CSB Bank Limited (CSBBANK) Earnings Call Transcript

Ladies and gentlemen, good day, and welcome to CSB Bank Limited Earnings Call for Q1 FY '27 Financial Results hosted by Yes Securities Limited. [Operator Instructions] Please note that this conference is being recorded. With that, I hand over the call to Mr. Shivaji Thapliyal from Yes Securities. Thank you, and over to you, sir.

Thank you, Swapnil. Good evening, and a warm welcome to all those who have joined the call. The CSB Bank management will be represented by Mr. Pralay Mondal, Managing Director and CEO; Mr. B. K. Divakara, Executive Director; and Mr. Satish Gundewar, Chief Financial Officer. We specifically thank the management of CSB Bank for giving Yes Securities the opportunity to host their result call. The management will first be making some opening remarks after which, we will throw the floor open for questions. I now invite the management to make their opening remarks. Pralay, over to you.

Thank you, Shivaji, and good afternoon or good evening to everybody who's on this call, and thank you for joining our Q1 FY '27 earnings call. To start with, on the economic scenario, the global economic conditions remain stable despite the sudden geopolitical risks and [indiscernible]. U.S. rates have been stable with probability of rate hikes in this year, reducing due to incoming data. India's annual retail inflation rate based on consumer price index rose to 18 months [ 1.38% ], which is still a provisional number in June 2026. This increase was primarily driven by a rise in food price index, CPI, which climbed to 5.32%. This is largely due to supply side effects of increase in oil price. Liquidity situation remains stable and is likely to remain so for the next quarter. Systems credits have softened for this quarter. However, decent escalation [indiscernible] remains quite stable. On the CSB specific results, key highlights are on the profitability side, the profit stood at INR 150 crores in Q1 FY '27 with a 27% Y-o-Y growth over Q1 FY '26. Operating profit for the bank grew by 14% on Y-o-Y basis and stood at INR 251 crores for Q1 FY '27. Net interest income grew by 26% to INR 479 crores. Other income degrew by 7%. We'll discuss this when you come on the call on this point, over Q1 2026, mainly due to a decline in treasury profit. Other income, excluding profits grew by 13%. If you [indiscernible] grew by around 13% in Q1 2027. Cost-to-income ratio for Q1 FY '27 was marginally lower than Q1 FY '26 and stood around 64.55%. NIM for Q1 FY '27 stood at 3.66% against 3.54% for Q1 FY '26. ROA for the quarter ended [indiscernible] 1.09% against 1.03% in Q1 FY '26. Contingency provisions are held intact and bank is continuing with the accelerated loan provisioning policy, which will aid the bank in transitioning towards ECL framework. On the liability side, our funding base continued to improve. Deposits recorded a strong Y-o-Y growth of 26%, significantly outpacing the industry growth rate of 13.4%. CASA ratio stands at 19.41 percentage. To aid liquidity, we also aid both domestic and FOA borrowings based on cost considerations. On the liquidity side, we efficiently managed the liquidity risk. Average LCR for the quarter was 123% and SFR ratio was 126%. On the asset side, the advances grew by 24% Y-o-Y as against industry growth of 18.6%. Yield on advances for Q1 FY '27 stood at 5% -- on the asset quality metrics, GNPA and NNPA ratios for the quarter stood at 1.75% and 0.39%, respectively. PCR stands at 77.96% without WO almost 78%, which is high compared to what we used to have before. Bank is holding a provisional provisioning buffer of around INR 198 crores over and above regulatory requirements, including a contingency provision of around INR 105 crores. On the capital side, CRAR continues to be well above the regulatory requirement and stood at 19.96%. Tier 1 ratio stood at 18.96%. Our risk weights are somewhere around 42%. So I think this is -- we are very, very well capitalized given our risk weights. Shareholder value creation, book value per share stands at INR 289. EPS for Q1 FY '27 stood at INR 35 against INR 27 for Q1 '26. ROE for the quarter improved from 10.9% in Q1 FY '26 to 12.71% in Q1 FY '27. On the distribution side, we have a network of 886 branches and 835 ATMs as on 36 '26. In conclusion, I'd like to say that the quarter witnessed healthy growth across our key business parameters, especially when you look at Y-o-Y. And we are a regional bank, and it's not just 1 year. Every year, we see that Q1, Q2, Q3, Q4 operates differently for us. And from that perspective, we have done well on our year-over-year basis. Our deposits and advances grew by 26% and 24% year-on-year, respectively, significantly outperforming the average industry growth trends. Importantly, in contrast to the broader industry parameters, deposit growth outpaced advance growth, resulting in a favorable improvement in our credit deposit ratio, which is now below 90%, just marginally just below 90%. We further tapped the funding streams optimally leading to a comfortable liquidity position and room for growth. I don't see liquidity as a risk for us at all in the coming year, depending on the growth plans we have. On the advances front, the corporate and gold portfolio continue to perform well. Amidst the market uncertainties, we remain measured in our approach towards the SME/BLG as we call it, and other unsecured retail book consistent with the size of risk appetite and will resume scale once the environment turns conducive. Our lending strategy continues to be guided by a balanced focus on profitability, asset quality and sustainably long-term growth. On the liability side, we are enhancing our sales capabilities depending on distribution reach and driving greater alignment towards customer acquisition channels. These efforts are expected to drive stronger customer engagement, improve conversion rates and further strengthen our ability to generate granular and sustainable deposit growth. From a profitability perspective, our opening performance remained -- operating performance remained resilient. Operating profit increased by 14%, while net profit registered a growth of 27% over the corresponding period last year. Looking ahead, our objective is not merely to grow, but to grow efficiently by improving operating leverage, increasing employee productivity, deepening customer engagement and accelerating the payback from our technology transformation initiatives. We remain firmly committed to delivering SBS 2030 milestones in a progressive and disciplined manner quarter-on-quarter. Just to end my initial comments, I'd say that the entire technology transformation went on extremely well. And now we are going to leverage that. And that's the reason we have just started our retail liability acquisition channel because now we can launch whichever products we want to. And even on the transaction banking side, our trade, our supply chain and CMS, all systems, some are already in place, some will be in place in the next 3 to 4 months. So we are looking at enhancing our transaction banking ability and products and services there. So we will continue to leverage and build the franchise. And now the journey really begins for the phase in true earnest in terms of scaling the bank with respect to new customer acquisition, more balanced growth across segments and the franchise creation. With that, I stop. Over to you for questions. Thank you very much.

[Operator Instructions] We'll take our first question from of Punit Bahlani of Dolat Capital. We are unable to hear you.

Yes. Sir, just on the 2 things first. Firstly, your gold portfolio is now 54%, the way you reclassify of the total portfolio. And growth, because post the new regulations and everything, some peers have highlighted that they have faced some struggles with growth. So what are we thinking on that? Are we going to continue to grow gold? Or there are other sources of growth, which we are eyeing? And accordingly, what's the growth guidance there of? Secondly, sir, our bulk deposit mix is over 52% of term deposits, and it's around 40% of total deposits. This is something which is inherently volatile and creates pressure on your funding cost also, which I believe is the responsible -- is the reason for lower NIMs. Any comment on that, sir? What is the target here? Because that is something I believe is causing a lot of pressure on margins, if I'm not wrong.

Yes. Thanks, Punit, for your question. So first of all, yes, gold is somewhere around 54%, but we have continued to grow gold at a reasonable pace. Right now, the 2 businesses, which are not only in terms of mix, one of the highest, one is gold and one is wholesale. So these are the 2 portfolio has grown also. So to that extent, it has not been such challenging. Also strategically, we want to ensure that we become a holistic bank just under Golden Bank, which has been an objective around SBS 2030. And hence, eventually, this 54%, we have a glide path internally going towards somewhere around 30% by 2030. And hence, other business has to grow. On your question on regulation, et cetera, so one thing which happened is on the repledger business, we had -- though we could have done it till past April this year, but we had taken a call around 2, 3 quarters back that we'll not renew whatever we are doing. So that's why that portfolio came down from INR 2,100-odd crores to around now INR 60 crores. Effectively, it's gone. I mean it will also run off in the next -- by next quarter. But that was not under gold loan, that is under retail. And that's one of the reasons we call it last. That's one of the reasons you are seeing that the gold disbursements -- sorry, retail disbursements as well as retail portfolio has degrown. Primary reason is that we have kind of a runoff that INR 2,000 crore portfolio on a small retail portfolio. But overall, I think direction we'll continue to have gold loans somewhere around 50% this year and then gradually glide path over the next 3 to 4 years, closer towards 30%, primarily because of growth of other businesses to. On the -- otherwise, most of the regulations we have sort of implemented. And there are positives and challenges both positives are now renewals are allowed. And hence, operationally, this becomes a little easier. But of course, there are challenges in terms of end-use monitoring and things like that, where we have put and we are continuing to putting more and more processes in place. On your question on deposit mix, Yes, bulk is around 52% right now. and retail is around 48%. So that's the reason, no rocket science that our cost of funds is slightly higher. But this is done to fund building a long-term franchise. But eventually, as and when the CASA franchise starts building and as and when the granular retail is a function of the CASA franchise, that's just building, that is -- I've already told that will start happening by FY '28 onwards, because we just launched our systems last year. Products are being built, sales team is getting in place. So it's a kind of a high road which we have to take and build that franchise. But today, we are ready to build that franchise. We have the machines to build that franchise, the teams to build that franchise. Until then, we have -- we cannot wait for that to build the asset side of the business on the balance sheet. That's why we are funding you to a slightly higher cost. Our cost of funds is somewhere around [ 3.5 ] -- sorry, [ 6.5 ], and that's the reason. But volatility, as I said before, funding is not a problem. Volatility is not a problem at all for us because as you saw that LCR is [ 123 ]. The reason we don't take it further up is because anything taking further up with these kind of funds is inefficient for the bank. But -- and why is it not volatile? Because when we do bulking, primarily, we do non-callable, a clear tenure in place so that it is well planned. We also have funding in form of FCY in form of CDs, in form of refinance, of course, CASA and retail deposits and bulk deposits and wholesale deposits all are in place. So given the size of our balance sheet, which is reasonably small, managing this is not a problem at all. So funding volatility and risk is absolutely not there in the bank. But yes, cost of funds is slightly higher because we primarily focus on noncallable deposits.

Got it. So firstly, then the NIM decline is only because of the bulk deposit mix increase, right? Is that a fair assumption to make, mostly?

See, when I see the breakup of where my higher cost is, one is bulk deposit, one is FCY and one is CDs. Now all this, as and when the overall stabilization happens, will repress itself faster than the retail deposits, okay? So I'm not kind of saying that we should replace or do bulk and CDs because of that reason, but we must do retail. But given where we are purely from a financial perspective, as and when the yield curve improves, for example, if there is really a lot of FCNR deposits comes to the country, liquidity will improve. And on it improves, hopefully, CD prices already would show some softening. So all that will help us both in bulk and CDs in the near future. But long term, we have no choice but to build retail deposits because that's the only way our franchise built. So tactically, we are okay. But strategically, we have to build the retail. But yes, you are right, at this point of time, what has also happened because while all the numbers I read out are looking good because they are year-on-year, but you may have questions quarter-on-quarter. The answer to that is that some of the deposits which we brought in, in March end of 2026, they didn't have cost in Q4, but their cost all came in Q1. And that's the reason this is a flow-through which is happening. As we are talking, we are not seeing deposit prices elevating anymore. If at all, there is a marginal softening, which is happening. So as and when it replaces, hopefully, things will start getting better on the NIM side. The other reason, which is a fluctuating number is also NIM to some extent gets impacted with your slippages and things like that. And for us, we had a little bit of a funny story where Q3 had high slippage. Q4, we had a lot of upgrades and recovery. Again, in Q1, there's a little bit of a slippage. So that also impacts slightly in the overall NIM. So overall, I think like last year also in the first quarter, I had said this is the worst-case scenario. This year also, this NIM is the worst-case scenario will only improve from here.

Got it. And just on the -- structurally on the mix because you're saying like the products are in place and it will take time, say, the mix decline should be visible maybe from next year onwards? Or how should we see that trajectory going forward?

So this year, we will see gold coming to somewhere around 50%. We are around 50%.

No, no, I was referring to the deposit.

. Deposit, no, that is going to take a little time because we also see that building our retail franchise when you have just launched products, will be first the CASA we have to get in and then we have to get into retail deposits, you will start seeing, and this is not the first time. I think I've said before also. You will start seeing that. So the plan is that CASA will grow as much as the deposits only in FY '28 onwards. And FY '29 onwards, CASA will do better than deposits. And hence, that's the time we'll see improvement in CASA ratio. This year, we'll be lucky if we continue to hold the same CASA ratio because if you have to grow by 25% minimum and if I have CASA, then also we have to grow by 25%. We have to see if we can do it or not. We are trying -- we are putting our sales machine in place. So if we do a good job, I think our CASA ratio will remain the same.

Sir, on the yield front, your yield on gold loan has declined or also on the BLG book, the yield has declined. What is the reason for that just on a Q-o-Q basis? Is this something, just the seasonality this thing, or maybe there is something else to it?

So on gold loan yield has not clearly declined too much. It has come down from 12% or something to 11.81% or something like that. So those things can happen a little bit here and there. So there is no specific reason because we didn't decrease the gold yields. It could be just a mix of some products, businesses, et cetera. It went down from -- is gold 7.85%, 15 basis points. That's what I said. And on the SME or BLG side, it went down from 9.81% to 9.25 but previous -- so one of the reasons for this is that SME, given the environment and given the size and geography we operate, we are just being a little more cautious and careful because who knows whether tariff is coming back again or not, who knows what is happening in the West the share prices. So with all the supply chain challenges, et cetera. So we are just being a little careful. That's why our credit standards, we have raised the bar on the SME side a little bit right now. This can change again once things -- the disruption starts taking over. But at least for this year, we have decided we'll be careful on SME. Also because we had some slippages in SME this quarter, which we know that it will come back. Again, we'll have the same Q3, Q4 story of last year, where some slippages happened in Q3 and Q4, again, it got upgraded. Similar thing will happen this year also, either in Q2 or Q3, it will get upgraded. We are fairly confident of that. So given that, there has been some impact on the yields on the SME. So it's a function of both incremental businesses are getting booked at slightly lower yields because we are taking much lesser risk. And secondly, some slippages, which is only kind of a transient kind of a slippage has impacted, and hence, it should get better next quarter on that margin.

Got it. Got it. And how much...

I'm really sorry, Punit, would you mind coming back in the queue? We'll take our next question now from Parag Jariwala from White Oak Capital.

Yes, can you hear me?

Yes.

See, my first question is -- and I got the explanation which you have given to the previous question about the yield and margins. If we -- if I just look at the quarter-on-quarter movement in the loan portfolio, your gold SME and retail has been declining, and I got a detailed reply of INR 2,000 crores, which you have given there. But even if I look at gold and SME, they have grown at around 2-odd-ish percent put together, right? And most of the growth has come in from the corporate side, which is around 6% quarter-on-quarter. Now my -- what I want to ask you is that since we are bulk deposit dependent to an extent, right, because such kind of -- ideally, we have borrowed in a wholesale and given a corporate loan, right? I mean, wouldn't this kind of create a pressure on the margins? And if yes, what is -- I mean, we can give up this kind of a business and maintain the profitability. So what were your thought process there? That is the first question I have. And second is on the asset quality. Look, how should we think about slippages and upgradation because it has been quite volatile because in first quarter, we saw around INR 140-odd crores last -- first quarter last year. Then we kind of recovered a bit in second quarter. And in third quarter, we saw around INR 200 crores. We covered a bit in fourth quarter. Now this quarter also, as you mentioned, that there are some slippages on the SME side. Reason I'm asking, Pralay, this is not stabilizing and remains quite volatile and difficult to predict and difficult to get that what's happening there. So if you can give some comfort on that side, that would also be helpful. Yes, these are my 2 questions.

Thank you. So on your first question, it's pretty clear. Your question is that can you fund a wholesale asset book with wholesale funding? That's the question?

Yes.

So the answer to that is that as long as we can keep the NIM within our guided lines, which is somewhere around 3.75%, is guided line, somewhere around that, we can be a little lower at some time, we can be a little higher at times, but for the whole year, our guided line is 3.75%. And as long as we can manage our ROA somewhere around 1.3% to 1.5%. I know we are lower than that this quarter, but we will take it up there for sure because the same thing we did last year as well. That's how our trajectory of the bank is for the last few years. And by doing this, what we are creating is we are creating a wholesale franchise because here, we are not doing tactical business in wholesale. The way the teams has been built, the -- the way the structure has been built in terms of large corporates, commercial banking/mid-corporates, financial markets. We are diversifying the risk by saying that we'll now financial markets has come down around 1/3 of the whole portfolio. There is time and it's to 70% of the portfolio. So all that, we are doing it by distributing the risk and building the future franchise. So we are in the franchise building mode on the corporate side. And given that, very clearly, the target to Manish Modi, who is our Head of Wholesale is that eventually he has to deliver both ROA as well as RAROC. RAROC by itself doesn't mean everything, but a combination of ROA and RAD will help us in building a good quality. And that can only happen when the transaction banking. If you look at it, the amount of investments, both in terms of people and in terms of technology, which you're putting in transaction banking is primarily to derive this ROA and ROE from the wholesale banking relationships. One thing I don't know whether we have disclosed or not, but last year in our growth, there has been significant contribution on the liability side from wholesale side as well. And that one thing and their cost of funds is in line retail cost of funds. maybe here and there. So given that, that is a fast indication that we are building just not opportunistic asset book because there's no meaning I completely it has no meaning. But when you are building a franchise, when we are starting with liability, we are starting to build non-funded business that has also grown well. When you are starting to build a transaction banking franchise, our products, at least to start with and capability, then we are building a proper wholesale franchise and there are investments to be made. And if at all, in retail, we have made investments in manpower, operating cost and all that in wholesale, we have to make investment in terms of little compressed NIM of that franchise for some time as long as they are able to, in the long term, deliver ROA. So that's the thought process between building the wholesale bank. And we will be able to manage this till the time our gold mix is somewhere between 45% to 50% or so. But when the -- we have calibrated it in our mind very clearly. As and when the gold mix starts coming below 45%, then each of these businesses to stand on their own feet. And then we will start monitoring -- we already monitor. I'm saying that we'll start demanding the ROA from each of the respective business, and that kind of a time is given to every business to build the franchise. That's the thought process on the wholesale side. On the headline item, I'm saying again that so far, I don't see a risk to our guidance on the NIM for the -- on a full year basis of 3.75%. And I don't see too much of a risk on our ROE guidance of to 1.5 in that range. I don't see much -- as long as we can do that and then build a franchise on the wholesale side and then eventually build a franchise on the retail side for which the systems are now in place. Huge investments have gone into technology in the last 1 or 2 years. And now we have to fructify and leverage that investment into building a franchise leading to a better ROA in future. So we are on the right path. We got delayed on the technology for some time. I have discussed with you why, how, et cetera. But now we are firmly on track. So that's your first question. The second question was?

About the asset quality.

Asset quality fluctuations. So what has happened is this quarter, we had a slippage of around INR 90 crores -- I don't exactly remember the number, INR 96 crores or something like that. Last quarter was around INR 60 crores something. But this INR 96 crores is much lower than what it was in Q3, okay? So that's the point you are making that how do we make it out? This is happening because the portfolio is small. This is not happening in wholesale, by the way. This is -- to some extent, is happening in VLG or SME to some extent. And that's the reason we have turned cautious a little bit because the environment we deal in VLG. But the good part is none of the -- none of this. A lot of this is not moving into eventual losses because we don't do any unsecured business. And that's the reason the fluctuation because we had a slippage in Q3 and we had an upgrade of some INR 80 crores or something like that in Q4, okay? And again, I'm saying whatever slippages we have seen in BLG this quarter, some fair bit of this will come back in Q2 only and some part will come in the Q3 back because these are not bad businesses. These are well collateralized. And hence, they are going through a cycle because of various issues in the ecosystem. And we don't manage our books. We just try to say that whatever happens, we will kind of no unsecured loan in BLG. And hence we are able to upgrade those customers as and when this happens. So you will see, I mean, in Q2 and Q3, we'll see things have changed again. Yes, there has been a little bit of volatility, and it has never happened before. This year it;s happening primarily because of, I think, is because of the environmental challenge. Now we can say that other banks are not facing it. I don't know, but maybe in the markets we are seeing, we are seeing a cash flow issue or supply chain issue or some demand issues there for those customers. And hence, we are doing what we have to do. But eventually, these are not going into losses.

Sure. Sorry, just one question, if I can chip in. See, this year -- sorry, this quarter, we are somewhere near to 1% kind of in ROA. So this 1.3% to 1.5%, should we consider that as more a normalized and the long term, which can be achieved in '28, '29? Or do you think in '27 also you would be...

No. It in '27 itself, we'll touch 1.3%.

Okay.

And if you look at last year's trajectory also, a similar trajectory. So there is no reason for me to believe that we can't do it this year, because I think we have a better placed this year and more balanced kind of -- or more balanced kind of franchise with all -- not all, but more cylinders firing, okay? So I don't see a risk to 1.3% to be conservative. I don't see too much into this quarter's ROE because last quarter, ROE in the same quarter is even lower than this.

We'll take our next question from [ Saumil Shah ] of Paras Investments.

So I wanted to know why other income has gone down considerably in this quarter?

Yes. So it has always been a strong point for us, other income, but there are 3 reasons because last year, we disclosed treasury income separately. investors -- but whatever -- so let me -- without giving numbers, let me tell you that last for Q1, we had a substantial treasury gain in Q1. And this year, we have almost negligible treasury gain in Q1. We must have disclosed these numbers last year. This is an investor. So we had INR 53 crores of treasury gain last year in Q1. And this year, we have got INR 12 crores, I think, treasury gain this year, okay? So from that perspective, it is obvious. Second is that on insurance, because of various noise in the system, et cetera, et cetera, and there are various things which we read and also know that RBI Governor himself is looking into complaints of customers and things like that. We took a step back on our insurance and we put a lot of things in place so that we are -- and hence, in CI GAs, for example, which is the DFS, we got 6 out of 8 times -- 5 or 6 out of 8 times, we have got the best service compliance management award. So we are proactively taking these actions so that we are not on the wrong side of this misselling and compliance, et cetera. Our Board is very firmly focused on that. And we put several measures because of that, the insurance business actually did lesser than what we did last year same quarter, but that's only a corrective measure. Now it will start picking up because now that things have stabilized, what we have taken measures. We took fairly tough measures on that to ensure there are no probable misselling in the branches or the banks. So these are the 2 main reasons why our fee income has sort of come down. There's a third reason, which is if you look at the disbursement numbers, which we shared with you, on the gold loan side as well as the loan against share gold loan, which is the LAS in both places because that we don't show separately. But in retail, you see disbursement have significantly come down. And what has come down in disbursement in retail is primarily LAS, which is against gold. And in this gold -- in normal gold business also, disbursement has come down year-on-year slightly and quarter-on-quarter significantly. And with disbursement processing fee comes down. So because we are implementing a lot of regulatory and other things, et cetera, in the gold loan business, we, for example, end-use monitoring, other things, et cetera. So any transition takes a little time. It will pick up again next quarter onwards. But this quarter, we have been very cautious and careful. That's why the disbursements has been a little low on gold and gold-related retail products. So these are the 3 reasons why processing fee, insurance fee and treasury, which we have no hand in it, but it happens naturally based on cycles, all 3. That's why our overall fee has come down to around 12%, 13% of overall income, where our kind of guidance is we will be somewhere around 16%, 17% or so. So we have lost around 5% primarily, but most of it will come back because at some point of time, treasury will also make money, hopefully, in the year. And in core fees also, we'll make some money on insurance because Q2 onwards, we'll see the insurance pick up and gold disbursement also will start picking up. So between all these 3, I think fee income around 15%, 16% will be there. And for the full year, we'll try to come back to around 17%.

And on the treasury, sir, why there was so much of fluctuation? I mean, last Q1, you said INR 3 crores and now it is INR 53 crores -- I mean, INR 53 crores to [indiscernible].

Yes, because this year, we didn't book any profits because it's a question of a call that do we want to make profits when yields have gone down marginally or you want to keep it for future is a call which you have to take. We took a little conservative call and said that we are not rushed for this. So let's wait because we have a much larger AFS book than the HTM book at this point of time because that one opportunity got we put a lot of money in the AFS. -- we have ability to book that profit as and when situation stabilizes. No rush. If it happens this year, fine. If it doesn't happen this year, the bank will look at next year. But no point making small profits and feeling good about it. And that's the reason. But last year, we had an opportunity to make large profit. And then we bank that and made that profit that year. That's a kind of a call which we took.

Okay. Okay. And on the ROA front, if I'm not wrong, earlier calls, we were saying that we should be closer to 1.5% ROA for FY '27. And now I think I heard to the previous participant, you said around 1.3%. So are we revising our guidance or...

No, no. I said that we are between -- Parag was asking me that, ROA is at 1.03% or somewhere around that. So we'll take it to 1.3%. That's what I was responding. Our internal objective is still are of 1.5%. That's an internal target. But I'm saying that we'll not go below 1.3% for this year. So that's the point. So it is a different response to a different question.

1 Okay. Okay. Because from here to reach an 1.5% ROA for a full year basis, I think gradually, we need to in -- I mean by Q4, we can -- we need to exceed 1.5%, then only the average...

Of course, I understand that, yes.

And we see no issues with that as of now?