Ladies and gentlemen, good day and welcome to the Axis Bank Conference Call, to discuss the bank's financial results for the quarter ended 30th June 2025. Participation in the conference call is by invitation only. Axis Bank, reserves the right to block access to any person to whom an invitation has not been sent. Unauthorized dissemination of the content or the proceeding of the call is strictly prohibited, and prior explicit permission and written approval of Axis Bank, is imperative. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions at the end of the briefing session. Should you need assistance during the call, please signal the operator by pressing star then zero on your touch phone. Please note that this conference is being recorded.
On behalf of Axis Bank, I once again welcome all the participants to the conference call. On the call, we have Mr. Amitabh Chaudhry, MD and CEO, Mr. Rajiv Anand, Deputy Managing Director, and Mr. Puneet Sharma, CFO. I now hand the conference over to Mr. Amitabh Chaudhry, MD and CEO. Thank you, and over to you, sir.
Thank you, Neil. Apart from Rajiv and Puneet, I also have Subrat Mohanty, ED, Munish Sharda, ED, and other members of the leadership team on the call. This quarter, we delivered steady operating performance aided by high non-cash income, and continued moderation of operating expenses. Our focus has been on profitable and sustainable growth. The bank's balance sheet is resilient, and capital position, continues to remain strong. Let me summarize the quarter-one operating performance. Operating profit was up 14%, year-on-year and 7%, quarter-on-quarter. Non-cash income grew 25%, year-on-year, and our fee-to-average assets continues to be the best amongst pre-authorized banks. On a year-on-year basis, total deposit growth rates were similar for both period-end and quarterly average basis of 9% and 8%, respectively. On a rated basis, retail and small business deposits, under the MCR, framework grew 12%, year-on-year.
On the lending side, small business, SME, and mid-corporate, together grew at 18%, year-on-year and 5%, quarter-on-quarter, and constituted 23%, of the total bank loans. The bank remains well-capitalized with a CET1 ratio, of 14.68%. We stay focused on three core areas of the position of our GPS, strategy, namely becoming a resilient all-weather franchise, creating multiplicative forces to build competitive advantage, and building for the future. I will now discuss each one of these areas. We have significantly progressed towards building a resilient all-weather franchise. There are four areas of focus as we navigate the current cycle: deposit quality and growth, credit growth, retail asset quality, and cost, where we continue to work on sustainable outcomes. On retail asset quality, the normalization cycle is in progress.
As indicated in last call, we have prudently made changes to our technical recognition criteria, which has impacted quarter-one, asset quality numbers across gross slippages, net slippages, credit costs, and interest reversals, impacting NIM. Puneet, will provide details on each one of these later. On credit, we are focused on delivering better growth outcomes. Quarter-one financial year 2026, has been one of our strongest quarters in terms of quarter-on-quarter loans, with growth in the last few years. Wholesale banking, growth was driven by sector-specific demand, strong refinancing activity, and disciplined execution, not just rate-driven. On the cost side, our expense growth, moderated 2%, year-on-year and declined 5%, quarter-on-quarter. Let me move to deposits now. The deposit journey for Axis Bank, should be looked at from three aspects: quality, cost, and growth. Please refer to slide 17. On the first two parameters, we delivered well and demonstrated consistency.
We have improved the granularization, of our deposits, which positively impacts the quality of MCR deposits. Consequently, the outflow ratio, improved by 150 basis points, over the last one year and is similar to larger-tier banks. We have also demonstrated controlled increase in cost of funds over the last eight quarters. Our confidence in the franchise has allowed us to take early and proactive action on savings account rates and term deposits, which has resulted in quarter-on-quarter, decline and 11 basis points, in cost of funds. On growth, year-on-year, on a CASA, basis, total deposits grew 9% and 8%. Term deposits grew 12% and 12%. Current accounts grew 9% and 4%, and savings accounts grew 3% and 1% respectively. The quality and strength of our deposit franchise, continues to improve. Our acquisition engine, expansion plans, product launches, salary credits, and budgetary variance, remain healthy.
In quarter one, we made strong strides in acquiring quality new-to-bank, customers as we executed a differentiated customer acquisition strategy that involved premium customer acquisition, through curated propositions and targeting high-potential personas like senior citizens, doctors, self-employed professionals, homemakers, and women, which has led to a notable jump of 58%, year-on-year in average total savings, and 58% and 25%, year-on-year in savings deposits. Moreover, the productivity of relationship managers, has seen improvement, up 25%, in financial year 2025, exit over financial year 2024, and up 33%, year-on-year in June 2025. Our transformation projects like CASA's, push are contributing to this change.
The bank has also made focused interventions to ensure better engagements with its salary customers and continues to see healthy trends with 18%, year-on-year growth in salary uploads in the new-to-the-bank salary book June 2025, and 27%, year-on-year growth in premium acquisitions in the new-to-the-bank salary book, as of June 2025. The realization of our franchise continues to progress well, led by 6%, quarter-on-quarter growth in Burgundy, assets under management. As per the recently published Asian Private Banker India 2024 League Table, we retained the third position, with the highest growth rate amongst the banks. Coming to our existing bank customers, our strategy centers on deepening customer engagement, transforming passive accounts into active, high-value relationships. Through data-driven segmentation, personal ledgers, and life cycle campaigns, the bank, is driving higher balances, product penetration, and long-term loyalty. This improved strategy has target-scoring results with improved average balance, steady penetration, and positive deepening.
Our industry-leading new platforms, along with customized solutions across utility management, payments, and collections, continue to drive higher transaction banking. Also please refer to slide 31, for more details. While creating multiplicative forces to build competitive advantage, as a full-suite card and payments player, the bank, continues to build on innovation with partnership models to tap newer customer segments, and their evolving needs. They partnered with Flipkart, SuperMoney, and Rupee, to launch a co-branded credit card targeted at UPI users, and innovative variable payment solutions in partnership with Mastercard. The bank also became the first to implement a pioneering B2B collection solution, for a Fortune 500 company, on NPCI's, Bharat Connect. Leveraging the bank's best-in-class corporate API, stack. As I said, building the bank for the future is imperative. Retail banking performance continues to remain strong. Providing cross-tier digital platform remains a key priority for the bank.
In quarter one, the bank enhanced transaction monitoring and introduced fraud prevention-related features such as mobile OTP, safety center, and log entry, and additionally, the bank introduced enhanced features to My Money, the bank's personal finance manager, to provide customers a comprehensive view of their finances and to manage them better. On the corporate banking side, the bank continued to roll out and further enhancement of features on the new platform. In quarter one, the bank migrated 80%, of eligible clients to the new platform. We continue to see meaningful increase in digital activation, transactions, and other relevant metrics versus clients already migrated. Our digital platforms are scaling rapidly. Our GenAI-powered, frontline assistant has seen a 66%, increase in usage. It helps employees deliver faster, consistent resolutions at the frontline, enhancing productivity and reducing dependency on manual support. Bank-wide programs, such as Bharat Banking and SPARSH, are progressing well.
The rural advances grew 5%, year-on-year, and deposits from Bharat branches, were up 9%, thereby aiding the PSM metrics. We expanded our multi-product distribution architecture to now 7,277 branches. SPARSH 2, our enhanced customer experience program simplifies interactions, guiding NPS automation, and digitization with a focus on customer loyalty and business growth. Our retail bank NPS score, has matured significantly, rising to 159. From a baseline of 100, in the past few years. You will see that the score has been inching up regularly and slowly. Software aspects like our brand consideration score have also improved over the past few years. In conclusion, we are optimistic as we step into financial year 2026. We believe large, well-capitalized banks like Axis, with strong digital capabilities, innovative product suites, are best placed to capitalize on the India opportunity.
Our platform will allow us to grow at rates faster this year than the industry, and this thesis will continue to play in the longer term. The supportive regulatory conditions and the competitive landscape add to our confidence. We will continue to invest where necessary to remain differentiated and distinctive in our journey towards building an all-weather institution. Before I hand over to Puneet, on behalf of the bank, I would like to acknowledge Rajiv Anand's, exceptional 16-year journey, with Axis Group. We thank him for his visionary leadership and invaluable contributions, across all business segments of the bank that have created a lasting impact on the bank's growth and culture. Thank you, Rajiv. I will now request Puneet, to take over.
Thank you, Amitabh. Good evening, everyone, and thank you for joining us. We disclosed in our Q4, FY25 earnings call, that we had reviewed the classification and upgrade criteria for certain types of loans that would impact the reported asset quality metrics. Accordingly, the prudent application of technical parameters for recognizing slippages and consequent upgrades has been implemented and has impacted the reported asset quality parameters, including provisions and contingencies, for the quarter-ended fiscal year. For reference purposes, let's call this the technical impact. The technical impact is largely restricted to cash credit and overdraft accounts and on accounts that have been given one-time settlements. Hence, due to the technical impact, the reported values of gross slippages, net slippages, credit costs, NPA ratios, ROA, and ROE, are not like-for-like comparable to the previous quarter or previous year.
I would request all of you to please see slide 44, for quantification of the technical impact, across the key variables that I have just discussed. Let's pick up gross slippages. Reported gross slippages, for the quarter were INR 8,200 crores. INR 2,709 crores, of the gross slippages is attributable to technical impact, representing 1.03%, of gross slippages, for the quarter in value terms. Gross slippages, for the quarter adjusted for technical impact, is INR 5,491 crores. It's important to note that this amount is flat to Q3, FY25 slippages. The reason I'm referencing Q3, FY25 slippages is you have aggregated the first quarter and the third quarter, so effectively flat to Q3, FY25. Gross slippages, except technical impact, have increased by 13 basis points, year-on-year and 20 basis points, quarter-on-quarter. Reported gross slippage ratio, annualized for Q1, FY26 is 3.13%.
Gross slippage ratio, adjusted for technical impact is 2.10%, increasing 13 basis points, year-on-year, 20 basis points, QoQ. Gross slippages, segmentally were INR 7,500 crores, in retail, INR 403 crores, in our commercial banking business, and INR 297 crores, in our wholesale business. The technical impact on gross slippages, by segment is INR 265 crores, retail, INR 234 crores, wholesale, and INR 310 crores, for our CBD business. Segmentally, the gross slippage ratios, for our CBD and wholesale segments, adjusted for technical impact, declined quarter-on-quarter and year-on-year. For the quarter, 29%, of our gross slippages, other than technical impact, are attributed to linked accounts of borrowers, which were standard and classified or have been upgraded in the same quarter. 80%, of individual contracts that slipped because of technical impact and that continue to remain NPA, as of 30th June 2025 are fully secured.
Hence, given the aforementioned security cover, we believe that the economic loss due to the technical impact will be minimal over the life of these contracts. Further, the current quarter represents the impact on stock inflow. With the stock corrected, the flow is likely to be more muted as compared to the current quarter in future quarters. Net slippages. Reported net slippages, in the quarter were INR 6,053 crores. INR 1,861 crores, of the net slippage is attributable to technical impact, representing 0.71%, of net slippages, for the quarter in value terms. Net slippage, for the quarter adjusted for technical impact, is INR 4,192 crores. Reported net slippage ratio, annualized for Q1, FY26, is 2.33%. Net slippage ratio, adjusted for technical impact, stands at 1.62%. Net slippages, segmentally were INR 5,726 crores, in retail, INR 137 crores, in commercial banking, and INR 190 crores, in our wholesale business.
Net of technical impact, by segment, the slippages, were INR 1,574 crores, retail, INR 187 crores WBCD or wholesale, and INR 100 crores, for our CBD business. Segmentally, the net slippage ratio, for CBD and wholesale segments, adjusted for technical impact declined year-on-year. Recovery from our return of accounts for the quarter was INR 904 crores, increasing 53%, year-on-year and flat QoQ. Net slippages for the quarter adjusted for recovery from return of accounts and technical impact, was INR 3,288 crores. The same number in Q1, was INR 2,700. Q1, of the previous year was INR 2,700, and Q4, was INR 1,079. Segmentally, retail was INR 3,636 crores. Q1, FY25 was INR 2,456 crores. Q4, FY25 was INR 2,297 crores. Commercial banking, was negative INR 14 crores, for the quarter. Q1, FY25 was INR 13 crores, and Q4, FY25 was INR 5 crores. Our WBCD segment, was negative INR 334 crores, for the quarter. Q1, FY25 was INR 231 crores. Q4, FY25 was negative INR 1,223 crores.
Reported GNPA ratio, is 1.57%. GNPA ratio, adjusted for technical impact stands at 1.41%, lower 13 basis points, year-on-year. Reported net NPA ratio, is 0.45%. NPA ratio, adjusted for technical impact stands at 0.36%, increasing 2 basis points, year-on-year and 3 basis points, quarter-on-quarter. Reported margin is 3.8%. Interest reversal on technical impact has roughly impacted margin slightly 1 basis point, for the quarter. Credit cost. Reported credit cost, is 1.38%. Net credit cost adjusted for technical impact stands at 1.09%, increasing 12 basis points, year-on-year. PAT, ROA, ROE. Technical impact has adversely impacted PAT, by INR 614 crore. ROA, has been adversely impacted by 15 basis points, and ROE, has been adversely impacted by 1.4%. Moving to discuss the salient features for the financial performance of the bank for Q1, FY26, across our operating performance parameters, capital and liquidity position, asset quality, and ROE, is as follows.
The key metrics for Q1, FY26 are. NII, at INR 13,560 crores, YOY growth of 1%, net interest margin, at 3.8%. CE at INR 5,746 crores, YOY, growth of 10%, granular CE, at 91% of 2%. Expenses, at INR 9,303 crores, YOY growth, moderated to 2%, and expenses declined QoQ, by 5%. We delivered a positive show both on operating revenue and core operating revenue. Cost to assets at 2.41%, declined 5 basis points, QoQ and 13 basis points, YOY. Core operating profit, at INR 10,095 crores, YOY, growth of 5%. Net credit cost, at 1.38%, up 41 basis points, YOY, largely due to technical impact. PAT, at INR 5,806 crores, GNPA, 1.57, and NPA, at 0.45, 11 basis points, YOY increase. PCR, stands at 71%, and declined 300 basis points, QoQ. This is largely due to the secured nature of the technical impact. Standard asset coverage ratio, at 1.12%.
All provisions to GNPA, at 138%. Consolidated ROA, at 1.58%, consolidated ROE, at 13.57%. Subsidiaries contributed 4 basis points, to consolidated ROA, and 43 basis points, to consolidated ROE. Bank's CET1, including Q1 profit, stands at 14.68%. We accreted. Net consumption, 1 basis point , of CET1 capital, QoQ and 62 basis points, of CET1 capital, year-on-year. In addition, the bank has prudent other provisions aggregating to INR 5,012 crore, to be largely utilized for ECL, transition. This provision has not been reversed in capital computation and translates to a capital position of 36 basis points, over and above our reported capital adequacy ratio. The bank assesses its capital position on two pillars: growth and protection. We reiterate we do not need equity capital for either pillar. Net interest margin, for Q1, FY26, was 3.8%. It declined 25 basis points, year-on-year and 17 basis points, YoY.
One basis point decline in NIM, is attributable to technical impact, and 3 basis points, QoQ decline in NIM, is attributable to seasonally higher aggregate slippages, due to aggregate cyclicality. Full quarter impact, of 75 basis points, of repo cut will play through on loan yields in Q2, FY26, and will adversely impact margins in Q2, FY26. The bank, however, maintains its two-cycle stance of average gains, of 3.80. Cycle measured, in terms of duration starting from the date of the last rate cut. Our progress on structural net interest margin, carriers continues with improvements across all variables on a year-on-year basis. Improvement in balance sheet NIIs. Loans and investments comprise 89%, of total assets at June 25, improving from 88%, at June 24. INR-denominated loans comprise 96.24%, of total advances at June 25, improving within this year-on-year.
Retail and CBD, advances comprise 70%, of total advances at June 25, stable YoY. Low-yielding RIDF, bonds declined by INR 13,519 crore, year-on-year. RIDF, comprised 0.84%, of our total assets at June 25, compared to 1.36%, at June 24. Quality of liabilities measured by outflow rates improved by 50 basis points, over the last year. CASA deposits, grew 2%, QoQ. CASA ratio, was flat QoQ at 38%. MSB-CASA ratio, at 40%, declined 1%, sequentially. Our fee performance was good, reflected in a fee growth of 10%, year-on-year. Our fee-to-assets improved by 3 basis points, year-on-year to 1.45%, in Q1, FY25. Total retail fees grew by 9%, year-on-year. Total wholesale fees grew 13%, year-on-year, better than the growth in advances, reflecting improvements in the franchise. Trading profits and other income, at INR 1,512 crore, grew 161%, year-on-year, mainly on account of realized gains across government securities and bonds.
Operating expenses, for the quarter stood at INR 9,303 crore, growing 2%, year-on-year, declining 5%, sequentially. The year-on-year increase in routine floor expenses, can be attributable to 46%, linked to volume, 27%, to technology and growth-related, and the remaining BAU, partly offset by. Merger integration expenses, for Q1. Technology and digital expenses, constituted 10%, of our total operating expenses. Staff costs, increased by 4%, year-on-year. QoQ, decline in operating expenses, is largely attributable to reduction in other operating expenses, as indicated we were taking very tightening measures. These are playing through. Our staff costs, increased 10%, QoQ, mainly due to increments in gratuity. Provisions and contingencies for the quarter were INR 3,948 crores, higher by 190%, QoQ, 94% YoY.
Cumulative non-NPA provisions, at 30th June 2025, is INR 11,760 crores, comprising provisions for potential expected credit loss of INR 5,012 crores, restructuring provision of INR 238 crores, standard asset provisions higher than regulatory rates of INR 2,119 crores, and weak assets and other provisions of INR 4,391 crores. Coming to the performance of our subsidiaries, detailed performance of our subsidiaries is better outlined in slides 50 to 57, of our investor presentation. In Q1, FY26, the domestic subsidiaries reported a net profit of INR 451 crores, growing 4%, year-on-year. Return on investment on domestic subsidiaries was 47%. Axis Finance, overall assets under finance grew 23%, year-on-year. Retail book constituted 47%, of total loans. Q1, FY26, PAT, grew 23%, year-on-year to INR 189 crores, with a capital adequacy of 19.83%. Strong asset quality, with net NPA, of 0.35%, and negligible restructuring. Axis, AMC, overall quarterly average asset, under management grew by 15%, year-on-year to INR 335,607 crores.
Q1, PAT, at INR 130 crores, growing 12%, year-on-year. Axis Securities, revenues for Q1, FY26, of INR 360 crores, and Q1, FY26, PAT, stood at INR 89 crores. Axis Capital, PAT, stood at INR 38 crores, for the quarter when we executed six ECM, deals in Q1, FY26. Asset quality, provisioning and restructuring, the slippages, GNPA and NPA, and PCR ratios, for the bank. And segmentally for retail, CBD, and corporate are provided on slide 42, of our investor presentation. To summarize, Axis Bank, is progressing well to be a stronger and sustainable franchise in the medium term, defined as a period of three to five years with FY26, as base year. We believe advances can grow 300 basis points, faster than industry. We continue to closely monitor the current macro, geopolitical environment, inflation, liquidity, tax refunds, and its impact on our business. Thank you for your patience.
We'd be very happy to take questions from you. Have a night.
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. If you wish to remove yourself from the question queue, press star and two. Participants are requested to use handsets while asking questions. Ladies and gentlemen, we will wait for a moment while the questions are assembled. The first question is from Chintan, from Autonomous Investments. Please go ahead.
Hi. Thank you for taking my question. I have a question on asset quality and a question on NII. On asset quality. Even after removing the technical impact, credit costs, are quite high this quarter. What is driving this elevated level? How should we think about this number going ahead, not just for FY26, but for FY27, as well?
I don't think you are calibrating your business model to this high level. What should we think about on that calibration? And then on NII. The NIM, compression that we have seen in this quarter seems to be a little bit more than what we were discussing in the previous earnings call. Has anything surprised you positively or negatively in the expected trajectory of the NIM? And would you say you're still comfortable with NIM, reverting back to the fourth quarter level, given that last quarter you had said that the balance sheet duration is tightly matched on an annual basis?
Chintan, thank you for your question. I'd like to offer a couple of factual clarifications before I respond to them. I do not think we've ever alluded to the fact that assets and liabilities are tightly matched on an annual basis.
We have consistently maintained that our assets and liabilities are tightly matched. However, the matching is in the 15-18-month range. So I would just want to factually correct the 12-month anchoring that you've provided in your question. Now, let me answer part of your question. If you take your slippages question, adjusted for the technical impact, the slippages, are exactly equal to one year equal to the Q3, FY25, number. Which indicates the stabilization that we had previously called out as part of the Q4, commentary continues to be maintained in Q1, also. The function of the actual P&L, charge, yes, if you're comparing the INR 2,185 crore, loan loss provision that we had in Q3, versus the adjusted roughly INR 3,000 crores, of provision for loan loss that we have in Q1, that's a function of certain aging provisions plus the composition of slippages for the quarter.
So those numbers will play through, but the lead indicator of asset quality slippages, and adjusted for technical impact were flat to Q3. The last part of your question was on the margin trajectory. I think you alluded to us having provided some form of guidance for quarterly margins. Again, I'd like to reiterate, we do not provide quarterly margin, guidance. Our stated position is we are confident that we can deliver a 3.8%, margin on a two-cycle basis. Cycle, starting from last rate cut. We've offered duration of our assets and liabilities on this call. So if you're willing to take the duration view of the balance sheet, you will see margins. We feel confident that margins will get back to the levels we've indicated over the period of duration.
The shape of how the margin trajectory would work, I was requested to think of the margin trajectory as an inverted C. Effectively, you start with when the rate cuts are announced, you drop on the inverted C, and then you start climbing back up towards the end of the duration period. So that's how margins will behave. Let me also answer a question that you're likely to receive through this call. What is next quarter looking like? Margins, for the current quarter have fully absorbed on a full book basis, full quarter basis, 25 basis points, of rate cut. The second 75 basis points, of rate cut have been absorbed only for part of the quarter. So that 75 basis points, of rate cut will flow through on a complete basis in the next quarter.
It will get offset by some deposit plus borrowing cost savings that will play through. But directionally, you know that 70% plus of our book is floating. So you get a clear clarity of how that margin direction should move. I hope I've been able to answer each of your questions, but happy to take subsequent questions. So Chintan,
let me just add. Just a clarification. You just finished. You said that there's a distress on our model and we need to change our model. So. Let me just clarify a couple of things here. One. Our slippages, are stabilizing. We have talked about it in the last call. We're talking about it on this call.
We have openly talked about the fact that if you look at the new stocks which we are booking as loans on the retail side and how it is performing, it is performing as well as what we saw during pre-COVID times. Across some of the asset classes, we had a problem. So as the stock plays out, at some stage, it will start reflecting in our overall slippages also. That's the hope because right now, that's what the data is showing to us. So yes, we are going through a cycle. Yes, we are seeing elevated slippages and elevated credit costs. But also at the same time, and on the same note, we've been sharing that the stock which is being booked based on the risk cuts which we have done is reflecting signs, and I'll ask Hamid, to add to it if he wants.
It's very clearly showing to us that the quality is improving and improving quite rapidly. So in that sense. Within a defined time period, I don't know what that defined time period is because we have not given any guidance, we will see the credit costs, reverting to lower levels. Hamid, do you want to add anything?
Yeah. Just to add to that, Hamid, you're right. All the key indicators that we've seen on, especially on the retail unsecured side, which is credit cards and personal loans primarily, whether it's bounce rates, early delinquency, or collection resolution rates have shown a clear improvement. And that's what provides us comfort. And all of this is within the risk guardrails.
Thank you.
Thank you. The next question is from Murug Adaniya, from Kotak. Please go ahead.
Good evening. So I have a couple of questions. Firstly, on this technical classification.
So we have seen technical classifications earlier on corporate by many banks, right? Just as late as last year, there were PSUs, who had slipped a central government account as technical. But what actually happens in all these technical accounts is that they get upgraded in the next or the next to next quarter. So usually, technical accounts are such that there's a nature or an element of their recoverability in the forthcoming quarters. So are the technical upgrades that we—sorry, the technical downgrades that we have done recoverable immediately, or they are recoverable through sale of collateral as in recover—sorry. That's the wrong way to put it. What I'm trying to ask is, are these technical downgrades likely to be upgraded to standard, or they'll be recovered because 80%, of them are secured? So which bucket or which classification do they fall into? So that's my first question.
And my related question to that is that if these technical slippages, would not have happened—of course, I can understand that the stock has been recognized—but if these technical slippages, had not happened, then would your flow of slippage, on a run rate basis settle at lower than what you will see in the next few quarters? And likewise for your credit cost. And then thirdly, we've usually seen technical slippage in corporate, and most of your slippage is in retail, but you also called out OTS, cash credit, and working capital, right? Sorry, overdraft. So I'm assuming that cash credit and overdraft will be classified in non-retail, and only OTS, gets classified in retail. These were my questions.
Marik, thank you for your questions. Let me attempt to respond to them in parts. Let's take your last question first.
All banks in the country offer cash credit overdraft products even to retail customers. A classic example of that could be loans for discount credit. So they are in a CCoD format. So please do not assume that CCoD, is only in the wholesale segment. In fact, when you make technical corrections, the wholesale segment is the first to recover because they are more professionally managed and they are able to update themselves much faster. Consequently, the impact that you're seeing is in the current quarter is dominantly in the retail business, as I called out as part of my opening remarks. You alluded to whether we will recover and upgrade these accounts through security enforcement or through DAU.
The current intention is to recover this money, and our expectation is parts of this money will get recovered in the normal course of business as customer behavior changes and they regularize themselves in the normal course. 80% of these accounts have 100% security cover, and that helps us get comfort that if the customers do not rehabilitate them over a period of—rehabilitate themselves over a period of time, there is enough security cover for us not to face an economic loss on this loan. So these are running businesses. You will work through the running businesses. Recoveries and upgrades would be the preferred means to recover on these loans. But if those efforts fail, we have security cover to minimize economic loss. I hope that answers all your questions.
Sure. Thank you.
Thank you. The next question is from Kunal Rao from Citi. Please go ahead. Yeah. Hi.
Thanks for taking the question. Also, firstly, if you can explain slightly in detail in terms of what has happened with this policy and what actually led to this change? Is it more of a prudent measure? Was it identified during any kind of regulatory inspections or audit and we had to do this? And maybe within that, in terms of the slippages, I didn't get a few clarified in the opening remarks, but were there a few accounts wherein the borrower-wise classification, would have led to higher slippages, just because something getting classified due to this change in the upgrade policy? So that's the first question, yeah.
Kunal, thank you for the question. Effectively, it is the recognition policy that has changed. The upgrade policy is only about entitlement. We have tightened the recognition criteria, which is why you see the dominant impact come through on cross-slippages.
You alluded to the fact on whether this was proactive or reactive. Sorry, if you can just give one example as to what has happened, yeah. Maybe one couple of examples would really help to clarify in terms of what is leading to almost INR 2,900 crores, of addition, yeah. Happy to give you an example, Kunal. I think let me complete the response to your earlier question on whether this was proactive or regulatory-led. We can confirm to you that this was not regulatory-led. So that should answer the question that you had raised as part of your first question. Now, coming to an example of impact, I had said that this impacts cash credit, overdraft, and one-time settlement accounts. I think very simplistically put, asset classification happens on a day-spot view counter basis, and asset classification can happen on qualitative parameters.
Let's take one example of a one-time settlement to illustrate to you what could possibly happen. Let's assume Sunit, has a personal loan. That personal loan is of INR 100, and that's five days past due. Our collections team figures out that Sunit, may not be able to service his loan and consequently decides to enter into a one-time settlement with Sunit. And the settlement amount is, let's say, three installments of INR 30, with a one-month moratorium. So INR 100, loan, five days past due, to be settled in three installments of INR 30, with a. Sorry, three installments of INR 30, with a 90-day moratorium. What will happen is I will sign off to the settlement. The DPD, counter continues to move. So on the 85th day, after the settlement, or 90 days after the first amount fell due, Sunit, would get classified. All INR 100, of Sunit's, loan will get classified.
Because it's a 90-day moratorium, on the 95th day of DPD, because 90 days after five days, on the 95th day, Sunit, pays in INR 30. The INR 30, clears all past overdues, and the DPD, counter goes to zero. If you were recognizing classification only on a DPD, basis, Sunit's, residual principal outstanding of INR 70, would get fully upgraded because DPD, counter has gone to zero. One of the technical changes is we have stopped upgrading Sunit, despite his DPD, counter going to zero. Therefore, it is a technical parameter that is classifying Sunit, and not a DPD, parameter. That hopefully explains to you what we mean by technical parameters. These are non-DPD-led parameters that have been tightened, resulting in higher slippages, for the quarter.
Got it.
So these were more wherein it was not objectively defined, maybe on days past due, but qualitative parameters were used in terms of expectations from the OTS. And maybe that's what it was. That's the reason it was not classified as NPA. And now, since we have stopped that, now it is getting on the entire bankbook, now it is getting classified as GNPA.
So Kunal, let me clarify. There is no expectation here. The IRAC, norms were DPD, and therefore, if the DPD, was not past 90, there was an upgrade. Again, please appreciate that I just want to reiterate and reclarify. Our balance sheet was. We have said recognition criteria has changed. Provisioning has not changed. Provisioning remains as stringent as it was previously. So previously, on Sunit's loan, INR 10, would have been provided when the settlement was entered into.
So I was running zero risk even at that point in time. The incremental INR 90, of provision which was coming through and being released because only DPD, was being used and qualitative was not being used is now flowing through the PMF. So there is no subjectivity here. The simple point now is instead of reading a DPD, counter, if a customer has an OTS, a customer will not get upgraded till the last installment is received in explicit form. Now, this is one example. The criteria change is about multiple examples. We would not like to discuss all of them on the call. Yeah, yeah. No, agreed.
The only thing is in the retail segment, would it be fair to say that the dominance would be of the credit card within this portfolio?
No, that would not be factually correct.
So how would it be spread across product segments?
Broadly, if you can indicate like 2,200-odd crores, in retail, which segment does it really impact?
So Kunal, I had indicated as part of my opening comments that the product impacted our CCoD. So cash credit overdraft product is impacted as a product. Okay. And OTS. One-time settlements will impact across the board.
Got it. And lastly, maybe any comments on PL and CC? The last time you have been indicating that we have not yet called the peak on PL side and CC, is stabilizing. So what would be the incremental comment on it now?
So broadly, we have seen stabilization and improvement across retail and secured. Specifically, we have seen improvement on the credit card side and stabilization in the personal loan side. We did mention the fact that all the key indicators, which include bounce rate, early delinquency, collection efficiencies, have all shown an improving trend.
And that's something that provides us comfort. But having said that, I think Puneet, did mention in his opening remarks that we are monitoring these indicators for the quarter before we call out stabilization. So PL, we can still say it's stabilized or not yet?
It is improving for sure. And like I said, because we still want to call it out, we had mentioned in the last call as well that we want to watch and wait till end of quarter two. But clearly, we've seen signs of improvement on PL as well.
Okay. Got it. Thanks. Thanks and all the best, yeah.
Thank you. The next question is from Param Subramanian, from Investec. Please go ahead.
Hi. Thanks for taking my question. My first question, again, so you clarified that it's not regulatory-driven, this technical recognition. But what exactly drove this?
Is this a gap that you recognize versus peers, or is this Axis Bank, being more prudent in terms of recognition? If you could just call that out because one can't understand why exactly we are doing this. Yeah. That question, yeah.
Thank you for the question. We follow a benchmarking exercise once a year on policies across the market space. It's a practice that we've been following for multiple years. And if you go back in our history, you would have seen, for example, we had meaningfully corrected our SME, provisioning in 2021-22. So it's an annual practice that the bank has. As part of the annual practice, we benchmark all of our policies. Wherever we find somebody more prudent even on an individual parameter basis, we try and make sure that we get to that level of prudence as an institution.
It keeps our balance sheet healthy and resilient. That's the principal focus of the benchmarking or purpose of the benchmarking. Because we had completed the benchmarking when we announced quarter four results in April, we had called this impact out as part of our quarter four commentary, but this impact is likely to come through. So it's an annual feature. We called it out. The comfort I can provide is given where we stand both on recognition and provisioning. We do not expect any further changes to either criteria in the foreseeable future unless the regulation changes for the whole industry as a whole.
Okay. Got it. So would it be fair to say some of the other larger private banking peers are doing this already, and this is a gap? I'm not sure if that was clear.
And secondly, if you could call out how much is the impact on the bankbook versus the flow? Because you said there is a bankbook impact as well. Because from Q2, onwards, we'll have to look at the flow impact. So what is the number one should be working with?
So I'm not going to give you a stock versus flow impact. You'll probably need to work that through. There is a full stock correction that happened in quarter one. Coming to the first part of your question on whether we were lagging some of the peer banks. I think that's a comment the peer bank should offer. This is the benchmarking we do, and the policy that we have as of 30th June 2025. I do not think there is a bank that's more prudent than us on asset classification and upgrades combined. On this feature.
So if you take classification and upgrade criteria on a combination basis, our benchmark leads us to believe that we are more prudent than banks on this feature.
Okay. Got it. Very clear, Puneet. One last question, if I may. Again, a happy one this. Is this in preparation for, say, an ECL, transition? And if so, the bank is sitting on INR 5,000 crore, of ECL, buffer. And just to, again, extend the point, we are more conservative in terms of unsecured provisioning, which we've called out in the past. There is an ECL, buffer, and now this technical recognition. This is all coming at the expense of book value per share as well as ROE, for the shareholders, right? So there is something to consider. So firstly, is this in preparation for ECL? And secondly, your thoughts on the other part? Yeah. Thank you.
Thanks for your question.
I think I clarified previously and I'll reiterate. Unless there is a change in regulations, we do not think our recognition of provisioning policies need further change. So we are confirming that this would be the last, last change that we are putting through. ECL, is a function of provisioning on recognized numbers. We do pro forma preparations internally as we prepare for ECL, implementation. This is the last pro forma we prepared. We can confirm to you that on stage three assets we have adequate cover to meet ECL, guidelines.
Thanks. Thanks, Puneet. Thank you.
Thank you.
The next question is from Abhishek M, from HSBC. Please go ahead.
Yeah. Hi, everyone. Hope I'm audible. Hello? Yes, I'm audible. Yes. Yeah. Thank you. Right. So one question on loan growth. If I look at the movement, especially in the last two quarters.
Not only have we completely consolidated or slowed down growth in retail, but we have grown more in corporate. And this sort of goes against the trend when we are trying to protect our margins and minimize the income compression impact. This also sort of coincides with commentary that stress in unsecured is stabilizing or it is coming under control. So at what point or what would trigger higher growth in retail, maybe not unsecured, but at least secured retail? Because surely that would be more yield or results compared to corporate. Some comment and color here would be helpful.
So I think we have, at least, demonstrated our ability to grow certain asset classes at the cost of the other asset classes and get the right mix through various kinds of interest rate changes we have seen over the last few years or so.
On one side, you see our elevated retail risk. It was important to get a handle and ensure that the stock or the kind of flow which is coming is coming at a right cost which is much lower than what we have seen in the past. So some of those areas, if you're growing, obviously the growth has slowed down. If you go to the disbursement growth in some of our retail asset classes, you will see that has definitely picked up in comparison to what you saw in 24-25. The AUM, has not picked up because you are seeing repayment of loans, but we do expect that disbursements will start going through AUM. You are seeing decent growth on the mortgage side in the industry as between wholesale and mortgage.
We have grown the wholesale side more, and wholesale has not really been one of the lower growth asset classes for us for some time. Now we have an opportunity to grow, and we are growing there. And we have always told you that when we want to grow wholesale, we can grow, and we are just demonstrating that as we speak. We expect growth to come back up in some of the other asset classes also as time goes by. Very clearly, in my opening remarks, I made a statement that we expect we have the confidence to grow at a greater clip than the industry in this year and in the medium term because our platform allows us to grow. And give us due credit for being able to manage the portfolio mix, in the right way so that we can drive the lending in the right direction.
I mean, I think that's the call we take on a regular basis, on a continuous basis, based on what the policies in the market are. What will drive right lending, what is the LDR, where are we getting the deposits, what kind of deposits we are getting, and so on and so forth. It's a combination of a lot of factors. And I'm just saying that I think we have demonstrated the ability to manage product mix, and we are quite confident we'll manage that as we move forward. Hope that answers the question.
No, this was important from a historical look at what you've done over the last one to two years. But now it's become even more important to grow retail because lenders are going to take a bit of a knock from the local repricing impact.
So are you comfortable enough to grow retail now going forward, let's say 12 months, from now, since you said you'll grow at par with the industry?
So that catch-up. That happens across the board. Retail across the 60%, of our book. If we had to drive lend, as we said, we'll have lends of 3.8%, on a two-cycle basis. Either we change the product mix, to wholesale and get the lend up there, which is not easy, or the retail has to grow. I think the answer is quite obvious, isn't it?
Right. Right. Yeah. Because most of the retail book is in complete consoli,dation mode for a few quarters. Okay. Thanks. Now, a second question is on your ROE, just trajectory over the next couple of years.
So your 15- to 18-month, trajectory for that match duration of the balance sheet, starting February, when the first rate cut happened, broadly indicates that by the end of this calendar, we should see the deposit cuts starting to show up and utilizing the yield impact. Is that the right way to think about it? Let's say by end of December, we should start seeing enough accumulated benefit of the SAR and TV, rate cuts that you have done so far?
Look, I think. We said duration is 15 to 18 months, from the last rate cut announced. So the last rate cut was post-February. So you've got to measure it from the last rate cut date. Second is, let's be clear that there is a market force at play on deposits. Given where. And deposits will get price basis competitive intensity.
So yes, I would agree with your answer in a perfect market. But competitive intensity changes over a period of time, and you've got to bear that in mind when you think about liability repricing on a three-cycle basis. But directionally, look at individual banks' liability durations, and you should see their deposits as well as borrowers repriced over that period. Thank you.
Before we take the next question, I request two participants to please limit your questions to two per participant. Should you have a follow-up question, we request you to rejoin the queue. We take the next question from Saurabh Nanavati, from Sundaram Mutual Fund. Please go ahead.
Yeah. Hi, sir. Thanks for the opportunity. Again, I mean, harping on this technical thing, I mean, just one simple question.
If I have understood correctly, that now since your upgrade will only happen if they pay let us say 3 EMI. And since you have started this exercise from first quarter, would it be fair to assume that probably going into second half, your recovery or upgrade number would be meaningfully higher versus the current levels? Because by that time, probably whatever the stock impact you have had in this quarter, those would have paid, let us say, two, three EMIs, already, and hence probably your recovery upgrade number would be meaningfully higher. So that is point one, question one. Question two is, sir. Put it very simply that since last year, till last year, you were following a different classification, and now you are following a different, let us say, policy.
If I assume that everything is same last year versus this year, would it be fair to assume that your slippages number for second, third, and fourth quarter would be higher this year versus YoY? Because now you are not going to recognize those OTS, numbers into the flow. And if I assume that everything is same, your incremental slippages are not coming down, hence your reported slippages would be higher. Is that the understanding correct? These are my two questions.
Thank you for your questions. I think without specifically commenting on recoveries and upgrades versus what is going to be flow impact, I think the simplest way I would respond to your question directionally is Q2, Q3, Q4, will be more muted than Q1, simply because Q1, has corrected stock.
Q2, Q3, Q4, will have slippages elevated because of the new criteria, but that will get offset by recoveries, as we've correctly pointed out. So I think the way we should look at this is on a net basis, Q2, Q3, Q4, will be more muted than Q1, on both the slippage variable as well as the consequent progression variable. I think to your second part of your question on where will we directionally be on net-to-gross slippages, whether it will be higher or lower than prior quarters, we do not guide on slippages. So I do not want to stack the factors of giving you quarterly indications on where slippages would be. But directionally, more muted than quarter one for certain. With a mix of better recoveries and upgrades and lower fresh flow slippage.
Yes, sure. Sir, one last question if I may.
So your PCR, has come down this quarter. Directionally, would it continue to come down, or I mean, how you are thinking about the PCR?
Provision cover ratio, is down by about 300 basis points. I would request you to look at slide 44, of our presentation. If you look at slide 44, of our presentation, you will see that we made, on the technical impact, INR 821 crore, of provision roughly on INR 1,861 crore, of gross slippages. Net slippages, INR 1,861 crore, of net slippages. That translates roughly to a PCR, of about 44%-45%. So the way I would request you to think is in terms of the technical slippage, the PCR, actually improved because our policies are prudent. The new slippages have attracted a lower provision cover, and this goes back to a point I made earlier. 80%, of the accounts have more than 100%, security value.
And because they have more than 100% ,security value, they will stand fully covered and therefore require less provision. So the PCR, drop is a mixed impact, principally. There is no dilution of provision standards in comparison to banking forecast.
Thank you. The next question is from MB Mahesh, from Kotak Securities. Please go ahead.
Just again, clarification on the technical one. We're trying to understand how the bank kind of deciding as to see just the benefit of the one-time settlement offered on the DPD, product. And on CCoD, products, typically these are very interest-only products. And just the function of how much of interest comes versus how much of interest needs to be paid. The customer is defaulting on this product. We're trying to understand how we foresee slippages the first year.
And when you call it as technical today, was it inherently much more weaker than what you otherwise think it should be?
Sorry, Mahesh. Could you help me with your questions again? I couldn't fully hear that, please.
My understanding is you kind of indicated that you were offering this benefit of this one-time settlement for the borrowers on the EMI, moratorium. Just trying to understand on what basis were you offering this as a scheme across your entire product? Because you have seen slippages in the other portfolios as well. When does a borrower get this benefit of one-time settlement versus is it just classified immediately as a slippage in your book?
Mahesh, thanks for the question. So I think let's go back to the Puneet, example I gave at the start of the call.
The fact on whether Puneet, will get collected on or whether Puneet, will be offered a settlement is pretty much a sort of a data science within us, within our system. Criteria that could be used is, let's assume Puneet, is not over-leveraged but has a DPD, and it's used to collect on Puneet, rather than offering a settlement. But let's assume my Bureau analysis, shows that Puneet, has multiple loans with other counterparties. And he is probably likely to fail on those counterparties. The first person out of the door, he's more likely to collect than the last person out of the door. So very simplistically put, it will be specifics of the case wherein the collections team will decide, evaluating all facts, whether Puneet, should be offered a settlement or Puneet, should be continued to be collected on. I hope that clarifies what you have.
Perfect. And when did you start this entire journey during the quarter? In the sense that if you have started in the beginning of the quarter on the incremental flows as well as on the stock. Ideally, the borrower had nearly about 90 days, to repay because there was a technical risk that the borrower was going to be declared as an NPL. And yet when we look at the upgrades and recoveries seen on the lower side, we're trying to understand why has the borrower not chosen to repay and you joined the high recovery?
So, Mahesh, let me go back to the numeric example I gave that may help answer the question. So I was, let's say, the high DPD, on 1st of April. So I will slip somewhere towards the end of June. The borrower, the slippage will be for the full INR 100.
But Puneet, as a borrower, has paid in only INR 30. So the slippage will be for the full INR 100. The recoupment for the first quarter would have been only INR 30, in the example we discussed. So INR 70, will still remain slipped. The next INR 30, and the next INR 20, in my example will be recovery, which should come through in subsequent quarters. But there may be another Puneet, that slips on 1st of July. So this is why I go back to the comment I made earlier for your consideration, which is to say quarter two, quarter three, quarter four will be more muted than quarter one. And the muting effect will be for two reasons. One, the stock has been corrected, so there is no more stock to flow through in the subsequent quarters.
And second, absolutely correct, we should have recoveries from the stock that has flowed through in the current quarter in subsequent quarters. That's it.
This is clarified. Can you clarify, Puneet, before I. Sorry. Puneet, just to clarify before I just get moved out of the call. The question that I'm asking is, Puneet, gets classified in this quarter as an NPA, which he ideally wouldn't have done last year. So it is in Puneet's, interest to actually make the payment of INR 30, from every possible choice of money that you can get outside. Yet he has chosen to default and not repay the loan. Just trying to understand why has the borrower not chosen to repay the amount, which has resulted in this higher slippage. And these are all CQOD, products. It doesn't mean that they need to only pay the weaker stock.
So CQOD, is a product set. So, Mahesh, again, I think let me. We said that there was a set of technical factors that we have changed for classification. We were asked to provide one example of a technical factor that we've changed. So OTS, was one of the examples of the changes that we have made. That is not the only change we have made. So that should help answer your question on why. It is not solely OTS. Now, coming to OTS, actually, Puneet's, behavior has not changed at all. Puneet, only has INR 30, to pay. Earlier, Puneet, was not being classified while the bank waited for INR 30, to come in. And because Puneet, was not being classified, the bank was not carrying a 100%, provision on Puneet. The only change now is Puneet, is being classified. The bank is carrying a 100%, provision on Puneet.
If Puneet, pays back the INR 90, the INR 90, of provision will be released. So from a customer perspective, customers' cash flows are mirrored. So on 31st March, if I had offered the same structure to Puneet, he would continue to remain classified, as standard. On 1st April, when I offered the same structure to Puneet, he gets classified to NPA, and does not get upgraded. So it's not a differential customer cash flow. It's a bank choice of classifying the customer. I hope that explains in detail to what you're offering. Thank you.
The next question is from YY Sari from Eastwing. Please go ahead. We seem to have not the right person to chat. We move to the next question. Next question is from Akash, from Enam Holdings. Please go ahead.
Yeah, hi. I'm talking to Puneet.
The question is, eventually, we've put a net cost of about INR 800, on credit costs, from this adjustment. Through the year, we may have some recovered some. Net net would be possible for you to kind of, on a ballpark basis, estimate what the credit cost impact would be for the year. And hopefully, 27, will be normalized so that doesn't rack up next year.
Yes, Akash, 27, will be normalized with effect. In comparison to 26. That I would agree with. We have confirmed that there will be no other policy changes unless there is a change in regulation. So we have offered that confirmation. We continue to offer that confirmation. Akash, I wouldn't want to guide on what the value of recoveries and upgrades versus fresh slippages on the criteria would be. This is the first quarter in which the criteria has been implemented.
Let us get some more. Data and vintage data on this for us to come back. So for FY27, directionally, I would agree with what you've said. FY26, I would not want to comment on a quarter-by-quarter basis.
Understood. And the second question was on the guidance on growth faster in the system. Just want to understand. Driven by better deposit outlook or better system liquidity? Just want to understand. What is anchoring our faster than system growth expectation this year. We kind of had a weak year last year.
So Akash, we would not like to start giving guidance on specific areas where we believe. Where the growth is going to come from. I think we have demonstrated the ability to manage our portfolio mix. We have demonstrated the ability to grow some asset classes, not grow some, cut down on some.
We have shown the ability to manage our NIMs. Yes, obviously, deposit has to be a driver. We expect deposit growth also to start feeding into the system in the next one or two quarters. So it's a combination of all those factors. Rather than getting into what exactly is the formula which will help it, I think we will partly have a certain strategy. Partly, we'll also have to react to what is happening in the market. But we do believe that. The growth engine is slowly gradually coming back, and we will be able to drive that growth in the system.
And my last question is on OpEx, if you can. Since things are coming in control, some of the one-offs we had are not happening now. So. Just the outlook on either cost to income, cost to assets over the next couple of years.
Akash, thanks for the question. I think. Look. We are fully cognizant of the fact that operating expenses is a variable that we will work on. We had dialed up operating expenses when the viewpoint permitted us to do so. We've demonstrated over the last three quarters our ability to optimize expenses. We'll continue to do that. In the short term, clearly, the management is looking to deliver a positive flow. Over the longer term, cost to assets. Should improve from where we are today.
Got it. Thanks a lot for the answers. All the best. Thank you.
We'll be able to take two more questions. We take the next question from Jay Yadav, from ICICI Securities. Please go ahead.
Yeah. Hi. Good evening. Puneet, if you can give the breakup of this INR 6,000, gross of net slippages.
So INR 8,200 minus INR 2,100 gross, so INR 6,053, gross of net slippages breakup between retail, wholesale, and commercial.
Sorry, Jay. I just want to clarify the number. It's not INR 6,000 gross of net slippage. Net slippage reported is INR 6,053. Technical impact is INR 1,861. So apples to apples net slippages, is INR 4,192. If you need the breakup of the net slippages on a segment basis, the net slippages on a segment basis are set out on slide 54, on slide 44, on the bottom table. Reported net slippage wholesale is INR 190. CVD, is INR 137. Retail is INR 5,726. If you adjust for technical impact, wholesale is absolute INR 3 gross, which is close to zero. CVD, is absolute INR 37 gross, which is also close to zero. And you are left with retail, which is INR 4,152 gross. Jay, I hope that clarifies to you what you were asking for.
Sure. Thanks. Thank you.
The next question is from Nitin Aggarwal, from Motilal Oswal. Please go ahead.
Hello. Do I know how—am I audible?
Yes, please.
Yeah. Hi. So two questions. One is on the CASA deposits, wherein we have cut like 50 basis points, even for deposits above INR 50 lakh, and in line with some of the other large PSU, banks. So have we seen any outflows there? And what was the composition of CASA deposits, above INR 50 lakh? If you can share because our deposit base has declined marginally. So any outflows? Because first, deposits will naturally be a little more interested than it is. So any color around that? That's question one. And in the one-third of the credit cost, excluding technical impact, was like materially higher versus POs, almost like 3/8 of POs. So when you say that FY27, will be more normalized, how should we look at that?
Because earlier, we used to give that long-term average credit cost chart in the presentation. So just some idea as to what could be a more normalized number given where we are right now.
So on deposits from after the rate cut, I don't think we've seen any shift in the INR 50 lakh, deposits etc. In fact, for individual deposits, we've seen slightly better momentum this quarter on deposits after the rate cut as well. And we've seen good momentum, continued to see good momentum in our premium acquisition as well as in our NTB, customer acquisition, both in salaried and non-salaried customers through the quarter.
Nitin, we won't give you specific guidance on what you're asking for. Okay. You know. Our policy on guidance. I don't want to be calling out numbers related to competition or related to a past reported number.
Directionally, we are very clear, which is what we responded to as part of the earlier question. FY27, should be better than FY26. Right.
Got it, Puneet. Thanks so much. I wish you all the best.
Thank you very much.
Thank you.
We'll take that as the last question. I would now like to hand the conference back to the management team for any closing comments.
Thank you, Rehu. Thank you, everyone, for your time and patience this evening. If any questions remain unanswered, please reach out to the Investor Relations team, and we will try and pick that up and come back to you as soon as possible. Thank you for your patience and time. Have a good evening.
Thank you very much. On behalf of Axis Bank, that concludes the conference. Thank you for joining us, ladies and gentlemen. You may now disconnect at the moment.