ICICI Bank Q1 26/27 Earnings Call Transcript

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Provided by Quartr
July 18, 2026

Key Takeaways

  • Positive Sentiment: ICICI Bank delivered strong Q1 FY2027 profit growth, with profit before tax excluding treasury up 20.9% year over year and profit after tax up 15.9%, supported by solid core operating performance.
  • Positive Sentiment: Loan and deposit momentum remained healthy, as total loans grew 19.6% year over year and deposits rose 14%, while average CASA deposits also increased 12.1% year over year.
  • Positive Sentiment: Margins held up well, with net interest margin at 4.36% versus 4.32% in the prior quarter, and management said margins should remain range bound assuming no major policy rate changes.
  • Neutral Sentiment: Asset quality stayed broadly stable, with net NPA ratio at 0.35% and provisions of INR 12.6 billion, while the bank maintained a large contingency provision buffer of INR 131 billion.
  • Positive Sentiment: Fee income and several subsidiaries posted strong results, including 23.5% growth in fee income, higher ICICI Life new business value, and improved profits at ICICI AMC and ICICI Securities, although ICICI General’s profit was hit by higher reserves.
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Earnings Conference Call
ICICI Bank Q1 26/27
00:00 / 00:00

Transcript Sections

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Operator

Ladies and gentlemen, good day and welcome to ICICI Bank Limited Q1 FY 2027 earnings conference call. As a reminder, all participant lines will be in the listen-only mode, and there will be an opportunity for you to ask questions after the presentation concludes. Should you need assistance during this conference call, please signal an operator by pressing star then zero on your touch-tone phone. 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. Over to you, sir.

Sandeep Bakhshi
Sandeep Bakhshi
Managing Director and CEO at ICICI Bank

Thank you. Good evening to all of you, and welcome to the ICICI Bank earnings call to discuss the results for Q1 of financial year 2027. Joining us today on this call are Sandeep Batra, Rakesh, Ajay, Anindya and Abhinay. 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. The profit before tax, excluding treasury, grew by 20.9% year-on-year to INR 189.75 billion in this quarter. The core operating profit increased by 15.6% year-on-year to INR 202.35 billion in this quarter. The core operating profit, excluding dividend from subsidiaries, increased by 18.3% year-on-year to INR 191.25 billion in this quarter. The profit after tax grew by 15.9% year-on-year to INR 148.05 billion in this quarter.

Sandeep Bakhshi
Sandeep Bakhshi
Managing Director and CEO at ICICI Bank

Total deposits grew by 14% year-on-year and 2.2% sequentially at June 30, 2026. Average deposits grew by 14% year-on-year and 6.1% sequentially, and average current and savings accounts deposits grew by 12.1% year-on-year and 4.7% sequentially during this quarter. The bank's average liquidity coverage ratio, LCR, for the quarter was about 124%. The overall loan portfolio, including the international branches portfolio, grew by 19.6% year-on-year and 5% sequentially at June 30, 2026. The retail loan portfolio grew by 12% year-on-year and 2.7% sequentially. Including non-fund-based outstanding, the retail portfolio was 41.1% of the total portfolio. The rural portfolio, including gold loan, grew by 35.4% year-on-year and 6.2% sequentially. The business banking portfolio grew by 28.2% year-on-year and 6.9% sequentially. The domestic corporate portfolio grew by 18.5% year-on-year and 6.9% sequentially.

Sandeep Bakhshi
Sandeep Bakhshi
Managing Director and CEO at ICICI Bank

The domestic loan portfolio grew by 18.8% year-on-year and 4.6% sequentially at June 30, 2026. The overseas portfolio was 3.1% of the overall loan book at June 30, 2026. The net NPA ratio was 0.35% at June 30, 2026, compared to 0.33% at March 31, 2026, and 0.41% at June 30, 2025. During the quarter, there were net additions of INR 27.07 billion to gross NPAs, excluding write-offs and sale. The total provisions during the quarter were INR 12.60 billion, or 6.2% of the core operating profit and 0.32% of average advances. The provisioning coverage ratio on non-performing loans was 74.7% at June 30, 2026. In addition, the bank continues to hold contingency provision of INR 131 billion or about 0.8% of total advances at June 30, 2026.

Sandeep Bakhshi
Sandeep Bakhshi
Managing Director and CEO at ICICI Bank

The capital position of the bank continued to be strong with a CET1 ratio of 16.19% and total capital adequacy ratio of 16.84% at June 30, 2026. 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 Anindya.

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

Thank you, Sandeep. I will 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 14.6% year-on-year and 3.2% sequentially. Auto loans grew by 3.6% year-on-year and 1.2% sequentially. The commercial vehicles and equipment portfolio grew by 12.8% year-on-year and 2.2% sequentially. Personal loans grew by 12.9% year-on-year and 4% sequentially. The credit card portfolio declined by 1.9% year-on-year and 1.7% sequentially. Within the corporate portfolio, the total outstanding to NBFCs and HFCs was INR 920.52 billion at June 30, 2026, compared to INR 859.04 billion at March 31, 2026. The total outstanding loans to NBFCs and HFCs were about 4.5% of our advances at June 30, 2026.

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

The builder portfolio, including construction finance, lease rental discounting, term loans, and working capital, was INR 747.21 billion at June 30, 2026, compared to INR 714.21 billion at March 31, 2026. The builder 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 0.7% of the builder portfolio at June 30, 2026 was either rated BB and below internally or was classified as non-performing. The gross NPA additions were INR 55.52 billion in the current quarter, compared to INR 62.45 billion in Q1 of last year. There were gross NPA additions of INR 7.06 billion from the Kisan Credit Card portfolio in the current quarter. We typically see higher NPA additions from the Kisan Credit Card portfolio in the first and third quarter of a fiscal year.

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

Recoveries and upgrades from gross NPAs, excluding write-offs and sale, were INR 28.45 billion in the current quarter compared to INR 32.11 billion in Q1 of last year. The net additions to gross NPAs were INR 27.07 billion in the current quarter compared to INR 30.34 billion in Q1 of last year. The gross NPA additions from the retail and rural portfolios were INR 43.31 billion in the current quarter compared to INR 51.93 billion in Q1 of last year. These include the KCC NPAs mentioned earlier. Recoveries and upgrades from the retail and rural portfolios were INR 22.10 billion in the current quarter compared to INR 25.25 billion in Q1 of last year. The net additions to gross NPAs in the retail and rural portfolios were INR 21.21 billion in the current quarter compared to INR 26.68 billion in Q1 of last year.

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

The gross NPA additions from the corporate and business banking portfolios were INR 12.21 billion in the current quarter compared to INR 10.52 billion in Q1 of last year. Recoveries and upgrades from the corporate and business banking portfolios were INR 6.35 billion in the current quarter compared to INR 6.86 billion in Q1 of last year. There were net additions to gross NPAs of INR 5.86 billion in the current quarter in the corporate and business banking portfolios compared toINR3.66 billion in Q1 of last year. The gross NPAs written off during the quarter were INR 16.73 billion. Further, there was sale of NPAs of INR 2.39 billion for cash in the current quarter. The non-fund-based outstanding to borrowers classified as non-performing was INR 22.07 billion as of June 30th, 2026, as compared to INR 21.74 billion as of March 31st, 2026 and INR 32.98 billion as of June 30th, 2025.

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

The loans and non-fund-based outstanding to performing corporate borrowers rated BB and below was INR 34.85 billion at June 30th, 2026 as compared to INR 35.19 billion at March 31st, 2026 and INR 29.95 billion at June 30th, 2025. This portfolio was about 0.2% of our advances at June 30th, 2026. The total fund-based outstanding towards standard borrowers under resolution as per various guidelines declined to INR 13.63 billion at June 30th, 2026 from INR 14.96 billion at March 31st, 2026 and INR 17.88 billion at June 30th, 2025. At the end of June, the total provisions, other than specific provisions on fund-based outstanding to borrowers classified as non-performing, were INR 229.63 billion or 1.4% 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 non-performing, fund and non-fund-based outstanding to standard borrowers under resolution and BB and below portfolio.

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

The bank also continues to hold additional standard asset provision of INR 12.83 billion made in Q3 of FY 2026 as directed by RBI in respect of the agricultural priority sector portfolio. Moving on to the P&L details. Net interest income increased by 12.7% year-on-year and 6.1% sequentially to INR 243.84 billion in this quarter. The net interest margin was 4.36% in this quarter, compared to 4.32% in the previous quarter and 4.34% in Q1 of last year. The cost of deposits was 4.41% in this quarter compared to 4.43% in the previous quarter and 4.85% in Q1 of last year. The benefit of interest on income tax refund was eight basis points in the current quarter compared to five basis points in the previous quarter and seven basis points in Q1 of last year.

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

Excluding the benefit of interest on tax refund, the net interest margin would have been 4.28% in this quarter, 4.27% in the previous quarter, and 4.27% in Q1 of last year. Of the total domestic loans, interest rates on about 57% of the loans are linked to the repo rate and other external benchmarks, 13% to MCLR and other older benchmarks, and the remaining 30% of loans have fixed interest rates. Non-interest income, excluding treasury, grew by 16% year-on-year to INR 84.25 billion in Q1 of FY 2027. Fee income increased by 23.5% year-on-year to INR 72.86 billion in this quarter off a low base of Q1 of last year. Fees from retail, rural, and business banking customers constituted about 72% of the total fees in this quarter. Dividend income from subsidiaries was INR 11.1 billion in this quarter, compared to INR 13.36 billion in Q1 of last year.

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

On costs, the bank's operating expenses increased by 10.4% year-on-year in this quarter, compared to 11.5% year-on-year in FY 2026. Employee expenses increased by 5.5% 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. Non-employee expenses increased by 13.8% year-on-year in this quarter. Our branch count has increased by 97 in the first quarter. We had 7,608 branches as of June 30th, 2026. The technology expenses were about 11.4% of our operating expenses this quarter. The total provisions during the quarter were INR 12.6 billion, or 6.2% of core operating profit and 0.32% of average advances, compared to the provisions of INR 18.15 billion in Q1 of last year. The profit before tax, excluding treasury, grew by 20.9% year-on-year to INR 189.75 billion in Q1 of this year.

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

There was a treasury gain of INR 1.51 billion in this quarter as compared to a loss of INR 1.06 billion in the previous quarter and a gain of INR 12.41 billion in Q1 of last year. The tax expense was INR 43.21 billion in this quarter, compared to INR 41.63 billion in the corresponding quarter last year. The bank has written back tax provision of INR 4.46 billion pursuant to favorable tax orders. The profit after tax grew by 15.9% year-on-year to INR 148.05 billion in this quarter.

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

The consolidated profit after tax grew by 13.9% year-on-year to INR 154.4 billion in this quarter. The details of the financial performance of key subsidiaries are covered in slides 33-35 and 54-59 in the investor presentation. The annualized premium equivalent of ICICI Life increased to INR 21.36 billion in Q1 2027 from INR 18.64 billion in Q1 2026.

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

The value of new business increased to INR 5.71 billion in Q1 2027 from INR 4.57 billion in Q1 2026. The value of new business margin was 26.7% in Q1 2027 compared to 24.7% in FY 2026. The profit after tax of ICICI Life increased to INR 3.86 billion in Q1 2027 from INR 3.02 billion in Q1 2026. Gross direct premium income of ICICI General increased to INR 83.18 billion in Q1 2027 from INR 77.35 billion in Q1 2026. The combined ratio stood at 107.2% in Q1 2027 compared to 102.9% in Q1 2026. The profit after tax was INR 4.03 billion in Q1 2027 compared to INR 7.47 billion in Q1 2026. The results for the quarter include the impact of an increase in reserves pursuant to a recent judicial pronouncement.

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

The profit after tax of ICICI AMC, as per Ind AS, increased to INR 9.65 billion in this quarter from INR 7.84 billion in Q1 of last year. The profit after tax of ICICI Securities, as per Ind AS on a consolidated basis, was INR 4.19 billion in this quarter compared to INR 3.91 billion in Q1 of last year. ICICI Bank Canada had a profit after tax of CAD 5.3 million in this quarter compared to CAD 7.8 million in Q1 of last year. ICICI Bank UK had a profit after tax of $7.2 million in this quarter compared to $5.9 million in Q1 of last year. As per Ind AS, ICICI Home Finance had a profit after tax of INR 2 billion in the current quarter compared to INR 2.14 billion in Q1 of last year.

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

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 session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use handsets while asking a question. Ladies and gentlemen, we will wait for a moment while the question queue assembles. We will take our first question from the line of Mahrukh Adajania from Tara Capital. Please go ahead.

Mahrukh Adajania
Analyst at Tara Capital

Yeah. Hi. Congratulations. I had a question on your loan growth outlook. Given that you already achieved such good loan growth in a seasonally weak quarter, do you find this sustaining? As in, would you be able to do, say, a high teen loan growth through the year? Is there enough visible demand across your segments? That's my first question. Then on FCNR, if you have a target in mind and how much you have already mobilized and what is the cost effectiveness of FCNR relative to your domestic term deposits. Also just one more question. The foreign loans, they have grown quite aggressively this quarter. Any comments on that?

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

Yeah. On the first one, I think it is partly really reflective of what has happened in the system where loan growth has picked up over the last two, three quarters as the various policy measures both on the fiscal side and the monetary side have taken effect. I think not just loan growth, but a range of other high-frequency indicators are showing positive momentum. We are sort of participating in that, and we will keep looking at opportunities as they come. I think the momentum continues to be pretty good as far as we can see it. On the second question on FCNR, we do not really have any target or so on that we put out. We think it is a good scheme, and we will look to mobilize as much as we can. It is very early days yet.

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

This is something that will really play out over the next maybe eight to 10 weeks or so. Nothing that can be said on that just now. From a cost-effectiveness perspective, 6%, and then if you look at kind of the all-in cost after hedging the coupon, et cetera, it will be somewhere maybe 630, 640, which is of course lower than the wholesale lending rates. It will therefore be competitive compared to the wholesale lending rates. Of course, there'll be an incremental loan growth opportunity also as these funds start getting deployed. Lastly, on the international branches growth, I guess, again, even if you look at the previous quarter, we had a decent momentum. We have been seeing both increase in the trade-related book as well as some borrowing by the overseas operations of Indian companies, well-rated companies, and we have been participating in that.

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

As we go forward, of course, there will be some amount of loans against FCNR deposits that will also keep adding to the loan book overseas.

Mahrukh Adajania
Analyst at Tara Capital

Okay, thanks a lot. Thank you.

Operator

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

Kunal Shah
Kunal Shah
Analyst at Citigroup

Yeah. Thanks for taking the question. Firstly, just a clarification on the NIMs. The overall yields have held on steady despite the reversals on Agri. Was there any offsetting recoveries also during the quarter, which has helped that in terms of sustaining the yields?

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

That's something that keeps happening on an ongoing basis. Overall the NIM reflects the healthy funding franchise, our disciplined approach consistently on both deposit and loan pricing, and as well as our management of the government securities book. I think that is what really held the NIM up. As for other factors, there is always some amount of collection, less or more in each quarter. There was, of course, this interest on income tax refund, which we have as always specifically called out.

Kunal Shah
Kunal Shah
Analyst at Citigroup

Yeah.

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

Even if adjusting for that, the NIM is stable both on a year-on-year and on a quarter-on-quarter basis.

Kunal Shah
Kunal Shah
Analyst at Citigroup

Yeah. The question was more on yield because the growth is also coming in from the corporate and all. Okay. To that extent, yields are still sustained. That was the question. Secondly on the Agri, now maybe larger part of the regularization we have been working all through and would have been interacting with the regulator as well. How is the approach and when do we see the recoveries coming through or maybe the reversals of the provision? Is it expected to come through in the second quarter, or maybe it might take some time, and we should see it more towards the end of the fiscal year?

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

I wouldn't really be able to comment on the timing, but yes, of course, we have been working on the required remediation of the portfolio, and we just want to make sure that whatever we have done is correct and signed off and validated before we discuss a writeback of the provision. I think we are in the process, and we will hopefully work it out over the next few months. I don't want to give a timeline.

Kunal Shah
Kunal Shah
Analyst at Citigroup

Okay. That process is already on in terms of the validation and getting the sign-off from all the-

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

Oh, yes. Very much so. It's a granular portfolio, and as I said, we want to make sure that we are getting it right, and then we want to get it appropriately validated, the work that the field teams have done, and that process is on.

Kunal Shah
Kunal Shah
Analyst at Citigroup

Sure. Okay, thanks. Yeah, that answers the question.

Operator

Thank you. Next question is from the line of Rikin Shah from IIFL Capital. Please go ahead.

Rikin Shah
Analyst at IIFL Capital

Yeah. Hi, thanks for the opportunity. I had five questions. First one is on fee income. It has accelerated significantly from 8% YoY last year to 23% YoY this quarter. If you could just throw some color on what is driving this, and should one expect it to remain closer to the overall balance sheet growth year onwards?

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

As I briefly mentioned in our opening remarks, there is some amount of a base effect. Last year, the fee income growth in Q1 was in fact sequentially lower over the preceding quarter. Sorry, the absolute fee income in Q1 was actually sequentially lower over the preceding quarter. There is some amount of base effect as well. I think other than that, it really reflects the underlying business momentum. We've seen growth pick up across all business segments, retail and corporate, while business banking has sustained. We would continue to focus on the fee income line item as we go forward.

Rikin Shah
Analyst at IIFL Capital

Right. The second question on margins. You've managed it extremely well in this cycle, now with loan growth accelerating meaningfully for you, would you continue to maintain your guidance on range-bound margins even going ahead?

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

There are a lot of moving parts to it because it really depends to some extent on systemic liquidity and interest rates. Where, for example, in the month of May, we had seen a lot of hardening of wholesale rates that has come off substantially. Based on current conditions and assuming no real policy rate movements, I would say it should be range bound. We'll also have to, as we go along, factor in sort of the impact of the FCNR deposit mobilization and the related leverage, where there could be some impact on margins. That is something that will happen over a period of time. In any case, the program itself has significant advantages. That's something we'll see. Other things being equal, I would still say range bound.

Rikin Shah
Analyst at IIFL Capital

That exactly was my third question. Could you talk a bit more about potential NIM and profitability profile for FCNR raised via self-leverage and versus via tie-ups with the foreign banks? Is it materially different in terms of the implications on margins and profitability?

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

I think we have just about started that whole process. We will have to wait and see. It will be a combination of unleveraged deposits, the deposits where we are providing leverage. For that, there may be some fundraising requirement at our end as well, and there will be, of course, other banks providing leverage for deposits into us. As I said, the best case we have now is that there could be some impact on the NIM, particularly because, as I mentioned in response to Mahrukh's question, the balance sheet of the international branches will expand materially if we indeed are able to mobilize significant amounts. That will happen. We'll see it as it comes. Of course, from an earnings perspective, it is quite positive.

Rikin Shah
Analyst at IIFL Capital

All right. The fourth one is on recoveries. Was there any one-off recovery in this quarter from any accounts?

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

I think you would all be aware that in one particular case, there was an NCLT judgment where the company was taken over. That recovery did come through this quarter. This is an asset that had been previously sold to NARCL, and that is there. Then there are some other things in the regular course. From a credit cost perspective, the reported of 32 basis points, I guess as we always say, in the more normalized level, adjusting for chunky recoveries would be around 50 basis points, and that is where it stays.

Rikin Shah
Analyst at IIFL Capital

Got it. Thanks. The last question is on ECL. If you could just talk about the impact on transition from next year, both on one-time basis on net worth and also on the recurring credit cost, please.

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

On the net worth, we will not really have any impact in our assessment based on whatever pro forma estimates we've done based on the existing position of the balance sheet of the portfolio, is that whatever impact is there will be well absorbed by our provisioning buffers. Of course, all this depends on what is the situation of the portfolio at that point in time. On an ongoing basis, the fact that we will be providing for Stage 2, obviously that is a provision that is currently not made by any bank. That will result in higher provisions, which will be partly offset by lower provisions on the Stage 3, where currently we follow this percentage-based approach, there it will be much more on a predicted loss kind of approach.

Rikin Shah
Analyst at IIFL Capital

Any pro forma estimate that you may want to call out, like is it 5-10 basis points or meaningfully higher?

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

Very difficult to make that estimate because we then actually have to run it based on the new ECL guidelines. I think we have some assessment of the transition impact. The ongoing impact is something that will come, but it will be a uniform impact across the sector, adjusted for portfolio composition.

Rikin Shah
Analyst at IIFL Capital

All right. Thanks, Anindya, and congrats on a very strong quarter.

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

Thank you very much.

Operator

Thank you. Next question is from the line of Chintan from Autonomous Research. Please go ahead.

Analyst at Autonomous Research

Hi. Thank you for taking my question. We have seen some very strong loan growth, particularly business banking. I'm just wondering, is this the right time to accelerate, given we are going through the energy shock and El Niño is upon us? We are coasting a little bit on the kind of macro tailwinds from last year. I'm just wondering how you think about the growth opportunity and the evolving environment over the next kind of year or two.

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

We are of course monitoring this portfolio very closely, and we are factoring in some of these, West Asia, et cetera, into our customer selection and onboarding. I think fundamentally, we feel quite comfortable with the portfolio and with growing it. You would see the NPL performance is also pretty good and stable, and we will keep adjusting it as we go along. It is a granular portfolio, reasonably secured portfolio, and we are quite comfortable growing it.

Analyst at Autonomous Research

Are you leaning on these credit guarantee funds? Are you leaning on these government schemes to help you grow better or there's no need?

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

No. When applications come under that, we are assessing and going ahead. It is a scheme that has been created for the benefit of the customer, we are quite open to it. We are also adding new customers and growing with existing customers in line with their business.

Analyst at Autonomous Research

Okay. What would the average loan be on a year-on-year basis? I'm just wondering if there's any lumpiness that will run off in this 19.6% number.

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

Average loan growth on a year-on-year basis.

Analyst at Autonomous Research

14%.

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

It will be somewhat lower, as I mentioned earlier, this higher loan growth this quarter is reflective of the increase in loan growth in the system, both the banks and the systems is off the base of Q1 last year. There could be some base effect, I think incremental momentum continues to be pretty strong.

Analyst at Autonomous Research

Okay. The final question is just on competitive dynamics. Have you seen any easing off of competitive dynamics from the PSU banks, or does it remain intense as ever? They've used up their LCR and LDR buffers substantially. Just wondering if there's been any change in recent months.

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

The way we like to look at it is what is our existing market share and what is the franchise capable of delivering. Our belief is that our franchise should deliver more. There is always some set of competition that you have to deal with, but I think there is enough business for us to do within our frameworks, and we keep calibrating based on sort of the interest rate environment and the competitive environment. I think we will keep looking at that as we go along. That is not sort of something that is holding us back currently.

Analyst at Autonomous Research

No. I appreciate looking at yourself and not at others, but the asset pricing kind of gets impacted by those things, right? That's why I was asking that question.

Analyst at Autonomous Research

So we-

Analyst at Autonomous Research

Are you seeing asset pricing improve?

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

I think it's a large market and there is enough for us to do. We are, for example, some of the rates that get quoted, we are not doing that kind of business, but there is enough other business where we are comfortable with risk-adjusted returns on a customer basis, which we do.

Analyst at Autonomous Research

Okay. Thank you so much.

Operator

Thank you. Next question is from the line of Abhishek Murarka from HSBC. Please go ahead.

Abhishek Murarka
Abhishek Murarka
Analyst at HSBC

Yeah. Hi, good evening, Congratulations for the strong quarter. I just wanted to go back to the fee income question, You mentioned that it is largely disbursement linked and disbursements have gone up. If I just look at the overall growth of 23%, assuming card fees is also a chunk of your fee and card balances are lower, is the rest of it just disbursement linked or is there any other fee line item that is picked up significantly? That's my first question.

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

I did not say that it is disbursement linked. I just said that overall business volumes and business growth has gone up. That will partly reflect in it, particularly the increase, for example, on the corporate side, continued growth on the business banking side and the pickup in retail. Our fee income has a range of components, cards, as you mentioned, the loan processing fees, transaction banking and trade, Forex and derivatives. The deposit-linked fees, all those have seen a growth and at different times, there may be more opportunity in one segment than the other, which we have to keep making sure that we are there across the opportunity spectrum within our kind of risk framework, which is what we do. Also, as I said, there is some base effect last year, because last year, the Q1 was indeed not a good quarter from a fee perspective.

Abhishek Murarka
Abhishek Murarka
Analyst at HSBC

Right. In these-

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

If you look at it sequentially-

Abhishek Murarka
Abhishek Murarka
Analyst at HSBC

Sorry

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

the increase in the fee line June quarter over March quarter is about INR 5 billion or so.

Abhishek Murarka
Abhishek Murarka
Analyst at HSBC

I'm just looking at because sequential seasonality will be there. I'm just trying to wonder, in these five or six buckets that you have highlighted, which are the ones where you see significant opportunity or pickup right now? Are there any one or two buckets which are contributing a lot right now just because of the market?

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

I think opportunity is there across the board. As you said, maybe cards is one area where fee growth is less than what we would want it to be. Although, at a PBT level, the business has done very well because of the reduction in credit costs. There is opportunity across the board.

Abhishek Murarka
Abhishek Murarka
Analyst at HSBC

Right. Okay. I wanted to check on cards and PL. We've been saying that overall we're comfortable with the environment, but growth has not picked up a whole lot, right? I think in cards you were also trying to sort of clean up the portfolio a bit if I remember correctly. Can you give an update on how you see the growth in these two businesses, let's say from a next 12-month, 15-month perspective?

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

PL has picked up quite a bit, actually, 12% year-on-year and 4% sequential growth. I think it's after a long time that we are seeing those kinds of numbers. Cards, I think the revolver rates are lower, so that is impacting the book growth. We'll see how to optimize that as we go along.

Abhishek Murarka
Abhishek Murarka
Analyst at HSBC

PL, the growth is sustainable? This 4%, kind of three, 4% quarter-over-quarter kind of growth.

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

I don't want to really give an outlook per se. I think we had gone down to a declining portfolio.

Abhishek Murarka
Abhishek Murarka
Analyst at HSBC

Right

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

We are at 4% sequential growth. I don't see anything today that will reduce growth, but we'll take it as it comes.

Abhishek Murarka
Abhishek Murarka
Analyst at HSBC

Got it. Just finally, on ECLGS, how's the offtake? How much disbursements have you done? Can you just give some sort of an update on what kind of offtake you're seeing on that product?

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

No, I think I answered that. We are getting some inquiries and we are doing some of that. It's part of the increase in the business banking book. That is something that is being done for the benefit of the customer and, wherever it is appropriate, we are doing it.

Abhishek Murarka
Abhishek Murarka
Analyst at HSBC

Okay. All right. Thank you, and all the best.

Operator

Thank you. Next question is from the line of M.B. Mahesh from Kotak Securities. Please go ahead.

M.B. Mahesh
Analyst at Kotak Securities

Just a couple of questions. First is on this corporate loans. This recovery in growth that we are seeing in your bank and also in some of the other banks as well. If you could just kind of give us some colors to how much of it is a demanded growth that one is seeing because of CapEx versus probably a credit substitution or a short-term working capital demand that has come through.

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

The corporates were always doing what they were doing. They are doing CapEx to the extent that they were doing CapEx. I think certainly bond markets this quarter have not favored the corporate sector. If you see, we have a reasonable increase in our NBFC portfolio as well. Part of it is a shift from bond markets. Part of it is, I would say working capital utilization. Part of it may be corporates taking on some borrowings and just maintaining some liquidity buffers as they also want to have greater resilience in the uncertainties of the environment. To the extent that they are investing or were investing, that also continues. Maybe the source of financing has shifted a little.

M.B. Mahesh
Analyst at Kotak Securities

You don't see any meaningful increase in, let's say, loan proposals relating to fresh CapEx over what you've seen earlier. Would that be fair?

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

No, I am hesitant to make a comment which can get extrapolated at a system level. We are dealing with our customer base and catering to their needs. I think the customers are doing a range of things, they were doing and are doing CapEx and new investments as well. Obviously, in addition to that, some shift in funding mix is also there. I think this quarter in particular, we saw a healthy pipeline at reasonable rates. That is what has led to this growth.

M.B. Mahesh
Analyst at Kotak Securities

Perfect. Second question. This is pertaining to the retail side. I know you've done well on loan growth on that part of the market. Just if you can just kind of comment on this entire IT corridor, both on the asset side as well as on the liability side. How is the demand for retail assets and have you seen any change on the liability side? Thank you.

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

No, we have not seen any change actually. I think in terms of inflows into the savings, et cetera, they are quite stable. We've not seen any change. As you can see, the performance of the retail portfolio has only improved. In fact, additions have come off and in particular, if you look at it on a year-on-year basis, unsecured additions have come off. I think things are quite stable from that perspective.

M.B. Mahesh
Analyst at Kotak Securities

Okay, thank you.

Operator

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

Anindya Banerjee
Anindya Banerjee
Group CFO at ICICI Bank

Thank you very much for making time for the call, and we'll take any other questions that you have as we interact going forward. Thank you.

Operator

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

Executives
Analysts
    • Mahrukh Adajania
      Analyst at Tara Capital
    • Kunal Shah
      Analyst at Citigroup
    • Rikin Shah
      Analyst at IIFL Capital
    • Analyst at Autonomous Research
    • Abhishek Murarka
      Analyst at HSBC
    • M.B. Mahesh
      Analyst at Kotak Securities
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