State Bank of India
NSE:SBIN
| US |
|
Johnson & Johnson
NYSE:JNJ
|
Pharmaceuticals
|
| US |
|
Estee Lauder Companies Inc
NYSE:EL
|
Consumer products
|
| US |
|
Exxon Mobil Corp
NYSE:XOM
|
Energy
|
| US |
|
Church & Dwight Co Inc
NYSE:CHD
|
Consumer products
|
| US |
|
Pfizer Inc
NYSE:PFE
|
Pharmaceuticals
|
| US |
|
American Express Co
NYSE:AXP
|
Financial Services
|
| US |
|
Nike Inc
NYSE:NKE
|
Textiles, Apparel & Luxury Goods
|
| US |
|
Visa Inc
NYSE:V
|
Technology
|
| CN |
|
Alibaba Group Holding Ltd
NYSE:BABA
|
Retail
|
| US |
|
3M Co
NYSE:MMM
|
Industrial Conglomerates
|
| US |
|
JPMorgan Chase & Co
NYSE:JPM
|
Banking
|
| US |
|
Coca-Cola Co
NYSE:KO
|
Beverages
|
| US |
|
Target Corp
NYSE:TGT
|
Retail
|
| US |
|
Walt Disney Co
NYSE:DIS
|
Media
|
| US |
|
Mueller Industries Inc
NYSE:MLI
|
Machinery
|
| US |
|
PayPal Holdings Inc
NASDAQ:PYPL
|
Technology
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
559.5
905.65
|
| Price Target |
|
We'll email you a reminder when the closing price reaches INR.
Choose the stock you wish to monitor with a price alert.
|
|
Johnson & Johnson
NYSE:JNJ
|
US |
|
|
Estee Lauder Companies Inc
NYSE:EL
|
US |
|
|
Exxon Mobil Corp
NYSE:XOM
|
US |
|
|
Church & Dwight Co Inc
NYSE:CHD
|
US |
|
|
Pfizer Inc
NYSE:PFE
|
US |
|
|
American Express Co
NYSE:AXP
|
US |
|
|
Nike Inc
NYSE:NKE
|
US |
|
|
Visa Inc
NYSE:V
|
US |
|
|
Alibaba Group Holding Ltd
NYSE:BABA
|
CN |
|
|
3M Co
NYSE:MMM
|
US |
|
|
JPMorgan Chase & Co
NYSE:JPM
|
US |
|
|
Coca-Cola Co
NYSE:KO
|
US |
|
|
Target Corp
NYSE:TGT
|
US |
|
|
Walt Disney Co
NYSE:DIS
|
US |
|
|
Mueller Industries Inc
NYSE:MLI
|
US |
|
|
PayPal Holdings Inc
NASDAQ:PYPL
|
US |
This alert will be permanently deleted.
State Bank of India
You don't have any saved screeners yet
[Foreign Language] and good evening, ladies and gentlemen. My name is Sanjay Kapoor, and I'm the General Manager of Performance Planning and Review department of the bank. So on the occasion of the declaration of the Q2 FY '23 results of the bank, it gives me immense pleasure to welcome the analysts, investors and our colleagues in person after a gap of nearly 3 years. I also extend a warm welcome to the analysts, investors and colleagues who have joined this presentation through our live webcast.
We have with us on the stage our Chairman, Shri Dinesh Khara, at the center; our Managing Director, International Banking and Global Markets and Technology, Shri C.S. Setty; our Managing Director, Corporate Banking and Subsidiaries, Shri Swaminathan J; our Managing Director, Risk Compliance and SARG, Shri Ashwini Kumar Tewari; our Managing Director, Retail Business and Operations, Shri Alok Kumar Choudhary; our Deputy Managing Director of Finance, Shrimati Saloni Narayan.
Our Deputy Managing Directors, heading various verticals and managing directors of our subsidiaries are seated in the first row and second row of this hall. We are also joined by Chief General Managers of different verticals and business groups.
So to carry forward the proceedings, I request our Chairman sir, to give a brief summary of the bank's Q2 FY '23 performance and the strategic initiatives undertaken. We shall thereafter straightaway go to the questions-and-answers season. However, before I hand over to Chairman sir, I would like to read out the safe harbor statement.
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 outcomes may differ materially from those included in these statements due to a variety of factors. Thank you.
Now I would request Chairman sir, to make his opening remarks. Chairman sir, please?
Good afternoon, friends. Thank you for joining this analyst meet post announcement of the quarter 2 results of financial year '23. It's actually a pleasure to see all of you in person after a gap of almost 3 years. I must complement my finance team for opening this face-to-face interaction, which all of us have been missing in the last 3 years. A warm welcome to all of you, including those who are connected virtually. We hope you and your family are in best of the health.
Global economic activity is experiencing a broad-based and sharper-than-expected slowdown, with inflation being higher in developed economies as compared to EMEs. This phenomena is perhaps seen for the first time. The cost of living crisis, tightening financial conditions in most regions, Russia's invasion of Ukraine, and the lingering COVID-19 pandemic, all weigh very heavy on the outlook.
However, in such uncertain and fragile global economic environment, the Indian economy has showed resilience. Indicators of aggregate demand indicate that the onset of the festive season and the pent-up demand kept growth impulse very strong. Several high-frequency indicators remain upbeat. The withdrawal of the Southwest monsoon has aided travel, hospitality and construction sector too.
Electric generation has picked up in September. Rural demand also has shown a very healthy sign. Also, we have seen that the 2-wheeler and the 3-wheelers and the motorcycles have shown a very encouraging trend. This is actually a reflection of the rural economy. Domestic tractor sales have also picked up sharply to an 11-month high in the month of September.
Credit growth in the banking system has continued to grow in double digits in this financial year as against single-digit growth, which we witnessed in the last year. With economic activity gaining momentum, there will be an optimistic outlook for the demand conditions, and we expect credit growth to continue in the near term.
At State Bank of India, our long-term strategy has been to build sufficient resilience in our balance sheet so as to absorb the volatilities caused by such external events. As a result, we have not only been able to ride through these difficult times, but we have been able to post consistently improving outcomes in business, profitability and asset quality parameters.
I'm pleased to announce that during this quarter, we have posted the highest ever quarterly profit of INR 13,265 crores. Our business growth numbers are good. And in terms of asset quality, our net NPA has dropped well below 1%.
Let me now give some color on the bank's numbers for the quarter. The net profit for the quarter increased almost 74% Y-o-Y to INR 13,265 crores, while the operating profit at INR 21,120 crores, increased by almost about 17%. ROA of the bank for the half year period improved by 15 basis points on Y-o-Y basis to 0.76%, though this quarter ROA stands at 1.04%. And ROE improved by 291 basis points on Y-o-Y basis to 16.08%.
Most other core profitability metrics have also improved over previous year as well as sequentially. Net interest income increased by almost 13% Y-o-Y on the back of the improved credit offtake in all segments and continuous improvement in asset quality.
Domestic NIM also improved by almost 5 basis points Y-o-Y and 32 basis points sequentially. Actually, on Y-o-Y basis also, we had some onetime -- one-offs, which are there last year around the same quarter. If we ignore that, then we have actually grown well in this quarter on a Y-o-Y basis, too, as well as NIM is concerned.
Fee income grew by almost 10% Y-o-Y. Our cost to asset continues to remain among the lowest in the industry, reflecting our efforts to build long-term cost efficiencies. On the business front, the credit growth has continued to trend upward as the bank posted a Y-o-Y growth of almost 20%, with growth coming from all the segments.
Corporate advances grew by 21% plus on a Y-o-Y basis, with bulk of the growth coming from large corporates, personal retail, also witnessed a decent growth of 19% on a Y-o-Y basis, with home loan book growing almost at about 15% and other personal loans growing at almost 25%. SME and Agri segment advances also posted double-digit growth at 11% and 13.24% Y-o-Y, respectively.
Domestic deposit grew by 9.16% Y-o-Y, driven by the growth in savings bank deposit and the term deposits. Our foreign offices have continued to perform well with good growth in advances as well as deposits. Advances portfolio at foreign offices in rupee terms grew by almost 30%, while in dollar terms it has grown at 18%. And the growth is coming from local lending, trade finance as well as India-linked loans. Sector-wise, growth has come mainly in OMC, banking and financial services and IT services. Deposit at foreign offices grew at almost 35%.
Coming to asset quality. We continue to post improving outcomes. Our net NPA ratio has come down below 1% mark and stands at 0.80% only at the end of -- only as at the end of quarter 2 of the financial year '23, with a Y-o-Y decline of 72 basis points. Gross NPA ratio at 3.52% is down by 138 basis points. Slippages ratio for the quarter stands at 0.33% and is lower by 33 basis points on a Y-o-Y basis. Consistently improving asset quality is also reflected in our credit cost, which stands at 28 basis points for the quarter and is down by 15 basis points Y-o-Y.
On the restructuring front, as at the end of quarter 2 of the financial year '23, our total exposure on the COVID Resolution Plan 1 and 2 stands at INR 27,336 crores. The restructured book has behaved well, with 9% of the current exposure falling under SME 1 and SME 2 category. We are holding sufficient additional provision against the restructured accounts.
Capital also, I would say, is fairly okay, and we expect that our internal accruals will be adequate to take care of the normal business growth requirements. Our capital adequacy ratio without adding the profit for the current half year is at 13.51%, and the CET ratio at 9.53% are well above the regulatory requirements.
Digital continues to be an important acquisition engine for the bank across assets as well as liability product. During the quarter, we have sourced 62% of the savings accounts and 45% of the retail asset accounts digitally through YONO.
Our subsidiaries have also consistently performed well and continue to create significant value for all the stakeholders, and most importantly, for the customers. Most of our subsidiaries are leader in their respective segment, and we will continue to nurture these subsidiaries and see them creating value for their own shareholders as well as the shareholders of State Bank of India.
Now before I conclude, I thank you all for your continued support to the bank. We are proud to be part of SBI and consider it a privilege to be able to contribute towards the growth of our economy and the bank. We remain committed to reward your trust in us with superior sustainable returns over the long term. I wish everyone here a very good health and a very happy weekend.
The floor is now open for questions from all of you. Thank you.
Thank you, Chairman sir, for the presentation. We now request questions from the audience. [Operator Instructions] Also, kindly restrict your questions to the quarterly results only and no questions about the specific accounts, please. [Operator Instructions]
We now proceed with the question-and-answer session. And the first question is from Mahrukh.
Congratulations on a very, very strong set of numbers. Sir, my first question is on margins. So you've done very well and all core margin expansion. Given that there's a bit of MCLR repricing still left and there's also EBLR repricing, which is not fully captured in. Is it fair to assume that at least for the next 2 quarters, you will continue to see margin expansion? The quantum can be different, but...
I normally follow a golden principle, under promise and over deliver. So on that particular account, I will say that I will still under promise that we'll try to keep the NIM at this level, though we might give you better results quarter-on-quarter.
Okay, sir. So a related question to that was on deposit growth, that obviously, you have a lot of liquidity, your CD ratio domestic is the lowest, right, at 63%. So will we continue to see flattish deposit growth? I mean, till what level should the domestic CD ratio rise before your deposit growth accelerates?
Actually, we look at deposit as a franchise. And that is one the reasons why during the period when there was not enough credit growth, we never stopped our deposit gathering engine. And that resulted into a situation where we had deployed the money into the treasury. And today, while we talk, we have about -- almost about INR 3.5 trillion plus money, which is laying in the treasury instrument, what we expect to redeem during the current financial year itself.
So you can very well expect that, that kind of growth can be there in the deposit to support the advances growth, which is -- which we expect to see in the remaining part of the year. And also, having said that deposit is a franchise, you would have observed that in the last quarter or so, we have also increased our deposit rates because we don't want to be unfair with our depositors either.
Okay, sir. And just one last question. If you could give some sense on what quarterly increments you can expect in your wage bill for the new wage revision, it will start mostly from next quarter, right? And what would be your assumption?
Yes. I have got those numbers. I expected this question from the analyst community. So that's why I have kept those numbers also ready with me. And I'll just share those numbers. Just one second. Give me a minute.
Yes. If at all, the monthly ad hoc provisions, we assume that it will be required to provide for about 36 months. And the estimate increase in wages, if at all, it is 10%, in that event we expect about INR 477 crores. So that is kind of a number which we expect. And if at all, 12%, it is about INR 580 crores. So much of it will depend upon what is the current [indiscernible] demand and where we finally start providing for it.
INR 477 crores per?
Per month.
My complements to you, sir, for the fantastic performance. In fact, one of the best performance in the recent times and highest profitability in the bank and bank has done well on almost every parameter. But sir, having said that, now the question comes for sustainability, because this quarter was an exceptionally good quarter and for some of the other banks also. But of course, you have exited.
So on sustainability, what Mahrukh's question was also there that in the coming quarters now, number one if the ROA -- of course, we have crossed now 1.04. It was a demand for a long time, people were expecting. And secondly, on all other parameters like cost to income and other ratios and the future growth in the credit books and also on the treasury front.
Like last time, I think in -- to answer one my questions, you had said that we are cushioned for 7.45 on the treasury front. So here onwards now, since we have already come to that level and we expect another 50, 60 basis points now going further, looking at the Fed increase of 75 basis points. So on all the fronts, like on the treasury front, on the credit front, on the recovery front, returns, profitability, where do you see now -- at least in the coming 2 quarters, how do we expect to end FY '23, sir?
See, when it comes to the treasury front, though this quarter we had an opportunity, we could have booked MDM gain, but we consciously thought that we will not book it. We have kept it as a reserve for the rainy day. And maybe at some later date, if at all there would be a requirement, we can tap it. This is what our intention was.
But having said that, I would also like to mention that how the global interest rates will move and how the interest rates will move over here in the country will also be a function of the fiscal. That is something which I expect that the kind of robust GST collections which you have seen till now in the current year. And going forward, I expect that those kind of things will probably ease out the burden of the government raising the borrowings from the system.
So if at all, it so happens, then perhaps the pressure will not be there as much for the G-sec. That's how I read the situation, but much of it will depend upon how the situations unwind over the period of time.
The other question relating to the sustainability of this kind of a growth. Well, of course, we all are cognizant of the fact that the growth which we have seen in this quarter is a growth of the busy season. And generally, even post the busy season, the kind of growth which we are witnessing even now is in the range of about 14% to 16%.
So my reasonable expectation is that there are -- some of the contributing factors, which I must articulate. The retail engine has grown all this while without any challenge, almost about 16% kind of growth which you have registered in the retail segment quarter-on-quarter basis, on a 3-year CAGR basis also.
Corporate, we have witnessed a decent trend, and this trend is essentially attributed to the fact that we have seen improvement in the working capital utilization, almost it has improved, but to the extent about 4% as compared to the last Y-o-Y number.
The other important component which we have seen is, we have seen the term loan sanctioned and the availment. We still have got a reasonably decent pipeline, which is as high as about INR 3.7 trillion of the loans either already sanctioned or the proposals under process. So that is something which gives me some kind of a confidence that 14% to 16% seems achievable.
Last but not the least, corporates certainly were borrowing from the international market. Today, the international market rates plus the hedging cost is actually an expensive proposition. So that is also another factor which has led to a scenario, where corporates have started looking at the Indian banking system for borrowing.
So I think these are some of the factors which gives me some kind of a confidence that we can perhaps book 14% to 16% of the credit growth. But having said that, I would like to caveat it by the fact that the growth in the banking system is a function of the real economy. And though in the normal circumstances, we expect that the economy should continue to do well. And when we look around the globe, all of them are looking at India as one of the silver spots. So I think in view of that, my reasonable expectation is that we should have a decent growth in the economy and which will offer us opportunities for the credit growth too.
Sir, now coming on that international only, there are 2 things. One is that our investment, we are one of the -- I mean, what one? We are the largest Indian bank having maximum branches and investment outside. Now there is a practice of marking 100% mark-to-market in the international book, and since our investment is the largest there, how much pressure do you see is left to be -- like because interest rates are hardening up there also with another 75 basis and still it's not stopping. So something must have been already provided in this quarter. But going forward, what kind of numbers or some idea if we can get on that? This is number one.
Second, on international book, again, there is a plenty of -- I mean, the book is growing very fast because of the interest rate now divergence and we are getting higher margin and the cost of operations is much lesser, maybe 20 basis or 15. So net-net, we are gaining there. So what are your comments on that and plans for the future on the international book?
See, when it comes to international book, one, of course, our assets are generally, if we look at their average maturity, it would be much lesser. So as compared to what we normally get to see over here, that is one part.
The second component is our -- when it comes to our NIMs, of course, they have improved. And our book is actually split into the local lending, which is almost about 33%, India-linked loans are about 35% and the trade finance is almost 30%. And local lending, which we are doing, it is essentially syndicated loans which we do.
So I think -- and also when it comes to geographies, we are essentially into U.S.A., U.K. and also into Singapore and Hong Kong. These are the major geographies where we are present. So I think on that particular count, we are very closely reviewing this book. Though, as I mentioned, in rupee terms, it has grown about 30%. But in terms of dollar terms, it is at 18%. So I think we are quite cognizant of what the realities are. And -- but one thing is I think ECBs for us may not really pick up as much going forward. That's the other sense which I have for the international book. Deposits [indiscernible] to raise in the local markets depending upon our local requirements. So that's how this international book is.
One question on NARCL. Now you see our gross NPA is still, I think, 3.5%, 2%. So how much are we still expecting the same kind with which we started? That time I had calculated that almost about 25 basis point our gross NPA will come down if all those accounts which are identified goes to NARCL. So what is the difference now? Have they -- first of all, they were yet to start. But now started, it seems. But they are going slow on that, I think INR 2 lakh crore initial amount and that. So what is it -- can you give the color on the total NARCL number of accounts this quarter? And this FY '23, how much we are going to pass on at least to bring down the gross NPA?
Actually, when we started and now, there is a lapse of time and during that period, from the system also, all kind of options were explored, including the options of [ 4TS ] and compromises, all kind of options were explored. And by the system as a whole, that number also came down. Having said that, now NARCL has started performing and as far as -- I believe there are about -- around more than 40 accounts are there, which are under resolution with NARCL. And we expect that it will -- I mean, the way they are really addressing, I hope to see better results there. But nevertheless, I think the banking system as a whole is open for all kind of other options as well.
The plus is that with NARCL coming in a very important component of the ecosystem has got strengthened. And also, it has helped in the resolution through various other channels also. So I think overall, what will be the impact? We'll have to probably wait and watch. But as far as we are concerned, I think about 14 such accounts -- 14 offers have been made.
My name is Manish Oswal from [ Mangalam ] Securities. My question on the -- from the 4th of May 2022, the policy rates has moved by 190 basis points. And on lending side, mostly the rates have been passed on. But the deposit side, rates passing on is very gradual. So when do you see the deposit rates see the reflection of the policy move?
Well, as far as the rates are concerned, I think each of the bank is actually looking at the rates on their own perspective in terms of how their liabilities stacked up and how things are with them. So I think -- and also what kind of growth they are seeing as far as the asset book is concerned.
So as far as the retail TD rates are concerned, we are very closely monitoring how things are and what is our ALM requirement. And based on that, we are also calibrating our interest rates. Your question that, in how much time will the transmission happen, I think perhaps we'll have to wait and watch. Because as I mentioned, that there are multiple factors, which would be at work in the transmission of the policy rates.
How much we have raised till now, from 4th May?
From 4th May, we will give you that number. We'll give you that number.
The second point, sir, from the credit cost and the slippage and ROE and ROA, a 10-year high. And the credit growth also, 9-year high. So in terms of certain numbers like credit cost and the slippage number is extraordinarily low for the bank. So can we sustain these numbers? Or what is your comment? I know you under deliver, promise and overdeliver. But what is your sense on these numbers, sir?
Our effort will be to keep it as low as they are currently. But yes, of course, it's a function of the real economy, too. So how the real economy pans out, we'll have to wait and watch for the actual numbers.
The hike in the retail deposit rates, we have raised the rates 4x after 4th of May, and it has been as high as 80 bps in the 1- to 2-year segment.
This is Saurabh from JPMorgan. Sir, just 2 questions. One is your net slippage is negative this quarter. So can you at least -- what will your expectation, at least in the near term, we can continue with these kind of levels or this is exceptional what we are seeing right now?
And second is there is a small -- there's an increase in your SMA 1 book, SMA 2 is still flat. What would be explaining that?
Well, SMA loan book, of course, we have seen the number is slightly above where it was in June. But we had a one particular large corporate account where we had seen it got slipped into SMA, but that we could pull back immediately. So I think SMA is a phenomena, which is on a particular day. So it's a number which keeps on changing. And even in the retail also, we have pulled back some of the SMAs also. So I think not as much of a worry.
The other question is whether slippages will be around this number, I think as of now, as I mentioned, it's again a function of the real economy. As of now, we don't envisage any challenge, whatever challenges were seen in the book, we have already provided for it. But if at all, there are some one-offs at a point of time, we really cannot really predict that kind of a scenario. So we'll have to be in readiness for any kind of eventuality. But I think we have built up enough cushion in the balance sheet to really address any such challenge which comes up.
This is Jai Mundhra from B&K Securities. Sir, your CET1 now stands at 9.5% around. If you can elaborate if you want to raise capital because the growth that you are seeing is also pretty decent. So your thoughts on capital.
See, as far as our plan of action is concerned, we were to raise 81 and 82, which we raised at the most competitive rates. And also, the other plan of action is, that last year also, we plowedback a decent amount of profit, and we intend to do a similar plowback in the current year too.
And at this number, we will have reasonably decent number to plowback as well. So with that, we will have sufficient capital to support the growth here. And even at this number also, the kind of growth which you are visualizing, we are in a position to support it.
No, sir, no doubt that you are well above the regulatory threshold and this is sufficient enough to chase growth. But it looks like that within all, even PSU peers and large private, SBI has the least amount of CET1.
No, we'll raise at the appropriate time, don't worry.
Secondly, sir, on your margins. Is there any one-off kind of a thing in interest income? Or this is purely, purely organic?
This quarter, we have -- INR 592 crores is the interest on income tax refund. Actually last year around the same time, we had INR 1,900 crores worth of -- so I think it is much less as compared to that. Considering our numbers, it should be -- it is almost insignificant.
Sure. And last question, sir, if you can provide the breakup of the entire loan book by EBLR, MCLR and maybe fixed rate and...
Almost about 74% of the book is linked to MCLR and EBLR, 75%. And out of that, about 41% is MCLR linked. The remaining is EBLR linked. And I think our fixed rate is just about 26% -- 21%. And rest is BPLR, base rate and those kind of things.
So just a corollary, sir, if I look at yields in this quarter, right, despite having 75% of the loans, which are floating rate and within that, 30% is EBLR. The yield expansion on a quarter-on-quarter basis looks very sort of low. Any comments there, sir? If you look at your yields on loan domestically...
Actually, yield expansion is also a function of the one-off, which I mentioned. If at all, we will we look at that particular number, then probably it will throw up the right numbers. You were saying something.
Essentially, see, 41% is MCLR and bulk of this book is linked to 6 months MCLR. So the reset will be with a lag. And 34% is EBLR, of which 11% is treasury-bill linked, T-bill linked. We -- since it is linked to 91 day T-bill, we reset only once in 3 months.
So while the policy rates keep moving, it's not that immediately the transmission takes place. Transmission has got a reset date, during which it will happen. So the full benefit of this will be available in Q3, Q4 rather than Q1, Q2. That's the sense that I would like you to read from there.
Sir, question here. Adarsh from CLSA. On -- because margins have done so well, do you see any scope for changes in savings rate? Or do you think it's transactional, so no need to really look at savings rate over the next 3 to 6 months?
No, we will also look at the market scenario. And also, you would have observed that for high-value savings bank account, we have already increased the interest rates.
Got it, sir. And sir, you mentioned the reset on the T-bill. Your reset on repo is 90 days after the RBI moves? Or you do it in the next month?
It's immediate.
It used to be quarter end and month-end, now it's 15th of the same month. No, no, we change it immediately after.
Anand from Emkay. So we have seen so much of rate hikes all along. This year has been pretty strong in terms of overall credit growth. Can we see a dip in the overall credit growth next year? Do you see any impact of the rate hikes, particularly into the retail segment or the corporate CapEx possibly which would have actually come in?
To answer your question, we'll have to probably look at what the behavior we have seen in the current year. And one of the major area where -- which perhaps can be a reflection of the behavior, which we can see going forward is the home loan. We have seen the home loan interest rates have gone up, but we have not seen the demand tapering off.
So I think much of it will depend upon the segments. The way I look at it is, as far as the corporates are concerned, so long as there is a visibility of demand, then perhaps they -- because in the overall cost structure, the interest rate -- interest cost is about -- on an average, about 10% of their total cost structure. So long as they have got a visibility of the demand and they've got the capability to pass on this increase in interest rate, so I think people will continue to borrow.
But we are assuming some factors to remain constant. The fact of life is that practically all the variables keep on changing. So I think a year down the line, we'll have to probably revisit all these assumptions and look at it how the economy is looking like, what is the confidence level across the globe and what is the confidence level in India, that will probably help us in sort of gauging the situation on ground.
But there is a chance of basically a dip in terms of the overall home loan number?
I don't think so, as I mentioned that the home loan, despite the increase in interest rate, the home loan book for us has grown almost 15%, the highest ever growth which we have seen. So I think much of it is -- I mean, of course, there are multiple variables. So how those variables interact and throw out the results, we'll have to wait and watch.
Sir, secondly, there was this RBI circular in 2019. And basically, what we had heard that a lot of these banks have made standard asset provisioning on some of these government entities. Have we got any intimation from RBI that we also need to make some additional provisions on these quasi-government or government entities, including the likes of FCI, Food Corporation of India in the current quarter? If yes, what is the status over there?
At this point in time, we don't have any definite indication on that, but we are aware that at the industry level there are discussions happening. But I think it will be premature to comment at this stage. Maybe we will let you know once the time -- once these discussions get firmed up.
Because look at BOB, PNB, all of these banks have made provisions or in fact, BOB has reversed the provisions on that front. So it's just a matter of time that you will get some kind of an intimation. But any ballpark...
These things are normally looked at on merits. And if at all required, we will also -- we'll see as and when the situation arises, we will appropriately plea it with RBI and -- if at all, there is a situation like that. And we'll see what is the outcome. And whatever be the outcome we are there to comply with what the regulatory dictates would be.
On the balance sheet and P&L has adequate cushion. If at all such things do come up, I think we'll be able to absorb as and when it comes. It should not be an issue.
But then as of now, we don't have any such message.
This is Mahesh from Kotak. Three questions from my side. One is, is there a particular threshold limit beyond which you would say that the margin seems to be too high and you would want to revisit the yields that -- or the spreads that is sitting across the various lending products that you have?
We have not kept any threshold margins for us. But yes, of course, as one of the -- we would like to be reasonable with our customers, both on the deposit side as well as on the loan side.
Okay. In the sense that if margins does expand further, you would say your action would be mostly on the deposit side rather than the lending side?
Let's wait and watch.
Second question, sir, on this foreign currency loan. Any particular reason as to why there is so much excitement to do this business? Very strong growth, environment doesn't seem to be that great outside India.
Normally, this is given to the well-rated corporates in India and well-rated public sector entities in India.
But -- okay. You don't see any risk coming out of this particular book?
That's why I'm saying, the well-rated is something which takes care of the risk component.
Okay. And the final question, sir, just a bookkeeping question. Write-off from the loans, does it now come under other income? Or does it -- is it not part of provisions?
The write-off...
Income from write-offs. Recovery from write-off.
Recovery from write-off, that in the other income.
What is the ballpark number that is there for this quarter?
It's I think -- how much -- INR 1,800. INR 1,800 crores kind of a number is there. INR 1,823 crores.
Sir, under miscellaneous income, it is INR 564 crores, which is total, which should be part of that.
No, no, it is not like that. We have had some losses. And to offset that actually, derivative losses we have had, but the AUCA recovery has been to the tune of INR 1,803 crores. Last year, AUCA recovery was INR 1,344 crores, which is a growth of 34.15%. But last time, we had some treasury losses because of some derivatives losses, due to which this 528 number is coming.
Maybe we can have one more question.
Yes, sir. Kunal over here from ICICI Securities. So maybe with respect to this entire other provisions which are there of almost INR 900-odd crores. So what that pertains to actually? Because I think maybe there is no recovery component. But otherwise, we had seen a negative and there is some provisioning of INR 900-odd crores this quarter.
Just one second. INR 900 crores, other provisions...
Other provisions would be this nonfund-based, provision on nonfund based...
Just a second. No, that's right.
INR 898 crores, INR 900-odd crores.
Yes, we've provide the breakup.
Yes, these are the provisions that are made under nonfund-based limits. Also, wherever the ICA restructuring is not implemented within the time line, et cetera, there are some additional provisions that get made as per the regulatory requirement. They appear under other provision. But in any case we'll share the exact breakup later.
Sure. And when we look at it in terms of the overall slippage, which is there for this quarter...
INR 898 crores is the restructuring...
It is towards the restructuring, yes. Okay.
We have provided 30% instead of the 5% mandatory that was the RBI guidance.
Okay. Got it. And when we look at the slippage, how much could be the impact of recoveries inter-quarter adjustments which would have been there? Because last quarter also, we highlighted that out of INR 9,700-odd crores, INR 2,800 crores have already got recovered. So does that get into the recoveries and upgrades? Or it is netted off into this number itself?
No, it gets into the recoveries and upgrades.
So this is pure in terms of -- maybe when we look at it, almost like INR 3,000-odd crores retail, SME, which was the last time, that itself would have come down quite significantly?
Inter-quarter net-off is there. The numbers which you're seeing here.
This is the net number.
The number which you are seeing here, it is Inter-quarter net-off. Recovery [indiscernible] for the last year.
There a Slide on NPA movement plus AUCA, there you will see the breakup in terms of total gross slippages as well as the recovery and upgrades. You want the slide number, I can guide you there.
Yes, yes. That's there. So maybe whatever is there up to last year, only those recoveries and upgrades are there. Whatever was there in Q1, maybe that's getting netted off.
Yes.
Okay. And lastly, in terms of the restructured pool. So when we look at the decline, that's also not significant. In fact, hardly like INR 1,000-odd crores of movement, that too coming in from the corporate. And even since March, hardly INR 3,000-odd crores movement. So when do we see retail and SME actually moving out of the restructured pool? And how would that behavior be?
I think the repayment process started -- 24 months repayment is there -- 24 months moratorium. And I think moratorium only in -- very small book of the book has got the moratorium over. So there -- that, I think, is what we have already seen. That we..
Slide #13. Go to Slide #13.
So this is how it is looking like. And...
Yes. So movement has largely been on the corporate side. Retail and SME would really take some time. So when should we see that actually coming off?
24 months was the maximum that was...
That's the moratorium which has been extended. So we'll get to see it, perhaps early part of the next financial year.
So we have a few questions coming in through the online webcast. So Chairman sir will now address these questions.
Yes. The question from Mr. Darpin Shah is, if you can provide breakup of slippages for retail SME, Agri, corporate and overseas business?
SME has slipped INR 408 crores. Agri has slipped INR 631 crores. And [ per ] has slipped INR 330 crores. In the retail segment, it is INR 1,369 crores slippages. In the corporate segment, it is INR 956 crores. And total domestic, all put together, is INR 2,325 crores. The IBG slippages were INR 74 crores. So overall, bank as a whole, we have seen a slippage of INR 2,399 crores.
The next question comes from -- what is bank's outlook on NIM and ROA? Can we sustain the trend we have shown in this quarter?
We will put in our best effort to see that we sustain this trend. This is coming from Ashish Sharma.
Next, third question is coming from Sharad [ Jutu ]. Are NIM sustainable if looked at in the context of shrinking CASA base and rising FD rates amid competition? Strategies and lever available to save the NIMs.
Well, of course, I do agree with what you have mentioned in terms of shrinking CASA base, but there also we have put in some efforts and those efforts are essentially -- the current account market otherwise is comprising about 49% government business and 45% coming from the trade and commerce. Government business likely to witness a very tectonic shift, because now they are opening the SME and the CNA accounts. And they are managing their cash pretty well. So they may not leave much afloat. That's why we have started embarking upon the trade and commerce. And there, we have seen growth of almost about 8% in the current quarter.
So hopefully, we have recalibrated our strategy for the current account deposits. And we have all the products and services. Hopefully, we should be in a position to reverse this trend of current account also. And savings bank deposit, we have opened very large number of savings bank accounts, and we'll continue to do that. So that will probably help us in coming back as far as CASA is concerned. And we are very mindful in terms of increasing our interest rate on the term deposit.
So I think hopefully, our effort will be to sustain the NIM. But of course, the market forces, how will they really react going forward, will also influence our decision. But nevertheless, our conscious effort would be to sustain the NIM.
Going forward, given the present advances growth and capital burn, post what level of CET will you consider an equity capital base?
Perhaps we will revisit this decision. This is a question from [ Lalita ]. And we will be revisiting this subject after the financial result of the financial year '21 -- '22/'23. And at that stage, what will be the plowback and how the capital will look like? That will be the point of time when we will look into this.
Last question is from Mr. Sawant. His question is, will you please give more color on how bank is positioning to manage credit growth in low deposit growth environment?
I mentioned that we have almost about INR 3.5 trillion worth of securities which we're holding in the treasury. And we'll be in a position to monetize those securities, which will help us in supporting the credit growth. And we are having almost about 10% kind of a deposit growth also as of now. Going forward, we might see even better trends. And with that, we should be in a position to take care of the advances growth.
Just to follow up on your question on how many offers have been made. 10 offers of INR 24,000 crores roughly. Our share is INR 3,400 crores.
We have some more questions received on the chat box, but in the interest of time, we'll reply in writing. Sorry for not taking it up right now.
Okay. So I trust all the major questions have already been addressed now. So in the interest of time, we'll stop here and we'll be happy to respond to other questions in offline mode.
So let me end this evening with thanking the Chairman, the top management team, the analysts, and the ladies and gentlemen. To round off this evening, we request you to join us for high tea, which is just arranged outside the hall. Thank you very much.
Thank you very much.