Keki Mistry: I would say that the main driver of profit has largely been the fact that, if you compare just the second quarter and the third quarter, then there has been a slight expansion in the spreads during the course of the quarter. Spreads came down sharply in the second quarter to about 2.20% and only for the third quarter of the financial year had spreads gone up from 2.20% to 2.28%.

Total spreads for the nine-month period stand at 2.25% and individual spreads continue to remain the same, as they were in the second quarter, which is 1.95%. So I would say that it has been a marginal improvement in spreads. Interest rates have not declined as much as one would have liked them to. In terms of growth, the numbers have been stronger than we have always talked about. We have always talked to investors of a growth of 18% to 20%. We have also said that it will never be 18-20% every quarter of the year.

There may be quarters where it will be higher and those where it will be lower, which could be a function of a number of issues, like high base, low base and so on so forth. This time when we look at the 12 months ended December 2013, the growth in individual loan book has been as much as 24%, but this growth has been calculated after considering the loans that we have sold and in the last 12 months we have sold loans aggregating to Rs 3263 crore.

So if you add that to the loan book and then calculate the growth in the individual loan book, it would stand at 27%. Overall, growth would increase from 19% to 21% and the individual segment would increase from 24% to 27%.

Q: ET Now: We also saw some asset quality pressure emerging in the last quarter. Have those pressures abated? What is the outlook that you now have on the asset quality, going forward?

A: Keki Mistry: See, these are obviously very challenging times in terms of the entire economy. So I do not want to make too many forward statements, but the loan which caused an increase in the non-performing loan number by 2 bps in the last quarter, we hope will get resolved in the course of this quarter. If not this quarter, it will get resolved next quarter, but we expect it to get resolved in this quarter itself.

In terms of NPLs, when you compare September with December, there is an improvement of 2 bps. The September NPLs stood at 0.79% and December NPLs stand at 0.77%. Individual non-performing loan numbers stand at 0.57% compared to 0.59% in September and 0.62% in December 2013. Non-individual NPLs stand at 1.18% in December compared to 1.19% in September.

Q: ET Now: Your expenses have gone up in the quarter gone by. What has led to that and what are your fund costs now looking like?

A: Keki Mistry: You cannot really give a funding number, because interest rates keep changing all the time and it depends on whether you are raising money from one source or the other. It depends on whether you are raising short term money, medium term money, or long term money.

So it is very difficult to put a number to it. But having said that, interest rates have not declined as much as one would have liked, but have declined a lot compared to what prevailed in the second quarter of the financial year, which is what is helping a slight expansion in spreads. My outlook on spreads would be a band of 2.15% at the low end and 2.35% at the high end.

Q: ET Now: What is your credit growth projection for the year ahead?

A: Keki Mistry: If we take the last two years, the growth has all been on individual loans. So in the individual loan book, after adding back loans sold in the last 12 months, the growth has been 27%. The non-individual segments saw a growth of only 10%, which came to 21% after adding back loans sold, or 19% in the aggregate, before adding that loans sold.

Going forward, one would expect that till we start seeing the economy revive and the investment cycle start again, the growth will continue to be largely on individual loans, but we never make statements on how each quarter is going to be, because the third quarter of last year for example was very strong, while the fourth quarter of last year was very strong.

So every quarter is going to depend on what the previous year's quarter had been, whether it was high or low. So let us not get into quarterly numbers, but if we take a long-term view or a five-year view, one would continue to believe that given the shortage of housing and given the young population that we have in India, one would expect 18% to 20% growth over a period of time. It may be higher in some quarters, and lower in some quarters.