ICICI Bank Limited Q2 FY2026 earnings call

Strategic focus on growing profit before tax excluding treasury through a 360-degree customer-centric approach. Discussed loan growth across various segments including retail, rural, corporate, and business banking. Covered credit quality details such as gross NPA additions, recoveries, and net additions. P&L details: Net interest income increased by 7.4% year-on-year to INR 215.29 billion. Net interest margin was 4.30%. Noninterest income excluding treasury grew by 13.2% year-on-year. Operating expenses increased by 12.4% year-on-year. Performance of subsidiaries: ICICI Life's annualized premium equivalent and value of new business, ICICI General's gross direct premium income and combined ratio, and financials of other subsidiaries like ICICI AMC, ICICI Securities, etc., were discussed.

Profit before tax excluding treasury grew by 9.1% year-on-year to INR 161.64 billion. Core operating profit increased by 6.5% year-on-year to INR 170.78 billion. Profit after tax grew by 5.2% year-on-year to INR 123.59 billion. Average deposits grew by 9.1% year-on-year and 1.6% sequentially, with average current and savings account deposits growing by 9.7% year-on-year and 2.7% sequentially. Domestic loan portfolio grew by 10.6% year-on-year. Retail loan portfolio grew by 6.6% year-on-year and 2.6% sequentially, accounting for 42.9% of the total portfolio. Rural portfolio declined by 1% year-on-year but grew by 0.8% sequentially. Business banking portfolio grew by 24.8% year-on-year and 6.5% sequentially. Domestic corporate portfolio grew by 3.5% year-on-year and 1% sequentially. Overall loan portfolio grew by 10% year-on-year and 3.2% sequentially. Net NPA ratio was 0.39% at September 30, 2025. Total provisions during the quarter were INR 9.14 billion. Provisioning coverage ratio on nonperforming loans was 75%. Contingency provisions were INR 131 billion. Capital position strong with CET1 ratio 16.35% and total capital adequacy ratio 17%.

Look to drive risk-calibrated portfolio growth and grow market share across key segments. Remain focused on maintaining a strong balance sheet, prudent provisioning, and healthy levels of capital. Positive on growth outlook but no specific year-end loan growth number given. Expect margins to be range-bound over the next couple of quarters.

Competitive dynamics in the market. Impact of regulatory changes such as ECL and risk weight adjustments. Seasonality effects like Kisan credit card quarter impacting NPA additions.

Q: Congratulations. My first question was on growth. Do you already see green shoots on growth? Do you see growth accelerating after so many measures taken by the government? And will we reach like close to mid-teens by the end of the year? That's my first question.

A: So I think whatever we have seen in the quarter, certainly, growth has picked up. So if you see the sequential growth in Q2 across all the -- the retail portfolio certainly has picked up, business banking growth continues to be strong, and we hope that these trends will sustain. We are positive on the growth outlook. We would not really be giving a specific year-end loan growth number. But certainly, both in terms of what is happening in the market and our own continuing investment in distribution and allocating capacity to the higher growth opportunities, that continues and we continue to focus on that.

Q: And would you see corporate picking up? Any comments on the corporate loan growth environment?

A: I think corporate India is very well funded. They have very strong balance sheets, and they have access to many forms of funding. So banks are just one of the things that -- areas that they look at. And we will take it as it comes. I think we are focused on overall the risk-calibrated PPOP journey, and that is how we will look at it. We are very active in the corporate space, but that may reflect more in our transaction banking income or the flows through us, current accounts, et cetera, and not necessarily in terms of loan growth per se.

Q: Okay. Got it. And my next question is on margins that they've held up pretty well compared to expectations. So this is the bottom, right? And from here on, do they stay stable without rate cuts or they can actually improve?

A: So I would say that you're right. I think margins have done better than expectations, both -- of course, quarter-on-quarter, yes. But I think broadly through the cycle where we are now at the -- after the large part of the rate cuts have played out, they have done well, which has been aided by the systemic liquidity and the continued healthy funding profile as well as, I would say, the discipline on pricing that we have had consistently over several years. From here on, our expectation is that margins should be more or less range-bound. We don't expect any major movements either way.