SBIN — earnings call
The transcript as filed. Every paragraph is addressable: its link names the page and the position it sits at in the call.
Prepared remarks
MR. SWAMINATHAN J · Management
MANAGING DIRECTOR (CORPORATE BANKING & SUBSIDIARIES) MR. ASHWINI KUMAR TEWARI MANAGING DIRECTOR (RISK COMPLIANCE & SARG) MR. ALOK KUMAR CHOUDHARY MANAGING DIRECTOR (RETAIL BUSINESS & OPERATIONS) MRS. SALONI NARAYAN
DEPUTY MANAGING DIRECTOR (FINANCE) · MR. PAWAN KUMAR KEDIA
MR. PAWAN KUMAR KEDIA CHIEF GENERAL MANAGER (FINANCIAL CONTROL) MR. CHARANJIT ATTRA
CHIEF FINANCIAL OFFICER · MR. SANJAY KAPOOR
MR. SANJAY KAPOOR GENERAL MANAGER (PERFORMANCE, PLANNING & REVIEW) State Bank of India August 06, 2022
Moderator · Conference Operator
Ladies and gentlemen, good day and welcome to State Bank of India Q1 FY23 Earnings Conference Call.
As a reminder, all participant lines will be in the listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes.
Should you need assistance during the conference call, please signal an operator by pressing “*” then “0” on your touchtone phone.
Please note that this conference is being recorded.
I now hand the conference over to Mr. Sanjay Kapoor – General Manager, PPR from State Bank of India.
Thank you and over to you Mr. Kapoor.
MR. SWAMINATHAN J · Management
Namaste and good evening ladies and gentlemen.
I am Sanjay Kapoor – General Manager Performance Planning and Review.
On behalf of the top management of SBI I extend a warm
Moderator · Conference Operator
Thank you.
Next question is from the line of Jay Mundra from B&K Securities.
Please go ahead.
MR. SWAMINATHAN J · Management
So, the first question is regarding your savings account rate.
So, SBI savings rate is linked to repo and now with yesterday rate hike.
The SAR rate by formula is very, very similar, almost similar to the floor of 270 that we offer.
So, just wanted to check is it safe to assume that incremental repo rate hike would now be flowing to the savings account card rate is that safe to assume?
No, the question is sir incrementally.
So, now that your formula derived rate and your floor of 270 are almost similar there is only five basis point gap.
So, whatever incremental repo rate hike should one assume that the savings account rate will also be reflecting that?
Dinesh K. Khara
No.
MR. SWAMINATHAN J · Management
Even going forward right.
Dinesh K. Khara
Yes, even going forward at this rate, this increase which has happened in repo rate.
MR. SWAMINATHAN J · Management
Understood.
Second question is sir on EBLR, so in last three months less than three months there is a cumulative 140 basis point rate increase and the card rate on all floating rate loans on retail SME they clearly would have increased by 140 basis point rise.
So, do you think the credit demand is healthy enough to absorb this increase of 140 basis point rate or do you think that State Bank of India August 06, 2022 irrespective of 140 basis point rate hike in EBLR the effective interest charge to the customer could be lesser than 140 basis point on a floating rate?
Dinesh K. Khara
This is a part of the market dynamics we are taking a call but nevertheless the kind of trend which you have seen, we don’t envisage the demand tapering off even if because actually when it comes to the retail loan book, retail loan book it is directly linked to the actual number and when it comes to the corporate loan book it is all linked to the various benchmarks and also spread over whatever the benchmark is, risk spread over, risk premium over the benchmark that’s how it is worked out.
But when it comes to the final pricing, the risk spread accordingly gets adjusted depending upon the risk appetite and the market dynamics.
So, that’s how really it works out.
MR. SWAMINATHAN J · Management
And last two thing sir, if you have the ECLGS number outstanding disbursement and NPA there?
Dinesh K. Khara
Yes, ECGLS we had 32,000 crore was the total amount in both restructuring one and two.
It has already come down to about 28,000 crore and out of this 28,000 crore this 4000 crore worth of reduction is about 2000 crore is I would say is essentially on account of the repayment and 2000 crore is NPA which has happened.
MR. SWAMINATHAN J · Management
So, this is about restructured right, so I was asking on ECLGS?
Dinesh K. Khara
ECGLS is also 41,000 crore was the total disbursement, 1.91%.
MR. SWAMINATHAN J · Management
Okay.
Lastly sir, the credit growth is running at 15% Q-o-Q is also healthy but it looks like that part of that is because of the low base of last year on Y-o-Y basis.
So, how confident you would be to sustain this 15% growth for the rest of the financial year?
Dinesh K. Khara
I’m quite hopeful the reason behind is kind of a term loan and also the underutilization of the working capital, which is all aggregating to almost 5 trillion, and the pipeline is almost 1.2 trillion.
So, I’m quite hopeful that we should be in a position to sustain this in the subsequent quarters.
Moderator · Conference Operator
Thank you.
Next question is from line of Kunal Shah from ICICI Securities.
Please go ahead.
Kunal Shah
So, firstly on this decline in yield on advances on a quarter-on-quarter basis.
So, in fact we have hiked the MCLR there would have been EBLR linked loans as well plus sequentially the growth is largely from the retail side.
So, what is actually leading to this decline in yield on advances is it like more competitive rate pressure, which is coming in on the corporate and the SME front and with the revised EBLR, how should we see that trend in next couple of quarters?
Dinesh K. Khara
Sequentially perhaps may not be a right way because normally towards the end of the financial year, there are multiple other channels of revenue which are available for various accounts.
And maybe that may not be the right way.
And that is a reason why we are comparing on a sequential State Bank of India August 06, 2022 basis.
And on a sequential basis, it is an improvement.
Actually, if we look at it, Y-o-Y basis it’s an improvement though sequentially it looks like to be a reduction because invariably we have seen that year end there are multiple other sources which actually improves the, which are the yield enhancers.
Kunal Shah
Okay.
So, how should be the trend maybe with this EBLR hike and the MCLR hike, how should we look at it from year-on-year?
Dinesh K. Khara
We hope it to be improving going forward.
July onwards, it should start looking up.
If you look at this graph also you will probably see, this trend line also very clearly indicate June is low, and it does spike to the towards March, quarter after quarter it went up.
So, it’s a similar situation, we hope that we should be in the position to have a similar trend or maybe better towards in the coming quarters.
Kunal Shah
Sure.
And overall, in terms of the deposit growth, so it is slightly below average as well now.
So, they are definitely in terms of the hike, our hike on the deposit side has been lower compared to one of the other private bank.
So, what would be the stance out there, is it like still 69%, 70% odd of CD ratio is comfortable and we can further allow it to expand without tweaking too much on the deposit side, would that be the call or maybe we will see some action on the deposit rates as well to maybe garner the higher deposit mobilization now?
Dinesh K. Khara
We are very closely focusing on the NIM and within that boundary condition if at all we’ll get a chance to shore up our deposit we will certainly do but nevertheless, as of now our credit deposit ratio is at about 63% and if we look at the redemption which will happen during the current financial year, both from our AFS and HTM book it will be almost at 1.5 trillion.
So, we will be very closely looking at couple of variables one of course as I mentioned the availability of liquidity.
Second, we would be very mindful of our franchisee into the liability sector.
And also, thirdly that whatever deployment opportunities which are available and the price at which we can deploy this money.
So, these are some of the variables which will be kept in mind for deciding the interest rate increase in the deposits.
Kunal Shah
Sure.
And one last question on miscellaneous income.
So, there is recovery from AUCA but still miscellaneous income is significantly down.
So, what is the element which is actually leading to that impact on an average it used to be like 2000, 3000 odd crores and this time it is only 475?
Dinesh K. Khara
Miscellaneous income is essentially.
Kunal Shah
But there is a sharp decline both year-on-year as well as quarter-on-quarter.
Dinesh K. Khara
No, actually miscellaneous income also, we’ll have a situation where quarter four would normally have the kind of dividend income which we get and also derivative is the other component.
So, last year we had a dividend income of about 500 crore but this year it is negative and also when it comes to recovery in written-off account last year we had a onetime recovery State Bank of India August 06, 2022 of 1,692 crores in King Fisher which is not there this year.
So, that is the reason why this is behaving like this.
Kunal Shah
Okay.
And derivatives also would be a part of it?
Dinesh K. Khara
Yes, derivative is the other component.
Kunal Shah
Some knock-on derivative which would have been there in this quarter.
Dinesh K. Khara
Yes.
Moderator · Conference Operator
Next question is from the line of Adarsh from CLSA.
Please go ahead.
Adarsh Parasrampuria
Just a question, sir.
What would be your margin outlook incrementally?
Dinesh K. Khara
We're hoping it to be in line with the kind of trend which you have seen in the past and also what we have already recorded till now.
Adarsh Parasrampuria
Sir, is there a change because if you go back to the fourth quarter, clearly the margin outlook look a lot more stronger.
So, is there anything that you are seeing in the market, which makes you believe that margins now should be like flattish rather than going up?
Dinesh K. Khara
No. I think I would rather expect the margin to improve from 3.23.
Adarsh Parasrampuria
And sir, second question is on capital.
While we are better than regulatory requirements, growth has certainly picked up in the last few months.
Do you anticipate that bank may need to shore up a little bit of capital now given how well the stock is done?
And number 2, growth certainly is holding up a lot better?
Dinesh K. Khara
See, we have already got the approval from the Board for raising AT-1 and T-2 bonds worth about Rs.
11,000 crore.
In fact, this month itself I think we have already redeemed about Rs.
2,000 crore.
So, about Rs.
9,000 crore is the incremental, which will be available which we'll be using.
So, I think hopefully, we'll be very closely watching the situation.
And if need be, we will look at the options what all can be tapped to see to it that we have adequate capital available.
Adarsh Parasrampuria
And sir, what will be the threshold to consider equity raise because we are close to 10%.
Many banks operate at better CET1s.
And obviously the growth is better than what we've seen in the last few years.
So, what is the threshold when you would think about seriously looking at equity raises?
Dinesh K. Khara
Well, actually, we have a couple of other options, but we have not really deliberated at the Board level.
So, it will not be in order for me to really share those plans in this call.
Moderator · Conference Operator
The next question is from the line of Abhishek Murarka from HSBC.
Please go ahead.
State Bank of India August 06, 2022
Abhishek Murarka
So, just a couple of data related questions.
What is your LCR right now?
Dinesh K. Khara
It's about 130%.
Abhishek Murarka
And currently how much excess liquidity you will be retiring?
And you said that there is about Rs.
1.5 crore redemption coming from the investment book.
Apart from that?
Moderator · Conference Operator
Next question is from line of Ashok Ajmera from Ajcon Global.
MR. SWAMINATHAN J · Management
Sir, while we appreciate, sir, the operating profit, but for this MTM losses would have been Rs.
19,302 crore, does it mean that we can assume that the operating profit for the whole year of the bank would be around in the range of about Rs.
78,000 to Rs.
80,000 crore, number one?
Yes, sir, we hope so.
And secondly, sir, this is a loss on sale and revaluation of investment, this Rs.
6,549 crore.
So, what is the component, I mean of the loss which you have already booked and the MTM on the revaluation?
Dinesh K. Khara
It is actually on account of MTM.
So, we have not really incurred any loss, it all revaluation.
MR. SWAMINATHAN J · Management
So, heading only says that the loss on revaluation of the investment.
Isn’t it?
Dinesh K. Khara
That is the format, so that's why it is mentioned like that.
MR. SWAMINATHAN J · Management
No, I understand, sir.
So, sir, now going forward now with this 50-basis point again further rise, what do we expect on the Treasury front going forward in the next 3 quarters?
Any estimate of further likely MTM or how much we are cushioned for further MTM losses on the Treasury front, sir, including this year?
Dinesh K. Khara
Actually, we are cushioned for 7.45%.
And if I may say so, the way the situation stand, you will observe that yesterday when the rate hike was there for 50 basis points, the yield moved up from 7.10% to 7.30%.
So, that is something which is, I mean if I read into that kind of a trend then even if the next hike happens from RBI, which will be somewhere in September 28 to 30th, it's too early to say that what will be the interest rate hike because they normally get guided by the inflation trajectory and if at all past is a guide for the future, we have seen the inflation was trailing at around 7.9% about 2.5 months back.
And from that level, it has already come to about 6.7%.
So, what will be the situation from now onwards.
If at all the past trend continues, then one may expect the inflation to be within 6%.
And who knows, if at all it is something it may not really lead to any kind of interest, but it is all subject to various assumptions.
So, having said that, as I mentioned that we have already booked the MTM losses to the extent of 7.45%.
So, we hope that we should not have any more such instances of providing for the further depreciation on the AFS book.
State Bank of India August 06, 2022
MR. SWAMINATHAN J · Management
Sir, coming to this provisioning, we said that we have taken the benefit of some of the buffers of the provision which are there in this quarter.
How much buffer is left which can be utilized in case the higher provision is required in future?
Dinesh K. Khara
Rs.
7,800 crore is the provision which is available for the restructured assets.
So, that can always be used and whatever we have used is essentially wherever the repayment has happened.
So, to that extent only we have used.
We have not used otherwise.
Rs.
7,800 is the additional provision for the restructured accounts.
MR. SWAMINATHAN J · Management
Sir, on the advances front, credit front, our credit growth especially in the domestic book is muted, if you take the corporate book except that yes, International book has grown very healthy, where the margins are but very less or limited.
So, going forward when you say that we are aiming 15% of the growth, it means that the in next 3 quarters including the August now which is going July-August also, we may grow our total credit to about 12.5% for the remaining 3 quarters now.
Dinesh K. Khara
We hope so because if I look at the underutilization of the working capital limit in the corporate accounts, which is almost as a whole Rs.
2.5 trillion.
Similarly, when it comes to term loans, which are un-availed it is also to the extent over Rs.
2.5 trillion.
And proposals in pipeline are about Rs.
1.2 trillion.
So, that is how it is stacked up even if the term loans will not start availment immediately or may not get disbursed immediately.
Still I expect that we should have a situation where we can easily think in terms of growing to the extent of about Rs.
2.5 crore to Rs.
3 lakh crore into the corporate book.
We are at about 8.75 lakh crore as far as the corporate book is concerned.
So, that is the kind of expectation which I have.
So, if at all that comes and the kind of growth which you have witnessed into the retail side that I think will continue.
Even SME also we have started seeing the traction and the pipeline is also there.
So, I think all put together, I expect that there should be a decent sustainable growth in the remaining 3 quarters.
Moderator · Conference Operator
The next question is from the line of Nitin Aggarwal from Motilal Oswal.
Please go ahead.
Nitin Aggarwal
Sir, this quarter, like many other PSU banks have reported controlled treasury losses, and some of them have reported profits as well.
So, just wanted to check if we have done any transfer of securities from AFS to HTM during the quarter?
And just related to it, do you think that the mix of AFS portfolio which is like still looks high needs to be reduced given how the rate cycle is placed out?
Dinesh K. Khara
We had done the transfer of securities, but unfortunately, we could not avail the benefit soon thereafter the 40-basis point increase announced by the RBI, which led to the yields moving up.
So, we really could not take much of benefit.
We went for the further transfer of securities also.
I mean as of now, we have got a decent elbow room available in the HTM and whatever securities are maturing in AFS and whenever we are buying new securities, we are only putting in the HTM portfolio.
State Bank of India August 06, 2022
Nitin Aggarwal
And this mix of AFS, sir, which is 42%, doesn't seem like comfort or any thoughts around reducing this mix.
Dinesh K. Khara
I'm sorry, I could not get your question.
Nitin Aggarwal
The mix of AFS investments in the total investment book at over 40%, does this number seems comfortable or any there have been any thoughts to reduce this number also?
Moderator · Conference Operator
The next question is from the line of Ayushi Shah, an individual analyst.
Please go ahead.
Ayushi Shah
Sir, in the beginning of the presentation, you mentioned that you are planning on increasing your CASA book by focusing on the savings account part of things.
Sir, so I just wanted to get an overall idea about it, how exactly do you plan on doing that?
Because there's such intense competition in the market going on right now.
So, how do you plan on ensuring growth?
Dinesh K. Khara
We will be trying to beat out the competition.
Ayushi Shah
Sir, basically by raising rate?
Dinesh K. Khara
No, where actually digital is something which is actually growing very well.
And almost about 65% of our accounts are getting opened digitally.
So, which means that we are in a position to offer the convenience to the customers and also the kind of product bouquet which we offer it is State Bank of India August 06, 2022 complete in all respects.
There is no reason for us not to be really sharing the mind space of the customers and getting their accounts.
And CSP is one of our focus effort and we will continue to strengthen that going forward.
Maybe Alok wants to add something.
Alok Choudhary
Yes.
So, in CASA, what exactly if you find last couple of years there was a huge increase in saving bank deposits as well as TDR.
So, on the ground it was being considered that whatever is coming is fine.
But with the competition intensifying, we have also now communicated to the ground that the CASA has to be a priority and that is why on an daily basis, the opening of accounts as well as encouraging contact with the premium customers or high value customers so that they can deposit more and transact more in our accounts so that the balances also increase.
So, it is 2-pronged.
One, acquisition of new valuable customers so that we open accounts where there is a higher possibility of increase in balances.
Number 2, with whatever customers we have making relationship more rich so that the balances in the account increase.
We will also try to increase product per customers so that the stickiness as well as the float around it that also improves.
So, it is both acquisition strategy as well as the relationship strategy which will lead to better CASA.
Ayushi Shah
That is very good to hear.
And sir, is there any guidance about like the CASA ratio that you will have for the coming 2 to 5 years?
Alok Choudhary
See, in this case, what we'll do is we understand the importance of CASA, everybody in the bank understands, so the endeavor will be to increase as much CASA as possible.
We have our internal say benchmarks and internal aspiration as to where we should go, but there is a single say structurally as a bank, we are a bank, where people trust a lot.
So, they bring a lot of term deposits to us and the growth rate of CASA and the growth rate of TDR is normally pretty skewed because we have higher growth in TDR because of customers trust.
So, then percentage may not increase much, but in absolute numbers, it will surely increase.
Moderator · Conference Operator
Next question is from the line of Anand Dama from Emkay Global.
Please go ahead.
Anand Dama
Sir, again, the question on the treasury front.
So, we said that basically there is a redemption of about Rs.
1.5 trillion of investment.
So, whether that could lead to higher realized losses going forward, number 1?
And number 2 is that, what is the status on our investment fluctuation reserve?
Where does it stand?
Do we have a shortfall over there?
And whether that is also to be made up going forward leading to higher provisions over there?
Dinesh K. Khara
See, when it comes to Rs.
1.50 trillion, which I mentioned this is a redemption which is during the normal course in the current year.
So, which means that we will not book any loss and in this redemption process, and we don't have any stressed NPA in the book as of now.
So, that is one thing which will happen and the second question is relating to, sorry, I missed out the second question.
State Bank of India August 06, 2022
Anand Dama
Investment fluctuation reserve, sir.
Sir, what is the outstanding in the IFR and is there any shortfall over there?
Dinesh K. Khara
There is some shortfall but we are actually building up that shortfalls.
Anand Dama
So, what will be the quantum of the shortfall?
Dinesh K. Khara
Sorry, there's a Board approved glide path which is in line with the RBI directions and we are strictly following that and we will try and see that that gets completed in the current financial year.
Anand Dama
Currently quantum basically, what's the kind of shortfall that we have?
Dinesh K. Khara
I will not have that number.
Moderator · Conference Operator
The next question is from the line of Jignesh from Incred Capital.
Please go ahead.
MR. SWAMINATHAN J · Management
Sir, I had a question one on around your margins, basically, which basically has come up on a sequential basis.
So, I agree that Y-o-Y basis it has been pretty high, I mean, it has improved.
What trajectory basically you're seeing it up for the full year though you have already indicated that you will see an improvement happening.
But if you can give some guidance and the roadmap, how we are seeing it up, the improvement will be coming in?
That is one.
State Bank of India August 06, 2022 And second, obviously, on the growth front with the rate hike already being there and inflation remaining high, though you remain confident that the growth would be -- you will be able to now benchmark it, but what exactly would be the momentum and which areas you think will be a better one as the growth may be coming up in retail corporate or international book, that you're seeing it for the next 3 quarters, if you can give some clarity on it, that would be really useful.
Thank you.
Dinesh K. Khara
The trajectory as far as the NIM is concerned, I would say the kind of trend which you've seen in the past, we expect to be a repeat of the similar trend going forward also though we're starting at a little higher base as compared to where we were last year in the first quarter of financial year ‘21.
As far as your second question relating to which are the areas of focus, I think, irrespective of the interest rate hike, etc., which has been talked about, now the retail engine continues to adhere to its promise and we hope that we will have a decent growth in the retail going forward as well.
Rather, when it comes to the corporate growth, we are quite hopeful this year we'll have better traction as far as the corporate book is concerned.
And even SME also is one of the special focus for the bank.
You would have observed that we have moved up in the SME from about Rs.
2.20 trillion to about Rs.
3 trillion plus, it has already moved and this is all we are getting into supply chain finance and some kind of balance sheet lending also, but we are very mindful of the risks which are inherent in the SME.
We are ensuring that we should underwrite the best of the quality of SME also.
So, I would say that retail corporate SME all will grow.
As far as Agri is concerned, our focus is going to be high value agriculture, our focus is going to be a SHG financing.
So, this will be our focus so that the agri book should also improve in terms of quality.
That is what our endeavor would be.
Moderator · Conference Operator
Next question is from the line of Prakhar Sharma from Jefferies India.
Please go ahead.
Prakhar Sharma
Just 2 questions.
First on the SMA-1 and SMA-2 loan, the balances have gone up from Rs.
3,500 crore to about almost Rs.
7,000 crore.
Could you just help us understand what is the reason for this?
Dinesh K. Khara
Of course, out of this Rs.
7,000 also if you will really look at it, we would have pulled back a significant component.
So, essentially, invariably we have seen that in the first quarter there are always some peculiar behavior which we see.
And that is one of the reasons why sequentially it looks on the higher side, but almost about Rs.
2800 crore has been pulled back out of this.
So, if at all we look at that Rs.
2,800 odd crore.
So, then actually it comes almost in the same range as on December 21.
So, that's how that partly explains the behavior.
Prakhar Sharma
Sir, second question is on the interest on tax refund for the March quarter.
Could you please clarify what was the amount in the previous quarter?
Dinesh K. Khara
Rs.
600 crore was the amount interest on tax refund.
Moderator · Conference Operator
Thank you very much.
Ladies and gentlemen, due to time constraint that will be the last question for today.
And I'll hand the conference over to the Chairman sir for closing comments.
Dinesh K. Khara
Thank you very much to all the analysts who are taking out time on a weekend on a Saturday evening.
I wish all of you the very best.
As we have explained that our endeavor is to keep on delivering better outcomes.
Hopefully, it will be the scenario going forward.
But for the situations which are actually beyond our control, in terms of GSEC, etc, we have to play in the broader macro and our effort will be to navigate through the turbulent times in the most professional way.
Thank you very much. all the very best.
Moderator · Conference Operator
Thank you very much.
On behalf of State Bank of India, that concludes this conference.
Thank you for joining us.
You may now disconnect your lines.
Thank you.
Questions and answers
Moderator · Conference Operator
Thank you very much.
We will now begin the question-and-answer session.
The first question is from the line of Mahrukh Adajania from Edelweiss.
Please go ahead.
MR. SWAMINATHAN J · Management
Sir my first question is on international loan, so we do have a breakup of domestic corporate loans in the presentation, but there’s a strong growth in international loans as well.
So, which are the sectors that have contributed to international growth say maybe the top two to three sectors, is it the oil companies borrowing which are the sectors?
State Bank of India August 06, 2022
Dinesh Kumar Khara
Actually when it comes to international book cover, our major growth would have come from the syndicated loans.
So, we will not have sector wise per se, but nevertheless the growth is essentially coming through we can come out with some kind of details relating to whether it is syndicated loan or it is state finance loan those kind of details we can certainly provide but majorly it is coming from the syndicated finance and also trade finance.
Syndicated loans and the trade finance are the two major products in which we have witnessed the growth.
And these are the geographies where the syndicated loans are coming from.
And, I would also like to mention that both the places USA and UK both the places have got decent trade finance growth also because there are many platforms which are available, which helps us in sort of really ensuring that we underwrite decent loan growth from this particular product.
MR. SWAMINATHAN J · Management
Sir, I’m asking because other PSU banks have also seen a very sharp rise in international loans.
And this has been happening in general for the segment for the last two to three quarters, so suddenly why has there been higher focus on overseas loans because they’re growing faster than for domestic corporate?
Dinesh Kumar Khara
No, I am unable to comment about others.
But as far as we are concerned, we had introduced a product, a factoring product was introduced by us about a year, a year and a half, almost two years back and that is something which has helped us to participate on various platforms which are available in USA and UK.
And so, that is one of the major reasons for the growth which we have witnessed in the international banking group and we had witnessed similar growth last year also but if you look at it, our growth in dollar terms is actually 15% when it comes to the international book.
MR. SWAMINATHAN J · Management
Okay.
And sir most of the incremental growth in this quarter will be syndicated not trade finance, is that a fair assumption?
Dinesh Kumar Khara
Yes, it would be syndicated as well as trade finance.
MR. SWAMINATHAN J · Management
Okay.
So, both would be kind of equal?
Dinesh Kumar Khara
Yes.
MR. SWAMINATHAN J · Management
Okay.
And sir, the other question is on provision.
So, the standard asset provisions are negative and the flowchart that you gave on the breakdown of provisions that are not reckoned for calculating net NPA that stock of cumulative provision that also declined sequentially, so has there been a drawdown of existing provisions via standard asset provisions negative during the quarter?
Dinesh Kumar Khara
Just one second, let me get the details.
There is actually the right back of 1295 crore which is essentially attributed to it’s a combination of write back taken from provision for COVID restructuring, which is essentially attributed to the reduction in the exposure under the State Bank of India August 06, 2022 restructuring and additional number present of 300 crore were made further credit growth.
So, net of that is actually getting reflected here in 1295 crores.
MR. SWAMINATHAN J · Management
Okay.
So, basically there was a right back up to 1595 crores?
Dinesh Kumar Khara
Yes.
MR. SWAMINATHAN J · Management
Because of COVID restructuring, drawdown?
Dinesh Kumar Khara
Yes.
MR. SWAMINATHAN J · Management
Okay.
And sir my last question is on personal loans.
So, what would be the maximum and average ticket size and what will be the share of private versus government?
Dinesh Kumar Khara
This express credit, the average ticket size is 5.97 lakh is the average ticket size and out of this 95% is given to the customers who are maintaining the salary accounts.
And when we look at this 95%, almost about 85% would be for the government employees only, that is defense and government employees.
Including the quasi-government would be about 90% out of this 95%, 5% would be large corporates, which are well rated corporate.
So, that’s how it is stacked up.
MR. SWAMINATHAN J · Management
Got it and the maximum ticket size would be?
Dinesh Kumar Khara
Almost about 6 lakhs, 5.97, that is average maximum will go up to 20.
We actually recently launched another product which is RTFC but which has yet to really grow well.
So, there the maximum ticket size can go even up to 30 lakh, but as of now our maximum ticket size will be in the range of about 20, Rs.25 lakh.
MR. SWAMINATHAN J · Management
Got it, and sir my last question on this thing is that the business development expenses are the highest component of other operating expenses by value.
So, these agents would be sourcing what loans express credit or some other loans, I’m assuming that DSA commission?
Dinesh Kumar Khara
Actually when it comes to various acquisition expense, it is essentially on account of the home loans as one and also the PSLC certificates which you buy, for that also whatever fee, the premium is paid that will also come under this.
We’re not using any of the outsourcing agents for express credit.
Moderator · Conference Operator
Thank you.
Next question is from the line of Mona Khaitan from Dolat Capital.
Please go ahead.
Mona Khaitan
Sir my first question is on slippages if you could share the breakup of slippages and if there was any one off in terms of interest reversal this quarter?
Dinesh Kumar Khara
Break up of slippage you need, just a second.
When it comes to the breakup of slippages.
Breakup of slippage are essentially about 9700 crore which is coming from SME 3000 crore, agri is about 2700 crore, per segment is 2353 crore so, which actually add up to 8070 crore, then State Bank of India August 06, 2022 CAG was 320 crore and CCG was 1335 crore.
So, that’s how it is and out of that we have already recovered 2800 crore till now.
Mona Khaitan
Okay.
And were there any one off in interest reversal some say agri book or something?
Dinesh Kumar Khara
No, there is no one off.
Mona Khaitan
Okay, sure.
So, what was the reason behind the sequential decline in margins?
Dinesh Kumar Khara
As far as last quarter was concerned we had some 600 crore worth of income tax refund, interest on the income tax refund which is not available this year, this quarter it is not available.
Mona Khaitan
Sure, got it.
And secondly on the reset of EBLR loan.
So, what is the basis of these resets what is the time period of reset?
Dinesh Kumar Khara
Sorry, I could get it.
Mona Khaitan
On what basis are the EBLR loans resets, the repo linked loan reset?
Dinesh Kumar Khara
Actually, it happens on the first day of the quarter, first of the following month.