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Informist, Saturday, Jan. 25, 2025

--ICICI Bank: De-growth in personal unsecured loans a conscious choice 

--CONTEXT: Comments by ICICI Bank management in post-earnings media call 

--ICICI Bank: Expect NIM to remain stable till RBI cuts interest rates 

--ICICI Bank: Comfortable with liquidity coverage ratio of 123% as on Dec 31 

--ICICI Bank: Comfortable with capital, no plan to raise equity 

MUMBAI – ICICI Bank expects its net interest margin to remain stable until there is a rate cut by the Reserve Bank of India, Sandeep Batra, executive director of the bank, said in a press conference after the announcement of Oct-Dec earnings. The net interest margin of the bank moderated to 4.25% in Oct-Dec from 4.27% in Jul-Sept and 4.43% a year ago.

"We do expect the margins to be broadly stable until the rate cycle starts. Of course, after the rate cuts happen, margins would be impacted due to lead-lack effect as floating loans will get repriced much faster than fixed deposits," Batra said.

The management also said that it feels comfortable in terms of the bank's liquidity situation. Liquidity coverage ratio of the bank was 123% as on Dec. 31, it said.

On plans to raise capital, officials said the bank is adequately capitalised. "The total capital adequacy has been 16.6%. This is a very comfortable position. We have got no immediate plans of raising equity," Batra said.

The management also said that there was a conscious effort to reduce the share of unsecured loans in the bank's portfolio. The personal loan book grew by about 8.8% on year in the Oct-Dec quarter while it was growing in the mid-30s about a year back. "I think this has been a conscious decision....as you are aware, we continuously monitor the various parameters in which we assess the risk, and in case, wherever we need to tighten, we have been doing that," Batra said.

Talking about the asset quality of the bank, Batra said the bank is focussed on the quality of the book it underwrites. "We have been sort of comfortable with the approach that we have taken and this will keep on evolving so that's where we are. We continue to closely monitor and identify early buildup of stress but overall the quality of the book is stable and we are very happy with that," he said. The gross non-performing assets ratio fell to 1.96% from 1.97% a quarter ago and the net NPA ratio remained unchanged from a quarter ago at 0.42%. 

The management said that recoveries from corporates may slow down in the Jan-Mar quarter. "It's fair to say that the recoveries from the corporate book will slow down as most of the recoveries would have happened," Batra said. Recoveries and upgrades, excluding write-offs and sale, stood at INR 33.92 billion in Oct-Dec compared to INR 33.19 billion in Jul-Sept.  End

Reported by Kabir Sharma

Edited by Ashish Shirke

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