PNB Housing Finance Limited analyst Q&A

The first question is from the line of Varun from Kotak Securities.

I had a question regardi ng the cost o f bor rowing. Your cost of borrowing looks to have flattened out. But still, there must be some impact left of NCDs re -pricing, right? Do you expect this to settle?

NCDs are all fixed rate . So, there is no impact left. And again, f or MCLR also, most of the repricing has already happened. And hence our cost of funds are flat right now.

I mean to say that as they mature, you need to refinance it. If you be raising NCDs or getting them replaced the other kind of borrowing. So, your incremental must be higher than what you have borrowed something like 2 years or 3 years ago?

No, no, no, not really. The cost is actually almost same or, in fact, slightly lower than what it was like 2-3 years back.

Okay. So, this is what you wou ld expect for this full year and going forward, maybe slightly benefit?

Yes, yes. It should be -- it's a regular course of business, we will keep replacing. This should not have any much impact.

The next question is from the line of Shubhranshu Mishra from PhillipCapital.

Yes, this is for all the retail loan s, largely on th e prime side and deposit agents, both put together, we have 14,000 partners.

Understood, sir. So that was like entire 100% of your sourcing, if you can follow what would be a concentration in the channel partners. So, we say top 100 chan nel partners contribute to what percentage of disbursements versus, say top 500 partners contributing to what percentage of distribution, dispersion?

No, there is no concentration. We have multiple channels. One is DST. Seco nd is DSA. Third, we have Digital. And of course, to a small extent, we have branch walk-in, which we call as direct. So, there is no concentration because our -- if we have to look at the sourcing m ix between DST and DSA. DSA is about 40% and DST 60%. So, there is no conce ntration with respect to sourcing from DSA.

Understood. And in terms of branch concentration, top 10 branches contributing to any particular number of disbursement, if you can speak on that, concentration of branches?

No, there is no concentration in terms of branches. But of course, there are -- the top 5 states for us is Maharashtra -- this is on a book level: Maharashtra, Delhi, Tamil Na du, Telangana and Karnataka. And typically, if you look at these 5 s tates would always be the top 7 or 8 states for us. So, it is -- we had changed our strategy. And we wanted to get better share from South and therefore, we were a little bit more focused on South and that is why we saw that there is a shift in business, a nd there's an increas e almost by about 7%-9% in the mix from South.

Understood. And if I can just even one last question on the South strategy. If I say South, credit would be slightly super float because of the number of organized players that could be slightly more sal aried versus North India. So then are they necessarily taking the yield compression building into the business from the South?

I couldn't hear you properly. I think your question was that we are now focusing more on South b ecause we want to inc rease our salaried. I think it is not just South, it is across the country, all geographies we want to change our profile mix. We wante d to increase our sourcing from salaried. A nd typically, South happens to contribute on the higher s ide on the salaried side. Otherwise, we are present across the country, and our focus remains -- focus on 20-odd states where we are present.

That a fair understating would we be NIM compression as we focus more on salaried?

Not really becaus e within salaried, see, one is in terms of profile, we have changed our mix incrementally slightly skewed towards salaried, but what we are doing on salaried also, we are now focusing more on the affordable side, affordable income salaried, so that the yields could be higher. So, there is no yield compression because of the change in profile mix. Within salaried, we have identified opportunity where we can build the book at a higher yield.

Understood. Thanks. I will come again in the queue.

Thank you. The next question is from the line of Renish from ICICI. Please go ahead.

Yes. Hi, sir. Sir, two questions from my side. One is on this excess provision right back. Obviously, we had due to the large corporate account, getting resolved. So, in P&L, wh ere does it reflect? And the stage III provision is also sort of flat. There is no subsequent increase in the PAT as well. So, does it, try to assume that we have done a write-off in the retail side?

So, on the retai l side, we -- of course, obviously, we got a write -back of provision on the corporate account. A nd that we have utilized for three purposes. One is ECL true up on retail & corporate, and also we took some one-off on the retail apart from cash collection.

So, you mean retail write-off, one-off retail write-off?

Yes. That's right.

Okay. I am got it. And secondly, sir, this slightly from a medium -term strategy point of view, so let's say, pre-COVID our leverage used to be 7x - 8x, and we used to generate in 14% -15% ROE on a 1.5% kind of ROA. Given our ROA has improved significantly and considering our guidance, be it on NIM, be it on credit costs, be it on the growth side. It seems to suggest that current trajectory more or less will sustain. So wh ere does our ROE should settle maybe in the medium term considering the post leverage?

See if we now look at our affordable business, I think incrementally, it is contributing to about 9%. So, I had earlier mentioned that this year, it will be close to 10%. It looks like, we might exceed what I had indicated earlier. So, we are pretty aggressive on the affordable side, and we are able to build traction on the affordable side. So maybe this year, we 'll end up with sl ightly more than what I had indicated earlier. So, with every quarter, the mix between Prime and Roshni is getting changed. Roshni is affordable. So - - and I also mentioned that we'll be able to maintain margins at the current level. So going forward, it has to only improve. It will take time because affordable, it is small tick et loans and therefore, it takes time. But we probably would be one of the housing finance company to build a book of, let's say, INR 1,000 crores fastest. And so, with every passing quarter, the mix keeps changing. So eventually, the ROE profile also should improve.

So, the steady state ROE should be 17%-18%?

So, our gearing now is 3.77 x, okay? So, we plan to take that up to 6-6.5x, since we are now focused on growth also along with profitability. So, we h ave a vision of building book to INR 1 lakh crores. And therefore, a leverage, which is now less than 4 x might go up to 6- 6.5x. So, this might happen in the next 2.5 years to 3 years. Now ROE is low because, obviously, we raised rights --we did rights issue recently, and there will be a drag for some time, but that will catch up with growth and volumes.

Got it. And sir, just l ast question on the growth side. Considering our first half growth is slightly muted. I mean on a YTD basis; it is close to 1.5%. Now even if we have to go with the lower end of the guidance, which is at 17%, which implies a very tall task in the second ha lf, implying maybe 7% odd sequential growth rate in Q3-Q4. So just wanted to reconfirm that, we are confident of maintaining this run rate in Q3-Q4, right, sir?

If you look at last four quarters, we have done a lot of tactical changes in our strategy. And just to mention a few, we wanted to reduce the ticket size, focus on retail. Today, as I mentioned, we are close to 90% upto INR 1 crores. LAP ticket size has come down drastically. The focus is now more on home. Focus is more on salarie d. So, we've done all of these things and also the book, what we're going to build in the future has to be pristine. And therefore, we've taken -- I know last time I was mentioning, we have taken some calls in terms of certain geographies, certain products, we have peaked some of the processes . So basically, if you see las t three quarters to four quarters, we spent a lot of time to get all of these things right, so that a few quarters from now, we will be one of the best housing finance companies and would be comparable, right? And I had guided book growth of 17% to 18%. Th at is the intact. So, we will be able to grow at 17% this year over last year. And we had guided disbursement growth of 22% plus. We'll be there very comfortably.

Got it, sir. Thank you so much and best of luck, sir.

Thank you.

Thank you. The next question is from the line of Abhijit Tibrewal from Motilal Oswal. Please go ahead.

Yes. Good evening everyone. Just following up from the last par ticipant. Your gu idance of 17%-18% loan growth is on retail, right, not on…

It is on retail. But however, if you look at the corporate book, it is de -growing. So now the book is less than INR2,400 crores. So, the guidance, what we had given was on retail. Yes, you're right.

Yes, right, sir. Sir, the other thing is, again, coming back to that write -off that we have done. So, it seems like -- I mean, excluding this one corporate account that we have resolved, the gross stage III has come down by about INR 400 crores, excluding that corporate account. And out of that, we've taken around INR 320 crores of write-offs in retail. So, if you could just explain this part a little better that whatever releases we had from the corporate NPA account, almost INR 200 crores of releases is what I see. How did we kind of -- because this -- I mean one would have thought, we will want to increase the provisioning cover on your maybe retail loans. But contrary to that, we've chosen to kind of write -off. So, if you could just explain the thought process behind that?

So, if you look at our overall GNPA March’22, it was 8.13%. Now last quarter, it was 3.76%. And this quarter, it is 1.78%, right? Now even if you look at retail , March’22 was 3.89% and last quarter was 2.49%. So, what I'm trying to say is that there has been a consistent decline in the retail GNPA as well, not just the corporate. Now whatever provision write -back would it be, we have utilized that for three things. One is as ECL true up, that is PCR on retail and ECL on corporate. And we utilize the amount for a bit of write-off. So, it is a combination of all these three.

Perfect, sir. And sir, just one clarification here. I'm just referring to Note number 4 of the SEBI results release. There, it says that from this corporate NPA account, which has been resolved, we have recovered INR 828 crores. Am I reading it, right?

Yes, you're right.

Got it. And this, all of this INR 828 crores, we have received it in cash?

Correct.

There are no tranches which are involved?

Yes, it's 100% cash deal.

Got it. There is just one last question. Again, you kind of talk to, senio r leaders like you in the industry. Some where there is an acknowledgment that maybe in mortgages, particularly smaller ticket mortgages against INR15 lakh to INR25 lakh, INR30 lakh kind of ticket size, there is some slowdown that people are talking about. Are you also seeing that because, obviously, it doesn't reflect in the disbursement numbers that you've reported. But are you structurally seeing some slowdown in maybe urban affordable or lower ticket affordable housing?

So, if we talk abou t affordable incom e base, the competition has increased. But if you talk about overall affordable which typically all the NBFCs and HFCs focus, there is no slowdown. As I had mentioned, there are four segments, super prime, prime, aff ordable income, affordable assessment. So, if you're talking about, a bit of prime on the lower side and affordable income, there for some time, there was a bit of slowdown, but we have not seen any slowdown. For us, we had to correct a lot of things internally. And therefore, we had guided a disbursement growth of 22%, and we have already shown 18% growth. So, in next two quarters, we will catch up and we will be more than 20% -23% growth on disbursement. On the book, we had guided 17% to 18%. And in the n ext two quarters, we will catch up and we will be able to show growth of 17%-18%. So, we have not seen -- even if you look at our affordable, even though the size is very small because we started about eight months back. If you see whatever be the size, w e are seeing significant traction given the number of branches and team size. We have seen significant traction. We've been growing at about 60% quarter -on-quarter on the affordable. So, we have not seen that slowdown. However, even I have read many report s which spoke about a bit of slowdown in the segment.

Got it, sir. And sir, just one last question. My line also is too bad when you were explaining the ROA improvement and consequently, ROE also improving as leverage picks up. Is the understanding right that, obviously, we have reverse on the borrowing cost side. Going forward, there could be potential credit rating upgrades, which could feed into an improvement in what the decline in borrowing costs at the same time. As you keep doing affordable, maybe yields can improve marginally from here, which suggests that margins could remain stable to a minor improvement. But, in terms of your guidance of credit cost s of 40 basis points for next year, opex, I don't know, how much of a room is ther e to further op timize opex. So just trying to understand, what is it that you were telling about ROE expansion from next year onwards, '25 onwards?

See in terms of opex, we will be more or less stable in terms of percentage will be somewhere between 80 bps to 90 bps. In terms of credit cost, I had guided 40 bps from coming year onward. This is blended. I'm not talking about short term. I think long term. 40 bps will be the credit cost given the blend of prime and affordable. And the mix, as I mentioned, is changing. So incrementally, this year, we will probably , looks like, we will be at about 12% and add on Roshni out of the overall disbursements what we are going to do this year, and this will keep improving. So, I think directionally, I t hink our effort is to ensure that we identify p ockets where we can build book at a much higher yield on the prime side, increase Roshni penetration so that the yields would be higher and which will help us in better profitability. On the opex side, we’ll be able to maintain at the current levels between 0.8% to 0.9%. I think on the credit cost, it will be 40 bps coming around onward. I think this is the overall direction what we want to give.

The next question is from the line of Onkar Ghugardare from Shree I nvestments. Please go ahead.

Yes, as the overall NPA has come down drastically, what would be the guidance or trajectory of NPA coming to the 2- 3 quarter as well as the next 2 years?

Yes, I was asking about the net NPA trajectory for, say, next 2 -3 quarters as well as for next 1- 2 years on a gross level?

Yes. So, I think MD has responded. So right now retail GNPA is at 1.74%. We are trying to bring it down in line with any other comparable with housing finance company. And we shall be comparable on this parameter in the next 2 -3 quarters inline with any other well-managed housing finance company. Even on the credit cost, we have guided around 0.6% for this year and 0.4% from next year onwards.

This in line with the other NBFCs or best in the class you are talking about?

Yes

For individual as well as for the corporate loan, right?

Yes. Overall, yes, because largely, we are now retail, 96% is our retail loans. So, it’s overall.

Okay. Just wanted to kn ow what are the cost of funds for this quarter and incr emental cost of funds right now?

It’s almost same as previous quarter. We have closed this quarter at 7.99%, and incremental also is somewhere in the same range, 7.9%.

Okay. And there were a co uple of one-offs in this quarter, say, like for pre -provisioning profit and for NIMs and all that. So that would continue for the next quarter as well? Or that will normalize in the coming quarters?

No, no, there are no one-offs in this quarter. One -offs were in the last yea r same quarter. So, for a comparable purposes, we have excluded and given a comparison. But this quarter, there are no one-offs. Even on the credit cost side, – I mean those one-offs are utilized for financing provision on corporate side and taki ng certain one -off on the retail side. But other than that, there are no one-offs in the financials in this quarter.

Okay. Can you just highlight your guidance on ROA front?

ROA right now is around 2.24% this quarter. It has been improving sequentially. Previous quarter was 2.1 %, and now we are at 2.24%. Our endeavour is to keep improving and keep working on it. I mean, we are not giving guidance on th is. We have given guidance on the spread and NIM, which we have maintained.

As far as the gearing is concerned, you have already mentioned in the next 2, 3 years, you will be at 6.5-7x, right?

6 to 6.5x is what we are trying.

So, the question is with respect to yields, given that now the focus is also going to be on the individual as well as the home loan portfolio. And given the ticket size of almost like INR29 lakhs and INR32.5 lakhs in NHL, how do we see the risk in terms of the balance transfer given where we are in terms of the cost of borrowing? And over last 3 -odd quarters, how much ha s been pricing at par with , when we were growing the retail portfolio, how much have we been able to pass on in terms of the lending rates? So, if you can just kind of let us know in terms of the incremental lending rate partic ularly in this category of ticket size?

Runoffs perhaps have been very stable and consistent. We ha ve been in the range of 16% to 17%. This is total runoff, including the regular EMI payoffs and B Ts and foreclosures. The total there has been in the range of 16 % to 18%. It used to be in the range of 22% -23%. So, it has been now in this p articular range for the last few quarters, and we inten d to maintain it. I didn't get your second part of the question; can you just repeat?

I just wanted to check what it's somewhere around 4.5% run rate for the quarter, which leads to like almost 18% in runoff. But just in terms of the risk on the yield side, because this is going to be extremely competitive. And have you seen the pr icing path for us, maybe for the industry, if the rates have gone up, to what extent have you also have been able to pass it on over the last quarter in terms of particularly based on loan portfolio, how much is the lending rate increase that we have taken?

So, we have completely passed on the entire increase that we have seen on the repo rate. So that has been completely passed on, roughly 240 to 250 basis points has been passed on. And this is the rate now on a steady-state basis after all pass on are done.

Okay. So incremental would be how much now on home loan and LAP?

Incremental yield is between 9.6% to 9.7%.

9.6% to 9.7% compared to our book yield of 10%?

Correct.

Okay. And lastly, in terms of break up, so this INR45 crores, if you kind of help in terms of much will be write-back, how much was the write -off, and there is some recovery especially that you may highlight, was not able to give in terms of how mu ch will write -off in the recovery. So INR45 crores is the net amount? Yes.

Yes. So INR 199 crores was the write -back that we have got on resolution of one corporate account. And the net P&L impact is INR 45 crore. So, you c an work out the ma th for the result.

It is used for both for strengthening Stage 1 ECL on the corporate and for strengthening ECL on the retail and for certain one-offs that we have taken on the retail side.

The next question is from the line of Jigar Jani from B&K Securities. Please go ahead.

Sorry to just continue with the previous participant question. If I look at your prese ntation in terms of the ECL provisioning, Q -o-Q, your total ECL provision has dropped from INR 1,485 crore to INR 1,196 crore. This is despite you taking the INR 245 crores kind of pr ovisioning, which is the INR 199 crores write- back and the INR 45 crores to the P&L. So, is it fair to understand that the overall write-offs would be somewhere around INR 400 crores to INR 450 crores?

No, no, no. It's not.

So, can you just e xplain me the bridge as to why our ECL pr ovision is kind of going down despite having write-backs and provisioning to the P&L?

No, I think that we can take up offline. I mean that is like a lot of numbers, so we can take it up offline.

Sure, sir. No worries. And just wan ted to know what i s the incremental yields that we are doing on the affordable housing portfolio on the HL and the LAP side or we are just doing HL right now?

Overall, as I said, it is between 9.6% to 9.7%. On the affordable side, our overall yield is around 11.5%.

And we'll be doing both HL and LAP here right?

Yes. Both HL and LAP put together.

The next question is from the line of Anusha Raheja from Dalal & Broacha. Please go ahead.

Sir you said that on con struction finance, you would want to grow this book back again. So, if you can throw some light in terms of strategy, like how you're plan ning to grow this book? How much of the average ticket s ize? And what share we can expect from this book in an overall loan book?

So, I think as a mix going forward, when we start doing corporate business, in the overall mix, this will be le ss than 10% at its peak. So, we will restart this business in a few quarters from now. And when we r estart, we'll be f ocusing only on construction finance, will be picking choosy on builders and projects and locations.

So just wanted to get some more colour on the write -off that you've taken on the retail part. One is, could share the quantum of the write-off? And secon dly, you gave some more colour as to what kind of ticket siz es those loans were -- were there specif ic in geography wi th the independent houses or apartments, if you can give some more colour on that, please?

The write-offs, as I stated, it was on the P&L side, around INR 200 crores we had, which was available to us. The net P&L is INR 45 crores. So around INR 245 crores we have used between write -offs and for strengthening the PCR on Stage 1 assets of corporate . So, it is basically a combination o f these two that ’s where funds have been utilized. It was l argely doubtful 2, doubtful 3 categories of assets.

And so, this like what ticket size of loans that we had written off?

These are normal retail cases. So, there is no any -- no specific pool as such, but these are normal retail cases, which were in NPA in doubtful 1 and 2 category.

Sure. And then just one last thing as to because the guidance that we have given on the asset quality, it tends to increase from further year on . Any such one-off write-offs that we planning in future quarters?

As of now, there is no plan. There is no plan for any one -off in future. We'll not be able to comment on that. But definitely, as our endeavour is to try and bring down the NPA on retail side as well. I think largely it will be driven by collections and legal.

Thank you. We have the next question from the line of Bhuvnesh Garg from Investec Capital. Please go ahead.

A couple of questions . Firstly, sir, wh at was our BT out r ate for this quart er and for the last couple of quarters?

See, overall, we have given a runoff rate of 16% to 18%. This includes normal runoff as well as BT and foreclosure. It will be somewhere between 7% to 8% only for BT.

And what was it for Q1 and Q4?

Q1 was also -- it is in the same range for the last few quarters. It used to be in the range of 9% to 10%. It has come down to the level of 6% to 7% now for the last few quarters.

Got it, sir. Okay. And in terms of growth, if I look at on our slide six, that we have growth path for retail loan book. So, in Q2, I mean, our retail loan book has gone by INR 1,493 crores, similar slightly lower than what the growth was in Q1. But generally, wh at we have seen th at Q2 is a better quarter than Q1. So, what explains this lower growth in retail loan book?

Right, sir. But in your slide six, top left here, I see from April to June, INR1 ,507 crores and then from June to July to September, INR1,493 crores. That is the increase in retail loan asset. Just want to understand?

Yes. There is some imp act of write -off in that, so hence it is looking lower. But if you see gross disbursement, that has grown 14% quarter-on-quarter.

Got it. And sir, considering that our total di sbursement for H1 has grown at about 13% Y-o-Y and we are guiding for 22% Y -o-Y growth for full year, so what gives you confidence that it will accelerate in next two? So, what are the key trend driver that you are witnessing?

So, I think last three, four quarters, as I mentioned earlier, we were r eally working on -- trying to change some of this mix, profile mix, product mix, geography mix, moving away from super prime completely and moving to prime and affordable. So, we were focusing on all these things and therefore it was by design consciously we had to grow at this level. And H2 is always better than H1 and within H2 you will see that quarter 4 would be really very good compared to quarter 3 and quarter 3 will be far b etter than quarter 2. And we will cover up in quarter 3 and quarter 4. So, which is what I mentioned earlier as well, 17% to 18% of a book growth and 22% to 23% of disbursement growth is well in sight.

Got it sir. That’s it from my side. Thank you. Good answer. Have a good day. Thank you.

Thank you. The next question is from the line of Ravi Naredi from Naredi Investment. Please go ahead.

Thank you. Sir, my question is regarding your comment – in your comme nt in press releas e, the INR 160 crores one-off in Q2 financial year '23. And so, it excludes NII grow 35% year - on-year. So please elaborate this INR 160 crores one-off income. It's comment was not in last year Q2 results also. So...

See, as I said, whenever there is a benchmark rate reset, even on the securitized book, you have to change the rate for that book. And you have to take an upfront gain. So that upfront gain came as a one -off in Q2 last year when we changed our rate reset by aroun d 100 basis points. So, it was one time gain that came last year, which is not there in the current quarter. So hence, it has been called out separately.

And the next question is rega rding the COVID -19 related stress assets, INR1,600 crores approx. So, what is the ave rage tenure of this exposure? And what is your asses sment related to this exposure?

So, I think you're referring to restructured pool. So, the tenor is on par with the entire portfolio tenor. So, there is no difference. But for only changed that during the restructuring period, some of these customers would have opted for morat -- interest morat, which could be for maybe ranging from three months to 12 months or maybe 15 months. So otherwise, the t enor is broadly in line with the entire portfolio, retail portfolio.

Okay. thank you, sir.

Thank you. The next question is from the line of Abhijit Tibrewal from Motilal Oswal. Please go ahead.

Thank you for allow ing me a fol low up . Just one question. Girish, your opening remarks talking about restarting construction finance in a couple of quarters. You'd also mentioned the ticket size that you're looking for. Can you just elaborate on that? What ticket size you're looking for?

So yes, we are still working on that, but there is a pl an to start corporate business. very shortly, could be two, three quarters from now. So, when we restart, we'll be really pick and choosy. We will do corporate business mor e from a str ategic point of view, which could enable our retail growth. Ticket size w ould be about INR150 crores to INR200 crores. That is what we would be looking at. And we'll be very pick and choosy on the developer projects and we will do in select locations.

Got it, sir. And sir, typically, this projects that you're planning to do, I mean I understand, I mean, maybe two, three quarters away too early to comment given that maybe you've not started working on this piece yet? But broadly will the yi elds in the corporate book that you will be building be lower than the yields that we have in retail today?

Not at all. I think the yield on corporate will be much higher than the retail book. But yes, I know since we are going t o focus on s elect developers, good developers, the yield may not be significantly hig her than the prime yield. But definitely, if you compare to, let's say, a affordable business, Roshni, it will be on par or maybe slightly less than that. Because today, Roshni our yield is about 11.5%. I think this would increase over a period of time and this could grow beyond 12%. So even the corporate book yield would be on similar lines.

Got it, sir and that's all from me. Thank you so much.

Thank you. We have the next question from the line of Varun from Kotak Securities. Please go ahead.

Hi, sir. Thanks for giving me the opportunity. So, if I look at the restructured book, that was about INR 1,700 crores. And there is som e movement of t hat into NPAs and some of it has been on paid off. There's still some INR 1,500 crores in the standard book. So, is this coming out of resolution or have some all of it moved out of moratorium where are they right now in stages and what's the provision?

So as of now, there is nothing in the restructured window. So, all those cases, which were restructured, EMI have fallen due, and they are servicing. So, whatever we see today in various stages, Stage I, Stage II, Stage III is post the completion of a restructured period.

There is nothing additional.

As per retail ECL model, the provisioning is done.

Varun does that answer your question?

Yes.

Thank you. We have the next question from the line of Onkar Ghugardare from Shree Investments. Please go ahead.

Yes, you were tal king about overall loan book grow th of 17% -18%. That was only for retail category or overall loan book you're talking?

The retail category, because corporate we are degrowing and by the time we start, it will take another two to three quarters. So, the growth what we were talking was only on retail.

And what about the overall growth there?

I think more or less, it will be in line because today, if you see out the overall portfolio, retail is about 96%. And even if you see -- and even if you see what the book was last year, I think the gap is going to be about maybe 3% -3.5%, otherwise -- largely the growth is going to come from retail till we start corporate.

So overall growth would be similar to the retail?

17% to 18%, what I mentioned was on retail.

Yes, correct. But once you start growing the construction finance?

construction finance, it will be a very small business for us. At i ts peak, it will be less than 10% of the entire portfolio.

Okay. And right now, the retail is consisting around 96% of the overall loan book?

Yes.

Okay. All right.

We have no further questions on the queue. I wo uld now like to ha nd over to the man agement for closing comments. Over to you, sir.

Thank you, everyone, for joining us on the call. If you have any questions unanswered, please feel free to get in touch with Investo r Relations. The tr anscript and audio of this call will be uploaded on our website. Thank you.

Thank you. On behalf of PNB Housing Finance Limited, that concludes this conference. Thank you all for joining us. You may now disconnect your lines.