ICICI Bank Q1 23/24 Earnings Call Transcript

Quartr
Provided by Quartr
July 22, 2023

There are 7 speakers on the call.

Operator

Ladies and gentlemen, good day and welcome to ICICI Limited Q1 FY 2024 Earnings Conference Call. As a reminder, all Para 7 lines will be in a listen only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Please note that this conference is being recorded. Bank. I now hand the conference over to Mr.

Operator

Sandeep Bakshi, Managing Director and CEO of ICICI Bank. Thank you and over to you, Mr. Bakshi.

Speaker 1

Bank. Thank you. Good evening to all of you, and welcome to the ICICI Bank earnings call to discuss the results for Q1 of FY 2024. Joining us today on this call are Sandeep Batra, Bank. The Indian economy continues to be resilient amid signs of slowdown in the global economy.

Speaker 1

The underlying indicators reflect continuing growth in economic activity with expansion in manufacturing and services PMI, higher tax collection, Real Estate Buoyancy and Resilient Urban Demand. The government led CapEx cycle is continuing. Though there has been a pause in the monetary tightening cycle in India, the global and domestic inflation, liquidity and rate environment continues to evolve. Bank. At ICICI Bank, our strategic focus continues to be on growing our core operating profit less provisions, I.

Speaker 1

E, profit before tax, excluding treasury gains through the 3 60 degree customer centric approach and by serving opportunities across ecosystems and micro markets. We continue to operate within a strategic framework and strengthen our franchise, enhance our delivery and servicing capabilities and expand our technology and digital offerings. The core operating profit less provisions grew by 38% year on year to INR 125,950,000,000 in this quarter. The core operating profit increased by 35.2 percent year on year to INR 138,870,000,000 in this quarter. The profit after tax grew by 39.7 percent year on year to INR 96,480,000,000 in this quarter.

Speaker 1

Total deposits grew by 17.9% year on year and 4.9% sequentially at June 30, 2023. Term deposits increased by 25.8 percent year on year and 9.8% sequentially at June 30, 2023. During the quarter, the average current and savings accounts deposits grew by 6.6% year on year and 2.6% sequentially. Bank's liquidity coverage ratio for the quarter was about 124%. The domestic loan portfolio grew by 20.6% year on year and 4% sequentially at June 30, 2023.

Speaker 1

The retail loan portfolio grew by 21.9% year on year and 4.5% sequentially. Including non fund based outstanding, the retail portfolio was 45.9% of the total portfolio. The Business Banking portfolio grew by 30.4% year on year and 3.8% sequentially. The SME portfolio grew by 28.5% year on year and 5.5% sequentially. The rural portfolio grew by 17.6% year on year and 3.6% sequentially.

Speaker 1

The domestic corporate portfolio grew by 19.3% year on year and 2.8% sequentially, driven by the growth across well rated financial and non financial corporates. The overall loan portfolio, including the international branches portfolio, grew by 18.1% year on year and 3.7% sequentially Bank at June 30, 2023. We continue to enhance our digital offerings and platforms to onboard new customers in a seamless manner, provide them end to end digital journeys and personalized solutions and enable more effective data driven cross sell and up sell. We have shared some details on our technology and digital offerings in Slides 15 to 26 of the investor presentation. Bank.

Speaker 1

The NPA ratio was 0.48 percent at June 30, 23 compared to 0.84% at March 31, 23 and 0.7 percent at June 30, 2022. During the quarter, there were net additions of INR 18,070,000,000 to gross NPAs, Excluding write off and sale, reflecting mainly the seasonal higher additions in the Kvaasan credit card portfolio and lower recoveries and upgrades of the corporate portfolio compared to the last couple of quarters. The total provisions during the quarter were INR 12,920,000,000 or 9.3% of the core operating profit and 0.49% of average advances. The provisioning coverage ratio on NPA was Bank 82.4 percent at June 30, 2023. In addition, the bank continues to hold contingency provisions Bank of INR 131,000,000,000 or about 1.2 percent of total loans as of June 30, 2023.

Speaker 1

The capital position of the bank continued to be strong with a CET1 ratio of 16.66%, Tier 1 ratio of 16.76% and total capital adequacy ratio of 17.47 percent at June 30, 2023, including profits for Q1 of 2024. Bank. Looking ahead, we see many opportunities to drive risk calibrated profitable growth. We believe our focus on Customer 360 extensive franchise and collaboration within the organization backed by our digital offerings and Process Improvement and Service Delivery initiatives will enable us to deliver holistic solutions to customers in a seamless manner and grow market share across key segments. We will continue to make investments in technology, people, distribution and building our brand.

Speaker 1

We will remain focused on maintaining a strong balance sheet with prudent provisioning and healthy levels of capital. The principles of return of capital, Bank and 1 Bank, 1 Team, 1 ROE will continue to guide our operations. We remain focused on delivering consistent and predictable returns to our shareholders. I now hand the call over to Anandia.

Speaker 2

Bank. Thank you, Sandeep. I will talk about loan growth, credit quality, P and L details, growth in digital offerings, portfolio trends and 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 16.6% year on year and 3.2% sequentially.

Speaker 2

Bank. Auto loans grew by 23.7% year on year and 5.6% sequentially. The commercial vehicles and equipment Bank. B. Lowe:] The portfolio grew by 8.1% year on year and 2.4% sequentially.

Speaker 2

Growth in the personal loan and credit card portfolio was 40.6 and 7.6 percent sequentially. This portfolio was INR 1355,150,000,000 or 12.8 percent of the overall loan book at June 30, 2023. The overseas loan portfolio in U. S. Dollar terms declined by 32.1 percent year on year and 5.2% sequentially at June 30, 2023.

Speaker 2

The overseas loan portfolio was about 3.1% of the overall loan book at June 30, 2023. The non India linked corporate portfolio declined by 39.7 percent or about US182 $1,000,000 on a year on year basis. Of the overseas corporate portfolio, about 90% comprises Indian corporates, 6% is overseas corporates with Indian linkage, 2% comprises companies owned by NRIs or PIOs and the balance 2% is non India corporate. Bank. Coming to credit quality, there were net additions of INR 18,070,000,000 Bank.

Speaker 2

Gross NPAs in the current quarter compared to INR0.14 billion in the previous quarter. The net additions to gross NPAs were INR 19 point Bank. INR 2,000,000,000 in the Retail Rural and Business Banking Portfolios and there were net deletions of gross NPAs INR 1,250,000,000 in the corporate and SME portfolio. The gross NPA additions were INR 53,180,000,000 in the current Including write offs and sales were INR 35,110,000,000 in the current quarter compared to INR 42,830,000,000 in the previous quarter. Bank.

Speaker 2

The gross NPA additions from the retail, rural and business banking portfolio were INR 50,720,000,000 compared to INR 40,200,000,000 in the previous quarter. There were gross NPE additions of about INR 6,660,000,000 from the Kissan credit card portfolio in the current quarter. We typically see higher NPA additions from the Kissan credit card portfolio In the first and third quarter of our fiscal year, recoveries and upgrades from the retail, rural and business banking portfolio were INR31,400,000,000 compared to INR31,470,000,000 in the previous quarter. Bank. The gross NPE additions from the corporate and SME portfolio were INR 2,460,000,000 Compared to INR 2,770,000,000 in the previous quarter, recoveries and upgrades from the corporate and SME portfolio were INR 3,71,000,000,000 compared to INR 11,360,000,000 in the previous quarter.

Speaker 2

Bank. The gross NPAs written off during the quarter were INR 11,690,000,000. There was no sale of NPAs in the current quarter compared to sale of INR 2,010,000,000 for cash in the previous quarter. The non sale based outstanding to borrowers classified as non performing was INR 37.04 billion as of June 30 compared to INR 37.80 billion as of March 31. The bank holds provisions amounting to INR 19,640,000,000 against this non fund based outstanding.

Speaker 2

Bank. The total fund based outstanding to all standard borrowers under resolution as per various guidelines declined to INR 39,460,000,000 or about 0.4 percent of the total loan portfolio at June 30, 2023 from INR 45,080,000,000 as of March 31, 2023. Of the total fund based outstanding under resolution at June 30, INR 34.06 INR 1,000,000,000 was from the Retail, Rural and Business Banking Portfolio and INR 5,400,000,000 was from the Corporate and SME Portfolio. Bank holds provisions of INR 12,240,000,000 against these borrowers, which is higher than the requirement as per RBI guidelines. Bank.

Speaker 2

Moving on to the P and L details. Net interest income increased by 38% year on year to INR182,270,000,000. The net interest margin was 4.78% in this quarter compared to 4.90% in the previous quarter and 4.01 percent in Q1 of last year. The sequential movement in the NIM reflects the lagged impact increase in deposit rates over the last year on the cost of deposits, offset in part by an increase in loan and investment yields. Of the total domestic loans, interest rates on 46% are linked

Speaker 1

to the repo

Speaker 2

rate, 3% to other external benchmarks and 20% to MCLR and other older benchmarks, the balance 31% of loans has fixed interest rates. The impact of interest on income tax refund on net interest margin was 3 basis points in Q1 of this year compared to nil in the previous quarter and 3 basis The domestic NIM was at 4.88% this quarter compared to 5.02% in the previous quarter and 4.14 percent in Q1 of last year. The cost of deposits was 4.31% in this quarter compared to of 20.98% in the previous quarter, reflecting the increase in deposit rates over the last year, though rates On incremental detailed term deposits have largely stabilized and wholesale deposit rates have moderated. We expect the cost of deposits to continue to increase over the next couple of quarters. Non interest income excluding treasury gains grew by 12% year on year to Bank of INR 1,830,000,000 in Q1 of 2024.

Speaker 2

Fee income increased by 14.1% year on year to Bank. INR8.43 billion in this quarter. Fees from retail, rural, business banking and SME customers constituted about 78 The dividend income from subsidiaries and associates was INR 2,900,000,000 in this quarter compared to INR3.47 billion in Q1 of last year. The year on year decline in dividend income was due to lower final dividend from Securities primary dealership. On costs, the bank's operating expenses increased by 25.9% year on year in this quarter.

Speaker 2

Bank. Employee expenses increased by 36.3% year on year, reflecting the annual instruments Bank and promotions and the increase in number of employees over the last 12 months. The bank had about 130 5,000 employees at June 30, 2023. The number of employees has increased by about 27,650 in the last 12 months. Bank.

Speaker 2

Non employee expenses increased by 19.5% year on year in this quarter, primarily due to retail business related expenses and Technology expenses. Our branch count has increased by 174 in the Q1 and we had 6,074 branches As of June 30, 2023, the technology expenses were about 9% of our operating expenses in this quarter. Bank. The core operating profit increased by 35.2 percent year on year to INR138.87 billion in this quarter. Including dividend income from subsidiaries and associates, the core operating profit grew by 37% year on year.

Speaker 2

The total provisions during the year during the quarter, I'm sorry, were INR 12,92,000,000 or 9.3 percent of core operating Bank. 0.49 percent of average advances, including the seasonal impact of Kisan credit card NPAs and lower write back from corporate And upgrades relative to the last couple of quarters. The provisioning coverage on NPAs was 82.4% as of June 30, 2023. In addition, we hold INR 12,240,000,000 of provisions on borrowers under resolution. Further, the bank continues to hold contingency provision of of INR131,000,000,000 as of June 30, 2023.

Speaker 2

At the end of June, the total provisions other than specific provisions on fund based outstanding to borrowers classified as non performing were INR223,460,000,000 or 2.1 percent of loans. Bank. The core operating profit less provisions grew by 38% year on year to INR 125,950,000,000 in Q1 of this year. There was a treasury gain of INR 2,520,000,000 in Q1 compared to a gain of INR 0,360,000,000 in Q1 of the previous year, primarily reflecting proprietary trading gains capitalizing on market opportunities during the quarter. Bank.

Speaker 2

The tax expense was INR 31,990,000,000 in this quarter compared to INR 22,600,000,000 in the corresponding quarter last year. The profit after tax grew by 39.7 percent year on year to INR 96,480,000,000 in this quarter. Bank. Sandeep earlier talked about the capital adequacy position with the CET1 ratio including profits for the quarter of 16.66%, A Tier 1 ratio of 16.76 percent and total capital adequacy ratio of 17.47 percent. These ratios include the impact of increase in risk weighted assets for operational risk, which is computed in the Q1 of every fiscal year.

Speaker 2

Also during this quarter, there was a redemption of Tier 1 bonds of INR 40,000,000,000.

Speaker 1

Bank.

Speaker 2

Leveraging digital and technology across businesses is a key element of our strategy of growing The risk calibrated core operating profit, we continue to see increasing adoption and usage of our digital platforms by our customers. Bank. There have been more than 10,000,000 activations of Imobile Pay by non ICICI Bank account holders at end June 2023. We have seen about 230,000 registrations by non ICICI Bank account holders on Insta based till June 30, 2023. Bank.

Speaker 2

Our merchant stack offers an array of banking and value added services to retailers, online businesses and large e commerce firms such as digital current account opening, instant overdraft facilities based on point of sale transactions, connected banking services and digital and management among others. We have created more than 20 industry specific stacks, which provide bespoke and purpose based digital solutions to corporate clients and their ecosystems. Our trade online and trade emerge platforms allow customers to perform most of their trade finance and foreign exchange transactions Digital. Our digital solutions integrate the export transaction life cycle with bespoke solutions, providing frictionless experience to our clients and simplify customer journeys. The latest digital solutions include Insta EPC, for instance, with the dispersal of export finance, Bank's eDOC solution for regulatory compliance, vessel tracking for real time status update on shipment and document tracking for movement of export documents.

Speaker 2

About 70% of trade transactions were done digitally in Q1 of this year. The value of transactions through the trade online and trade emerge Platforms in Q1 2024 was 1.4 times the value in Q1 2023. Bank. We have provided details on our retail business banking and SME portfolio on Slides 32 to 43 of the investor presentation. The loan and non fund based outstanding to performing Credit and SME borrowers rated BB and below was INR42.76 billion at June 30, 2023 compared to INR 47,040,000,000 at March 31, 2023 INR 82,090,000,000 at June 30, 20 22.

Speaker 2

The total outstanding of INR42.76 billion includes INR 7,270,000,000 of loan and non fund based outstanding to borrowers under resolution. The maximum single borrower outstanding in the BB and below portfolio was less Bank. INR 5,000,000,000 as of June 2023. At June 2023, we held provisions of INR 4 point INR 2,000,000,000 on the BB and below portfolio compared to INR 4,090,000,000 at March 31. This includes provisions held against borrowers under resolution included in this portfolio.

Speaker 2

The total outstanding to NBFCs and HFCs was Bank of INR 874,180,000,000 at June 30, 2023 compared to INR 834,900,000,000 at March 31, 2023. The total outstanding loans to NBFCs and HFCs were about 8% of our advances at June 30. The sequential increase in the outstanding to MDFCs and HFCs is mainly due to disbursements to entities having long vintage an entity owned by REL Established Corporate Group. The builder portfolio, including construction finance, lease rental Accounting term loans and working capital was INR 427.12 billion at June 30, 2023 compared to INR398 Bank of INR 0.87 billion at March 31, 2023. The builder portfolio is about 4% of our total loan portfolio.

Speaker 2

Our portfolio largely comprises well established builders and this is also reflected in the sequential increase in the portfolio. Bank. About 3.8 percent of the build up portfolio at June 30, 2023 was either rated BB and below internally or was classified as non Bank of America. Moving on to the consolidated results. The consolidated profit after tax grew by 44% year on year to INR106,360,000,000 in this quarter.

Speaker 2

The details of the financial performance of subsidiaries and key associates are covered in Slides 46 to 49 in the investor presentation. The value of new business margin of ICICI Life was 30% in Q1 2024 compared to 32% in fiscal 2023. The value of new business of ICICI Life was INR 4,380,000,000 in Q1 2024 compared to INR 4,710,000,000 in Q1 2023. The annualized premium equivalent was INR 14,610,000,000 in Q1 2024 compared to INR15.2 billion in Q1 2023. The profit after tax The success of ICICI Life increased by 32.7 percent year on year to INR 2,070,000,000 in Q1 2024 compared to INR1.56 billion in Q1 2023.

Speaker 2

The gross direct premium income of ICICI General was INR63.87 INR53.87 billion in Q1 2024 compared to INR53.7 billion in Q1 2023. The combined ratio stood at 103.8 percent in Q1 2024 compared to 104.1 percent in Q1 2023. Bank. Excluding the impact of the cyclone, which was about INR 0.35 billion, the combined ratio was 102.9 percent for Q1 2024. The profit after tax was INR 3,900,000,000 in Q1 2024 compared to INR 3,490,000,000 in Q1 2023.

Speaker 2

The profit after tax of ICICI AMC was INR 4,740,000,000 in this quarter compared to INR 3.4 for INR 5,000,000,000 in Q1 of last year. The profit after tax of ICICI Securities as per India on a consolidated basis was INR 2 point Bank 1,000,000,000 in this quarter compared to INR 2,740,000,000 in Q1 of last year. ICICI Bank Canada had a profit after tax of INR 16,400,000 in this quarter compared to INR 7,200,000 in Q1 last Bank U. K. Had a profit after tax of US9.4 million dollars this year compared to US3.4 million dollars in Q1 of last year.

Speaker 2

As per India, ICICI Home Finance had a profit after tax of INR 1,050,000,000 in the current quarter compared to INR0.4 billion in Q1 of last year. With this, we conclude our opening remarks and we'll now be happy to take your questions.

Operator

Bank. Thank you very much. We'll now begin the question and answer session. On the Bank. Ladies and gentlemen, We will wait for a moment while the question The first question is from the line of Maruko Chania from Nomavath.

Operator

Please go ahead.

Speaker 3

Bank. Yes, hello. Hi. Congratulations. My first question is on cost of funds.

Speaker 3

So over the last two quarters, in each of You've seen an over 30 basis points Q o Q increase in cost of funds. So do we See this increase moderating from here on and where or when do cost of funds peak? So that's my first question.

Speaker 2

I think I don't want to talk about the level, but we will see the cost Funds continue to increase, I would guess, for the next couple of quarters. And by then, the repricing impact should That has largely taken place that trajectory will continue.

Speaker 3

Okay. Varun, see any kind of color that you could give on how much deposits have already been repriced and how much are pending re Pricing, how much liabilities?

Speaker 2

Not really because it's a function of both scheduled and premature repayments. Also, of course, now given the growth in the deposit base itself, a function of the rates at which the incremental deposits are being raised. Bank. So I think we if you look at you could try and look at it based on sort of the current versus historic deposit rates And that should give us a fair idea. We still have some way to go.

Speaker 3

Okay. And my next question is on loan growth. So in the quarter, at least on a Sequential basis unsecured has grown much faster than secured, even housing. Is there any challenge to asset quality in any of the segments? So maybe not in the income segments you operate in, Bank.

Speaker 3

But there are often on noises about unsecured NPLs going up. It may not be for banks like you, but in general. So any stress in any segment, which could then lead the regulator to high risk weights?

Speaker 2

Bank. So I wouldn't want I mean, we can talk about our own portfolio. And as you can imagine, we also Pay close attention to market commentary as well as regulatory commentary and keep looking at the portfolio and various cuts of the portfolio. So we are quite comfortable with our origination and the quality of the portfolio that we have as well as the incremental volumes that we are doing. So no concern from our side as such.

Speaker 2

I think We continue to see a pretty decent opportunity for penetration in our existing customer base and also for new customer acquisition in our target segments.

Speaker 3

Bank. Okay. Thanks. Thank you.

Operator

Thank you. The next question is from the line of Kunal Shah from Citigroup. Please go ahead.

Speaker 4

Bank. Yes, congratulations for a good set of numbers. So firstly, I'll just say deposit growth, A lot of catch up which has happened in this particular quarter is still getting towards almost 18 odd percent. Bank. So within this strong deposits, incremental, how much would have the steady hold, silver sales

Speaker 2

The proportion in our deposit base hasn't really changed. I think we've always said that 75% to 80% of our deposits overall are retail and that continues. So we've seen pretty strong growth on the retail side. And of course, we have seen some flows on the wholesale side as well, but retail continues to be the prime driver.

Speaker 4

Okay. And in terms of again the larger part of deposits in terms of the repricing, Bank. So Amar will also ask this question, but should we see the further catch up maybe the deposits which would have been re leased currently Bank. It seems it would not have entirely got reflected in terms of the cost of deposits now and that should lead As I

Speaker 2

You mentioned there is a deposit rates. Now if you look at the retail deposit rate, It has been more or less stable for the last 6, 7 months. So to the extent that there are deposits From prior periods that have to mature and reprice that effect will play through. In addition, of course, the growth in deposits itself. So if you look at This quarter we have increased our term deposit base by about INR620,000,000,000.

Speaker 2

So that within growth incremental deposit will also affect the overall cost. So we will see a continuing

Speaker 4

Bank. And secondly, on Bank. And Roy costs on our side, we already had a one off of the impairment and maybe the pace was expected to moderate. But in fact, Even on that base, we have seen a sequential uptake. So you highlighted maybe the real incentives, but How much would it matter?

Speaker 4

What could be the stable level of employee cost we should look at? And what was the one off in terms of the annual incentives before I think that in month 2?

Speaker 2

We don't really disclose the annual incentive etcetera, but if you look at it, we have Bank. We had significant additions to the team in the second half of last year. And we have, of course, on top of that added number of people in the Q1 as well. And also given the increments and started the year at that level. So that is what has led to the increase in the employee cost.

Speaker 2

And from here on, we will see based on our business plans, we We do expect to continue to hire and that will all start contributing to revenues also at some point. Bank.

Speaker 4

Yes. And one last question on NCLR differential to private banks, we are still much lower, almost like 25 I just want to hand off again. Any plans to get upon that? Maybe obviously, it's a factor of cost of deposits and the return expectations, Bank. But still it's much on the lower side.

Speaker 4

And should we see we getting the benefit on the corporate when we do the lending maybe

Speaker 2

So I Bank. The way in which MCLR is required to be computed is pretty prescriptive. So we basically follow Those guidelines and there is an outcome. There is some discretion beyond that, but it's pretty limited. So there is no real question of say on the base MCLR, which is the 1 year MCLR of doing a catch up per se.

Speaker 2

It is a function In terms of the corporate lending, I think Bank. Even if we look at the current level of MCLR that we have, there are, Of course, corporates who are borrowing below that level, so those end up getting linked to do end up some amount of getting linked to external benchmarks and so on. So I don't think that the level of the NCLR itself It does have some impact, but not may not be as much because finally what matters is Really the level of yield, I mean the MCLR is just a benchmark like other available benchmarks.

Operator

Thank you, Poonal. Sorry to interrupt you. I'll request to join the queue again for a follow-up question. Bank. The next question is from the line of Nitsnagrawal from Motilal Oswal.

Operator

Please go ahead.

Speaker 5

Yes. Hi, thanks for the Pashanti and Kumar from the Rivers. One question is like, has there been any change in the way ITC

Speaker 2

Bank. I don't think there is any Bank. Fundamental change as far as ICICI Lombard is concerned, as you are aware, our shareholding has come down below 50% Due to an M and A that the company has done and as per statute, we can't hold between 30 50. And when this event happened in 2020, the view was that we would have to go down to 30, so which we had obtained the regulatory Bank. Exemption for 3 years, which we subsequently were able to obtain an extension of 1 year.

Speaker 2

But as things stand out, I think we felt that it would be possible to look at increasing our stake back above 50% Bank. And that is what we decided to do. And we are of course awaiting regulatory approval for that and the application Bank. So I think if you look at it from a strategic perspective, as whether it is at 48% or 51%, it's still a very large holding. It's a company carrying our name and so on.

Speaker 2

So I don't think anything fundamentally changes. It's more a way of what is the best question of what is the best way of complying with this statute. As far as Bank. ICICI Securities is concerned. I think we have always said that it is very core to our business and there is a lot of synergy Bank and ICICI Securities.

Speaker 2

And we had been quite clear that we don't intend to monetize, although it is a listed company and required to maintain a minimum public float. We are not we would not want to go below 75% in that entity. And then as we saw the opportunity to enter into a scheme of arrangement and make it a wholly owned subsidy, We thought that, that would be the right path to pursue given the synergies between the two companies. But I don't think either of these is really Fundamentally strategic changes.

Speaker 5

Okay. And second question is there has been a slight increase in our email advances This quarter, Rich. So is it possible to share how much of this increase is due to the mix change in growth and how much due to repricing of loans? What I'm trying to really assess is that this quarter the NIM completion has been around 12%. So in the absence of any retailing related benefit, is it fair to say that

Speaker 2

Bank. So this quarter, I think if you look at it, we have seen some increase in our yield on investments and on our yield on advances. I think we did get some benefit of the last repo hike which happened during Q4 because the portfolio reprices over a period of time based on the reset date. So that benefit did come. There was also some benefit in the Yield on advances because in the yield on investments, I'm sorry, because of the repricing of some of the floating rate bond portfolio and so on.

Speaker 2

So assuming that the repo rate remains where it is, those kind of That benefit will not be there in the subsequent quarters. That's correct.

Speaker 5

Right. And if I can squeeze in one more question. On the corporate lending fees, we have reported pretty strong growth 19%. Some of the peers Bank. So how do you assess the competitive environment in wholesale business?

Speaker 2

So actually, I think if you look back a little further, we were not growing till last Our corporate owned portfolio as much, while some of the peers were growing it at a much faster clip and Our main concern was around the levels of pricing. I would say over the last year, Bank. Possibly, certainly, there has been some improvement at least last year. Post the monetary tightening cycle, there was Some better opportunities for corporate lending. So, we continue to look at the risk adjusted returns and really the whole overall ecosystem approach because we don't see the lending decision in isolation.

Speaker 2

And wherever we see that there is a overall opportunity for the corporate that particular profitable opportunity from a particular client and their ecosystem. We participate in it. I think Basically, what we are looking for is the first principle of return of capital. We want to keep the portfolio reasonably granular and really look at cases where we have a larger ecosystem opportunity in terms of their value chain and their employee base. So within this construct, we are quite happy to grow the corporate portfolio.

Speaker 5

Right. Thanks, Andriy. I wish you all the best.

Operator

Bank. Thank you. Next question is from the line of Saurabh from JPMorgan. Please go ahead.

Speaker 4

Hi, sir. Sir, just two questions. One is, Bank. The attrition level at ICICI Bank, today have gone up in fiscal 23% versus fiscal 22%. And secondly, Bank.

Speaker 4

The growth that you're seeing in personal loans and credit cards, so have you moderated down risk filters or is it due You know, more cross sell through to your existing clients, right,

Operator

if

Speaker 4

you could get some qualitative color around that. Thank you.

Speaker 2

Bank. So first, I think on attrition, we have not yet published our BRSR that will come out hopefully in the next 10 to 15 days and then the numbers would be in the public domain. I would I think you've seen the numbers which have come Some of our peer set and they are reasonably high and that's reflective I guess of What has been happening across the system over the last 2 years, I would say. So I don't think that there is Any specific thing that we would want to call out really regarding attrition in our context? On your second question on Credit Cards and Personal Loans.

Speaker 2

So we have not moderated any sort of whatever diluted any Risk Factors. On a large scale basis, of course, we would always be trying to sharpshoot and sort of Figure out which are the pockets where we can do more and which are the pockets that we should do less. But broadly, I would say the stance on which has Bank. We keep reviewing the portfolio and the outcomes today are well within our tolerance Thank you.

Operator

Next question is from the line of Raka Agrawal from Melara Capital. Please go ahead.

Speaker 4

Bank.

Operator

Due to no response, we move to the next participant. Next question is from the line of Param Subramaniam from Nomura. Please go ahead. Param, may I request to unmute your line please and go ahead with your question.

Speaker 6

Yes, hello. Am I audible?

Operator

Yes, now you are. Bank. [SPEAKER SRINIVASAN VENKATAKRISHNAN:] Yes.

Speaker 6

Thank you. Thanks for the opportunity. My question is on operating expenses. So if you look over the last couple of years, the operating expenses So actually we're growing faster than the overall balance sheet growth and it continues to be so. So any time line or any Bank.

Speaker 6

Guidance on when this starts moderating or we see some sort of operating leverage kicking in. Of course, we still have the employee headcount and the branch rollout still in the pipeline. But yes, any [SPEAKER SRINIVASAN VENKATAKRISHNAN:] Color around when we see

Speaker 4

an operating leverage playing out? That's my first question.

Speaker 2

So we don't really look at it that way. I mean in that sense, if you look at this Quarter also the operating income growth is a little bit higher than the operating expense growth. So What we look at is really the overall PPOP and that having a positive direction on a risk calibrated basis. And we would look at all levers of profitability within that. Currently, as we have said in the past, we feel that there is a Lot of opportunity for us to grow our franchise and we would continue to invest in that.

Speaker 6

Okay. Fair enough. [SPEAKER UNIDENTIFIED COMPANY

Speaker 3

REPRESENTATIVE:] Just

Speaker 6

one more question again on the unsecured loans. Now if you look across the market participants, there hasn't really been an increase in the lending rates Bank across the market. Now in your sense is this being led largely by competition or do you see any pressure in And is there something that should play out, say, over the course of the year? Because if we compare with other segments, the segment has not We received any repricing over the last year. Yes, that's it from me.

Speaker 6

Thanks.

Speaker 2

Sorry, which particular segment were you referring to? I missed that.

Speaker 6

Bank. Unsecured personal loans, largely, yes.

Speaker 2

No, I think it is it has been quite competitive and the rates Have not moved up. So I don't see immediate sort of move up in rates. Bank. There has been a lot of players entering that segment, a lot of banks as well as some of the NBFCs. Bank.

Speaker 2

And I guess credit experience in that segment has also been pretty good over the years. So in that sense, Some reduction in the rates from what we have seen historically would be justified. But yes, today the rates are Bank at probably pretty low levels, but I don't see them increasing much from here, although probably ideally issued.

Speaker 4

Bank. Okay, fair enough. Congratulations on the quarter end. Thanks.

Operator

Thank you very much. I now hand the conference over to the management for closing comments.

Speaker 2

Thank Bank. Thank you all for spending time on a Saturday evening and we'll be available to take your questions offline as well. Thank you.

Operator

Thank you very much. On behalf of ICICI Bank Limited, that concludes this conference. Thank you for joining us. You may now disconnect your lines. Thank you.

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Earnings Conference Call
ICICI Bank Q1 23/24
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