Icici Bank Ltd (IBN) Q2 2027 Earnings Call Transcript

Ladies and gentlemen, good day and welcome to ICICI Bank Limited Q2 FY27 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 start then zero on your touchtone phone. Please note that this conference is being recorded. I now hand the conference over to Mr. Sandeep Berkshi, Managing Director and Chief Executive Officer of ICACA Bank. Thank you and over to you, sir.

Good evening to all of you and welcome to the ICACA Bank earnings call to discuss the results for Q2 of FY27. Joining us today on this call are Sandeep Batra, Rajesh, Ajay, Anandia and Abhinay. At ICACA 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. The profit before tax, excluding Treasury, grew by 23.4% year-on-year to 199.54 billion rupees in this quarter. The core operating profit increased by 21.8% year-on-year to 208.05 billion rupees in this quarter. The core operating profit excluding dividends from subsidiaries increased by 25% year-on-year to 203.42 billion rupees in this quarter. The profit after tax grew by 20.1% year-on-year to 148.43 billion rupees in this quarter. Total deposits grew by 27.1% year-on-year and 11.8% sequentially at September 30, 2026. Average deposits grew by 21.2% year-on-year and 8% sequentially, and average current and savings accounts deposits grew by 10.7% year-on-year and 1.4% sequentially during this quarter. The bank has mobilized gross FCNRB deposits of about 18 billion US dollars pursuant to RBI swap facility. Excluding FCNRB deposits, total period in deposits grew by 17% year-on-year and 3.1% sequentially at September 30, 2026. The bank's average liquidity coverage ratio for quarter was about 126%. The overall loan portfolio including the international branches grew by 30% year-on-year and 12% sequentially at September 30, 2026. Excluding loans provided by international branches of the bank against FCNRB deposits, total loans grew by 24.1% year-on-year and 7.3% sequentially. The retail and rural portfolio grew by 14.8% year-on-year and 3.2% sequentially. Including non-fund-based outstanding, the retail and rural portfolio was 43% of the total portfolio. The business banking portfolio grew by 33.8% year-on-year and 11.1% sequentially. The domestic corporate portfolio grew by 30.6% year-on-year and 10.4% sequentially. The domestic loan portfolio grew by 22.8% year-on-year and 6.8% sequentially at September 30, 2026. The overseas loan portfolio was 7.8% of the overall loan book at September 30, 2026. The net entry ratio was 0.3% at September 30, 2026 compared to 0.35% at June 30, 2026 and 0.39% at September 30, 2025. During the quarter, there were net additions of 12.13 billion rupees to gross NPAs, excluding write-offs and sales. The total provisions during the quarter were 8.51 billion rupees, or 4.1% of core operating profit and 0.2% of average advances. The provisioning coverage ratio on non-performing loans was 75% at September 30, 2026. In addition, the bank continues to hold contingency provisions of 131 billion rupees, or about 0.7% of total advances at September 30, 2026. The capital position of the bank continues to be strong with a CET1 ratio of 16.01% and total capital adequacy of 16.68% at September 30, 2026. The bank purchased 2% additional shareholding in ICSA Life Insurance Limited for consideration of 14.7 billion rupees during the quarter. Looking ahead, we see many opportunities to drive risk-caliberated profitable growth and grow market share across key segments. We remain focused on maintaining a strong balance sheet, student provisioning, and healthy levels of capital while delivering sustainable and predictable returns to our shareholders. I now hand the call over to Anandia.

Thank you, Sandeep. I will talk about loan growth, credit quality, P&L details and the performance of subsidiaries. On loan growth, we have revised the presentation of loans to reflect a consolidated view of the retail and rural portfolio with additional product-wise details. The comparable data for previous periods have also been provided on slides 64 and 65 of the investor presentation. Coming to the growth across retail and rural products. The mortgage portfolio grew by 15.3% year-on-year and 3.5% sequentially. Vehicle loans grew by 7.8% year-on-year and 1.4% sequentially. Personal loans grew by 16.6% year-on-year and 4.7% sequentially. The credit card portfolio declined by 9.7% year-on-year and 0.2% sequentially. Jewel loans grew by 79.4% year-on-year and 4.5% sequentially. Within the corporate portfolio, the total outstanding to NBFCs and HFCs was 1033.78 billion rupees at September 30, 2026 compared to 920.52 billion rupees at June 30, 2026. The total outstanding loans to NBFCs and HFCs were about 4.3% of our advances at September 30, 2026. The builder portfolio including construction finance, lease rental, discounting, term loans and working capital was 788.52 billion rupees at September 30, 2026 compared to 747.21 million rupees at June 30th, 2026. The builder loan portfolio was 4% 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 0.5% of the builder portfolio at September 30th, 2026 was either rated WB and Willow internally or was classified as non-befall. Moving on to credit quality, the gross NPA additions were Rs.48.33 billion in the current quarter compared to Rs.50.34 billion in Q2 of last year. Recoveries and upgrades from gross NPAs, excluding write-offs and sales, were Rs.36.20 billion in the current quarter compared to Rs.36.48 billion in Q2 of last year. The net additions to gross NPAs were Rs. 12.13 billion in the current quarter Compared to Rs. 13.86 billion in Q2 of last year The gross NPA additions from the retail and rural portfolio were Rs. 37.09 billion in the current quarter Compared to Rs. 40.49 billion in Q2 of last year Recoveries and updates from the retail and rural portfolio were Rs. 26.04 billion in the current quarter compared to Rs. 26.10 billion in Q2 of last year. The net additions to gross NPAs in the retail and rural portfolio were Rs. 11.05 billion in the current quarter compared to Rs. 14.39 billion in Q2 of last year. The gross NPA additions from the corporate and business banking portfolios were Rs. 11.24 billion in the current quarter compared to Rs. 9.85 billion in Q2 of last year. Recoveries and upgrades from the corporate and business banking portfolios were Rs. 10.16 billion in the current quarter compared to Rs. 10.38 billion in Q2 of last year. There were net additions to gross NPAs of 1.08 billion rupees in the current quarter in the corporate and business banking portfolios compared to net deletions of 0.53 billion rupees in Q2 of last year. The gross NPAs written off during the quarter were 15.92 billion rupees. Further, there was sale of NPAs of 1.33 billion rupees for cash in the current quarter. The non-fund-based outstanding to borrowers classified as non-performing was Rs 22.51 billion as of September 30, 2026, as compared to Rs 22.07 billion as of June 30, 2026 and Rs 23.22 billion as of September 30, 2025. The loans and non-fund based outstanding to performing corporate borrowers rated double B and below was 35.47 billion rupees at September 30th, 2026 as compared to 34.85 billion rupees at June 30th, 2026 and 36.61 billion rupees at September 30th, 2025. This portfolio was about 0.2% of our advances at September 30th, 2026. The total fund-based outstanding to all standard borrowers under resolution, as per various guidelines, declined to 11.85 billion rupees at September 30, 2026 from 13.63 billion rupees at June 30, 2026 and 16.24 billion rupees at September 30, 2025. At the end of September, the total provisions, other than specific provisions on fund-based outstanding to borrowers classified as non-performing were 238.15 billion rupees or 1.3% of loans. This includes the contingency provisions of 131 billion rupees 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 double B and below portfolio. The bank also continues to hold additional standard asset provision of 12.83 billion rupees made in Q3 of FY2026 as directed by RBI in respect of the agricultural priority sector portfolio till completion of the review process. Moving on to the P&L details, net interest income increased by 17.7% year-on-year and 3.9% sequentially to 253.39 billion rupees in this quarter. The net interest margin was 4.18% in this quarter compared to 4.36% in the previous quarter and 4.30% in Q2 of last year. Excluding the benefit of interest on tax refund, the net interest margin would have been 4.28% in the previous quarter. The domestic name excluding benefit of interest on income tax refund was 4.32% in the current quarter compared to 4.36% in the previous quarter and 4.37% in Q2 of last year. The cost of deposits was 4.50% in this quarter compared to 4.41% in the previous quarter and 4.64% in Q2 of last year. The increase in proportion of the assets of overseas branches in the total assets and the large sequential increase in the retail term deposit base have led to a moderation in margins and the full impact would reflect in the third quarter, after which we expect the margins to start moving back up, even based on the current level of policy rates. Of the total domestic loans, interest rates on about 57% of the loans are linked to the repo rate and other external benchmarks, 14% to MCLR and other older benchmarks and the remaining 29% of loans have fixed interest rates. Non-interest income excluding Treasury grew by 12.5% year-on-year to 82.77 billion rupees in Q2 of FY2027. Fee income increased by 20.1% year-on-year to 77.95 billion rupees in this quarter. Fees from retail, rural and business banking customers constituted about 75% of the total fees in this quarter. The income for the quarter includes fee for providing lending facilities against FCNRB deposits. Dividend income from subsidiaries was 4.63 billion rupees in this quarter compared to 8.1 billion rupees in Q2 of last year, primarily reflecting the shift in timing of dividend declaration from quarterly to half yearly basis by ICICI Prudential AMC Limited. On cost, the bank's operating expenses increased by 8.5% year-on-year and 1.9% sequentially in this quarter. Employee expenses increased by 13.5% year-on-year. Non-employee expenses increased by 5.6% year-on-year. Our branch count has increased by 145 in H1 of 2027. We had 7,656 branches as of September 30, 2026. The technology expenses were about 11.2% of our operating expenses in H1 of the current year. The total provisions during the quarter were 8.51 billion rupees or 4.1 percent of core operating profit and 0.2 percent of average advances compared to the provisions of 9.14 billion rupees in q2 of last year adjusting for one-off corporate recoveries standard asset provision on loans provided against fcnrb deposits and seasonality of kcc provisioning the normalized credit cost to advances would be about 50 basis points. The profit before tax, excluding Treasury, grew by 23.4% year-on-year to 199.54 billion rupees in Q2 of this year. There was a Treasury loss of 2.3 billion rupees in this quarter as compared to a gain of 1.5 billion rupees in the previous quarter and 2.2 billion rupees in Q2 of last year, reflecting market movements. The tax expense was 48.81 billion rupees in this quarter compared to 43.21 billion rupees in the previous quarter and 40.25 billion rupees in q2 of last year in the previous quarter the bank had written back tax provision of 4.46 billion rupees pursuant to favorable tax orders the profit after tax grew by 20.1 percent year-on-year to 148.43 billion rupees in this quarter the consolidated profit after tax grew by 22.3% year-on-year to Rs. 163.33 billion in this quarter. The details of the financial performance of key subsidiaries are covered in Slides 37-39 and 58-63 in the investor presentation. The annualized premium equivalent of ICICI Life increased to Rs. 49.35 billion in H1 of this year from Rs. 42.86 billion in H1 of last year. The value of new business increased to 12.83 billion rupees in H1 of this year from 10.49 billion rupees of H1 of last year. The value of new business margin was 26% in H1 of this year compared to 24.7% in FY2026 and 24.5% in H1 of last year. The profit after tax of ICICI life increased to 7.6 billion rupees in H1 of this year from 6.01 billion rupees in H1 of last year and 3.74 billion rupees in this quarter from 2.99 billion rupees in the second quarter of FY2026. Gross direct premium income of ICSA general increased to 67.92 billion rupees in Q2 2027 from 65.96 billion rupees in Q2 2026. The combined ratio stood at 107% in Q2 2027 compared to 105.1% in Q2 2026. Excluding the impact of CAT losses of 1.18 billion rupees in Q2 2027 and 0.73 billion rupees in Q2 2026, the combined ratio was 105.3% and 103.8% respectively. The profit after tax increased to ₹9.46 billion in Q2-2027 from ₹8.2 billion in Q2-2026. The profit after tax of ICSA AMC as per INDS increased to ₹8.89 billion in this quarter from ₹8.38 billion in Q2 of last year. The profit after tax of ICSA Securities as per on a consolidated basis increased to 4.39 billion rupees in this quarter from 4.25 billion rupees in Q2 of last year. Isasia Bank Canada had a profit after tax of 5 million Canadian dollars in this quarter compared to 6.3 million Canadian dollars in Q2 of last year. Isasia Bank UK had a profit after tax of 6.5 million US dollars in this quarter compared to 6.4 million US dollars in Q2 of last year. As per India, ICSA home finance profit after tax increased to 2.2 billion rupees in the current quarter from 2.03 billion rupees in Q2 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 touch-tone telephone. If you wish to remove yourself from the question queue, you may press star and 2. 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 Maruk Adajanya from Tara Capital. Please go ahead.

Yeah, hi. Congratulations. I just had a couple of questions. Firstly, on the corporate growth, is it just temporary parking of FCNR funds or do we see corporate growth remaining high in the future quarters? I mean, what is the kind of retail corporate mix because retail growth looks a bit softer than usual and corporate growth is very strong. So, how do you see it in the future quarters? That's my first question. Secondly, on provisions, so we've seen credit costs lower than the new normal in the last two quarters, and then in the third quarter of last year, there was also this agri provision of around 13 billion, and when does that get reversed?

And was there a big corporate recovery you did mention? so that continued i mean there was a big corporate recovery even this quarter like there was in the last is that true that's that's what i wanted to know yeah so on the first question actually the retail growth has been steadily picking up over the last few quarters if you look back you know maybe three or four quarters ago retail loan growth was running in the single digits and that has picked up now to close to 15%. And within that, in segments like home loans, the mortgages and personal loans, we have seen quite a steady pickup now back to mid-teen kind of levels. On the corporate side, partly, I guess, because till maybe Q2 last year, our corporate growth was quite subdued. So maybe the base effect is also there. But I don't think there is anything on really temporary parking of FCNR funds, etc. It is really a response to client demand and our view on pricing. Of course, as in any quarter, there is a mix of working capital draws, short-term lending, and long-term lending in the mix of the book growth. It's across all three. What is driving it, I think, is a mix of factors, you know, working capital requirements, some shift from bond markets, some shift from foreign currency borrowing markets, and some amount of investment activity. So, you know, we don't have a particular view on the mix between retail and corporate, you know, going forward. We are, you know, the franchise is open on both fronts and whatever comes in and meets our risk reward kind of threshold, we would be quite happy to do and we have the capital and funding for that. Yeah, so that would be the response. It's not really, in terms of our thinking, a temporary thing from a liquidity perspective. While we are on the subject of loan growth, I'll also just cover the business banking piece where we have seen a pretty strong growth, partly, of course, over the last two quarters there have been draws on the ECLGS front, but aside from that, also the underlying growth in terms of both new customer acquisition by us as well as the same increase in working capital or a fresh expansion of business-led activity also continues. And as you would have seen from the NPL numbers, across all these segments, the portfolio performance continues to be, you know, extremely healthy. So that is the way we would, you know, look at it. And, you know, that, you know, takes us into your second question on provisioning. You know, I think on the, you know, if we look at it on the NPL formation in the corporate side, new NPL formation in the corporate side is pretty negligible. On business banking, it continues to be quite low. And on retail, it is pretty stable. Actually, if we look back over the past four to six quarters, it has come down because of the reduction in NPL formation in personal loans and cards. and that is really feeding into the provisioning number. Yes, in this quarter there was one relatively chunky recovery on the corporate side and as I mentioned in the opening remarks, we also had some higher general provisioning this quarter because of the expansion of the loan book, particularly the loans against FC&R deposits in the overseas branches, which is more of a one-off and adjusted for all this, we would continue to believe that up to 50 basis points is where the credit cost would be. On the agriculture portfolio-related standard asset provisioning, I think it is still work in process in the sense that, as I had mentioned earlier, we want to be very sure that whatever remediation we have done is to the satisfaction of the regulator that process is underway and hopefully we should have an update on that over the next two quarters actually okay thanks a lot thank you thank you next question is from the line of nitin agarwal from otila loswal please go ahead hi uh good evening and thanks for the opportunity uh so a couple of questions from my side one is

on the two retail lending product segments, one is the credit card and also the gold loans. So credit card, we know that the trend has been running for the industry and for the bank the book has been declining slightly quarter every quarter. So where are we on that, when are we likely to see some recovery in credit card portfolio growth and on the gold loans also this quarter we have seen a much slower growth per se like versus what we are seeing with some other banks. So anything to read into that? What is our aspirations on this portfolio overall over the coming year?

So as far as the credit card book is concerned, I think we, you know, are fully engaged in the business and we are, as you would have seen, launching some of the new products and variants aimed at particular customer segments as well. and we are increasingly looking at it as a, you know, shifting from a product lens to a customer lens in this product and looking at it as part of the overall bouquet of our services to customers, a high-touch product that helps us, you know, try and establish primariness with the customer. So that is the broad approach. I think the spend piece will keep moving up and down. I mean, the specific reason for the decline this quarter was that last year there was a buildup of the book towards the end of September, which, you know, this year that will happen, you know, during the third quarter and not at the end of Q2. So that's more of a seasonal effect. But I don't think, you know, the underlying in terms of growth, things are okay, maybe marginally positive. The decline is more of just a date and base issue. On dual loans, as you would have seen, the year-on-year growth is very strong. The sequential growth has come off as we have been aligning our processes and other distribution as well as various operational risk management measures towards the new RBI guidelines and making sure that we have, you know, we do the business in full compliance with those. But I think it's a matter of time and we would expect volumes to pick up there.

Right. And the other question is of the overall growth per se, like when this quarter has been very well supported by FCNR, but do you see any change as such in the business environment that is driving such a strong growth even adjusted for FCNR? Like we are reporting a 10% plus corporate growth on Q&Q, which you alluded to is because of the base and we have not grown much in the past. But is there something which is materially changing the growth trajectory for the bank over the coming one or two years versus how it was in the last year as such?

I think when we look at the bank, I think we have a very strong franchise across customer segments. So we have access to all growth opportunities that come up as we serve the customers. At different points of time, we may have a different view on either pricing or the rate environment or the rate cycle and may calibrate our growth accordingly. But as we have gotten comfortable with, as we have spoken in the past, the point of the rate cycle or the level of pricing in the market, you know, we have picked up the growth. But that is the way we would continue to look at it. I think for banks in general and for us, of course, growth is supported currently by some of the factors that we mentioned earlier, including some amount of shift from bond markets as well as some amount of shift from offshore to onshore rupee markets. So we will keep taking those opportunities as we go along. But fundamentally, I think the franchise is fully open and capable of delivering, you know, very robust levels of growth.

Got that. And lastly, if I can squeeze one more question. How should one look at the margins now for the next one or two quarters? Has the impact of, say, FCNRB sourcing, which is very heavy for us, has it played out fully in this quarter? Or do we expect some more compression before the journey starts recovering?

As I explained, I mean, if you look at the numbers, there has been a small reduction in the domestic margin. if one leaves out the, you know, impact of income tax refund in the previous quarter, and the overseas margin has been stable to slightly higher. So the main impact which has come is the fact that the overseas book has expanded as a proportion of the overall book, and also, you know, given the large increase in the term deposit base, that has led to the small reduction in the domestic margin that I spoke of, because just mathematically the average CASA ratio has come down. The FCNRB deposits were raised during Q2, so the full impact of these on the average balance sheet will come in Q3 and we will see a further moderation in margin, offset a little bit by the rate hike which has already taken place. But then from Q4, I would expect margins to come back in a pretty healthy way as these factors start to reverse out, even assuming that there are no further rate hikes. But from an overall perspective, as we have said before, this sort of decline in margins for a quarter or two quarters on an optical basis doesn't worry us at all because we believe that we have raised a very large quantum of fixed rate funding which will support our growth and the expansion of our franchise over a period of time. And also given the fact that interest rates are certainly unlikely to go down and probably likely to go up, that gives, you know, a cushion to the profitability as well. So from a timing, balance sheet construct and just pure franchise perspective, we saw this as a big opportunity. And, you know, the small movement in margins, which anyway continue to be pretty healthy at the absolute level, while there is a shift from quarter to quarter, was not really something that concerned us too much.

Got it. Thank you so much, Anabya. Wish you all the best.

Thank you. Next question is from the line of Kunal Shah from Citi. Please go ahead.

Yeah, thanks for taking the question and congratulations for good set of numbers.

So on overseas margins, if I look at it, it has gone up sequentially. The base has obviously widened and I believe that incremental 90 or 1000 crores that would be at a much lower margin compared to one percent which is there on the overseas business so didn't get actually as to how it's moving up during the quarter and uh maybe to what level can it actually settle once we see the full impact of uh the overseas fcnr leverage table uh so uh so that's the first question and secondly in terms of the fcnr given that we have raised the substantial uh chunk uh so uh one of banks quantified 11 business points of impact due to FCNR maybe if you look at it 4.95 odd percent increase in the overseas and just multiply the difference that itself is the margin impact but if you can quantify how much is the FCNR impact in margin during the quarter and when do we see this utilization coming through to the average yield on earning interest earning assets at 8.1 or maybe yield-on advances at 8.81%, how long would the entire utilization take place here?

So, you know, overseas margins are not affected only by the margins on FNR. Interest rates have gone up, you know, in dollar markets over the last three, four months, and that also results in an increase in margins because you earn a higher spread on the deposits, particularly the float deposits that are there in any bank, including in the operations of our overseas branches. I would not want to get into projecting overseas margins separately. I think on an overall basis, what I've said is that the full impact of this increase in the term deposit denominator and its impact on the CASA ratio and the increase in the proportion of the overseas book which earns a 1% thereabouts margin compared to the 4% plus margin on the domestic book will just mathematically be fully seen in the averages in Q3. And thereafter, you know, I think we should start seeing a pickup, a pretty healthy pickup from Q4 onwards. So that is the way it would work. And on the utilization piece also, yes, obviously we are carrying some amount of excess liquidity currently, and I would expect that to be kind of deployed over the next two quarters, which is anyway, you know, the season where traditionally credit growth tends to be strong on the mark impact of fcnr you know i don't really want to give a number excluding including i mean finally it is something which is there on the balance sheet so we have kind of explained the trend of how it impacted the margins and what we expect to see going forward i don't really want to give a pro forma excluding or you know impact number because that can be calculated in many ways. Sure and fair to assume that it would it would be a theoretical number the FCNR deposits are what they are and the margins are what they are and we are trying to explain them and also give an outlook on how we expect them to move going forward.

Sure and try to assume that the report rate hike the positive impact of that will be lower than the drag which we would see because of the full quarter FDNR impact getting into Q3 plus there will be seasonal agree also which will come in Q3 so that's the reason you are indicating that margins should be down in the third quarter yes okay got it yeah thank you thank you we'll take our next question from the line of Param Subramanian from Investec please go ahead yeah hi good evening thanks for taking my question.

Firstly question on the SCNR itself. So we have I mean relative to our peers as a you know proportion of our balance sheet you know the number is very high that we have raised. So any change in our say strategy that has prompted this as in are we from a strategic perspective are we now prioritizing NII over name or any such thing because if I the reason I ask is if I think back to last year, you know, when the rate cuts were going on, it almost seemed to indicate that we had slowed down loan growth a bit and were solving for margin. So is that, is there a, you know, a strategic direction change also?

No, no, we don't, we solve for sustainable earnings growth and yes, as you said and we have indicated at a time when there was a downward rate cycle and we felt that spreads over the rate levels were not sufficient we did calibrate our growth and which has of course changed over the last few quarters. The FCNR opportunity was a one-off opportunity and as I said it's not not something that we read in the context of short-term impact on margins but rather the strength that it gave us in terms of business growth over a period of time going forward, and the impact on margins is anyway going to be transient. And I think it is an outcome that we are very happy with, because if we look at sort of the broad breakup of the deposit mobilization, and we are given this number shortly after the end of August, We made a public disclosure, I'm just rounding off the numbers, about $18 billion in all, around $10 billion where we have provided loans to the customers, about $3.6 billion or so where partner banks have provided loans and upwards of $4 billion, which is really where the customers have put in their own money. and we saw that as a very healthy outcome, including in terms of demonstration of the NRI franchise and the opportunity it gave us for engagement with the NRI customers, both existing and new. So I think we just saw it as a big opportunity to, you know, garner these resources which would support our growth, which were very cost effective because there is no regulatory preemption and so on on these deposits once you bring them onshore. And it just made, you know, long-term economic sense to maximize on these.

Perfect. Very clear on India.

Thank you.

Second question on the fees.

Is there any one-off on FCNR that you want to call out in this quarter because 20 percent fee income growth is much higher than what any of your peers are reporting yeah there is some some amount of you know the processing fees that were charged for the leverage against fcnr but equally for example if you look at the opex if you look at the sequential increase in opex it's largely due to the cost of you know the wholesale resources bonds and loans that we raise during the quarter to fund that leverage so I think net broadly the two even each other out.

Okay possible to call that or?

So as I as I said the increase in the OPEX of Q quarter between Q1 and Q2 can largely be explained by that.

Okay perfect perfect and one last question your savings growth if anything maybe that's the softer savings deposit growth that's a soft number 5% So, anything to read into that and if you can call out the LCR for the month of September separately because that would be higher than the average for the quarter right like that yeah that's it for me.

So, on the savings deposit growth nothing really I think as we have been saying there is a sort of it moves up and down quarter to quarter but in general there has been a trend of decline in the institutional savings, particularly what comes from the government departments and so on, while the retail savings growth continues to be quite okay. On the retail savings side also, we generally don't really drive the business on savings per se. We drive our business on money in bank. So what is the total sort of money that the retail customer is keeping with us in both the form of fds and in the form of savings accounts the retail mib as we call it and if i look at the retail mib accretion it is pretty stable to slightly better actually if i compare with past quarters so that is really the way we would look at it. We are, you know, not really looking at the headline number. On the LCR for the month of September, you know, it would not really be too informative for us because we could have deployed a lot of the excess liquidity in non-HQLA. For example, papers issued by financial counterparties and so on or money market mutual funds or bank CDs which are not eligible as HQLA because given the anyway base level of LCLR, LCR there was no need to deploy further in HQLA, there was a need to optimize return on liquidity while investing in safe instruments which is what we did.

Perfect. Thank you so much. Congrats on the quarter.

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

Hi, thank you for taking my question. Can I come back to the retail versus corporate debate? You know, do you, do the two businesses have similar RAROC thresholds that you give out to the businesses? I would assume that the RAROC achieved in retail is higher than in the corporate. So even if you, even if the businesses meet the threshold, is it fair to say there could be some dilution in ROE if you keep doing corporate or it doesn't work that way, just would like some color, you know, both on the thresholds but also on achieved dry rocks that you give to retail versus corporate businesses.

So it doesn't really work like that for a couple of reasons, one, you know, I think I think in corporate, we have one, the credit loss that is there in the corporate segment is much lower. I mean, even adjusting for the one-off recovery because in the corporate segment, by and large, our focus on return of capital at the sort of client level is very high. Whereas in the granular portfolios, we have to look at it at a portfolio level and have a certain tolerance for credit loss, whereas in the corporate portfolios, our focus on return of capital is very high. It is like a go-no-go kind of a decision. So in that sense, I would expect credit costs in the corporate portfolio to sustainably be lower than in retail. And of course, we look at it, you know, in the case of corporate, there are a lot of, you know, ancillary revenue streams, you know, transaction banking, payment collections, etc. So we factor all that into account. So just a lending RAROC would not, you know, may not show it up. So, for example, if you look at the very healthy growth in our current account balances over the last year, you know, even a year-on-year basis, a substantial part of that owes to work done on the corporate franchise. So, we have to really look at it in totality.

Okay, but they produce similar ROEs for you. Is that a fair assumption? I'm asking because one of your peers had said in a call a couple of quarters ago that the corporate business produces a slightly lower return than the retail business. I just wanted to understand whether that is true or false for ICACI. Yeah, hi, Anandar.

So what I was asking you is that- I'm sorry, because to answer your question, corporate is definitely not worse than retail.

That's good enough.

And the second question is, I appreciate all the color on the NIMS. uh uh just just kind of uh you know extrapolating your comments it does look like the underlying nims excluding fcnr probably improved cotter on cotter is that a fair observation i don't how because you know it's now money which is sitting in the balance sheet so we can explain how it has impacted the thing but i i we can't really talk about a excluding number but i would say that even if you leave aside you know the this yeah i guess our ability to raise funding at the most competitive costs and our focus on pricing and our ability to price our loans well has remained the same okay thank you thank you ladies and gentlemen we'll take that as a last question for today i now hand the conference back to management for closing comments over to you sir Thank you very much for taking time out on a Saturday evening and happy Dashehra in advance.

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