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Federal Bank Ltd
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Ladies and gentlemen, good day, and welcome to the Federal Bank Q4 FY '20 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I would now like to hand the conference call to Mr. Shyam Srinivasan, MD and CEO. Thank you, and over to you, Mr. Shyam Srinivasan.
Thank you, and good afternoon, everybody, and I hope everybody is safe wherever you are and are able to cope well with the challenges of the world, so to say. We're gathered to have a conversation about our Q4 outcomes and, more importantly, the way forward. I'm just trying to reflect back on 26 February, when we had our Analyst Day in Mumbai. And we came away quite encouraged that we had given a good narration of ourselves and the -- many of you who are probably on the call today had a good sense of our plans and way forward. While our direction hasn't changed, certainly, the challenges that we are faced with today were not visualized then. And consequently, the mid-course corrections have been quite daunting. That said, I do believe that Q4, given all the challenges, was fairly strong operationally. We had some gains, some challenges. Whatever gains that we got, we made sure that it helps us strengthen the balance sheet and positions the bank for whatever challenges or environmental issues that may crop up or that we are faced with. So a quick 2-line update on the COVID impact on the bank. No different from any other organization in the country. We've had the same set of issues in terms of people having to work from home quite happily. And interestingly, we quickly rearranged ourselves that it today looks like we've done it all our lives. People have got used to working from home. In particularly, our teams in Mumbai and other large metros have had to literally sort of do everything from afar. And even the Q4 results, including our auditors, Board members, everybody in multiple locations, sites, it's looking like it's a seamless process, and everything is tracking quite on plan in that count. In terms of our business situation, in terms of the momentum, our belief is that Q4, in particular, till about 10th of March or first week of March, we were coursing quite well on all the areas that we had sort of chosen to put our attention around, wherever growth was, containment of costs and also, most importantly and crucially, the marked improvements in credit quality and the recovery. It was going well. Unfortunately, the last 3 to 3.5 weeks had challenges, and that did dent our numbers. But we had created a war chest by having some gains on the treasury and investment side, which came in handy to make sure that we can substantially increase our provision cover and enhance our coverage ratios and strengthen the balance sheet in a manner that we hadn't done before. So that sort of positions us very strongly as we enter what arguably is one of the toughest times in any of our lives. Most conversations in most organizations are around the banks, are around the portfolio quality, the prospective dent that it can make on both financial outcomes and the need for capital. We don't know or we have no clue how bad or how good it is going to be. We just know that about 35% of our book is in moratorium. We have sliced it and diced it in many ways. We have a sense of how we can deal with it, but the outcomes are not necessarily predictable. But I think we are positioning ourselves well to make sure that we can deal with all the challenges that are likely to come up. In terms of numbers, I'm not getting into any of them. I think you've all had an opportunity to look at our debt. Operating profit was clearly the highest all-time ever at INR 959 crores. The gross and net NPA, both have had material improvement, which I think is a tribute to our multiyear focus on being conservative in credit standards and ensuring that the quality of the book is quite robust. Our stressed asset portfolio is at an all-time low at 1.28%. Liquidity, which is the strength of our bank, our LCR is -- at the end of the year was 185%, and now it's well over 200%. Liability franchise through any period, in any look, we've had a good quality liability franchise, and all of it is granular. Many of you have been reporting that we are top quartile or top 2, 3 banks in terms of the richness of the liability franchise. That is continuing. Even through the first 2 months of this financial year, we've seen good quality growth, both domestic and long-distance client deposits. And I believe that it will continue. Our focus around digital enhanced during the COVID even more. Our capabilities matched the best digital capabilities -- I mean, digital transaction volume has picked up both for individual and for corporates, as you would see in the slide. So on balance, credit growth for the year was about 11%, deposit growth for about 13%. Both of that were marked by the last 2, 3 weeks slowdown as well as it could have hit the teens -- only mid-teens, but that's just a data point. Growth in areas that we had put our focus around, retail, gold, did well. We had consciously, for almost 4 quarters, have been slowing down the mid and higher ticket credits, and that's visible in the numbers. Business banking saw some pickup towards the second half of the financial year. We'll see how that plays out as things sort of shape up. Fee income and -- sorry, other income, in particular, treasury had a very strong year, both through one-off opportunities, as also structurally organically, things that have done -- have gone well. We've made substantial provisions for wage increase on account of the negotiations that are going on. The yield fall has resulted in treasury gains but, equally, some cost impact on pensioning, which also we've provided for. And despite that, the cost-to-income ratio is at 50%. I'll draw your attention to a slide on our deck, which is just an explanation of how the year may have looked if the events of the last 2, 3 weeks didn't come through. But if we still had the one-off gains and a one-off impact, we would have still had quite close to what we believe was something that was in striking distance of delivering in the last quarter well over 1% ROA, which is what we have sort of geared all year for. But that is wishful thinking. That's -- unfortunately, it didn't happen. But I think the underlying momentum, the market permitting, we have the capabilities we've demonstrated. And the year ahead will be all about ensuring we conserve, preserve, hold on to the good stuff that we have been doing, ensure that we are opportunistically picking up lending opportunities. Gold loan looks like a nice place to be. Our momentum has picked up quite materially. On corporate, selectively, we are doing cross-selling to existing customers based on data mining. It is well underway. And the government-guaranteed schemes, where there are opportunities, we will sort of lead into that. So let me just summarize by saying we exited Q4 operationally strong, well-provided for, whatever one-off opportunities we got, we could gain from. We set that aside and ensured that we strengthened the book. We have a reasonable look into a book that has taken a moratorium. It's about 35%. The most heartening aspect of that is the SMA book, as of 2 days back, is at 0.7%, which is INR 840 crores out of the entire book. And that is -- out of which INR 303 crores we provided through the special COVID provisions. And we are preparing to make sure that between Q1 and Q2 of this year, which is likely to be low or no provisions in a normal sense because of the moratorium and the consequence of it, we will substantially build up provisioning to make sure that we are well positioned. And our capital adequacy continues to be strong at 14.35%. And since there was no dividend payout in FY '20, all of that has been flowed back and is into capital. So it's 14.35% CRAR. And stress test, point out that as the year rolls by, we will still be good to run the business without going into additional capital requirements for at least 12 to 15 months as we see. But these are unprecedented times. We are preparing for being nimble and right up there to do the best possible in current situation. So I'm not going to take much more than this. The slides, we have tried to make it very explicit and the best disclosure that we can offer, we've made. Between me, Ashutosh, Harsh, Babu, Anand, Nilufer, I think Shalini is not able to dial in, other team members, we'll be happy to take questions, clarify to everybody. So once again, thank you for dialing in, and I do hope everybody is safe. And happy to take questions. So operator, you may open it.
[Operator Instructions] We take the first question from the line of Jai Mundhra from B&K Securities.
Sir, first question is, sir, you had mentioned in your slide that you have sliced and diced the morat portfolio, and you have classified into red, green and orange. Sir, can you provide some qualitative aspect -- quantitative aspect where in these 3 categories? Lower risk, medium risk, high risk?
Yes. No, I intentionally didn't provide numbers in that because it's dynamic. It's the model we are using. Using all these parameters, we're putting it in a multi-varied model, putting it into our prediction engine, which brings up by each product category, what is low risk, medium risk, high risk. And then when you look at the probability of default of each of these, and then we work our collection strategy. But at this juncture, it may not be very clear because there is not much data that has changed in the last 45 days. What really will be visible as we go into Q2 and then only we'll be able to -- but that's why I guess the earlier slide of the moratorium book has this. The current SMA book has this, and we have to see how this evolves over the next 60 days. So I think we can give a better line of sight on this as we go into Q2 or probably in August, September, only then. At this point in time, we have our internal measure based on which our collection efforts are being directed. But I don't think we can give a very a meaningful number into this. But we have a sense of it. We think it could be something that we can share as we really get into Q2.
Sure, sir. And sir, now the extension -- I mean, the moratorium has been extended by 3 more months allowed by RBI. So how are you approaching? Are you giving the, again, 3 months moratorium by default? Or what is the moratorium policy that the bank has adopted for their moratorium policy?
I think our moratorium policy is consistent. We have both an opt-in and an opt-out model for the different businesses. We haven't seen any change in the last 2 weeks of that. I do believe that as moratorium 2, so to say, kicks in, in the week 1 of June, you may see people either seeking to do. Our sense so far is, there was a rush for moratorium in the early stages. I think people are seeing that it is an expensive choice to take a moratorium, unless they are really pushed and want to keep cash in hand. People are somehow ensuring that they are -- that's why this 35% number of ours hasn't been swinging widely. It was not 45% or 50%, which came to 35% or 25%, became 35%, near in that zone. My sense, and I could be wrong, we will see, I would think this will remain more or less consistent with this number even in Q2 because I think people are realizing that there is a cost of holding out for too long. So if they can offer and then the economic activity picks up in select places, some cash flows are coming in, my sense is people will pay and try to get out of moratorium because there's a cost of it.
Sure, sir. And just last thing, sir. So now this MSME guarantee scheme, once it starts, I mean, the operational guidelines are already seen. Once you start giving the loans to business banking and qualified, let's say, commercial banking, I believe this should come out of moratorium, right, technically speaking? Or how would it be?
Ashutosh, do you want to pick that?
Please come again?
So sir, I was saying that the borrowers which are in same business, banking and commercial banking, now if you start to roll out the credit guarantee scheme, now these guys would technically come out of moratorium or they will still remain in moratorium.
So they will remain in moratorium because moratorium is for repayment of the installments that are fallen due. So even otherwise, when you structure the loan and all that, I mean, you will have a 4-year loan in which there would be a moratorium. So it's -- I mean, based on the projections and the viability of that particular process or that particular unit, it would be the same on much -- I think this is a general moratorium, which would last up to 31st August. So when you give this particular loan, going by that conditionalities of that, of a 4-year loan and all, you can have a -- for that part, additional part which is guaranteed, you can have the moratorium there, and this would continue up to August. So both would be there.
We take the next question from the line of Nitin Aggarwal from Motilal Oswal.
Thanks for the opportunity and the additional disclosures this time. So I have couple of questions around moratorium again. While you have said that this book has not yet moved wildly, but if you can just give some approximate numbers on as to how this book [indiscernible] April 9 when many other banks have reported numbers on 1 April? And now that...
The numbers that have been given in our presentation are as on day before yesterday. These are 25th May numbers, 25th May numbers. These are not 30th April or these are not 31st March numbers.
Yes. So sir, my question was like how much approximately would this have been around April end? 35%, I understand is, your current number.
It hasn't moved much. It hasn't moved much. I think it would have been 34 -- at the peak, it was about 38% by my recollection. That's why I said the spring is not very much.
Okay. And any pending cases there on which you still need to decide?
No.
At this point in time, no.
Because you had towards the end of the first...
Tomorrow is...
Yes. And getting over on 30th of May in another 2 days, day after tomorrow, the first step is going to be over. Now from 1st June, we'll have to observe afresh anybody who would like to extend that. Or they would be -- I mean some of them would probably -- I mean, looking at the expense, if you -- adjusting SMA book and all, it's at INR 840 crores. So people have been paying INR 840 crores is -- I mean, even in normal times, we used to have somewhere around 1.5% SMA book and all, and this is less than 1%.
Right. And your interaction with customers, does it look like that customers are looking forward to further relaxations on interest levels as interest for 6 months gets piled up and they will refrain from utilizing their account despite resuming business operations?
So very difficult to predict right now. I mean it's very difficult to predict because that would be a prophecy that one can make, but you never know in terms of how the situation turns out. If you go back to 1918 and 1920, I mean, Spanish flu and all, the second wave was more dangerous and all. So I think fatality-wise and I think destruction of wealth-wise and all that, I don't know. I mean this is something which we need to -- I mean, lots of lessons would have been learned from that particular episode. And definitely, those learnings would have been put to use in this one. And therefore, the casualties are lower. And therefore, all sorts of precautions are being taken, and probably people would not be as sort of reckless in all, which they were in 1918 to '20, when the relaxations were made after the lockdown and all. So I don't think it's going to be that one, but then I think it's very difficult to predict how it's going to happen. But we would periodically -- based on that engine and all, which Shyam has discussed, we would be periodically recalibrating our predictions and all.
And Nitin, I'll just try and expand on what Ashutosh mentioned. The short point is it is difficult to make a very generic prediction. If you ask us anecdotally, Harsh is also on the line, some of our business heads are on the line, we've had many kinds of conversations with different segments. And it is the truth that some segments themselves are shrinking their suppliers or their buyers by giving them cues. If a textile exporter is suddenly getting a force majeure from their buyer overseas, then their commitment that they made 10 days back could change. We've heard some customers say that the overseas orders in markets like Italy have started picking up. And therefore, their lubrication has started. We also have customers who have said their supplier -- their buyer in the U.K. has applied force majeure and said that they are not able to take offload -- take off their stock. And therefore, the suppliers here had to deal with his own problem. So it's kind of mixed. And I would think, particularly for tickets, say, more than INR 10 crores, INR 20 crores, so it has very bespoke client-to-client solution. And so the entire RM community for the last 60 and, I would think, for the next 120 days, their -- a big part of their role is a very close engagement with clients and structuring it in such a way that we are able to make sure that the client and the bank doesn't get into any agony. Easier to say, but that's what our teams are doing.
Right. And my last question is around the retail segment. Now that segment in absolute terms contributes the most to the moratorium book. So if you can give some more color on different segments within that, say, gold loans or housing, LAP? And so what is the contribution? How much of this is coming in from opt-in and how much from opt-out? Because I believe the proportion of moratorium would be starkly different between the 2 states.
Nitin, the gold loan book is in a nice place. There is no challenge on the gold loan book. We are quite happy with that. And the retail, as in loan against property, home loan, which are the dominant part of our retail book, is secured. The moratorium, if I remember right, is 38% -- not if I remember right. It's in front of me, 38%. And that's a book that we have cut it into much more because it's data amenable. We have put the decision engine on it. We've got the kind of dimension of the kind of book that it will be, roughly, I would say, about 6% to 7% of that book, which is the sharpest part of it, which needs great attention. The rest will fall in the low or in the medium category. So the high-risk part of it is between 5% and 7%, that needs attention and focus. But since these are secured, our unsecured book is very small, and that is the book that is sold to existing customers. So we are not seeing much stress on that. But that said, these are -- it was good for 3 months. Will it good for 6 months? Will it good for 9 months? We'll have to see. So we are watching closely the progress on that. But yes, I could say that 5% to 7% of the retail book is where the greatest attention will be.
Additionally, the LGD is lowest in our retail book basically because as Shyam has said, it's all secured. We don't have too much of unsecured. So whether it is gold or housing loan or LAP or whatever it is, our past term of 5-, 6-year figure [Audio Gap] in these books.
Next question is from the line of Venkat Subramanian from Organic Capital.
Congratulations on managing very well on during very challenging circumstances. A couple of questions. How comfortable are you with the sovereign guarantee for MSME? Because there are conflicting arguments with respect to how it is structured. Are there challenges with respect to how we get this through?
Yes. Venkat, the CGTMSE scheme, that is a reference from the past, there are, like any other insurance program, always a base to decline our claim, right, like your health check was not done properly or your submission quality was poor or this feature was not met. And therefore, we have not had the best of experiences on CGTMSE. And hence, our use of that scheme has been quite limited. I don't want to negative about it. We just have to deal with this on a case-to-case basis. So have I got a higher sense of comfort now? Is it a scheme that we will pursue very closely? Yes, and we have to structure it in such in a way that we document where we use our learnings from the past to make sure that the recoverability is high. We also now know that the time for recovery, even if the guarantee is sure and the money has to come, it's not like you pay and you get it immediately kind of thing. It will take a score. So we are just kind of prepared for that.
One positive point is 3/4 of the money is coming to you within a defined period, and the rest of it can go on and all. That's an additional comfort and all. So number one, you do not require any capital charge for that. So risk weight is 0, on one hand. And therefore, probably, they have created a separate trust for that. That could be the reason.
Of most of the [ patrons ], I think it's most useful for us because our exposure to MSME is fairly high. So how do we intend using this just now given all of your reservations and all of your learnings?
I think the -- these -- both businesses, business banking and commercial banking, are RM-led businesses. So we have mined that. We have got a preapproved credit clearance on who we can make offers to, and the RMs or the teams that are working in the branches are reaching out and working with clients. So it's a fairly -- it's not like you walk in and demand. It's pretty clear. We go to client.
Sure. Secondly, Shyam, what is the status of your extension with the RBI?
It's waiting for the regulator to clear. Our letter is with the RBI for about 2 months now, I think March 25 or so. So we hope sometime in the next -- I don't know. With the RBI, it comes when it comes, right? But there are no negative signs. So we hope it will come.
We take the next question from the line of Mayuri Yadav from Equentis.
Sir, just more of a data-related question. If you can just help me reconcile the numbers on Slide 3 and Slide 13, where we are given a breakup of one-off cases. You have mentioned an additional credit provision of INR 167 crores and COVID provision of INR 93 crores, which again is broken up into INR 30 crores and INR 63 crores for the COVID provision. So if I just look at the provision data as for quarter 4, there is a loan loss provision of INR 417 crores, and there is a standard accounts provision of INR 102 crores. So just want to understand how this INR 167 crores and INR 93 crores are accounted in your provisions, if you can help me understand that data, please?
The INR 167 crores is part of the INR 417 crores. The INR 93 crores is part of INR 102 crores. INR 102 crores is a standard asset provision. The COVID provision of INR 93 crores come under the standard asset provision. We held some of the standard asset provision because of asset growth, and this INR 93 crores [indiscernible].
Right, sir. So this additional credit provision of INR 167 crores primarily is what is reflected in our PCR growth for the quarter itself. So this is additional provision that you have taken.
The increased provisions we have made are to ensure that we strengthen our coverage from 45-point-something percent to 53-point-something percent.
Certainly. Sure. And sir, this additional provision for the employee cost of INR 120 crores, you mentioned in your opening remarks about the pensioning provisioning for the employees that have been done for the quarter. I just want to understand that for the last 2 to 3 quarters, we have seen the employee cost going up. Correct me if I'm wrong, it is also largely to do with your pension provisioning that you have been doing. So is this over? Or is it likely to continue in the future as well?
May I respond, Shyam?
Please go ahead. Please go ahead.
It's directly linked to what type of treasury gains you made, ma'am. If the yields fall, your volume get appreciated and you book profit there. And on the other hand, when the yields fall, your actuarial calculation for your future OTT, which is on account of superannuation and pension gratuity, leave encashment, all those payments, is there. So when these yields fall, so sort of how much more is it over depends on what is your prediction of how many basis points the yield would fall from here. So it's not to say that 10-year yields would go to 4%. Probably the additional provision would be required on the employee cost, but then we would make...
Two points just to bring on Ashutosh's. One is generally the gain is 2.5x to 3x of the expense on the yield provision pensioning, correct? That said, pensioning cost is captured then and there. The yield, it depends whether you sell or not. Sometimes, it may just be that. So it's not necessarily one-to-one matched up. In this quarter, it's matched up because we sold and we also provided. So in this quarter, it matched up. May not, on a regular basis. We may choose not to sell if there's holdup in the gains, but the pensioning is a must. So we will provide for it.
Right, sir. Sir, one last question. Our deposits for the quarter has seen a very healthy growth on a quarter-on-quarter basis, approximately around 6%. What has contributed to this? And given our higher dependence on revenues from remittances, what is your outlook given the environment and the probable job losses within the period?
See, if you tracked us for long, you would realize that every time there is some kind of disarray in any of the overseas markets, in particular, Middle East, we benefit because the remittances increased. So that is one of the reasons. Second is when there is instability elsewhere, people send money to the safest bank, and we happen to be one of the safest banks. So we get a large share or a larger share of it. And we are increasing our share of remittances from about 6% to 7% 5 years back to now 16% to 17% of India's remittances flowing to Federal Bank. And so generally, we are a larger market share player, more stable. Middle East instability gives money flow. Now will this continue forever? We will speak for it to happen, but you know how things are. If things dry up and situation gets worse, we will get better before it gets worse because initially, when there's a problem, money is frozen. And then after, then for a while, it may dry up. At this juncture, we see even in the first 2 months of this financial year, it's growing quite well.
Our next question is from the line of Mona Khetan from Dolat Capital.
So firstly, I wanted to just -- do we hold any floating provisions in our books currently?
A very small number, in the 2-digit crores. Ashutosh, am I right? Ashutosh? I think he is off the line. Anand, do you remember the number?
Yes. You are right. You are right. It's 2 digits.
Okay. And what percentage of the portfolio will be eligible for the MSME guarantee scheme? Because I understand that apart from business banking and commercial banking, some parts of the portfolio may also be eligible for the scheme.
The part that is eligible for that comes under a [indiscernible] crores per day.
Sorry, sir, can you come back? What was that?
About INR 16,000 crores to INR 18,000 crores of our book is eligible.
I was disconnected. I hope you -- this is to be answered or this has been completed?
Yes, Ashutosh, I mentioned it.
Sure. And -- on the gold loan book, including agri gold loans, what would be your total gold loan portfolio?
So how much is gold loan, including agri?
INR 9,300 crores.
Okay. And on the OpEx side, I just want to check, what is the kind of flexibility we have given that in the current environment, there might be some impact on the top line?
Not wage. Every line of the bank is flexible. Variable compensation, the rentals, volume-related costs, renegotiating every other contract, everything is [indiscernible] those and we believe we have a great structure on that, risking some gains on the rental renegotiation and certain decisions of deferring spend are very much [indiscernible]. Yes.
Next question is from the Renish from ICICI Securities.
Sir, quick 2 questions. So one is on, again, on the moratorium fee. So within the retail, so sir, over 50% of the book is into home loan and some part of it in the gold loan also. So this number looks slightly on the higher side. So if you can just qualitatively comment on the portion which is under moratorium in terms of the customer segment or how we have arrived at this 38% within retail, considering that 50% of the book is home loan.
So the question is, is that INR 14,000 crores, INR 14,271 crores is retail moratorium. So what's the question, sorry?
So this looks slightly on the higher side because almost 50% of the book is under the home loan piece. So just trying to get a sense of what sort of customers are opting for moratorium or what sort of stress you see in this retail book?
The stress part I mentioned. We've used the decision engine. We've got low, medium, high risks, and high, I said, including 5% and 7% of that INR 14,271 crores. So that's what it is. Nilufer, do you want to give more texture, if you have any? Nilufer or Babu?
This is Nilufer here. I can simply say that irrespective of whether the home loan -- I mean, the borrower is salaried or self-employed, they have -- I mean, this is -- this particular classification is indifferent to going for this moratorium. So probably even if their salaries are getting credited and all, they would like to retain the balances in their operative account rather than paying the EMI because this facility is available. And there are -- from there, someone's changing from that, [ they know we will ] pay and all that. So that is always happening. As Shyam had said, at peak, the moratorium for this has gone to 38%, now reduced to 34.5%, around 35% or so. So I think initially opting and then again opting out, all these things are happening. So I think it's not necessary, but those who have availed moratorium are, for sure, stressed. There's uncertainty for which they are keeping some liquidity available with them.
Got it. Got it. And as per our analysis, we feel the 5% to 7% would -- might...
Let me just give you one data point, Renish, which may help you since you've asked for. The home loan plus LAP put together is about INR 12,000 crores. Out of that, about INR 3,000 crores is the NR customers, and the rest are domestic customers. So that's just the data point for you, if you want some analysis to be done on that.
Okay. Got it, sir. Got it. Sir, just second on this CGTMSE thing. So you mentioned that we'll assess account by account. But as per the operational guidelines, it's opt-out. So does it mean we have to offer to all our clients or how we are looking at internally?
No. I think if you read this carefully, it says credit prudence to be applied by the banks. So we will apply prudence. I know our prudence is visible in every division of ours in credit.
All right. Yes, sir, definitely. Yes. Sir, lastly, on the gold loan piece, as you have rightly mentioned in PPT as well that near term, we're going to focus on this book. So any number you want to put to that, I mean, in terms of growth or strategy?
We have quite an ambitious plan, Renish. When we come out with our results for Q1 at the end of -- middle of July or last week of July, I think we'll be able to share traction. But I'm happy that there is good progress.
Okay. So even as you speak today, you are saying there is a good traction in gold loans.
Yes. We are seeing good traction.
Yes. I think March -- the numbers which I gave you, INR 9,300 crores, was the March end number.
Exactly. Right, sir. So April, May has been good in terms of gold loan growth. Is that...
May has been good. April is less. May has been good.
Next question is from the line of Gurpreet Arora from Aviva India.
Yes. I'm referring to Slide 15, if you can help me on -- with a data point. I mean the external rating of corporate advances, what is the base of this corporate advances? What's the number?
Anand, go ahead.
Sorry, I missed the question. Can I have it again?
Yes. So on Slide 15, where you have given the ratings of the corporate advances, so on the left side, where you mentioned the external rating of corporate advances, what's the denominator or the chunk of that corporate advances you're talking about?
It's around -- our Slide 5 gives the total of corporate advances, which is INR 50,725 crores. That's the denominator.
Okay. And what would be the other part, which you mentioned at the bottom right?
The other part is 7% of that. That is further blown up into FB internal ratings.
7% of that...
INR 50,000 crores is given an internal -- the internal rating for that.
Got it. Got it. And how much of our NBFC and HFC book is under moratorium?
We haven't offered it at scale.
NBFC is very small.
Very small.
Next question is from the line of...
Just to an earlier point, I think the slide around corporate book moratorium is 22%. That itself explains that the low part of the 20%, so a very low part of the book is NBFC/HFC. Please go ahead.
Next question is from Anirvan Sarkar from Principal Asset Management.
Yes. Sorry, sir. Just one question. The moratorium 2, so is that applicable only to customers who had been granted moratorium 1? Or is this applicable to customers who have taken loans in the interim as well? So for example, let's say, a customer who has taken a loan in April, would he be -- he or she be applicable for the -- I mean, will this moratorium be applicable for them?
No, as of February 29, whoever is on the book.
Okay. They have to be the same set of customers basically, who are eligible earlier, only they are eligible now.
It's really unlike somebody will take a loan in April and who will seek a moratorium, unless it's part of the contract with the client.
Okay. Okay. And the other question is that, do we see any risk in our retail and SME books, especially in accounts where there is some dependence on revenues from the Gulf region?
I think that is a portfolio for all -- sorry, nothing to do with moratorium or otherwise. But -- so that has always been in the bank, right? I mean it depends on how things shape up. But I...
I mean are we seeing any worsening in the credit quality there or...
I'm sure you guys are more aware than me. Last 50 days, there is no indication of anything because the moratorium is there. So we don't know whether it's going to pay or not, right? And you are seeing balances build up. If we scrub the existing customer against the deposit balance they hold with us, more than 70% have more than 1 EMI available on their account.
Okay. Okay. Just my last question. On the additional employee provisions, I think you mentioned that there is an element of provision made due to wage hike negotiation that's ongoing. Is that correct?
Yes. Yes.
So how much are we building in? I mean what kind of percentage increase are we taking on?
We are up to date. As of March 31, we have provided for 15% of it. This quarter, we've provided for 29 months, 3% extra, including March provision of 15%. So we've provided INR 45 crores or so.
Next question is from the line of [ Abhijit Bora ] from [ Sidra ] Mutual Fund.
First question is, sir, you did mention that Q1 and Q2, you will start building provisions aggressively. Just wanted to understand what is the LGD expectation from the accounts under moratorium, if you could give some broad estimates, especially because some of these are secured...
On the Ind AS, we have been doing for 8 quarters, the LGD at a portfolio level is between 38% and 40% at the total portfolio level, with retail being lower and the corporate being higher. Our -- generally, we said if it worsens by 25%, we should be prepared. So we are building up to 50s and early 50s coverage, which is what we are working on.
Right. Right. And my second question is on the asset quality. I just wanted to understand this SMA number, Your SMA numbers. Can you give me -- some of the banks have started taking provisioning -- provisions on entire SMA book [ for the future ] or just on SMA-2, as per RBI guidelines. So you choose to build only from Q1 and Q2 with the earliest...
Well, if you build more, if you pay INR 840 crores as the SMA book as of yesterday, we made INR 93 crore provision, which includes the INR 300 crores, which would have otherwise split if it had not got asset quality standards at a standstill.
Right. Right. Sure, sir. Just one more question. Why did you choose to increase the borrowing Q-on-Q when there is excess liquidity on the balance sheet? I can see deposits are growing much more than advances, but still borrowings are also going up. Any specific reason you are sort of increasing your liquidity levels much more?
Yes. I think there was a feeling that smaller banks will not get deposits and all. So I think this is something which was creating -- I mean, we saw a couple of banks having negative growth in deposits. So I mean, on one hand, we have not aggressively pushed it, but what we have done is we have curtailed our credit growth. So in the process, liquidity got built up. So our deposit growth, if you see, continues to be more or less what in previous years quarter 4 had been. And that is coming from both resident depositors as well as NRE on both fronts. Our NRE deposit growth has been 14% Y-o-Y. The total deposit growth had been almost 13%. So I mean, more or less, same growth in resident as well as in NRE. And NRE is your permanent, stable, retail granular deposit. So you can't just -- I mean, number one, same mode to deposit. Number two, you can't stay higher than resident depositors. That's also a regulatory requirement. So at the same cost at which you are getting resident deposit, you are also getting NRE deposits.
Yes, sir. But the borrowings -- your borrowings during...
The wider the [ generator ] is making, borrowings were made in the beginning of the month. [ In fact ], 29th February is when YES BANK had the problem, right? There was this fear that banks will not get deposits. Money was available. We took the money. At that time, nobody visualized we will choke the credit in the last 2 weeks of the quarter. I think between corporate and retail, we'll -- clearly, we told the business guys, "No, don't do it now. You may get bad credits." So the lockdown plus our own charge, I think corporate stayed at about INR 1,000 crores, retail about INR 500 crores, INR 400 crores.
Sure. So deposits continued...
Sorry?
Continued to accrue -- deposits continue to accrue in Q1 at a much faster clip.
Retail deposits are going well. Our bulk deposits, we let go.
Yes. Bulk deposits and these fees and all are coming down drastically, sharply coming down.
But retail is growing well.
Sir, maybe the credit card business Y-o-Y dropping cost of funds or will the NIMs be impacted because of excess liquidity on the balance sheet?
Near-term NIMs will hold as in Q1 and Q2 because the credit, that is neither growing, not falling. And you are seeing the interest accrual happening. We've cut our deposit rates to match every time there's a credit cut. So we believe that NIMs will hold for Q1, Q2 with no contra revenue because of no slippages. Q3 onwards, we will certainly revisit. But the business mix is also changing. The gold loan business, which is relatively higher margin, is growing well. And so we will see. I'm making no commitment of how the Q3, 4 will happen depending on environment shaping up.
And our savings bank is linked to repo rate. So on the ALM side, also, we are balanced because on external benchmarking loans, we are giving against repo. So on one hand, we are repooling the assets. And on the other side, we are repooling liabilities.
Next question is from the line of Rakesh Kumar from Elara Capital.
Could you hear me, sir?
Yes, very much.
Okay. Sir, firstly, my question is pertaining to the strong growth that we witnessed in FY '17, '18 and '19, particularly in the corporate loan book. So overall growth, we had 26%, 25% and 20% in this 3 respective years and more in corporate loan. And now we are also saying that NRE is higher on this portfolio. So considering that what happens post November, because in August, the moratorium will get over and thereafter, 90 days DPD would be there. And so what is the PD we are looking at already of default, we are looking at in the loans and the moratorium in the corporate loan?
We are, at this juncture, quite most sanguine about the corporate book because, a, you would have seen the moratorium itself is only 20%, and the book is 80% A or above. And we have reasonable grip on that book. That said, in the environment version when things fall apart, then it's a different story. At this -- whatever line of sight we have at this point in time, the corporate book looks reasonably under control. I paused when I said that because we don't know what things are in store. But we are not seeing any names at this point in time that's worrying, other than the one name that is a Middle East name, which everybody is talking about, which we have started building provisions for.
One more question that is pertaining to AS 15 provisions. So in previous quarter, we had a feeling that the provisions related to terminal benefits obligations would be 7% to 8% of total OpEx. But it came out to be around more than 12% and obviously because G-SIB movement was very, very soft this time around. But what is the discount rate and return -- rate of return on the planned assets that we have assumed now?
Ashutosh?
Yes. I think discount rate has been taken at 6.50% or something around that because that is for 22 years, it's working, depending upon what is the average maturity period they've taken for gratuity and pension. So that's in that range. Return, because the money is placed with LIC and from LIC to buy annuities, so they declare every year. Until now, they have been declaring in excess of 7% or so.
[Operator Instructions] Next question is from the line of Sumeet Kariwala from Morgan Stanley.
Shyam, I had a quick question. You mentioned that the MSME portfolio has been reviewed, and you've selected the entities where you will offer the 20% additional MSME funding. Wanted to check what percentage of MSME portfolio would that amount for.
We think it may be about over a 6-month period, about INR 2,000 crores is the potential that is there.
You're saying the MSME portfolio worth INR 2,000 crores is where you will provide additional significant fundings? Or INR 2,000 crores would be...
Yes. INR 2,000 crores is the lending opportunity over a 6- to 8-month period.
Okay. Very clear. And second is the [indiscernible]...
Sorry, we lost part of the line, lost part of the line, Sumeet.
The increase in market risk this quarter, was that quite meaningful? Because if I look at RWA, that has grown at 6x versus loan book growth of 3%. So just trying to figure out, is it that -- the market itself has gone up quite meaningfully, right, this quarter?
Let me respond that. I think the market is still down because we have invested in equity of a particular bank or so, on which I think you have to provide higher risk weight.
Okay. Okay. So that higher market risk weight still remain.
Next question is from the line of Manish Shukla from Citigroup.
On liquidity and LCR, I just wanted to understand what is the thought process in the medium term and the near term because we've been carrying quite significant liquidity [indiscernible] over to 200%. While having good high liquidity is good, it also comes at a cost. So just wanted to get your thoughts around how you look at it maybe in the near term and then normalized liquidity and [ LCR ].
Yes. So during this COVID period, until the dust settles or starts settling and all that, we would like to be having a higher liquidity, even if there is some cost to it. That's a conscious decision, and you would have seen our CD ratio also has fallen from nearly 84% to now 80% or so. So that is a choice. We are made to be highly liquid and all. As -- I mean, days go past, and we see some sort of reduction in the uncertainty and all. We would start building up our credit portfolio. Once we have the liquid, it's only a measure of, I mean, pushing the paddle and growing your [ product ].
Traditionally, you've been at 150% plus. Do you think that kind of stays, that will...
Yes, we did 150% to 160%, and that will be the steady state.
Yes. Average from last quarter has been 180%, average. I mean, right now, it's maybe 212%, but average for the...
In uncertain times, which may last for the next 3 to 6 months, it will be north of 160%.
Please remember this LCR number. Fortunately, the cost is higher because of the granularity of deposits. That has nothing to do with -- I mean, it's not a direct proportion of cost and all because HQLA, high-quality liquid assets, for that, I mean, most banks would have that 18% coming to them through a fall into LCR, where they can dip into -- I mean, 15% of your NDTL is considered as HQLA from your SLR book, and you can dip into your SLR to the extent of 3%. Earlier it was 2%. Now it increased to 3%. And that also -- you can borrow from RBI under MSF. So put together, almost entire requirement of SLR now comes as an HQLA. So that could be the case with all the banks. What comes as a sort of benefit to us is that the outflow part in that, we have very small bulk deposit book and we have more of retail. So that is considered as a stable deposit, and that results in a higher ratio. So you'll see all banks which are adding higher LCR, partly it's because their deposit profile is more retail in nature than bulk.
Absolutely. I get that point. But I mean, your [indiscernible] is meaningfully ahead most of other peer average even before this started so. Just one more question. Do you have any...
[indiscernible] [ up to 50% ].
Yes. Sorry, do you have any exposure to NMC? And are you willing to quantify it?
We have an exposure to -- not NMC, to the other exchange house.
UAE Exchange.
Okay. And is it material enough to...
It is. It is $20 million.
Next question is from the line of Darpin Shah from HDFC Securities.
What I understand is, we have ceded INR 93 crores provision on COVID. And your SME book, overall SME book is almost INR 840 crores. So you have provided 10% on it, correct?
Yes. You can interpret that, yes, Darpin.
So which means we have not created any additional or ad hoc provisions for COVID-related impact, which may come in next 2, 3 quarters or 4 quarters?
We have increased our credit provisions. We see credit plus COVID provisions as one large chunk. So we -- between the 2, we have created good provision and increased our coverage. And during the Q1, Q2, we will make appropriate provision.
Okay. And sir, you had mentioned that you have seen good inflows in retail deposits. Can you quantify for the first 2 months of the year?
Nonbulk has grown 2%, 2% to 2.5% in this quarter.
Sorry?
Nonbulk. Nonbulk has grown to 2% to 2.5% growth.
Retail deposits have grown by about 2% to [indiscernible].
Normally, as happened in the Q1 of any financial year, the first 60 days is like a no-growth [ kind of growth ].
Hello? Sorry, I'm not able to hear.
I said normally, in a financial year, the first 2 months doesn't see much deposit growth. This time, because of either remittance coming in or customers leaving their balances in their account and not taking it for spending, you see growth of about 2% to 2.5% on the retail deposit. Having said that, we have shared some corporate and bulk deposits and CDs.
Okay. And sir, the last thing is, if you can provide the book breakup between how much of the book is linked to LCR, how much of the book is linked to external benchmark rates.
Do you have it on the top of your mind, Anand?
Every retail and MSME, for most of October 2019, this will be linked to any of the external benchmarks. So new book is being linked to that. Earlier, you used to have one -- you've been linked a book that...
I will share that. Ashutosh, I have the number. I have the number. The base rate book -- sorry, the external benchmark loan to deposit, 25%, and base rate is about 5%. That's the [ full load ]. MCLR linked is about [ 40% ].
Sorry, MCLR linked is 40%
40%.
The rest is fixed rate.
We take the next question from the line of Abhishek Murarka from IIFL.
Yes. So my question is on OpEx. If I knock off this INR 120 crores, even then you are roughly at around INR 800 crore overall quarterly run rate. For this current year, a, are you planning any particular cost saving in any particular line that you can share your plans about? And secondly, would we still expect around an INR 800 crores or INR 850 crore of quarterly run rate? Or should we expect that to subside?
No. I think there are 2 parts to it. Like I mentioned, some part of the OpEx is variable, right? It's volume linked. It is either a debit cut spend or sourcing and servicing of some of the assignment books. So that if volumes come down, that will have a direct impact. Second, that which is variable and very renegotiate-able is to be renegotiated. So I think I won't put a number to it. But yes, we are targeting to see some meaningful reduction in our run rate between lower volume-related and also renegotiated-related. I think you'll get a better sense of it as we come out of Q1.
All banks will have a 20% hike in deposit insurance fee. So from INR 10 paisa, it has gone to INR 12 paisa. So that for this financial year, all banks will have on their total deposit that much additional charge.
Sure. But sir, just to press upon it, ballpark, what impact proportion of cost, let's say, through just the nonstaff expenses, which is generally variable? So where you could expect the volumes dropping to have a natural impact?
So your sales origination costs, your variable cost into...
Travel expenses.
Yes. I haven't seen a flight for 2.5 months. Unlike -- I will see for the one over next 2, I guess. I used to do 4 a week, and I'm sure many of the senior colleagues do. So there are lots of these which are perforce become a reduction. So there will be a bunch of it. Every rental contract is negotiated.
Rent renegotiations.
We've seen success on some of them. I'm not quantifying anything yet because I'd like to see it crystallize in the quarter.
Fair enough. And on the salary side, generally, how much is variable?
These are -- the compensation structure is as follows. The variable part is either at the senior level, what, say, the AVP and above, which is an incentive. And that is entirely in our hands. If you don't perform, we don't pay. The fixed salary, which is already in the run rate, that can't go away. So roughly, I would say, about INR 100 crores a month. Ashutosh, is that the right number?
Yes.
Right. So that part, out of the salary part will be close to INR 80 crores. That won't change. And about INR 950 crores to INR 1,000 crores a year won't change. Everything else in the cost line is variable.
Okay. Okay. Great. That's clear. The other quick question I had was that in terms of provisions, again, I know you said that Q1, Q2, we'll be making appropriate provisions. But if we just sort of compare to -- compare with your bank, some of them are holding around 100, 120 basis points of loans as contingency or floating provisions on the balance sheet. So any such number, let's say, maybe 50 basis points or something, that you would look to build in the next 6 months, say?
See, I think...
Go ahead, Ashutosh, go ahead.
If you take the total loan book, I mean, that includes the NPLs and all that, I mean, that depends how much you put there.
Sir, I'm just talking about the floating and contingency, not the specific provision.
Yes. I think let me just expand on that. Yes, some banks have taken a huge number, and some banks have taken a different number. Between now, Q1 and Q2, we will hopefully provide meaningfully because Q1 and Q2, otherwise, there is no provisioning required, right? So we will make a provision. So it's in the run rate. We are not in a rush to show higher profitability. We are in a rush to strengthen the balance sheet.
Sure, sure. And just lastly, one clarification. I think you said you gave a number for the portfolio that is eligible under CGTMSE -- sorry, the new scheme, the NCGTC scheme. Can you just repeat that?
INR 16,000 crores to INR 18,000 crores is the new ones. We think about INR 2,000 crores is a lendable opportunity. We will take 2 or 3 more questions and then close. Is there any further...
It's the last 3 questions, from the line of [ Nilanjan Karfa ] from IDFC Securities.
A question to probably Ashutosh. Look, I mean, you had built the business around making RMs, right, and not opening branches. Do you think the new environment will have to make some changes to that business plan?
I think I will take that, not Ashutosh.
Okay.
In fact, I will not hesitate to say this is the best thing we have done, and we'll do more of it.
Why do you say that, Shyam?
Because the personal connect and the no-physical infrastructure is helping us greatly. And RMs are connecting quite well with clients. Clients like the model. And most importantly, I don't carry any fixed costs, and I have a lot of flex on how to reach out. And this whole new world of technology enable to connect is helping greatly.
We are delivering our services and products at doorsteps. So I mean it when I say that, I think whether these are loan products or deposit products, so on your desktop or at your doorstep, so whichever way you take it. So I think that doesn't need physical infrastructure to that extent. Yes, there should be presence for trust and sort of -- I mean, recognition of the brand and all that. And for that, I think we have reasonable presence in the selected geographies. So if at all we open, we'll so choose the geographies where we want to be present and needed from the brand building point of view and all.
Right. So there was this plan of starting to open new branches, right, from this current FY '21 onwards?
I said last year, we will do about 20, 25 last year and a similar number, a little more, this year. Out of the 20, 25, I think 12 or 14 we opened, then this COVID hit. So we froze that. We don't visualize anything other than the ones that are contracted, and work is underway, which will happen when the lockdown lifts. I don't think we will open anything for the next 6 to 9 months till there's line of sight and clarity. These are coming under the discretionary spends, which we can hold off till clarity emerges.
Perfect. Perfect. That's very helpful. And Shyam, I think I've missed a data point you've shared. You said something like 5% to 7% is high risk. I just want to check what...
On the moratorium book, I think one of the questions was give us some texture on the retail moratorium. I said INR 14,000 crores or something is in the moratorium. The model shows between 5% and 7% will fall under the high risk.
Right. And would you qualify that this book is what is in NR-linked?
No, no, it's not necessarily NR-linked because the NR portfolio is about 30% of the retail portfolio, 25%.
Right. Okay. Okay. I'm sorry to prolong this. I mean I know -- I mean, you have been -- this is a question for every time about the NR book. And they're now close to being increased either in festivals or when there is a distress.
NR prices increase or fuel prices fall or when the rupee weakens.
All right. Yes. But is there a job-related -- this is the first time I think we are seeing job-related crisis as well, not that [ good of a sign ], right?
Yes. I think we should, first, not downplay this. It can be. I don't know what it will be. And I've always said this, right, there are 2 parts to the NR, and allow me the luxury of giving a little lecture around this. NR remittances have 2 types. One is the must-send home because people hear their house chulha has to burn. The other is the arbitrage-seeking money. We have generally been a larger part of the must-send home category. If those people lose jobs and they all return, near term, there will be a higher flow, which is what we are visualizing. If there's a massive job loss and that whole community of people are going to come back, there can be challenges. But we've seen that for now Kuwait war, Gulf war, I've seen this on many occasions, they come back and find a way to go back, too, right? Like, for example, now there's a crazy demand for nurses in the U.K., North America, and they even reduced the criteria of their exam to encourage more people to come. So there may be some resettlement that will happen. Early to tell, but we will keep a very close watch. But it doesn't mean that it won't be a problem. It doesn't mean that it will be a problem. We'll have to deal with it.
Next question is from the line of Anand Laddha from HDFC Mutual Fund.
Just a question -- just 2 questions from my side. Just wanted to understand, Shyam, if I look at our margin, even though you had given a lot of explanation, as compared to last year, we are almost down 10 to 15 bps on the margin side from 3.15% to 3.04%. We have been growing the retail and SME faster than the corporate loan book. Aside being gold loan growing, personal loan growing, we had not seen any improvement in the margin. If we have to see an ROA improvement, we need to see higher margin as well. What's your outlook on the margin side?
I'm sort of -- I know we're all in the same world. I don't believe any of us is in a cave. I think we must reset all aspirations of ROA differently from where we were on March 31, right? So I would not even venture to give any kind of guidance around that. Other than what I said is the mix of business is shifting. We are focusing around gold loan, and I've already explained how the mix of margin happens. It's not only in the rate of segment, it is also the slippages. As slippages come down, revenue reversals also change. There's a bunch of stuff happening. So I would think it would be too early to give you any kind of guidance. I do believe that our mix of book is in the right place. Incremental growth is coming from the right segments. So far, too hard to predict what FY '21 will look like. So far, our credit book was developing the way we would like it to be. That's why the stress level was relatively low. If you -- it's visible, right? If you saw our Q4 slippages, it was at a super place. And if COVID had not happened, we would have had the best-ever quarter on slippages. So the results are there. But that said, we will have to see how it shapes up. I would have normally argued that margins will improve because slippages will come down, but I can't say that just now because you know how the market is shaping up. So I'm making no commitment of what it would be, other than the business mix is in the right place. We will only push the businesses that have a positive carry as we go ahead.
Perfect. And second, on the AS 15 provision, pension provision, if you can quantify what is the total provision you have done for FY '20? And within that, what proportion was the normalized pension provision? And what was the additional provision because of the change in interest rate?
I think our provision was about INR 220 crores for pensioning for the full year. I would think most of it -- Ashutosh, do you want to sort of expand on that?
I will have to see the breakup, but I think the additional part is INR 75 crores. And I think this is almost like INR 80-odd crores more than the December quarter.
Would it be fair to say out of INR 220 crore, INR 80 crores is the additional provision because of the change in interest rates?
You are just looking at one line pension. There's a pension, gratuity and leave encashments, all 3 put together, just to mentally see. Let me find out and...
Sir, what I wanted to understand is, if interest rate were to remain where they are, if they remained flat for next year, what should be our normalized pension cost for next year? Is it INR 220-odd crores? Or it would be, again, lower than...
It would be lower. If interest rates are flat, wherever they are, then it would stay flat this year.
Okay. Okay. So whenever there is a change in interest rate, we make onetime provision.
It is basically as on the balance sheet date. So on 31st March, where the yields are, based on that, it is assumed as the discount rate. And based on that, I mean, the future actuarial requirements are calculated.
Okay. Suppose, this year, we did INR 220 crores of provision and assuming, suppose, INR 100 crores one-off provision because of the interest rate change. So next year, if interest rate remains same, our provision or pension will come down to INR 100 crores.
Yes. I mean there have been some of the quarters where you would have seen the reversal also. Where the staff costs have been negative, I mean, rather than growing, it has become negative because it isn't one-off.
Perfect. Shyam, Lastly, on the employee wage negotiation. So this 15% was negotiated pre-COVID, and I think that the new -- things have changed post-COVID. Do you still believe that the 15% wage hike still holds or there will be a rethought on that? And second, lastly, on the fee income side, now since we have relationship management concept, do we expect the semi business should sustain for us and, therefore, the fee income should sustain for us? Also, we have a very low proportion of CE from third-party distribution. Therefore, a large part of fee income for us should be sustainable fee income.
There are no one-offs is all I can say. We lost a lot of fee income because of the last 3, 4 weeks of low or no business momentum. Fee income growth has been trending reasonably in the direction we would like. That will continue. See, again, everything that -- we must be mindful that the next 2, 3 months or, I would argue, even 6 months may be very different. And therefore, it's hard to predict. If everything comes back bouncing, we'll be back in full flow. So let's keep a close watch. Your question on wage negotiation. My sense, and it's anybody's guess, it's a very arduous process from November 17 to May 20. The negotiations are underway. It was coming to a fruition in February, which is where this number of 15% came up. Then COVID came. I would argue that -- I would think that if, at all, there's a reduction, it will be prospective, not retrospective. We've provided for all retrospective. So we have no backlog and no baggage. And therefore, we can hope that prospective, it may come down.
Wage negotiation is -- I mean, on the implementation, it's due from 1st November 2017. You can say that for that period also, you give a lower amount. Till February, everything was okay.
Perfect. Perfect. No, I got that one, sir. I think it should be from prospective, not from retrospective.
Guys, I have a request. I have another call to get into. Last question, one more question and [indiscernible] panel the question later. So last question, and then after that, we can take it to Anand and team.
Last question is from the line of Dhaval Gada from DSP Investment.
Just 2 questions. The first is on the standstill. If we were to not utilize the standstill that...
Sorry, Dhaval, your line fell off. If we didn't use the standstill?
What would have been the additional slippage in the March quarter? So what is the...
INR 303 crores.
And second was, what is the direct and indirect exposure to travel and tourism sector since that would be one of the most impacted? It was...
Almost nothing. Almost nothing.
Okay. And lastly, any update on IDBI Federal?
We have agreed -- we had a Board approval to take it up to 4% additional, depending on RBI's clearing it. And the price discovery that is happening in a conversation between AGS and IDBI as they agreed. When they come to a conclusion. Once they make us an offer, we have an approval to go up by 4%, take out 26 to 30. The EV of the company last value was INR 2,000 crores. Thank you, everybody. Thank you for dialing in. And as always, stay safe, and we hope to come back to you in July 15 or thereabouts when we do Q1 with hopefully a different world. Thank you very much, everybody. Good luck.
Thank you. On behalf of Federal Bank, we conclude today's conference. Thank you all for joining. You may now disconnect your lines.