ICICI Bank Ltd (IBN) 2025 Q3 法說會逐字稿

Ladies and gentlemen, good day, and welcome to ICICI Bank Limited Q3 FY25 earnings conference call. (Operator Instructions) Please note that this conference is being recorded. I now hand the conference over to Mr. Sandeep Bakhshi, MD and CEO, 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 Q3 of FY25. Joining us today on this call are Sandeep Batra, Rakesh, Ajay, Anindya, and Abhinek. The operating environment for the banking system continues to be dynamic based on evolving global and domestic economic factors. We would continue to monitor domestic inflation, liquidity, rate, and uncertainties in the global environment.

At ICICI Bank, our strategic focus continues to be on growing profit before tax, excluding treasury to the 360-degree customer-centric approach and by serving opportunities across the system and micro markets. We continue to operate within our strategic team work to strengthen our rents, maintaining high standards of governance, deepening coverage, and enhancing delivery capabilities are focus areas for our risk-calibrated profitable growth.

The profit before tax, excluding treasury grew by 12.8% year on year and 3.2% quarter on quarter to INR152.89 billion in this quarter. The core operating profit increased by 13.1% year on year and 2.9% quarter on quarter to INR165.16 billion in this quarter.

Excluding dividend income from subsidiaries, the core operating profit increased by 14.7% year on year and 3.3% quarter on quarter to INR160.07 billion in this quarter. The profit after tax grew by 14.8% year on year to INR117.92 billion in this quarter.

Total deposits grew by 14.1% year on year and 1.5% sequentially at December 31, 2024. During the quarter, average deposits grew by 13.7% year on year and 2.1% sequentially. And the average current and savings account deposits grew by 12.6% year on year and 2.3% sequential. The bank's average liquidity coverage ratio for the quarter was about 123%. The domestic loan portfolio grew by 18.1% year over year and 3.2% sequentially at December 31, 2024.

The retail loan portfolio grew by 10.5% year on year and 1.4% sequentially. Including non-fund-based outstanding, the retail portfolio was 43.9% of the total portfolio. The rural portfolio grew by 12.2% year on year and 0.9% sequentially. The business banking portfolio grew by 31.9% year on year and 6.4% sequentially. The domestic corporate portfolio grew by 13.2% year on year and 4.3% sequentially.

The overall loan portfolio, including the international branches portfolio grew by 13.9% year on year and 2.9% sequentially at December 31, 2022.

The net NPA ratio was 0.42% at December 31, 2024, compared to 0.42% at September 30, 2024, and 0.44% at December 31, 2023. The total provisions during the quarter were INR12.27 billion or 7.4% of core operating profit and 0.37% of average advances.

The provisioning coverage ratio on nonperforming loans was 78.2% at December 31, 2024. In addition, the bank continues to hold contingency provisions of INR131 billion or about 1% of total loans at December 31, 2024. The capital position of the bank continued to be strong with the CET1 ratio at 15.93%, and total capital adequacy ratio at 16.6% at December 31, 2024, including profits for nine months 2025.

Looking ahead, we see many opportunities to drive risk-calibrated profitable growth. We believe our focus on customer 360-degree extensive franchise and collaboration within the organization, backed by our focus on enhancing delivery systems and simplifying processes will enable us to deliver holistic solutions to customers in a seamless manner and grow market share across these segments.

We will continue to make investments in technology, people, distribution and building a brand. We are laying strong emphasis on strengthening our operational resilience for seamless delivery of services to customers.

We'll remain focused on maintaining a strong balance sheet with prudent provisioning and healthy levels of capital. The principles of return of capital paid to customers fair to bank and one bank, one team, will continue to guide our operations. We remain focused on delivering consistent 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, technology initiatives, 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 11.4% year on year and 2.1% sequentially.

Auto loans grew by 6.6% year on year and 1.7% sequentially. The commercial vehicles and equipment portfolio grew by 7.4% year on year and 1.7% sequentially. Personal loans grew by 8.8% year on year and declined 1.3% sequentially. The credit card portfolio grew by 17.9% year on year and 2.8% sequentially. The personal loans and credit card portfolio were 9.2% and 4.3% of the overall loan book, respectively, at December 31, 2024.

The overseas loan portfolio in US dollar terms declined 21.2% year on year at December 31, 2024. The overseas loan portfolio was about 2.4% of the overall loan book at December 31, 2024. Of the overseas corporate portfolio, about 90% comprises Indian corporates.

Moving on to credit quality. The gross NPA additions were INR60.85 billion in the current quarter compared to INR59.16 billion in the first quarter of the current fiscal year and INR50.73 billion in the previous quarter, i.e., the second quarter.

Recoveries and upgrades from gross NPAs, excluding write-offs and sales were INR33.92 billion in the current quarter compared to INR32.92 billion in the first quarter of the current fiscal year and INR33.19 billion in the previous quarter. The net additions to gross NPAs were at INR26.93 billion in the current quarter compared to INR26.24 billion in the first quarter of the current fiscal year, and INR17.54 billion in the previous quarter.

The gross NPA additions from the retail and rural portfolios were INR53.04 billion in the current quarter compared to INR52.04 billion in the first quarter of the current fiscal year and INR43.41 billion in the previous quarter.

We typically see higher NPA additions from the Kisan credit card portfolio in the first and third quarter of our fiscal year. There were gross NPA additions of about INR7.14 billion from the Kisan credit card portfolio in the current quarter compared to INR7.21 billion in the first quarter of the current fiscal year.

Recoveries and upgrades from the retail and rural portfolios were INR27.86 billion compared to INR25.32 billion in the first quarter of the current fiscal year and INR25.92 billion in the previous quarter. The net additions to gross NPAs in the retail and rural portfolio were INR25.18 billion compared to INR26.72 billion in the first quarter of the current fiscal year and INR17.49 billion in the previous quarter.

The gross NPA additions from the corporate and business banking portfolios were INR7.81 billion compared to INR7.32 billion in the previous quarter. Recoveries and upgrades from the corporate and business banking portfolios were INR6.06 billion compared to INR7.27 billion in the previous quarter.

There were net additions to gross NPAs of INR1.75 billion in the corporate and business banking portfolio compared to net addition of INR0.05 billion in the previous quarter. The gross NPAs written off during the quarter were INR20.11 billion. There was sale of NPAs of INR0.58 billion for cash in the current quarter compared to INR0.16 billion in the previous quarter.

The non-fund based outstanding to borrowers classified as non-performing was INR31.6 billion as of December 31, 2024, compared to INR33.82 billion as of September 30, 2024. The provisions on this non-fund-based outstanding declined to INR17.12 billion at December 31, 2024, from INR19.11 billion at September 30, 2024, reflecting the decline in the outstanding itself.

The total fund-based outstanding to all standard borrowers under resolution as per various guidelines declined to INR21.07 billion or about 0.2% of the total loan portfolio. at December 31, 2024, or from INR25.46 billion at September 30, 2024.

Of the total fund-based outstanding under resolution at December 31, 2024, INR19.6 billion was from the retail and rural portfolios and INR1.71 billion was from the corporate and business banking portfolios. The bank holds provisions of INR6.91 billion against these borrowers, which is higher than the requirement as per RBI guidance.

Moving on to the P&L details. Net interest income increased by 9.1% year on year to INR203.71 billion in this quarter. The net interest margin was 4.25% in this quarter, compared to 4.27% in the previous quarter and 4.43% in Q3 of last year. The impact of interest on income tax refund on net interest margin was 1 basis point in the current quarter, [named] in the previous quarter, and 4 basis points in Q3 of last year.

The domestic NIM was 4.32% in this quarter compared to 4.34% in the previous quarter and 4.52% in Q3 of last year. The cost of deposits was 4.91% in this quarter compared to 4.88% in the previous quarter.

Of the total domestic loans, interest rates on 52% of the loans are linked to the repo rate 16% to MCLR and other older benchmarks and 1% to other external benchmarks. The balance, 31% of loans have fixed interest rates.

Non-interest income, excluding treasury grew by 12.1% year on year to INR66.97 billion in Q3 of 2025. Fee income increased by 16.3% year on year to INR61.8 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 INR5.09 billion in this quarter compared to INR6.5 billion in Q3 of last year. Dividend income from subsidiaries was INR19.44 billion in nine months of the current year compared to INR15.89 billion in nine months of last year.

On costs, the bank's operating expenses increased by 5% year on year in this quarter. Employee expenses increased by 3.1% year on year, and non-employee expenses increased by 6.2% year on year in this quarter. Our branch count has increased by 129% in Q3 and 219 in the nine months of the current year. We had 6,742 branches as of December 31, 2024. The technology expenses were about 10.5% of our operating expenses in nine months of the current year.

The total provision during the quarter were INR12.27 billion or 7.4% of core operating profits and 0.37% of average advances, compared to the provisions of INR12.33 billion in the previous quarter. The provisioning coverage on non-performing loans were 78.2% as of December 31, 2024. In addition, we hold INR6.91 billion of provisions on borrowers under resolution. Further, the bank continues to hold contingency provision of INR131 million as of December 31, 2024.

At the end of December, the total provisions other than specific provisions on fan-based outstanding to borrowers classified as non-performing for INR225.69 billion or 1.7% of loans.

The profit before tax, excluding treasury grew by 12.8% year on year to INR152.89 billion in Q3 of this year. Treasury gains were INR3.71 billion in Q3 as compared to a treasury gain of INR1.23 billion in Q3 of the previous year.

As you are aware, the treasury gains for the current quarter vis-a-vis the same quarter last year, would not be comparable due to the implementation of the revised investment accounting guidelines from the April 1 of the current year. The tax expense was INR38.6 billion in this quarter compared to INR34.02 billion in the corresponding quarter last year. The profit after tax grew by 14.8% year on year to INR117.2 billion in this quarter.

We continue to enhance the use of technology in our operations to provide simplified solutions to customers. The bank has introduced DGE, a digital platform designed to streamline the customer onboarding process for business banking.

This enhances operational efficiency and the customer experience by integrating multiple digital services into a single seamless workflow. iLens, the retail lending platform is being upgraded on an ongoing basis, with retail credit cards now integrated in the platform along with mortgages, personal loans, and education loans.

We continue to make investments in the computing infrastructure and upgrade digital channels to further strengthen system resilience and simplify processes for enhancing customer experience.

We have provided details on our retail rural and business banking portfolios on slides 25 to 28 of the investor presentation. The loan and non-fund-based outstanding to performing corporate borrowers rated BB and below was INR21.93 billion at December 31, 2024, compared to INR33.86 billion at September 30, 2024.

This portfolio was about 0.2% of our advances at December 31, 2024. Other than one account, the maximum single borrower outstanding in the BB and below portfolio was less than INR5 billion at December 31, 20224. The bank put provisions of INR0.92 billion against this portfolio at December 31, 2024.

The total outstanding to NBFCs and HFCs was INR893.6 billion at December 31, 2024, compared to INR880.27 billion at September 30, 2024. The total outstanding loans to NBFCs and HFCs were about 6.8% of our advances at December 31, 2024.

The builder portfolio, including construction finance, lease rental discounting, term loans, and working capital was INR586.36 billion at December 31, 2024, compared to INR542.16 billion at September 30, 2024. The buildup portfolio was about 4.5% 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 1.7% of the portfolio at December 31, 2024, was either rated BB and below internally or was classified as non-performing, compared to 1.9% at September 30, 2024.

Finally, the consolidated results, the consolidated pocket after tax grew by 16.6% year on year to INR128.83 billion in this quarter. The details of the financial performance of key subsidiaries are covered in slides 36 to 38 and 57 to 62 in the investor presentation.

The annualized premium equivalent of ICICI Life was INR69.05 billion in the nine months ended December 31, 2024, compared to INR54.3 billion in the nine months of last year. The value of new business was INR15.75 billion in the nine months ended December 31, 2024, compared to INR14.51 billion in nine months of last year.

The value of new business margin was 22.8% in these nine months compared to 26.7% in the nine months of last year and 24.6% in FY2024. The profit after tax of ICC Life was INR8.03 billion in nine months ended December 31, 2024, compared to INR6.79 billion in nine months of last year. and INR3.26 billion in the current quarter compared to INR2.27 billion in Q3 of last year.

Gross direct premium income of ICICI General was INR62.14 billion in the current quarter compared to INR62.3 billion in Q3 of last year. The combined ratio stood at 102.7% in the current quarter compared to 103.6% in Q3 of last year.

The profit after tax was INR7.24 billion in the current quarter compared to INR4.31 billion in Q3 of last year. with effect from October 1, 2024, long-term products are accounted on a one-by-one basis as mandated by IRDAI. Hence, the Q3 numbers are not fully comparable.

So the profit after tax at ICICI AMC as per IMS was INR6.33 billion in this quarter compared to INR5.46 billion in Q3 of last year. The profit after tax of ICICI Securities as per Ind AS on a consolidated basis was INR5.04 billion in this quarter compared to INR4.66 billion in Q3 of last year. ICICI Bank Canada had a profit after tax of CAD19.6 million in this quarter compared to CAD15.9 million in Q3 of last year.

ICICI Bank UK had a profit after tax of USD5.1 million in this quarter compared to USD6.7 million in Q3 of last year. As per Ind AS, ICICI Home Finance had a profit after tax of INR2.03 billion in the current quarter compared to INR1.86 billion in Q3 of last year. With this, we conclude our opening remarks, and we will now be happy to take your questions.

(Operator Instructions) Mahrukh Adajania, Nuvama Wealth.

My first question is on provisioning. So what would be the utilization or reversal of provisions this quarter because project your non-fund have gone down and you explained that, that's because the exposure has only gone down and then restructuring or resolution provisions have also gone down. So what would be the number? Or is it just the two?

No, we don't give the number of tiebacks separately. I think what we are seeing overall on the credit cost side is that on the retail business banking portfolios, it continues to be quite stable. On the corporate portfolio, incrementally, there is practically no credit cost or NPL provisioning that we are team continuous improvement in the quality of the portfolios that we have been calling out over the years, such as the non-fund outstanding to NPAs or restructured assets or the BB and below portfolio, but we also continue to see some recoveries from accounts written off in the past.

So I think that's contributing to the provision line. Overall, as we've been saying, the provisions do vary a little bit from quarter both because of the loan book and because of other factors, for example, over the last -- may be not the last quarter, the previous two quarters up and down with, for example, the AIS-related provisioning.

But I think overall, we continue to be within sort of the 50 bps that we have been talking of in previous calls, the reported number for this quarter being at [37 bps].

Got it. Fair enough. And just on deposit growth, so the sequential run rate is a bit softer this time. That's just because of the liquidity environment or any comments there?

I think it's because of the funding requirement. So if you see system loan growth did slow down a little bit, which is, to a lesser extent, reflected in our portfolio as well. There was a CRR cut effective the middle of December. And we also saw some reduction if you look at our investor presentation in [our RIDF] portfolio and so on. So it's really a function of the requirement.

We also were able to take in some very cost-effective refinance borrowings. So it's really that we continue to maintain very strong liquidity. Our LCR actually went up slightly this quarter, average for the quarter was 123%. So it's more driven by the requirement than anything else.

Okay. I just wanted one last clarification. So you have called out gross farm slippages. I mean, you always do call out. So thank you for that. But would there be a comparable number for second quarter or it's just first and third only, like if you want to --

Largely, it comes in the first and third.

Rikin Shah, IIFL.

Just one question, and it's on operating costs, operating expenses. So they have been to tag for the last three quarters. and this is despite the tech expenses that you have been incurring. Just wanted to understand how much further flex do we have to manage the OpEx at the current levels or alternatively, when do you see that kind of picking up in line with your business growth? And data keeping question would be what would be the outstanding employee head count as of end of December.

So the head count does keep evolving in line with our requirements of how we want to staff the bank and what is the requirement at any point in time. We continue to invest in branches. As you would have seen, we've added 129 in the current quarter.

Overall, when we look at costs, I think the way we feel that we do have a large cost base, and there are always opportunities for bringing in efficiencies in that cost base by streamlining our internal processes, integrating workflows and removing redundancies, which are not required. So I think that's an ongoing journey, both in terms of how do we sort of leverage the cost base much better.

And at the same time, we continue to invest in the growth requirements of the business as well as in things like IT security and reliability. So that's a process which goes on. I would think that our aim would be to, as I said, leverage the cost base -- continue to leverage the cost base better. And we don't think that there needs to be -- needs to go to a sort of linear relationship with the top line.

Very helpful. And would you be able to quantify the outstanding head count as of December?

We give that number on an annual basis now. So we've not been giving it.

Kunal Shah, Citigroup.

Yeah. Firstly, on the yield side, so last time, you indicated the impact of number of days also being the -- so this time, when we look at the decline in yields of 8 basis points-odd, is it primarily on account of KCC or there has been any impact of the days? And would it be fair to assume that this day count would entirely unwind in 4Q and there should be a positive bias towards the yields?

We will -- so as far as the movement from Q2 to Q3 is concerned, you're right, it's largely the impact of the KCC because they are a longer period of interest accrual gets reversed in that one quarter. As far as the day count impact, et cetera, for going forward, wouldn't really want to -- we had said, I think last quarter that Q4 has a lesser number of days, so mathematically, you would see some unwinding.

Okay (technical difficulty) banking side, generally, maybe we are more focused in terms of the risk-return approach. This quarter, we have seen a decent level of growth on the corporate side, while retail, there is some slowdown because of the unsecured lending. But otherwise, maybe is the price -- pricing intensity easing over there?

Would it be slightly margin dilutive? We have not seen impact this quarter. So how should we look at the overall corporate banking growth?

I think that it's not -- I wouldn't say it is going to be margin dilutive and so on. We have to look at -- the way we look at it is we look at the overall relationship with the corporate. I think we don't want to take very chunky, finally priced long-term exposures just for the sake of loan growth. That's not our approach at all.

But we do have an ongoing relationship with corporates, where there could be periodic working capital requirements or short-term lending requirements or longer-term requirements where indeed it does meet our overall sort of P&L aspiration.

So we keep looking, I think we have a very active franchise and engagement with corporate clients across the spectrum, and we keep taking advantage of those opportunities to work with them as and when they come up and fit our sort of approach.

And there was an increase also in BBB and above, okay, by almost like 210 basis points-odd. So this is maybe incremental growth coming in from there or maybe business banking. So how should we read that?

I think that -- I think it is large an update from the BB because as you can see the BB, the portfolio has reduced.

Yeah, that 60 basis points.

That will reflect partly in the increase in the BBB. Of course, we could be doing incremental BBB lending also. I mean, it's investment grade, but we have limits on how much of that we would do.

(Operator Instructions) Piran Engineer, CLSA.

Congrats on another steady quarter. Just firstly, on retail products, a couple of ones mortgages. We were growing at 16%, 17%, now down to 11%. Is that more a function of pricing in the industry or just overall slowdown? And same for vehicle loans, we understand that this year was a slowdown, but what's your house outlook for next year?

So the mortgages, of course, I think there is an element of price competition, which is there and which has been there to over a period of time. But there has been, I would say, the incremental disbursements have not been growing as much. They continue to hold up.

As you are aware, overall, the -- to be continued momentum in the mid and higher segments of the market and maybe some softening in the more affordable type of segment. On vehicle loans, I think it's more a function of the underlying -- sort of asset class itself because we are primarily in new cars financing.

And there thing we had, if you look at actually last year or early part of this year, we had a pretty good run, maybe from -- more recently, the market has slowed. I think it will go through its ups and downs as customers replace or as new models come, which typically create their sort of wave of excitement in the market, I guess, you will see it go from a good quarter to bad quarter over the next -- that's the way it will work.

Okay. Fair enough. Secondly, just on business banking now. This has been a product that you all as well as your peers have gone really strong on, what really can go wrong for the industry two years later? Because today, everything looks hunky-dory, but is there some part which you are missing on because it seems like almost of a retail business.

So I think if you look at the bigger picture of the way this business has evolved over the last two years. I think at the customer level, I think that there's been a great deal of formalization and the introduction of GST and the digitization of the business and a fairly high degree of digital adoption by this customer segment itself and a reasonable level of credit discipline.

I think in India, we have one of the countries where we have the commercial bureau as well. So that certainly helps. So I think that there is a fair degree of formalization, digitization, and credit discipline. That helps banks like us for whom this segment becomes much more underwrite books.

Also, we look at this segment as a from a holistic perspective. This is -- we have a very strong customer 360 focus in this segment, and we really look at not just the lending piece, but also the -- all the transaction banking and the liability piece as well. So in that sense, it's a segment which is we want to focus on.

From a credit perspective, two, three things, I think one is that it's a reasonably well secured segment. So you do get particularly in the more tabular sections of the portfolio, you do have collateral as well. Second, the portfolio itself is quite granular and quite diversified. So if not, if we hopefully behave more like a retail portfolio rather than a corporate portfolio where a single borrower or a couple of borrowers can create more damage.

And of course, it's a portfolio where you have to keep monitoring and you have to have a very close eye on what is happening with the borrowers. It's a lot of it is working capital, which also helps because you -- either the way that the account is being operated and how it is behaving.

So it has to be tightly managed in terms of not just the initial underwriting, but also keeping a close eye on borrower behavior through the appropriate portfolio monitoring mechanism. I think as of now, we are very, very comfortable with the quality of the portfolio.

Got it. And it's fair to say that the credit cost in this business are lower than your retail book? Right?

Yeah, currently, that would be the key.

(Operator Instructions) Nitin Aggarwal, Motilal Oswal.

I have a few questions. First is on the fee income. We have seen a good traction in fee income this quarter. So now with the margins being constantly like under pressure and likely to remain slow as a cycle dance. Is it fair to say that fee income will continue to gain share as a percentage of total income? And what kind of opportunities in particular are we looking at in respect to transaction banking over the year?

So we don't really get into the proportion piece. I think we have an overall objective and look at what is the way to sort of maximize that.

I think specifically on fees, as we have said, we believe that our transacting platform are pretty strong. And the whole objective is to get more and more adoption of those existing customers and acquire more and more renew customers on the strength of those platforms across the entire sector from large corporates to those small businesses. Cards and payments is also a focus area, which is doing well for us.

So I would say we have seen a pretty decent growth across cards and payments, transaction banking, the FX and derivatives part of transaction banking as well as the pure lending-linked fees, that are related to loan disbursals or renewals or sanctions and so on. So it's really -- so I think we will continue to look at that and try to drive adoption of our platforms as much as possible.

Right. And the second question is on the trade-off between, say, growth and the focus around asset quality. Because if I see -- while bank has done a very good job in navigating through this environment, India delivering one of the better growth among the larger banks. But if I look at context to that, the slippages have also been just 6% Y-o-Y growth in slippages. And the slippage rate has actually come down.

So how are we like assessing the asset quality situation and strategizing on growth because it's a very sort of a fine (technical difficulty) to maintain between the group. So are we tightening too much? Or how are we actually reading that on the growth part?

So as I spoke, I don't think concerns on asset quality are really holding us back from growth. I mean, we definitely see growth -- good growth opportunity. As I mentioned, on the corporate sector continues to do -- which is 20% of our portfolio continues to do very well. And at the margin, we are actually continuing to see some clawbacks of past provisioning or losses that we may have taken, again, now close to 20%.

17%, 18% of the portfolio now is the whole business banking space. which we talked about in some detail. So we certainly see very good growth opportunity there. On the retail side, I would say that on the secured side, I think the slippages have been quite stable. They will keep going up in absolute terms as the portfolio grows and seasons.

But I think our credit experience has been pretty stable. Unsecured, as we have commented in the past, we have seen as the whole system, some increase in delinquencies and NPL additions over the last may be six quarters or six, seven quarters.

And we have taken corrective actions on that because of which, for example, you see the personal loan portfolio flattening out this quarter. But I think there also the trend has stabilized. And hopefully, as these actions feed to more maybe a couple of quarters down the line, we should start seeing some improvement.

But even for the moment, I think we are quite stable and all of these are anyway getting absorbed in a very healthy credit cost number. So as of today, I don't see that trade-off. And to the extent we needed to make that trade-off, particularly on the PL side, I think we've made it.

[Param Subramanian, Nomura].

Congratulations on another great quarter. Firstly, on CASA. So if I look at both the daily average CASA which you report and period end, for the last three quarters, both these numbers have actually been in a band, which is not the case for the rest of the system. And especially our [SAR] growth is pretty healthy at 13%. I think most of your peer group would be at a low single-digit sort of number. So what is driving this outperformance?

So I guess the way we approach this is that we don't really pursue any particular type of deposit. I think what we want to achieve is that we should increase our share of business with existing customers and acquire new good customers, and they should do as much of their banking as possible through us.

And whatever shape that takes, it could be [CASA, SAR], or a fixed deposit, we would want a bigger portion of that share. So we don't really, therefore, drive any particular number in this regard. I think this approach has worked well because I think probably the conversation with the customer is really about doing more banking with us rather than getting a particular deposit or type of deposit.

I think our digital platform do help because once the customer becomes digitally active and start using those platforms, the stickiness and therefore, the balances tend to go up.

Okay. Got it, Anindya. But it's not any change in the product offering or pricing or any such thing at all.

No, none at all.

Okay. Fair enough. Secondly, Anindya, I don't know if you mentioned this earlier, but -- just on the employee cost, the absolute number is down for two quarters in a row now. So what is driving that?

So that there are many variables, for example, provisions for retires and things like that, which do impact it on a sequential basis.

Okay. And head count reduction as well, the gross number?

That is something, as I said, that's a moving number. There could be in a quarter some reduction, and then it will come back up later as and when we hire to meet our requirements.

Chintan Joshi, Autonomous.

Two questions. If I can pick up your comment about kind of the provisioning cost, indicating that the underlying level is comfortable around 50 basis points. Should we think about this also in the context of the next year?

And the reason to ask the question is mainly because you've recycled about 30 basis points of provisions, actually that's incorrect, your provisions to loan number has come down from 2% to 1.7%. And we are not sure how much of that is recycled through the P&L. So just trying to understand what could be a sustainable level as we look into the next 12, 18 months?

No, there is nothing called recycling. I mean we give that absolute number. As you are aware, in part of that number is the [INR131 billion] of contingency provisions which is really a sort of a fixed number that we, I think, reached that level by March of 2023 and thereafter, we have not seen further contingency provisions.

As I said, apart from the retail provisioning and so on, on the corporate side, there are always some releases which come -- which are really reflective of improvement in the quality of the portfolio of recoveries that we have made. So that's the way it works. The numbers are all there.

I don't want to -- we don't really give an outlook for next year, but as we have always been saying, these numbers could inch up, but we don't see anything which worries us particularly or where we see any dramatic increase.

Okay. And then the second question was on the RIDF or requirements. Your RIDF number has been coming down for a while now. I'm just wondering, are there any shortfalls building up on the balance sheet that RBI may ask you to increase this balance down the line or take on some more PSLC or are you very comfortably placed in the more difficult segments of the PSL? Just wondering how much of this is sustainable or if we should factor some increase down the line?

The number is so small now that even if you factor some increase, I don't think it will have an impact. We, of course, do significant PSLC purchases, particularly for the small farmer category, while on most other categories, we are in a surplus position.

And we have been -- so that's a cost that has been getting reflected in the P&L over the years. Hopefully, we will be able to still compliance targets, but that INR17,000 crore portfolio on this balance sheet now -- sorry, INR15,000 crore, pardon me, portfolio on this balance sheet now is not too relevant a number even if it goes up some more.

Okay. And a quick data question. How much of the business banking book is unsecured?

So we don't split that out. It would be largely [unsecured].

Thank you very much. Ladies and gentlemen, we will take that as the last question. I'll now hand the conference over to the management for closing comments.

As always, thank you for taking time out on a Saturday evening, and we can take any other questions you have offline. Thank you very much.

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