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LIC Housing Finance Ltd
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Ladies and gentlemen, good day, and welcome to the LIC Housing Finance Q3 FY '20 Investors Conference Call hosted by Axis Capital Limited. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Praveen Agarwal. Thank you, and over to you, sir.
Thank you, Aisha. Good morning, everybody, and welcome to this earnings call of LIC Housing Finance. From the management team, we have Mr. Siddhartha Mohanty, MD and CEO; and Mr. Sudipto Sil, CFO. I would request Mr. Mohanty to take us through the key highlights for the quarter gone by. And post that, we'll open the floor for Q&A. Over to you, Mr. Mohanty?
[Technical Difficulty] conference call of LIC Housing Finance Limited. As you would be knowing, LICHFL declared its Q3 FY '20 results yesterday. The key highlights of the results are as follows.Revenue from operations INR 4,996 crore as against INR 4,439 crore for the corresponding quarter of the previous year, showing a growth of 13%. Outstanding loan portfolio is at INR 2,05,690 crore (sic) [ INR 2,05,692 crore ] against INR 1,81,553 crore as on December 31, 2018, reflecting a growth of 13.29% (sic) [ 13%], out of which individual loan portfolio stood at INR 1,92,452 crore (sic) [ INR 1,92,459 crore ] as against INR 1,70,652 crore (sic) [ INR 1,70,658 crore], up by 13%.Within the individual loan portfolio, home loan portfolio recorded a growth of 13%. Disbursements in the individual home loan segment clocked a healthy growth of 16% during the quarter and stood at INR 10,655 crore against INR 9,170 crore.Disbursements in the project loans were lower at INR 931 crore as against INR 1,238 crore. Total disbursements during the quarter were INR 13,177 crore against INR 12,778 crore for the same period in the previous year.Net interest income for the Q3 was at INR 1,228 crore as against INR 1,043 crore, up by 18%. Net interest margin for the quarter were at 2.42% as against 2.33% for Q3 FY '19.Profit before tax for the quarter stood at INR 745.32 crore as against INR 859.59 crore, a decline of 13%. Profit after tax for the quarter stood at almost similar level at INR 597.53 crore as against INR 596.31 crore for the Q3 of the previous year.During the quarter under review, the company performed quite well in the individual home loan segment, recording a disbursement of INR 10,655 crore as against INR 9,170 core for the corresponding quarter in the previous year, recording a growth of 16%.Amongst the regions, the Central, North Central, South Eastern and Northern regions registered good growth. The company's strong performance in the Pradhan Mantri Awas Yojana - Credit Linked Subsidy Scheme segment continued in Q3, with company disbursing more than 16,000 loans totaling to more than INR 3,400 crore during the period, clocking a growth of 88% and 106%, respectively.For the year, company has already disbursed more than 40,800 accounts, totaling INR 8,400 crore under PMAY. As mentioned in our previous interactions, we continue to be extremely confident of continued growth in this area. And I strongly believe that this will act as an engine of growth for the company.As far as disbursements in project loans is concerned, we have continued to be selective, considering the overall market conditions and have disbursed INR 931 crore in Q3 as against INR 1,238 crore for the corresponding quarter in the previous year. On the business front, recently, we have launched 2 new products to cater to the needs of the customers, which are very relevant in the current environment.One is aimed at under construction homes, where there are -- there, the customer can opt to pay only interest till the date of occupation or for 48 months, whichever is less. In the other product for ready-to-move-in dwelling units, there is an EMI waiver up to 6 EMIs, subject to certain conditions. Both products have been received very well by the market and will generate confidence amongst homebuyers.On the portfolio growth front, the total portfolio recorded a stable growth of a little more than 13% and now stands at INR 2,05,692 crore. Our focus in the affordable segment has led to a healthy growth in the individual home loan segment at about 13% year-on-year. Individual home loans stand at more than 76% of the total loan portfolio.In terms of asset quality, there has been an increase in stage 3 exposure at default, which has increased by 35 basis points from September 2019 from 2.38% to 2.73%. However, it is encouraging to note that there has been no further increase in the project loans from September '19 level of INR 2,000 crore approximately.In the retail segment, this stage 3 has increased to 1.92%. Within that number, there are approximately INR 180 crore of loans which are up to date, but have been classified as nonperforming because the other account taken by the same customer is nonperforming. This has accounted for nearly 10 basis points of the 35 basis points increase in delinquencies for the quarter.Improvement in asset quality is our highest priority area, and we are confident of improvement. This quarter, we have made a much higher provision of INR 390 crore, which has impacted the profits, the total provisions of MCLR at a little over INR 2,500 crore, a coverage ratio of approximately 45%.On the funding side, we have witnessed a reduction in overall cost of funds by 27 basis points during the current financial year. For Q3 alone, the incremental cost has declined 69 bps year-on-year from 8.56% to 7.87%. Net interest income registered a strong growth of 18% for the quarter as compared to the corresponding quarter of the previous year. Net interest margins for the quarter stood at 2.42% as against 2.33% over previous year, an improvement of 9 basis points.The funding environment and the liquidity conditions remain quite favorable. During the quarter under review, we have raised funds through NCDs, bank loans, CPs and public deposits. Also, the company raised an ECB of USD 200 million during the quarter as a strategy to diversify its resource base.With this introduction, I would like to invite you for your queries. Thank you.
We will now begin the question-and-answer session. [Operator Instructions] The first question is from the line of Nishant Shah from Macquarie.
A couple of questions. Firstly, just love some clarification. So on Slide #10, you have given the portfolio, the loan book composition, where developer loans are shown at 6.9%, right?
Yes.
And if you go to Slide #14, the slide titled Executive Summary of 3Q, the project loans are given as INR 13,233 crore on a base of INR 2,05,000 crore.
INR 2,05,000 crore, right.
Right. So the number works out to be about 6.4%. So like if I were to just do 6.9% of the INR 2,05,000 crore, it turns out to be a little bit higher, like closer to INR 14,192 crore.
Correct.
So what's the difference here?
See, this is Sudipto here. Just -- these are very technical explanation. As per the Ind AS, you have to actually knock off the specific provisions against the portfolio to arrive at a balance sheet reporting figure.
Okay. So because you didn't wanted to have a higher...
Was marginal...
It was technical, but when you are presenting the balance sheet numbers, it has to be presented that way. But overall, composition of the assets is exactly what is mentioned in the earlier slides.
Okay. Yes. This is very clear. And secondly, a question on your overall project loans. So how many project loans would still be under moratorium right now, which in your assessment, are likely to like say slip or they are stuck or some other form of stress? What would be the quantum? And maybe the number?
Till now, all projects loan, whatever has become NPA already has become NPA. But all other loans, they are paying regularly. And we do not find any stress in those projects because their sellability is very high and they are getting -- there is cash flow is there. So we are observing them. So I don't think there will be any such problem for those loans, project loans.
Okay, sir. Just a follow-up then. What percentage of your developer book would still be in moratorium right now?
That -- around 25% to 27%.
[Operator Instructions] The next question is from the line of Kunal Shah from Edelweiss. Kunal Shah, your line is in talk mode. Please go ahead.As there is no response from the current participant, I have muted the line. The next question is from the line of Sachin Shah from Emkay Global Financial Services.
A couple of questions. Just first, one clarification, you mentioned that retail GNPA is 1.92%.
Yes.
Which means that in this quarter, whatever has been the incremental NPLs, that large part has actually come only from retail. And on corporate side, there is not much slippage in this quarter.
Actually, in fact, let me clarify further. We have -- actually corporate loan, we have been able to control. In fact, it has been less, few crores, some INR 24 crore, INR 25 crore less as compared to last quarter, Q2 to Q3, becomes less.But retail, as you told, retail, because of technical reason, we have experienced some spike in individual loan NPA having multiple accounts. Means one account is NPA, but that individual loanee, he has 3, 4 loan accounts. He has taken top of loan subsequently 2 or 3 loan for the extension, something like that. So those -- this time, our experience is bitter as compared to previous quarter. So this has gone up. Retail loan has gone up. And that amount, if I can say a rate, is almost INR 175 crore, INR 180 crore total NPA for this account. But actual NPA, particular account if you take together, it will be some INR 54 crore, INR 55 crore. So that's why it has gone up, retail.
Okay. Now my question is on the corporate loan book or developers loan book. If you could give us some of the granular numbers, like what are the -- I mean, what's the concentration of top 10 exposures in this particular segment? And how much of it has already slipped? And what's the total PCR on the only developers loan portfolio? And if you have this rating of the developers loan portfolio, if you can give us some highlight on the distribution of that rating?
Actually, developer loan, you see, around 260 total accounts are there. And we have identified already which are under NPA, we are after them. 5 cases already we have taken up to NCLT and 2 cases, I think we are hopeful, already NCLAT has given direction to settle before March. Then besides that, we are making adequate provision for all this developer book and some 14 accounts amounting to around INR 1,000 crore, INR 1,100 crore or something, those have been referred to AIF. They are eligible for this alternative investment fund, which is managed by SBICAP. So all these activities we are undertaking. And adequately, we have made -- our provision for entire NPA, we have made 45%, 46% provision, we have provided for that.
Sir, what is particularly only for developers, so where GNPA is about the -- about...
Our developer book, 51% is provided.
Sorry?
51%.
Okay. 61% or 51%?
It's 51%, 51%. 51.17%.
That is for developers loan?
For developer.
And top 10, what would be the total exposure?
Top will be around 14% to 15%.
Okay. And how many of this top 10 would have already...
14-point -- see, actually, exact total NPA will be 14.5 -- 14.05%.
Top 10. And of this top 10 or let's say, 14%, 15%, how much would be already classified as NPA?
All, all.
All of them?
Yes. Out of that -- I think total, it will be 15%, 16% within that.
Okay. So 15%, 16% of this 15%, 16% is already part of NPA?
Yes, yes.
Okay. And just last question on the repayment side. If I look at your individual loan repayment this quarter or, let's say, if I'm just doing a calculation, opening plus disbursement minus the closing amount, there seems to be significant spike over there in terms of repayment number. So have we either securitized something or assigned something...
No, no. There is no securitization so far.
Okay. So as we're looking at repayment rate which is about, let's say, 4% or let's say, INR 5,500-odd crores per quarter, it looks like this quarter, this number has gone up to INR 8,100 crores. I mean I'm just [Technical Difficulty] only individual loans right now.
See, actually, the number also includes the repayments as along with the prepayments.
Total repayment also.
But if you see the presentation, we have very clearly given the prepayment numbers, which is very stable. In fact, slight decline is there as compared to last year, which is right now at 10%. So that is more or less in trend.
Right, right. Yes, Sudipto. Just wanted to understand one basic in terms of direction. We are not used to -- if you see in the last 12 months or so or the last 9 months, the retail NPAs are actually -- gross NPAs are actually nearly double, it's like from INR 1,500 crore, INR 1,600 crore, we have gone to INR 3,000 crore. So that is my first question, that is this is really a sign of worrying or something? Or this is -- I mean, how do you see this? That's number one. And second, if I just see that overall provisioning number also has been very large for the last many quarters now. So like if I just take FY '18, FY '19 and FY '20 year-to-date, they've provided nearly INR 2,000 crore on the provisioning side. Now if I take 10 years before that, the cumulative number would have been just about less than INR 1,000 crore. So obviously, this developer loan book has hit us back quite badly. And now how do we see this directionally going ahead? Can you just give us some sense on these 2 points? One is the retail gross NPAs going from INR 1,500 crores to INR 3,000 crores in the last 9 months. And one is this provisioning number being so large, maybe a lot to do with developer loan book. How do we see this -- how do you pursue this now going ahead, this 2 points of...
In fact, our experience in the last quarter is far, far better as compared to previous quarters so far as recovery is concerned. Last quarter, we -- every time, last quarter, we make a good recovery. So if you see, as you told, provisioning is going up and no doubt, NPA has also gone up, particularly this individual segment. As I told earlier, individual segment because of multiple accounts. So technically, those are NPA. Otherwise, that would have been reduced too. And we are providing adequately for that. But I am hopeful in the current quarter, this Q4, things will be under control, particularly 2, 3 big accounts, we are hopeful of resolution. Already court orders are there. 2, 3 accounts, we are also discussing, some payments will come. In some projects, already part payment, they have already made. So last quarter, I'm very much hopeful this will not further spike.
Okay. Yes. And I was not only asking for this one quarter or so, I'm saying in the next 12 months, 18 months, 24 months.
That we are taking care, actually. You see, current year, if you see our project loan disbursement, there has been a decline, heavy decline is there, 57% dip in the project loan. So we are very selective in project loan. So that will give us some boost in next year in asset quality. Asset quality, that will help us. Okay. So I don't see in coming year, there will be any further growth in this NPA. So this year, we have been very conservative. That's why you see our result is also very conservative. So next year, all good things will come.
And in terms of this gross NPA for the retail book, which has nearly doubled in the last 9 months...
That I explained, because of multiple -- single account going NPA having multiple accounts.
That amount is just you said less than INR 200 crores, right, because of that?
[Foreign Language]
But out of INR 1,600 crore to INR 3,000 crore, so which is additional INR 1,400 crore...
Even that, when we segregate the individual loan, we also take individual big ticket size loan, individual commercial LAP also we consider at individual. Otherwise, pure home loan, individual home loan is much less, it is 1.3% or 1.4%. It will be 1.3%, pure individual housing loan. But we categorize also commercial individual, commercial LAP, if some individual takes a commercial loan also, that is also -- so that's why it is a bit high.
So how do you see your LAP book in terms of the quality going ahead?
LAP also, quality is good. LAP we are doing well. We have introduced commercial LAP in the current year, that is also doing well. And experience, there also, it is very negligible. Asset quality is good. 2% to 3% delinquency is there. But it is totally backed by quality assets.
Okay. On that rating distribution, do you have data? I mean, what's the rating distribution of developers loan portfolio in terms of credit rate?
No, we have some internal rating.
Internal rating.
Yes, that is internal.
[Operator Instructions] The next question is from the line of Roshan Chutkey from ICICI Prudential.
So how much is the LRD book out of this INR 13,000 crores that we have?
Out of which?
Out of the commercial book that we have?
Out of the developer loans, it's around INR 3,000 crores.
INR 3,000 crores. Now when you say, 25% to 26% is...
INR 3,000 crores. In the project loans, in the project loans.
So out of the INR 13,000 crores, the total...
At retail also, we have LRD. Retail also, we have LRD. Individual set, that is also considered as the individual LRD. So total LRD, corporate as well as the individual, will be some nearing INR 8,000 crore, INR 8,000 crore.
INR 8,000 crores. Okay.
Yes.
But this is disclosed in 2 separate segments. That you are aware of?
Sure, yes. So of the INR 13,000 crores, approximately INR 3,000 crores is LRD. When you said 25% to 26% of developer book is under moratorium, you are -- the base is, the denominator is INR 10,000 crores or INR 13,000 crores, sir?
No, no, no. See, LRD, there is no moratorium.
Correct. Therefore, what is the base? Base is INR 10,000 crores, right?
Yes. Approximately, yes.
So last quarter, you had something like INR 4,500 crores under moratorium, if I remember right?
Correct.
So now the number has dropped to INR 2,500 crores?
Yes.
And what is the experience of the ones which have come out of moratorium? How many...
They have started paying...
In fact, if you see the -- yes, the NPA overall in the project loan segment has come down.
Okay, that's great. Okay, fine. So on the individual book, so what percentage of the individual book is there where top-up loans is given? Like multiple loan accounts where you are facing an issue right now?
No, see, that multiple loan accounts and top-ups are not one and the same. Multiple loans is that a person might have taken 2 different loans, would be for 2 different properties also. Not necessarily for the same property. So kindly don't interpret top-up and regular loans in the same -- as a multiple...
Multiple property, okay.
It could be different properties also.
But just to get a hang of it, I mean...
And overall, it is just less than 1%.
Overall less than 1% is where, multiple loan accounts have been there, are there?
Yes.
Okay. And slippages under the individual book. Now what is the slippages that we have this quarter?
See, as compared to last September quarter, the increase is roughly on INR 800 crores.
Right. But slippages, what is there? No, but not all of it is slippages, right? There may be some impairments or...
Yes. That -- net of the INR 180-odd crores which is actually standard assets, the balance will be -- the next slippages will be around INR 600-odd crores.
Okay. But how much of it is from LAP and the other stuff that you do?
See, LAP, that is the non-core portion of it. That is a non-home loan portion of it will be around INR 200 crores to INR 250 crores. And another INR 200 crores to INR 250 crores will be from the home loans and across around INR 180 crores or INR 200 crores will be approximately the accounts which we just mentioned, that multiple accounts. This is spread across.
The next question is from the line of Mahrukh Adajania from IDFC Limited.
Could you give the numbers of core retail NPLs for last quarter and this quarter? This quarter, you gave. Last quarter, what was it? This quarter, you said it's 1.3%. So...
Last quarter, September quarter was 1.05%.
And the -- yes, 1.05%, okay. Got it. And this multiple accounts, the change in policy happened now or multiple...
In the last quarter.
No, no, it was earlier. Last quarter.
Sorry. So you changed the policy of clubbing all accounts?
No, no, no. Last year, it was there, but this year, there is a spike in this segment.
Okay. And it's nothing to do -- there's no geographical bias there, right?
No, no.
No, no, across. It is across.
Right across.
Okay. And what is the LAP NPL in retail last quarter and this quarter?
2% to 3%.
It'll be 2% to 3% in LAP.
Sorry?
2% to 3% in LAP.
This quarter and last?
Yes.
Could you give the absolute number?
Right now, it's around 3%.
3%. Okay. And last quarter, it was?
It does -- last quarter means September quarter, it was around...
In September?
It was around 50, 60 basis points lower. I think 2.2% is the number last.
The next question is from the line of Pranav Gupta from Birla Sun Life Insurance.
So we've seen -- so there's been also an increase in your stage 2 assets.
Can you speak up a little loudly, sir, please?
Can you hear me now?
Yes, this is better.
Yes. So apart from the NPL increase that we've seen, we've also seen an increase in stage 2 assets.
Correct.
Which is about INR 2,000-odd crores for this on a sequential basis. If you could give a sense on whether this is coming from the developer book or the LAP book or any particular geographies, if you would give some color?
Actually, in fact, it is not from developer book. It is -- as I told you earlier, multiple accounts. That experience this quarter, it is bitter. It was there earlier, but this quarter, it has gone up. Single loan having multiple accounts and a single account going to default. So all other accounts also are treated as that NPA. And if you see builder book, builder book, impact, as compared to Q2, Q3 is less. That somehow we have been able to control. In fact, INR 24 crore, INR 25 crore less NPA is there in the current quarter. So that's why stage 2 has gone up. As compared to Q2, stage...
This INR 2,000 crores increase is attributable to these multiple accounts?
Not INR 2,000 crore increase is not there. INR 800 crore total increase in total...
I'm talking about the stage 2 assets?
Stage 2, yes.
Yes. Can you speak up a little loudly, please?
Yes. I'm talking about the stage 2 assets, which have increased from INR 9,600-odd crores to about INR 11,750 crores?
Yes, yes.
So if you could give us a sense of where -- what portfolio this stress is looking from?
This is mostly in the retail segment. And there -- it is mostly on account of delays. And just to also give you one more data point, to share with you one more data point is that we have internally just assessed that even for the loans which were NPAs on 30th of September, about 2,000 accounts, they have made payments in the retail side, 2,000 accounts, they have made payments of total around INR 40 crores to INR 50 crores. Though they have not been able to fully service the EMIs, but the payments are there, which means that this slowdown which is there, this transition from stage 1 and stage 2 partly is accounted through that, that there is some payment which is coming, but the payment is not exactly equal to the EMI the reason for which it is moving from the stage 1 to the stage 2, but payments are coming.
Right, right. Okay, great. And so just one more clarification. You said that about 15% of your developer book is to top 10 accounts in the developers. Is that right?
Yes, roughly, yes.
Around.
Okay. And...
All the constructions in the site, yes.
Right. So about INR 1,500 crores is to top 10 accounts?
Yes, roughly.
Okay. And your NPA level in this book is about 13% to 14%?
Yes, roughly around 15% -- I think 16% was the number which was given. 16%, 17%.
Right, right. And just one last data point. If you can help us with the Y-o-Y comparable numbers for individual home loan and LAP NPAs, that will be very helpful.
Individual?
Individual home loan and LAP NPA.
Individual home loan, what, disbursement number?
No, no. The NPA number. So you said...
NPA number, actually, last year, last year, NPA individual home loan was 1.14%.
Okay, which was at 1.05%...
Retail individual home loan last year, last March, '18 March, '19 March. And total was 1.54% and our project book was 6.96%.
Right, right. And if you could also give that number for the...
And the current year, it is 1.92% and 2.73% total. Builder book is 14.05%.
The next question is from the line of Dhaval Gada from DSP Mutual Fund.
Just 2 questions. One, could you give the gross NPA for top 7 cities? And beyond that 7 cities, what is the gross NPA breakdown...
No. That we don't have the number readily. Don't have the number readily.
Citywide, we don't mention. We have total, we have kept. So total figure, it was some INR 5,686 crore, the NPA, gross NPA.
Sorry, I missed the comment, sir?
Total NPA, INR 5,686 crore, gross NPA.
Right. And sir, could you give a percentage for individual self-employed and individual salaried NPA number, if that is...
That is also not here. That too...
By and large, it is similar. By and large, it is similar experience.
Okay. And just one last thing, sir. I mean, when we look at data, for us, the NPA spike has been far severe compared to what you've seen in the bureau as well as some of our competition. So is there any specific reason why we are seeing such high levels of individual NPAs? I mean, any color around that?
Can you please repeat your question, sorry?
No, no. I was saying in the individual HL, home loan NPAs, the rise for us has been far sharper than what we've seen for some of our peers. Is there a specific reason that you can identify why it has happened for us with this...
So I cannot comment upon the competition. That is something which I cannot comment. We have shared all data regarding our company. We cannot comment about other companies.
Okay. Okay. And what is the impact of this higher level of NPAs on the interest income line? Because that is something that we've not seen materially. So is there any interest income reversal that we've seen? Or that's not there?
No, no.
No, no. It's not there.
The next question is from the line of Bhavik Dave from Nippon India Mutual Fund.
Sir, I just wanted to understand, so we've got a feedback from other companies stating that salaried under construction segment, where the project has been halted and developers have stopped payment and that's leading to some increase in salaried retail NPAs. Can we throw some light on if we have a new proportion of our loan book there? Or what is your sense? Is this happening in the market? Or is it very specific to certain cities?
See, we -- actually, I do not know whether that is the situation. Because even though the construction stalls or go slow, an individual generally does not stop payment because it impacts the credit score, CIBIL credit score. And that probably creates more situations or problems for the individual homebuyer as compared to the solution that he is seeking. So I do not know to that extent, maybe a few stray cases could be there as you would have interacted with them, but overall, generally, it is not the experience.
Actually, if I tell you, particularly, just let me further clarify, particularly if you take NCR, most of the projects are stalled, and many of our individual borrowers, they have taken houses in those projects. But our experience is good because they're continuing repayment, particularly if I analyze the NCR segment because the projects are stalled, but we are getting regular repayment from our individual home borrowers. That is there. Few cases are there. Their NPA, very, very negligible, but that is there. So it is not that if a project is stalled, individual home borrower will not continue EMI repayment, that is not there.And then secondly, we have introduced one product recently to address this issue. We have given principal repayment holiday up to 48 months for under construction project. Pay When You Stay 2020 Home Loan Offer, that we have given whereby one person can just pay interest only up to 48 months or till possession of the house, whichever is earlier, if he is going for under construction project. So I think that will address the issue. If readymade house he is purchasing, 6 EMI waiver, or up to 6 EMI waiver also we have given.
And sir, this is for your previous customer as well? Or is it for incremental customer?
This is new customer. This new product we have given for our new customers. Previous customers, they are paying. Regularly, they are paying.
And sir, just to understand, out of our individual home loan book, how many -- like what proportion of the book will be in the INR 1 crore, INR 2 crore above ticket sizes, like the luxury segment in Bombay and Delhi, specific geographies, right, with Bombay and Delhi are the two cities where we'll have high-end luxury housing. So what proportion of our loan book would be to that?
Total INR 1 crore loan.
INR 2 crore, whichever you feel...
It is very less. Percentage-wise, it will be very, very less. Actually, our strength is in affordable segment, our average loan size is INR 23 lakh, INR 24 lakh. INR 2 crore, INR 1 crore loans are there, but exact figure, I'm not able to give. But percent-wise, it will be 2%, 3%.
[Operator Instructions] The next question is from the line of Nischint C from Kotak Securities.
So you just mentioned that your NPL ratio in the developer book is around 14.05% and the NPL ratio in the individual retail business is -- the home loan business is around 1.3%. Mathematically, what that means is that your NPL in the non-core segment, which is essentially LAP, et cetera, works out to around 4.8%, and the absolute amount is around INR 1,600 crores from approximately INR 800 crores in the previous quarter. So I was just saying that mathematically, either something doesn't add up or maybe there is a massive growth in the LAP segment?
No. Actually, the NPLs there, as I mentioned in the earlier question, it's around -- slightly more than 3%. Maybe somewhere -- because maybe somewhere it is not reconciled because somewhere the base is taken as the ECL adjusted base. So probably a couple of thousand crores there could be a difference in the outstanding amount, as I had pointed out in the first question itself.
But in individual LAP...
But it is 3%, around 3% for the LAP.
But in that case, what you're trying to say is that on the individual retail side, possibly the growth is a lot more. I mean, we're just trying to understand in terms of percentage growth...
No, no, no, forget the percent. We have shared the exact numbers, exact numbers we had shared.
Okay. If you could share the exact numbers of the GNPLs of the...
See exact numbers we have shared. We have shared the exact numbers. Out of INR 5,686 crores of total NPA, INR 2,000-odd crores, slightly more than INR 2,000 crores is the project loan NPA. Balance is the retail NPA. In the Indian -- individual home loans, it is between 1% and 1.35% thereabouts.
1.35%...
Exact numbers and all that, you can find out. Okay?
So that's approximately INR 2,000 crores?
Whatever, I've not checked the numbers but whatever is the number, yes.
Because balancing is still working out to somewhere close to 4.5%?
No, it will be around -- maybe around 3-point-something percent.
Sure. Maybe my only request to you is maybe we can put it in the presentation because I think in the last 40 minutes, maybe 15, 20 minutes have gone in kind of trying to reconciling this number. So if we can put it in the presentation...
No. I don't think -- I mean, because there are several products sub categories, maybe there is some confusion there.
Some classification...
Sub-classification somewhere.
Just now, the second question is your view on coverage on stage 1 and stage 2 loans, it has kind of gone down to quite a low extent this quarter. So it's almost INR 33 crores.
Correct, correct.
It's around 2 points. So how should one really be thinking about it?
See, this is, again, I think in last several calls, we have tried to answer this query. This is actually a formula-driven number which comes out. There is a formula-driven calculation for the expected credit loss arising out of the exposure at default. So it is being applied. So there is a study -- this model is based upon 20 quarters previous numbers, and that is how the number is derived. So it is possible that in a particular quarter in that period of 20 quarters, there could have been a lumpy kind of an increase or decrease due to which this is happening. We have no -- actually, we do not have the control on this because it is a formula-driven, system-driven kind of a input which comes.
Because the absolute number has changed a lot. So logically, if this is supposed to show a long-term trend, then the absolute number is swinging quite a lot.
No, I know that. I get your point. But this is something which is basically a statistical analysis of last 20 quarters, which is thrown up through a particular model. And that is how it is being adopted.
Sure, great.
Which is obviously duly assessed by the auditors as well.
The next question is from the line of Kunal Shah from Edelweiss.
So sorry, once again, to touch upon these numbers, okay. Actually, these are not getting tallied. So this 1.3% of retail home loan, does that include this INR 180 crores of multiple accounts? Or this is excluding...
No, no. That is actually across all categories.
So this INR 180 crores would have be in LAP as well as in terms of the home loan. It would be across.
Correct, correct.
Or more so it will be in LAP, and that's the reason maybe LAP number seems to be...
Yes, yes, yes.
No. So it's in LAP or it's in home loan?
Partly it is in home loan, but it is also there in the other -- all segments of retail, in all segments of retail. The total number is around INR 180 crores.
Okay, total number is INR 180 crores and it would be spread across both of them?
Yes, yes, yes.
Okay. Sir, the only thing is like, again, what maybe Nischint also have touched upon. If I were to look at it, 1.35% and multiply by your individual book, which is [ INR 1 lakh 50 ]...
Let us keep the calculations. I mean, we can always address the calculation, but maybe some...
No, sir. I just want to get the sense wherein this NPLs are coming. So actually, what you broadly highlighted at the start, that INR 180 crore is multiple account and thereafter, it's like INR 200 crore, INR 250 crore in home loan, and INR 200 crore, INR 250 crore in LAP. Actually, the...
Yes. Total around INR 800 crores. Let me again go through the numbers in case you have missed it. Approximately INR 800 crores. See, I'm not getting into the exact number. Whether it is INR 802 crores or INR 822 crores or whatever. Approximately INR 800 crores and thereabouts. And about roughly around INR 180 thereabouts, I'm just giving you an approximate number, is because of the double counting in the -- because of multiple, so that leaves around INR 650 crores or thereabouts. So now everything has to fit in that. In terms of -- let me -- in terms of the project loan numbers, NPL number, there is no increase. So that is around say INR 2,000 crores whatever. So balance INR 3,400 crores, that is where probably you're missing, probably the INR 180 crores, you are counting 2x or you're not counting 2x [indiscernible].
No, no. Just again...
See, let us not reconcile this. I mean, this is...
No, no, so one second. Just maybe INR 180 crores is multiple accounts.
Correct, correct.
Then project loan has not gone up. So INR 620 crores is between the home loan and LAP.
Correct, correct.
So now in that, based on 3%, 3.2% left is somewhere around INR 200-odd crores. So balance INR 450 crores, INR 500-odd crores seems to be in retail compared to what you are analyzed...
INR 300 crores, INR 300-odd crores.
Okay. INR 300-odd crores is home loan.
INR 300 crores, INR 350 crores. So now if you recalculate that number, around 1.32% -- around 1.35% will come. Okay?
Yes. And just on the construction side, under construction. So what proportion of the overall home loan would be the customers wherein who had taken loan under construction or under-construction property?
No, not clear. Can you please repeat your query?
Of INR 1,57,000 crores of home loan book which we have, how much would be the proportion of the customers who have taken these loans for the under-construction property?
In the retail side?
Yes, on the retail sale. Only retail side. Maybe...
See, retail side, we have to go by the flow figure because if you look at the balance sheet figure, whatever was under construction 2 years back would have by now got completed.
Yes. No. So currently, if I have to look at it...
Currently, we can only...
Total...
Total around, 40% approximately.
So 40% of the under-construction...
40% of the total INR 2,00,000 crores. If you remove the...
INR 80,000 crores to INR 90,000 crores.
Yes, INR 80,000 crores. So around 40% you can take. But then that number with the caveat we have to give you because what was under construction 2 years back is probably now completed. Whatever -- this is a balance sheet figure. That's what I'm telling you. This figure will have some inaccuracies for the purpose of your interpretation.
Sir, sorry to interrupt. We would request you to join the question queue for any follow ups as we have several participants waiting for their turn.The next question is from the line of Amit Rane from Quantum Securities.
Sir, can you give your outlook on credit cost going forward? Do you feel that similar run rate may continue for 1 or 2 more quarters because stage 2 has gone up sharply?
Credit cost, if you look at, there has been an increase as compared to the last year. There has been a significant increase. This year, total provisions that we have made is around INR 900 crores already for the year, including INR 390 crores to INR 400 crores in the current quarter itself, which is a sharp rise from whatever it has been there in the earlier years, several years, especially if you look at 2019, for example, it has been around say INR 600 crores. So already, there has been an increase. But however, we believe that with some remission in the builder loan default, further provision on the discount may not be so aggressive as we have seen in the last -- this current financial year. As far as the retail book is concerned, retail business or -- I mean, the retail NPLs are generally easier to tackle as compared to the wholesale book.
The next question is from the line of Adarsh Parasrampuria from Nomura Services.
Sir, 2 questions. Firstly, your non-core book, right. Can you -- again, in the past, we have discussed the breakup and the color of that book. So as it stands today, can you give some color of that book in terms of, let's say, the book is INR 33,000 crores, INR 34,000 crores, what's the split? You said there are retail LAP of INR 5,000 crores, then the other INR 29,000 crores or INR 30,000 crores is what? What's the broad ticket size in these categories? If you can just give -- because the NPLs, as you said, is broadly in the range of 3% to 4%, has gone up quite a lot. So can you just give some color of this book? Because this book is like built in the last 3 years. So we have relatively less color.
Actually, if you see, current year, our individual home loan share is 80.49%, in the individual home loan share to total disbursement in the current year. And nonhousing individual loan, that constitutes 8.75%, and the nonhousing commercial disbursement constitutes 4.57% and our project constitutes 6.19%. So this is the portfolio segmentation for the current year.
Sorry, could you repeat apart from...
Yes. Our individual housing loans share to total portfolio disbursement, current year's disbursement, total portfolio individual housing loan share is 80.49%.
Sir, sorry, I'm just interrupting. But what I was asking is not on the flow of this year, but more on the stock, right? So on the stock of balance sheet for this quarter end, your non-core mortgages are INR 33,000 crores, INR 34,000 crores of book.
Total -- if you see total book size, you want book size share?
No, no, sir. Not the share. You've given in the presentation the share. What I'm trying to understand is, of the LAP book, right, which is non-core mortgages, what is the split? And can you give us some color of ticket sizes and everything, right? So the INR 34,000 crore of...
Nonhousing commercial is 6.65%. Of our total size, it is 6.65%. And nonhousing individual, that also constitutes other LRD and other things also for the individual people, that constitutes 9.69% of the total book size. And the project constitutes to 6.9%. This is the breakup of our total outstanding portfolio. So further what you require?
Sir, just within the 2 categories of the LAP book, right, which is the non-core book, can you give us some color of what the ticket sizes are, right? Retail LRD is, what ticket size, the nominal LAP, what is the color? If you can just give some...
Broadly, we can give you -- broadly, we can share with you. This is a -- again, there are 2 sub segments. But overall put together, the average ticket size is around INR 15 lakhs, INR 16 lakhs in terms of the ticket size, approximately. And what else? What are the...
Salaried. What percentage of this is salaried?
Salaried is roughly around 70%. 70%, roughly.
And what percentage of these customers are your -- would have been your home loan customers like in-sourcing within the people who've repaid or either given a topup...
It's around 30% ballpark.
20%?
30%.
30%, 30%, 3-0.
Yes, because it looks a little [Technical Difficulty] the pace of increase in this book being 70%, 75% salaried, the pace of deterioration is very, very quick. So that's the comment. I don't know if you want to add something there, but it looks like earlier, we used to say it's mostly salaried...
It is, it is.
Low ticket size. So...
See, there are some, probably some large ticket cases here, which would have slipped into NPLs. But generally, if you look at it, the constitution of the book and the nature of the borrowers still overwhelmingly remain in the same salaried segment. There could be a few large cases, which would have been there. But if you look at the salaried segment, it is exactly 74%. As on 31st of December, 74.04% is the salaried segment.
And portfolio wise [Foreign Language].
Portfolio wise, it is like second...
Sir, the second question is on resolution, right? So you're now seeing some mortgages NPA inch up, right, or in LAP, retail LAP. So what's the resolution framework, right? They become due at what point? Till what point do you support? At what point do you start repositioning? The point I'm trying to ask is...
So there is no support. There is no support or anything of that sort. The moment it becomes NPA and in fact, from the stage 2 itself, we start following up. And as I told you, even in stage 2 also, we have received some payments. Those accounts are in stage 2 or stage 3, we received some payments. But irrespective, the legal action gets triggered. And the in retail segment, the resolution, the pace of resolution is better as compared to on the wholesale book.
So let's say, I become an NP and I'm not responding or I'm not paying my bit. With all legalities involved, what are the timelines on which you can...
The SARFAESI gets immediately triggered within 90 days.
And what's the history of once you trigger SARFAESI to completing legal, for taking and disposing off, what's the -- because I would agree that the loss that you would have on these assets could be low because it's very collateralized. But the point is, that process can take quite long, right?
The process, actually, what happens in the retail segment, the retail segment, the resolution process is slightly different as compared to the wholesale builder loan book. In retail, the invocation of the notice of SARFAESI itself triggers action because people generally try to close that matter before going to the court itself. So the process of resolution starts from that issuance of notice itself, and we have actually increased the pace that , in fact, for the month of January, we had identified month of January as a month where we will put up a -- maximum number of properties for auction, e-auction. So that process has already happened. And a good number of properties have actually been put on auction and several of them got sold also.
No. I just wanted some timeline, right? So if your NPAs are increasing, you start...
Individual loan, when you issue SARFAESI notice, mostly people respond. And sometimes, the experience is bad. It takes at least 2 years to -- for any final outcome. You know litigation process is lengthy because some people are highly litigant, and they go to appellate court, they drag on. So that takes time, 1 to 2 years it takes.But for our company, we have good experience, and mostly, we have taken possession of the property, and those are in our custody, and we are going for auction. So at least, our principal, we have a policy we do not compromise on principal. We make it a point to recover at least principal.
The next question is from the line of Aakash Dattani from HDFC Securities.
My first question is, you mentioned the individual home loan NPLs for December '19 and for September '19. You also mentioned the number of March '19. Could you mention the number for December -- for the quarter ended December 2018, please?
December 2018. Individual loan, December 2018.
Yes, the home loan?
Last quarter, we have -- December '18, it was --
0.93%.
0.93%. December '18 was 0.93% individual.
That was -- is that -- that's for overall individual loans, right. I'm talking about...
Our total individual wholesale. So comprises individual commercial loan, individual non housing loans, all those things are there.
Could you please provide the number for individual housing loans only?
Individual housing loan will be much less. It was be 0.76%, 0.76%, only pure individual housing loan.
Okay. That's clear. And sir, secondly, what percentage of your outstanding debentures would be coming up for redemption say in the next 6 months? And would you like to sort of increase your reliance on bank borrowings?
Yes. As far as the borrowing is concerned, that borrowing, we will -- we approach a -- take a very dynamic approach depending upon wherever funds are available at a cheaper rate. So right now, we'll not be able to comment whether we'll go for the NCD or we'll go for the banks or we'll go for some other instruments or we'll go overseas. So that is something that we will decide depending upon the situation.As far as the numbers that you asked for, in next 6 months' time, I'm taking this current quarter and next quarter put together, around INR 15,000 crores to INR 16,000 crores will be coming up for redemption.
The next question is from the line of Vikram Subramanian from Spark Capital.
I just have a query on the customer type segmentation. So in the presentation, we've mentioned salaried customers are 85% and self-employed is 15% and within the non individual -- nonhousing individual, you mentioned in a previous answer to a previous query, it was 70% salaried. I just want to know what this salaried segment comprises of. Does it also include professionals like doctors, lawyers, et cetera? Or do doctors and lawyers, that kind of professional segment, it gets classified under self-employed according to your presentation?
Yes. As far as the...
Actually, professional, actually, percentage of professionals to total outstanding loan portfolio is 2% as of December '19. Among the...
Mostly doctors.
Mostly doctors, other professionals also, consultants, this advocates, all of them, 2%. They constitute 2% of the total outstanding loan portfolio.
Okay. And that 2% would be within the self-employed or the salaried?
No, no. Self-employed.
No, self-employed is different. Self-employed are there almost 11%, 10.56%, 10.54%, something like that, self-employed, yes.
Okay. And just one additional data point there. Within the salaried segment, would you be able to give a breakup of what proportion of these salaried customers belong to the PSU and the government sector and what percentage belong to the private sector?
25% to 30% will be this PSU, PSU, government, et cetera.
25%, 30% would be PSU.
Yes, yes.
50%, 55% of your loan book customers are private sector?
Yes, yes.
Okay. And just an additional question. I'm not making it redundant, but on the slippage, the INR 800 crores that you mentioned, INR 180 crores are from the multiple account?
Yes. We have shared it at the beginning of the -- and several times during the call, that number.
Yes, I know, I know. So would you be able to give us the stock number for this? What is the -- as of now in the GNPAs, what is the total number that comes from this multiple top-up?
That right now, we are not having. We've just shared with you the incremental.
Incremental is INR 180 crores, right?
Yes, yes.
The next question is from the line of Subhradeep Mitra from UTI Mutual Fund.
So just wanted to check like what's the ALM like for the next 6 months to 1 year? And what would be the mismatch in that bucket?
Yes. ALM in what sense? Can you be a little bit more specific?
So your inflows and...
See, ALM, overall, I can share with you in the 0 to 1-year bucket, this is something which is very closely being monitored. Exactly, if you look at the permissible limit as per NHBs plus -- I mean, minus 15%, we are around 13% as on December.
Okay. And sir, what would be your undrawn lines of credit from bank as on...
Will be more than INR 10,000 crores from the banks itself. Plus, if you add the NHB finance, then it will go more than INR 15,000 crores, INR 16,000 crores.
The last question is from the line of Umang Shah from HSBC Securities.
I just need 2 clarifications. One, one comment was made where it was said that INR 180 crore slippage from multiple accounts is technical in nature. Should we interpret that all of these accounts are non paying? Or some of them might be paying but are classified...
Out of INR 180 crore, you see, we are getting INR 55 crores, INR 56 crores. Actually, those are being paid.
So logically, if a borrower pays all his dues, then there could be multiple upgrades...
Yes. Because our -- yes, multiple of -- that is our focus in the current quarter because we have to make those accounts standard. And already, we have started, all initiative we have taken and conducting.
The second account -- the reason why we have shared with that, that INR 180 crores [Foreign Language] number is that, that INR 180 crores is actually the ones which are up-to-date and they're servicing.
Actually...
So when the main account gets paid, automatically, the related accounts will...
Yes. There will be an update for both.
Yes.
Okay. All right. And just one data point. What would be the average duration of our non-core portfolio?
Non-core portfolio average duration. See, contractually, it will be closer to 10 years, but considering some repayments, prepayments, it will be around...
Extensive, 6 to 7 years.
7 years.
Mostly repayment.
As there are no further questions, I would now like to hand the conference over to the management for closing comments.
Thank you all for being on the call and for your valuable feedback. We are confident that we'll close the year on a very, very positive note, and you will definitely find extraordinary improvement in company's performance in the last quarter. Thank you.
Thank you. Ladies and gentlemen, on behalf of Axis Capital Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.