ICICI Bank Q1 25/26 Earnings Call Transcript

Quartr
Provided by Quartr
July 19, 2025

Key Takeaways

  • Positive Sentiment: The bank’s profit before tax (excluding treasury) rose 11.4% YoY to INR 156.9 billion and profit after tax grew 15.5% to INR 127.7 billion in Q1 FY26.
  • Positive Sentiment: Average deposits increased 11.2% YoY (12.8% growth in total deposits) and the domestic loan portfolio grew 12% YoY, driven by a 29.7% jump in business banking loans.
  • Positive Sentiment: Asset quality remained strong with the net NPA ratio improving to 0.41%, a provisioning coverage ratio of 75.3%, and contingency provisions equal to about 1% of total advances.
  • Neutral Sentiment: The net interest margin dipped slightly to 4.34% as deposit costs fell to 4.85%, reflecting savings rate cuts and gradual loan repricing.
  • Positive Sentiment: Capital ratios stayed robust with a CET1 ratio of 16.31% and total capital adequacy of 16.97% at June 30, 2025.
AI Generated. May Contain Errors.
Earnings Conference Call
ICICI Bank Q1 25/26
00:00 / 00:00

There are 8 speakers on the call.

Operator

and gentlemen, good day, and welcome to the Q1 FY 'twenty six Earnings Conference Call of ICICI Bank. As a reminder, all participant lines will be in 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. I now hand the conference over to Mr. Sandeep Bakshi, Managing Director and Chief Executive Officer of ICICI Bank.

Operator

Thank you, and Ann, over to you, sir.

Speaker 1

Thank you. Good evening to all of you, and welcome to the ICICI Bank earnings call to discuss the results for Q1 of FY 'twenty six. Joining us today on this call are Sandeep Batra, Rakesh, Ajay, Anandiya and Abhinik. At ICICI Bank, our strategic focus continues to be on growing profit before tax excluding treasury through the three sixty 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.

Speaker 1

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 profit before tax excluding treasury grew by 11.4% year on year to INR156.90 billion in this quarter. The core operating profit increased by 13.6% year on year to INR175.05 billion in this quarter. The profit after tax grew by 15.5% year on year to Rs. 127,680,000,000.00 in this quarter.

Speaker 1

Total deposits grew by 12.8% year on year and were flat sequentially at 06/30/2025. During the quarter, average deposits grew by 11.2% year on year and 3.1 sequentially, and average current and savings account deposits grew by 8.7% year on year and 3.9% sequentially. The Bank's average liquidity coverage ratio for the quarter was about 128%. The domestic loan portfolio grew by 12% year on year and 1.5% sequentially at 06/30/2025. The retail loan portfolio grew by 6.9% year on year and 0.5% sequentially.

Speaker 1

Including non fund based outstanding, the retail portfolio was 43.2% of the total portfolio. The rural portfolio declined by 0.4% year on year and 1.5% sequentially. The business banking portfolio grew by 29.7% year on year and 3.7% sequentially. The Domestic Corporate portfolio grew by 7.5% year on year and declined by 1.4% sequentially. The overall loan portfolio, including the International Branches portfolio, grew by 11.5% year on year and 1.7% sequentially at 06/30/2025.

Speaker 1

The Overseas loan portfolio was about 2.4 of the overall loan book at 06/30/2025. The net NPA ratio was 0.41% at 06/30/2025 compared to 0.43% at 06/30/2024. During the quarter, there were net additions of INR30.34 billion to gross NPAs, excluding write offs and sales. The total provisions during the quarter were INR18.15 billion or 10.4% of core operating profit and 0.53% of average advances. The provisioning coverage ratio on non performing loans was 75.3% at 06/30/2025.

Speaker 1

In addition, the Bank continues to hold contingency provisions of INR131 billion or about 1% of total advances at 06/30/2025. The capital position of the Bank continued to be strong with a CET1 ratio of 16.31 and total capital adequacy ratio of 16.97% at 06/30/2025, including profits for Q1 of financial year twenty six. Looking ahead, we see many opportunities to drive risk calibrated profitable growth and grow market share across key segments. We remain focused on maintaining a strong balance sheet, prudent provisioning and healthy levels of capital, while delivering sustainable and predictable returns to our shareholders. I now hand the call over to Anandir.

Speaker 2

Thank you, Sandeep. I will talk about loan growth, credit quality, P and 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 10.3% year on year and 1.9% sequentially. Auto loans grew by 2.2% year on year and declined by 0.7% sequentially.

Speaker 2

The commercial vehicles and equipment portfolio grew by 5.9% year on year and 1.1% sequentially. Personal loans grew by 1.4% year on year and declined by 1.3% sequentially. The credit card portfolio grew by 1.5 year on year and declined by 5.4% sequentially. The personal loans and credit card portfolio were 8.84% of the overall loan book, respectively, at 06/30/2025. Within the corporate portfolio, the total outstanding to NBFCs and HFCs was INR874.17 billion at 06/30/2025, compared to INR91838 billion at 03/31/2025.

Speaker 2

The total outstanding to NBFCs and HFCs were about 6.4% of our advances at 06/30/2025. The builder portfolio, including construction finance, lease rental discounting, term loans and working capital, was INR628.33 billion at 06/30/2025, compared to INR616.24 billion at 03/31/2025. The builder portfolio was about 4.6% 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 1.9% of the builder portfolio at 06/30/2025 was either rated BB and below internally or was classified as nonperforming.

Speaker 2

On credit quality, the gross NPA additions were INR62.45 billion in the current quarter compared to INR59.16 billion in Q1 of last year. There were gross NPA additions of about INR 7,670,000,000.00 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 the fiscal year. Recoveries and upgrades from gross NPAs, excluding write offs and sale, were INR32.11 billion in the current quarter compared to INR32.92 billion in Q1 of last year. The net additions to gross NPAs were INR30.34 billion in the current quarter compared to INR26.24 billion in Q1 of last year.

Speaker 2

The gross NPA additions from the retail and rural portfolios were INR51.93 billion in the current quarter compared to INR52.04 billion in Q1 of last year. These include the KCC NPAs mentioned earlier. Recoveries and upgrades from the retail and rural portfolios were INR25.25 billion in the current quarter compared to INR25.32 billion in Q1 of last year. The net additions to gross NPAs in

Speaker 3

the retail and rural portfolios were INR26.68 billion in

Speaker 2

the current quarter compared to INR26.72 billion in Q1 of last year. The gross NPE additions from the Corporate and Business Banking portfolios were INR10.52 billion in the current quarter compared to INR 7,120,000,000.00 in Q1 of last year. Recoveries and upgrades from the corporate and business banking portfolios were INR 6,860,000,000.00 in the current quarter compared to INR 7,600,000,000.0 in Q1 of last year. There were thus net additions to gross NPAs of INR3.66 billion in the current quarter in the Corporate and Business Banking portfolios compared to net deletions of INR0.48 billion in Q1 of last year. The gross NPAs written off during the quarter were INR23.59 billion.

Speaker 2

Further, there was sale of NPAs of INR1.08 billion in the current quarter compared to INR1.14 billion in Q1 of last year. The sale of NPA includes about INR0.6 billion in cash in the current quarter. The non fund based outstanding to borrowers classified as nonperforming was INR32.98 billion as of 06/30/2025, compared to INR30.75 billion as of 03/31/2025, and excuse me, INR35.43 billion as of 06/30/2024. The total non fund based outstanding to all standard borrowers under resolution as per various guidelines declined to INR17.88 billion or about 0.1% of the total loan portfolio at 06/30/2025 from INR19.56 billion at 03/31/2025 and INR27.35 billion at 06/30/2024. Of the total fund based outstanding under resolution at 06/30/2025, INR16.22 billion was from the retail and rural portfolios and INR1.66 billion was from the corporate and business banking portfolios.

Speaker 2

The loans and non fund based outstanding to performing corporate borrowers rated BB and below were INR29.95 billion at 06/30/2025 compared to RMB28.54 billion at 03/31/2025 and RMB41.64 billion at 06/30/2024. This portfolio was about 0.2% of our advances at 06/30/2025. Other than two accounts, the maximum single borrower outstanding in the BB and below portfolio was less than INR 5,000,000,000 at 06/30/2025. At the June, the total provisions other than specific provisions on fund based outstanding to borrowers classified as nonperforming were INR226.64 billion or 1.7% of loans. This includes the contingency provisions of INR131 billion as well as general provisions on standard assets, provisions held for non fund based outstanding to borrowers classified as nonperforming and fund and non fund based outstanding to standard borrowers under resolution and the BB and below portfolio.

Speaker 2

Moving on to the P and L details. Net interest income increased by 10.6% year on year to INR216.35 billion in this quarter. The net interest margin was 4.34% in this quarter compared to 4.41% in the previous quarter and 4.36% in Q1 of last year. From Q1 of twenty twenty six, the Bank has changed its convention of computation of NIM and other return ratios from actual number of days to number of months. While the full year NIM would remain unchanged, the revised convention eliminates the quarter to quarter volatility in NIM computation due to difference in the number of days.

Speaker 2

The impact on reported ratios in this quarter was negligible. The impact of interest on income tax refund was about seven basis points in the current quarter compared to about two basis points in the previous quarter and nil in Q1 of last year. Of the total domestic loans, interest rates on about 53% of the loans are linked to the repo rate, 15% to MCLR and other older benchmarks and 1% to other external benchmarks. The remaining 31% of loans have fixed interest rates. In comparison to the first quarter, the impact of transmission of repo rate cuts on external benchmark linked loans is expected to be higher in the second quarter.

Speaker 2

This impact would be partially offset by reduction in savings account interest rates in May and June and the gradual repricing of term deposits. The domestic NIM was 4.4 in this compared to 4.48% in the previous quarter and 4.44% in Q1 of last year. The cost of deposits was 4.85% in this quarter compared to 5% in the previous quarter and 4.84 in Q1 of last year. Non interest income, excluding treasury, grew by 13.7% year on year to INR72.64 billion in Q1 of FY twenty twenty six. Fee income increased by 7.5% year on year to INR59 billion in this quarter.

Speaker 2

Fees from retail, rural and business banking customers constituted about 79% of the total fees in this quarter. Dividend income from subsidiaries was INR13.36 billion in this quarter compared to INR8.94 billion in Q1 of last year. The year on year increase in dividend income was primarily due to higher dividend from ICICI Securities, ICICI AMC and ICICI General and receipt of dividend from ICICI Securities' primary dealership in the current quarter compared to Q2 of last year. On costs, the Bank's operating expenses increased by 8.2% year on year in this quarter compared to 8.3 in FY 2025. Employee expenses increased by 8.5% year on year in this quarter, reflecting mainly the impact of annual increments and promotions that take place during the first quarter of every fiscal year.

Speaker 2

Nonemployee expenses increased by 8% year on year in this quarter. Our branch count has increased by 83 in the first quarter, and we had 7,066 branches as of 06/30/2025. The technology expenses were about 10.7% of our operating expenses in this quarter. We continue to enhance the use of technology in our operations to provide simplified solutions to customers and make investments in our digital channels. We continue to further strengthen system resilience and simplify our process.

Speaker 2

The total provisions during the quarter were INR18.15 billion as compared to the provisions of INR13.32 billion in Q1 of last year. The provisions in Q1 of last year included the impact of release of AIF related provisions of INR3.89 billion. The provisions during the quarter were 10.4% of core operating profit and 0.53% of average advances. Adjusting for the seasonality of KCC provisioning, which occurs only in Q1 and Q3, the credit cost to advances would be about 50 basis points. The profit before tax, excluding treasury, grew by 11.4% year on year to INR156.9 billion in Q1 of this year.

Speaker 2

Treasury gains were INR12.41 billion in Q1 of the current year as compared to INR6.13 billion in Q1 of the previous year, primarily reflecting realized and mark to market gains in fixed income securities and equities. The tax expense was INR41.63 billion in this quarter compared to INR36.34 billion in the corresponding quarter last year. The profit after tax grew by 15.5% year on year to INR 127,680,000,000.00 in this quarter. The consolidated profit after tax grew by 15.9% year on year to INR 135 point 58 billion in this quarter. The details of the financial performance of key subsidiaries are covered in Slides 34 to thirty five and fifty four to 59 in the investor presentation.

Speaker 2

The annualized premium equivalent of ICCI Life was INR18.64 billion in Q1 twenty twenty six compared to INR19.63 billion in Q1 twenty twenty five. The value of new business was INR 4,570,000,000.00 in Q1 twenty twenty six compared to INR 4,720,000,000.00 in Q1 twenty twenty five. The value of new business margin was 24.5% in Q1 twenty twenty six compared to 22.8% in FY 2025. The profit after tax of ICICI Life was INR3.02 billion in Q1 twenty twenty six compared to INR2.25 billion in Q1 twenty twenty five. Gross direct premium income of ICICI General increased to INR77.35 billion in Q1 twenty twenty six from INR76.88 billion in Q1 twenty twenty five.

Speaker 2

The combined ratio stood at 102.9% in Q1 twenty twenty six compared to 102.3% in Q1 twenty twenty five. The profit after tax increased to INR7.47 billion in this quarter from INR5.8 billion in Q1 of last year. With effect from 10/01/2024, long term products are accounted on one by end basis as mandated by IRDAI. Hence, Q1 numbers are not fully comparable with prior periods. The profit after tax of ICICI AMC as per Ind AS was INR7.82 billion in this quarter.

Speaker 2

The profit after tax of ICICI Securities as per Ind AS on a consolidated basis was INR3.91 billion in this quarter compared to INR5.27 billion in Q1 of last year. ICSIA Bank Canada had a profit after tax of CAD7.8 million in this quarter compared to CAD20.3 million in Q1 last year. ICSIA Bank UK had a profit after tax of US5.9 million dollars in this quarter compared to US7.7 million dollars in Q1 of last year. As per Ind AS, ICSA Home Finance had a profit after tax of US2.14 billion in the current quarter compared to INR 1,170,000,000.00 in Q1 of last year. With this, we conclude our opening remarks, and we will now be happy to take your questions.

Operator

Thank you very much. We will now begin the question and answer Participants are requested to use handsets while asking a question. In order to ensure management is able to answer queries from all participants, kindly restrict your questions to two at a time. You may join back the queue for follow-up questions. We'll take our first question from the line of Maruk Adajanya from Nuwama Wealth Management.

Speaker 4

So my first question was on margins regarding the change in method. Now fourth quarter is the quarter where you see the biggest positive impact of the old method. So in fact, your margin decline even adjusted for the tax refund, interest on tax refund appears to be just four to five basis points. Is that a correct assessment? That's my first question.

Speaker 4

You Or could give a like to like comparison of margins for the fourth quarter, that would be even better. And then my second question is on growth because that is an obvious challenge for the sector and nothing seems to be growing much other than low yield corporate loans. Home loans, there's intense competition. So when do you see growth reviving, and where do you see our growth settle? Means, I see I see loan growth settle because mid teens I mean, would mid teens still be possible?

Speaker 4

Yes, those are my questions.

Speaker 2

So thanks, Marik. On the first one, yes, on the reported margin for Q4 would have been a few basis points lower. So the kind of range that you spoke of is probably correct. As far as but equally, the same Q3 to Q4 spike will not happen in the current year. We'll have a more even spread of the reported margin through the year.

Speaker 2

On the growth side, I think, as you know, I think in the first quarter, there have been a number of global events, etcetera, which have had some impact on, I guess, on sentiment. But the substantial monetary easing that has taken place starting from Q4 particularly and carried through into Q1 will also have some positive impact hopefully as we go along. So I think it's too early to say we will have to wait for another quarter to really form a view about how it's going to go.

Operator

Okay. Thanks a lot. Thank you. Thank you. We'll take our next question from the line of Kunal Shah from Citigroup.

Operator

Please go ahead.

Speaker 5

Yes. Hi. So sorry, again, to touch upon on margin. So fair to say maybe the unwinding, which was expected to come in, in the first quarter, maybe because of this day benefit, that wouldn't have been there in this particular quarter. Otherwise, any which is like we are comparing 04/1941 to 04/1934, so maybe like four, five basis points of unwinding is not really there in this quarter.

Speaker 5

And thereafter, maybe adjusting for interest on income tax refund, we have seen like 14 bps kind of a decline in NIMs on a quarter on quarter basis. So would that be correct?

Speaker 2

No, that would not be correct because there is no unwinding in the first quarter. The NIM typically declines from the Q4 to Q1 because of the higher number of days in Q1. And there is a pickup again in Q4. So, the Q4 NIM, if we had used an equal month basis, would have been lower than the reported number of 4.41. But I think this is the way one that's why even in our previous calls, we have focused attention on the previous year's full year NIM of 4.3% as the anchor for further discussion.

Speaker 2

But we thought that it would also be good to eliminate that one confusion point.

Speaker 5

Yes. So, no, so only thing was maybe I was unwinding, I just meant to say that the benefit which was there in the fourth quarter that would have been relatively lower in the first quarter by say four, five basis points which goes away, which is not there in the competition now?

Speaker 3

No.

Speaker 2

The method, if you look at, for example, the reported margins for this year and on the new basis and Q1 last year on the old basis are almost the same. There is no real impact. That impact largely comes later in the year. So, the first quarter is not impacted at all. You're looking at a sequential analysis, then on a like to like basis, the reported margin for Q4 would have been a little bit lower.

Speaker 5

Yes. So would that have been like eight, nine basis points? How much it would have been lower, yes?

Speaker 4

No, I

Speaker 2

think I answered the range that Maharup quoted was probably the correct range.

Speaker 5

Okay. Okay. Got it. Perfect. Yes.

Speaker 5

And secondly, with respect to the credit cost, so we have been indicating that it would normalize in a gradual manner. This quarter would have cases and slippages. But ex of that when we look at the credit cost, okay, so would we say like now we have reached or maybe there is a further normal gradualization, which has still to happen from the current levels adjusting for KCC? Because we are already seeing like 50, there would be some impact of KCC. So do we expect further normalization?

Speaker 5

Or maybe this is more like a clean margins, which we are seeing now clean credit cost, which we are seeing now?

Speaker 2

I think we have always said that currently, underlying level would be more like about 50 basis points. Can that interrupt? It could, but I don't see anything major any major movement.

Operator

Next question is from the line of Harsh Modi from JPMorgan Life Insurance.

Speaker 6

Right. JPMorgan Chase, but thanks for that. Couple of questions. First is, if I see your mix on, corporate, creditors, the AA minus mix has been reducing over the last few years and BBB minus has been increasing. Is that the best, the sweet spot on ROI, that's why you're doing it?

Speaker 6

And any risks around that? That is first one. Second one is on Business Banking, very good numbers. What went right? And going forward, if you think about the mix of credit growth over the next, let's say, couple of years, where should we see the incremental delta coming from?

Speaker 6

Any granularity you can provide would be great. So

Speaker 2

on the first question, I think the decline in the proportion of the very high rated is partly a function of demand and partly a function of pricing. And in some cases, we may have in earlier periods of very easy liquidity, built up some portfolio there and that has gradually run off as the funding environment got tighter. Currently, of course, as you would know that overall credit growth itself has come down. And in this particular segment, there is a fairly high price competition. So, we would really look at this segment as we look at all the other corporate borrowers from Customer three sixty perspective and look at the totality of our relationship with the borrower.

Speaker 2

And in that context, if lending makes sense, we would do it. As far as the increase in the proportion, I think we are very comfortable with the whole entire, I think, A bucket. So, don't have we feel that to answer your question, that is probably the segment where you do have the right balance of risk reward, although we have competition in those segments also. I think on the lower rated origination the BBB and below, we have fairly tight controls and limits on how we approach that segment, and it is quite calibrated. So, I think the reduction in the very high proportion of the very high rated is really a function of demand and pricing.

Speaker 2

On your second question on business banking, I think we have spoken about it in the past couple of calls. To keep it short, I would say it's a combination of distribution, process and technology, the digital interfaces and capabilities that we offer to the customers and also fairly tight focus on monitoring of the credit and managing the portfolio in a disciplined way.

Speaker 6

All right. Sorry, can I add just one more question on the

Speaker 2

Sorry, go ahead? The last part of your question was on a mix going forward. I think, based on the visibility and the market share opportunity, one would expect the business banking piece to grow faster than the overall loan book, and therefore, that proportion should gradually go up.

Speaker 6

Right. And one more on the liability side. It seems you have been gaining market share on CASA deposits nationwide. Now with rate cuts, how do you see behavior changing? Any early signs of higher degree of competition, more preponderance of sweep accounts and so on and so forth?

Speaker 6

So do you see market share stabilizing? Or you still see CASA market share growing for the bank over the next, let's say, twelve months period?

Speaker 2

So, I think, CASSA is not really the current account, of course, is purely the result of presence in the transaction flows of corporate businesses, capital markets players and so on. The savings account is result of being sort of the primary bank or the transacting bank or the retail customer. And that is how money comes in, goes out and some level of float stays in those accounts. I don't think that there is any particular change in the competitive scenario. If you see in the quarter, I think the rate actions taken by all the large banks have been more or less in the same line, given the decline in the overall interest rates and the policy environment.

Speaker 2

And we would continue to focus on this segment by through increasing customer acquisition, increasing our share of the customer's wallet and trying to become the primary bankers. So, would hope that we will continue to do reasonably well.

Speaker 6

Thank you.

Operator

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

Speaker 3

Yes. Hi. Good evening, everyone, and congrats on another set of good numbers. Have three questions. One is around like the decline in cost of deposits that we have reported in the quarter.

Speaker 3

So it seems a fairly sharp 15 basis point decline. So is it like the unwinding that has that we have done in respect to the cost of deposits that has resulted in this kind of decline and has it played out fully and this or all of this will continue along with the SAARA credit benefits in Q2 also?

Speaker 2

There is no unwinding. As I said, the impact of the equal man convention on the reported NIM for the quarter and other ratios for the quarter is negligible. So, far as the decline in deposits, deposit costs, it's clearly the reduction in the savings account deposit rate, which has a large part of it was 25 basis points that was there in April, which the benefit of that has been there for pretty much the full quarter. And then on the higher value deposits, there was another cut in May, which also helped. In addition, of course, we had as the retail term deposit also gradually the incremental rates repricing would reflect.

Speaker 2

Plus during the quarter, we saw a reasonable reduction in our wholesale deposit book given the continued strong growth in CASA and retail term deposits and the high liquidity that we were running. And so that the runoff of the wholesale deposit book also helped in the funding cost.

Speaker 3

Yes. So that was yes, that actually I was referring to the wholesale deposit unwinding that we have done. And so the benefit of that has played out fully in this quarter or you expect that to continue?

Speaker 2

I don't it's difficult to really say. I think we have not been aggressively raising wholesale deposits. So, I think as as I said in the opening remarks, we would continue to see a gradual benefit of deposit cost repricing in Q2. But there will also be a higher impact of the 50 bps repo part of June.

Speaker 3

Right. And second question, Ananda, is around the unsecure retail growth. So how are we looking at that segment? Because while we have been able to deliver Delhi growth, but because of the systematic softness in the overall credit demand, the growth overall has come down to 12. And our unsecured retail segments have not been able to contribute as we know like.

Speaker 3

So how are we seeing those segments given the asset quality has seen some stabilization? So how do we look at those segments in terms of their contribution going forward?

Speaker 2

I think clearly we can do more on both personal loans and credit cards. Personal loans, I think as Vinay have commented in the past, we are quite comfortable with the quality of origination done over the last twelve to fifteen months. So, I think we can see volumes pick up and see some better growth there. And similarly, on cards also going forward, maybe some better customer acquisition is also something we can see. So I think we're quite focused on both the segments.

Speaker 2

We could do better there than what we've done in Q1.

Speaker 3

Right. And lastly on the business banking, for that kind of segment, which has been going very well for us and I think very good news. But how do you really ensure that we don't go on to see some challenges in respect to asset quality because the kind of growth on a very decent base that the segment is at now? So how do we ensure that we don't get into sort of asset quality challenges in the segment, any tightening that we have done in the recent quarters? And we have talked about that the underwriting like conditions being tightened in the past.

Speaker 3

Are we looking at this on a continuous basis as the environment is getting tougher around some of these segments?

Speaker 2

As I said, we monitor the portfolio continuously. Just to put the numbers in context, if you look at the gross NPE additions to the corporate and business banking portfolios in the quarter were about INR 10,000,000,000 on an aggregate portfolio of about INR5.6 trillion. The business banking portfolio alone is now about INR2.7 trillion. So, I think the current sort of credit behavior and asset quality is extremely benign. And we will probably see some increase going forward, but credit costs today are negligible, so they may go up slightly.

Speaker 2

But the portfolio is granular and tightly monitored.

Operator

We'll take our next question from the line of MB Mahesh from Kotak Securities.

Speaker 3

Just on this on this, again, this question on margins.

Operator

I'm sorry to interrupt. Can you use your handset more, please? Your line is not very clear.

Speaker 3

On this question on the margins, just on the lead side, with the drop of 25 basis point that you've seen, is it possible to kind of quantify how much of the leads sorry, how much of the leads that's going through the through the loan book?

Speaker 2

We have not quantified it. If you look at the February cut, I think it would be it would have largely flown through almost entirely. The April cut also would have substantially flown through. Maybe we have a little bit more to happen in Q3. The June cut, I would say, has not flown through much and most of that will come through in Q2.

Speaker 3

Sorry, just to answer the previous question, you said that the bulk of the benefit on the cost of deposit side has come from the savings account, given that the contribution of wholesale is fairly small?

Speaker 2

That you can just compute that's just computable, a 25 bps cut on the portfolio that is could have yielded a reasonable benefit.

Speaker 3

And the second question on the demand environment. When you say that you are ready to accelerate, portfolio is good. Is it a question of demand being an issue on the ground? Or is it a problem with pricing?

Speaker 2

I think it's a part maybe. There is some pricing, but probably we also need to focus a little more on the distribution and the throughput. So, wouldn't say that in some of these segments it is purely demand if you're talking about PL and cards. Other segments, of course, overall loan growth in the system is what it is. So that reflects some softness in demand.

Speaker 3

Perfect. And last one, one question. Are you allowed to restructure any standard assets and let's say, if it's in a default book in the SMA one and two, are you allowed to restructure it and classify it as standard?

Speaker 2

No.

Operator

Next question is from the line of Rikin Shah from IIFL Capital. Please go ahead. Sorry, we've lost the connection. We'll take the next question from the line of Piran Engineer from CLSA. Please go ahead.

Speaker 7

Yeah. Hi, team. Congrats on the quarter. Just firstly, a couple of clarifications on previous questions. So Nitin's question on 15 bps reduction in cost of deposit, that also includes the number of days thing, right?

Speaker 7

Like core deposit cost would not have gone down 15 bps, correct, Q o Q?

Speaker 2

So as I said, the deposit the margins for the first quarter on both basis, there would be a negligible difference, which is what we have mentioned in our opening remarks. Relative to the fourth quarter, the margins would have been the decline in margins would have been somewhat lower on a comparable basis.

Speaker 7

But then, Anindya, how do I think about it in the context of you versus peers where your margins are down, say, five, six bps, core NIMs, HDFC access around twelve, thirteen bps, is it just a more delayed pass through of the repo rate cut? Is that how I should simplistically put it? Because all of you all have cut SAR rates at approximately the same time and by the same amount.

Speaker 2

I don't

Speaker 7

And similar EV and R

Speaker 2

I can't really comment on others. I think we have, A, to begin with, always saying that we have to look at the full year margin of last year of 4.3% and the repo rate cut and the lagged repricing of deposits will create some pressure on that. In the first quarter, I think we had the upfront benefit of the savings deposit rate cut and we also had six, seven basis points of the benefit of interest on income tax refund. As we go into Q2, the full impact of the 50 bps repo cut of June will come into effect. We will also have some continuing repricing of term deposits as well as the benefit of the savings rate cut that happened in May and June.

Speaker 2

And then from in Q3, I guess, unless there is any change in the policy stance, the benefit of the CRR cut will also kick in.

Speaker 7

Okay. Okay. That's helpful. Just secondly, if I have to compare retail term deposits today versus a wholesale term deposits today and even adjusted for the outflow rates and the LCR competition, would wholesale rates be similar to TD rates now or lower?

Speaker 2

No. Lower. They would be lower.

Speaker 7

It'll be lower. Right? So then why are we trimming wholesale deposits when it's lower? That's what I don't think.

Speaker 2

I think it's a function of the overall liquidity that we are carrying if you look at the CASA and the term deposits. So we had what we have trimmed is the what has gone down is the deposits that were raised in the past at higher rates. If we get deposits at the rates we are quoting now, we'll take them.

Speaker 7

Understood. Understood. And just lastly on vehicle loans, I mean, our growth has gone down to 2%, 3%. This is now, of course, demand has slowed down. There's no doubt about it.

Speaker 7

But it's not slowed down so much also. Is this more a function of us just being cautious on pricing, and that's why we are choosing not to grow here?

Speaker 2

So I think price competition has always been a part of it. And with with, you know, of course, the underlying asset class also is not growing at that pace.

Speaker 7

Got it. Got it. Okay. Thank you, and wish.

Operator

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

Speaker 2

Thank you very much for taking time on a Saturday, and we are happy to clear any other doubts offline. Thank you.

Operator

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

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