ICICI Bank Limited

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Thank you. Thank you. Thank you. © transcript Emily Beynon

© transcript Emily Beynon Ladies and gentlemen, good day and welcome to the Q2 FY26 earnings conference call of ICICI Bank. 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 the 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, Managing Director and Chief Executive Officer of ICSA Bank. Thank you and over to you, sir.

Thank you. Good evening to all of you and welcome to the ICSA Bank Earnings Call to discuss the results for Q2 of financial year 2026. Joining us today on this call are Sandeep Batra, Rakesh, Ajay, Anandya and Abhinag. At ICICI Bank, our strategic focus continues to be on growing profit before tax, excluding treasury, through the 360-degree customer-centric approach and by serving opportunities across ecosystems and micro-markets. We continue to operate within the framework of our values to strengthen our franchise, maintaining high standards of governance, deepening coverage, and enhancing the delivery capabilities. with a focus on simplicity and operational resilience, are key drivers for our risk-calibrated profitable growth. The profit before tax, excluding treasury, grew by 9.1% year-on-year to Rs. 161.64 billion in this quarter. The core operating profit increased by 6.5% year-on-year to Rs. 170.78 billion in this quarter. The profit after tax grew by 5.2% year-on-year to Rs. 123.59 billion in this quarter. Average deposits grew by 9.1% year-on-year and 1.6% sequentially and average current and savings account deposits grew by 9.7% year-on-year and 2.7% sequentially in this quarter. Total deposits grew by 7.7% year-on-year and 0.3% sequentially at September 30, 2025. The bank's average liquidity coverage ratio for the quarter was about 127%. The domestic loan portfolio grew by 10.6% year-on-year. The quarter-on-quarter growth in domestic loan portfolio was 3.3% at September 30, 2025 compared to 1.5% at June 30, 2025. The retail loan portfolio grew by 6.6% year on year and 2.6% sequentially. Including non-fund-based outstanding, the retail portfolio was 42.9% of the total portfolio. The rural portfolio declined by 1% year on year and grew by 0.8% sequentially. The business banking portfolio grew by 24.8% year on year and 6.5% sequentially. The domestic corporate portfolio grew by 3.5% year-on-year and 1% sequentially. The overall loan portfolio including the international branches portfolio grew by 10% year-on-year and 3.2% sequentially at September 30, 2025. The overseas loan portfolio was 2.3% of the overall loan book at September 30, 2025. The net NPA ratio was 0.39% at September 30, 2025, compared to 0.41% at June 30, 2025, and 0.42% at September 30, 2024. During the quarter, there were net additions of 13.86 billion rupees to gross NPAs excluding write-offs and sales. The total provisions during the quarter were 9.14 billion rupees. or 5.4% of core operating profit and 0.26% of average advances. The provisioning coverage ratio on non-performing loans was 75% at September 30, 2025. In addition, the bank continues to hold contingency provisions of Rs. 131 billion or about 0.9% of total advances at September 30, 2025. The capital position of the bank continued to be strong with a CET1 ratio of 16.35% and total capital adequacy ratio of 17% at September 32, 2025, including profits for H1 2026. Looking ahead, we see many opportunities to drive risk-calibrated portfolio growth and grow market share across key segments. We remain focused on maintaining a strong balance sheet, prudent provisioning, and healthy levels of capital, while delivering sustainable and predictable returns to our shareholders. I now hand the call over to Anand here.

Thank you, Sandeep. I will talk about loan growth, credit quality, P&L details, and the performance of subsidiaries. On loan growth, Sandeep covered the loan growth across various segments. Coming to the growth across retail products, the mortgage portfolio grew by 9.9% year-on-year and 2.8% sequentially. Auto loans grew by 1.4% year-on-year and were flat sequentially. The commercial vehicles and equipment portfolio grew by 6.4% year-on-year and 0.5% sequentially. Personal loans declined by 0.7% year-on-year and grew by 1.4% sequentially. The credit card portfolio grew by 6.4% year-on-year and 8.4% sequentially. Within the corporate portfolio, the total outstanding to NBFCs and HFCs was 794.33 billion rupees at September 30, 2025, compared to 874.17 billion rupees at June 30, 2025. The total outstanding loans to NBFCs and HFCs were about 4.4% of our advances at September 30, 2025. The builder portfolio including construction finance, lease rental discounting, term loans and working capital was 635.83 billion rupees at September 30, 2025 compared to 628.33 billion rupees at June 30, 2025. The builder loan portfolio was 4.1% 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 1.3% of the builder portfolio at September 30, 2025 was either rated double B and below internally or was classified as non-performing. Moving on to credit quality, the gross NPA additions were 50.34 billion rupees in the current quarter compared to 62.45 billion rupees in the previous quarter. and 50.73 billion rupees in Q2 of last year. Recoveries and upgrades from gross NPAs, excluding write-off and sale, were 36.48 billion rupees in the current quarter compared to 32.11 billion rupees in the previous quarter and 33.19 billion rupees in Q2 of last year. The net additions to gross NPAs were 13.86 billion rupees in the current quarter compared to 30.34 billion rupees in the previous quarter and 17.54 billion rupees in Q2 of last year. The gross NP additions from the retail and rural portfolios were 40.49 billion rupees in the current quarter compared to 51.93 billion rupees in the previous quarter and 43.41 billion rupees in Q2 of last year. We typically see higher NPA additions from the Kisan credit card portfolio in the first and third quarter of a fiscal year. Recoveries and upgrades from the retail and rural portfolios were 26.1 billion rupees in the current quarter compared to 25.25 billion rupees in the previous quarter and 25.92 billion rupees in Q2 of last year. The net additions to gross NPAs in the retail and rural portfolios were 14.39 billion rupees in the current quarter compared to 26.68 billion rupees in the previous quarter and 17.49 billion rupees in Q2 of last year. The gross NP additions from the corporate and business banking portfolios were 9.85 billion rupees in the current quarter compared to 10.52 billion rupees in the previous quarter and 7.32 billion rupees in Q2 of last year. Recoveries and upgrades from the corporate and business banking portfolios were 10.38 billion rupees in the current quarter compared to 6.86 billion rupees in the previous quarter and 7.27 billion rupees in Q2 of last year. There were thus net deletions of gross MPAs of 0.53 billion rupees in the current quarter in the corporate and business banking portfolio compared to net additions of 3.66 billion rupees in the previous quarter and 0.05 billion rupees in Q2 of last year. The growth NPAs written off during the quarter were 22.63 billion rupees. Further, there was sale of NPA of 0.06 billion rupees, mainly for cash, in the current quarter. The non-fund-based outstanding to borrowers classified as non-performing declined to 23.22 billion rupees as of September 30th, 2025, from 32.98 billion rupees as of June 30th, 2025, and 33.82 billion rupees as of September 30th, 2024. The loans and non-fund-based outstanding to performing corporate borrowers, rated double B and below, increased to 36.61 billion rupees at September 30th, 2025, from 29.25 95 billion rupees at June 30, 2025 and 33.86 billion rupees at September 30, 2024. This portfolio was about 0.3% of our advances at September 30, 2025. The increase during the quarter was due to the upgrade of certain borrowers having non-fund outstanding from non-performing to performing status. The total fund-based outstanding to all standard borrowers under resolution as per various guidelines declined to 16.24 billion rupees or about 0.1% of the total loan portfolio at September 30, 2025 from 17.88 billion rupees at June 30, 2025 and 25.46 billion rupees at September 30, 2024. of the total fund-based outstanding under resolution at September 30, 2025, 14.84 billion rupees was from the retail and rural portfolios and 1.4 billion rupees was from the corporate and business banking portfolios. At the end of September, the total provisions other than specific provisions on fund-based outstanding to borrowers classified as non-performing were 26.2 billion rupees or 1.6% of loans, This includes the contingency provisions of 131 billion rupees, as well as general provision on standard assets, provisions held for non-fund-based outstanding to borrowers classified as non-performing, fund and non-fund-based outstanding to standard borrowers under resolution, and the WBN below portfolio. Moving on to the P&L details, net interest income increased by 7.4% year-on-year, to 215.29 billion rupees in this quarter. The net interest income was 216.35 billion rupees in the previous quarter, which included interest on tax refund of 3.61 billion rupees. The net interest margin was 4.30% in this quarter compared to 4.34% in the previous quarter and 4.27% in Q2 of last year. The benefit of interest on tax refund was nil in the current quarter compared to seven basis points in the previous quarter and nil in Q2 of last year. The margins for the quarter reflect the benefit from the reduction in deposit rates and cost of borrowing as well as the impact of repricing of external benchmark linked loans and investments. Of the total domestic loans, interest rates on about 55% of the loans are linked to the repo rate and other external benchmarks. 14% to MCLR and other older benchmarks. And the remaining 31% of loans have fixed interest rates. The domestic NIM was 4.37% in this quarter compared to 4.40% in the previous quarter and 4.34% in Q2 of last year. The cost of deposits was 4.64% in this quarter compared to 4.85% in the previous quarter and 4.88% in Q2 of last year. Non-interest income excluding treasury grew by 13.2% year-on-year and 1.3% sequentially to 73.56 billion rupees in Q2 of FY2026. Free income increased by 10.1% year-on-year and 10% sequentially to 64.91 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 subsidies was 8.1 billion rupees in this quarter compared to 13.36 billion rupees in the previous quarter and 5.41 billion rupees in Q2 of last year. The timing of receipt of final dividend depends on the annual general meetings of the respective subsidiaries, which are generally held in the first quarter of a fiscal year. The year-on-year increase in dividend income was primarily due to the receipt of interim dividend from ICICI Securities and ICICI Venture. On costs, the bank's operating expenses increased by 12.4% year-on-year and 3.6% sequentially in this quarter. Employee expenses increased by 5% year-on-year and declined by 8.5% sequentially in this quarter, mainly due to lower provisioning requirements for the title benefits. Non-employee expenses increased by 17.3% year-on-year and 12.2% sequentially in this quarter. The year-on-year and sequential increase in non-employee expenses reflects retail business-related expenses and festive season-related marketing spends. Our branch count has increased by 263 in each one of the current year. We had 7,246 branches as of September 30, 2025. The technology expenses were about 11% of our operating expenses in each one of the current year. The total provisions during the quarter were 9.14 billion rupees or 5.4% of core operating profit and 0.26% of average advances. compared to the provisions of 18.15 billion rupees in Q1 of 2026 and 12.33 billion rupees in Q2 of last year. The sequential decline in provisions reflects the impact of KCC seasonality and healthy asset quality across segments. The annualized credit cost was about 40 basis points in H1 of the current year, similar to that in H1 of last year. The profit before tax excluding Treasury grew by 9.1% year-on-year and 3% sequentially to Rs. 161.64 billion in this quarter. Treasury income was Rs. 2.20 billion in Q2 of the current year as compared to Rs. 12.41 billion in Q1 and Rs. 6.80 billion in Q3. in q2 of the previous year the lower treasury income during this quarter primarily reflects the increase in yield on fixed income security the tax expense was 40.25 billion rupees in this quarter compared to 37.44 billion rupees in the corresponding quarter last year the profit after tax grew by 5.2 percent year-on-year to 123.59 billion rupees in this quarter Moving on to the consolidated results, the consolidated profit after tax grew by 3.2% year-on-year to Rs. 133.57 billion in this quarter. The details of the financial performance of key subsidiaries are covered in slides 33 to 34 and 53 to 58 in the investor presentation. The annualized premium equivalent of ISA Life was Rs. 42.86 billion in H1 of this year compared to 44.7 billion rupees in H1 of last year. The value of new business was 10.49 billion rupees in H1 of this year compared to 10.58 billion rupees in H1 of last year. The value of new business margin was 24.5% in H1 of this year compared to 22.8% in FY2025 and 23.7% in H1 of last year. The profit after tax of ICICI Life was 6.01 billion rupees in H1 of this year compared to 4.77 billion rupees in H1 of last year and 2.99 billion rupees in this quarter compared to 2.52 billion rupees in Q2 of last year. Gross direct premium income of ICICI General was 65.96 billion rupees in this quarter compared to 67.21 billion rupees in Q2 of last year. The combined ratios to that are 105.1% in this quarter compared to 104.5% in Q2 of last year, excluding the impact of cash losses of 0.3 billion rupees in this quarter and 0.74 billion rupees in Q2 of last year. The combined ratio was 103.8% and 102.6% respectively. The profit after tax increased to 8.2 billion rupees in this quarter compared to 6.94 billion rupees in Q2 of last year. With effect for October 1, 2024, long-term products are accounted on one-by-n basis as mandated by IRDAI, hence Q2 numbered and not fully comparable with prior periods. The profit after tax of ICICI AMC Asperin-Bas was 8.35 billion rupees in this quarter compared The profit after tax of ICICI securities as per NDIS on a consolidated basis was 4.25 billion rupees in this quarter compared to 5.29 billion rupees in Q2 of last year. ICICI Bank Canada had a profit after tax of 6.3 million Canadian dollars in this quarter compared to 19.1 million Canadian dollars in Q2 of last year. ICICI Bank UK had a profit after tax of 6.4 million US dollars in this quarter compared to 8 million U.S. dollars in Q2 of last year. As per NDIS, ICICI Home Finance had a profit after tax of 2.03 billion rupees in the current quarter compared to 1.83 billion rupees in Q2 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 the question and answer session. Anyone who wishes to ask a question may press star and one on the touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and two. In order to ensure that management is able to answer queries from all participants, kindly restrict your questions to two at a time. You may join back the queue for follow-up questions. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We'll take our first question from the line of Maruk Adajania from Nuwama. Please go ahead.

Hi, congratulations. My first question was on growth. Do you already see green shoots on growth? Do you see growth accelerating after so many measures taken by the government? And will we reach close to mid-teens by the end of the year? Is that an assessment we can make right now? That's my first question.

I think whatever we have seen in the quarter, certainly growth has picked up. So if you see the sequential growth in Q2 across all the retail portfolios, certainly has picked up. Business banking growth continues to be strong and we hope that these trends will sustain. We are positive on the growth outlook. We would not really be giving a specific year-end loan growth number, but certainly both in terms of what is happening in the market and our own continuing investment in distribution and allocating capacity to the higher growth opportunities. That continues and we continue to focus on that.

And would you see corporate picking up? Any comments on the corporate loan growth environment?

I think corporate India is, you know, very well funded. They have very strong balance sheets and they have access to many forms of funding. So banks are just one of the areas that they look at and we will take it as it comes. I think we are focused on overall the risk calibrated PPOP journey and that is how we will look at it. We are very active in the corporate space but that may reflect more in our transaction banking income or the flows through us current accounts, et cetera, and not necessarily in terms of loan growth per se.

Okay, got it. And my next question is on margins that they've held up pretty well compared to expectations. So this is the bottom, right? And from here on, do they stay stable without rate cuts or they can actually improve?

I would say that you're right. I think margins have done better than expectations, both, you know, quarter on quarter, yes, but I think broadly, you know, through the cycle of where we are now at the, you know, after the large part of the rate cuts have played out, they have done well, which has been aided by the systemic liquidity and the continued, you know, healthy funding profile, as well as I would say the discipline on pricing that we have had consistently over several years. From here on, our expectation is that margins should be more or less range bound. We don't expect any major movements either way.

Got it. But there would still be deposit repricing left, right?

If we move from quarter to quarter, so if we look at Q3, there will be, of course, a some depository pricing. There will also be the, you know, full CRR reduction, which will take effect. At the same time, it will be a KCC quarter, as we call it. So the level of non-accrual will also go up. And, you know, of course, there are continuing competitive dynamics in the market. So all taken together, as I would say, I would say that, you know, over the next couple of quarters, we see it being range-bound.

Okay. Thanks a lot. Thank you.

Thank you. Next question is from the line of Harsh Modi from JP Morgan. Please go ahead.

Hi. Thanks for this kind of fantastic set of numbers. Congratulations. The question is on CASA. Your CASA market share has been improving if I look at on the average balance basis. Could you talk a bit about how much of visibility do you have in this continued market share gains on CASA? And what are the two or three areas where you expect this relative advantage to sustain over the next 12 to 18 months? Thank you.

I think where the CASA growth has improved from over the last few years because things really take root over a period of time. I would say three things. One, of course, is the steady expansion and distribution over a period of time. I think our digital platforms do help. Certainly they are something that attracts customers to the bank and offers convenience to the customers and encourages flows to the bank. And third, I think there are specific segments that we have been focusing on over a period of time. I think business banking is a great example where while of course the loan growth is visible, the CASA growth also in the business banking has been a contributor. Going forward, I think we certainly see the whole transaction banking space as something where we can do more given our distribution and our platforms. In the corporate space where we have corporate relationships, we can further deepen the synergy of what we are doing on the retail side across actually both the deposit side and the loan side in the corporate ecosystem. And also the synergy with the ISSA direct, you know, through the three-in-one platform is another area where we could do a lot more. So these are some of the levers that we have, which we believe will, you know, sustain the CASA growth going forward. It would be our objective.

Yeah, makes sense, especially the SME liabilities. The second bit is on your capital adequacy 16.1, CET1, if we include the profits. How do we think about the payout ratios with such a solid stock and flow of CET1? Thank you.

Including profits at September, it was 16.35 actually. I think this is kind of currently the level at which most of the large private sector banks, you know, some of them are there, some may be a little higher actually. So no specific plan on payouts. I think our view would be to maintain a strong balance sheet at all times and to leverage the capital for growth. You know, that is what we will try to do.

Thank you.

Thank you. Next question is from the line of Anand Swaminathan from Bank of America. Please go ahead.

Thank you. I have a couple of questions. Sandeep, first question to you. Are you in a position to give us any color on your intention to continue for another term? I think investors have been looking for some clarity around that. Any color on that would be great. Number two, in terms of the trade-off between growth and profitability, we have now sustainably developed the 30, 40 BIPs. ROA difference versus even the next best peer. Are we kind of giving up some growth as part of it? Is there a scenario where we could accept a 10, 20 bips lower ROAs and go for higher growth? And where are we in that thought process now? Any cloud would be great. Thank you.

Yeah, so I'll take both the questions, Anand. As far as the position of CEO is concerned, you are aware that there is still a year to go and the board will take a view and decide and disclosure will be made at the appropriate time. On the trade-off point, we don't really look at it as a trade-off between growth and profitability. Our aim is and what we operate to is the risk-adjusted PPOP, and that has to be done in a framework which is sustainable. And, you know, we have to have an appropriate framework for pricing. And then, of course, we can always tactically do tradeoffs, keeping the overall, you know, opportunity in mind. But by and large, we don't think about it in terms of a tradeoff between growth and profitability. We think about it in terms of sustainable sort of accretion to the PPOP over a period of time. And the ROA is more of an outcome. We have never targeted that we will have a 2.3% ROA or something like that. It's basically been an outcome of the way the business has evolved.

Sure, makes sense. In your kind of mind, you're not leaving any growth on the table to achieve these ROAs. That's the point you're making.

I don't think we are leading any long-term PPOP growth on the table. We could always do a little bit more. Obviously, we certainly believe that we are not doing that as much as the franchise can deliver, and it should deliver more over a period of time. But we would rather think of it in terms of the PPOP opportunity, risk-adjusted, rather than loan growth.

Sure. Makes sense. Thanks a lot.

Thank you. We'll take our next question from the line of Kunal Shah from Citigroup. Please go ahead.

Yeah. Hi. is uh say on the growth side but particularly looking at the various segments of retail like say vehicle obviously the industry-wide volumes were down but with the gst cuts we have seen the momentum so should we expect any uptake out there on the vehicle loans how has been the initial uh maybe 15 20 days of feedback plus personal loans are we comfortable on the overall trade cost when should we start To see the growth out there, it's been just flat on both year-on-year and quarter-on-quarter basis. Even on the mortgages, obviously, it's competitive and not PPOP-accretive to an extent, but how should we look at the overall mortgage growth going forward?

Overall, if you see, the loan growth has picked up from 1% sequentially in the previous quarter to and we are positive on growth, both in terms of the market opportunity and the way we are continuing to gear up our distribution and allocate resources to growth segments and growth markets. So we would hope to see growth in these segments. As far as the question on personal loans is concerned, If you look at the overall retail NPL, you know, the additions have declined both year on year and sequentially despite the growth in the balance sheet. And we do see, I think, healthy asset quality across all the segments. As we have said in the past, we had taken a number of corrective actions on personal loans in 2020 to 2023, and the cohorts of origination post that We are quite happy with the performance. So we are increasing our disbursements there. It may take a little while to show up in book growth, because obviously there's a runoff as well. But in terms of doing more, we are quite happy to do, and we are moving on that front.

Okay, and then on the deposit side, so like LDR have been expanding past couple of quarters almost like 400 odd business points kind of an expansion in the LDR. The pace on loan growth still seems to be higher than the deposit growth. It has helped manage margins as well. How would we look at it from here on maybe the pressure on the repricing on the margins would be relatively low now at almost 87 plus LDR. how should we see this ratio settling? So maybe on the term deposit side, we garner more of the term deposits just to make sure that it is in line with the loan growth from here on?

So I don't think that it's really right to compare the September LDR with the June LDR. First of all, LDR is just a quarter in measure, whereas what happens on the balance sheet depends on what happens on an average basis. I think for most of the large banks, to the extent I've seen, LDRs would have gone up in Q2 because most of the large banks would have seen relatively lower growth and good deposit inflow and been carrying higher liquidity at the end of Q1. So I think LDRs have expanded across the system and at overall system level as well. In fact, I would think that as the CRR cuts take effect in Q3, the natural corollary would be that LDRs will go up further because that is what would happen when liquidity gets released. From our perspective, we are quite comfortable with where we are. I think our retail deposit growth, current account growth is pretty good. We are quite comfortable with the current levels. and we have ability to grow further. On the wholesale side, we do optimize between various types of funding and that's the way we look at it. I think the current levels of LDR may be even slightly higher with a lower CRR requirement, but it's sustainable.

Okay. And lastly, in terms of the RBI directions, any initial commentary in terms of the impact which we could see on account of ECL or maybe the risk-wise benefit which would come in, say, in the various rating of the corporates plus the home loans and the NSME?

On the capital side, of course, these segments will give a benefit. There are other segments where risk rates are being... being proposed to be increased where that would take away some of that benefit. But net-net, I guess, for most banks, it would be a positive. The guideline is still open for comment, so we'll have to wait to see what is the final guideline that RBI issues after whatever submissions they receive. Similar is the case with ECL. It's, again, open for comment, and we'll have to see what the final guidelines come out. On ECL, as far as the transition point is concerned, I think given the level of provisioning that we hold on the balance sheet, we should be okay. On what credit costs will look like under an ECL regime on an ongoing basis is something we have to still work out and assess.

Got it. So contingency would be utilized at that point in time.

I think we have to just say that given the overall, because we also provide, for example, on a pretty accelerated basis against MPLs, we hold provisions, other provisions as well, and there is the contingency provisions. So all of it we have to reassess at that point in time, given the totality of the provisioning on the balance sheet and what would be, you know, what the base ECIL plus potential floors suggest, you know, under the draft guidelines, we don't expect any impact of that.

Sure. Got it. Thanks and all the best here.

Thank you. Next question is from the line of Rikhin Shah from IIFL Capital. Please go ahead.

Thanks for the opportunity. The first on OPEX, with festive-related non-salary expenses coming in 2Q this year, Should one expect a sequential decline in OPEX in the third quarter given that these expenses could have been front-ended?

So I guess in that line item, we will see a decline. I'm not sure. I want to say that there will be a decline in overall OPEX because we continue to invest and we are quite focused on the growth of the business. I don't expect sequential increases of the time that we have seen in this quarter.

Got it. Second is on retail asset quality. You know, until now you've been saying that it has been stable for us, but if you look at the slippages in absolute terms, they are down almost 7% YOY when your book, rural plus retail book has grown 6%. So clearly a huge delta. So are we in a position to now say that retail slippage or the overall asset quality environment has started to improve and not only just stabilize?

So I guess the starting point is that we don't think it was particularly bad at any point of time. I mean, I think for the last several years, banks have been reporting pretty good asset quality. If I look at the secured retail, I think it has been pretty stable, maybe getting marginally better for the last, I would say, eight or nine quarters. We did have some spike in the unsecured, in the PLN cards. And, you know, there, of course, the regulator took several actions and I think individual banks like us would also have taken actions. And I think that the benefit of those actions is starting to show up, which is why we are now growing those portfolios again.

Got it. And lastly, you know, for one of the peer banks, we saw some, you know, PSL classification problem on the crop loans. Just wanted to understand how do you track the end use of the crop loans that you give out? and has there been any discussion around this on your portfolio as well with the regulator?

We have our processes for PSL classification, and those get reviewed. The regulator could always, of course, can always examine and have a view, but nothing specific to call out at this point in time.

Perfect. Thanks, Anindya, and wishing you and the broader team a happy Diwali. Thank you so much.

Thank you. Next question is from the line of Peter, an engineer from CLSA. Please go ahead.

Yeah, congrats on a good set of numbers and happy Diwali. Firstly, just on NIMS, why do you say they'll be largely range-bound for the next two quarters? I understand next quarter, you're talking about the interest reversals and credit card. But why shouldn't NIMS improve consistently for the next four, six quarters?

I think that we have, you know, I would say, navigated the cycle reasonably well and the NINs have come in at this level. Over the next few quarters, we will see there are too many moving parts in terms of monetary policy, the competitive dynamic, loan mix and so on. So we will see it as it comes. We have not really taken a view on the next year. For the next couple of quarters, it should be range bound.

OK. Let me hop on this in another way. Out of your 9 and 1 half lakh term deposit, how much was acquired in the last?

We don't really give data of that kind. I think on the main question, we have given our perspective.

OK. Okay. Secondly, just moving on to this more provision for retargeted benefits. This was because of higher GSEC yields or what caused this sudden drop?

So I think if you look at it, I think every year there is some decline from Q1 to Q2 because in Q1 when the increments, et cetera, given the, you know, gratuity-related provisions and so on, you know, we threw them up. And we also have certain employees who are on pensions, who are mainly the retired colleagues who were earlier working with some of the acquired entities. And there, they are entitled to dareness allowance. And this year, there's been no increase in the dareness allowance. So those would be the two main factors.

Okay, so then if I have to think of it, think of modeling this going forward, clearly two should not be the correct base to model growth of.

Piran, I'm sorry, your voice was breaking.

Okay, am I audible now?

I don't have a... I don't... We have, of course, a sense of what kind of implements, et cetera, will happen.

We don't...

You can't really model it for you. But as I said, over the next couple of quarters, I don't expect overall OPEX to increase at the pace at which it has in the current quarter.

Got it. Fair enough. And just lastly, getting back to Rikim's question on slippages. Now, slippages are down meaningfully even if you adjust for the SEC portfolio. Is all of that improvement attributable to PLCC or are we seeing improvement in other retail segments also?

We have given, first of all, the breakup between retail and rural and corporate and business banking. So there is actually a small net deletion in corporate and business banking. But I would say you're right across most of the other retail segments.

No, I'm referring to retail and rural, Anindya.

In most of the other retail portfolios also, there has been some improvement frequently.

Got it. Okay, that answers all of my questions. Thank you. Wish you a happy Diwali. And also just one request. You could please, you know, do something about the Saturday results. It just gets too much for all of us. And I understand you all want to keep your data secret and no leakage and all of that. Maybe if you could release results on Friday night and then 9 a.m. on Saturday, keep a comm call. That just helps us a lot. But please just try to listen to it.

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

Thank you. Can I come back on the capital points? You know, the credit risk reduction seems substantial. You highlighted it's a net positive. Your CET1 ratios are also very high. I understand that's where the larger banks operate, but isn't there an opportunity to grow at the pace you want to grow, take the opportunity that is on the table, and yet improve payouts more? Because from our vantage point, you know, the top three banks in the system are swimming in capital. Just want to get some thoughts on, you know, how this might play out as the, as you look, you know, as these guidances and the draft reports become more concrete.

So we will take a view at that point in time. This is anyway going to kick in a year and a half from now. And it really, a lot of it depends on What is the position of the balance sheet at that point in time and which are the segments where we have seen growth? But overall, capital is not constraining us from growing. We are continuing to focus on the kind of growth that we want.

In fact, your retained earnings is enough to grow already. Could you give us some color from your last submission? You said there is no impact for you. So I'm assuming there's no impact, including the other provisions you have on the balance sheet. So you would assume that they will be utilized when you say no impact.

I guess it depends on what form the final guidelines take. But we have to look at the total provisions on the balance sheet in totality, including NPL and other provisions. and we don't expect that there should be any impact.

So it could even be positive, because from what I can see, you have more than enough provisions on your balance sheet, and they come back into your CET1 if they are excessive. So shouldn't this become almost CET1 accretive at some point?

Yeah, we'll have to see. It's very difficult to say it now. In any case... This is something, again, which will really depend upon the balance sheet at the point of transition.

And then final point, you are one of the two large players in salaried accounts. How much of your salaried accounts come from the IT services area? There's so much hype around here. I'm just wondering if there are kind of unemployment in that section. How much would it impact you? How do you think about that?

Just for us, for any bank with salaried accounts, the IT services sector and similar sectors would account for a good share of the salary accounts because they are a good share of employment in the country, salaried employment in the country. So far, we have not seen any impact.

Thank you.

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

Thank you very much and wish you all a very, very happy Diwali. Thank you.

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