Release Date: October 26, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- ICICI Bank Ltd (IBN, Financial) reported a 14.5% year-on-year increase in profit after tax, reaching INR 117.46 billion for the quarter.
- The bank's total deposits grew by 15.7% year-on-year, with term deposits increasing by 15.9% year-on-year.
- The domestic loan portfolio expanded by 15.7% year-on-year, with significant growth in the business banking portfolio at 30% year-on-year.
- ICICI Bank Ltd (IBN) maintained a strong capital position with a CET1 ratio of 15.96% and a total capital adequacy ratio of 16.66%.
- The bank's net NPA ratio improved slightly to 0.42% from 0.43% in the previous quarter, indicating better asset quality management.
Negative Points
- The net interest margin decreased to 4.27% from 4.36% in the previous quarter, reflecting pressure on interest income.
- The overseas loan portfolio declined by 6.9% year-on-year, indicating challenges in international operations.
- There was an increase in gross NPA additions from the retail and rural portfolio, highlighting potential stress in these segments.
- The cost of deposits increased slightly, which could impact future profitability if not managed effectively.
- Operating expenses grew by 6.6% year-on-year, with employee expenses rising by 11%, potentially affecting cost efficiency.
Q & A Highlights
Q: Your slippages have done well this quarter despite growing unsecured loans. How do you view your book going forward, and what are you doing differently compared to others?
A: We have seen an increase in delinquencies in unsecured loans over the last few quarters. We've taken steps to improve underwriting and sourcing, which has helped stabilize slippages. Our unsecured loans are about 14% of the loan book, and we manage credit costs within a 40-50 basis point range. - Anindya Banerjee, Group Chief Financial Officer
Q: Can you provide an outlook on funding costs and margins?
A: Retail deposit rates have increased slightly this year, but we don't expect significant further increases. Wholesale rates remain high, but with improved liquidity, they may ease. We might see marginal increases in term deposit costs, but overall, we expect margins to remain broadly stable. - Anindya Banerjee, Group Chief Financial Officer
Q: What is driving the higher treasury gains this quarter?
A: The revised investment guidelines require more mark-to-market accounting. This quarter's gains were largely from trading operations across fixed income and equities, with some positive mark-to-market adjustments. - Anindya Banerjee, Group Chief Financial Officer
Q: Can you explain the slower branch openings and its impact on operating expenses?
A: Branch openings are based on market needs and are not fixed. The slower pace is not a major driver of lower OpEx growth. We expect branch openings to be higher in the second half of the year. - Anindya Banerjee, Group Chief Financial Officer
Q: How do you view the growth and sustainability of your business banking segment?
A: We've invested significantly in this segment, focusing on Customer 360 and digital offerings. While competitive, it's profitable due to our comprehensive customer engagement. We see no saturation in market share and expect continued growth. - Anindya Banerjee, Group Chief Financial Officer
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
