ICICI Bank Limited (IBN) Q4 2026 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call reveals a mixed sentiment. While there are positive aspects such as stable credit costs and a strong capital position, concerns about external uncertainties, vague management responses, and a treasury loss impact the outlook. The focus on profitable growth and stable margins balances these issues, suggesting a neutral short-term stock price movement.
Key Financial Performance
Profit Before Tax (excluding treasury) Grew by 10.1% year-on-year to INR 182.09 billion in Q4 FY 2026 and by 7.1% year-on-year to INR 650.21 billion in FY 2026. This growth is attributed to the bank's 360-degree customer-centric approach and operational resilience.
Core Operating Profit Increased by 5.1% year-on-year to INR 183.05 billion in Q4 FY 2026 and by 7.7% year-on-year to INR 704.01 billion in FY 2026.
Profit After Tax Grew by 8.5% year-on-year to INR 137.02 billion in Q4 FY 2026 and by 6.2% year-on-year to INR 501.47 billion in FY 2026.
Consolidated Profit After Tax Increased by 9% year-on-year to INR 147.55 billion in Q4 FY 2026 and by 6.2% year-on-year to INR 542.08 billion in FY 2026.
Total Deposits Grew by 11.4% year-on-year and 8.1% sequentially as of March 31, 2026.
Average Current and Savings Account Deposits Increased by 11.3% year-on-year and 2.7% sequentially during Q4 FY 2026.
Overall Loan Portfolio Grew by 15.8% year-on-year and 6% sequentially as of March 31, 2026.
Retail Loan Portfolio Increased by 9.5% year-on-year and 4.2% sequentially as of March 31, 2026.
Rural Portfolio (including gold loan) Grew by 25.6% year-on-year and 18% sequentially as of March 31, 2026.
Business Banking Portfolio Increased by 24.4% year-on-year and 7.6% sequentially as of March 31, 2026.
Domestic Corporate Portfolio Grew by 9% year-on-year and 3.1% sequentially as of March 31, 2026.
Domestic Loan Portfolio Increased by 15.3% year-on-year and 5.6% sequentially as of March 31, 2026.
Net NPA Ratio Reduced to 0.33% as of March 31, 2026, compared to 0.37% as of December 31, 2025, and 0.39% as of March 31, 2025.
Provisioning Coverage Ratio on Nonperforming Loans Stood at 75.8% as of March 31, 2026.
Net Interest Income Increased by 8.4% year-on-year and 4.8% sequentially to INR 229.79 billion in Q4 FY 2026.
Net Interest Margin Remained stable at 4.32% in FY 2026, similar to FY 2025.
Noninterest Income (excluding treasury) Grew by 5.6% year-on-year to INR 74.15 billion in Q4 FY 2026.
Fee Income Increased by 7.5% year-on-year to INR 67.79 billion in Q4 FY 2026.
Operating Expenses Increased by 12% year-on-year in Q4 FY 2026 and by 11.5% year-on-year in FY 2026.
Credit Cost Was 38 basis points in FY 2026.
Gross NPA Additions Reduced to INR 42.42 billion in Q4 FY 2026 from INR 51.42 billion in Q4 FY 2025.
Recoveries and Upgrades from Gross NPAs Reduced to INR 30.68 billion in Q4 FY 2026 from INR 38.17 billion in Q4 FY 2025.
Net Additions to Gross NPAs Reduced to INR 11.74 billion in Q4 FY 2026 from INR 13.25 billion in Q4 FY 2025.
Dividend Income from Subsidiaries Was INR 6.31 billion in Q4 FY 2026 compared to INR 6.75 billion in Q4 FY 2025.
Technology Expenses Accounted for about 11% of operating expenses in FY 2026.
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Operating Highlights
Loan Portfolio Growth: The overall loan portfolio, including international branches, grew by 15.8% year-on-year and 6% sequentially. Retail loans grew by 9.5% year-on-year, rural portfolio by 25.6%, and business banking portfolio by 24.4%.
Deposit Growth: Total deposits grew by 11.4% year-on-year and 8.1% sequentially. Average current and savings account deposits grew by 11.3% year-on-year.
Profit Growth: Profit before tax (excluding treasury) grew by 10.1% year-on-year to INR 182.09 billion in Q4 FY 2026. Profit after tax grew by 8.5% year-on-year to INR 137.02 billion in Q4 FY 2026.
Net Interest Income: Net interest income increased by 8.4% year-on-year to INR 229.79 billion in Q4 FY 2026. Net interest margin was 4.32%.
Asset Quality: Net NPA ratio improved to 0.33% as of March 31, 2026, compared to 0.37% in December 2025. Provisioning coverage ratio on nonperforming loans was 75.8%.
Branch Expansion: The bank added 126 branches in Q4 FY 2026, bringing the total to 7,511 branches as of March 31, 2026.
Subsidiary Performance: ICICI Life's value of new business increased to INR 26.29 billion in FY 2026, and ICICI General's profit after tax increased to INR 27.72 billion in FY 2026.
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Risk or Challenges
Credit Card Portfolio Decline: The credit card portfolio declined by 5.6% year-on-year and 1.3% sequentially, indicating potential challenges in this segment.
Gross NPA Additions: Gross NPA additions were INR 42.42 billion in the current quarter, reflecting ongoing credit quality challenges.
Net Additions to Gross NPAs: Net additions to gross NPAs were INR 11.74 billion in the current quarter, highlighting persistent asset quality issues.
Builder Loan Portfolio Risk: About 0.9% of the builder portfolio was rated BB and below or classified as nonperforming, indicating risks in the real estate sector.
Loans to NBFCs and HFCs: The total outstanding loans to NBFCs and HFCs increased, which could pose risks if these entities face financial stress.
Nonperforming Borrowers: Nonfund outstanding to borrowers classified as nonperforming was INR 21.74 billion, showing exposure to high-risk borrowers.
Operating Expenses Increase: Operating expenses increased by 12% year-on-year, which could pressure profitability if not managed effectively.
Treasury Loss: A treasury loss of INR 1.06 billion was recorded in the quarter, reflecting market volatility and regulatory impacts.
ICICI Bank Canada Profit Decline: Profit after tax for ICICI Bank Canada declined significantly due to reduced benchmark interest rates and lower business volumes, indicating challenges in international operations.
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Guidance & Outlook
Future Profit Opportunities: The company anticipates numerous profit opportunities to drive risk-calibrated profitable growth and expand market share across key segments.
Balance Sheet and Capital Management: Focus remains on maintaining a strong balance sheet, prudent provisioning, and healthy capital levels to deliver sustainable and predictable returns to shareholders.
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Shareholder Return Plan
Dividend per share: The Board has recommended a dividend of INR 12 per share for FY 2026, subject to requisite approvals.
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Key Q&A
Q:What is driving the growth in mortgages, particularly quarter-on-quarter?
A:The growth in mortgages is driven by the stabilization of benchmarks, which has allowed the bank to grow its portfolio. The competitive market is being navigated with appropriate pricing and a focus on customer 360 aspects.
Q:What is the stance on deposit growth given the slower growth compared to loan growth?
A:The average deposit growth is closely matched with average loan growth, and the bank is comfortable with its liquidity and CASA ratios. Deposit growth is not seen as a constraint for pursuing loan growth.
Q:Were there any provisioning releases or write-backs during the quarter?
A:Yes, there were higher recoveries and write-backs on the corporate portfolio, including recoveries from written-off accounts. Retail credit costs have also been coming down due to lower net additions to NPLs, particularly on the unsecured side.
Q:What steps are being taken to drive better traction in fee income growth?
A:The bank is focusing on transaction banking, deposit account-linked fees, and lending-linked fees. Cards and payment fees have been slower this year, and this area will be a focus for improvement.
Q:What has been the impact of RBI's recent foreign currency control regulations on other income?
A:The bank incurred a net treasury loss of INR 1.06 billion, which includes the impact of mark-to-market adjustments on swaps and forwards as of March 31.
Q:What is the outlook for growth in FY '27, particularly in unsecured loans and other segments?
A:The bank is optimistic about growth due to stabilizing interest rates and a positive economic outlook. However, external uncertainties like the conflict in West Asia are being monitored. The bank aims to leverage its strong franchise and healthy capital levels to grow within risk parameters.
Q:How does the bank view credit costs and their stability?
A:The bank sees credit costs as stable, with corporate sectors showing resilience and retail credit costs benefiting from sensible credit selection. The business banking portfolio has also held up well through various challenges.
Q:Has the bank tightened any credit parameters following recent geopolitical events?
A:The bank has not specifically tightened credit parameters but is closely monitoring potentially impacted segments and calibrating actions as needed.
Q:Is the yield on advances close to bottoming out?
A:The yield on advances has been impacted by rate cuts, but the bank expects margins to remain range-bound and broadly stable.
Q:What is driving the decline in credit costs?
A:The decline is driven by higher recoveries and write-backs on the corporate portfolio and moderating unsecured retail credit costs.
Q:Why has the credit card book been contracting for two successive quarters?
A:The decline in Q3 was seasonal due to festive season spend runoff. The small decline in Q4 is attributed to spend and revolver levels. The bank is focused on profitable growth and steady customer acquisition.
Q:What are the growth aspirations for the corporate loan book?
A:The bank is focused on quality counterparties and business opportunities. Growth has been strong over the last two quarters, and the bank continues to see opportunities with better-rated clients.
Q:What is the outlook for operating expenses (OpEx) growth?
A:The bank aims to keep OpEx growth below top-line growth. This year, higher costs were due to priority sector compliance and remuneration adjustments. The bank expects business growth to outpace OpEx growth next year.
Q:Have government SA balances stabilized?
A:Government SA balances are in the low-teens as a proportion of SA. The level of rundown has been lower this quarter, but the bank focuses on growing balances from other customer segments.
Q:What is the status of residual deposit repricing?
A:The bank expects deposit repricing to be range-bound, with peak rates more in the 1-year horizon. Margins are expected to remain stable.
Q:What is driving the sharp uptick in rural loans?
A:The uptick is driven by higher demand for gold loans and improved operational capabilities, although some of these loans are not strictly rural.
Q:What is the update on priority sector lending (PSL) compliance and related provisioning?
A:The bank continues to hold provisions for PSL compliance issues and is working to bring the portfolio into conformity. There is some shortfall on the small agri side.
Q:What is the growth outlook for the coming quarters, considering external uncertainties?
A:The bank finds it difficult to predict due to evolving situations but believes the system is resilient. It aims to leverage its strong capital and liquidity to grow while calibrating risk levels.
Q:Are there any early indicators of stress in the corporate or business banking book?
A:It is too early to generalize or identify stress in these segments.
Q:Is the bank committed to delivering positive jaws next year?
A:The bank aims to grow revenues ahead of costs but does not target a specific cost-to-income metric. The focus is on PPOP and PBT post credit costs.
Q:Review of Unclear Management Responses
A:Management avoided providing specific growth numbers for FY '27, citing external uncertainties like the conflict in West Asia. Additionally, they did not provide a clear timeline or detailed update on the resolution of priority sector lending compliance issues. The response to the question on residual deposit repricing was somewhat vague, with no precise figures or timelines shared.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Bank Limited
Conference Instructions
Director evening
FY approval
FY core
FY dividend
FY tax
FY today
INR MD
INR share
LCR loan
Limited FY
Mr Managing
adequacy dividend
advance coverage
approval deposit
bank LCR
day ICICI
dividend INR
dividend opportunity
fund portfolio
gold loan
loan banking
portfolio fund
portfolio gold
ratio provision
result FY
risk INR
risk market
share FY
sir tax
today Rakesh
IBN Transcript
ICICI Bank Limited (IBN) Q4 2026 Earnings Call Transcript
Unknown4-18
The earnings call reveals a mixed sentiment. While there are positive aspects such as stable credit costs and a strong capital position, concerns about external uncertainties, vague management responses, and a treasury loss impact the outlook. The focus on profitable growth and stable margins balances these issues, suggesting a neutral short-term stock price movement.
ICICI Bank Limited (IBN) Q3 2026 Earnings Call Transcript
Unknown1-17
The earnings call summary presents a mixed picture: stable financial performance with some growth in loan portfolios, but concerns about margin pressure and compliance costs. The Q&A highlights uncertainties in PSL compliance and unclear management responses, which may worry investors. Despite positive trends in some areas, the lack of clarity and potential cost impacts balance out the positives, leading to a neutral stock price outlook over the next two weeks.
ICICI Bank Limited (IBN) Q2 2026 Earnings Call Transcript
Unknown10-18
The earnings call summary reveals a stable financial performance with range-bound margins and improving asset quality. However, the lack of specific guidance and vague management responses in the Q&A session, particularly regarding CEO tenure and NIM projections, introduces uncertainty. No significant positive catalysts like partnerships or strong guidance were mentioned, and the absence of market cap data limits insight into potential stock reactions. Thus, the prediction remains neutral.
ICICI Bank Limited (IBN) Q1 2026 Earnings Call Transcript
Unknown7-21
The earnings call presents mixed signals. Basic financial performance is stable with growth in deposits and loans, but NIMs have slightly declined. The Q&A reveals uncertainty in growth revival and unclear management responses. While there are positives like strong business banking performance and increased dividend income, the cautious outlook on growth and unchanged guidance suggest a neutral sentiment. The market's reaction is likely to be muted, resulting in a stock price movement within the neutral range of -2% to 2%.
IBN Report
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