管理層發言
Ladies and gentlemen, good day, and welcome to ICICI Bank Limited Q3 FY 2026 Earnings Conference Call. 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 Q3 of FY 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 delivery capabilities with a focus on simplicity and operational resilience are key drivers for our risk-calibrated profitable growth. The core operating profit increased by 6% year-on-year and 2.5% quarter-on-quarter to INR 175.13 billion in this quarter. The total provisions during the quarter were INR 25.56 billion. This includes additional standard asset provision of INR 12.83 billion made pursuant to Reserve Bank of India's annual supervisory review, which Anindya will explain later on the call. The profit before tax excluding treasury was INR 149.57 billion in this quarter compared to INR 152.89 billion in Q3 of last year. The profit after tax was INR 113.18 billion in this quarter compared to INR 117.92 billion in Q3 of last year. Average deposits grew by 8.7% year-on-year and 1.8% sequentially, and average current and savings account deposits grew by 8.9% year-on-year and 1.5% sequentially in this quarter. The bank continued to see healthy growth in current account deposits and individual term and savings deposits. Total deposits grew by 9.2% year-on-year and 2.9% sequentially at December 31, 2025. The bank's average LCR for the quarter was about 126%. The domestic loan portfolio grew by 11.5% year-on-year and 4% sequentially at December 31, 2025, compared to 10.6% and 3.3% at September 30, 2025. The retail loan portfolio grew by 7.2% year-on-year and 1.9% sequentially. Including non-fund-based outstanding, the retail portfolio was 42.2% of the total portfolio. The rural portfolio grew by 4.9% year-on-year and 7.2% sequentially. The business banking portfolio grew by 22.8% year-on-year and 4.7% sequentially. The domestic corporate portfolio grew by 5.6% year-on-year and 6.5% sequentially. The overall loan portfolio, including the international branches portfolio, grew by 11.5% year-on-year and 4.1% sequentially at December 31, 2025. The overseas loan portfolio was 2.4% of the overall loan book at December 31, 2025. The net NPA ratio was 0.37% at December 31, 2025, compared to 0.39% at September 30, 2025, and 0.42% at December 31, 2024. During the quarter, there were net additions of INR 20.74 billion to gross NPAs, excluding write-offs and sale. The provisioning coverage ratio on nonperforming loans was 75.4% at December 31, 2025. In addition, the Bank continues to hold contingency provisions of INR 131 billion or about 0.9% of total advances at December 31, 2025. The capital position of the Bank continued to be strong with a CET1 ratio of 16.46% and total capital adequacy ratio of 17.34% at December 31, 2025, including profits for 9 months 2026. Looking ahead, we see many opportunities to drive risk-calibrated profitable growth and grow market shares 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. Let me first talk about the additional standard asset provision. Following its annual supervisory review, RBI has directed the Bank to make a standard asset provision of INR 12.83 billion in respect of a portfolio of agricultural priority sector credit facilities, wherein the terms of the facilities were found to be not fully compliant with the regulatory requirements for classification as agricultural priority sector lending. There is no change in asset classification or in the terms and conditions applicable to the borrowers or in the repayment behavior of borrowers as per these terms. The bank has been originating this portfolio over some years and will work to bring it in conformity with regulatory expectations. This additional standard asset provision will continue until the loans are repaid or renewed in conformity with the PSL classification guidelines. I will now talk about loan growth, credit quality, P&L details 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 11.1% year-on-year and 3.2% sequentially. Auto loans grew by 0.7% year-on-year and 0.9% sequentially. The commercial vehicles and equipment portfolio grew by 7.9% year-on-year and 3.2% sequentially. Personal loans grew by 2.4% year-on-year and 1.7% sequentially. The credit card portfolio declined by 3.5% year-on-year and 6.7% sequentially. During the quarter, we saw improved growth trends across the mortgage, rural and corporate portfolios. The sequential decline in the credit card portfolio was due to high festive spends towards the end of the previous quarter, which had resulted in high sequential book growth in that quarter and saw repayments in the current quarter. Within the corporate portfolio, the total outstanding to NBFCs and HFCs was INR 791.18 billion at December 31, 2025, compared to INR 794.33 billion at September 30, 2025. The total outstanding loans to NBFCs and HFCs were about 4.3% of our advances at December 31, 2025. The builder portfolio, including construction finance, lease rental discounting, term loans and working capital was INR 680.83 billion at December 31, 2025, compared to INR 635.83 billion at September 30, 2025. The builder loan portfolio was 4.3% 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 1.1% of the builder portfolio at December 31, 2025, was either rated BB and below internally or was classified as nonperforming. Moving on to credit quality. The gross NPA additions were INR 53.56 billion in the current quarter compared to INR 60.85 billion in Q3 of last year. Recoveries and upgrades from gross NPAs, excluding write-offs and sale, were INR 32.82 billion in the current quarter compared to INR 33.92 billion in Q3 of last year. The net additions to gross NPAs were INR 20.74 billion in the current quarter compared to INR 26.93 billion in Q3 of last year. The gross NPA additions from the retail and rural portfolios were INR 42.77 billion in the current quarter compared to INR 53.04 billion in Q3 of last year. There were gross NPA additions of about INR 7.36 billion from the Kisan credit card portfolio in the current quarter compared to INR 7.14 billion in Q3 of last year. We typically see higher NPA additions from the Kisan credit card portfolio in the first and third quarter of a fiscal year. Recoveries and upgrades from the retail and rural portfolios were INR 25.39 billion in the current quarter compared to INR 27.86 billion in Q3 of last year. The net additions to gross NPAs in the retail and rural portfolios were INR 17.38 billion in the current quarter compared to INR 25.18 billion in Q3 of last year. The gross NPA additions from the corporate and business banking portfolios were INR 10.79 billion in the current quarter compared to INR 7.81 billion in Q3 of last year. Recoveries and upgrades from the corporate and business banking portfolios were INR 7.43 billion in the current quarter compared to INR 6.06 billion in Q3 of last year. There were net additions to gross NPAs of INR 3.36 billion in the current quarter in the corporate and business banking portfolios compared to INR 1.75 billion in Q3 of last year. The gross NPAs written off during the quarter were INR 20.46 billion. Further, there was sale of NPAs of INR 1.2 billion for cash in the current quarter. The non-fund-based outstanding to borrowers classified as nonperforming was INR 22.29 billion as of December 31, 2025. The loans and non-fund-based outstanding to performing corporate borrowers rated BB and below was INR 33.92 billion at December 31, 2025. This portfolio was about 0.2% of our advances at December 31, 2025. The total fund-based outstanding to all standard borrowers under resolution as per various guidelines was INR 16.66 billion or about 0.1% of the total loan portfolio at December 31, 2025. At the end of December, the total provisions other than specific provisions on fund-based outstanding to borrowers classified as nonperforming were INR 226.57 billion or 1.5% of loans. This includes the contingency provisions of INR 131 billion as well as general provision on standard assets, provisions held for non-fund-based outstanding to borrowers classified as nonperforming, fund and non-fund-based outstanding to standard borrowers under resolution and the BB and below portfolio. These provisions do not include the additional standard asset provision as directed by RBI in respect of a portfolio of agricultural priority sector credit facilities. Moving on to the P&L details. Net interest income increased by 7.7% year-on-year and 1.9% sequentially to INR 219.32 billion in this quarter. The net interest margin was 4.3% in this quarter compared to 4.3% in the previous quarter and 4.25% in Q3 of last year. The cost of deposits was 4.55% in this quarter compared to 4.64% in the previous quarter and 4.91% in Q3 of last year. The benefit of interest on tax refund was 1 basis point in the current quarter compared to nil in the previous quarter and 1 basis point in Q3 of last year. 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 MCLR and other older benchmarks and the remaining 31% of loans have fixed interest rates. Noninterest income, excluding treasury, grew by 12.4% year-on-year and 2.3% sequentially to INR 75.25 billion in Q3 of FY 2026. Fee income increased by 6.3% year-on-year and 1.2% sequentially to INR 65.72 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 6.81 billion in this quarter compared to INR 8.1 billion in the previous quarter and INR 5.09 billion in Q3 of last year. The year-on-year increase in dividend income was primarily due to the receipt of interim dividend from ICICI Securities. On costs, the bank's operating expenses increased by 13.2% year-on-year and 1.2% sequentially in this quarter. Employee expenses increased by 12.5% year-on-year and 1.8% sequentially in this quarter, including the impact of INR 1.45 billion of provisions on an estimated basis pursuant to the new labor code. Non-employee expenses increased by 13.6% year-on-year and 0.8% sequentially in this quarter. Our branch count has increased by 402 in 9 months of the current year. We had 7,385 branches as of December 31, 2025. The technology expenses were about 11% of our operating expenses in 9 months of the current year. The total provisions during the quarter were INR 25.56 billion. Excluding the additional standard asset provision, the total provisions were INR 12.73 billion or 7.3% of core operating profit and 0.36% of average advances compared to the provisions of INR 12.27 billion in Q3 of last year. The profit before tax excluding treasury was INR 149.57 billion in this quarter compared to INR 152.89 billion in Q3 of last year. There was a treasury loss of INR 1.57 billion in Q3 of the current year as compared to a gain of INR 2.2 billion in Q2 of the current year and a gain of INR 3.71 billion in Q3 of the previous year, primarily reflecting market movements. The tax expense was INR 34.82 billion in this quarter compared to INR 38.68 billion in the corresponding quarter last year. The profit after tax was INR 113.18 billion in this quarter compared to INR 117.92 billion in Q3 of last year. Adjusting for additional standard asset provisioning, the profit before tax, excluding treasury, would have increased by 6.2% year-on-year to INR 162.40 billion. And similarly, profit after tax would have increased by 4.1% year-on-year to INR 122.80 billion in this quarter. The return on average assets and stand-alone ROE would have been 2.3% and 15.5%, respectively, in this quarter. The consolidated profit after tax was INR 125.38 billion in this quarter compared to INR 128.83 billion in Q3 of last year. The details of the financial performance of key subsidiaries are covered in Slides 33 to 36 and 55 to 60 in the investor presentation. The annualized premium equivalent of ICICI Life was INR 68.11 billion in the 9 months ended December 31, 2025, as compared to INR 69.05 billion in 9 months of last year. The value of new business increased to INR 16.64 billion in 9 months ended December 31, 2025, from INR 15.75 billion in 9 months of last year. The value of new business margin was 24.4% in 9 months ended December 31, 2025, compared to 22.8% in FY 2025 and in the 9 months of last year. The profit after tax of ICICI Life was INR 9.92 billion in the 9 months ended December 31, 2025, compared to INR 8.03 billion in 9 months...
Ladies and gentlemen, we have the management team back. Please go ahead.
I'll just repeat, gross direct premium income of ICICI General increased to INR 70.41 billion in this quarter from INR 62.14 billion in Q3 of last year. The combined ratio stood at 104.5% in this quarter compared to 102.7% in Q3 of last year. The profit after tax was INR 6.59 billion in this quarter compared to INR 7.24 billion in Q3 of last year. The profit after tax of ICICI AMC, as per Ind AS, was INR 9.17 billion in this quarter compared to INR 6.32 billion in Q3 of last year. The profit after tax of ICICI Securities as per Ind AS on a consolidated basis was INR 4.75 billion in this quarter compared to INR 5.04 billion in Q3 of last year. ICICI Bank Canada had a profit after tax of CAD 5.4 million in this quarter compared to CAD 19.6 million in Q3 of last year. ICICI Bank U.K. had a profit after tax of USD 5 million in this quarter compared to USD 5.1 million in Q3 of last year. As per Ind AS, ICICI Home Finance had a profit after tax of INR 1.95 billion in the current quarter compared to INR 2.03 billion in Q3 of last year. 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.
My first question is about the standard asset provision. Can you tell me the size of the portfolio for which these provisions were made? What will be the impact on operating expenses now that you have a lower priority portfolio? Also, what was the classification issue? Specifically, what was noncompliant about the classification? That's my first question. My second question is regarding margins. Margins have remained steady, but with the recent rate cut and aggressive competition in mortgage pricing, how do you see your margins moving forward? Is there still room for deposit repricing that could help maintain margins at these levels in the near future? Those are my questions.
Yes. Regarding the first set of questions, following the supervisory review, the regulator has instructed us to set aside a provision of INR 12.83 billion, and we have complied with that. The portfolio we need to address to meet the PSL guidelines is estimated to be between INR 200 billion and INR 250 billion. In terms of costs, our goal is to align this portfolio with regulatory expectations to minimize both provisioning and PSL impacts. The issues highlighted are observations from the regulator's inspection process, and we prefer not to delve into those specifics, but we have reported the outcomes. As for your question on margins, in the recent third quarter, we experienced the effects of loan repricing due to both repo and MCLR changes. Additionally, there was a seasonal rise in nonaccruals related to KCC NPAs, which was somewhat countered by deposit repricing and the benefits from the CRR cut. Looking ahead to the fourth quarter, we expect the high level of nonaccruals to decrease. We will feel the impacts of repo repricing and MCLR adjustments on our floating rate loan portfolio, especially following the repo cut in December. However, we anticipate continued repricing of retail deposits. Overall, we believe that our NIM will remain relatively stable from this point forward.
We'll take our next question from the line of Rikin Shah from IIFL Capital.
I had three questions. The first one is regarding whether there were any additional PSL costs from the declassification of agri loans as non-PSL. Was there any cost reflected in the P&L this quarter or any potential impact on OpEx in future quarters? The second question is about growth. Are you noticing any improvement in growth, even on a month-to-month basis during the third quarter? Do you expect growth to improve from current levels while adhering to your quality and risk framework? My third question pertains to the credit card sector. What is affecting the overall growth of the credit card portfolio? Is it simply a decrease in the share of transactor loans after the festive season in the second quarter, or is there more to consider? Those are my questions.
First, I believe that the cost of compliance with priority sector lending has been increasing. We fulfill some of our obligations by purchasing priority sector lending certificates, and their costs have risen consistently over the past few quarters. This has contributed to the increase in operating expenses recently. However, this rise isn't specifically linked to the current regulatory observation. We continuously evaluate the most efficient ways to meet our lending requirements overall. Regarding this observation, we aim to align our portfolio with regulatory expectations to minimize the impact. At this point, I wouldn't want to specify any additional costs. We will look at everything comprehensively and see how we can incorporate it into our financial results. On your second question about growth, we've noticed an improvement in the sequential growth rate from Q3 to Q4, despite a decline in credit card activity, which I'll address separately. We've seen momentum picking up, and we expect this to continue into the fourth quarter. Additionally, the year-on-year growth rate has also shown improvement, reflecting more recent trends. I anticipate this will persist into Q4. Regarding credit cards specifically, we experienced significant book growth in Q2 due to festive spending, which was billed and repaid in the current quarter. This is the primary reason for the changes observed now. We are optimistic that the book will continue to grow from here. Both in credit cards and personal loans, we have seen an improvement in credit quality. Our overall retail non-performing loans have decreased, and we feel confident about the quality across secured and unsecured loans. Although there has been a slight increase in personal loans year-on-year and sequentially in Q3, we are positive about our underwriting process and focused on leveraging our franchise to grow these areas. While price competition is present, we will work on optimizing and managing it.
Right. Sir, just a clarification on the first one. While you are not calling out any additional OpEx-related costs due to this regulatory observation, there would be this INR 200 billion, INR 250 billion of the loans which are now declassified as PSL. So to meet that shortfall, would you be requiring to do more of RIDF bonds or PSLC? Or do you think that the organic PSL generation itself will take care of the shortfall and hence, no additional cost impact?
So I think the first step is that we will work to bring this portfolio into conformity with the PSL requirements. And that is how we will minimize the shortfall and the impact thereof. That would be the first objective. Thereafter, we will assess overall as we do in any case on an ongoing basis that to the extent after organic and inorganic generation of priority sector loans, whether we should buy PSLCs or we can live with some amount of RIDF call. That is an analysis that we anyway do on an ongoing basis. And over the years, I think we have improved our PSL compliance. So our RIDF book outstanding currently, on a relatively larger balance sheet, is down, I think, to 1/3 of its peak levels.
Yes. So a couple of questions. Sorry, again, to harp up on the credit card side. But even now when we look at the portfolio, it is almost at a similar level to where we were in June, okay? In fact, like hardly any growth out there over and above June. And this kind of a trend we had not seen in the earlier years during the festive wherein it tends to run down. So any particular cohort or maybe like the transactor proportion significantly going up, which is leading to this?
No, I think that the transactor portion has gone up across most players, I would think. In our case, there's nothing specific other than the fact that we had an unusually strong growth in Q2 and that has gotten offset in Q3. We continue to be...
But how should we compare it with first quarter or maybe Q4 end? Because since Q4 end also, there is a decline in the portfolio. And even from first quarter, it has just been flat over 2 quarters despite the spends going up, yes.
See, as we have said in the past, we are not looking at credit card just as a product portfolio in itself, but really as part of an overall customer offering and most of our new launches are aimed at enriching the offering to attract good customers and really be able to bank them on a 360 basis. But as I said, I think in this quarter, the book decline is more one-off, and we should see it gradually improve from here on.
Sure. And secondly, on the corporate side, so significant traction on a quarter-on-quarter basis. And within the risk framework or maybe on a risk calibrated operating profit level, earlier it was thought that maybe PSU entities would not be giving us that kind of a benefit or operating profit. And we are seeing the increase in the BBB proportion as well. No doubt you have earlier alluded that, that's because of the business banking. But is the larger part of the growth on the corporate also coming in that segment of BBB or not really?
No, I believe that when we consider our strategy for corporate loan growth, corporations are well-funded and have numerous funding avenues. When they do utilize bank funding, we are eager to get involved. This market has become very competitive in terms of pricing. We assess the overall relationship with each corporate and actively engage where we want to expand our presence. One notable shift compared to the last few quarters is the stabilization of the benchmark rates, as much of the lending is now tied to external benchmark-linked rates. This stabilization boosts our confidence in pricing and lending. Regarding credit quality, we are quite satisfied with our ratings. We maintain specific limits on BBB origination, both for total amounts and borrower size, and we are operating within those guidelines. Thus, we feel assured about the quality.
Sure. And lastly, on overall OpEx growth now getting closer to like, say, 13-odd percent, we had seen OpEx growth being contained almost in a single digit. So you indicated some cost of compliance being there, but is there any other element? And would we see cost almost settling in a similar level or there are maybe cost containment levers which are available and it should grow below the balance sheet growth?
We will see whatever is necessary to maximize kind of the overall PPOP. I don't expect costs to go up at the pace at which they had gone up maybe till a couple of quarters ago. If you would see sequentially this quarter, other than the impact of the labor code, costs would have actually come down marginally on an absolute basis. So I think we will work towards maximizing the PPOP and not really cutting cost per se, but definitely leveraging it as well as we can. Of course, one thing is that as far as the labor code is concerned, what we have accounted for is really the additional estimates of liability as they stand today. On an ongoing basis for all companies and banks, the code will marginally increase the recurring operating costs, but that's something we'll have to just absorb as we go forward.
I have a few questions. One is regarding the business banking segment. The growth in business banking has been moderating for quite some time now. We have previously discussed that this moderation is intentional, as we aim to maintain strong overall quality. However, how are we evaluating this on an incremental basis? Are we considering adjusting some figures? Has the growth rate reached its lowest point? I would appreciate any insights on this.
No, we are fully engaged in business banking. The slowdown in growth rate is primarily due to the size of the base. This quarter, we still achieved a 22% year-on-year growth, and the increase has been consistent with what we've observed in the corporate segment. Our business banking portfolio is now slightly larger than the corporate portfolio. We are not holding back and believe there is still significant potential for growth. As the portfolio expands, it is natural for the growth rate to stabilize. However, we are pleased with the quality of the portfolio, and we are satisfied with its growth.
Anindya, just two questions. One is on this low growth in deposits on the savings account side, if you can just kind of comment what's happening there?
Yes. Over the past two quarters, our growth in retail savings accounts has remained strong, even after adjusting for seasonal factors. Growth is typically higher in the first and second quarters due to year-end salary payments. However, we have still experienced significant growth in retail savings this quarter. In contrast, we have observed a decrease in balances in institutional banking savings accounts, which primarily include government entities and departments. This decline in balances has led to lower or flat overall growth in savings, but retail savings continues to perform well. We are quite satisfied with the performance of retail savings, retail term accounts, and current accounts. The decline in institutional savings accounts has somewhat dampened our overall numbers, but this segment is a smaller part of our overall deposit base. We hope this issue will improve in the coming quarters, although it has been a concern recently.
Yes, Anindya, what is your LCR this quarter?
126%.
Okay. And post the new April 2026 guidelines, would it go up or go down?
It will be kind of similar.
Congratulations to Mr. Bakhshi. But my first question is related to that. So what is the thought process behind the Board seeking a 2-year extension as opposed to a full 3-year extension because there is nothing holding us back from a regulatory perspective. So how should stakeholders read into that? Yes, that's my first question.
So I think the Board in consultation with the CEO have decided on a 2-year appointment. As you know, the current term itself ends in October 2026. So from now till the end of the renewed term is almost 3 years and nothing really further to add to that.
Fair enough. So just if I can follow up on that. So one might read into it that this might be his last term. So that's the sort of signal that comes through. So yes, anything you want to add to that?
No, I think as we said, we have 3 years to go. So on a lighter vein, we hopefully addressed the speculation around October '26, and I think it's too early to speculate about October '28.