Transcription révisée de la conférence ou présentation sur les revenus de FEDERALBNK.NSE du 4 mai au 19 mai à 10 h 00 GMT – Finance Curation

Il convient de souligner les résultats financiers de l’amélioration de nos coûts de crédit, particulièrement substantielle au quatrième trimestre. Et c'était granulaire, et ce n'était pas sur le bénéfice d'aucun bénéfice ni dispense. C'était structurel et reflétait les nombreuses initiatives de la banque au fil des ans, je dirais, et celles-ci portent leurs fruits.

Ainsi, le résultat de l’exercice 19 et, en particulier, du quatrième trimestre nous donne la certitude que nous travaillons sur ce sur quoi nous travaillons et sur ce que nous cherchons à offrir à l’avenir. À partir de l’année 20, nous déterminerons le score et la manière dont nous devrions évoluer de manière responsable.

En termes de croissance, il aurait compris que la croissance des prêts et des dépôts était assez solide, avec 20% de plus. Les segments du crédit aux entreprises, crédit de détail, grossiste, banque commerciale, croissance variée et certains par choix, ont l’impact du marché. Mais là où nous avons vu de grandes opportunités, la croissance a été assez spectaculaire. Et si je prends la croissance du commerce de détail, elle dépasse 33%, ce qui est également le cas de nombreuses entreprises. Traditionnellement, nous étions une seule entreprise, qui consistait principalement en un prêt hypothécaire. Ensuite, nous avons obtenu le prêt hypothécaire plus le LAP et un continuum d’assurances. Et puis nous avons contracté des prêts-auto. À mesure que nous progressions, nous avons obtenu des prêts personnels, qui sont basés sur notre propre portefeuille, basé sur l'exploration de données. Et puis, d’une certaine manière, nous l’éliminons, nous l’unissons dans une création numérique, basée sur les archives de bureau. Ainsi, la continuité de la croissance du crédit dans chacun de ces produits entraîne une impulsion.

De même, en Corporate, nous avons bien progressé au cours des 3 dernières années. Nous avions un miroir ou imité cela dans notre banque commerciale, et je suis heureux d’avoir constaté des progrès importants au cours des deux derniers trimestres. Et nous avons pris – au début de l’exercice 19, le portefeuille de la banque commerciale a connu un franc succès. Nous avons pris environ 800 millions de rands de crédit, puis nous sommes rentrés avec une croissance assez forte au moment de notre entrée, quittant l’exercice 19. C'était en termes de relance du crédit.

Traditionnellement, nous avons été assez forts avec notre franchise de responsabilité. Je suis heureux que cet élan se poursuive. Et je pense que ce qui est plus important, ce que je veux souligner, c'est que la franchise fédérale fonctionne, par opposition à certaines zones géographiques où la banque est plus dominante. Et, en fait, dans certaines zones géographiques clés que nous avons rencontrées en raison d’une catastrophe naturelle, le reste de la banque s’est suffisamment constitué pour le supporter.

En ce qui concerne les honoraires, je suis heureux de constater de bons progrès, et c’est beaucoup d’améliorations dictées par la structure. En matière de trésorerie, je l’ai signalé, nous avons créé une très bonne capacité de vente. Et ce résultat est le sentiment que la dynamique s'accélère, qu'il s'agisse de la vente de produits de change ou de produits nationaux à des entreprises, à des clients du marché intermédiaire.

Les revenus tirés des taxes dans le secteur de la vente au détail, qu'il s'agisse de l'assurance-vie, de l'assurance de dommages, des fonds communs de placement ou des produits tiers, sont plutôt bons. Par conséquent, les efforts déployés par la banque au cours des trimestres commencent à bien fonctionner. Et nous pensons qu’ils sont à la fois évolutifs et durables.

En ce qui concerne le crédit, en particulier au cours de l’exercice 19 et même du quatrième trimestre, nous avons constaté que, pour la première fois, je pense qu’en 9 trimestres, les erreurs se sont glissées sur la reprise et la mise à jour. Et la mise à jour de récupération pour le trimestre était de 323 crores INR, les feuillets sont d'environ 256 crores INR. Et la mise à jour de la reprise était assez granulaire, créant une transaction dans laquelle nous avons effectué une vente au comptant. Et nous avons laissé un compte, alors nous avons vu qu'ils nous ont rapporté un bénéfice d'environ 50 millions de roupies. En dehors de cela, les efforts de récupération granulaires de la banque ont été réguliers.

Ainsi, sur la diapositive 3, sur notre plate-forme d’investisseurs, sur les revenus tirés des commissions NIM, les coûts liés aux revenus, les glissements de terrain, l’amélioration de la reprise, le coût du crédit, le ROA, nous avons tracé la trajectoire et où avons-nous dit ou pensons-nous sortir de la année, et comment nous nous démarquons, nous croyons que dans la plupart des cas, nous avons atteint les chiffres ou autour d'eux. Et nous pensons que cela établit la plate-forme ou le marqueur de notre élan pour l'exercice 20. Et c'est ce que nous allons mettre à l'échelle.

Avec cette introduction, comme je l'ai dit, ou Raj a dit, toute l'équipe senior est avec moi. Nous serons heureux de répondre aux questions et de clarifier tout ce dont vous voudriez parler.

Ensuite, opérateur, vous pouvez l’ouvrir pour les questions et les réponses.

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Questions et réponses

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Opérateur [1]

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(Instructions de l'opérateur)

(difficulté technique)

exercice financier. Et nous pensons que cela devrait se poursuivre alors que nous entrons dans l’exercice 20 & 21. Nous pensons que nous améliorerons encore de 250 points de base et nous les visualisons au cours des deux prochains exercices.

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Analyste non identifié, [2]

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Bon. Assez juste. Et puis, enfin, l’intérêt pour les autres: la ventilation du revenu d’intérêts et du crédit unique INR 47 en INR 70 crore, INR 72 impairs. Alors, est-ce égal à un?

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Shyam Srinivasan, The Federal Bank Limited – Directeur général et directeur [3]

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Remboursement des intérêts sur l’impôt sur le revenu – intérêts sur le remboursement de l’impôt sur le revenu.

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Analyste non identifié, [4]

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Alors, combien cela ferait-il?

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Shyam Srinivasan, The Federal Bank Limited – Directeur général et directeur [5]

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Environ 18 millions INR.

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Analyste non identifié, [6]

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INR 18 millions d'années. Bon. Monsieur, une dernière chose, je suis désolé. Pouvez-vous fournir la pause des fermetures?

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Shyam Srinivasan, The Federal Bank Limited – Directeur général et directeur [7]

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Je pense que c'est sur le pont. Mais nous pouvons revenir en arrière, je suis sûr que d’autres auront une question similaire. En attendant nous …

N'est-ce pas sur la couverture?

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Ashutosh Khajuria, The Federal Bank Limited – Directeur exécutif et directeur financier [8]

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137 INR, nous avons des millions de pertes sur créances.

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Shyam Srinivasan, The Federal Bank Limited – Directeur général et directeur [9]

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Perte de crédit, 137 crores INR. Actifs standard – Les provisions d’investissement sont de 24 millions d’INR. Provision d'actifs standard, 16 crores INR.

INR 137 crore, INR 24 crores et INR 16 crores.

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Opérateur [10]

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Nous allons passer à la prochaine question, celle de la ligne Jai Mundhra de B & K Securities.

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Jai Mundhra, Batlivala et Karani Securities India Pvt., Division de la recherche – Analyste de recherche [11]

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Félicitations pour un – la tendance des chiffres. Monsieur, tout d’abord, dans cette clarification de l’amélioration du rendement des investissements de 10, 12 points de base chaque année. Cette salle de sortie de ROA est-elle meilleure? Ou le dites-vous pour toute l'année?

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Shyam Srinivasan, The Federal Bank Limited – Directeur général et directeur [12]

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Salle de départ. Alors dans le …

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Ashutosh Khajuria, The Federal Bank Limited – Directeur exécutif et directeur financier [13]

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Je pense que vous verrez une amélioration similaire dans la base.

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Jai Mundhra, Batlivala et Karani Securities India Pvt., Division de la recherche – Analyste de recherche [14]

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Bien sûr. Et deuxièmement, oui … la question de la qualité des actifs, monsieur. Si vous pouvez, d'une certaine manière, partager votre processus de réflexion sur votre exposition, le cas échéant, à certains des grands groupes moyens que nous écoutons dans les médias, qui se trouvent dans le segment des médias / divertissement. De NBFC, nous avons assisté à une dégradation récente de la notation. Et troisièmement, le portefeuille immobilier, qui représente entre 3% et 4% du portefeuille de gros.

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Ashutosh Khajuria, The Federal Bank Limited – Directeur exécutif et directeur financier [15]

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Oui, commençons par le portefeuille immobilier. Nous avons regardé notre livre. Nous pensons qu’en ce moment, la qualité de crédit est correcte. Nous ne sommes donc pas particulièrement alarmés. Et une grande partie de cela, 90% est un loyer avec une réduction. Et les locataires sont le genre de locataires, ils sont plutôt enjoués. Donc, en général, nous ne sommes pas inquiets pour le moment.

En particulier à votre question sur les grands groupes d’exposition présents dans les médias, puis dans l’ensemble des conversations de la plupart des institutions financières. Nous n'avons aucune exposition directe à l'un de ces NIM. SL, ou RCom, RInfra ou Jet. Cela dit, pour le financement de la maison de ce groupe, nous avons un numéro d’exposition ou deux chiffres, ce qui est bien pour le moment. Nous évaluerons comment les choses évoluent.

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Jai Mundhra, Batlivala et Karani Securities India Pvt., Division de la recherche – Analyste de recherche [16]

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C'est la seule exposition que nous avons dans l'ensemble du groupe de la Fed, non?

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Shyam Srinivasan, The Federal Bank Limited – Directeur général et directeur [17]

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Nous avons une structure en devise étrangère de la CRPA.

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Jai Mundhra, Batlivala et Karani Securities India Pvt., Division de la recherche – Analyste de recherche [18]

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Bien sûr monsieur. Et si possible, si vous pouvez partager, je pense que deux chiffres, trois chiffres essentiellement …

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Shyam Srinivasan, The Federal Bank Limited – Directeur général et directeur [19]

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C'est un dollar à deux chiffres.

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Ashutosh Khajuria, The Federal Bank Limited – Directeur exécutif et directeur financier [20]

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Petit à deux chiffres, petit à deux chiffres.

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Jai Mundhra, Batlivala et Karani Securities India Pvt., Division de la recherche – Analyste de recherche [21]

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Bien sûr monsieur. Et maintenant, monsieur, si vous pouvez partager ce portefeuille avec une double facture, alors, si vous en avez un, un portefeuille de ce genre pour votre livre d'entreprise, où si vous deviez mettre un numéro ou une perspective plus surveillée, si vous en aviez un. double facture en dessous du ratio du livre?

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Shyam Srinivasan, The Federal Bank Limited – Directeur général et directeur [22]

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Je vais partager comme suit. Si vous vous souvenez de l'année dernière, au début de l'année, lorsque nous en avions parlé, nous avions établi un coût du crédit de 65 à 70 points de base et nous sommes arrivés avec un taux de sortie de 50. Notre guide pour cette année est de 55 à 60 Coût en points de crédit Et nous croyons que nous sommes sur la bonne voie pour cela.

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Jai Mundhra, Batlivala et Karani Securities India Pvt., Division de la recherche – Analyste de recherche [23]

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55 à 60 points de base, non?

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Shyam Srinivasan, The Federal Bank Limited – Directeur général et directeur [24]

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Oui

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Jai Mundhra, Batlivala et Karani Securities India Pvt., Division de la recherche – Analyste de recherche [25]

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C'est génial, monsieur. Bien sûr. Et, enfin, sur cette question, la note que nous avons incluse du côté de IL & FS, nous réalisons qu’une grande partie de cela fonctionne et que vous recevez vos honoraires. Mais si vous pouvez partager un peu plus de couleur. Si vous voyez que cela tombe, si vous voyez cela du point de vue de la LGD, cela devrait être, quel type de LGD devrait-il impliquer?

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Shyam Srinivasan, The Federal Bank Limited – Directeur général et directeur [26]

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Nous avons 3 actifs dans le nom que vous avez mentionné, et tous les 3 sont là. Nous avons partagé cela dans notre divulgation. L'un d'eux, le plus important, est à 210 crore INR. Oui, même dans le classement et la performance et en bon état, tout le dépôt est financé. Et notre – les comptes qui – l'argent atteint le compte de la banque fédérale. Donc, il n'y a pas de problème du tout. Et LGD est pratiquement inexistant en cela, c'est presque un actif totalement sûr. Dans les deux autres plus petits crores de 30 INR, ils sont en cours, la garde est entièrement financée. Les fonds ne sont pas parvenus à la Banque fédérale, pour laquelle nous avons constitué une provision de 21 millions de INR. À ce jour, nous pensions que ces 3 sont performants, que les fonds entrent dans le compte et qu’ils sont d'anciens actifs d'exploitation. Nous sommes convaincus que cela ne posera pas notre problème, mais nous verrons comment les choses se déroulent.

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Opérateur [27]

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Nous allons passer à la question suivante, qui concerne la ligne Gaurav Jani de Centrum Broking Limited.

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Gaurav Jani, Centrum Broking Limited, Division de la recherche – Analyste de recherche [28]

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Félicitations pour un grand nombre de chiffres. Trois questions rapides de ma part. Tout d'abord, dans la croissance du prêt. Je pense donc que la croissance des prêts a légèrement fléchi, sous l’effet du segment des entreprises, qui a progressé d’environ 23%. Donc, je veux juste comprendre ce que vous pensez de cela? Je tiens à dire que nous avons sûrement vu un cadre kényen quitter le secteur des entreprises.

Et quelle est votre perspective à ce sujet? Et comment le voyez-vous à l'avenir? Parce que si vous regardez les principales banques, je veux dire qu'elles auraient une certaine personne de haut niveau qui examinera tout le marché de gros. Vouliez-vous savoir ce que vous en pensiez et quel type de croissance espérez-vous dans ce segment à l'avenir?

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Shyam Srinivasan, The Federal Bank Limited – Directeur général et directeur [29]

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Bien sûr. Oui, je pense – laissez-moi d'abord répondre à la deuxième partie de votre question. Des personnes âgées examinent le portefeuille et je suis très heureux des personnes âgées qui le voient. Donc, il n'y a pas de problèmes du tout. La seconde est que la croissance est calibrée. La création progressive était la croissance nette, que vous verrez.

Comme vous l'avez peut-être observé, il existe certaines parties des secteurs que nous avons; traditionnellement, nous avons eu une croissance importante. Nous avons ralenti ou ne pas renouveler les lignes ou demander l'amortissement. Et par conséquent, les chiffres combinés peuvent être inférieurs à leur croissance passée. Nous ne sommes donc pas inquiets à ce sujet. Dans certains domaines, tels que les projets Greenfield, la permanence prolongée, l’énergie, les télécommunications, nous nous en éloignons. Nous avons maintenant ajouté certains des secteurs de stress les plus récents, pour ainsi dire.

Ensuite, l’augmentation nette est – déduction faite de certaines des ventes que nous avons réalisées ou des réductions que nous avons effectuées. La dynamique de croissance reste forte. Mais je voudrais souligner que notre équipe est, comme nous l’avons souligné, je crois qu’il ya 3 ou 4 trimestres, je souhaite atteindre un détaillant en gros à 50/50. Nous sommes dans le grossiste de détail 53-47. Nous travaillons à la banque et nous intervenons dans le commerce de gros si vous êtes dans les secteurs des sociétés et du commerce, et que le commerce de détail est l’autre activité. Nous travaillons à la banque dans ce sens, les deux grandissent et grandissent assez bien.

Mais le taux de croissance dans le commerce de détail sera plus élevé: A, l’opportunité est plus grande; B, ma base est plus petite; C, la possibilité d'obtenir un meilleur flux de revenus dans les banques est plus grande. Voici comment nous mélangeons le livre.

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Gaurav Jani, Centrum Broking Limited, Division de la recherche – Analyste de recherche [30]

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Bon. Bien sûr monsieur. Monsieur, maintenons-nous notre guide de croissance des prêts? Je veux dire, ce serait utile si je pouvais donner cela pour les 2 prochaines années. À l'origine …

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Shyam Srinivasan, The Federal Bank Limited – Directeur général et directeur [31]

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Oui, il est motivé par l’appétit et les événements du marché. Nous croyons que nous pouvons croître de 20%, 22%, voire plus. Mais nous pouvons être un peu plus attentifs jusqu'à ce que l'environnement soit complètement dégagé et nous pensons pouvoir le faire une fois que nous aurons atteint la Q3. Mais à ce stade, cela représente une croissance de 20% à 23%.

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Gaurav Jani, Centrum Broking Limited, Division de la recherche – Analyste de recherche [32]

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Bien sûr. Je l'ai. En second lieu, Monsieur, dans l’exposition de IL et FS, nous vous remercions, à l’avenir, de votre clarté quant à l’atout que vous avez mentionné. Mais quel genre de trajectoire de coût du crédit ou comment cela prendrait-il l'offre à l'avenir? Je veux dire, serait-il plus en bois là-bas? Sera-ce un peu encombrant dans une salle du salon IL & FS?

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Shyam Srinivasan, The Federal Bank Limited – Directeur général et directeur [33]

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Je pense que Gaurav, IL & FS, en ce moment, comme je l’ai indiqué il ya quelques minutes, LGD devrait être proche de 0 dans ce domaine. Parce que ce sont des actifs fonctionnels opérationnels.

Maintenant, il pourrait y avoir un moment pour une raison quelconque. Quelqu'un peut dire que le coût doit être NPA et peut être enregistré. Maintenant, à moins que tout ne transfère l'argent des actifs d'exploitation à un groupe central et en fasse un désastre, oui. Nous pouvons être au mauvais bout de cette poursuite.

Notre conviction est qu’il s’agit d’un anneau SPV, qui a été configuré pour ces actifs. La perception des péages d’exploitation va sur ces actifs. Ce sera presque juridiquement faux de le faire. Mais en disant cela, tout peut arriver aujourd'hui. Par conséquent, à ce stade, nous ne voyons pas d’approvisionnement en matériaux volumineux. Nous pensons que si cela devient NPA, si cela est fait, alors 7,5% de plus seront ajoutés au registre, au cours de l’exercice.

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Ashutosh Khajuria, The Federal Bank Limited – Directeur exécutif et directeur financier [34]

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15%, nous l'avons déjà.

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Girish Raj Sankunny, Quest Investment Advisors Pvt Ltd. – Analyste de recherche [35]

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Correct corrige je l'ai. Monsieur, enfin, quelques questions de maintenance des données. Nous avions donc l'habitude de mentionner notre portefeuille agricole dans le portefeuille de prêts aux particuliers. Alors, pouvez-vous quantifier cela maintenant? Et quelle est notre position actuelle en tant que responsable des relations?

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Shyam Srinivasan, The Federal Bank Limited – Directeur général et directeur [36]

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Le chargé de clientèle de toutes les entreprises avoisine maintenant les 500 millions de INR. Au sein des entreprises, des trésors, des banques commerciales, de l’agriculture et des banques prioritaires, il s’élève à environ 500 crores INR, moins / plus ou moins. Comme mon guide me le dit, je suis désolé, 700 crore INR, toutes mes excuses. C'est un crore de 700 INR. Je suis désolé, votre autre partie de la question?

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Gaurav Jani, Centrum Broking Limited, Division de la recherche – Analyste de recherche [37]

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Monsieur, le portefeuille de prêts aux particuliers, nous avons mentionné le portefeuille de prêts à l’or. Monsieur, ce n'est pas donné ce trimestre. Si vous pouviez quantifier cela?

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Shyam Srinivasan, The Federal Bank Limited – Directeur général et directeur [38]

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Le prêt d’or s’élève actuellement à environ 7 200 crores.

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Gaurav Jani, Centrum Broking Limited, Division de la recherche – Analyste de recherche [39]

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Donc, à l'exception de l'autre, et non de l'or agricole, je parlais de l'or vendu au détail, qui était d'environ 1 631 CRR au dernier trimestre.

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Shyam Srinivasan, The Federal Bank Limited – Directeur général et directeur [40]

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Nous l'avons fusionné, mais ce livre représente maintenant environ 1 700 millions de roupies indiennes.

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Opérateur [41]

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La question suivante vient de la ligne Girish Raj de Quest Investment.

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Girish Raj Sankunny, Quest Investment Advisors Pvt Ltd. – Analyste de recherche [42]

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La diminution d'un trimestre à l'autre du différentiel, les rendements comparés au coût du dépôt au cours de l'exercice 19, attendons-nous à ce que ce phénomène s'inverse? Et que s'est-il passé exactement pendant l'année qui a diminué d'un trimestre à l'autre?

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Shyam Srinivasan, The Federal Bank Limited – Directeur général et directeur [43]

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Parlez-vous de la baisse de performance?

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Girish Raj Sankunny, Quest Investment Advisors Pvt Ltd. – Analyste de recherche [44]

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Performance moins le coût de la caution.

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Shyam Srinivasan, The Federal Bank Limited – Directeur général et directeur [45]

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Les NIM sont passés de 3,11% à 3,14% à 3,17%.

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Girish Raj Sankunny, Quest Investment Advisors Pvt Ltd. – Analyste de recherche [46]

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Oui, alors, monsieur, cela dépend de la propagation. Alors, que s'est-il passé exactement? Et on voit que ça s'inverse?

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Shyam Srinivasan, The Federal Bank Limited – Directeur général et directeur [47]

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J'ai dit que le NIM pour l'exercice 20 serait de 3,20%. Donc, cela est ajusté à cela.

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Ashutosh Khajuria, The Federal Bank Limited – Directeur exécutif et directeur financier [48]

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Il devrait encore augmenter de 3.17% maintenant.

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Girish Raj Sankunny, Quest Investment Advisors Pvt Ltd. – Analyste de recherche [49]

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3,17% à 3,20%, à droite. Bon. Et une perspective sur les autres revenus? Parce que…

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Shyam Srinivasan, The Federal Bank Limited – Directeur général et directeur [50]

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Le taux d’exécution, que nous avons observé au cours de l’exercice financier 2003-2004, est constamment axé sur le maintien au cours de l’exercice fiscal 2005. Ce ne sont pas ponctuels, ils sont organiques structurels. Nous pensons donc que c'est évolutif.

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Opérateur [51]

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La question suivante vient de la ligne Pavan Ahluwalia de Laburnum Capital.

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Pavan Ahluwalia, [52]

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Juste une autre question sur les retours. Comment devrions-nous voir les compositions du livre changer dans les 1 ou 2 prochaines années? Et comment cela va-t-il conduire à la performance? S'agit-il d'une augmentation significative numérique, personnelle ou automatique? Parce que certaines des catégories dans lesquelles vous évoluez maintenant sont sans aucun doute plus performantes que la performance moyenne du livre. Mais ce sont aussi des catégories plus risquées. Et, franchement, sa catégorie est celle où les grands fournisseurs ayant une expérience dans ces catégories au niveau national ralentissent. Comment voyez-vous notre potentiel de croissance en eux l'impact sur les rendements, et assurez-vous que nous n'augmentons pas les rendements en prenant des risques de crédit au mauvais moment du cycle?

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Shyam Srinivasan, The Federal Bank Limited – Directeur général et directeur [53]

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Merci Oui, j'ai posé une question au tout début de l'appel, ce qui est un crédit quelque peu responsable, de sorte que nous ne rechercherons pas plus ou moins la croissance des gangs dans la marge ou le rendement. Nous estimons que, alors que nous passons d’environ 53-47 à 50-50 en 2 exercices, le prêt personnel à taux de croissance incrémentiel, plus numérique, plus certains des produits à rendement plus élevé, qui sont actuellement inférieurs à la 3%, peut devenir 5% de notre livre. Donc, le taux de croissance de ce sera plus élevé. Mais même avec un dénominateur plus grand, ce sera toujours 5%, 6% de la croissance.

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Pavan Ahluwalia, [54]

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Et ce sont des prêts personnels? Sommes-nous une sorte d’exploitation minière de nos clients existants, pour lesquels nous disposons de nombreuses données et pour laquelle nous n’avons pas été attaqués par le HDFC, Bajaj Finances du monde? Ou alors nous allons simplement dire: pouvons-nous faire la même chose qu’un Bajaj Finance ou un HDFC? Et nous pouvons vraiment leur donner un taux légèrement supérieur. Parce que nous n’avons pas besoin de faire la même répartition que ces gars-là, c’est parce que cela pourrait être rentable pour nous, alors que le ROE les diluait. Quelle est la stratégie là-bas?

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Shyam Srinivasan, The Federal Bank Limited – Directeur général et directeur [55]

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Le plus important, et principalement sur ce sur quoi nous travaillons, et nous poussons très fort, est certainement d’assurer l’exploitation de toute notre base de données. Je pense que les 3 derniers appels que nous avons annoncés ont un programme appelé BYOM, soyez votre maître. Il est axé sur le numérique et provient du crédit de nos clients existants. Et au cours des deux dernières années, nous avons réussi à embarquer de nombreux clients salariés. L'exploitation de notre base de données existante de clients fonctionne parfaitement pour nous.

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Pavan Ahluwalia, [56]

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Mais pourquoi s’adressent-ils à vous et non aux 50 autres personnes qui essaient de vendre des prêts personnels numériques en ligne, et cetera? Est-ce que ces gars-là ne sont pas encore en mesure d'atteindre ces personnes? Ou offrez-vous un meilleur taux? C'est ce que j'essaie de comprendre. Aujourd'hui, toute personne salariée est sur le digital avec des offres de prêts personnels, de prêts auto, de prêts de tous types. Donc, ce que j'essaie de comprendre, c'est quel est votre avantage? Est-ce juste, vous faites baisser le prix? Est-ce que vous obtenez au client, ces personnes ne peuvent pas toucher pour une raison quelconque? Qu'est-ce – y a-t-il une couleur à ce sujet?

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Shyam Srinivasan, The Federal Bank Limited – Directeur général et directeur [57]

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La réponse ne sera peut-être jamais la même, mais peut-être tout ce qui précède, n'est-ce pas? Mais je tiens à souligner que je pense que quiconque dit avoir un saule secret ou un segment unique se moque de lui-même. Nous touchons aussi agressivement que les meilleures banques du pays. Et comme beaucoup d’entre eux sont des clients existants, il existe un certain degré de loyauté et de relation. Et par conséquent, nous sommes en mesure de tendre la main à ces gars et de leur offrir. Et nos offres numériques, et si vous prenez un prêt numériquement, vous obtiendrez probablement deux banques fédérales et deux autres bonnes banques, et tout cela. Nous sommes certainement l’un des trois premiers fournisseurs de prêts numériques. Et je ne le dis pas parce que je dirige la banque. Vous pouvez vérifier par vous-même.

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Opérateur [58]

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La question suivante vient de la lignée de Mona Khetan de Reliance Securities.

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Mona Khetan, Reliance Securities Limited, Division de la recherche – Analyste bancaire principale [59]

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Ma première question porte donc sur ce plan de restructuration des MPME du 1er janvier. Quelle part de notre activité PME a été restructurée dans le cadre de ce programme ce trimestre?

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Shyam Srinivasan, The Federal Bank Limited – Directeur général et directeur [60]

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Le total était de 7 crores INR ou 8 crores INR.

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Mona Khetan, Reliance Securities Limited, Division de la recherche – Analyste bancaire principale [61]

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Ok, j'ai compris. D'accord, et sur une question axée sur les données. Sur CASA, quel serait le CA contre le SA pour vous? Je ne pense pas que les détails figurent dans la présentation.

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Shyam Srinivasan, The Federal Bank Limited – Directeur général et directeur [62]

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C'est environ 6,5%.

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Ashutosh Khajuria, The Federal Bank Limited – Directeur exécutif et directeur financier [63]

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Il est passé de 4,5% à 6,5% au cours des 3 dernières années.

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Shyam Srinivasan, The Federal Bank Limited – Directeur général et directeur [64]

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Notre croissance la plus forte a été en Californie.

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Mona Khetan, Reliance Securities Limited, Division de la recherche – Analyste bancaire principale [65]

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Bon. Et ce serait dirigé par?

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Shyam Srinivasan, The Federal Bank Limited – Directeur général et directeur [66]

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Un tas de choses, si vous nous avez suivis. I've said on old calls, we have built a very good architecture for originating CA from a point of view of technologies, distribution and reaching out to existing customers and making them to bank with us as their priority bank. Traditionally we were only a lender. So we've done a lot of data mining with existing clients. Our cash management and, what we call, [Freddie] is our transaction-lending capability. Now it's probably, at this juncture, the first bank to offer all of that entirely customer-originated. Sorry, from MSME restructuring it's INR 11.68 crores, not INR 7 crores, INR 8 crores.

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Mona Khetan, Reliance Securities Limited, Research Division – Senior Analyst of Banking [67]

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Bon. And on your SME book, you have this business banking and commercial banking. What would be the ticket sizes between these, in the sense that what we'll be doing?

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [68]

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INR 5 crores and below is tagged as business banking. INR 5 crores to INR 25 crores, commercial banking.

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Operator [69]

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The next question is from the line of Renish Bhuva from ICICI Securities.

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Renish Bhuva, ICICI Securities Limited, Research Division – Assistant VP [70]

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Congratulations on this set of numbers. Sir, a couple of clarification. One on this IL&FS exposure. Sir, are this still between interest income on the project, which is under Amber.

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [71]

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Interest income on the Amber project. How we're looking?

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Ashutosh Khajuria, The Federal Bank Limited – Executive Director & CFO [72]

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Because we got payment up to April — up to April we have got the payments in the accounts, in our own accounts.

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Renish Bhuva, ICICI Securities Limited, Research Division – Assistant VP [73]

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Bon. Because one of the analysts, he reported numbers couple of days back, that to reverse it saying regulators are not allowing…

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [74]

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I want to point out, you must be aware that the same asset in some case is secure, some case is unsecure. In our case, we believe it's fully secure. That's why we said the LGD should be minimized.

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Ashutosh Khajuria, The Federal Bank Limited – Executive Director & CFO [75]

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And we are getting the payments through the consortium leader. It's not that we, in isolation, are getting it. It's been distributed by the consortium leader.

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Renish Bhuva, ICICI Securities Limited, Research Division – Assistant VP [76]

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Bon. Would you like to quantify that number, if possible?

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [77]

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Which number?

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Renish Bhuva, ICICI Securities Limited, Research Division – Assistant VP [78]

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The interest income on IL&FS.

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [79]

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You can say roughly — if the asset is INR 210 crores. You can then calculate, 20%-plus per annum will be the interest income.

Droite?

This is interest income, not the — minus interest cost.

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Renish Bhuva, ICICI Securities Limited, Research Division – Assistant VP [80]

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Yes, yes, yes. Thanks for that clarification. Just secondly, on our [resituated] affairs, it actually declined in absolute terms on quarter-on-quarter basis. Is there any specific reason? Or it is just because there is [dream] of the unwinding sum of the risky effects, how they had debt?

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [81]

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No, no. It's a combination of things. Also, you saw the NBFC, RBI has given some changes to NBFC RWAs. So to that extent on all the benefits.

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Renish Bhuva, ICICI Securities Limited, Research Division – Assistant VP [82]

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Okay, okay. And sir, lastly on the slippages and also retail slippages. In absolute terms, actually it's lowest in past many in quarters. And why it was somewhat agri, it is highest in past many quarters? So I mean, is it difficult for us to draw a time line. If you can show some light about what is happening? And then what one should assume that a, kind of, a trend in Retail and agri slippages?

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [83]

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See, Renish, and this is something I've said in all of our calls, our numbers are never smooth. It is what it is. And in agri, in certain states and particular in Kerala, after the flood, there been a lot of dispensations, lot of political interventions. So we have taken a larger hit this quarter. And that has been — if you see the last 3 quarters, even the agri — and it's all Network-I. Of our total INR 256 crores, 160 — INR 91 crores is outside Kerala and INR 160 crores is Kerala, and driven largely by recent events. But we've upfronted it, and we've taken all the hit.

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Renish Bhuva, ICICI Securities Limited, Research Division – Assistant VP [84]

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Bon. So in this side (inaudible) going forward, it should decline. We have taken our…

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [85]

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We would believe that this INR 256 crores, which is the blended between the 2 — with the whole portfolio, it should be more like closer to INR 200 crores.

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Renish Bhuva, ICICI Securities Limited, Research Division – Assistant VP [86]

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All right. And would you like to give a guidance on slippages for the full year within FY '20?

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [87]

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I think we've you pointed out 56 — 55, 60 basis point credit cost, which clearly — it's very easy for you to compute. You know the run rate, you know the overall recovery trend line. So fairly indicates. I'm interested doing that because last year we told a number, and you were like off by INR 80 crores, and you were beaten up many times over.

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Renish Bhuva, ICICI Securities Limited, Research Division – Assistant VP [88]

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Sir, if I can ask last question. On the cost side, though, we are not been adding any branches or ATM so far from last 2, 2.5 years. But still our OpEx growth is running between — anywhere between 16% to 20%. So I mean, are we adding more people? Or are we spending more on technology, or are we done with debt cycle. And going ahead, we should see the operating leverage? You have rightly mentioned in your opening remark also. So what is happening there? I mean, is there the incremental growth, are we sourcing from a third-party and that's why we have to pay more fees and everything to third-party? Or what is happening there, I mean?

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [89]

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No. I think I mentioned in the last 3 years, we've seen 750 basis improvement in operating leverage — cost income improvement. And that points to about 200 basis points improvement almost every year. We think that'll continue. Our cost increase is given as a — it has a certain degree of pensioning that we have to do. And that is never a direct — you don't see the direct benefit of that in the near term, in the cost/income ratio, it only inflates the cost. That's a given, I mean, that's — in 2022, I have to carry that. But outside of that, our costs are fairly well managed. And in technology, we will continue to invest.

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Renish Bhuva, ICICI Securities Limited, Research Division – Assistant VP [90]

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Bon. So this run rate, if (inaudible) it didn't sustain, right? Whatever you are saying that this is big reason for decline in cost to income, that you're confident of achieving that?

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [91]

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No. I'm not saying the 250 basis points each year. But I'm saying…

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Renish Bhuva, ICICI Securities Limited, Research Division – Assistant VP [92]

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No, no. Cumulatively for 2 years?

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [93]

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Yes, yes, yes.

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Operator [94]

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The next question is from the line of Ankur Shah from Quasar Capital.

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Ankur Shah, [95]

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Sir, I just wanted to ask one question in relation to whole Retail portfolio. Because Retail — all the banks are coming out and saying that, we want to increase our Retail exposure and something in relation to that. The big corporate banks are even saying the same thing. Sir, has the risk reward in favor to grow this portfolio? Because it's becoming like a bandwagon sort of a thing that everyone is trying to ride the Retail portfolio. And eventually, there might be a case where that is too or isn't too favorable to prove operative.

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [96]

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Sí. I tend to agree with you, and you'd never have heard that from Federal. We've said we will be a balanced book. And for long I said, we're a 1/3, 1/3, 1/3 book within Corporate, SME and Retail. When we're running a low CD ratio, we stepped up on our Corporate, we saw good progress. As we came to in the mid-80s or early 80s of CD ratio, I said we will step up on our commercial banking. We've put a full architecture for that. As we are doing that, we said there's an opportunity to step up on Retail. So we will — and if you go back to the earlier definition of Corporate, SME and Retail, directionally, we'd like to be a 1/3, 1/3, 1/3. We'd never want to be caught in a cycle. But we take, within 3 and 5 years to pull out. So that's why we are not saying Retail wholesale will be 50-50, driven by these dynamics.

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Ankur Shah, [97]

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Bon. So the second question is on the CASA. Sir, I saw that year-on-year, at least the CASA ratio has come down to around 32%. Any specific reason, why we are not able to match the CASA growth with the loan growth or the deposit growth. And secondly, related to CASA, is there a chance that we are lagging somewhere in technology or the API integration offerings to the Corporate clients because of which we might lose CASA.

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Ashutosh Khajuria, The Federal Bank Limited – Executive Director & CFO [98]

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But our price improved. I think car issue is improved vis-a-vis our own past as well as the market. Car growth has been in excess of 25%, closer to 30%.

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [99]

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No. Let me explain that you. Our CASA for the full year grew 16%, our deposits grew 20%. And like Ashutosh pointed, car grew north of 25%. SA grew 15%. SA ex-Kerala grew higher. SAin Kerala, while remittences were remarkably strong, CA growth was muted because the second half was huge consumption events, people like to restore livelihood. To that extent, I'm not saying that's the only driver. We'll have to see how thing play out. But we are actively managing our cost of funds as opposed to just running the CASA ratio because today, SA has been originated by some banks at 6% and 7%, which is like a term deposit rate.

So we would like to look at CASA through a context of CA, which I'm happy to report has moved 4.5% to closer to 7%. And Corporate is doing a remarkable job because the capability is built on cash management and the focus that we've created there. And added to that would be the focus on the cost of deposits being managed.

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Ankur Shah, [100]

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Bon. And just the last question. On the RWA, sir, was it just because of the RBI change in NBS? Or was it that the overall quality also improved? Because…

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [101]

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Certainly, it's a good quality. But it was helped by almost 60 basis point because of the RWA's NBS.

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Operator [102]

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(Operator Instructions) The next question is from the line Sri (inaudible) from (inaudible) Value Life Insurance.

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Unidentified Analyst, [103]

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Congratulation on a very good set of numbers. Sir, just wanted to get a — in terms of recoveries, recoveries and upgrades were very strong this quarter. So was it granular in nature or were there any bad corporate accounts which were recovered and updated during the quarter? And what's the number that we should expect going forward?

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [104]

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I mentioned, maybe you came in late. INR 323 crores had 1 transaction where we had done a cash transaction, and that was about INR 50-odd crores. The balance is granular, regular recovery and upgrades.

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Operator [105]

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The next question is from the line of Praful Kumar from Pinpoint Asset Management.

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Praful Kumar, [106]

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Shyam, congratulations to you and team for the good numbers. Just wanted to know are we looking at any key hire, Shyam, on the senior management any more role? Any new hire that you need to take it out away up 25 bps over next 2 years in terms of manpower?

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [107]

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We do have a lot of senior recruits, and they have some — many have come in, a few more are in the pipeline for specific roles as business managers, credit heads, functional heads. My direct report team, we're not looking at any senior hires just now.

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Operator [108]

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The next question is from the line of Krishnan ASV from SBICAP Securities.

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Krishnan ASV, [109]

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Just two things as it relates to (inaudible) Number one, can you…

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [110]

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Your voice is trailing off, Krishnan.

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Ashutosh Khajuria, The Federal Bank Limited – Executive Director & CFO [111]

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Krishnan, the voice is getting broken.

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Krishnan ASV, [112]

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Is it better?

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Ashutosh Khajuria, The Federal Bank Limited – Executive Director & CFO [113]

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Sí. It's better now.

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Krishnan ASV, [114]

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Bon. Brillant. Lo siento. So I had 2 areas to comment. Number one, among the various businesses that Federal Bank has on its portfolio, generally, we foresee that Retail is firing below potential. I just wanted to understand across variable portfolio, which are the ones where you see certain elements of normalization happening in terms of ROEs? And where do you thing you can fill it up far better?

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [115]

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No. I think in all our businesses, as you would have observed as you also watch it very closely, it's not an either/or. We are scaling up on each of the verticals, whether it's commercial banking, whether it's Corporate or the newly initiated commercial vehicle opportunity. In Retail, there are various granular pieces. Business banking is a big opportunity. Maybe I should just for clarity explain the architecture. While you put it out much more clearly, we have 5 distinct verticals: Corporate, Commercial, Business Banking, Retail and then Agri. Agri is micro finance. And each of them are headed by a Business Head, and they have P&L outcomes and responsibilities. Some parts, they have their own distribution, otherwise, they leverage the bank's distribution. And each of them are headed by people who have relevant experience in that and are going out and building a P&L to make sure that it's profitable and is ROA accretive. So the business architecture is quite well laid out and it's getting really enshrined in what we do. And therefore, they are pursuing value creation within each of them.

In that context, we believe businesses like business banking has a remarkably large opportunity for us to pursue. I would say commercial banking, I would personal loans, I would say fee generation capability on credit cards because we haven't done that at scale. We've just tested it out and beginning to work. We're doing now close to 10,000 car versus 10,00 cars a full year. So we're looking at scaling that up, which is such as in our current model, the fee income model, we're looking at a revenue through unsecured revolving credit, but we're looking at a fee income model. So at all these things, we think there is dialing up capability. So I would say for the next 2 years, there would be no one step the child an done poster child, we would like to do all of them at scale.

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Krishnan ASV, [116]

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Brillant. Eso es útil. The other question I had is around juts the previous barriers. I mean these recoveries that you have been sharing were fairly strong, except for the INR 50-odd crores that was the last (inaudible). I just wanted to understand what initiatives have been taken just to make sure that this pace or this run rate actually sustains that lets us build it out in terms of whether that business is a new normal than it's today?

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [117]

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Sí. I think if you see our fourth quarter or actually go back, the run rate is within 200 to 250. Now certainly, a, last quarter is always much more, maybe a 10%, 15% bump up is always there, but the run rate rhythm is built for that. Now the denominator had already started coming down. The denominator of written off tool is already down. And wherever there's bilateral client of the bank, the opportunity is much higher. The consortium-lead did kick it account, then we are only waiting for a Kingfisher or a (inaudible) to pay. So we have carved out the portfolio where it is unique Federal relationships, where we are an asset, where we can go and do a onetime settlement where we can use an aggressive activity to collect. And what is as an conception level then you have to work with other partners to work on. So it's kind of make strategy.

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Ashutosh Khajuria, The Federal Bank Limited – Executive Director & CFO [118]

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So as the gross entry also reduces in absolute terms, which it has in this quarter, I think there would be so much anomaly recovery tools — higher recovery tools. So both on the written-off assets as well as the gross NPA, the total itself has fallen drastically.

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [119]

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That said, last year was INR 800 crores, this year is INR 963 crores, backout the INR 58 crores, it was INR 912 crores. We see a similar progress in FY '20.

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Operator [120]

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The next question is from the line of Seshadri Sen from Alchemy Capital.

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Seshadri K. Sen, Alchemy Capital Management Private Limited – Head of Research [121]

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Just following up on the previous questioner's line. The recovery on written-off assets was INR 49 crores in the fourth quarter. What did we exactly in this year — in this bucket, the written-off assets, what is the size of the pool? How much do you hope to be able to harvest over what time frame? If you give some color because that's a fairly lumpy item in the fourth quarter P&L.

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [122]

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Segmentally it is not [pool], it is about INR 1,500 crores. So that's the universe we are pursuing.

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Seshadri K. Sen, Alchemy Capital Management Private Limited – Head of Research [123]

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What do you recognize the harvest, the total of this?

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [124]

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See, the age less than 3 years and age later than 3 year, behavior is different. Because if it is greater than 3 years, there's a litigation, there is a [concession] and a whole bunch of stuff. The more recent write-off about INR 1,500 crores and there were INR 500 crores. That's the more directly-addressable pool. Typically in a year you can expect about 25% on that.

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Ashutosh Khajuria, The Federal Bank Limited – Executive Director & CFO [125]

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Additionally, in this INR 323 crores of recovery and upgradation, this recovery from written-off is not included, that is over and above that. That is separate.

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Unidentified Company Representative, [126]

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C'est bien. That's the INR 49 crores I was referring to.

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [127]

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This is — this particular amount is INR 44 crores, in fact, and that is against INR 101 crores last year with lower vis-a-vis last year's listing.

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Unidentified Company Representative, [128]

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Exactly. I think on even quarterly on a year-over-year basis, it's down. It's INR 54 crores to INR 49 crores. It's in Slide 22.

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [129]

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So Mr. Sen what happens is, if you have one account — one Corporate account settled in a particular quarter, that's certainly changes the amount in trend line. We are in OpEx some amount coming last year. So suddenly the amount had gone up and all.

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Seshadri K. Sen, Alchemy Capital Management Private Limited – Head of Research [130]

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Yes, I appreciate. This is a line which can be very volatile on a quarterly basis. But I just wanted to get from a 2-year perspective, we know, Shyam was mentioning INR 500 crores, some of this will be harvested overall 2-year perspective with a lot of quarterly volatility, if I read you right?

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [131]

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Absolument.

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Seshadri K. Sen, Alchemy Capital Management Private Limited – Head of Research [132]

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The second question is on capital and net worth. So there was — the increases in the net worth is more than your quarterly profits. Just if you could explain that.

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [133]

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So that is partly because of the prescription from Reserve Bank of India. Wherein earlier, they were playing for all NBFC's, you have to have a weighted as a 100% percentage as quitted assets. Now they have extended it to equivalent of non-NBFC quarter exposures, like if you have AAA, then it's only 20%, if it's AA, 30%, if it's A, 50%, if it's BBB, then 100%. So that particular formula, in that AAA NBFC certainly would consume lesser capital, instead of 100% they will consume 20%.

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Seshadri K. Sen, Alchemy Capital Management Private Limited – Head of Research [134]

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Entiendo que. That's the RWA movement. But if Tier 1 capital has moved from INR 11,800 crores to INR 12,500 INR — 12,700 crores, have you issued some Tier 1 bonds? O…

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [135]

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No, no, no. No bonds. No debt instrument in our balance sheet, which is a capital-contributing instrument. Neither in Tier 1, nor in Tier 2. No in T1, no Tier 2 bonds. A piece of exercise in all, some would have got added because of that.

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Seshadri K. Sen, Alchemy Capital Management Private Limited – Head of Research [136]

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Okay, (inaudible) would explain that, yes. We — broader question is on, what do you see in T1? And for 2-year, 3-year timeframe, what are the absolute flows that you're looking at? Are you thinking of capital issuance in the next 12 to 24 months?

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [137]

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So as the numbers figures, we would not need to raise capital in next (inaudible) — the current financial year and the next financially, at least up to 18 months. But then there is a slight (inaudible) it is hot probably, I mean if the markets are favorable and suddenly our growth also picks up, environment picks up and all that. And you can never predict how much do we — it would not be correct on my part to say that you're saying strict no no to raising capital in next 2 years. It doesn't seem like that in current financial year we would need it.

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Seshadri K. Sen, Alchemy Capital Management Private Limited – Head of Research [138]

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And a final query on your home loan business. That's obviously a fairy large part of your Retail housing loan business a large part your Retail. How do you see the operating environment there? On the one hand, we know a lot of HFCs are now stopped lending. So that obviously works to your advantage, especially given the quality of your liabilities. But on the other hand, the demand environment isn't probably that great. There's a lot of risk for builders who may not be able to complete projects. So how are you approaching that in terms of future growth? And if you can give some color on average ticket sizes, what percentage is affordable, et cetera?

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [139]

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Bien sûr. Average ticket size in metro, particularly in Mumbai is closer to INR 80 lakhs. Rest of India is about INR 40 lakh to INR 50 lakh. And we see gold — sorry, home loan growth sustaining this momentum. We are — our distribution is quite strong. The relationships we have built in different developers is not quite strong. So we're becoming a one of the principal mortgage lender in most of these big projects now. So if you take Mumbai as a sort of a benchmark, I'm assuming that the market is about INR 7,000 crores, INR 8,000 crores a month. We're doing INR 400 crores or so. So we are doing meaningful participation, and think that will continue.

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Operator [140]

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We'll move on to the next question that is from the line of Dhaval Gada from DSP Mutual Funds.

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Dhaval Gada, DSP Investment Managers Pvt. Ltd. – Assistant VP of Investments & Equity Analyst for Financials [141]

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Congrats on the set of numbers. Just 3 questions. First, data-keeping question. On the INR 50 crores sale that we did, is it largely from the SME and PA book?

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [142]

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No. It was Corporate road Asset.

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Dhaval Gada, DSP Investment Managers Pvt. Ltd. – Assistant VP of Investments & Equity Analyst for Financials [143]

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Bon. The second question was on SA growth. So it was 12%, if I back calculate based on the CA number that you've given. Is that correct? And I missed the comment around what drive — drove this numbers materially lower than what the trajectory was in the past quarters?

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [144]

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I think SA Kerala was closer to 12%, all-in non-Kerala was closer to 16%. Kerala was slightly lower because while remittances are strong, the trend for sort of restoring livelihood was higher. And therefore, it has closed down in second half.

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Dhaval Gada, DSP Investment Managers Pvt. Ltd. – Assistant VP of Investments & Equity Analyst for Financials [145]

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Bon. And lastly on the pricing environment. I mean how do you see loan yields moving into FY '20? And could you give some color on where are we on incremental yields and averages for Corporate book SMEs to retail book?

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [146]

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Our overall book management, I told you, is driving closer to 50-50 Retail wholesale. And within Retails there is a bunch of products from purely 100% home loan secured to unsecured. But that's a spectrum. I also said that the personal loans those relatively unsecured products will at best be about 5% of the total book. So the yield expansions look we're talking about 320. A product-wise yields, I mean it's not at the top of my head, but you can sort of easily figure it out.

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Dhaval Gada, DSP Investment Managers Pvt. Ltd. – Assistant VP of Investments & Equity Analyst for Financials [147]

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So just — sorry, just to follow-up. So I remember a few quarters back, this numbers were about 10% in Retail, 9% in Corporate and 11%…

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [148]

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Inching up, inching up, that's why where are able to keep our NIMs consistently at least where we are without while cost of deposits at the market level has gone up.

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Ashutosh Khajuria, The Federal Bank Limited – Executive Director & CFO [149]

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(inaudible) has also gone up, cost of deposit.

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Operator [150]

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We will take the our next question from Abhishek Murarka from India Infoline Ltd.

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Abhishek Murarka, IIFL Research – VP [151]

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So I have a couple of questions. One is, at what point of time, and what are the metrics that you — that will trigger branch additions from the current position? So how will you decide on when you need to start adding branches? And the second is out of your incremental, let's say, savings account and retail term deposit accounts that you've done enough in FY '19, let's say. How much of it was from the digital channels and how much of it was from your — sourced through your branch network?

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [152]

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Bon. We — let me — I'll draw your attention to a slide in which we didn't say — I just (inaudible) found that line but I thought we believe in it, Slide #25, where we said prominence to dominance and presence to prominence. I think that because in Kerala, we were prominent, but we are now seriously dominant. And in Kerala, we were present, but not prominent. And we believe we are scaling up on both of that count, and I'm seeing that happen. And we certainly will fight it hard to make that prominence to dominance at Kerala to over the next 2 years. That said, your question on where we are seeing the growth in terms of the savings account and in the linked questions. All — sorry, I'll come to the brach expansion in a moment. All our accounts largely in the liability side are now digitally originated. So whether it's through a branch or to be selfie or whichever, is all digitally originated. But the branches per se, we think ex-Kerala, we will look at about 40, 50 branches per year for the next 2 years. But that is not something that we will do in a conventional model, we are visiting a few instead of size of branch, skills required in the branch. How much is self service? How much is automation? How much is the conventional tellering? So a bunch of stuff that's going on. But it's not a number one priority for Q1 and Q2. We are putting some things in place, but that's not limiting our near-term growth. I genuinely believe as we've demonstrated over the last 4 years, we haven't a branch in 4.5 years. Our growth has not been constrained. And today the distribution of the bank is quite significant. And we believe that reach out, salaried accounts, bringing more digital is giving us reach. We will certainly invest into the network, but very selectively in few geographies and differentiated model. Over the next 2 years, we will probably put 80 to 100 branches in certain geographies outside of Kerala.

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Abhinesh Vijayaraj, Spark Capital Advisors (India) Private Limited, Research Division – VP of Equity Research & Banking Analyst [153]

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Bon. So just sort of to follow up on both these one by one. In terms of your SA and RTE commentary that you gave. Is it fair to say that, lets say, in FY '19, whatever increase happened in, let's say, number of customers, almost 80% to 90% of that would have been digitally sourced. And is it entirely digitally sourced or is it like adjusted digital, where a person walks in your branch and your branch guys actually helps him fill in a form digitally?

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [154]

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It's originated digitally to our digital it will be 10%. where the customer himself unsupported. But the digital origination using tap banking or straight through when he comes into the branch and the account opening happens on the system instantly. That's the thing. So it's 90% in favor of assisted, 10%in favor of purely digital.

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Abhinesh Vijayaraj, Spark Capital Advisors (India) Private Limited, Research Division – VP of Equity Research & Banking Analyst [155]

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And despite that kind of links, given that assisted digital is also sourcing mechanism where the person has to reach the branch, do you still think that you don't need to add more than 50 — 40, 50 branches outside of Kerala in a given, let's say, per year for the next 2 years?

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [156]

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Sí. That's our view right now. Oui

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Abhinesh Vijayaraj, Spark Capital Advisors (India) Private Limited, Research Division – VP of Equity Research & Banking Analyst [157]

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And your SA growth in that context, even if it is 14%, 15%, 16% in this quarter, it is slowing down in the last 3, 4 quarters and it's becoming more difficult to get SA. So you still think that's adequate, given your overall 20% growth trajectory?

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [158]

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We are talking about CASA, which is I think a better metric for cost of funds. And our strategy on CA is robust and we believe, in FY '19, we may be top 3 banks in CA growth in percentage and in some sense even absolute.

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Abhinesh Vijayaraj, Spark Capital Advisors (India) Private Limited, Research Division – VP of Equity Research & Banking Analyst [159]

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Bon. So whatever slowdown in terms of SA, you'll make up through CA?

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [160]

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(inaudible)

Any other unanswered, our teams will come back, if there any queries, clarifications. So if there are any non-number, non-data point question, I'd like to take that.

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Operator [161]

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We lead the next question from the line of the Gaurav Kochar from AMBIT Capital.

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Gaurav Kochar, AMBIT Capital Private Limited, Research Division – Associate of Banking and Financial Services [162]

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Below (inaudible) is it around 15% of the profit growth. And you've given another slide, where you have mentioned that in NBFCs and the HFCs are mostly A or separated. So when are this sector are in the (inaudible) 16% category?

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [163]

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Gaurav, I think this is data point, I may not have instant answer. I request — Raj is here? No. His question is that 15% was a simple B, what would it be if it's not NBFC HFC?

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N Rajanarayanan, The Federal Bank Limited – VP of Marketing & IR [164]

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There would be bunch of stuff. It won't be just one sector or something. And commercial banking is also included.

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Gaurav Kochar, AMBIT Capital Private Limited, Research Division – Associate of Banking and Financial Services [165]

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Bon. Commercial banking is also included. And lastly, on the auto loan, how much of it is CV and how much is non-CV?

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [166]

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Sí. This is not CV.

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Gaurav Kochar, AMBIT Capital Private Limited, Research Division – Associate of Banking and Financial Services [167]

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Auto loans?

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [168]

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Sí. This is not CV at all.

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Gaurav Kochar, AMBIT Capital Private Limited, Research Division – Associate of Banking and Financial Services [169]

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Okay, not CV at all.

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [170]

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CV book is just under INR 100 crores now.

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Gaurav Kochar, AMBIT Capital Private Limited, Research Division – Associate of Banking and Financial Services [171]

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CV would in business banking or commercial banking.

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [172]

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CV will come under business banking, commercial banking (inaudible)

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Gaurav Kochar, AMBIT Capital Private Limited, Research Division – Associate of Banking and Financial Services [173]

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So these are purely car loans and two-wheeler?

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Unidentified Company Representative, [174]

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Sí Sí.

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [175]

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No, not even two-wheelers.

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Unidentified Company Representative, [176]

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Car loans. retail loans. Individuals.

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Gaurav Kochar, AMBIT Capital Private Limited, Research Division – Associate of Banking and Financial Services [177]

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So retail — the car loans saw a 62% growth despite a slowdown in the number of cars which were sold. How are we tracking here, I mean 62% growth.

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [178]

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No, I think car growth is a very small, relatively small base. And we think — and bulk of this is in Kerala and Tamil Nadu, where A, our distribution is strong and we've activated it. So we have — we now are a for INR 5 lakh and above car segment can Network-I, we may be the first to go bank. And probably Kerala is the largest four-wheeler sales market in the country. Luxury car sales.

Operator, are there other questions?

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Operator [179]

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Sir, we we'll take the last question that is from the line of Saurabh Dhole from Trivantage Capital.

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Saurabh Dhole, [180]

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Just one main question, which was from Slide #15, where on the bottom right there is a chart, which talks about mainly exponential growths in the digital users. So I just wanted to know what did we doing in this quarter so differently which is driving this growth?

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [181]

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What did we do differently this quarter?

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Saurabh Dhole, [182]

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Sí. On slide #15.

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [183]

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No. I think it's a build up. I mean frankly it's not anything uniquely different, it's a buildup. And we ran a lot of internal contests to make sure that digital and it's one of the employee targets to ensure digital growth. Typically quarter 4 ends up being the most active quarter, and we saw that pickup, that will be the new base. So from that new basic, again, people will be targeted to growth.

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Saurabh Dhole, [184]

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So this was — this is cumulative?

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [185]

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Oui

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Saurabh Dhole, [186]

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Okay, okay. And just 1 more, If I can. On your (inaudible), you already mentioned that you plan to have around 40, 50 additional branches outside Kerala, which is I think for the next 1 year, right?

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [187]

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Sí. Well, I — yes, that's directional. We may not put 40, we may put 30 and we'll put 60 the next year, but directionally another 80-odd branches over the next 2 years.

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Saurabh Dhole, [188]

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But if we talk a bit about a more longer time horizon, so you think the time is right to maybe change the profile of the bank and have a much stronger presence outside Kerala? Or much less dependent (inaudible)?

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [189]

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I mean that is — being the journey of the bank now for the last 3 to 5 years is what has playing through.

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Saurabh Dhole, [190]

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No in terms of branch…

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [191]

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No. That's what I'm saying. Our physical presence, I think is, and that's our judgment, is not so much the limitation. It's our reach which is the issue, which you already focused on. If physical presence is important, we are looking at various banking outlets and more nice search kind of activities, which can give us the physical presence to give the sort of prominence. So we are not looking at physically putting in hundreds of branches. And our strategy has borne out by that effort, and I think we can sustain that. But we don't want to be blind to anything, we'll certainly consider if this is a need. This whole space is emerging almost consistently. And while we are doing this, our subsidiary is particularly [flexinizing] great expansion plans. So we might do some piggybacking on that and develop some PC outlet strategy.

Operator, if there are none, I'd like to say a 2, 3 points and close out.

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Operator [192]

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Merci Sir, you may please go ahead with your closing remarks.

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Shyam Srinivasan, The Federal Bank Limited – MD, CEO & Director [193]

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Merci As there's one crucial and important input in terms of the overall Federal franchise in addition to what we believe was a robust quarter and positions us for FY '20. We are quite pleased that Flexi is now turning out quite strongly, the whole team has been after the arrival of (inaudible) as a partner. Very strong senior management team with good focus has come into place. IDBI Federal, which is another JV partner of us. We've had good progress, you may have seen the numbers, and we think that's scalable too. The declared made in dividend this year, and it will get cleared in the AGM next month.

The (inaudible), which is our 100%-off subsidiary, it's now coming up to steam. We believe in the course of FY '20, that will scale up nicely. And our investment in the Equirus is turning out to be very productive, not only just from an investment banking side, but also for our Wealth Management (inaudible). And I think we'll have more concrete outcomes to show in the course of FY '20.

I thought I'll summarize with that input. For another input for those of us who work closely with us and track us closely, you've been used to that, Narayan has the Investor and Marketing Relations Head. He is moving to another larger assignment, he's going around the Bangalore zone. so Anand Chugh is coming in as the Investor and Marketing Relations Head. so he'll be the new point of contact. And I'm sure they will reach out very soon. Raj will…

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N Rajanarayanan, The Federal Bank Limited – VP of Marketing & IR [194]

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Thank you all for the support that you're extending to me. And the camera agrees that I have enjoyed with at least some of you has been exhilarating. Thank you, and have a wonderful evening.

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Operator [195]

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Merci Ladies and gentlemen, on behalf of Federal Bank Limited, that concludes today's conference. Thank you for joining us, and you may now disconnect your lines. Merci