Kotak Mahindra Bank Ltd (NSE:KOTAKBANK) Q2 FY22 Earnings Concall dated Oct. 26, 2021
Corporate Participants:
Uday Kotak — Managing Director & Chief Executive Officer
Jaimin Bhatt — Group Chief Financial Officer
Shanti Ekambaram — President – Consumer Banking
D Kannan — Group Head – Commercial Banking
KVS Manian — Head – Corporate, Institutional & Investment Banking
Gaurang Shah — President and Chief Risk Officer
Jaideep Hansraj — Chief Executive Officer and Managing Director
Nilesh Shah — Managing Director
Dipak Gupta — Joint Managing Director
Analysts:
Nilanjan Karfa — Nomura — Analyst
Adarsh Parasrampuria — CLSA — Analyst
Saurabh — JPMorgan — Analyst
Kunal Shah — ICICI Securities — Analyst
Rahul Jain — Goldman Sachs — Analyst
Jai Mundhra — B&K Securities — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to the Kotak Mahindra Bank’s Q2 FY ’22 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Uday kotak. Thank you, and over to you, sir.
Uday Kotak — Managing Director & Chief Executive Officer
Thank you very much, and good evening to all my analysts and investor friends and colleagues. As we come to a crucial 18 months in the post COVID era, it is – at this stage, it clearly looks like we are moving from a pandemic to an endemic, something which all of us as human beings are beginning to deal with and accept more and more as a part of our regular lives. We are also seeing that there’s a very significant change across many of us.
And just as an example, we are doing this in the conference room here with my team here in a physical meeting after quite some time. So we are adjusting to what I would call as new next normal or never normal, whichever way we want to define our present and future to be. As we make this change, the big question around us is global macro and domestic macro in terms of how we see the way forward.
Looks like on the global side, we are coming towards the end of the very, very easy money policy with the beginning of potential paper by the U.S. Federal Reserve between now and the next conference call as things look today, and a gradual increase in interest rates sometime in 2022 calendar.
On the Indian side, too, the bond yields have begun to move up. And in the last 20 to 30 days, there has been a reasonable movement in the bond yields from the short end to the long end. The short end, of course, you’ve seen the 1 year treasury bill, move up by 20 to 25 basis points in the last few weeks, as also the 10-year, which is now around the 6.35 range. Again, a movement of 15 basis points. And it — belief that this will be a gradual, but very steady increase, not anything dramatic. So with a macro situation, which is still growth-oriented, some of the commodity prices, like oil going up, I would still see of the view that economic growth is very much on.
The Indian recovery, as I look at on the economic side has been significantly faster than what any of us would have imagined in May or June. And I’m keeping my fingers crossed that this festival season, we are able to manage without any significant damage of what is a worry of a potential COVID 3.0. However, with this good backdrop of a turning economy, I would just like to turn my focus to Kotak.
When I look at Kotak in the 18-month period starting March, April 2020 into September ’21, I see on reflection our approach at the early stage of the pandemic was that of an event we have never seen before, and probably we were seeing for the first time in our lives, which is true, and therefore, an unknown, unknown. And we did turn cautious in the early stage of the COVID cycle.
The first 6 months post the pandemic coming in, which is April to September period, was a period where we at Kotak had moved into significant caution on the asset side, including on unsecured retail. Coming October last year, we began to feel more confident, but were still wanting to move in the area of secured loans and secured assets, and still cautious about unsecured consumer retail in view of the potential risks out of the pandemic and the risk costs and the stress costs coming out of that. That was the first product, which we started doing more aggressively in the months of November, December were home loans. And we did take a position reasonably, aggressively, on the price of home loans.
And as we started gaining more confidence, we also took a decision to significantly up our game on hiring. Around January, February, we took a call that we will start hiring significantly, combined with being a little more open at that stage, even on unsecured retail. And as we started gathering that courage, we saw the beginnings of COVID 2.0 in April and May, and which again put us in a way some standard in our wheels as we were going down the path.
The big difference between COVID 1 and COVID 2.0 is we did not stop our desire to start hiring. And if you look at the speed at which we have added employees, we have added between — we’ve added nearly 10,000 employees in about a year’s time. And in the last quarter itself, that is July to September quarter, we’ve added at the bank alone about close to 4,000 employees. So our acquisition engine for people, a decision which we took some time in January, February, which we should have implemented more by around May, June but got delayed because of COVID 2.0 started coming on board in July, August 2021. And we have continued with that significant focus on building capability, building our engine and getting our growth engine revved up.
And fortunately for us, this time around, the growth has come back in the economy in July, August, September, and we were in a much better position than in the last 18 months of the cycle. And come around August and September, more in the second half of August into September, we began to see our advances and growth looking better. As a result of this, I’m happy to come back to you and say that our quarter-on-quarter growth in advances at the bank has been about 8%. And if I add credit substitutes, which is credit investment instruments, our quarterly growth is about 9%, which on an annualized basis, turns close to 36%, of course, of a lower base from last year. But we’re seeing our growth engine [Technical Issues] August September and into the festive season, begin to show significant traction, more than we have seen probably in the last couple of years. Because if you would recollect, we had slowed down our growth engines, particularly on unsecured retail even before the COVID pandemic.
So we come into this with greater capacity with a significant ability to grow off a relatively small base of our bank. And we also come on the back of a significantly higher confidence in the quality of our existing book, whether restructured or not. And on that, I’m happy to share with you that our restructured loans, which includes COVID 1, COVID 2 and also MSME, all three put together is a total of 54 basis points, or 0.54% of our entire loan book. And obvious consequence of this is that anything other than this restructured book has obviously been reflected in our NPA book, with the obvious implication on interest income because moment it goes into the NPA bucket it hurts the interest income line because of IBR reversal.
The other redeeming things which we have seen in our book and of course, it is a much smaller historical unsecured retail book is our credit costs are running at back to around 63 basis points. And we see the overall existing book, including the credit cost in very good control. We have — this credit costs and the restructured book includes our entire ECLGS book as well. And I just wanted to share this with all of you.
So we come into this within August, September, which is showing us significant muscle on the growth engine on the loan side and the asset side, we are coming into this with a confidence of a very solid, high-quality low credit cost and a low — relatively low restructured book, combined with a very strong liability franchise, which we are now nearly close to 61% on current and savings account.
Our current account engine has fired extremely well. It’s grown to — between the 30% to 35% range over the year, and it’s continuing to fire pretty well. We are looking at ways and means to further push our savings deposit engine. But keep in mind, through this period, we have sharply dropped our savings deposit rate, though we have still higher than some of the other banks on that. But we do believe that with some friction coming out of this drop, we now see an ability to be pushing our savings deposit engine also faster as we go forward.
Therefore, if I look at overall the asset and the liability side, the asset side engine is revving up. We are sitting with significant liquidity. If you look at our LCR ratios, they are about 150%. Therefore, we have a lot of room with purpose liquidity on our balance sheet. The asset engine has just begun to crank up in the last couple of months. Our liability engine on an extremely strong foundation, and we believe it will continue to grow. This is the overall situation with reference to the bank and its asset and liability position.
At the same time, we are almost very enthused with our many engines on the capital markets side. We’ve had a really remarkable period and we continue to run with a very strong pipeline on our equity capital markets business being able to really work for some of the finest companies coming into the market. And that engine is continuing to work in the third and the fourth quarter of the current year.
Similarly, our both retail and institutional equities engine, the franchise is also gaining strength and some market share. Our wealth management business is getting new customers and deepening the franchise. And of course, our asset management business has also shown a good growth on AUM as we go forward. Therefore, all the businesses around market side also and what I call link to investments are also working — are in a very robust position.
On the insurance side, we were the first to recognize the problems coming out of COVID 2.0, recognized it in our June quarter. We are now seeing normalization of that begin to happen in the September quarter. And we genuinely believe we are adequately provided on the life grid side as we go forward. So when I look at the situation, I would like to believe that the unknown, unknown of the pandemic, which is what we started with 18 months ago, started gradually getting our arms around risk and return to acquisition, which we are today, there is reasonably greater confidence in our team here to now even further push the growth engine from the time which we, as I said, August, September onwards, which we have seen, continuing to, at the same time, build the franchise, the brand and go out there and grow our customer business at the same time.
I’m also happy to report that we have closed two transactions, which we think are strategically important. One is buying the portfolio of Volkswagen Finance, demonstrating our openness to go out there and acquire stuff, which makes sense for us and creates value for us. We also made a investment in KFin Tech, which is another — just below 10% investment because we believe some of those spaces, both in the financial infrastructure space and consumer tech space are spaces, which we continue to be excited about.
We believe we have a very strong capital position to be getting bolder as we go forward on a sensible basis without due risk. And I just feel we are at a good point in this time and look forward to a period of more stable and sustained growth, and genuinely hope that we don’t have any surprises coming in from the COVID pandemic turning into an endemic.
With that, I’ll request my colleague, Jaimin Bhatt, to take the presentation forward.
Jaimin Bhatt — Group Chief Financial Officer
Thank you, Uday. Let me just take through the bank stand-alone numbers first. For this quarter, which is July, September 2021. [Technical Issues] compared to [Technical Issues] the first quarter this year. Our net interest income is at 4,021 crores, which compares with what we did the same period last year at 3,897 crores. While [Technical Issues] fact that we’ve had advances growth during this period, which is on a YoY basis, 4317%. We’ve seen a lot of the growth in this quarter, which has commenced during the, almost towards the end of the quarter.
In addition, of course, the advances have grown up. The investment portfolio has actually declined on a year-on-year basis. And to that extent, that’s impacted [Technical Issues]. Also importantly, we’ve seen the growth of the advances happening in areas, which are mortgages and secured activities, which are lower yielding to that extent that’s been impacted [Technical Issues].
The fees and distribution income during this period, [Technical Issues] growth, which we closed this period at 1,419 crores. And that income has happened most on the distribution area as well as on [Technical Issues]. Distribution is not just by the regular [Technical Issues] insurance segment, but we’ve also had a very sharp rise in the syndication fee which we have [Technical Issues] comprising the regulat activity on service charges on loan, on credit card related and other areas have continued to grow well and we grow [Indecipherable] year-on-year basis.
On the overall cost — on the employee cost, we ended this period at 1,177 crores [Technical Issues] last year. Last year, of course, we had taken some small cuts, and to that extent which was restored thereafter. And as we put a note in the RBI, we’ve taken a small hit on the cost in this quarter.
The nonemployee operating expense we closed at 1,536 crores last year in this quarter. Last year the scale period was a subdued period where activity levels had dropped significantly. And to that extent, the last [Technical Issues]. This quarter, we’ve also seen expenses going in areas, which are investment committed in a lot of the areas like card-related costs, brokerage expenses, all acquisition costs have gone up. The marketing and advertisement area is another area where we’ve seen cost going up and recovery-related areas which have gone up.
If I look at a 2-year period, which is the same period for FY ’20, the operating expenses have actually seen a growth of about 15% [[Technical Issues]. Our provision for this quarter, we’ve taken a total of 424 crores, which includes 385 crores towards advances. The large part of the investment [Technical Issues] account of investment [Technical Issues] settlement of [Indecipherable].
On the asset quality, the gross nonperforming assets overall, we see drop in the quarter from 7,932 crores to 7,658 crores, which would take the GNPA from 3.56% as of June to 3.19%. And the net NPA, we closed at 1.06% in September as against 1.28% a quarter ago.
Our slippages during this quarter have been at the gross level at 1,293 crores, but we actually see the recovery in upgrades, which are higher than that during this quarter. As Uday mentioned, restructuring on the COVID-related stuff, we are total both under COVID 1 and COVID 2, the total restructuring is at 0.21%. And our restructuring under the MSME segment is another 0.33% of our overall [Technical Issues].
The credit cost at 63 bps for the quarter and [Technical Issues] quarter one at [Technical Issues]. SMA2 continues to be low at 388 crores as of September 30, which is those which are borrower, which are outstanding of this more than 5 crores. We continue to have no sales to ARCS during this quarter. Our balance sheet overall [Indecipherable]. And as Uday mentioned, our LCR average for this quarter at 153%. Capital adequacy continues to be extremely strong. We closed at 23.1% overall with a Tier 1 of 22.1%.
And as Uday mentioned, this is on the back of robust growth from the advances side at 14.7% for the year and 8% for [Technical Issues]. Our capital and results in the quarter at bank stand-alone at 67,000 crores with a CASA of 60.6%.
I request Shanti to take up some of the digital [Technical Issues], which we have made [Technical Issues].
Shanti Ekambaram — President – Consumer Banking
Thank you, Jaimin. I will start with our digital strategy and initiatives. Our digital strategy continues to be centered around our customers. Last time, I covered our digital activation and engagement strategies across a platform of saving, lending, payments, investment protection powered by Al ML. This continues even during this quarter. We continue to invest in enhancing our technology stack and platform, which is the backbone of our digital strategy. We continue building scalability, agility and resilience in our core tech infrastructure, including cloud for agility.
In the application side, we have the greatest platform to be able to offer new features and customize solutions, thus enhancing the whole experience for our customers. In the digital channel, we continue to revamp our DIY, STP and automation journey, providing a seamless, frictionless and convenient ability for our customers to transact. This investment in our technology stack will be a continuous journey and will be a base for our digital strategy.
Mobile cost has always been a key strategy. In the last two years, we upgraded our mobile app significantly by providing customers more functionalities and greater choice across banking, payments, loan cards, investment in insurance. By integrating shopping and lifestyle, we are now well into the journey to be a super act. Our customer-centric experience and functionality has allowed us to be consistently amongst the top rated banking app in both iOS and Android. Mobile transaction volumes have shown a 138% YoY growth. UPI transactions both, P2P and merchants have almost tripled 2.9 times YoY over this quarter.
The app enables the customers to [Technical Issues] financial products and nonproduct, and provide a wide range of payment product including QR, bill pay, recharge, etc. To the key feature of pay your contact, which we launched last quarter, we’ve added the ability to send gift to your contact and this has been well received. Pay your contact has seen rapid adoption with about 3.8 times transactions in September versus June. The shopping malls within the app came out of a 14 categories of e-commerce to customers with 15 live merchants. We added some more in Q2. This is a focus area, and we will add many merchants over the upcoming quarters.
ECom transactions inside pay mall grew 1.7 times QoQ. And the shopping and the grocery categories actually doubled in Q1. We’re aiming to serve our customers in vernacular languages and digital, and enables the top 4 used features in Hindi, [Indecipherable]. We are working towards Mobile 2.0 which is a state-of-the-art mobile platform and experience and our vision of the super app. Mobile 2.0 aims to personalize and customize the banking experience for customers and users will have full control to customize the act to suite their requirements.
The app will be built for scale using new-age cloud native technologies without compromising on security. And even non-Kotak customers will be able to use the app without opening an account for every day payments, bill payments and shopping.
Ecosystem. The strategy on ecosystem is in three parts, Office [Indecipherable]. We are — I already talked about the shopping mall, which is [Indecipherable] our own ecosystem. We are building ecosystems for investments in insurance, which will be launched in the upcoming quarters. We are rapidly expanding fintech partnership network, and we keep experimenting on use cases and business model. The connected banking partnership allows us to put banking within the platform with select partners, and the initial uptick is promising. We plan to leverage regulatory network of accounts, aggregator and open for retail and MSME vending in the upcoming quarter.
Retail assets. We have been building [Indecipherable] end-to-end customer digital journey across retail assets [Indecipherable] home loan, credit card, personal loan MSME. This will significantly enhance our retail assets, customer experience layer, engagement and friction-free delivery of products and services. This is across all our categories of customers, NPV, existing and customers through partnerships. Both DIY and assisted journey. All of this will go live in a phased manner across Q3 and Q4 of this fiscal.
We launched WhatsApp as a service channel for various asset product since Q2 and have seen a significant uptick in usage. Merchant acquisition. A new key focus area for Kotak. This business model has been changing given the multitude of payment options, growth in digital transaction, growth in UPI and [Indecipherable]. We embarked on the path on delivering a complete bouquet of these services with the launch of our merchant app Kotak Best in Q2. Kotak has asset on board merchants for payment, collection services digitally, serve them digitally and deliver targeted offers in multiple banking and value-added services.
We’re upgrading our acquiring and payment collection income which is the core of the merchant strategy and committed to delivering western class service to management. We intend to scale the business, including through partnerships. We have partnered recently with Finalized for leveraging their existing network of merchants as well as new acquisitions.
Corporate Banking stats. We have upgraded our transaction banking tech stack to transforming customer experience in trade and cash management products. We introduced many features, which are industry first. Our aim is to provide a superior digital experience and enhanced market share across non-individual customer [Indecipherable]. Some highlights. We launched the paperless end-to-end seamless trade portal. Customers can do many things and transact digitally through it. A WhatsApp box with a three click single window payment experience, which is an industry first. Payment plus CMS solution for HNI savings first, which is again a first in the industry. We have a pipeline of upcoming initiatives, which we launched in the next two transactions. Digital transaction highlights. Mobile will continue to be our key strategy and drive transactions digitally as well. 97% of savings volume transactions were in digital for non-branch mode.
Now in deposits and lending. As Uday said, this quarter saw a return to normalcy right across market acquisition products and transactions. An average savings deposit growth YTD YoY is 11% and current account, 32%. Suite term deposits, 22%. The focus continued on granular customer growth across digital and clinica channels, and 811 continue to contribute significantly to our digital customer acquisition. [Technical Issues] 28.5 million customers as of September 30.
Our CASA ratio was at 60.6% as at September 21 versus 57.1% in Q2 last year. CASA and TD below 5 crores comprised 90% of deposits versus 91% in Q2 last year. Suite deposits were at 8.3% versus 7.7% in Q2 last year. And the cost of savings is at 3.69% this quarter versus [Indecipherable] last year. Our asset was strong across retail asset products led by home loans, [Indecipherable] working capital, business banking, personal loans, credit cards and consumer durables. Fee income showed good growth across insurance and brokerage.
We have increased our market share issuance of fast track to 7% for September ’21 on a monthly incremental ratio. We are happy to share with you that we are the first bank to receive an approval for income tax, GST and central excise, which means direct and indirect taxes mandate after the opening of agency bank [Indecipherable]. In October, we’ve also received approval for the pension business for all Central employees. We are working on enabling and integrating our tech platforms and will be implementing soon.
Now to lending. Consumption [Indecipherable] a good uptick in the quarter. All our retail lending products showed robust growth in volume and in [Indecipherable] quarter two. This helps us gain market share in many products. At our consumer bank. The consumer asset aggregate level grew 20% YoY and 10% quarter-on-quarter.
Mortgages. We had our best ever quarter on fresh volumes for both home loan and lap. Like Uday mentioned, we launched the price leadership campaign for a limited period of 6.5%. This has helped us acquire quality customers, strengthen our market share and widen our distribution, which will be a focus area.
Personal loans. We had a strong quarter on volumes, with September being an all-time high. We see stabilization of risk in this space and have scaled up our new customer acquisition, both in traditional and data-led digital space.
Cards. We saw strong momentum in card spend last year, making it one of the best quarters. We have stepped up our investments in marking alliances and attractive offers across e-com and physical partners. We are likely headed for one of our best months in card acquisition in customer on the back of our upgraded tech stack. We announced and have entered into a program partnership with Indigo, the market leader in aviation. With travel coming back, we hope to leverage this partnership significantly for our card business.
Consumer finance, one of the best quarters and the strong demand across physical and digital distribution and asset stack. We intend to scale in this space through relationships with key partners and a strong data-led digital business. Working capital and business banking. The segment saw an increase in credit demand due to better business volume and expansion of capacity, aided by strong new client acquisition as well.
Portfolio quality is holding well and better than pre-COVID. 85% of the book qualifies for PSL. Our focus remains growth by expanding distribution footprint, multiple and deeper channel and technology [Technical Issues]. We launched health care financing in this quarter. This is a growing segment, and we see multiple opportunities [Technical Issues].
Our key metrics are back to pre-COVID levels and, in some cases, even lower. During this quarter, we launched a fully digital DIY collection platform. This enables lowest delinquent customer to pay their missed installments in a nonintrusive manner. Apart from being customer-friendly, this platform will also help us bring down our collection costs in [Technical Issues] bucket.
We continue to invest in technology, analytics and capacity enhancements to grow our consumer assets. I now request Kannan to take [Technical Issues].
D Kannan — Group Head – Commercial Banking
Thank you, Shanti. Commercial vehicle sales improved during the quarter as compared to the previous quarter, and so was the demand for CV finance, commercial vehicle finance. Deployment of vehicles and capacity utilization of vehicles were better during the quarter. Load availability is also improving. However, increasing diesel prices continue to impact the viability of these operators. Collection efficiency on demand has improved during the quarter and is as good as normal times.
Intercity passenger transportation as well as tours and travels are showing early signs of improvement. Though the school bus segment continues to be impacted. Demand for construction equipment finance continues to be good, mainly driven by government and mining contracts. The end of the monsoon season should lead to improvement in the deployment of equipment and better cash flows for equipment owners.
Collection efficiency, again, here during the quarter has been good and is back to normal times. Demand for tractor finance has been good, helped by another year of good monsoons. A good harvest is expected to ensure robust cash flows in the rural agriculture markets. Collection efficiency during the quarter for tractor finance has been much better than the previous quarter.
In the agri SME segment, demand for credit has been good, aided by good monsoon, and stable agri commodity prices. Collection environment has improved. And collection efficiency on demand is back to normal times. Micro finance disbursements and collections have shown an improvement over the previous quarter. Collection efficiency on demand has shown marked improvement as compared to the previous quarter and is almost close to normal times.
I now hand it over to Manian to take it forward.
KVS Manian — Head – Corporate, Institutional & Investment Banking
Thank you, Kannan. I’ll just take you through the corporate banking segment. As you can see, we’ve been talking about corporate banking and SME as separate subsegment within the corporate segment. So if I look at corporate banking, I will draw your attention to the credit substitutes at the bottom of that table. So if you look at the combination of corporate banking and credit subsides, on a YoY basis, it has grown at about 17.5% and the QoQ number is close to 11%.
And if you look at the SME business, on a YoY basis, it has grown at about 24%. And on a QoQ basis, it has grown at 8%. So we have seen good demand, and our ability to price has been good through this period and we have seen reasonable traction in both the SME side as well as the corporate banking side on the asset side of the business. But more importantly, I think wholesome part of the business has been quite wholesome.
We have seen very, very robust, both in our key lines as well. DCM has been a triple-digit growth. Effect has been quite strong. And our transaction banking business has been quite robust through this period. Both our custody business has been extremely strong during this period and current account other than custody has been remarkably robust. Of course, the transaction banking business has been driven by significant investments we are making in our digital, and like Shanti mentioned, a while back there are several first in the industry products we will be able to launch. And we are seeing significant traction in the transaction banking business.
The spread towards the later part of the quarter were slightly under pressure. But with interest rates rising, I think while we see some pressure on spread, I think in the ultimate [Technical Issues] give us better ability to price. The pricing power will get better. But broadly, we’ve been able to maintain spreads in the business through the year and through the quarter as well.
The asset quality has held up quite well. Actually, almost negligible slippages and both in the SME as well as in the corporate segment. In fact, even in the SME business, I can probably count the number of accounts in one hand of mine. So the rate — cost have remained extremely good, and the costs have remained good. Overall costs have remained good. And a good mix of fee as well as asset income has ensured that we have maintained a healthy after-tax return on equity on this business as is always our focus.
I will now hand over this to Mr. Jaimin to take you forward. Thank you.
Jaimin Bhatt — Group Chief Financial Officer
Thank you Manian. Let me take the quick one on the consolidated numbers. This quarter, we closed the consol profits at 2,989 crores, which is a tad higher than what we did in the same period last year, which is 2,947 crores. Of course, significantly better than what we did in the previous quarter, which we have clocked at 1,806 crores. We talked about the bank closing the quarter at 2,032 crores. The nonbank activities, therefore, has brought in 32% of our post-tax consolidated numbers for this quarter.
This quarter has seen the two capital markets activities, Kotak Securities and Kotak Capital, record profits. Kotak Securities closed the quarter at 243 crores of post tax profits, while the investment bank had 58 crores of post-tax profits. Kotak Prime on the back of good recoveries has dropped in 240 crores of post-tax profit for this quarter. The other NBFC Kotak Mahindra investments coming up with 89 crores of post-tax profits.
The life insurance company, which had a negative number in the first quarter, thanks to increase in claims, has got to a profit of 155 crores for this quarter. Those lower than the previous period, it has got into a positive zone compared to what it was in the previous quarter. The mutual fund NPT is getting a total contribution of just below 100 crores for this quarter. We’ve got the overall advances at the group level also going up by 14% and for the quarter at 8%.
Our total capital at the group level now at 89,600 crores. We’ve added capital to some of our businesses, which acquired that, which included the General Insurance Company, the alternate assets, as well as our pension fund activity. And we now have a book value of about 449 crores — INR449 per share.
I request Gaurang to take up the life insurance.
Gaurang Shah — President and Chief Risk Officer
Thanks, Jaimin. For Life Insurance this quarter, gross seasonal premium grew by 21.4%. New business [Technical Issues]. Most importantly, overall, our clean experience in this quarter was in line with the excess mortality, which we provided at the end of Q1. And in terms of our experience on — in terms of our experience in [Technical Issues] of the credit business, credit term business — individual mortality risk business. The individual and the group term business, the experience has been completely developed. So we don’t have any provision relating to that. But in terms of our credit term business, still due to delay in reporting claims. We have to carry some provision, which we believe we are adequately provided.
In case of our AUM, we have grown by 31.3%. Our profit for the quarter was 155 crores against 171 crores last year. And our solvency ratio continues to be strong at 2.61% — 2.61 times.
Now I hand over to Jaideep to take over the presentation forward.
Jaideep Hansraj — Chief Executive Officer and Managing Director
Thank you, Gaurang. At Kotak Securities, the top line for this quarter is 613 crores, this is compared to 516 crores in the corresponding period last year, and 571 crores in the quarter ended June 21. The PBT for KS for this quarter is 325 crores, which is compared to 266 crores for the quarter ended June 21, and 315 crores for the last quarter.
The PAT is at 243 crores, which was 199 crores in the same period last year, and 236 crores in the previous quarter. Our cash market share for the quarter ended September 21, is at 11%, which was 9.6% last quarter and 8.7% in the previous quarter. Some flavor on how the markets have behaved — the equity markets have behaved over the few quarters. The cash daily volume in this particular quarter has been at 50,000 crores per day. The same number was at 56,000 crores the previous quarter, and 46,000 crores same period last year. Not so much of a difference in the cash market space. Similarly, in the futures market, this quarter has been at about 81,000 crores per day. The previous quarter was at 83,000 crores a day, whereas the same period last year was at 74,000 crores. The big jump has happened in the option market. The options market for this quarter is at 30.4 lakh crores of volumes per day which was 14 lakhs in the last quarter, and 11 lakhs in the quarter at the same period, a big jump in the option space.
I’m excited to inform that beta testing has started on Kotak Securities retail trading engine in the last 2 weeks, which should see some traction happening in the months going forward.
I’ll now hand over to Manian for the investment banking business.
KVS Manian — Head – Corporate, Institutional & Investment Banking
Thank you, Jaideep. The investment bank is having its best ever year. Of course, I’ll just also mention that the Kotak institutional equity, which is reported within Kotak Securities is also having a great year, both in the secondary side as well as in partnership with Kotak Mahindra Capital Company, the investment bank for the primary business. Apart from the fact that Kotak Mahindra Capital company remains the go-to banker for the IPO business, we are seeing a good pipeline of advisory business as well, and we expect the advisory business also to do well in the current year. And of course, you have the names there. We are there in most of the large new age company business as well as the traditional businesses.
So we have seen extremely good traction in the business and the numbers, of course, show up. The profit after tax in the quarter is 58 crore as against 14 crore last year. In the H1 this year, we have already crossed the entire year’s profit last year. Much more than that actually. So continues to remain good and the pipeline continues to be good. Thank you. Sorry.
I will also take on — take KMIL. Kotak Mahindra Investment Limited is an NBFC — 100% owned NBFC. The primary business we run here are 2 kinds. One is the real estate — corporate real estate business, the developer financing business and the structured products business. So on the corporate real estate business, we are seeing robust pipeline. And in fact, the asset quality in this business, contrary to what we thought in the beginning of COVID, has been extremely good and robust. And it has given us confidence to build this business. And we are now getting far deeper into this business. And we are getting entry with new customers and large customers.
On the structured products business, of course, it’s almost a no NPA business and that continues to grow. And the outcome is, of course, there, you see the quarterly PAT is 89 crore as against last year, this period, this was 74 crore. And in the first quarter this year, it was 71 crores. So we are seeing good traction. And the net NPA position looks good. And we continue to be focused on growing businesses.
Thank you so much. And I will hand over to Kannan to cover Kotak Mahindra Prime.
D Kannan — Group Head – Commercial Banking
Kotak Mahindra Prime had a profit after tax of 240 crores during the quarter. This is a comparison to the 79 crores of profit after tax, which we had in the previous quarter. Disbursement during the quarter has been much better than the previous quarter, though disbursements have been impacted by the supply constraints faced by manufacturers. Collection during the quarter has been much better and collection efficiencies are almost back to normal times. During this quarter, Kotak Mahindra Prime acquired the car finance portfolio of Volkswagen Finance. It brings along with it, apart from the portfolio, 30,000 quality customers into our fold.
I now hand it over to Nilesh to speak about the AMCs.
Nilesh Shah — Managing Director
Thanks, Kannan. Good evening, friends. Let me take you through our asset management business for the quarter ending September 21. Our total average assets under management grew 41% year-on-year to reach 2.71 trillion. Our equity assets under management, supported by market bonds grew 67% year-on-year to reach 1.28 trillion. Our total average AUM market share reached 7.4%, an increase of 50 basis points over last year.
Our equity average assets under management market share increased by 50 basis points to reach 5.4%. Our SIP and average assets under management growth continues to outpace the industry. We continue to serve investor requirements by launching both active as well as passive funds, focused on local as well as offshore markets. Our profit after tax grew 15% year-on-year to reach 97 crores.
Our total assets under management across mutual funds, PMS offshore, insurance and alternate assets grew 40% year-on-year to reach INR3.81 trillion. Our relationship value across wealth, priority and investment advisory grew 54% to reach INR4.63 trillion. I will hand it over to Jaimin Bhatt.
Jaimin Bhatt — Group Chief Financial Officer
Thank you, Nilesh. We will be [Technical Issues] questions from the [Technical Issues].
Questions and Answers:
Operator
Thank you very much. [Operator Instructions]. The first question is from the line of Kunal Shah from ICICI Securities. Please go ahead. Kunal Shah, your line is in talk mode, kindly go ahead with your question please. As there is no response from the current participant, we move to the next question from the line of Nilanjan Karfa from Nomura. Please go ahead.
Nilanjan Karfa — Nomura — Analyst
So one quick question. I mean, obviously, the current account engine seems to be firing quite well. Would you want to ascribe what exactly have we changed because I mean there are multiple engines that have worked over the last couple of years. I mean, earlier it was savings. Now, it seems to be — the current accounts seem to be doing well for the last 3, 4 quarters. So any color there? And would you — is it more related to, let’s say, the IPO market or take something more out there?
KVS Manian — Head – Corporate, Institutional & Investment Banking
Yes. So the current account story is split three parts in my view. One is, of course, the core retail engine is also doing well. That is also growing in a robust way. And as I mentioned, the second part of the story is the corporate. We have seen significant traction on the back of transaction banking in the corporate segment as well. And the third is, of course, the custody story, which also I mentioned. So all 3 segments have grown. Yes, of course, the fact that capital markets are good helps our custody business. So there is some element of that. But having said that, non-custody current account has also grown fairly robustly.
Nilanjan Karfa — Nomura — Analyst
Okay. And this should be despite the 10% threshold that RBI circular had mentioned?
KVS Manian — Head – Corporate, Institutional & Investment Banking
Yes.
Nilanjan Karfa — Nomura — Analyst
Anything specific that you are doing, which is helping us?
KVS Manian — Head – Corporate, Institutional & Investment Banking
No. So it’s always a combination. So like I said, in the corporate side it is transaction banking, which works. On the retail side, we are focused on branches in current account data. And Shanti, you would like to add anything on the retail side, please go ahead.
Shanti Ekambaram — President – Consumer Banking
Yes, Manian. So on the retail side, also, as Manian has said, we have seen robust growth. And we really sort of started bundling value-added services along with just current account, including our cash management solutions that I talked about and other value-added services. We focused on activating our existing customers much more actively on transaction. And all that has given us a result apart from the MTV. So even in the retail space, the focus is on bundled offerings, value-added services and of course, lending when we look at the current account. Yes, I’ll just add that since you asked the RBI circular part. We have managed the circular part in a way that our losses are not significant. Yes, there are — there is a bit of a loss, but that is, of course, built-in to these numbers. But largely, we have been able to plan in a manner that we have lost very little of our book in cases where we could do a [Indecipherable] 10% we have done it. And this has been a process of over the last 6 months. We have managed it in a way that are — in fact, I think our gains will be more than the losses.
Uday Kotak — Managing Director & Chief Executive Officer
And I think if I have to add in addition to what Manian and Shanti are saying, years of efforts on the current account suite product is a differentiating factor at Kotak. So not many people are comfortable allowing suite products on a current account. We have been offering that for a very long time. And therefore, I think since inception. So there is a natural attraction for our current account customer where the ability to earn interest by getting automatic sweep in and sweep out about a certain threshold has been our ability to get more sticky current accounts and grow them is one of our differentiated proposition, a proposition we did not start opportunistically, but started ever since we became a bank.
Therefore, obviously, in the early days, when you are wanting to grow current account, a suite product naturally cannibalizes on the current account stock if you have a stock. But since we started in the current account, which is zero stock, we continued that all the way for the last 18 years. And therefore, it is a much more engaging and sticky product for customers to engage with us on current account. a And if you look at our suite product, it is 8.3% of our total deposits. For a current account customer who would otherwise get zero interest on his current account. By using suite above our threshold is actually benefiting and is a superior customer proposition, which is now helping us also on the total stock.
Nilanjan Karfa — Nomura — Analyst
Right, Uday. Can I extend probably this question quickly. But this will be a function of then the liquidity and then the interest rate scenario, right? mean, obviously, that probably, given the way you explained this, that would have a larger bearing beyond the [Indecipherable].
Uday Kotak — Managing Director & Chief Executive Officer
No. My point to you is — what — for a current account customer making any interest earning is better than zero. Therefore, whether it’s liquidity, low interest rates, high interest rate, if a current account customer gets zero all the while, but has the ability above our threshold, he will sweep, he or she will always prefer that because we are making something in addition to zero [Indecipherable].
Nilanjan Karfa — Nomura — Analyst
Sure. Sure. No, that point is well taken. Great. And how did we do — obviously, there is a strong growth push that has happened. I mean, that was, I guess, a long time coming. But we did probably need to sacrifice a bit of spread for that. Would this continue in the next — going forward, is there some change in strategy behind that? Or this is like a run rate kind of thing that you want to look at?
Uday Kotak — Managing Director & Chief Executive Officer
No, I think you’ve got to look at the mix. If you look at — when we got into COVID, we have been cautious on unsecured retail even before getting into COVID. As we continue to be cautious on unsecured retail all the way up to end of June quarter because COVID 2.0 came in. Therefore, if you look at our quarter-on-quarter growth, even in unsecured retail, x percent growth in unsecured retail, which is 10% flat, okay? So we are maybe of a very small base.
One of the reasons why you see, in the last 18 months, we’ve had a change in the mix because the stock of unsecured retail kept on going down and the secured fees become larger. That obviously, as the mix has an impact, especially where loan growth for the 18-month period was subdued, has an impact on earnings. But now, at a much lower rate of mix, the rate of growth, both in secured as well as unsecured retail is now revving up. Therefore, overall, as a bank, we have grown in the quarter, including credit substitutes at 9% flat for the quarter.
If you look at our credit card quarter-on-quarter growth, it’s about 13%. And we have a much lower engine. We are picking it up and really making it grow faster. If you look at our consumer durable financing business on a very low base, we have grown quarter-on-quarter at 76%, flat. So we are now adding the hep to our mix, albeit of a very low unsecured retail base, combined with a continued aggression on secured.
Nilanjan Karfa — Nomura — Analyst
Right. I’ll stretch this a bit and then also ask the third question. So I guess, we are cautious on our unsecured retail.
Uday Kotak — Managing Director & Chief Executive Officer
We were.
Nilanjan Karfa — Nomura — Analyst
We were. Okay. So now you — incrementally, that caution is behind us, right?
Uday Kotak — Managing Director & Chief Executive Officer
If we have grown 10% quarter, flat, that’s 40% annualized, no?
Nilanjan Karfa — Nomura — Analyst
Right. Right. Okay. Okay. And the data keeping question.
Uday Kotak — Managing Director & Chief Executive Officer
And more importantly, we think now there’s a much better quality of distilled modeling, which we have, through which we can lend more aggressively than we could in the past.
Nilanjan Karfa — Nomura — Analyst
Sure, sure. Okay. Understood. A data keeping question. The quantum of slippages and recoveries and upgrades, please, in an absolute rupee terms.
Jaideep Hansraj — Chief Executive Officer and Managing Director
I’ve mentioned that in this quarter, we had gross slippage. And when I say gross slippage, I’ll come to it in a minute, that’s 1,293 crores, against which we have a recovery and upgrade of 1,350 crores. And when I say gross slippage, it includes people who slipped during this quarter, but also recovered during this quarter. If I adjust for that, the gross slippage — the slippage will come down to below 1,000 crores.
Nilanjan Karfa — Nomura — Analyst
Okay. Brilliant. Thanks.
Operator
Thank you. The next question is from the line of Adarsh Parasrampuria from CLSA. Please go ahead.
Adarsh Parasrampuria — CLSA — Analyst
Hi Uday and team, congrats on great set of numbers. One question that I had was you do indicate higher willingness to now lend and the environment looks good. Just wanted to understand if you go back to historically benchmarking growth or certain times of the market and all that. Given our low base, would you say that the equation can drastically change going forward? Probably some of it showed up in this quarter.
Uday Kotak — Managing Director & Chief Executive Officer
I would like you to — without sort of giving you a quarter type forward guidance, I would like you to look at, and something which we have put up as a chart in our Annual General Meeting, giving all history of Kotak post global financial crisis, and you may want to see it. I’m not giving you any forward guidance.
In global financial crisis, before the crises, and in the early stage of the crisis, Kotak was extremely conservative. And then you can see the start about how we really got the engines revved up. Our approach, I need to be very clear, is that when unknown, unknown hiccupped, our natural tendency is to understand the risk before we jump into the water, okay? Now, 18 months ago, we did not understand COVID pandemic. Maybe we were not smart. We did not actually understand the nature and the impact of this pandemic. And maybe we missed some opportunities. Who knows.
History will be the best judge. But as you get your arms around what this risk means and how the pandemic is becoming an endemic and what we get a certain level of comfort, we are not — well understanding the risk, we are getting more comfortable and this is exactly where we are.
Adarsh Parasrampuria — CLSA — Analyst
Got it, Uday. And second question is on cost income. Obviously, when business momentum goes up, some costs come in. But the cost ratios have kind of gone up, not comparing this to COVID lows, but otherwise, if it’s kind of high at 46-odd percent. What’s the trajectory as the loan book builds up?
Uday Kotak — Managing Director & Chief Executive Officer
One thing, I would like to put some very clear objectives on our game plan. I’m clear, whatever it takes for us to rev up our customer acquisition engine with the front-end cost, we will take it and we will take it aggressively. The cost may hit us now, but customer acquisition engine, both — including a much faster physical and digital engine, we will spend. We are clear that this is a battle for ownership of the customer, and this is a battle not a quarter-on-quarter battle.
Similarly, if we have to spend money for front-end growth of our businesses, including for the advances growth of the retail, and that means higher front-end cost, we are very open and ready to take the cost. That does not mean we are not focused on productivity, but we are making a distinction between ongoing operating costs, what is cost related front end for growth. And we are ready to take the front end cost for growth rather than worrying about quarter-by-quarter part.
I hope I’m giving my message about when you look at our cost to income, you have to consider certain base level of cost, which is for running the shop. And second for growth on customer acquisitions, technology and digital and a much faster canvas. So we are very clear. We have the very big advantage, vis-a-vis, the best of banking, or fintech, or consumer tech, call it by whatever name you want, we are a small 2% market share player. And this is the time for us to be taking on whatever it takes, including the cost from getting our engine up. Therefore, we have people often ask me, are you worried, oh, so many players coming from consumer tech, fintech, banks getting more aggressive? I said that I am a 2% player. There’s 98% for growth. And all that we need to focus on, where do we take the 2% up to. That’s all that we need to do while keeping our natural conservatism with reference to risk and results.
Adarsh Parasrampuria — CLSA — Analyst
And I’ll just squeeze in the last question. The last couple of years, we’ve seen like tremendous amount of cost of benefit. Sometimes I — obviously, there’s a lot linked to franchise, but some of it is also linked to slower growth, right? When you don’t grow, the network doesn’t really need to give out a lot of money today as retail TDs and all that, right? As you rev up this, do you see that pressure come up? Or how do you respond to this?
Uday Kotak — Managing Director & Chief Executive Officer
With reference to the liability franchise?
Adarsh Parasrampuria — CLSA — Analyst
Liabilities and the cost of liabilities, because let’s say, right, we hardly had any need to accrete TDs over the last couple of years Uday.
Uday Kotak — Managing Director & Chief Executive Officer
At this stage, we have great confidence in our liability franchise and the engine. And it is up to us. Now, keep in mind, yes, our liability engine has slowed down. But keep in mind, there was a significant friction when a bank, which was giving 6% starts making correction. We think we are past the friction stage.
Adarsh Parasrampuria — CLSA — Analyst
Got it. Thanks, this was useful Uday.
Operator
Thank you. [Operator Instructions] The next question is from the line of Saurabh [Phonetic] from JPMorgan. Please go ahead.
Saurabh — JPMorgan — Analyst
Sir, just two questions. So one is, how should we think about your net interest margins. So you have excess liquidity on the book, [Indecipherable] is 153%, but the incremental growth will probably be in lower-yielding segments as well. And that’s reflected if you look at the core PPOP is still flat quarter-on-quarter. So how would you think about the NIM trajectory going ahead? So that’s the first one.
Uday Kotak — Managing Director & Chief Executive Officer
My position is pretty clear. I’m looking at the windshield in front, not the rearview mirror in terms of what my free pop is, what my mix is. We have very clearly said, and including you can see the early sign on that number, we are not only growing secured as you have seen. And I said this is very recent August, September. When I am saying we’ve grown 9% flat for the quarter, which is 36% annual, there are two important points. One is, we are at the advantage of base, okay? Second is the fact that we were very light on our part, which is reflecting in our set number, okay?
The past position is very light, as reflected in our spread numbers. We have been very cautious on unsecured retail, therefor the mix that has gone down. We started first with a more aggressive position on secured retail, particularly home loan. But we now actually feel, as the pandemic moves endemic, we think we’ve got much better ability to analyze the data and we are getting significantly more comfortable with unsecured retails as we’ve showed 10% growth in this quarter in unsecured retail, flat, that is 40% annualized, albeit of a much smaller base.
And the second important point, which you need to keep in mind, in addition to secure home loans and unsecured retail is our business banking, whether it’s working capital, banking in our consumer bank, or in the SME business, it is beginning to fire. And therefore, my approach to this is I — whatever is the rearview mirror of last 18 months is a rearview mirror, we did get a little side step by COVID 2.0 to be honest, which just as we were revving up our engine, May, particularly end April to middle end June sort of got up a little out of where we thought it will be. Frankly, we did not expect such a vicious 2.0. We now believe that, that has delayed us like few months, but the engine is ready to go. And August, September are good signs.
Saurabh — JPMorgan — Analyst
Got it, sir. That’s fair. The second, sir, is, obviously, you’ve given a lot of details on your digital this time. I mean, can you just quantify what is the technology spend maybe in terms of what percentage of revenue, what you are investing in this business or any absolute amount?
Uday Kotak — Managing Director & Chief Executive Officer
I think we will give you that at the right time. I think my request to you is, as I’ve said to the earlier question, we are going to grow our front-end costs, for customer acquisition, digitization and technology because we think that is the future. The front-end costs will continue to be aggressive, but we are in a business of growing our customer franchise at a much faster pace. And at some point of time, we will share it with you when we change where we’ve seen some sort of stability.
Saurabh — JPMorgan — Analyst
Okay. Sir, but if you benchmark it to, let’s say, Tier 1 private banks, would you be in line as a percentage of revenue? Or will you be higher?
Uday Kotak — Managing Director & Chief Executive Officer
I’m saying, I am very clear, my future is consumer tech. My consumers — my future is fintech. My future is maybe other private banks. My future is any PSU bank. My future is some unknown players. I have to be out there in the battle of the customer without being constraint by benchmarking against any one category.
Saurabh — JPMorgan — Analyst
Thank you.
Operator
Thank you. The next question is from the line of Kunal Shah from ICICI Securities. Please go ahead.
Kunal Shah — ICICI Securities — Analyst
Yes. Congratulations for a good set of numbers. So in terms of the home loans, so we have this rate offering. But even if you can explain in terms of building the capabilities with say, so is it more in-house or we are getting aggressive even in terms of the outsourcing that is happening because there is a good enough growth, which is happening on the home loan side?
Uday Kotak — Managing Director & Chief Executive Officer
Shanti?
Shanti Ekambaram — President – Consumer Banking
Yes. Yes. So if you’re talking about distribution of home loans, I think we — our internal channels, our own customer base, we work with external partners. And given what’s happening in the market, both what’s happening from a demand, about pricing, low interest rate, we’ve been able to get business from all around.
We have scaled our teams. We have scaled our internal capacities and thus we are able to grow the business. The important thing is, with this price, we’re getting very high-quality customers, which can then become holistic banking customers. This is one of the gates we have opened and that’s what it is.
Kunal Shah — ICICI Securities — Analyst
So in terms of the new customer acquisition, which we are seeing on the asset side, how much would be like say, already the existing relationship with the bank on the liability? And so what is the potential to further cross-sell, both on the asset as well as on the liability side? So that is why I was getting to — so we are seeing a good growth all through on the asset side now. But what is the kind of profile. Is it like a new to bank? Or is it like say the existing customers when we are cross selling?
Shanti Ekambaram — President – Consumer Banking
See, it is different for different products, because like I told you, we are on a growth phase in almost all the products. It can range anywhere from 25% to 50% in terms of new customers, but it ranges in home loans. I would say that anywhere — we are getting a reasonable amount of NTB customers, New To Bank customers.
Kunal Shah — ICICI Securities — Analyst
Okay. And what would be the proportion of the outsourced maybe in terms of the DSAs outside of our own branches and other network?
Shanti Ekambaram — President – Consumer Banking
Broadly, our own internal contributes anywhere still about 55% of our sourcing and the balance comes from the external partners.
Kunal Shah — ICICI Securities — Analyst
Okay. Okay. And secondly, in terms of, say where we have extended ECLGS facility, can you give maybe — I think it’s been almost like, say, 8, 9 months into that, but how are we seeing the behavior of those customers.
Uday Kotak — Managing Director & Chief Executive Officer
Kunal, I think you may have missed the early part. If you look at our stresses numbers that includes flow-through into NPA from ECLGS customers, if any. And our overall restructuring on COVID accounts is both COVID 1 and 2 put together is 33 basis points, plus 21 basis on SME restructuring. And our credit cost is 63 basis points.
So all — this includes all flow-through in stress between restructuring and NPA. [Indecipherable] NPA numbers will come down for the quarter.
Kunal Shah — ICICI Securities — Analyst
Yes. So NPA and restructuring is good. I was just trying to gauge in terms of on ECLGS side post one year.
Uday Kotak — Managing Director & Chief Executive Officer
Kunal, if any ECLGS is getting into trouble, it will show in one of those two places.
Kunal Shah — ICICI Securities — Analyst
Okay. Okay. So there is nothing like say there is payment holiday or something and it will get reflected.
Uday Kotak — Managing Director & Chief Executive Officer
Nowhere else we can put up, either it is in restructuring or it is NPA or it’s in SMA2. Our SMA2 number also, we have shared. Our SMA2 number is also shared with you.
Kunal Shah — ICICI Securities — Analyst
Okay. So there also — so this takes into account everything. Okay. Great. Okay, thanks a lot.
Operator
Thank you. The next question is from the line of Shagun Varma from Goldman Sachs. Please go ahead.
Rahul Jain — Goldman Sachs — Analyst
Hi, good evening. Most of my questions have been…
Operator
Mr. Varma, if you can speak closer to the handset please. You voice is inaudible.
Rahul Jain — Goldman Sachs — Analyst
Yes, hi this is Rahul here. Can you hear me?
Uday Kotak — Managing Director & Chief Executive Officer
Yes, Rahul, we can hear you.
Rahul Jain — Goldman Sachs — Analyst
Yes. Thanks, Uday. And everyone good evening. I think most of the questions have been answered. But again, sorry to deliver on this OpEx point. So clearly, I think Uday, of course, good to hear that the outlook is looking better from the growth standpoint on the loan side. But on the OpEx side, when do you see the inflection would start getting reflected in the numbers on the operating leverage? And which are the products you think could drive that. Is it going to be mortgages, which is what I think the focus seems to be at this point of time? Or is it going to be a combination of, let’s say, consumer retail, various parts of it? Just trying to think through because like you yourself admitted that the OpEx, if needed, bank would be willing to spend. But at some stage, the leverage would be [Technical Issues].
Uday Kotak — Managing Director & Chief Executive Officer
Okay. I’ll ask my colleague Dipak Gupta. Rahul, can you hear Dipak?
Rahul Jain — Goldman Sachs — Analyst
I unfortunately cannot hear him. I can hear you though.
KVS Manian — Head – Corporate, Institutional & Investment Banking
Dipak hasn’t started talking that’s why you can’t hear him.
Rahul Jain — Goldman Sachs — Analyst
Okay.
Dipak Gupta — Joint Managing Director
Okay. Rahul, basically, when you have growth, there will be some costs which will come upfront, yes, and they will be investment costs. So — and then as for the time period, which growth is high, these upfront costs will keep coming. So I think it is not easy to look at a leveling off level until you see growth itself leveling off. For example, if you are growing home loans at a certain percentage, yes, your upfront costs will keep hitting you. And if that growth rate continues, those costs will keep hitting you until your level off growth, yes? It’s the same also on the liability side.
While we keep on acquiring new digital customers, there is an upfront cost. And as growth rates are high, those costs will keep coming up. And it’s very difficult for you to disaggregate the investment costs from the run costs to arrive at what point of time you’re going to level off. I think for the time being, I think let us just concentrate on the growth, yes? And as long as we are convinced that this growth is profitable, it is positive contribution. I don’t think the cost, which is an investment really is a worry.
Rahul Jain — Goldman Sachs — Analyst
Thanks, Dipak. Just a small extension to that. So the PPOP ROAs, which is, of course, this quarter took a bit of a knock. Should we say that we kind of hit the bottom an d from here, things should start getting better on the PPOP ROA?
Dipak Gupta — Joint Managing Director
No, it will get better because you see your ROE to some extent also depends on the mix in a certain period of time, yes? What you see as ROA just now is the mix of this quarter, yes? As the unsecured piece starts catching up, the SME piece starts catching up. We will see that mix change reflecting in the ROA appropriately.
Rahul Jain — Goldman Sachs — Analyst
Understood. Understood. So one last question. So when you look at the mortgage piece on a stand-alone basis, just the pure spread seems to be pretty healthy just doing simple math would be easily north of 3.5% to 4%. Is this a comfortable threshold for you all to grow this portfolio? Or it could be even lower?
Uday Kotak — Managing Director & Chief Executive Officer
Are you hinting that telling Shanti to reduce the home loan rate further?
Rahul Jain — Goldman Sachs — Analyst
Kind of, yes.
Uday Kotak — Managing Director & Chief Executive Officer
Rahul, all that I can say is in case you are looking for a loan, with the interest rate scenario, which you must be a better judge of this could be as good a time as any. So grab it as soon as you can.
Dipak Gupta — Joint Managing Director
Before 8th November. No, but jokes apart, I think the spread are reasonable for what I call an acceptable ROE, yes, given the growth opportunity and the customer proposition, yes? So I think…
Uday Kotak — Managing Director & Chief Executive Officer
And if I can add on this, we are actually quite surprised at the pace of inflow of demand for home loans, which we are getting.
Dipak Gupta — Joint Managing Director
Yes. So Kunal touched upon how much was in-house and how much was outsourced. That’s now there is an overflow. So it’s a very healthy sign.
Rahul Jain — Goldman Sachs — Analyst
Got it. Just one last point just to wrap it up. In the previous quarters, around previous calls, I think Uday, you talked about the inorganic opportunity, which is out there and bank is always open. But as you look forward in the next few quarters and years, is it going to be more driven by organic now given that the outlook is getting better for you all? Or you say it’s a fair mix of organic and inorganic?
Uday Kotak — Managing Director & Chief Executive Officer
Rahul, I think we’re quite open. Having said that, we have a reasonable view about having [Technical Issues] inorganic. And should it be appropriate, we will look at that opportunity in all seriousness. And we will do what is right. And the two are pretty independent in terms of our plan, as we think about future. Obviously, the common thing is we care about getting customers.
Rahul Jain — Goldman Sachs — Analyst
Understood. And then on the consumer retail side, I presume more so [Speech Overlap]?
Uday Kotak — Managing Director & Chief Executive Officer
No, we are also open to consumer retail. We also like customers in business banking. You’ve seen us — we are very focused on business banking customers. They also help us in the liability side on low-cost liability. So we like — also a whole stream of services income which come from that. Therefore, we like consumer. We like business — business banking customers.
And on the other side, we believe the wholesale banking business is transforming much closer to the market side, which is where we are well adjusted for the market’s opportunity along with the wholesale banking business, including debt capital market business. So we manage our storage versus distribution well.
Rahul Jain — Goldman Sachs — Analyst
Understood. Thank you so much and wish you all a good luck.
Operator
Thank you. The next question is from the line of Jai Mundhra from B&K Securities. Please go ahead.
Jai Mundhra — B&K Securities — Analyst
Yes, hi sir, thanks for the opportunity. One, if you can quantify the ECLGS outstanding number that we have at the end of this quarter. And would it be fair to assume that 8% quarter-on-quarter growth that we have is more or less — it will also be applicable to the people who had taken ECLGS borrowings at the beginning — I mean, in the beginning.
KVS Manian — Head – Corporate, Institutional & Investment Banking
Yes, the number is 12,300 crores, close to 12,300 crores ECLGS loans outstanding will be that, right? And like Uday mentioned earlier, we aren’t seeing any difference in the behavior of that portfolio, vis-a-vis, the normal portfolio. If at all, it is behaving better in most products. We are just now not seeing — so it’s not such a big item to track separately is the way we look at it just now.
Jai Mundhra — B&K Securities — Analyst
Yes. Because, sir, it would be a substantial portion of your loan book, right? So 12,000 crores is the ECLGS disbursement only. The corresponding loan book would be at least 30%, 35% of your loan book. And so it is reasonable to believe that this portfolio is also growing in line with the overall number?
KVS Manian — Head – Corporate, Institutional & Investment Banking
No. If you look at it, it doesn’t mean that 12,300 crores into six, that’s not the right way to do it because a lot of people who would have taken ECLGS has not necessarily increased their exposure. So if you look at 12,300 crores is the ECLGS amount, the absolute exposure to these entities would be of the order of about 55,000-odd crores.
Jai Mundhra — B&K Securities — Analyst
Right. So even, INR55,000 crores is around 20% of the book. So there is not too much of a difference between this portion of the bank and the rest of the book.
KVS Manian — Head – Corporate, Institutional & Investment Banking
No, that’s right.
Uday Kotak — Managing Director & Chief Executive Officer
And I think we again highlighted that if there was any issue in that book, it would flow into our restructuring or into our NPA and credit costs. We have given the details of all our restructuring, SME restructuring, total cost — total restructuring book in SME is 21 basis points. And our NPA numbers are already with you in our presentation. And our credit costs have also been shared with you at 63 basis points.
Jai Mundhra — B&K Securities — Analyst
Right. The only exception could be, sir, that these — because initially, there was a 12-month moratorium on this particular facility. I understand that there was no moratorium on the existing facility. So maybe that could — I mean, the entire outstanding may be out of moratorium only in this quarter. So maybe —
Uday Kotak — Managing Director & Chief Executive Officer
On the primary outstanding loan, there was no moratorium, right? The moratorium was on the 20% lending that was there. So you’re still saying the primary loan only if we did ECLGS because was not able to pay that it would already show up in our NPA.
Jai Mundhra — B&K Securities — Analyst
Right, right. So no. So that clarifies. The second point is, sir, if you can comment while the loan growth has been very strong, even on YoY, QoQ, the same has not been reflected in the NII on YoY and QoQ. Part of this, I think you have explained that part of that is because of the mix. But is there any — if you want to sort of provide some more clarity there because I —
Uday Kotak — Managing Director & Chief Executive Officer
Loan growth has started in August and September. So NII takes time to make.
KVS Manian — Head – Corporate, Institutional & Investment Banking
I would add two points. One is you rightly said there’s a mix change. The growth has happened much more if you’re comparing now YoY. When we looked at credit cards and all, while the quarter has had a positive number, the YoY number is actually negative for both the unsecured pieces. So that does impact. So the mix is much more in favor of the lower-yielding fees.
The third thing, NII is also comprised of not just advance, NII is also comprised of what you make on investments. As I mentioned, while the advances have grown, the investment book has actually shrunk from a year-on-year. And to that extent, the earning assets has grown only about 5% during the year-on-year period.
Jai Mundhra — B&K Securities — Analyst
Understood. And the last data point question, sir, if you have the RWA number for the stand-alone bank. That is it. Thank you.
Uday Kotak — Managing Director & Chief Executive Officer
Give me a minute. As of September it would be 283,000.
Jai Mundhra — B&K Securities — Analyst
Great sir. Thank you and all the best.
Operator
Thank you. Ladies and gentlemen, that was the last question for today. I now hand the conference over to Mr. Uday Kotak for closing comments. Over to you, sir.
Uday Kotak — Managing Director & Chief Executive Officer
With that, I thank all of you for spending time, and I wish each of you a wonderful Diwali and New Year, and look forward to meeting you in both in the summer as well as the calendar new year, soon. Thank you.
Operator
[Operator Closing Remarks]