State Bank of India (SBIN) Q4 FY23 Earnings Concall Transcript

State Bank of India (NSE: SBIN) Q4 FY23 earnings concall dated May. 18, 2023

Corporate Participants:

Sanjay Kapoor — General Manager, Performance Planning and Review

Dinesh Kumar Khara — Chairman

Saloni Narayan — Deputy Managing Director, Finance

Analysts:

Ramesh Bhojwani — Mehta & Vakil — Analyst

Vishal Goyal — UBS — Analyst

Jai Mundhra — ICICI Securities — Analyst

Nitin Aggarwal — Motilal Oswal — Analyst

Sushil Choksey — Indus Equity — Analyst

Rahul Maheshwary — Ambit Asset Management — Analyst

Presentation:

Sanjay Kapoor — General Manager, Performance Planning & Review

Namaste and good evening, ladies and gentlemen. My name is Sanjay Kapoor and I’m the General Manager, Performance Planning and Review Department of the Bank.

On the occasion of the declaration of the FY ’23 results of the Bank, it gives me immense pleasure to welcome the analysts, investors and our colleagues for an in-person meeting. I also extend a warm welcome to the analysts, investors and colleagues who have joined this presentation through a live webcast.

We have with us on the stage our Chairman, Shri Dinesh Khara at the center; our Managing Director, International Banking, Global Markets and Technology, Shri C.S. Setty; our Managing Director, Corporate Banking and Subsidiaries, Shri Swaminathan J; our Managing Director, Risk, Compliance & SARG, Shri Ashwini Kumar Tewari; our Managing Director, Retail Business & operations, Shri Alok Kumar Choudhary; our Deputy Managing Director, Finance, Shrimati Saloni Narayan; our Deputy Managing Directors heading various verticals and Managing Directors of our subsidiaries are seated in the first row of this hall. We are also joined by CFO and Chief General Managers of different verticals, business groups.

To carry forward the proceedings, I request our Chairman sir to give a brief summary of the Bank’s FY ’23 performance and the strategic initiatives undertaken. We shall thereafter straightaway go to questions and answers session.

However, before I hand over to the 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.

Dinesh Kumar Khara — Chairman

Thank you. Thank you very much. Very good evening to all of you. Thank you very much for joining this analyst meet, post the announcement of our financial year ’23 annual results of the Bank. As you’re all aware that the global economy is passing through various uncertain times, with the cumulative impact of adverse shocks of the past three years, most notably COVID-19 pandemic, geopolitical situations in Ukraine, manifesting in unforeseen situations, spur by the pent-up demand, lingering supply disruptions and commodity price spikes. Inflation reached multi-decadal high last year in many economies, nudging central banks to tighten aggressively, to bring it back towards their target and keep inflation expectation anchored.

As a result of all these, the baseline forecast of the global growth is to fall from 3.4% to 2.8% and then to rebound to 3% in 2024. In the backdrop of all this, India continues to remain resilient to various adverse external environment, owing to large domestic market. Despite all the headwinds, India’s GDP in financial year ’23 is estimated to grow at 7%, driven by investment and private consumption. And going forward, the economic activity will be supported by improving rural demand and the government’s thrust on infrastructure spending.

We also expect a revival in the corporate investment, which will give us opportunities of the healthy bank credit and also will lead to moderating the commodity prices. Despite the increase in interest rate and its transmission, credit growth has continued to grow in double-digit and has been broad-based across all the sectors in financial year ’23.

During financial year ’23, all scheduled commercial bank credit grew by almost 15% on a Y-o-Y basis, as against 9.6% Y-o-Y in the financial year ’22. Aggregate deposit of all scheduled commercial bank grew at about 9.6% compared to the last year growth of 8.9% Y-o-Y.

In the Union Budget for financial year ’24, several steps have been announced to push up the capital investment in the country which will actually boost the credit demand in the economy, and we expect the credit growth to continue in financial year ’24, also though with some moderation which can perhaps happen.

In the above backdrop, let me now share with you the Bank’s numbers for financial year ’23, as well as for the quarter four of the financial year ’23. I’m happy to share with all of you that the Bank has for the third quarter in running have posted the highest ever quarterly profit at INR16,695 crores. And for the full year, our net profit has crossed the landmark number of INR50,000 crore, which is the highest ever by any bank in India. Net profit for financial year ’23 increased by 58.58% Y-o-Y, while operating profit at INR83,713 crore increased by 11.18% Y-o-Y.

ROA of the Bank for the year improved by 29 basis point on Y-o-Y basis to 0.96%, and ROE improved by 551 basis points to 19.43%. Here I would also like to mention that for three quarters in a row our ROA has been more than 1%. For the quarter four of ’23, net profit stands at INR16,695 crore, which is higher by 17.52% sequentially and 83.18% on a Y-o-Y basis.

Most other core profitability metrics have also improved over the previous year as well as sequentially. Net interest income for the year has witnessed a growth of 19.99% on the back of improvement in yields and continued credit offtake. Domestic NIM also improved by 22 basis point on a Y-o-Y basis. Non-interest income declined marginally by 9.73%, essentially attributed to the MTM loss of more than INR7,000 crores, which we suffered in the first quarter. Other than that our core income streams, fee-based incomes have remained intact and have improved by almost 6.84% Y-o-Y.

Operating expenses increased by 13.68% Y-o-Y as we have started building provision for the wage revision which has fallen due effective from November ’22. There is some increase in overhead expenses, which is essentially attributed to the higher tech-related expenses like expenses on IT, development, mobile banking, ATMs, and also higher DICGC premium because of the growth in deposit, which we have witnessed in the last financial year.

On the business front, the credit growth has been robust across all the segments. Domestic advances grew by 15.38%, headline by retail personal advances which grew by 17.64% and corporate segment grew by almost 12.52% Y-o-Y. SME and the agri segment advances also posted healthy double-digit growth at 17.59% and 13.31%, respectively. Domestic deposit grew by 8.50% Y-o-Y, driven by the growth in savings bank deposit and term deposits. Our foreign offices have continued to perform well with good growth in advances as well as in deposits.

With regard to the asset quality, our gross NPA ratio has come down by 119 basis point and stands at 2.78%, which is its lowest level in more than 10 years. Our net NPA ratio has also declined by 35 basis points and stands at 0.67%. Slippage ratio for the year stands at 0.65%. The consistently improving asset quality is also reflected in our credit cost which stands at 32 basis points for the year, and it is down by 23 basis point on a Y-o-Y basis.

We have a well provided stressed book with PCR showing improvement by 135 basis point at 76.39%. PCR including AUCA improved by 171 basis point Y-o-Y and stands at 91.91%. On the restructuring front, our total exposure under COVID resolution plan 1 and 2 stands at INR24,302 crores as at the end of quarter four of financial year ’23. The restructuring book has behaved well. And when we look at our SMA 1 and SMA 2 also in this category, they are much within the range of about 11%. As against this book, we have already provided 30% as you’re all aware, as compared to the 15% requirement of RBI.

So we actually have insulated our book from any potential threat from the restructuring which might happen, which have already been — restructured book has already been taken care of by additional provision, but the book is behaving much better than what we have seen in our SME book, otherwise or in the stressed book overall.

The Bank has remained very well-capitalized and we have sufficient headroom to take care of the normal business growth requirement. Our capital adequacy ratio has improved by 85 basis point Y-o-Y and stands at 14.68%. CET1 ratio has also improved by 33 basis points to be at 10.27% and both the ratios are well above the regulatory requirements.

Digital continues to be an important customer acquisition engine for the Bank across assets as well as liability products. During the year, we have sourced 64% of our savings bank account and 35% of our retail asset accounts digitally through YONO. We have embarked upon a journey of creating a digital bank of choice within the Bank when we have launched over YONO 2.0.

Our subsidiaries have also consistently performed well and continued to create significant value for all the stakeholders, and most importantly, the customers of the bank. Most of our subsidiaries are leaders in their respective segments. We will continue to nurture these subsidiaries and see them creating value for their own shareholders, as well as the shareholders of SBI.

Before I conclude, I thank you all for the continued support to the Bank. We consider it as a privilege to be able to contribute towards the growth of our economy. We remain committed to rewarding your trust in us with superior sustainable returns over the long-term. I wish everyone here the very best. And now the floor is open to all of you for the questions. Thank you.

Sanjay Kapoor — General Manager, Performance Planning & Review

Thank you, Chairman sir, for your opening remarks. We now invite questions from the audience. And for the benefit of all, we request you to kindly mention your name and company before posing the questions. To accommodate all the questions, we request you to restrict your questions to maximum two at a time. Also kindly restrict your questions to the financial results only and no questions about specific accounts, please. In case, you have additional questions, the same can be asked at the end. We’ll now proceed with the question-and-answer session.

Questions and Answers:

Unidentified Participant — — Analyst

Hello, sir.

Sanjay Kapoor — General Manager, Performance Planning & Review

Yes, please go ahead.

Unidentified Participant — — Analyst

Sir, my question — I’m taking from your comment about the — the credit growth will continue with some moderation in FY ’24. So, for the Bank, what is your expectation of credit growth for the Bank for the FY ’24? And secondly, in terms of deposit growth and the pricing of the deposit for the year, do you see a material increase or risk to our margins, domestic margins? This is the fist question.

Dinesh Kumar Khara — Chairman

Sure. As far as the credit growth is concerned, we expect that we will have a opportunity of growing at — as far as the loan book is concerned, we should be growing somewhere in the range of between 12% to 14%, overall. As far as the deposit is concerned, in the current financial year, we are seeing an increase in our deposit cost to the extent of about 16 basis point — 16 basis point and much of it has come in the last quarter. We have seen from last quarter till now, increase of about 9 basis point. Whether to support this kind of a credit growth, whether we will be required to go aggressive for the deposits, perhaps no. Reason behind is that we still have excess SLR to the extent of about INR4 trillion.

And we have increased our interest rate on the deposit essentially because we always perceived that deposit is a franchise, and to the extent possible, we will take care of the interest of the depositor, provided our overall cost of resources don’t go up much. So we have some elbow room, which is always available. So we try to calibrate the deposit interest rate within that elbow room.

Unidentified Participant — — Analyst

So you don’t see any risk to the margin to sustain?

Dinesh Kumar Khara — Chairman

Sorry?

Unidentified Participant — — Analyst

So you don’t see margin to materialize…

Dinesh Kumar Khara — Chairman

I expect, in fact, we still have some kind of a cushion available for our MCLR to go up. And we have kept it essentially to really take care that our margin should not undergo much of a loss.

Unidentified Participant — — Analyst

Right, sir. Second question on the…

Sanjay Kapoor — General Manager, Performance Planning & Review

Can you bring your mic close to your mouth, please. Thank you.

Unidentified Participant — — Analyst

Yes. Second question on the — sir, when you are talking about operating metrics for the year, 96 basis point ROA and the 3.58% net interest margin in domestic side, the only scope — only metrics where we can see some improvement because other metrics are top-notch and best of — in decades. So the cost to — cost to income ratio, operating efficiency basically…

Dinesh Kumar Khara — Chairman

Sorry, operating…

Unidentified Participant — — Analyst

Operating efficiency.

Dinesh Kumar Khara — Chairman

See, as far as operating efficiency is concerned, the important component is cost to income ratio. And cost to income ratio also essentially, we have seen the — what we have seen in this quarter, somewhere around 53% is our cost to income ratio. And it’s just essentially because we have already started providing for the wage revision, which is — which has fallen due in the month of November. So INR500 crore is the allocation which we are doing every month, INR500 crores. So last five months, we have already provided for INR2,500 crore. But at the same time, if we ignore this particular increase and also whatever PLI, which is reaping now because as per the arrangement for 10% increase in operating profit, we are required to pay 10% of the wages to — as PLI. And that is something which will be required to do, which will require some kind of present worth about INR600 odd crores. So we have already provided for all those things. So these are the expenses which will take place in the next financial year.

What is — we have got certain rigidities in our structure when it comes to cost. And part of the rigidity is coming from the fact that almost about 18%, 19% of our cost is on account of retiral benefits. So that is something which is a function of what the — how the interest rate moves. We have to make the actuarial provisions, so that is something which happens. But other than that, our effort and endeavor is to improve our income. And with that in mind, what we have seen in the current financial year, if at all we improve our income and also we keep the NPAs in check, quality of assets remain the best, then perhaps we are in a position to address these challenges.

And of course, other income continues to be a major focus. We have already seen decent traction in the forex income in this year and also the cross selling income has gone up by almost about 26%, 27%. So I think going forward, these are the levers which we are working on and it will certainly help us in improving our income. And at this stage, when it is a normal year, perhaps even now also, if at all we ignore the impact of the additional provisions which we have made, we would have been somewhere around 50% in our cost to income ratio.

So, I think, as a strategy, we are very clear in our mind that the rigidities we’ll have to live with and we’ll have to only think in terms of improving our income. And cost we are trying to contain and control with the help of our digital engine. This year we have already underwritten more than INR1 trillion worth of assets through the YONO. So naturally, eventually when this number grows up, this will also help us in reducing our overall cost. So, I think, we are on a very — very clearly stated trajectory in terms of how should we address this cost to income ratio, and that will be ensured.

And the other very important lever for a bank like us, when it comes to efficiency is what matters is the ROA and the ROE. ROA we have been exceeding 1% for now for last three quarters on a sustainable basis. This quarter I think we had a ROA of 1.27% — 1.23%. So hopefully with the kind of focus, which we have brought in, I’m sure there will be a point of time when our cost to income will also come down.

Apart from this — this year, we also had another event of MTM, which was about INR7,000 odd crore. When we look at the yield movement that is behind us. And even at the end of the financial year also, the impact of that remained. So that is also having an impact on the cost. So these are some of the factors which have an impact. So there are some factors which are one-off. Those one-offs will go away. So that will also have a bearing in terms of improving our cost to income ratio.

Unidentified Participant — — Analyst

Appreciate the insightful answers and congratulation to the SBI team for the extraordinary performance and execution. And all the best for sustaining the metrics of FY ’23. Thank you.

Dinesh Kumar Khara — Chairman

Thank you.

Unidentified Participant — — Analyst

Compliment sir for the yet another good quarter and the whole year of the very good performance. You have exceeded in most of the numbers. Net profit going beyond INR50,000 crore, the operating profit of more than INR83,000 crores. And the Bank is cushioned very much for any future eventuality in case anything slowdown or something is there.

Sir, I have got some numbers, which I would like to just to — like we have the non-NPA provision of almost about INR35,000 crore. It means, our total provision held in the books, including everything is INR2,44,000 crore. And if you include this INR35,000 crore, then INR2,79,000 crore is the provisioning in the entire book if you take 100% of the AUCA provided for. Now going forward, sir, two things are there. One is that there was some odd amount of some INR2,500 crore something of a provision — extra provision for some corporate — other corporate related accounts, corporate accounts or something. So is there any specific account in mind for that or it was — so this is just one.

Secondly, with the ECL now going to come, I mean the guidelines are getting finalized and everybody knows that it is going to come, how much have we prepared ourselves for that? And is there any specific provision already have been made in this year in this quarter for that? And what is your assessment on that, on the ECL vis-a-vis the extra provisions which we are holding?

Dinesh Kumar Khara — Chairman

So, well, of course, what you mentioned in terms of — there is some number, which is INR2,600 odd crore. I would like to elaborate upon the process that you follow. There are certain accounts, which may not really qualify to attract any provision. But in our own assessment, these are the accounts which can potentially be a threat going forward. As a matter of prudent practice in the Bank, we have taken a call, that we will ensure that our balance sheet stays protected and we start providing for them. And these provisions are done on ad hoc basis. And as and when there is a eventuality which materializes, then these provisions are crystalized

The second question relating to ECL. Well, I think, to my mind, till such time, the RBI regulations are announced on this subject, it’s more of a fiction. And to really address that fiction, let me assure to this whole house that we are very well prepared. The number which you are seeing as our non-NPA provisions, we have done some back of the envelope calculation, which of course, I cannot disclose till such time I go to my Board. But my own assessment is that number is much below this number. And that too it will be spread over five years.

So considering the fact that if at all it has to be spread over five years and that is a kind of a number, and in that context, I would also like to draw your attention to the fact that you would recall last year, for family pension, we provided for more than INR7,500 crore in one quarter in single go — in single go.

Unidentified Speaker —

In September ’21 I think.

Dinesh Kumar Khara — Chairman

And even this year — even this year also INR7,000 crore.

Unidentified Speaker —

Quarter one of this year, INR7,400 crore.

Unidentified Speaker —

No, no, I think that was…

Dinesh Kumar Khara — Chairman

No, no, MTM was…

Unidentified Speaker —

September ’21, in financial year ’21-’22.

Dinesh Kumar Khara — Chairman

Yes, you’re right.

Unidentified Speaker —

That’s why I didn’t touch….

Dinesh Kumar Khara — Chairman

So INR7,000 crore MTM also, we absorbed in one quarter. So I only want to assure all of you that this is something, which none of you should bother for and we have got the ability to take care of that, without any impact on the earnings of this bank. And let me tell you, I just want to assure all of you, you need not worry about that.

Unidentified Participant — — Analyst

Thank you for that assurance, sir. I heard some couple of just data point and just explanation on some P&L account, expenditure account, income and expenditure account. The miscellaneous income in this quarter has gone up to INR4,187 crore as against INR1,214 crore. The breakup of miscellaneous income has not been given. So what is this INR4,287 crore in this quarter comprises of? This is number one.

Dinesh Kumar Khara — Chairman

I think miscellaneous income would have one component of the written-off recovery — I think we’ll get you the numbers.

Unidentified Participant — — Analyst

No, no, no issues, sir. Second is, sir, this employee cost…

Dinesh Kumar Khara — Chairman

Maybe [Indecipherable].

Unidentified Participant — — Analyst

Employee cost is understood.

Dinesh Kumar Khara — Chairman

Just one second. Yes.

Unidentified Participant — — Analyst

Can you — I mean, can we get the breakup of that? How much is recovery?

Dinesh Kumar Khara — Chairman

We’ll give you the break up, yes.

Unidentified Participant — — Analyst

Got it. Second, sir…

Dinesh Kumar Khara — Chairman

[Foreign Speech]

Unidentified Participant — — Analyst

No, sir. This is just for our information and…

Dinesh Kumar Khara — Chairman

[Foreign Speech] This is a very unique example in the banking system. One bank is being audited by more than 12 auditors.

Unidentified Participant — — Analyst

This has nothing to do with auditor.

Dinesh Kumar Khara — Chairman

So I think you should not have any doubt on the numbers which we are giving.

Unidentified Participant — — Analyst

No, no, doubt is not there at all. There is no question of any doubt. Sir, secondly, the employee cost is understood. It’s increased from INR14,700 crores to INR17,000 crores in this quarter. But even the overall operating expenses have also gone up by almost about INR2,500 crore to INR3,000 crore in this quarter. So that is also — if there is any one-off thing in that or it is going to be a trend in the subsequent quarters. This is — this was my…

Dinesh Kumar Khara — Chairman

Next slide [Foreign Speech], yes.

Unidentified Participant — — Analyst

Sir, if you see the analyst presentation…

Dinesh Kumar Khara — Chairman

Next to next.

Unidentified Participant — — Analyst

I think I must have missed…

Dinesh Kumar Khara — Chairman

Next to next slide we’ve given the entire breakup of operating, explore it.

Unidentified Participant — — Analyst

These are the total expenses. And third, sir, on the capital adequacy, okay, we are above the regulatory norms. But now when our deposit growth, I mean the credit growth is still we are targeting 14%, 15% or 13.5% — 14.5%, 15%. But the deposit is still, I think, 8% or so. So…

Dinesh Kumar Khara — Chairman

Deposit growth is about 9%.

Unidentified Participant — — Analyst

8.5% to 9%.

Dinesh Kumar Khara — Chairman

9%, but I also mentioned that we have got excess SLR of INR4 lakh crore — INR4 trillion. Excess SLR of INR4 trillion is something which we have.

Unidentified Participant — — Analyst

Okay. So money will be pulled out of [Speech Overlap]

Dinesh Kumar Khara — Chairman

Yes, which we can either unwind — which we can always unwind and support the loan book growth.

Sanjay Kapoor — General Manager, Performance Planning & Review

May we move for the next person.

Unidentified Participant — — Analyst

Thank you, sir. Thank you. Yes, sure. Thank you.

Saloni Narayan — Deputy Managing Director, Finance

So as far as miscellaneous expenses is concerned — expense also they were asking sir. So under the overheads, the biggest contributors are tech expense, insurance expense and expense on GST. Sequentially, overheads have increased by 26.73%, which is the usual phenomenon in the last quarter, because all the bills are paid or either accounted for. So these are the reasons.

Sanjay Kapoor — General Manager, Performance Planning & Review

Yes, please.

Ramesh Bhojwani — Mehta & Vakil — Analyst

Sir, Ramesh Bhojwani from Mehta & Vakil.

Dinesh Kumar Khara — Chairman

Sorry?

Ramesh Bhojwani — Mehta & Vakil — Analyst

Ramesh Bhojwani from Mehta & Vakil.

Dinesh Kumar Khara — Chairman

Can you bring the mic closer to your mouth, please.

Ramesh Bhojwani — Mehta & Vakil — Analyst

Yes. First and foremost, not only for State Bank, this full year has been the best in the banking industry for all the banks. And it comes once in a decade or even once in 15 years. Going back 15 years, we saw the worst scenario where gross NPAs hit 14.51%. Today, your gross NPA is at 2.79%. So the cycle — economic cycle has turned and two thoughts come to my mind. As you also mentioned it in an subtle way that going forward, this trend, this tempo will continue maybe at the same rate or little lesser. That is number one. And number two is, sir, two days back, wholesale price inflation came negative, minus 0.92 basis points. And the CPI is below 4.9%. I personally believe in June when RBI will come. I am seeing a cycle of rate reduction to start with 25 basis point, if not 50 basis point, and monsoon is expected to be 94% to 102%. So it’s a reasonably average or a reasonably expected rainfall. So going forward, the rate cycle — the rate downcycle will start. Maybe 25 basis point this time and subsequently 50-50. So in such a scenario, how do you see the whole banking metrics and parameters playing out?

Dinesh Kumar Khara — Chairman

See, I would say that what you mentioned was something which I always had in mind. And that is one of the reasons when rest of the market was only increasing the deposit interest rates. We did not increase the interest rates.

Ramesh Bhojwani — Mehta & Vakil — Analyst

Excellent.

Dinesh Kumar Khara — Chairman

Isn’t it? And then, I knew that from this fall to this fall, let there be aberrations, let others face those aberrations. We are the largest bank, let us stay cool.

Ramesh Bhojwani — Mehta & Vakil — Analyst

Yes.

Dinesh Kumar Khara — Chairman

We remained cool. So this is something which we — we were expecting to happen.

Ramesh Bhojwani — Mehta & Vakil — Analyst

This is like a foresight which you are now seeing playing out.

Dinesh Kumar Khara — Chairman

So, this is something which we were very — very mindful, and we did not — you would have observed that we started increasing interest rates somewhere in November, December quarter, because we were feeling that our depositors’ interest is getting compromised, those who have stayed with us all this while, we should take care of them. And that is why you would have observed that I also mentioned that we increased the deposit rate in some buckets, so that we should take care of our depositors’ interest. But keeping in mind, the overall cost of resources should not go up. So that is something that is what I also believe. So if at all, if that happens, what you are saying, what we believe will turn out to be correct.

And when it comes to interest rates, even if it comes down, we have not increased our interest rate to the hilt already. We still have elbow room there. So we will not be required to reduce our interest rate. So the picture which you are seeing today will probably stay.

Ramesh Bhojwani — Mehta & Vakil — Analyst

Wonderful. Brilliant. You have put it very beautifully.

Dinesh Kumar Khara — Chairman

So that is what my sense was. And secondly, you mentioned in terms of what we saw 15 years back. And it’s a similar — it’s once in 15 years kind of a event which happens when the banking sector does well. But yes, of course, banking sector — banks and banking sector, they are the institutions.

Ramesh Bhojwani — Mehta & Vakil — Analyst

Yes, and institution…

Dinesh Kumar Khara — Chairman

Even if they face accidents, they internalize those learnings.

Ramesh Bhojwani — Mehta & Vakil — Analyst

Yes, but great resilience in there in the banking sector in India. Thanks to our RBI’s stricter…

Dinesh Kumar Khara — Chairman

Thanks to the regulator and thanks to the practices adopted and the risk management practices adopted by the banks.

Ramesh Bhojwani — Mehta & Vakil — Analyst

Yes. We have a SLR and CRR which combined becomes 21%.

Dinesh Kumar Khara — Chairman

Yes.

Ramesh Bhojwani — Mehta & Vakil — Analyst

In a country like the U.S., they have only 4% CRR. And what we are seeing today, we’re not even seeing the tip of an iceberg or a beginning of a storm.

Dinesh Kumar Khara — Chairman

So I think on this particular account, whatever learnings which were — which got incorporated, they have been very well practiced in the system. We have significantly strengthened our risk management practices over the years. And we’re in a position to ensure that the underwriting should be of excellent quality. Not only underwriting, even controlled follow-up should be of the highest order. And also the ecosystem has also got developed over the period of time. Today there is a situation where [Indecipherable] is there, today there is a situation when IBC is in place. So borrowers are also responsible, banks have also strengthened their risk management practices. So, overall, this is nothing but a reflection of an economy’s transition from a developing to the developed state. Thank you.

Ramesh Bhojwani — Mehta & Vakil — Analyst

Yes, absolutely. Thank you very much. All the best.

Sanjay Kapoor — General Manager, Performance Planning & Review

Next person, please.

Vishal Goyal — UBS — Analyst

Hello. Excuse me, sir, here at the last bench.

Sanjay Kapoor — General Manager, Performance Planning & Review

Yes, please go ahead.

Vishal Goyal — UBS — Analyst

Hi. This is Vishal from UBS. Sir, two questions from my end. One on express credit, which is now almost 9%, 10% of our loan book and actually has grown at a very express rate as well. So how do you derive comfort on this book and also what would be the lead indicators before you start worrying about this book? Right now, the gross NPA is 0.6% only. But generally, how do you track that book?

Dinesh Kumar Khara — Chairman

I think, I’ve stated it in the past analyst meets also and I will again repeat the same thing. When it comes to our express credit book, we give it only to our corporate salary package customers. And also perhaps our experience is that it is, though it is unsecured, but it is better than the secured book. And that is something which we have already demonstrated. And the NPA ratios we have already seen. More than 83% of the customers are either employed in armed forces or government place. And apart from that, more than 12% of the customers are employed in the reputed corporates with very low incidence of default. So this is a kind of a book, which we have. 95% of the book, if at all, people are going to get their salaries, we’ll be in a position to recover the loans. I have not seen a single default from the defense forces in terms of payment or salary in my 38 years, 39 years of my service life. So, I don’t think it will ever happened in this country. So I think we need not worry much about it.

Vishal Goyal — UBS — Analyst

Okay. Thanks for that color. And the other question which keeps I’m sure coming to you is capital.

Dinesh Kumar Khara — Chairman

Yes.

Vishal Goyal — UBS — Analyst

So clearly you have increased the cushion. Now, what would trigger a capital raise from here?

Dinesh Kumar Khara — Chairman

See, you are from UBS.

Vishal Goyal — UBS — Analyst

Yes.

Dinesh Kumar Khara — Chairman

So I would like to ask a question, in an economy like ours, how many entities can raise INR40,000 crore worth of equity in a year?

Vishal Goyal — UBS — Analyst

No, sir. I think we can answer that but you can raise, SBI can raise.

Dinesh Kumar Khara — Chairman

No, no. You answer my question. How many entities have raised INR40,000 crore worth of equity in last five years time.

Vishal Goyal — UBS — Analyst

SBI would have.

Dinesh Kumar Khara — Chairman

We have not raised, we have ploughed back that profit man. And this is something which I’ve been saying for last six months plus. We have created value for our existing shareholders. And without diluting our return on equity. I think you people, if at all you are — you have invested into State Bank of India stock, you should be rather happy. And also when it comes to capital, unless and until we shut that capital right, you know, it is not merely a number. You need to understand this. This 14.68% is something which is our capital adequacy ratio. And today with 14.68% capital adequacy ratio, I can support the loan book growth to the extent of INR7.10 trillion without any impact. That 7.10% [Phonetic] if at all I underwrite well, that will only give me an opportunity to plough back. So, I think, this is a machinery which we should salute, if at all we only ensure that we underwrite properly and there are no NPA provisions, there are no aging provisions. We need not look at market for raising further equity. We should only generate profit and plough it back.

Vishal Goyal — UBS — Analyst

Yes. I think that would be great, sir. I think we’ve not seen that in last 15 years, 20 years. This is for the first time we are seeing that there is plough back.

Dinesh Kumar Khara — Chairman

No, I think, you have not seen it for — maybe you might not have seen for last three years. We are very clearly focused on this that we will only plough back profit and we will create value for our existing shareholders. Those who have stayed with us through the thick and thin, we will work for them, we will create value for them. And that is one of the reasons why today when we went to the Board, we have declared a dividend to the extent of 1,113% — 1,113%. Last year, we had declared a dividend of 770%. How many corporates are there is the country who have raised this kind of a dividend?

Vishal Goyal — UBS — Analyst

Thank you, sir. All the best.

Jai Mundhra — ICICI Securities — Analyst

Yes, hi, sir. This is Jai Mundra from ICICI Securities. Question, on your fee income, sir. So maybe fourth quarter has a seasonality. So if I look at full year, your core fee ex-treasury, it is around 60 basis point to 70 basis point of the assets, right, which has been more or less stagnant. It is growing more or less in line with the loan growth. But it has been stagnant at that level 60 basis point to 70 basis point of the assets. As compared to the, let’s say, other peers, which are 1.5% to maybe 2% of assets, they clock that kind of a fee. We are very well placed on the opex to asset and, of course, NII and credit growth — credit cost. So wanted to understand, sir, do we have any internal target or aspirations to raise fee to asset ratio?

Dinesh Kumar Khara — Chairman

See, that context you have to — of course, it was a very conscious call which we took in terms of waiving of our processing fee in the last quarter. So these are all — these are the competition related dynamics which will always be at play. But yes, of course, for a bank like us with INR32 trillion worth of asset book, loan processing will continue to be one of the major earning point when it comes to our fee income. Apart from that, the cross selling is another area, because we are leveraging our distribution channel and we have seen a growth of about more than — of almost 27% in the cross selling income. On this, we have got a very clear target. In the medium term, we would like to make it a billion dollar plus. So today, we have reached about INR3,600 odd crores. We would like to see it — this numbers around INR7,000 crore to INR8,000 crore.

The other — other major area is going to be the forex income, which will — which we have already seen a growth of almost over 25% to 26% in this year. So these are the major levers of growth in fee income, loan processing, cross selling, forex. This will be the mainstay for our fee income going forward.

Jai Mundhra — ICICI Securities — Analyst

Right. And sir question on your deposit cost, right. So, A, the deposit cost that we report in our presentation is, I believe, the cumulative number and which is, let’s say, 1Q and then first half, then nine months and then full year. So, if possible, I wanted to get…

Dinesh Kumar Khara — Chairman

It’s a deposit costs at the point of time.

Jai Mundhra — ICICI Securities — Analyst

Correct.

Dinesh Kumar Khara — Chairman

Yes.

Jai Mundhra — ICICI Securities — Analyst

So, I was looking at if you have the quarterly number, because in a rising rate or so far…

Dinesh Kumar Khara — Chairman

[Foreign Speech]

Jai Mundhra — ICICI Securities — Analyst

Because you are giving and of course you are…

Dinesh Kumar Khara — Chairman

[Foreign Speech]

Jai Mundhra — ICICI Securities — Analyst

Okay, sir. And just lastly, would it be safe to say that the card rates on deposit, right, if I look at SBI term deposit rates, they have not changed barring very few 5 basis point here and there since Feb, right. Would it be safe to say that the card rates on TD have almost peaked?

Dinesh Kumar Khara — Chairman

[Foreign Speech] I will only like to mention, since you have come from the ICICI, I should say that very clearly [Foreign Speech].

Sanjay Kapoor — General Manager, Performance Planning & Review

Can we move to the next question.

Nitin Aggarwal — Motilal Oswal — Analyst

Hi, sir.

Dinesh Kumar Khara — Chairman

Who is this? Yes, please go ahead.

Nitin Aggarwal — Motilal Oswal — Analyst

Sir, Nitin Aggarwal from Motilal Oswal. Congratulations on a good year and reaching the milestone of INR50,000 profit this year. One question on YONO, wherein like it is contributing 64% of the savings bank account that you are opening. So how do you look at the cross selling as a strategy for the accounts, the customers that you’re gaining through this channel? And if you can also share some color on the value of the balances, like in terms of the customer behavior over past couple of years, how are you seeing the progression in terms of the deposit balances in these accounts?

Dinesh Kumar Khara — Chairman

Well, as a strategy, when it comes to YONO, I think for a bank like us we have to have — we perceive YONO as a distribution channel. So there are set of customers who can perhaps be serviced only through this channel. And there are set of customers who can be served through the physical channel only. So, phygital is a reality for us and we will continue to work on this.

Well, when it comes to YONO, we have blended it with analytics also now. And by virtue of analytics, we’re in a position to have a much better assessment of our customer behavior, customer profiling and that helps us in going for the targeted marketing also.

The question which you have asked in terms of value and all that, I would not have it right now with me. Maybe we can share with you separately. But yes, of course, the intention is to — we are targeting a specific customer segment with the help of YONO. And we are going ahead in terms of upgrading this essentially with that in mind, because the kind of customer base, which has been targeted, they would like to experience frictionless banking, and that is something which we are offering through YONO.

Nitin Aggarwal — Motilal Oswal — Analyst

Right. And sir, second question, on the deposit rates, apparently, it looks like that the overall rate environment has peaked out, RBI has taken a pause for now and inflation data points are coming quite benign. So by when we can expect the interest rates, the deposit rates to start to moderate? Will you look from the RBI to change the stance and reverse the trajectory to take that step or that can be pretty much in advance prior to RBI, like reducing the repo rates?

Dinesh Kumar Khara — Chairman

See moderation in deposit will be a function beyond the repo rate also. There are many banks in this country who are running into a credit deposit ratio [Indecipherable] 85%. And if at all, they have to remain relevant in the loan book side, then they will have to continue to increase their deposit rates. So, I think, to my mind, repo rate is just one indicator which will be — which will be put to use to arrive at the deposit rate. But other than that there would be — so again, it would be a function of the market in terms of borrowing. But if at all they are increasing their interest rates and are underwriting loans, then I’m sure they will very soon start providing for it also. So it’s a very fine balance which we have to keep in mind while doing the real life betas [Phonetic] in the banking sector.

Nitin Aggarwal — Motilal Oswal — Analyst

Sure, sir. Thank you so much.

Sanjay Kapoor — General Manager, Performance Planning & Review

Yes. We’ll take one last question from gentlemen, yes. Can you bring the mic here. We have lot of questions received through online webcast also. We’ll take the last question.

Sushil Choksey — Indus Equity — Analyst

Congratulation to the team SBI. This is Sushil Choksey from Indus Equity. Sir, do you expect that credit growth will be more front-end in the first half of this year in view of election, infrastructure spend and various other factors?

Dinesh Kumar Khara — Chairman

I would say that it should be all through the year.

Sushil Choksey — Indus Equity — Analyst

All through the year.

Dinesh Kumar Khara — Chairman

Because see today, we have to be very mindful of the fact that for the system as a whole, a significant portion of the credit growth is coming from the retail. And the retail demand is all season — all season demand. So — and the other piece is infrastructure-related spend. etc. I think the infrastructure project normally have got long gestation period. So the sanctioning might happen at a point of time, but the availment might get spread over the period of time. So I think to my mind it should happen throughout the year.

Sushil Choksey — Indus Equity — Analyst

These projects can credit a credit for two years, three years because this will be big projects.

Dinesh Kumar Khara — Chairman

Yes, yes.

Sushil Choksey — Indus Equity — Analyst

Okay. Second question, sir, you’ve spent lot of…

Dinesh Kumar Khara — Chairman

And also, by the way, apart from the infrastructure spend, therefore, sharper focus on renewable, sharper focus on solar, sharper focus on battery, EVs, etc., these are actually new growth levers in the economy.

Sushil Choksey — Indus Equity — Analyst

And wonder it be linked to your green deposit scheme which RBI is rolling out — green deposit scheme.

Dinesh Kumar Khara — Chairman

See irrespective the grid deposit or otherwise, apparent — actually speaking, it’s a bit of a dilemma. Green deposit — to support the green deposit, we expect better returns. And wherever you want to lend the green deposit, you have to give concessions. So how to really strike out this balance. So, I think, it will probably stabilize over a period of time, irrespective of the — I mean, color of the deposit, green or black. Whatever be the color of the deposit, the opportunities will be supported.

Sushil Choksey — Indus Equity — Analyst

So outlook on your foreign offices. And second thing, you’ve spent a lot of money on creating digital and physical infrastructure, which may increase your salaries at individual level, because it’s performance-led and the kind of productivity they are going to lead. But this may lead to a lot of income, but the cost may freeze from a — outlook on a long-term point because some initiatives are visible, some are not spoken so far.

Dinesh Kumar Khara — Chairman

Yes. Well, as far as the foreign offices are concerned, we are very mindful in terms of our NIMs in the foreign offices. And that is a reason why we started slowing down our growth in the last quarter of this financial year because there are good number of opportunities which are available in the receivable finance. But that is available at very, very low margins. So we sacrificed the topline for our profitability from the front office and that is the reason why you would have observed that our NIM in the international book has gone up from 1.32% odd to 1.69%, 1.70%, that is something which we are very clearly focused on.

Foreign offices are more like our, I mean, corporate bank. And being a corporate bank, majority of the offices are into the corporate lending only. But we are very mindful, in terms of the quality. We have become — we participate in syndication. We are not as much into bilateral credit. We are, therefore, ECB supporting large corporates of India. So this is the broad components of our loan book in the foreign offices.

Our effort is to now to move up from the lead syndicator also, to assume the status of the lead syndicator, so that we should [Indecipherable] on the fee income as well. In some geographies, we have already started doing it. But increasingly, we would like to see it happening across.

Your second question relating to branch network of 22,400 and with the increase in salary, we might have a situation of the costs going up. You would have observed that the fee income, which has now — we are seeing about 26% odd kind of a growth, our effort is that our employees who are posted in the branches, we should use them for high skilled job, whether it is marketing or it is processing.

In the rural segment, we have started getting into high value agri loan book. And for that we need the processing capacities. So we’ll be utilizing our employees’ base. We have already put in place about 47 CPCs for agri, 47 CPCs we have already…

Unidentified Speaker —

45.

Dinesh Kumar Khara — Chairman

45 CPCs have already started functioning in the last second half of this financial year. Going forward, we’ll be doing that. We’ll be doing quality business, we’ll be using our high cost resources for underwriting quality business, we’ll be using them for marketing cross selling. 26% growth which we have seen is not the ultimate, as I’ve mentioned that we have got a very clear target for having a $1 billion earning from the fee income, which means that the distribution of our subsidies’ product from these upcountry locations, where the penetration level is very low. We are leveraging the brand value of State Bank of India, we are leveraging the branch network of State Bank of India and we are ensuring that it should be a most reliable product, which we should sell from those counters, those repos who are being exposed to these product for the first time. That is something which our effort is and we have already [Indecipherable] going forward, it will only multiply.

Sushil Choksey — Indus Equity — Analyst

So what can be a digital spend on a sustainable basis?

Dinesh Kumar Khara — Chairman

I have not really applied myself on this job, but we are ensuring that we should — we actually aim to become digital bank of choice within State Bank of India. Even before the central bank comes out with its regulation for the digital bank, we want to be in readiness.

Sushil Choksey — Indus Equity — Analyst

Thank you for answering all my question and all my questions.

Dinesh Kumar Khara — Chairman

Thank you, sir.

Sanjay Kapoor — General Manager, Performance Planning & Review

Thank you. Sir, we have received a few questions through the online webcast.

Dinesh Kumar Khara — Chairman

Yes, okay. I’ve got some questions which I’ve received online. So, I think, I’ll just take few minutes to answer all of them. The first question is, please provide guidance on NIMs, credit growth and deposit growth in financial year ’24. I have already answered this question.

The next question is relating to — from Sneha Ganatra, any plans to list subsidiary? As of now there is no such plan.

Another one from Velu Gopalakrishnan Kannan, VG Kannan. Would you be considering increasing interest rate on savings bank deposit, which has been rather stagnant and if sold will it not affect your NIM? We don’t have any plan to raise the savings bank rate for the time being. So we have some other. Overall overseas lending portfolio, it is INR4,92,440 crores and it has witnessed a rupee term growth of 19.55%. In dollar terms, it has grown by about 10%.

Manish Dhariwal, kindly share the reasons for dip in corporate loan growth. No dip in corporate loan growth. Corporate loan has actually grown at more than 12%.

Akash Agarwal, can I know the impact of wage revision in total employee cost? Total employee cost is INR57,292 in ’23. Wage revision is about INR2,490 crores in financial year ’23. So it is 4.35% [Phonetic] of the employee cost.

Employee cost went up a lot this quarter, driven by provisions, can you breakup the provisions? So wage revision provisions are INR498 crore, which has gone up. Pension and other retirement benefit, it has gone up by INR1,359 crore, essentially on account of the year movements.

Vishal from Rediffmail, yes and the question, what is the trend of NII Y-o-Y and how are you looking for growth in first six months of the financial year ’23-’24 in terms of NII? NII growth in the current year — I mean in the financial year ’23 was 19.99%. And 29.47% in quarter four of financial year ’23 over quarter four of financial year ’22. Yes, please.

Sanjay Kapoor — General Manager, Performance Planning & Review

Thank you, sir.

Dinesh Kumar Khara — Chairman

Now I can take the physical question.

Sanjay Kapoor — General Manager, Performance Planning & Review

So, I trust all the questions have been addressed. And we’ll be happy to respond to other questions in offline more and people can reach out to our…

Dinesh Kumar Khara — Chairman

No, let us hear, if at all somebody has any question, let us…

Sanjay Kapoor — General Manager, Performance Planning & Review

Can you bring the mic here please?

Unidentified Participant — — Analyst

So, sir, in international book geographically, I mean, [Indecipherable] like INR92,000 crore, we have major, I mean, almost about 26%, 27% in U.S. and then UK, and some of the other European countries and Japan and other places. Now, with this whatever is happening globally outside and our lot of capital has been invested there. And the movement in the rupee and dollar, of course, for some time, it is stable. So how do you see, I mean, that going forward? As you already said that you are tempering the further growth in the book. But…

Dinesh Kumar Khara — Chairman

No, let me — I think it should be seen in a very different perspective. I’ve got your question. See, the point is that, today India has already become the fifth largest economy in the globe. Our exports have gone to the extent of INR770 billion. So very clear focus in terms of manufacturing and re-exporting from the country. And similarly, when it comes to — we have got Apple coming into the country. They will also be exporting. We have got Foxconn, Apple, all the leading manufacturers are looking at India.

So, eventually, the way I look at the scenario is that we have got the potential to be if not China, at least Taiwan. And to that extent, there is going to be a huge manufacturing export, which should happen from this country. There is a very clear focus on the government and the PLI is something which is intended with that in mind. So eventually when that kind of a situation comes, we have to have our global presence also.

We have been calibrating our business strategies from time to time depending upon the situation which are obtaining in those geographies. But we have been a long-term player in the international market. And there is no other bank which is long-term player in international markets. Let me tell you. So it is more of a strategic move. We have completed 101 years in UK. We have completed 50 years in New York. And we have — Maldives also we have completed, how many, 50 years. Colombo today, perhaps maybe would be a surprise, more than 100 years, 150 years, we have completed in Colombo. So, this is the only bank which has got deep roots in the international geographies.

And as and when the opportunity will arise, we are the one who will be in a position to take benefit of this. And let me also bring back your memory to the year 2020-’21. That was a point of time where there was no taker for deposit in this banking system of the country. We continued to mobilize the deposit. And then we went for the rupee-dollar swap. We supported — we created factoring as a product in the international market and we made money on that.

When the lending opportunities came up in India, we unwound those swaps. We brought that money back. And when all others were clamoring for deposit, we are only unwinding our swaps. Even if there was a loss on the swap, still the cost was not [Indecipherable]. So I think these are the strategic moves which we always make to take advantage of the situation. And I always believe that the bank, more than 216 years old should not look at a year, two year or five year, it should look at 20 years, 25 years and 50 years, hence. By the time people will take time to really build up the organizations we have already created. So, I think this is what our strategy is.

Unidentified Participant — — Analyst

Thank you.

Dinesh Kumar Khara — Chairman

Yes, please.

Rahul Maheshwary — Ambit Asset Management — Analyst

Rahul Maheshwary from Ambit Asset Management. Sir…

Dinesh Kumar Khara — Chairman

Which one?

Rahul Maheshwary — Ambit Asset Management — Analyst

Ambit Asset Management.

Dinesh Kumar Khara — Chairman

Okay, yes.

Rahul Maheshwary — Ambit Asset Management — Analyst

Just as you in initial remarks said that the growth you’re expecting 12% to 14%, can we expect whatever the metrics of the engines which we have built?

Dinesh Kumar Khara — Chairman

[Foreign Speech]

Rahul Maheshwary — Ambit Asset Management — Analyst

[Foreign Speech] My question is can the gap between the private sector banks, few private sector bank and the PSU, which was very high in the initial years in the past, can that be bridged or even SBI’s type can grow much faster than the private sector bank? Looking at the two factors, one…

Dinesh Kumar Khara — Chairman

I think, last year, the loan book for the system as a whole has grown at 15%. And we grew at 15.99%. People talk about elephant dancing. Elephant is racing, racing faster than the system. It’s not only dancing. So I think the kind of potential which we have…

Rahul Maheshwary — Ambit Asset Management — Analyst

And just second…

Dinesh Kumar Khara — Chairman

You will have to watch.

Rahul Maheshwary — Ambit Asset Management — Analyst

And just second thing, as you said, we know a few of the banks only participate for the large corporates and the industrials loans which are there. As SBI is one of the primo. This time if the cycle builds for the capex, what are the internal metrics that will be taken care of that we don’t see the past cycle, which in the GNPA that had taken place. Any…

Dinesh Kumar Khara — Chairman

We have significantly strengthened our risk management. And we are very mindful, we actually prescribed our risk limits for each industry. And we draw up on our learnings from the industry. What are the mitigants which are required to put in place. We ensure that they are already in place. And when it comes to the credit appraisal, apart from the appraisal in the committees, we have got the [Indecipherable] who are there to — [Indecipherable] who are there to independently appraise the proposals. So I think these are enough mitigants as of now. Going forward what else will be the need of the system, even that will be taken care of.

Rahul Maheshwary — Ambit Asset Management — Analyst

And just last, what is the projects in pipeline?

Dinesh Kumar Khara — Chairman

And also, in the past, we were not having analytics. Today, we are using analytics in a very big way to build-up our risk models.

Rahul Maheshwary — Ambit Asset Management — Analyst

And what are the projects in pipeline, the large projects [Speech Overlap]?

Dinesh Kumar Khara — Chairman

I would not like to name anyone of them.

Rahul Maheshwary — Ambit Asset Management — Analyst

No, no, the quantum, can you give that what is the…

Dinesh Kumar Khara — Chairman

Almost INR1.7 trillion worth of projects are in — are work in process.

Rahul Maheshwary — Ambit Asset Management — Analyst

Okay, cool.

Sanjay Kapoor — General Manager, Performance Planning & Review

Thank you. We’ll take one last question from the lady there.

Unidentified Participant — — Analyst

Thank you. Just wanted to understand what would be our exposure to the NBFC sector?

Dinesh Kumar Khara — Chairman

Sorry, yes.

Unidentified Participant — — Analyst

Our exposure to the NBFC sector this year and last year?

Dinesh Kumar Khara — Chairman

NBFC sector exposure is 3 point — INR3.73 trillion is our NBFC exposure, but that exposure is essentially to very well-rated corporates, these NBFCs which are either into the public sector or supported by the leading corporate groups.

Unidentified Participant — — Analyst

Sorry, sir, the exposure is was INR3.57 trillion?

Dinesh Kumar Khara — Chairman

Sorry.

Unidentified Participant — — Analyst

INR3.57 trillion.

Dinesh Kumar Khara — Chairman

INR3.57 trillion, yes. INR3.57 trillion.

Unidentified Participant — — Analyst

And what would it be last year?

Dinesh Kumar Khara — Chairman

How much was it last year? It has seen a growth of about 31%.

Unidentified Participant — — Analyst

INR2.71 trillion, right.

Dinesh Kumar Khara — Chairman

Yes.

Unidentified Participant — — Analyst

All right. And sir lastly on the slippages ratio, I mean, this is for the industry also right?

Dinesh Kumar Khara — Chairman

Sorry.

Unidentified Participant — — Analyst

The slippage ratio and this is for the industry also. Will all the PSU banks have seen a low slippage ratio. Can this continue this sustainability?

Dinesh Kumar Khara — Chairman

Okay. Okay. Slippages ratio, are they sustainable? I think, partly it is macro, but a significant part would be the underwriting and also the control and follow up.

Unidentified Participant — — Analyst

Thank you, sir.

Sanjay Kapoor — General Manager, Performance Planning & Review

Thank you. We’ll be happy to respond to these questions in offline mode now. Let me end this evening with thanking the Chairman sir, the top management team, the analysts, ladies and gentlemen. And to round off this evening, we request you to join us for the high tea which is arranged just outside the hall. Thank you very much, everyone.

Dinesh Kumar Khara — Chairman

Thank you very much. Thanks to all the participants. Thank you.