Summary
ICICI Bank Limited - Q3 FY2026 Earnings Call Summary Saturday, January 17, 2026
Event Participants
Executives 6 Abhinek, Ajay, Anindya Banerjee, Rakesh, Sandeep Bakhshi, Sandeep Batra
Analysts 6 Kunal Shah, Mahrukh Adajania, MB Mahesh, Nitin Aggarwal, Param Subramanian, Rikin Shah
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Total Deposits | ₹2,213,000 crores | +9.2% YoY, +2.9% QoQ; driven by healthy growth in retail term and savings deposits. |
| Average CASA | ₹803,000 crores | +8.9% YoY, +1.5% QoQ; retail SA remains strong, offset by lower institutional floats. |
| Domestic Loans | ₹1,524,000 crores | +11.5% YoY, +4.0% QoQ; acceleration seen in mortgage, rural, and corporate segments. |
| GNPA Ratio | 1.97% | -3 bps QoQ; net additions to GNPA improved to ₹2,074 crores vs ₹2,693 crores YoY. |
| NNPA Ratio | 0.37% | -2 bps QoQ; stable asset quality remains a key differentiator. |
| Core Operating Profit | ₹17,513 crores | +6.0% YoY, +2.5% QoQ; growth reflects steady NII and granular fee income. |
| Net Interest Margin | 4.30% | Flat QoQ, +5 bps YoY; repo and MCLR repricing offset by lower deposit costs and CRR cut. |
| Profit After Tax | ₹11,318 crores | -4.0% YoY; impacted by a one-time ₹1,283 crore additional standard asset provision. |
| CET-1 Ratio | 16.46% | Including 9M profits; bank maintains a very strong capital buffer. |
| LCR (Average) | 126% | Reflects comfortable liquidity position; expected to remain stable post-April 2026 guidelines. |
Geographic & Segment Commentary
- Retail & Rural: The retail portfolio grew 7.2% YoY, with mortgages leading at 11.1% YoY growth. Rural loans grew 4.9% YoY but saw a sharp 7.2% sequential jump. The bank noted seasonally higher NPA formation in the Kisan Credit Card (KCC) portfolio (₹736 crores) typical for Q1 and Q3, though overall retail credit quality is improving.
- Business Banking & Corporate: Business banking remains a high-growth engine, up 22.8% YoY, now slightly exceeding the total corporate portfolio size. Domestic corporate loans grew 5.6% YoY and 6.5% QoQ as benchmarks settled, allowing for more competitive pricing in the “A” family and above ratings.
- Unsecured Lending: Personal loans grew modestly at 2.4% YoY, while the credit card portfolio declined 3.5% YoY and 6.7% QoQ. Management attributed the card decline to high repayments following festive spending in Q2 rather than a structural pullback, expressing comfort with current credit underwriting.
Company-Specific & Strategic Commentary
- Agri-PSL Provisioning: Following an RBI supervisory review, the bank made an additional ₹1,283 crore standard asset provision on a ₹20,000–₹25,000 crore agri-portfolio deemed non-compliant with PSL classification guidelines. There is no change in asset classification or borrower terms; the bank aims to bring these loans into conformity upon renewal.
- Leadership Continuity: The Board has sought a two-year extension for CEO Sandeep Bakhshi. Management clarified that including the remaining current term, this provides a three-year horizon, aiming to quell speculation regarding leadership transitions.
- Operating Efficiency: Technology expenses stood at 11% of operating costs. While total expenses rose 13.2% YoY, management noted that excluding new Labour Code provisions (₹145 crores), absolute costs would have declined marginally QoQ.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Net Interest Margin | Range-bound | Repricing of retail deposits and repo cut impacts will likely keep margins steady in the near term. |
| Loan Growth | Sustaining Momentum | Q4 is expected to maintain the improved growth trends seen in mortgages, rural, and corporate segments in Q3. |
| Credit Cards | Gradual Recovery | Following the Q3 repayment cycle, the portfolio is expected to grow incrementally as the bank focuses on 360-degree customer banking. |
| PPOP | Maximizing Returns | Strategy remains focused on growing PBT excluding treasury rather than absolute cost-cutting. |
Risks & Constraints
| Risk | Context |
|---|---|
| Regulatory Compliance | The RBI-directed provision on agri-loans highlights ongoing regulatory scrutiny on PSL classification; failure to remediate could impact future costs. |
| Yield Pressure | While margins are currently steady, aggressive competition in mortgages and the repricing of repo-linked loans (75 bps cut cycle) pose downward risks to yields. |
| CASA Volatility | Institutional savings account floats have been a “dampener” on overall CASA growth; continued depletion could raise the cost of funds. |
Q&A Highlights
PSL Classification Issue
- Question: What was the specific classification issue and size of the affected portfolio? (Mahrukh Adajania)
- Answer: The portfolio size is approximately ₹20,000 to ₹25,000 crores. The RBI observation relates to technical conformity with PSL guidelines; it does not change the repayment behavior or asset quality of the borrowers (Anindya Banerjee).
Margin Outlook
- Question: How do you view margins given rate cuts and mortgage competition? (Mahrukh Adajania)
- Answer: Q3 benefited from a CRR cut and lower deposit costs. Going forward, the December repo cut will impact yields, but retail deposit repricing should provide a buffer, keeping NIMs range-bound (Anindya Banerjee).
Unsecured Lending Strategy
- Question: Why did the credit card book decline and when will unsecured growth pick up? (Rikin Shah, Nitin Aggarwal)
- Answer: The card decline was a one-off due to timing of festive repayments. While personal loan growth (2%) is currently below the 11.5% average, the bank is positive on the credit quality being underwritten and expects growth to improve from these levels (Anindya Banerjee).
LDR and Liquidity
- Question: Is the rising Loan-to-Deposit Ratio (LDR) a constraint? (Suresh Ganapathy)
- Answer: LDR rose due to the CRR cut. Given the bank’s high capital levels and moderate reliance on wholesale funding, management is comfortable with current levels and does not see LDR as a constraint to growth (Anindya Banerjee).
Key Takeaway
ICICI Bank delivered a resilient quarter characterized by steady core operating profit growth (+6.0% YoY) and stable margins (4.30%), despite a one-time ₹1,283 crore provision related to agricultural PSL classification. Asset quality remains top-tier with an NNPA of 0.37% and a massive contingency buffer of ₹13,100 crores. While retail growth moderated, particularly in unsecured segments, the bank saw a notable pickup in corporate (+6.5% QoQ) and business banking (+4.7% QoQ) momentum. Management appears focused on a “360-degree” customer approach to drive risk-calibrated growth while navigating a rate-cut cycle and regulatory refinements. With a CET-1 of 16.46% and leadership continuity until 2028, the bank is well-positioned to sustain its high-RoA (2.3% adjusted) profile in a competitive landscape.
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