Q1 2027 ICICI Bank Ltd Earnings Call - Media Conference
Speaker #1: ICICI Bank, and Mr. Anindya Banerjee, Group Chief Financial Officer, ICICI Bank. Mr. Batra will now give you an overview of the results, which will be followed by a Q&A session.
Speaker #1: Thank you, and over to you, sir.
Speaker #2: thank you. Good evening, everyone, and thank you all for joining us today. I know it's going to be a busy afternoon for all of you, amidst the global uncertainties.
Speaker #2: The Indian economy continues to be resilient, as reflected in high-frequency indicators, backed by various initiatives taken by policymakers. We continue to monitor the developments closely and remain focused on our long-term strategy, aligned with India's evolving economic landscape.
Speaker #2: At ICICI Bank, our strategy 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.
Speaker #2: We continue to operate within the framework of our values to strengthen our franchise. Maintaining high standards of governance, deepening coverage, and enhancing delivery capabilities with a focus on simplicity and operational decisions are key drivers for our risk-calibrated profitable growth.
Speaker #2: Our board has approved the financial results of ICICI Bank for the quarter ended June 30, 2026. I would like to highlight some of the key numbers.
Speaker #2: First, moving on to profit and capital. One, the net interest income grew by 12.7% year-on-year to 24,384 crore rupees in Q1 2027. Net interest margin was 4.36% in Q1 2027, compared to 4.32% in Q4 2026.
Speaker #2: Free income grew by 23.5% year-on-year to 7,286 crore rupees in Q1 2027. Operating expenses grew by 10.4% year-on-year to 1,574 crore rupees in Q1 2027.
Speaker #2: Core operating profit grew by 15.6% year-on-year to 20,235 crore rupees in Q1 2027. Core operating profit, excluding dividend from subsidiaries, grew by 18.3% year-on-year to 19,125 crore rupees in Q1 2027.
Speaker #2: Provisions excluding provision for tax were 1,260 crore rupees in Q1 2027. Profit before tax excluding treasury grew by 20.9% year-on-year to 18,975 crore rupees in Q1 2027.
Speaker #2: Profit after tax grew by 15.9% year-on-year to 14,805 crore rupees in Q1 2027. Standalone ROE was 17.1% in Q1 2027. At June 30, 2026, the bank had a net worth of about 3.5 lakh crore rupees.
Speaker #2: CET1 ratio was 16.19% and capital adequacy ratio was 16.84% at June 30, 2026. Moving on to deposit growth, the total period and deposit increased by 14% year-on-year to 2.2%, to 2.2% quarter-on-quarter at June 30, 2026.
Speaker #2: Average deposits increased by 14% year-on-year and 6.1% sequentially during Q1 2027. Average current and savings account deposit increased by 12.1% year-on-year. Bank opened a 97 branches during Q1 2027 and a network of 7,680 branches and 12,190 ATMs and cash recycling machines.
Speaker #2: At June 30, 2026, moving on to loan growth, the total loan portfolio grew by 19.6% year-on-year and 5% quarter-on-quarter at June 30, 2026. The retail loan portfolio grew by 12% year-on-year, including non-fund outstanding, the retail portfolio was 41.1% of the total portfolio.
Speaker #2: The mortgage portfolio grew by 14.6% year-on-year. The personal loan portfolio grew by 12.9% year-on-year. The credit card portfolio declined by 1.9% year-on-year. The rural portfolio grew by 35.4% year-on-year.
Speaker #2: The business banking portfolio grew by 28.2% year-on-year. Growth in the domestic corporate portfolio was 18.5% year-on-year at June 30, 2026. About 71.9% of the corporate loan portfolio was retail A-minus and above as at June 30, 2026.
Speaker #2: Now, moving to asset quality, net NPA ratio was 0.35% at June 30, 2026, compared to 0.33% at March 31, 2026, and 0.41% at June 30, 2025.
Speaker #2: During Q1 2027, there were net additions to gross NPAs of 2,707 crore rupees. Gross NPA additions were 5,552 crore rupees in Q1 2027. Recoveries and upgrades of NPAs, excluding write-offs and sale, were 2,845 crore rupees in Q1 2027.
Speaker #2: Gross NPAs written off were 1,673 crore rupees in Q1 2027. There was sale of NPAs of 239 crore rupees for cash in the current quarter, provision coverage ratio on non-performing loans was 74.7% at June 30, 2026.
Speaker #2: Total fund-based outstanding to all borrowers under resolution as per various extent regulations was 1,363 crore rupees. Loans and non-fund-based outstanding to performing corporate, borrowers rated BB and below were 3,485 crore rupees at June 30, 2026.
Speaker #2: The total provisions during Q1 2027 were 1,260 crore rupees or 6.2% of core operating profit and 0.32% of average advances. The bank continues to hold contingency provisions of 13,100 crore rupees at June 30, 2026.
Speaker #2: At ICICI Bank, customers continue to remain at the heart of every initiative. I would like to share some of the latest updates on AI that we are making to make banking simpler, safer, and more convenient.
Speaker #2: ICICI Bank has established a structured and disciplined approach to scale AI, with a focus on long-term value creation, risk management, and enterprise-wide adoption. The bank has invested in enterprise AI platforms which serve as a secure environment for development, hosting, and development of AI and generative AI use cases.
Speaker #2: The bank continues to invest in AI and generative AI use cases across areas such as portfolio monitoring, customer onboarding, fraud detection, document extraction and summarization, and customer servicing, among others.
Speaker #2: These capabilities empower the bank to enhance customer communication, improve efficiencies, achieve faster turnaround times, support decision-making across functions, and deliver seamless customer experiences. Our approach places emphasis on information security, data privacy, and responsible AI compliance.
Speaker #2: We have implemented a comprehensive framework of guardrails, including defining ring-fenced areas for AI usage, human-in-the-loop oversight, stringent data access control, and effective model governance protocols.
Speaker #2: Parallelly, the bank continues to invest in internal capability building with focus on upscaling initiatives across businesses, digital and technology teams, and attempting to strengthen enterprise-wide readiness and support sustainable building of AI capabilities across the organization.
Speaker #2: Going forward, we will continue to operate within a strategic framework while focusing on micro markets and ecosystems. The principles of fair-to-customer, fair-to-bank, one bank, one team, and third capital decider operations.
Speaker #2: We focus on building a culture where every employee of the bank serves customers with stability and upholds the values of brand ICICI. We aim to be a trusted financial services provider of choice for our customers and deliver sustainable returns to our shareholders.
Speaker #2: With this, I conclude my opening remarks, and I would be happy to take on your questions. Thank you.
Speaker #1: Thank you. Thank you very much, sir. We will now begin the Q&A session with Mr. Batra and Mr. Banerjee. Anyone who wishes to ask a question may press star and 1 on the telephone.
Speaker #1: If you wish to remove yourself from the question queue, you may press star and 2. Today's announcement is on the bank's financial performance, hence we would like to request you to ask questions related to that.
Speaker #1: Please write to the corporate communications team separately for any other queries. Due to time constraints, I request all of you to ask two questions at a time.
Speaker #1: If you have additional queries, you may join the queue again. If time permits. Thank you. We'll take our first question from Ritu Singh from CNBC TV 18.
Speaker #1: Please go ahead.
Speaker #3: good evening, Mr. Batra and Mr. Banerjee. you know, first I wanted to start by asking about your margins that really stood out, especially compared to almost all other banks that have reported numbers today.
Speaker #3: you know, this further expansion you've been able to achieve, now at, you know, almost 4.36%. is this the normalized rate we should look at how sustainable are these levels?
Speaker #3: Do you have levers to further expand? That was the first part. Second, this rise in slippages that we've seen, you know, substantially in the quarter from about, 4,200-odd crores to about 5,500 crores.
Speaker #3: How much of this is real, and are you seeing any stress on account of what's happening in West Asia? Because this is the first quarter when we've seen some of that impact come through.
Speaker #3: And if I may add a question on loan growth as well, which has been pretty strong, corporate also seems to be doing well. what are the segments, of course, within your risk calibrated, you know, in your view, that you think are seeing higher credit demand that you believe will drive incremental credit growth for the bank?
Speaker #2: Thank you, Ritu. That's lots of questions. I think, first of all, I'll start with the NIM, question that you asked. as you are aware, as we have reported, the NIM, increased by about 12.7% year-on-year.
Speaker #2: And about 6.1% sequentially. This quarter, we had the benefit of income tax refunds, which helped in the margin improvement compared this was about 8 basis points compared to about 5 basis points in the previous.
Speaker #2: Quarter and 7 bits in the Q1 of last year. the margins in Q1 were also reflective of the benefits due to repricing of term deposits, impact of higher interest refunds, offset partially by higher interest on reversal of KCC portfolio.
Speaker #2: To your point on Outlook, I think, the NIM trajectory would depend on a number of factors. which includes, of course, the geopolitical developments, monetary policy, liquidity, loan growth, and loan pricing.
Speaker #2: our expectations of NIM is that in FY27 it should be, range-bound, assuming no, rate movements. Of course, there'll be some impact on account of FCNR, B deposit program, and loans against FCNR deposits.
Speaker #2: which could be sort of, slightly NIM diluted. But overall, as a bank, we would continue to look at leveraging, you know, growth. And as you rightly pointed out, risk calibrated profits.
Speaker #2: Through optimizing various levers where NIM is, clearly. One of them. Coming to your point on slippage, I think it's, it would be better if you look at the compare of number over Q1 26, over Q1, 27.
Speaker #2: I think there are seasonality impacts. If you look at that number, in Q1 2026, it was about 62 billion, which is now down to 55, billion.
Speaker #2: moving on to, loan growth, as you are aware, you're seeing loan growth, across, across all the segments. in particular, corporate loans, we have seen, some amount of sequentially, pick up, which has been largely due to, I mean, I mean, for, from our point of view, we continue to have active engagements with our corporate clients.
Speaker #2: And we continue to seek opportunities, whichever NIT meet within our risk and reward thresholds. During, the current quarter in particular, I think there was a little more demand on account of working capital.
Speaker #2: And also, we have seen some kind of a moderation, in the bond markets and equity markets, which is, which has been an opportunity for us to capitalize.
Speaker #2: So I presume I have answered all your.
Speaker #1: So you answered,
Speaker #3: you know, the reason why there was a sequential rise in slippages. And even on FCNR, since you bring it up, what's the target you think?
Speaker #3: How much could the bank le raise, and what kind of.
Speaker #2: To that extent, the, the first one is absol is, is, is fa is, is seasonal. So I don't think so. I would like to call out anything specific on the, quarter.
Speaker #2: So it's just a question of seasonality. If you have to actually, you have to look at and most of it is, I mean, the difference is because of, Kisan credit cards.
Speaker #2: So on FCNRB, since we are talking about the subject, I think, we are I mean, it's a, it's a, , it's a great measure, from a government point of view.
Speaker #2: And, the of course, it is early stages, yet. And this will evolve over the couple of months. And as you are aware, we are going to continue to focus sorry, we will be tapping on the Indian diaspora.
Speaker #2: You're aware that we have got a large international presence. And, we will leverage all our international branches, especially those in West Asia. we have also tied up with various partners for providing leverages.
Speaker #2: we've, we'll be raising bonds. This amount will I mean, we do expect the momentum to pick up as we go along. And of course, we are committed for this, committed to make this initiative of RBA a success.
Speaker #3: Yeah. But no amount, Mr. Batwa? You could share?
Speaker #2: we can't do this. It's very difficult to say at this point of time.
Speaker #3: All right. Thank you.
Speaker #1: Thank you. Next question is from Siddhi Naik from Bloomberg. Please go ahead.
Speaker #3: hi, sir. Am I audible?
Speaker #1: Yes. Please go ahead.
Speaker #3: Yes. Hi. I just wanted to take, some of Ritu's questions forward. the 20% loan growth that we have seen, for you, I think it's, among the highest in the last few quarters.
Speaker #3: I wanted to understand how sustainable is that, and if you could if, if are you foreseeing any risks that could have this kind of credit growth for ICICI and for the banking sector as well?
Speaker #2: No, this, I think the growth is, is reflective of the continuous momentum of economic, economic activity and also the impact of various policy initiatives which have been taken by, by the policymakers.
Speaker #2: From, from our point of view, we continue to see, growth across segments, whether it is mortgages, rural portfolio, personal loans. We have also seen healthy growth in business banking.
Speaker #2: And, and for this quarter, as I really did mention as I already mentioned, there has been a good sequential pick up in corporate loans.
Speaker #2: So we continue to engage with the entire spectrum. And wherever we get opportunities, which meet our risk thresholds and meet, the, the, the, the, the pricing framework that we have, we are happy to lend.
Speaker #2: And from our perspective, it is not mis it's not only about the loan growth. We look at customers on a 360 basis. And the overall relationship, with the customer and within that framework, we take, various, various calls.
Speaker #2: So this is, so we do have a strong balance sheet. And we will continue to look at various opportunities as they come
Speaker #3: Understood. On the FCNR part, if I may ask, sir, what is the kind of leverage that you are offering? And i what is the indicative demand looking like?
Speaker #3: I mean, there are some con-conflicting reports about, you know, inflows being very slow, some say they have go they we have received a lot of inflows.
Speaker #3: You being the second largest, private bank in the country, what is the demand on ground that you're seeing for FCNR flows? And if you could also share the leverage that you're offering, sir, through this product.
Speaker #2: So, we, we, we will offer leverage based on the customer profile and what, and whatever leverage, partners are willing to offer. So we're not giving any specific numbers at this point of time.
Speaker #2: But rest assured, I think the customers will get a reasonable return. And from our point of view, we are as I did mention, we are, committed to making, ma-making sh I mean, making this scheme of the government and RBI a success.
Speaker #2: And we will continue to remain focused on it. I think there is a and this the rates will evolve over a period of time.
Speaker #2: I mean, there is, I mean, as you are reading various newspaper reports of various competitive activities. From our point of view, we will we look at, we as I mentioned, we are looking both as leverage from our partner banks as well as raising bonds from our side and which will help our customers.
Speaker #2: And we do expect, decent pick up to happen over the next, couple of weeks and months.
Speaker #3: So lastly, is there scope for you to raise do you see the need to raise these FCNR deposit rates? Because, beyond 6%, that's on five-year.
Speaker #2: At this point of time, I don't think so. There is any need. I mean, we will see how it goes along.
Speaker #3: Sure. Thank you so much.
Speaker #1: Thank you. Next question is from Sangeeta Mehta from Economic Times. Please go ahead.
Speaker #3: thank you, sir. So, wanted to know, what is the estimated provision for ECL? And, other thing is that what is the corporate pipeline looking like?
Speaker #3: Because you've already had 20% in first quarter. so specifically, corporate pipeline and third is that what is the max leverage that, ICICI would be willing to provide to the best rated customers?
Speaker #2: For EC no, ECL ECL is effective from first of, April next year. So I don't think so. There is anything specific. No, we are I, I we are we've I mean, those are the numbers that we will start sharing from the next year basis.
Speaker #2: At this point of time, we do not see a material impact on an ongoing basis as we mentioned in the last call. There would be some marginal impact during the transition period, which for which we have which, which we have got adequate, I mean, adequate provisions are already in place.
Speaker #2: We will see. that is as far as ECL is concerned. FCNR sorry, the second question was on, corporate.
Speaker #3: Corporate, pipeline.
Speaker #2: Huh. I as I mentioned, we al we have been engaging with the corporate customers over a, long period of time. And whenever we get opportunities which mis which meet our risk and reward thresholds, we are happy to lend to them.
Speaker #2: So there are enough of there are adequate opportunities which are there. And this quarter did, open up fair go fairly good number of opportunities.
Speaker #2: So we will continue to engage with our, corporate customers. And as I have always mentioned, it is not necessarily about the loan pipeline. We look at the overall 360 relationship with, all customers.
Speaker #2: And in particular, corporate customers. And, look at the whole ecosystems and take a decision based on that.
Speaker #3: and so what is the max, leverage that you would be willing to offer?
Speaker #2: we have not called that out yet, yes, at present. But it will be, you know, it'll be quite calibrated. and, you know, it'll be at, calibrated levels.
Speaker #2: And we will look at, whether it, you know what is, you know, the leverage that we will provide as Sandeep mentioned what, partner banks may provide.
Speaker #2: And there will, of course, be some unleveraged inflows as well.
Speaker #3: So have you, tied up any line of credit or bilateral loans, in the recent in the last one month?
Speaker #2: No, these are all, all no, these are all evolving things, you know. And this is an activity which has started, effectively only towards the end of June once all the FAQs, etc., had come out.
Speaker #2: So it will evolve over, you know, the second quarter. And of course, when we do the second quarter results, we will have a full picture.
Speaker #3: Okay. Just one last thing. Can you share how much you have raised so far in the last one month under FCNR?
Speaker #2: Absolutely. As I said, we. To these details would be shared, you know, in the second quarter. And maybe at some point of time during the quarter, as this, as this, evolves, because it is still very early days, maybe some systemic numbers will start getting published.
Speaker #2: But from our perspective, it's a quarterly result.
Speaker #3: Okay. Thank you.
Speaker #1: Thank you. We'll take our next question from Shivam Killer from NDTV Profit. Please go ahead.
Speaker #2: Is my my question is on the.
Speaker #1: Shivam, can you use your handset mode, please?
Speaker #2: loan book growth target, going forward.
Speaker #1: Shivam, sorry to interrupt you. Can you use your handset mode, please? Your audio is very feeble.
Speaker #2: We work in capital requirements. So what could be the growth rate, that the, bank is targeting?
Speaker #4: Hey, Shivam, as we have always said that we do not have any targets, across any segment. and in particular, corporate loan as well. We look at opportunities and, and the cost of repeating whenever we find opportunities which meet our risk thresholds.
Speaker #4: it can reward and pricing thresholds. We are happy to lend. And we are focused on, customer 360 and try to ac-access the overall ecosystem.
Speaker #2: And, some of the second question is regarding the, margins trajectory going forward. As, Madison was expecting that the margins could be, in a range bound, level previously.
Speaker #2: But, recently, the margins have been, seen a slight improvement. So what could be the margin trajectory going forward from here on?
Speaker #4: As I mentioned, earlier, this is going to be range bound. That I, I think I've already responded to that question. So that the cost of repeating I mentioned, we do expect, to be re range bound.
Speaker #4: And of course, it's going to get impacted by many things like, monetary policy and liquidity, etc. it could well be a little bit diluted given the FCNR borrowing and deposits which, sorry, w because of the FCNR deposits that we are going to be raising, but we will continue to leverage I mean, as far as we are concerned, we are looking at over increasing the, risk calibrated profit.
Speaker #4: And, of using all, all, all the levers which go into it. And, and in particular, NIM is an important part of that.
Speaker #2: Yes, sir. And, sir, if I could, squeeze one more question in, regarding the cost of funds, do you, see the cost of funds trajectory, declining going forward?
Speaker #4: I it's very difficult to make that statement. It is, again, very, depends on all the things that are really talked about. As at this point of time, we expect this to be range bound.
Speaker #1: Thank you. Next question is from Mayur Shetty from Times of India. Please go ahead.
Speaker #3: thank you. I had a question
Speaker #5: on gold loans. could you share the size of your gold loan book and also the year on your growth rate?
Speaker #4: Mayur, we do not give specifically, but this is part of our rural portfolio. This port I mean, substantial part of a rural portfolio is actually gold loan.
Speaker #4: this gold loan portfolio the overall rural portfolio has grown by 35% year on year. And, I mean, and from our perspective, loan is the loan product is just a product.
Speaker #4: gold loan is just a product. We are focused more on the customer. And, whenever we get opportunities to give loans to good customers, there are various products and op-options which are available.
Speaker #4: So this is part of that, overall customer-centric, approach that we have been talking about.
Speaker #5: And so if it's not part of the, personal, loans, segment.
Speaker #4: No. It is part of the rural portfolio rural portfolio that, that, that we are giving. And a substantial portion of that you can attribute to gold.
Speaker #5: Oh, okay. Thank thank you.
Speaker #1: Thank you. Next question is from Hamsini Karthik from Money Control. Please go ahead.
Speaker #3: Go ahead. Hi sir, good evening. two questions. One, for, almost four quarters in a row, ICICI Banks corporate loan growth has, sort of exceeded, the retail books, performance.
Speaker #3: Would it be fair to say that at a bank level, you are more comfortable today with, corporate portfolio versus retail, that is also where the strategy is largely getting headed to?
Speaker #3: Would that be a, a, a, a reasonable assumption to make?
Speaker #4: okay. Hamsini, I think, just, I've been we have been talking about, you know, for a bank, we look at cash flows. We are objective is to look at good quality customers, whether they come from corporate business banking and retail is not so important.
Speaker #4: where whichever segment gives, results in, which meets the credit parameters, which meets the return parameters, we are happy to grow. What you are seeing is more.
Speaker #4: Outcome of working with good quality customers. We do not have any particular target what portion of our book should be corporate or retail or business banking.
Speaker #4: I mean, these numbers can well be varied. corporate loans had not been growing in the past for various reasons which we have talked about.
Speaker #4: Recently, of course, there has been, I mean, there have been opportunities which is a function of, the increased working capital requirement by the corporate books as well as moderation, as well as moderation, which we have seen in the equity markets as well as in the bond markets.
Speaker #4: So, the, the we keep on I mean, and further, I think the corporate book also we have to get a reasonable pricing. and it has to meet our credit thresholds.
Speaker #4: As long as these two things are met, we are we are happy to lend to that segment.
Speaker #3: So you're comfortable on the pricing side as well in the corporate, segments?
Speaker #4: We will we will not lend if we are not comfortable.
Speaker #3: Fair point. Fair point. My next question pertains to FCNRB. I've heard out whatever you said but let me try asking it a little differently.
Speaker #3: the most of the banks currently are offering offering leverage between 9 to 11, 12 percent. The kind of leverage that H ICICI Bank offers, would it be at par with what your competitors are offering or are you a little more cautious than what the current run rate is?
Speaker #3: And, and as an add-on to that particular question, do you expect your cost of funds to get, to come down maybe two quarters or three quarters down the line because there's a possibility of you to, replenish some high-cost bulky deposits with these FCNRBs?
Speaker #4: No, Hamsini, in a way, we answered this when I was looking when I was responding to the NIM question. Overall, FCNR de-deposit program would be marginally NIM diluted.
Speaker #4: So that's about that's about it. But, sorry. Yeah.
Speaker #2: On the on the leverage question, you know, it will be calibrated. I we are not giving a particular number because it is also early days yet.
Speaker #2: We will see how this thing evolves. But as. As in all our businesses, we will be calibrated and, and, reasonable about it. and on the, co NIM, etc., as Sandeep, you know, explained in detail, we expect it to be range bound.
Speaker #2: And, to what ex and how what the impact of the FCNRB program, is, we, we will have to see. Of course, it will be an earnings accretive, program.
Speaker #2: There because of, you know, the growth in the offshore balance sheet, etc., there may be some marginal impact on NIM.
Speaker #1: Thank you.
Speaker #3: Oh, thank you.
Speaker #1: Next question is from Subrata Panda from Business Standard. Please go ahead.
Speaker #4: Hi. I had a couple of questions. First is on your, you know, plans to tap the overseas bond market. You've guided for a two and a half billion dollar borrowing program.
Speaker #4: So how much of it would be under the RBI's concession swap window? also, why haven't you tapped the market, as of now? Because I think most of your competitors have already.
Speaker #4: Is there some I mean, is the mar is the spread more right now? That's why you're not tapping it. Also, what is your strategy on the acquisition financing front?
Speaker #2: Also, on the first question, I think, you know, each bank has its own timing and its own, approach. and, I, I so, you know, we, we are looking at various options, and we have taken this enabling approval.
Speaker #2: So we will see how, it, goes. but, you know, there is nothing, specific to the timing as such. It's just the normal process of planning and decision-making that could happen in, in any organization.
Speaker #2: And on the acquisition financing, Sandeep, I, I there's nothing specific to say. I mean, a-a-again, as in all our businesses, we would be focused on, you know, the counterparty risk.
Speaker #2: And for counterparties with whom, we, are fine to do business, we would be fine to do this product as well.
Speaker #4: So there's no specific number as to how much you will raise under the RBI's concession swap window?
Speaker #2: No. All these things will evolve over the next two months, you know.
Speaker #4: Understood. Thanks.
Speaker #1: Thank you. We have a next question from Ashish Agashe from PTI. Please go ahead.
Speaker #5: Thank you so much. So the confirm audible. so just from the loan growth for FY27 perspective, you mentioned in the co in the context of corporate loans that, there is adequate demand which is meet.
Speaker #5: So, is this about 20% overall loan growth? How sustainable is it? for from a fiscal standpoint. And also, where is this demand really coming up from?
Speaker #5: is there any bit of green, greenfield, brownfield there? And, given your, calibrated approach to lending, what are the segments you are staying away from right now?
Speaker #4: We look at good quality customers, I don't think so. It's coming from any particular segment. As long as we are able to find good quality customers across segments, we are able to lend.
Speaker #4: We really do not give a guidance on how it will shape out in the future. This quarter, they were opportunities. We have been able to, seize them.
Speaker #4: And, we will see how it goes along in the future. So there is nothing specific to call out. There is no change of strategy as we continue to scan the markets.
Speaker #4: We continue to calibrate our risk. And wherever we see opportunities, we are happy to lend.
Speaker #5: Okay. So and, earlier you spoke in your in your initial comments, you spoke about, bank-wide, upscaling program, on, on AI especially, and how you have invested, on the AI, front.
Speaker #5: So what sort of impact would it have on, hiring, replacement of, retiring employees, going forward, sir? And, like, are we should we look at a leaner organization?
Speaker #5: going ahead and, how expensive is this entire AI, bit? such that, okay, even the leaner aspect does not really accrue any cost to income gain.
Speaker #4: No, we will because these are early days in AI. As I did mention, we have we have calibrated our approach. We look at the cost.
Speaker #4: We look at the risk, and we look at the benefits. The final objective is to make the journeys of our customers, simpler. And I think there are enough opportunities out there.
Speaker #4: I don't think so there's going to be a material imp there's going to be any material impact on, on, on employees, per se, on this.
Speaker #4: This is still early days. We are focused on more on the governance side at this point of time. We are looking at long-term value creation.
Speaker #4: but we de we do see a fair bit of opportunities coming across. And I did mention, about various areas that we are focused on.
Speaker #4: Finally, the numbers will have to get reflected in the in the PBT number. And, that's essentially that we are focused on. The rest, are actually in process.
Speaker #4: Just one of the levers that we are using, as you are aware, over decades, we have used technology, largely to benefit our customers and improve our efficiencies across.
Speaker #4: That approach will continue to remain remain there. I don't think so anyone can take away the importance of a human relationship. When more particular in a banking kind of a relationship.
Speaker #4: So we continue to invest in our human capital. As well as, technology capital. And it is a section of both of it. We do expect, we will be able to deliver a decent value to our customers.
Speaker #5: so just a quick follow-up, sir. there are these worries over the expensiveness of tokenization and other things, from coming in from the tech front.
Speaker #5: And, probably the naysayers would also be questioning the entire, efficacy from, from a, spend perspective on AI. early days, I agree, but, okay, how do you look at this right now?
Speaker #4: No, whenever new technology comes, you have to look at, the cost. You have to look at the risk, and you have to look at the benefits.
Speaker #4: And continue to make investments in these and calibrate your way across. So we don't really have to be in a hurry or be a pioneer here.
Speaker #4: But we I mean, over the year over the reasonable period of time, we have we think we have been able to make, I mean, we have been able to assess where areas where we can actually benefit over a longer term, longer term perspective.
Speaker #4: We are remain invested in it. If the cost become too high, we will recalibrate our strategy. This is a continuous, exercise which happens with any technology deployment.
Speaker #4: And that includes for AI itself. Yeah, as well.
Speaker #1: Thank you. Next question is from Aryan Khanna from Informist. Please go ahead.
Speaker #6: Hello. can you hear me?
Speaker #1: Yes, Aryan. Please go ahead.
Speaker #6: Okay. Great. sir, so congratulations on a great quarter. do you see any levers that you can tap for better profitability in the rest of the financial year?
Speaker #6: you know, including maybe some higher yielding, you know, loan portfolio, this thing considering that there is a risk to names from the FCNR, deposits that are going to be coming in.
Speaker #5: Aryan, I think, we are focused on increasing our, PBT number, per se. You know, and for that, there are multiple levers. Which includes, NIM, fees, expenses, provisions, etc.
Speaker #5: So we look at all the levers and finally, we would really like to add value to our customers. So that is the overall framework that we, we have been working on.
Speaker #5: And, we hope to continue to work on, on that frame, remain focused on that framework. Within that, wherever opportunities do come, we will we would capitalize on the same.
Speaker #6: Okay. That's perfect. and my second question being, you know, if you could lend some color, to the NPA trajectory, for the rest of the financial year, you know, especially as the West Asia situation, you know, has, has continued to flare up and remain uncertain.
Speaker #6: So, you know, the last two quarters have been really good, both in the March quarter and, and June. you know, we've seen a bit in the June quarter, we saw a YOY fall in, recoveries.
Speaker #6: And then the net NPA ratio has sort of inched up, sequentially. So have we bottomed out on NPAs? And, like, do you see an expansion in the rest of the SR?
Speaker #4: It's difficult to make that assessment. I know because the geopolitical, developments, as you, you yourself have said, is uncertain. in terms of Outlook, we've been I mean, if you see, we have gone a fair bit of challenges over the last year as well.
Speaker #4: I mean, it's not that it's we have this is this has been the first time that we have got, through these challenges. But, we continue to monitor our asset quality.
Speaker #4: And we will continue to closely look at all the developments which have been happening over this period of time. And work closely with our customers.
Speaker #4: So, there's li very much more that I don't think so I can add much more to that. And in case you want to add.
Speaker #5: Yeah. So first of all, there is really no inching up of NPAs or any, any, thing in the ratio in the seasonally in Q1 and Q3 of every year.
Speaker #5: We do see higher NPAs from the agri, related lending. And then you know, that even the so and the credit cost has slightly higher.
Speaker #5: But they even out over the rest of the year. and even in this quarter, you know, a net credit cost is just about 30, 32 basis points, of average loans.
Speaker #5: I think as far as the Outlook is concerned, I, I think, if you look at the po government RBI, etc., have taken a number of measures to make sure that the Indian economy stays resilient, which is reflected in all the high-frequency indicators, as well as, the NPL performance across banks.
Speaker #5: I mean, all the results which have come so far.
Speaker #6: Right.
Speaker #5: how it will evolve, we will we will have to see. But as of today, I don't think we have, you know, based on the current set of information or borrower behavior, we have any specific, concern.
Speaker #5: And, our, you know, these things are very difficult to predict. So the only way to handle them is to maintain a strong balance sheet, which, we have.
Speaker #4: I see, see.
Speaker #1: Thank you.
Speaker #6: Got it. So, so far, I mean, okay.
Speaker #1: Next question is from Manju AB from Financial Express. Please go ahead.
Speaker #4: Good afternoon. can you hear me? I wanted to ask you how, how will you bridge the gap between the deposit and the credit growth?
Speaker #4: Because the and how sustainable is the credit growth?
Speaker #5: So, Manju, credit, and credit and deposit growth will have to go hand in hand. I mean, they could be a quarter or so where there is a, gap.
Speaker #5: But finally, credit and deposit grow hand in hand. Of course, I mean, advances also get supported by, by, by the increase in net worth.
Speaker #5: And, and there could, could well be some amount of opportunities on borrowings which you can take on. But over a period of time, they have to balance.
Speaker #5: It's a mathematically impossible for, for the two, not to go hand in hand.
Speaker #4: And, for most of your, I'm not asking about the targets, that you have for, let's say now the deposits. But how much of, those deposits will help you to reduce your wholesale deposits?
Speaker #4: And can you give a color on your, deposit base? How much is term deposit wholesale and plus up?
Speaker #5: No, Manju, we do not look at whole, this. We just look at money in the bank. And wherever we can, I mean, whether it is CAFA or FDs, and clearly the preference is within getting CAFA and retail deposits.
Speaker #5: In case we need, more funding, that gets topped up by wholesale deposits. That's the approach that we have been following the whole time. And we will continue to remain focused on that.
Speaker #4: Okay. And the 5,500 crore of, NPA surprise addition, from where is it coming from? It's segment. It's more, retail or?
Speaker #5: It is, a pretty normal trend. So if we look at on a year-on-year basis, you know, the retail NPL formation the retail NPL formation has actually come down, principally, you know, in the unsecured segment.
Speaker #5: other segments were anyway quite stable. And, you know, business banking, is at, business banking and rural and, are at the kind of similar levels as they were.
Speaker #5: corporate, there is virtually no new NPL formation.
Speaker #6: Okay.
Speaker #4: Thank you.
Speaker #1: Thank you. Next question is from Phalaknath Sayer from Deccan Chronicle. Please go ahead.
Speaker #6: Yeah.
Speaker #2: banks, you have tied up with, international banks. You have tied up for SCNR mobilization.
Speaker #5: No, as we said, these are all evolving issues. And we will report the outcomes, you know, at the appropriate time. Nothing really to announce as of now.
Speaker #2: And recovery, what is it like?
Speaker #5: I'm sorry?
Speaker #2: Recovery pipeline.
Speaker #5: No, that is a ongoing, process, you know, from the, you know, retail and SME portfolios, you know, there is always an inflow and outflow of, you know, NPLs.
Speaker #5: on the corporate side, there are, you know, some recoveries that also keep coming through out of the, older portfolio whenever there is a settlement or some, you know, NCLT judgment and so on.
Speaker #5: So that is there. No, no specific pipeline that we can talk of.
Speaker #2: I see. And this, 5,500 crore NPAs, so there's no, new, from the corporate side, so mostly largely they've come from the retail sector, no?
Speaker #2: Which is showing.
Speaker #5: Yeah, it would and, and that has been the case for the last, I would say, you know, four, five years also.
Speaker #2: So, so can you give a breakup? Is it from home loans?
Speaker #5: No, we don't give that break.
Speaker #2: Okay. Thank you.
Speaker #1: Thank you. Next question is from Ram Kumar from Hindu Business Line. Please go ahead.
Speaker #6: Hello. Hello.
Speaker #5: Ma'am, go ahead.
Speaker #1: Please go ahead.
Speaker #6: Yeah. sir, how much surplus SLR are you having right now? And what was it in the year ago period, actually? Yeah.
Speaker #4: If we get the number.
Speaker #5: I'm sorry.
Speaker #6: SLR.
Speaker #4: Surplus SLR.
Speaker #5: No, we don't really give any surplus SLR. I think the LCR for the quarter, which is really the operative liquidity metric, was at 124%.
Speaker #6: Okay. How much is the LCR, if you could share that?
Speaker #5: 124%.
Speaker #6: And what was it in the year ago period, sir?
Speaker #5: No, 128.
Speaker #6: Ach. Okay. And, you know, given the, how much is your total deposits is on account of non-resident Indians, actually?
Speaker #5: No, we are not resident.
Speaker #6: And we will not push it is going to change.
Speaker #5: We have not given that breakup. And, yeah, I mean, I guess as the FCNRB flows start and pick up, that, that number will go up, yeah.
Speaker #6: Thank you.
Speaker #1: Thank you. This brings the conference call to an end. On behalf of ICICI Bank, we thank you all for joining us. You may now disconnect your lines.
