Yes, thanks for taking my question.
Yes, is it better now?
Questions across 100 calls
Kunal Shah
Citigroup
Union Bank of India
Home First Finance Company India Limited
Thanks for taking the question. So, not sure if the co-lending piece got addressed. So this quarter, it was low. How much time would it take to rectify this and again scale it up? I understand that the regulatory changes have led to this. But it is addressed to a larger extent and whe n should we again start seeing a pickup in this?
Okay. So thereafter, the run rate of co-lending would be similar or maybe better than what we saw last year?
Aavas Financiers Limited
So, a couple of questions on the growth side. You articulated aspiration to get towards 20%+. And we are seeing the network expansion. This quarter, again, larger part of the network expansion was in Gujarat, Tamil Nadu and UP, wherein we would have added like, say, 8 to 10-odd branches in each state. So, would that be the strategy maybe in terms of expansion? And we have seen almost flat branches in Maharashtra, MP and Rajasthan, maybe 3 branches getting added as such. So, do we see that a larger part of the expansion would be coming to these states in terms of the branches and even in terms of the incremental growth? So that's firstly on geography. And secondly, on the productivity side, maybe what are the initiatives we are taking incrementally just to ensure that productivity and maybe the disbursements per sales officer, that also inches up? So, if you can highlight in terms of what your near-term strategy would be in terms of inching productivity up?
So, in terms of indirect sourcing, would we want to take that proportion up? Or maybe still the focus will be more on direct sourcing, as you mentioned, like since we have the control out there?
So, the first question is on growth. When we look at maybe the first 9 months growth, it clearly suggests maybe the guidance which was given of closer to like 18 -odd percent. That appears to be quite stretched, and it might settle at less than 15 -odd percent. So maybe in terms of the indicators as to how do we plan to get towards 18% to 20-odd percent growth in the coming years? And the related question is on the branches. Last time you indicated that you will add the 20, 25 -odd branches, but we had seen some consolidation of branches in Rajasthan and Maharashtra. So maybe the addition of branches has also been not very high. So, what's happening on that front in terms of the franchise expansion?
Sure. And with respect to branch expansion, it was quite slow during the quarter, and there was some rationalization as well?
Aadhar Housing Finance Limited
So three questions. Firstly, with respect to the left growth, both in terms of disbursements, I think maybe it is lagging a bit on the home loan side. Would it be more kind of a seasonal phenomena, any particular reason like last 2, 3 quarters, in fact, the overall nonretail home loan part, maybe non-home loan part that is growing relatively slower. So if you can address that and how should we look at it in terms of the overall AUM growth? Second is on the fee income side or maybe on the noninterest income side, both the assignment income is quite high. So was it like equally larger proportion of ass ignments done during the quarter or it was more in terms of the spreads, which have led to this assignment? And even other income seems to be slightly higher. Is there any one-off out there? Yes. So that's the second question. And thirdly, on ESOP cost. So this is just Q4 cost, which is there. This is not going to accrue even in FY '27. This is like a onetime c ost which we have taken, and it is over. There will be no impact getting into FY27 too?
No differences in the delinquency or bounce rate trends between LAP and home loans?
The Federal Bank Limited
Firstly, after this onetime provisioning that we had done, does it change our credit cost outlook? Maybe would we require a slightly lower provisioning given that we have already scaled it up or maybe transitioning into ECL, we would still continue to maintain like, say, 45, 50 basis points of credit cost guidance?
Maybe last few couple of quarters, it's been between 45 to 50, but we still continue with 50 to 60 basis points of guidance.
AU Small Finance Bank Limited
Yes, thanks and congratulations on a good set of numbers. So firstly, with respect to ROA, we are almost at 1.8% now on exit level. So , what would be the focus, maybe we would still try to drive it up further or sustenance of that will be critical? And what would be the levers available to drive it? No doubt there would be some levers on opex, but would it get offset by other measures and we will just try to sustain it at 1.8%?
Sure. And on margins, you’ve indicated some break -up with respect to, say 6 bps benefit because of the lower slippages and 7 bps due to lower day count. So is there an element of IT refund as well, as some recoveries which is indicated in that paragraph. So how much if you can quantify that because there would be some pressure on yields as well?
Shriram Finance Limited
Yes. Thanks for taking my question. So, when we look at it in terms of the disbursements, what has been the proportion of this new vehicle s now? And where do we see it going through over the next 18 to 24 months because we have been saying that the new vehicle will start contributing to the growth. But just want to gauge in terms of the proportion of disbursements, how it's scaling up?
So broadly, would it be in the r ange of like 10, 20 today? And do we see it scaling it up to like 30%, 35% over a period because that's something which can drive the growth by 3, 4 percentage points, okay? So just wanted to gauge where we are and how you would look at over the next 18 to 24 months in terms of the proportion?
So, the first question is on liquidity again. When we look at it on the balance sheet side, cash and investments put together, that's again closer to INR32,000-odd crores. We got it down to INR23,000-odd crores in September. So, is it more a period-end phenomena? Or even on the average, we are again seeing the increase in liquidity on the balance sheet, which can have some drag on margins. And that's the reason you are suggesting that margins will still remain at the current level?
Annually, shouldn't the benefit on margin should still continue be it particularly from the borrowing s ide because the incremental cost of borrowing is still significantly below the outstanding borrowing, while maybe Immediately, we are not planning to switch to new vehicles till the time the money come in and the near-term outlook on margins should be relatively better than that of Q3.
Mahindra & Mahindra Financial Services Limited
So firstly, again, on this entire overlay provisioning, so again what quantum of book we would have created this? You mentioned like maybe this is against some portfolio, which maybe it might, if there is a slowdown or something, we might see a risk to that portfolio. And given that it's again created in GS3, so if you can quantify that proportion of pool against which 217 is created?
Yes, absolutely agree because when we look at it overall, at least in terms of the trend, GS2, GS3, that's directionally coming off. And maybe we had quite a volatile coverage all through. Maybe earlier, it was higher. We brought it down again, we took it up to 53% then we mentioned like it should be between 53% to 55%-odd. Now again, maybe because of overlay, it's getting back to 59%-odd. So a lot of volatility out there in terms of the coverage, but now maybe should we see this remaining in this zone or could there be a further risk? Have we adequately provided for this? An d that's the reason you are confident that 1.3 -1.7 is now a reasonable trajectory of credit cost after this provisioning?
HDFC Bank Limited
So firstly, again, touching upon on the growth side. So, we indicated like we will try to grow in line with the industry average, but we are seeing industry average being upwards of 15%, we are still at 12%. So we have been below it. And next year, would we retain the guidance of growing Classification - Internal above the industry average or would we say like we will still grow in line with the industry average because industry average itself has picked up to a very large extent? And on the deposits, how much of this is transitory in nature? And how much of this it can sustain? Because last year, we indicated that we will more focus on the sustainable deposits even during the period end. So I just want to get the sense because the difference between the end of period and average deposit is quite high during this quarter?
47% is less than INR 3 crores?
Yes. Thanks for taking the question and doing the call at the short notice. Firstly, maybe you indicated that at least there are no material matter that bank is aware about or no specific happenings or operational issue. But maybe for such a strong wording in the resignation letter, what do you think would have actually triggered that maybe that it is mentioned that it is not in congruence with his personal values and may be ethics. So, if you can highlight if there is something which would have triggered the friction which would have got created? And the second question is again. maybe it coincides the reappointment term of MD and CEO which is now due in next 7 months. So, how since there are like board members also who are there on the call, maybe in terms of whether what would be the impact with respect to the MD and CEO reappointment and maybe the application which would be made to the RBI and any timeline which you can suggest in terms of how should we look through in terms of this development over next two-three months? Classification - Internal
Okay and in terms of timeline, so maybe generally 6 months prior to the reappointment we see it getting applied?
LIC Housing Finance Limited
So, firstly on balance transfer, after having reduced th e rewriting rates, how has been the trend on the balance transfer side? If I heard you correctly, you mentioned like Rs. 3,300 crores, which was last time 4,000 odd crores in Q2. Is that the right number?
So, given that the overall run rate is still Rs. 800 crores – Rs. 900 crores, so we should still see Rs. 2,500 to Rs. 3,000 crores continuing even in the next quarter.
Five-Star Business Finance Limited
Hi. Couple of questions. So, firstly, as you mentioned, like, now it's becoming more of a behavioral problem. Earlier, it was more of overleveraging. So, when I look at it both in terms of the repeat customers, are we getting more prudent in terms of underwriting to these repeat customers, given the behavioral issue? And how about the rejection rates? How they have gone up over past 3 quarters? Is it stabilized? Has it gone up in Q3 compared to where we were in Q1?
Sure. And second question was with respect to the overall ECL provisioning. When we look at it across the buckets, sir, there is a sequential decline out there in be it terms of Stage-3, Stage 1 as well from 0.26% to 0.21%. And maybe the last 2 years pool would fall maybe into this, and the earlier, maybe better behaving pool would move out. How should we look at the overall coverage? Will there be a requirement for the higher coverage, maybe from the current levels of 1.83 of the AUM as we go forward into the next 3 to 4 odd quarters?
Kotak Mahindra Bank Limited
Hi, thanks f or taking the question. Firstly, on the margin part, it was a flat quarter -on- quarter. Last time you had guided that there should be a gradual improvement looking at Page | 19 the deposit repricing and the CRR benefit. What has actually changed in terms of the expectations with respect to margins? You had indicated maybe some short-term liquidity deployed into treasury, which impacted by 4 odd business points. But apart from that, anything else which has impacted the margins, which has just led it to be flat quarter-on- quarter? And what would be the outlook getting into Q4 and next year?
Sure. That helps. And the second question is with respect to credit cost. So, eventually now we are seeing the specific credit cost coming down to 63 odd basis points. You Page | 20 indicated some stress conti nuing on the retail CV. But otherwise, are we comfortable on PL, credit card? Has MFI also maybe almost picked out and you should see the benefit? And where should we ideally see the credit cost trajectory going forward?
IndusInd Bank Limited
Yes. So the first question was on net NPA. It is still at 1.04% and slippages also appear to be sticky across the segment s. So when we look at it like say MFI, ye s, it has been at still more than Rs. 1,000 odd crores, but vehicles still continuing at 690. When we look at the consumer banking still closer to like Rs. 470 odd crores. So there, there is not much of an improvement on this slippage. And eventually when we look at it on the net NPA side, we indicated that we would endeavor to bring it down to 0.4%-0.5% odd. But it doesn't seem like there has been the increase in the provisioning coverage. So if you can share in terms of what would be the plans with respect to net NPA?
Sir, any target for net NPA?
PNB Housing Finance Limited
Continuing on the question with respect to, say, under the new management, just wanted to understand any key priorities that would be there, or maybe it's the business as usual, any key priorities from your end. And in terms of the ROA, we are still guiding for 3.6 % to 3.7% ROA. We still have the benefit of, say the recoveries, which is there. So maybe in terms of picking the ROAs up, and what would be the aspirational ROA target over next 3 years?
No, no. So I was saying, like, margins, we are guiding for 3.6 % to 3.7%. And we still have the benefit of the recoveries, which would eventually go away over the medium term. So then maybe in that scenario of steady margins and maybe some normalization of credit cost, how do we see the ROA spanning out over 2 to 3 years?
Punjab National Bank
Yes. Thanks for taking the question. So firstly, on margins, again, so I think there would have been some impact of repo repricing and we have like 50% EBLR portfolio. So that would have taken the knock-on margins. But in terms of deposit repricing, when should we actually start to see the deposit repricing benefit? If we look at it, it's hardly like, say, 25-odd basis points, which we have over the last 3 quarters. So when does that happen? And in fact, w e revised our margin guidance also down. So was it purely the repo rate cut, which is leading to the revision in the guidance? Or is there any other element in terms of lower benefit from deposits coming through?
Yes.
RBL Bank Limited
So 2 questions, particularly now getting on to the credit cost. So given that the pain on the credit card is continuing, now how should we see the credit cost settling? And I heard that maybe the credit card slippages would peak out in maybe June. So do we see a much elevated level even compared to that of 2Q going forward -- 3Q going forward? Or maybe this is the level, which can be sustained? And what would be the overall guidance on the credit cost side?
Okay. So maybe this kind of a run rate of 2.5%, 2.3% to 2.5% should continue for a few more quarters?
So 2 questions, particularly now getting on to the credit cost. So given that the pain on the credit card is continuing, now how should we see the credit cost settling? And I heard that maybe the credit card slippages would peak out in maybe June. So do we see a much elevated level even compared to that of 2Q going forward -- 3Q going forward? Or maybe this is the level, which can be sustained? And what would be the overall guidance on the credit cost side?
Okay. So maybe this kind of a run rate of 2.5%, 2.3% to 2.5% should continue for a few more quarters?