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State Bank of India
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Good evening, ladies and gentlemen. On behalf of State Bank of India, it gives me great pleasure to welcome all of you, the analysts, the investors, our colleagues present in this hall and those who are joining us through the live webcast to this analyst meet on the occasion of the declaration of result of the bank for quarter 1 FY '19. Before we proceed with the program, let me introduce the dignitaries on the desk. We have with us on the stage, our Chairman, Shri Rajnish Kumar, at the center; to his right is our Managing Director, Retail and Digital Banking, Shri Parveen Kumar Gupta; our Managing Director, Global Banking and Subsidiaries, Shri Dinesh Khara, who also holds additional charge of Risk, he's seated left to our Chairman; our Managing Director, Commercial Client Group, Shri Arijit Basu, who also holds additional charge of Stressed Assets Resolution Group, he's seated next to Shri Dinesh Khara; our Deputy Managing Director and Chief Financial Officer, Smt Anshula Kant, he's seated next to Shri Parveen Kumar Gupta. Our deputy managing directors heading various verticals and managing directors of our subsidiary are seated in the first row of this hall. We are also joined by chief general managers of various verticals, business group. Without any further ado, I request our Chairman to highlight the Bank's Quarter 1 FY '19 performance and strategic initiatives undertaken, thereafter which we shall straightaway go to question-and-answer session. Before, I hand over to our Chairman, I would like to read the safe harbor statements. Certain statements in these slides are forward-looking statements. These statements are based on management's current expectations and are subject to uncertainty and changes in circumstances. Actual results may differ materially from those included in these statements due to a variety of the factors. Now over to our Chairman. Chairman, sir, please.
A very warm welcome to all of you. I have a presentation which I will not call it a small presentation. But this time, we have tried to put things in a little bit different perspective for you. So we can start?
Yes.
Slide 2. So I wanted to highlight a couple of things about the State Bank of India. It's not that these -- some of these are not known to all of you, but still I thought that it needs some reiteration that where does State Bank stand today as far as the Indian banking system, at least, is concerned. We are 53rd amongst the top banks globally in terms of assets. We are the highest profit-making entity in India in terms of operating profit and 1.4 lakh touch points in India and a customer base which will be an envy of anyone in the world, whether the organization be banking or not banking, 42.5 crore customers. The leadership of the bank in Indian markets as far as the retail is concerned, again it is unmatched. Liability franchise is very strong and particularly [ is current ] and savings accounts. In fact, savings account we have, in terms of deposits itself across the benchmark of INR 10 lakh crores. Many banks, their size is not INR 10 lakh crores. Our savings bank alone is INR 10 lakh crores, then housing loans, auto loans, personal loans, everywhere state bank has today leadership. As far as technology is concerned, YONO is creating waves in the market, in fact. It is one of the best applications in India, and this is where we see the future of the digital banking. And there, we are setting the agenda from State Bank of India. The alternate channels now, 82%. [ Sure ] it includes, of course, ATM also, but only 18% transactions are not happening at the branches. Our internet Banking, it is very popular and fifth most visited financial site. IT infrastructure, global IT center and the kind of infrastructure bank has set up to serve this mass base of customers, it is again unique. All of our subsidiaries, they are doing very well. And please keep on sitting, there's no issue. [Foreign Language] And all the subsidiaries are doing well. Last year we unlocked the value as far as SBI Life is concerned and the market valuation of INR 70,000 crores. There are at least 3 more subsidiaries where we are planning an IPO next year. For SBI general, already we have started the process with a small partial sale, which we are trying to do within this quarter. Up to 4% we are divesting more as a price discovery as a precursor to IPO. And the synergy between the subsidiaries and the bank in last couple of years, there is a huge investment in this synergy. And as a result of this, the leadership position of all these subsidiaries is now established. Just an example, SBI Mutual Fund now has moved to fourth position. And very soon, I think, we will cross -- we will become the third largest mutual fund. Same as the SBI general. SBI Card, the number of cards being issued now is at least 4x more than what it used to be through bank channel. Coming to the quarterly performance, again the highlight is that the liability franchise of the bank, as I said, it remains very strong and particularly the CASA franchise, and within CASA, more on savings than current account. And the figure, as I mentioned, that now the savings account alone of our deposit base exceeds INR 10 lakh crores. On the top of the growth which happened, post demonetization and savings account, this year the growth is 9%. So if we take the growth post demonetization and this 8% growth, so I think CAGR will somewhere come to around 14% or 15%. This is a huge advantage which State Bank has. Every day, we open almost 60,000 accounts. And out of that, 27,000 accounts are now being opened on YONO platform. And as soon we have some more developments around opening of joint accounts, 100% account opening will move to YONO platform, even at branches, which, again, is a very efficient process. And the time has been cut drastically from 30 minutes to almost 5 minutes for opening a savings bank account. Credit growth year-on-year, domestic, 7.5%. But because domestic, 2 factors. One is that we carved out a subsidiary and almost INR 10,000 crores was transferred to subsidiary in U.K. And as a result of ban on LoU, the buyers' credit portfolio has gone down by almost INR 45,000 crores. So that is where the International Banking [ group, ] there is some shrink. But if I look at what is the YTD negative growth, because first quarter there's always negative growth as compared to the last quarter. So the negative growth is much lower than what it was previous year. And average, we have grown by 4.5% quarter-on-quarter basis. And YOY, as I mentioned, that domestic we have grown by 7.5%. The improvement in net interest income, 23.81%. But in, this there are exceptional item of INR 1,950 crores, which is on account of recovery into large account, where these [indiscernible] write-back of the interest income. But if we remove that impact, even then there is a growth of 12.5%, approximately. NII is improving. NIM margins are improving. Again, domestic NIM margin will be around -- is 2.95%. And if we remove the impact of this INR 1,950 crores, still 2.8% is the NIM [ number ]. The operating performance, yes, one impact is, of course, about the wage revision, where we, from November '17, we have been providing a 10%. And the gratuity, it is INR 3,600 crores for the bank. With June quarter, now half of it is provided. This INR 900 crores will be there for 2 more quarters, September and December. And by December, we would have fully provided for the gratuity. The -- if we remove these 2 components, then you will see in the later slides that the overheads as well as staff costs are very much under control. As far as loan-loss provision is concerned, what we have done is that we got write-backs. But on certain accounts, we have advanced the provision. In a way, we went by the regulatory guidelines. There was no requirement. But what we have done is that, particularly for NCLT 1 list, it is now completely aligned for all accounts, whatever is the resolution plan shows the recovery or liquidation or whatever is the situation. So there is no requirement for provision on NCLT 1. Again, we have some -- I have some slides later on, showing the correct position. But NCLT 1, we are expecting a write-back of at least INR 4,000 crores. I am expecting NCLT order next week. It can happen on Monday. It can happen on Tuesday. That resolution may happen by 30th September, if all goes well, or it may go to the next quarter, but depending upon that. The write-back is certain, but it can happen in this September quarter or it can happen at December quarter. But there are affidavits in the court that what is the amount of bids which are there. And that's why there should not be any doubt about the -- what are we going to get out of that resolution. I wouldn't be surprised if I get the full money. But still, even if we keep a cover of 10%, 15% on the principal outstanding, we'll get very good recovery. All other accounts fully provided. So -- and NCLT 2, again, you will see later on that 79% provision I am holding. So there are also the potential for write-back is very much there. So when we look at this INR 4,876 crores, one is bank's decision, management and board's decision to take the entire mark-to-market provisions within the first quarter itself. The rationale, as far as bank's capital is concerned, whether you take it in 1 quarter or 4 quarter, it remains the same. You don't get any advantage. If it is only from optics perspective, we thought that it is better that rather than keep a hangover of INR 1,500 crores per quarter, what is reality and what is certain, so rather we take it within this quarter itself. So that the charge of the current provisions, so it does not impact the future of this. What with the effort is that sooner the better the bank's earnings must stabilize, and there should be a consistent performance. If we have a hangover of this mark-to-market, also then that objective would be difficult to achieve. Capital position as compared to March quarter has improved despite a loss, and that is on account of improvement in risk-adjusted -- sorry, risk-weighted assets, and they have further declined. So bank remains well-capitalized. And because this is a very informed group, that's why the presentation -- this time, we are also trying to present before you that what are the long-term value drivers for State Bank of India. If you look at our overall business, then Retail and Digital Banking, there is no challenge to State Bank of India in my view. The leadership is well-established, be it customer base, be it the digital banking, be it the transaction banking. And that the composition of portfolio is such that if we include SMEs, then 59% is what we call our retail portfolio as on date. And the corporate book is just 40%, and I don't think that mix is going to now change in any significant manner. The breakup of the growth itself shows that the IBG international book, for reasons that I already explained, so there's a negative. But otherwise, we are seeing growth in corporate book also and as well as retail. So total retail portfolio now is INR 10.22 lakh crores, and INR 10 lakh crores is treasury. So what we are looking at is a INR 20 lakh crores alone, which will be size of the next 3 banks taken together, is all retail, funded by savings bank, current accounts, retail deposits. So this is something which gives a very solid base for the bank. One slide on like what does the retail portfolio looks like. Here, again, the market share is, as I said, that clearly there is a leadership position with 33% in home loans; auto loans, 35%; express credit in this data, of course, for market share is not available, but there is a very decent growth. And all the -- if you look at the GNPA percentage and we have to take into consideration that we merged 6 banks last year, and they were elevated, NPAs, at the time of merger. Last year in June, I remember that we made the NPA was INR 17,000 crores, which we added in the quarter in the retail segment. And the effort, which has gone into recovery and bringing down the NPAs, that is yielding very good result and all the numbers compare with the best in the industry. This is retail personal portfolio. The -- we have given some comparison that where the state bank is and where other banks are, be it, again, whether private sector bank or public sector banks. It shows how much is the gap. And with the kind of marketing infrastructure and the kind of infrastructure around processing of the loan, deployment of technology, this is a very unbeatable combination as far as SBI is concerned and on the top of trust the people in this country have in State Bank of India. Agriculture, which is always a matter of some sort of a concern or issue, there also, the portfolio strategy has been that we go more and more for these mitigated products. And KCC, of course, the renewals are being done. But many exciting things are happening in the agriculture also. And again, through the use of technology, aggregator model, new models are emerging and what the state bank's effort would be that again take the lead in this segment and make agriculture lending a commercially viable position rather than just treating it as a social obligation. So we are very excited about this segment, and we don't view it despite all the [Foreign Language] around loan waivers. But this is one segment where I believe that going forward with the government's emphasis on giving remunerative price, the changes which are taking place, we should be in a position to reap the benefit. But overall, of course, in the overall portfolio of the bank, the share of agriculture is about just 16%. SME portfolio, out of which pure MSME is INR 162,000 crores. Again, the risk mitigator products consciously we have been increasing the percentage here. And here again, we are leveraging our relationship with all the corporates, the vendor financing, the dealer financing, the Mudra Loans for sub- dealers or dealers. There's a huge potential around SME. Again, the technology, the new methods of lending, the move towards cash flow-based lending, they all will play a very critical role. It is again despite that the NPAs are relatively higher, but the segment is profitable for the bank because the pricing is also remunerative as far as MSME goes. And the GNP ratio has improved in SME sector despite what the belief is that SME -- of course, this is one segment where the sector is very vulnerable. But the formalization of economy and the GST itself will enable more and more flow of institutional credit and particularly from the banks to the SME sectors, and we are, again, in this segment also many exciting things are happening. Then technology and innovation. I can say with pride that despite the tag of public sector banks that State Bank of India is a clear leader as far as the technology concerned. And it is not the leadership amongst public sector banks. I'm talking about the banking sector as a whole. They reach again which bank has established. And the investment, which has gone into technology or is still being maintained and whatever new is coming. Our GITC Belapur, they are -- in every field, they are taking initiatives. Many POCs have been contacted for the blockchain technology, which seems to be the technology of future, artificial intelligence, robotics, advanced analytics. In every field, we have put people, and they are from the bank, they are from the vendors, they are from the lateral recruitment. So if you look at our GITC Belapur, it's a very vibrant place. Again, YONO, which is our prime customer-facing application, already it has won 3 awards, including 1 international award in Singapore and this we launched only in November. And the kind of feedback we are getting about the application and particularly from the younger generation, that is very, very encouraging. And many more developments are on way. By December or January, we will have full offering for the retail. And parallelly now, the development work will start for the corporate or the business segment. I don't know, but our partners, and which is IBM, they tell that this application can compare anywhere in the world with any other application. And in the time frame in which we have put this application, that is also unmatched. We have done in 15 months what people have not been able to do in 36 months. So this, again, shows that -- how much planning, of course the support from the business consultant and the system integrators and banks own team, they have done a remarkable job and ultimately the vision of bank is that maybe 5 years down the line, this will become the primary channel, rather than the physical branches for delivering, not only banking services, but financial products. And of course, the online marketplace, which is loved by youngsters, and we have special offers for YONO customers, which has been very well-received. Even IRCTC integration is going on. It has been tested under CUG for the staff. But it will be so easy even to book tickets on IRCTC that everything -- the concept is that any transaction you do, it is either 3 click -- that is our -- that is the mandate for the team. Whatever doesn't happen in 3 clicks, in 5 clicks it definitely happens. So that is the beauty of this architecture. And if you have not experienced it, I will request you to download and to start experiencing it. The financial inclusion, much talked about. Again, we have reached that inflection point as far as financial inclusion initiatives are concerned. The BC channel is now at a breakeven level and will become more -- will become profitable as more and more money flows through DBT account, and this also presents a huge opportunity to cross-sell as well as start giving small loans to this segment. Coming to the corporate banking. In this quarter, we completed the reorganization. Corporate accounts group is now based not on the size of the credit but the quality of the credit. And the entry barriers for this group, we have kept high. The low credit risk almost PV0. That is what the objective is, that in this segment we should not worry about the -- what the credit risk is. This should give value to the bank. It will give growth, but the RWA will remain under control. So less capital consumption, more fee-based income and synergy with the National Banking Group. So how do we deepen relationship with all the corporates, whether they borrow from the bank or don't borrow from the bank, that is not a material factor for this group. So we are looking at many relationships where credit requirement is not there. But still, all these corporates have huge ecosystems, and that ecosystem presents an opportunity for the bank with the kind of products, services and business verticals we have. So we have everything for everyone. And that is the mandate of this group. And when they have the account plans in some form present, but what today enabled is that using CRM, that project is also nearing completion. So today, all of our relationship managers have single-customer view, not only about the borrowing relationship or the exposure, but the entire relationship value, which is -- which corporate offers. So that is a big improvement, and now our relationship managers can easily target any corporate that what are the business opportunities. Commercial client groups, which is, like earlier, it was mid-corporate group, but now it is commercial client. As I said that here also, it is not the size of the credit, but the risk profile of the credit. So the best is sitting in [ CH ] and the rest is sitting in CCG. And here, what we have done is that our credit review department, which is under CCO and who is not part of the business, he is now responsible for ensuring that credit quality remains robust, the underwriting, any proposal without CRD, or credit review department, giving a go-ahead or a green signal, it cannot be accepted. And there are a lot of, again, specialization expertise, reorganization around these sectors rather than the geography. So that is how this department has been organized, and we have put lot of hopes that because of this structural change, the kind of risks which bank undertook in the past, it may not be repeated. But any initiative you take, you cannot make a judgment on day 1 or in 6 months or 3 months. Only the future will tell whether it is successful or not. International Banking, consolidation continues. The book shrunk because of 2 factors. One was LoU ban, so [ by our schedule ] almost we are down by INR 45,000 crores there. And we have formed a subsidiary in U.K., so INR 10,000 crores got transferred to the subsidiary. This is another important slide, how our global markets is performing. And as you can see that they have also tried to derisk quite a bit. And modified duration of AFS book has come down from 3.3% to 2.4%. And PV01 of the AFS portfolio also has come down by nearly 15% also. [ Big ] favorite slides, which is around distressed asset and which has always -- has to be talked about. The -- as far as the asset quality and particularly NPAs are concerned, so the downward trend is very much visible. There is a reduction in the gross NPAs. There's reduction in net NPAs. Gross NPA percentage is now down to 10.69%, net NPA to 5.29%, which shows that our provision coverage ratio has gone up. In one year, it has gone up by almost 900 basis points. And if we exclude AUCA, then it has gone up by almost 1,100 basis points. Credit cost almost now returning to near normal. June is -- still it is elevated, but the guidance for this year of 2% credit cost. So we are very much on the target to achieve that. Slippage ratio, the guidance was 2%., so we are very much there at 1.95% as far as the fresh slippages are concerned. Coming to the watch list. So as compared to March, again there is an improvement there and the corporate slippages 91% has come from the watch list, which was given as on the 31 March, 2018. Again, this slide becomes important. So PCR on NCL (sic) [ NCLT ] accounts without OCA is 65%. So here the -- at least 15% write-back opportunity is there for a single account and rest of the accounts are fully provided based on the resolution plans or liquidation and quite a few accounts are in fact bank is holding 100% provision and there may be some recovery there, but largely the recovery will come from a single account, NCLT 2 I think, again we are over provided. The recovery will definitely be better than 21% even in respect of NCLT 2 accounts. So NCLT, there is definitely going to be a good amount of write-back during the year. Another sector, which receives a lot of attention and is always in discussion. So we have presented that where do we stand as far as the power sector is concerned. [ So we do the NPA, ] INR 10,081 crores in the watch list and the standard accounts, the ownership distribution is private is just 37%, 63% is all public sector undertakings, [ and that due ] high-quality [ likes of ] [ NTPC, ] et cetera. And rating distribution for the private sector is also given where 69% is now A- and above and only 9% is BB+ and below. The Stressed Assets Resolution Group, major changes have been made in the June quarter. One is that all the stressed accounts and NPA accounts they have been transferred to this group. And this group, earlier was organized around geographies, but now it is organized around the sector specialization and there the bank has its own people, it has lateral recruitment that is also going on and the pace of recovery, resolution, uniformity in approach, this is going to bring in, I would say, a lot of income and profit to State Bank of India. Because 2 lakhs 10,000 crores , out of 2 lakhs 10,000 crores, most of the assets are now sitting in this group and there is an OCA advance in debt allowance of 1 lakh 9,000 crores.So now we are viewing SARG not as some sort of a burden on bank's spreadsheet, but we are looking at now as an opportunity where whatever losses have been incurred in the past. So we start recovering them in a big way. This is some of the pointers about as I talked about that what is our provision coverage ratios. I've already talked -- spoken about NCLT 1 and 2, and corporate overall, 53.31%; the bank's LGD is [ 54%. ] So we are nearly there as far as PCR is concerned, it is now aligned with [ LG. ] Credit cost, as I mentioned, that 2% or below that is a target, and we are very much on the target. Subsidiaries, I think, all of you know that they are giving great value to State Bank of India, their performances improved, and they are now leader in their segment: SBI Life, #2; SBI Cards now, in terms of Retail spend, they are #1 and the kind of marketing, which [ has now ] come and the synergy with the State Bank, it is giving them very good result. SBI General, again we have given some statistics. They all are giving very good ROE plus cross-sell income and plus valuation gains. So it is a win-win situation for everyone, the bank, the subsidiaries and the customers. So we believe in creating value for the customers, and our subsidiaries are exactly doing that. But there is a huge potential and again as I mentioned that CRM platform is now almost fully implemented, it is just a matter of 2 or 3 months. So this enables lead generation and cross-sell in a much more systematic manner. So thank you for hearing me patiently and now to whatever questions you have. What we have tried to do this time is not to leave any questions, but still I'm sure you will have some.
Thank you, Chairman sir, for the presentation. We now invite questions from the audience, analysts joining through webcast can also ask live question by selecting the question tab. For the benefit of all, we request you all to kindly mention your name and company, before posing the questions. The first question is from?
Yes, I am Ashok Ajmera, Chairman at Ajcon Global. Sir, compliments for a very good quarter, very robust performance, but only thing which you have clarified that for optic purpose, though it is not looking good. So my first question is that, I mean, the loss-over-loss, [ like ] 7,700 crores loss, would it not help you look good that 7,700 has come down to 770 crores rupees loss? I mean, ultimately, it would not have made any difference as far as the books are concerned as far as your capital adequacy is concerned. So what was the need, I mean?
So need was that you show what you are. I considered it to be purely of no value that you know that 4,500 crore I have to book in next 3 quarters. And everyone knows, and particularly the informed investors like you, they know it very much. So even if I had done that, that 4,500 crore [ NPV ] even for the loan loss provision, we had the option of not taking the provision and still be compliant with the regulatory guidelines. But as I mentioned, is that the thinking and the strategy is, that don't burden the future with the current costs.
[indiscernible] that on the negative side, so many provisions are required by RBI regulators, they have done away with all those schemes, those restructuring and everything. So one side we are saying that, it was not very fair to do it in just in 1 year or 6 months or in 1 quarter. And other side, something which is available to us, we are not [indiscernible] anyway, it's a management decision.
No it is, but, I think, everybody will [indiscernible] my view.
But to my eyes, you know what everyone said it would look much, much better and prima facie, where it goes with again with such a huge loss, I mean, it affects the sentiments also.
So when we meet in November, things will be all right, don't worry, it is just a matter of [ taste ].
Sir. And now on some of these targets or the most important is that 12% CAGR on advances up to 2020 which was last time it is, it means almost about 3 lakhs 40,000 crores of advances in the domestic book. So in this quarter, we are down as you also said, 16,000 crores , 17,000 crores, 1.5% we are already down. So now we need 26.5% in just 7 quarters. So how do you, I mean, do you want to revise it or you feel that...
No, we don't want to revise it, Y-o-Y growth, particular on the domestic book. International banking book was a different story as I've already told. So we are, Y-o-Y, are 7.5%. I look at Y-o-Y. And in India, everybody starts working in the second half, which is called the busy season. And that's why I'm very confident that if we look at the retail, the home loans for example, the last year there was a slowdown, because of GST and [ JR, ] but now the market is bouncing back. So on the retail as well as on the corporate and SME all 3 taken together, 10% growth this year. It seems to be very, very feasible, and I don't think there is a need to revise that target. Even on international banking now, they were as a matter of strategy, they were more like a matter of strategy focused on booking the long-term assets through syndications. So that strategy will continue and only this LoU bias [ stated overrank ], it will go away so that's...
Is that ROA target also 0.9% to 1% will also remain?
My [ indiscernible ] that remains.
That also remains, because if this kind of advances growth is there then we can --
Yes, and no overhang of the past credit cost, because lot of [ off-take ] has already happened.
Sir, one observation on the petroleum and petrochemicals, which has come down from INR 52,896 crores to INR 37,000 crores. So what, I mean, such a INR 15,000 crores to INR 16,000 crores of ...
These are all OMCs. No, that is the draw in March and then first quarter it comes down. Nothing unusual, because these are all OMCs, public sector OMCs. So their funding requirement in the last week of March is always there, but in the first quarter it always comes down.
But nothing unusual.
Yes, nothing unusual.
I think you should allow others to ask a question.
Pardon? Yes, sure. I asked only 2, 3 questions against the 8, 9 questions which I used to ask earlier.
Sir, can you give us some more details about the Samadhan scheme since SBI is leading it and whether most of it or whatever you want to complete by August 27 will be through by then?
The effort is on, and -- but there are lot of lenders involved. The agreement is very much there both on the process, on the price discovery, on the approach to be taken. So there, there is a consensus, it is now a matter of process, where internal approvals are required and some external approvals will also be required like CCI approval, or may be some regulatory approval in some cases. But there is still the intention is there, that at least before 27 August, money should come in escrow account whoever are the buyers or [ whoever has ] interest. If it is adjusted as just a restructuring with the existing promoter then that task in any case be completed, because no external approvals are required. So all the lenders are working very hard and are focused on resolving this.
So basically for these accounts to not go to the NCLT, the CCI all approvals have to be in place by August 27? No?
No, this is not something as clearly defined, because not everything can be defined in terms of regulation. But the intent -- what you could have achieved in NCLT, the same result and outcome is possible or rather better outcome is possible and without losing time. Because in NCLT also you would've done the same thing, invite bids, invite expression of interest, invite resolution [ of plans]. So that we did it in April, we invited bids, we invited resolution plans. So the process is identical and that's why, I believe, that even if the 27 of August is coming, but there is still some time before you [ find ] provisions where with the consent of lenders before EOI, 90% lenders agree that it can be withdrawn also. So let us see and then matter is subject to what Allahabad High Court has to say, we would know in a day or 2, by Monday or Tuesday. But the visibility is there, in terms of the value which these assets will fetch. And this is supported by -- for all assets, the rated sustainable debt. So in a way, the process is fully compliant with the 12 February resolution framework.
For your answer, this will require a 100% lender approval or?
Oh, all are agreeable anyway.
[ Very ]. But it will require, it won't require [ 65 ] because not everyone has...
No, we are not going in that [ 66 ] or this thing but I think better is that everybody agrees.
[indiscernible].
[indiscernible] Mahrukh [indiscernible].
We have some questions to answer from the [ web, first ]. [indiscernible]
Yes, we can. [indiscernible]
Yes, sir. [indiscernible]
[indiscernible] Other questions on webcast. [Foreign Language]
Mahesh from Kotak. Sir, this quarter you had seen a NCLT reduction of about 14,500 crores. What is the progression that you are likely to see in Q2, given that you've seen a fair amount of cases resolved one way or the other?
Right.
And during the course of this year, where does the NCLT cases end based on your current assumption?
Yes, I think, I'm expecting that everything should get resolved by 30 September.
That INR 34,000 crores in NCLT 1, how much of it has almost completed, barring the 2 large cases that are sitting there?
No, the INR 34,000 crores 2 are already out, out means already resolved and even NCLT 2 today has given the order about the eligibility and the --
The INR 34,000 crores is excluding those 2.
The INR 34,000 crores is excluding those 2, these are the remaining 10 accounts.
No, there are 2 accounts, SR is still not completed out there. So when do you see this INR 34,000 crores getting...
By 30 September.
By 30 September. And on the balance...
But it may like as I [ steal your metric ] but -- and we should not be shy, [indiscernible]. So that out effort will be that as soon as we get the NCLT order next week, we -- the people are ready with the check, let me tell you. Whoever wins or whatever it is, they are ready to write the check next.
And these 25,000 crores of reductions that you saw this quarter, 15,000 crores is explained by the NCLT cases? Or have you moved one account fully through the noninterest income?
What is your question is?
There's a reduction of 25,000 crores, because of [ upgradation, ] write-off and cash recoveries.
There are other accounts also.
This is you know 15 -- 14,850 crores is recovery and upgrades, the remaining is transferred to OCA.
But you have also reported 1,500 crores in income from written-off accounts.
Yes, 1,950 crores, 2 accounts.
See, we have a recovery in written-off accounts of 2,426 crores. Out of that, 1,360 crores is account of the resolution. Rest are all smaller accounts.
Okay. So that is an NCLT case or it's a non-NCLT case.
That's an NCLT case. You know we got 3,300 crores from these 2 cases, around 1,900 plus went to interest income, 1,360 came to this written-off [indiscernible] OCA.
OCA was [ 90 ].
No, the reason I'm asking is, these 25,000 crores of reduction that you reported this quarter, that one NCLT case wouldn't have moved through the [ movement of India's, ] right?
No, no. So recovery and upgrades are 14,850 crores and rest is all transferred to OCA. That's what we're saying.
Upgrade is 4,025 crores.
Yes, recovery and upgradations 14,850 crores, rest is all transferred to OCA.
And the -- and some color on the slippages which happened outside the corporate loans and ...
So, it is all detail, 6,000 crores and last year it was INR 17,000 crores and [ for the ] first year is always elevated.
It was not agri, is it?
I will give you the breakup actually. See, the slippages in the Retail segment last year were 17,886 total, okay, entirety. And this year the first quarter, it is 6,299 and the breakup is SME 1,774 this year against 6,381 last year; agri 2,560 this year against 7,025 last year; and personal segment is 1,965 against 4,480 last year.
And one last question, the increase in gross NPAs that you reported on the existing NPAs, -- is it led by some [ LC ] defaults or [ devolution? ]
It is like standby letter of credit, but already provided for. It does not impact your provisions because provisions were already there.
How does this look over the next couple quarters? Because this is now starting to form a significant portion of the ...
Yes, but [ NP now ] Is not much. How much is [indiscernible]?
See, what happens is typically, when a account reaches to the stage of the becoming [ NPA ], D1, D2, there is very little [ NFP ] left. So there are largely, it already gets default before it becomes an NP. So today we have below 8%, to be precise about 7.7% of corporate and SME outstanding NPAs, we -- which have additional [ non-fund base ] of 7.7%.
After existing NPAs, is it?
Corporate, and SME NP outstanding, if you take that.
That, you have 7%.
7.7% of that would be the non-Fund [ basis to these ] accounts.
And the possibility of these slipping is remote here.
[indiscernible]
It could, gradually over a period of time it will happen.
Some accounts are operating accounts.
Many of them will get resolved, recovered. So, the non-Fund base will [indiscernible].
But one major account which went to these 4,400 crores so there we were already holding the provision even on the standby letter of credit. It does not impact your provisions.
And 50% of that has come from that one account, 50% of this increase in outstanding has come from that one account. It's not the usual run rate.
Kunal over here from Edelweiss. Sir, with respect to watch list, so in fact when we look at the reduction in the watch list out of, say, what was highlighted last time of 25,000 crores and including SME 1 , SME 2, now it is like 29,000 crores off last year. So there is not much of slippage, which has come through from the watch list, [ where it ] was anticipated that it would be more skewed towards the first half. So what is the probability of default, which we look on the outstanding watch list as of now? And would it be more skewed towards Q2, Q3 or it will be well spreaded across?
No, the numbers which you look at as on June '18, it gives you SME 2, it gives you [ Stressed ] SME 1 and it gives you watch list. And whatever slippages happened in corporates slippages, 91% came from the watch list. So [ when a ] bank there we have 7 lakhs crores of portfolio, so some 500 crores, 1,000 crores every quarter, which is not in my view a very big deal, because you have to look at from this perspective that overall, what we have said that in this year the fresh slippages will not exceed 2%. 2% for us means about 40,000 crores, and we are very much on track that in this quarter it's at 9,900 crores and there are still 3 quarters to go. So these slippages will progressively come down, but you cannot ensure that it is even, in one quarter it may be high, in the second quarter it may be low. But 3,700 crores on a book of 7,000 crores [ and that to ] 90% coming from the watch list. So whatever is the stressed portfolio of the bank apart from NPA is here on this Slide 26.
[Audio Gap] [ 3,700 crores ] is again the part of the fresh slippages, but even outside of that when we look at it almost 4,500 odd crores which has come in.
No, no. It is coming from largely from the watch list. One single account itself [ is not proven. ]
No, no, sir when we look at this 3,700 crores, is only a part of 9,000 crores, okay, 9,900 crores.
No, [ INR 25,800 crores ], so in 9,900 crores yes, corporate is 3,700 crores.
Yes, but outside of this, which is like another maybe 4,400 crores which.
That is retail.
That is -- I gave you the breakup just now.
He gave you the breakup of retail, 6,000 crores.
Agriculture, SME...
Agriculture, SME increased...
[indiscernible] outstanding which [indiscernible] increase in outstanding that is not part of the fresh slippage.
Yes, so what I'm saying is total increase in outstanding plus the slippages that is almost 14,400 crores. Okay, so when we look at this number and assuming that may be 6,900 crores let's say Retail, SME and Agri. So corporate, including development of the non-fund based exposure and everything, that is much higher than 3,700 crores. So when in this watch list, we have not yet included the non-fund based exposure and all these related stuff, which is there, which has [ slipped at ] this quarter.
So if I may answer that...
It is not included, it is not included, very clear.
Yes, so when we look at it maybe if we include the non-fund based exposure related to our restructured pool or NPLs.
No, no but that was an NPA. Let me clarify here, because the account is already an NPA and [ it had ] nonfund based and as I mentioned that -on that also we were holding the provision [ as part ] of the classification, otherwise nonfund base you don't provide but in a particular account, because it was a standby letter of credit and the -- we knew that this ultimately gets or will get converted into a fund base. So the provisioning was done, treating it as a fund based. So it is just so happened that this quarter as expected, but there -- why was it not included in the watch list because it is already under NPA anyway.
See, in any case, this has been our approach all along. We are not including the nonfund based since inception in the watch list and the reason is that it is a very fluid situation. Some crystallizes, some doesn't crystalize. So that is why and like I mentioned, that nonfund based as a proportion of corporate and SMEs NPAs is about 7.5%. So it's not a big number. And it is not again -- just to repeat, it is not the usual run rate, 50% has come from one large account, which Chairman just mentioned.
So this is unlikely to be repeated.
[indiscernible] much lower going forward?
Yes.
Yes. This is unlikely to be repeated in the next 2 or 3 quarters. This nonfund base suddenly slipping to this extent is unlikely to be repeated in the next 2 or 3 quarters.
And sir, in terms of overlap now between the Samadhan Scheme and the Sashakt which has come in, so do we see like most of the projects now being pushed through Sashakt and maybe Samadhan or Parivartan might not work well, the way -- because RBI is also not very keen and there is high court judgment, supreme court is also expected to give a judgment by 28. So how do we see it finally, will get under Sashakt or maybe even power sector would get a result under Samadhan and Parivartan?
See under this resolution framework of Reserve Bank of India of 12 February, there is 180 days window available to the lenders in any case. So what the Sashakt does is that within this 180 days you build a consensus around the approach to be taken. This 180 days window has not come from Sashakt, this was there. So any stress test, you have multiple options and where the account is being handled by more than one way, so you need a framework. Earlier we had a joint lenders framework, JLF, which was discontinued, so how do you approve it? How do you operate? The purpose of inter-creditor agreement is not to postpone anything, not to -- not -- with no intention that the case will not go to NCLT. If suppose, under inter-credit agreement lenders sit and decide about distressed asset, there is no other means through which it can be resolved, so on day 1 you decide that it will go to NCLT, why even wait for 180 days? Even if after 15 days. Only it is providing a framework under which banks can take decisions in a coordinated matter. Right now, the asset, both on the seller side as well as the buyer side, it is all disaggregated, and that makes the task of resolution very difficult, through this process the consolidation can happen both on the seller side and the buyer side. Otherwise, each bank, sometimes decides I will sell to X [ ARC, ] another bank decide I will sell Y, somebody decides to sell it to Z. So what happens that you will never have a consolidation at the asset level. So to just equate it with that -- the intention is not to [ report ] to NCLT. Out of the Samadhan 11 cases, 4 we have decided that they have to land in NCLT and cannot be resolved outside NCLT, and that was parameter based. So whatever assets meant certain parameters which lenders decided, they were accepted for resolution. The one which did not meet that criteria we'll refer to NCLT. So why this confusion around this Sashakt framework and NCLT? I think this confusion is unwarranted. Because whatever you're doing, you're doing it in terms of whatever the framework for resolution provides. It is absolutely in line with 12 February resolution framework. So NCLT -- RBI says that you have to go with 180 days. I'm saying I can go in 15 days. Once the asset is stressed and lenders have agreed that this is the only option. So refer it, why even wait for 180 days?
Under Samadhan, whatever expression of interest we have received in few of the projects, are we seeing enough of takers may be for all of these projects, which are there? Or maybe we are seeing only interest in 2 or 3 and again the haircuts could be higher in the others?
Right. So again, I'm clarifying that whether to go to NCLT or not to go to NCLT, there are certain parameters, what should be the minimum for per megawatt for lenders. This is one benchmark. What is the recovery on the current [ outstanding ]? Whether the buyer is 29A compliant or not? So whatever you could have done in NCLT has been done also in NCLT. There is a greater debt confirmed by the 2 rating agencies. Any offer, which is above the rated debt, only that is acceptable. If the offer is less than rated debt, not acceptable, go to NCLT. So it is a parameter-based approach. And I believe that the benchmark, which, through this process lenders have established, it is a fairly good benchmark given the PPS, which these assets have. So there is a net present value based on those PPAs. There is a mechanics. And again, everything within that 12 February framework. So nothing outside that process. NCLT, you would do the identical process. So I -- we have advanced it. The disadvantage to lenders, also let me tell you, that if I go to NCLT, I have 9, 10 or 12 months to make provision as for aging. If I do it in September, then whatever is the shortfall, I have to provide in September. So that way, but -- the advantage what I'm seeing is, you provide NP, done away with it. So no hangover again even of power sector.
Number of questions to be limited to two, so that everybody get a chance. Next, please. Mic.
I was listening in to the Union Bank con call. And one of the comments that they made was roughly INR 70,000 crore worth of assets in the power sector, which was under slight distress in the sense that they were either SME 0 or SME 1, but not SME 2 have become regular for the entire system. Any comments that you will want to offer on that?
I would broadly agree with that.
And these assets would be under any of...
Our watch list or -- distinct. And in my watch list alone, there are INR 10,000 crore, power sector.
Okay. That would be covered in the -- under your watch list. But any of these assets would be under the schemes like Sashakt or the Samadhan or any of the...
No. There may not be a need to cover them under Samadhan. Samadhan was identified 11 assets. And how did these 11 came? Because all these are PPAs, either full or partial. And the risk once you go for IBC is that the [indiscernible] state governments, they could have walked away from those PPS. So that was the downside taking them through in solvency process. So to avoid that downside, this was thought of. Otherwise, like a -- the -- as far as the State Bank of India is concerned, I am all for referring the battle to NCLT and get it resolved there. But only this consideration that their -- some of them have good PPAs, so let through this process those PPAs not fault. That is the only consideration. No other consideration.
Okay. Because -- I mean, on the ground, there is not much improvement in the power sector scenario. So was that incremental equity infusion by the sponsor in this product -- in this project? Or how did these accounts become...
Supposed there is a... [Technical Difficulty]
Sorry.
What is this, sir? Whatever is the value. As I said, that one benchmark is that it has to be better than the rated asset. And if it is better than [ rates in ] the asset, lenders -- if anybody is looking for refinancing, if it is like I'm paying you full, then I don't care what is the equity or [ this thing. ] I am getting paid in full. If somebody asked me whether you will refinance and continue, then definitely, I will ask them to bring 25% equity. Getting my point? So if I have to continue as a lender, I will ask for 25% equity. If I am getting paid in full, I don't care.
Hello. Sir, my question on the exposure towards 2 sectors. One is aviation, the second is telecom. So what is the total exposure we have for 2 sectors? And secondly, what provisioning you're doing against those sectors because both sector under stress currently?
Aviation, I would say, we don't have any large exposure. It may have been not more than INR 3,500 crore in 2 key accounts. And the other sector is telecom. Telecom, whatever were the 2 big assets. So they all are NPA. One of them is an NCLT, and the second is getting resolved. The payment has started coming in as per the monetization plan. In fact, first installment, we received only yesterday.
And the second question on the -- again, on power sector side. You said there's a minimum cap of -- per megawatt. So what kind of shortfall in case of resolution happens in power sector?
I think average recovery will be 50%.
50%.
Sir, a few days back, there was news article about RBI conducting a second asset quality review. I think it mentioned about 200 or 240-odd either new accounts or existing accounts where they're looking at provisioning levels and so on. Sir, can you provide your insights as to what exactly the RBI is looking at? And what is the exposure that SBI would have on it?
So the -- one is that -- this is your annual review, normal annual review. Nobody has [ called ] from RBI that is [ earning Q ]. But this time, the supervision process which they have adopted is that the credit part gets reviewed and is over in most of the banks. And again, they come and do the rest, other than credit. And then once the process has been completed, then the -- always the norm has been, let it draft, [ RAR ] report will be issued. So only then we will know that what are the assets in that review. For State Bank of India, 104 accounts, they review. I can't give you a number as of now because what will come in September out of those accounts, so that is -- will be decided by their own internal processes, the representations made by the bank. So probably, we have to wait until then. But the only caveat or the only statement then particularly I can make that this 2% which I had said for the fresh slippages or slippages and 2% for the credit cost. So whatever comes, we will be within those parameters [indiscernible]. So that should satisfy the -- this question.
That's good to hear. The second question is, do you have any account which is standard or yet to be recognized which would fall into the NPA category because of the February circular of RBI?
I don't think so.
Not anymore.
So basically, like all of them would be either SME 2 or NP.
I mean, they are part of the...
But SME 2, if you look at our list, so okay, you can see there what the amount is, and this keeps on for Q2. The accounts keep on moving from SME 2 to SME 1, SME 1 to 0, 0 to 1, 1 to 2. So that will like if you look at the stress for the bank, so this number is a very manageable number. Most of the accounts, what we are talking about is, they were -- largely, all of them were classified in the NP. And through the plans for them would have been implemented on the SDR or S4A. And if the plan were not implemented as for that circular within the time lines, so these accounts would get classified as for the full description now. So they may [ straight up ] a move or might have moved within June. And the D2 or D3, for example, one account which we have, it has a straight of a move to D3, and I have fully provided in June.
And one last data request. Can you tell me the -- your amount of risk-weighted assets?
Anshula, risk-weighted assets? That number if you can?
Yes. So what is your question?
The amount of risk-weighted assets.
Total risk-weighted assets are [ INR 17,094,710 ] As of 30 June, which is a significant decline from June last year.
This is Avneesh from BNP Securities. Sir, the way ma'am talked about the non-fund-based exposure on the NPL book that you're carrying, can we also get the similar non-fund-based exposure for the watch list?
You know, when I saw this increase in outstanding, to be very frank, a couple of days ago, then I knew I'll be asked this question, so we tried to pull out this data. I was able to get it for the total corporate SME NPS. Watch list, you give me some time, I'll let you know in a week's time. [indiscernible]
[indiscernible]
[indiscernible]
Let me remind you, it may not be more than INR 2,000, INR 3,000 crore, I'm telling you in the total watch list.
Okay.
See, the total is around INR 13,000 crores. About a subset of the watch list, you can imagine how small it will be. For the total corporate in SME NP non-fund basis, INR 13.5 thousand crores.
So mostly these are funded exposures.
Sure. Sure. And second is that we were talking about this guidance, slippage guidance of about INR 40,000-odd crores. So when we work out these INR 40,000 crores number, we don't include the non-fund-based exposure whether it will be devolvement, number one. And we generally look at the watch list, right? So anything which could just come out of the watch list which you will not have factored in like it happened like in case one of the airlines, in [indiscernible] or all of these exposures, which will not be in the watch list.
That is for everything because INR 40,000 is a very sort of a conservative guidance, I would say. So that would account for all these eventually. As I said, that -- where you have such a large portfolio, you're the watch list, you're an idea. But somewhere, something can happen, right? So that eventuality also has been taken into consideration when giving the number of INR 40,000 crores. And I believe that we will not exceed that number.
So -- but there could be still a deviation of about 20% to 30-odd percent on...
No, no, no. 20%, 30%, I will -- I don't know what will -- so, no question.
The total watch list is not going to slip. It's a watch list. It's not...
Yes. I get it. But that....
And there is no assurance that all of it will become in [indiscernible]. We have cushion there.
Yes. But that watch list that we've been still reporting is not the below investment credit portfolio, right, for the entire corporate portfolios?
So obviously, the matter there is...
It doesn't matter.
So like...
Can we get the number of like...
Before the -- below investment here does not necessarily mean -- it's just like that I will give you any number of accounts where they are below investment grade, but they are better than investment grade.
But still...
So I don't think that is the criteria in any manner. We have lot of companies which are like government backing is there. They are owned by the central government. They're owned by the state government. So I don't think that this can be the criteria whether they are investment grade or not or are unrated. Internationally, you look at any bank's books, it will be unrated. But that does not mean that they are necessarily stressed out bad asset. So that analysis, I don't think is the right analysis. But our analysis of a stress in the system, whatever we are presenting, it is based on the scrutiny of each and every account. But apart from the watch list, every quarter, there will be something out, there will be something in. So what should ultimately be that this 2%, in a way, it becomes [ sacrosanct ] us. There can be a deviation of 5%, but 20%, 30% deviation then, we have not done our job properly.
And sir, like the other banks, like ICIC access have already actually moved towards providing the below investment-grade kind of portfolio, assuring for them as well all of that was normal slip. But just for comparison, if we can have that kind of a number, it will be very...
Yes. I don't think that we'd need to give that number. I have no such intent, honestly. Because if I [ show you ] my portfolio as [ big ] SME, where do you have investment grade? You don't. This is all -- like I don't think that...
Maybe x of SME is what you can give, maybe that will also help.
That we will see.
This is -- probably, this quarter.
Maybe next quarter we can expect...
Whether you should be satisfied...
We'll see, we don't get that coming from, but we'll see.
What has been disclosed -- and SBI, as I said, that we have a huge portfolio. We know whatever that [ delinquency ] trend in detail, which does not throw any surprises. Once we know that corporate, what is under stress, if we have a good idea about that and if we have -- presenting it, I think you have to believe that.
Sir, this is Mayank from Goldman Sachs. Just had a question about the power stress. So you're talking about a recovery of about 50% on that overall stress as such.
All power sector.
Yes. At this moment, what is the level of provisioning that we hold on the stressed power book?
Overall, power sector NPI in distress, I said, we are holding a provision of 40.5%. But if you specifically ask me on this 17 accounts, the provision is low. And the estimate, if everything goes within this quarter, so we will need a provision of around INR 4,000 crore.
Understood. Also just one more question. So in terms of our overall coverage and excluding the written of accounts. So in -- by FY '19 and FY '20, what is the overall level where we could see the PCR at? The overall coverage, could it be around -- are you aiming at a number of closer to 70% for that?
No. Without like OCA, we are not aiming at 70% because ultimately, the -- even if we -- I go by the India's guidelines on LGD, for State Bank of India, our analysis is 54%. So we are very close to that.
And in fact, today, for the corporate book as you can see on this slide, our PCR is 56.85%. Even on SME piece, it is at 46.58%.
Yes. So that will like, as I said, [indiscernible] is very much not getting the like to [ LG ]. So that's why the gap is not very minimal. So there's no question of taking it to 70%. 100, 200 basis point improvement will definitely be there from the current levels what we are [indiscernible].
See, and the other thing is...
And that is what like when Mr. [indiscernible] asked is that although we may be looking bad in June, but we don't intend to look bad quarter-after-quarter and be uncertain. So it is better to look bad. So we have not taken back the [ indiscernible ] [ after that ] it looked good.
So just...
You see it, because of this provisioning that we have done, our assessment is when we actually cutover to India's on 1 April, the impact is going to be very minimal.
Very minimal.
Just one more question. So we look at substantial income from NPL recoveries on the interest income line in this quarter, and we have a big recovery pipeline also going ahead from the permitting NCLT 1 cases. So will that bump up in interest income be visible now continuously as these NPL recoveries come in over the next 2, 3 quarters as such?
Yes. It should be. Because like when you recover, there are 2 ways: either you -- depending upon the preference of, let me say, the buyer if there is any who -- depending on how do they structure takeover of the liabilities of the insolvent corporate, that is their preference and their tax planning which matter. So money would come either by way of write back of provision or money can come back by way of interest income. So account-to-account, buyer-to-buyer, it will defer.
Okay. And would this also be depend upon the overall LGD on that account? So on the 2 accounts -- on one specific account in this quarter, your LGD levels were very low. So is that also affecting the amount of interest income you'll end up booking? Or is it completely dependent upon the structure and with the transactions...
Dependent upon the structure. Because they do their own tax planning around when they take over an asset. And based on that, the structure is decided. And that is where whether we will have more of interest income or a provision write back. It will depend upon the structure.
This is Roshan from ICICI Pru AMC. Firstly, this INR 15,000 crore of recovery and upgradation, how much of it is retail related?
Sorry?
How much of the INR 15,000 crore is retail related?
Retail.
Retail, I can give you a...
Yes.
In retail, the cash recovery in this quarter 1, INR 1,921 crores. So this actually compares with INR 1,869 last year. And upgradations were INR 2,088 crores against INR 1,169 last year.
And how much of the NCLT case is also recovered? And how much or what is the amount corresponding to that in this INR 14,500 crores?
It's about just short of INR 12,000 crores. So INR 11,000 one account, and other account was about INR 593 crores was still remaining as outstanding in NPA. The rest was already transferred to OCA. So INR 1,360 came in OCA, about INR 593 for that account came in this.
And INR 11,000 can -- for the one which you barely recognized into [indiscernible]?
Was about INR 11,000 crores.
Okay. Sure. And what is the SME 1, SME 2 in the retail segment?
SME 2, we have given the...
For the retail segment, we are not disclosing. This is a -- we have given a full disclosure of corporate SME 1 and SME 2, so we have about a...
[indiscernible] everything it changes. As in any account, if it is the -- account is INR 5,000 crore. And if there is a INR 500 overview that also in SME 0, so the -- I don't think that is relevant. What is relevant is what is presented here.
And can you please give a breakup of the INR 4,000 crore addition to the existing GNPLs, as in how much of it is [indiscernible]?
So that was what we are explaining...
So all of it is...
One single account, itself accounted for 50%. And that was a stand-by letter of credit on which bank was holding the provision as per the aging classification. Normally, you don't do it for NFB. But in this case, the provision was -- is for the aging classification. So though the fund, this outstanding has gone up, it has no impact on your provision.
And is there any depreciation-related impact as well this quarter about INR 400 crores of [indiscernible]?
Which one?
Because you have -- also has foreign currency GNPs, do you have any dip...
No. I don't think so.
Sure. And why did the miscellaneous income see a significantly dip this quarter? In the other income, there's a miscellaneous fee income, which has seen a significant...
No. Other income is up by 27%. But treasury income partly impacted because of the overall movement in the bond prices and -- treasury income and we did one switch also from AFS to HTMs, so that impact us also there in this quarter.
No. But if you are referring to miscellaneous income, that is basically recovery and written-off accounts that actually had gone up.
No. Slide #9, the last line now there.
Yes. The back one, look at the [indiscernible].
But there was no GST, we're going to [indiscernible].
Yes.
Okay. There is some GST impact that has come there.
See, what has happened is that we have these annual inspection charges and annual recovery charges. If you net off the GST that has been paid or entire fee income, that difference has come to INR 143 and INR 460. Some of it is GST impact. And relatively flat, other miscellaneous income, which is about INR 1,000 crores-plus, same as last year.
INR 143 crores compared to, call it, INR 463 last year.
Yes -- no. So that is the net amount. That is net of GST. So we paid INR 900 crores GST, so INR 900 plus INR 143, INR 1,042 crores would be the miscellaneous income. It's like that. So the major difference there has come from the higher GST that has been paid other than lower miscellaneous fee income that we worked.
And what is the inflation provision split this -- my last question. Can -- if you again give the split of the investment provision of INR 7,000 crores, how much of it is SR related?
So it is -- one second. INR 5,893 is GST, nonperforming investment is INR 627 crores and foreign investments are INR 578 crores. So what we could have amortized is INR 5,893, not the rest of it.
So I think if there are no more questions, I can take these questions which have come on the web, actually. One was the impact of inter-creditor agreement on recovery of bad loans? That, I think the Chairman has already answered that question. Some color on the segment. Why slippage is in detail? That, we have already given. What steps the bank is taking to address the situation. I think again, SME, if you look at it, our overall numbers have declined a little bit. Agri is elevated. It's mainly the state of Maharashtra and a little bit of Karnataka also. There, the government is already in the process of implementing the debt waiver scheme. Some money has come in, most of the money has come in actually in the standard accounts and not in NPA accounts. But some more recovery is expected in the state also. Impact under India at the end of the Q1 financial year '19. That, I think is still on a parallel run. So we are not really -- would know separately what the exact impact of that would be. How do you see the situation going forward for interest income reversal? See, the reversals are already down. I think in this quarter itself, there is a difference of INR 1,600 crores, I think, on the reversals. Yes. Against what INR 2,800 crore last year. So this year, interest reversals were only INR 1,200 crore. So going forward, we think that the interest reversals are going to be much lesser than what they have been in the past. The addition to NPA in the form of additions? So outstanding in NPA is a development of -- devolvement of non-fund-based exposures? I think yes, that has already been clarified. That's mainly devolvements of non-fund based. And the exposure of non-fund-based exposures to NPA. That, again, has been answered. So I think -- so most of these questions have already been answered. So any more questions?
And I think most of everyone's questions in the halls of auditorium...
Except that one, the case that you are talking about [indiscernible] that the account which are NPA with other banks, 200 or 240 accounts had left this...
So that...
Is there any possibility like our internal assessment, is there not -- is there any account, which is NPA and other banks provision has [indiscernible]?
No, no. That...
See, that, I think Chairman mentioned at the beginning of his -- one of the questions that was asked was this. He mentioned that it is the usual RBI inspection that is going on. And they have identified a few accounts, which are under discussion with us. And we have given our point of view. Now, they will assess what we have said, and then a final call will be taken in maybe the second or third quarter. It is not a large number. Again, Chairman had clarified that all provisions or classifications will be within that 2%.
Yes. So can -- now Chairman if back. So even if it is there, it will be within that 2%.
Yes. Yes.
Yes.
Yes. So that is also one thing out there. Other one, was that 12 February circular, we said 100% is there. Apart from this 3, 4 schemes, there were circulars before that -- much before in order to give the facility in the normal course even to the standard accounts also, like the repayment period, if you want from 10 years to up to 18 years, you can go. So all those accounts also have been -- come under the preview of 12 February. And is there any -- all those accounts have also been accordingly dealt with or some of them are still...
Before any stressed asset. If you were...
No. But -- suppose from a - some were stressed or not.
Stress, I said but the dispensation was given. If you want you can do it.
But not anymore.
So all those have been already dealt with.
In the company, even if I did use the interest in stressed account, I think even that is an issue. No. So that is a process there like that we're very tight [ sort of process.]
Yes. And accordingly, everything had been dealt in.
Everything. We have no choice.
Sir, [ Aswhani ] here. My question was that what is your assessment of the economy? Because ultimately, banking will be accelerating or decelerating because of economy. So corporate CapEx, infrastructure, what are you witnessing there, sir?
So one is that, of course, the estimate, which everybody -- even I have -- is giving is 7.5% growth, but largely driven by services sector. And infrastructure spend, there is increased spending, but coming from the government. And we have been seeing in the last 6 months that there has been a huge investment in the infrastructure. Once infrastructure government spend increases, then all the related sectors like cement or steel, they all get a flip. So overall, if you ask me, quite a few sectors, in fact, are doing very well. Steel is one of them. And that's why we are seeing the kind of recoveries we are having in NCLT, cement, it's doing again very well. Road sector is doing very well. Considerable interest in renewable energy. Your LCV is doing well. Your personal cars, doing well. If cars do well, then your auto component industry does well, so quite a few sectors. And apart from services sector, there is an -- I would say, a considerable optimism about the economic growth. And that will also help banks in improving the quality of assets not there were fears that retail, there may be a problem. But if you compare my performance as compared to the last year and after merger, there was a slippage in our retail book. But today, we are, again, coming back to premerger scenario. So that's why I think -- and particularly, we are approaching the election year. So government spend on infrastructure will be going up, not going down. And that itself will drive a lot of economic activity. So essentially, it is infrastructure and consumption.
Are you also witnessing improved capacity utilization at your clients which is leading them to, let say, at least -- looking at planning some CapEx now?
There are proposals for CapEx. And some of them are big ones. And again, some of them are likely their requirement will not be more than INR 2,000, INR 2,500 crore. But that all adds up. So we are seeing investment. It's not that we are not seeing investment.
Any more questions?
Then we can take this if I have -- did not answered anything. All done?
I guess all the questions have been addressed. If we have no more questions, let me end the evening with thanking our Chairman, the top management team, the analysts. Ladies and gentlemen, we hope all your queries had been addressed satisfactorily. To round out this evening, we request you to join us for the high tea, which is arranged outside the [indiscernible]. Wish you all a very pleasant weekend. Thank you.