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Informist, Saturday, Jan. 17, 2026

 

--ICICI Bank: Expect NIM to remain range-bound in future 

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

--ICICI Bk: Don't see need for major incremental provisioning for PSL loans 

 

MUMBAI – ICICI Bank does not see a major rise in provisioning in its agricultural priority sector loan book going ahead, Sandeep Batra, executive director of the private sector bank, said in a post-earnings press conference Saturday. Batra's comments come after the bank's net profit for the December quarter fell for the first time in over six years due to doubling of its provisions on year.

 

In its annual review, the Reserve Bank of India had directed the lender to make a standard asset provision of INR 12.83 billion for its agricultural priority sector loans due to non-compliance with regulation for classification. The loans were provided since 2012, and size of the loans are between INR 200 billion and INR 250 billion, the bank's management said. The additional provisioning would continue until the loans are repaid or renewed, as per guidelines for priority sector lending classification, the management reiterated.

 

"The additional provisions will continue until the loans are repaid or renewed in conformity with the PSL (priority sector lending) classification guidelines...And we will work towards the same," Batra said. "And based on our current assessments, we do not see very major incremental provisions going forward."

 

The bank reported provisions of INR 25.56 billion for Oct-Dec, more than double of INR 12.27 billion in the year-ago period. It posted a net profit of INR 113.18 billion for the December quarter, down 4% on year. If not for the additional provisions, the net profit would have been up 4.1%, Batra added.

 

Batra said there is no change of asset classification or terms of repayment from the borrowers of the agricultural loans in focus. The bank is "comfortable" with the quality of that loan book, and is looking to minimise the impact of provisioning, he said. The loans are fully secured and in the nature of working capital limits, the bank's executives said. The bank holds large provisions which are more than mandated for the December quarter, the management said. As of Dec. 31, the bank held contingency provisions of INR 131 billion.

 

As for margins, the bank expects its net interest margin to be range-bound going ahead. The bank's net interest margin was 4.30% in Oct-Dec, unchanged on quarter. The trajectory reflects repricing of loans and investments linked to external benchmarks, and competition, the management said. The bank has a large loan exposure linked to external benchmarks, and will see better profits once the RBI's Monetary Policy Committee ends its rate-cut cycle. The bank's treasury loss of INR 1.57 billion for the reporting quarter was due to mark-to-market movements, the bank's executives said. The bank is looking at long-term economic returns over booking gains to show in accounting statements, they said.

 

Speaking about the extension of tenure of Managing Director and Chief Executive Officer Sandeep Bakhshi, Batra said the bank's board of directors felt that a two-year term would be appropriate for Bakhshi's reappointment. This came in as a surprise since Bakhshi had changed the lender's trajectory for good after he was brought in following the unceremonious exit of his predecessor Chanda Kochhar. The board Saturday approved the reappointment of Bakhshi at the bank's helm till Oct. 3, 2028, making it a two-year extension instead of a usual three-year term. On Friday, shares of the bank ended 0.5% lower at INR 1,410.80 on the National Stock Exchange.   End

 

Reported by Priyasmita Dutta and Cassandra Carvalho

Edited by Ashish Shirke

 

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