Ladies and gentlemen, good day, and welcome to IDFC FIRST Bank Q3 and FY 2026 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. I now hand the conference over to Mr. Saptarshi Bapari, Head Investor Relations. Thank you, and over to you, sir.
Hello, everyone. Thanks for joining the call. Today we have Mr. V. Vaidyanathan, MD CEO, and Mr. Sudhanshu Jain. We'll start the call with a brief commentary opening remark from Vaidya, followed by update on financials and business parameters from Sudhanshu. Post that, we'll open the forum for Q&A. So, I'll hand over to Vaidya for his initial remark.
Good evening, everybody. Thank you very much, every one of you, for joining us, and with here is Sudhanshu and Saptarshi. You know, it's exactly 7 years since the time the merger happened. December 31, 2018, is when we put together our first financials. The merger actually was announced to the markets on 11 December 2018, but the first quarter financials were 31 December. So, you know, it's 7 years have gone by, so it's a good time for us to give a quick brief about the business model of the bank, because the...
So let me just share that in the business model context, you know, in as of 31 December 2018, when we started, we had, a, a total, deposits and borrowings in the bank of INR 118,000 crore. And of that INR 118,000 crores, 10,400 crores are retail deposits. Rest, 28,000 crores is wholesale deposits, 22,000 crore is certificate of deposits, and borrowings was 57,600 crores. So, you can see that a good portion, which is wholesale deposits, certificate deposit, borrowings, had to be repaid on due dates. And, you know, we, we therefore, the first priority of the bank at that point of time began to raise, was to raise deposits, because it's a large amount.
This is really very unlike any other non-bank finance company, small non-bank finance company converting to a bank, because it doesn't start with such a situation. So therefore, think of it like a DFI converting to a bank, which is what our bank is. That to a large DFI, let me say, or a mid-sized DFI, comes with these, these kind of, starting point, what I just described. So, let me just say the first thing the bank did was to raise deposits at, you know, at a very serious pace. And, you know, to give you context, for four quarters prior to the merger, the total deposits raised from the bank was INR 5,300 crore of retail deposits.
So obviously, we were not, at that phase, we were not going to repay INR 79,000 crore of this kind of money even in two or three years. So, the thing that is the reason you might notice that our banks, you know, liability franchise is probably among the more developed ones, because that was the weakest muscle, and we had to build that very, very quick. So, I'm happy to say that, you know, since then, the bank has really developed a good mobile app. We put out 1,000 branches. We developed savings account propositions, current account propositions, startup banking, NRI banking.
We built out a technology stack, brand positioning, you know, hyper-personalization, analytics, technology, service center, and we made customer service, the customer first being like the almost front and center about what the bank is all about, that kind of positioning. Then, you know, made the culture of the bank from top to bottom to think like that in terms of customer, made products of a pro-customer, and launched commercial banking and, you know, reset our corporate banking, you know, all that kind of stuff, and relationship manager. So, net-net, we developed this entire franchise and also supported it with a 7% interest rate on savings accounts. Now, it's not that we're very proud giving money at, you know, raising money at 7% savings account. Market is giving 3% or 4%.
It just had to be done. In any case, it was cheaper than what we were otherwise raising. You know, our existing borrowing was like 7.8% was the cost of funds at the bank at that point of time. So, the point is that having raised, you know, serious deposits, we obviously all of you were happy in hindsight to note that we honored every bit of the transaction that were due. We brought down credit deposit ratio from 136% to 94% now.
Frankly, it sounds like 136%, but if you note that the bank also had a lot of money given out in the form of investments, which is also effectively credit, that is like 165%. So, that's now down to 94%. So, things started, you know, structurally became much better. So, having fundamentally structured the bank and settled the liability issue, which frankly is the biggest issue for the bank to settle, the bank, along the way, started cutting deposit rates. So, this became... Let me say, in my scheme of things, pay off dues obviously becomes priority number one. Then, of course, second priority is fixing the cost of funds.
So, I'm just happy to share with you that, progressively, since then, we have been bringing down cost of funds, from seven point eight percent, which was the cost of funds in February, sorry, in 2019, that is FY, that is 31 of March 2019, the first quarter after merger, and frankly, that is the same rate all through the next four quarters also, 7.8%. We have brought it down today to a 6.11%. So, I'd like you to note, this is a reduction of 169 basis points. I'd like you to just pause for a minute and think about what the cost of funds of the mid-tier banks were at that point of time, mid-tier banks, and we all know the mid-tier banks.
The mid-tier banks, when we were raising money at 7.8, was at 6.3. So, we were paying as high as small finance banks to start with, that is a fact. So, and we were paying 150 basis points more than mid-tier banks. I'm happy to share that the mid-tier banks' cost of funds has now come down from 6.3% to 6.09%, and IDFC Bank cost of funds have come down from 7.8% to 6.11%. So just in 7 years flat, we have not only raised serious deposits over INR 200,000 crore, with which we settled our entire, you know, let me say, the upcoming maturities of that scale. But simultaneously, we have also brought down cost of funds, and now we have become at par.
We're basically paying two basis points more than mid-tier, average of mid-tier banks. Mid-tier banks, 609, we are at 611, and we believe that end of this financial year, financial year, I mean, the fourth quarter, the way because recently they've cut the savings account rates, that full impact will come through this quarter, so we'll come down below 6%. So, the transition to a low cost of funds is a journey that had to be done, but you can see from the numbers that we are firmly on that path. And that, in turn, opens up the, the new, you know, areas for, for doing financing.
Obviously, when you're raising money at 7.8%, then the kind of segments you lend to are more the higher yield and higher credit cost ones. But obviously now with these kinds of rates , now we are as competitive as any other good quality mid-tier bank and, you know, hopefully, as the years go along, we can even, you know, get better from here. Now, I'd like to, you know, share some very precise numbers to you. What was 7%, we were paying up to INR 200 crores, and from INR 200 crores-INR 750 crores, we were paying 8.5%. Whatever it is, it is. It is not something to be proud of, but it is.
Today, we have brought down our 0-1 lakh bucket from 7% to 3%. That's 400-basis points reduction. The 1 lakh to 5 lakh buckets, we have brought down by 200 basis points, from 7 to 5. Above that, we pay 6.5, and above 10 crores, we are straight dropping it back to 5%, 4%, and so on. So, net-net, we have structured this in such a way that large ticket bulk money does not come to the bank. It is, basically, if it comes, it'll come at really low rates as any other big bank would have given. And then we are basically trying to accumulate money more in the early, you know, smaller ticket ones.
Not really small, small, like, not like they have less than INR 50,000, et cetera. That's the rate is the 3%, but maybe, you know, in the zone of the INR 100,000-INR 500,000 kind of rates. Now, similarly, of course, on the term deposits, we brought it down, and then I told you what the... As a result, the cost of funds for the bank has come down. Now, I want to like to quickly then move ahead, move on the conversation, to share with you what this does to us on the lending side with the reduction of rates.
So, on the lending side, think of it like, like, you know, on the personal finance front, you know, we, we have, let us say there are, we think of it like three categories of financing. One is where we lend at about 18%-24%, and the cost of credit is, like, could be between 4%-6%, maybe 3%-6%, depending on products. You know, these, then there are the products like your products which are where you lend about 14%, and credit cost is 2%-3%.
Then there are the products which are where we lend at 8%-9%, like mortgages, loan against property, et cetera, and there the credit cost could be, like, as low as 0.5%. Similarly, on the business finance front, same logic. We do lend at sectors 20-25%, which is where credit cost is 4-5%. We do lend at segments of 10%-14%, credit cost 3%-4%. And then we do lend at 8%-9%, with credit cost of 0.5%, which is the loan against property and home loans, et cetera. So, net-net, the combination of this mix that we do, as a strategy for the bank, we aim to get a credit cost of 2%.
Now, I'd like to share with you what the real numbers of credit costs are for the last five years, and basically five years is a... You know, our gross NPA, net NPA of the bank really has been, you know, under 2% and under 0.5, 0.6% for really very, very long time. You know the numbers. But all of us know that gross NPA, net NPA can be managed by, can be handled by write-offs, and the net NPA can be a write-off of provisions. So, write-offs and provisions, we take it as one family, and therefore, we'd like to specifically call out credit cost.
On the credit cost front, we'd like to specifically point out that if you take, and any of you analysts can do the math, if you take FY 2021, 2022, which is the peak of COVID, that was re- you know, raising, the entire wave one, wave two was happening. Then the FY 2023, 2024 were benign period. Then FY 2025 was hit by microfinance. FY 2026 still have a residual tail effect of microfinance going on. All put together, good days, bad days, all averaged out through the cycle, you know, our credit cost is 1.95% on funded assets. So, you can do the weighted math for yourself. It is 1.95%.
Now, a five-year period, 1.95% should give us comfort, should give you comfort, that the combination of products we talked about is giving us that kind of credit cost. And by the way, that 1.95% of average funded assets and average loan book translates to 1.36% on average on assets, just to mark the distinction there. Now, we'd like to then say: What is the risk-adjusted net interest margin for the bank? This is important to note, risk adjusted. Now, we, we've done analysis which I'd like to share with you. For our bank, again, look through five-year cycle, all put together, good days, bad days, all put together, our NII by assets is 5.65%.
For a 5.65% of assets, credit cost to asset is 1.36%. So that translates to 4.3% is our risk-adjusted NIM. And if you take this number for top banks, it is basically 3.93% is NII by assets. Credit cost is 0.58, and that is at 3.35%. The point is that, you know, we do have higher credit cost, that's a model, but the income is also higher, but risk-adjusted, we're running 4.3, and mid-tier banks are, you know, a little short of 3. So, if the bank's model is fundamentally so strong, and from the numbers I read that to you, then how is it that the return on assets is 0.5?
So, this is one people tend to sometimes tend to think of this, that, look, you know, if your, if your return on assets is low, then there must be some problem with your business, you know, which you might, which we should look into. So, this 4.3, if it's a risk-adjusted income, I'd like to then share with you that this is obviously going ahead in, in building the bank. I mentioned to you this is a domestic financial institution with a large balance sheet, suddenly raising deposits and trying to retire, you know, retire liabilities. So, we want to just share with you that this entire capability that we built of, of these, deposit branches that we're building, this obviously will build scale. And as of now, it's touching something like about INR 280,000 crore.
In the next, maybe we are hoping that next few years, let's call it 4 years or 5 years, depending how it goes out, this will be INR 600,000 crore. And at that point of time, this breaks even. And then the whatever return on assets of the lending side translates to the P&L straightaway, okay? Now, I would like to finally close this by giving a quick input to you on how our operating expenses as a percentage of the book is today and what we expect it to be in a normalized way. This is important to understand, because, again, these books are still under build-out mode. So, our cost-to-income ratio for the lending side is 62.3%, on the retail lending side.
We believe it will come down to, like, the low 50s, just with scale. Our wholesale book, the cost-income ratio is running at, like, 36%. We believe it will come down to 30% with scale. And our credit cards are running at about 97.5%, which will come down to about 70% with scale. So, the blend and the retail liabilities is running cost-income ratio about 149%, which will come down to about 100% with scale. So, what is the combination of the 73%-74% that you're seeing here? We believe with scale, it should come down to about the mid-50s. So, if you do the math, you'll get there. And none of these numbers are unrealistic. We believe they're all, like, should be achieved with scale.
And therefore, at this 55-56%, if you plug that back into a business model, you will see that the ROE of this bank will start going to about 1.6 odd. And you know, then the rest of the equation will become like any other good bank posting that 1.6, 1.7+ ROE, and life is great, and life moves on from there. So, this is the long and short of the entire business model. Basically, the bank is making good money on the lending side, not making money on the liability side, rather, it's a loss. And as they scale up, the cost-income ratio comes down and costs come down, and you'll find the good bank and, you know, you'll find the numbers coming through.
Then it's business as usual, and life moves on, and then challenges and successes of any other bank as it were. But it does take 10 years to build a bank, that much I'm realizing, and certainly takes 10 years to build a liability franchise when you convert a DFI to a bank. Like I said, if it is an NBFC, you've got a bank license, that would be much easier life. But if you're NBFC tied with infrastructure DFI, which is three times your size, remember, Capital First was INR 23,000-25,000 crore on books. IDFC was INR 35,000 crore on books. So, you walk the path into, you know, to get the bank license. You paid, you know, this is a part of building it out.
So, but then this will land very well, in our opinion. The business model is strong. It's very solid. I read out the numbers to you. And with this business model, with the kind of margins I told you, moment when we fix this cost-income ratio, this is, like, this is going to fly... In my opinion, it's going to fly as well as, like, as any fantastic bank. And in fact, more so, because the bank has actually built, you know, rather, slightly differentiated model on the lending side. This is not a regular model built. It's built on technology. So we built many, you know, for example, the last month of October alone, just in October, IDFC gave out close to about 1.3-1.4 million loans in one month.
Obviously, this can't be done through the human, people sitting and calculating incomes, you know, and, and all that. Each of these loans have identity check, bureau, fraud check, KYC, mandate, stamping, registration, the whole thing, everything electronic. So that is a very special capability bank has built. And similarly, on the deposit raising front, we have developed capabilities for, you know, personalization, hyper-personalization, and so on. So that is the kind of capability the bank has built, and with our arrival of technology, cost is also coming down, and you know, you get the drift. So therefore, we should look forward.
Now, frankly, this, this picture I painted was from a larger picture, that we're painting, that we're looking forward to in the many years, because the business model is looking more stable to us right now. We're looking quite hopeful for the, you know, upcoming Q4, Q1, Q2, Q3 of next financial year. We are looking at it with confidence because now I think that the microfinance issue is behind us, rest of the model is anyway good, and it just proven out through this, by coming out of the cycle. Thanks very much. Over to you, Sudhanshu, for the quarter updates.
Yeah, thanks, Vaidya. And thank you everyone for joining on a Saturday. I will start with outlining a few key financial numbers for the quarter, and the sequence would be largely deposits and loans, and then I will talk about asset quality, and finally, profitability. On the deposit front, we saw a strong growth in the deposits. Deposits, in fact, has grown at 22.9% on a YOY basis, to reach about INR 290,000 crore. If I talk on customer deposits, then the growth here was about 24.3%, and this now stands at about INR 283,000 crore. Further to add, the nine-month average customer deposits has grown strongly at 25% on a YOY basis.
Within deposits, the growth primarily came from CASA deposits, which I am happy to report that it has touched INR 150,000 crore at December, with a strong YOY growth of 33%. Here, also, if we see on an average basis, then we saw a strong momentum, and this growth has been about 32% on a YOY basis. This has been led both by CA and SA, and we have given some numbers in the presentation. CASA ratio, as a consequence, on end of period basis, ended up to 51.6%, and the average CASA ratio was about 50% for the quarter. On an average basis, CASA mobilization accounted for about 75% of the incremental deposits mobilized during the current quarter.
Vaidya talked about that we saw a reduction in cost of deposits by about 15 basis points, and similarly, cost of funds reduced by 12 basis points during the quarter. This was largely driven by FD repricing and strong CASA mobilization, which I mentioned before. During the quarter, we have added about 25 branches, which takes the total branch count to about 1,066 branches. Even on an LCR front, the retail deposits as per LCR was strong at about 64.7%, and it almost stacks like the big banks, if you go and check out on that ratio. Talking of a number, which would speak of granularity, our CASA plus TD, less than INR 5 crore, was at 83% for the quarter, vis-a-vis about 82% in the last year at the same time.
If I now talk about loans and advances, then there also we saw a strong growth of 21%, and that has reached about INR 280,000 crore. We saw sustained and healthy growth across mortgages, vehicle loans, consumer loans, MSME loans, wholesale loans. These all collectively accounted for 89% of the total increase. Needless to say, this growth also came on the back of a festival period sales, which further got a boost on account of the recent GST cuts. If we talk of MFI now, that book is at about INR 6,657 crore at December end, and now comprises about 2.4% of the total funded book. We saw the pace of decline reducing in this quarter, as disbursements have started picking up slowly.
From an insurance coverage point of view, the book is now 81% insured, vis-a-vis 77% in the previous quarter. Moving on to credit cards. The credit cards in force for the bank has reached 4.3 million marks during the current quarter, and the book has now reached INR 9,100 crores. The credit card spends were also strong, and for the 9-month period, has, in fact, increased by 35% on a YOY basis. On the wealth management side, the AUM continues to grow at a steady pace of 31% on a YOY basis, and that book has now almost touched about INR 60,000 crores. I move now to the asset quality. We saw an improving trajectory across NPA and SMA ratios during the quarter.
If I start with NPA, then the gross NPA ratio of the bank improved by 17 basis points to 1.69% from 1.86% in Q2. Similarly, the net NPA ratio of the bank stood at 0.53% compared to 0.52% in Q2. Some further breakup in terms of NPA for retail, rural, and MSME segment, there, the gross NPA ratio also sequentially improved by 18 basis points to 1.55%. Moving on, the gross slippage ratio. The gross slippage declined during the quarter by around 7%, and the net slippages improved by 9% sequentially. We saw a reduction in MFI slippages. Further, if I talk of gross slippage ratio ex-MFI, that also was lowered by about 30 basis points during the quarter, sequentially.
In terms of collection efficiency, we continue to see a healthy trend, ex-MFI. On the early buckets, the collection efficiency has been steady at 99.5%. Even for MFI business, the collection efficiency for the quarter has now reached close to the pre-crisis levels of 99.4%. The SMA of the retail, rural, and MSME book also improved to 0.88% in Q3, from 0.9% in Q2. In microfinance portfolio, the reduction was slightly sharper, it reduced by about 27 basis points, and in fact, the SMA pool has come down by 33% sequentially. So, in a sense, both on SMA, NPA, we have seen a strong set of improvement during the current quarter.
Moving quickly to profitability, we have reported a profit after tax of INR 503.3 crore, which is a sequential growth of 43% and a 48% on a YOY basis. Profit for nine-month period stood at INR 1,317 crore. If I talk of NI I for the quarter grew by about 12% on a YOY basis, and in fact, this growth has improved from 6.8%, which we reported in Q2. This was also led by an improvement in net interest margins that on an AUM basis, improved by 17 basis points and was at 5.76% in the current quarter. Similarly, on the fee and other income side, we saw a strong growth, some also led because of, I would say, the stronger book growth.
Here, the fee income grew by 15.5%, and sequentially, that number was 10.5%. We made trading gains of INR 96 crore in the current quarter, compared to INR 56 crore in the previous quarter. If I now move on to OpEx, the OpEx growth was 13.4% YOY for the current quarter. In Q3, FY 2026, we have taken additional impact of INR 65 crore through the P&L on account of the new labor code. Excluding this impact, this 13.4% would stand reduced to 12.1%, and it is slightly lower than the 12.5%, which we reported in Q2.
If I talk of operating profit, including trading gains, that increased by about 8.2%, on a sequential basis, and on an excluding trading gains, it improved by about 6.2%. Moving on to provisions, this reduced by about 3.7% from INR 1,452 crore to INR 1,398 crore during the quarter. Overall, credit cost percentage improved by 19 basis points to 2.02-2.05% during the quarter. Excluding microfinance, the credit cost for the overall loan book was at 1.99% and was roughly 10 basis points better than the previous quarter. In line with improvement seen in the SMA numbers, bank has utilized microfinance provision buffer of INR 75 crore during the current quarter, which is a similar amount which was utilized in Q2 as well.
On a cumulative basis, rupees 150 crore has been utilized during the current year, and the bank continues to carry forward rupees 165 crore as a contingency provision. Now, moving on to the last section on capital adequacy. The capital adequacy, including profits for 9M, was at 16.22%, with CET1 ratio at 14.23%. During the quarter, CCPS of rupee 7,500 crore were converted into equity, and these ratios do incorporate the effect of this conversion. Average LCR deposits were also quite stable and healthy at 115% for the quarter. This is broadly within our guided range. With this, I have broadly covered the key financial numbers, and we can take the questions from here on. Thank you. Thank you, friends. Please take over and ask your questions.
Thank you so much. Ladies and gentlemen, we'll begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we'll wait for a moment while the question queue assembles. Our first question come from the line of Akshay Jain from Autonomous Research. Please go ahead.
Hi, sir. Thank you for the opportunity, and congrats for a good set of numbers.
Thank you.
Two questions. Starting with margins. So how should we look at the margin movement this quarter? So margins have improved by close to 17 basis points quarter on quarter. You indicated that cost of funds have dropped by 12 basis points. So what other factors are contributing to the margin improvement? And how should we expect margins to, you know, go incrementally? And what proportion of your term deposits are yet to be repriced? My second question is on SA rate. So now that you have started to cut SA rates, so should we expect, you know, IDFC to be more open to SA rate cuts in order to protect margins? So is that the thought process going forward? And lastly, on asset quality.
So last quarter, you had indicated that, you know, for the full year FY 2026, for credit cost guidance, was reiterated at around 2.1%, which meant that in Q2, close to 2.05-2.1% this quarter. While slippages have declined, PCR has also dropped by three percentage points. So could you provide some guidance on, you know, how should we expect credit costs to trend from here onwards? And, on segmental, so credit card SMAs have increased quarter-on-quarter. Anything to read over here? And, even mortgages and MSME GNPA have increased by, like, around 25-30 basis points over the last three quarters. Anything worth highlighting over here? So these are my questions.
Yeah, thank you for the questions. I think you have asked a series of, series of questions, but we'll make best attempt to answer all. On, on the margin front, yeah, out of that 17 basis points, as you said, 12 basis points came because of the reduction in cost of funds. I would say, about 2-3 basis points came because the CRR requirements were lower during the current quarter. Last quarter, the CRR was broadly at 4%. This quarter, it was reduced in the quarter to about 3%, so that gave us some benefit. Third, I would say, is that we got capital in the mid of the quarter last, last quarter, and hence we saw some full impact of that also sort of playing out, by a few bits.
So that essentially is the bridge for the margin increase of 17 basis points. The next question was on SA rate. Maybe whether if you-
Yeah, on SA rates, basically. Yeah, I mean, you can see we've cut at least in the main bulk bucket, the biggest bucket that we had, INR 5 lakh-INR 10 lakh bucket, we cut it by 200 basis points straight. So we'll watch. We feel that this will pass through comfortably, in the sense we don't expect any, we don't see any outflow in a serious manner, et cetera, because we believe that we are supported the good service levels and brand and all that. So, we will keep a good eye out for this, for an opportunity to reduce it.
The key thing to watch out for IDFC is the thing that it depends on the growth that we need, because end of the day, if our balance has got to grow by this order of magnitude, say about 20-odd%, you know, it could be anywhere in that zone, because it's got 18, 19, 20, 21, something in that zone. Then corresponding in today's deposits. So we will monitor the. You know, this is to be seen in the context of how much funding we will really need and what kind of branch architecture or physical architecture we have to support it. In other words, for example, let me put it like this: theoretically, not just as a thought experiment, if this bank did not have 1,000 branches, it had 2,000 branches, right?
And we had incurred the cost of that line, then we don't need to pay even the current rates. We could have cut it by 100 basis points, probably. So you're paying through this route or that route, one or the other, right now we're running less number of branches for the kind of deposits we raise. So it appears we pay more on the rate, but end of the day, we are running less branches, therefore incurring less cost there. So it's we got to pay for it through one line or the other, either through expense line or the interest line, because we are still in this phase of building out. But we'll keep a very close eye on this, and we'll balance the situation.
Yeah, maybe I'll take the few other questions which were sort of put out. On the credit cost, yes, we have come at about 205 basis points for the current quarter, and our guidance in the earlier call was about 210 basis points. We are quite hopeful that Q4 also should be strong on this front, and we are hopeful that we will still try to get close to that number. So that's on the credit cost front. And in terms of PCR, it has marginally come up, but if you take into account the contingency provision which we still hold, then the PCR is about 72.7%. So we feel quite comfortable as far as the PCR is concerned.
Your last question was on the SMA increase in credit card. There also, if you see last two or three quarters, it came down in the last quarter, it has marginally gone up. We feel quite comfortable on this front and, hence, nothing specific to call out on that front.
Frankly, on this last point that Sudhanshu answered, you see, as you, as I don't know if you've noticed or not, but we disclose product by product SMA, and both SMA one and SMA two, and we also give it by product, by quarter, so you can see the full trend out there. So you can see that most of them are in the zone, like almost every product is flat, you know, plus or minus 20 basis points here or there, maybe 10. So every product is flat, so you can get good clear look through visibility of what's happening underlying in the portfolio.
Understood, sir. Thank you. And, on the MSME and, mortgages, there the GNPA seem to have inched up by, you know, 25-30 basis points over the last three quarters. So anything to read over there? Or-
No, nothing to read. No, no, nothing to read out there because the, if you see the mortgages also, it's broadly it is flat. You know, what's happening is also that the books are also not growing at the pace. You know, every business when you start, they have an aging process, and finally they age and they stabilize. So, if the mortgage running at SMA of 0.54%, in itself is a pretty low number. In fact, last quarter was also 0.54, the quarter before that, 0.49. It's like normal aging that's happening with the portfolio. So, but in absolute terms, they're, like, absolutely, absolutely safe. They're doing well.
Understood. So, any rate cost guidance for next year?
Yeah, it should come down actually. This at least the next quarter also should come down. At least we, the way we're looking at the numbers and analyzing them, not just in percentage terms, in credit cost percentage, in absolute terms also, we see it coming down next quarter, we think. Yeah.
Yeah, because the MFI problem we feel is by and large done and dusted. Of course, the normalization of credit cost may still take one or two quarters. It's, it's beautifully coming down every quarter. So, definitely next year we should see an improvement in the credit cost.
And I also pointed out to you; I don't know if you really concentrated or if you got that or not. Our bank's credit cost has been 1.95% of average book through, in a look through, through the cycle. Five years is a long period, you know? So, and which is of... And I told you, as suppose assets is 1.36. So, we should come back there because the crisis is behind us, no new, I mean, to, of course, in banking, we should always watch out. God knows what's around the corner. We should be very careful, but for now, as far as our eyes can see, next quarter, next year, we should come back to those levels, so, probably a bit better, hopefully.
Mm-hmm. Thank you. Maybe even better than 1.95, because our mix has improved over the last few years.
Yes, hopefully. Yeah, that's true. I mean, we should, we should hope so, because in the subsequent years, mix should even look better. So, at least you should expect from us, we say 2, so, that all of you are anchored to a particular number, because that's a business, that's model. But hopefully, if you take 27, 28, 29, 30, it should be even lesser than that. But, you know, who can talk that long? We should play it by the ball.
Sir, I guess we missed on the margin guidance, so how should we expect margins to move? That's the last question. Thank you.
Yeah. So, if you remember for Q4, we had earlier guided that margins could be upwards of 5.80%. We would slightly want to revise that guidance upwards to 5.85. This is also on account of the SA rate reduction, which we have done, which Vaidya talked about. That should give some benefit. So, we expect that margin trajectory to improve in the next quarter.
Thank you, sir. Those were my questions.
Thank you.
Thank you. Our next question come from the line of Piran Engineer from CLSA Limited. Please go ahead.
Yeah, hi, team. Congratulations on the quarter.
Thank you.
Just, hi, hi. Just getting back to, you know, this SA thing, right? Like, V.V., last time when we had this con call, you said you are a bit cautious about cutting SA rates because you think the same customer will then go and put in TD. And, you know, you were debating with your colleagues out there as to what to do.
Yeah.
But it seems like that didn't happen, your CASA has actually improved. So, has it improved because of CA, or has it improved because of SA? So, that's that, and then just on this, you know, and we would expect that over the next few years, you keep pruning your cost of funds by, you know, getting it in line. Now, you got it in line with the mid-tier banks, and then hopefully in the future, closer to the larger banks. How should we think about whether you want to pocket, these gains in terms of NIMs, or you would rather compromise on that and grow in safer segments or safer customers? If you, if you get what I mean.
Yeah, yeah, no, it's a very good question. So, on the SA strategy, yeah, of course, we were debating internally, should we, shouldn't we? And we did do it, one, because we saw the market also, almost all competition had cut it, and we were kind of an outlier where we had, you know, our rates were standing out.... quite high, and we actually felt that even if we cut it, it will, we are safe to cut it, meaning, we had, we felt comfortable about it, firstly. Secondly, we also, the, you know, the fact that this quarter has gone up, you shouldn't read too much into it, because this quarter, all of this quarter, we've been having substantially higher SA rates than the market, so to say.
So, the truth will tell next quarter or the quarter after that. So, let's see where it goes. We frankly feel comfortable, even if to say internally, if you were to talk to us, we would just say we're internally comfortable even at 45-50, in that zone. It doesn't have to be like 50+ and all that. So, it gives us enough headroom right now, sitting at the current CASA ratio, as it plays. So, we'll see this, you know, as I told you earlier, end of the day, mind you, that we have only for the kind of deposits we are raising, we have only 1,070-odd branches. Now, so, therefore, it's the more network we grow, the more ability for us to cut the rates.
Because the output we need to raise, the INR 60,000-odd crore or INR 50,000-odd crore, that is a given, because the amount balance sheet is growing. So, if your output is given, then it's a, it's a product of the network we have and the rates, and we just play as a combination of that. Because other items, other than these two variables, the bank has fine-tuned really very well. You know, brand is known, products are good, service levels are good, and so on. Now, coming back to the second question, how do you want to deal with this? That if we get an opportunity to reduce it, what are we going to do with it?
Are we going to go down safer segments or are you going to pocket to the PNL? That's really a very good question. Our own thinking is that we'll probably walk down the safer segments route and increase that as a combination. Because as we walk down the path into 2028-2030, remember, I always say, I hope you remember that right from day one, 2019, we've been saying, thinking long, thinking long. So, even now we're thinking long. We're not thinking for one quarter, two quarter. We're thinking of 5 years, 8, 5 years ahead.
So, when we wake up 2030, we don't see ourselves as a bank lending out at 13.5% and having cost of funds of maybe 3.5% or 4% and, you know, pocketing and having ROE of some insane ROEs. We don't see like that. We do see ourselves that we would have become a more mature institution. We would have probably come down the risk curve. We would have a larger proportion of mortgages, business loans, loan against property, gold loans, and these kinds of businesses . So, you know, hopefully, a great rating. I'm hoping we'll get to a AAA league. We are AA+ today. So, we are shooting to be one of those institutions which, you know, people can look back and look and feel more happier about.
And by that time, hopefully, the entire, the loss from liabilities will have, would have gone away. So, that is the picture we have for the future.
Then just to add to your specific question on CASA. So, I'm saying, as I said earlier, 75% of the increase during the current quarter came from CASA. Of course, CASA for us still happens to be a lower proportion versus the overall customer deposits. And so, there also we saw a, I would say, a very decent growth during the current quarter, and the balance was led by CASA.
But given, generally speaking, which all of us internally also acknowledge, that our, you know, Our CA as a percentage of our CASA and current account, as percentage of our total deposit, is quite low, relatively. Because when we had, I told you, we had to replace, pay INR 100,000 crore up, coming up. So, at that point of time, the quickest way to raise this was savings account through our various methods. So, the current account is one of our spots that we are relatively, I'd say, on the lower side. But this we will fix. We fix many things in the bank, this also we'll fix.
And the last thing, I must say that, while we talked about the fact that broadly, we will use this, as and when we can bring down cost of funds, either through distribution or whichever way, when we do it, we, I said we'll go towards safer, safer segments, lesser credit cost products. That's a broad picture we have. But I want to just point out one thing to you and everybody hearing the call, that a unique DNA built at IDFC, which is coming actually from Capital First, which we've been honing and honing for 15 years now, which is lending to these segments, you know, by using technology and underwriting models and scorecards and machine learning-based scorecards.
We have 100 machine learning scorecards to give you an idea, for example, 100 of them, a little more. So, that kind of a very unique capability, where we can power up at scale and open unserved, underserved segments in a profitable way, that DNA, we don't want to give away. So, in fact, we treat credit costs as a bit like a research and development cost. I don't, it's not something for us to zeroize. That's not what we're striving for. So, that is a unique model capability we have. We want to keep that model. So, just that the percentage of that will come down and, the conventional traditional businesses will increase.
Understood. Understood. Okay, second question is, what percentage of our unsecured consumer lending, be it, you know, consumer durable loans, personal loans, digital personal loans, credit cards, et cetera, to our own deposit customers?
Very high. I can't say that for consumer durable, because consumer durable and two-wheelers are largely new to bank customers, and so on. But the credit card is largely to our base. Largely, I'm not saying only to our base, but largely.
And, salaried and professional loans?
That we are doing a, I should say, okay job, not in the... Okay, I use the word okay job because we, we have a lot more to do on that front. But the on, because our personal loan business is still a good portion originated through direct marketing associates, et cetera, that we, that we engage with. But increasingly constrained that we have developed a, a really good, you know, savings account base... and also, we are digital in our capabilities. Our ability to, you know, to give personal credit to this base is very good. It's not that we have the base, we have the ability to give also in a very seamless way. So, we are doing that, and our, we are developing capabilities on app, et cetera.
I mean, I use the word okay, because we feel there's a lot of scope to improve on that front.
Understood. Just last question for Sudhanshu. What are the standard asset provisions you are carrying right now? When we migrate to ECL, what sort of impact do you foresee, A, on transition and B, after, you know, on a steady state basis?
Yeah. So, our standard asset provision, the number roughly for the quarter is about INR 50-odd crore, and typically it's about 30-35 basis points of the overall loan book, which we carry. So, and so it should be about that 19,000-
No, I meant the overall buffer. So, okay, sorry.
Yeah, and-
The outstanding buffer.
Yeah, yeah, yeah. So, it's broadly, it's around those numbers. In terms of ECL, yeah, this was a question which sort of came in the last call also. Of course, we have responded to the draft paper in terms of suggestions, and that has gone from all the banks. I did touch upon that from a... On implementation, from a capital point of view, we feel that it could, if the guidelines have to come through around ECL, around credit risk, around operational risk, this should be marginally positive for us on implementation. In terms of credit cost, of course, there could be some increase on a steady state, but we could have some benefit which could also come because of an EIR implementation.
We actually need to look into in what form and shape it sort of eventually comes through. There could be some increase in credit cost, just to put it straight.
Got it. Because the standard asset provision of 35-40 basis points won't be enough, right? That's what-
No, but I'm saying your ECL, you also have to see in conjunction with the PCRs which you're holding, right? And that also sort of has a play there, right?
Understood. Okay, yeah. That's it from my end. Thanks and wish you all the best.
Thank you.
Thank you. Our next question comes from the line of Param Subramanian from Investec. Please go ahead.
Yeah, hi, good evening. Congrats on the quarter. Firstly, could you give a breakup between CA and SA of that, you know, 51.6% CASA ratio?
Yeah.
What is the impact on cost of savings from the change that you have taken in January?
Yeah, I'll put numbers for you if that helps you. So, our CA number is about INR 20,000 crores, right?
Yeah.
Yeah.
So, your SA, CA will be about 7% in that 7-7.5% in that 51.6%, and balance will be SA.
That's why we said that we are low, we are punching low on CA, I told you.
Yeah. And to your question on the savings rate impact, this would lead to a reduction of about 15-16 basis points on the CASA cost.
Okay, very clear. Second question, in this quarter, you know, like, you know, the previous participant pointed out, so, our SMA in credit cards is up, so, and also our write-offs are inching up. So, would it be fair to say that some of this is unsecured lending and, you know, our write-offs could stay elevated for some time? Or should this also start falling? Yeah.
It's very simple actually. See, the write-off is a measure of what policy we have after provisioning. So, the way to look at it is that you track us and on... Finally, what hits the P&L? Provisions.
That's it.
So, we track also the credit cost. So, don't bother too much about we write off or don't write off, in the sense, because they're all a line item. End of the day, it is credit cost. That's why we call out credit cost every single time, and we track ourselves to that. I told you the number of 2% and 1.95%, et cetera.
Fair enough. Fair, yeah. Okay. So, my next question is actually on the CGFMU book, right? So, about 80% of our book is now in MFI, is now CGFMU insured. So, how do you on the CGFMU NPAs, how exactly do you provide? Because one of our peers actually called out that you, they only provide on the uninsured portion, a portion of that 28% which is uninsured. Is that how we do it as well?
No. So on this one, I would say we slightly follow conservative norms. In fact, we end up providing 100% as the account touches 180 days. So, we have a slightly differentiated policy here.
See, frankly, they all come back to the same thing-
Yeah.
at the end of the day, you probably 72% of that will is covered. But frankly, they're all even other people doing it.
So, this means later in the year, we will get write backs whenever we invoke these guarantees, right?
Yeah. Obviously.
Yeah, fair enough. Okay. And lastly, sir, so our ROA started trending up. When do we think we can get that 1% ROA run rate? I heard you mention 1.6%, but when do we start getting a 1%+ ROA run rate?
I know this is a... We should be very careful about putting numbers out there. Why don't you just—we'll take it by the quarter, no? We are quiet, quite hopeful that every quarter from now on should look better. And see the, I, I'm not ducking the question, and please don't get me wrong. Except that sometimes putting these numbers specifically out there, you know, puts us into a position where we can't take market moves up to that. So, I don't want to, pin ourselves down because market is market. If you've got to cut the rate somewhere, cut the rate. If you want to increase the rate somewhere, you want to increase rate. We just want to be able to play our shots.
So, but I must say that fundamentally, you can well under- you know, think that if you're borrowing money at 6, we're lending at the rate we're lending, we're posting a NIM of 5.8%, it just has to make money. It just has to, mathematically, it has to make money. So, and as the liability cost, you know, comes down, liability, you know, the OpEx, not OpEx, the loss from liabilities, you know, the - it comes down. It just has to, it just has to become more and more profitable, but I think hopefully by end of next year, I don't know, and operating leverage. So, but don't, I don't want to specifically pin ourselves down to it.
... Fair enough, sir. One last question, if I may, the LCR for this quarter, and what is the impact of this transition to the new LCR calculation?
Yeah, average LCR for the quarter is about 115%, broadly at similar levels as the previous quarter. On account of these new guidelines, which will come in from April first, of course, we will get some benefit on the wholesale front, but because, on the retail, LCR also, we are at 65%, which I mentioned earlier. On a composite basis, we may have a small impact, about 1%-1.5% on LCR, but it's a quite small number in that sense.
And to the previous question, don't, don't, don't, don't get disappointed that we're not putting a number down. Don't, don't be, because like I said, you know, it's not about one year. We're building the bank for year after that and the year after that. We are building institution here. So if we, and clearly, unit economics of this bank is pretty good. I showed you, I told you the numbers, risk-adjusted income of this bank on a five-year look-through period. It's really good. It just will play out. You will see it quarter by quarter, and we'll take it as it comes.
Absolutely, sir. All the best and congrats on the quarter. Thank you so much.
Thanks, Param.
Thank you so much. Our next question comes from the line of Jai Mundra from ICICI Securities. Please go ahead.
Yeah. Hi, good evening, sir, and congratulations on the quarter. Sir, across large products, mortgage, vehicle, consumer loan, would you have an idea? I mean, can you tell us how much is, let's say, DSA-led or co-lending-led? Because I believe the co-lending norms would now be much tighter and hence, you know, it could be difficult to originate through co-lending. And how much is DSA, co-lending, and maybe branch-led?
Not much. We don't do, our business is not much a co-lending model. It's broadly what we originate from our branches, what we originate directly and digitally, and what we originate through regular third-party originators.
Okay. And, sir, any number for DSA and/or online, this thing?
We don't have any-
At least for few large products.
Yeah, of course. If you take large products, then the easy question to answer. For example, take a loan against property or take an education loan, I'd say it's largely third-party originators. And or if you take a two-wheeler loan or a vehicle loan, they're done at the dealership point. It's not that customers are walking to our branch and asking for a car loan, right? So, the thing is that, so, if you think of those products, they are the obvious ones. They are more third-party led, and I'd say, majority, I'd say. But we have also developed our ability to have our branches originate. As a bank, we are a bit shy of you, you...
If you're a customer of the bank, you might have noticed that you don't get too many cross-sell calls, you don't get repeat calls from the same customer. If any of them, if any of you have got an odd call, I mean, odd person, I can, I'll apologize for that, but 99%, I'm quite confident you won't have got that. Because we are very careful about anti-repetition rules, which we've inbuilt in the system, anti-spamming rules we built in the system. So, we kind of constrain cross-sell, so that, but, and keep it in a, you know, from, we think from a customer experience point of view. And therefore, our own cross-sell, I'd say, that, you know, has some room for improvement, and it's, for these products, it is more outside.
But for credit cards, we'd say largely is in-house. In-house meaning existing customers, where we reach them digitally, and they come to the app, and they take the card away. So, if you take personal credit, like I said earlier, we are also developing that capability in-house. We also have tie-up with some of these platform companies, you know, the platform company, the digital platform companies. So, we originate through that model because we have a really good API, you know, architecture in the bank and which we use. So those kinds of products , we are also originating, you know, digitally. So, we don't have the number offhand, so next time maybe we'll share with you.
But, Param, I can-
Sure, sir.
I can, I can just add that definitely, in some of these products, which we had, the proportion of sourcing from branches are increasing.
Are increasing.
Whether it's mortgages, whether it is, like, business banking, that's entirely done out of the branches, credit cards, where they already talked about. Personal loans also, we are trying to source more through our internal channels. So, in all of these products, we are trying to reduce the dependency on DSA.
One number, I mean, it's coming to me just last time, you know, a minute ago when I spoke, it is not on my hand. So basically, we saw that we tracked ourselves with how much is the origination by the bank from branches for the last, we say five years, and it's almost growing by about, you know, despite all the anti-repetition rules and anti-spam rules, it is growing by about, while the book is growing by, 20%, that business originated from branches, give or take, is growing at about 35%-40%. And so you get, so proportion is obviously, by this mathematics, improving. But what is the exact percentage? Maybe next time we'll share with you.
Sure, sir. And the question on your OpEx and OpEx strategy, actually. So, let us say now, so far, the NII growth was lower than loan growth because the NIM was under pressure, and this quarter seems to be a pivot quarter. And, you know, NIM have started to expand, and maybe this trend could continue. So increasingly, NII growth should become better. If that is the case, then will OpEx remain at 12%-13%, or you believe the OpEx could also rise? Because you have, you know, at least in the last 4-5 quarters, the OpEx has been constrained, and as NII growth also increases, maybe you'll maintain the delta, or you believe OpEx is now more or less steady at 12%-13%?
Okay, let me take that, Akshay. So, the thing is that, yes, of course, last 4 quarters or 5 quarters, you can see that we have kept it very, very, very tight in terms of our expenses. The thing is that, you know, this could even go back to, say, 14 odds %. It could well be, like, you know, if you look ahead into, say, 2027. But still, the fact is that, you know, income will also grow by probably, because now the mix, the mix issue is already done, right? Because the microfinance book had to shrink, has shrunk already. So, hopefully next year's income also should grow by 18%-19%. So-
Yes. So, I would say definitely next one or two quarters, we see income sort of normalizing much more, and almost maybe keep pace with the book growth.
Yeah, that's fine. But coming back to my-
Of course, contingent, I just to caveat, I'm saying if there are any further rate cuts or any sort of systemic changes, then that could have a different bearing.
No, that is one thing.
Yeah.
But still, broadly, the OpEx front, so, you know, really, I just, I'll throw a number at you, and if I'm wrong in my assessment, then you can correct me also, all of your analysts, that frankly, the book grew by maybe 20, and the income grew by, say, 18, but the OpEx grew by, say, 14, just to, you know, to simulate that. That's still operating leverage. And, we, we'll see how next year looks like, but I'm just giving an order of magnitude the way we are thinking about.
Yeah. So, as I said, income growth could, to a great extent, normalize starting into the early next year, so, it could keep pace with the advances.
Because this year we really, really constrained it and, you know... Like I said, you know, you could choose to pay through the OpEx line, or you could pay through the interest line. We do believe that setting up some cost structures is part of building the bank.
Sure, sir. And last question, and a bit of an observation. So, if I look at your SMA, SMA 1-2 has been very, very reasonably stable at 70-80 basis points. And your slippages, non-annualized, is also similar, right? 70-80 basis points. So, it looks like that either the people who slip to SMA 1-2, they straightaway slip, or you know, or the recovery is not... I mean, other banks, they have much higher SMA number, and only part of that will slip to NPA. Whereas in our case, the slippages are around 3% annualized, and the SMA number has been very, very stable. So, either the migration from SMA 1 to NPA looks a bit higher. I mean, that is an observation, if you have any comment around it.
It's possible. Maybe the combination of our products is such, it's possible, you know, if you are giving mortgages and all, you know, it could probably get a lot more recovery. Maybe in our combo of products, it moves ahead. But still, end of the day, as long as it's 85, 85 or 90 is stable, and the credit cost is on the guide, end of the day, it all comes down to credit cost. Okay? So, if a credit cost is in the line, our income is, like, 5.8, credit cost is, you know, I mean, of assets, I mean, okay? And credit cost 1.36 of assets or 1.36 assets, it's a lot of money.
Right. Sure, sir. That is very, very helpful, sir. Thank you and all the very best.
Thank you.
Thank you. Our next question comes from the line of Samir Ahluwalia from Diamond Scholarship. Please go ahead. Samir, please proceed with the question. As there are no response, we'll move forward to the next participant. Our next question comes from the line of Suraj Das from Sundaram Mutual Fund. Please go ahead. Mr. Suraj, can you hear us?
Yeah. Hi, am I audible now?
Yes, you are.
Yes, yes, sure.
Yeah. Thank you, sir. Thank you for the opportunity. So 2, 3 questions. First question is on the operating income ex trading gains in MFI. That number seems to have dropped from, you know, INR 1,500 crore last nine months last year nine months versus INR 650 crore this year nine months. And also, if I look at as a percentage of loans, this number seems to have dropped, you know, from 14% last year to 9-10% this year. And even it is lower than the, you know, nine-month FY 2024 also. However, as you have highlighted and also as we are seeing the trends, that the slippages are improving in MFI, so the interest reversals should be, you know, lower, and then thus the operating income. So, why is the decline?
I mean, are my numbers correct, or, or there has been any reclassification or any sort of that thing? And if the numbers are correct, then probably can you give some rationale, for this, you know, core operating income decline in MFI?
Yeah, I couldn't relay the full numbers, but let me tell you that ex-MFI this year has been impacted because of MFI.
Okay. I'm calculating-
Yeah.
I'm calculating. This is your slide 41.
Yeah.
So, if you look at slide 41, you have mentioned that ex MFI, the operating income has increased 15% YoY.
Yeah.
So, I think last year, you know, December quarter, you had given some, you know, disclosures, where the non-MFI portion, the operating income was INR 17,805 crore. So, this year-
Yeah
... 15% increase would be somewhere around INR 20,450 crore-INR 470 crore.
Yeah.
If I minus that from the overall operating income, INR 21,134.
Yeah.
Hence I'm getting the INR 650 crore kind of a number.
Yeah. Got it. In fact, if you again see that number for Q3, ex MFI, that income has grown at 18%. Ex MFI, also we had some impact because of the fast repo reductions which happened this year. We saw almost a 100-basis points reduction in the repo rate, which in terms of a cost of funds have translated with some lag. So, I would say some part of the impact is on that account, right? But things are normalizing, and that's why we also said earlier, that even both MFI and non-MFI, we expect the operating income trend to continue to improve from here on every quarter. So, things are normalizing on this front, as our cost of funds are also coming off.
Okay. But you have not taken any rate cuts or any card rate changes on the MFI side?
MFI, we lend at the market rates, so I'm saying these are the pretty standard rates prevailing for some of these products across players.
... Okay, sure. Probably I'll connect offline on this for more understanding. The second question is, sir, on the retail liabilities, I mean, if I look at the cost to assets on the retail liabilities, that seems to be very flat, you know, at negative 0.8% for the last three, four quarters. Do you believe there is still scope for, you know, a cost improvement here? And then if yes, what are the drivers?
This comes by scale. So, if you notice, FY 2024, it is minus 1.7. FY 2025 it is about 1.2. Now, this quarter, this year is running and trending at 0.8, or like, minus 0.8. So, this is what we call as the investment that is going in the business. Investment meaning that liability side is, you know, not yet productive because it's a new bank as compared to somebody which is a 30, 25, 30-year-old bank. They are running a marginal costing bank. This is a very important note, okay? A bank which is there for 15, 20, 30 years, they are running a bank on marginal costing. We are running the bank on full costing, because a new bank, everything is a cost. So, that is why the minus 0.8, 0.8 is there.
Like, I mean, it should gradually come down. It should not expect miracles here. It should not gradually, but I mean, it should come down year-on-year from here on. We think that building a bank takes 10 years, at least to, not just building a bank 10 years, actually, to fix a INR 75,000 crore, you know, funding, legacy, plus build the growth of the bank. That takes, you know, it's already spent, this time, maybe by next 4-5 years, this -0.8 should come down towards zero.
And that's when the full ROA, what I talked about, that, that 5.65 NI to assets, minus credit cost 1.36, giving 4.3%, you know, at a, you know, at, at a risk-adjusted NIM, minus cost-income ratio to pass to P&L, that, that thing will fully start reflecting in the, ROA of the bank when this becomes zero.
Right. Sure. Understood. The last is in our credit card. I think, if you can highlight what is the proportion of, you know, EMI, revolver and transactor as of December quarter versus last quarter? Because I mean, I believe that the transactor portion has gone up because you have reported an uptick in QOQ uptick in cost to income in credit card, and also, I think the loan growth has been lower than the spend growth. So, if you can highlight, I mean, what is the proportion of EMI, revolver and transactor this quarter versus last quarter, maybe, or maybe Y-Y?
No, so, the revolver has been, I would say, quite steady. I would say we see a run rate of about 17%-18% there on revolver. EMI, as a proportion, has been increasing for us bit by bit, and that's about a 35 point, 30, 35-36%, and the rest is the transactor book. So, these are pretty standard trends which we are observing in last few quarters.
Okay. Sure.
In fact, I have a progress meeting, if I have any... Yeah, I think I got one number, which is probably might be useful for you. So let me check, I got some extra numbers here. So, wait a minute, just if I can fetch it for you. Our revolver is about 16.5%, and our EMI is about 36%, and our transactor is 47.5%. Yeah, so, those are broadly the numbers which I also sort of called out. I didn't call it. Sorry about that. Yeah.
Sure, sir. Thank you for answering all my questions. I'll let us know the future questions.
Thank you. Are we done? If you like one or ten minutes in case any other serious questions. I mean, if there are, we'll still be able to answer, but I assume most of them are answered by now.
Ladies and gentlemen, in the interest of time, that was the last question for today. I would like to hand the conference over to Mr. Vaidyanathan for closing comments. Thank you, and over to you, sir.
No further comments to make, so, thank you for being with us this late Friday afternoon, evening. And we're feeling the bank is on a strong ground now. We think that subsequent quarters, next 3, 4 quarters, they should all look up gradually, but steadily, steadily, I'd say, more than gradually, steadily. I think we are quite hopeful that the next 4, 5 years now, we are on a steady track. Frankly, you know, it's been like 5 years, 7 years, except the microfinance thing, which was an industry issue, we haven't put a foot wrong. We've made our strategies right, deposits came, our book grew, our credit cost was in control, except this microfinance problem.
And we think that with MFI behind us, things should stabilize again, and the rest are playing to plan. No major call-out. We are behind our cost-income ratio, but frankly, when we started the bank, we had no clue that this is going to be so complicated. But overall, we are on, we are on track. Thank you.
Thank you so much.
Yeah. Thank you, everyone, for the patience. Thank you, everyone. Thank you.
Thank you so much. On behalf of IDFC FIRST Bank, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.