IDFC First Bank Limited (NSE: IDFCFIRSTB) Q3 2026 Earnings Call dated Jan. 31, 2026
Corporate Participants:
Saptarshi Bapari — Head, Investor Relations
V. Vaidyanathan — Managing Director & CEO
Sudhanshu Jain — CFO
Analysts:
Akshay Jain — Analyst
Piran Engineer — Analyst
Param Subramanian — Analyst
Jai Mundhra — Analyst
Suraj Das — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to IDFC First Bank Q3 and FY26 conference call. As a reminder, all participant line will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation. Conclude should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchstone phone. I now hand the conference over to Mr. Saptarshi Bhapari, head Investor relations. Thank you. And over to you sir.
Saptarshi Bapari — Head, Investor Relations
Hello everyone. Thanks for joining the call. Today we have Mr. V. Vedranathan MD CEO and Mr. Sudanshu Jain. We’ll start the call with brief commentary opening remark from Vaidya followed by update on financials and business parameters from Sudanshu. Post that we’ll open the forum for Q and A. So I’ll hand over to Vaidya for his initial remarks.
V. Vaidyanathan — Managing Director & CEO
Good evening everybody. Thank you very much every one of you for joining us. And here is Sudanshu and Saptarishi. You know it’s exactly seven years since the time the merger happened. December 31, 2018 is when we put together our first financials.
The merger actually was announced to the markets on the 11th of December 2018 but the first quarter financials were the 31st of December. So you know, seven years have gone by. So it’s a good time for us to give a quick brief about the business model of the bank because. So let me just share that in the business model context. As of 31st December 18th when we started we had a total deposits and borrowings in the bank of one 18,000 crores. And off that one 18,000 crores, 10,400 crores was retail deposits rest 28,000 crosses wholesale deposits.
22,000 crores of certificate of deposits and borrowings was 57,600 crores. So you can see that a good portion which is wholesale deposit certificate deposit borrowings had to be repaid on due dates. And you know we therefore the first priority of the bank at that point of time began to raise was to raise deposits because it’s a large amount. This is really very unlike any other non bank finance company, small non bank finance company converting to a bank because it doesn’t start with such a situation. So therefore think of it like a DFI converting to a bank which is what our bank is, a large DFI we say or a mid sized DFI comes with this kind of starting point what I just described.
So let me just say the first thing the bank did was to raise deposits at a very serious pace and to give you context, for four quarters prior to the merger, the total deposits raised from the bank was 5,300 crores of retail deposits. So obviously we were not at that phase. We were not going to repay 79,000 crores of these kind of monies even in two or three years. So the thing that, that is the reason you might notice that our banks, you know, liability franchise is probably among the more developed ones because that was the weakest muscle and we had to build that very very quick.
So I’m happy to say that since then the bank has really developed a good mobile app. We put out a thousand branches, we developed savings account propositions, current account propositions, startup banking, NRA banking. We built out a technology stack, brand positioning, hyper personalization, analytics technology, service center. And we made customer service, the customer first being almost front and center about what the bank is all about. That kind of positioning then made the culture of the bank from top to bottom to think like that. Customer made products about pro custom and launched commercial banking and reset our corporate banking, all that kind of stuff and relationship manager.
So net net we developed this entire franchise and also supported it with a 7% interest rate on savings accounts. Now it’s not that we were very proud giving money, you know, raising money at 7% savings account market was giving 3% or 4%. It just had to be done. In any case it was cheaper than what we were otherwise raising. You know, our existing borrowing was like, you know, 7.8% of the of funds at the bank at that point of time. So the point is that having raised serious deposits, obviously all of you are happy in hindsight to note that we honored every bit of the transactions that were due.
We brought down credit deposit ratio from 136% to 94% now and frankly sounds like 136. But if you note that the bank also had a lot of money given out in the form of investments, it is also effectively credit that is like 165%. So that’s now down to 94. So things started structurally became much better. So having fundamentally structured the bank and settled the liability issue, which frankly is the biggest issue for the bank to settle, the bank along the way started cutting deposit rates. So this became, let me say in my scheme of things to be to pay off dues obviously becomes priority number one.
Then of course priority second priority is then fixing the cost of funds. So I’m just happy to share with you that progressively since then we have been bringing down cost of funds from 7.8% which was the cost of funds in February, sorry in 2019. That is FY, that is 31st of March 2019, the first quarter of the merger and frankly that is the same rate all through the next four quarters. Also 7.8%. We have brought it down today to 6.11%. So I’d like you to point out, note this is a reduction of 169 basis points.
I’d like you to just pause for a minute and think about what the cost of funds of the mid tier banks were at that point of time. Mid tier banks and we all know the mid tier banks, the mid tier banks when we were raising money at 7.8 was at 6.3. So we were paying as high as small finance banks to start with and we were paying 150 basis points more than mid tier banks. I’m happy to share that the mid tier banks cost of funds have now come down from 6.3% to 6.09%. And IDFC bank cost of funds have come down from 7.8% to 6.11%.
So just in seven years flat we have not only raised serious deposits over 2 lakh crores with which we settled our entire, you know, let me say the upcoming maturities of that scale but simultaneously we have also brought down cost of funds and now we have become at par, we’re basically paying 2 basis points more than mid tier average of mid tier banks. Mid tier bank 609, we are at 611. And we believe that end of this financial year, I mean the fourth quarter because recently we have cut the savings account rates, that full impact will come through this quarter so we’ll come down below 6%.
So the transition to a low cost of funds is a journey that had to be done. But you can see from the numbers that we are firmly on that path and that in turn opens up the new areas for financing. Obviously in the raising money at 7.8% then the kind of segments you lend to, the higher yield and higher credit cost ones. But obviously now with these kind of rates now we are as competitive as any other good quality mid tier bank. And hopefully as the years go along we can even get better from here.
Now I’d like to share some very precise numbers to you. What was 7% we were paying up to 200, 200 crores and from 200 crores to 750 crores we were paying 8.5. Whatever it is, it is, it is not something to be proud of. But it is. Today we have brought down our 0 to 1 lakh bucket from 7% to 3%. That’s 400 basis points reduction the 1 lakh to 5 lakh bucket. We have brought down the 200 basis points from 7 to 5. Above that we are paying 6.5 and above 10 crores. We are straight dropping it back to 5%, 4% and so on.
So net net we have structured this in such a way that large ticket bulk money does not come to the bank. It will be if it comes, it will come at really low rates as any other big bank would have given. And then we are basically trying to accumulate money more in the early smaller ticket ones. Not really small, small like not like less than 50,000 et cetera. That rate is 3% but maybe in the zone of the 1 lakh to 5 lakh kind of rates. Now similarly of course on the term the process brought it down and then I told you as a result the cost of funds for the bank has come down.
Now I would like to quickly move ahead, move on the conversation to share with you what this does to us on the lending side with the reduction of rates. So on the lending side think of it like on the personal finance front, let us say we think of it like three categories of financing. One is where we landed about 18 to 24% and the cost of credit could be between 4 to 6%, maybe 3 to 6% depending on products. Then there is the products like your products which are lending about 14% and credit cost is 2 to 3%.
And then there is the products which are where we lend at 8 to 9% like mortgages, loan against property, etc. And there the credit cost could be like as low as 0.5%. Similarly on the business finance front, same logic, we do lend it people at sectors is 20, 25% which is where credit goes 4, 5%. We do lend at segments of 10 to 14% credit growth 3 to 4% and then we do lend at 8 to 9% with credit growth of 0.5% which is the loan against property and home loans etc. So net net combo combo combination of this mix mix that we do as a strategy for the bank.
We aim to get a credit cost of 2%. Now I’d like to share with you what the real numbers of credit costs are for the last five years. And basically five years is a, you know our gross NP and net NP of the bank really has been, you know, under 2% and under 0.5 0.6% for really very, very long. Time you know the numbers but all of us know that gross net can be managed by can be handled by write offs. And the net NPA can be a write off of provisions. So write off in provisions we take it as one family.
And therefore we’d like to specifically call out credit cost. On the credit cost front we’d like to specifically point out that if you take the any of your analysts can do the math. If you take FY21 22 which is the peak of COVID that was raising in fact wave one, wave two was happening then the FY23, 24 were benign period. Then FY25 was hit by microfinance. FY26 still have a residual tail effect of microfinance going on. All put together, good days, bad days, all averaged out through the cycle. Our credit cost is 1.95% on funded assets.
So you can do the weighted maths for yourself. It is 1.95% now a five year period 1.95% should give us comfort. Should give you comfort that the combination of products we talked about is giving us that kind of credit cost. And by the way that 1.95% of average funded assets as average loan book translates to 1.36% on average on assets. Just to mark the distinction there now we’d like to then say what is the risk adjusted net interest margin for the bank? This is important to note risk adjusted. Now we’ve done analysis I’d like to share with you for our bank Again look through 5 year cycle all put together.
Good days, bad days, all put together. Our our NII by assets is 5.65% and for a 5.65% of assets credit card asset is 1.36%. So that translates to 4.3% is our risk adjusted NIM. And if you take this number for top banks it is basically 3.93% is NII by assets credit cost is 0.58 and that is at 3.35%. The point is that we do have higher credit costs. That’s a model. But the income is also higher. But risk adjusted we’re running 4.3 and mid tier banks are a little short of 3%. So if the bank’s model is fundamentally so strong and from the numbers I read that to you, then how is it that the return on assets is 0.5.
So this is one people tend to sometimes tend to think of this that look, if your return on assets is low then there must be some problem with your business which we should look into. So this 4.3, if it’s a risk adjusted income, I’d like to then share with you that this is obviously going ahead in building the bank. I mentioned to you this is a domestic financial institution with a large balance sheet suddenly raising deposits and trying to retire liabilities. So we want to just share with you that this entire capability that we built of these deposit franchises that we’re building, this obviously will build scale and as of now it’s touching something like about 2.8 lakh crore in the next maybe we are hoping the next few years, let’s call it four years or five years depending how it goes out, this will be 6 lakh crore and at that point of time this breaks even and then whatever return on assets of the lending side transfers to the P and L straight away.
Now I would like to finally close this by giving a quick input to you on how our operating expenses as a percentage of the book is today and what we expect it to be in a normalized way. This is important to understand because again these books are still under build out mode. So our cost to income ratio for the lending side is 62.3% on the retail lending side and we believe it will come down to the low 50s just with scale. Our wholesale book, the cost income ratio is something like 36%. We believe it will come down to 30% with scale.
And a credit card is running at about 97.5% which will come down to about 70% with scale. So blend and the retail liabilities is running cost income ratio about 149% which will come down to about 100% with scale. So what is the combo combination of the 73, 74% that you’re seeing here? We believe with scale it should come down to about the mid-50s. If you do the math you’ll get there. And none of these numbers are unrealistic. We believe they’re all like should be achieved at scale. And Therefore at this 55, 56% if you plug that back into a business model you will see that the ROI of this bank will start going towards 1.6 odd and then rest of the equation will become like any other good bank.
Posting that 1.6, 1.7 ROA and life is great and life moves on from there. So this is the long and short of the entire business model. Bas the bank is making good money on the earnings side, not making money on the liability side. Rather it’s a loss. And as they scale up the cost income ratio comes down and Cost comes down and you’ll find the bank and you’ll find the numbers coming through and then it’s business as usual and life moves on and then challenges and successes of any other bank as it were. But it does take 10 years to build a bank.
That much I’m realizing and certainly takes 10 years to build a liability franchise. When you convert a DFI to a bank, like I said, if it is an nbfc, it’s got a bank license. That would be a much easier life. But if you’re NBC tagged with infrastructure DFI which is three times your size, remember Capital first was 25,000 crores on books. IDFC was 75,000 crores on books. So you walk the path to get the bank license. This is a part of building it out. But then this will land very well in our opinion. The business model is strong, it’s very solid.
I read out the numbers to you and with this business model with the kind of margin side told you moment, when we fix this cost income ratio this is like this is going to fly. In my opinion it’s going to fly as well as any fantastic bank. And in fact more so because the bank has actually built rather slightly differentiated model on the lending side. This is not a regular model built, this is built on technology. So we built many. For example the last month of October alone, just in October, IDC gave out close to about 1.3 to 1.4 million loans in one month.
Obviously this can’t be done through the human people sitting and calculating incomes and all that. Each of these loans had identity check, bureau fraud check, KYC mandate, stamping, registration, the whole thing, everything e everything electronic. So that is a very special capability bank has built. And similarly on the deposit raising front we have developed capabilities for personalization, hyper personalization and so on. So that is the kind of capability the bank has built. And with arrival of technology cost is also coming down and you get the drift. So therefore we should look forward. And now frankly this picture I painted was from a larger picture that we’re painting that we’re looking forward to in the many years because the business model is looking more stable to us right now we’re looking quite hopeful for the upcoming Q4, Q1, Q2, Q3 of next financial year.
We are looking at it with confidence because now I think that the microfinance issue behind us rest of the model is anyway good and it is proven out through this by coming out of the cycle. So thanks very much. Over to you Sukhanshu for the quarterly Details.
Sudhanshu Jain — CFO
Thanks Vidya. And thank you everyone for joining on a Saturday. I will start with outlining few key financial numbers for the quarter and the sequence would be largely deposits and loans and then I will talk about asset quality and finally profitability. On the deposit front we saw strong growth in the deposits. Deposits in fact has grown at 22.9% on a YoY basis to reach about 2.9 lakh crores. If I talk on customer deposits then the growth here was about 24.3% and this now stands at about 2.83 lakh crore. Further to add the 9th month average customer deposits has grown strongly at 25% on a yoy basis.
Within deposits, the growth primarily came from CASA deposits which I am happy to report that it has touched rupees 1.5 lakh crores at December with a strong yoy growth of 33%. Here also if we see on an average basis then we saw a strong momentum and this growth has been about 32% on a YoY basis. This has been led both by KA and SA and we have given some numbers in the presentation. CASA ratio as a consequence on end of period basis inched up to 51.6% and average CASA ratio was about 50% for the quarter on an average basis CASA mobilization accounted for about 75% of the incremental deposits mobilized during the current quarter.
Madhya talked about that we saw a reduction in cost of deposits by about 15 basis points and similarly cost of funds reduced by 12bps during the quarter. This was largely driven by FD repricing and strong CASA mobilization which I mentioned before. During the quarter we have added about 25 branches which takes the total branch count to about 1066 branches. Even on an LCR front the retail deposits as per LCR was strong at about 64.7% and it almost acts like the big banks if you go and check out on that ratio. Talking of a number which would speak of granularity, our CASA plus TD less than 5 crores was at 83% for the quarter visa based about 82% in the last year.
At the same time if I now talk about loans and advances then there also we saw a strong growth of 21% and that has reached about 2.8 lakh crores. We saw sustained and healthy growth across mortgages, vehicle loans, consumer loans, MSME loans, wholesale loans. These all collectively accounted for 89% of the total increase. Needless to say this growth also came on the back of a festival period sales which further got a boost on account of the recent GST cuts. If we talk of MFI now, that book is at about 6,657 crores at December end and now comprises about 2.4% of the total funded book.
We saw the pace of decline reducing in this quarter as disbursements of slotted started picking up slowly. From an insurance coverage point of view the book is now 81% insured, visa based 77% in the previous quarter. Moving on to credit cards, the credit cards in force for the bank has reached 4.3 million mark during the current quarter and the book has now reached 9,100 crore. The credit card spends were also strong and for the nine month period has in fact increased by 35% on a yoy basis. On the wealth management side the AUM continues to grow at a steady pace of 31% on a yoy basis and that book has now almost touched about 60,000 crores.
I move now to the asset quality. We saw an improving trajectory across NPA and SMA ratios during the quarter. If I start with NPA then the gross NPA ratio of the bank improved by 17 basis points to 1.69% from 1.86% in Q2. Similarly the net NPA ratio of the bank stood at 0.53% compared to 0.52% in Q2. Some further breakup in terms of NPA for retail, rural and MSME segment There the gross NP ratio also sequentially improved by 18 basis points to 1.55%. Moving on the gross slippage ratio. The gross slippage declined during the quarter by around 7% and the net slippages improved by 9% sequentially we saw a reduction in MFI slippages.
Further if I talk of gross slippage ratio x MFI that also was lowered by about 30 basis points during the quarter sequentially. In terms of collection efficiency we continue to see a healthy trend ex MFI on the early buckets the collection efficiency has been steady at 99.5% even for MFI business. The collection efficiency for the quarter has now reached close to the pre crisis levels of 99.4%. The SMA of the retail, rural and MSMA book also improved to 0.88% in Q3 from 0.9% in Q2. In microfinance portfolio the deduction was slightly sharper. It reduced by about 27bps and in fact the SMA pool has come down with 33% sequentially.
So in a sense both on SMA NPA we have seen a strong Set of Improvement Current quarter Moving quickly to profitability, we have reported a profit after tax of rupees 503,3 crores which is a sequential growth of 43% and a 48% on a yoy basis. Profit for nine months period stood at rupees 13,17 crore rupees if I talk of NI NI for the quarter grew by about 12% on a yoy basis and in fact this growth has improved from 6.8% which we reported in Q2. This was also led by an improvement in net interest margins that on an AUM basis improved by 17 basis points and was at 5.76% in the current quarter.
Similarly, on the fee and other income side we saw a strong growth. Some also led because of I would say the stronger book growth here the fee income grew by 15.5% and sequentially that number was 10.5%. We made a trading gains of rupees 96 crores in the current quarter compared to rupees 56 crores in the previous quarter. If I now move on to Opex, the Opex growth was 13.4% YoY for the current quarter in Q3FY26 we have taken additional impact of rupees 65 crore through the PNL on account of the new Labor Code. Excluding this impact, this 13.4% Bootstrand reduced to 12.1% and it is slightly lower than the 12.5% which we reported in Q2.
If I talk of operating profit including trading gains that increased by about 8.2% on a sequential basis and excluding trading gains it improved by about 6.2%. Moving on to provisions, this reduced by about 3.7% from rupees 1452 crore to Rs. 1398 crore during the quarter. Overall credit cost percentage improved by 19 basis points to 2.05% during the quarter. Excluding microfinance, the credit cost for the overall loan book was at 1.99% and was roughly 10bps better than the previous q uarter. In line with improvement seen in the SMA numbers. Bank has utilized microfinance provision buffer of rupees 75 crores during the current quarter which is similar amount which was utilized in Q2 as well. On a cumulative basis, Rupees 150 crores has been utilized during the current year and the bank continues to carry forward rupees 165 crores as a contingency provision. Moving on to the last section on capital adequacy, the capital adequacy including profits for 9M was at 16.22% with CET1 ratio at 14.23%. During the quarter, CCPs of rupees 7,500 crores were converted into equity and these ratios do incorporate the effect of this conversion.
Average LCR deposits were also quite stable and healthy at 115% for the quarter. This is broadly within our guided range. With this I have broadly out covered the key financial numbers and we can take the questions from here on.
V. Vaidyanathan — Managing Director & CEO
Thank you. Thank you friends, please take over and ask your questions.
Questions and Answers:
operator
Thank you so much. Ladies and gentlemen, we’ll begin with the question and answer session. Anyone who wishes to ask a question may press star N1 on the Touchstone telephone. If you wish to remove yourself from the question queue, you may press star N2. Participants are request to use handsets while asking a question. Ladies and gentlemen, we’ll wait for a moment while the question queue assembles. Our first question come from the line of Akshay Jain from Autonomous Research. Please go ahead sir.
Akshay Jain
Thank you for the opportunity and congrats for a good set of numbers. So I have three questions starting with margin. So how should we look at the margin movement this quarter? So margins have improved by close to 17 basis points. Quarter on quarter you indicated that cost of funds have dropped by 12 basis points. So what other factors are contributing to the margin improvement? And how should we expect margins to go incrementally? And what proportion of your term deposits are yet to be repriced? My second question is on Sahara. So now that you have started to cut sa, should we expect, you know, IDFC to be more open to SA cuts in order to protect margins? So is that the thought process going forward? And lastly on asset quality, so last quarter you had indicated that you know, for the full year F26, your credit cost guidance was reiterated at around 2.1% which meant that in two.
Point05 2.1% this quarter while slippages have declined, PCR has also dropped by 3 percentage points. So could you provide some guidance on, you know, how should we expect credit costs to trend from here onwards? And on segmental. So credit card SMAs have increased. Anything to read over here? And Even mortgages and MSME GMPs have increased by around 25 to 30 basis points over the last three quarters. Anything worth highlighting over here? So these are my questions.
Sudhanshu Jain
Yeah, thank you for the questions. I think you have asked a series of questions but we’ll make best attempt to answer all on the margin front. Out of that 17 basis points as you said 12bps came because of reduction in cost of funds. I would say about 2 to 3 bips came because the CRR requirements were lower during the current quarter. Last quarter the CRR was broadly at 4%. This quarter it was reduced in the quarter to about 3%. So that gave us some benefit. Third I would say is that we got capital in the mid of the quarter last quarter and hence we saw some full impact of that also sort of playing out by few bips.
So that essentially is the bridge for the margin increase of 17 basis points. The next question was on SA rates, maybe if you.
V. Vaidyanathan
Yeah, on SA rates basically, yeah. I mean you can see we’ve got at least in the bulk bucket, the biggest bucket that we had, 5 lakh to 10 lakh bucket, we cut it by 200 basis points straight. So we’ll watch. We feel that this will pass through comfortably in the sense we don’t expect any, we don’t see any outflow in a serious manner, etc. Because we believe that we’re supported by good service levels and brand and all that. So we will keep a good eye out for this, for an opportunity to reduce it. The key thing to watch out for IDFC is the thing that depends on the growth that we need.
Because end of the day, if a balance sheet has got to grow by this order of magnitude, say about 20 odd percent, it could be anywhere in that zone because it’s got 18, 19, 20, 21 something in that zone, then corresponding unitraised deposits. So we will monitor the. This is to be seen in the context of how much funding we will really need and what kind of branch architecture or physical architecture we have to support it. In other words, for example, let me put it like this. Theoretically, not just as a thought experiment, if this bank did not have thousand branches, they have had 2,000 branches, right? And we had incurred the cost of that line, then we don’t need to pay even the current rates.
We could have cut it by 100% points probably. So you’re paying through this route or that route. Right now we’re running less number of branches for the kind of deposit we raise, so it appears we pay more on the rate. But end of the day we are running less branches and therefore incurring less cost there. So we got to pay for it through one line or the other, either through expense line or the interest line because we’re still in the phase of building odd. But we’ll keep a very close eye on this and we’ll balance the situation.
Sudhanshu Jain
Yeah, maybe I’ll take a few other questions which were sort of put out on the credit cost. Yes, we have come at about 205 basis points for the current quarter and our guidance in the earlier call was about 210 basis points. We are quite hopeful that Q4 also should be strong on this front and we are hopeful that we will still try to get close to that number. So that’s on the credit cost front and in terms of pcr, it has marginally come off. But if you take into account the contingency provision, which we still hold, then the PCR is about 72.7%.
So we feel quite comfortable as far as the PCR is concerned. Your last question was on the SME increase in credit card there. Also, if you see last two or three quarters, it came down in the last quarter, it has marginally gone up. We feel quite comfortable on this front and hence nothing specific to call out on that front.
V. Vaidyanathan
And frankly on this last point that Sudanshu answered, you see, I don’t know if you’ve noticed or not, but we disclose product by product, sma and both SMA1 and SMA2 and we also give it by product by quarter. So you can see the full trend out there. So you can see that most of them are in the zone. Like almost every product is flat, you know, plus minus 20 basis point zero there may be 10. So every product is flat. So you can get good, clear look through visibility of the what’s happening underlying in the portfolio.
Akshay Jain
Understood, sir, thanks. And on the MSME and mortgages there, the GNP seem to have inched up by, you know, 25 to 30 basis points over the last three quarters. So a nything t o read?
V. Vaidyanathan
No, no, nothing to read up there because the, if you see the mortgages also broadly, it is a flat, you know, the, what’s happening is also that the, the, the books are also not growing at the. To pace every business when you start they have an aging process and finally they age and they stabilize. So if mortgage running at SME of 0.54% in itself is a pretty low number. In fact, last quarter was 0.54. The quarter before the 0.49. It’s like normal aging that’s happening on the portfolio. But in absolute terms they’re like absolutely safe, they’re doing well.
Akshay Jain
And the, any trade cost guidance for next year?
V. Vaidyanathan
Yeah, it should come down actually this, at least the next quarter also should come down. At least the way we, when we’re looking at the numbers and analyzing them not just in percentage terms in credit cost percentage in absolute terms Also we see it coming down next quarter, we think.
Sudhanshu Jain
Yeah. Because the MFI problem we feel is by and large done and dusted. Of course the normalization of trade cost may still take one or two quarters. It’s beautifully coming down every quarter. So definitely next year we should see an improvement in the credit cost.
V. Vaidyanathan
And I also pointed out to you, I don’t know if you, if you really concentrate, if you got that or not. Our bank’s credit cost has been 1.95% of average book through in a look through the cycle five years alongside a long period, you know, so which is of. And I told you, I suppose assets is 1.26. So we should come back there because the crisis is behind us. No news. I mean of course in banking we should always watch out. God knows what’s around the corner. We should be very careful. But for now, as far as RIs can see, next quarter, next year we should come back to those levels are probably a bit better, hopefully.
Akshay Jain
Thank you. Maybe better than 1.95 because our mix has improved over the last few years.
V. Vaidyanathan
Yes, hopefully. And yeah, that’s true. I mean we should hope so because in a subsequent years mix should even look better. So at least you should expect from. Us we say too so that all. Of you are anchored to particular number because that’s, that’s model. But hopefully if you take 27, 28, 29, 30, it should be even lesser than that. But you know, who can talk that long? We should play it by the ball.
Akshay Jain
And I guess we missed on the margin guidance. So how should you expect margin to move? That’s the last question. Thank you.
Sudhanshu Jain
Yeah. So if you remember for Q4 we had earlier guided that margins could be upwards of 5.80%. We would slightly want to revise that guidance upwards to 5.85. This is also an account of the SA rate reduction which we have done, which Vaidya talked about. That should give some benefit. So we expect the margin trajectory to improve in the next quarter.
Akshay Jain
Thank you, sir. Those were my questions.
V. Vaidyanathan
Thank you.
operator
Thank you. Our next question comes from the line of Piran Engineer from CLSA Ltd. Please go ahead.
Piran Engineer
Yeah. Hi team. Congratulations on the quarter. Hi. Hi. Just getting back to, you know, this SA thing. Right. Like Vivi, last time when we had this con call, you said you’re a bit cautious about cutting because you think the same customer will then go and put in td. And you know, you were debating with your colleagues out there as to what to do. But it seems like that didn’t happen. Your CASA has actually improved. So has it improved because of car? Has it improved because of sa? So that’s that. And then just on this, you know, and you would expect that over the next few years you keep pruning your cost of funds by, you know, getting it in line.
Now you’ve got it in line with the mid tier banks and then hopefully in the future closer to the larger bank. How should we think about whether you want to pocket these gains in terms of MIMs or you would rather compromise on that and grow in safer segments or safer customers, if you get what I mean.
V. Vaidyanathan
Yeah, it’s a very good question. So on the SAR strategy, yeah of course we were debating internally should we, shouldn’t we? And we did do it one, because we saw the market also, almost all competition had cut it and we were kind of an outlier where we had, you know, our rates were standing out quite high and we actually felt that even if you cut it, we are safe to cut it. Meaning we had, we felt comfortable about it firstly. Secondly, we also, you know, the fact that this quarter has gone up, you shouldn’t read too much into it because this quarter, all of this quarter we’ve been having substantially higher SAR rates than the market, so to say.
So the truth will tell next quarter or the quarter after that. So let’s see where it goes. We frankly feel comfortable even if you say internally. If you were to talk to us. We would say we internally comfortable even at 45 to 50 in that zone it doesn’t have to be like 50 plus and all that. So it gives us enough headroom right now sitting at the current CASA ratio as it plays. So we’ll see this, you know, as I told you earlier, end of the day mind you, that we have only for the kind of deposits we are raising, we have only 1070 odd branches now. So therefore the more network we grow, the more ability for us to cut the rates because the output we need to raise the 60 odd 1000 crore or 50 odd thousand crore that is given because that amount balance sheet is growing.
So if your output is given then it’s a product of the network we have and the rates and we just play as a combination of that because other items, other than these two variables, the bank has fine tuned really very well, brand is known, products are good, service levels and so on. Now coming back to the second question. How do you want to deal with this? That if we get an opportunity to reduce it, what are we going to do with it? Are we going to go down safer segments or are you going to pocket to the P and L? That’s really a very good question.
Our own thinking is that we’ll probably walk down the safer segments route and increase that as a combination because as we walk down the path into 28, 29, 30, remember I always say I hope you remember that right from day one, 2019 we’ll be saying thinking long, thinking long. So even now we’re thinking long. We’re not thinking for one quarter, two quarter, we’re thinking five years, eight, five years ahead. So when we wake up 20, 30, we don’t see ourselves as a bank lending out at 13.5% and having cost of fund of maybe 3.5% or 4% and pocketing and having ROE of some insane roes.
We don’t see like that. We do see ourselves that we would have become a more mature institution. We would have probably come down the risk curve. We would had a larger proportion of mortgages, business loans, loan against property gold loans and these kind of businesses. So hopefully accreditating I’m hoping we’ll get to the AAA League via AA today. So we are shooting to be one of those institutions which people can look and feel more happier about and by that time hopefully the loss from liabilities would have gone away. So that is the picture we have for the future.
Sudhanshu Jain
And P just to add to your specific question on CASA so I’m saying as I said earlier, 75% of the increase during the current quarter came from CASA. Of course car for us still happens to be a lower proportion business the overall customer deposits. So there also we saw I would say a very decent growth during the current quarter and the balance was led by SaaS.
V. Vaidyanathan
But given a generally speaking which all of us internally also acknowledge that our CAR as a percentage of our CASA and current account as a percentage of a total deposit is quite low relatively because when we had I told you we had to replace pay a lakh of crores coming up. So at that point of time the quickest way to raise this was savings account through our various methods. So the current account is one of our spots that we are relatively I’d say on the lower side but this we will fix. We fixed many things in the bank this also will fix and the last thing I must say that while we talked about the fact that broadly we will use this as and when we can bring down cost of funds either through distribution or whichever way when we do it I said we will go towards safer segments, lesser credit cost product.
That’s a broad picture we have. But I want to just point out one thing to you and everybody hearing the call that a unique DNA built at IDFC which is coming actually from Capital first, which we’ve been honing and honing for 15 years now, which is lending to these segments by using technology and underwriting models and scorecards and machine learning based scorecards. We have 100 machine learning scorecards to give you an idea, for example, 100 of them, a little more. So that kind of a very unique capability where we can power up at scale and open unserved underserved segments in a profitable way that DNA we don’t want to give away.
So in fact we treat credit costs a bit like a research and development cost. I don’t. It’s not something for us to zero. That’s not what we’re striving for. So that is a unique model capability we have. We want to keep that model so just that these the percentage of that will come down and the conventional traditional businesses will increase.
Piran Engineer
Understood? Understood. Okay. Second question is what percentage of our unsecured consumer lending, be it, you know, consumer durable loan, personal loans, digital personal loans, credit cards, etc. To our own deposit customers.
V. Vaidyanathan
Very high. I can’t say that for consumer durable because consumer durable and two wheelers are largely new to bank customers and so on. But the credit card is largely to our base. Largely. I’m not saying only to our base, but largely.
Piran Engineer
And salaried and professional loan that we.
V. Vaidyanathan
Are doing is it’s a okay job. I use the word okay job because we have a lot more to do on that front. But because our personal business is still a good portion is originated through direct marketing, associates, etc. That we engage with. But increasingly considering that we have developed a really good savings account base and also we are digital in our capabilities, our ability to give personal credit to this base is very good. Not that we have the base, we have the ability to give also in a very seamless way. So we are doing that and we are developing capabilities in IAP, etc.
I mean I use the word okay because we feel there’s a lot of scope to improve on that front.
Piran Engineer
Understood. And this last question for sudanshu, what are the standard asset provisions we are carrying right now and when we migrate to ecl, what sort of impact do you foresee A on transition and B after, you know, on a steady state basis?
Sudhanshu Jain
Yeah. So a standard asset provision, the number roughly for the quarter is about 50 or crores. And typically it’s about 30, 35 bips of the overall loan book, which we carry. So and so it should be about that. 90.
Piran Engineer
I mean the overall buffer. I mean the outstanding buffer.
Sudhanshu Jain
Yeah, yeah, yeah. So it’s broadly, it’s around those numbers in terms of ecl. Yeah. This was a question which sort of came in the last call. Also, of course, we have responded to the daft paper in terms of suggestions and that has gone from all the banks. I did touch upon that from a. On implementation, from first, from a capital point of view, we feel that it could, if the guidelines have to come through around ecl, around credit risk, around operational risk, this should be marginally positive for us. On implementation. In terms of credit cost, of course, there could be some increase on a steady state, but we could have some benefit which could also come because of an EIR implementation.
So we actually need to look into in what form and shape it sort of eventually comes through. There could be some increase in credit cost, just to put it straight, because.
Piran Engineer
The standard asset provision of 3540 bips won’t be enough. Right. That’s what I’m saying.
Sudhanshu Jain
But I’m saying your acl, you have also have to see in conjunction with the PCRs, which you’re holding. Right. And that also sort of has a play there.
Piran Engineer
Right, understood. Okay. Yeah, that’s it from my end. Thanks and wish you all the best.
V. Vaidyanathan
Thank you.
operator
Thank you. Our next question come from the line of Param Subramanian from Investec. Please go ahead.
Param Subramanian
Yeah, good evening. Congratulations. The quarter, firstly, could you give a breakup between CAR and SA of that, you know, 51.6% CASA ratio? And what is the impact on cost of savings from the change that you have taken in January?
V. Vaidyanathan
I’ll put numbers for you. That helps you. So our car number is about 20,000 crores, correct?
Sudhanshu Jain
Yeah, yeah. So your car will be about 7% in. In that 7. 7.5% in that 51.6% and balance will be SA.
V. Vaidyanathan
That’s why we said that we are low, we are punching low on car. I told you.
Sudhanshu Jain
And to your question on the saving rate impact, this would lead to a reduction of about 50 to 16 basis points on the SAR cost.
Param Subramanian
Okay, very clear. Second question in this quarter, you know, like, you know, the previous participant pointed out, so our SMA in credit cards is up, so. And also our write offs are inching up. So would it be fair to say that some of this is unsecured LED and, you know, write offs could stay elevated for some time or should this Also start falling.
V. Vaidyanathan
Yeah, the. It’s very simple actually. CCD write off is the measure of what policy we have after provisioning. So the way to look at it is that you, you, you track us finally what hits the P and L provisions. That’s it. So we track also the credit cost. So don’t bother too much about the write off or don’t write off in the sense because they’re all a line item. End of the day it is credit cost. That’s why we call it credit cost every single time. And, and we track ourselves to that. I told you the number of 2% and 1.95 etc.
Param Subramanian
Fair enough. Okay, so my next question is actually on the CGFMU book, right? So about 80% of our book is now in MFI is now CGFMU insured. So how do you. On the CGFMU NPAs, how exactly do you provide? Because one of our peers actually called out that you. They only provide on the uninsured portion. A portion of that 28% which is uninsured insured. Is that how we do it as well?
Sudhanshu Jain
No. So on this one he would say we slightly follow conservative norms. In fact, we end up providing 100% as the account touches 180 days. So we have a slightly differentiated policy.
V. Vaidyanathan
Frankly, they all come back to the same thing because end of the day probably 72% of that is covered. But frankly they’re all.
Param Subramanian
Later in the year. We will get right backs whenever we invoke these guarantees. Right? Yeah. Okay. And lastly, sir, so our ROA started trending up. When do we think we can get that 1% ROA run rate? I, I heard you mention 1.6%, but when do we start hitting a 1% plus ROA?
V. Vaidyanathan
I know this is a. We should be very careful about putting numbers out there. Why don’t you just. We’ll take it by the quarter. We are quite, quite hopeful that every quarter from now on should look better and see the. I’m not ducking the question and please don’t get me wrong, except that sometimes putting the numbers basically out there, you know, puts us into a position where we can’t take market moves after that. So I don’t want to pin ourselves down because market is market. If you got to cut the rate somewhere. Cut the rate.
We’re going to increase the rate somewhere. We want to increase rate. We just want to be able to play our shots. But I must say that fundamentally you can well think that if you’re borrowing money at 6, we’re lending at the rate we’re lending, posting a NIM of 5.8%. It just has to make money. It just has to. Mathematically it has to make money. And as a liability cost comes down. Liability, the OpEx, not OpEx. The loss from liabilities, it comes down, it just has to, it just has to become more profitable. But I think hopefully by end of next year.
I don’t know. And operating leverage, but I don’t want to specifically pin ourselves down to it.
Param Subramanian
Fair enough. So one last question if I may. LCR for this quarter and what is the impact of this transition to the new LCR calculation?
Sudhanshu Jain
Yeah, average LCR for the quarter is about 115% broadly at similar levels as the previous quarter. On account of these new guidelines which will come in from April 1st, of course we will get some benefit on the wholesale front but because on the retail LCR also We are at 65% which I mentioned earlier on a composite basis we may have a small impact, about one to one and a half percent on lcr. But it’s a quite small number in that sense.
V. Vaidyanathan
And to the previous question, don’t get disappointed that you’re not putting a number down. Don’t be because like I said it’s not about one year. We’re building the bank for a year after that and the year after that we are building institution here. And clearly unit economics of this bank is pretty good. I told you the numbers risk adjusted income of this bank on a five year look through period. It’s really good. It just will play out. You will see it quarter by quarter and we’ll take it as it comes.
Param Subramanian
Absolutely sir, all the best and congrats on the quarter. Thank you so much.
V. Vaidyanathan
Thanks Param.
operator
Thank you so much. Our next question comes from the line of Jamundra from ICIC securities. Please go ahead.
Jai Mundhra
Yeah, hi, good evening sir and congratulations on the quarter sir across large products, mortgage vehicle, consumer loan. Would you have an idea? I mean can you tell us how much is let’s say DSA LED or CO lending? Led because I believe the CO lending norms would would now be much tighter and hence you know if it could be difficult to originate through CO led. And how much is BSA CO lending and maybe branch length?
V. Vaidyanathan
Not much. We don’t do when our not much of CO lending model, it’s broadly what we originate from our branches, what we originate directly and digitally and what we originate through regular third party originators.
Jai Mundhra
And sir, any number for DSA and or online listing?
V. Vaidyanathan
Yeah, of course if you take large product Then the easy question to answer, for example take loan against property or take education loan, I’d say it’s a largely third party originated. Or if you take a two wheeler loan or a vehicle loan, they’re done at the dealership point. It’s not that customers walking toward branch and asking for a car loan. Right. So the thing is that. So if you think of those products, they are the obvious one, they are more third party led and it’s a majority I’d say. But we have also developed our ability to have our branches originate.
As a bank we are a bit shy of if you are a customer of the bank, you might have noticed that you don’t get too many cross sell calls. You don’t get repeat calls from the same customer. If any of them, if any of you have got an odd call, I mean odd person, I’ll apologize for that. But 99% are quite confident you wouldn’t have got that. Because we, we are very careful about anti repetition rules which we inbuilt in the system. Anti spamming rules we built in the system. So we kind of constrained cross sell and keep it in a, you know, we think from a customer experience point of view and therefore our own cross sell I’d say, you know, has some room for improvement.
And for these products it is more outside. But for credit cards, cards we’d say largely is in house. In house meaning existing customers where we reach them digitally and they come to the app and they take the card away. So if you take personal credit, like I said earlier, we are also developing the capability in house. We also have tie up with some of these platform companies. Platform company, the digital platform companies. So we originate through that model because we have really good API architecture in the bank which we use. So those kind of products we are also originating digitally so we don’t have the number offhand.
So next time maybe we’ll share with you.
Sudhanshu Jain
But Param, I can just add that definitely in some of these products the proportion of sourcing from branches are increasing. Whether it’s mortgages, whether it’s like business banking that’s entirely done out of the branch credit card. Maidya already talked about personal loans. Also we are trying to source more through our internal channels. So in all of these products we are trying to reduce the dependency on DSA
V. Vaidyanathan
And one number, I mean it’s coming to me just last minute ago when I spoke, it is not on my hand. So basically we saw that we tracked ourselves with how much is the origination by the bank from branches for the last say five years and it’s almost growing by about. Despite all the anti repetition rules and anti spam rules. It is growing by about. While the book is growing by 20% that business original branches, give or take is growing at about 35 to 40%. And so you get so proportion is obviously by this mathematics improving.
But what is the exact percentage? Maybe next time I’ll share with you.
Jai Mundhra
Sure, sir. As a question on your OPEX and OPEX strategy, actually, so let us say now so far the NII growth was lower than loan growth because the NIM was under pressure and this quarter seems to be a pivot quarter. And you know, NIM have started to expand and maybe this trend could continue. So increasingly NII growth should become better. If that is the case, then will OPEX remain at 12, 13% or, or you believe the OPEX could also rise because you have, you know, at least in the last 4, 5/4 the OPEX has been constrained and as NII growth also increases, maybe you will maintain the delta or you believe OPEX is now more or less steady at 12, 13%.
V. Vaidyanathan
Okay, let me take that. Sudanshu. So the thing is that yes, of course, last 4/4 or 5/4, you can see that we have kept it very, very, very tight in terms of our expenses. The thing is that this could even go back to say 40%. It could well be like if you look ahead into say 2027. But still the fact is that income will also grow by probably because now the mix issue is already done because the microfinance book had to shrink, has shrunk already. So hopefully next year’s income also should grow 19%.
Sudhanshu Jain
Yeah, so I’m saying definitely next one or two quarters, we see income sort of normalizing much more and almost and maybe keep pace with the book growth.
V. Vaidyanathan
Yeah, that’s fine. But coming back to the point.
Sudhanshu Jain
Contingent, I just to caveat, I’m saying if there are any further rate cuts or any in any sort of systemic changes, then that could have a different bearing.
V. Vaidyanathan
No, that is one thing, but still, but broadly the OPEX front. So you know, really I just, I’ll throw a number at you and if I’m, if I’m wrong in my assessment, then you can correct me also all of your analysts that frankly if the book grew by maybe 20 and the income grew by say 18, but if the opex grew by say 14 just to simulate that, that’s still operating leverage and we’ll see how next year looks like. But I’m just giving an order of magnitude the Way we are thinking about.
Sudhanshu Jain
Yeah. So as I said, income growth could to a great extent normalize starting into the early next year. So it could keep pace with the advances.
V. Vaidyanathan
Because this year we really, really constrained it. And like I said, you could t o pay through the OPEX line or i t could pay through the interest line. We do believe that setting up some cost structures is part of building the bank.
Jai Mundhra
Sure, sir. And last question and a bit of an observation. So that if I look at your SMA, SMA 12 has been very, very reasonably stable at 7080 basis point. And your slippages non annualized is also similar 7080 basis point. So it looks like that either the people who slip to SMA12, they straightaway slip or you know, or the recovery is not. I mean other banks, they have much higher SMA number and only part of that will slip to NPA. Whereas in our case the slippages are around 3% annualized and the SMA number has been very, very stable.
So either the, either the migration from SMA1 to NPA looks a bit higher. I mean that is an observation. If you have any comment around that.
V. Vaidyanathan
It is possible maybe the combination of our products are such. It’s possible, you know, if you are giving mortgages and all, you know, you could probably get a lot more recovery. Maybe in our combo of products it’s. It moves ahead. But still end of the day, as long as there’s 85, 85 or 90 stable and a credit cost is on the guidance, the end of it all comes down to credit cost. Okay. So if a credit cost is in the line, our income is like 5.8 credit courses. You know, I mean of assets. I mean.
Okay, because 1.36 of assets or 1.36 assets. It’s a lot of money, right?
Jai Mundhra
Sure, sir. That is very, very helpful sir. Thank you. And all the very best sir.
V. Vaidyanathan
Thank you.
operator
Thank you. As there are no response, we’ll move forward to the next participant. Our next question comes from the line of Suraj Das from Sundaram Mutual Fund. Please go ahead. Suraj. Can you hear us?
Suraj Das
Yeah. Hi. Am I audible now?
operator
Yes.
V. Vaidyanathan
Yes.
Suraj Das
Yeah. Thank you sir. Thank you for the opportunity, sir. Two, three questions. First question is on the operating income X trading games in MFI. That number seems to have dropped from you know, 1500 crore last nine months last year nine months versus 650 crore this year nine months. And also if I look at as a percentage of loans this number has seems to have dropped, you know, for some 14 crore percent last year to 10% this year and even it is lower than the, you know, nine month FY24 also. However, as you have highlighted and also as we are seeing the trends that the slippages are improving in mfi so the interest reversal should be you know, lower.
And then does the operating income. So why is the decline, I mean are my numbers correct or there has been any reclassification or any sort of that thing and if the numbers are correct then probably going to give some rational for this, you know, core operating income decline in mfi.
Sudhanshu Jain
Yeah, I couldn’t relate the full numbers but let me tell you that X MF this year has been impacted.
Suraj Das
I’m calculating, yeah, I’m calculating this is your slide 41. So if you look at on slide 41 you, you are, you have mentioned that X MFI the operating income has increased 15%. Yui. I think last year year, you know, December quarter you had given some, you know, disclosure where the non MFI portion, the operating income was 17,805 crore. So this year 15% increase would be somewhere around 20,454, 470 crore. And if I minus that on the overall operating income 21,134. So hence I’m getting the 650 crore kind of a number.
Sudhanshu Jain
Yeah, got it. In fact if you again see that number for Q3XMFI that income has grown at 18% XMFI. Also we had some impact because of the fast repo reductions which happened this year. We saw almost 100 reduction in the repo rates which in terms of a cost of funds have translated with some lag. So I would say some part of the impact is on that account. Right. But things are normalizing and that’s why we also said earlier, earlier that even both MFI and non MFI we expect the operating income trend to continue to improve from here on every quarter. So things are normalizing on this front as our cost of funds are also coming off.
Suraj Das
Okay, but you have not taken any rate cut or any card rate changes on the MFI side.
Sudhanshu Jain
MFI we lend at the market rates. So I’m saying these are pretty standard rates prevailing for some of these products across players.
Suraj Das
Okay. So probably I’ll connect offline on this for more understanding. The second question is sir, on the retail liabilities, I think if I look at the cost to assets on the retail liabilities that seems to be very flat, you know, at that negative 0.8% for the last three four quarters, do you believe there is still scope for you Know cost improvement here year and then if yes, what are the drivers?
V. Vaidyanathan
This is come by scale. So if you notice FY24 it is minus 1.7. FY25 is about 1.2. Now this quarter, this year is running trending at 0.8 or minus 0.8. So this is what we call as the investment that is going in the business. Investment meaning that liability side is you know not yet productive because it’s a new bank as compared to somebody which is a 30, 25, 30 year old bank. They are running a marginal cost of bank. This is very important note, okay. A bank which is there for 15, 20, 30 years they are running a bank on marginal costing.
We are running the bank on full costing. Because new bank everything is a cost. So that is why the minus 8 is 0.8 is there. I mean it should gradually come down. It should not expect miracles here. It should not gradually but I mean it should come down year on year from here on. And we think that building a bank takes 10 years at least to not just building a bank, 10 years actually to fix a 75,000 crore, you know funding 1 lakh crore funding problem legacy plus build the growth of the bank that takes, you know it’s already spent this time.
Maybe by next four, five years this minus 0.8 should come down towards zero. And that’s when the full ROE what I talked about about that. That 5.65 Ni to assets minus credit cost 1.36 giving 4.3% you know at a, you know at at a risk adjusted NIM minus cost income ratio to pass to P and L that that thing will fully start reflecting in the ROA of the bank when this becomes zero.
Suraj Das
Understood. And the last is our credit card. I think if you can highlight what is is the proportion of you know emi, revolver and transactor as of December quarter versus last quarter. Because if I, I mean I believe that the transactor portion has gone up because you have reported a uptick in QQ uptick in cost to income in credit card. And also I think the loan growth has been lower than the spend growth. So if you can highlight, I mean what is the proportion of EMI revolver and transactor this quarter versus last quarter maybe or maybe Y-o-Y?
Sudhanshu Jain
So the r evolver has been I would say quite steady. I’m saying we see a run rate of about 17 to 18% there on revolver. EMI as a proportion has been increasing for us bit by bit and that’s about 35 to 36%. And the rest is the transactor book. So these are pretty standard trends which we are observing in last few quarters.
Suraj Das
Okay, sure.
V. Vaidyanathan
In fact meeting if I have any. Yeah, I think I got one number which is probably might be useful for you Sudanshu. I got some extra numbers here so wait a minute, just if I can fetch it for you. Our Revolver is about 16.5% and our EMI is about 36% and our transact is 47.5%.
Sudhanshu Jain
Yeah, so those are broadly the numbers which I also sort of called over. Yeah.
Suraj Das
Thank you for answering all my questions.
V. Vaidyanathan
Thank you. Are we done so much like one or ten minutes in case any any other serious questions? If they are, we’ll still wait to answer but I assume most of them are answered by now.
operator
Ladies and gentlemen, due to the interest of the time that was the last question for today I would like to hand the conference over to Mr. Vaidyanathan for closing comments. Thank you. And over to you sir.
V. Vaidyanathan
No further comments to make. So thank you for being with us this late Saturday afternoon evening and we’re feeling the bank is on a strong ground now we think that subsequent quarters, next three, four quarters they should all look up gradually but steadily. I’d say more than gradually steadily I think next we are quite hopeful that the next four, five years now we are on a steady track. Frankly it’s been like five years, seven years except the microphone I was saying which is an industry issue. We haven’t put a foot wrong. We made our strategy right, deposits came, our book grew, our credit course was in control except this microfinance problem and we think that with MFI behind us things should stabilize again and rest of rest are playing to plan.
So no major call out. We are behind on cost income ratio but frankly when we started the bank we had no clue that this is going to be so complicated. But overall we are on track. Thank you so much.
Sudhanshu Jain
Thank you, everyone, for patient hearing. Thank you.
operator
Thank you so much. On behalf of IDFC First Bank, that concludes this conference. Thank you for joining us, and you may now disconnect your lines.