ICICI Bank — Q4 FY26 earnings call

There has been a treasury loss of about 106 crore in Q4 compared to a loss of about 157 crore in the previous quarter and a gain of 239 crore in Q4 of the previous year. This primarily reflects market movements. Of course, the Bank had some open positions on onshore market, which were required to be reduced as per RBI guidelines. And treasury income of this ₹109 crore loss, does reflect the impact of the widening of spread, post issuance of this guideline.

Explains the reason for the treasury loss, linking it to market movements and RBI regulations, which is a key concern for investors.

Asked by Mayur Shetty

Yes, the total provisions during this quarter have been less than 100 crore, compared to 891 crore in the previous quarter. We have seen some improvement in quality of the portfolio and also certain corporate recoveries which have come from written-off accounts. We have also not utilised the contingency provisions.

Clarifies the significant reduction in provisions, attributing it to improved asset quality and corporate recoveries, rather than a release of contingency buffers.

Asked by Joel Rebello

Piyush, very difficult to make a forecast in this day, where forecast validity is not even a day at this point of time. But given the overall scenario, there has been an immediate impact on market yields which you are aware of. There has been an impact on currency, equity prices and some of this is reflected in the numbers for Q4. Of course, even RBI has mentioned that there is some amount of uncertainties on account of supply shocks. We do hope things become better sooner.

Addresses a major macro concern, highlighting the immediate market impacts and acknowledging the uncertainty, while reiterating the bank's strong balance sheet.

Asked by Piyush Shukla

Yes, we have seen a broad-based growth. We have been mentioning over the previous quarter, growth has been picking up driven by opportunities as well as our continuous effort on distribution and allocating appropriate resources in growth markets. I think it is just a question of focus. Our standards around growing in a risk-calibrated manner remains.

Confirms the broad-based nature of loan growth and management's intent to sustain it through strategic focus and risk-calibrated approach, despite not giving specific forward targets.

Asked by Ritu Singh

I think from our perspective, we have got a healthy LCR, which is at about 126%. Given the increase in net worth and increase in profits, that also contributes substantially to what we can do in terms of loan growth. So, mathematically, both have to grow in tandem. And in case there is a need, we will look at borrowings in a limited fashion.

Explains how the bank manages the growth differential, emphasizing strong LCR and capital, and indicating that deposit growth is not a constraint for loan growth.

Asked by Subrata Panda

The decline we saw in Q3 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 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.

Addresses the contraction in a key retail segment, explaining it as a function of spends/revolvers and a strategic focus on profitable growth rather than just volume.

Asked by Seshadri Sen

So as far as the operating expenses are concerned, if we look at this year, more or less, it has been in line with our expectations. 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 Labour Code and a couple of others, like the market movement impact that we saw in March.

Provides reasons for higher operating expense growth, including regulatory compliance and remuneration, and sets an objective for future opex growth to be below top-line growth.

Asked by Rikin Shah

You are right, there is lack of clarity on the same. So, how do I make a forecast at this point of time? We are just going to focus on good quality customers, and we will watch the developments carefully.

Highlights management's reluctance to provide specific credit cost guidance for FY27 due to macro uncertainties, indicating a watch-and-wait approach.

Asked by Ashish Agashe