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Union Bank of India Ltd
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Ladies and gentlemen, good day, and welcome to the Union Bank of India Earnings Conference Call for the period ended December 31, 2022. The bank is represented by Managing Director and CEO, Ms. A. Manimekhalai; Executive Directors, Shri Nitesh Ranjan, Shri Rajneesh Karnatak, Shri Nidhu Saxena, Mr. Ramasubramanian S. and other members of the top management. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mrs. Ranjita Suresh, Assistant General Manager, Investor Relations. Thank you, and over to you, ma'am.
Thanks, Michelle. Good afternoon, ladies and gentlemen. I, Ranjita Suresh, Head of Investor Relations, welcome you all for the Union Bank of India earnings con call for the period ended December 31, 2022.
The structure of the con shall include a brief opening statement by MD and CEO, and then the floor will be open for interaction. Before getting into the con call, I'll read out the usual disclaimer statement. I would like to submit that certain statements that may be discussed during the investor interaction may be forward-looking statements based on the current expectations. These statements involve a number of risks, uncertainties and other factors that cause the actual results to differ from the statements. Investors are, therefore, requested to check the information independently before making any investment or other decisions.
With this, I now request your MD and CEO ma'am for her opening remarks. Thank you. Over to you, ma'am.
Good afternoon to all of you. It is my pleasure to welcome the analysts and the investor community. You are one of the major stakeholders for the bank and we are grateful for your continued support and the feedback that helps us to take informed decisions.
Let me give you a brief on the broad macro environment before going into the performance or design for the Q3 '23, '24 -- sorry, '22, '23. Banking sector has shown improved performance led by a broad-based economic recovery. The deposits and credits of the scheduled commercial banks registered a Y-o-Y growth of 9.2% and 14.9% for the fortnight ended 30th December 2022.
Again, the same, our bank has registered a higher growth under deposits and advances, recording a Y-o-Y growth of 13.6% and 20.1%, respectively.
The bank's financials for the quarter ended December 2022, have shown some good performance. The global business of the bank has reached INR 18.69 trillion, consisting of INR 10.65 trillion deposits and 8.4 trillion of the advances as of 31st December 2022.
The bank has also registered a growth of 17.8% Y-o-Y growth in RAM, et cetera, retail being 16.6% growth, agriculture 17.6%, and MSME has registered a growth of 19.6% Y-o-Y.
The NIM has improved to 3.21% as against 3.15% in Q2 of FY '23, an increase of about 6 bps. Operating profit of the bank has registered a growth of 29.8% Y-o-Y to INR 6,619 crores during Q3 FY '23.
Net profit of the bank has also improved by 106.8% Y-o-Y to INR 2,245 crores during Q3 FY '23. The gross NPA of the bank has reduced substantially to 7.93% and net NPA has also reduced by 195 bps to 2.14% as of 31st December 2022.
The PCR has improved to 88.5% and CRAR of the bank has also improved by 53 bps to about 14.45%, and CET has also improved by 53 bps to about 10.71%.
I conclude my prepared remarks. I once again thank all our analysts and investors community. We are now open for Q&A. Thank you.
[Operator Instructions] We have the first question from the line of Mahrukh Adajania from Nuvama Wealth Management.
My first question is, if at all we can get the breakdown of profit on sale of investment and FX income. And then my second broader question is that what is the outlook for loan and deposit growth from here on, because the trends is that obviously, deposit mobilization will get more aggressive and more competitive in the fourth quarter. Fourth quarter is generally a busy season as well, plus rates have already risen a lot, so where do you -- what is the outlook for deposit and loan growth near-term, that is in the fourth quarter, and then in FY '24?
And even in terms of margin, there has been a lot of concern on whether the margins will decline or stay stable in fourth quarter and FY '24. So what are your thoughts on margins given that deposit rates are moving up? And any special segment of deposits that we are targeting? So that's the second part of my question.
Ma'am, to answer your question regarding the advances and the deposit growth, we had given a guidance that we will grow at 10% to 12% for March '23. And as on date, we are at 20.09%, so we have been in the range, of course, of 15.4%, 15.5%...
Sorry to interrupt you ma'am, there is a disturbance on the line.
Yes. Let me answer your question with regard to advances and the deposit growth. We have seen -- if you could see our guidance for FY '23, advances growth was given at 10% to 12%. And as on day -- Q3, we have grown by 20%. Deposit growth, we had given a guidance of 10%, and we are at 13.61%. So we would like to keep this guidance and we will see that we keep the advances growth minimum to 12% in the current quarter also, though we have grown by 20% in the last quarter.
And coming to your ForEx and treasury. My treasury head will give you the -- reflect to this.
Good afternoon. As far as the bifurcation of the treasury income is concerned, we have INR 471 crores for this quarter ending December, 3 months. Out of that, INR 168 crores is by way of profit on sale of investments and...
Sorry, how much is profit on sale?
Profit on sale is INR 168 crores. And the exchange income is INR 206 crores. And we have a write back of NPM also to the tune of around INR 67 crores.
Write back of?
NPM.
Okay. Okay. So ma'am, I appreciate the guidance given, and you've already outdone or outperformed that guidance. So kudos to you and your team. But ma'am if you look at 12% Y-o-Y growth for Q4, then we could actually be at a level lower than Q3. So you could revise the guidance and give us like more say recent picture on loan growth guidance for 4Q, right? Because then if the guidance is maintained at 12% year-on-year, then there'll hardly be any growth in the fourth quarter. That's why I'm asking.
Yes. So to answer your question, see, the growth guidance has been pegged at 10% to 12%, reason being that the base effect is there. So December '21, the advances of the bank were on the lower side. So the growth what you are seeing at around 20%. So this is the same situation for all the scheduled commercial banks. So the base had increased for all scheduled commercial banks, including Union Bank of India, for March '22. Because of this, the year-on-year growth will not to the extent of say 20% for others. So this is also the reason why the credit growth is around 20% in the industry and the deposit growth is around 13%. Because the base of deposits was high in December '21 all around for scheduled commercial banks, but for the credit growth, the base was muted. So this is the reason why the guidance has been muted, though we may outperform it, but we are trying to keep the guidance at a low level, which is 10% to 12%.
Sure, sir. Sir, if you see the gross advances for Q4 FY '22, they were at around INR 7 trillion, right? So if you take a 10% growth, then there won't be a much Q-o-Q growth, correct?
No, it's not a question of -- see we were at INR 7 lakh crores. So we have already touched INR 8 lakh crores operated book as on December '22. So there will be some growth over this number definitely, but the growth we are presently seeing is around 12% only, because our base of March '22 is INR 7 lakh crores.
Correct. Okay, sir.
[Operator Instructions] We have the next question from the line of Ashok Ajmera from Ajcon Global.
Congratulations to ma'am and the entire team, all the executive directors in top management, for coming out with yet another set of very good numbers for the bank, whether you look at the profitability front or even the asset quality and recovery. Having said that I have got just a few observations and some couple of questions, which are just maybe some information point also. So my first one is just in order to assess that what the impact would be or in future how much can we have? This note number 13, which says that 100% provision from the fraud accounts has been made without giving actually the amount. So just to get an idea, like how much the fraud reported in this December quarter and I mean the 100% provision is made for that. So what was that amount ma'am?
Ajmera ji, namaste, I'm Samal here. See, there is no major material fraud decline during this quarter, actually in the December quarter. And you would have seen our unamortized, some fraud provisions were there during the September quarter, INR 1,100 crores, that have been fully absorbed in the provisions.
Yes. So that's INR 1,100 crores, because this time the amount is not given, that is why, otherwise...
Yes, that is fully absorbed, and there is no major fraud this quarter, so there is no alternative.
Okay, sir. Now since Samal you are there on this, on note number 15, I would like to have some clarity about this impact. And secondly, the number of -- figure for the tax, it distorts sometimes the overall picture, like our net profit before tax is INR 3,583 crores, which is actually the real profit. But if you look at the net profit after tax, it is INR 2,245 crores, which is improved. Information provided for here is INR 1,338 crores as against INR 652 crores, almost 100% more. So had the tax provision would have been the same what was in September, our profit would have been INR 2,900 crores something. So can you again explain that, in fact, for the information of every one who is here?
No, that is -- Ajmera sir, that is because of the DTA reversal, again. So current quarter we have again reversed INR 1,296 crores of deferred tax assets, that is what. So because we have been aggressively writing off the loans also, I'll tell you, during the 9 months, we have done -- writing off of the loans is INR 16,496 crores, which will have an impact on the DTA reversal. So that's exactly it is.
Write-off?
Loan write-off, NPA write-off, TWO technical write-off, so loan write-off will have no impact on the DTA reversal. So that's why the DTA reversal is at INR 1,296 crores during the current quarter.
So the write-off, which is also again an erratic figure, because in the last quarter it was INR 8,599 crores, in this quarter it is INR 1,249 crores only. So going forward, what will be the real picture or color, can you give to March ending. Like it is going to be so volatile, the number, because ultimately, the people -- overall, investors and the people, they see your bottom line. They don't actually understand, because of this tax how much impact has been made, where really actually you are not paying any tax.
That is true. That is true. If you see last year, we had a write-off of INR 19,484 crores. It was last year, right? And current year, it is in the similar line. You can say erratic, but then quarter to quarter it may vary, but year to year you will be in a similar line. And this is one of the reasons the banks they also bring down the gross NPA, because notably loans are where the 100% provision has been made. And also recoveries chances are lesser, the banks selectively selects some accounts for write-off.
Of course, later on we get -- from those accounts, we get some recovery, that is another issue, but then the write-off is in line with last year, Ajmera sir.
Ma'am, when we are on the gross NPA side, of course, it is under control now, it has come down substantially, but the figure is still very high otherwise if you look at some of the smaller PSBs. So one is, what is the position of the NARCL accounts now, because December also I think it couldn't actually take place. So in the March quarter, now finally how much are we going to -- I mean, how much amount is going to be transferred? And how much of that we are going to get in the March quarter?
Good evening, Ajmera sir. Ramasubramanian here. Regarding NARCL, yes, it is now taking some shares. We also identified 3 to 4 accounts for this one. I think now there will be some -- sales will be happening actually in this case, and certainly, the gross NPA level in banks may come down going forward.
Some idea of the amount now finally when the government has also -- I mean, that modality of the guarantee and everything is over now, and in this quarter, like the January - March quarter, definitely some actual action is going to take place. So some idea that how much -- number of accounts okay, but -- and with that also this [ Shrey ] also now coming in and -- almost at the...
Ajmera sir, let it happen. It will come anyway, everything will come out, but only thing is till it comes -- so that is the only issue.
All right, I'll take it that way. One is on the treasury side. Of course, we are doing well, and even the NPA, the INR 67 crores just now reported, exchange profit and the profit on sale INR 206 crores and INR 168 crores. But in the segment-wise result if you see, the treasury profit has come down to INR 447 crores as against INR 1,096 crores in the last quarter. So what is the overall picture -- from various sources in the treasury, where do we stand in this quarter, December quarter, where were we?
Ajmera ji, this is on account of provision made towards CDR, SDR cases to the extent of INR 400 crores, which has been added in treasury overall performance, which is already provided by the banks in the credit side. So the coming quarter also, we will not face any much NPA in this regard. This is mainly on account of CDR, SDRs, which are restructured accounts converted into NPA due to noncompliance of the terms and conditions.
Okay. So we may go back to INR 1,000 crores plus in the January - June (sic) [ March ] quarter?
During this quarter only, it is around INR 400 crores, and we have provided SR fully to the extent of 92.7%, which has added additional provision during this quarter. So we will not face much in the coming quarter, which is already 92.7%. Of the SR outstanding, INR 2,000 crores, around INR 1,850 crores already been provided. Another INR 200 crores recovery we are expecting during the current quarter. With this we will be able to complete the entire process. So we are not facing any much additional provision during the current quarter.
Okay, point well taken, sir. Ma'am, last is on the...
Mr. Ajmera, I'm sorry to interrupt. I would request you to please rejoin the queue.
All right. I will come back again.
[Operator Instructions] We have the next question from the line of Dixit Doshi from Whitestone Financial Advisors Private Limited.
My first question is regarding the credit cost. So we've now already reached 1.25% credit cost this quarter. And our net NPA is coming down to only INR 16,000 crores now. And with SMA-2 book quite under control, how do you see credit cost in FY '24, not for Q4, the next year.
So we will not be able to commit ourselves to the credit cost for FY '24.
Okay. But do you see at least we can maintain the current credit cost?
We had given a guidance of 1.56% for -- sorry, 1.7% for FY '23 and we are today at 1.56%. So we will be able to reduce it to a further number below 1.56%.
Okay. Okay. And anything planned for the QIP? I mean, will it be happening this year before March or...
So we have taken an approval to raise capital to the extent of INR 8,100 crores from the Board. We have raised AT1 to the tune of INR 1,983 crores and Tier 2 to the extent of INR 2,200. We also have Board approval to raise INR 3,800 crores as QIP. So we will come out at the opportune time, probably in this quarter.
Okay. And just last question from my end. So as you have rightly mentioned that for the industry, the loan book growth is around 20%, also because of the lower base of the last year. So with now a higher base of this year, do you feel that we can still grow at 10% to 12%, 13% next year?
So our guidance is to the extent of 10% to 12%, and we do have some good sanctions on hand. And so we will be able to maintain at least to 14% to 15% growth in our advances.
[Operator Instructions] We have the next question from the line of Ashlesh Sonje from Kotak Securities.
Just a couple of questions from my side. Firstly, if you can tell me what is the outstanding DTA amount on the balance sheet today? Is it close to INR 9,000 crores?
Yes, correct.
Okay. And secondly, can you talk about the trend on margins, because this quarter we have not seen much of an improvement there. Any particular thing you would love to comment, any one-offs over there?
The margin -- margin means NIM, you want to...
Yes.
Yes. We have given a guidance of NIM of 3%. We are well above that. You know, for the 9 months, NIM stood at 3.11%. Quarter-to-quarter, there is improvement. The second quarter it was 3.15%, and third quarter it was 3.21%. We are expecting the NIMs to be on a similar line. Year end, we will be able to maintain that minimum NIM margin of 3%.
So was there any interest benefit from recoveries in this quarter? We had about INR 700 crores last quarter.
Please repeat your question.
In the interest income, we had about INR 700 crores of benefit coming from NPL recovery last quarter.
Yes.
Yes. This quarter also, we expect a similar line only will be there for interest income.
And what was the number for third quarter?
Third quarter, you have the number.
INR 685 crores.
Okay. I'm just trying to understand that for some of the peer PSU banks we have seen expansion in margins, but not so much for us. It's only expanded by about 5 basis points. Any color over that?
You are talking about, again, NIM margin only?
Yes.
See, actually speaking, whatever the rate hikes, it doesn't pass through to the credit side immediately. So last quarter if you see that, the deposit rates have moved only from the latter half of the quarter 1. Because of that -- it depends upon the bank, which has come out positive -- the increase in the rate hike in the deposits. So it is only temporary in the last quarter. In this quarter every bank will have the same stabilization.
[Operator Instructions] We have the next question from the line of Rakesh Kumar from Systematix Shares.
So can you give us the breakup of the provision, so we have the NPA provision number. And apart from that, if I see, in the restructuring side, as per the -- there are lots of accounts, so there is some reduction. So if you can give a bifurcation of the provisions for this quarter?
Yes, sure. Total provision during the quarter is INR 4,374 crores, which comprises of INR 2,443 crores is NPA provisions, and INR 860 crores is, again, provisions for ASR securities, and certain NPI basically, which are the -- basically, which are loan loss provisions converted to securities on account of restructuring, okay. So that was INR 860 crores, and we have provided INR 1,296 crores towards DTA provision -- DTA reversal, and current tax return INR 41 crores. Yes, you rightly mentioned, there are certain reversal of INR 279 crores in the [indiscernible] provisioning, mostly on account of certain accounts where we earlier made provision because of the 7th June circular [indiscernible].
So on that account we have provided certain accounts that have come out of stress and therefore there are certain reversals.
Okay. And sir, there is some rise in the SMA numbers on a sequential basis also. So what is happening, like there is some volatility in the SMA number that we have reported.
You're talking about SMA, right?
Right, right. Yes.
Yes, SMA number for December '22, it is above INR 5 crores, it's 0.72% to the grosses, and for Q2, it was around 0.57%.
Yes. So what's the reason, like where we are witnessing this slip, which particular segment?
So we have seen little bit of rise in retail and MSME, but that is also controlled. Retailers, though there is a stress, but there is not much slippages in the retail advances. MSME, of course, there is a little bit of stress. Slippages to the extent of about INR 850 crores you've seen in MSME and close to about INR 300 crores in retail advances.
Okay. Any ad hoc provision that we have taken for that -- on the standard asset side, any ad hoc provision that we have taken?
No, no, no. During this quarter, nothing.
We have the next question from the line of Jai Mundhra from B&K Securities.
Ma'am, a, I wanted to check the RBI divergence exercise for FY '22. Has that been over for our bank?
Yes, it is completed. The divergence exercise has been completed for our bank.
Right. And there is nothing to -- I mean, the divergence is, of course, below the threshold, right?
Yes. And we have taken care of that.
In fact, there was no divergence actually. In NPA and provisioning, there was no divergence. There was only [indiscernible]; regarding that some divergence was pointed out and that was fully provided in last quarter, in September.
Right. Okay. And secondly, sir, this INR 120 crores wage revision that you have provided, this is assuming what wage revision hike?
Over 12% to 13% hike.
Okay. And ma'am on this quarter we have seen corporate slippages of around INR 500 crores -- INR 507 crores. Is there any sectoral color there, any 2, 3 large sectors there?
See, in corporate advance, this quarter it is INR 380 crores, but in MSME around INR 760 crores, agriculture is around INR 800 crores, and retail is around INR 420 crores.
The accounts are, one is [ HIL ] India, and another is [ A2D ] Infrastructure. These 2 large accounts slipped in the last quarter.
Okay. Understood. And on the same slide, sir, it says that we have around INR 5,300 crores of restructured corporate loans. Is there any breakup, or at least are there any sovereign accounts which have been there and hence the probability of default is negligible, or how should we look at that corporate restructuring of INR 5,300 crores?
These are all COVID restructured accounts under the RF-1 category. So these are all spread over different industries actually, steel sector is there, textile is there, all kinds of sectors are there in that. So none of them is sovereign.
Okay. And sir, all these loans have come out of moratorium, right? They would have started repayment?
Yes. Still a moratorium is there, some of them. There are around INR 4,000 crores account [indiscernible].
Restructured accounts in RF-1, that is specifically what you're talking about corporate loan of INR 5,300 crores. None of them are in the moratorium book as of date.
And ma'am, what is your sense on the health of this portfolio, especially on the corporate side, as they come out of moratorium. I mean would they see the same sort of a relapse rate that we have seen 2, 3 years back? Or do you think they are -- I mean what kind of slippages can one expect from this portfolio?
We don't expect any slippages and they've all come out of moratorium, and we are not finding any stress in these accounts.
And lastly, ma'am -- sorry, 2 more questions is, this quarter, again, we have seen slippages -- sorry, the recoveries and upgrades have been higher than slippages. What would be your -- I mean, should this trend continue as we go into fourth quarter, because you will have some NARCL recoveries and maybe some other recoveries. So would that trend -- sort of should continue or how should one look at it?
So we have given a guidance of slippages to the tune of INR 13,000 crores and recovery to the tune of INR 15,000 crores. So as of date we have slipped to the extent of INR 9,700 crores and recovered close to INR 13,600 crores. So we will find the trend going forward, and we will see that slippages are contained below 13,000, but we hope to recover more than INR 15,000 crores, of course.
Right. Okay. And ma'am, we have given this SMA-1 plus 2 number [indiscernible]. If you can provide the total, including below INR 5 crore loans, because I think that would be a key indicator as we transition to ECL also. So if you have that number handy, that what is the total SMA-1 and SMA-2 for bank as a whole?
So we do not have the figures right now. We will send it to you separately, sir.
Sure, sure. And lastly, what would be the LCR percentage for the bank?
LCR is about 163.
We have the next follow-up question from the line of Ashok Ajmera from Ajcon Global.
Ma'am, we are acquiring few loans and this thing, like in this quarter also we have acquired. So what is going to be our strategy for the inorganic kind of growth? And these are good accounts, I mean our tangible security is 113.41%, and the retention by the originator is 10%. So going forward, can you give some idea on this?
And secondly, in the core lending space and the overall NBFC space, how active we are and what is our target?
So NBFC, we are not very aggressive, but then if you look at the sector, NBFC and HFC, we have given close to 14% of our portfolio towards NBFC and HFC. And we have also done some co-lending and full buyout also. So the strategy will be the same even in the next quarter. We are having equally, we are giving to various other sectors also, infrastructure also. That is another growth area for us. Almost 15% of our portfolio is in infrastructure. Steel is another area that we are looking very aggressively. Petroleum and renewable energy is also another sector that we are looking at.
So when you are little -- I mean, more positive, even your initial note was also very positive on the Indian economy and the overall growth prospect. So can we, again -- like the question was in the original, I think one of the analysts had asked, this overall target of the credit which we are giving, do we not have the now clear visibility to increase the same, looking at all these kind of prospect, so that some idea can be drawn from that about how are we going to end the March?
Yes. We have a clear visibility. We have some sanctions on hand in various stages of disbursement. But we do have to align it with our deposit growth, which is at 13.65%, and going forward, if we see the same sustained growth of deposits, we will be able to increase our advances to the extent that what we have done for this quarter also.
All right, ma'am. On the operating...
Sir, I'm sorry to interrupt, the management won't be able to take any more questions ahead.
All right. Thank you.
As that was the last question for today, I would now like to hand the conference over to Shri Nitesh Ranjan, Executive Director, for closing comments.
Yes. Thank you. I think most of the things have been dealt. One very, very important aspect of the bank, which we are deeply engaged in, which is about the technology and digital transformation, which was not dealt. So in my concluding remarks, I will try to touch on that. So as I said, we are looking ahead very positively and aggressively, and therefore, 3 things are very important for us. One is building the technology capability. Second is building the partnership ecosystem. And third is building the people capability. So on the technology capability, today, we are investing -- our budget this year is around INR 1,600 crores compared to less than INR 1000 crores of budget last year for the technology CapEx and that is mostly going to building our microservices deck digital platform, secondly on building a data lake, and building a center of excellence, which we believe we will be able to create a good customer experience across the lifecycle of the customer needs.
Now if you look at the partnership, which is another important aspect of our objective, we are today in over 150 partnerships in fintech and multiple journeys that we have done, it has been possible only because of the partnership that we have built.
Third aspect of our digital transformation is about building the people capability. And another thing that we have done last quarter is we have hired a Chief Digital Officer, Mr. Rajnish Khare, who is coming off of 2 decades of experience in large private and foreign banks in a similar space. We have also identified people inside the bank for grooming the talent for the future. And still in the process of adding certain more skill sets from the market to drive the digital and technology transformation.
And -- so if we look at today, we have 20 plus [indiscernible], particularly on the lending side, and then same will also be coming on the loyalty side. In fact, on the loyalty side, one of the interesting number that I would like to share is about the fixed deposit creation on the mobile app. So today, including fixed deposit and the recurring deposit, also kind of FD, over 2.5 million accounts have been created on mobile app itself. That's your number. Over INR 1,500 crores of disbursals we have done, which we completely escaped through process, which includes the preapproved personal loans, which is currently only to our existing bank customers.
Then we have also the pre-journeys for the MSME loans. We have recently introduced a couple of more journeys for the women entrepreneurs that we [indiscernible] call the Union Nari Shakti, and also for the education loan for the premium institutions. And our objective is also to onboard more and more customers on our mobile app, which we've recently launched, and will include more than 350-plus features. And today, we have more than 20 million registered users. We get, on a daily basis, around 2.2 million clicks on our mobile app.
Similarly, all other channels of digital, be it debit card, mobile banking, or the UPI, we are seeing a phenomenal growth in the range of 40% to 70% of our AI. And as for our aspiration of having a higher level of retail business coming through or [indiscernible] coming through the digital channel, we are on the right track. And over the next 12 months, we will be deeply engaged in further creating the capability for digital transformation. It's just the brief. I wanted to share a couple of slides we have already given in the presentation, and we'll be happy to touch base with anyone of you who would like to understand. And digital for us is not only in terms of customer transaction, but even on the entire [indiscernible] recovery module, and interestingly, on the SR module, we have digitized most of it, and we are taking it forward.
So just to conclude, apart from digital, as we have discussed today, bank has very strong balance sheet in terms of the [indiscernible] ratio and the capital adequacy ratio. And we continue to show very high growth in the top line as well as in the bottom line. And we are confident that whatever guidance we have given on different parameters, we will be able to achieve that. So with this we can conclude. Thank you very much.
Thank you, all of you.
Thank you. On behalf of Union Bank of India, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.