ICICI Bank Limited

Ladies and gentlemen, good day and welcome to ICICI Bank Limited Q4F526 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 the conference call, please signal an operator by pressing star then zero on your touchstone 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, sir.

Thank you. Good evening to all of you and welcome to the ICICI Bank earnings call to discuss the results for Q4 of FY2026. Joining us today on this call are Sandeep Batra, Rakesh, Ajay, Anandiya and Abhinay. At ICSA Bank, our strategic focus continues to be on growing profits before tax, excluding treasury, through the 360-degree customer-centering 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, keeping coverage, and enhancing delivery capabilities with a focus on simplicity and operational resilience, are key drivers for a risk-calibrated profitable growth. The profit before tax, excluding Treasury, grew by 10.1% year-on-year to Rs. 182.09 billion in this quarter and by 7.1% year-on-year to Rs. 650.21 billion in FY2026. The core operating profit increased by 5.1% year-on-year to 183.05 billion rupees in this quarter and by 7.7% year-on-year to 704.01 billion rupees in FY2026. The profit after tax grew by 8.5% year-on-year to 137.02 billion rupees in this quarter and by 6.2% year-on-year to 501.47 billion rupees in financial year 2026. The consolidated profit after tax grew by 9% year-on-year to Rs. 147.55 billion in this quarter and by 6.2% year-on-year to Rs. 542.08 billion in FY2026. The Board has recommended a dividend of Rs. 12 per share for FY2026 subject to requisite approvals. Total deposits grew by 11.4% year-on-year and 8.1% sequentially at March 31, 2026. Average current and savings account deposits grew by 11.3% year-on-year and 2.7% sequentially during this quarter. The bank's average LCR for the quarter was about 126%. The overall loan portfolio, including the international branches portfolio, grew by 15.8% year-on-year and 6% sequentially at March 31, 2026. The retail loan portfolio grew by 9.5% year-on-year and 4.2% sequentially at Including non-fund-based outstanding, the retail portfolio was 41.7% of the total portfolio. The rural portfolio, including gold loan, grew by 25.6% year-on-year and 18% sequentially. The business banking portfolio grew by 24.4% year-on-year and 7.6% sequentially. The domestic corporate portfolio grew by 9% year-on-year and 3.1% sequentially. The domestic loan portfolio grew by 15.3% year-on-year and 5.6% sequentially at March 31, 2026. The overseas loan portfolio was 2.7% of the overall loan book at March 31, 2026. The net NP ratio was 0.33% at March 31, 2026 compared to 0.37% at December 31, 2025. and 0.39% at March 31, 2025. The total provisions during the quarter were 0.96 billion rupees, or 0.5% of core operating profit, and 0.03% of average advances. The provisioning coverage ratio on non-performing loans was 75.8% at March 31, 2026. In addition, the bank continues to hold contingency provisions of 131 billion rupees, or about 0.9% of total advances at March 31, 2026. The capital position of the bank continued to be strong with a CET1 ratio of 16.35% and total capital adequacy of 17.18% at March 31, 2026, after reckoning the impact of proposed dividend. Looking ahead, we see many opportunities to drive risk-calibrated profitable growth and grow market share across key segments. We remain focused on maintaining a strong balance sheet, good information, 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, portfolio trends, and the performance of subsidiaries. Sandeep covered the loan growth across various segments, coming to the growth across retail products, The mortgage portfolio grew by 13.2% year-on-year and 4.7% sequentially. Auto loans grew by 1.7% year-on-year and 1.4% sequentially. The commercial vehicles and equipment portfolio grew by 11.6% year-on-year and 6.4% sequentially. Personal loans grew by 7.2% year-on-year and 5.2% sequentially. The credit card portfolio declined by 5.6% year-on-year and 1.3% sequentially. Within the corporate portfolio, the total outstanding to NDFCs and HFCs was 859.04 billion rupees at March 31, 2026 compared to 791.18 billion rupees at December 31, 2025. The total outstanding loans to NDFCs and HFCs were about 4.6% of our advances at March 31, 2026. The builder portfolio including construction finance, lease rental discounting, term loans and working capital was 714.21 billion rupees at March 31, 2026 compared to 680.83 billion rupees at December 31, 2025. The builder loan portfolio was 4.2% 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 0.9% of the builder portfolio at March 31, 2026 was either rated BB and below internally or was classified as non-performing. On credit quality, the gross MPA additions were Rs. 42.42 billion in the current quarter compared to Rs. 51.42 billion in Q4 of last year. recoveries and upgrades from gross NPAs excluding write-offs and sales were 30.68 billion rupees in the current quarter compared to 38.17 billion rupees in Q4 of last year. The net additions to gross NPAs were 11.74 billion rupees in the current quarter compared to 13.25 billion rupees in Q4 of last year. The gross NPA additions from the retail and rural portfolios were 31.45 billion rupees in the current quarter compared to Rs. 43.39 billion in Q4 of last year. Recoveries and upgrades from the retail and rural portfolios were Rs. 22.93 billion in the current quarter, compared to Rs. 30.39 billion in Q4 of last year. The net additions to gross NPAs in the retail and rural portfolios were Rs. 8.52 billion in the current quarter, compared to Rs. 13 billion in Q4 of last year. The gross NP additions from the corporate and business banking portfolios were 10.97 billion rupees in the current quarter compared to 8.03 billion rupees in Q4 of last year. Recoveries and upgrades from the corporate and business banking portfolios were 7.75 billion rupees in the current quarter compared to 7.78 billion rupees in Q4 of last year. There were net additions to gross NPAs of 3.22 billion rupees in the current quarter in the corporate and business banking portfolios compared to 0.25 billion rupees in Q4 of last year. The gross NPAs written off during the quarter was 17.68 billion rupees. Further, there was sale of NPAs of 1.12 billion rupees for cash in the current quarter. The non-fund outstanding to borrowers classified as non-performing was Rs. 21.74 billion as of March 31, 2026 as compared to Rs. 22.29 billion as of December 31, 2025. The loans and non-fund outstanding to performing corporate borrowers rated WB and below was Rs. 35.19 billion at March 31, 2026 as compared to Rs. 33.92 billion At December 31, 2025, this portfolio was about 0.2% of our advances at March 31, 2026. The total fund-based outstanding to all standard borrowers under resolution as per various guidelines declined to Rs. 14.96 billion at March 31, 2026 from Rs. 16.66 billion at December 31, 2025. At the end of March, the total provisions other than specific provisions on fund-based outstanding to borrowers classified as non-performing were Rs. 227.1 billion or 1.5% of loans. This includes the contingency provisions of Rs. 131 billion 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 double B and below portfolio, the bank also continues to hold additional standard asset provision of 12.83 billion rupees made in Q3 as directed by RBI in respect of the agricultural priority sector portfolio. Moving on to the P&L details, net interest income increased by 8.4% year-on-year, and 4.8% sequentially to 229.79 billion rupees in this quarter. The net interest margin was 4.32% in this quarter compared to 4.30% in the previous quarter. The cost of deposits was 4.43% in this quarter compared to 4.55% in the previous quarter. The benefit of interest on tax refund was 5 basis points in the current quarter compared to 1 basis point in the previous quarter. The margins for the quarter reflect the impact of external benchmark linked loans repricing, repricing of term deposits, and seasonally lower interest reversal on the KCC portfolio. The net interest margin in FY2026 was 4.32%, similar to FY2025. Of the total domestic loans, interest rates on about 56% of the loans are linked to the repo rate and other external benchmarks. 13% to NCLR and other older benchmarks and the remaining 31% of loans have fixed interest rates. Non-interest income excluding treasury grew by 5.6% year-on-year to Rs. 74.15 billion in Q4 of fiscal 2026. Fee income increased by 7.5% year-on-year to Rs. 67.79 billion 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 6.31 billion rupees in this quarter compared to 6.75 billion rupees in Q4 of last year. On costs, the bank's operating expenses increased by 12% year-on-year in this quarter and 11.5% year-on-year in FY2026. Employee expenses increased by 8.8% year-on-year and non-employee expenses increased by 14% year-on-year in this quarter. Our branch count has increased by 126 in Q4 and 528 in FY2026. We had 7,511 branches as of March 31st, 2026. The sequential increase in operating expenses primarily reflects the impact of market movements resulting in higher provisions for retireal benefits. The technology expenses were about 11% of our operating expenses in FY2026. The total provisions during the quarter were Rs. 0.96 billion or 0.5% of core operating profit and 0.03% of average advances compared to the provisions of Rs. 8.91 billion in Q4 of last year, reflecting healthy asset quality and higher recoveries and ridebacks. The credit cost was 38 basis points in FY2026 adjusted for the additional standard asset provision in respect of the agricultural priority sector portfolio and the corporate recoveries. The credit cost was under 50 basis points in fiscal 2026. The profit before tax excluding treasury grew by 10.1% year on year to 182.09 billion rupees in Q4. and by 7.1% year-on-year to Rs. 650.21 billion in FY2026. There was a treasury loss of Rs. 1.06 billion in this quarter as compared to a loss of Rs. 1.57 billion in the previous quarter and a gain of Rs. 2.99 billion in Q4 of last year, primarily reflecting market movements and including the impact of capping of FX net open positions in the onshore market as per recent RBI guidelines. The tax expense was 44.01 billion rupees in this quarter compared to 41.43 billion rupees in the corresponding quarter last year. The profit after tax grew by 8.5% year-on-year to 137.02 billion rupees in this quarter. The profit after tax grew by 6.2% year-on-year to 501.47 billion rupees in FY2026. The consolidated profit after tax grew by 9.3% year-on-year to 147.55 billion rupees in this quarter. The consolidated profit after tax grew by 6.2% year-on-year to 542.08 billion rupees in FY2026. The details of the financial performance of these subsidiaries are covered in slides 33 to 35 and 54 to 59 in the investor presentation. The annualized premium equivalent of ICICI Life increased to 106.41 billion rupees in FY2026 from 104.07 billion rupees in FY2025. The value of new business increased to 26.29 billion rupees in FY2026 from 23.70 billion rupees in FY2025. The value of new business margin was 24.7% in FY2026 compared to 22.8% in FY2025. The profit after tax of ICICI life increased to 16 billion rupees in FY2026 from 11.89 billion rupees in FY2025 and 6.09 billion rupees in this quarter from 3.86 billion rupees in Q4 of last year. The gross direct premium income of ICICI General increased to Rs. 287.12 billion in FY2026 from Rs. 268.33 billion in FY2025. The combined ratios to that 103.4% in FY2026 compared to 102.8% in FY2025. The profit after tax increased to Rs. 27.72 billion in FY2026 from Rs. 25.08 billion in FY2026. In FY 2025, the profit after tax increased to 5.47 billion rupees in this quarter from 5.1 billion rupees in Q4 of last year. The profit after tax of ICICI AMC as per INDS increased to 7.63 billion rupees in this quarter from 6.92 billion rupees in Q4 of last year. The profit after tax of ICICI securities as per INDS on a consolidated basis was 4.22 billion rupees in this quarter compared to 3.81 billion rupees in Q4 of last year. Isatia Bank Canada had a profit after tax of 4.4 million Canadian dollars in this quarter compared to 12.5 million Canadian dollars in Q4 of last year, primarily reflecting the impact of reduction in benchmark interest rates and lower business volumes. Isatia Bank UK had a profit after tax of 8 million US dollars in this quarter compared compared to 6 million US dollars in Q4 of last year. As per NDIS, ICSA Home Finance had a profit after tax of 2.49 billion rupees in the current quarter, compared to 2.41 billion rupees in Q4 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 1 on their touched on 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. We'll take our first question from the line of Jayant Karote from Access Capital. Please go ahead.

Thank you for the opportunity and congratulations on our brief.

First question is on... Sorry, can you use the handset mode, please? The audio is not very clear.

Yeah. Hello, can you hear me now?

Yes, please go ahead.

Thank you for the opportunity.

The first question is on the... I'm sorry, his line is disconnected. We'll move on to the next question from the line of Kunal Shah from CD2. Please go ahead.

Yeah, so thanks for taking the question. So the first question is on the growth side. So particularly on retail, we had seen the good uptake out there. Particularly when we look at the mortgages, it's been up like almost 4.7 odd percent. And we had seen the uptake even on the PL as well as the commercial vehicle sites. So, on mortgages, is it like the competition is coming off, the sales are getting attractive, otherwise we have always focused on ROA. So, what is actually driving this growth on the mortgagee side in particular? And the second question is on deposits. Deposits still seems to be slightly slower compared to the level of the loan growth and we have been in the market share maybe a couple of years back we have gained quite a bit of market share on CASA and all but I think now the overall deposit growth is lower than the system. So what will be our stance on the overall deposit growth getting into next year?

So first on the growth in mortgages, I think as we may have discussed in the past, you know, maybe if we look back two to three quarters ago, we were probably holding back a little because of both the benchmark risk and the spreads over the benchmark. I think as the benchmark has settled, it has given us the space to grow that portfolio. and that is what you have seen over the last two quarters and more particularly in this quarter. And we continue to – it is, of course, a competitive market, but we are within that trying to operate and price appropriately across the spectrum, also focusing very much on the entire customer C60 aspect, which we do in all our businesses. On the deposit side, I think, you know, while it looks like a loan growth of 15% and a deposit growth of 11%, on an average basis, they are pretty closely matched. I mean, average deposit growth would also be very similar to the period end deposit growth, while average loan growth would be, you know, closer to the average deposit growth. So, you know, if you look at it from an LCR perspective also, we continue to be very comfortable at about 125% average for the quarter. So, you know, we are quite comfortable on the deposit side and CASA ratios are also holding up well. So, you know, that should support a healthy level of loan growth.

Sorry, so you mentioned it. So, average deposit growth is almost 10.8%.

Okay, so you mean to say that if the average loan growth, then the gap would not be like a 11 to 15 gap, it will be a lower gap and that much is fine. And on an overall liquidity and LCR basis, we are pretty comfortable. So deposit growth is not, you know, something that will constrain us from pursuing loan growth, deposit growth, you know, the deposit flows are more than adequate and healthy.

Sure. And lastly, in terms of the provisioning, so when we look at the overall provisioning quite low during the quarter, so were there any ridebacks which have happened or release which have been there during the quarter? Maybe the overall recovery still seems to be pretty much in line with the last quarter. But was there any provisioning released in any of the line items?

So I think a couple of things on the provisioning side. One, if you look at even on a year-on-year basis on the retail side, the net additions are lower. And in particular, over the last few quarters, the additions to NTAs on the unsecured side, which get provided pretty aggressively, have been coming down. So that has, you know, brought down the provisioning requirements even on the retail side. Plus, I would say we had a somewhat higher level of recoveries and write-backs on the corporate portfolio, including recoveries from written-off accounts, which has, you know, resulted in the provisioning for this quarter being at a pretty low level. Overall, for the year, as we said on the call, we were at, you know, 38 basis points, and if we kind of adjust out the one-time KCC provision and also the, you know, corporate recoveries, we would be, you know, below 50 basis points. So the underlying credit cost remains, you know, pretty stable.

Okay. So, maybe for Q4, nothing in particular. Maybe we are getting too full here. But, because if I look at recoveries in corporate and business banking, it seems to be almost similar at 750, 775 odd crores. So, nothing appears to be there in terms of higher recoveries in Q4.

So, that's the recovery from the gross NPLs. As I said, we would have also a recovery from the return of accounts that get, you know, that get meted off in the provision line item that could have been on the somewhat higher side in this quarter.

Got it. That's it. Yeah. Thanks. Thanks and all the best. Yeah.

Thank you. Next question is from the line of Nitin Agarwal from Motilal Oswal. Please go ahead.

Yeah. Hi. Good evening and congrats on strong performance once again. The first question Anindya is on the free income growth. How do you look at this over the coming year? What steps are we taking to drive better traction on this line?

I guess if we look at the broad areas of fee income that we focus on, I think on the transaction banking in which I would include both all the trade aspects as well as forex and derivatives and on the deposit account linked fees, deposits, DMAT, etc. I think we are doing reasonably well. On the cards and payment side, this year has been a little slow. We have not grown as much there in terms of fees and that would be one area for us to focus on. I think more recently as the loan growth has picked up, the lending linked fees have also picked up and we will hopefully see that momentum sustain going forward. But this is something we'll have to keep calibrating.

Okay. And can you also give some color as to what has been the impact from RBI's recent foreign currency control regulations that they came up with in respect to the net open position and the NDF regulations as to how much has been the impact on the other income and any losses that we have incurred because of that this quarter? Yes.

So we have a net treasury loss of 1.06 billion rupees. That includes, you know, that's after taking into account the impact of the mark-to-market as of March 31st on the net swaps, the forwards. So that's factored into those numbers.

Okay, okay, sure. And the last question is around the growth. We have seen a very strong pickup in the system. Even IJC Bank in the last two quarters have picked up very well on the growth point. How do you look at this momentum going into FY27? Is this like something that you will think that will pick steam further or is it kind of has already reached the high point? I mean, overall, the growth... will broad-based from here further in respect to unsecured loans and some of the other segments which are not contributing, like mortgage started to pick up now, or you think that 16% growth where we are right now is already on the upper end that we are looking at?

We wouldn't get into giving a growth number. I think that post all the measures that were taken at a policy level through last year and from our own side I think with some of the factors like the interest rates stabilizing, benchmark stabilizing, growth has picked up and the general outlook on the economy has been quite positive. Of course more recently since March the conflict in West Asia has clouded the outlook in the sense that it has created some amount of uncertainty. But from our side, I think we believe we have a strong franchise, very healthy capital levels, and strong funding and liquidity. So we would want to leverage that to grow the business within our, you know, parameters of risk acceptance.

Right. And if I can squeeze one more. and especially on the credit cost line, wherein I think everybody has been waiting for some normalization, some uptick in credit costs in the banking system. And yet we have reported a sharp improvement here again. while our guidance remains below 50 business point. But in terms of your own confidence and assessment, do you feel more confident now versus how things were in the prior years? Because our guidance in general has been sub 50 over the years. So how do you see and compare this now versus what we have guided in the past?

So I would think that if you look at the different segments of the business, I think the corporate sectors, is pretty strong, and they are well-funded with healthy balance sheets and significant resilience, I would say. And on the retail side, I think banks, including us, have been reasonably sensible about credit selection, and the customers have also held up well. We had maybe a year... year and a half or two years ago some increase in delinquencies on the personal loan side but with regulatory action and with the steps taken by banks that also was fairly quickly contained so that is showing up in these very healthy credit numbers and you know while there are these externalities to be monitored we don't at the moment see any cause for concern as such The other portfolio which is, you know, reasonably large now and has grown rapidly over the last few years is the whole business banking portfolio. And again, one would have to monitor any potential impact of the external events on that. But I would say that that is a portfolio at least to the extent that we have a track record has been tested through COVID, the energy dislocation of companies you know, 2022 and then the whole tariff issue and has held up reasonably well. So that gives us some degree of confidence that we will monitor it as we go along.

Right. Thanks, Anand. Thanks for all the insights. Wish you all the best.

Thank you. Next question is from Maruk Adajania from Tara Capital. Please go ahead. Hi, congratulations. I have a couple of questions. Firstly, after this walk, would you have tightened any credit parameter or any credit rule going into FY27 or is business as usual or growth as usual across segments, even small segments? So that's my first question. Secondly, if you see your yield and advances, what you reported in the presentation, that's been coming off over the last two quarters of course there have been the impact of rate cuts as well but can we say that yields have now bottomed because your cost of funds has also come down materially so and I believe most of the repricing is done there so in terms of yield is this now close to the bottom that's my second question

So on the first question side, of course, we have, you know, looked at and continue to look at regularly all the potential sectoral impact as well as the impact at a client level. I would not say that we have specifically tightened anything or are excluding any segment, but, you know, we have our understanding of which are the segments that are potentially needs require closer monitoring and we are doing that and we will calibrate, you know, our actions as we go along. Overall, I think, as I said, we are continuing to focus on growing the business. On the yield, I think we have, of course, you know, this quarter seen the impact of the December repo cut. And we will, you know, we just have to, as we go along, look at how incremental pricing, et cetera, play out in the market. And, you know, we'll have some maybe amount of depository pricing also. So I guess at a margin level, we continue to look at sort of range-bound margins, unlikely to move up, but should be broadly in this range is what we would think.

Got it. And I just have one last question. You explained the decline in credit cost. Was it more driven by unsecured slippage coming down or more by corporate slippage this quarter? I mean, more by corporate recoveries.

No, so this quarter, of course, we saw a higher level of recoveries and write-backs on the corporate portfolio, including recoveries from return of accounts. But in general, the retail credit costs, as you can see from the retail net additions itself, have been coming down. So the retail credit costs have also been coming down. And within that, you know, the unsecured has been moderating. So, you know, secured was anyway pretty stable. So that is having a beneficial impact on the provision.

Okay, perfect. Thanks. Thanks a lot. Thank you. Next question is from the line of Shashadri Sen from MK Global. Please go ahead. Shashadri, your line is unmuted.

Thank you for the opportunity. I have a couple of questions. One is, For the second successive quarter, your credit card book is contracting. Is that just the nature of the business, seasonal, or are you taking any interventions in terms of trying to boost profitability? And overall, if you could comment on how the profitability of the credit card business is trending because, you know, revolver rates are coming down, cost of acquisitions should be moving up a little bit.

So, you know, I think in Q3, the decline we saw was really seasonal because there was a sharp build-up of the book towards the end of Q2 due to the festive season spend, which ran off in Q3. The small decline in the fourth quarter, I would say, you know, we can't really say that it is seasonal. It is really a function of spends and revolvers. From our perspective, I think we are focused on, you know, growing the business and growing it with the right set of customers in a profitable way. And we have been seeing reasonably steady new customer acquisition. I think the level of revolvers, et cetera, has been an issue for the industry. So that is something that we have to deal with. But we would hope to see better numbers in terms of growth. And as I mentioned in prior presentations, One of the analysts earlier asked about fees, on the fees as well. Profitability, I think, yes, I mean, at a very high level, if you look at over the last few years, the decline in the level of revolvers has impacted profitability, but it still remains a very profitable business, and it is a business with many levers of profitability, you know, including, you know, the the kind of – on the cost side, reward side, et cetera. So I think those, you know, we keep tweaking those as well. So overall, I think it's a business one would, you know, continue to have a very strong focus on.

Thanks. And my second question is on the corporate loan outlook. both tactically in the short term while the energy crisis and the war is on, and also from a cyclone medium perspective, what are your growth aspirations? What are the key drivers? Are there any particular segments that you're looking at?

I think, you know, we are very focused on the counterparty and in terms of... the quality and the overall business opportunity. I think, you know, our funnels are open and we are in constant dialogue with the clients and wherever there is a, you know, a level at which, where it makes sense both for the client and the bank, you know, the business happens. Over the last two quarters, we have seen a reasonably good appreciation to the corporate book and we continue to see opportunities going ahead And I think with the better rated clients, we will look through any short-term issues arising out of this crisis and see how we can work with them over the longer term.

Thank you so much. Thank you. Thank you.

We'll take our next question from the line of Rikhin Shah from IIFL Capital. Please go ahead.

Hi, good evening. A few questions. First one is on OPEX. So the OPEX growth about 11.5-12% this year has been higher than the peers, perhaps due to the increase in the average remuneration for the employees. So how should we think about it going into next year, especially when your volume growth is also picking up? So does this further rise in terms of the overall OPEX growth or there are certain levers to bring that down? So that's one. Second, Anindya, could you comment on the government SAR balances where we were seeing some outflows? Have the trends stabilized and should we start seeing some growth even in the institutional SAR going ahead? So those are my two questions.

So as far as OPEX is concerned, you know, I think if we look at this year, more or less it has been in line with our expectations. I think a couple of areas where the costs have been somewhat higher than what we would have expected, would have started out with. One is, you know, on the priority sector compliance and the second is to some extent on the remuneration because of the labor code and, you know, a couple of other, you know, like the market movement impact that we saw in March. And the final, you know, numbers on business growth are a little ahead of OPEX growth, and we hope that that will be, you know, sustained over the next year. So, you know, definitely we would want to have OPEX growth at a level which is below the top-line growth. That would be our objective.

And the government saw balances?

Yeah, government saw balances. So, as we had said last time, those are, you know, in the low teens as a proportion of the balances. I think this quarter, it's been, you know, maybe the level of rundown has been somewhat lower, but really that's something that we will have to just bake into our plans and really focus on growing, you know, the the money in bank as we call it from the other set of customers. But of course, this is something that will come and go as it comes and goes.

Right. And if I can just squeeze in one last question, could you comment on how much residual deposit repricing is remaining in your case?

Don't really give a, you know, a number of that time, but I guess, you know, maybe, you know, till, till, you know, till the last summer, our peak rates were more in the one-year kind of level. So, that's kind of the repricing horizon.

Okay. Thank you.

Thank you. Next question is from Param Subramanian from Investec. Please go ahead.

Hi. Good evening. Thanks for taking my question. Firstly, on rural loans, so there is a sharp uptick in this quarter. So what is driving that 18% quarter on quarter?

So part of it is due to, I think over the last couple of quarters, higher demand for gold loans. And we have also geared up, you know, our machinery. I mean, some of it is not strictly rural, although we club it in that segment. It could be from a broader range of branches, but that could be one of the drivers in addition to other elements of the portfolio.

Okay, got it. And where are we in terms of the issue that came up in the last quarter on the priority sector related provisioning? So, we have been talking about, say, recoveries of those provisions gradually over the next year. So, any update you want to give on that?

So, as we said earlier, as of March, we continue to hold those provisions. We are in the process of working through that portfolio, as we said, to try and bring it into conformity with the requirements of the agreed lending classification. And maybe, you know, we will have an update on that, you know, a quarter or so from now.

Okay. And Ananya, broadly, where are we in terms of, say, our ESL compliance, say, on SMX, et cetera?

Pretty much I think the same picture I mean we would have you know some we would be compliant overall we will have some shortfall on the small agri side so that's pretty much the same picture.

Okay. Thank you so much and congrats on the quarter. Thank you.

Thank you. Next question is from the line of Piran Engineer from CLSA. Please go ahead.

Congratulations.

Piran, your audio is not very clear. Can you use the handset mode, please?

Yeah, one second. Is it better now?

Yes, please go ahead.

Hi, congrats on the quarter. Firstly, just a clarification on the process. Since the government deposits being in low teens, it's low teen share of total deposit or low teen share of SAR?

SAR. The government side is a leading share of staff.

Correct.

Piran, I'm sorry, you're sounding muffled.

Okay, I don't... Can management hear me?

Now it is fine.

Go ahead. Okay, so I got the answer to the first question. On the second question, just wanted to understand on home loans. Firstly, is there also an element of lower prepayment rate driving the pickup in home loan growth for this quarter? Or is it just a question that now repo rate cuts have ended, as you said, and now you all are pushing growth?

I would say it's more a pickup in this version.

More a pickup. Like to like Anindya, let's say for the repo.

Piran, sorry, we lost you again.

Is it better now?

Yes.

Yeah. So just pre-repo cut cycle to today, how much? Increment in the first week, of course.

I think we are not able to hear you, Peran. Maybe we can just take this offline.

Yeah, yeah, sure.

Thank you. We take our next question from the line of Chintan from Autonomous Research. Please go ahead.

Hey, good afternoon. Thanks for taking my question. How do we see the growth outlook for the coming few quarters? We are talking about nice growth in the system in this quarter, but clearly it's too early to incorporate the supply shock into expectations. As you look forward, as you look into your books, as you see how corporates are getting impacted by this, how do you think both your book and system loan growth will develop over the next few quarters? It's very difficult to answer that question because the outlook on the underlying issue

I'm sorry, sir. You're not audible. Ladies and gentlemen, please stay connected. You've lost the management line. Ladies and gentlemen, we have the management team back online. Such interest.

Hi, yeah, I'm still here. I think Karinda was answering my question. I'll let him finish. Yeah, I don't know where you are.

Pretty much from the start.

Yeah, okay. Essentially, it's very difficult to make a prediction at the current time because this is an evolving situation. But as we said, we believe the system is going into it with a reasonable degree of resilience. So we will wait and see how the demand conditions pan out. I think as far as we are concerned, we see that we have strong levels of capital, liquidity, funding and large franchise and we would continue to try to use that to grow the business. Of course, we'll have to keep calibrating the risk acceptance levels as we go along. But are you seeing anything in your corporate or business ranking book that looks like production is falling, slowing down? you know working capital limits are not getting utilized you know is there any kind of kind of are you seeing any stress in your early indicators it's too early to make you know any call or generalization of that time okay and then a quick follow-up on your cost of deposit point I think you said that there should be some more residual repricing left but you also said that you know kind of take the duration as one year, which is a slightly contradictory. So, which is it? Is there kind of more to go on cost of deposit in terms of residual repricing? So, you know, I guess if you look at where the deposit rates were a little more than a year ago, they are at somewhat lower levels. I mean, the last weight cut cycle happened in June and then there was some further cut, you know, small cut in December. So, as I said, overall on the margin side, we expect it to be range bound from here on. Okay. And finally, on cost income ratio, you know, this year OPEX growth has led top line growth. Could we say we are committed to delivering positive jaws next year? We don't. We really look at the PCOP and the PBT post credit costs. So it's not that we are, you know, looking at managing or targeting a particular cost-to-income metric. Obviously, our objective would be to grow revenues ahead of cost, but we will see how it evolves. That's certainly the way in which we would like to drive the bank.

Thank you.

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

Thank you very much and we'll be available to take questions if there are any follow-ups. Thank you.

Thank you. On behalf of ICICI Bank, that concludes this conference. Thank you for joining us and even our disconnector lines.