South Indian Bank Ltd (SOUTHBANK) Q4 FY22 Earnings Concall Transcript

South Indian Bank Ltd (NSE: SOUTHBANK) Q4 FY22 Earnings Concall dated May. 13, 2022

Corporate Participants:

Murali Ramakrishnan — Managing Director and Chief Executive Officer 

Analysts:

Divya Purohit — ICICI Securities Ltd. — Analyst

Vaibhav Badjatya — Honesty & Integrity — Analyst

Prashant Kumar — Sunidhi Securities & Finance — Analyst

Aditya Doshi — Chanakya Capital — Analyst

Suraj Das — B&K Securities — Analyst

Selvamuthu Kumar — — Analyst

Akhil Hazari — RoboCap — Analyst

Rohan Mandora — Equirus Securities — Analyst

Jai Mundhra — B&K Securities — Analyst

Sagar Rungta — Anand Rathi — Analyst

Mehul Khandelwal — Span Capital Services — Analyst 

Presentation:

Operator

Ladies and gentlemen, good day and welcome to the South Indian Bank Q4 FY ’22 Earnings Conference Call hosted by ICICI Securities. [Operator Instructions] Please note that this conference is being recorded.

I now hand the conference over to Ms. Divya Purohit from ICICI Securities. Thank you, and over to you, ma’am.

Divya Purohit — ICICI Securities Ltd. — Analyst

Thank you, Dhanvi. Welcome, everyone. On behalf of ICICI Securities, I welcome you all to the results call of South Indian Bank. I would now like to hand over the call to Mr. Murali Ramakrishnan, Managing Director and CEO, South Indian Bank. Thank you, and over to you, sir.

Murali Ramakrishnan — Managing Director and Chief Executive Officer

Good morning, everyone. Thank you. Good morning to all of you and thank you for joining us for the South Indian Bank Limited Q4 FY ’22 earnings conference call. We are joined by my colleagues, Mr. Thomas Joseph, EVP and Group Business Head, Sales; Mr. Anto George T, Head, HR and Administration; Mr. Sanchay Sinha, Head, Retail Liabilities; Ms. Chithra, CFO; Ms. Minu, GM, Credit; and Mr. Senthil Kumar, GM, Recovery.

Let me start with the key highlights of the financial performance for the financial year ended March ’22. With new book of INR25,750 crores with better underwriting mechanism, GNPA on new book were less than 0.1%, and SMA2 book is 0.35%. Provision coverage ratio increased to 69.6, which was in mid-50s.

Bank saw a record recovery and upgrade of INR1,450 crores from GNPA and good recovery from technically written-off accounts compared to INR500 crores to INR700 crores during the last few years. Overall, GNPA improved to 5.9% from a peak of 8.02% during the year. Net NPA improved to 2.97% from a peak of 5.05% during the year. Following the robust collection drive, our SMA2 portfolios consistently improved quarter-on-quarter from INR2,139 crores in Q1 ’22, INR892 crores in Q4 ’22.

Let me now take you through the key highlights of operational and financial performance. The total business for the Bank stands at INR150,957 crores as at March 31, 2022. Advances grew by 4% year-on-year to INR61,816 crores, backed by total disbursement of INR24,533 crores during the financial year ended March ’22. The Bank disbursed more than INR10,200 crores of corporate loans during FY ’22, predominantly to A and above-rated corporates. The share of A and above rated large corporates has improved from 63% as of March 31, 2021 to 89% as of March 31, 2022.

We have zero delinquency and zero SMA2 book in our new contract book, that is disbursement starting October 1, 2020. Hopefully, the segment which has been consistently growing throughout the pandemic, our disbursement increased by 96% year-on-year to INR7,998 crores during financial year ended March ’22 with an average ticket price of about INR148,000.

Gold loan book grew by 20% year-on-year to reach INR10,766 crores. Personal loan is another segment where we are seeing good traction since the launch of pre-approved personal loan in September ’21. As on date, our PL book crossed INR1,000 crore mark. We are seeing steady monthly disbursement run rate of INR100 crores.

Credit card is another new product which we launched during FY ’22. In April ’22, we had more than 72,000 credit cards with monthly average spends of INR20,279. As far as SME is concerned, we are seeing good uptick in disbursements month-on-month over past few quarters. We are cautiously growing this segment with monthly disbursement averaging at INR300 crores in comparison to average of INR175 crores in the first two quarters. We expect healthy economic growth and government spending towards infrastructure sectors will help create uptick in coming years. Our aim is to grow loan book by double-digit in FY ’23.

Coming to liabilities, our retail deposit grew by 10% year-on-year to INR85,320 crores. CASA deposits increased by 20% year-on-year to INR29,601 crores, predominantly due to continued improvement in our SA business, which grew by 22% year-on-year to INR24,740 crores. CASA ratio continued to improve and increased by 125 bps q-on-q, reached 33.2% on the total deposits as of March, 31, 2022. Bulk deposits declined by 21% year-on-year to INR3,821 crores, in line with our strategy.

NRE deposit, which has been growing steadily rose by 6% year-on-year to INR27,441 crores and contributes to about 31% of total deposits. The low cost NRE deposits grew by 13% year-on-year to INR8,844 crores. The Bank saw a robust growth of 36% year-on-year in our NRI remittance business during the quarter. Our investment book was INR25,534 splitting to HTM of INR19,365 crores and AFS and HFT and INR3,174 crores. The Bank witnessed slippages of INR345 crores during Q4 ’22 and INR2,142 crores in FY ’22, which was within the overall guidance of INR2,500 crores given for FY ’22.

This is the first quarter since COVID outbreak where recovery and upgrade of INR4,412 crores were higher than slippages. The overall restructured book stands at INR2,417 crores, of which business segment is INR3,338 crores, personal segment is INR305 crores and corporate is INR774 crores. The Bank’s whole standard and restructure provisions of INR617 crores. The Bank’s collection efficiency during the quarter was 102% with individual monthly collection efficiencies of 105%, 104% and 102% for January, February and March ’22 respectively.

Gross NPA ratio improved by 107 bps from 6.97% as of March 31, 2021 to 5.9% as of March 31, 2022. During the quarter, the Bank recovered or upgraded INR412 crores worth of NPAs and sold INR151 crores of GNPA to ARC. The net NPA improved by 174 bps from 4.71% as at March 31, 2021 to 2.97% as at March 31, 2022. Our endeavor is to bring GNPA below 5% and net NPA closer to 2% in FY ’23 and expect the credit cost to be in the range of 1.75% to 2%.

The Bank reported net profit of INR272 crores in Q4 ’22, mainly due to improvement in net interest income and reduction in provisions on account of lower slippages and better recoveries. Further, the Bank reversed the tax provision to the tune of INR68 crores on receipt of favorable judgment/assessment orders for the previous financial years. Net interest income for the quarter increased by 7% year-on-year to INR598 crores. Net interest margin improved by 16 bps q-on-q to 2.8% in Q4 ’22. The sequential growth in CASA has let improvement in cost deposits of 13 bps q-on-q to reach 4.54%. We endeavor to reach NIM of 3% in FY ’23.

Non-interest income was INR204 crores. Our core fee income increased by 14% year-on-year to INR142 crores. Overall provisions decreased by 83% to INR78 crores in Q4 FY ’22. The reduction in provisions was mainly due to lower slippages, better recoveries and reversal of standard provisions of INR60 crores on account of recovery from fully written-off accounts.

Our PCR improved by 10.82% during the financial year from 58.73% as at March 31, 2021 to 69.55% as at March 31, 2022. Our aim is to further improve PCR to 75% in FY ’23. PCR, excluding write-off, improved by 17.27% during the financial year from 34% as at March 31, 2021 to 51.27% as at March 31, 2022. Our overall capital adequacy ratio continues to be robust with 15.86% as of March 31, 2022. The Tier 1 ratio stands at 13.22% as at March 31, 2022. We are hopeful that the momentum in disbursements and collections will continue in the coming quarters to achieve the desired targets.

With this, we open the floor for questions. Thank you.

Questions and Answers:

Operator

Thank you very much. [Operator Instructions] The first question is from the line of Vaibhav Badjatya from Honesty & Integrity. Please go ahead.

Vaibhav Badjatya — Honesty & Integrity — Analyst

Thanks for providing this opportunity. So, you have given this nice breakup between the old and new book. So, out of the new book of INR22,752 crores, can you provide the breakup as to what is the gold loan and what are other, like corporates and SMEs and personal loan kind of [Speech Overlap] of the new book?

Murali Ramakrishnan — Managing Director and Chief Executive Officer

Yeah. Out of INR22,752 crores, we have — retail is about INR5,039 crores, corporate is about INR7,204 crores, business segment is about INR2,023 crores, agri is about INR8,486 crores.

Vaibhav Badjatya — Honesty & Integrity — Analyst

Got it. Understand. And sir, this new book — this average tenure, obviously you’ve started in October 1, 2020. I mean to say that, a lot of this would be loans which is very early in the tenure as of now, and the credit cost will be low as of now. How much of this would be related to project expansion? And on this interest, is it still being capitalized in the [Indecipherable]?

Murali Ramakrishnan — Managing Director and Chief Executive Officer

I didn’t understand the second part of your question. Into the first part of the question, you are saying is, since you have built this book fairly in the second half of this year, is it too early to talk about quality? Yes, I agree that it’s too early to talk about quality. But having said that, since we are using, I mean, advanced techniques in terms of credit underwriting, we are fairly sure what we are onboarding. Therefore, I’m fairly confident that this book will hold. And as you know, especially in retail, etc, the nature of the deal will start showing up much earlier. If you have not onboarded a good customer, you will start showing delinquency much earlier.

And if you look at — while addressing, I talked about the quality of corporate credit, which you are adding. All these are rated A and above and substantial portion of my new book is on highly rated corporates. Similarly, business segment also, we are using tools available and we are also now sort of completing our pilot using our credit model, which has been built with McKinsey’s help and with which we are underwriting now. So we are fairly confident of the quality of the book which we are having.

So, even if you look at the GNPA from this book, obviously it’s very low. But even if you look at SMA2 or SMA1, even they are very, very low as of now despite the fact that the average age of this book is still — I must say that it is still too early, but I’m fairly hopeful that it will sustain.

Vaibhav Badjatya — Honesty & Integrity — Analyst

Got it. And lastly, on this new book again, how much of this INR22,000 crores is basically to customers which were not previously the customers of South Indian Bank till October 1, 2020?

Murali Ramakrishnan — Managing Director and Chief Executive Officer

In terms of number of customers, probably I wouldn’t be able to tell immediately, but I can tell you that personal loan and credit card, these are — the personal loan predominantly we have used a pre-approved model where we have actually mind our own data base using data analytics. You know that we formulated our data science division during this year. This was one of the important strategy which I want to — thought of using analytics for sourcing and underwriting. So, PL, which we have almost added INR1,000 crores during the year, I must say that most of them would be for existing customers. But we have started now sourcing new-to-bank customers obviously using imputed SCOR model, etc, where customers may not be banking with us, but they might be it somebody else, but they have a good CIBIL score, etc. Using bureau’s help and doing some analytics, we are onboarding a lot of new-to-bank customers also.

In credit card, I must say that out of the 72,000 cards which we’ve sourced, initially we started with giving cards to our existing customers, but of late when we are actually started ramping up the number of cards in terms of averaging close to 15,000 to 50,000 cards, almost 60% of them will be new-to-bank customers who have got an excellent credit score. And that actually is a fertile ground for me to go and cross-sell many of my retail products. So this is one of the biggest source for me for new-to-bank customers.

So, with the plan I have for building credit card this year close to, let’s say, 130,000 cards plus, I’m expecting that a lot of new-to-bank customers will get targeted during the year.

Vaibhav Badjatya — Honesty & Integrity — Analyst

Yeah. But that’s — actually it is only a small portion of the book. I think out of INR23,000, you said about INR8,500 is agri, and I think INR5,000 is reputed corporates…

Murali Ramakrishnan — Managing Director and Chief Executive Officer

Agri includes agri gold also, just for clarifying that.

Vaibhav Badjatya — Honesty & Integrity — Analyst

Yes. So, in that two large segments, how much would be to the new customers and how much would be…

Murali Ramakrishnan — Managing Director and Chief Executive Officer

Hardly anybody will be new, because this segment is — as you know, this segment comes back for loan again and again. Once their initial loan gets measured, they can come and again take. Especially since we are experiencing COVID, etc, where clearly the disposable income of the customers, especially in the semi-urban and rural, have come down, so it’s natural for them to come back and avail loan again by pledging gold again. So, therefore, there may not be many new-to-bank customers, but we are actually not really differentiating. When it comes to products like gold, as you know, credit risk is reduced, it’s only operation under progress which we need to be concerned about. So long as you have those in traction, it doesn’t really matter whether somebody is new or existing.

Vaibhav Badjatya — Honesty & Integrity — Analyst

Understand. That’s it from my side.

Operator

Thank you. The next question is from the line of Prashant Kumar from Sunidhi Securities & Finance. Please go ahead.

Prashant Kumar — Sunidhi Securities & Finance — Analyst

Thank you, sir, for the opportunity. My question is on operating expense side. Actually just to understand where, after one year or two year, the overall cost to income ratio will — it’s going to be sustained, I mean, the staff expenses is decreasing, obviously churning of the old employee, and I think so voluntary retirement. And other operating expenses increases because of business and other. So, what will be the run rate, sir, of staff expenses for FY ’23 and ’24, quarterly or yearly basis if you can give some guidance?

Murali Ramakrishnan — Managing Director and Chief Executive Officer

See, one thing which I want to tell you is, cost-to-income ratio, which is one of the keys which we are focusing on as part of our fixed strategy clearly is to bring down the cost-to-income ratio to the levels of 50% and below, because that’s a healthy ratio. In fact 45% below will be the most healthy ratio. But having said that, the structure in which the Bank has been normalized, as you know, we follow IBA methodology, and IBA as certain frequency of negotiation which happens on behalf of all those banks where IBA system is followed for employee salaries, etc.

So, those settlements also happen at regular intervals. And obviously we need to include those costs into our cost. Therefore, the only way to bring down the cost-to-income is to increase the income. And the increase in income, as you know, will happen when, A, when the economy actually starts really showing up opportunity for more and more quality assets, and the net ratios [Phonetic] in the market start going up. Now with the inflation going up, etc, the traction in terms of interest rates are hardening in the market is certainly seen now. Now, we are hoping that both in assets as well as in our treasury, we have a good opportunity to reprice our assets at a much higher interest rate than what we were contracting earlier. And whenever any case, whether it’s SME or corporate comes for renewal, etc, we will obviously price it by linking it to the reference sheet, which is only start going up.

So, to answer you, cost, I’m looking at the impact — making an impact in cost-to-income, not necessarily by tweaking on the cost, because as you know, cost is something which we — give us. We need to manage that and we need to continue to work with that. But only way to bring down the ratio is to increase in income, and that is what we are attempting to do. And whatever measures which I talked about in terms of focusing on good quality assets and high yielding assets and repricing the entire book depending on the interest rates hardening in the market, etc, we hope that the traction on overall income will start going up, which is the surest way to bring down the cost-to-income.

Prashant Kumar — Sunidhi Securities & Finance — Analyst

Yeah. On the other one, I think I have missed. You have already mentioned, but just to repeat, what will the credit cost — what is the guidance for FY ’23?

Murali Ramakrishnan — Managing Director and Chief Executive Officer

We are looking at 1.70% to 2%.

Prashant Kumar — Sunidhi Securities & Finance — Analyst

Okay. Thank you so much for — that’s it from my side.

Murali Ramakrishnan — Managing Director and Chief Executive Officer

Thank you.

Operator

Thank you. [Operator Instructions] The next question is from the line of Aditya Doshi from Chanakya Capital. Please go ahead.

Aditya Doshi — Chanakya Capital — Analyst

Hello. Thanks for the opportunity, sir. Just a follow-up on the previous one. So, our credit cost guidance of 1.75% to 2%. So, can we say that South Indian Bank has the least and steady state in terms of per NPA [Phonetic]? And second, where does competitive edge of South Indian Bank be going forward?

Murali Ramakrishnan — Managing Director and Chief Executive Officer

See, I wouldn’t — see, steady state you start saying only when you see consistent performance. That is what steady is all about. So we have just come out of much higher credit cost, so this is the first quarter where actually our recovery has been better than the slippages. So, we need to replicate this in the year –in the quarters to come. And the way actually I look at it is when we compare this with many of the large banks. There is a certain amount of slippages which happen for every bank in terms of their portfolio composition, which typically have seen it in the range of 1.5% to 1.75% of the portfolio.

Normally when they say this percentages, they include even the restructured book, whereas for us, as you know, since we were — we had two consecutive years of flood and we had COVID restructuring and MSME restructuring. And the book composition is predominantly in the business segment, etc. Clearly the restructured book, which was, let’s say, INR1,200 crores about a year back, today it’s at about INR2,400 crores. From there, I’m expecting a slippage of close to one-fourth of that. So, I’m — what I’m hoping is, approximately INR1,000 crores, INR1,100 crores to come from regulatory pages in the overall portfolio, plus another INR600 crores to come from my restructured portfolio. So I’m looking at a overall slippage of INR1,600 crores, INR1,700 crores for the full year, which obviously is a much, much, much better number compared to INR2,200 crores which I had experienced this year and INR2,350 crores which I experienced last year, though this year it was lower than what I gave as a guidance in the beginning of the year.

So, I really need to — we need to really work on this. And with this and with the double-digit growth which I’m anticipating in the overall loan book where I’m currently at about INR61,000 crores, which I want to, let’s say, reach to INR67,000 crores, INR68,000 crores, if you take that into account, I think our slippages ratio will be about 1.7% to 2% and our credit cost naturally will be much, much lower than that. Okay. Thank you, sir. And my second question, where does South Indian want to be in competitive edge? See, competitive — in terms of, you’re saying competitive edge, I didn’t understand your question.

Aditya Doshi — Chanakya Capital — Analyst

Where does South Indian Bank had to have a competitive edge over other banks? Any note we want to be — where we [Phonetic] want to be heads on a few segment of business?

Murali Ramakrishnan — Managing Director and Chief Executive Officer

See, aspirationally, obviously we all would want to be big bank at some time in the day. Therefore, that is the aspiration. Obviously there is a part which you need to take to reach that level. So, the way I envisage the vision for the Bank is, in terms of milestones, plus we need to get the matrices right. All these Bank performance matrices in terms of CASA, GNPA, net NPA, PCR, capital adequacy, slippages, credit cost, provisioning cost, the employee cost, cost-to-income, CASA, everything will have to get to the levels where it is respectable. So, the journey has already started. And if you look at — almost in all these parameters which I mentioned just now, we have shown a good improvement from where we started. And this journey will have to continue, and we need to keep building the asset book. And in the whole process what happens is, the entire team will also get used to the right way of doing business, right way of sourcing like, right way of underwriting, right way of monitoring, right way of collection and also doing excellent customer service, which has always been our strength.

So, with that, we expect the book growth to happen. And this book growth we feel quality has emphasis, clearly the profitability of the Bank can really go at an exponential pace. If you look at, let’s say, some bank having a NIM of, let’s say — operating profit of, let’s say, INR1,600 crores, INR1,700 crores, and if it has a negligible provisioning, you can pretty well imagine that the entire — at least two-thirds of that can actually get reflected as a PAT, if you do manage our book very well. So, the endeavor is to build the book, which is of high quality, continue to work on improving on your income without sacrificing on the matrices, which the bank will be measured of. So, clearly the end state would be to realize that the market recognizes this turnaround, market recognizes that we have put all the building blocks in place and the bank really is poised for a big growth. That’s when it will have a positive cycle. And that will only help us to grow more and more. And eventually the first milestone will be obviously to reach some of the big milestones, which I mentioned earlier, like reaching INR100,000 crore of asset book, really reaching a ROE of 15% plus, ROA of 1% plus. These are some of the milestones, which we have working towards.

Aditya Doshi — Chanakya Capital — Analyst

Okay. Thank you, sir. And all the best.

Murali Ramakrishnan — Managing Director and Chief Executive Officer

Thank you.

Operator

Thank you. [Operator Instructions] The next question is from the line of Suraj Das from B&K Securities. Please go ahead.

Suraj Das — B&K Securities — Analyst

Yeah. Hi, sir. Thanks for giving me this opportunity. I have two questions. First on the NIM side. So, I mean, your NIMs have improved q-o-q, but that seems to be driven mainly by using cost of deposits, because if I see your yield, I mean that has declined q-o-q. And if I see the new — I mean, yield on the new book that you are building, that yields are looking on the lower side. And you are estimating — you’re guiding that the NIMs, I mean, will improve gradually from here from 2.8% to 3%. So, sir, how do we envisage that because I believe in the rising rate scenario your cost of deposits may bottom and it should so up. I mean — yeah, I mean, any comment there?

Murali Ramakrishnan — Managing Director and Chief Executive Officer

No. Let me — I think some factual corrections just I wanted to do. This INR22,000 crore book which we’ve added, my NIM is 3.7% in my new book. So, clearly — and if you look at my Q4 ROE, ROA, all of them have shown the rate where we want to be. ROE is excess of 15%, ROA is in excess of 1%. So clearly — and you know that we have added substantially the portion of our asset book in the second half of this concluded year. See, and also you must remember that while you observation is right in terms of the yield coming down, but you should actually compare it with the rate in which the markets have dropped.

This is something which I have shared with all of you earlier also that today SMEs — we talked today. I mean, till recently SMEs were getting rates of 7% 7.25%, 7.3% and card rates were getting sub-5.5% rates, etc. And even the retail loans like home loan, etc, as you know, it’s been hovering between 6.75% to 7.5%. Auto loans — good auto loans — good quality auto loans are at about 7.5%, 7.75%. So these are the rates which are prevailing for the good credit in the market. If you look at my quality of book and if you look at my yield in the quality of the book which I’m maintaining, I must say that the team is really negotiating hard and getting good yield. Because I’m maintaining an yield of 8.8% today with my quality, which is close to fairly clean. So, this improvement will happen on two accounts. One is, with the market rates hardening, definitely our ability to price our loans will be better, number one. Number two, with our constant efforts towards bringing down the cost of funds, which is clearly happening due to CASA going up, and all my four engines of CASA is firing today, whether it’s government banking or a task or retail or NR. All of them are firing for me. And it can only become better because as you know, we got our agency license during the year and we have already started engaging with many governments for improving CASA by doing business with the government.

Similarly, task and — that has also started showing good traction. Retail has always been our forte and we are also seeing good traction happening in the current account. Salary account always have been showing good growth. And NR clearly is also firing. Today, my CASA from NR alone is close to INR800 crores for the full year. And so, with my CASA continues to filing, which you know it comes at a much lower cost, and with our constant traction in bringing down the cost of funds by working on bulk deposit, which is continuously showing decline, my overall NIM, that is the difference between the lending rate and my cost of deposits, even in the situation market going down like nobody’s business, we have been able to maintain. And this is not at the cost of sacrificing quality, this has come at the cost of impeccable quality.

So I’m fairly sure that the effort in this is not so much about what is available in the market, it’s also to do with our ability of our team to go and negotiate hard as far as the rates are concerned, and our ability of team to go and continue to improve work on CASA, improve work on our task, government as well as NR. In all these areas by continuous working, I’m sure we’ll be able to increase the spreads. And I agree with you that the deposit rates will have to be fine-tuned depending on the hardening which is happening in the market. Definitely we will do that because at the end of the day, one of our biggest strength is our liability franchise. So we certainly don’t want to disappoint our liability franchise, we’ll continue to price it as it should be priced. And we will continue to enjoy their patronage. That’s something which we’ll definitely do.

And the third — last one is on the yield on the investment. One of the reasons why my NIM is also going down is due to my fairly large investment book. And as you know, treasury yield, etc, I mean the opportunity in fixed income clearly has dwindled. And we have did a smart thing of reducing our duration. Within the first quarter, we completed that exercise. Now with the rising interest rates, etc, we are well poised to reprice it and we are actually much better placed than many of the large banks also in terms of improving yield as the market rates start going up.

So, with all these, I’m fairly sure that we will work on improving NIM. And I’m any way not giving too much of guidance on improved. I’m talking about improving it marginally, which I’m sure we’ll be able to do.

Suraj Das — B&K Securities — Analyst

Understood, sir. Thank you so much for the detailed answer. Sir, can you give a breakup of the total loan book, how much is EBLR linked and how much is fixed, how much is in HLA linked, any guidance would be really helpful.

Murali Ramakrishnan — Managing Director and Chief Executive Officer

I don’t have the data, but maybe we can get offline with you and probably share. But just to tell you that, predominantly off late, we are seeing that most of the corporates as well as — especially corporates, obviously the rates are linked to Tbills or the rates are linked to repo. These are the rates — because I’m talking about well rated cost rates of A and above, so their expectation is to link it to B grade. So, my INR10,000 crores of disbursement which I have done in the corporate book, which is a combination of short-term and bills as well as long-term, they are all linked to reference which are one of these two, treasury or repo rates. So, with the repo rates, it’s already at 4.4 and the expectation is that repo rates are going to be hiked depending on how Central Bank looks at the inflation trajectory. I’m sure there will be an opportunity for us to keep repricing them. And obviously we need to ensure that we meet with the expectation of the quarter.

Suraj Das — B&K Securities — Analyst

Okay. Understood. Sir. And the last question from my side, is there — if you can give the outstanding number of EPLDs [Phonetic], what is the outstanding disbursement of outstanding portfolio under ECL here? And how has the book [indecipherable] I mean in terms of slippages or NPA, any NPA from this book?

Murali Ramakrishnan — Managing Director and Chief Executive Officer

Just give me a minute. Let me just take of it. See, if you look at, EPLDs [Phonetic], see, EPLDs, total if you look at — I’m including all of the them, ECLDs 3, 4, 1 extension, 2 extension, 3 extension, 4 extension, etc. We look at the overall this thing is at INR9,950 crores, of which — number of accounts is — just give me a minute, let me just — first, number of accounts is 9,950, the limit is INR3,163 crores. As of March ’22, we have INR2,665 crores. Of which, NPA is about INR131 crores.

Suraj Das — B&K Securities — Analyst

Okay. Understood, sir. Thank you so much, sir.

Murali Ramakrishnan — Managing Director and Chief Executive Officer

Thank you.

Operator

Thank you. [Operator Instructions] The next question is from the line of Selvamuthu Kumar [Phonetic] from business — individual investor. Please go ahead.

Selvamuthu Kumar — — Analyst

First of all, I congratulate the management of South Indian Bank for wonderful excellent results during this kind of COVID pandemic period. So, just I would like you to know about — do we have any further plan to reduction of branches in upcoming years? The second question regarding our dividend, so past three to four years we are not able to get any dividend for long-time investors, so please try to provide dividend next year. Thank you. Thanks a lot.

Murali Ramakrishnan — Managing Director and Chief Executive Officer

Thank you. Yes, we understand. We appreciate that we have not been able to do that. Certainly we will work towards that. I see no — these are outcome of how well we are actually repositioning the bank in terms of profitability, etc. Clearly we are conscious of it and we know that we need to do a lot more hard work to ensure that we declare dividends, but certainly we will work towards that. Thank you so much. Thanks for your appreciation.

Operator

Thank you. [Operator Instructions] The next question is from the line of Rohan Mandora from Equirus Securities. Please go ahead. We’ve lost the line from Mr. Rohan Mandora.

[Operator Instructions] The next question is from the line of Akhil Hazari from RoboCap. Please go ahead.

Akhil Hazari — RoboCap — Analyst

Hello. Good afternoon. Am I audible?

Murali Ramakrishnan — Managing Director and Chief Executive Officer

Yes.

Akhil Hazari — RoboCap — Analyst

So, I just wanted to know the tax credit that you’ve got this quarter. Going forward, again, would there be any — is this a one-time thing for this quarter and going forward, would there be any other tax credits that you’re getting?

Murali Ramakrishnan — Managing Director and Chief Executive Officer

Yeah, it’s a continuous effort. I think, what we have got clearly has been due to the sustained efforts put in by the management. And we have got lots of orders favorable to us of the cases which we had filed over the last few years. And this is a continuous success. We’ll continue to do that in the coming year. Obviously, you know that these are not something which we can predict as to how much will come and how much will not come, but efforts will be on to continue to work on. Wherever there is a possibility of redeeming, we will definitely redeem it.

Akhil Hazari — RoboCap — Analyst

Okay. That’s it from my end. Thank you.

Murali Ramakrishnan — Managing Director and Chief Executive Officer

Thank you.

Operator

Thank you. The next question is from the line of Rohan Mandora from Equirus Securities. Please go ahead.

Rohan Mandora — Equirus Securities — Analyst

Yes, sir. Thanks for the opportunity. Sorry, it got disconnected last time. [Technical Issues] will there be…

Operator

Sorry to interrupt you. Your voice is breaking up in between.

Murali Ramakrishnan — Managing Director and Chief Executive Officer

Your voice is not clear, Rohan.

Rohan Mandora — Equirus Securities — Analyst

Yeah. Is it better?

Murali Ramakrishnan — Managing Director and Chief Executive Officer

Slightly better, yeah. Tell me.

Rohan Mandora — Equirus Securities — Analyst

Yeah. On the OneCard partnership that we have, just to understand, post-RBI master direction on the call running arrangement on the data sharing part, how does that effect this partnership and what is the data sharing that we were having earlier with OneCard?

Murali Ramakrishnan — Managing Director and Chief Executive Officer

See, as I’m talking to you, we are also looking at very closely the RBI directions and how the bank as well as the partner will have to realign the way we are having the partnership today to ensure that we continue to have working relationship with them. That’s the broad thing which I want to share. Second thing is, obviously the arrangement has been — has taken off very, very well. And clearly we expect that this partnership is something which will continue in this year and we have a plan to really take it up to a significant level this quarter — this year. But this will be obviously, after we completely scrutinize the impact of the new regulations. There could be a little bit of tweaking, which we might have to do in terms of the agreements, etc., which we entered into with them. And we also need to ensure that whatever we are setting out to do is incomplete alignment with the guidance, which has come from the regulators. So we are closely looking at what — which we’re done into, ensure that we completely satisfy the regulatory requirements.

Rohan Mandora — Equirus Securities — Analyst

Right, sir. So if you can just elaborate a bit here in terms of what is the data sharing that would be happening with OneCard or what are things would need to change for the regulatory, if you have some clarity on that front right now.

Murali Ramakrishnan — Managing Director and Chief Executive Officer

Currently — let me just tell you, the current arrangement, what we have is, see we have tie-up with the OneCard in terms of their own sourcing, where they have methodology for sourcing new customers, who are probably who could be new to bank — new to our bank. So those customers are, obviously, I mean looked at for credit quality etc. and once they meeting with the norms, which the Bank specified in terms of what we need for the issuance of credit card where we say, it just a co-branded card, such individuals are given cards, etc. So that is one thing which is working.

Second thing, which was working is, wherever we have an existing customer base. We are using data science to ensure that we do a data mining of our customers and whoever basic or eligible for having cards we share the details with OneCard. And OneCard then issues card to our existing customers. So clearly the customers belong us and the risk norms are obviously our own risk norms.

The third product, which we are working with them is a secured card, where the credit card limit is backed with the FD. There are many customers who hold FD with us and we would probably give us secured card which — where the limits will be backed by, say, FD, which we carry. Now in the — one of the important things, I think which as per our understanding, as per the new regulation is, obviously, the partner should not have access to be transaction data etc. And obviously we need to, particularly in the credit card kind of business you need to understand that there are three-four big areas where we have the partnership, one in terms of technology alignment, second, in terms of sourcing and processing, third one in terms of collection and fourth one, in terms of customer service.

So we need to see that how we ensure that all these are done by fully complying with the regulations, which has now been introduced. So team from our side and team from their side is carefully going through all this and whatever needs to be done to ensure that this is fully met we will endeavor to do that and we hope to put everything in place, so that they are fully compliant with the regulations.

Rohan Mandora — Equirus Securities — Analyst

Sure, sir. That’s was helpful. Sir, secondly is, on terms of PSL, however you finished at the end of the year.

In terms of what? Sorry.

Priority Sector Lending agreement —

Yeah, we are always a well ahead of whatever is the requirement of regulators. So we have no challenge there. In fact, we have — always we are surplus. So we keep selling also PSL etc. So we are very well placed.

And so, sir, just if you can talk about how PSL rates trending right now? And are there any expectations of that increasing, given that through the larger bank is going to?

Murali Ramakrishnan — Managing Director and Chief Executive Officer

Let me put this as, it’s more opportunity based the sale, which we do. We really don’t do that as a business. We look at it if there is an opportunity and we are finding it to be surplus where we fully meeting with all the requirements of the bank and if we see an opportunity we go and look for rates at that point in time and if it makes sense, we do that. It’s not looked as a main business activity or anything of that.

Rohan Mandora — Equirus Securities — Analyst

Sure sir. And sir, just lastly on the revenue that we have generated post the October 2020, what would be the effective ROAs, ROEs, if you were to look at only that particular book?

Murali Ramakrishnan — Managing Director and Chief Executive Officer

Our NIM is, we calculate as NIM. NIM is about 3.7% for the new book and the delinquency as I explained earlier, it is negligible. It is — we are talking about the SMA, give me a minute, I will just check.

Rohan Mandora — Equirus Securities — Analyst

Sure.

Murali Ramakrishnan — Managing Director and Chief Executive Officer

Yeah, in terms of new book SMA is hardly INR79 crores out of INR25,750 crores and GNPA is only INR3 crores. So it’s clearly negligible delinquency and average yield for this new book is about 8.03% and this obviously might look lower compared to the old book, but you must remember that the interest rate scenario actually has been going down. So in the lower interest rate scenario, we are continuing to work on improving our cost of deposit, cost of funds and we are also continuing to work on improving rates in a way that our splits keep going up. So ROA, ROE, we haven’t really done for the new book per se, but Q4, which is what I shared. I think earlier may ROA and ROE are pretty good, 15% plus for ROA and ROE is 1% plus. But obviously, it’s a one-off. You can really expect that to be replicated, because we have done a fantastic job in terms of recovery and upgrade in the Q4.

In fact, the recovery and upgrade done in Q4 is equal to what we did for the full year of year before last. So we have almost improved our performance 81% and 50% in terms of upgrade and recovery. So obviously, we would endeavor to replicate that going forward, but that obviously has to got — we need to factor that when we are calculating the profitability, which might have. So right now the ROA and ROE for the full bank, which clearly very, very low and we need to work towards improving them, which will start happening as we churn the existing portfolio with more and more of new portfolio.

Rohan Mandora — Equirus Securities — Analyst

Sure. As you just lastly on the [indecipherable] again, on the new book part is the fee income profile as a percentage of, say, the average loan book, similar to the old book or is it could have better, and if it is better, where we’ve brought in that?

Murali Ramakrishnan — Managing Director and Chief Executive Officer

Substantially improved, I mean we — the habits of charging fees, etc. We actually now infiltrated into the team, and in fact in all our income streams. If you look at whether it’s a transaction income or a technology income or a fee income or all the areas third-party everywhere we have shown substantial improvement. I think as a culture. We are now looking at improving our wallet share.

Rohan Mandora — Equirus Securities — Analyst

Sure sir. Thanks a lot.

Murali Ramakrishnan — Managing Director and Chief Executive Officer

Thank you.

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

Yeah, hi, sir. Good afternoon. So if I look at Slide number 18 and we — which we have given the makeup of loan book in terms of ticket size. We are reducing less than INR5 crores — INR5 crores to INR25 crores, INR25 crores to INR100 crores, the only segment where we have grown is above INR100 crores. And there is, we think healthy growth there, which is also improving the overall growth. Only the check, sir, is this going to be the strategy that the maybe from at least from a near-term perspective, you would be going more aggressive on this INR100 crores plus size, maybe little use very good, or is there something, which is why [Technical Issues]

Operator

Yes, please continue, sir.

Jai Mundhra — B&K Securities — Analyst

Yeah. So I was saying, sir. If I look between the above INR100 crores and below INR100 crores, there is a clear difference in the way the bank is growing. So just wanted to check, I thought maybe the focus would have been more on granular below 100 crores, kind of loans. But somehow it is coming out that way. So what do you think, what is going to be very strategic, sir?

Operator

This is the Operator. We have the lost the line for the management. Please hold while we reconnect. [Technical Issues] This is the operator. We have the line from management reconnected.

Murali Ramakrishnan — Managing Director and Chief Executive Officer

Hello. Yeah, sorry. I think we got disconnected. Tell me.

Jai Mundhra — B&K Securities — Analyst

Yes, sir. So on Slide 18, that gives the ticket wise breakup of the loan book, this quarter, at least we have shown a healthy growth in about INR100 crore. I wanted to check. Are you facing some, let’s say more competition or you are more leaned towards, sorry, are you from below the INR5 crores to INR25 crores and INR25 crores to INR100 crores ticket size and hence we are growing there? Or what is — what maybe the risk reward is not — we’re not finding that attractive. So what is the reason that we are having the growth in 3 smaller ticket size versus above INR100 crores?

Murali Ramakrishnan — Managing Director and Chief Executive Officer

No. If you look at less than INR5 crores, it’s only grown INR32,408 crores to INR33,833 crores, which is grew by INR5 crores.

Jai Mundhra — B&K Securities — Analyst

Right, right.

Murali Ramakrishnan — Managing Director and Chief Executive Officer

Which is clearly, with the retail growing obviously, that is growing. If you look at predominantly, INR5 crores to INR25 crores and INR25 crores to INR100 crores, in terms of number of cases and the thing there what we are actually doing is, we are churning wherever the cases which are switching etc. Obviously, we are addressing them through recovery and collection and any new addition to this, in the segment, we are obviously looking at the quality as a criteria. And as you know, INR5 crores to INR25 crores typically would be SMAs who are — whose average ticket size would be, let’s say INR8 crores to INR12 crores kind of segment. This segment especially across banking also, this segment is something which we need to be very careful about, because they may not have as much resourcefulness as a corporate would have and they are much like retail in terms of their discipline and in terms of their maintenance of books etc. etc. So you need to be very good in doing quality INR100 crores. We don’t know the reason why SME, if you look at industry as a whole also always suffer some higher delinquency, if you don’t have you credit at right.

So if you look at more than INR100 crores why we have grown, clearly we are focusing on large well rated corporates, who are requirements are of a larger size and where we are very sure about the credit quality. Obviously, the flip side to that is the rate, etc., would be relatively much lower compared to what probably you would get for MSME or a mid-corporate. To that extent, yes, you will have a little lesser income. But then if you actually look at the risk adjusted income, they still will make a lot of sense.

Jai Mundhra — B&K Securities — Analyst

Right. And do you see higher competition in INR5 crores to INR25 crores and INR25 crores to INR100 crores, because other banks — other large banks seem to be getting more aggressive for the last few quarters?

Murali Ramakrishnan — Managing Director and Chief Executive Officer

I mean, I would probably — obviously, each bank is in its own state of evolution as to how they want to do this act. But as far as I can only talk about my bank, where I can tell you that this segment of INR5 crores to INR25 crores especially we need to be very sure about the quality of our underwriting and we need to be really equipping our team to identify good cases. So because today typically INR5 crores to INR25 crores, if you look at average ticket is INR8 crores. I’m just giving a backup or annual calculation.

If somebody later look at INR8 crores, his working capital, his turnover — let’s say we are in a multiple banking or consortium banking, let’s say three, four banks are together, let’s say INR30 crores, INR40 crores will be the working capital requirement, which means you are talking about the company, which has a turnover of let’s say INR120 crores to INR150 crores. This segment, if you look at it in the last couple of years, this is a segment which has had the worst hit. 80% of SMEs facing losses were mostly in the smaller and mid-segment of SME. So, one is we are very sure about the quality. So the way we have gone about addressing this segment is clearly the operational methodology will be mimicking to some extent the corporate underwriting methodology.

But at the same time, there will be emphasis on collateral. Because these are the segments where because of their less resourcefulness, you might — if you experienced any delinquencies that you need to recover or reduce your entity by, I mean, good collateral backing you up. So therefore we are carefully choosing the segment and as we feel that our model is the right and our credit underwriting quality is definitely becoming better and better and if the opportunities for these segments keeps moving up. Today, the opportunity also is pretty low in this segment. While you are saying that other banks are growing. They are mostly, if you look at it. They are actually poaching by offering very low rates, it’s not that any new entities coming up today. They go and look at well performing customers of let’s say other banks and go and offer 6%, 6.5%, 7%, which have obviously smaller bank may not –cannot afford such rates. So these customers are getting poached, that is what is happening.

And to a large extent, this also to some extent puts pressure on the NIM of all the mid-sized banks, because not in retail and a loyal customer, they need to offer go down on rates, which is clearly the banks won’t create a situation. If not the risk is going down in any way, or the pricing to risk is happening in a proper way. So I’m of the view that pricing to risk is clearly missed out in the segment. And today, people are growing in the segment just to show advances growth. It’s not really adding — in the oral scheme of their things probably will still be very low because they got a much larger book size. So therefore, even if we go aggressively this, it may not be very contributing much to their book size. But for a bank like ours, we especially when we’re trying to collect situation of slippages coming under control and credit cost coming under control. We need to be choosy about who we want to lend in this segment.

Jai Mundhra — B&K Securities — Analyst

Right. Understood, sir. And secondly, on this security receipts book that we have, right? So clearly out of our own INR1,600 crores book value, we have around INR700 crores, we have provided INR900 crores and INR700 crores is still NAV. So I mean, usually this still looks like the provisioning is on a lower side. Would you — do you intend to provide much more here? Or how do you look at the residual provisioning there?

Murali Ramakrishnan — Managing Director and Chief Executive Officer

No. I probably may not agree for that we are providing less for anything, because if you look at the way the sale to ARCs, which have happened in the past clearly the performance of ARCs, if you look at overall over the last several years, if you look at it, many of the sellers were not too happy with the way redemption was happening in SRs. But one thing, which you also should also remember that every quarter, there is a rating agency, which looks at the possibility of recovery from the various underlying cases. And they say, what is the likely recovery, etc. Now given the fact that market has actually deteriorated in terms of recovery over the last two years, thanks to COVID, etc. Clearly, rating agents are also rightly reduced their prediction of recoverability from these cases. And therefore as a bank, we need to obviously take into account the provisioning, which we need to take as additional provisioning.

So, but now, if you look at the last, I would say, 12 month scenario compared to the first year of COVID, when most of the quotes were not functioning, most of the resolution mechanisms were not functioning, etc. Obviously, the recovery from — by ARCs were pretty low, but if you look at last six to eight months across all banks, if you look at the recovery has been improving. And so are we finding that even from ARCs. Today, ARCs are getting cases resolved either by going in for our OTAs, or by go through a resolution, etc., there is some traction happening. And we are also seeing that quarter-after-quarter things have started moving. Now we have more and more — I mean, I won’t say we are in a happy state. We still have a long way to go, but whatever we used to experience earlier, compared to that, I think what we are getting now is slightly better.

So I only believe that collection and recovery scenario will become better and that will make, ARCs also improve their performance. And we continuously engage with all the ARCs who we have sold our portfolio. And we are engaging with them. We have also done an additional initiative of ascending, somebody who has got a rich experience in handling recovery and collection, who has been with the bank for many years to work very closely with ARCs so that we can — our engagement with the customers who are contacting sold ARCs are handled reasonably well, and we are getting maximum value out of whatever we saw. So that’s how we are planning to address this. So in my view, we will take it as it comes. I mean, as of now, what you said is right, that 55% coverage is what we have, but depending on how the whole thing spans out we will provide, whatever is required to with profit.

Jai Mundhra — B&K Securities — Analyst

Understood, understood. And lastly said on capital, is there any capital raising plan or I mean, concrete capital raising?

Murali Ramakrishnan — Managing Director and Chief Executive Officer

No, actually, if you look at the capital adequacy, we are pretty well priced now. But having said that for the opportunity in the market, clearly, we need to beef up our balance sheet strength, for which definitely we will be looking for opportunity to raise capital. If you ask me whether we are in a dire need to raise capital, the answer is no. But will we be raising capital and there is an opportunity, the answer is yes.

Jai Mundhra — B&K Securities — Analyst

Right. Last question, sir on this OneCard, right? So what is it for the bank? [Technical Issues] Yeah. Is this any better?

Murali Ramakrishnan — Managing Director and Chief Executive Officer

I didn’t understand your question. You’re asking whether —

Jai Mundhra — B&K Securities — Analyst

[Technical Issues] Question on OneCard credit card. So why not go process and why do we need OneCard partnership? My initial impression, which was that this, I mean, OneCard operates in a segment, which are you — which a bank of your size would’ve very tiny percentage. I mean, you, anyway, as you said, you have data mining and everything. So maybe there will be very hardly between their targets and then your existing customer what [Technical Issues]

Murali Ramakrishnan — Managing Director and Chief Executive Officer

So, two things. One is, if you want to start the credit card business on your own. As you know, credit card is a long decision business, and it requires lot of considerable investments in the technology, as well as in the human resource side. So if you ask me, whether it is a product which we want to start on our own and want to raise, take it to the level where we might initially have to take some capital expenses, as well as some losses before we turn around the business. This is a long gestation business. So currently, in my north theme of thing, we don’t want to venture on our own.

Having said that, is it a business which is worth for pursuing? Yes, it’s worthy of pursuing, because this one business, which can give you much better ROA. And what we are now trying to do, we are trying to basically partner with somebody who has got expertise in this, who done this credit card business for years. And all of them are worked with me. So I know all of them. And they have good expertise in this area. And we are specifying the norms, which we — which is, we will match with our risk appetite. So we are clearly specifying, this is the risk, which we would want to take into this business because credit card business, as you know, is a high return high risk business. So how do you control risk by only having your own risk appetite clearly understood and having a norm which will fit in with your risk appetite. So with that, if you’re underwrite obviously, you’ll have everything to gain.

So today these — I would slightly disagree that the segment, which they are targeting and the segment, which we want to target, they’re not different, when we are trying to say that we would want to grow in retail or with a better quality. We would want to obviously target customers who civil scores are better, who are in the age group of, let’s say 25 to 35 who have got lot more professional carrier ahead and who are working in good sectors, etc. That’s the segment, again, we want to look at for growing our retail. If somebody’s looking for a credit card today, he might look for a home loan tomorrow. He might look for a car loan day after tomorrow.

So clearly, what we are acquiring as a customer today, you have a customer life cycle dependent loans, which we can do from the bank. So whole methodology is to acquire a customer and then work with the customer to keep increasing your penetration with the customer in terms of offering all of the products apart from the third-party products, which you want to sell. So clearly, very much is synchronize with the strategy which I have in mind, in terms of improving, increasing our customer base, increasing our product suit and improving the overall wallet from the customer, which will improve our overall ROE and ROA. So it makes immense to go with a partnership, but this actually starting on our own, which today may not make sense for the bank of all size.

Operator

Thank you. The next question is from the line of Sagar Rungta from Anand Rathi. Please go ahead.

Sagar Rungta — Anand Rathi — Analyst

Hi. thanks for taking up my question. So I just want to follow on the earlier question about if you can throw some color on how the market currently is in terms of competitive intensity, among SME business loans and about the growth prospect it has? Thank you.

Murali Ramakrishnan — Managing Director and Chief Executive Officer

The SME business scenario, if you look at the market, it is a — clearly, it is unlike large corporate, etc., where to a large extent to be driven by the outlook of the industry. In SME, since it’ll be mostly regional-based or area-based entities, clearly the uniqueness of SMEs is what is going to make them survive. So whenever we look at SME cases for onboarding, we need to see what is their uniqueness, what is special about them, which will make them survive. Because if it’s a very easy business where the barrier to entry is very low, anybody can get in, if the margins are attractive, more and more people get in, and that is a assure way to spoil the spreads, etc. And that is a sure sign that SME will go down the train.

Therefore, when you are looking at onboarding good SME customers across the country, we need to see which business are they in, depending on the geography, which they’re operating. Let’s say, if its SME based out of — let’s say industrial center in Pune or in Chennai, are they contributing? Are they acting as OEMs to a major auto manufacturer over there? Obviously, you look at how long have they been supplying that product and how integral are they in terms of the overall scheme of the principle, etc., that’s what we should look at when you are trying to onboard them. If you look at markets like Kerala, for example, we will look at whether somebody’s in rubber plantation or somebody’s in tourism business, etc. And what kind of penetration they have had in that line of business.

So when it comes to assessing SME potential, I must say that it is more and more regional-based and more and more area-based. So what we are trying to do is, since we have a fairly good distribution network, we have got 925 branches spread across the country with 18 regions, and each region has its own uniqueness. So we clearly give the target and we sort of give the guideline on which industries are having outlook, which are positive, which industries having a stable outlook, which industries are not having positive, which have a negative outlook. So we try and stay away from industries, which are not doing well, which are where there is a negative outlook. But here, again, there could be locations where even though they might be in that industry, but their uniqueness in that locality probably will be helping them to do very well over there. And they might have a long history of operating from there.

Such customers, obviously, we will definitely onboard. So when it comes to SMAs, it’s more, I would say, very locations based strategies, what we should — we are following. And therefore the way, I look at it as SME, the key to building an SME book is to be very sensitive about the quality. If you get your quality act, right, you will have good money to make. Especially in the raising rate scenario, you can afford to charge reasonably a good rate for pricing the risk. And if you get your act right, you’ll be able to make good money. So right now, we are at a phase, where we are continuing to de-group for some time. Now you started actually building back now. We are still reach the level which we were. But this year, hopefully, we will be able to surpass the book and we’ll be able to show some decent growth over there.

I’m looking at overall double-digit growth for the entire portfolio, which definitely SME will be one of the key contributors to my business. The average disbursement run rate we are seeing is about INR400 crores to INR450 crores in a quarter, if you look at six months average, it’ll be about INR300 crores. So we are seeing continuous traction happening in terms of a disbursement happening. And here again, the sub-segment, which is growing is the lower segment, which is essentially up to INR2 crores ticket size, where ticket size will be about INR1 crore, where it’ll be more acting to retail. And even the way the businesses run will be acting to retail, where you have a very standard set norms and you don’t have too much of deviation. It’ll be backed with the good collateral and that the business model is sustainable. And there is a uniqueness for the promoter to have a sustainable advantage.

Sagar Rungta — Anand Rathi — Analyst

Thank you. Thank you so much for the detail answer.

Operator

Thank you. The next question is from the line of Mehul Khandelwal from Span Capital Services. Please go ahead.

Mehul Khandelwal — Span Capital Services — Analyst

Hi, sir. This is Mehul Khandelwal. Sir, my first question is last year, we have grown at 3% on loan books. So what gives us confidence that we will grow double digit in FY’23?

Murali Ramakrishnan — Managing Director and Chief Executive Officer

If you see my growth in the last four months, see there, I said that asset growth, we started actually growing. We were de-growing our book for, because we were setting up the entire structure of the bank to really do quality sourcing and quality underwriting. And we are also setting up controlled divisions, etc., to ensure that we are not fit with any conflict of interest and frauds, internal, external frauds, etc. So all that got stabilized and economy was also not doing that well in the first quarter. And even up until mid of second quarter, things were not very that great. So we actually started growing our book if you asked me from month of September onwards. So if you look at the growth which we have actually posted in Q3 and Q4, and especially in Q4, if you look at it, we are shown at growth of close to 10%.

We have almost grown INR2,500 crores of book from the book — starting book of January. So I’m not saying that I will do an analyst growth of 30%, 40%. I am looking at a growth of, let’s say double digits — lower double digits, but I would like to repeat that between quality and growth still go for quality because that’s the one which is going to sustain. If a good quality assets are available, we will definitely grow more. I’m not limiting, I’m not very limit myself by saying that I grow only 10% or 12% or 13%, 15%. If there are good quality assets available, and if the team really, which is geared up now to really source more and more, I’m sure we are taking an ambitious target of wanting to reach double digit. We will take it as it comes.

Mehul Khandelwal — Span Capital Services — Analyst

So, sir, so would you like to quantify double-digit in terms of number, like, what is your targeting mid-teen or high-teen? Anything?

Murali Ramakrishnan — Managing Director and Chief Executive Officer

Double digit starts with 10%. So you can take it as 10%.

Mehul Khandelwal — Span Capital Services — Analyst

Okay. Okay. Okay. And sir, you targeting ROE of 15% and 1% ROA in how many years?

Murali Ramakrishnan — Managing Director and Chief Executive Officer

It’s a very theoretical question if you ask me, because we would want to reach this level. It’s not about how many years we reach. It’s a question of how soon we would want to reach, which will — which is dependent on so many things. I mean, it’s a composite number, right? So you need to look at the composition of the book that you’re trying to build. You need to look at the delinquency, the behavior of each of this sub portfolio, etc. So our endeavor is to reach this — my original vision statement, I said, we’ll reach it by 2024, but given the fact that COVID has really pushed everything by one year, I’m hoping that it will reach it by 2025 March.

Mehul Khandelwal — Span Capital Services — Analyst

Okay, sir. Okay. And sir, are this out of restructuring book of INR2,400 crores? How do you see this spanning out this year? Like, what are the chances of recovery or any kind of improvement over year?

Murali Ramakrishnan — Managing Director and Chief Executive Officer

One-fourth of the book to slip into NPA, rest all I think will behave. No issues.

Mehul Khandelwal — Span Capital Services — Analyst

Okay. Okay. And any lumping accounting are we seeing?

Operator

Sorry to interrupt, sir. I would request the management to go ahead with the closing comments in the interest of time. You may email the questions so please. Management over to you.

Murali Ramakrishnan — Managing Director and Chief Executive Officer

Yeah. If you have any more questions please do not hesitate to send a email or send — talk to any for colleagues. We’ll be happy to take your questions. I would like to thank all the participants for taking your time out to be part of this call. And as I keep saying in my every analyst call, our endeavor is to provide as much information as transparent — as transparently as possible, whatever information we have, we would want to share it in full detail. So that you will know exactly how we are steering the bank and I simply expect all of you to continue to support us in the journey of transforming the bank and to reach the next level of growth. Thank you so much. And thanks for the organizers for organizing a wonderful teleconference. Thank you so much.

Operator

Thank you very much. On behalf of ICICI Securities, that concludes this conference. [Operator Closing Remarks]