Cost of deposits to increase for next 2-3 quarters
Management expects cost of deposits to continue rising for the next couple of quarters due to repricing of maturing deposits and incremental growth.
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ICICI Bank · forward-looking guidance across the available source record.
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Continue investing in technology, people, and distribution
The bank will maintain investments in technology, employee hiring, and branch expansion to drive franchise growth.
Focus on risk-calibrated profitable growth
Management aims to grow market share across key segments while maintaining prudent provisioning and strong capital levels.
Credit cost to normalize around 50 bps
Management expects credit cost to gradually normalize around 50 basis points, adjusted for seasonality and one-offs.
OpEx growth to moderate
Operating expense growth is expected to remain around 10-13% YoY, similar to recent quarters.
Personal loan growth to trend towards 20%
Personal loan growth is expected to moderate to around 20% or lower by year-end, from 24% YoY in Q1.
NIM pressure in Q2 from repo rate transmission
Full impact of 50 bps repo rate cut in June will flow through in Q2, partially offset by lower deposit costs.
Credit cost normalization to ~50 bps
Underlying credit cost expected to be around 50 bps, excluding KCC seasonality in Q1 and Q3.
Business banking to grow faster than overall loan book
Business banking portfolio expected to grow faster, increasing its share of total loans.
Full-year NIM similar to FY23
Management expects net interest margin for FY24 to be at a similar level as FY23 (4.53%), with some moderation from Q2 levels.
Continued branch expansion
The bank added 174 branches in Q2 and 350 in H1, with plans to continue expanding based on micro-market opportunities.
Technology investment at ~9% of opex
Technology expenses were about 9.2% of operating expenses in H1, and the bank will continue investing in technology, people, and distribution.
NIM expected to be broadly stable in H2 FY25
Management expects net interest margin to remain stable in the second half of the fiscal year, with potential improvement when rate cuts begin.
Operating expense growth to be around 8-10% in near term
OpEx growth moderated to 6.6% YoY in Q2; H1 growth was ~8.5%, and H2 may be slightly higher due to festive spends, but broadly in that range.
Personal loan growth to trend down further
Personal loan growth has slowed from 40% YoY to 17% and is expected to decline further over the next couple of quarters due to tighter underwriting.
NIMs expected to be range-bound over next couple of quarters
Management expects net interest margins to remain broadly stable, with no major movements either way, despite deposit repricing and competitive dynamics.
Loan growth to sustain with positive outlook
Management is positive on growth outlook, citing sequential pick-up in retail and strong business banking growth, but refrains from giving a specific year-end number.
Operating expenses not expected to increase at Q2 pace
Management indicated that sequential OpEx growth should moderate from the Q2 level, though continued investment in distribution will persist.
Full-year NIM expected similar to last year
Management expects FY24 NIM to be similar to FY23, implying further compression in Q4 but at a lower pace than Q3.
Headcount additions to moderate
Employee additions will not continue at the pace of previous 4-5 quarters; Q3 saw only 1,700 additions vs ~10,000 in H1.
Personal loan growth to moderate further
Growth in personal loans may continue to moderate from current levels due to tighter credit parameters and pricing actions.
Credit cost around 50bps
Management reiterated that reported credit cost of 37bps is below the sustainable level of ~50bps, with no expectation of a dramatic increase.
Continued investment in technology and branches
The bank will keep investing in technology (10.5% of opex), people, and distribution, adding 129 branches in Q3.
Focus on risk-calibrated profitable growth
Management aims to grow market share across key segments while maintaining strong balance sheet and prudent provisioning.
NIM to remain range-bound
Management expects net interest margin to stay around current levels in Q4, supported by deposit repricing and lower non-accrual impact.
Loan growth momentum to sustain
Sequential loan growth improved in Q3 and management expects this momentum to continue into Q4.
Credit card book to improve gradually
After a seasonal decline in Q3, credit card portfolio is expected to grow from current levels.
NIM expected to be range-bound near current levels
Management expects net interest margin to remain range-bound in the near term until a rate cut occurs, with only modest further moderation possible.
Operating expense growth to moderate
Management expects the pace of operating expense growth to moderate from the high levels seen in the last 12-15 months, driven by slower headcount additions and sourcing cost optimization.
Credit cost to remain below 50 bps
Management indicated that credit costs, adjusted for seasonality, should remain under 50 basis points, with no dramatic increase expected.
Margin pressure expected from rate cuts
Management expects some impact on NIMs as loan repricing is immediate while deposit repricing lags, but will manage through growth and other levers.
Continued focus on risk-adjusted PPOP
The bank will prioritize risk-adjusted pre-provision operating profit over pure loan growth, making tactical pricing calls as needed.
Unsecured retail NPL stabilization expected to continue
NPL formation on unsecured retail has broadly stabilized; management hopes for improvement in coming quarters.
Credit cost below 50bps in FY27
Management expects credit cost to remain below 50 basis points, excluding one-time items, supported by healthy asset quality.
Opex growth below revenue growth
Management aims to keep operating expense growth lower than revenue growth, targeting positive jaws.
NIM rangebound around 4.3%
Net interest margin expected to remain in the current range, with limited upside due to competitive pricing.