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Informist, Saturday, Jul. 19, 2025

--ICICI Bk:Will continue to see benefit of deposit cost repricing in Jul-Sept 

--CONTEXT: ICICI Bk mgmt's comments in post-earnings concall with analysts 

--ICICI Bk: Yet to transmit most of June's 50 bps cut in RBI repo rate 

--ICICI Bk: Impact of 50 bps repo rate cut in June to be felt in Jul-Sept 

By Sourabh Kumar and Vidhushi RajPurohit

MUMBAI – Most of the impact of the 50-basis-point repo rate cut by the Reserve Bank of India in June is yet to be transmitted on ICICI Bank Ltd.'s loan book, and it may be felt in the September quarter, the bank's management said at a post-earnings conference call with analysts. ICICI Bank's total advances stood at INR 13.64 trillion as on Jun. 30, up 11.5% on year.

"We have not quantified it (the effect of the repo rate cuts on the bank's loan book), but if you look at February cut I think it would have largely flown through almost entirely. The April cut also would have substantially flown through, maybe we have a little bit more to happen... The June cut I would say has not flown through much, and most of that will come through in Q2," the management said. 

ICICI Bank's net profit for the June quarter rose 15.5% on year to INR 127.68 billion, supported by a robust increase in its other income. The private-sector lender's other income rose 22% on year to INR 85.05 billion. Sequentially, the bank's net profit rose a mere 1.1%, primarily due to a surge in its provisions, which more than doubled on quarter to INR 18.15 billion in Apr-Jun. The bank's shares had closed 0.5% higher at INR 1,425.80 on the National Stock Exchange Friday.

Pointing to a need to focus on "distribution" and "throughput", the bank's management pointed to weak overall demand as the reason for the slow growth in its credit card and personal loan business in the June quarter. As of Jun. 30, the credit card portfolio and personal loan portfolio of ICICI Bank stood, respectively, at INR 542.55 billion and INR 1.20 trillion, rising 1.5% and 1.4% on year.

ICICI Bank said that while it expects some benefit of "re-pricing" of term deposits as well as the savings rate cut to continue, the benefit of a cut in the cash reserve ratio would kick in from Sept-Oct. At its June monetary policy meeting, the RBI had also cut the CRR by 100 bps to 3% of banks' net demand and time liabilites. The cut is estimated to release about INR 2.50 trillion into the banking system, which will gradually lower the cost of funds for banks. This liquidity infusion is expected to aid net interest margins of banks and boost return on assets.  End

Edited by Rajeev Pai

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