Ladies and gentlemen, good day, and welcome to ICICI Bank Limited Q4 FY '26 Earnings Conference Call. [Operator Instructions] 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…

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 nonperforming. 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 sales, 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…

[Operator Instructions] We'll take a first question from the line of Jayant Kharote from Axis Capital.

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.

Yes. The 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.

Yes. So the first question is on the growth side. So particularly on retail, we had seen the good uptick out there, particularly when we look at the mortgages, it's been up like almost [ 4.7-odd ] percent, and we had seen the uptick even on the PL as well as the commercial vehicle side. So on mortgages, is it like the competition is coming off, spreads are getting attractive? Otherwise, we have always focused on ROA. So what is actually driving this growth on the mortgages side, in particular quarter-on-quarter? And the second question is on deposits. Deposits seems to be slightly slower compared to then of the loan growth and we have 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 in the system, so what will be our stance on the overall deposit growth getting into the next year?

So first on the growth in mortgages. I think as we may have discussed in the past, we -- maybe if we look back 2 to 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 and that is what you have seen over the last 2 quarters and more particularly in this quarter. And we continue to -- 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 the -- it looks like a loan growth of 15% and a deposit growth of 11%. On an average basis, they are pretty closely matched. I mean 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. So if you look at it from an LCR perspective also, we are continuing to be very comfortable at about 125% average for the quarter. So we are quite comfortable on the deposit side and CASA ratios are also holding up well. So that should support a healthy level of loan growth.

Sorry, so you mentioned average, so average deposit growth is almost 10.8%, okay? So you mean to say that [indiscernible] the average loan growth...

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

Sure. And lastly, in terms of the provisioning. So when we look at the overall provisioning quite low during the quarter. So 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. But was there any provisioning release in any of the line items?

So 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 and in particular, over the last few quarters, the additions to NPLs on the unsecured side, which get provided pretty aggressively, have been coming down. So 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. And if we kind of adjust out the onetime KCC provision and also the corporate recoveries, we would be below 50 basis points. So the underlying credit cost remains pretty stable.

Okay. So maybe for Q4, nothing in particular, maybe you're still alluding to full year. But Q4, because if I look at recoveries in corporate and business banking, it seems to be almost similar at INR 750 crores, INR 775-odd crores. So nothing appears to be there in terms of higher recoveries in Q4 in corporate.

So that's the recovery from the gross NPLs. As I said, we would have also a recovery from the written-off accounts that gets netted off in the provision line item, that would have been on the somewhat higher side in this quarter.

Next question is from the line of Nitin Aggarwal from Motilal Oswal.

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 sustain going forward, but this is something we'll have to keep calibrating.

Okay. And 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?

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

Okay. Okay, sure. And the last question is around the growth. We have seen a very strong pickup in the system numbers, even ICICI Bank in the last 2 quarters have picked up very well on the growth front. How do you look at this momentum going into FY '27? Is this like something that you will think that will pick steam further or is it kind of has already reached the high point? I mean, 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 mortgages started to pick up now or you think that 16-odd percent growth where we are right now is like the -- already on the upper end that we are looking at?

I won't -- 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 other factors like the interest rates stabilizing, benchmark stabilizing growth has picked up. And the economy -- 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. But from our side, I think we believe we have a strong franchise, very healthy capital levels and strong funding and liquidity. So we would want to leverage that to grow the business within our parameters of risk acceptance.

Right. And sorry, if I can squeeze 1 more. And especially on the credit cost line, wherein I think everybody has been waiting for some normalization, some uptick in credit costs in the banking system and yet you've 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? So how do you see like -- and compare this now versus what you have guided in the past?

So 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. And on the retail side, I think banks, including us, have been reasonably sensible about credit selection and the customers have also have held up well. We had maybe 1 year -- 1.5 year, 2 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. So that is showing up in these very healthy credit numbers. And 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. And again, one would have to monitor any potential impact of the external events on that. But 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. So that gives us some degree of confidence, but we will monitor it as we go along.

Next question is from Mahrukh Adajania from [ Tara Capital ].

Congratulations. I had a couple of questions. Firstly, after this war, would you have tightened any credit parameter or any credit rule going into FY '27 or its 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 reported in the presentation, that's been coming off over the last 2 quarters. Of course, there have been the impact of rate cuts as well. But can we say that yields have now bottomed because your cost of funds has also come down materially? So -- and I believe most of the repricing is done there. So in terms of yield, is this now close to the bottom? That's my second question.

So 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, but we have our understanding of which are the segments that are potentially need, 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'll just have to, as we go along, look at how incremental pricing, et cetera, play out in the market, and we'll have some amount of deposit repricing also. So 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. And 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. So this quarter, of course, we saw a higher level of recoveries and write-backs on the corporate portfolio, including recoveries from written-off accounts. But in general, the retail credit costs, as you can see from the retail net additions itself, have been coming down, so the retail credit costs have also been coming down. And within that, the unsecured has been moderating. So secured was anyway pretty stable. So that is having a beneficial impact on the provisions.

Next question is from the line of Seshadri Sen from Emkay Global.

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? And overall, if you could comment on how the profitability of the credit card business is trending because revolver rates are coming down, cost of acquisitions seems to be moving up a little bit?

So 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 spend, which ran off in Q3. The small decline from -- 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. And 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. But we would hope to see better numbers in terms of growth. And as I mentioned in prior -- 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, including the kind of -- on the cost side, reward side, et cetera. So I think those -- we keep tweaking those as well. So overall, I think it's a business one would continue to have a very strong focus on.

And 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 slightly medium perspective, what are your growth aspirations? What are the key drivers? Are there any particular segments that you're looking at?

So 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 2 quarters, we have seen a reasonably good accretion to the corporate book, and we continue to see opportunities going ahead. And I think with the better-rated clients, we will look through any short-term issues arising out of this crisis and see what -- how we can work with them over the longer term.

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

A few questions. First one is on OpEx. So 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, so how should we think about it going into next year, especially when your volume growth is also picking up? So does this further rise in terms of the overall OpEx growth or there are certain levers to bring that down? So 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? So those are my 2 questions.

So as far as the OpEx is concerned, I think if we look at this year, more or less, it has been in line with our expectations. I think couple of areas where the costs have been somewhat higher than what we would have expect -- 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. And 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. So 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. And the government SA balances?

Yes, government SA balances. So 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. But 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. And if I can just squeeze in 1 last question. Could you comment on how much residual deposit repricing is remaining in your case?

Don't really give a number of that time, but I guess maybe till the last summer, our peak rates were more in the 1 year kind of level. So that's kind of the repricing horizon.

Next question is from Param Subramanian from Investec.

Firstly, on rural loans, so there is a sharp uptick in this quarter, so what is driving that, 18% quarter-on-quarter?

So part of it is due to, I think, over the last couple of quarters, higher demand for gold loans and we have also geared up our machinery. I mean, some of it is not strictly rural, although we club it in that segment, it could be from a broader range of branches, but that would be one of the drivers in addition to other elements of the portfolio.

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

So as we said earlier, as of March, we continue to hold those provisions. We're in the process of working through that portfolio, as we said, to try and bring it into conformity with the requirements of the agri lending classification. And maybe we will have an update on that a quarter-or-so from now.

Okay. And 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?

So it's pretty much I think the same picture. I mean, we would have some -- we would be compliant. Overall, we will have some shortfall on the small agri side. So that's pretty much the same picture.

Next question is from the line of Piran Engineer from CLSA.

Congrats on the quarter. Firstly, just a clarification on [indiscernible] the government deposits being in low-teens, it's low-teen share of total deposits or low-teen share of SA?

SA. Government SA is a low-teen share of SA.

Correct. Okay. So 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?

So I would say it's more a pickup in disbursements.

Okay. Like-for-like, Anindya, let's say, [Technical Difficulty].

Piran, sorry, we lost you, again.

Yes. So just pre-repo cut cycle to today, how much [Technical Difficulty] incremental disbursements, of course.

I think we are not able to hear you, Piran. Maybe we can just take this offline, yes?

Yes. Sure.

We'll take our next question from the line of Chintan from Autonomous Research.

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. So 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?

No, it's very difficult to answer that question because the outlook on the underlying [Technical Difficulty].

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?

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

Yes. I don't know where we -- where you lost us...

Pretty much from the start.

Yes. Okay. Essentially, it's very difficult to make a prediction at the current time because this is an evolving situation. But as we said, we believe the system is going into it with a reasonable degree of resilience. So 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.

But 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? Is there any kind of -- are you seeing any stress in your early indicators?

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

Okay. And then 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 1 year, which is a slightly contradictory. So which is it? Is there kind of more to go on cost of deposit in terms of residual repricing?

So I guess, if you look at where the deposit rates were a little more than a year ago, they are at somewhat lower levels. And in the last rate cut cycle happened in June, and then we did -- there was some further cut, small cut in December. So as I said, overall, on the margin side, we don't -- we expect it to be a range bound from here on.

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

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

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.