ICICI Bank Limited

Ladies and gentlemen, good day and welcome to ICICI Bank Limited Q3 FI25 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 then zero on your touch-tone phone. Please note that this conference is being recorded. I now hand the conference Over to Mr. Sandeep Bakshi, MD and CEO, ICICI Bank. Thank you and over to you, sir.

Thank you. Good evening to all of you and welcome to the ICICI Bank earnings call to discuss the results for Q3 of FY25. Joining us today on this call are Sandeep Batra, Rakesh, Ajay, Anandya and Abhinayak. The operating environment for the banking system continues to be dynamic based on evolving global and domestic economic factors. We will continue to monitor domestic inflation, liquidity, rates, and uncertainties in the global environment. At ICICI Bank, our strategic focus continues to be on growing profit before tax, excluding treasury, to the 360-degree customer-centric approach and by serving opportunities across ecosystems and micro-markets. We continue to operate within a strategic framework to strengthen our franchise. Maintaining high standards of governance, deepening coverage, and enhancing delivery capabilities are focus areas for our risk-calibrated profitable growth. The profit before tax, excluding treasury, grew by 12.8% year-on-year and 3.2% quarter-on-quarter, to Rs. 152.89 billion in this quarter. The core operating profit increased by 13.1% year-on-year and 2.9% quarter-on-quarter to Rs. 165.16 billion in this quarter. Excluding dividend income from subsidiaries, the core operating profit increased by 14.7% year-on-year and 3.3% quarter-on-quarter to Rs. 160.07 billion in this quarter. The profit after tax grew by 14.8% year-on-year to Rs. 117.92 billion in this quarter. Total deposits grew by 14.1% year-on-year and 1.5% sequentially at December 31, 2024. During the quarter, average deposits grew by 13.7% year on year and 2.1% sequentially. And average current and savings account deposits grew by 12.6% year on year and 2.3% sequentially. The bank's average liquidity coverage ratio for the quarter was about 123%. The domestic loan portfolio grew by 15.1% year on year and 3.2% sequentially. at December 31, 2024. The retail loan portfolio grew by 10.5% year on year and 1.4% sequentially. Including non-fund-based outstanding, the retail portfolio was 43.9% of the total portfolio. The rural portfolio grew by 12.2% year on year and 0.9% sequentially. The business banking portfolio grew by 31.9% year on year and 6.4% sequentially. The domestic corporate portfolio grew by 13.2% year-on-year and 4.3% sequentially. The overall loan portfolio including the international branches portfolio grew by 13.9% year-on-year and 2.9% sequentially at December 31, 2024. The net NPA ratio was 0.42% at December 31, 2024 compared to 0.42% at September 30, 2024 and 0.44% at December 31, 2023. The total provisions during the quarter were 12.27 billion rupees, or 7.4% of core operating profit, and 0.37% of average advances. The provisioning coverage ratio on non-performing loans was 78.2% at December 31, 2024. In addition, the bank continues to hold contingency provisions of 131 billion rupees, or about 1% of total loans at December 31, 2024. The capital position of the bank continued to be strong with a CET1 ratio at 15.93% and total capital adequacy ratio at 16.6% at December 31, 2024, including profits for nine months, 2025. Looking ahead, we see many opportunities to drive risk-calibrated profitable growth. We believe our focus on customer 360-degree extensive franchise, and collaboration within the organization, backed by our focus on enhancing delivery systems and simplifying processes, will enable us to deliver holistic solutions to customers in a seamless manner and grow market share across key segments. We will continue to make investments in technology, people, distribution, and building a brand. We are laying strong emphasis on strengthening our operational resilience for seamless delivery of services to customers. We'll remain focused on maintaining a strong balance sheet with prudent provisioning and healthy levels of capital. The principles of return of capital, fair to customer, fair to bank, and one bank, one team will continue to guide our operations. We remain focused on delivering consistent and predictable returns to our shareholders. I now hand the call over to Anand here.

Thank you, Sunil. I will talk about loan growth, credit quality, P&L details, technology initiatives, portfolio trends, and the performance of subsidies. Sandeep covered the loan growth across various segments. Coming to the growth across retail products, the mortgage portfolio grew by 11.4% year-on-year and 2.1% sequentially. Auto loans grew by 6.6% year-on-year and 1.7% sequentially. The commercial vehicles and equipment portfolio grew by 7.4% year-on-year and 1.7% sequentially. Personal loans grew by 8.8% year-on-year and declined 1.3% sequentially. The credit card portfolio grew by 17.9% year-on-year and 2.8% sequentially. The personal loans and credit card portfolio were 9.2% and 4.3%. of the overall loan book respectively at December 31, 2024. The overseas loan portfolio in US dollar terms declined 21.2% year-on-year at December 31, 2024. The overseas loan portfolio was about 2.4% of the overall loan book at December 31, 2024. Of the overseas corporate portfolio, about 90% comprises Indian corporates. Moving on to credit quality, the gross NPA additions were 60.85 billion rupees in the current quarter compared to 59.16 billion rupees in the first quarter of the current fiscal year and 50.73 billion rupees in the previous quarter, i.e. the second quarter. Recoveries and upgrades from gross NPAs excluding write-offs and sale were 33.92 billion rupees in the current quarter compared to 32.92 billion rupees in the first quarter of the current fiscal year and 33.19 billion rupees in the previous quarter. The net additions to gross NPAs were thus 26.93 billion rupees in the current quarter, compared to 26.24 billion rupees in the first quarter of the current fiscal year and 17.54 billion rupees in the previous quarter. The gross NPA additions from the retail and rural portfolios were 53.04 billion rupees in the current quarter compared to 52.04 billion rupees in the first quarter of the current fiscal year and 43.41 billion rupees in the previous quarter. We typically see higher NPA additions from the Kisan credit card portfolio in the first and third quarter of a fiscal year. There were gross NPA additions of about 7.14 billion rupees from the Kisan credit card portfolio in the current quarter compared to 7.21 billion rupees in the first quarter of the current fiscal year. Recoveries and upgrades from the retail and rural portfolios were 27.86 billion rupees compared to 25.32 billion rupees in the first quarter of the current fiscal year and 25.92 billion rupees in the previous quarter. The net additions to gross NPAs in the retail and rural portfolios were 25.18 billion rupees compared to 26.72 billion rupees in the first quarter of the current fiscal year and 17.49 billion rupees in the previous quarter. The gross NP additions from the corporate and business banking portfolios were 7.81 billion rupees compared to 7.32 billion rupees in the previous quarter. The recoveries and upgrades from the corporate and business banking portfolios were 6.06 billion rupees compared to 7.27 billion rupees in the previous quarter. There were net additions to gross NPAs of 1.75 billion rupees in the corporate and business banking portfolios compared to net addition of 0.05 billion rupees in the previous quarter. The gross NPAs written off during the quarter were 20.11 billion rupees. There was sale of NPAs of 0.58 billion rupees for cash and in the current quarter compared to 0.16 billion rupees in the previous quarter. The non-fund based outstanding to borrowers classified as non-performing was 31.6 billion rupees as of December 31, 2024 compared to 33.82 billion rupees as of September 30, 2024. The provisions on this non-fund based outstanding declined to 17.12 billion rupees at December 31, 2024 from 19.11 billion rupees at September 30, 2024, reflecting the decline in the outstanding itself. The total fund-based outstanding to all standard borrowers under resolution as per various guidelines declined to 21.07 billion rupees, or about 0.2% of the total loan portfolio at December 31, 2024, or from 25.46 billion rupees at September 30, 2024, of the total fund-based outstanding under resolution at December 31, 2024, 19.36 billion rupees was from the retail and rural portfolios and 1.71 billion rupees was from the corporate and business banking portfolios. The bank holds provisions of 6.91 billion rupees against these borrowers, which is higher than the requirement as per RBI guidelines. Moving on to the P&L details, Net interest income increased by 9.1% year-on-year to 203.71 billion rupees in this quarter. The net interest margin was 4.25% in this quarter compared to 4.27% in the previous quarter and 4.43% in Q3 of last year. The impact of interest on income tax refund on net interest margin was one basis point in the current quarter. nil in the previous quarter and four basis points in Q3 of last year. The domestic name was 4.32% in this quarter compared to 4.34% in the previous quarter and 4.52% in Q3 of last year. The cost of deposits was 4.91% in this quarter compared to 4.88% in the previous quarter. Of the total domestic loans, interest rates on 52% of the loans are linked to the repo rate 16% to MCLR and other older benchmarks and 1% to other external benchmarks. The balance 31% of loans have fixed interest rates. Non-interest income excluding treasury grew by 12.1% year-on-year to 66.97 billion rupees in Q3 of 2025. Fee income increased by 16.3% year-on-year to 61.8 billion rupees in this quarter. Fees from retail, rural and business banking customers constituted about 78% of the total fees in this quarter. Dividend income from subsidiaries was 5.09 billion rupees in this quarter compared to 6.5 billion rupees in Q3 of last year. Dividend income from subsidiaries was 19.44 billion rupees in 9 months of the current year compared to 15.89 billion rupees in 9 months of last year. On costs, the banks operating expenses increased by 5% year-on-year in this quarter. Employee expenses increased by 3.1% year-on-year and non-employee expenses increased by 6.2% year-on-year in this quarter. Our branch count has increased by 129 in Q3 and 219 in the nine months of the current year. We had 6,742 branches as of December 31st, 2024. The technology expenses were about 10.5% of our operating expenses in nine months of the current year. The total provision during the quarter were 12.27 billion rupees or 7.4% of core operating profit and 0.37% of average advances compared to the provisions of 12.33 billion rupees in the previous quarter. The provisioning coverage on non-performing loans was 78.2% as of December 31st, 2024 In addition, we hold 6.91 billion rupees of provisions on borrowers under resolution. Further, the bank continues to hold contingency provision of 131 billion rupees as of December 31, 2024. At the end of December, the total provisions other than specific provisions on fund-based outstanding to borrowers classified as non-performing were 225.69 billion rupees or 1.7% of loans. The profit before tax excluding Treasury grew by 12.8% year-on-year to Rs. 152.89 billion in Q3 of this year. Treasury gains were Rs. 3.71 billion in Q3 as compared to a Treasury gain of Rs. 1.23 billion in Q3 of the previous year. As you are aware, the Treasury gains for the current quarter vis-à-vis the same quarter last year would not be comparable due to the implementation of the revised investment accounting guidelines from the 1st of April of the current year. The tax expense was 38.68 billion rupees in this quarter compared to 34.02 billion rupees in the corresponding quarter last year. The profit after tax grew by 14.8% year-on-year to 117.92 billion rupees in this quarter. We continue to enhance the use of technology in our operations to provide simplified solutions to customers. The bank has introduced DigiEase, a digital platform designed to streamline the customer onboarding process for business banking. This enhances operational efficiency and the customer experience by integrating multiple digital services into a single seamless workflow. iLend, the retail lending platform, is being upgraded on an ongoing basis. with retail credit cards now integrated in the platform along with mortgages, personal loans, and education loans. We continue to make investments in the computing infrastructure and upgrade digital channels to further strengthen system resilience and simplify processes for enhancing customer experience. We have provided details on our retail, rural, and business banking portfolios on slides 25 to 28 of the investor presentation. The loan and non-fund based outstanding to performing corporate borrowers rated BBN below was 21.93 billion rupees at December 31, 2024 compared to 33.86 billion rupees at September 30, 2024. This portfolio was about 0.2% of our advances at December 31, 2024. Other than one account, the maximum single borrower outstanding in the BBN below portfolio was less than 5 billion rupees at December 31, 2024. The bank holds provisions of 0.92 billion rupees against this portfolio at December 31, 2024. The total outstanding to NBFCs and HFCs was 893.6 billion rupees at December 31, 2024 compared to 880.27 billion rupees at September 30, 2024. The total outstanding loans to NBFCs and HFCs were about 6.8% of our advances at December 31, 2024. The builder portfolio including construction finance, lease rental, discounting, term loans and working capital was 586.36 billion rupees at December 31, 2024 compared to 542.16 billion rupees at September 30, 2024. The builder portfolio was about 4.5% of our total loan portfolio. Our portfolio largely comprises well-established builders, and this is also reflected in the sequential increase in the portfolio. About 1.7% of the portfolio at December 31, 2024 was either rated BB and below internally or was classified as non-performing, compared to 1.9% at September 30, 2024. Finally, the consolidated results. The consolidated profit after tax grew by 16.6% year-on-year to 128.83 billion rupees in this quarter. The details of the financial performance of key subsidies are covered in slides 36 to 38 and 57 to 62 in the investor presentation. The annualized premium equivalent of ICICI Life was 69.05 billion rupees in the nine months ended December 31, 2024, compared to 54.3 billion rupees in the nine months of last year. The value of new business was 15.75 billion rupees in the nine months ended December 31, 2024, compared to 14.51 billion rupees in nine months of last year. The value of new business margin was 22.8% in these nine months compared to 26.7% in the nine months of last year and 24.6% in FY 2024. The profit after tax of ICICI Life was 8.03 billion rupees in nine months ended December 31, 2024 compared to 6.79 billion rupees in nine months of last year and 3.26 billion rupees in the current quarter compared to 2.27 billion rupees in Q3 of last year. Gross direct premium income of ICICI General was Rs. 62.14 billion in the current quarter compared to Rs. 62.3 billion in Q3 of last year. The combined ratio stood at 102.7% in the current quarter compared to 103.6% in Q3 of last year. The profit after tax was Rs. 7.24 billion in the current quarter compared to Rs. 4.31 billion in Q3 of last year. With effect from October 1, 2024, long-term products are accounted on a one-by-one basis as mandated by IRDAI. Hence, the Q3 numbers are not fully comparable. The profit after tax of ICICI ANC as per NBS was Rs. 6.32 billion in this quarter compared to Rs. 5.46 billion in Q3 of last year. The profit after tax of ICICI securities as per NDIS on a consolidated basis was 5.04 billion rupees in this quarter compared to 4.66 billion rupees in Q3 of last year. ICICI Bank Canada had a profit after tax of 19.6 million Canadian dollars in this quarter compared to 15.9 million Canadian dollars in Q3 of last year. ICICI Bank UK had a profit after tax of 5.1 million US dollars in this quarter compared to 6.7 million US dollars in Q3 of last year. As per INDS, ICICI Home Finance had a profit after tax of 2.03 billion rupees in the current quarter, compared to 1.86 billion rupees in Q3 of last year. With this, we conclude our opening remarks and we will now be happy to take your questions.

Thank you very much. We will now begin with the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. Participants, you may press star and one to ask a question. The first question is from the line of Maruka Jania from Nuwama. Well, please go ahead.

Yeah, hi. My first question is on provisioning. So what would be utilization or reversal of provisions this quarter? Because provisions on non-fund have gone down and you explained that that's because the exposure has only gone down and then restructuring or resolution provisions have also gone down. So what would be the number? Or it's just the two of these?

No, we don't give the number of write-backs separately. I think what we are seeing overall on the credit cost side is that on the retail, business banking portfolios, it continues to be quite stable. On the corporate portfolio, incrementally, there is practically no credit cost or NPL provisioning, but we are seeing continuous improvement in the quality of the portfolio portfolios that we have been calling out over the years, such as the non-fund outstanding to NPS or restructured assets or the double B envelope portfolio. We also continue to see some recoveries from accounts written off in the past. So I think that's contributing to the provision line. Overall, as we've been saying, the provisions do vary a little bit from quarter to quarter, both because of the loan book, and because of other factors, for example, you know, over the last, maybe not the last quarter, but previous two, three quarters, we had ups and downs in, for example, the AIS-related provisioning. But I think overall, we continue to be within sort of the 50 bits that we have been talking of in previous calls, the reported number for this quarter being 37 bits.

Got it. Fair enough. And just on deposit growth, so the sequential run rate is a bit softer this time. That's just because of the liquidity environment or any comments there?

I think it's because of the funding requirement, you know. So if you see system loan growth did slow down a little bit, which is to a lesser extent a reflected in our portfolio as well. There was a CRR cut effective the middle of December, and we also saw some reduction if you look at our investor presentation in our RIDF portfolio and so on. So it's really a function of the requirement. We also were able to take in some very cost-effective refinance borrowings So it's really that we continue to maintain very strong liquidity. Our LCR actually went up slightly this quarter. Average for the quarter was 123%. So it's more driven by the requirement than anything else.

Okay. And I just wanted one last clarification. So you have called out gross farm slippages. I mean, you always do call out. So thank you for that. But would there be a comparable number for second quarter or it's just first and third only?

Like if you want to... Largely, it comes in the first and third only.

Okay. Okay. Thanks a lot.

Thank you. Next question is from the line of Rick and Shah from IIFL. Please go ahead.

Hi. Am I audible? Yes. Hi.

Okay. Thank you for the opportunity. Just one question, and it's on operating costs, operating expenses. So they have been flattish for the last three quarters, and this is despite the tech expenses that you have been incurring. Just wanted to understand how much further flex do we have to manage the OPEX at the current levels? Or alternatively, when do you see that kind of picking up in line with your business growth? And data keeping question would be, what would be the outstanding employed headcount as of end of December? Thank you.

You know, the headcount does keep evolving in line with our requirements of, you know, how we want to staff the bank and what is the requirement at any point in time. We continue to, you know, invest in branches. As you would have seen, we've added 129 in the current quarter. Overall, when we look at costs, I think we feel that we do have a large cost base and there are always opportunities for bringing in efficiencies in that cost base by streamlining our internal processes, integrating workflows, and removing redundancies which are not required. So I think that's an ongoing journey, both in terms of how do we sort of leverage the cost base much better. And at the same time, you know, we continue to invest in the growth requirements of the business as well as in, you know, things like IT security and reliability. So that's a process which goes on. I would think that our aim would be to, as I said, leverage the cost base, continue to leverage the cost base better And, you know, we don't think that there needs to be, needs to go to a sort of linear relationship with the top line. Perfect. Very helpful.

And would you be able to quantify the outstanding headcount as of December?

We give that number on an annual basis now, so we've not been, you know, giving it. Okay, fine. Perfect. Thank you.

Thank you very much. Next question is from the line of Kunal Shah from Citi Group. Please go ahead.

Yeah. Firstly, on the yield side, so last time you indicated the impact of number of days also being there. So, this time when we look at the over declining yields of ACOT basis points, is it primarily on account of KCC or there has been an impact of the days? And would it be fair to assume that this day count would entirely unwind in 4Q and there should be a positive bias towards the yields?

You know, we will also, as far as the movement from Q2 to Q3 is concerned, you're right, it's largely the impact of the ACC because they're a longer period of, you know, interest accrual gets reversed in that one quarter. As far as, you know, the day count impact, et cetera, for going forward, wouldn't really want to. We had said, I think, last quarter that, you know, Q4 has a lesser number of days, so just mathematically, you would see some unwinding.

Okay, so that should be there. And secondly, on the corporate banking side, generally maybe we are more focused in terms of the risk return approach. This quarter, we have seen a decent level of growth on the corporate side. While retail, there is some slowdown because of the unsecured lending. But otherwise, maybe is the price, pricing intensity easing over there? Would it be slightly margin dilutive? We have not seen the impact this quarter. So how should we look at the overall corporate banking growth?

I think that it's not, I wouldn't say it is going to be margin dilutive and so on. We have to look at, the way we look at it is we look at the overall relationship with the corporate. I think we don't want to take you know, very chunky, finely priced, long-term exposures just for the sake of loan growth. That's not our approach at all. But we do have an ongoing relationship with corporates where there could be, you know, periodic working capital requirements or short-term lending requirements or longer-term requirements where indeed it does, you know, meet our overall sort of P&L aspirations. So we keep looking, you know, I think we have a very active franchise and engagement with corporate clients across the spectrum and we keep taking advantage of those opportunities to work with them as and when they come up and fit our sort of, you know, approach.

And there was increase also in BBB and above, okay, by almost like 210 or business points. So this is maybe incremental growth coming in from there or maybe business banking, how should we read that, yeah?

I think it would largely be an upgrade from the BBB because, as you can see, the BBB portfolio has reduced. Yeah, there are 60 business points. That will reflect partly in the increase in the BBB. Of course, we could be doing incremental BBB lending also. I mean, it's investment-based.

But we have limits on how much of that we will do. Okay. Got it. Thank you. Thank you and all the best.

Thank you. A request for all the participants. Kindly listen to two questions per participant. Next question is from the line of Peran and Junior from CLSA. Please go ahead.

Yeah. Hi, team. Congrats on another steady quarter. Just firstly on retail products, a couple of ones, mortgages, you know, we were growing at 16%, 17%, now down to 11%. Is that more a function of pricing in the industry or just overall slowdown? And same for vehicle loans. We understand that this year was a slowdown, but what's your house outlook for next year?

So, the mortgages, of course, I think there is an element of price competition which is there and which has been there over a period of time. But there has been, I would say, the incremental disbursements have not been growing as much. They continue to hold up. As you are aware, overall, there seems to be continued momentum in the you know, higher segments of the market and maybe some softening in the, you know, more affordable type of segment. On vehicle loans, I think it's more a function of the underlying, you know, sort of asset class itself because we are primarily in new cars, you know, financing. And there, I think we had, if you look at actually last year or early part of this year, we had a pretty good run. Maybe from more recently, the market has slowed. I think if we go through its ups and downs as customers replace or as new models come, which typically create their sort of wave of excitement in the market, I guess, it will, you know, you will see it go from a good quarter to bad quarter, you know, over the next, you know, that's the way it will work.

Okay, okay, fair enough. Secondly, just on business banking now, this has been a product that you all as well as your peers have gone really strong on. What really can go wrong for the industry two years later? Because today everything looks hunky-dory, but Is there some part which we are missing here because it seems like almost a fairytale business?

So I think if you look at the bigger picture of the way this business has evolved over the last few years, I think at the customer level, I think that there's been a great deal of formalization and the introduction of GST and the digitization of the business and a fairly high degree of digital adoption by this customer segment itself and a reasonable level of credit discipline. I think in India, we are one of the countries where you have the commercial bureau as well. So that certainly helps. So I think that there is a fair degree of formalization, digitization and credit discipline. that helps banks like us for whom this segment becomes much more underwritable. Also, we look at this segment from a holistic perspective. We have a very strong customer 360 focus in this segment, and we really look at not just the lending piece, but also all the transaction banking and the liability piece as well. So in that sense, it's a segment which we want to focus on. From a credit perspective, two, three things, I think. One is that it's a reasonably well-secured segment. So you do get, particularly in the more granular sections of the portfolio, you do have collateral as well. Second, the portfolio itself is quite granular and, you know, quite diversified. So it's not, it will hopefully behave more like a retail portfolio rather than, you know, a corporate portfolio where, you know, a single borrower or a couple of borrowers can, you know, create more damage. But, and of course it's a portfolio where, you know, you have to keep monitoring and you have to have a very close eye on what is happening with the borrower. A lot of it is working capital which also helps because you see the way that the account is being operated and how it is behaving. So it has to be tightly managed in terms of not just the initial underwriting but also keeping a close eye on borrower behavior through the appropriate portfolio monitoring mechanism. I think as of now, we are very, very comfortable with the quality of the portfolio.

Got it. And it's fair to say that the credit costs in this business are lower than your retail book, right? Currently, that could be the case, yeah. Got it. Okay, that's it from mine. Thank you and wish you all the best.

Thank you. I request all the participants kindly receive two questions per participant. Next question is from the line of Nitin Nagarwal from Motilal Oswal. Please go ahead.

Hi. Am I audible? Yes. Thanks for the opportunity. Good evening. I have a few questions. First is on the fee income. We have seen a good traction in fee income this quarter. Now with margins being constantly under pressure and likely to remain so as the cycle turns, Is it fair to say that fee income will continue to gain share as a percentage of total income? And what kind of opportunities in particular are we looking at in respect to transaction banking over the years?

So, you know, we don't really get into the proportion piece. I think we have an overall PPOP objective and we look at, you know, what is the way to sort of maximize that. I think specifically on fees, As we have said, we believe that our transacting platforms are pretty strong and the whole objective is to get more and more adoption of those by our existing customers and acquire more and more new customers on the strength of those platforms across the entire spectrum from large corporates to small businesses. Cards and payments is also a focus area which is doing well for us. So I would say we have seen a pretty decent growth across cards and payments, transaction banking, the effects and derivatives part of transaction banking, as well as the pure lending-linked fees that are related to loan disbursals or renewals or sanctions and so on. So I think we will continue to look at that and you know, try to, you know, drive adoption of our platforms and as much as possible.

Right. And the second question is on the trade-off between, say, growth and the focus around asset quality. Because if I see, well, bankers have done a very good job in navigating through this environment and yet delivering one of the better growth amongst the larger banks. But if I look at... Context to that, the slippages have also been just 6% YOMI growth in slippages, and the slippage rate has actually come down. So how are we assessing this asset quality situation and strategizing on growth? Because it's a very sort of fine thing that we need to maintain between the two. So are we tightening too much, or how are we actually leading on the growth part?

So as I spoke, you know, I don't think concerns on asset quality are really holding us back from growth. I mean, we definitely see growth, a good growth opportunity. As I mentioned, you know, the corporate sector continues to do, which is 20% of our portfolio, continues to do very well. And at the margin, we are actually continuing to see some clawbacks of past provisioning or losses that we may have taken. Again, you know, now close to 20%, 17, 18% of the portfolio now is the whole business banking space, which we talked about in some details. So we certainly see very good growth opportunity there. On the retail side, I would say that on the secured side, I think the slippages have been quite stable. You know, they will keep going up in absolute terms as the portfolio grows and seasons, but I think our credit experience has been pretty stable. Unsecured, as we have commented in the past, we have seen, as has the whole system, some increase in delinquencies and NPL additions over the last maybe six quarters. And we have taken corrective actions on that because of which, for example, you see the personal loan portfolio flattening out this quarter. But I think there also the trend has stabilized and hopefully, you know, as these actions, you know, feed through more, maybe a couple of quarters down the line, we should start seeing some improvement. But even for the moment, I think we are quite stable and all of these are anyway getting absorbed in a very healthy credit cost number. So as of today, I don't think we see that trade-off. And to the extent we see needed to make that trade-off particularly on the PL side, I think we've made it.

Right, got it.

This is very useful.

Thanks so much.

Thank you very much. Next question is from Paramsa Branyan from Nomura. Please go ahead.

Yeah, hi. Thanks for taking my question and congratulations on another great quarter. Firstly on CASA, So if I look at both the daily average CASA which you report and the period end, for the last three quarters, both these numbers have actually been in a bank, which is not the case for the rest of the system. And especially your SAR growth is pretty healthy at 13%. I think most of your peer group would be at a low single digit sort of number. So what is driving this outperformance?

So I guess, you know, the way we approach this is that we don't really pursue any particular type of deposit. I think what we want to achieve is that we should, you know, increase our share of business with existing customers and acquire, you know, new good customers. And they should do as much of their banking as possible through us. And whatever shape that takes, it could be car or car or or a fixed deposit, we would want a bigger portion of that share. So we don't really therefore drive any particular number in this regard. I think this approach has worked well because I think probably the conversation with the customer is really about doing more banking with us rather than getting a particular deposit or type of deposit. I think our, you know, digital platforms do help because once the customer becomes digitally active and starts using those platforms, the stickiness and therefore the balances tend to go up.

Okay, got it, Anindya. But it's not any change in the product offering or pricing or any such thing at all, right? No, no, no, none at all. Okay, fair enough. Secondly, Anindya, I don't know if you mentioned this earlier, but just on the employee cost, the absolute number is down for two quarters in a row now. So what is driving that?

So that, you know, there are many variables, for example, provisions for retirees and things like that, which do impact it on a sequential basis.

Okay. And headcount reduction as well, the gross number?

That is something, as I said, that's a moving number. There could be in a quarter some reduction and then it will come back up, you know, later as and when we hire to meet our requirements.

Okay. Fair enough. Thank you so much and congratulations on the quarter again.

Thank you. Thank you so much. Thank you. Next question is from the line of Chintan Joshi from Autonomous. Please go ahead.

Hi. Thank you. Hi, there are two questions. If I can pick up your comment about kind of the provisioning cost, you are indicating that the underlying level is comfortable around 50 basis points. Should we think about this also in the context of the next year? And the reason to ask the question is mainly because you've recycled about 30 basis points of provisions. Actually, that's incorrect. Your provisions to loan sum has come down from 2% to 1.7%. And we are not sure how much of that is recycled through the P&L. So just trying to understand what could be a sustainable level as we look into the next 18 months. There is nothing called recycling. I mean, we give that absolute number. As you are aware, part of that number is the Rs. 131 billion of contingency provision, which is really a fixed number that We, I think, reached that level by March of 2023, and thereafter we had not been making further contingency provisions. As I said, apart from the retail provisioning and so on, on the corporate side, there are always some releases which are really reflective of improvement in the quality of the portfolio or recoveries that we have made. So, you know, that's the way it works. The numbers are all there. I don't want to, you know, we don't really give an outlook for next year, but as we have always been saying, you know, these numbers could inch up, but we don't see anything which worries us particularly or where we see any dramatic increase. Okay. And then the second question was on the RIDF, your requirements, your RIDF number has been coming down for a while now. I'm just wondering, you know, are there any shortfalls building up on the balance sheet that RBI may ask you to increase this balance down the line or take on some more PSLC or are you very comfortably placed even in the more difficult segments of the PSL? Just wondering, you know, how much of this is sustainable or if we should factor some increase down the line? So the number is so small now that even if you practice an increase, I don't think it will have too much of an impact. We, of course, do significant PSLC purchases, particularly for the small farmer category, while on most other categories, we are in a surplus position. And we have been, so that's a cost that has been getting reflected in the P&L over the years. Hopefully, we will be able to still meet the compliance targets, but at a 17,000 crore portfolio on this balance sheet now, sorry, 15,000 crore, pardon me, portfolio on this balance sheet now, it's not too relevant a number even if it goes up somewhat. Okay, and a quick data question. How much of the business banking book is unsecured? So we don't spit that out. It would be largely a secured book.

Thank you. Thank you very much. Ladies and gentlemen, we'll take that as the last question. I'll now hand the conference over to management for closing comments.

As always, thank you for taking time out on a Saturday evening and we can take any other questions you have offline. Thank you very much.

Thank you very much. On behalf of ICICI Bank Limited, that concludes this conference. Thank you for joining us, and you may now disconnect.