Axis Bank Ltd (AXISBANK) Q4 FY23 Earnings Concall Transcript

Axis Bank Ltd (NSE:AXISBANK) Q4 FY23 Earnings Concall dated Apr. 27, 2023.

Corporate Participants:

Amitabh Chaudhry — Managing Director and Chief Executive Officer

Puneet Sharma — Chief Financial Officer

Analysts:

Mahrukh Adajania — Nuvama — Analyst

Kunal Shah — Citigroup — Analyst

Adarsh — CLSA — Analyst

Abhishek — HSBC — Analyst

Saurabh — JPMorgan — Analyst

Hardik Shah — Goldman Sachs — Analyst

M.B. Mahesh — Kotak Securities — Analyst

Sumeet — Morgan Stanley — Analyst

Jai Mundhra — ICICI Securities — Analyst

Anand Dama — Emkay Global — Analyst

Presentation:

Operator

Ladies and gentlemen, good day, and welcome to Axis Bank conference call to discuss the Q4 FY ’23 financial results. [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. Thank you, and over to you, sir.

Amitabh Chaudhry — Managing Director and Chief Executive Officer

Thank you, Neerav. Good evening, and welcome, everyone. We have on the call, Rajiv Anand, Deputy MD; Puneet Sharma, CFO; and other members of the leadership team. We, Axis Bank, have had a solid year of performance built on our GPS strategy with meaningful or per shift in trajectory on key business parameters every quarter. More importantly, the investments in building blocks that we have made in this period on customer experience, digital capabilities, and people give us the confidence in sustaining this performance. We delivered strong growth across our focus segments, completed successful acquisition of Citi and retained our leadership position in specific businesses like credit cards, wealth management and digital. This has been possible through the collective efforts of our employees and partners who serve the needs and aspirations of our customers.

We are carrying the confidence and momentum of having check the boxes on growth, profitability and sustainability over the past year into financial year ’24. We continue to stay on course on three core areas of execution of our GPS strategy, namely starting the first one embedding the performance-driven culture. In the performance-driven culture, it was important for us to improve the profitability metrics. During the quarter, we completed the acquisition of Citi Bank India consumer business, a landmark in the Indian banking industry. This was a large and complex transaction, including cards, wealth, deposits and assets businesses, which we have completed in an accelerated time line within seven months after the CCI’s approval. To that effect, we have taken nonrecurring onetime charges reported as exceptional items, details of which would be provided by Puneet subsequently. Our consolidated annualized excluding exceptional items, for quarter four financial year ’23 stood at 21.58%, up 500 basis points year-on-year and 177 basis points quarter-on-quarter.

We also delivered our aspirational consolidated ROE, again excluding essential items of 18.84% on a full year basis. Let me highlight the key trends for quarter four. Net interest income grew by 33% year-on-year and 2% quarter-on-quarter. Net interest margins improved 73 basis points earlier. Core operating profit grew by 46% year-on-year and 3% quarter-on-quarter. Profit after tax, excluding essential items, stood at INR6,625 crores, which was up 61% year-on-year and 13% quarter-on-quarter. Point number two, we listed the growth trajectory and consistently gained market share. On deposits and advances, the domestic loan book grew by 23% year-on-year and 13% quarter-on-quarter, and deposits grew by 15% year-on-year and 12% quarter-on-quarter with CASA ratio at 47%, up 215 basis points year-on-year and 261 basis points quarter-on-quarter, respectively. And retail term deposits up by 5% quarter-on-quarter. We continue to grow faster than the industry.

The foundation we have built on customer centricity, rigor and rhythm to improve in these core business areas has meant a smooth upward growth trend that we see confident will sustain. In credit cards, we were among the largest issue on that basis. Our card issuances for quarter four financial ’23 stood at new quality highs of 1.13 million, taking the full year financial year ’23 card issuances to 4.2 million, up 8% year-on-year. We gained significant conversion market share of 36% in financial ’23 to merchant acquiring business. We launched digital, a company to digital offering for the merchant community. We are now ranked number two in volumes market share, which is up from both. Customer acquisition and deposit quality. Our customer acquisition remains strong. In quarter four, we added three million new customer accounts, a growth of 33% year-on-year and 3% quarter-on-quarter taking the total number of accounts opened in financial year ’23 to new highs of 10.8 million, up 26% year-on-year. We have strengthened our corporate salary option significantly. We saw 33% year-on-year growth in new salary levels acquired and 30% year-on-year growth in salary acquisitions in financial year ’23.

Our premiumization strategy and the recent acquisition of the portfolio has resulted in 870 basis points increase in share of premium segment in the retail savings portfolio. Deposit quality has improved with outflow rates lower by 550 basis points on a year-year basis. And obviously, this is a result of a lot of hard work work we have done in this area. We have also seen all-round growth across businesses, market-leading growth and market-leading growth in our focus segments. Retail disbursement stood at new lifetime highs for the quarter and the fiscal year as a whole. Retail loans grew 22% year-on-year and 14% quarter-on-quarter. The Bharat loan portfolio grew by 26% year-on-year and 19% quarter-on-quarter, respectively. Unsecured personal loans and credit card advances grew faster at 21% year-on-year and 97% year-on-year, respectively. MSME segment continues to remain a key growth driver for the bank.

The mid-corporate book grew 38% year-on-year and 10% quarter-on-quarter. The combined portfolio of mid-corporate SMEs and small businesses grew 32% year-on-year and now constitute 20% of the loan book, up 629 basis points in the last three years. corporate loans grew 22% — 24% year-on-year, 11% quarter-on-quarter. We have seen a healthy pickup in demand for corporate loans. Demand is seen across capital structure. And as One Axis, we are serving them through a range of products, working capital and term loans, bonds and equity. Importantly, this growth has come without any dilution of our risk. We have a reasonably good pipeline of transactions and are confident that the momentum will continue into financial year ’24. The third pillar in the — ensuring that the improvement of the — sorry, — and performance-driven culture was fostering a very mindset.

We are doing more, and this is reflected in multiple external recognitions we received this quarter and anyhow new possibly the most wholesale digital banking platform in India, continues to receive positive reviews from clients. During the quarter, the bank won the best BFSI customer experience a lot for new API banking suite and the best BFSI MSME suburb Board for Neo connected to Prestige has done in that set, BFSI and Fintech Summit 2023. also won the BFSI award for customer gain initiative of the year. We were ranked in the top 10 of the Kincentric best employees in India survey, and we have certified a great place to work for a second consecutive year. Business Today has recognized us as the top seven best companies to work for, owing to our employee-friendly policy. These accolades demonstrate the impact of investment we have made in people and reflect the positive cultural change in the bank, which we have seen over the last couple of years.

The second pillar for us is strengthening the core. Our balance sheet is strong with self-sustaining capital structure. Balance sheet resilient with our asset quality now amongst the best-in-class with net NPA of 0.39%, high coverage of 81% and standard asset coverage of 1.42%. We have net accreted CET1 capital, excluding the impact of exceptional items of 69 basis points in financial year ’23. We are building the next-generation technology architecture for wholesale/retail banking. I have spoken a bit about new already. Let me give some color on it. The outcomes in financial year ’23 demonstrated a strong product market fit with our API-led cash management and trade proposition finding good acceptance. Over 200 corporate clients are now experiencing the technology-driven working capital optimization benefits from Neo. Business outcomes have seen three times growth in transactions along with two times growth in throughput over last year.

During financial year ’24, we have a strong pipeline of demand for new — from our customers. We expect significant uptick in adoption and subsequent monetization of this platform. We have built the number one rated consumer banking digital app in the world. Simply put with Neo, we aspire to replicate that success in wholesale bank. We’re also building for the future. Our digital banking performance continues to be strong. I have spoken about the next wave of the capabilities that we are building in Axis Two. This is fully functional with over 20 products across liabilities, loans, investment products, insurance and forex accounting for up to 5% to 85% of incremental sales for these products. If you take a view of Axis two balance sheet during the year, we grew CASA balances by 92% year-on-year, retail TD inflows by 89% year-on-year and retail loans up by 53% year-over-year.

We have scaled our account aggregator linked business significantly through the year, and we also launched our Central Bank data currency offering. We continue to enter strategic partnerships to expand our presence in the digital space. Our bank-wide programs to build the distinctiveness, continue to gain strength on strength. Bharat banking engine is humming with disbursement growing by 37%, booked by 36% and deposits by 15% in financial year ’23. The distribution footprint has been expanded to 2,132 in Bharat banking branches, complemented by the 60,000-plus CSC agents across the country. We have launched several new initiatives to strengthen our proposition in these markets. Our digital co-lending platform has gone live with five more partners joining in. It will provide access to new customer segments and augment the PSL portfolio. We have launched an eKYC based CASA platform, enabling deepening of our liability products through partnership ecosystem.

Sparsh, our customer operation program is making an impact on our customer experience scores. We started the sparsh buildout from branches and wealth management segment of. And in the last 12 months, sparsh has taken to all our service touch points, all products payments and to the commercial banking group. This is a multiyear journey, and we will continue to invest here with the aim to cover the entire bank in this financial year. Our subsidies continue to create significant value. The One Axis approach continued to reflect the robust performance of our subsidiaries. The total financial year ’23 PAT of our domestic subsidiaries stood at INR1,304 crores. Having scaled up the business significantly in the last four years, we realigned and strengthened the leadership teams across our capital markets, facing subsidiaries during the quarter to drive our next phase of growth. On Citibank Consumer business integration, we closed the transaction on 1st March 2023 and has true transaction of business without any service disruption for customers. Early traction for Citibank customer base has been quite positive and that is reflected to deposits from this customer set, growing by 4% since 31st Jan 2023.

In the past two months, the senior management of the bank has engaged directly with several high-value customers who have acknowledged. We’ve seen this transition, continuation of highest levels of service and access to Axis Bank’s extensive network of branches and wide product portfolio under the One Axis umbrella. All the 1,600 corporates, for salary accounts have been contacted and set up in our systems. We are activating them for additional locations of Axis where Citi was to present. We have already started incremental onboarding on Axis Bank platform. There is strong interest from Citi service our corporates for our comprehensive product suite. All the Citi employees are now integrated into the Axis organization structure. We are excited to be part of the large Axis franchise and are looking forward to building new carriers in a fast-growing platform.

The business teams have started implementation of 20-plus synergy initiatives in this quarter, identified across business units as we look to drive revenue and cost benefits. In closing, in the last three years, we have strengthened our balance sheet and listed the key operating metrics significantly. We are well positioned to take advantage of the trends that are emerging in India, at China plus one MSC, the next-gen public infrastructure like account aggregator, OC and and Bharat being an engine of growth for India. We at Axis remain confident on the growth of our in the in economy. We remain watchful over consumer demand in the global macros, but we feel confident that our franchise will grow at 400 to 600 — 400 to 600 basis points faster than the industry in the medium to long term. We are working hard in building an all-weather institution that will stand the test of time. I’ll now request Puneet to take over.

Puneet Sharma — Chief Financial Officer

Thank you, Amitabh. Good evening, and thank you for joining us. We continue to make good progress on our endeavor to be a stronger, consistent and sustainable franchise. We delivered above our aspirational ROE of 18%, excluding exceptional items on a full year FY ’23 basis. We remain focused on strengthening our core businesses and ensuring our balance sheet is resident across cycles. Amitabh has discussed the business and transformation project. I will cover the salient features of the financial performance of the bank for FY ’23 and Q4 FY ’23, focusing on our operating performance, capital and liquidity position, growth across our deposit and loan franchise, asset quality, restructuring and positioning. The bank is the legal owner of Citi Bank India Consumer business effective March 1, 2023.

Hence, our reported numbers for FY ’23 and Q4 FY ’23 are not strictly comparable with the reflected prior period. Charged to the P&L aggregating INR12,490 crores, emanating from prudent accounting choices comprise, one, full amortization of intangibles and goodwill, which is equal to the purchase consideration payable on the acquisition of Citibank India Consumer business. Number two, the impact of policy harmonization on operating expenses and provisions. And number three, the stamp duty on acquisitions. These are nonrecurring and onetime and have been charged to the P&L in Q4 FY ’23 reported as exceptional items. Details are provided by way of Note five to the published AFR. I would also request you to please refer to Slide 19 of the investor presentation, which provides a comparative analysis of key performance parameters as reported with and without exceptional items. Additionally, Slide 89 of the investor presentation provides annual and sequential growth rates with and without Citi Bank India Consumer business for advances and deposits.

In FY ’23, our operating performance is strong across NIM, fee cost and credit line. For full FY ’23 on a reported basis, NIM stands at 4.02%, improving 55 basis points Y-o-Y. NII stands at INR42,946 crores or Y-o-Y growth of 30%. Fee stands at INR16,216 crores, Y-o-Y growth of 25%. Granularly fee at 93% of quarter three. Core operating performance stands at INR32,291 crores, Y-o-Y was 40%. Cost of assets at 2.25%, increasing eight basis points Y-o-Y.. Cost to income, excluding exceptional items, stands at 46.1%, improving 234 basis points Y-o-Y. Credit cost at 40 basis points declined 32 basis points Y-o-Y. PAT, excluding exceptional items, is INR21,933 crores, increasing 68% Y-o-Y. Net NPA at March ’23 was 0.39%, declining 34 basis points Y-o-Y. Gross NPA at March ’23 was 2%, declining 80 basis points Y-o-Y. PCR stands at 81%, improving 613 basis points Y-o-Y.

Our standard assets cover, which is all non-NPA provisions per standard assets, stands at 1.42%. All provisions standard on standard others by GNPA gives us a ratio of 145%, improving 13.29% on a Y-o-Y basis. Consolidated ROA, excluding exceptional items, at 1.82% improving 53 basis points Y-o-Y. Consolidated ROE 18.84%, above our aspiration ROE, improving 517 basis points Y-o-Y. The CAT accretion, net of organic consumption but excluding exceptional items, was 69 basis points. For Q4 FY ’23 are reported — on a reported basis, NII stood at INR11,742 crores, growing 33% Y-o-Y, 2% Q-on-Q. NIM for Q4 FY ’23 stood at 4.22%, growing 73 basis points Y-o-Y. NIM for the quarter was adversely impacted by six basis points as the bank maintained 13% higher average LCR in the current quarter as compared to the previous quarter and the same quarter previous year. Reported NII NIMs for the quarter also include interest on income tax refund aggregating INR85 crores, contributing three basis points to the net interest margin.

The previous quarter included a onetime interest recovery on restructuring of an existing NPA accounts aggregating INR149 crores contributing five basis points to the previous quarter’s NIM. As previously indicated, we saw an increase in deposit costs in Q4 FY ’23, and we expect deposit costs to increase further in Q1 FY ’24. We have a cushion of approximately 40 basis points over our guided structure cycle and our endeavor will be to retain as much as possible of the said cushion. We had clearly articulated the drivers of our NIM improvement journey. The progress against the key drivers in this quarter are as follows: improvement in balance sheet mix. Loans and investments comprised 86% of total assets at March ’23, improving to 42 basis points Y-o-Y. INR-denominated loans comprised 95% of total advances at March ’23, improving 340 basis points Y-o-Y.

Retail and CPG advances comprised 69% of total advances at March ’23, improving 150 basis points Y-o-Y. Low-yielding RAD responds declined by INR11,089 crores Y-o-Y. comprised 2.3% of our total assets at March ’23 compared to 3.5% at March ’22. We have PSL compliance across all subsegments and at a headline level for FY ’23. Composition of liabilities measured to average CASA ratio improved 66 basis points Y-o-Y. Quality of liability is measured by outflow rate improved 550 basis points Y-o-Y. We had strong fee performance for the quarter. Our fee income stood at INR4,673 crores, growing 24% Y-o-Y, 16% — 14% Q-on-Q. Total retail fee grew 31% Y-o-Y and 14% Q-on-Q, Fee on retail cards grew 50% Y-o-Y, 9% Q-on-Q. Fees from retail loans grew 22% Y-o-Y, 12% Q-on-Q. Fees on retail foreign exchange and remittances grew 25% Y-o-Y and 22% Q-on-Q.

Wholesale lending fees grew 27% Q-on-Q and treasury fee grew 25% Q-on-Q. Trading profit for the quarter stood at INR83 crores compared to a profit of INR428 crores in the previous quarter and INR231 crores for the same quarter last year. Operating expenses for the quarter stood at INR7,470 crores, growing 14% Y-o-Y, 9% sequentially. The Y-o-Y increase in rupee crore expenses can be attributed to the following reasons: 28% is linked to volume, 34% is technology and growth related, 16% is related to integration expenses and the balance 22% is. Technology and digital spend grew 27% Y-o-Y and constituted 8.7% of total operating expenses. Staff costs increased 15% Y-o-Y and declined 5% Q-on-Q.

We added 6,083 people from the same period last year, mainly to our growth businesses and technology teams. The decline in staff expenses in the quarter you have to be able to a true-up provision for variable pay previous quarter to the current year no longer required. We continue to hold social security code provisions aggregating to INR28 crores. Cost-to-income ratio, excluding exceptional items for Q4 is 45%, improving 553 basis points year-on-year. The sequential range in cost-to-income ratio can be attributed in the large part to lower trading income and incurring of integration expenses related to the acquisition in the month of March ’23. Operating expenses to average assets stood at 2.25%, higher by eight basis points Y-o-Y and one basis point sequentially. We remain committed to consciously investing in our focus segments. The lower credit cost over the past few quarters has provided some headroom to run operating costs at slightly elevated level.

The acquired Citi business is entirely which understandably runs at higher cost and higher. The Citi business is ROE-accretive post integration. The cost ratios will remain sticky till the Citi integration phase is over. This does not impede our ability to deliver our aspirational ROE. Operating profit for Q4 FY ’23 is INR9,168 crores, increasing 42% Y-o-Y. Core operating profit INR9,084 crores, growing 46% Y-o-Y, 3% quarter-on-quarter. Provisions and for the quarter were INR306 crores, declining 69% Y-o-Y, 79% Q-on-Q. The bank has not utilized any of its corporate provisions. During the quarter, this provision is entirely prudent. Annualized credit cost for Q4 FY ’23 is 22 basis points, declined 10 basis points Y-o-Y and 43 basis points Q-on-Q. Profit after tax, excluding exceptional items, INR6,625 crores, growing 61% Y-o-Y, 13% quarter-on-quarter.

Consolidated ROE annualized, excluding exceptional items of Q4, stood at 2.18%, including 64 basis points Y-o-Y, 18 basis points Q-o-Q. Subsidies contributed eight basis points in the quarter. Consolidated ROE annualized, excluding exceptional items for Q4 FY ’23, stood at 21.58%, improving 500 basis points Y-o-Y and 177 basis points Q-o-Q. Subsidies contribute 46 basis points to consolidated ROE. The cumulative non-NPA provisions at 31st March 2023, stand at INR11,928 crores, comprising COVID-19 provisions of INR5,012 crores, restructuring provisions of INR812 crores, which includes unsecured retail at 100% rates and the rest asset classes at first bucket NPA. Standard asset provision is higher than regulatory rates of INR2,276 crores, weak assets and other prevalence of INR3,828 crores. Our journey to be self-sufficient on capital is progressing well. The organic access business accreted 69 basis points of CET1 product cycle ’23.

We consumed 191 basis points for the Citi India Consumer business purchase transaction after accounting for purchase price harmonization and stand duty expenses. We have proposed a dividend of 50% or INR one per share, in line with the dividend rate declared in FY ’22. Our total capital adequacy, including profit but after proposed dividend for FY ’23, is 17.64%, and our CET1 ratio is 14.02%. The COVID provision translates to a capital cushion of 51 basis points over and above reported capital adequacy. Our LCR ratio for the quarter is 129%. That’s the average LCR ratio as compared to 116% in the previous quarter. stands at INR75,071 crores. The RW intensity for the bank on 31st March 2023 stands at 65%, improving by 75 basis points, i.e., the book has lower risk-weighted assets as compared to the previous quarter.

Amitabh has discussed the progress on customer acquisitions, growth in liability and grown franchise in his opening comments. I would request you to refer to Slides 33 and 34 for details around the quality of our liability franchise and flight on our loan franchise. Our CASA ratio on an NAV basis was 47%, improving 215 basis points Y-o-Y, 261 basis points Q-on-Q. Our loan book continues to be more granular and witnessed strong sequential growth. The loan book is well balanced with retail advances at 58%, corporate loans at 31% and CBG at 11%. 68% of our loans are floating rate, 42% of our fixed rate book matures in 12 months. The breakup of the floating rate loan booked by benchmark type and the pricing frequency is set out on Slide 25 of investor presentation. Moving to our retail book.

Retail advances grew 22% Y-o-Y and 14% sequentially. 78% of the book was secured, unsecured disbursal for the quarter constituted 20% of the total disbursement. Q4 FY ’23 retail disbursements for home loans grew 43% quarter-on-quarter, rural disbursements grew 56% quarter-on-quarter, small business banking disbursements grew 57% quarter-on-quarter, personal loan disbursements were up 20% quarter-on-quarter. Cards NPL portfolio grew 97% Y-o-Y and 21% Y-o-Y, respectively. The credit card spends for Q4 FY ’23 grew 57% Y-o-Y and 14% quarter-on-quarter. Wholesale banking. We are progressing well on our endeavor to build a profitable and sustainable corporate bank. Details of rating composition, incremental sanction quality is set out at Slide 49. The corporate loan book grew 14% Y-o-Y and 6% quarter-on-quarter.

The offshore wholesale advances are largely trade finance related and primarily driven by our branch. 96% of overseas standard corporate loan book is in branch is India link and 92% is A- — rated A- and above. The commercial banking book grew 23% Y-o-Y and 13% sequentially. The quality of the CBG franchise we are building and the strong relationship-led approach is reflected to our CBG current account balances on a basis growing 13% Y-o-Y. Overall fees from CBG increased 29% quarter-on-quarter. 86% of the CBG book is PSL compliant. Detailed performance of our subsidiaries are set out on Slides 76 to 82 of the investor presentation. The domestic subsidiaries reported a total annualized net profit INR1,304 crores, which translates into a return on investment for the bank at 50%.

Axis Finance delivered strong growth as the full-service customer-focused franchise, offering retail as well as wholesale banking solutions. In FY ’23, overall AUM grew 35% Y-o-Y. Retail book grew 67% Y-o-Y and now constitutes 41% of the total loans, up from 17% two years ago. PAT grew 30% on a Y-o-Y basis to INR475 crores, ROE at 17.9% and then healthy capital adequacy of 20.5%. Strong asset quality with net NPA of 0.36% a negligible restructuring. Axis AMC total investor days stood at 12.9 million. Its FY ’23 tax grew 16% Y-o-Y to INR415 crores. Axis capital PAT stood at INR142 crores. Axis Securities new client additions were up 28% Y-o-Y, booking revenues were up 9% Y-o-Y and PAT stood at INR203 crores. Asset quality restructuring and provisioning.

The slippage GNPA and NPA and PCR ratios for the bank and segmentally for retail, CPG and corporate are provided on Slide 69. Reported GNPA improved 36 basis points quarter-on-quarter, reported net NPA improved eight basis points quarter-on-quarter. Recoveries from written-off accounts for the quarter was INR823 crores. Reported net slippages in the quarter adjusted for recovery from written off accounts was negative INR147 crores, of which retail was INR807 crores, CBG 26 crores and wholesale a negative INR980 crores. Reported gross slippages for the quarter, including onetime day one impact of Citi India Consumer business was INR3,375 crores, lower 15% Y-o-Y and 11% quarter-on-quarter. Further, for the quarter, 35% of the reported gross slippages are attributed to linked accounts of borrowers, which are standard when classified or have been upgraded in the same quarter. Reported net slippages for the quarter were INR676 crores. Of this, retail was INR1,179 crores, CBD at INR112 crores. the wholesale bank at a negative INR615 crores.

Details of the pool and restructuring have been provided on Slide 19 of our investor presentation. Banks are required to report the digital banking segment as a subsegment within the existing retail banking segments from Q4. This disclosure includes the business and related income soft through digital banking units along with other products and services based on the definition of digital banking as stated by RBI in a circular. Axis 2.0, which we have previously discussed, is completely digital and not comparable to. To summarize, Axis Bank is progressing well to be a stronger consistent and sustainable franchise. Our franchise is strong, resilient and getting more sustainable, visible to organic access business CET1 accretion, excluding exceptional items of 69 basis points. COVID provision are 51 basis points of capital, overall coverage ratio of 145% of GNPA and limited COVID fee structuring of 22 basis points of our gross customer in.

Consistent delivery across our key initiatives and disciplined execution in our focus segments has resulted in a consolidated ROE for the quarter standing at 21.58%, improving 500 basis points Y-o-Y and 77 basis points Q-on-Q. We’ve delivered above our aspirational consolidated ROE target for the full year ’23. Our liability improvement journey is progressing well with our Q4 QAD and MAD CASA at 44% and 47%, respectively, improving 80 basis points and 215 basis points, respectively, on a Y-o-Y basis. The liability franchise is getting granular. Reduction in outflow risk gives us comfort that we’ve laid a strong foundation. Improvements planned over the next eight to nine quarters should deliver results with inter-quarter fluctuations which are normal for a business of our scale and size. While we are well placed in the current macro environment, we continue to closely monitor the geopolitical environment, including both domestic and international and liquidity risk and its impact on our cost of fund actual policy action and its impact on our business and client businesses. Thank you. We’ll be glad to take your questions now. will be questions now.

Questions and Answers:

Operator

[Operator Instructions] The first question is from the line of Mahrukh Adajania from Nuvama.

Mahrukh Adajania — Nuvama — Analyst

So my first question is that this would include one month of Citi’s income, right? I mean Citi’s P&L?

Puneet Sharma — Chief Financial Officer

Thank you, Mahrukh, for the question. Yes, it would include specific P&L for the month of March.

Mahrukh Adajania — Nuvama — Analyst

Okay. And my other two questions are, firstly, on operating. Basically, you’ve given a breakup in the notes to accounts of INR five billion for provisions and for opex on urbanization. That is part of the INR20 billion or INR15 billion Citi-related opex over two years that you had pointed out?

Puneet Sharma — Chief Financial Officer

No, Mahrukh. I think what we’ve given in the AFR Note five is the cumulative exceptional items of INR12,489 crores, of which, we have said operating expenses is INR129.33 crores and stamp duty cost is INR180 crores. This is transaction-related expenses. I had specifically called out in our communication previously that we will incur integration expenses of INR1,500 crores per tax over the next 18-month period. Therefore, the INR12,489 crores does not include integration expenses. Integration expenses are recurring and integration expenses are, therefore, sitting in the operating expense line on a reported basis this quarter.

Mahrukh Adajania — Nuvama — Analyst

Got it. And my last question is just out. So I know that you said that you’ll grow 400 to 600 basis points above the sector. But what’s your view on sector growth and deposit growth specific to your bank, right? And also how that translates into branch exchange? Because it — because the HDFC Bank is likely to set up many more branches, would you want to scale up your branch expansion given that deposits are getting tight in the system?

Amitabh Chaudhry — Managing Director and Chief Executive Officer

We don’t give guidance for next year. I think what we will consistently maintained through our analyst commentary has been that we are very confident that in the medium to long term, given the platform, given where we stand, we can grow 400 to 600 basis points faster than the industry. As far as the overall credit growth and the deposit growth is concerned, I think you have already seen that the credit growth has come off a little bit. Our projection for next year on the credit side is 12% to 13% and our deposit growth is expected to remain in the same zone as well it is today. So the numbers speak for themselves. This potentially is not sustainable over a long period of time that we have a deposit growth, which is lower than the credit growth. And as I said, we maintain the stance that we — we will be able to grow at a certain rate. Your second question was around…

Puneet Sharma — Chief Financial Officer

Branches.

Amitabh Chaudhry — Managing Director and Chief Executive Officer

Branches. Thanks a lot. As far as branches are concerned, I think we have maintained a pretty consistent stance that we believe that the combination of opening new branches, our mobile ap, which for us is the largest brand for us. The fact that we have these business correspondent relationships, the fact that we expanded our network is a way to reach our customers in different forms, in different ways, and we’ll continue to build on that strategy. We are, at this point in time, quite clear that we expect to add up to 500 branches this year. Obviously, we keep calibrating our thought process around it as the year will move on. We would obviously like to get them all the way as quickly as possible. We do not want to react to what others are doing. We want to do what we believe will be the right way to grow our business and grow our deposits and reach our customers in a particular way. And that’s what we’ll continue to as we go forward. But yes, is very important to look at what others are doing and keep calibrating our strategy on that basis, and we’ll continue to do that as we move forward. And there is a change in that strategy, we’ll obviously let you know.

Mahrukh Adajania — Nuvama — Analyst

Okay thank you.

Operator

The next question is from the line of Kunal Shah from Citigroup.

Kunal Shah — Citigroup — Analyst

Hi, thanks for taking the question. So my question was with respect to yields and on a calculated basis despite whatever you have mentioned with respect to increase in retail plus SME and maybe the lending profile, which we have. Still, there is not much of an increase on a quarter-on-quarter basis on yields. So one is in terms of the excess liquidity. But what could be the other reason for that, yes?

Puneet Sharma — Chief Financial Officer

Kunal, principally, what I said earlier — thank you for your question. What I clearly called out earlier for your consideration is there is a six basis point impact on net interest margins because of the 13% average LCR — higher average LCR maintained through the quarter. That effectively should explain any that you’re trying to work through.

Kunal Shah — Citigroup — Analyst

Okay. But ideally with this lending profile, in fact, the yield expansion should have been higher on a quarter-on-quarter basis, maybe 6% plus no improvement on a calculated basis. So that still seems to be suggest a slightly lower number, yes..

Puneet Sharma — Chief Financial Officer

So Kunal, I think — and instead of specifically getting into the competition you are running, my request would be for you to look at what we’ve disclosed on Slide 25 of our investor presentation. We’ve clearly said that our loan spreads have expanded by four basis points for our competition on an average basis. And overall, we feel comfortable with the low yields that we are currently running at for the we have.

Kunal Shah — Citigroup — Analyst

Okay. And any reason for running this excess LCR at 129% — maybe LCR at 129% in excess of at INR75,000 crores?

Amitabh Chaudhry — Managing Director and Chief Executive Officer

If you look at the historical LCR that we have maintained, it has been in the region of 116% to 121%. This quarter was 129%, so about 8% extra. was explained by the fact that we had to pay for Citibank acquisition of about INR12,000 crores, for which we were carrying excess liquidity. Partly, we had a much better outcome on low side depending on basis for the transaction banking-related flows that we received. So that resulted in a much higher balances and a much higher holdings and government bonds. So both of these have contributed towards this increase in the LCR of 129%. I think it will normalize over the next quarter.

Kunal Shah — Citigroup — Analyst

Okay. Okay. And last question is on write-offs being higher. So is there anything to do with the acquired Citi portfolio because NPAs are given separately, but any impact of Citi On write-off?

Puneet Sharma — Chief Financial Officer

Kunal, the entire city portfolio is retail led, and I have a rule-based policy of writing off retail loans that I have discussed with you previously. Given that the portfolio was just acquired a month ago, they would be limited to no impact of the Citi portfolio and trend.

Kunal Shah — Citigroup — Analyst

Okay. So INR2,400 crores is entirely Axis Bank standalone?

Puneet Sharma — Chief Financial Officer

Across all three segments.

Kunal Shah — Citigroup — Analyst

Okay, thank you.

Operator

Next question is from the line of Adarsh from CLSA.

Adarsh — CLSA — Analyst

Congrats. First is I just wanted to understand, as you get into ’24, your — you’ll have a full year of higher opex business costs coming in branch as well. And overall, the cost to asset of acquired Citi business would be more. So just wanted to understand, do you want to recalibrate your guidance of 2%? Or you think over a three, four-year period, you will get there?.

Puneet Sharma — Chief Financial Officer

Adarsh, thanks for the question. I think very fair. What I have tried to do is if you reference Slide 28 of the investor presentation that we put out. We’ve even a broad sense of what our cost of assets for quarter four, which is 2.25%. And then you see a dotted line, which is showing you a number of about 2.40%, this is post annualization of costs booked for one month. That should be a fair indication of the annualized impact across integration expenses and cumulative book taken out. To the second part of your question, yes, we have a guidance out there which said we would expect to get to around 2% by FY ’25. We will work hard towards normalizing the number, but very clearly, the Citi business is entirely a retail business. Retail business is done at higher cost ratios. And therefore, there should be a recalibration in all our to where the like that. That’s broadly what — that’s probably how I would respond to your question. We’ve also said that against FY ’25 exit, we’re saying in the medium term, we stay committed to getting to the 2% cost to assets. It might be slightly later, but that commitment.

Adarsh — CLSA — Analyst

And can you just clarifying the 2.4% number includes both the running cost, which is a higher opex business and the one-off integration costs, does that include both or that only runs — includes the running costs?.

Puneet Sharma — Chief Financial Officer

So it includes both cases, the best estimate that we have currently.

Adarsh — CLSA — Analyst

Got it. And second thing is on margins. Let’s say, we are at 420-ish with some liquidity buffer. So — and we get into the next two, four quarters where cost of fund will catch up with yields, which had moved up earlier. So just wanted to understand we had earlier indicated a margin bank. We had some fundamental improvement in our business also. So what’s your comfort zone on margin looking like if I look — if I want to look 12 months out?

Puneet Sharma — Chief Financial Officer

I think we stick by the fact that we don’t guide what absolute margins are. But let me present a framework, let me help think through the issue. FY ’23 full year, we’ve called out is 4.02%. We started on a low number. We ended on a higher number. We report on a quarterly basis, the numbers exist. Our quarter four annualized is 4.22%. What we have — and at a full year FY ’23 NIM of 4.42%, I have delivered an ROE of 18.83% on a full year basis. I go back to what I have consistently said. We have a 40 basis point cushion over the structural in guidance that we have. We will continue to work on the five initiatives that I have spoken to you about on improving our net interest margin. Yes, there will be a lag effect of deposit cost increase. We will maintain our endeavor to maintain as much as the cushion that we have built for a sustainable period. We do not guide a specific outlook for 12-month margins…

Amitabh Chaudhry — Managing Director and Chief Executive Officer

So Adarsh, just to what Puneet said, and he has said it, but I just want to size it. We worked very hard to get here. And our endeavor, as Puneet said, would be to ensure that we continue to maintain as much of the cushion as possible. You know all the factors which are working against us. Puneet has talked about the five kind of initiatives or potential ways and means we have to mitigate some of the rising cost of deposits. We also have the added benefit of the extra LCR, which we are carrying. Again, we’d not like to guide it, but please understand and appreciate that the endeavor of the management team is to remain as we as a own as possible. But we know some things are working against us very clearly.

Adarsh — CLSA — Analyst

Got it. This is helpful. Thanks.

Operator

The next question is from the line of Abhishek from HSBC..

Abhishek — HSBC — Analyst

So just a question on — so in the Analyst Day back in November, I think you had shown a slide where you had shown a movement of lendable deposits versus nonlendable deposits. And the lendable deposits had gone up, I think, 10% in the first half, down about 17-odd percent. Can you give an update on how that has trended? Ideally, it would have improved further the mix?.

Puneet Sharma — Chief Financial Officer

Abhishek, thanks for the question. The one way — the other way to look at the same data point is the reduction in outflow rate. As Amitabh called out in his opening remarks, our outflow rates on a basis and reported basis, are down by about 550 basis points. So if we had an outflow rate of 25%, 26%, our rates in the 21%, 22% range now. That itself shows you the improvement in the quality of the deposits. As outflow rates declined, lendable deposits by implication increase.

Abhishek — HSBC — Analyst

Right. No, that’s useful. Another thing is on the yield side, again, I have to come back to that. But if you look at just the advances. Is there any particular sector where it has become increasingly difficult to pass on yields because your loan mix has moved favorably in the last four to five quarters due to all the efforts that you’ve taken, but the yield is not reflecting a commensurate increase. So is there any sector where you’re mining it difficult to pass on the rates or any comment there would be?

Amitabh Chaudhry — Managing Director and Chief Executive Officer

No. So firstly, I’m a bit surprising comment that there is no commensurate increase in yield. I mean we have worked very hard to increase our NIMs, which have moved from 3.4% to 4.2%, partly obviously four of the reasons I’ve been able to do is we’ve been able to increase our yields. And that is. In our case, it has happened faster and comparing the because we push through some of these changes faster. So it can’t be timed exactly as maybe someone you might be comparing us to. As far as generally, that the overall business is concerned, we don’t give some guidance on where the yields are falling, where the yields are up. But if you check the market, you know that on the wholesale side, the pricing has been up for quite some time, it’s open up a little bit now. Mortgage, every bank, every NBFC seems to be going after that segment. The pricing has always been tight there.

And as far as some of the other sectors are concerned, depending on which bank wants to drive growth in which quarter. So you do sometimes completion intensity, which is more than what we anticipated. That happened with the market all the time. But we are on according to attract. We have a certain strategy. We, as I just mentioned in the answer to the previous question, one would like to ensure that we remain at a certain level, and we’ll be very disciplined about maintaining some of those matrices at those levels because we worked very hard over the last six to eight quarters to get them there. And as I said, we believe the platform which allows us to maintain the met those levels. I’m not giving you a very special answer, but I think you need to understand the sense of what we can do in Axis Bank.

Abhishek — HSBC — Analyst

Sure, sure, sure. And just one quick question on fee growth. The sequential movements have been very strong. How much of that is durable? And how much would you attribute to a, let’s say, year-end effect, typically March would have a bunched-off effect?

Amitabh Chaudhry — Managing Director and Chief Executive Officer

Everything we are doing in Axis is to trying to build a granular business. Nothing is being driven one-off, onetime or pushing it towards end of the quarter or end of the month. Yes, you can have some transactions, some things which worked out and you had a little bit of a start. But otherwise, please understand and appreciate. The entire drive over the last 3.5, four years is to get everything granular so that we can repeat our numbers quarter-on-quarter on a predictable basis. As I said, we are towards the end of my remarks that we are trying to build an all-weather institutions that will stand the best of time by doing this one other thing, you don’t clear institution of the nature. So long answer, but please assume things are annual.

Abhishek — HSBC — Analyst

Sure sure, thank you so much.

Operator

Next question is from the line of Saurabh from JPMorgan.

Saurabh — JPMorgan — Analyst

So just three questions. One is just on the sustainability of the credit cost. So if you look at your recovery upgrade momentum is very high — so how would you..

Operator

Saurabh, sorry to interrupt you, we lost your audience between. [Operator Instructions]

Saurabh — JPMorgan — Analyst

Is better now? Okay. So just firstly, on the sustainability of the spare costs. So recovery of grade momentum is quite high this year. How should we think about it going into next year? Would we expect this momentum to start moderating? How you think about your price cost or net share? The second is, can you help us one month tee-up and profit of the portfolio? And lastly, in terms of Axis Finance, the growth is very high deliver the retail business of a low base. What kind of customer segments or retail business as we gone back?

Amitabh Chaudhry — Managing Director and Chief Executive Officer

So as far as Axis — let me answer the Axis Finance growth question first. I think yes, Axis Finance has been trying to grow the retail side of the business quite actively. They are into lag. They are into business loans, and I think they have built a niche for themselves based on some of the technology and the kind of customer end-to-end solutions they have developed. The portfolio quality is pristine at this point in time. They’ve also developed what they call emerging market business, which is more the SME side of things. Their overall wholesale business continues to do well. Axis Finance has also sold a pretty decent portfolio through the year because they were getting very good rates, and that is also reflected in the P&L. We are quite positive about how that business is being built. And obviously, Axis Bank is very, very supportive of what they’re trying to do. They intend to continue to expand the franchise as we move forward. Actually, they just completed 10 years and is one of the fastest-growing NBFCs if you look at in terms of the growth and profitability in our 10-year history. So we are very, very happy with what they have achieved.

Saurabh — JPMorgan — Analyst

On the credit?

Amitabh Chaudhry — Managing Director and Chief Executive Officer

Yes. On the credit cost side, before Puneet kind of jump in, I would like to make one quick statement, but please understand and appreciate that we’ve pivoted to better asset quality. I think our numbers are reflecting better asset quality. So first is that we need — somewhere, we need to be start getting rewarded for the fact that the asset quality has moved so well. So the credit costs have gone down. And I understand if the question that this current level of credit cost is not sustainable. I would also like you to appreciate that this pivoting which has happened in such a significant amount for Axis Bank will, over a period of time, hopefully reflect consistent lower credit cost in comparison to competition out there because that’s exactly what we have done. Puneet?

Puneet Sharma — Chief Financial Officer

No, fully agree. Saurabh, thanks for the question. Broadly, the upgrade and recoveries are reflective on the net credit cost number. But if you even look at where our gross credit costs are that we show you a data point, which is over 15 years, and we show you every quarter. The gross credit cost itself has improved meaningfully, which is the point Amitabh was making that the underwriting strength of the has clearly improved. The last question that you had was Citi peak for one month. We are operating City India Consumer business and Axis Bank as one bank. And therefore, we will report as such. We don’t intend to report Citi independently basis. So that’s the number. Okay. Thank you.

Operator

Next question is from the line of Hardik Shah from Goldman Sachs.

Hardik Shah — Goldman Sachs — Analyst

Good evening. Yes. Just circling back to the yields point to Amitabh, what you said the delta that you’ve seen may have been ahead of others. But as…

Amitabh Chaudhry — Managing Director and Chief Executive Officer

Rahul, can you speak a bit louder?

Hardik Shah — Goldman Sachs — Analyst

Yes. Is this any better?

Amitabh Chaudhry — Managing Director and Chief Executive Officer

Just speak loudly, a little bit loudly.

Hardik Shah — Goldman Sachs — Analyst

Is it better?

Amitabh Chaudhry — Managing Director and Chief Executive Officer

Yes, perfect. Yes.

Hardik Shah — Goldman Sachs — Analyst

Okay. So I was just circling back to the yields point. So Amitabh, you said you’ve got the delta maybe slightly ahead of what others may have got. So keeping in mind the loan book mix that we’ve got, which has MCLR and even some of the fixed trade portfolio as that is getting repriced at a higher rates. But do you reckon that despite all of it, we have now started reversing the yields, I mean, are we going back on this page on the cycle, given whatever the competition that you talked about? Or we still have some room available to kind of maintain or too this number?

Amitabh Chaudhry — Managing Director and Chief Executive Officer

Okay, let me first start by saying we don’t give any guidance. On one side…

Hardik Shah — Goldman Sachs — Analyst

No, no, it’s not about — I’m just trying to understand the…

Amitabh Chaudhry — Managing Director and Chief Executive Officer

Yes. Yes. I’ll try to answer. I’m not — present. On one side, we have factors, which are working against us, including repricing of deposits and slow deposit growth. On the other side, as Puneet has always mentioned that we have five factors at play where there is still some scope left to continue to push for improving our overall wins. Over and above that, if you look at within retail and wholesale, the growth, for example, if you combine the mid-corporate, the, what we call, the CBG and the business banking segment that continues to have seen a pretty meaningful increase in overall share in the — our overall earning assets. So there is also a kind of a product mix factor at play. We are — while not giving a guidance, we have stated quite vociferously that our intention is to try very hard to be in the zone where we are.

Obviously, some factors could play up and result in some of the numbers going here and there. But our intention is to stay there. So while not giving a guidance, we are trying to say that we have factors working on both the sides. Let’s see where we end up And we are — we’ll continue to drive hard to ensure that reflect all the hard work we have done. We also had by the fact that in the last quarter, our LCR has gone up and there is some play there also.

Hardik Shah — Goldman Sachs — Analyst

Understood. That’s helpful, Amitabh. The other question was on — just trying to understand the growth trajectory now that the integration may be going on full swing. How should we think about how the growth will look like over the next couple of quarters? When do we expect some delta to start reflecting from the Citi customers in the portfolios where they are significant?

Amitabh Chaudhry — Managing Director and Chief Executive Officer

So we have taken it over as of March one. That’s when we really got an idea of the — we did not have any data before that, we’ve got an idea of the customers. As we said, the senior management team has been visiting some of these customers and getting a sense for the policies out there are. We have also mentioned that we saw 60-plus synergy initiatives, which could be undertaken by Axis to the combination. I also mentioned that 20-plus synergy initiatives are already in play in the first quarter and the synergy benefits are obviously around three things. They are around deposits, they are around revenues and expenses. So these things will play out through the year and beyond because we also, please understand, appreciate going through the transition to LD2 when other systems, all the cards, all every technology and onboarded under the access platform. So while changing the wheels of the car, we are obviously pushing through the synergy benefit. There’s a separate team that is working on it. There is a team senior management people who are in charge of ensuring that the synergy benefits are delivered. So if you are expecting uplift, you should start expecting uplift coming through from the second quarter onwards. We’re not guiding on what the ruble would be. But I’m just telling you that the work is going on as we speak.

Hardik Shah — Goldman Sachs — Analyst

Got it. Just final question maybe to Puneet. On the cost side due to integration, the only thing now that is left is or rather the merger cost, the only thing that is now left is the integration cost, right, which is INR1,500 crores over the next 18 months that you have alluded to a couple of times..

Puneet Sharma — Chief Financial Officer

Yes, Rahul, onetime costs with respect to have been dealt with. The INR1,500 crores is post tax, and we incurred over in 18 months. That’s…

Hardik Shah — Goldman Sachs — Analyst

Very helpful, thank you so much.

Operator

Next question is from the line of M.B. Mahesh from Kotak Securities.

M.B. Mahesh — Kotak Securities — Analyst

I mean, sorry, I do have to have a similar question on the yield side. Post the acquisition of Citi, when we look at the next couple of quarters, is the housing is reflecting the book at which you are carrying today and also for the credit card book and also on the deposit side.

Puneet Sharma — Chief Financial Officer

Mahes, thanks for the question. I didn’t fully catch it. Could you just help me with that question again, please?

M.B. Mahesh — Kotak Securities — Analyst

I guess we just don’t know at what yields where the portfolio acquired it. And when you compare that book with your — is there room for an implement or would you see some pain as we go forward on the — when you look at the overall portfolio, both from a housing yield side, the kind of credit card book that they are carrying as well as term deposit and the savings account rate that they were enjoying.

Puneet Sharma — Chief Financial Officer

Understood, Mahesh. Thanks for clarifying. Just to set context, the total Citi asset book that came over was approximately INR29,000 crores, that’s about 3.5% of the total assets at Axis level. off that book on a pro forma distal basis that we did in January, INR9,000-odd crores was credit cards and the balance was mortgages, Autos CDC. So first and foremost, on a cumulative number basis, will this move the yield insofar as the noncards business is on Axis booking? No. On a disbursement yield basis, I have said, we’ve decided to operate as one franchise, and therefore, disbursement yields should be consistent. We don’t want to have internal competition vis-a-vis the customer. On credit cards, the Citi franchise, obviously, was a superior franchise in terms of both spend on cards and that we hope we will continue to.

M.B. Mahesh — Kotak Securities — Analyst

Okay. Okay. I’ll take this question offline again. But the second question, Amitabh, you had kind of indicated there is a potential slowdown that you’re seeing on growth side. Any possible reason for calling it out this early? Is there a demand slowdown that you’re seeing? Or is there any kind of risk that you’re seeing out there that you’re worried of?

Amitabh Chaudhry — Managing Director and Chief Executive Officer

Mahesh, I think the narrative on what is going to happen in the world has changed every one month. My reference with — I think the comment you’re referring to was at a time when people were talking about rapid increase in interest rates globally because of what had been happening. After that, obviously, and this was going to the banking license. I think things have improved a little bit, though, again, we don’t know. You know what is going on in the U.S. as we speak. I think the more the macro remains volatile and in a volatile environment to say everything is going to be things are going to all look up and nothing else can happen, I think it would be a full hard on our part. So what we’re really saying is, on one side, we have a platform we can capitalize all the policy that comes our way, and we will grow at a certain rate above the industry.

But at the same time, it is very, very important for us to be cognizant of some of the risks out there, which could play out and to reunite all those risks as and when they emerge and to be able to change our path, our way to ensure that we don’t get hit by unexpected risks and unexpected losses as the return the other way. I’m not expecting Indian economy to go south. I’m just saying that if things were to slow down, if interest rates are lever to rise, we could have potentially a problem in terms of how risk to play out. So the comment was set in that context. I think it has somehow been taken to mean that I’m saying that there will be a slowdown. We’re not seeing a slowdown. I think our numbers in this quarter very clearly reflect that the growth in all our asset classes have done extremely well. Even on the deposit side, I think we can quite well to some of our peer banks, and we will continue to strive for it. But macro remains volatile, and we are very. That’s what I mean.

M.B. Mahesh — Kotak Securities — Analyst

Perfect, thanks. That’s understandable.

Operator

The next question is from the line of Sumeet from Morgan Stanley.

Sumeet — Morgan Stanley — Analyst

Am I audible?

Operator

Your voice is breaking. [Operator Instructions] The next question is from the line of Jai Mundhra from ICICI Securities.

Jai Mundhra — ICICI Securities — Analyst

Good afternoon and good evening sir. Yes, and thanks for the additional disclosure. I had a question on loan growth. So while I understand that we don’t give guidance, and we have the stated aim of growing 400 to 600 basis points ahead of the industry. For FY ’23, if I exclude Citi, then we are very close to the industry. And this year, probably we had one of the best tailwinds for NIMs. So I wanted to check as to what were the two, three key constraints, which limited our loan growth to similar to industry level? And to what extent you think they have been addressed?

Amitabh Chaudhry — Managing Director and Chief Executive Officer

So if you look at our numbers for the year, and I’ll ask Puneet to supplement, our growth rate on the wholesale side was quite muted for the first three quarters because very calibrated will be realized, we’re not getting the kind of pricing which we want. And we did not want to participate for the sake of participating in whatever transactions which we are coming our way. And we’ve been stating that consistently in the first three quarters. And we saw the pricing kind of opening up. You saw that in the third quarter, we showed some growth in the wholesale side and the fourth quarter has shown even more healthy growth. So for the — a large part of our book did not grow that much in the first two quarters and muted growth in the third quarter. Similarly, on the mortgage side, you would see that we have been quite cautious in the first couple of quarters because it’s the same reason. We saw intense competition.

We saw people were cutting prices. And again, we were quite cautious in terms of just going out there and offering loans at a certain rate, it did not make sense to us. As things have stabilized, I think we have demonstrated very clearly in this quarter that we can grow faster than the industry. As we’ve always said, you can’t deliver 400 to 600 every year or in the medium to long-term basis, we believe that, that’s the kind of growth we can demonstrate over a certain period of time. And that’s the growth very confident we can deliver as we continue to move forward because we have the platform, we have the reach. We are digitizing extremely fast. We are seeing the impact of our products in the marketplace. We have gained market share across various asset classes. And that’s where the confidence comes from. So that’s in nutshell kind of a long-winded answer to your question.

Jai Mundhra — ICICI Securities — Analyst

Sure. And the last — second and last question. Sir, if you can talk about the pricing in your fixed rate book, right? So over the last 12 months, repo rate and EVNR-linked products would have seen a 250 basis point upward revision. And I think NCLR-linked book would have also seen a 150-plus kind of upward revision. What kind of upward revision in the yield would have happened for fixed rate book? And what kind of scope do you see going ahead? Because it looks like that you are now more confident on growing the unsecured book. So I wanted to understand the scope. I mean so far, what has been the yield price in the fixed rate book? And how should one look at the yield on this particular book?.

Puneet Sharma — Chief Financial Officer

Jai, thanks for the question. I respond to it in part in part, obviously, we don’t disclose which is what is the yield on fixed rate book. The part that was requested to consider is something I said earlier in the conversation. 42% of fixed rate book matures in the next 12 months. That should give you comfort that if there is an uptick, it will get captured in market space. We are very confident that we are not underpricing ourselves the competition. Therefore, book yield should get captured.

Jai Mundhra — ICICI Securities — Analyst

Right, sir. Okay. So if you can specify, sir, a fair range or maybe a broad range within which the fixed rate book would have repriced at least on incremental. Just to understand that is this 40% book gets repriced and what kind of an impact one could see if possible?

Puneet Sharma — Chief Financial Officer

Yes, I’m sorry. We don’t put that number outside. I actually wouldn’t respond to that.

Operator

[Operator Instructions] Next question is from the line of Anand Dama from Emkay Global.

Anand Dama — Emkay Global — Analyst

Thank you for the opportunity. So when we look at our SMA book that growing at a pretty faster pace. This quarter, we have grown almost about 13% quarter-on-quarter. So one, what is the lasing the growth, which are the segments where we are going? And have we issue the yield on this portfolio in line with the increase in the reference?

Puneet Sharma — Chief Financial Officer

So point one is that growth in this segment over the last 18 to 24 months has been strong and continuously so. The portfolio is very well diversified across sectors and geographically. We also managed from a risk perspective, the ticket prices that we do on a per company per corporate basis within this space. And the yields, as far as the yields are concerned, this book is linked to repo. So therefore, the impact of higher rates as the repo rates increases have been passed on.

Anand Dama — Emkay Global — Analyst

So we have part for the rate hikes or like there has been some back and forth in the customer comes back and basically review rate. Or there is competition as well, which basically leads to some kind of cutoff in the?

Puneet Sharma — Chief Financial Officer

They’ve been fully passed on.

Anand Dama — Emkay Global — Analyst

Sir, secondly the question is to Amitabh, particularly on the corporate growth front. So as you said that last year, there are some issues in terms of corporate but how do you see the corporate trade you’re picking up this year? Can you provide some of?

Puneet Sharma — Chief Financial Officer

So we are seeing demand on the corporate side across multiple sectors in the — for example, in iron and steel, commercial real estate, infra roads, and NBFCs. So demand is quite robust at this point in time. We are also seeing a reasonably strong uptick in terms of private capex. However, not all private capex is being funded by bank loans, given the fact that corporate cash flows continue to remain strong. And corporates have delevered, they are using their own balance sheet to fund capex as well. So demand is — continues to be strong and across multiple sectors.

Operator

[Operator Instructions] Ladies and gentlemen, we will take that as the last question. I will now hand the conference over to Mr. Puneet Sharma for closing comments.

Puneet Sharma — Chief Financial Officer

Thank you, Nirav. Thank you, everyone, for taking the time to speak with us this evening. If there are any questions that we have not been able to take or clarify, we would be happy to engage with you and take them subsequently. Have a good evening. Stay safe. Thank you.

Operator

[Operator Closing Remarks]