State Bank of India (SBIN) Q2 FY22 Earnings Concall Transcript

State Bank of India (NSE:SBIN) Q2 FY22 Earnings Concall dated Nov. 03, 2021

Corporate Participants:

Pawan Kumar Kedia — State Bank of India

Dinesh Kumar Khara — State Bank of India

Ashwani Bhatia — Managing Director, Corporate Banking and Global Markets

Analysts:

Mahrukh Adajania — Elara Capital — Analyst

Unidentified Participant — — Analyst

Ashok Ajmera — Ajcon Global Services — Analyst

Kunal Shah — ICICI Securities — Analyst

Mona Khetan — Dolat Capital — Analyst

Rahul — Goldman Sachs — Analyst

Mohit Surana — CLSA — Analyst

Abhishek Murarka — HSBC — Analyst

Nilanjan Karfa — Nomura Securities — Analyst

Saurav — JP Morgan — Analyst

Sumeet Kariwala — Morgan Stanley — Analyst

Manish Shukla — Citigroup — Analyst

Jay Mundra — B&K Securities — Analyst

Prakhar Sharma — Jefferies — Analyst

Jignesh Shial — InCred Capital — Analyst

Praful Kumar — Dymon Asia — Analyst

Presentation:

Operator

Ladies and gentlemen, good day and welcome to State Bank of India Q2 FY ’22 Earnings Conference Call. [Operator Instructions] I now hand the conference over to Mr. Pawan Kumar Kedia, General Manager, Performance Planning and Review, State Bank of India. Thank you. And over to you, sir.

Pawan Kumar Kedia — State Bank of India

Good evening, ladies and gentlemen. I’m Pawan Kedia, General Manger Performance Planning and Review. On behalf of the top management of SBI, I extend a warm welcome to all joining us today on SBI Q2 FY ’22 earnings conference call. On the call today, we have with us our Chairman, Mr. Dinesh Kumar Khara; Mr. C.S. Setty, Managing Director, Retail and Digital Banking; Mr. Ashwani Bhatia, Managing Director, Corporate Banking and Global Markets; Mr. Swaminathan J, Managing Director, Risk, Compliance and Stressed Assets Resolution Group; Mr. Ashwini Tewari, Managing Director, International Banking, Technology and Subsidiaries; Mr. Alok Choudhary, Deputy Managing Director, Finance; and Mr. Charanjit Attra, Chief Financial Officer.

Before I request our Chairman sir to give a brief summary of the bank’s Q2 FY ’22 performance and the strategic initiative undertaken, 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 outcome may differ materially from those included in these statements due to a variety of factors. Thank you.

Now I will request Chairman sir to make his opening remarks.

Dinesh Kumar Khara — State Bank of India

Thank you. Very good evening to all of you. Thank you for joining this conference call. Today, I would like to start by thanking the support of all our stakeholders, including our customers, shareholders, employees and the broader ecosystem, which has always been supportive of our efforts and initiatives. I also take this opportunity to express my heartfelt gratitude to our shareholders and other financial market participants who have supported and valued the bank through the challenging times in the recent past. I feel a sense of immense pride for our institution as we discuss today our quarter 2 financial year ’22 results.

Today, some of our outcomes through this period are industry-leading by a fair margin, while others are comparable with the best, especially when normalized for the scale and complexity of our operations. I feel satisfied to see the results of our continuous efforts to improve our credit underwriting process and systems, which have led to a significant improvement in asset quality outcomes for the bank.

I’m glad to share that we could absorb a liability to the tune of 7,400 crores due to enhancement in family pensions in this quarter itself without availing the relief which was granted by Reserve Bank of India in terms of deferring it for 5 years, without impacting the profitability outcomes of the bank too. This actually demonstrates the strength of our balance sheet. I’m happy to highlight that our retail book at 9 lakh crores, which is the largest in the country, is growing at a 3-year CAGR of 16%-plus.

With an industry-leading asset quality, I’m also glad to share the progress we are making in the digital banking. 62% of our savings bank accounts opened in the first half of financial ’22 were through YONO. We opened almost 27,500 savings bank account on a daily basis through YONO in the quarter two financial year ’22. We think these outcomes demonstrate the resilience of the bank, underpinned by our process- oriented culture, the quality of our employees and the expertise and the vision of our leadership team.

While we are happy with outcomes in the current quarter, we are also mindful of areas that require further improvement. With the country crossing the milestone of 1 billion vaccination, and hopefully, the third wave not being there or being far less disruptive, the wheels of the economy picking up speed, we should see higher credit offtake in the near future. On the liability side, we continue to focus on increasing our share in current accounts while maintaining our leadership position in savings deposit.

We believe from a P&L perspective, the bank is at an inflection point. As credit growth improves, the bank will be able to better utilize our strength on the liability side. Further, operating costs are likely to lag income growth as operating leverage kicks in, which would also give a more normalized picture of the cost ratios. Our aspirations from our current position of strength is to consistently deliver a ROE of 15% through major cycles. Hopefully, as the economic growth picks up, we should be able to deliver on our targets sooner than expectation. However, we remain cognizant of the uncertainties of the world we are operating in, and therefore, we believe that it is still early to give a timeline for reaching our targets.

Concluding my opening remarks, I want to thank you all for your support to the bank. The bank, while pursuing its own progress, contributes to the progress and economic growth of the broader ecosystem. We remain committed to reward your trust in us with superior sustainable returns over the long term. My team and I are now open to taking your questions. Thank you.

Questions and Answers:

Operator

Thank you very much. [Operator Instructions] The first question is from the line of Mahrukh Adajania from Elara Capital.

Mahrukh Adajania — Elara Capital — Analyst

Hello, sir. Congratulations and happy Diwali. Sir, my first question is on recovery. So in the last con call, you had said that probably you had recovered 40 billion to 45 billion of first quarter slippages already, and that was in August. So the recoveries of the first quarter slippage would have increased only after that. So what would be the total recovery from the first quarter slippage we have so far? Would you be able to give that number, again 40 billion, 45 billion you had given last quarter?

Dinesh Kumar Khara — State Bank of India

I would say that we have — I think when it comes to recoveries, of course, whatever was the stress that you have seen in the first quarter for our retail book, and we could hold back all and we have further, I would say that 8,000 crore worth of recoveries were also affected over and above out of 15,000.

Unidentified Participant — — Analyst

Just to amplify with you Mahrukh, 15000 was Q1 gross slippages. Out of this Q2 pulled back for around 8,000.

Mahrukh Adajania — Elara Capital — Analyst

And sir, this 8,000 would be netted from the gross slippage figure of Q2, right, because it was…

Unidentified Participant — — Analyst

Mahrukh, if I might add please. If see our notes to account serial number 5, that makes very amply clear that the figure of the quarter is the balancing figure between the figure of 30th of September and the published figure of 30th of June. So this is how we have been reporting. And because this is a figure as of now and that is all the balance we have got.

Dinesh Kumar Khara — State Bank of India

So between two dates, whatever is the difference, that is the recovery, which is as stated in our notes to accounts.

Mahrukh Adajania — Elara Capital — Analyst

Sir, and in terms of — was there any tax refund or recovery income going through NII this quarter?

Dinesh Kumar Khara — State Bank of India

Yes, we do have some tax refund which is there and it is 4,922 crores and it has been there in the past also. In 2021 also, we had 1,517 crores. So I believe it’s almost like a annual feature which is there.

Mahrukh Adajania — Elara Capital — Analyst

Sorry. But this quarter, it was how much?

Dinesh Kumar Khara — State Bank of India

1,922 crores.

Mahrukh Adajania — Elara Capital — Analyst

1,922 crores. And in the fourth quarter – in the first quarter, we did not have much tax refund, right? Though in the full year FY ’21, we did have?

Dinesh Kumar Khara — State Bank of India

No, None.

Mahrukh Adajania — Elara Capital — Analyst

Got it. And sir, just one last question in terms of retail restructuring, would you be able to give a breakdown of how much was restructured under Express and how much was restructured under home loans?

Dinesh Kumar Khara — State Bank of India

I think in the express, there was hardly any restructuring. It was all in the home loan or in SME category.

Mahrukh Adajania — Elara Capital — Analyst

Okay. Thank you so much. Thanks a lot.

Operator

Thank you. The next question is from the line of Ashok Ajmera from Ajcon Global Services. Please go ahead.

Ashok Ajmera — Ajcon Global Services — Analyst

Thank you for this opportunity. Good afternoon and a very happy Diwali to all of you. My congratulations to you Khara sahab and your entire team of Setty, Bhatia, Ashwini and all the DMD top management and entire stock of the bank for such a fantastic results of the State Bank of India. Just immediately after we came out of the pandemic, almost coming out of it, it’s a fantastic feeling also now your bank has become like almost about INR30,000-plus crores profit bank, net profit bank, which is a very welcome sign.

Having said that, sir, I got some small varying point. Number 1 is that the 7,418 crores which you have provided for because you had sufficient room here this time because the slippages also came down to 4,176 crores as against 15,000 crores in the last quarter, will it be available for the tax benefit also that because the dispensation was for 5 years and you have provided the entire in the one year itself. Will we get the benefit of the entire provision in the income tax also?

Unidentified Participant — — Analyst

If you see the RBI later in this regard and approval, RBI basically wanted that the bank should take it in the quarter itself, they should not amortize it. But they are also given b, if some bank doesn’t have the room, they can amortize it for five years.

Dinesh Kumar Khara — State Bank of India

I think it was an option which was given by RBI either to defer it for 5 years and also carry out the treatment which they had prescribed or absorb it in the first year itself, in the quarter concerned. So since RBI dispensation has given both the options, I’m sure tax authorities will be in a position to give comment.

Unidentified Participant — — Analyst

Actuarial valuation. It is an actuarial valuation, so there is no tax angle involved to it.So but only as a cost. To the extent, it’s a cost, it will be allowable cost.

Ashok Ajmera — Ajcon Global Services — Analyst

Yes, allowable cost. Yes, yes. Okay. Sir, thank for this clarification. For this SMA 1 and 2, you have given above 5 crores or 6,690 crores for this Slide number 31. What is the total figure even if you take less than 5 crores also, sir, the entire amount?

Unidentified Participant — — Analyst

That we don’t really look into, but it’s not a significant number at all.

Ashok Ajmera — Ajcon Global Services — Analyst

Sir, it’s nice to know that it’s not a very significant figure. Some items on the expenses and income, some small queries are there. The miscellaneous expenses shot up to 1,709 crores from 1,000 crores. At the same time, the miscellaneous income came down to only 365 crores from 1,181 crores. Can you throw some light on this? One is that miscellaneous expenses going up by 600 crores, 700 crores and miscellaneous income is coming down by 700 crores, having the effect of multiple — I mean, effect of almost about 1,400 crores.

Unidentified Participant — — Analyst

The blended income would have an impact of that, no miscellaneous expenses are…Yes, in case of miscellaneous expenses, what you have pointed out, if you see that 1,013 to 1,709 kind of figure. Actually, the development in this regard is that the expenses have gone for GST increases there because GST operating expenses increased a bit. So GST increased. Then we had some increase in the donations also, like we give donations to our SBI Foundation and then we met other donations during this year also. So that is also increase of around 100 crores. Then law charges, audit fees, then security GST and some of the other expenses, which are numerous and mini. So average all these things, they make up for this difference.Thank you. Mr. Ajmera, may we request that you return to the question queue for follo-up questions. The next question is from the line of Kunal Shah from ICICI Securities. Please go ahead.

Kunal Shah — ICICI Securities — Analyst

Yes. Congratulations to the entire team for great set of numbers. So first question is on yield so not the overall interest income, but particularly yield on advances. So if we calculate that has also gone up. So was there any element of recoveries, interest recoveries out there in this? And where should we finally see the yield on advances stabilizing? So that’s the first question.

Dinesh Kumar Khara — State Bank of India

Yield on advances, yes, there is a component of some of the write-backs, which we had. And also, the other aspect is the lower amount of interest reversals also would have an impact on the loan advances. In terms of normalizing, if at all we do, I think we’ll have the number — just one sec, let me just try and get that number. If we normally for the — normalize for the one offs on the yield of —

Unidentified Participant — — Analyst

In the yield on advances there is no one-offs, yields on advances, basically if you see, the last quarter it was 15,166 crore. So there were reversal.[Speech Overlap] not happened so that’s why it is seen like this.And this quarter slippage has been very less. So we have got, again, whatever reversals happened last quarter. Those reversals were then again booked. And this time reversals were very less. It is a reflection of the asset quality.

Dinesh Kumar Khara — State Bank of India

Yes. It’s the a reflection of the asset quality.

Kunal Shah — ICICI Securities — Analyst

And any recovery from DSSL or anything which is getting recognized? So this will be entirely — DSSL will be entirely in provisioning.

Dinesh Kumar Khara — State Bank of India

So DSSL, we have not written off so that’s why that has not come in here. It has only – it has affected the provisions.

Kunal Shah — ICICI Securities — Analyst

Okay, sure. And secondly, in terms of growth. So again, on the corporate side, there is still deleveraging and that’s the only segment which was down quarter-on-quarter and that too 4 odd percent. So last time you were highlighting in terms of the underutilization of the limits and all. But finally, I think we need to see some corporate growth coming back for the industry as such. So what would be your outlook in terms of some indicators, lead indicators are suggesting that it should be prepared for investment-related capex. But from SBI side, are we seeing that over the next couple of quarters, we should see it coming back?

Dinesh Kumar Khara — State Bank of India

Even now also the capacity utilization stands at around 60% only. So when it comes to the corporate credit, it is a function of the capacity utilization, first of all. And — but only one thing which I must mention that we already have got unavailed term loan and unutilized working capital almost over 450,000 crores. And we have got some pipeline for the new proposals also, which are, as I is about 115,000 crore. So that is a kind of a number. But in the month of October, we have certainly seen some traction in terms of the corporate credit growth. Maybe I’ll request Mr. Ashwani Bhatia to further add his view on this subject.

Ashwani Bhatia — Managing Director, Corporate Banking and Global Markets

Yes. So we have seen a pickup in the first month of this quarter. You’re absolutely right that in the quarter ended 30th September, corporate loans was below the March levels. As we get into the busy season, we are already seeing more inquiries, higher utilization. This utilization may also come from oil companies. At the same time, we are seeing some deleveraging happening as far as iron and steel industry. But from the iron and steel industry, we are also getting proposals for greenfield, brownfield expansion at the same time.

We are getting inquiries from P&I and other assets, we think the pipeline right now as our Chairman said is pretty [Technical Issues].

Unidentified Participant — — Analyst

And international is going on strong. I think this quarter, again, there was further rise. So I think that the overall demand for quality Indian corporates in some of the countries that is very much on.

Dinesh Kumar Khara — State Bank of India

So in fact, in the overseas operations, we are generally having exposure to all the well-rated corporates. And because all these economies are doing very well, so it has opened up huge a opportunity. We are quite confident of building a healthy book in the international space.

Operator

Thank you. The next question is from the line of Mona Khetan from Dolat Capital. Please go ahead.

Mona Khetan — Dolat Capital — Analyst

Yes. Hi sir. Good evening and thanks for taking up my question. So on the non-COVID, how much would be the non-COVID MSME restructuring in our book that was under the earlier release team?

Unidentified Participant — — Analyst

Total restructuring is 38,000 crores. Out of this 30,000 is on account of restructuring one and two. [Speech Overlap] is the legacy restructuring. Out of which around 3,700 is the MSME.

Mona Khetan — Dolat Capital — Analyst

Okay, got it. And on DHFL recovery, just a clarification. So of the 10,000 or so of exposure, about 4,000 will be taken through the recovery and upgrades in the GNPA movement, while the rest of 6,000 will go via the write-off? Is that a correct understanding?

Dinesh Kumar Khara — State Bank of India

Request you to please repeat your question.

Mona Khetan — Dolat Capital — Analyst

So when we look at the GNPA movement this quarter and the DHFL recovery, so of the 10,000 crores of BHFL exposure, 4,000 crores which has been recovered, will go through the upgrades and recoveries line of 7,000 crores in total, whereas the rest of 6,000 will go via the write-off? Is that the correct understanding?

Dinesh Kumar Khara — State Bank of India

No, actually, you see what happened, we had provided for fully in the case of DHFL. And having provided for fully to the extent we have got the recovery. Of course, it was not written off in our books. Since it was not written off in our books to the extent of the recovery, we could reverse back the provisions. And the remaining of course, since it is resolved, so remaining will have to be written off.

Mona Khetan — Dolat Capital — Analyst

Right. So of the 7,000 crore of upgrades that we are seeing —

Dinesh Kumar Khara — State Bank of India

As far as the person is concerned because we are holding excess provision for that.

Unidentified Participant — — Analyst

If I would request your attention on Slide number 30 of our presentation, real issue of write-off would be — I mean in entire half year it is 3,164 crore because for the purpose of NPA and AUCA we consider any movement from NPA and AUCA as part of our book only. So the real write off in this entire half year is 3,164 as showed on Slide number 30.

Mona Khetan — Dolat Capital — Analyst

Okay, okay. And just finally on the — again coming to the movement of GNPA, when we look at the slippages, as you mentioned, the pullback of previous quarters are netted off in this quarter. So ideally if we have to look at the gross slippages and recoveries, 8,000 crore or so will be added to both slippages as well as recoveries and upgrades. Is that a correct understanding?

Dinesh Kumar Khara — State Bank of India

You will stay with the slide 13 see, like say, you have every day some slippages, right, and some upgradations. So if you do cumulatively like this that in 365 days, maybe the numbers will be ballooning like anything, right? So at the end of the year, what is your total slippage is the number as on the previous 31 March and the number as on the current 31 March. So this is how it is calculated. This is the balancing figure as I have told you that this is the balancing figure as on 30th September, what has been reviewed and published by the bank minus already published figure for the previous quarter. So this is how this goes, and this is a concept which should be understood.

Mona Khetan — Dolat Capital — Analyst

Sure. Got it. And is it possible to get the breakup of fresh slippages segment wise?

Unidentified Participant — — Analyst

I think we — you can do the split — Investor Relations department will share with you. But mostly, it’s corporates only. It’s not retail. This is — majorly it is all corporate.

Operator

Thank you. [Operator Instructions]. The next question is from the line of Shagun Verma from Goldman Sachs. Please go ahead.

Rahul — Goldman Sachs — Analyst

Yes. Thanks. This is Rahul [Phonetic] here. Good evening everyone. Just a follow-up on the slippages question. So even though it’s a sort of a net slippages during the quarter, is it fair to assume that the NBFC account which has been, which was in the news has already been accounted for in this quarter?

Dinesh Kumar Khara — State Bank of India

It is fully provided for. It is accounted for and fully provided for.

Rahul — Goldman Sachs — Analyst

Second clarification question is, can you just share the — what would be the loan duration of these restructured loans? I mean, when would these accounts start coming out of the restructuring base?

Dinesh Kumar Khara — State Bank of India

In case of home loans, most of the people availed moratorium ranging from 18 to 24 months. But what is interesting is that many of them probably would start paying off. It is — basically, what we have seen is that many of them are having a high signal cost. Probably they have just taken as a safety measure. Most of them will not — may not avail the full moratorium what they have taken.

Unidentified Participant — — Analyst

It is actually hedged against the possible risk of the third wave or disruption in the cash flows.

Dinesh Kumar Khara — State Bank of India

So technically, this [Indecipherable] is for 18 months, but I think at the end of 1 year, we may see many of them becoming normal.

Rahul — Goldman Sachs — Analyst

All right. What about SME loans, sir? And how is the stress in general for the SME accounts?

Dinesh Kumar Khara — State Bank of India

So the restructured book is because there’s a moratorium, [Technical Issues] but there is a turnaround in the sector. Some sectors are doing well, particularly second [Indecipherable] they have taken the restructuring. So hopefully, I think they will also be able to come out before they complete the 2-year moratorium. There also many MSMEs [Indecipherable].

Unidentified Participant — — Analyst

Actually, this restructuring, there is a characteristic difference because this is essentially a function of the disruption of cash flow. When the cash flows are getting repaired and restored, people would like to come out of the restructuring tag. That is what we have generally observed. So I think this is what we expect to witness going forward.

Rahul — Goldman Sachs — Analyst

All right. Sir, just two more questions. On the growth side, you talked about corporates still have not availed of the credit levels. But when you look at Slide 10 of your presentation deck, do you see the loan book reduction across many industries. So is this because of repayments there’s a competitive pressure that you are witnessing? Can you just throw some color on that? And how do we kind of start — if you’re seeing the competitive pressures, how do we kind of respond to that?

Unidentified Participant — — Analyst

See the point is when we look at this particular slide, wherever we have seen like iron and steel sector, it’s already similarly in airports also. We had – one account got repaid. That is the reason, likewise in case of So in fact, there’s highly any I mean hardly any reasons for us to really visualize that it has gone to the completion. It is not really so.

And similarly, part of it is also on account of the repayments which are due and which you have received on time. So that is also a rebuild. But it has not been replaced by the fresh disbursements in the sector, that is a reason. So we — at is not really attributed to their competition taking out — taking over our accounts.

Rahul — Goldman Sachs — Analyst

This sanction limit of INR4 lakh crores plus you talked about in your press what percentage can really fructify from this and over what period?

Unidentified Participant — — Analyst

Eventually, as I mentioned that it is a function of the capacity utilization. So there are many moving parts, but our expectation at all, I can put it like this. As of now, we have seen the credit growth about 6%, 7%. So I hope that the kind of agreements which will come in and kind of dispersion such as the way in the tuna, we should perhaps see their growth in somewhere around 10%.

Operator

Thank you. [Operator Instructions] The next question is from the line of Mohit Surana from CLSA. Please go ahead.

Mohit Surana — CLSA — Analyst

Hi, and congrats on great set number. So I had a question, if I try normalize the performance of this quarter for the family pension that we’ve provided upfront basis and adjusted for like one-off recoveries from the DST. It looks like we’ve already crossed our threshold of 15% ROE. And given the trends that we’ve seen in asset quality, it looks like we certainly will undershoot credit costs in the near term, right, at least for the next few quarters or a couple of years at least. So in that sense, it looks like the bank is quite well positioned to kind of deliver more than what we have indicated, right? Because you’re already at 15% ROE coming just out of this. So just wanted to understand, right, that this correct? And what is the risk?

Unidentified Participant — — Analyst

I think your assessment is quite correct. But we do believe that whatever cost or risk we can perceive we should be rather prepared for meeting out all that in time. So we had the available, and we have done that. So hopefully, because we all operate in the uncertainties.

What uncertainty will head from where an rely does not know. So we have to ensure that while we have time when we have resources to our site, we should rather provide for it.

Mohit Surana — CLSA — Analyst

Got it. Sir, and the second question I had was on the core net interest margins for NII. We reported a 31,000 crores approximate number. Out of that, there is some refunds that’s where some maybe because of asset quality. So from a forward-looking perspective, what should be the adjustment to get the core NII of the bank, which is like more a recurring number that 1 should work with?

Dinesh Kumar Khara — State Bank of India

Actually, when it comes to NII of course, every year, there will be something on the other. This is what we have seen in the past. And I think those one-offs will continue. And those are not that significant in number considering the overall incomes. So I think perhaps I was not beneficent to give you any kind of a normalized number, because this has been there in the past also. It has happened this year also.

And also, there will be marginal differences there and for instance, I’ll just share with you that in the year ’21, ’22, we have the income tax refund of interest on the income tax of 1,022 crores. In 2021, at 1,517 crores. So likewise, we have seen that on a year-on-year basis, there’s always one such of an issue.

Mohit Surana — CLSA — Analyst

So this whole of 1900 crore is this quarter.

Unidentified Participant — — Analyst

Sorry?

Mohit Surana — CLSA — Analyst

The whole of the income has come in this quarter in sales this quarter.

Unidentified Participant — — Analyst

We recognize that we received. That’s all.

Mohit Surana — CLSA — Analyst

And what’s the outlook on margins? We are at a decent point in terms of margins. And it looks like rates have kind of clearly bottomed out and depending upon how much RBI wants to tighten liquidity, it can go up. So what would be a NIM outlook, let’s say, next 12, 18 months, not one of the quarters?

Dinesh Kumar Khara — State Bank of India

Our effort would be that we should be range bound between 3.20 to 3.30.

Mohit Surana — CLSA — Analyst

Thanks and congrats again.

Operator

Thank you. The next question is from the line of Abhishek Murarka from HSBC. Please go ahead.

Abhishek Murarka — HSBC — Analyst

Good evening and congratulations for the quarter. So a couple of questions. One, what is your exposure to the Calcutta-based NBFC and whether that is now fully provided for, I guess, so just what is the exposure to that group? And secondly, if you can share the incremental yield on express credit and home loans, that would be useful.

Dinesh Kumar Khara — State Bank of India

Well, as far as the Calcutta based NBFC is concerned, it is fully provided for. And as regard the yield on excess credit and home loan is concerned, I would not be in a position to share the data because I’m not keeping it with me. Maybe you can get in touch with our Investor Relations.

Abhishek Murarka — HSBC — Analyst

Sure. And what would be the exposure to the Calcutta based NBFC? Is it around 2,000 crores?

Unidentified Participant — — Analyst

2,700 crores. The entire amount has been provided for.

Abhishek Murarka — HSBC — Analyst

Yes, 2,700 crores. And your recovery from DHFL, did any part of it flow through interest income? Just trying to clarify that.

Unidentified Participant — — Analyst

No, Nothing. Okay.

Operator

Thank you. The next question is from the line of Nilanjan Karfa from Nomura. Please go ahead.

Nilanjan Karfa — Nomura Securities — Analyst

Thank you very much sir. Just a question on capital. I mean we are doing quite well. And hopefully, the growth is in front of us. Is there a possibility you want to raise capital over the next 12 to 18 months?

Dinesh Kumar Khara — State Bank of India

We still have a elbow room for about INR4,000 crores of AT1 to be raised. Board has already given us the approval for that. And the current kind of a growth of about 13-odd percent, we can easily support with our existing capital. For all purposes, we have already raised 6,000 crores in the month of October in the AT1. If we add that, we are at about 14.22%. So the 14.22% capital, we will be looking at the growth opportunities and if need be, we will be tapping the market, but that will be at the opportune time, keeping in mind the interest of all the stakeholders.

Nilanjan Karfa — Nomura Securities — Analyst

Right. And sir, any color on potential IPOs of two of our subsidiaries, the general insurance and mutual fund? Is that also probably factoring in your calculations?

Dinesh Kumar Khara — State Bank of India

No, we have not factored the IPO of our subsidiaries. As I have mentioned in the past also, we have been nurturing these entities, and it’s not a compulsion of our raising capital, which will really push us for taking them to IPO route, it will be rather meeting their own ambition and aspirations because when they have become the industry leader in their own right, they should get listed. That will be something the guiding principle. We are already engaging with our JV partners and in the case of one of the subsidiary and at the material point and the opportune time, we will be sharing that information with you.

Nilanjan Karfa — Nomura Securities — Analyst

Right, good. And sir, on — going back to the movement of NPL, I just wanted to reclarify this. So for example, if there was INR100, which slipped in Q1 and we managed to recover 50 we are basically what we are reporting in Q2 is basically a net of 50. So basically, what you have reported is, is it cumulative Q1 and Q2 number? Is that right?

Dinesh Kumar Khara — State Bank of India

This is the slippage part which you are saying?

Nilanjan Karfa — Nomura Securities — Analyst

Yes.

Dinesh Kumar Khara — State Bank of India

Yes, this is how we reckon the slippages. At the — on two different dates and this particular pace, 30th September and prior to that, 30th June. So whatever was a slippage number as on 30th June and whatever is the slippage number as of 30th September, the difference between the two would be the slippage.

Operator

[Operator Instructions] The next question is from the line of Saurav from JPMorgan. Please go ahead.

Saurav — JP Morgan — Analyst

Sir, two questions. One is on the COVID drawdown from 9,000 crores to 6,200 odd crores, that’s on account of the NBFC.

Dinesh Kumar Khara — State Bank of India

No, no, no. See, the point is that when we did the, COVID provision, it is more like a adopt provision, so it’s not a specific provision. And in any case, we have got the obligation unless rental. We — the general provisions will have to have as on 31st of March. That is there’s an accounting norm. The other factor that, as I mentioned that in the second — in the first quarter, whatever slippages we have seen, we have been in a position to pull back almost all. So that is the reason why whatever additional provision we have brought in, we have already reversed it also, because we don’t see the possibility.

And the other thing is that our total restructured asset aggregated to about 30,000 crores. And we have looked into the the PD computation of our legacy book, and we have seen that generally about the [Indecipherable] 30% only. And if we go by those reckoning those numbers, we don’t need more than 9,000 crores in any case. Also, I would like to like you to consider the other fact that this restructure book is being very differently as compared to the legacy restructured book because it is attributed to the cash flow disruptions as and when cash flows are getting repaired, we have seen the customers coming back and keeping also. So in view of that, we have kept about 20% kind of a provision on the total book. But as we see visibility of the behavior, if need to see our – these posts also.

Saurav — JP Morgan — Analyst

And the second question, sir, is on your ROE, ROA targets. So the point is that if your credit cost normalizes and your ROA is exceeding this point here to 1% range you have, will it be fair to assume that you could possibly decrease your net interest margins to kind of compensate kind of most of the growth?

Unidentified Participant — — Analyst

I think we’ll react to the situation when we come to that.

Operator

Mr. Saurav, does that answer your question?

Saurav — JP Morgan — Analyst

Yes.

Operator

Thank you. The next question is from the line of Sumeet Kariwala from Morgan Stanley. Please go ahead.

Sumeet Kariwala — Morgan Stanley — Analyst

Hello everyone. Congratulations on great set of numbers. I had a question on margin progression. And how should we think about it as the interest rate spike is compared to past cycles this time, if I look at the share of repo, linked loans are higher given the regulatory changes, the savings deposit rates are much lower. So should one expect margins to improve quite uniquely as the rate cycle[Technical Issues]?

Dinesh Kumar Khara — State Bank of India

See, when it comes to the behavior of deposit and liabilities and the asset, the repricing at what periodicity it can happen will actually decide this particular aspect. So since we have when it comes to the interest rate sensitive deposit, they are essentially our fixed deposit. And they are normally contracted for our maximum deposit and the fixed deposits are in the rate, in the one year category. So I think maybe we’ll have some — for some time, we might have some opportunity. But MCLR as and when and our — about 29%, 30% of our accounts are EVLR raised, when it comes to our advances and almost about 12% are3 in the fixed cost. So 20% is EBLR. About 37% of our book is either fixed or EBLR. And if at all, EBLR also, it is external benchmark link. So if the interest rate movement happens, we should be in a position to take care of our yield or our interest earnings. So that is something that’s what we expect. But yes, of course, much of it evolve as and when we will reach towards those stages, but this is what — how I look at the situation.

Sumeet Kariwala — Morgan Stanley — Analyst

Thank you. This is early days. But if I were to ask you how should I think about savings deposit rates over the next 1, 2 years, as interest rates move up, is there any framework that you have in mind?

Dinesh Kumar Khara — State Bank of India

I think it’s a very dynamic situation, and we have to remain vigilant of the situation on the ground and be responsive to the needs of the customers and also the market.

Operator

Thank you. The next question is from the line of Manish Shukla from Citigroup. Please go ahead.

Manish Shukla — Citigroup — Analyst

Good evening and thank you for the opportunity. My question was on RWA density, RWA to total assets, that has been steadily falling. How much of it is driven by the demand and how much of it is maybe caution or risk coverage on part of the bank.

Dinesh Kumar Khara — State Bank of India

See, when it comes to — of course, it is partly attributed to — it’s a very conscious effort in terms of our underwriting principles that we follow and partly attributed to our policies. And having said that, I would also like to mention that our excess credit which is considered to be unsecured, it has gone up. And — but yes, of course, it’s eventually what we are only keeping in mind is some kind of a risk reward relationship in terms of risk and what all reward we should generate. So with that in mind, we — it’s kind of a trajectory seed. So that’s all I would like to answer your question.

Manish Shukla — Citigroup — Analyst

So express credit will have a risk weight of 100%, right?

Dinesh Kumar Khara — State Bank of India

Yes, of course.

Manish Shukla — Citigroup — Analyst

Yes. So my question is that, I mean, I’m assuming that there would have been good benefit of NPA decline over the last one year on the RWA front. Now incrementally, if NPA decline were to moderate and express credit continues to provide towards the overall retail. Do you see RWA density inching higher?

Dinesh Kumar Khara — State Bank of India

I think it will go up marginally, but will remain within the tolerable limits.

Manish Shukla — Citigroup — Analyst

Okay. All right. Thank you.

Operator

Thank you. The next question is from the line of Jay Mundra from B&K Securities. Please go ahead.

Jay Mundra — B&K Securities — Analyst

Hi. Thanks for the opportunity. First question, sir, we used to discuss disclose the segment-wise slippages, right? So this quarter, maybe there is an inter-quarter netting of slippages that we have done. But if you were to show the segment wise slippages like we used to do earlier, retail corporate agri SME, that would be very help.

Dinesh Kumar Khara — State Bank of India

See what happened. We used to show segment was earlier because of the slippages were a matter of concern. So now it has come down significantly, and we feel that maybe if it all if somebody would need it on a segment wise, maybe you can reach out to our VP investors relation. Those details will be available, but it is nothing too great a bit to bigger number. So that’s why we have not given the segmentals.

Jay Mundra — B&K Securities — Analyst

Sure, sir. Secondly, on the ECLGS book sir, if you can quantify how much is the outstanding ECLGS? And how would you read the health of this portfolio, because I mean I just wanted to understand when this book, when the moratorium book will come out of moratorium in this one, how do you read that progression here?

Dinesh Kumar Khara — State Bank of India

Early days, but it still maturation has yet to happen. Nevertheless, as of now, it is behaving okay, and about 26,000 is the ECGLS overall.

Jay Mundra — B&K Securities — Analyst

Sorry, how much, 26,000?

Dinesh Kumar Khara — State Bank of India

About 25,078 is the book. 26,360 and as of now, only 2% we have seed, which has got classified as NPA in the GECL.

Jay Mundra — B&K Securities — Analyst

Right. So when this 2% of the loan slips, the entire corresponding, the other facility, the main facility will also be classified as NPA, right?

Dinesh Kumar Khara — State Bank of India

It is the total impact of that.

Jay Mundra — B&K Securities — Analyst

Okay. Understood.

Dinesh Kumar Khara — State Bank of India

There’s a total impact of the NPA in the GCL book.

Jay Mundra — B&K Securities — Analyst

Understood. And otherwise, you are seeing the portfolio behaving reasonably in line with other part of the book, right, non-EPA?

Dinesh Kumar Khara — State Bank of India

Otherwise, we don’t see much of a challenge in this.

Jay Mundra — B&K Securities — Analyst

Understood. And thank you. All the best.

Operator

Thank you. The next question is from the line of Abhishek Khanna from Jefferies. Please go ahead.

Prakhar Sharma — Jefferies — Analyst

Good evening sir, this is Prakhar and congratulations to you and your team for a phenomenal performance. Sir just one request, if you would reconsider going back to the asset quality disclosures on a gross basis, because as we get into the third and the fourth quarter, it will become even more difficult for us to understand the quarterly performance. And most of the peer set or mostly are all on daily stamping and gross quarterly disclosure. So will humbly request if you could reconsider switching back to the gross exposure next time.

Dinesh Kumar Khara — State Bank of India

No, it has been consistent. Whatever disclosures that you have seen in the previous quarters are also the slippages are net of pullback that happened during the quarter. So that’s how it is getting reported. Maybe this quarter being such a small amount of 1,000 crores it is attracting a lot of attention. Otherwise, the way in which it is always calculated in the opening balance at the beginning of the quarter and the closing balance, the portion that slipped and remind is what is disclosed as the slippage because as [Speech Overlap].

Prakhar Sharma — Jefferies — Analyst

Can I just reconfirm, were you also in the past, you were reporting on inter-quarter adjustment also like something that slipped in 1Q but recovered in 2Q. Was that also netted up in the past?

Dinesh Kumar Khara — State Bank of India

It is. It has been done in the past also. It has been a consistent practice outlook. And other banks, as I understand, are also doing likewise.

Unidentified Participant — — Analyst

Because in any banking as GMD Finance explained, every day there could be on to account slipping and then within two-three days they will be getting pulled back. So in case if we have to keep aggregating these numbers, that will be kind of — will not reflect a true position. It’s always a comparison between the opening and closing position. The slippages, that’s all that slipped and remind in the slippage category, is what is disclosed at the end of the quarter. So there has been no change in the disclosure practice as far as this particular item is concerned.

Prakhar Sharma — Jefferies — Analyst

Okay. Thanks for the clarification. Thank you.

Operator

Thank you. The next question is from the line of Mahrukh Adajania from Elara Capital. Please go ahead.

Mahrukh Adajania — Elara Capital — Analyst

Thank you sir for taking my question again. So I just wanted to reclarify one thing again on BHFL. So basically, the entire exposure, including loans and bonds would have passed through the recovery or write-off line in the movement of GNPL? Is that correct?

Dinesh Kumar Khara — State Bank of India

Right.

Mahrukh Adajania — Elara Capital — Analyst

If it goes around 100 billion, right because some banks show only GNPL, but I think you show GNPS, bond and loans both. And in terms of what is accounted for in the recovery line and what is accounted for in the write-off line, would that be 40 billion, 60 billion, 40 billion and 60 billion, is that the correct?

Dinesh Kumar Khara — State Bank of India

Mahrukh, I think we can provide you more granular detail [Speech Overlap] readiliy available right now.

Unidentified Participant — — Analyst

But as a matter of principle, as you would know, you were aware of the exposure that we had in both loans and deal investments. And this was an account which was fully provided for both the loans as well as bonds. And the recoveries are also in public main. So when the provision is returned back, it is returned back to the extent of recovery. The balance of provision is utilized for writing off. So there has been no change in the accounting treatment, for this account as compared to any other accounts. But if you need the granular details, I am sure our Investor Relations will be able to provide you bilaterally.

Mahrukh Adajania — Elara Capital — Analyst

And just one more question in terms of slippage for the quarter. You said almost entire is corporate, so basically 2 to 3 accounts live with it.

Dinesh Kumar Khara — State Bank of India

But we didn’t say almost [Indecipherable] major part, largely corporate, and you also know one large account is known. So that’s only standing.

Mahrukh Adajania — Elara Capital — Analyst

Other than that account, there were no other corporate slippages, is it?

Dinesh Kumar Khara — State Bank of India

There were a few account but [Indecipherable].

Unidentified Participant — — Analyst

But in terms of number, it may not be as large.

Dinesh Kumar Khara — State Bank of India

4,173 and 2,700 both numbers are available with you. So the remaining cannot be anything chunky.

Operator

Thank you. The next question is from the line of Jignesh Shial from InCred Capital.

Jignesh Shial — InCred Capital — Analyst

Hi, thanks for the opportunity. I just wanted to check there have been a lot of soise happening around on the digital lending segment side altogether. Though it is a smaller segment compared to what SBI does in general, but can you throw some light on how you are seeing this particular space and some more details about your [Indecipherable] that will be pretty useful.

Unidentified Participant — — Analyst

Yes. We are, in fact, as far as Yono is concerned, a preapproved personal loan is something which has become very popular, and it is end to end digital. And we are generally underwriting about 5000 crores worth of PAPL almost [Indecipherable] on a quarterly basis. The first quarter, of course, was little subdued so that side it was about 2,000 to 500 crores, 2000 to 800 crore [Phonetic] kind of a number.

So already, YTD we have done about 7800, 75 crore [Phonetic] as preapproved personal loans are concerned in the current financial year, YTD. And I’m quite hopeful that the remaining two quarter, we can easily do at least 10,000 crores plus in the preapproved personal loans.

So that is one part of it. Apart from that, we are using this for doing our KCC reviews also almost about 3.65 lakh crore worth of portfolio got reviewed with the help of Yono. And also, we are using it for opening of the accounts. About 27,000 odd accounts are getting opened on a daily basis. In the current quarter of this financial year sold up almost about 5,000 crore worth of mutual fund with the help of Yone. And our total registration as of now is about plus 4.4 crores. And we have online banking facility, which is — which we started offering way back in the year 2001, which is 20 years old of facility. There our total registration is about 9 crore plus. There’s a new offering where our total registration is 4.4 crore.

We are seeing average daily login of about 1.20 crore kind of a number on Yono. Even non-life policies also, about 22 lakh policies have been sold in the current financial year until now, in the first half of the financial year. So that’s what it is. And even in the gold loan, we are actually leveraging it in a very big way. And it actually helps people to have the convenience they can apply for the gold loan, they can have it sanctioned. Only the physical delivery is to be done by using a particular reference number at worth about 10 lakh cards, 60,000 crore worth of gold loans also could be disbursed with the help of [Technical Issues].

Jignesh Shial — InCred Capital — Analyst

Understood, sir. And just this was really helpful. Could you just — there have been a lot more large peers are coming up or doing the overall quantum of [Indecipherable] could be smaller in the form DNPM and all. Are you guys seeing it up that this particular segment can become gradually over a period of time. A very tough competition as far as consumer lending or MSM is concerned? Or how do you see that particular space are growing of. What’s your sense over this?

Dinesh Kumar Khara — State Bank of India

When it comes to the commoditized product, they can be easily rolled out and offere through the Yone. This is what the strategy we are following. And our effort going forward would be that as many as commoditized products, we should be in a position to offer through this channel. So maybe it is the banking or maybe our financials of the store, where we are in a position to sell the products of our various subsidiaries also. So that’s what the strategy would be.

Operator

Thank you. Ladies and gentlemen, we will take one last question from the line of Praful Kumar from Diamond Asia. Please go ahead.

Praful Kumar — Dymon Asia — Analyst

Just to conclude on the Yono, [Indecipherable] platform in the next couple of years, is there any plan to benchmark the valuation for Yono as well because given the franchise and kind of work you’re doing on Yono it’s much more underappreciated, I think, by the broader community? Thank you.

Dinesh Kumar Khara — State Bank of India

At a material point of time, we will consider. But as of now, we intend to ensure that we make it robust and so that it should be in a position to fetch the right value, as and when if we decide to monetize it.

Praful Kumar — Dymon Asia — Analyst

Appreciate it. Thank you and all the best to the team.

Operator

Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to the management for closing comments.

Dinesh Kumar Khara — State Bank of India

Thank you very much. Wish you all a very, very happy Diwali. May be very happy, healthy and prosperous for everyone. Thanks a lot.

Operator

[Operator Closing Remarks]