IDBI Bank (NSE:IDBI) Q3 FY22 Earnings Concall dated Jan. 21, 2022
Corporate Participants:
Rakesh Sharma — Managing Director
Pothukuchi Sitaram — Executive Director, Chief Financial Officer
Joseph Jebaraj — Deputy Managing Director
Suresh Khatanhar — Deputy Managing Director
Analysts:
Renish Patel — ICICI Securities — Analyst
Bunty Chawla — IDBI Capital — Analyst
Pranav Tendulkar — Rare Enterprises — Analyst
Unidentified Participant — — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to the IDBI Bank Q3 FY ’22 Earnings Conference Call, hosted by ICICI Securities Limited. [Operator Instructions].
I now hand the conference over to Renish from ICICI Securities. Thank you, and over to you, sir.
Renish Patel — ICICI Securities — Analyst
Hi. Thank you, Aman. Hello and good evening, everyone and welcome to the IDBI Bank Q3 FY ’22 earning conference call. From the management team we have with us today Mr. Rakesh Sharma, MD and CEO; Mr. Samuel Joseph, Deputy Managing Director; Mr. Suresh Khatanhar, Deputy Managing Director and Mr. P Sitaram, ED and CFO. We’ll start with the opening remarks and then we’ll open the floor for Q&A. I would like to thank the management team for giving us the opportunity to host the Q3 FY ’22 earnings call.
I will now hand over the call to Mr. Rakesh Sharma for the opening remarks. Over to you, sir.
Rakesh Sharma — Managing Director
Thank you very much and good evening, ladies and gentlemen and hearty welcome to this analyst meet for the Q3 results, yet one more quarter when we are having virtual meeting. It’s my pleasure to present to you the number for Q3. The Bank has shown consistently in growth and improvement in the financial despite challenging position created by COVID-19. The performance has been better than the guidance given at the beginning of the year and we are quite confident of improving the performance further.
So just few highlights I will mention to you and then after that I will hand it it over to Mr. Sitaram, our CFO for making the presentation. The bank had earned a profit of INR578 crore, which shows 53% increase Y-o-Y and there has been 31% increase in net interest income. Of course, there has been some extraordinary INR353 crore of income by way of income tax refund. Even if we exclude that, there has been a 11.6% Y-o-Y growth in income. And the net interest margin also has increased to 3.88% and after excluding that income tax refund, it will be 3.31%. CASA is 54.71% and CASA growth has been 11%. And NPAs — the assets are quite stable. Net NPA was 1.70, marginally lower than the previous quarter, which was — when it was 1.71.
The capital adequacy has been quite robust and the collection efficiency has been 96%. Despite this COVID situation, we have been able to affect reasonably good recovery of INR900 crores. And also we have been able to maintain our collection efficiency at the 96%. In fact, there is improvement and the SMA numbers have declined as compared to September quarter.
Now the area which little bit remains is the growth part. Of course, there has been growth in our structured retail asset by 4% Y-o-Y and retail portfolio when we include retail, agriculture and MSME, there has been 5% growth. And of course, we are targeting 8% to 10% growth. Let us hope because this COVID has slightly affected the growth part. And secondly, like the whatever the some partly the growth has gone towards the NCDs because some of our good clients they are availing the facilities of NCD, so which is passed in treasury. And so that’s why this growth appears to be muted here.
After 4 years of our that PCA period and now after one year of that, first time we have shown 12% growth in our mid corporate advances and this mid corporate advances was our focus area also. Now the way we have strengthened our this sanctioning teams, we are quite confident that going forward we will be able to show reasonably, good very calibrated growth in advances, which will ensure the good quality assets.
Just to mention two, three things about the guidance which we had given. So I had indicated that our slippage ratio will be less than 3%. I can mention that you know at the end of the 9 months, it is 2.80%. Similarly, credit cost which we had promised up to 1.75 it is finalized, it is 1.60 and cost to income ratio for the 9 month period is 43.59%. So that way whatever we had promised and the [Technical Issue] including ROE and ROA, we have been able to surpass the numbers and show better improvement.
So that’s why going forward, I am quite confident that next year also we will be able to show better improvement. Of course, the guidance for next year will be given to you at the presentation of Q4 results.
Now with that, I will request Mr. Sitaram, CFO to make presentation and after that we can take question answers. Thank you very much. Thanks for being present here. Yeah, Mr. Sitaram, over to — Sitaram, over to you.
Pothukuchi Sitaram — Executive Director, Chief Financial Officer
Good afternoon to all of you. Now the MD has covered most of the high spot, so I will not spend too much time on this. If we go to the presentation slide to 5, Page 5 although the operating highlights. Most of it has already been covered by MD. We want to say two more things that CASA ratio is maintained, slightly improved to 54.69%. Cost to income for the 9 months is 43.59% and overall the retail corporate ratio is at 63.37, which is also almost the same as in the — from September.
So we have been able to maintain all this and including a PCR of 97% including technical layers knock in. If we go to the next slide, this is what just briefly the PAT has grown 53% year-on-year and 2% quarter-on-quarter. Overall operating profit has also gone up by 31% quarter-on-quarter and NII has grown by almost 30% quarter-on-quarter or year-on-year. Overall, the NIM therefore has improved, as MD mentioned, even if we take out that interest on refund of income tax still, we are well above 3% as far as NIM is concerned. The cost income ratio is below 45 — 43.5.
I’ll quickly go to the next slide, here we are saying that the net NPA like this quarter we had slippages, one is from the divergence which we disclosed in part of the stock exchange exclusive after receiving the report, plus we had one bigger corporate case and some retail cases. Despite the slippages, we have maintained net NPA at 1.7% as compared to the same ratio in September. And GNPA has also slightly come down on the back of the technical write-off that we have done of about INR1150 crore. Yeah, the capital is of course quite comfortable. I’ll now go to Slide 9. This is the breakup of the P&L. As we can see the first feature is of course what is a declining market rate, both the interest income, as well as the interest cost both are trended down, but we have been able to maintain an improvement in the NII and this improvement in NII again we repeat that though there is this attributed INR3 crores of interest on refund of income tax, even excludes that, that we had still at a good improvement over the corresponding period, I can give you the figure as we later go on.
Now the other income said out at the last quarter meeting, I had said that the recovery from write-off cases is now to be classified under provisions and contingencies and we have presented like that. But after that, RBI has again amended its master circular, so now that line item has come back to other income. We regrouped even the previous year figure also in that. So overall, other income has shown an improvement, one reason was that in the Q3 of last year we had a sale from the gain from sale of strategic investment that, of course, there is no repeat here, but we have certain amount of recovery from written-off cases. But if we exclude these one-off also, there is an improvement in the other income overall.
Then coming to the Opex, we have seen some amount of uptick in the Opex broadly under the employee cost. The increase is because that we have enhanced the family pension rate in line with the industry what other banks have already done. Then there is also the subscription to NPAs have been enhanced. So we have taken a — not only the period cost also there from the effective date to now the accumulated cost also, therefore there is a level amount of one-off there. And let’s say in the other — in the employee cost, valuation of the retirement benefit some amount of provision has come from that.
Plus in the other operating cost, it is a small increase, mainly because of the increasing level of operations that we come out of PCA and certain other marginal item, there is no major costs for this increase in other operating costs. Then coming to the operating profit, there is a increase of about 42% year-on-year. And operating profit if we remove that strategic gain sale, then we have shown an improvement of about 58%.
Provisions and contingencies we’ll come to it in a little more detail later. Overall, the profit PBT as we already discussed there is a improvement of 42% and PAT has improved by almost [Technical Issues]. Interest income, as I mentioned, there is a breakup advances income has gone up. We also have the improvement in other interest income that’s where the interest on refund of income tax is included and others all the income trends are in the same way that they have been trending in the previous part of the year. NIM has improved now to [Indecipherable] 65% [Phonetic]. Now with that, of course, this next slide Page 11, it shows the build up of how this percentage improvements are being contributed from various segment. It is quite contributed here. So I will move on to the next slide, this is the provisions and contingencies and spend couple of minutes on this, first is on the depreciation of investment, again there is nothing unusual or big here, these are normal momentum provisions.
The provision for the NPAs we have provided for this calendar provision and also we have provided for the divergence that has been identified in the report, plus that the slippages during the quarter. The provision for standard asset, again there is a negative here. The negative is because the one case that we have provided earlier that has moved to NPA now as part of divergence. Therefore, that — interest provision for restructured asset, we have to implement all the provision as far as the COVID restructuring is concerned and that is reflected in the quarter as well as 9 months.
Overall, therefore the income, of course, there is no current tax, it’s all the deferred tax as we used carryforward losses for setting of the current-year profit. We have done a technical write-off about INR1150 that’s part of the bad debt written-off besides the normal settlement and OTA’s that we do that is about INR230 crores which is there.
So this is the breakup of the provisions for the year. If we come to the next slide, these are the yield ratio. Overall, the yield on advances — in line with the market open, we are — this is daily average, but in line with the movement in interest rate or on the yield on advances have come down, but we have been able to maintain the similar control on the cost of deposit. So overall the NIM has improved to 3.65.And the cost to income has been now remained steady at about 43%. So this is the — the next slide shows the cost of deposit, which I just now mentioned that along with the movement in the yield on advances, we are — the cost of deposits and the cost of funds have trended now.
If we come to slide number 16, this is the balance sheet position, nothing special to mention here, so we’ll go on to the next slide is slide 17. Overall deposit position has come down, but this deposit has come down mainly because we have dropped bulk deposit. We have increased the CASA both in numeric terms, as well as in terms of percentage and within CASA also, the share of savings has increased.
So the deposit mix has moved to a more favorable composition over the quarter and as well as compared to the December of last year and this is also one of the factor why the NIM has improved and the cost of deposit and the cost of funds have come down.
The next slide shows movement in the individual components of the deposits. I have already mentioned this in the highlight, I will not repeat that. Coming to the advances part, on the composition of advances, there is a growth albeit in the single-digit both in retail as well as corporate. Overall, the composition of the advances and the structure of the advances book has more or less remained stable as compared to September.
Now coming to the next slide which is the PSL. PSL we are comfortable, we have turned down the [Technical Issues]. Now moving on to the investments, which is in slide 22. Again, there is nothing much to mention here, the movement in the SLR as compared to the December of last year, as well as September is mainly because that in Q1 and Q2 we have divested some amount of the SLR.
The non-SLR, there is a slight increase because we have been lending to corporate now that also through the NCD route and that corporate NCD book is reflecting in some increase in the non-SLR. Then we come to the slide on the COVID provisioning, this is the provisioning which we have been letting to you every time.
So we have fully provided for how restructuring is done up to December, plus we also have those excellent provisions made which we have not yet taken, actually we’ll take a call at the end of the year. On the next slide, we have given the — how the gross NPAs and the net NPAs stand. We already mentioned and talked about the ratio. Just want to highlight that in the DA1 category, we are provided — fully provided for more than 50% of the DA1 loans. And as far as DA 2 is concerned, we are more than 80% fully provided.
Next one is on the movement, as I said the first time NPA for the quarter is — the aggregate is about INR1600 crore, out of which there is one corporate case and then the remaining are mostly the retail, note there are 2 corporate cases sorry. One has been identified through the RBI divergence report and another slipped in this quarter, both of which we are fairly confident that we’ll be able to upgrade in the next couple of quarter.
Settlements and upgrades are about INR520 crores and that right now concludes the technical write-off that I mentioned of about INR1150 crore. Slippage ratio, MD had already mentioned that it is below 3% and it would — will even less than that, but for that two cases which we are fairly confident that they are doing well now also, but we had to make them NPA then we are expecting them to upgrade in the near future. The position of summary of NCLT has been given here, there is not much change in the position as compared to September. Sadly, we are at the same position.
Coming to slide 22 that is sorry 28, the SMA position. Again there is as been discussed by MD that is the — the significant improvement in the SMA position both in the corporate as well as in retail as a combination of the measures taken under the government guidelines as well as the RBI guideline, plus overall there is an improvement in the position of the borrower. And so even though we have seen the second wave and the third, but I think successively with the experience gained and with the intensity of the COVID not being as much as it was in the first wave and the uncertainty having been handled quite well over a period of time. We are seeing a reduction in the stress and improvement in the outlook.
Capital adequacy which we had given in the Slide 30 we are comfortable I already mentioned. This, of course, rather include the 9-month profit. In the next slide shareholding pattern, there is not much change, it is the same. The book value is I think [Technical Issues], but if we deduct the revaluation reserve, intangible and the DTA, the book value would be in the range of 17.5 [Phonetic].
And digital footprint it is continuing to be despite healthy as part of the customer induced transaction with almost 96% are digital, out of which the share of UPI have gone up. This is also a trend that’s showing that small volume transaction, the usage of UPI has jumped. This we can say one of the side effects of COVID over the [Technical Issues].
Now I will not discuss too much about the financial inclusion part, there is — more or less, these are the what I have — as of close of September. There is improvements in all this from September to December, but, yes. Now coming to subsidiaries, again, there is nothing much to tell, all are profit making, they have shown improvement some little some more, but all have shown improvement in the performance this quarter.
On the guidance, I think MD has already discussed, I will not repeat that guidance, it is given here. So I think, without further ado, I leave the floor for questions.
Questions and Answers:
Operator
Thank you very much. [Operator Instructions] First question is from the line of Bunty Chawla from IDBI Capital. Please
Go ahead.
Bunty Chawla — IDBI Capital — Analyst
Yeah, sir. Thank you. Thank you for giving me the opportunity. Few questions from my side. Firstly, on the margin per se, as you rightly said, if we adjust with the one-off income tax refund, the net interest margin comes to around 3.3% for the quarter. If we try to compare with June, again September, there is a decline in the net interest margin on a sequential basis, on a quarter-on-quarter basis. Also if we compare with the last year FY ’21 which is 3.4%, there is still a decline. So what could be the margin expectation going forward as what we are seeing now cost of funds has completely declined and it’s almost near to bottom out because the G Sec [Phonetic] yield showing up move few banks have shown that increase in the deposit rates. So it seems to be cost of funds are bottoming out. So how should we consider costs, net interest margin fall during next quarter, as well as FY ’23?
Rakesh Sharma — Managing Director
Yeah, if we compare with the previous quarter September ’21 without this interest on income tax, it was 3.02. So, that has improved by about 29 basis points. In the third quarter of last year, the comparable figure was 2.88. So that improvement is about 53 basis points. Okay? So if we compare the 9-months figure again without this interest on income tax, 9 months ended December the figure was 2.8 and now it is 3.46.
So the improvement is 66 basis point. So anyway you look at it, there has been an improvement in the mix. Now coming to the second part of the question that the — what will happen when the interest rate cycle start driven. So if we look at our advances now, as I mentioned, the new advances that we have given, some of them are through for the Corporate through the NCD route, which is they’re not locked up, it is more of the medium or short-term.
And also on the this one the retail side, we are well placed to pass on this the interest rate cycle bit reversal onto the advances side as and when because most of the advances are linked to our RLLR, so other floating rate. So the — we do not apprehend that the catch-up will be shows delayed that it will impact the NIM.
Yes, but there will be a factor that as we grow, the rate of growth is the question. We have been focusing on quality of growth drivers and the volume of growth. So, therefore, it will continue to be moderate. So the — we’ll not be under a compulsion to the high cost deposit at a fast pace. So we’ll be able to keep a focus on the cost of funds as we have been doing now, without the composition will again change. We will take some resort to say bulk deposits or other as we need funds when we go forward, but that’s still quite some time away.
Liquidity is very comfortable and it is sufficient to fund our growth story, but it is in next few quarter. We really do not envisage a situation where we will be facing increasing trend in the cost of deposit, but we are unable to pass it on to the loan side. What we are much, much more focused on is that that we want growth, which is a qualitative nature and that is where we will be focusing our [Indecipherable].
Bunty Chawla — IDBI Capital — Analyst
So in that case, what one should consider net interest margin for next year as such?
Rakesh Sharma — Managing Director
So in fact net interest margin as last time at the beginning of the year I had indicated that it will be more than 3% and consistently I think we have been able to maintain. So next year keeping in view, although, there is like scenarios, the rising interest rate scenario will be there, but as Mr. Sitaram has explained we’ll be able to pass it on. So we are quite confident that we will be able to maintain NIM of 3.245 [Phonetic] and more during the next year.
And accordingly next year at the time of declaration of our Q4 results, we will indicate the exact number.
Bunty Chawla — IDBI Capital — Analyst
Okay. Okay. Sir, secondly — that was very helpful, sir. Thank you. Secondly on the asset quality front, what we were observing as major impact of COVID 2 for the industry as such was visible in Q1 FY ’22. So after that Q2 FY ’22, there was a decline or improvement in the gross NPA or decline in the slippages, but in our case what we are observing first time or first slippages are consistently Q1 to Q2, Q2 to Q3 there is a increase. And in fact in Q3, if you observe the settled plus upgradation kind of a recovery part which we see is quite low as compared to first 2 quarters. So any specific reason if you can share? Also in this you have shared that 2 corporate accounts are there. So can you bifurcate the first time NPA, what was the corporate amount, what was the retail and what was the other MSME or such like that?
Rakesh Sharma — Managing Director
You’re right, this — you know, this — we had indicated that our slippage ratio will be less than 3% and we have been able to maintain it below 2.80. Now coming to your question specifically, now that 1,639 the breakup is 1,066 is corporate and 573 is retail. So retail is more or less in fact, it is better than the estimates and we have been able to control then that you will see from the slides on SMA’s that our SMA’s have come down and the stress has come down, the collection efficiency as I had indicated earlier also it is 96%. My total SMA when I — total SMA means including everything not only for more than INR5 crores everything, it was 3.86% as on 30th September, which has come down to 3.53 as on 31st December.
Now this out of 1066 of corporate, 900 crore is — are two account which are one is of course as we had indicated one was because of divergence and the other one due to some commencement of commercial production.
Both the accounts are that which are regular as far as repayment record is concerned, but on technical grounds these have been classified as NPA and we are quite hopeful that these two accounts will be upgraded either in this quarter or the next quarter.
So, but for this I think our slippage ratio would have been less than 2% in fact, it would have been 900 core if we exclude, the corporate slippages are only 166 crore. So it’s a one-off situation and we are not much trend about that because we know that these two accounts will be upgraded either during this quarter or next quarter and these are only due to technical reasons. So — but I can assure you the slippages and the slippages are under control and our recovery position and with systems, which we have established are quite robust now and we don’t expect much slippages in near future.
Bunty Chawla — IDBI Capital — Analyst
Thank you. Thank you. Thank you very much sir for that. Sir, lastly from my side, if you can share the one single data point, outstanding restructured standard advances as of December 31, be it one, two all inclusive, but as of December, what will be that number and against that, what will be the provision we have?
Rakesh Sharma — Managing Director
Yeah, just one second, we’ll give that figure. Yeah, actually this, I have this number immediately available, Sitaram will find out in the meantime, that this COVID which we have restructured this other than COVID he will give you a number, during COVID season as per RBI instructions, we have restructured the advances — that amount is around INR4,436 crore, which is 3.5% of our total standard advances.
So it is like it is again as per which was our estimate that it will be in the range of 3% to 4%. So that there is — and these are and regular assets, there is no problem. Other than this COVID, Sitaram any other numbers are there with you?
Pothukuchi Sitaram — Executive Director, Chief Financial Officer
Yeah, in fact, yeah, that S4A and 5A25 [Phonetic] aggregates to INR3,495 crore.
Bunty Chawla — IDBI Capital — Analyst
So INR4,436 crore plus INR3495, can we say like that?
Rakesh Sharma — Managing Director
Yeah.
Bunty Chawla — IDBI Capital — Analyst
Yeah, that was very helpful, sir. Lastly, sir ECLGS scheme, what is the outstanding amount the ECLGS disbursement what we have done, the loan amount total toward ECLGS?
Rakesh Sharma — Managing Director
Above INR2,000 crore.
Bunty Chawla — IDBI Capital — Analyst
Okay. And how the collection efficiency in this happening in ECLGS loan amount, loan book, if you can share?
Rakesh Sharma — Managing Director
96%.
Bunty Chawla — IDBI Capital — Analyst
Okay. Similar of — on overall basis kind of thing, that was very helpful, sir. Thank you. Thank you very much, sir.
Operator
[Operator Instructions] Next question is from the line of Pranav Tendulkar from Rare Enterprises. Please go ahead.
Pranav Tendulkar — Rare Enterprises — Analyst
Hi, thanks a lot for the opportunity. Sir, the two corporate accounts that you mentioned, they totally constitute for the total INR1066 crore of corporate slippages that you mentioned or is there anything else, so this —
Rakesh Sharma — Managing Director
Out of the total corporate slippage, that two accounts are above INR970 crore. Then there are another three accounts, which are in aggregate less than about INR100 crores.
Pranav Tendulkar — Rare Enterprises — Analyst
Okay. So this INR970 crore will be — you are saying that upgraded in the next quarter?
Rakesh Sharma — Managing Director
No, the next quarter or the quarter thereafter.
Pranav Tendulkar — Rare Enterprises — Analyst
Okay, two quarters.
Rakesh Sharma — Managing Director
Whenever, they have sound footing, they are doing quite well and overall they are regular.
Pranav Tendulkar — Rare Enterprises — Analyst
Correct. Sir, recovery and upgrades for the next quarter or for the year, could be how much?
Rakesh Sharma — Managing Director
For the next quarter?
Pranav Tendulkar — Rare Enterprises — Analyst
Next quarter or the or next 6-months or anything that you can —
Rakesh Sharma — Managing Director
Actually to be very frank, this we had fixed up a target of INR4,000 crore recovery for the full year. As against that, we have already achieved the target of — the actual number is INR4,334 crore. In fact, the year-end target we have already achieved. Another around INR700 crore to INR800 crore, I’m expecting. So we’ll be able to achieve total full INR5,000 crore of recovery during the current financial year. And apart from that, there will be some upgradations also, if these two big accounts are upgraded that will add substantial amount, but if not otherwise some INR300 crores, INR400 crores every quarter, there are some upgradations are there.
Pranav Tendulkar — Rare Enterprises — Analyst
Right, right. Sir, just a query. So in your presentation where you present the business performance in advances, so there are two values. First is, what is this services business like loans to services sector? So if you go to slide page number 19, on the bottom right-hand chart, there is a pie chart shows the advances, so 58 — INR574 crores is the industry advances then 24 — 889 is service, so what is the services?
Rakesh Sharma — Managing Director
It’s more of trading.
Pranav Tendulkar — Rare Enterprises — Analyst
It will be SME MSME traders?
Rakesh Sharma — Managing Director
Right, we will get back to you both, SME as well as also agriculture service units because services rendered both in agriculture, MSME also, okay? And then there will be some movement of services in corporate side also. So let me get back to you exact, because these as per RBI definition.
Pranav Tendulkar — Rare Enterprises — Analyst
Right. And there is one more doubt, in the same slide in that pie chart, you mentioned that personal loans is INR52,086 crores.
Rakesh Sharma — Managing Director
Personal loan?
Pranav Tendulkar — Rare Enterprises — Analyst
Personal loans, but in the pal diagram above in [Indecipherable] assets, you said at September ’21, total retail asset is INR60,093. So what is the difference?
Rakesh Sharma — Managing Director
Yes, first of all, our personal loan portfolio is not that definitely [Speech Overlap] INR500 crores is our personal loan portfolios. I think if you look at that the light blue color in the bar chart, the first top tier, INR540 is the personal loan compared to INR514 and INR582 in December ’20, that’s the movement in the personal loan. Aggregate is the grey figure right hand side [Speech Overlap], okay? Then what is your question exactly in this?
Pranav Tendulkar — Rare Enterprises — Analyst
So even that INR60,093 doesn’t match with the personal INR52,086 in the pie chart?
Rakesh Sharma — Managing Director
Yeah, this personal loans is something else I think of advances.
Pranav Tendulkar — Rare Enterprises — Analyst
So can you just modify this slide because it confuses because the balance sheet advances are just I think [Speech Overlap].
Rakesh Sharma — Managing Director
Yeah, this is personal, if you look at it that is INR536.51, okay? So what has happened I think because of that additional thing, I think the pie chart have gone distorted. So thanks for pointing it out, we’ll correct that. But the figure is right that INR536.51 is the figure. Only that the graph is wrong because the decimal got missed out and therefore the overall sharing got affected. It’s definitely the pie, share of the pie is not that, it is much very small. Thanks for pointing it out.
Pranav Tendulkar — Rare Enterprises — Analyst
Right. Sir, also in the employee expenses of INR859 crore, can you just explain what is the impact of that family pension adjustment, that is one? And what could be the — so this obviously this quarter contains the prior period adjustments and that is why — what could be the normal quarter run rate going forward for employee expenses?
Rakesh Sharma — Managing Director
Yeah, employees we have provided for three quarters, we have provided INR50 crores is what we have provided for three quarters. So on an average per quarter you can take it as INR17 crore.
Pranav Tendulkar — Rare Enterprises — Analyst
Right. So in last quarter say INR698 [Phonetic] crore plus INR17 crore could be the employee expense going forward, is that right or?
Rakesh Sharma — Managing Director
I mean INR17 crore is what would be — in the last quarter, yeah, per quarter. So we have provided for three quarters this time. Therefore, two quarter will not be repeated.
Pranav Tendulkar — Rare Enterprises — Analyst
Right, right. But even if we just exclude say INR51 crore from INR859 crore, still it is INR808 crore versus INR698 crores last quarter. So is there anything else in this?
Rakesh Sharma — Managing Director
Yeah, then there is the NPS also, the national pension scheme. There also we announced a contribution, so that effect from the effective date to now has also been taken into account.
Pranav Tendulkar — Rare Enterprises — Analyst
Right. And what is that impact, how much?
Rakesh Sharma — Managing Director
That is about INR150 crores — that is INR4crores per month. So it is one year impact INR50 crore is what we have taken.
Pranav Tendulkar — Rare Enterprises — Analyst
Right, right. So can you just spell, what will be the quarterly expense going forward when this abnormal adjustments are not there, roughly?
Rakesh Sharma — Managing Director
So INR4 crores for NPAs that is plus INR4 crore is announcement in normal run rate plus similarly for the family pension, that together will be how much, about INR720 but say the normal run rate would be about INR720 overall and the aggregate, but you will have to keep in mind that AS15 plays a role here. This — there has been a valuation rate of about INR120 crores due to INR67 crore.
Like as Sitaram ji has clarified, there this salary structure consist of two parts as you can see. One is that salary and other benefits and secondly that AS15 provision. Now this AS15 provision depends on the 30-year interest rate, now that keeps on varying. So if the rates are increasing, then you know we may not be required to make any provision on that. If the rates are declining, there will be provision. So that will keep on varying, but the salary part structure is that that because this time we have provided for one year I think more than one year for NPS areas and then this three quarters family pension. So apart from that that normal expenditure will be there, which will be in the range of around same INR720 crore say roughly INR700 crores or INR720 crore.
So AS15 provision, we cannot predict at this juncture.
Pothukuchi Sitaram — Executive Director, Chief Financial Officer
Only, we cannot take back a provision, so it is in a favorable movement, there will be no provision made.
Pranav Tendulkar — Rare Enterprises — Analyst
Right. Sir, just last question from my side. Previous quarter you had provided details of INR983 crores of other income. Similarly, can you provide this quarter December and last year same quarter December. Any possible can you include this data from next time onwards in PPT itself, so that we don’t have to waste time?
Rakesh Sharma — Managing Director
Yeah, I mean you want the breakup of other income, is it?
Pranav Tendulkar — Rare Enterprises — Analyst
Yeah, so it will be core fee, treasury, revaluation, Forex, recovery, these were items last time.
Pothukuchi Sitaram — Executive Director, Chief Financial Officer
Okay. So as far as the commission part is concerned, for the quarter it is INR450 crores and 9 months, it is INR1,290 crore, okay. Then on sale of investments, it’s INR151 crore and INR1046 crore, okay? And revaluation of investment is small that is INR3 and INR63 crores. Then on Forex, it is INR171 crores and INR505 crore. And other major recovery from write-off is INR308 crore and INR777 crore. And miscellaneous income is INR65 crore and INR142 crore.
Pranav Tendulkar — Rare Enterprises — Analyst
Perfect sir, perfect. And same numbers for last year same quarter?
Pothukuchi Sitaram — Executive Director, Chief Financial Officer
Yeah, same way, I’ll give three months and 9 months. Commission and brokerage INR460 crore and INR1,228. Then profit on sale of investment INR641 crore and INR1,631 crore.
Pranav Tendulkar — Rare Enterprises — Analyst
Right. INR1631?
Pothukuchi Sitaram — Executive Director, Chief Financial Officer
INR1631 crore, yeah. Then profit on revaluation of investment INR72 crores and INR7 crores. And the Forex is INR84 crores and INR147 crores. Recovery from written off cases, INR105 crore and INR279 crore. Miscellaneous income INR70 crore and INR145 crore and we had taken the suggestion, we’ll include this in the presentation.
Pranav Tendulkar — Rare Enterprises — Analyst
Thanks a lot, sir. Thanks a lot. I’ll come back If I have other questions. Thank you.
Operator
Thank you. [Operator Instructions] The next question is from the line of Renish. Please go ahead.
Renish Patel — ICICI Securities — Analyst
Yeah, hi, sir. Just, sir, couple of clarification on this corporate accounts. Sir, what could be the systemic exposure?
Rakesh Sharma — Managing Director
Sorry, can you repeat that?
Renish Patel — ICICI Securities — Analyst
Yeah, sir, so the corporate account which slipped in the Q3, what could be the systemic exposure of these two accounts?
Rakesh Sharma — Managing Director
One issue that on the divergence part. RBI does it selectively for each bank as part of inspection.
Pothukuchi Sitaram — Executive Director, Chief Financial Officer
Time gap between their reports. So what we have downgraded in Q3 because of a divergence [Technical Issues] consortium according to our knowledge, nobody else has done so far.
Renish Patel — ICICI Securities — Analyst
Yeah, so I’m just trying to understand what could have triggered let’s say a regulator asking us to downgrade, while rest of the industry is still not downgrading, I mean if you just a quarter away from where the system will also downgrade or it’s a technical thing and hence you are saying the same account will upgrade in the next quarter?
Rakesh Sharma — Managing Director
So, we are not sure what would be the regulator stance because everybody gives representation also including us we gave a presentation. And others also as part of their inspection report, they did a representation, so RBI may have a rating, we don’t know. But as of now in Q3, I think we are the only bank who have downgraded that account based on RBI.
Renish Patel — ICICI Securities — Analyst
Okay. So I mean it is right to assume it’s a 90 DPD plus account?
Rakesh Sharma — Managing Director
No, this was — this was a whole restructuring, according to the banks — all the banks some 9 or 10 of them, all the condition for restructuring were met with and the account was upgraded by us in March, but RBI had a difference of opinion and they said, you shouldn’t have upgraded and hence downgrade again.
Renish Patel — ICICI Securities — Analyst
Okay, got it.
Rakesh Sharma — Managing Director
So we downgraded, but others are maintaining that upgraded status.
Pothukuchi Sitaram — Executive Director, Chief Financial Officer
Others, they have no dues in this account.
Renish Patel — ICICI Securities — Analyst
Got it, got it, got it, sir. This is —
Rakesh Sharma — Managing Director
Actually, there are no overdues, rather one year in advance, they have failed. So DPD wise, debt wise, there is no problem, no overdue.
Renish Patel — ICICI Securities — Analyst
Got it. So this is a pure technical reason?
Rakesh Sharma — Managing Director
That is why we are quite confident that it will be upgraded either this quarter or next quarter.
Renish Patel — ICICI Securities — Analyst
Got it, sir, pretty much clear sir. Thanks a lot for the clarification. Just last part, on this new investment valuation paper, which RBI has put out, do you guys foresee any negative impact on P&L once it gets implemented?
Rakesh Sharma — Managing Director
On the other end, I feel that there will be a positive impact. But as of now, the method is that it don’t recognize any upside and [Technical Issues] downside. This is moving more towards IFRS the indebt version, so though it’s not completely in alignment within that but still it is moving towards that, which means that there could be recognition of some of the upside, which so far banks have not allowed to.
Renish Patel — ICICI Securities — Analyst
Got it, got it, got it. Yeah, yeah, sir. That’s it from my side, sir. Thank you so much.
Operator
Thank you. [Operator Instructions] We have the follow-up question from the line of Pranav Tendulkar from Rare Enterprise. Please go ahead.
Pranav Tendulkar — Rare Enterprises — Analyst
Hi, sir. Thanks a lot for the opportunity. Sir, could you just give some detailed view on how loan growth is looking forward in both retail and corporate accounts? Thanks a lot.
Rakesh Sharma — Managing Director
Yeah, Mr. Joseph, can you take it for wholesale? And retail, I will request Mr. Suresh Khatanhar, kindly Suresh Ji, you mention about that co-lending steps we have taken, agri banks and all these things, so kindly explain, Mr. Joseph?
Joseph Jebaraj — Deputy Managing Director
So overall, as MD mentioned this time and also in the last time, our target for this year, asset growth target has been 8% to 10%. And within that we are confident that by Q4 we will achieve, though, as of now Q3 it is at 5%. Now on the corporate side for Q3, year-on-year, we have grown by about 12%, on the mid corporate side. On the large corporate, it is — there is a slight negative growth, but if we were to take the NCDs, because during the last two quarter there has been a heightened activity in the non-convertible debenture market.
And some of this as you are aware were also eligible under the TLTRO scheme of RBI, which ended on December 31st to be put under the HTM bracket also.
So we have also picked up some quality paper in the primary market for that. That is, of course, showing in our investment book and not in the credit book. So overall NCG, we have grown by about 12%, the large corporate is stagnant, but at the end of Q4, I think we will be able to grow the corporate book also by about 10%.
Suresh Khatanhar — Deputy Managing Director
As far as retail is concerned, see large portion of I mean when we say retail is ran, so large portion consist of our home loan where the growth has been already 7% Y-on-Y basis. And the disbursements over last two months have started picked up, I mean because of the activities also has picked up in these thing.
So these are growing rapidly.
On the SME front and the agriculture front, also there is a pick up. On the SME front, now we have entered with three partners in the co-lending. So that push is additionally coming and good quality of the microfinance lending is also happening on the agriculture front. There is a good momentum on the gold loan book also, so that is also part of the agriculture loan, so that is also growing. So I think we should be able to maintain there on relative.
Pranav Tendulkar — Rare Enterprises — Analyst
Right, sir. And going forward how is it looking per se next 12 months?
Rakesh Sharma — Managing Director
12 months, I think we will continue the strategy which we have adopted and our focus on granular business and the quality business will grow. So, we are looking at a minimum of 10% growth.
Pranav Tendulkar — Rare Enterprises — Analyst
Right, sir. Thank you.
Operator
[Operator Instructions] The next question is from the line of Vishal Gupta from Dnata [Phonetic] International. Please go ahead.
Unidentified Participant — — Analyst
Hi, sir. Good afternoon. Could you please elaborate on this co-lending arrangement that you have spoken off?
Suresh Khatanhar — Deputy Managing Director
So, co-lending arrangement, we have entered with three partners and one is already activated. What more details you would like to know sir?
Unidentified Participant — — Analyst
What is the size of the lending that you’ve done so far on the — through the co-lending partners? And how do you expect it to track over the next, let’s say, year or so?
Suresh Khatanhar — Deputy Managing Director
So these are a recent additions. We have already signed up for about INR100 crore to begin with the partner, but this we will grow. There are some two three other partners, which we are talking too. And we expect this book to be about INR500 crore in the next year.
Unidentified Participant — — Analyst
Right. Thank you.
Operator
Thank you. Ladies and gentlemen, that would be our last question for today. I now hand the conference over to the management for their closing comments. Thank you, and over to you.
Rakesh Sharma — Managing Director
So, thank you very much and ladies and gentlemen, thanks to all of you for the active participation. I hope we have been able to answer to your questions. But if you still have some questions, so kindly feel free to send email to either me or to Mr. Sitaram, CFO and we’ll will be very happy to clarify on any issues. Thank you very much and happy weekend.
Operator
[Operator Closing Comments]