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Ladies and gentlemen, good day, and welcome to CSB Bank Q1 FY '24 Earnings Conference Call, hosted by YES Securities. [Operator Instructions] Please note that this conference is being recorded.I now hand the conference over to Mr. Shivaji Thapliyal from YES Securities. Thank you, and over to you, sir.
Thank you, Nirav. Good afternoon and a warm welcome to all those who have joined the call. The CSB Bank management is represented by Mr. Pralay Mondal, Managing Director and CEO; Mr. B. K. Divakara, Head of Strategy and Corporate Legal; and Mr. Satish Gundewar, Chief Financial Officer.We specifically thank the management of CSB Bank for giving YES Securities the opportunity to host their results call. The management will first be making some opening remarks, after which we will throw the floor open for questions.I now invite the management to make their opening remarks. Pralay, over to you.
Thank you, Shivaji, for hosting the call, and thank you, everybody, for joining. Very good evening, and we just announced our results for Q1 FY '24. I'm sure you have seen the commentary -- seen the results already.So to begin with, I think -- globally, I think the economy has started improving slightly, though at a very slow pace. The declining trend is projected in the global GDP growth even now, where 2024 might witness some gradual uptick as inflation moderates and real incomes strengthen. Headline inflation is projected to decline due to tighter monetary policy taking effect, lower energy and food prices and reduced supply bottlenecks.Global growth has slowed sharply and the risk of financial stresses in emerging markets and developing economies is intensifying among the elevated interest rate. Uncertainty over the evolution of Russia's war of aggression against the Ukraine and which global impact remains to be a concern. And from the hawkish Fed announcement, market will there could be another chance of 25 basis points shy in the next meeting. Though certain headlines are changing because of the bond yields are going down. Even yesterday, I think the bank -- I mean, there had been certain inflation-related points, which is also in the Bank of England.So I think certain green shoots are emerging where the interest rate may not be continuing to go up continuously, but at least another 25 basis points is expected. On the domestic side, India has been stable and resilient, as reflected in sustained growth in bank credit, low levels of nonperforming assets, adequate capital and liquidity buffers. The narrow current account deficit, I mean, it's really pretty good underwriting foreign exchange reserves, ongoing fiscal consolidation and the robust financial system of setting the economy on a path of sustained growth.Headline inflation is gradually moderating due to the combined impact of monetary tightening, supply side measures and easing of global supply bottlenecks. The slowdown in monetary tightening by Central Bank has resulted in [indiscernible] declining. However, taking cues from the hawkish Fed announcements, 10-year benchmark, which is showing an improving trend, but it's in a range between 7.07% to 7.13%. System liquidity is hovering around INR 2 trillion plus. And as per RBI statistics, the banking system deposits grew by around 13%, a little less than that, and advances grew by slightly above 16% on a Y-o-Y basis. So I think that's broadly where we are now.Now coming to the CSB specifics, the overall performance on both top line and bottom line was pretty good on a Y-o-Y basis and highlights of our performance are improved profitability. Net profit, INR 132 crores, up by 15% from same time last year. Operating profit witnessed a growth of 17% over same time last year, provisioning buffer of around INR 170 crores over and above regulatory requirements, which includes a contingency provision. Could maintain a NIM above 5% for the quarter, around 5.4%. ROA improved Y-o-Y from 1.75% to 1.79% for Q1. Liabilities improving the funding base, so deposit growth of 21% Y-o-Y, almost in line with what we did last quarter growth, and as against the industry growth of around 13%. CASA growth of around 6% Y-o-Y and CASA ratio could be maintained above 30%. In my last call also I said, we'll keep it within 30% to 32%. On a sustainable basis, still we continue to grow. And then FY '25 onwards, we will take it up much faster.On the asset side -- on the CASA, one more point is while it is a 6% Y-o-Y, but average CASA growth is much faster than that for us, which means we are getting a sustainable CASA growth over a period of time. Asset growth front, net advances grew by 31% Y-o-Y. Industry has grown by around 16%. Gold loan portfolio crosses INR 1,000 crore mark and registered a growth of around 42% Y-o-Y. Yield on advances for Q1 FY '24 is 11.18%, with an improvement of 55 basis points. Improved asset quality metrics is also there, it fared well in all key parameters, GNPA 1.27%; NNPA 0.32%; PCR 93%. And if you take out the written-off portfolio, then it is 72% around. Contingency provision accounting books is higher than NNPA, continuing with accelerated NPA provisioning higher than RBI requirements, which I just talked about before. We have fully provided the SR portfolio in line with RBI guidelines.On the capital side, of course, we retain a very high capital, we're still 26%, a low proportion of risk-weighted assets compared to the industry, and that is also helping. Shareholder value creation front, book value per share has reached INR 184, pretty consistent growth. EPS for Q1 FY '24 is INR 30.57. ROE is at 17.5%. Investments, we are making 100 branches during FY '24, and 60% of those branches will be in North and West. And we are working majorly on technology enhancements. I'm sure there will be a lot of questions there. So I'll elaborate that point of time, majorly on technology enhancements, including new core banking system.So in conclusion, on a Y-o-Y basis, we have done well, we will do better through the year on all key parameters. On a YTD basis, the quarter has somewhat soft. And on the deposit front, as I mentioned in the previous call, there's slightly high cost short-term deposits that we have mobilized to fund the loan book in Q4 got matured and rebuilding the book was done cautiously with due cost considerations. And we have deliberately kept those deposits at a slightly shorter tenure, because we knew that interest cycle eventually will flatten out. And hence, we'll get the benefits of that maybe after a quarter or 2 as and when the interest rate cycle starts flattening or reducing. Few large value takeovers and prepayments affected our SMA and wholesale book slightly. These are some of the older books, but still we have shown a growth.Higher investments in people, technology systems, et cetera are required and for the scale-up, which are impacting the cost side slightly. And I have said before, costs can be seen as cost and investments, investments on people, investments on infrastructure, distribution, technology, all those are going full blown. And hence, we remain in -- we'll continue to invest into that, because it has a payback period. And over a period of time, we'll see the cost to income starting to have a glide path towards our 45% kind of a guidance by FY '30. Enhanced focus on income streams are helping us, like, commission, trade ForEx, processing fee, liability fee income, the insurance fee income, all of that is looking good. And we'll continue to work towards the achievement of the milestones set under SBS vision for the year and try to achieve the vision ahead of the target.So the management team is pretty confident. I also want to add that we have almost now filled up 80% to 85% of our senior management positions now across most businesses and verticals and functions, et cetera. So we are all having the potential to build the bank of the future. From now onwards, we'll see by FY '25, the build phase of the bank will be over and then the scale phase will start by FY '26 onwards. And FY '27 to FY '30 will be the absolute take-off stage.So with that, I conclude my opening remarks and hand over the conference back to further questions.
Thank you very much. We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Suraj Das from B&K Securities.
Congratulations on a good set of numbers. I have a couple of questions. So first question is on the growth trajectory and NIMs outlook. If I see your growth this quarter, I mean, loan growth in absolute term is hardly [ INR 450 crores ], while deposits and investment are broadly flat Q-o-Q basis. So in terms of growth, while the Y-o-Y gross percentage is great on absolute basis, the incremental business appears to be slightly sluggish. So my question is, I mean, what are your views there? How do you see it going ahead? That is question one.Question two is, sir, if I see your LCR and CD ratio, so LCR has come down to [ 100% ] and CD ratio is also, I mean, high at around 86%. So it appears that there is hardly any excess liquidity left on the book. So on this backdrop, how do we see your deposit growth and loan growth in coming quarters and as well as in FY '24? Do you feel that you need to be more aggressive on the deposit front and then you need to increase the card rates on both [ SA ] and TD or some -- I mean, only [ SA ] and TD, I mean, what are your views there? Consequently, how do you see your earnings in coming quarters as well as for the full year '24?And one last question on the data keeping side. So on your slide, Slide 9, according to me, in the prudential provisioning policy side, there the NPA provision that you mentioned INR 66 crores, which is over and above your, you know, [ high that ] requirement. The question is, is this provision is already accounted in net NPA calculation? I mean, has this INR 66 crores being deducted from gross NPAs to arrive here INR 68 crores net NPA figure? Yes, that is all from my side. Thank you, sir.
Thanks, Suraj, for your questions. So I will answer the first 2, and I will request either Satish or Mr. Divakara to respond to the third question. Yes, on the growth side, year-on-year growth is robust, and we have continued to grow what -- actually faster than what we grew last quarter on a year-on-year basis. And generally, first quarter is soft for us in general, and then it starts picking up. That's how historically it has happened. But clearly, we are committed towards what I have said before that we will grow faster than the system by 30% to 50%. Now the team is confident to sort of come up and say that we'll grow faster than the system by 50%, not 30% to 50% anymore. So if that account gives you confidence that the team is quite clear that we have to grow faster than the system by 50% at least, which means that if the system grows by 13% to 15%, we should be able to grow somewhere around 25%, and we are geared for that.Coming to the second question on CD ratio and LCR. Yes, that has dropped a little bit for various technical reasons as well. CD ratio, of course, is a function of deposits. And I already said before that we will remain in the range of 85% to 90%. So almost all the numbers if you see, including CASA, including CD, including growth, this is -- and if you look at my commentary or transcript last time or last to last time, it has been pretty consistent, and the results are exactly in line with that. So CD, we will keep it between 85% to 90%, because a bank which is growing by less than 10%, even 2 years back or 1.5 years back, is growing at 30%. So when you grow at 30%, obviously, overnight granular deposit mobilization, which will help everything, including LCR, CD, cost of funds, everything is not easy. So we have to sacrifice summer. So I think CD ratio between 85% to 90% this summer, we will hold ourselves to.On the LCR, this will fluctuate a little bit here and there, but we are well above the regulatory norm, and we are pretty confident that this will not going to be a challenge for us. So if the question is funding for our asset growth, I don't think there is any problem at all for us in terms of funding for asset growth in the foreseeable future. And the NIM of 5.4% and the cost of deposits, et cetera, as you see, we are holding to that. So to that extent, I think we are having a stable growth trajectory.Coming, do we need higher interest rates for mobilizing deposits or CASA, answer is no. I don't believe in buying deposits or buying CASA. We will set the system to ensure that we get the right businesses. Having said that, we will focus on a lot more verticals. So those verticals includes a task, includes more focus on government. We will start implementing salary businesses. We -- and we are launching that. We are segmenting our quality of products and going gradually higher. We are adding 60% more branches in North and West, where the liability franchise is predominant and we are focusing on that. We have launched transaction banking. So there are various initiatives which we are doing, which will help us in building the CASA as well as the deposit franchise and just not one.And lastly, we are adding 800 to 1,000 more people on the front end to get on the sales side to add more customers to the bank. So all of these will build a deposit, which is sustainable and component growth story. So we don't need rates to build the businesses. So these are the first 2 answers to your first 2 questions.On the third question, Satish you would like to add?
So your question was in terms of our provisioning policy, which is more aggressive than the RBI norms. So simple answer to that is that if the provision is made on an NPA account, then, of course, on the net NPA when we calculate, it will be reduced from that. So if the RBI norms require us to provide, say, 25%, and I provide 50% on that. And if it's an NPA account, then, of course, that provision will be counted for concluding the net NPA. However, over and above that also, we have spoken in our earlier calls also about the contingency provision. Now that contingency provision is held against some of the standard accounts. So that is an over and above the NPA accounts provision. We also hold our provision -- contingency provision, which are specific to some standard accounts. So I think that should answer your question.
Yes, yes. Yes, it does.
Next question is from the line of Mona Khetan from Dolat Capital.
My first question is on the cost of funds. So going forward, what sort of trajectory do you expect? We have seen another 15 bps rise in cost of funds. So could we sort of expect the same run rate on the rise in cost of funds? Or how do you see it?
So on cost of funds, I think, gradually you're seeing flattening. I mean it has increased the cost of deposits and cost of funds. But now it is starting to flatten, one more quarter to go. So by the end of this quarter, I think this is the last quarter where we'll see, if at all, anything on the cost of funds elevation. After that, it will start either flattening or tapering down. So that is what our take when we do our analysis of our portfolio. So -- and NIM will also follow that. So we -- from an NII perspective, maybe this quarter, we'll have -- we'll continue to have a soft quarter. But third quarter onwards, I think -- NII means, net interest income. But eventually, I think third quarter onwards, we should start picking that up as well.
Sure. Got it. And secondly, on the fee lines, we've seen a strong growth on a year-on-year basis. So are there any one-offs out there or this kind of a traction could continue?
We -- our bank -- a, is cannot do one-off. And secondly, I don't believe in one-off. So whatever you see will be sustainable franchise long-term growth story. So what do you see this quarter, you will see better next quarter on fee income and that -- these have been promising for the last 1.5 years. So I said that core fee income is my focus. And you are seeing now core fee income is becoming a sustainable story for the bank. And we will continue to grow this part directly, okay?So to that extent, you will see -- because we are launching a lot of other things on the fee side. So from that perspective, we'll see core fee income growth to sustain. This quarter, for example, we have not even create an PSLC income. While we have bought some PSLC on the micro side, we have not sold anything and we are sitting on reasonably large book. So all of that will also add to this income, but I don't consider PSLC treasury as a core fee income. Core fee income will do even better than what you are seeing right now.
Got it. And when it comes to the employee expenses, so on a high base, we continue to see very strong growth. And I understand you have a large addition of employee-based plans to add in a big way this fiscal as well. So what sort of growth in employee expense could be and as such?
So let me clarify one thing that this was a little bit of an aberration. This one is a one-off. Because first quarter employee expense, the way we have managed so far goes up a little bit, and then gradually it stepped down. So to that extent, in number of employees, we will see continue to grow. If you look at it, Q4 to Q1, our number of employees have gone down actually instead of going up, but that will significantly go up in the next 3 quarters. But our employee cost has gone up primarily because of the way the expense -- we expense out the bonus and other things. That's the reason it is showing up a little bit. Also, we had some actuarial costs, et cetera, this quarter.So if you net that off, that one-off kind of a thing, then I think employee cost will be in line with our growth in employee. Actually, it will be lesser than our growth in employee because now we are expanding the base of the employees and rather than the top end of the employee because that's 80%, 90% done. So to that extent, I don't think this is a one-off. And you will see employee expense going up, but not at the rate at which it is, it will be probably at the half the rate which you saw this quarter.
Sure. Got it. I have 2 additional questions. Should I go ahead? Or should I come back in the queue?
I don't know. Up to you.
Ma'am, I request you to join the queue again.
Okay.
Next question is from the line of Shubhranshu Mishra from Phillip Capital. Due to no response, we move on to the next participant. Next question is from the line of Pallavi Deshpande from Sameeksha Capital.
On the actuarial expenses, so how much would the actual amount be for that [indiscernible] cost and what you see for pension liability?
So I don't think those things are in the public domain, but it's a, one-off and b, not, really very large to be talking off. But because I've explained to Mona, I said that there has been some additional there as well, but it is really not a very large amount.
Right, sir. And sir, especially on the cost of funds, I think would you have any details on the bulk deposit rate? What would be the share of that in the total of cost of funds?
So we don't pay for bulk deposits -- so Pallavi, there's echo, but let me try again. So what I'm saying is that we don't pay high rates for bulk deposits. And hence, we do it best on a relationship basis. Do we have large deposits? Answer is yes, but they are mostly historical in nature. Incrementally, we are primarily focusing on sustainable long-term kind of deposits, and they can be slightly large, they can be granular. But we are pretty confident of the kind of deposit franchise we are building, which doesn't -- which is not price dependent. And hence, it will be sustainable and long term. That's the way we're building it, and we are pretty confident of building up a good liability franchise.
[Indiscernible]
Ma'am, sorry, we are not able to hear you.
I think she has done with her question.
The next question is from the line of Sumit Rathi from Centrum PMS.
My first question is what is our strategy, for example, over the next 2 to 3 years on the percentage of the retail loan as a percentage of AUM and SME as a percentage of AUM, like, over a period of 2, 3 years, sir?
So let me give a slightly longish answer to this. So our -- what we have found of zeroed upon is by FY 2030, as a part of our sustained build and scale strategy 2030, we will have 20% gold, 30% retail, 20% SME and 30% wholesale and other businesses, which includes securitization. That is our 2030. The way we have broken it up is now to FY '25 one phase, FY '25 to FY '27 second phase and FY '27 to FY '20 next phase. And we have completely planned it out how we'll do in each block of this 2, 3 years. So right now in the build phase till FY '25, we will continue to depend on building our revenue and for investments, the money which we need from the gold loan business, which we understand, we have sorted the system. We have those investments already built in. So gold loan is continuing to do well for us. And hence, and it is -- it is quite very low. The losses are very low. We understand this business. Yields are very good, which I have shared with you.So from that perspective, we'll continue to do something which is doing well. Apparently, we are building the entire retail assets and SME franchise. You could see that for the first time in the last 12 months, the retail franchise have started showing positive growth because of the older portfolio, there is a run up there also. That's why it was showing negative before. Even SME was showing negative. Now last 2 quarters, you're seeing a positive growth. These are green shoots, what we're doing. But given that, a, there is a -- there's a tremendous growth in retail in the ecosystem. So I want to wait out a little bit from a risk perspective and see because when as a new entrant, you enter a system where it is a heated kind of a system, you don't want to catch the tail there. So I want to wait out, out for 2 years.And more importantly, in these 2 years, we are building everything, including leadership, processes, internal customers, the sales channel, which will be the liability franchise and the liability customers, because I still believe that you don't go out and distribute retail loans based on our credit bureau score and things like that. You need to understand the income of the customer, his relationship or her relationship with the bank. So we want to build a proper franchise. So that will take us 2 years. And which are the products we are focusing on retail, while we have some business -- I mean, forward the old portfolio, which is already there, but the new portfolio, there is a small portfolio in 2-wheeler and personal loans. But the real ones, which you want to focus on in home loans, in-house home loans. We want to do retail LAP as well as SME LAP. We want to do commercial vehicles. We want to do commercial equipment. We want to do auto loans.We are also looking at specific education loans targeted toward certain segments, which are -- where risks are lower. We are also looking at health care. So all these businesses we have built and we are building modules of LOS on this, and we are also parallelly implementing the LMS. So -- and we are also building up the leadership team for all these products. We have created a business leadership team, the credit and the collections leadership team, and we are gradually starting to build the technology and the processes and distribution.So the entire plumbing for the retail assets is now at play, and this will show up FY '25 onwards. But till then, because the base is low, you're seeing a good growth in retail, but in absolute terms, it's not much. It's shows that it's green shoots. On the SME side, I think a lot of what has been done in the last 1 or 2 years, and that is starting to show up now and we will continue to see the growth in SME now onwards, because now we are going to be seriously playing that game on the SME side.And wholesale FY '25 onwards will take slightly larger strides there as well. So because of all this, '25 to '27, we will start seeing tapering down of gold loan as a mix, not as a growth but as a mix. And FY '27 to 2030, you will see a significant growth on the retail and SME. And then wholesale will start picking up also from there the way we are building the transaction banking and some of that. Also need a large balance sheet to build the wholesale business in a more realistic way. So that is exactly the plan.And along with this, if we do it right, the CASA franchise will automatically build, because based on all these, the CASA franchise will build. The fee franchise will get even better. And if you get the transaction banking, if you get the CMS, then automatically task starts doing better, the SME does better. So all of these, the inter-ecosystem banking, as we call it, we are building. So this is the way we are building FY '25, FY '27 and FY '30.
Wonderful, sir. That was a great detailed answer. So in continuation to this, like, for example, SME, we have seen like from last 2 quarters, started giving those green shoots, which you were looking for. So I just wanted to understand what kind of underwriting practices related changes we have brought, because as I understand, gold loan underwriting and SME underwriting and other retail asset underwriting requires different kind of skill sets. So what are we doing over there? Are we going to make anything centralize or decentralize or what kind of people are we adding in our credit team? If you can give some color on that.
Sure. So first of all, gold loan, there is very little credit in gold loan, it's a operations risk, not so much of a credit risk because you have the metal with you. Only for the higher ticket sizes, CIBIL Score, et cetera, are required, but it's more a operating risk thing. So gold loan is not so much credited more operating -- operation risk on the -- an execution risk.On the retail side, of course, you need very different kind of [ pay underwriting ], which is policy based, process-based, technology-based, spot card based and more than underwriting constant monitoring of the portfolio and constant correcting of that portfolio is what is important.Coming to SME, I think -- so let me just explain, it's a great question. So let me tell you, how we are -- there was a time in the bank many years back, which should do decentralized underwriting, many, many years back. We have moved away from that some time back. And now we are creating a very strong credit governance structure, because all my life I have been more of a credit guy than a business guy, okay? During my HDFC bank days, everywhere, we have -- I have been more credit focused.So the way we're building is, under our CCO, we have created SME vertical separately, wholesale vertical, retail; under retail, there are various sub verticals depending on which products. Then we have created under in the entire debt management structure. Under debt managed structure, we are creating retail separately, SME separately and wholesale and then recovery and some -- and strategy function because collection has a detailed strategy requirement there and MIS and other things, analytics. So analytics is also falling under the Chief Credit Officer, who is looking after this.So in short -- and on retail, obviously, it will go on LOS and hence it will go mostly on the APS or LOS. So -- and on the wholesale, obviously, it is more relationship-based and hence, you have to get into the full depth of the relationship and understand what kind of business we're doing, why we are doing this, and we focus on certain segments, certain verticals, et cetera. So -- but one thing is common, there is nothing decentralized. The only thing decentralized is gold loan business because there's operation risk. Everything is centralized based on policy. And we -- I have worked in 3 -- 4 banks before this, but let me tell you the amount of focus we have from Board on Credit Committee and those kind of governance. It's really good credit, I think, which you are building up, both on wholesale and SME.So to that extent, on credit, I'm very, very confident, we are building a very good governance and culture. It's just not processes. We are getting great people. We have got a very good team under us right now. So credit is something which we are very, very focused on. Credit, debt management, collections, analytics and we are building systems and data also. So that's the way we are billing credit.
So what kind of numbers of people we have added so far in, say, credit team and our collection team so far, whatever we have added?
I don't have exactly that number, but we have built up a fairly -- we are building up a fairly large team. So what we are doing is unlike business where you go bottoms up and top down both, in credit you need to go top down first, which is creating the right kind of a management right, right from the governance and processes, because we don't want to unnecessarily build a large cost structure on the ground till the business starts coming in. But the framework and the management and the ability and the listing, that's what we're building right now.In terms of distribution, we are doing as and when the business asked for that, we have those requirements. So -- and on retail, it's not about just numbers, it's also about technology. We are investing significantly on the technology. So we are building up in credit. The right kind of -- it would be that kind of structure. I think the right answer to that is our structure is now in place. Now on the ground, we'll -- it'll be based on the requirement of the business.
Sumit, sorry to interrupt you. I will request you to join the queue again for a follow-up question. Next question is from the line of Deepak Poddar from Sapphire Capital.
Sir, I just wanted to understand, I think in one of the remarks you mentioned that till FY '25, the investment fees will continue, right, for the company?
Yes, yes, yes. Our investment fee, you mean fees, fee income?
Investment fees.
Investment fees. Yes, yes, yes. investment fees will continue. The major accelerator of investment fees will continue until FY '25 end. And after that, we'll continue to invest into people, into technology, into geography, distribution, because I've said before by FY '30, you would like the branch distribution to go to 1,500 branches. So which means that it's not we are going to stop. But right now, where we are to where will be the big heavy lifting will be done by FY '25.
So I mean, on a steady state, what should be our aspirational ROA that we kind of would be looking at?
ROA, I've told before, again I'm repeating, I am comfortable with ROA between 1.5% to 1.8%, which is even large banks in the build face have done it. But if we are lucky, in a few quarters, we may get 2% also.
So between 1.5% to 2% is a range that we might be working with, right? On a...
We'll not go below 1.5%, and it will be difficult to go up to -- it's in that range, yes.
Next question is from the line of Neel Mehta from Investec Capital.
Most of my questions are answered, but I just had one question as a follow-up on the LCR bit. Sir, you mentioned that there was a small technicality on the basis of which our LCR has come down lower this quarter around 106%, 107%. Would you be able to elaborate, please, on what a technicality, is that a different [indiscernible].
Yes. No, it's not very complex technology. It's a technical thing. I'll tell you what. This is a tactical play, which had decided that -- because I was seeing that interest rates eventually will taper down and then fall. And there was a huge rush after deposits in the fourth quarter and third quarter, last year, by everybody. So, we had taken a call saying that we will not lock in for a very long-term kind of deposits because then we have to pay a very high interest on that for a longer period when interest cycle will turn down. So based on that, some of the businesses' deposits tactically which had picked up, was slightly shorter-term. And obviously, when in the last 30 days, LCR starts -- LCR is not very friendly on the numerator side. So from that perspective, one is that.And secondly, obviously, if your CASA as a percentage is coming down a little bit, obviously, it will impact the LCR a little bit. And we will remain in the 30 to 32 range, so that is something which you have to bear with. So that's why I'm saying that, even this quarter, some of the big tickets, which we have taken, that is also running off. I'm very happy about them running off, because we are able to replace it with proper deposits now longer term and better rates, but it will have some impact somewhere, and the impact is on LCR. So Q1, and to some extent Q2, will have this impact. But Q3 onwards, we'll be back where we were.
Got it, sir. Got it. That helps.
The next question is from the line of Sonal Minhas from Prescient Investment Management.
Hi, sir. This is Sonal Minhas from Prescient Capital. I have 3 questions. First one is regarding the SME loan book. Just wanted to understand, I think, it's been like a few quarters now been seeing the growth and buildup, it's kind of muted. So I wanted to understand the concentration of this book, which is largely Kerala and TN. Also to understand the quality of the inbound proposals that you are receiving, is that something which is of concern? Just to get a sense of this business growth over time.
Okay. Thanks, Sonal, for your questions. So if you look at it, in fact, last call also I had told that the reason till Q3, we didn't pick up SME business as much we could have is because I thought that the pricing of the risk in the market was not to our appetite. So Q4 onwards, we saw that the pricing to the risk was becoming more rational, and that's the time when we started picking up the business. And this quarter also, we have picked up. So if you stand and then look Q4 and Q1, we have done reasonably well on SME. And that growth is only going to not only sustain, but going to go up.Second question, in terms of concentration. If you divide the old book and new book separately, the new book is fully national across Northwest and South. There is no specific geography concentration. In fact, we are expanding significantly in West and not as well on the SME side, and just not South. And we are also leveraging the branch banking channel in a big way. We have picked up 20 specific branches where we are running SME kind of a mela between the SME and the branch banking, et cetera. We're also launching a new current account product variant, where the current account team and the SME team will walk together.Also the Transaction Banking Head reports to the SME Head right now, who is also a very good guy. So they are building up solutions on TFX and other businesses, CMS, et cetera, which will help us in building the SME business. So from -- and we will leverage the branch banking channel. Also, the new acquisition channel, which we have created for liability acquisition, that would also have a current account team. They are also working with SME from a lead distribution perspective. So with all this, we are not interested in business where there is a walk-in of a customer. We don't encourage walk-ins either in liability or in assets. We believe in going out and getting customers based on what we want, and through referral businesses and things like that. So that's the second thing on the geography.The third point is, credit concentration -- credit focus. I have answered that before, that we are very focused on credit, and we don't do back credit. So because of that, we have to sacrifice business, we are. So I was discussing the other day between my Credit and SME Head. And we are letting more cases than we are approving at this stage in SME, and our approval rate is well below 50% right now in SME. So that's the kind of credit results, which I'm happy with.
No, which is good to know, sir, because I think when we do talk to some of your players in the same market, we hear not a tighter SME loan book growth. So this is heartening to know. This is good, this is good. So this answers my first question.I have a follow-on, which is on your fintech partnership, your partnership is one, which may be maps onto your retail loans in your book. What part of your retail loans is being sourced through these partners? And what is the quality of that book? How are you managing that? Just tying to understand that.
We are currently incrementally sourcing almost nothing through the fintech partners at this point of time.
Okay.
And we are also waiting for full clarity how the regulators are looking at it, how the FLDG -- of course, there is a better clarity on that. Also, our API stack is just ready right now. But we are not into this small ticket businesses and unsecured. We are not -- I'm very clear that, the building of the retail business cannot be on the basis of unsecured businesses. So if there are partnerships, but we have a good partnership on the cards side, because we don't have investment planned in cards in the next few years. We are building the other tech stack, we can't build credit card stack right now. So that business is doing well, that partnership is doing well, which is with OneCard. Otherwise, we are not doing any business at this point of time incrementally with any fintech at this point of time.But are we getting to the state of readiness to do that? The answer is yes, from a technology perspective. Because at some point of time, the clarity will be there, and then we will join hands.
And sir, out of the INR 122-odd crores of other income that we are generating in a quarter, how much -- is that largely -- and I'm not going to ask a question of how much, but is that largely being driven by OneCard like because they are steering quite fast as what we had in the market? Just trying to get a sense of...
No, no, no. Fee income, see, I've run a very large card business in HDFC bank. So I understand where your point is, because our cards portfolio is very small, so we can't generate that kind of a fees. So our fees is primarily, I'll tell you, in terms of top to bottom. It will be insurance to income, it will be liability to income, it will be the TFX to income. It will be processing based on various existing LCBG and all of that stuff. So it will be also ATM fees and some of the other card fees, which is debit card fees and all of that stuff. So it's a combination of many things. It's just not one thing. But what we have done is, because we're adding a lot more customers to the bank now, our ability to generate a lot more fees -- because this customer quality is much better than what we had before in the bank. That is helping us. So that's why I'm confident that we'll be able to continue to grow this fee business on a sustainable basis, and we are investing after that.And there are a lot of good partnerships which have got on the insurance side, that is also helping. So overall, it's a very good place to be in on the fee business.
I understand that, sir, that explains. Sir, this is the last question on CASA. Do we expect the CASA -- because, I think it's flattening out slightly in the negative territory. So just wanted to understand, do we expect the CASA to grow once your tech stack is up and running, basically. Is that the key trigger point, and we should wait for that?
Yes. So let me explain -- I mean, you know this, how does CASA grow? CASA can only grow when it is able to utilize the money, right? Based on usage, and that's how the float happens, whether it is current account for the business people or it is for household CASA. So only when you are able to cross-sell, we are able to create utilities around it, et cetera. Then only we'll be able to get a reasonable ATS and reasonably value per account. Otherwise, it will not grow.So that will be in that state of readiness FY '25 onwards. So the granular real CASA will start happening FY '25 onwards. Right now, the CASA growth we will see is because of the new launches which we are doing in products, whether it is current account or savings account, and huge acquisition we're getting into the bank, and we are improving the quality of acquisition. We have reduced our blue accounts, which are the lowest level accounts, and we are increasing our silver and gold -- I mean next level of accounts. We have added premium accounts, 2 more accounts there. So we are experimenting with all this. And once our cost system is ready by FY '20 -- I mean, whatever time, 15 months from now. After that, a lot of these things will get connected. So the right time for the granular CASA will be FY '25, till then we'll have to manage with a 30% to 35% in between maybe 30% to 33% kind of for CASA ratio.
Understand. Understand that. And we are reasonably sure of the triggers basically from 15 months from now. Basically, there are not too many moving parts from [ ATS ] in terms of execution.
Yes. FY '25, you tell me one thing which I have committed, we have not delivered in the last 18 months, so...
I have been tracking CSB for almost 10 years now. So from a private side to the public side, so I understand the [ fees ], but until -- this is something which, I have -- this is on for the longer term growth of bank, that's why I wanted to understand this.
FY '25 onwards, we'll be in the next phase. The bill phase is over for us.
Sure, sir. Look forward to being in touch.
Thank you. Next question is from the line of Rakesh Kumar from B&K Securities.
Sir, just to address some clarity on this, most of [ accounts from our channel ] with respect to labor code. So if you can help us understand what could be the likely impact, if any?
I didn't get your question. What was the question?
Yeah, that labor code -- I mean, if the standard note comes generally if you see in many of the banks, also. Since it is not yet implemented, it is very difficult because the final contorts are not known. And we really don't know when it will become applicable. So it is very difficult to comment on that.
Okay. [Indiscernible].
But sir, what was the purpose of, like you know, we have put that in the [ motor ] account, also like have we done any commission on this with...
No, no. Just because -- because currently, there is no clarity in terms of when it will become applicable. So we haven't done any such work in terms of what will the impact of that because still it is in the [ dark ] format and final contorts are not known yet. Whenever the government will make it applicable, of course, there'll be time for implementation. At that point in time, it will be clear, at that point.
Got it, got it.
For a moment, I got the question wrong, I thought -- see, I want to clarify, although, the question is not that. But let me tell you, in the last 18 months, we didn't have any strikes in the bank, okay? We didn't have any labor unrest. Today, our productivity in terms of the way the businesses are happening on a day-to-day basis, it's a very, very good productive organization. So we don't have any such issues, which -- we used to get a lot of questions on this before, but let me tell you, Labor Union, this, that, et cetera, doesn't -- everybody is working together in growing the bank today, and it's a very good environment to be in.
Got it.
Thank you. Next question is from the line of Aravind R from Sundaram Alternate Assets.Aravind may I request you to speak louder, please?
Yes. Can you hear now?
Yes.
Yes.
Yes. So I just wanted to understand like a few things to take, in a very basic understanding. SME loans, like are they predominantly LAP -- are they predominantly secured -- that is one thing I wanted to understand. And what kind of LTVs are yields to take care in the SME loan centric, and what kind of ticket phases it ranges.Similarly, in retail loans, I can see like 32% Agri, 16% MFI. So I was trying to understand, are Agri loans also like again secured loans? I was trying to understand, that's what I was trying to understand.
Okay, sure. So first question first, which is SME, LAP secured, unsecured. We don't do anything unsecured in SME, okay? And LAP is a separate business. We don't mix the LAP business with SME. So LAP, we report separately. And on LTV, on LAP, I think it is 60%, and SME there is no question of LTV, because mostly it is cash flow-based lending and detail credit related. So it is not to do with LTV.Ticket size, the way we divide is 2 parts. One is 0 to INR 10 crore turnover is done by the branch, I mean, leads are given by branch through a separate team under retail. Branch doesn't do it, but there is a separate team vertical, which works with branch and does it. And this is a pretty much standard structure, which is there in all the banks. And INR 10 crores to INR 250 crores turnover is looked up by the SME team. And hence, whatever the ticket size means. So anything between INR 2 crores to INR 25 crores is something which SME team mostly looks at, and average ticket size will be around INR 7 crores to INR 8 crores.Coming to Agri/MFI, yes, that's a part of the retail business. It's doing well. MFI, we don't do directly, we do it through [ BC ] partners at this point of time. And agri mostly it is KCC, and MSME kind of businesses in the -- on the ground, because we don't have our SME team going there, so they handle both the businesses on the ground.We have -- we are planning to launch -- in a way technically, we have launched probably it is tractors and all that, but we don't want to take it off at this point of time. And again MFI is doing pretty well for us. And because we have distributed almost 50%; 50+8, 58% of our branches are in semi-urban and rural. So we are also leveraging that through -- we don't leverage that for microfinance business because those are [ BC ]-oriented, but we leverage them for our Agri businesses as well.And Agri business mostly is secured. And MFI, of course, [ BC ] business or are unsecured. These are typically JLG kind of loans. So that's broadly what I thought -- hopefully, this is what answers your questions.
Just one more thing, like you did mention about the retail loans and SME loans like as a proportion of the total loans to be at the 10 range by FY '30. Can you just repeat it?
So by -- it's very easy to remember. That's why I've done it like that. 2030 is: 20% gold; 30% retail; 20% SME; 30% wholesale, securitization and all other businesses together. So 2030 is: 20, 30, 20, 30; 20 gold, 30 retail, 20 SME, 30 wholesale and others.
Thank you. The next question is from the line of Asha Rawal from Subhkam Ventures.
Yes. Sir, my question pertains to the things like you had mentioned. Next quarter also, we can see some deterioration in the CASA in terms of the short-term maturity. So -- and what would be our LCR? I mean, how you see LCR ratio then? That is 107.
I can't do a crystal ball gazing, but what I can tell you is that CASA ratio will be between 30% to 32%; and 30% to 33% actually, that is the range I'm planning. And we'll be better than this year, than this quarter. And LCR also hopefully will be better than this quarter. Where it will be, we don't know, okay? I would like to keep my hurdle rate at 110%, so this is 3% below hurdle rate. I would like to -- but that is the last quarter. Q3 onwards, I've done my calculation, Q3 onwards, our -- CASA will remain in this 30% to 33%, but LCR will start improving because of the explanation I get before.
Okay. And sir, what is the target for the credit cost has gone up for the quarter.
This is the problem. When you have a negative credit cost as soon as it touch below our basis points we say it has gone up, but I had told this in my previous calls that our long-term thinking is our GNPA will be below 2%, NNPAs will be below 1%, and credit cost will be contained within 50 basis points -- 40 to 50 basis points. This is what I've told before. We are well within that range.GNPA has reduced significantly compared to same time last year. So is NNPA 32 basis points. Slippages are well under control, and credit cost has marginally gone up. Credit cost has one component, which is upgrades and recovery. So this quarter, upgrades on recovery was slower than what we did in fourth quarter. And hopefully, we'll be able to pick it up next quarter. So -- but it's in -- it's really very small numbers to talk about at this point of time. But I had always told that we can never remain in negative credit cost zone forever. So sometimes, we have to cross that. So we crossed that this time. We'll see how it goes next quarter.
Thank you. Next follow-up question is from the line of Sumit Rathi from Centrum PMS.
So most of the questions are answered. I just wanted to check, like you have planned out till FY '30, very thinking -- in a very crystal clear manner. What would be the impact on our credit costs? Like how would it move? If you can give some clarity on that, like FY '25 and then beyond that? Because our asset mix will change, our credit costs accordingly [ temporarily ] would come -- go up. So how do you see credit cost panning out for this -- in these 3 stages?
No, very good question. The answer will be very long, but I'll try to keep it short, okay? So typically, what is happening right now is gold loan, if it is somewhere between 45% to 50% of the portfolio, the credit cost is almost negligible, okay? Then we have credit costs coming from our older portfolio, which clips, okay, which is also reducing balance, okay? I mean, I'm giving us how counter -- how each are going to counter each other. So one is positive, one is negative.Now, third is we will launch new businesses on the retail side. And obviously, nobody can do retail business at 0 credit cost first, okay? So, credit costs will start going up. Having said that, at least for the next 5 years, once it starts picking up from FY '25 onwards, the way it will play out is, typically, it doesn't show up in the first 2 years because of the nature of the waste on the retail side, then it starts showing up. But because we will continue to grow the retail very well for the next few years, we have to look both at LAP credit cost as well as coincidental credit cost, both we have to monitor separately. But what you see is basically coincidental credit cost.Now coincidental credit cost is going to continue to be slightly at a lower pace because the portfolio will continue to grow on the retail side because going from where today to 30% on our balance sheet, which is growing at 30%, will be significant. So to that extent, at least internally, I have to look at both lagged delinquency as well as coincidental delinquency.The next part is SME. Now SME will have its cycles. So however good we do, if somebody can tell me that GDP will continue to grow at 6.5%, 7%, 7.5% and will actually become a INR 7 trillion economy by 2030, then I can assure you that our SME credit cost will be very low. But if there is a cycle in between, we cannot escape that cycle also. That's again the nature of the SME business.On the wholesale side, I think we will contain the credit cost reasonably well. We don't see -- but again, there could be a bulky thing -- that can be -- it can be one account here or one account there that can come in. So overall, that's why we have calculated all of that. That's why I'm telling you confidently that this year, we will be still being lower single digit probably on the credit cost. Gradually, we'll move towards the 40 basis points credit cost by FY '30, which is very good, the best banks are in that range. And this will have this kind of a trajectory that will move on from FY '25 to FY '30. So I hope, I could answer you. Otherwise, this needs a longer conversation.
No, no, that was very good, sir. Thanks for patiently answering all the questions.
Thank you. Next question is from the line of Narendra from RoboCapital.
Most of my questions have been answered. So I just wanted some clarity over your OpEx costs. I mean you said that it would be around 45% by 2030. So what could be the trajectory? I mean, at what point of time will we see a decline in the OpEx cost?
No, I've done this calculation, so let me tell you. Again, it's a slightly long-ish conversation. The way the OpEx works is that there are 4, 5 elements in OpEx, okay? One is, the technology, which is the largest for us. Second is, distribution. Third is, manpower, which is linked to distribution, but manpower -- but it is not necessarily linked to distribution when you launch so many products and functions and particles and geography, et cetera. So non-distributional manpower cost will also be there. So these are the 3 main heads on the OpEx side, technology, distribution and manpower, okay? Salary cost.So when you look at the breakeven of each of these, manpower cost breaks even typically in 6 months' time, okay? The branch -- or distribution breaks even for us, it was breakeven faster before, because we are doing small branches with only gold loans, et cetera. But once we do proper branches in larger markets, et cetera, there we breakeven between 2 to 2.5 years. And then the technology breakeven between CapEx and OpEx, it may take 3 years or so on a rolling basis. So when you do all this calculation and put it in Excel and do a rollout plan and because we will continue to grow the manpower by, let's say, anything between 30% to 40% at least for the next 2, 3 years, and then probably by around 25% to 30% or maybe more beyond that, so we have to make that.And I've run this waterfall, and then we see that we have already told in my last call how much -- what kind of investments you're making in technology. And then you break it into CapEx and OpEx and typically, the CapEx will be for us around 35% and now in our P&L, and 60%, 65% will be OpEx on the P&L. But on the investment side, CapEx will be almost 70%, 80% and OpEx will be 25% probably, 20%, 25%. So when you bake all this in, these all this baked in brings us to around 43%, 45% by FY '30 in terms of cost-to-income.And obviously, cost-to-income is a ratio, so you have to have a lot of income assumptions out there. But because you asked the question on cost, I have divided cost into 2 parts, cost and investment. Investments are distribution, which is operating leverage on the branches. People -- operating leverage of the people which takes 3 to 6 months and technology, which gives you that kind of a breakeven.So with all the calculation, we have a phase-wise year-on-year CTI, which will take us to around 45% by FY '30.
Thank you very much for answering that very patiently. Just a second question and...
Narendra, you're not sounding very clear.
Yes. Is it clear now?
Yes.
Yes, I was saying thanks for the patient answer. Just one more thing. Given all your assumptions, is it safe to assume that our NII will increase by about 20%, 22% in FY '24 over the last year?
Our NII increase was around 17% this quarter, okay? Net interest income, right? That's what you're saying?
Yes, sir.
So NII increase was 17%, if I remember it correctly. So next quarter will not be better than this. But Q3 onwards we'll start doing better. So exit '24, obviously, I can't crystal gaze and give that kind of a number, but we'll be probably better than where we are by the end of the year.But Q2, we may have a softer quarter on NII, but we'll make it up with fee income. So always, but -- so our ROE will remain -- will sustain basically.
All the best.
Thank you. Next question is from the line of Shrish Vaze from Moneylife Advisory.
Most of my questions have been answered. My question pertains largely around something that was mentioned in the Fairfax's annual letter. So they had mentioned that the bank owns 38 residential and commercial properties, including land banks, which we had acquired several years ago and some also from -- in location of security. So just wanted to understand the geographical distribution of this and the market value? And what are our plans to monetize these properties?
Okay. No, I'll answer that. So the way it works is these are typically the [ BN ] assets, which by regulation, you can hold 7 plus 5, right? 7 years plus 5 years maximum. And within that, you have to monetize, we don't have a choice. And because most of these -- a lot of these are basically -- see, we are a 100-year-old bank, so you must understand that. A lot of these are probably recovered because some others didn't pay money or some others didn't pay their loans back, et cetera. So a lot of these BN assets are non-banking assets, as I call it, NBAs -- is it called NBAs, non-banking assets. These are recovered from that. So we are following RBI guideline. And certain times, this goes into litigation and all that. So it is almost like a recovery procedures, but we have taken a position of all this.So -- but we are not acquiring anything anymore. This is history and this is legacy for us. And we are following RBI guidelines, 7 plus 5. And within 12 years, we have to get rid of them, and we are on our way. On geography concentration, while I don't know, but I'm just assuming what of us on the same page, I mean in the same situation here. I'm assuming because the bank was out-focused. Probably the larger BN assets, non -- NBA assets will be in the southern regions, but I know for sure that last week, our Head of Premises who had gone to Amritsar also to look at some premises and get rid of that. So we would have some distributed here and there. But I would assume that there will be some, larger concentration will be on the South. That's only an assumption. I don't know the data.
Got it, sir. Sir, do we -- sir, I'm assuming that we don't expect a very large sort of income accretion from the monetization of these assets over the...
That is not even considered in. I have not even considered it, I've not even looked at it from a P&L perspective. So what I am telling you is this is on top of that. So not really material. Mr. Divakara, do you want to comment on this? You'd know better than me on this.
No, we don't have any real estate assets as such for sales. So hardly non-banking assets are there, amount-wise it is actually negligible. And we don't have any plans to sell any of our real estate.
Okay. Got it, sir. Got it, sir. That was all from my side.
Thank you. Next question is from the line of Nalin Shah from NVS Brokerage.
Yes. Most of our questions have been answered. Just 2 quick questions. Sir, this promoter shareholding, I believe from some RBI guideline, it has to come down. So if you could just tell us by what percentage, and by which year?And the second question is that, with such excellent performance and profitable numbers, when can we expect bank to be under dividend list?
So the first question, first. On the Fairfax Holding. So technical answer is that if you go by regulation, within 15 years, 26% is something which everybody knows, right? So which is in -- they came in, in 2019, so somewhere around 2034 probably, it will have to be brought down to 26%. Between that, how it will be brought down and what is the trajectory is a conversation between Fairfax and RBI. We are not a decision-maker on that. But of course, RBI may come back to us once Fairfax and some conversion goes in and they will keep us informed. So on that, at this point of time, we don't -- we can't comment on this point. But we know that 26%, but Fairfax mindset is that's what I hear, and I've heard it from very senior people in Fairfax, that they would like to hold it as long as they can. And on their own, they would not dilute anything unless they are told to dilute.On your second question on dividend, I mean, as an equity investor, would you like dividends? I don't know, okay. But we -- because, especially when our ROEs so good and things like that, and we are planning to grow the bank so well. Having said that, now the reason we are not giving dividends is because we never -- we were life-to-date, I mean we had accumulated losses. Now for the first time, we can look at it because our accumulated losses has been wiped off.Now rest is a question of what Board guides and that we have to look at it. But dividend is not always the best way to kind of a -- get return on a high growing and high aspirational bank.
Thank you. Next question is from the line of Vaibhav from Honesty and Integrity.
Yes. I hope I'm audible.
Yes, yes. You are audible.
Yes. So I have a couple of data points, so if you can help. For gold loan business, if you can help me -- if you can give me average gold loan ticket size, and average gold loan per branch and OpEx to average assets for the gold loan part of the business, not the total part of the business?
This data is not in public domain. So I would not be able to share most of this data. But typically, what I can tell you is that the gold loan ticket sales for us will be within INR 1 lakh to INR 3 lakhs in that on an average, but rest of the numbers are not in public domain. So it will be difficult to share.
So would it be correct to say that as the gold loan, because gold loan will have higher OpEx than the other part of the operation, generally, given our ticket size. Would it be the correct?
That's correct. That's a correct interpretation, but with the asterisks that where we are doing gold loan business: A) most of those branches have already broken even. B) is, we had invested into those already. So when you're invested on that, we are getting from a marginal cost perspective and marginal benefit on marginal return perspective it's very, very good for us. So from that perspective, you have to sit today and take a strategic call. Theoretically, we can say that gold loan, this is the OpEx, and this is IRR; and IRR is -- somebody asked that question, I think, I forget to answer. It is somewhere between 11% to 12%, somewhere around that, IRR, which is very good. And I think we have given that data also somewhere.But anyway, but coming back to this, with that -- with 0 loss, I mean, with very minimal loss and with very little risk [ heads ]. And already, we are working on a marginal cost, which is only the people there, it is a very, very good business to do. But going ahead, if you do so good, then we would have only become a gold loan bank, no. So the reason that we are expanding in North and West and building all those businesses because the gold loan customers -- beyond gold loan, you can't do much with him, because the liability business doesn't grow a fee business. I mean, gold loan fee comes, but other fee businesses, [ dual ] businesses cannot happen. So from that perspective, we have to diversify and we have to build those businesses. So this is a very niche business has to be seen it that way. And because we are invested into it, we are sorting the system. That is exactly what it means in terms of marginal cost efficiency.
Got it. And in terms of, like the scalability of this business, maybe because we might already be targeting areas, geographical areas where we can really scale up a gold loan per branch, this is really fast into a reasonable amount. Maybe as of now, it's profitable to the extent it is. But if you go deep and kind of target lower-yielding areas, would the profitability will get affected for the gold loan?
That is why -- see, the places where it is lower yielding, that is where your cost of premises also are higher, cost of manpower is also higher. So in those areas, you should not be doing gold loan business. So we'll not be doing gold loan business in those areas. So in a primary in Delhi and Bombay or they are saying, why should we do gold loan business. So for that, we need the right products in segment. So that's why we have to create that segmentation of the pyramid, which we are creating, and we are starting to build some of those branches now. And we may have gold loan as another product, but the main focus of those branches will not be gold loans.
Got it. That's it from my side, sir.
Thank you very much. I now hand the conference over to the management for closing comments.
Thank you very much. And thanks, everybody, for asking very interesting questions. I hope I could answer them. Again, we'll come back after a quarter to meet all of you. Thank you very much for participating, and have a good evening. Thank you very much.
Thank you very much. On behalf of YES Securities, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.
Thank you
Thank you.