IBN

Ladies and gentlemen, good day and welcome to ICICI Bank Limited Q4 FY 2026 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 the 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, and over to you, sir.

Thank you. Good evening to all of you, and welcome to the ICICI Bank earnings call to discuss the results for Q4 of FY 2026. Joining us today on this call are Sandeep Batra, Rakesh, Ajay, Anindya, and Abhinek. 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. We continue to operate within the framework of our values to strengthen our franchise. 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 10.1% year-on-year to INR 182.09 billion in this quarter, and by 7.1% year-on-year to INR 650.21 billion in FY 2026.

The core operating profit increased by 5.1% year-on-year to INR 183.05 billion in this quarter, and by 7.7% year-on-year to INR 704.01 billion in FY 2026. The profit after tax grew by 8.5% year-on-year to INR 137.02 billion in this quarter, and by 6.2% year-on-year to INR 501.47 billion in financial year 2026. The consolidated profit after tax grew by 9% year-on-year to INR 147.55 billion in this quarter, and by 6.2% year-on-year to INR 542.08 billion in FY 2026. The board has recommended a dividend of INR 12 per share for FY 2026, subject to requisite approvals. Total deposits grew by 11.4% year-on-year and 8.1% sequentially at March 31, 2026. Average current and savings account deposits grew by 11.3% year-on-year and 2.7% sequentially during this quarter. The bank's average LCR for the quarter was about 126%. The overall loan portfolio, including the international branches portfolio, grew by 15.8% year-on-year and 6% sequentially at March 31, 2026.

The retail loan portfolio grew by 9.5% year-on-year and 4.2% sequentially. Including non-fund-based outstanding, the retail portfolio was 41.7% of the total portfolio. The rural portfolio, including gold loan, grew by 25.6% year-on-year and 18% sequentially. The business banking portfolio grew by 24.4% year-on-year and 7.6% sequentially. The domestic corporate portfolio grew by 9% year-on-year and 3.1% sequentially. The domestic loan portfolio grew by 15.3% year-on-year and 5.6% sequentially at March 31, 2026. The overseas loan portfolio was 2.7% of the overall loan book at March 31, 2026. The net NPA ratio was 0.33% at March 31, 2026, compared to 0.37% at December 31, 2025, and 0.39% at March 31, 2025. The total provisions during the quarter were INR 0.96 billion or 0.5% of core operating profit and 0.03% of average advances. The provisioning coverage ratio on non-performing loans was 75.8% at March 31, 2026.

In addition, the bank continues to hold contingency provisions of INR 131 billion or about 0.9% of total advances at March 31, 2026. The capital position of the bank continued to be strong with a CET1 ratio of 16.35% and total capital adequacy of 17.18% at March 31, 2026, after reckoning the impact of proposed dividend. Looking ahead, we see many profit 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.

Thank you, Sandeep. I will talk about loan growth, credit quality, P&L details, portfolio trends, 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 13.2% year-on-year and 4.7% sequentially. Auto loans grew by 1.7% year-on-year and 1.4% sequentially. The commercial vehicles and equipment portfolio grew by 11.6% year-on-year and 6.4% sequentially. Personal loans grew by 7.2% year-on-year and 5.2% sequentially. The credit card portfolio declined by 5.6% year-on-year and 1.3% sequentially.

Within the corporate portfolio, the total outstanding to NBFCs and HFCs was INR 859.04 billion at March 31, 2026, compared to INR 791.18 billion at December 31, 2025. The total outstanding loans to NBFCs and HFCs were about 4.6% of our advances at March 31, 2026. The builder portfolio, including construction finance, lease, rental discounting, term loans, and working capital, was INR 714.21 billion at March 31, 2026, compared to INR 680.83 billion at December 31, 2025. The builder loan portfolio was 4.2% 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 0.9% of the builder portfolio at March 31, 2026, was either rated BB and below internally or was classified as non-performing. On credit quality, the gross NPA additions were INR 42.42 billion in the current quarter, compared to INR 51.42 billion in Q4 of last year.

Recoveries and upgrades from gross NPAs, excluding write-offs and sale, were INR 30.68 billion in the current quarter, compared to INR 38.17 billion in Q4 of last year. The net additions to gross NPAs were INR 11.74 billion in the current quarter, compared to INR 13.25 billion in Q4 of last year. The gross NPA additions from the retail and rural portfolios were INR 31.45 billion in the current quarter, compared to INR 43.39 billion in Q4 of last year. Recoveries and upgrades from the retail and rural portfolios were INR 22.93 billion in the current quarter, compared to INR 30.39 billion in Q4 of last year. The net additions to gross NPAs in the retail and rural portfolios were INR 8.52 billion in the current quarter, compared to INR 13 billion in Q4 of last year.

The gross NPA additions from the corporate and business banking portfolios were INR 10.97 billion in the current quarter, compared to INR 8.03 billion in Q4 of last year. Recoveries and upgrades from the corporate and business banking portfolios were INR 7.75 billion in the current quarter, compared to INR 7.78 billion in Q4 of last year. There were net additions to gross NPAs of INR 3.22 billion in the current quarter in the corporate and business banking portfolios. NPAs written off during the quarter was INR 17.68 billion. Further, there was sale of NPAs of INR 1.12 billion for cash in the current quarter. The non-fund outstanding to borrowers classified as non-performing was INR 21.74 billion as of March 31st, 2026, as compared to INR 22.29 billion as of December 31, 2025.

The loans and non-fund outstanding to performing corporate borrowers rated BB and below was INR 35.19 billion at March 31, 2026, as compared to INR 33.92 billion at December 31, 2025. This portfolio was about 0.2% of our advances at March 31, 2026. The total fund based outstanding to all standard borrowers under resolution as per various guidelines declined to INR 14.96 billion at March 31, 2026, from INR 16.66 billion at December 31, 2025. At the end of March, the total provisions, other than specific provisions on fund based outstanding to borrowers classified as non-performing, were INR 227.1 billion or 1.5% 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 the BB and below portfolio.

The bank also continues to hold additional standard asset provision of INR 12.83 billion made in Q3 as directed by RBI in respect of the agricultural priority sector portfolio. Moving on to the P&L details. Net interest income increased by 8.4% year-over-year and 4.8% sequentially to INR 229.79 billion in this quarter. The net interest margin was 4.32% in this quarter compared to 4.30% in the previous quarter. The cost of deposits was 4.43% in this quarter, compared to 4.55% in the previous quarter. The benefit of interest on tax refund was 5 basis points in the current quarter, compared to 1 basis point in the previous quarter. The margins for the quarter reflect the impact of external benchmark linked loans repricing of term deposits, and seasonally lower interest reversal on the KCC portfolio. The net interest margin in FY 2026 was 4.32%, similar to FY 2025.

Of the total domestic loans, interest rates on about 56% of the loans are linked to the repo rate and other external benchmarks, 13% to MCLR and other older benchmarks, and the remaining 31% of loans have fixed interest rates. Non-interest income, excluding treasury, grew by 5.6% year-on-year to INR 74.15 billion in Q4 of fiscal 2026. Fee income increased by 7.5% year-on-year to INR 67.79 billion in this quarter. Fees from retail, rural, and business banking customers constituted about 78% of the total fees in this quarter. Dividend income from subsidiaries was INR 6.31 billion in this quarter, compared to INR 6.75 billion in Q4 of last year. On costs, the bank's operating expenses increased by 12% year-on-year in this quarter and 11.5% year-on-year in FY 2026. Employee expenses increased by 8.8% year-on-year, and non-employee expenses increased by 14% year-on-year in this quarter.

Our branch count has increased by 126 in Q4 and 528 in FY 2026. We had 7,511 branches as of March 31st, 2026. The sequential increase in operating expenses primarily reflects the impact of market movements, resulting in higher provisions for retiral benefits. The technology expenses were about 11% of our operating expenses in FY 2026. The total provisions during the quarter were INR 0.96 billion or 0.5% of core operating profit and 0.03% of average advances compared to the provisions of INR 8.91 billion in Q4 of last year, reflecting healthy asset quality and higher recoveries and write-backs. The credit cost was 38 basis points in FY 2026, adjusted for the additional standard asset provision in respect of the agricultural priority sector portfolio and the corporate recoveries. The credit cost was under 50 basis points in fiscal 2026.

The profit before tax, excluding treasury, grew by 10.1% year-on-year to INR 182.09 billion in Q4 and by 7.1% year-on-year to INR 650.21 billion in FY 2026. There was a treasury loss of INR 1.06 billion in this quarter as compared to a loss of INR 1.57 billion in the previous quarter and a gain of INR 2.99 billion in Q4 of last year, primarily reflecting market movements and including the impact of capping of FX net open positions in the onshore market as per recent RBI guidelines. The tax expense was INR 44.01 billion in this quarter, compared to INR 41.43 billion in the corresponding quarter last year. The profit after tax grew by 8.5% year-on-year to INR 137.02 billion in this quarter. The profit after tax grew by 6.2% year-on-year to INR 501.47 billion in FY 2026. The consolidated profit after tax grew by 9.3% year-on-year to INR 147.55 billion in this quarter.

The consolidated profit after tax grew by 6.2% year-on-year to INR 542.08 billion in FY 2026. The details of the financial performance of key subsidiaries are covered in slides 33 to 35 and 54 to 59 in the investor presentation. The annualized premium equivalent of ICICI Life increased to INR 106.41 billion in FY 2026 from INR 104.07 billion in FY 2025. The value of new business increased to INR 26.29 billion in FY 2026 from INR 23.70 billion in FY 2025. The value of new business margin was 24.7% in FY 2026, compared to 22.8% in FY 2025. The profit after tax of ICICI Life increased to INR 16 billion in FY 2026 from INR 11.89 billion in FY 2025, and INR 6.09 billion in this quarter from INR 3.86 billion in Q4 of last year. The gross direct premium income of ICICI General increased to INR 287.12 billion in FY 2026 from INR 268.33 billion in FY 2025.

The combined ratios stood at 103.4% in FY 2026, compared to 102.8% in FY 2025. The profit after tax increased to INR 27.72 billion in FY 2026 from INR 25.08 billion in FY 2025. The profit after tax increased to INR 5.47 billion in this quarter from INR 5.1 billion in Q4 of last year. The profit after tax of ICICI AMC as per Ind AS increased to INR 7.63 billion in this quarter from INR 6.92 billion in Q4 of last year. The profit after tax of ICICI Securities, as per Ind AS on a consolidated basis, was INR 4.22 billion in this quarter, compared to INR 3.81 billion in Q4 of last year. ICICI Bank Canada had a profit after tax of CAD 4.4 million in this quarter, compared to CAD 12.5 million in Q4 of last year, primarily reflecting the impact of reduction in benchmark interest rates and lower business volumes.

ICICI Bank U.K. had a profit after tax of $8 million in this quarter, compared to $6 million in Q4 of last year. As per Ind AS, ICICI Home Finance had a profit after tax of INR 2.49 billion in the current quarter, compared to INR 2.41 billion in Q4 of last year. With this, we conclude our opening remarks, and we will now be happy to take your questions.

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'll take our first question from the line of Jayant Kharote from Axis Capital. Please go ahead.

Thank you for the opportunity and congratulations on a great set of numbers. First question is on.

Jayant, sorry, can you use your handset mode, please? Your audio is not very clear.

Yeah. Hello, am I audible now?

Yes. Please go ahead.

Thank you for the opportunity. T0he first question is on the—

I'm sorry, his line is disconnected. We'll move on to the next question from the line of Kunal Shah from Citigroup. Please go ahead.

Yeah. Thanks for taking the question. The first question is on the growth side. Particularly on retail, we had seen the good uptick out there, particularly when we look at the mortgages, it's been up almost 4.7 odd%. We had seen the uptick even on the PL as well as the commercial vehicle side. On mortgages, is it like the competition is coming off, the sides are getting attractive? Otherwise, we have always focused on ROA. What is actually driving this growth on the mortgages side in particular quarter-over-quarter? The second question is on deposits. Deposits still seems to be slightly slower compared to that of the loan growth and we have been losing the market share.

Maybe a couple of years back, we have gained quite a bit of market share on CASA and all, but I think now the overall deposit growth is lower than the system. What will be our stance on the overall deposit growth getting into next year?

First on the growth in mortgages, I think, as we may have discussed in the past, maybe if we look back 2-3 quarters ago, we were probably holding back a little because of both the benchmark risk and the spreads over the benchmark. I think as the benchmark has settled, it has given us the space to grow that portfolio. That is what you have seen over the last two quarters and more particularly, in this quarter. It is, of course, a competitive market, but we are within that trying to operate and price appropriately across the spectrum. Also focusing very much on the entire customer 360 aspect, which we do in all our businesses.

On the deposit side, I think, while it looks like a loan growth of 15% and a deposit growth of 11%, on an average basis, they are pretty closely matched, and an average deposit growth would also be very similar to the period end deposit growth, while average loan growth would be closer to the average deposit growth. If you look at it from an LCR perspective also, we are continuing to be very comfortable at about 125% average for the quarter. We are quite comfortable on the deposit side, and CASA ratios are also holding up well. That should support a healthy level of loan growth.

Sorry. You mentioned the average deposit growth is almost 10.8%, okay? You mean to say that maybe if the average loan growth-

Yeah.

Yeah.

The gap would not be like a 11-15 gap. It will be a lower gap and that much is fine. On overall liquidity and LCR basis, we are pretty comfortable. Deposit growth is not something that will constrain us from pursuing loan growth. The deposit flows are more than adequate and healthy.

Sure. Lastly, in terms of the provisioning, when we look at the overall provisioning, quite low during the quarter. Were there any write-backs which have happened or release which have been there during the quarter? Maybe the overall recoveries still seems to be pretty much in line with the last quarter. Was there any provisioning release in any of the line item?

I think a couple of things on the provisioning side. One, if you look at even on a year-on-year basis on the retail side, the net additions are lower. In particular, over the last few quarters, the additions to NPLs on the unsecured side, which get provided pretty aggressively, have been coming down. That has brought down the provisioning requirements even on the retail side. Plus, I would say we had a somewhat higher level of recoveries and write-backs on the corporate portfolio, including recoveries from written-off accounts, which has resulted in the provisioning for this quarter being at a pretty low level. Overall for the year, as we said on the call, we were at 38 basis points. If we kind of adjust out the one-time KCC provision and also the corporate recoveries, we would be below 50 basis points. The underlying credit cost remains pretty stable.

Okay. Maybe for Q4, nothing in particular, maybe we are still leading to full year. Q4, because if I look at recoveries in corporate and business banking, it seems to be almost similar at INR 750,000, INR 775,000 odd crores. Nothing appears to be there in terms of higher recoveries in Q4 in corporate.

That's the recovery from the gross NPLs. As I said, we would have also a recovery from the—

Got it. Yeah.

Written off accounts that gets.

Yeah

That gets netted off in the provision line item. That would have been on the somewhat higher side in this quarter.

Got it. That helps. Yeah. Thanks, and all the best. Yeah.

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

Yeah. Hi. Good evening, and congrats on strong performance once again. The first question, Anindya, is on the fee income growth. How do you look at this over the coming year? What steps are we taking to drive better traction on this line?

I guess if we look at the broad areas of fee income that we focus on, I think on the transaction banking, in which I would include both all the trade aspects as well as Forex and derivatives, and on the deposit account linked fees, deposit, Demat , et cetera, I think we are doing reasonably well. On the cards and payment side, this year has been a little slow. We have not grown as much there in terms of fees, and that would be one area for us to focus on. I think more recently, as the loan growth has picked up, the lending linked fees have also picked up, and we will hopefully see that momentum sustained going forward. This is something we'll have to keep calibrating.

Okay. Can you also give some color as to what has been the impact from RBI's recent foreign currency control regulations that they came up with in respect to the net open position and the NDF regulations as to how much has been the impact on the other income and any losses that we have incurred because of that this quarter?

We have a net treasury loss of INR 1.06 billion. That's after taking into account the impact of the mark-to-market as of March 31st on the net, the swaps, the forwards. That's factored into those numbers.

Okay. Sure. The last question is around the growth. We have seen a very strong pickup in the system numbers. Even ICICI Bank in the last two quarters have picked up very well on the growth front. How do you look at this momentum going into FY 2027? Is this something that you will think that will pick up steam further or is it kind of has already reached the high point? Overall, the growth will broad base from here further in respect to unsecured loans and some of the other segments which are not contributing, like mortgage has started to pick up now. Or you think that 16-odd% growth where we are right now is already on the upper end that we are looking at?

We wouldn't get into giving a growth number. I think that post all the measures that were taken at a policy level through last year, and from our own side, I think with some of the factors like the interest rate stabilizing, benchmark stabilizing, growth has picked up and the general outlook on the economy has been quite positive. Of course, more recently since March, the conflict in West Asia has clouded the outlook in the sense that it has created some amount of uncertainty. From our side, I think we believe we have a strong franchise, very healthy capital levels, and strong funding and liquidity. We would want to leverage that to grow the business within our parameters of risk acceptance.

Right. Sorry if I can squeeze one more, and especially on the credit cost line, wherein I think everybody has been waiting for some normalization, some uptick in credit cost in the banking system, and yet you have reported a sharp improvement here again. While our guidance remains below 50 basis points, but in terms of your own confidence and assessment, do you feel more confident now versus how things were in the prior years? Because our guidance in general has been sub 50 over the years. How do you see and compare this now versus what we have guided in the past?

I would think if you look at the different segments of the business, I think the corporate sector is pretty strong, and they are well-funded with healthy balance sheets and significant resilience, I would say. On the retail side, I think banks, including us, have been reasonably sensible about credit selection and the customers have also held up well. We had maybe a year and a half, two years ago, some increase in delinquencies on the personal loan side, but with regulatory action and with the steps taken by banks, that also was fairly quickly contained. That is showing up in these very healthy credit numbers. While there are these externalities to be monitored, we don't, at the moment, see any cause for concern as such.

The other portfolio, which is reasonably large now and has grown rapidly over the last few years, is the whole business banking portfolio. Again, one would have to monitor any potential impact of the external events on that. I would say that that is a portfolio, at least to the extent that we have a track record, has been tested through COVID, the energy dislocation of 2022, and then the whole tariff issue, and has held up reasonably well. That gives us some degree of confidence, but we will monitor it as we go along.

Right. Thanks, Anindya. Thanks for all the insights. Wish you all the best.

Thank you. Next question is from Mahrukh Adajania from Nuvama Wealth Management. Please go ahead.

Yeah. Hi. Congratulations. I had a couple of questions. Firstly, after this quarter, would you have tightened any credit parameter or any credit rule going into FY 2027, or it's business as usual or growth as usual across segments, even small segments? So that's my first question. Secondly, if you see your yield on advances, what you've reported in the presentation, that's been coming off over the last two quarters. Of course, there have been the impact of rate cuts as well. Can we say that yields have now bottomed? Because your cost of funds has also come down materially. I believe most of the repricing is done there. In terms of yield, is this now close to the bottom? That's my second question.

On the first question side, of course, we have looked at and continue to look at regularly all the potential sectoral impact as well as the impact at a client level. I would not say that we have specifically tightened anything or are excluding any segment. We have our understanding of which are the segments that potentially require closer monitoring, and we are doing that, and we will calibrate our actions as we go along. Overall, I think, as I said, we are continuing to focus on growing the business. On the yield, I think we have, of course, this quarter seen the impact of the December repo cut, and we will just have to, as we go along, look at how incremental pricing, et cetera, play out in the market, and we'll have some maybe amount of deposit repricing also.

I guess at a margin level, we continue to look at sort of range-bound margins, unlikely to move up, but should be broadly in this range is what we would think.

Got it. I just have one last question. You explained the decline in credit cost. Was it more driven by unsecured slippage coming down or more by corporate slippage this quarter? I mean, more by corporate recoveries.

No. This quarter, of course, we saw a higher level of recoveries and write-backs on the corporate portfolio, including recoveries from written-off accounts. In general, the retail credit costs, as you can see from the retail net additions itself, have been coming down. The retail credit costs have also been coming down, and within that, the unsecured has been moderating. Secured was anyway pretty stable. That is having a beneficial impact on the provisions.

Okay. Perfect. Thanks. Thanks a lot.

Thank you. Next question is from the line of Seshadri Sen from Emkay Global. Please go ahead. Seshadri, your line is unmuted.

Thank you.

Yes, please go ahead.

Thank you for the opportunity. I have a couple of questions. One is, for the second successive quarter, your credit card book is contracting. Is that just the nature of the business, seasonal, or are you taking any interventions in terms of trying to boost profitability? Overall, if you could comment on how the profitability of the credit card business is trending because revolver rates are coming down, cost of acquisition seems to be moving up a little bit.

I think in Q3, the decline we saw was really seasonal because there was a sharp buildup of the book towards the end of Q2 due to the festive season spends, which ran off in Q3. The small decline in the fourth quarter, I would say, we can't really say that it is seasonal. It is really a function of spends and revolvers. From our perspective, I think we are focused on growing the business and growing it with the right set of customers in a profitable way. We have been seeing reasonably steady new customer acquisition. I think the level of revolvers, et cetera, has been an issue for the industry, so that is something that we'll have to deal with.

We would hope to see better numbers in terms of growth, and as I mentioned when one of the analysts earlier asked about fees, on the fees as well. Profitability, I think, yes. I mean, at a very high level, if you look at over the last few years, the decline in the level of revolvers has impacted profitability, but it still remains a very profitable business, and it is a business with many levers of profitability. You know, including on the cost side, reward side, et cetera. I think we keep tweaking those as well. Overall, I think it's a business one would continue to have a very strong focus on.

Thanks. My second question is on the corporate loan outlook. Both tactically in the short term, while the energy crisis and the war is on, and also from a cyclical medium-term perspective, what are your growth aspirations? What are the key drivers? Are there any particular segments that you're looking at?

I think we are very focused on the counterparty, and in terms of the quality and the overall business opportunity. I think our funnels are open, and we are in a constant dialogue with the clients and wherever there is a level at which where it makes sense both for the client and the bank, the business happens. Over the last two quarters, we have seen a reasonably good accretion to the corporate book. We continue to see opportunities going ahead. I think with the better-rated clients, we will look through any short-term issues arising out of this crisis and see how we can work with them over the longer term.

Thank you so much. Thank you.

Thank you.

Thank you.

We'll take our next question from the line of Rikin Shah from IIFL Capital. Please go ahead.

Hi. Good evening. A few questions. First one is on OpEx. The OpEx growth about at 11.5%-12% this year has been higher than the peers, perhaps due to the increase in the average remuneration for the employees. How should we think about it going into next year, especially when your volume growth is also picking up? Does this further rise in terms of the overall OpEx growth or there are certain levers to bring that down? That's one. Second, Anindya, could you comment on the government SA balances where we were seeing some outflows? Have the trends stabilized and should we start seeing some growth even in the institutional SA going ahead? Those are my two questions.

As far as OpEx is concerned, I think if we look at this year, more or less it has been in line with our expectations. I think a couple of areas where the costs have been somewhat higher than what we would have started out with. One is on the priority sector compliance and the second is to some extent on the remuneration because of the labor code and a couple of other like the market movement impact that we saw in March. The final numbers on business growth are a little ahead of OpEx growth and we hope that that will be sustained over the next year. Definitely we would want to have OpEx growth at a level which is below the top line growth. That would be our objective.

Got it. The government SA balances?

Yeah, government SA balances. As we had said last time, those are in the low teens% as a proportion of the balances. I think this quarter it's been maybe the level of rundown has been somewhat lower. Really that's something that we will have to just bake into our plans and really focus on growing the money in bank, as we call it, from the other set of customers. While of course, this is something that will come and go as it comes and goes.

Got it. If I can just squeeze in one last question. Could you comment on how much residual deposit repricing is remaining in your case?

Don't really give a number of that kind but I guess maybe till the last summer, our peak rates were more in the one year kind of level. That's kind of the repricing horizon.

Okay. All right. Thank you.

Thank you. Next question is from Param Subramanian from Investec. Please go ahead.

Yeah. Hi, good evening. Thanks for taking my question. Firstly, on rural loans. There is a sharp uptick in this quarter. What is driving that 18% quarter-over-quarter?

Part of it is due to, I think over the last couple of quarters, higher demand for gold loans. We have also geared up our machinery. Some of it is not strictly rural, although we club it in that segment. It could be from a broader range of branches. That could be one of the drivers in addition to other elements of the portfolio.

Okay. Got it. Where are we in terms of the issue that came up in the last quarter on the priority sector related provisioning? We have been talking about, say, recoveries of those provisions gradually over the next year. Any update you want to give on that?

As we said earlier, as of March, we continue to hold those provisions. We are in the process of working through that portfolio, as we said, to try and bring it into conformity with the requirements of the agreed lending classification. Maybe we will have an update on that a quarter or so from now.

Okay. Anindya, broadly, where are we in terms of, say, our PSL compliance, say, on SMFs, et cetera? Since we are at the end of the year.

Pretty much, I think the same picture. We would be compliant overall. We will have some shortfall on the small agri side. That's pretty much the same picture.

Okay. Thank you so much, and congrats on the quarter. Thank you.

Thank you.

Thank you. Next question is from the line of Piran Engineer from CLSA. Please go ahead.

Congratulations.

Piran, your audio is not very clear. Can you use the handset mode, please?

Yeah, one second. Is it better now?

Yes. Please go ahead.

Hi. Congrats on the quarter. Firstly, just a clarification on the government deposits, being in low teens. It's a low teen share of total deposit or low teen share of SA?

SA.

SA. Okay.

Our SA is a low-teens share of SA.

Correct.

Piran, I'm sorry, you're sounding muffled.

Okay. Can management hear me?

Now it is fine. Go ahead, please.

Yeah. Okay, fair. I got the answer to the first question. On the second question, just wanted to understand on home loans. Firstly, is there also an element of lower prepayment rate driving the pickup in home loan growth for this quarter? Or is it just a question that now repo rate cuts have ended, as you said, and now you all are pushing growth?

No, I would say it's more a pickup in disbursement.

More a pickup. Okay. Like to like, Anindya, let's say for the repo

Piran, sorry, we lost you again.

Oh, God. Is it better now?

Yes.

Yeah. Just pre-repo cut cycle to today, how much incremental disbursements, of course?

I think they're not able to hear you, Piran. Maybe we can just take this offline. Yeah?

Yeah, sure.

Thank you. We'll take our next question from the line of Chintan from Autonomous Research. Please go ahead.

Hey, good afternoon. Thanks for taking my question. How do we see the growth outlook for the coming few quarters? We're talking about nice growth in the system in this quarter, but clearly it's too early to incorporate the supply shock into expectations. As you look forward, as you look into your books, as you see how corporates are getting impacted by this, how do you think both your book and system loan growth will develop over the next few quarters?

It's very difficult to answer that question because the outlook on the underlying is.

I'm sorry, sir, you're not audible. Ladies and gentlemen, please stay connected. We've lost the management line. Ladies and gentlemen, we have the management team back online. Chintan?

Hi. Yeah, I'm still here. I think Anindya was answering my question. I'll let him finish.

Yeah, I don't know where you lost me.

Pretty much from the start.

Yeah. Okay. Essentially, it's very difficult to make a prediction at the current time because this is an evolving situation. As we said, we believe the system is going into it with a reasonable degree of resilience. We will wait and see how the demand conditions pan out. I think as far as we are concerned, we see that we have strong levels of capital liquidity funding and a large franchise, and we would continue to try to use that to grow the business. Of course, we'll have to keep calibrating the risk acceptance levels as we go along.

Are you seeing anything in your corporate or business banking book that looks like production is falling, slowing down, working capital limits are not getting utilized? Are you seeing any stress in your early indicators?

It's too early to make any call or generalization of that kind.

Okay. A quick follow-up on your cost of deposit point. I think you said that there should be some more residual repricing left, but you also said that, kind of take the duration as one year, which is slightly contradictory. Which is it? Is there kind of more to go on cost of deposit in terms of residual repricing?

I guess if you look at where the deposit rates were a little more than a year ago, they are at somewhat lower levels. I mean, the last rate cut cycle happened in June, and then there was some further cut, small cut in December. As I said, overall on the margin side, we expect it to be range-bound from here on.

Okay. Finally, on cost-income ratio, this year, OpEx growth has led top-line growth. Could we say we are committed to delivering positive jaws next year?

We really look at the PPOP and the PBT post-credit costs. It's not that we are looking at managing or targeting a particular cost-to-income metric. Obviously, our objective would be to grow revenues ahead of costs. We will see how it evolves. That's certainly the way in which we would like to drive the bank.

Thank you.

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.

Thank you very much, and we'll be available to take questions if there are any follow-ups. Thank you.

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