ICICI Bank Limited Q4 FY2025 earnings call

Management Statement and Operational Highlights

• Strategic Focus: Continues to focus on customer-centric growth, leveraging ecosystems and micro markets; aim to drive risk-calibrated profitable growth.
• Loan Growth: Retail products (mortgage +11% Y-o-Y, auto +4.6% Y-o-Y, personal loans +4.2% Y-o-Y, credit cards +11.7% Y-o-Y); Business Banking portfolio grew 33.7% Y-o-Y.
• Credit Quality: Net NPA ratio improved to 0.39%; total provisions INR 8.91 billion; provisioning coverage ratio 76.2%.
• P&L Details: Net interest income +11% Y-o-Y to INR 211.93 billion; net interest margin 4.41%; noninterest income (excluding treasury) +18.4% Y-o-Y to INR 70.21 billion; operating expenses +11.2% Y-o-Y.
• Technology and Resilience: Invests in technology, focuses on operational resilience for seamless service delivery.
• Subsidiary Performance: ICICI Life annualized premium equivalent INR 104.07 billion; ICICI General gross direct premium income INR 268.33 billion; ICICI AMC, ICICI Securities, etc., reported varying profits.

Segment Performance

• Profit before tax, excluding treasury: Q4 FY '25: INR 165.34 billion (+13.2% Y-o-Y); FY '25: INR 607.13 billion (+11.4% Y-o-Y).
• Core operating profit: Q4 FY '25: INR 174.25 billion (+13.7% Y-o-Y); FY '25: INR 653.96 billion (+12.5% Y-o-Y).
• Profit after tax: Q4 FY '25: INR 126.30 billion (+18% Y-o-Y); FY '25: INR 472.27 billion (+15.5% Y-o-Y).
• Consolidated profit after tax: Q4 FY '25: INR 135.02 billion (+15.7% Y-o-Y); FY '25: INR 510.29 billion (+15.3% Y-o-Y).
• Deposits: Total deposits grew 14% Y-o-Y and 5.9% sequentially at March 31, 2025; average deposits grew 11.4% Y-o-Y and 1.9% sequentially; average current and savings accounts deposits grew 10% Y-o-Y and 0.5% sequentially.
• Loans: Domestic loan portfolio grew 13.9% Y-o-Y and 2.2% sequentially at March 31, 2025. Retail loan portfolio (43.8% of total) grew 8.9% Y-o-Y and 2% sequentially. Rural portfolio grew 5.1% Y-o-Y but declined 1.5% sequentially. Business Banking portfolio grew 33.7% Y-o-Y and 6.2% sequentially. Domestic corporate portfolio grew 11.9% Y-o-Y but declined 0.4% sequentially. Overall loan portfolio (including international branches) grew 13.3% Y-o-Y and 2.1% sequentially at March 31, 2025.
• Asset quality: Net NPA ratio 0.39% at March 31, 2025. Total provisions INR 8.91 billion (5.1% of core operating profit, 0.27% of average advances). Provisioning coverage ratio on nonperforming loans 76.2% at March 31, 2025. Contingency provision INR 131 billion (1% of total advances) at March 31, 2025.
• Capital: CET1 ratio 15.94%, total capital adequacy ratio 16.55% at March 31, 2025.

Guidance

• Sees opportunities to drive risk-calibrated profitable growth through customer focus, franchise, technology, people, and distribution.
• Emphasizes operational resilience, strong balance sheet, prudent provisioning, and healthy capital levels.
• Committed to delivering consistent and predictable returns to shareholders.

Risks

• Competition: Intense competition in lending rates impacting growth in certain segments.
• Economic Uncertainty: Global and Indian economic conditions pose risks to asset quality.
• Deposit Volatility: Fluctuations in deposit rates and CASA trends may affect funding costs.
• Regulatory Changes: Impact of evolving regulations on operational and financial performance.

Question and Answer

• Q: On loan growth caution, any specific caution? **A: No specific caution, largely demand and pricing; no specific credit side caution, mainly driven by market conditions and pricing discipline.
• Q: On deposit growth, outlook? **A: Liquidity improved, deposit growth strong; driven by central bank measures and stable liquidity.
• Q: On margin expansion, drivers? **A: Day count convention reversal, absence of KCC nonaccrual, interest on tax refund; no one-off items, but natural margin improvements.
• Q: On business banking risk, risk profile? **A: Granular portfolio, diversified geographically/industry-wise; focus on distribution, underwriting, and digital capabilities; credit performance stable.
• Q: On asset quality, comfort level? **A: Comfortable, NPL formation broadly stable; credit costs stable, portfolio performance good.
• Q: On RWA growth, drivers? **A: Mix of loan categories, market risk factors; evolving classification of loans impacting RWA.
• Q: On CASA, outlook? **A: Focus on total funding quantum and cost, not specific CASA growth; total funding and deployability key.
• Q: On vehicle loan growth, reason? **A: Underlying demand, marginally pricing; no asset quality concerns.
• Q: On net worth movement, cause? **A: Share issue, investment in ISEC; increased net worth due to additional investment in subsidiaries.
• Q: On CASA pressure, is it over? A: Logically behind due to monetary easing; improvement expected as liquidity stabilizes