth of around 5% in the retail assets. And MSME would to be around 3.5%.

And then Y-o-Y?

And Y-o-Y, of course -- no, I don't have the figures of Y-o-Y here -- disbursement would be about INR 4,200 crores to INR 4,500 crores last year same quarter.

Right. Okay. I was basically trying to figure this out from the context that if you looked at the total loan sourcing fee and with respect to BSA, there has been a substantial decline both on Q-o-Q as well as Y-o-Y. And I'm guessing the mid-corporate and the large corporates, whatever we would be doing would be through the -- through our own employee base and booked into the main center. So why is this decline on the effects only on the BSA?

Okay. So I'll just to clarify only on the retail asset, we were at approximately at some INR 2,200 crores last year, same month. And [ erase that asset ], we are already at around INR 1,600 crores now. So obviously, it is moving back to almost the normal level. I think in the next 1 or 2 months, it should come normal. Yes, answering your question on BSAs. What has happened is that the direct distribution by dealers and operators, they are trying inventories are moving very fast. And that is where a lot of growth is coming. See, often BSAs, they won't be lasting all because also, it's model-related. That is moving well. And more important than that, our direct channels are -- because our branches largely are actually moving extremely well and they are selling actually on arrival.

The next question is from the line of Mangesh Kulkarni from Almondz Global Securities. There is no response from the current participant, and this was our last question. I now hand the conference over to Mr. Prashant Kumar for his closing comments.

So thank you so much. And I think during the current time, we continue to engage on a digital framework so we are looking for that opportunity where we were able to meet all of you face-to-face. I wish you and your family, I think, very best in the current festival time.

Thank you.

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