Axis Bank Ltd (NSE: AXISBANK) Q3 2026 Earnings Call dated Jan. 26, 2026
Corporate Participants:
Amitabh Chaudhry — Managing Director and Chief Executive Officer
Puneet Sharma — Chief Financial Officer
Neeraj Gambhir — Executive Director
Munish Sharda — Executive Director
Subrat Mohanty — Executive Director
Vijay Mulbagal — Group Executive
Arnika Dixit — President and Branch Banking Head
Analysts:
Chintan Joshi — Analyst
Mahrukh Adajania — Analyst
Rikin Shah — Analyst
Mahesh Balasubramanian — Analyst
Jai Mundra — Analyst
Abhishek M — Analyst
Piran Engineer — Analyst
Adarsh Parasrampuria — Analyst
Kunal Shah — Analyst
Rahul Jain — Analyst
Param Subramanian — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Axis Bank Conference Call to discuss the Bank’s Financial Results for the Quarter Ended as on 31st December 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 contents or the proceeding of the call is strictly prohibited, and prior explicit permission and written approval of Axis Bank is imperative. [Operator Instructions] 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, 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.
Amitabh Chaudhry — Managing Director and Chief Executive Officer
Thank you, Michelle. Wishing a very happy Republic Day to everyone on the call. Apart from Puneet, our Executive Directors, Subrat Mohanty, Munish Sharda, and Neeraj Gambhir, and other members of the leadership team.
We continue to deliver strong growth across both deposits and advances. Our core operating performance remains steady, supported by resilient net interest income and healthy momentum in fee income. We have continued to strengthen our distribution footprint and have now crossed the milestone of 6,000 branches. Our balance sheet remains resilient, and our capital position continues to be strong, enabling us to pursue profitable and sustainable growth.
Let me summarize the highlights of quarter three. Our deposits growth momentum continued with month-end balances growing at 5% QoQ and 15% year-on-year, and also quarterly average balances growing 5% QoQ and 12% YoY, with CASA delivering a strong growth of 3% QoQ and 14% YoY. Our total advances grew 4% QoQ and 14% year-on-year. Within that, small businesses, SME and mid-corporate together grew at 5% QoQ and 22% year-on-year and constituted 24% of total bank loans. Core operating revenue was up 7% year-on-year and the core operating profit was up 7% year-on-year. Our PAT was up 28% QoQ.
The bank remains well-capitalized with a CET1 ratio of 14.5%. We continue to stay focused on the three core areas of execution of our GPS strategy, which we have talked about for many quarters before — becoming a resilient all-weather franchise, creating multiplicative forces to build competitive advantage, and building for the future, something we have been stating quarter-on-quarter for quite some time. I will now discuss each one of those areas.
Becoming a resilient all-weather franchise, we have continued on our journey towards building a resilient all-weather franchise. There are four areas of focus as we navigate the current cycle deposit growth, credit growth, retail asset quality and cost, where we continue to work on sustainable outcomes. Starting with credit, we continue to compound on the foundation built for wholesale in the first half with deeper ecosystem penetration and increasing customer stickiness.
We have reinforced our calibrated shift towards high-RAROC segments with growth anchored around high-quality transaction-led, an ecosystem-linked flows while holding our stance on quality intact. This is evident from the quality of our incremental sanctions, as growth remains concentrated in A-minus and above-rated clients. In Retail Banking, we remain selective in scaling segments with a sharp focus on credit-tested customers and growth across our distribution channels.
On asset quality, our secured portfolios across segments continue to remain resilient, while the early indicators on retail unsecured products are well within guardrails and stabilizing at all levels. All the key indicators, bounce rates, early delinquencies, collections, and resolution trends continue to stabilize, reflecting the ongoing improvement in portfolio behavior. We have positive operating jobs, both for the quarter as well as year-to-date, with our cost to assets at 2.33%, or 15 basis points, year-on-year improvement.
Moving to deposits now. The deposits journey for Axis Bank should be looked at from three aspects — quality, cost, and growth. Please refer to Slide number 17. We have managed our cost of funds with strong discipline through the rate-hike cycle, keeping the rate impact well-contained over the last two years.
Our cost of funds are now 39 basis points lower year-on-year and 8 basis points lower quarter-on-quarter, reflecting our effective navigation of the current rate cycle as well. We continue to demonstrate and remain focused on going faster than the industry in the medium- to long-term. In quarter three, our deposits have outpaced the credit growth. Year-on-year, on MEB and QAB basis, total deposits grew 15% and 12%, term deposits grew 16% and 14%, CA grew 20% and 10%, and SA grew 11% and 8%, respectively. Quarter-on-quarter on MEB and QAB basis, total deposits grew 5% and 5%, term deposits 6% and 6%, CA grew 7% and 5%, and SA grew 1% and 2%, respectively.
We recognize that while our progress in the cost and growth dimensions of deposits has been strong, there is still some work to be done on improving the quality. We continue to actively work towards deeper generalization of the deposit book to further enhance its resilience.
Building onto the momentum for quarter two, our deposit franchise continues to gain strength supported by strong acquisition funnels, a wider distribution footprint, sharper product propositions, and sustained momentum in our Salary and Burgundy business. At the start of this fiscal, we have recalibrated our approach to both New-to-Bank, NTB, and Existing-to-Bank, ETB deposit mobilization with a sharper focus on quality and engagement. The outcomes continue to be encouraging.
Our NTB engine has seen a marked upgrade in profile with new customer source maintaining higher balances and higher activity from day one driven by a more premium led sourcing strategy, Persona based acquisition and tighter conversion discipline. This has resulted in a richer mix of premier customers and family relationships with the 53% YoY increase in average balances maintained by our NTB customers year to date. Our transformation programs Siddhi and SPARSH continue to accelerate this momentum and embed execution consistency across the network. Our salaried franchise continues to show encouraging traction with improved activation and higher quality inflows resulting in 21% YoY growth in salary uploads in the NTB salary book by December ’25. 32% YoY growth in number of premium accounts for NTB salaried book acquired in year-to-date December ’25.
These trends reflect stronger engagement and a more targeted customer-level strategy. Similarly, our ETB franchise continues to gain momentum, supported by the execution discipline we have embedded across the network. Targeted analytics-led segment-focused campaigns are deepening balances, broadening product penetration, and elevating customer lifetime value as evident in our ETB salary book, now growing at 18% year on year.
Premiumization across the franchise is progressing well, supported by rising wallet share and superior client servicing reflected in the 7% Q-o-Q and 8% Y-o-Y growth in Burgundy agents. Our industry-leading NEO platforms continue to scale rapidly, now powering a fast-expanding digital ecosystem serving over 4.3 lakh customers on NEO for corporates, 3.1 lakh on NEO for business, and thousands more through our API and partnership channels. NEO for corporates is fast emerging as a digital backbone of our corporate banking franchise, transforming how clients engage with us and deepening our leadership in platform-led banking.
Please refer to Slide 31 for more details. Point number three, creating multiplicative forces to build competitive advantage, this quarter we have advanced our agenda on digital-first, inclusive, and future-ready initiatives to industry-first innovations and strategic partnerships. We pioneered the Omnichannel Express Banking digital point in partnership with Hitachi Payment Services. We believe a next generation banking concept offering a glimpse into the future of inclusive banking. Customers can now walk into Express Banking, 24×7, to open new bank accounts, avail instant cards, book fixed deposits, apply for loans, and pay utility bills, as per their convenience.
We continue to lead effectively in the UPI payer PSP space, with our market share rising to 39% by value and 38% by volume in quarter three, while maintaining the lowest technical declines as a remitter bank, reinforcing our position as the top UPI payee. We also introduced a UPI-powered digital co-branded RuPay Credit Card built for India’s financial needs, the Google Pay Axis Bank Flex, the first card under this offering.
Building for the future, Digital Bank performance continues to remain strong. We continue to introduce new journeys and enhancements during the quarter. In our mobile app, we further feature by using account aggregators allowing customers to see their portfolio across deposits, mutual funds, ETFs and stocks across the entire CICO ecosystem using this feature.
Additionally, we rolled out several new safety-related features which empower customers to protect their accounts. We launched face authentication-based journeys to select products using Aadhaar, which could dramatically reduce the possibility of fraud. Bank-wide programs to build decisiveness to Bharat Banking and SPARSH are progressing well.
At the end of 2025, the deposits from Bharat Banking branches were up 12%, Yo-Y and rural advances were up 2%, Q-o-Q. Our customer obsession initiative, SPARSH, continues to accelerate with our enterprise-wide focus, strengthening experience outcomes and simplifying interactions through digitization. Retail Bank NPS has risen four points, Q-o-Q, and 59 points since inception, with consistent improvement across retail products.
This progress is being enabled by our digital platforms like Adi, our Genai Power Assistant, now live across 72 products and processing over 36,000 monthly active users, and Kaleidoscope, our real-time CX engineering, which match 38 live journeys with more than 28,000 monthly active users.
Our progress this quarter reflects our focus on longer-term and sustainable solutions, simplifying access to credit, reimagining digital banking, and investing in talent and ideas that will shape the future. We remain as a bank vigilant to the evolving geopolitical environment and its potential implications for the operating landscape.
Over the medium- to longer-term, our ambition remains unchanged, sustainably outpace the sector growth. We will continue to invest where necessary to remain differentiated and distinctive in our journey towards building an all-weather institution.
I will now request Puneet to take over.
Puneet Sharma — Chief Financial Officer
Thank you, Amitabh. Good evening, and thank you for joining us this evening. The salient features of the financial performance of the bank for Q3, FY26, and nine months FY26 across our operating performance, capital and liquidity position, and asset quality restructuring and provisioning is as follows. For the nine-month FY26, our operating performance was stable across net interest income, fee, and operating expense lines. Net interest income at INR41,591 crores grew 3% year-on-year. NIM at 3.72% declined 27 basis points YoY after factoring 100 basis points pass-through of the repo rate cut fee at INR17,883 crores grew 11% year-on-year.
Operating expenses at INR28,896 crores grew 4% year-on-year. We delivered a positive operating job both on operating revenue and core operating revenue basis. Cost to assets at 2.33% declined 15 basis points year-on-year. Core operating profit at INR30,824 crores grew 5% year-on-year. Moving to the key metrics for Q3 FY26, year-on-year deposit and advances growth of 15% and 14%, respectively. QoQ deposits growth of 5% and advances growth of 4%. Net interest income at INR14,287 crores YoY and QoQ growth of 5% and 4%, respectively.
Margins for quarter three FY26 was 3.64%. Fees at INR6,100 crores, year-on-year growth of 12% QoQ and — 12% year-on-year, 1% QoQ, granular fee at 92% of total fees. Expenses at INR9,627 crores for the quarter, year-on-year growth of 7%, QoQ degrowth of 3%. Cost to assets 2.33%, declining 15 bps year-on-year, 5 bps QoQ. Core operating profit at INR10,815 crores, year-on-year growth of 7%. Net credit cost at 0.76%, down 4 basis points YoY.
Net credit cost excluding technical impact at 0.63%, down 17 basis points year-on-year, 1 basis point quarter-on-quarter. PAT at INR6,490 crores, 28% growth QoQ and YoY growth of 3%. GNPA at 1.40%, declined 6 basis points QoQ and YoY. Net NPA at 0.42%, declined 2 basis points QoQ and increased 7 basis points year-on-year. Provision coverage at 70%, standard asset coverage ratio 1.14%, all provisions to GNPA at 146%. Consolidated ROA at 1.57%, improved 27 basis points QoQ. Consolidated ROE at 14.15%, improved 264 basis points QoQ. Subsidiaries contributed 8 basis points to the consolidated annualized ROE and 47 basis points to the consolidated annualized ROE for the quarter. The bank’s CET1, including nine-month FY 2026 profit, stands at 14.50%. We net accreted 7 basis points of CET1 in the quarter.
The bank has provisions aggregating to INR6,243 crores, which have not been reckoned in the capital computation and translatable to a capital cushion of 43 basis points over and above the reported capital adequacy ratio. The bank assesses its capital position on two pillars, i.e., growth and protection. We reiterate we do not need any equity capital for either pillar. We may opportunistically evaluate raising tier two and AT1 instruments since our current AT1 outstanding is due for call in 2026, based on market conditions. Net interest margin for Q3 was 3.64%, down 9 basis points QoQ. Full quarter impact of the 25 basis points repo rate cut in December 2025 will play through loan yields in Q4 FY 2026 as we transmit repo rate changes at the end of the quarter in which the rate cut has been announced.
Yields on interest-earning assets declined 17 basis points QoQ. This decline was offset by cost of funds reduction of 8 basis points QoQ. The bank maintains its through-cycle stance of net interest margin at 3.8%, cycle measured in terms of duration starting from the last rate cut. Moving on to the progress we made on structural NIM drivers, that progress continues. Improvement in balance sheet mix. Loans and investments comprised 90% of total assets at December ’25, improving 38 basis points year-on-year and 5 basis points QoQ. Retail and CBG advances comprised 68% of total advances at December ’25, declining 333 basis points year-on-year. This is an outcome of the bank’s conscious strategy to optimize NII in the short term.
Retail disbursements have grown 20% year-on-year and 12% QoQ, which gives us comfort that we would be able to rebalance the portfolio proportionality over our planning horizon. Low-yielding RIDF bonds declined by INR6,792 crore year-on-year. RIDF comprised 0.57% of our total assets at December 2025 compared to 1.10% at December 2024. Quality of liabilities at December 2025, measured by outflow rates, stood at 28.6%, moved adversely as we gained market share in deposits in FY26. We continue to remain focused on this variable. QAB CASA at 37% declined 65 basis points QoQ and 116 basis points year-on-year. We have seen an improvement of 37 basis points on CASA pricing for the nine-month FY26 as compared to FY23. This improvement in pricing has offset some of the average CASA decline that is visible for us.
In addition, the impact of the YoY decline in QAB CASA was offset by rate benefits across parts of the liability stack. The cost of deposits declined by 36 basis points year-on-year and 6 basis points quarter-on-quarter. Our fee income grew 12% year-on-year, 1% QoQ. The total retail fee grew 12% year-on-year, supported by our small business banking, small enterprise group, liabilities, and cards businesses. Overall, our wholesale fee grew 11% year-on-year. Our WBCG, which is our large client coverage team, fee grew by 19% year-on-year. Our mid-enterprise group fees grew by 16% year-on-year, and our transaction banking fee grew 5% year-on-year. Trading profits and other income at INR125 crore declined both QoQ and YoY, mainly due to lower realized gains and MTM.
Operating expenses for the quarter stood at INR9,637 crores, growing 7% year-on-year and declining 3% quarter-on-quarter. Since Q3 FY21, based on a prudent internal policy, the bank has consistently been provisioning for gratuity liability in anticipation of the implementation of the code for Social Security 2020. At 31st December 2025, the bank holds a cumulative provision of INR434 crores towards the new labor codes based on the preliminary assessment of the impact. Given the provisional accumulation under the prudent policy till the end of the previous quarter, the bank has had to take a minimal charge to its profit and loss account for Q3 FY26 of an amount of INR25 crore for the labor codes.
The bank will monitor and finalize the finalization of the central and state rules relating to the labor codes and adjust its estimates and provisions in subsequent reporting periods for gratuity and other aspects of the new labor code in accordance with the applicable accounting standards. The year-on-year increase in operating expenses is INR593 crores. 79% of this increase can be attributed to an increase in statutory expenses attributable to PSLC cost, CSR, and DICGC premium. The balance increase is attributable to volume-linked expense growth, technology spends, and BAU expense offset by a reduction in staff cost. Total operating expenses declined 3% quarter-over-quarter. The decline in staff cost is attributable to a decline in QoQ period-end headcount by roughly 950, and reversal of accruals of staff expenses no longer required to be paid.
Operating expenses other than staff were flat QoQ as BAU volume-linked expenses were offset by PSLC cost reduction. Technology and digital spends grew 11% year-on-year and constituted roughly 11% of the total operating expenses of the bank. We opened 134 branches in the quarter, 234 branches in the nine months FY26, and 404 branches in the last 12 months. Net credit cost for the quarter was INR2,307 crores. Annualized net credit cost for Q3 FY26 was 76 bps, declined 4 bps year-on-year. Net credit cost for the quarter, excluding technical impact, was INR1,390 crores. The cumulative non-NPA provisions at 31st December 2025 is INR13,111 crores, comprising provisions for potential expected credit loss of INR5,012 crores, restructuring provisions of INR216 crores, standard asset provisions higher than regulatory rates of INR1,711 crores, additional one-time standard asset provision of INR1,231 crores, and weak asset provisions of INR4,941 crores.
Moving to growth across our liabilities and loan franchise. Amitabh discussed the growth in loans and deposits. We gained market share on a year-on-year basis across our deposit franchise and maintained our market share on loan franchise. Our loan book is granular, well-balanced, with retail advances constituting 56% of our overall advances, corporate loans at 32%, and CBG at 12%. Please refer slides 17 and 18 for details around the quality of our liability franchise and slides on our loan franchise. 73% of our loan book are at floating rate. 45% of our fixed-rate book matures every 12 months. Breakup of the floating rate book by benchmark type and CELA repricing frequency is set out on Slide 9 of the investor presentation. In Q3 FY26, retail disbursements grew 20% year-on-year and 12% QoQ. Disbursements in home loans grew 30% year-on-year and 16% quarter-on-quarter.
Vehicle loans were up 26% year-on-year, 20% quarter-on-quarter. Retail aggregate disbursements were up 32% year-on-year and 31% quarter-on-quarter. Personal loans were up 21% year-on-year and 1% quarter-on-quarter. Moving to the performance of our subsidiaries. Detailed performance of our subsidiaries is set out on slides 51 to 58 of our investor presentation. In nine months FY26, the domestic subsidiaries reported a net profit of INR1,490 crores, growing 6% year-on-year. The return on investment on domestic subsidiaries is 52%. Axis Finance. Overall, assets under finance grew 22% year-on-year, of which share of retail plus MSME at 56% of total book versus 53% last year. Nine months FY26 PAT grew 12% year-on-year to INR571 crores. Strong asset quality with net NPA of 0.36% and negligible restructuring.
Axis Finance took an incremental standard asset provision in the quarter to comply with upper-layer regulations. This impacted its profitability by INR55 crores for the quarter. Axis AMC overall quarterly average AUM grew 11% year-on-year to approximately INR360,575 crores. Nine-month PAT stood at INR454 crores, growing 20% year-on-year. Axis Securities’ nine-month FY26 PAT stood at INR270 crores. Axis Capital nine months FY26 PAT grew 20% year-on-year to INR178 crores. Moving to asset quality, provisioning, and restructuring. Slippage, GNPA, and NPA, and PCR ratios for the bank and segmentally for retail, CBG, and our corporate book is provided on Slide 42 of our investor presentation. Gross slippages for the quarter were INR6,007 crores, of which retail was INR5,472 crores, CBG at INR370 crores, and WBCG at INR165 crores. Gross slippages ratio for the quarter was flat sequentially and declined 2 basis points year-on-year. Our gross slippage ratio for the quarter, excluding technical impact, declined 4 basis points quarter-on-quarter and declined 62 basis points year-on-year.
Retail asset quality is stabilizing as evidenced by the credit card portfolio has seen a YoY improvement across gross slippages, net slippages, gross credit cost, and net credit cost. Retail asset portfolio, excluding cards, has seen a YoY improvement in gross slippages, net slippages, gross credit cost, and net credit cost. For the quarter, 39% of the gross slippages are attributed to linked accounts of borrowers, which were standard and classified or have been upgraded in the same quarter. Net slippages for the quarter were INR3,135 crores, declining in value terms by 11% year-on-year. Net slippages segmentally were INR3,051 crores for retail, INR195 crores for CBG, and a negative INR111 crores for our WBCG business. Net slippage ratio for the quarter declined 29 basis points year-on-year. Our net slippage ratio for the quarter, excluding technical impact, was flat sequentially and declined 45 basis points on a year-on-year basis.
Recoveries from written-off accounts for the quarter were INR799 crore, up 25% QoQ. Net slippages for the quarter, adjusted for recoveries from written-off pool were INR2,335 crores. Segmentally, retail was INR2,506 crores, CBG was INR109 crores, and WBCG was negative INR280 crores. Please see slides 44 and 45 for quantification of technical impact across segments.
To summarize, Axis Bank is progressing well to be a stronger and sustainable franchise. We continue to monitor the current macro geopolitical environment, inflation, liquidity, cost of funds, and its impact on our business.
Thank you. We conclude our opening remarks and would be happy to take questions.
Questions and Answers:
Operator
[Operator Instructions]The first question is from the line of Chintan from Autonomous. Please go ahead.
Chintan Joshi
Hi, good afternoon. Thank you for taking my questions. Can I please start with the 3.8 NIM guidance? Thank you for reiterating that. The question would be, is that something you’re fairly confident about or would you like to caveat that target with any kind of market dynamics that need to play out for you to achieve that target? That would be my first one.
My second, again on NIMs, is you’ve seen 27%, year-on-year corporate loan growth, 6% year on your retail loan growth. And of course, you highlighted disbursements are improving. But how should we think about this impacting your NIMs on mix effects? It’s kind of linked to the 3.8. If you’re going to grow corporate faster, does that mean that 3.8 may be a little in danger? And a final question would be, Amitabh, at Davos, you said it will take 18 to 24 months to return to deposit growth momentum. Could you please elaborate on that? I’m not quite sure what you are referring to there? Thank you.
Puneet Sharma
Thank you for the question, Chintan. I’ll respond to it in parts. 3.8%, we remain confident of, it is rate cycle agnostic, which is why we say it’s a through cycle NIM guidance. We are not walking away from that even today, despite the 125 basis points rate cut that we’ve seen. We remain confident that we will get to the 3.8% over the duration of our book. So we reiterate what we have said previously.
Chintan Joshi
Thank you.
Puneet Sharma
I think to your second part of your question on portfolio mix, we had clearly called out at the start of Q1 that for the current fiscal, we would look to optimize net interest income because that flows through PAT and has a positive impact on ROE. That’s exactly what you’ve seen. We found the right risk-adjusted opportunities to grow in the wholesale business. We haven’t sacrificed RoE We have deepened our relationships with the client, and that’s where growth has come through on the wholesale side. We do believe that we will rebalance our book to what we have previously indicated.
We think an optimal book balance in the current plan horizon would be 58-60 retail, 23-25 wholesale, and the balance being SME. That calibration will take place depending on the time of cycle that we are in. I’ll pause there. I’ve covered two parts of your question. I’ll hand back to Amitabh for the Davos question.
Chintan Joshi
Thanks, Puneet.
Amitabh Chaudhry
So I was specifically asked about two things when I was there, that one, the trade growth seems to have picked up. What about deposit growth, which remains anemic? And by when do we expect the deposit growth to come back? To that question, I had responded that first, the credit and the deposit growth has to converge as it converged earlier. So credit growth cannot get ahead of deposit growth on a sustained basis.
If the Indian economy has to grow at a certain rate, we have to ensure that the credit growth does happen, which feeds into deposit growth. I’m hoping that in the next 15-18 months, the deposit growth will stabilize at similar levels as credit growth because there is no option. If deposit growth remains anemic, then the credit growth will come down. You cannot have those two numbers diverging on a sustained basis. RBI, I think, is fully cognizant of this. While we have seen periods of very low liquidity again over the last couple of quarters, including in the last quarter, including now, only now RBI has talked about infusing liquidity. It has to be sustained. It has to be continuous. As is evident, a regulator is fully seized on that matter.
If that continues, we do believe that over a period of time, both the credit growth and sustained liquidity will feed into deposit growth. That was the context to my answer.
Chintan Joshi
What was surprising was the length of time you think the convergence will take –
Amitabh Chaudhry
So the reason I said that, sorry, apologies to interrupt you, the reason I said that is because given what is happening on a geopolitical basis, it’s very difficult to say that things can stabilize that quickly. I mean, look at what’s going on around us, and every day is a new event. So in that sense, what is happening to the rupee? Whether intervention will be required, at what stage some of these things will stabilize? I just thought that it cannot happen in a hurry.
It will take a little bit more time than what all of us want and anticipate. That’s where I was coming from.
Chintan Joshi
Exactly. Okay. Thank you.
Operator
Thank you. The next question is from the line of Mahrukh Adajania from Nuvama. Please go ahead.
Mahrukh Adajania
Yeah. Hi. Congratulations. I have a couple of questions. Firstly, on LCR, so your LCR has dropped. If you could explain the monthly or the average LCR, if you could give the average LCR outflow, if I’ve missed — I don’t know if I missed it in the commentary, but that’s my first question. And my second question is really on deposit growth, right? So you did address sector –you did give us sector commentary. But just in terms of deposit growth, we’ve beaten the sector over the last two quarters. Will we be able to continue the same pace?
Because we are coming from a period where people were questioning the low deposit growth, and now we’ve overtaken many large banks on overall growth. So does that momentum look sustainable to you? That’s my second question. And on opex, if at all, there is a reversal on employee expenses because the number looks too low, or should this be the new base and we work upon building upon this base only? So those were my questions. Thanks.
Neeraj Gambhir
Hi, Mahrukh. This is Neeraj here on LCR. We have been broadly in 115%-120% range for the last several quarters. We continue to operate in that range. Quarter-on-quarter, there is some variability because of the large balance sheet. There are changes to inflows and outflows that do happen, and compositions of liabilities and assets do change.
But the broad idea is to stay within that 115%-120% range that we have operated in for almost 8-10 quarters now, even longer. So not too much to be read into that at this point in time.
Munish Sharda
Okay. So, Mahrukh, thank you for your question. This is Munish. On deposit, thank you for acknowledging. We’ve been number one better than the industry. As we’ve been telling the street for the last few quarters that we have been undergoing a transformation in our execution and operating rhythm in the branches. The components of deposit growth are NTB and ETB, and also new segments that we are getting after in the branches, apart from the branch expansion that we are doing. We’ve been telling you that NTB growth has been encouraging for us. We’ve been premiumizing our new acquisition. We’re seeing great momentum in our salary book.
We’re seeing momentum in our NRI book. So the NTB book is growing. This is the work that we’ve done on customer servicing and customer engagement in the last few quarters. We’ve also seen our ETB book starting to deepen quite heavily this year as compared to the previous few years. So we’re confident that that execution, if we continue on that execution, that deepening with our customers will continue to improve, both on deposits as well as on per product customer, per customer product number of products that we have per customer that will continue to improve also. Last year, we added about 500 branches. This year, we will add about 400 branches. This year, we’ve added 134 branches this quarter. That momentum is continuing.
We are very clear that our new branches, location, etc., has to be in line with our premiumizing strategy and also in line with our digital ambition as well as our Bharat Banking ambitions. We continue to invest in there. Our Burgundy Private franchise also is growing very heavily, and our investments in digital, etc., have started giving us good results. Net net, I think we are confident that our retail deposit momentum, we’ve seen some good work, but we realized, as Amitabh said in the address, that we have a lot of work to do still across our current account and our individual deposit franchise. And we continue to double down on that in those areas.
Puneet Sharma
Mahrukh, thanks for the question. I think to the last question that you asked on staff cost, the reduction in staff cost has two variables: an absolute reduction in headcount quarter-on-quarter, which is permanent in nature, and there is a reversal of staff expenses that are no longer required to be paid. I will clarify that the staff expenses no longer required to be paid would not have changed the direction of the staff cost improvement on a sequential quarter basis.
Mahrukh Adajania
Okay. Thanks a lot. Thank you.
Operator
Thank you. The next question is from the line of Rikin Shah from IIFL Capital. Please go ahead.
Rikin Shah
Hi. Good evening, guys. A few questions. The first one is on the liabilities. So my question is specific on the current account. We have seen a decent acceleration even on average basis. So what’s driving that, and how do you think about its sustainability? Second part to that is on the borrowings as well. Looking at the last few quarters, we have seen the borrowings going up in the last two quarters, and it’s now back to 15% of IBL. How should we think about that moving ahead? That’s first on the liabilities. Second is on cost of deposits. This quarter, the improvement in cost of deposit was a bit slower than some of the other peers. Assuming no further rate actions, Puneet, when do you think our TD repricing gets over and how much more juice is left on cost of TD side? The third one, clarification on opex.
So just on the staff expenses again, if I look at the average remuneration per employee, should we assume that what we saw in this quarter is the new base and we build onto that, or the reversal helped that average number in this quarter and we need to strip that out? If you could quantify, that’s brilliant. And the last question is on asset quality. The standard loans provision were negative in this quarter. What’s driving that? And given that excess of technical slippages, the credit costs were only 63 basis points this quarter, so how should we think about the direction here on? Thank you.
Neeraj Gambhir
So hi, this is Neeraj here. On your question around current accounts, I think it’s a combination of a few things. One, we are continuing to see deepening of our existing customer base relationship driven by the tech stack and the technology investment that we have done on corporate banking side. We continue to have much more deeper engagement with clients on their operating flows through some of the Neo-based investments that we have done and the platform that we have put in place, whether it is through APIs or whether it’s through our Neo for Corporates platform. We are actually seeing some good outcomes of the solutioning that we do with our customers, whether it is corporate customers or government customers for their cash management requirements. So that is having a positive effect on our current account franchise. We are also working to deepen and granularize the current account franchise through our retail current account initiatives, which is spanning both ETB as well as NTB customer base.
On ETB customer base, I think there is a focus to also focus on a certain set of branches which are closer to current account customers and actually having a dedicated thought process in those branches for current account customers. So a combination of these things is what I would say is playing out for us at this point in time.
Subrat Mohanty
On the staff cost, this is Subrat. On the staff cost question, like Puneet mentioned, see, the absolute number is also down, and directionally, things would not have changed even if we had not taken the reversals into account. So staff wage cost productivity is an important metric. We are monitoring it very closely. We have mentioned in the past about Siddhi, the Employee Super App, Adi, the app that we use for addressing customer questions and queries at the branches.
These are very powerful tools to improve employee productivity. These are almost now 100% used across the bank for customer-facing roles and for productive roles in the field. So there is quite confidence in the team that is going out, meeting customers on an everyday basis in how they use this tool and what productivity gains they are getting out of this tool. We will continue to work to sustain the wage productivity numbers that we’ve been able to achieve in this quarter. And on a broader basis, I think we’ve maintained the point that we will have an operating jaws that is positive, and that’s really how we are looking at it from a medium-term perspective. So the cost-to-asset ratio will continue to head in the direction based on how the operating jaws continues to remain positive.
Puneet Sharma
Rikin, on your last question about cost of funds, we don’t give out the proportionality of the book to be repriced, but the shorter-term book has entirely been repriced as we stand. I think given that the duration of the book is set out in our annual report, a good estimate could be taken from there on what’s left to be repriced. But please appreciate that non-retail term deposit rates in quarter four have started to inch up, and consequently, the repricing benefit on deposits to the fullest extent of the lag book may not come through if the rate environment remains competitive through quarter four. So we’ll wait and watch, but ideally, you should see a deposit cost decline play through even in quarter four to offset some of the margin pressure that we will see on account of the past 2 to 25 basis points required cut.
Rikin Shah
Got it. And Puneet, on the standard loan negative provisions and the credit cost direction?
Puneet Sharma
So I think on the standard asset negative is effectively the negative in the standard assets provision for the current quarter is driven by the fact that there were sectors that we had marked as stressed previously, where, given the stabilization of the overall loan book, we don’t see as stressed. So that’s a marginal impact. It’s actually inconsequential in the context of our results. It’s about INR128 crore. We’ve clearly set that number out in the investor presentation to look at. Directionally, from a credit cost standpoint, we had said the retail book is stabilizing. We continue to remain true to that comment that it is stabilizing. You are seeing that flow through now in numbers.
Rikin Shah
Got it. Thank you so much.
Operator
Thank you. The next question is from the line of M.B. Mahesh from Kotak Securities.
Mahesh Balasubramanian
Hey, hi. Just a couple of questions. One, Amitabh, just wanted to check, are there any positions that you?
Operator
I’m sorry to interrupt you, sir. There is a lot of background noise. We are not able to hear you clearly. May I request to kindly rejoin with you and please ask your question from quieter place? I’m sorry, sir. Please rejoin with you. Thank you. [Operator Instructions] The next question is from the line of Jai Mundhra from ICICI Securities. Please go ahead.
Jai Mundra
Yeah, hi. Good evening. Sir, two questions. One is on PSL. The PSL compliance, how are you placed? The RIDF outstanding has been coming down, now down to INR100 billion. I mean, does this suggest that we are moving towards self-sufficiency in PSL, or the shortfall is being made good by PSLC certificate? I mean, that is question number one. Number two is deposit and LCR put together, right?
So I mean, the strategy on deposit has been cost, runoff, and growth. We have come more than industry on growth. Cost has also been competitive. The runoff rate has inched up a little bit. Now, LCR from April, the new guidelines comes in, and the runoff rates on the wholesale and NBFC should ideally come down. Do you sense that you can still continue this strategy? I mean, the new LCR guideline would be helpful in pursuing the current deposit strategy without compromising on the runoff rates. And if you would have LCR release, or you would need to sort of a buffer? So these are the two questions. Thank you.
Subrat Mohanty
So on the PSLC strategy, see, we’ve not got any RIDF allocation over the last four years or so. So largely because of how we manage the PSL book in terms of organic growth. We did Bharat Banking in 2021 as a specific strategic agenda for the bank. Some of it has played out in terms of the strength that we have built in the agri portfolio. So the RIDF numbers that you see are the old RIDF numbers which have been running off based on their tenure. Going forward, this is going to continue to be a challenge at a system level because everybody is focused on this. There has been some amount of reclassification, declassification in this specific area.
We feel fairly confident given how we have focused on the Bharat Banking part of the business over the last four years that through a combination of organic book as well as wherever, in order to bridge some of the gap, we might need to do PSLC purchase, we will continue to be able to manage the overall PSLC requirements that we have.
Neeraj Gambhir
All right. So Neeraj here, on LCR question, if you recall from 1st April, there are three things which are changing. First is that we are required to maintain an additional 2.5% runoff on retail and SBC deposits which have IB, MB. There is an alignment of HQLA haircut. And thirdly, some OLE deposits will move from OLE category to non-financial corporate category, which has a much lower runoff of 40%. So there are pluses and minuses with this guideline.
Our current estimate is that basis what our composition of deposits is. We are broadly neutral in terms of these pluses and minuses effective 1st of April. As for a strategy going forward is concerned, I think we need to bear in mind that currently, for the last, I would say, a couple of years, the growth rate of individual and small business customer deposits has been somewhat slower as compared to the growth of the corporate and institutional deposits. It’s a phenomenon that has been playing out in the Indian banking system. So we are actually seeing an impact of that, which is why there has been an increase in our outflow rates as well. We will continue to focus more on growing our granular and retail deposit base.
But please bear in mind that the current sort of institutional setup and the flow of the deposits in the system is somewhat against this. So the outflow rates going forward will actually depend upon the growth rates that we see for us as well as for the system on these two separate constituents.
Jai Mundra
Sure. But the net net, the lower runoff rate should ideally help in the runoff profile of the deposits, right? Is that a fair assessment?
Neeraj Gambhir
I mean, it is helping. Of course, it is helping. But there is also a higher runoff rate for retail deposits that is offsetting it. Because now you have to provide 2.5% extra on retail and SBC where you are giving internet banking and mobile banking.
Jai Mundra
Right. Sure. Thank you, and all the very best
Operator
Thank you. The next question is from the line of Abhishek M from HSBC. Please go ahead. Abhishek M, I have unmuted your line. Please proceed with the question, sir.
Abhishek M
Yeah, hi. Am I audible?
Operator
Yes, sir.
Abhishek M
Yeah, thank you. Good evening and congratulations for the quarter. Two questions. I think the first question is basically on any kind of inorganic opportunity that you see out there, especially something which can give a sort of lasting push to your NIM, ROA, PSL compliance, all those things. And given that any such thing has to be of a certain size, given your scale, would you need additional capital if this kind of an opportunity were to arise, or is the current capital position adequate? So that’s my first question. The second question, Amitabh, is also on how do you think about LDR? I think you said that the regulator still monitors it.
But as you move, as we use LCR, NSFR more and more to manage reserves, is that becoming more important than really looking at LDR, or is the regulator looking at both? And internally also, do you look at both? So just these two questions, if you could clarify. Thanks.
Subrat Mohanty
Thank you, Abhishek. This is Subrat. On the inorganic opportunity, I mean, we continue to be looking at what opportunities are available in the market. But given the size of possible opportunities, if you take the universe of opportunities available, I don’t think there is anything of the size which meets some of the criteria that you mentioned, which will require us for any which will require us to raise capital for that kind of for that kind of opportunity.
So to answer your question, I don’t think there will be any capital requirement given the set that is available in that kind of an area. I mean, we have no other comment to make in terms of what opportunities are available at this point in time. On your second question on LDR, see, over the last 6 quarters or so, this is seventh, we have been between about 90%-93% LDR, and we’ve been able to navigate this environment in terms of doing the right balance between growth and keeping the LDR in that range. Our general sense right now is that as a metric, the metric served its purpose. Right now, possibly the focus on the metric is a bit different than what it was a year back.
But we continue to remain focused on keeping it in that range, which we have managed in this quarter as well. And we think that we can maintain that range and still continue to show industry equal or industry leading growth. So that’s the way we currently have made sure that the operating model works, and we are comfortable with that.
Abhishek M
Sure. Thanks. Can I squeeze in just one more question? Just a sort of data-keeping question on slippages. How much would be the agri slippages this quarter? Because ex of that, I mean, even your QoQ performance and your underlying slippage looks to have improved quite substantially. So that’s a great thing. So just in case you can share the agri slippage, that would be great. Thanks.
Puneet Sharma
Abhishek, thanks for the question. Consistently, we’ve responded to that by saying we don’t break up the retail slippages across product categories. So that’s a number we won’t put out, please. Thank you.
Abhishek M
All right. Thanks, Puneet, and all the best.
Operator
Thank you. The next question is from the line of Piran Engineer from CLSA. Please go ahead.
Piran Engineer
Yeah, hi team. Congrats on the quarter. Before my questions, I just need a clarification, Subrat, to what you said that the focus on LDR as a metric is different today from what it was a year back. Are you referring to you guys or the RBI year?
Subrat Mohanty
No, no. We are referring to how important or what kind of a range we need to keep it in. I mean, when we were at the higher end of that range between 90 and 93, it was a different kind of a focus.
Now that we have been typically in the lower end of that range, we have some kind of elbow room from our perspective. We don’t offer commentary on what the regulator views on that range.
Piran Engineer
Got it. Got it. Okay. That’s helpful. Then just moving on to my questions, and I’ll ask them all at once. Just firstly, corporate growth, if you could give some more flavor coming from volume or value. And if it’s value, is it that the corporates are borrowing more, or are you gaining wallet share? So some quantitative stuff or color out there would be useful. Secondly, a little bit on credit cards. Credit cards, the declined QoQ, is it simply an end-of-period thing that last quarter was good due to an early festive season? Or should we read more into it and be concerned?
And honestly, this is not just for you all, but for the industry. And thirdly, and I know you all have spoken about this in the last one or two quarters about prioritizing NII over NIM. My question is, why only a FY 2026? Why not a FY 2027 and a FY 2028? It clearly gives you ROE accretion. If you see this quarter also, your capital has not been consumed because you’re probably growing in lower risk-weight assets. So let this just continue. What is the logic of keeping it only in the short term? Yeah, that’s it. Thanks.
Vijay Mulbagal
Hi. Thanks for the question. I’m Vijay here. I’ll answer on the corporate growth. We are being very selective about the growth. It’s being largely powered by the strong client engagement, materially faster turnaround times compared to how the market is operating. Clearly focused on our filters on both FTP and RAROC.
In terms of sectors, primarily led by power, corporate real estate, diversified conglomerates. But we’re not stopping at just asset growth on the corporate. Our idea is to embed the bank in each corporate to be able to improve our transactional flows. Neeraj spoke about NEO, and the current account flows are a testament to how we are embedding the bank in corporates. And as also corporate salary and Burgundy, most of these are how we are operating and engaging with the corporates. Clearly, we are not chasing the growth here. We’re being selective about it. And clearly, RAROC FTP filters operate. Clearly, ecosystem plays very much our play. Thank you.
Arnika Dixit
Hi. This is Arnika. On the card side, I think it’s a phenomena that we’ve seen across the sector post the festive demand rundown. The spend year-on-year came down. Last year, festive season was in October, November. This year, the festive season actually along with GST cuts came in September. And that’s why you see the quarter-on-quarter difference.
Piran Engineer
But Arnika, are you seeing pressure on revolvers and EMI products also, or is it just mathematically a decline? If you get what I mean.
Arnika Dixit
Yeah. So the key question is that our percentage share of revolve continues to be the same. There’s no change that we are seeing over there. I think depending on the mix of the clients you get from time to time, the color of the book. But from our perspective, our ENR share, our spend share continues to be stable for last six quarters.
Piran Engineer
Understood. Okay.
Puneet Sharma
Then to your last question on optimizing NII on a go-forward basis, our comment for FY 2026 was driven by the fact that we make these decisions on a plan cycle basis. So we are due for our plan cycle for FY 2027. Once we’ve made the decision, we’d be happy to communicate.
Piran Engineer
Okay. So it’s not definitely a no. It’s just that you will revise it each year and sort of communicate to the street.
Puneet Sharma
We will review it as part of our plan cycle, and the outcomes, we’d be happy to communicate at your point in time.
Piran Engineer
Okay. Okay. That’s helpful. Yeah. Thank you and wish you all the best.
Operator
Thank you. The next question is from the line of Adarsh Parasrampuria from Enam. Please go ahead.
Adarsh Parasrampuria
Hi team. Great set of numbers. A couple of questions. First is with things settling down on unsecured and retail, on credit cost, we did see some gap versus peers getting created on the credit cost side. So most large peers are operating close to fifth-year under, and now things seem to be settling on the unsecured side. So if you can offer some direction, you did speak about credit cost, but do you expect to bridge the gap you’ve had maybe in the last couple of years given that technical slippages also should not be an issue next year?
Operator
Ladies and gentlemen, the line for the management has been disconnected. Kindly stay connected while we reconnect. Ladies and gentlemen, thank you for patiently holding. Mr. Adarsh Parasrampuria, please proceed with your question.
Adarsh Parasrampuria
Okay. So I had two questions. One was on credit cost. Because of technical and other reasons, we did have a material gap created versus peers. Most of the larger peers also have reported 50 basis points or lower credit cost, and it doesn’t seem, given the direction that things will head up. So if you can offer your comments on credit cost, both absolute and a more relative basis also that from a quality of portfolio construct. And my second question is, Amitabh, if you can just give us a few rumors regarding the M&A, regarding a large listed MFI M&A. So if you can just specifically, if possible, clarify on that. Thank you.
Operator
I’m sorry, sir. The line for the management has been disconnected again. Please hold the line while we reconnect them. Ladies and gentlemen, thank you for patiently holding. The line for the management has been reconnected. Mr. Parasrampuria, you may proceed now.
Adarsh Parasrampuria
Yeah. Yes, I’ll just —
Amitabh Chaudhry
Hello, Adarsh. I’ll ask you about M&A, and then you had a question on slippages. Let me answer a second question, then I’ll ask Puneet to answer the first. I don’t know what M&A you’re referring to. We don’t comment on any M&A. We are not in any position to discuss any M&A at this point in time. People are quoting sources. Good luck to them.
Puneet Sharma
Adarsh, to your question on credit cost, as you’re aware, we don’t guide on credit cost, but I’ll reiterate. Retail asset quality stabilization is what we called out Q4 for cards, Q2 for PL. The numbers are visible on slide 44-45 for you to see. The stabilization is playing through. Early vintage delinquency of the new underwritten book continues to behave well. That’s where we will stop at commenting on credit cost performance, but that should give you a fair idea of stabilization actually playing through our numbers.
Adarsh Parasrampuria
Perfect. Thanks. I’m a gardener. Thanks, Puneet.
Operator
Thank you. The next question is from the line of Kunal Shah from Citigroup. Please go ahead.
Kunal Shah
Yes. So am I audible?
Operator
Yes, sir, you’re audible. Please proceed.
Kunal Shah
Yeah. So the question was on recoveries. When we look at the run rate on the recovery side in particular, it still seems to be almost similar on a quarter-on-quarter basis, somewhere around INR2,800-INR2,900 range. And there were expectations in terms of better recoveries to flow through even from the technical slippages, given that there was a lot of accretion which has happened. So maybe do we expect the overall recovery trend to improve from here on? How should that ideally behave? So no doubt on the slippages side, we have seen the core slippages being managed, but there were some expectations of improvement in the recoveries too.
Puneet Sharma
Kunal, thank you for the question. If your question is related to technical slippages and recoveries thereof, we reiterate that that pool will not result in an economic loss for us. We will be able to recover these loans because they have an adequate value or security cover. That’s what we’ve consistently been saying. You’ve seen a decline in the net slippage number on a quarter-on-quarter basis. I think you’re comparing quarter three to quarter two. Please do adjust for seasonality. And if you adjust for seasonality, the trend lines that we have been calling out continue to hold. So on technical slippages, we remain true to our comment that you should see recovery from that pool over a period of time. No economic loss on that pool.
Kunal Shah
Sure. Sure. And secondly, on the investment income side, so there has been quite a bit of volatility in 2Q and 3Q. So is it more to do with maybe some booking of the maybe some selling the investments during a particular quarter, which would have resulted in the treasury gain in last quarter not reflected in the investment income? And this quarter, maybe the treasury is low and investment income is high. So should we look at it both as a cumulative number to just see in terms of how the investment portfolio is giving the benefit, or how should we read that? Because last two quarters, it’s been quite volatile.
Puneet Sharma
Kunal, treasury income is a function of the treasury’s decision to monetize basis market scenarios. Ideally, you should look at trading profit on a full-year basis. It will differ on a quarter-by-quarter basis in each fiscal. So if I request you to look at nine months trading profits, nine months trading profits for last year was INR1,885 crore, and nine months trading profits for the current year is INR1,978 crore. So broadly flat to stable, INR100 crore gap. So please don’t either model or measure trading profits quarter to quarter. On a nine-month-to-nine-month basis, we’ve delivered a similar amount as we did last nine months.
Kunal Shah
So the question was more on the investment income side.
Puneet Sharma
If you’re looking at yields on investment income?
Kunal Shah
Yeah. So interest on investment. Sorry. Yes.
Puneet Sharma
Yeah. So if you’re looking at yields on investment income, there will be some volatility depending on the investment position we carry on our trading book. There will also be some volatility basis the interest rate view our treasury takes between long-duration securities versus short-duration securities. You’re right in your observation that there is a marginal decline in yield on investments in the current quarter. That’s driven by specific treasury strategies on elongating or shortening the duration of instruments we hold. Nothing to read into it as we stand today.
Kunal Shah
Sure. Thanks. Thanks. That’s helpful. Yeah.
Operator
Thank you. The next question is from the line of Rahul Jain from MFS Investment. Please go ahead.
Rahul Jain
Yeah. Hi. Am I audible?
Operator
Yes, sir. Please proceed.
Rahul Jain
Great. Thanks. Good evening, gentlemen. I’ve got two questions, actually. One is just wanted to understand about the growth in the retail asset book. What strategy are we adopting to improve the traction there? What do you think about the market share gain opportunities that exist in the retail asset side? Because the last few quarters, I mean, it’s growing in a very narrow band, if I’m not wrong, between 1% to 2% quarter-on-quarter. So really keen to hear your comments on that. Number one. Number two, on the operating leverage side, how confident or what’s your view about the direction of travel going forward in the next couple of years, as the investment need might again arise if the retail asset growth picks up, or irrespective of the retail asset, the operating leverage will continue to come through? So those are two questions. Thank you.
Munish Sharda
So Rahul, hi. This is Munish. Thank you for the question. At a very broad level, I’ll tell you there are two or three things that we use to look at the retail asset businesses. The first thing, at a broad bank level, we have said that we will grow our asset book through cycles at about 300 basis points better than the industry. And I think the franchise is well-positioned to deliver that. The second thing is that on the RAROC side, we are guided by our RAROC operating principles. We’re very clear that we will dial up or dial down depending upon the returns that we expect to make in any business. The third is any environmental shift that happens impacts the overall growth.
Fourth item is we are very committed to delivering large part of our asset growth by deepening the relationship with our existing customers. So within these four guiding principles, over the last few quarters, we’ve seen we took a hit in unsecured disbursals because there was about 6-8 quarters back, we went through a cycle there.
We’ve seen those disbursals now come back. We have remodeled our acquisition engine, etc., and we are seeing a traction in that business. We’ve also, in the mortgage business, was seeing a lot of competition from PSU banks a few quarters back. We’re seeing some sanity returning there. We’re also doubling down on a few lines within the retail mortgage business, which will give us higher RAROC, etc. So we’ve seen disbursals come back there as well. In our wheels business, which is auto loan, commercial vehicle construction equipment businesses, we’re also pushing for the right RAROC in that business. We have deployed technology. We are seeing also a growth in that business, also driven by the shift in the GST, etc., that’s happening in the last quarter.
Finally, in our small business banking businesses, there are also two secured and unsecured books where we are pushing growth because that business brings a whole lot of opportunity with those set of customers. We are seeing higher disbursal growth quarter-on-quarter and YoY. Puneet and Amitabh mentioned those numbers in their respective addresses. We think that if we continue to work in these areas and we continue to double down on digital transformation, etc., in those businesses, our ability to deliver on the 300 basis points better than the industry will continue to get sharpened. The growth of book will take time once the disbursal starts improving. And we’re hoping that if we continue on this momentum, we will be able to deliver and be well-positioned to deliver 300 basis points from the franchise better than the industry on a two-cycle basis. I hope that answers your question.
Rahul Jain
Yeah. Okay. Sorry. Go ahead, Rahul. Please. Please go ahead, Puneet. No, it’s okay. I’ll let you finish.
Puneet Sharma
No, Rahul, please complete your question. I’ll come back on call.
Rahul Jain
Okay. So just to follow on, so just to clarify what Munish said earlier, this 300 basis points is, to my understanding, was on the aggregate loan growth for the bank. So his remark was in context of the retail or the overall. That’s number one. Number two, just to clarify, RAROC, you all feel that the corporate book is better in RAROC than retail, or you’re talking about, in general, the capital allocation? Because retail growth at some stage will start becoming strategic because of even the relationship on the liability side or the CASA relationship
Amitabh Chaudhry
So Rahul, we have mentioned a couple of things consistently. One will maintain a growth which is better than the industry growth rate. Puneet gave the numbers. We have also mentioned in this call itself that over a period of time, we would like the ratio of retail, wholesale, and SME to be in a certain zone, which basically implies that at some stage, retail also has to start contributing in the same way as what wholesale is doing today. Wholesale is way higher right now, but at some stage, we can that will come down. Retail will pick up because the disbursal numbers definitely reflect that over the next couple of quarters, the retail growth will start picking up. And depending on the asset class in retail, if we can manage credit costs, we have talked about this that the RAROC for retail businesses tends to be higher if you do your client selection and all that well.
That does not mean that wholesale RAROC is lower. But wholesale, unless you get the full relationship and the full value, and the only thing you do is a loan, it does not work. Same thing with mortgage. The only thing you do is a retail mortgage loan. It does not work. So we obviously have very detailed, intensive, comprehensive RAROC framework, and we use that to decide which businesses can grow. And that’s why we keep this balance. I hope that answers the question. Puneet, you can answer the second one.
Puneet Sharma
So Rahul, on your cost question, the way I would request you to think about costs is as follows. Please think about cost to assets on a full-year basis rather than quarter by quarter. When retail disbursements improve, we will see costs increase because there is a sourcing component, cost component to retail disbursements.
But that does get compensated in part on the fee income line because we’ll realize some amount of processing fees to offset that cost. Keeping that aside for the moment, directionally, you should see cost to assets improve as we get efficiency into the business. That’s how you should think about our cost to assets on a go-forward basis. So efficiency from where we reported today.
Rahul Jain
Got it. Appreciate the responses. Thank you so much.
Operator
Thank you. Ladies and gentlemen, this will be the last question for today, which is from the line of Param Subramanian from Investec. Please go ahead.
Param Subramanian
Yeah. Hi. Good evening. Thanks for taking my question. First question is on the NIM movement in the quarter. So you’ve reported it’s down nine basis points quarter-on-quarter. So if I look at your NII at 4% quarter-on-quarter, it’s largely in line with your loan growth and your asset growth. So is it that the growth that we saw in the last quarter was back-ended, and so the averages have grown? Is my understanding correct there? Yeah. That’s my first question. Because it doesn’t tally with the NII movement.
Puneet Sharma
Param, thanks for your question. I think a good way to anchor the response is to anchor the response to slide nine of our investor presentation. Effectively, we’ve explained the 9 basis points as one basis point of extra interest reversal compared to the previous quarter due to seasonality of the quarter. Eight basis points is spread compression. Broadly, I would request you to think about the eight basis points as a reasonable portion of the eight basis points coming from mix shift in the book.
So what you’ve seen is wholesale proportionality move up compared to retail proportionality. Now, that’s playing through on full-full quarter basis as we move forward in time. So there’s an advances mix impact on margins that plays through in the 8 basis points. And second, there is a liability mix impact that’s playing through in margins. Given that for the system and us, the incremental CASA ratio is not at the same levels as the book CASA ratio. Those are the two variables that have played through from a margin compression standpoint. The pulls and pushes of what the average balances or when the growth is will differ quarter to quarter, but those are the two big variables that have impacted margin decline in the current period.
Param Subramanian
Puneet, that’s very helpful. Just to follow up on that, so this mix shift that has happened over the last two quarters where corporate has picked up in the mix by about 2.5%, like you called out, is it well reflected in the current quarter NIMs and yields, or is there some more pass-through in Q4 that still has to reflect? Yeah.
Puneet Sharma
So like we said, Param, we are focusing on NII optimization through the year. So effectively, given what opportunities present themselves in the current quarter, we will take a considered decision on where we grow for in the current quarter. So if there’s a further mix shift, it will impact margins. That’s the natural response I can provide you. The other impact on margins in Q4, as I had called out earlier, was the full pass-through of the 25 basis points repo rate cut offset by depository pricing in part.
Param Subramanian
Fair enough. Thanks, Puneet. Just one last question. I didn’t pick up your response too. What is the impact of the new LCR calculation from FY 2027 on your reported numbers? Yeah. That’s it from me. Thank you so much.
Puneet Sharma
Thank you. I think we would be neutral on the change from where we stand today.
Operator
Thank you. And that was the last question for today. I now hand the conference over to Mr. Puneet Sharma for closing comments. Thank you, and over to you, sir. Thank you, Michelle. Thank you, everyone, for taking the time to speak with us this evening. For any unanswered questions, the IR team and myself will be available. So please do feel free to reach out to us. Thank you, and have a good evening. [Operator Closing Remarks]