管理層發言
Ladies and gentlemen, good day, and welcome to the Q2 FY '26 Earnings Conference Call of ICICI Bank. Please note that this conference is being recorded. I now hand the conference over to Mr. Sandeep Bakhshi, 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 Q2 of financial year 2026. Joining us today on this call are Sandeep Batra, Rakesh, Ajay, Anindya, and Abhinek. 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 INR 161.64 billion in this quarter. The core operating profit increased by 6.5% year-on-year to INR 170.78 billion in this quarter. The profit after tax grew by 5.2% year-on-year to INR 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 the 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 overall 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 INR 13.86 billion to gross NPAs, excluding write-offs and sales. The total provisions during the quarter were INR 9.14 billion 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 INR 131 billion or about 0.9% of total advances at September 30, 2025. The capital position of the bank continues to be strong with a CET1 ratio of 16.35% and a total capital adequacy ratio of 17% at September 30, 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 Anindya.
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 INR 794.33 billion at September 30, 2025, compared to INR 874.17 billion 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 INR 635.83 billion at September 30, 2025, compared to INR 628.33 billion 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 BB and below internally or was classified as non-performing. Moving on to credit quality. The gross NPA additions were INR 50.34 billion in the current quarter compared to INR 62.45 billion in the previous quarter and INR 50.73 billion in Q2 of last year. Recoveries and upgrades from gross NPAs, excluding write-offs and sales were INR 36.48 billion in the current quarter compared to INR 32.11 billion in the previous quarter and INR 33.19 billion in Q2 of last year. The net additions to gross NPAs were INR 13.86 billion in the current quarter compared to INR 30.34 billion in the previous quarter and INR 17.54 billion in Q2 of last year. The gross NPA additions from the retail and rural portfolios were INR 40.49 billion in the current quarter compared to INR 51.93 billion in the previous quarter and INR 43.41 billion in Q2 of last year. We typically see higher NPA additions from the Kisan credit card portfolio in the first and third quarters of the fiscal year. Recoveries and upgrades from the retail and rural portfolios were INR 26.1 billion in the current quarter compared to INR 25.25 billion in the previous quarter and INR 25.92 billion in Q2 of last year. The net additions to gross NPAs in the retail and rural portfolios were INR 14.39 billion in the current quarter compared to INR 26.68 billion in the previous quarter and INR 17.49 billion in Q2 of last year. The gross NPA additions from the corporate and business banking portfolios were INR 9.85 billion in the current quarter compared to INR 10.52 billion in the previous quarter and INR 7.32 billion in Q2 of last year. Recoveries and upgrades from the corporate and business banking portfolios were INR 10.38 billion in the current quarter compared to INR 6.86 billion in the previous quarter and INR 7.27 billion in Q2 of last year. There were thus a net deletion of gross NPAs of INR 0.53 billion in the current quarter in the corporate and business banking portfolio compared to a net addition of INR 3.66 billion in the previous quarter and INR 0.05 billion in Q2 of last year. The gross NPAs written off during the quarter were INR 22.63 billion. Further, there was a sale of NPA of INR 0.06 billion, mainly for cash in the current quarter. The non-fund-based outstanding to borrowers classified as non-performing declined to INR 23.22 billion as of September 30, 2025, from INR 32.98 billion as of June 30, 2025, and INR 33.82 billion as of September 30, 2024. The loans and non-fund-based outstanding to performing corporate borrowers rated BB and below increased to INR 36.61 billion at September 30, 2025, from INR 29.95 billion at June 30, 2025, and INR 33.86 billion 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 towards standard borrowers under the resolution as per various guidelines declined to INR 16.24 billion or about 0.1% of the total loan portfolio at September 30, 2025, from INR 17.88 billion at June 30, 2025, and INR 25.46 billion at September 30, 2024. Of the total fund-based outstanding under resolution at September 30, 2025, INR 14.84 billion was from the retail and rural portfolios and INR 1.4 billion was from the corporate and business banking portfolio. At the end of September, the total provisions other than specific provisions on fund-based outstanding to borrowers classified as non-performing were INR 226.2 billion or 1.6% of loans. This includes the contingency provisions of INR 131 billion as well as general provisions 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 BB and below portfolio. Moving on to the P&L details. Net interest income increased by 7.4% year-on-year to INR 215.29 billion in this quarter. The net interest income was INR 216.35 billion in the previous quarter, which included interest on tax refund of INR 3.61 billion. 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 0 in the current quarter compared to 7 basis points in the previous quarter and 0 in Q2 of last year. The margins for the quarter reflect the benefit from the reduction in deposit rates and cost of borrowings 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 INR 73.56 billion in Q2 of FY 2026. Fee income increased by 10.1% year-on-year and 10% sequentially to INR 64.91 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 subsidiaries was INR 8.1 billion in this quarter compared to INR 13.36 billion in the previous quarter and INR 5.41 billion in Q2 of last year. The timing of receipt of final dividend depends on the annual general meeting 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 retiral 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 H1 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 H1 of the current year. The total provisions during the quarter were INR 9.14 billion or 5.4% of core operating profit and 0.26% of average advances compared to the provisions of INR 18.15 billion in Q1 of 2026 and INR 12.33 billion 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 INR 161.64 billion in this quarter. Treasury income was INR 2.20 billion in Q2 of the current year as compared to INR 12.41 billion in Q1 and INR 6.80 billion in Q2 of the previous year. The lower treasury income during this quarter primarily reflects the increase in yield on fixed-income securities. The tax expense was INR 40.25 billion in this quarter compared to INR 37.44 billion in the corresponding quarter last year. The profit after tax grew by 5.2% year-on-year to INR 123.59 billion in this quarter. Moving on to the consolidated results. The consolidated profit after tax grew by 3.2% year-on-year to INR 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. With this, we conclude our opening remarks, and we will now be happy to take your questions.
分析師問答
We'll take our first question from Mahrukh Adajania from Nuvama.
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.
So 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 portfolio, 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 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 can they actually improve?
I agree that margins have performed better than expected, particularly on a quarter-on-quarter basis. Overall, they have fared well throughout the cycle, especially now that most of the rate cuts have taken effect. This success has been supported by systemic liquidity and a strong funding profile, along with our consistent pricing discipline over the years. Looking ahead, we expect margins to remain relatively stable, with no significant changes anticipated in either direction.
Got it. But there would still be deposit repricing left, right?
It will move from quarter to quarter. So if we look at Q3, there will be, of course, some deposit repricing. There will also be the 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 of course, there are continuing competitive dynamics in the market. So all taken together, I would say that over the next couple of quarters, we see it being range-bound.
Next question is from the line of Harsh Modi from JPMorgan.
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 2 or 3 areas where you expect relative advantage to sustain over, let's say, the next 12, 18 months?
I believe the improvement in CASA growth over the last few years is a result of several factors that develop over time. First, there has been consistent expansion in our distribution network. Our digital platforms also play a significant role in attracting customers, providing them with convenience and promoting their engagement with the bank. Additionally, we have concentrated on specific segments, such as business banking, where we have seen clear loan growth, which has also positively influenced CASA growth. Moving forward, we see opportunities in the transaction banking space to leverage our distribution and platforms. In the corporate sector, we can enhance our retail and deposit operations through existing corporate relationships. Moreover, the collaboration with ICICI Direct via the 3-in-1 platform presents further growth potential. These factors represent our key levers for sustaining CASA growth in the future, which remains a priority for us.
Yes, makes sense, especially SME liability. The second bit is on your capital adequacy, 16.1% CET1 where if you include the profits. How do we think about the payout ratios with such a solid stock and flow of CET1?
So including profit 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, 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. That is what we will try to do.
Next question is from the line of Anand Swaminathan from Bank of America.
Sir, a couple of questions. Sandeep, first question to you, are you in a position to kind of give us any color on your intention to continue for another term? I think investors kind of 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 kind of sustainably developed the 30, 40 bps 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 bps lower ROAs and go for higher growth? And where are we in that thought process now? Any color would be great.
Yes. 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 growth 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 we have to have an appropriate framework for pricing and then, of course, we can always tactically do trade-offs, keeping the overall opportunity in mind. But by and large, we don't think about it in terms of a trade-off between growth and profitability. We think about it in terms of a 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.
No, sure. It makes sense. I just wanted to clarify that you believe there is no growth being left untapped in order to achieve these ROAs. That's the point you're making.
I'm saying I don't think we are leaving 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 per se.
We'll take our next question from the line of Kunal Shah from Citigroup.
Yes. This is related to growth, particularly regarding different retail segments like vehicles. Industry-wide volumes have decreased, but we've noticed some momentum due to the GST cuts. Can we anticipate an increase in vehicle loans? What has the feedback been like in the first 15 to 20 days? Additionally, are we comfortable with the credit costs for personal loans? When can we expect to see growth in this area? It has remained flat both year-over-year and quarter-over-quarter. Also, concerning mortgages, while it's competitive and not significantly contributing to PPOP, how should we view the future of mortgage growth?
So, as I said, overall, if you see the loan growth has picked up from 1% sequentially in the previous quarter to 3% in this quarter. 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 a growth in these segments. As far as the question on personal loans is concerned, if you look at the overall retail NPL, 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 2022-2023 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 LDRs have been expanding past couple of quarters, almost like 400-odd basis 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, would 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-end 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 inflows and been carrying higher liquidity at the end of Q1. So I think LDRs have expanded across the system and at an overall system level as well. In fact, I would think that as the CRR cuts take effect in Q3, LDRs, 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 term, CASA, current account growth is pretty good. We are quite comfortable with the current levels, and we have the 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 are quite sustainable.
Okay. 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 weight benefit, which would come in, say, in the various rating of the corporates plus the home loans and the MSME?
On the capital side, of course, these segments will give a benefit. There are other segments where risk weights are 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 comments. 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 need to acknowledge that, as we provide information on a timely basis regarding non-performing loans, we maintain various provisions, including contingency provisions. We will need to reevaluate everything based on the overall provisioning on the balance sheet and what the base expected credit loss plus prudential floor indicate under the draft guidelines. However, we do not anticipate any significant impact.
Next question is from the line of Rikin Shah from IIFL Capital.
A few ones. First on OpEx, with festival-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, you 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. On retail asset quality, you have previously mentioned that it has been stable for us. However, if we examine the slippages, they have decreased by almost 7% year-over-year, while your overall rural and retail book has grown by 6%. This indicates a significant difference. Can we now conclude that retail slippage and the overall asset quality environment are not just stable but beginning to improve?
So I guess, as a starting point is that we don't think it was particularly bad at any point in 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 PL and cards. And there, of course, the regulator took several actions, and I think individual banks like us would also have taken action, where 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, for one of the peer banks, we saw some 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?
As our processes for the PSL classification and those get reviewed, the regulator could always examine and have a view, but nothing specific to call out at this point in time.
Next question is from the line of Piran Engineer from CLSA.
Congrats on a good set of numbers and Happy Diwali. So firstly, just on NIMs, why do you say they'll be largely range-bound for the next 2 quarters? I understand next quarter, you're talking about the interest reversals due to Kisan credit card, but why should the NIMs improve consistently for the next 4 to 6 quarters?
I believe we have managed the cycle fairly well, and the net interest margins have stabilized at this level. In the coming quarters, there are many factors at play, including monetary policy, competitive dynamics, and loan mix. We will assess the situation as it unfolds. We haven't established a perspective for next year, but in the next couple of quarters, we expect it to remain within a certain range.
Okay. Let me hop on this in another way. Out of your INR 9.5 lakh crore term deposit book, how much was acquired in the last 6 months?
We don't really give data of that kind. I think on the NIM question, we've given our perspective.
Okay. Fair enough. Okay. Secondly, just moving on to this provision for retiral benefits. This was because of higher G-Sec yields or what caused this sudden...
Every year, there is typically a decline from Q1 to Q2 because in Q1, we adjust for increments and gratuity-related provisions. Additionally, we have certain employees who are retired colleagues from acquired entities and are entitled to a DMF allowance. This year, there has been no increase in the DMF allowance, which are the two main factors affecting this.
Okay. So if I need to consider modeling this for the future, clearly, the second quarter should not be the current basis for projecting growth.
Piran, I'm sorry, your voice was breaking.
Am I audible now?
I don't have a specific number, but we do have an idea of what increments might occur. However, we can't provide a detailed model for you. As I mentioned, over the next few quarters, I don't anticipate an increase in overall operating expenses at the same rate as we have seen in the current quarter.
Got it. Fair enough. And just lastly, getting back to Rikin's question on slippages. Now slippages are down meaningfully even if you adjust for the KCC portfolio. Is all of that improvement attributable to PLCC or are we seeing improvement in other retail segments also?
So we have given, first of all, the breakup between retail and rural and corporate and business banking. So there is actually a small net dilution in corporate and business banking. But I would say, you're right across most of the other retail segments. 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 lines.