Kotak Mahindra Bank Ltd (NSE: KOTAKBANK) Q3 2026 Earnings Call dated Jan. 24, 2026
Corporate Participants:
Ashok Vaswani — Managing Director & Chief Executive Officer
Devang Gheewalla — Group Chief Financial Officer
Pranav Mishra — Consumer Bank
Vyomesh Kapasi — Head of Products, Consumer Bank
Paritosh Kashyap — Whole-time Director
Jaideep Hansraj — Whole-time Director
Analysts:
Unidentified Participant
Kunal Shah — Analyst
Rikin Shah — Analyst
Abhishek Murarka — Analyst
Mahrukh Adajania — Analyst
Piran Engineer — Analyst
Suraj Das — Analyst
Jay Mundra — Analyst
Presentation:
operator
Ladies and gentlemen, good day and welcome to the Kotak Mahindra Bank Q3FY26 earnings conference call. As a reminder, all participant lines will be in the listen only mode and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing STAR and then zero on your touchstone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Ashok Vaswani, managing Director and CEO of Kotak Mahindra Bank. Thank you. And over to you, sir.
Ashok Vaswani — Managing Director & Chief Executive Officer
Thank you. Thank you so much. Operator. Good evening. Good evening everyone and thank you for joining us. Before I begin, let me welcome Anoop Saha, our new WTD designate. Anoop brings over three decades of vast experience and domain expertise across many fields including retail, finance, analytics, risk collections and financial service operations. He will oversee our consumer, bank data analytics and marketing verticals. His addition strengthens our leadership team and accelerates our ability to execute at scale. Moving on to today’s agenda, I’ll make some opening remarks. Devang will cover the numbers in detail. Pranav, the Deposit franchise, Yomesh, Consumer Assets, Manish, Commercial Banking, Paritosh, Wholesale Banking and institutional businesses.
And finally, Jaydeep will update you on our summits. Let me first talk a little bit about the macroeconomic environment. The global landscape has become more volatile. Geopolitical tensions, trade and tariff uncertainties have weighed on global investor confidence. While there seems to be a high level of confidence to get a trade deal with the eu, the absence of a final trade agreement with the US continues to add to this uncertainty. We have seen unprecedented strengthening of gold and silver and outflows From India by FIIs to other markets that are perceived to be more attractive to foreign investors.
However, the Indian economy continues to demonstrate strong and stable growth. GDP growth continues to be resilient with a positive outlook. This is supported by several enabling actions like the RBIs, repo rate cuts and GST rate rationalization. 3Q also saw an uptick in growth led by the usual festive demand. Rural India overall looks stable supported by good monsoons. The rupee weakness has partly offset tariff impacts but has also affected foreign flows and liquidity. With respect to capital flows. While FIIs have been net sellers, domestic institutional investors have provided support with around $24 billion in inflows in Q3 FY26 reinforcing the savers to investors trend.
This is also evident in the strong IPO pipeline expected for calendar 2026 in the banking sector. Specifically system credit growth has been healthy, but the flows into commodities and capital markets are putting more pressure on low cost deposits. There is enhanced volatility seen in the banking sector liquidity while benchmark rates are reduced. Longer term treasury yields have firmed up within this context. Coming to quota we remain focused on our strategy to scale responsibly. This discipline is reflected in our quarterly performance in the bank. Net advances grew 16% y o y this is in line with our stated philosophy of growing our advances in the range of 1.5 to 2 times nominal GDP growth.
We have seen consistent growth of around 4% per quarter for the last 3 quarters of this financial year. Average deposits grew 15% year on year. We have been focusing on granular CASA growth. This is on the back of our focused segment strategy and I will come to that shortly. We called out unsecured retail loans earlier. We said we would grow gradually and responsibly with the unsecured assets growing in absolute terms in the first instance. And that’s exactly what we have done and will continue to do so. The bank’s NIM continues to be healthy at 4.54% supported by a low cost of funds.
Credit costs as indicated previously continued the downward trend supported by our updated underwriting models and enhanced collection efforts. Credit costs are down sequentially from 93 basis points in Q1 to 79 basis points in Q2 and now 63 basis points in Q3. But within this we continue to watch the retail CV segment carefully. Overall, we expect normalization of credit cost to continue though at a more moderated pace. Total operating expenses continue to remain under control as we drive productivity and efficiency. This quarter includes certain one offs which Dewan will cover in his comments in the subsidiaries.
This quarter our subsidiaries contributed 30% of consolidated profits which grew 11% on a year on year basis. Jaydeep will take you through the details. At an overall level, the consolidated book value per share grew 15% year on year to 176 rupees on a post stock split basis. Stepping back, this was another quarter of solid progress against our stated strategy. Kotak is the most comprehensive financial conglomerate. We run the group through the bank and 19 wholly owned subsidiaries. This enables us to create holistic propositions for our chosen customer segments. In addition to this, we run Tractor Finance CVCE as standalone product verticals.
We’ve identified four focus segments High net Worth, Core, India SME and Institutional clients. For the high net worth segment we have the Private bank and Solitaire propositions. Our Private bank has shown consistent good growth in AUMs across MF, NDPMs, AIF et cetera. Solitaire. Our offering for the affluent has worked well in growing CASA, SIPs, mutual funds and driving card spend in core India. We have our 811 offerings. After the embargo we are back to acquiring a large number of customers every month. This has also contributed to the savings book growth. Our recently launched 811 Superb is attracting the digitally savvy younger customer with a much better ticket size.
SME continues to be the backbone of quota. The total SME book grew 17% year on year to 1.16 lakh crore. On the institutional side, investment banking and alternate asset businesses had a very good quarter. Additionally, we continue to be leaders in factor finance with a quarterly growth of 5% and year on year growth of 16%. On the tech front, we are now further accelerating progress on automation and digitization of quota, improving customer service and enhancing efficiency. This covers the entire gamut of the customer life cycle and our various channels across sales, offices, branches, call centers and digital channels.
These efforts have allowed us to grow the balance sheet without corresponding headcount growth. We have made significant progress on strengthening technology resilience and recalibrating credit risk. Our strategy is clear, execution is progressing well and we are seeing good traction in customer acquisitions, deposit and asset levels. The above results are a reflection of our continued progress against the execution of our strategy of driving scale for relevance without diluting our DNA of risk, prudence and profitability. With that I’ll hand it over Devang to walk you through the numbers in detail.
Devang Gheewalla — Group Chief Financial Officer
Thank you Ashok. Good evening friends and wishing you all a happy New year. Let me start with the overall bank performance for Q3. If you look at it, this quarter actually saw all round improvement in net interest income, fee income as well as credit cost combined with growth in granular low cost deposits. While maintaining the credit growth operating costs saw some one offs related to acquisition and volume related costs. I will speak about that later. The bank’s balance sheet grew 15% on a yoy basis with net advances growing at 16% y oi for advances Book Mortgage asset continues its growth trajectory with 18% YoY growth aggregate SME advances As you know we do SME from three separate verticals which is combined within Commercial Bank Agrippa working capital in consumer and business modes and SME in wholesale business.
All three put together growing at 17% yoy business. The dike was able to retain its leadership position in tractor finance business at 16% y o y growth. Absolute unsecured retail Loan book growth showed gradual growth as we had indicated. We remain cautious in growing retail commercial vehicle book while addressing the credit concerns. Coming to the deposit side, I think the total deposits grew 15% on YOY supported by healthy growth in low cost deposits as car and fixed rates are Both growing at 15% across customer segments. Even on average basis we saw significant granular movement in low cost deposits with average car growing 8% QoQ and average fixed rate SA growing 4% on a QoQ basis.
We have obviously also reduced our reliance on the Libor link SA which has also helped us in getting a higher cost of fund benefit. CASA ratio at 31st December was at 41.3%. Bank’s net worth is at 1,30,000 crores with a ROE for Q3 10.68%. Net worth increase in Q3 included about 2000 crore unrealized gain on valuation of the specific investment which we hold which is the mcx and as you know we have been accounting this post tax gains under AFF reserve and we are not taking it through the profit and loss count. Roe for Q3 computed on net worth excluding this cumulative AFS reserves out of the strategic investment is actually at 11.29% and if we further adjust for the excess equity and at 15% capital adequacy our ROE is closer to 14%.
At the bank standalone level the capital adequacy very healthy at 22.6% of which CET1 itself is 21.5%. Coming to the income statement bank ended the quarter with a PAT of 3400 crores. Q3 includes high cost on account of new labor code related provisions which at the bank standalone is 96 crore pre tax business. Adjusting for this profit actually grew 8% on a quarter on quarter basis NIM for the quarter remained at 4.5% which is same as last quarter despite the 50% reform rate cut in the quarter June. During the quarter three we also saw a higher short term liquidity which was deployed in treasury assets.
If we exclude those short term earning assets our BIM actually improved to 4.58% up 4bps during the quarter. Cost of funds reduced by 16bps during Q3 at 4.54% driven by low cost deposits and repricing of maturing term deposits. So if I look at the cost of fund trajectory reduced to 5.01 in Q1, reduced to 4.7 in Q2 now down to 4.54%. Free income saw a healthy growth of 6% QoQ contributed mainly by FX debt capital and distribution income. Credit card fee growth continues to remain muted. Employee cost of the bank is 2,200 crore for Q3 which includes 96 crore as I mentioned earlier pursuant to the new Labor Code.
Further there was a saving in retirement cost during Q2 if you recall which we had mentioned which has been normalized during Q3. So there is also an effect of Q2 or Q3 movement over Q2 Q under the Retirement cost which has also impacted the cost. Actual payroll cost without this which is basically the CPC cost of all the staff remains flat on a QOQ basis. Other operating expenditure of the bank is 2,700 crores for Q3 which is up 5% QoQ basis. However to further analyze that it includes marketing spend during the festive period on brand promotions.
Further, this quarter saw significant increase which is seasonal factor on the tractor finance disbursement and as you know there is a higher brokerage we issue pay in tractor finance which is accounted upfront and that also resulted in the acquisition cost going up. There was also increased acquisition in 811products which also increased the volume related cost. Cost to income ratio without considering the one off impact of the new labor code is at 47.4%. Asset quality parameter across all the parameters improved significantly during Q3 on expected lines. Gross NPA at 1.3 versus 1.39 net NPA at 0.31 versus 0.32 last quarter with a provision coverage ratio now at 76%.
Credit cost for Q3 reduced to 63bps down 16bps QoQ from 79bps in Q1 Q2 as you recall Q1 credit cost was at 91 while delinquencies in unsecured retail business showing improvement. We remain cautious on retail commercial vehicle segment slippages for Q3 for 1,600 crores which includes 257 crore that got upgraded within the same quarter. The slippage ratio therefore improved to 1.34% from 1.41 in Q2 coming to the consolidated performance with respect to group companies capital market subsidiaries showed growth with increased volume and improved market share. Our AMC business including the First Ship company continues to perform well with growth in AUM insurance business which got impacted by GST regulations.
Changes in Q2 has normalized in the current quarter. Our consolidated Customer assets are at 5,98,000 crores and AUM managed by the group is now 7,87,000 crore. Both grew at 15% on a YoY basis. Q3 26 consolidated profit after tax is 4900 crores grew 10% from 4400 crores. Q3 profit pack is after the new labor code impact of 128 crores. 128 crores is the pre tax cost at the group level equivalent to 96 crore. What we took it in the bank ROE at consolidated level is at 11.39% and ROA for Q3 is 2.10%. The consolidated net worth of the group is now 1 75,000 crores.
Our capital adequacy continues to remain strong at group level at 23.3% with CEP is 22.4. The book value of the share is 176 which has grown by 15% y o y and this obviously the book value is after considering the strength of the shares. With this I hand over to Pranav to take you through the highlights of the deposit franchise.
Pranav Mishra — Consumer Bank
Thank you. Dewang has taken you through the numbers. I will now take you through the underlying strategy of the bank deposit franchise as outlined earlier. Our strategy to serve the customer focuses on three levers for growth, consumption led, investment led and asset led in a cost effective manner. Customers are now highly digital expecting real time frictionless engagement across every touch point of the bank. We are providing and curating journeys to capture following customer behaviors which trends across high net worth, mass affluent and core India and that is a billion Indians. Number one Consumption first mindset. We are leveraging spending patterns to create relevant banking opportunities.
Number two Savers to investors. We are tapping into the shift from savers to investor via SIPs, DMAT and trading accounts to build CASA granularly and sustainable growth onto it liabilities. Opportunity from asset we are building a banking ecosystem around customers having asset relationship by offering aspirational product. Our propositions are capturing these behaviors and providing enhanced experience to new to bank customers as well as adding value to our existing customers on current account. Our average current account balances grew by 14% YoY this quarter. Our focus on the self employed customer base continued to show momentum in a new acquisition contributing to the overall balances and long term value creation.
In addition the focus on customer collection and flows drove the growth in throughput and liability balances on savings account. Our average fixed rate savings balances grew 12% YoY in savings account. Our focus continues to be on high net worth, mass affluent and core customer segments supported by a comprehensive relationship led approach that values customer engagement across quotex is ecosystem including libraries, investments, insurance and loan Kotak Solitaire as spoken by Ashok. That proposition was launched in quarter one and is designed to execute the above mentioned strategy through quality acquisition, deeper relationships and sustainable deposit growth. We have observed an uplift in new to affluent customers with increase in relationship value primarily driven by deposits and investments including mutual funds, SIPs and and other asset building products.
This trend is visible across both newly acquired and existing customer. Kotak811, our flagship digital banking proposition continues to accelerate customer acquisition and digital service at scale with speed and simplicity. It gives Kotak granular, sticky and low cost deposit through seamless digital onboarding and app platform. Kotak811 super savings account is a first of its banking proposition based on cash flows not on average monthly balance. It offers 5% cash back on debit card spends. It is specifically designed for core India customer young, aspirational and value conscious term deposit. We grew by 17% YoY and 4% Q on Q distribution.
Our distribution strategy continues to deliver omni banking experience by leveraging physical, digital and virtual channels. The virtual banking platform bridges branch and digital services with personalized scalable 24. 7 customer engagement. This approach helps us in enhancing operational efficiencies and effectiveness of remote banking services. Our ability to serve customer at both acquisition and service stages has been improved due to decongestion and digitization of processes across branches and all other channels. Our focus remains on maintaining a balanced mix of savings, current active money and term deposit to drive sustainable growth in liabilities in a cost effective manner.
I now hand over to Vyomesh to take you through consumer asset business.
Vyomesh Kapasi — Head of Products, Consumer Bank
Thank you Pranav. I’ll take you through the highlights of the consumer assets at a macro level, the demand environment of consumer assets remain favorable supported by stable economic activity and improving customer confidence. Our customer asset portfolio delivered 16% growth year on year and 4% growth sequentially led by strong momentum in MSME segment reinforcing our strategic focus on balanced high quality expansion mortgages. Mortgage loans comprising of home loans and loan against property continue to register healthy growth of 18% year on year and 5% quarter on quarter. The home loan market continues to be price sensitive. However our strategic focus on deepening customer relationship and positioning home loan as an anchor product for the affluent segment continues to drive steady traction.
This approach enables us to increase wallet share from existing customer helping in cross sell into liabilities investments and other core banking products. The home loan portfolio has demonstrated reasonable growth and remains a key area of focus. The loan against property segment largely serving the MSME customer base continues to show strong momentum supported by healthy borrower demand and our disciplined approach to underwriting. We maintain a strong position in this segment supported by ongoing investment in process improvement, enhanced credit assessment and an elevated customer service. Overall, the quality of our mortgage book remains sound enabling us to sustain growth in this particular space.
Business Banking There is a sustained demand for working capital across sectors driven by a surge in consumption trends following the changes in GST. Our secured business banking portfolio comprising micro and small SME customer recorded a strong growth of 21% year on year and 5% quarter on quarter with utilization level remaining high particularly during the first few period. In the unsecured business loan segment. Growth has remained steady with our focus on maintaining portfolio quality. Overall, the business banking portfolio across both secured and unsecured segment continues to be stable. Personal Loans Our organic personal loan business continues to be the main driver of our growth in retail.
Unsecured portfolio disbursements have stayed strong led by solid customer segments supported by wider range of digital lending journeys. Credit quality remains stable helped by better analytics, sharper underwriting and stronger risk controls. The rapid expansion of digital origination channels is allowing faster decisions, deeper customer reach and healthy growth in this segment. The personal loan portfolio acquired from Standard Chartered last year is performing better than expected. Although the rundown of the acquired book has been weaker this quarter, the strong pickup in organic disbursement position us well for a return to growth in personal loan advances in coming quarters.
Our focus on maintaining credit quality remains firm. We’ll keep building this business by using data driven insight, disciplined policies and digital first origination to manage risk effectively. Credit Cards Credit cards are key to our core strategy for deeper engagement with our customer ecosystem stickiness, richer data insight, cross sell and better CASA retention to drive improved profitability. Our new solidaire credit card continues to gain traction in the high net worth customer segment. The GST cut and festive season, improved customer spends and stronger portfolio engagement. We are seeing consistent improvement in credit quality due to moderating delinquencies driven by enhanced data analytics, strengthened risk control and portfolio seasoning.
The analytics led preapproved programs, superior risk model, new product launches across customer segment, digital issuances and targeted ecosystem partnership will drive scale with quality. In summary, delinquency in overall unsecured portfolio have improved with better flow rates and collection efficiencies observed in this quarter. We continue to enhance our risk management and monitoring framework for all our consumer asset portfolio. We are leveraging analytics including machine learning models, alternate data in collection to increase collection efficiency and recovery of unsecured portfolio. I now hand over to Manish to take you through the commercial banking business.
Vyomesh Kapasi — Head of Products, Consumer Bank
Thank you Ramesh. I’ll start the highlights of Commercial bank with a Commercial Vehicle Portfolio the CV industry saw a sales growth of 22% YUI and a 21% QoQ growth on account of growth across medium, light small commercial vehicles.
The growth was primarily due to reduction in GST and price hike announced by OEM’s effective first of Jan. We continue to maintain our overall market position with an appropriate customer segment mix ranging from fleet operators to retail. As we had mentioned last time, we continue to witness some stress in the retail CV segment. Hence, over the last few quarters we have substantially tightened our underwriting and have. Reduced our disbursements to this segment. We have strengthened our collections accordingly. The portfolio built over the last few quarters is showing better performance in terms of early delinquency trends and hence we expect improvement in overall portfolio performance over a period of time. We’ll continue to focus on building our business cautiously through calibrated risk interventions while keeping a close watch on certain customer segments. Construction Equipment the construction equipment industry sales continued to witness negative growth 14% negative YOY in Q3 and negative growth of around 10% for YTT December primarily impacted by slower infrastructure activity as well as project execution challenges due to early and extended monsoons disrupting equipment deployment as well as tight state government cash flows delaying intra execution.
Industry Wide the institutional buyers and mid sized contractors continue to show resilience whereas small contractors and first time users and buyers are navigating a slightly more tightened liquidity phase. Given this environment, our disbursements were broadly in line with industry trends and we continue to maintain our strong position in the market. Improved cash flow released by state governments, local bodies, municipal corporations, strong and expeditious project award by the government and higher budgetary CAPEX allocation in the upcoming budget will be key for the industry numbers to pick up in the coming quarters. Tractor Finance the tractor industry sales saw 22% YoY growth and 19% QoQ growth in quarter three primarily due to GST rate cut, government support on subsidies and favorable rural sentiment due to good monsoon Monsoons extending into early November as well as soft agri commodity prices has had some impact on the cash flows of the farmers.
However, robust RABI sowing should improve rural cash flows. Our disbursements grew broadly in line with the industry helping us maintain our leadership position. Impact of cash flow for the farmers reflected in slightly lower collections efficiency in this quarter and is likely to recover as rural cash flows improve. Microfinance the microfinance had started de growing quarter on quarter from quarter two of last financial year. While the disbursements have picked up over the last few months, we expect the industry data to reflect a muted quarter three as well. Our retail microcredit book has remained flat quarter on quarter primarily due to scheduled repayments offsetting the current disbursement rate.
The portfolio quality for business origination through our risk profile based underwriting models is performing quite well. We expect disbursements to gradually improve from this quarter and the portfolio performance to continue to get better in the coming quarters. We have also started covering our microcredit loan disbursements under CGFMU Credit Guarantee scheme post merger of BSS and Sonata in October. We are working towards integrating the overall franchise to serve our customers more efficiently across all geographies. Agri Business Group the agri SME book saw a y o wide growth of 12% and a quarter on quarter growth of 8% supported by pickup in working capital utilization and a strong growth in new the bank customer acquisition.
The quality of book continues to remain good in this segment. We’ll continue to grow our new customer acquisition across agri clusters and focus on providing holistic solutions to these customers through a one kotak approach addressing borrowing needs, transaction banking, investment and protection needs of our customers. I now hand over to Paritosh to take you through the wholesale banking and institutional business.
Paritosh Kashyap — Whole-time Director
Thank you Manish. I will now take you through the highlights of the wholesale banking and institutional businesses. This quarter our wholesale banking assets along with credit substitutes grew at 17% YoY and 3% quarter on quarter driven by robust advances growth. The great substitutes book was however flat this quarter as better loan market pricing led to a shift from investments to loan. We maintained our emphasis on granular growth through the SME and mid market verticals. In corporate SME, new business momentum remains strong with stable spreads adjusting for the migration we did at the start of this year from SME to other verticals of the corporate bank.
SME Advances grew at 26% YoY and 7% quarter on quarter. SME remains a core strategic pillar and our ongoing investments in technology projects such as CRM Loan Operating System and digitization of customer journeys are helping reduce turnaround time and improve productivity. Consistent with our focus on building holistic long term relationship with customers. We partner with Indian Institute of Technology to launch programs that enhance further readiness and AI adoption among our SME customers. Our mid market portfolio too continues to scale rapidly. Our book here is diversified and a substantial portion of the book is from working capital and Flow based businesses Pricing continues to be a challenge in the larger corporate space, especially in long term loans and project finance.
We continue to focus more on flow led businesses and profitability through higher cross sell, greater share of transaction banking and deeper penetration. Trade remains a priority While overall growth in the trade book was muted this quarter due to pricing pressures and large mandates, the granular portfolio showed good momentum with new client acquisitions and mandates. We also saw good growth in the cross border trade book in Gibb City. Our recently launched Iwago digital platform for supply chain finance is also witnessing a robust pipeline. Our asset quality across customer segments continues to be robust and we saw minimal slippages this quarter.
We continue to enhance returns and profitability through liabilities and fees. There was an uptick in DCM volumes and revenues this quarter driven by successful completion of large transactions across corporates, real estate and infrastructure. FX revenue also grew aided by both corporate and institutional flows. We continue to focus on increasing our share of customer collections and payment flows this quarter. Overall number of transactions and throughput have grown well. This was complemented by capital market transactions including escrows, dividends, buyback resulting in healthy average liability growth this quarter. Investment in technology including the launch of a dedicated escrow platform and enhanced API capabilities have further strengthened our systems.
Our unified corporate portal Fin is seeing good customer adoption this quarter. We automated the working capital loan disbursement, dealer financing and servicing on fin. The wholesale bank continues to work closely with the investment bank and institutional brokerage businesses to improve corporate and investor coverage. Together the group is able to maximize opportunities across custody, escrow, FX financing and primary market activity and deepen relationships across this franchise. This quarter was an active quarter for. These businesses with several marquee IPOs and advisory deals. In capital markets. The Investment bank managed 11 IPOs and 3 QIPs raising a cumulative of about 74,000 crore. And in advisory the investment bank advised on 5 transactions with a cumulative deal value of about 26,000 crores. The institutional brokerage business also maintained its Tier 1 ranking with most global FBIs for their India investments and with leading domestic mutual funds and insurance companies and gained volume share in a challenging market. Custody balances at the bank also showed growth this quarter in both the offshore and domestic custody space.
We remain focused on onboarding new custody clients including through GiftCity. Overall, the wholesale banking and institutional businesses remain in good health, delivering acceptable ROE and demonstrating resilience across market cycles. I now hand over to Jaydeep to take you through the subsidiary businesses.
Jaideep Hansraj — Whole-time Director
Thank you Baritud. Good evening to all. Let me talk about our subsidiaries now. In Q3 FY26 our subsidiaries reported profit of 1,453 crores, up 11% YoY and 19% sequentially. This strong performance meant subsidiaries contributed a healthy 30% of consolidated profits for the quarter, underscoring the depth and resilience of our conglomerate model. It enables us to capture shifting financial trends through cycles and retain profitability within the group. Our core engines of growth that enable us to meet customer needs across the financial spectrum are banking and lending, capital markets, asset management and protection. Starting with the lending subsidiaries, our largest. Contributor
Kotakmandra prime, our auto finance business delivered pat growth of 15% YoY. Its customer assets grew to 43,244 crores with a YY growth of 13%. KMIL and Kids saw muted performance in the quarter. Hence the total pattern for lending and related subsidiaries degrew on a sequential basis but was up 6% on a yoy basis. Turning to the capital market business, last year was an extraordinary period for capital markets with buoyant volumes driving strong profits in our capital market subsidiaries. The first half of this year was tepid but Q3 has bounced back with our PAT up 31% sequentially.
Given the high base in the previous year, the pat was down Y o Y in quota securities. Our overall market share increased to 13.5% from 11.5% on a YoY basis and its market share in the MTF business was about 14% as of 12-31-25. As mentioned by Paritosh earlier, our institutional equities business and the investment banking business have had a very healthy round of market share with Tier one with the institutional equity business being a Tier one broker for local and domestic institutions and KNCC acting as investment bankers for high quality mandates. Turning to the asset management business, Kotak AMC and Trustee Company saw growth of 31% on a YoY basis and 22% on a QoQ basis.
The total domestic MF AUM increased by 20% YoY to an average of 586610 crores as of 31st December 2025. Karma Coat of Alternate Asset Managers Limited is one of the largest domestic alternate asset managers in India with total funds raised since inception of 11.08 US of US$11.08 billion this quarter with some successful strategic exits in the portfolio which is reflected in the profitability. Moving to the life insurance business, the individual Premium earned grew 18.7% YoY in Q3FY26, our retail sum assured recorded a 75% growth in Q3FY22 due to increased focus on the protection segment aided by GSTB provided to customers.
The AUMs have crossed 1 lakh crores for the life insurance business showing a growth of 14%. YY Coated Life continues to maintain a solvency ratio of 2.3x as it gets the regulatory requirement of 1.5x Q3FY26 is flat on a YOY basis on account of GST and onetime labor code impact. In conclusion, let me reiterate that our unique strength lies in our breadth. We manufacture every major financial product as a group with subsidiaries that not only build and distribute through their own channels, but also leverage the bank’s distribution strength. Our 100% ownership allow us to retain full alignment and profit within the group and also capture emerging opportunities across financial markets as trends evolve.
I will now request the operator to begin the Q and A session.
Questions and Answers:
operator
Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press Star and one on their touchtone telephone. If you wish to remove yourself from the question queue you may press star and 2. Participants are requested to limit their questions to two questions per participant and please use handsets while asking a question. Ladies and gentlemen, we will now wait for a moment while the question queue assembles. Our first question comes from the line of Kunal Shah from Citigroup. Please go ahead.
Kunal Shah
Yeah, hi, thanks for taking the question. So firstly on the margin part it was flat quarter on quarter Last time you had guided that there should be a gradual improvement looking at the deposit repricing and the CRR benefit. So what has actually changed in terms of the expectations with respect to margins you had indicated maybe some short term liquidity deployed into treasury which impacted by four odd basis points. But apart from that, anything else which has impacted the margins which has just led it to be flat quarter on quarter and what would be the outlook getting into Q4 and next year?
Devang Gheewalla
Kunal Devang, here you are right. So let’s understand what was impacted before going to the likely scenario next quarter. So this quarter of course the yield got impacted, the floating rate yield got impacted by the 50bps cut in the June of which the effect came in the Q3 and our expected lines. However this was offsetted also by partially the CRR rate cut which happened during Q3 and of course the repricing of deposits where we saw the cost of funds reducing from 4.70 to 4.54. As against that, as I explained we also saw A lot of IPO related short term funds available in the bank and that obviously got deployed in the treasury assets which are typically lower yielding assets for a short period of time and that effectively brings down the averages of the funds available and impacts the NIM mathematically.
So if I effectively remove the effect of the short term funds which was significantly higher compared to the Q2 on average basis as well the NIM improvement is actually 4.58 as against the average which got arrived at 4.54. Now the second question, how do we see the outlook going forward? I think Q4 we will obviously have the impact of the 0.25% rate cut, MIPS cut on the in the Q4 floating rate advances as well. However the repricing of deposits of course will continue in the Q4 but at a lower pace as you can see actually the cost of fund decline was 5.01 to 4.70 now to 4.54.
So it has been obviously at a reducing pace which will go into Q4 as well. However the CRR cut which happened during each of the months in Q3 the average of that will have a full quarter impact benefit actually in the Q4 the last one as you know Q4 has a typical aberration where the February the lower number of days while the yield on the advances are at a full month basis of 30 days. The deposits costs comes only for 28 days. This does bring some sort of a kicker in the name which is aberration which gets of course paid in the Q1.
So assuming no further rate cuts in February I think we will see a Moderate increase in Q4 and NIM as I explained I think more realistic and stable NIM is something which we’ll be able to sort of estimate going forward from Q1 once the abrasions are also removed and and we have a clearer picture we are already seeing some of the tightening in the liquidity and the rates in the term deposits hardening. As against that we also expect to see some growth in the unsecured business and let’s see how it plays out and impacts the.
Kunal Shah
Sure, yeah that helps. And the second question is with respect to credit cost. So eventually now we are seeing the specific credit cost coming down to 63 odd basis points. You indicated some stress continuing on the retail cv but otherwise are we comfortable on PL credit card? Has MFI also maybe almost picked out and you should see the benefit. And where should we ideally see the credit cost trajectory going forward?
Devang Gheewalla
Yes, so the credit cost reduction is on the expected lines and as I explained the unsecured businesses, which is the micro finance, credit card and personal loan, if I look at each of them, the microfinance and personal loan credit cost actually has started decreasing. And that’s actually the benefit which is sort of. You are seeing credit card obviously has plateaued and it’s not showing any increasing trend. So the primary reason for the reduction in the credit cost is on account of unsecured business credit costs coming down on the commercial vehicle. I think we are now saying the we are cautiously observing it.
We are hopeful that it will plateau down during the Q4 and then we will see how it operates. But I think the good news is that the unsecured credit cost is behind us now and that’s what is effectively resulting in the reduction what we saw during the quarter.
Kunal Shah
So what should be the steady state credit cost number now after having achieved 63 basis points, do we see improvement to 50, 60 basis points over a period? Maybe over next 12 months period.
Ashok Vaswani
If I just step back pre Covid. If I look at my credit cost where of course my unsecured percentage was also lower, I was hovering around 0.4, 0.45. As you increase the mix of unsecured credit costs, obviously credit costs on a standalone basis might show an increase, but I think it also gets you a higher return. So given that the mix of unsecured will gradually go up, it obviously has to be higher than the historical what we used to have. But clearly even in Q4, we expect the credit cost to further gradually go down and the Trend continuing during Q1.
Kunal Shah
Thanks. Thanks, that’s helpful. Yeah, thanks. That’s all from my side.
Ashok Vaswani
Thank you.
operator
Thank you. Our next question comes from the line of Rikkin Shah from IIFL Capital. Please go ahead.
Rikin Shah
Hi, good evening everyone. I had four questions. So the first one is on car and you alluded to some benefit from capital market. But even the average car balances even on sequential basis for last two quarters have been improving. So how much of this would you really be attributing to the capital market and how should we think of stickiness of this deposits? So that’s the first one.
Paritosh Kashyap
Hi, Ricken.
Rikin Shah
Hi.
Paritosh Kashyap
Hi. This is Taritosh. See in our wholesale business we have a large number of customers who are from financial segment which is custody, private equity funds, mutual fund, insurance companies, all of them. While there’ll be some and also capital market business gives us deal car. Some of these things are consistently one or the other customer keeps giving us this car. So even if this is Deal car. This is a regular and consistent deal car which keeps coming to us from multiple set of customers. So I would say there is a tendency of this business to be more sustainable with some degree of volatility.
Devang Gheewalla
Just to add the current account average growth is not only wholesale deposit. I think the consumer current account also granularly grew including the SME business which also contributed my reference to the IPO and all that was with respect to the short term deployment in Treasury. But I think if I look at purely on a current account average thing it’s not only wholesale but I think consumer banking also contributed to that in that. So despite you know EOP, if you recall we had said that Q2 EOP had a lumpy deal based thing but on an average basis.
Also if you see the current account is showing growth both for consumer as well as wholesaler.
Rikin Shah
Got it. The second one is on the SAR deposits. So some of your peers have seen rundowns in the institutional SAR deposits. So what is the quantum of such deposits for Kotak behaving for you and the outlook on the same please.
Pranav Mishra
Hi, this is Pranav with respect to. Institutional or for that matter marquee and bulky savings account, we if you look at we are more focused towards granularity and we are also consciously looking on quarter on quarter running down as far as some myborrow is concerned. So as far as the fixed rate size concerned it is being built with primarily having more of retail focus onto it with granularity and also if you look at one of the engines of growth for us is 811 which is primarily the smaller ticket size but with lower amount of granularity and an active participation of the core India into it.
So that’s how we have designed our strategy to take care of whether high net worth individuals are concerned or for that matter mass affluent and then the core India. So that’s where it is building on as far as more granularity than a. Bulkiness onto it towards institutions.
Rikin Shah
Got it. The third one is on the total cost of deposit. How would that number look like? Would it be broadly 4.45% and how much of term deposit repricing do you think is still remaining? So that’s the third one.
Pranav Mishra
Look I think we have indicated the average cost of the CV account which is already there. I think the term deposit rates obviously have sort of reduced over quarter on quarter but I think as I indicated getting into Q4 clearly there is some tightening and hardening of the rate which may take place in terms of the residual Sort of repricing explained the cost.
If I look at the cost of fund benefit itself which used to be about 32bps in Q1 reduced to 16bps in Q2 and now it is around 16bps in Q2 is further obviously as the repricing starts completing it will further go down so clearly with the average 10 deposit which is between 9 to 12 months and if you look at roughly the repricing started towards middle of Q1 we expect the repricing to get completed by Q1 of the next year.
Rikin Shah
Got it. Perfect. And the last question is on the AGRI psl so some of the peers have had some regulatory supervisory observations. Would you be able to comment whether the same audit has been done or any broader color for your book as well?
Ashok Vaswani
So look, it’s not possible for us to comment on other banks. I just don’t know. As far as we are concerned we have not taken any provision. Also the, you know, as far as the RBI audit is concerned that is something that we are required to keep confidential. So I can’t discuss the findings of anything from the RBI audit but suffice to say that we have not taken as you would have seen, we have not taken any provision in this quarter.
Rikin Shah
Got it. Thank you gentlemen for answering all the questions. Good evening.
Ashok Vaswani
Thank you.
operator
Thank you. Our next question is from the line of Abhishek Murarka from hsbc. Please go ahead.
Abhishek Murarka
Yeah, hi, good evening. So my first question is on loan growth and specifically just coming to credit cards this quarter. We’ve seen at least in the RBI data that came out that a lot of other smaller banks have started increasing their card issuances. What seems to be holding you back in terms of card issuances and spend pickup?
Ashok Vaswani
So frankly Abhishek like we’ve been talking about, completely revamped our credit card proposition. We’ve launched a whole range of new products right from Solitaire to the top end or the top end to Airplus and Air which is a cash mile product for the mass affluent and then a cash back product. This whole range of products are going out and you will start seeing growth in spend and ANR having said that look, we want to be cautious. We obviously don’t want to grow very aggressively and then get into credit problems. And as you would have seen Q3 generally speaking has been a very muted quarter for credit cards across the industry.
So we’ll see in the first instance we will see spend on the cards go up as we ramp up acquisition and then we will see ANR build over a period of time. The newly launched product, particularly Solitaire, is doing very well and very, very hopeful that those numbers will start showing up very quickly.
Abhishek Murarka
So it’s probably more a matter of time that all these steps that you have taken, they’ll start building up and we start seeing some traction maybe one or two quarters down the in this portfolio.
Ashok Vaswani
That is correct.
Abhishek Murarka
Understood. And as far as OPEX is concerned, so one of the things is that you know, the marketing spend and the acquisition cost that will also continue to go up, as you know, PL cards, etc. All of these scale up. So just from a cost growth perspective, what kind of say medium term growth should we look at as a sustainable run rate? Because right now a lot of it is impacted by last year’s slowdown in several segments. But going forward we’re looking at more traction. So how would the cost growth pan out?
Ashok Vaswani
Abhishek Think about it this way, that we want cost to go up when we are acquiring new customers in 811 in affluent New cards, new tractor loans and stuff like that. Those costs frankly are good costs and let them kind of go up. That will be offset by a lot of our effort in automation and digitization where we are trying very hard and working feverishly to improve efficiencies and our customer experience. And obviously as we kind of grow the acquisitions and grow the marketing cost and things like that, you will see income go up as well.
I don’t think we can really talk about a kind of guidance on either cost income ratios and stuff like that, but effectively that is what we are trying to drive. Anything you would add?
Devang Gheewalla
Yeah, just to build up on that one data point. While Ashok rightly mentioned the acquisition costs are obviously volume related, which we obviously want to to grow with our philosophy of growth for scale. But I think if I look at the fixed cost and let’s say the ctc, which is the payroll cost of the staff, which is effectively around 60, 65% of the total cost between Q3, Q2 it has remained flat. So while we are spending on acquisition new businesses, I think the fixed cost is where we are clearly controlling and some of the investments in technology which we have been continuing is now sort of helping us to rationalize some of those things.
Abhishek Murarka
No, absolutely. I don’t look at cost as any negative item as such. It is a necessity for growth and revenue generation of course, but just as a thought process, if you’re expecting, let’s say mid teens, high teens, whatever loan growth costs would lag it substantially by 3, 4 percentage points. Or you could see more operating leverage, as in cost growth being much slower than loan growth. So just how do we think about these two and then that can give a sense of the jaws going forward. So I’m just trying to get some understanding there.
Ashok Vaswani
Over a period of time, Abhishek, over a period of time, not quarter by quarter by quarter, but on a trend basis, we should see cost to assets coming down and we started to see that trend and we are hopeful that trend will accelerate.
Devang Gheewalla
Actually, if you also look at cost to asset ratios, if you look at Ashok rightly said over a longer period of time, if I look at from last year over this quarter and this quarter, as I said, you have some operations, actually it has come down. It used to be above 3%, which is now down to around 2.7 and 2.5 sort of range. Right. So it is always coming down as a. That’s a good way to look at as an indication as a cost to the asset buildup, basically. I think it’s already on the. And certainly would like to further improve that as we go along.
Abhishek Murarka
Right, yeah, no, exactly. So that is where my question was from. Because cost to assets has come down in a period when some of your assets which require more spend, they have not grown. And now when they grow, does cost to asset go back to 3% or from here you continue to see, you know, steady reduction in cost to asset. So just that understanding, that’s it.
Devang Gheewalla
I think we would like to obviously maintain and, you know, cost to asset ratio in the range of two and a half to 2.2.6. Right.
Abhishek Murarka
Okay. Okay. All right. Thank you. Thank you. Thanks a lot and all the best.
operator
Thank you. Ladies and gentlemen, you are requested to please restrict yourselves to two questions only. Our next question is from the line of Maruk Adajania from Nuvama. Please go ahead.
Mahrukh Adajania
Yeah. Hi, good evening. My first question is on ecl. So based on the draft, what would be the likely impact on credit cost for you from Eclipse? And my other questions are that you did mention or you did allude to some rundown in the PL portfolio purchase from Standard Chartered. So could you quantify or throw some light on it? And I just also wanted to know if you could quantify the proportion of liabilities which are yet to reprice in the fourth and first quarters from the old parts. Yeah. Hi. Hi.
Devang Gheewalla
Okay. On the ecl, as you know, it is still a draft circular which RBI has come up and all the banks, including us, we have obviously represented because it requires you to make a floor based provisioning by asset segment. However, considering even the draft circular the impact of the ECL provision is less than 2% post tax for us in the bank. So it’s not likely to materially impact even if we were to apply the draft circulars as is. So that’s the first point on the sorry 2% of the network. And as you know we already we have significant higher network than required so we don’t see any significant impact arising out of that. And even in fact the circular also provides for amortizing that over four years and all that. But we’ll see how the final draft circular comes.
But I think it is suffice to say it is not a significant impact at all. Even if you were to go as per the as is circular coming to the Standard Chartered portfolio which is there now, I think the residual portion which remains is not very significant is less than 1,500 crore approximately about 20% of what it was. So I think it will run down over the next two quarters in that sense. The third portion, what you said is on the repricing which is left which I partially answered earlier. As we had mentioned the term deposit average maturity is about nine to 12 months and we expect the repricing to effectively complete during the Q1 in that sense and that anyway if you see the trend of cost of fund reduction it reflects actually the repricing pace of the term deposit.
So that’s how I look at it going forward.
Mahrukh Adajania
Okay, thank you very much. Thank you.
operator
Thank you. Our next question comes from the line of Piran engineer from clsa. Please go ahead.
Piran Engineer
Yeah. Hi team. Congratulations on the quarter and also on hiring Mr. Saha. Just firstly getting back to the current account thing, our growth for the last two quarters was good, last quarter is even better at 8%. Is all the pickup in growth due to the capital markets business or some structural changes we’ve made due to which current account growth is picking up.
Pranav Mishra
Hi Pranav. Our current account is primarily if you look at this large amount of activity around the granularity in the market also and we have been able to capitalize on in terms of the opportunity which is being thrown out there in the market as far as acquisition of more. Of what you called as private limited. Companies, proprietary and things like that. So our growth primarily and that’s where you’ll find an AMD growth commensurating with the fact that these are granular current account franchisees getting created.
Vyomesh Kapasi
I’ll just add in addition to this our Focus on building CMS capabilities in offering more cash management services to our corporate customers which not only help us get better car, also effectively helps improve productivity both at bank and as well as the customer end. That’s together between consumer bank and the wholesale bank helping us improve the car.
Piran Engineer
But I mean this was also true a year back, right? Year, year and a half back. But our growth was still weak then and we were catering to the SMEs. We had the consumer banking product cross selling current accounts to them. But this year we’ve seen, you know, current account deposit growth really accelerate. So just trying to understand, maybe just happened by chance but have there been any specific steps we’ve taken was my question.
Ashok Vaswani
Trust me, it hasn’t happened by chance. It’s been a lot of effort and a lot of focus of the sales teams and Pranav has driven a lot of this through the branch network. We’ve been very focused on getting the affluent customer base. The level of changes that we’ve driven through our branch network both in terms of process focus, building out branches based on percent of catchment areas, making the whole acquisition, making the whole acquisition process far more efficient. All of that plus all the automation and digitization to help customers with their payment flows has all resulted in this.
So trust me, it’s been a tremendous amount of effort and focus on this area which has led to this kind of performance.
Piran Engineer
Got it. Okay, that, that helps. Secondly, just on your agri finance book now last couple of years it’s been unchanged at 25,000 crores. And this is different from the tractor book. So can you just talk a bit about what loans are there here and why you’re not growing them. And I’m presuming these are better yielding than the rest of the book.
Vyomesh Kapasi
So this is the, primarily the agri SME value chain which is what we cover here. So this is not. The KCC book. This is primarily the agri SME value chain business which is what we are. We have kind of pivoted around building around the various agri clusters across the geography. And that is something which we kind of pivoted as a strategy over the last couple of years in terms of driving it. And that is what is yielding results in terms of numbers that you are seeing slowly the numbers have been inching. Up on our last three quarters. When you see the numbers.
Piran Engineer
Okay, so these are like two for a food processing units or storage units or stuff like that.
Vyomesh Kapasi
Yes, Agri traders, agri processors, primary processors, secondary processors, all of that falls within this particular segment
Piran Engineer
Got it, Got it. Okay. And then just lastly a couple of clarifications I needed devang when you say the CTC is flat but even if I adjust for the labor code the employee OPEX is up 9%. So what am I missing here? And secondly, what is the mix of LAP in the mortgage book?
Devang Gheewalla
So what you are. I also mentioned that if you see the pension liability last time I had mentioned we had a benefit because of the interest rate movement which has effectively reversed out and normalized during the quarter. So that is the first part. Second, I think some of the share based incentive which are like SAR obviously has the provisions has gone up because of the share price movement which has impacted those provisions.
Piran Engineer
Got it, Got it. And just on the lap percentage of the mortgage book.
Devang Gheewalla
Sort of hf I think it should be around almost equal 55, 65 sort of thing.
Piran Engineer
Got it. Okay, that’s useful. Thanks and wish you all the best.
Ashok Vaswani
Thank you.
operator
Thank you. Ladies and gentlemen, you are requested to please restrict yourselves to one question only. Our next question comes from the line of Suraj Das from Sundaram Mutual fund. Please go ahead.
Suraj Das
Yeah. Hi. Hi. Thanks for the opportunity. I think few questions have already been answered. Just a follow up and two questions to tell. First one on the credit card follow up. While I mean as you mentioned that your solitaire card seems to be performing well. But I guess last time you had earlier slowed down the card acquisition through Eton on channel for the mass customer segment. Has that funnel been reopened? That is one. And also I mean in terms of the solitaire card it is a super premium card, right? So is it a roe accretive product related to credit card Also one question.
In terms of this proportion of personal loans on credit cards, what could be that proportional in terms of this overall personal loan book of 25,000 crore. So that is question one. Question two sir is on strategy a. Bit. In terms of say the bank’s leadership bandwidth in the consumer vertical has been further strengthened. In that context do you have any plans say to expand or reject the consumer bank’s product portfolio? I mean are there any products which are probably not key focus areas or maybe growth drivers today or maybe you are not offering currently but you see becoming incremental growth drivers over time. And the last question in terms of this IDBI deal, what would be your comment since now government has finally invited bids.
Ashok Vaswani
Yeah. So let’s start with cards, right? Look, solitaire is targeted towards the affluent. Solitaire has landed well. The spend on the solitaire card is proving to be very Accretive for us. While it is still early days to see how it kind of builds up, I believe that solitaire will be a profitable product in its own right, given the levels of spend that we are getting on solitaire. Your other question around 811. You know, at one point in time we had done a lot of experiments with the 811 kind of customer base and those experiments did not entirely work out well for us.
It’s not as if we are not selling solitaire, sorry, card products to the 811 base, but we’re doing it in a much more refined kind of way, using advanced risk models and capping exposure just to make sure that we’re getting it right. So that will kind of continue. We will come back on cards and kind of throw the book. IDVI look, we look at every single transaction that comes up in the marketplace and essentially have three criteria that we look at. The first criteria we look at is, is this particular transaction going to add to us strategically? Right.
If the transaction adds to us strategically, then of course we go to the next stage. If it doesn’t add strategically, it kind of goes away. Then we look at valuation and say, what are the valuation on this particular transaction and is it value accretive for the firm? I’ve said time and time again that for us, scale is scale for relevance and not just scale for size. So does it really add strategically and will it add to. Will it be accretive to the group? If it is both strategically and financially good, then of course we get excited about the transaction.
But even then, there is a third lens that we put to it. And the third lens that we put to it is really the lens of. Saying, what is it going to take. To really integrate this kind of acquisition? We are on a pretty significant transformation path. Our transformation path is about getting far more customer centric. It’s about automating and digitizing quota to take it to a completely different level. And there’s a lot of effort that we are pushing into driving those efficiencies within the system because those will be clearly longer term significant benefits for quota. So even if it meets strategically or if it meets valuation, then we always compare. What does it really mean in terms of integration? How much management bandwidth is it going to be? How much of that will be a distraction? What are the kind of things that you really want to spend your time on? You want to spend your time on developing new technologies, getting into the AI game, making customer satisfaction a bigger priority, or do you want to spend your time Integrating HR systems, dealing with labor unions and all of that kind of good stuff.
And therefore we look at every single opportunity against these three lenses, right? And whichever opportunity comes up, we will continue to look at it against these three lenses and then weigh up whether it makes sense for us or does not make sense for us.
Suraj Das
Those two questions on the strategy on the consumer bank and the PL on Card
Ashok Vaswani
on the consumer bank. Look, our stated strategy is all about identifying focus segments and going aggressively after the focus segments to get this proportionate market share, right? We’ve launched a solitaire proposition. We’ve got a great proposition in the private bank Core India. We’ve got a great proposition in 811. Now these propositions, once we land the proposition, it’s not as if we are going to just keep quiet, right? We want to continue to enhance these propositions so that we get a greater deal of customer engagement and a higher level of acquisition. So that is going to be an ongoing effort as far as we are concerned.
Right. And we constantly, we are constantly monitoring what our customers are saying, what do they really want and how can we serve these customer segments better. And based on the feedback that we are getting, based on the conversations, we. Will improve. The propositions that we have in the marketplace. Sure sir.
Suraj Das
Sure sir. And any quantum, if you can highlight. On the PL on cards.
Ashok Vaswani
We have. A pretty much separate product in PL and PL on card frankly is to my mind is not such a great product because it clogs up the credit limit and therefore for us that is not a very significant proportion of the credit card book.
Suraj Das
Thank you for answering all my questions.
operator
Thank you. Our next questioner is Jayamundra from ICICI securities. Please go ahead.
Jay Mundra
Hi, good evening sir. Thanks for the opportunity. So on slippages, right? So the absolute slippages are stable. Qoq, you have been mentioning that the bank has been experiencing improving trajectory on personal loan credit card MFI and those are supposedly high delinquent product. So if they are improving then you know which is the piece which is rising and hence the overall slippages are stable. That is the, if you can provide some clarity there apart from the retail TV which anyway is a very small proportion I believe.
Devang Gheewalla
Hi Jay. So if you look at the slippage data, you are right that if you compare just the slippage data say 1629 going to 1605 doesn’t make a significant reduction.
I think I would urge you to look at the fresh slippages upgraded within the same quarter. So if you look at the number during this quarter is 257. So effectively while 1605 crore is a gross slippage which we entered during quarter of which 257 actually also got cured during the quarter, if I look at the similar number in the last quarter it is 169 65. So if I consider the upgraded portion also as a part of the slippage, actually it has come down by about 100 crores on a quarter on quarter basis. So that is the first part.
Second piece I think yes slippages are combination but I think in terms of the unsecured businesses they are indeed coming down. But I think it’s the commercial vehicle and some of the related advances and CV commercial retail which is effectively sort of bringing it up.
Jay Mundra
Sure sir. And lastly on one Kotak right so we have been, as we have been saying that we are a unique position in a financial conglomerate but if I look at the core fee income despite industry leading loan growth and deposit growth, but the fee income growth, core fee income growth has been much weaker or much smaller than the loan growth and even in absolute basis despite all this conglomerate strategy. So is there anything which is. When. Can we expect the core fee income going more or less similar in terms of business growth so far? Was there any obstacle?
Devang Gheewalla
Two things Jay. One obviously the fee income consists of a combination of a whole host of things starting from foreign exchange income to DCM income to life insurance distribution income to mutual fund distribution income and other such products as well. If you look at the fee income growth on a QOQ basis, you started seeing green shoots with a 6% growth on a quarter on quarter basis. As I said that this is something which has been started we’ve been talking about for maybe about two or three quarters now and it’s not immediate that you will see the results.
But a 6% quarter on quarter number is I would say a beginning and we just like to keep growing on that hopefully on a quarter on quarter basis.
Ashok Vaswani
I think it’s beyond the fee line also. Right. I mean look, there’s no question about getting referrals for referrals for assets and it’s also not only just from the subs to the bank, it’s also not only bank to the subs, subs to the bank, but also bank to the subs. So I think we’ve got to look at it on a little more holistic basis.
Jay Mundra
Right, thanks. And I think sir, if you could repeat what you said in response to the that we have strengthened the consumer banking management bandwidth. Any products that you would like to sort of Rehash or reintroduce or introduce or scale up over the next few quarters. Yes, thank you.
Ashok Vaswani
Yeah. So what I said was that look, ultimately we have, it’s not so much about doing a particular product. It’s more about the propositions that we’ve landed for our various customer bases. Right. And strengthening the proposition. So we land the proposition with a certain set of products and services and then we are in constant, you know, we are constantly monitoring what customers say about those about that proposition. And based on the feedback, we continuously strengthen the proposition so that it becomes more meaningful and more engaging for our customers. And we will continue to do that.
There will be things that will land which will have resonated with customers and then there will be other things which may have not resonated or there will be feedback and we will twist and adjust the propositions to take care of those things.
Jay Mundra
Sure, sir, that helps a lot. Thank you and all the very best.
Ashok Vaswani
Thank you.
operator
Thank you. Our next question is from the line of Chintan from autonomous. Please go ahead.
Unidentified Participant
Thank you for taking my questions. I’ll restrict myself to one question. Devang, you mentioned that rates are tightening. And competitive dynamics might not be as. Good in the fourth quarter. Do you not think the RBI measures. Will help there for or is the. Tightening for you strong enough that we. Should be a little wary of how. The dynamics play out in the fourth quarter?
Devang Gheewalla
I think Suptan. Hi. My comment was also based on the initial liquidity in the system data which we are seeing. Of course you are right. Some of the measures have been taken by RBI currently. But typically Jinter, if you see Q4 is a very quarter where for the corporates as well as for the bank where the liquidity does tighten up in that sense. So it was more based on what we saw for the first 10 days of January. Of course if RBI takes measures and to ease it out it will sort of reflect in that.
But till date at least we have seen at least the term deposits actually rates, if you see, even if you see the term deposit rates quoted by the peer banks across the buckets have actually inched up. So my comment was based on that experience actually. Now of course with this measures tightening, who knows whether they will sort of further bring it down. But let’s see about that.
Unidentified Participant
Yeah, okay. And just a request for the next quarter, just for a couple of quarters. If you could give us yield on. Advances and cost of deposits just as this repricing completes. I know you don’t want to get into that granularity, but it will help. For a few quarters. Thank you.
Ashok Vaswani
We’ll consider your interest. Thank you.
operator
Thank you. Ladies and gentlemen. We will take that as a last question for today. I would now like to hand the conference over to Mr. Ashok Vaswani for closing comments. Over to you, sir.
Ashok Vaswani
Thank you so much. Thanks everybody for joining us. Much appreciate doing this on a Saturday evening. And I look forward to seeing you all again in approximately 90 days. Thank you so much. Bye bye.
operator
Thank you on behalf of Kotak Mahindra Bank. That concludes this conference. Thank you all for joining us. You may now disconnect your lines.