ICICI Bank Limited

for you to ask questions after the presentation concludes. Should you need assistance during the conference call, please signal an operator by pressing star then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sandeep Bakshi, Managing Director and Chief Executive Officer of ICICI Bank. Thank you and over to you.

Thank you. Good evening to all of you. and welcome to the ICICI Bank Earnings Call to discuss the results for Q4 of FY 2025. Joining us today on this call are Sandeep Batra, Rakesh, Ajay, Anandya, and Abhinik. At ICICI Bank, our strategic focus continues to be on growing profit before tax, excluding treasuries. through 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 13.2% year-on-year, to 165.34 billion rupees in this quarter and by 11.4% year on year to 607.13 billion rupees in financial year 2025. The core operating profit increased by 13.7% year on year to 174.25 billion rupees in this quarter and by 12.5% year on year to 653.96 billion rupees in financial year 2025. The profit after tax grew by 18% year on year to 126.30 billion rupees in this quarter. For the fiscal year 2025, the profit after tax grew by 15.5% year on year to 472.27 billion rupees. The consolidated profit after tax grew by 15.7% year on year to 135.02 billion rupees in this quarter and by 15.3% year-on-year to Rs. 510.29 billion in FY2025. The Board has recommended a dividend of Rs. 11 per share for FY2025, subject to requisite approvals. Total deposits grew by 14% year-on-year and 5.9% sequentially at March 31, 2025. During the quarter, average deposits grew by 11.4% year-on-year and 1.9% sequentially, and average current and savings accounts deposits grew by 10% year-on-year and 0.5% sequentially. The bank's average liquidity coverage ratio for the quarter was about 126%. The domestic loan portfolio grew by 13.9% year-on-year and 2.2% sequentially at March 31, 2025. The retail loan portfolio grew by 8.9% year on year and 2% sequentially. Including non-fund-based outstanding, the retail portfolio was 43.8% of the total portfolio. The rural portfolio grew by 5.1% year on year and declined by 1.5% sequentially. The business banking portfolio grew by 33.7% year on year and 6.2% sequentially. The domestic corporate portfolio grew by 11.9% year-on-year and declined by 0.4% sequentially. The overall loan portfolio, including the international branches portfolio, grew by 13.3% year-on-year and 2.1% sequentially at March 31, 2025. The net NPA ratio was 0.39% at March 31, 2025 compared to 0.42% at December 31, 2024, and 0.42% at March 31, 2024. The total provisions during the quarter were 8.91 billion rupees, or 5.1% of core operating profit, and 0.27% of average advances. The provisioning coverage ratio on non-performing loans was 76.2% at March 31, 2025. In addition, the bank continues to hold contingency provision of Rs. 131 billion or about 1% of total advances at March 31, 2025. The capital position of the bank continued to be strong with a CET1 ratio of 15.94% and total capital adequacy ratio of 16.55% at March 31, 2025 after reckoning the impact of proposed dividends. 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 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 Anandya.

Thank you, Saviv. I will talk about loan growth, credit quality, P&L details, technology initiatives, portfolio trends and the performance of subsidies. We covered the loan growth across various segments. Coming to the growth across retail products, the mortgage portfolio grew by 11% year-on-year and 2.8% sequentially. Auto loans grew by 4.6% year-on-year and 0.4% sequentially. The commercial vehicles and equipment portfolio grew by 7% year-on-year and 2.9% sequentially. Personal loans grew by 4.2% year-on-year and 0.6% sequentially. The credit card portfolio grew by 11.7% year-on-year and 0.9% sequentially. The personal loans and credit card portfolio were 9.1% and 4.3% of the overall loan book respectively at March 31, 2025. The overseas loan portfolio in US dollar terms declined 10.2% year-on-year at March 31, 2025. The overseas loan portfolio was about 2.3% of the overall loan book at March 31, 2025. Of the overseas corporate portfolio, about 91% comprises Indian corporates. On credit quality, the gross NPA additions were 51.42 billion rupees in the current quarter. compared to 60.85 billion rupees in the previous quarter. Recoveries and upgrades from gross NPAs excluding write-offs and sale were 38.17 billion rupees in the current quarter compared to 33.92 billion rupees in the previous quarter. The net additions to gross NPAs were 13.25 billion rupees in the current quarter compared to 26.93 billion rupees in the previous quarter. The gross NP additions from the retail and rural portfolios were Rs. 43.39 billion in the current quarter compared to Rs. 53.04 billion in the previous quarter. Recoveries and upgrades from the retail and rural portfolios were Rs. 30.39 billion compared to Rs. 27.86 billion in the previous quarter. The net additions to gross NPAs in the retail and rural portfolios were 13 billion rupees compared to 25.18 billion rupees in the previous quarter. The gross NPA additions from the corporate and business banking portfolios were 8.03 billion rupees in the current quarter compared to 7.81 billion rupees in the previous quarter. Recoveries and upgrades from the corporate and business banking portfolios were 7.78 billion rupees compared to 6.06 billion rupees in the previous quarter. There were net additions to gross NPAs of 0.25 billion rupees in the corporate and business banking portfolios compared to net additions of 1.75 billion rupees in the previous quarter. The gross NPAs written off during the quarter were 21.18 billion rupees Further, there was sale of NPAs of Rs. 27.86 billion in the current quarter compared to Rs. 0.58 billion in the previous quarter. These were fully provided NPAs and in lieu of sale, the bank received Rs. 16.05 billion of security receipts and Rs. 3.14 billion in cash with the balance Rs. 8.67 billion being written off which is in addition to the write-offs mentioned earlier. the bank continues to hold 100% provision against these security receipts. The non-fund-based outstanding to borrowers classified as non-performing was 30.75 billion rupees as of March 31, 2025 compared to 31.60 billion rupees as of December 31, 2024. The provisions on this non-fund-based outstanding were 16.6 billion rupees at March 31, 2025 compared to 17.12 billion rupees at December 31, 2024. The total fund-based outstanding to all standard borrowers under resolution as per various guidelines declined to 19.56 billion rupees or about 0.1% of the total loan portfolio excuse me, at March 31, 2025 from 21.07 billion rupees at December 31, 2024. Of the total fund-based outstanding under resolution at March 31, 2025, 17.55 billion rupees was from the retail and rural portfolios and 2.01 billion rupees was from the corporate and business banking portfolios. The bank holds provisions of 6.43 billion rupees against these borrowers, which is higher than the requirement as per RBI guidelines. Moving on to the P&L details, the net interest income increased by 11% year-on-year to 211.93 billion rupees in this quarter. The net interest margin was 4.41% in this quarter compared to 4.25% in the previous quarter and 4.4% in Q4 of last year. The impact of interest on tax refund was about two basis points in the current quarter compared to about one basis point in the previous quarter and nil in Q4 of last year. The net interest margin for the full year FY 2025 was 4.32%. The domestic name was 4.48% in this quarter compared to 4.32% in the previous quarter and 4.49% in Q4 of last year. The cost of deposits was 5% in this quarter compared to 4.91% in the previous quarter. Of the total domestic loans, interest rates on about 53% of the loans are linked to the repo rate, 15% 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 18.4% year-on-year to Rs. 17.21 billion in Q4 of 2025. Fee income increased by 16% year-on-year to Rs. 63.06 billion in this quarter. Fees from retail, rural and business banking customers constituted about 80% of the total fees in this quarter. Dividend income from subsidiaries was 6.75 billion rupees in this quarter compared to 4.84 billion rupees in Q4 of last year. Dividend income from subsidiaries was 26.19 billion rupees in FY 2025 compared to 20.73 billion rupees in FY 2024. The year-on-year increase in dividend income was primarily due to higher dividend from ICICI Bank Canada ICICI Prudential Asset Management Company and ICICI Securities Primary Dealership. On costs, the banks operating expenses increased by 11.2% year-on-year in this quarter and 8.3% year-on-year in FY 2025. Employee expenses increased by 10.3% year-on-year and non-employee expenses increased by 11.7% year-on-year in this quarter. Excuse me. Our branch count has increased by 241 in Q4 and 460 in FY 2025. We had 6,983 branches as of March 31, 2025. Technology expenses were about 10.7% of our operating expenses in FY 2025. The total provisions during the quarter were 8.91 billion rupees or 5.1% of core operating profit and 0.27% of average advances compared to the provisions of 12.27 billion rupees in the previous quarter. The total provisions during FY 2025 increased by 28.5% year-on-year to 46.83 billion rupees. The bank, on a prudent basis, continues to hold provision against security receipts guaranteed by the government, which will be reversed on actual receipt of recoveries or approval of claims, if any. The provisioning coverage on non-performing loans was 76.2% as of March 31, 2025. In addition, we hold 6.43 billion rupees of provisions on borrowers under resolution. Further, the bank continues to hold Contingency provision of Rs. 131 billion as of March 31, 2025. At the end of March, the total provisions, other than specific provisions or fund-based outstanding to borrowers classified as non-performing, were Rs. 226.51 billion or 1.7% of loans. The profit before tax excluding treasury grew by 13.2% year-on-year. to 165.34 billion rupees in Q4 of this year and by 11.4% year-on-year to 607.13 billion rupees in FY2025. Treasury gains were 2.39 billion rupees in Q4 as compared to a Treasury loss of 2.81 billion rupees in Q4 of the previous year The treasury loss in Q4 of the previous year includes the transfer of negative balance of 3.4 billion rupees in foreign currency translation reserve related to the bank's offshore banking unit in Mumbai to the profit and loss account in view of the proposed closure of the unit. The tax expense was 41.43 billion rupees in this quarter compared to 36.13 billion rupees in the corresponding quarter last year. The profit after tax grew by 18.0% year-on-year to Rs. 126.3 billion in this quarter. The profit after tax grew by 15.5% year-on-year to Rs. 472.2 billion in FY2025. On technology, we continue to enhance the use of technology in our operations to provide simplified solutions to customers and make investments in our digital channels. We continue to further strengthen system resilience and simplify our process. We have provided details on our retail, rural, and business banking portfolios on slides 25 to 28 of the investor presentation. The loans and non-fund-based outstanding to performing corporate borrowers rated BB and below were 28.54 billion rupees at March 31, 2025 compared to 21.93 billion rupees at December 31, 2024. This portfolio was about 0.2% of our advances at March 31, 2025. Other than two accounts, the maximum single borrower outstanding in the BB and below portfolio was less than 5 billion rupees at March 31, 2025. The bank holds provision of 4.38 billion rupees against this portfolio at March 31, 2025. The total outstanding to NBFCs and HFCs was 918.38 billion rupees at March 31, 2025 compared to 893.6 billion rupees at December 31, 2024. The total outstanding to NDFCs and HFCs were about 6.8% of our advances at March 31, 2025. The builder portfolio including construction finance, lease rental discounting, term loans and working capital was 606.24 billion rupees at March 31, 2025 compared to 586.36 billion rupees at December 31, 2024 the builder portfolio was about 4.6% 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 builder portfolio at March 31, 2025 was either rated BB and below internally or was classified as non-performing compared to 1.7% at December 31, 2024. Moving on to the consolidated results, the consolidated profit after tax grew by 15.7% year-on-year to 135.02 billion rupees in this quarter. The consolidated profit after tax grew by 15.3% year-on-year to 510.29 billion rupees in FY 2025. The details of the financial performance of key subsidiaries are covered in slides 36 to 38. and 57 to 62 in the investor presentation. The annualized premium equivalent of ICICI Life was 104.07 billion rupees in FY 2025 compared to 90.46 billion rupees in FY 2024. The value of new business was 23.7 billion rupees in FY 2025 compared to 22.27 billion rupees in FY 2024. The value of new business margin was 22.8% in FY2025 compared to 24.6% in FY2024. The profit after tax of ISSA Life was 11.89 billion rupees in FY2025 compared to 8.52 billion rupees in FY2024 and was 3.86 billion rupees in the current quarter compared to 1.74 billion rupees in Q4 of last year. The gross direct premium income of ICICI in general was Rs. 247.76 billion in FY 2024 compared to Rs. 268.33 billion in FY 2025. The combined ratio stood at 102.8% in FY 2025 compared to 103.3% in FY 2024. including the impact of cash losses of 0.94 billion rupees in FY2025 and 1.37 billion rupees in FY2024. The combined ratio was 102.4% and 102.5% respectively. The profit after tax was 25.08 billion rupees in FY2025 compared to 19.19 billion rupees In FY2024, the profit after tax was 5.1 billion rupees in this quarter compared to 5.19 billion rupees in Q4 of last year. The profit after tax of ICHAMC as per NDIS was 6.92 billion rupees in this quarter compared to 5.29 billion rupees in Q4 of last year. The profit after tax of ICICI Securities as per NDIS on a consolidated basis was 3.85 billion rupees in this quarter compared to 5.37 billion rupees in Q4 of last year. Pursuant to the scheme of arrangement among ICICI Bank Limited and ICICI Securities Limited and their respective shareholders, ICICI Securities Limited has been delisted from stock exchanges on March 24, 2025 and become a wholly owned subsidiary of the bank. Isasia Bank Canada had a profit after tax of 12.5 million Canadian dollars in this quarter compared to 19.9 million Canadian dollars in Q4 of last year. Isasia Bank UK had a profit after tax of 6 million US dollars in this quarter compared to 9.5 million US dollars in Q4 of last year. As per India, Isasia Home Finance had a profit after tax of 2.41 billion rupees in the current quarter. compared to 1.69 billion rupees in Q4 of last year. With this, we conclude our opening remarks and we will now be happy to take your questions.