ICICI Bank Limited (NSE: ICICIBANK) Q3 2025 Earnings Call dated Jan. 25, 2025
Corporate Participants:
Sandeep Bakhshi — Managing Director & CEO
Anindya Banerjee — Group Chief Financial Officer
Analysts:
Mahrukh Adajania — Analyst
Rikin Shah — Analyst
Kunal Shah — Analyst
Piran Engineer — Analyst
Nitin Aggarwal — Analyst
Param Subramanian — Analyst
Chintan Joshi — Analyst
Presentation:
Operator
Ladies and gentlemen, good day, and welcome to ICICI Bank Limited Q3 FY ’25 Earnings Conference Call. As a reminder, all participant lines will be in the listen-only mode and there will be an opportunity for you to ask questions after the presentation concludes. [Operator Instructions] Please note that this conference is being recorded.
I now hand the conference over to Mr Sandeep Bakshi, MD and CEO, ICICI Bank. Thank you, and over to you, sir.
Sandeep Bakhshi — Managing Director & CEO
Thank you. Good evening to all of you, and welcome to the ICICI Bank earnings call to discuss the results for Q3 of FY ’25. Joining us today on this call are Sandeep Batra, Rakesh, Ajay, Anantya and Abhinay. The operating environment for the banking system continues to be dynamic based on evolving global and domestic economic factors. We would continue to monitor domestic inflation, liquidity, rates and uncertainties in the global environment.
At ICICI Bank, our strategic focus continues to be on growing profit before-tax, excluding treasury to the 360 degree customer-centric approach and by serving opportunities across ecosystems and micro markets. We continue to operate within our strategic framework to strengthen our franchise, maintaining high standards of governance, deepening coverage and enhancing delivery capabilities are focus areas for our risk-calibrated profitable growth. The profit before-tax excluding treasury grew by 12.8% year-on-year and 3.2% quarter-on-quarter to INR152.89 billion in this quarter. The core operating profit increased by 13.1% year-on-year and 2.9% quarter-on-quarter to INR165.16 billion in this quarter. Excluding dividend income from subsidiaries, the core operating profit increased by 14.7% year-on-year and 3.3% quarter-on-quarter to INR160.07 billion in this quarter.
The profit-after-tax grew by 14.8% year-on-year to INR117.92 billion in this quarter. Total deposits grew by 14.1% year-on-year and 1.5% sequentially at December 31, 2024. During the quarter, average deposits grew by 13.7% year-on-year and 2.1% sequentially and average current and savings account deposits grew by 12.6% year-on-year and 2.3% sequentially. The Bank’s average liquidity coverage ratio for the quarter was about 123%. The domestic loan portfolio grew by 15.1% year-on-year and 3.2% sequentially at December 31, 2024. The retail loan portfolio grew by 10.5% year-on-year and 1.4% sequentially. Including non-fund based outstanding, the retail portfolio was 43.9% of the total portfolio. The rural portfolio grew by 12.2% year-on-year and 0.9% sequentially. The business banking portfolio grew by 31.9% year-on-year and 6.4% sequentially.
The domestic corporate portfolio grew by 13.2% year-on-year and 4.3% sequentially. The overall loan portfolio, including the international branches portfolio grew by 13.9% year-on-year and 2.9% sequentially at December 31, 2024. The net NPA ratio was 0.42% at December 31, 2024 compared to 0.42% at September 30, 2024 and 0.44% at December 31, 2023. The total provisions during the quarter were INR12.27 billion or 7.4% of core operating profit and 0.37% of average advances. The provisioning coverage ratio on non-performing loans was 78.2% at December 31, 2024. In addition, the bank continues to hold contingency provisions of INR131 billion or about 1% of total loans at December 31, 2024. The capital position of the bank continued to be strong with the CET1 ratio at 15.93% and total capital adequacy ratio at 16.6% at December 31, 2024, including profits for nine months 2025.
Looking ahead, we see many opportunities to drive risk-calibrated profitable growth. We believe our focus on customer 360 degree, extensive franchise and collaboration within the organization, backed by our focus on enhancing delivery systems and simplifying processes will enable us to deliver holistic solutions to customers in a seamless manner and grow market-share across key segments. We will continue to make investments in technology, people, distribution and building a brand. We are laying strong emphasis on strengthening our operational resilience for seamless delivery of services to customers. We’ll remain focused on maintaining a strong balance sheet with prudent provisioning and healthy levels of capital. The principles of return of capital, fair to customers, fair to bank and one bank, one team will continue to guide our operations. We remain focused on delivering consistent and predictable returns to our shareholders.
I now hand the call over to Anindya.
Anindya Banerjee — Group Chief Financial Officer
Thank you, Sandeep. I will talk about loan growth, credit quality, P&L details, technology initiatives, portfolio trends and the performance of subsidiaries. Sandeep covered the loan growth across various segments. Coming to the growth across retail products, the mortgage portfolio grew by 11.4% year-on-year and 2.1% sequentially. Auto loans grew by 6.6% year-on-year and 1.7% sequentially. The commercial vehicles and equipment portfolio grew by 7.4% year-on-year and 1.7% sequentially. Personal loans grew by 8.8% year-on-year and declined 1.3% sequentially.
The credit card portfolio grew by 17.9% year-on-year and 2.8% sequentially. The personal loans and credit card portfolio were 9.2% and 4.3% of the overall loan book, respectively at December 31, 2024. The overseas loan portfolio in US dollar terms declined 21.2% year-on-year at December 31, 2024. The overseas loan portfolio was about 2.4% of the overall loan book at December 31, 2024. Of the overseas corporate portfolio, about 90% comprises Indian corporates.
Moving on to credit quality. The gross NPA additions were INR60.85 billion in the current quarter compared to INR59.16 billion in the first-quarter of the current fiscal year and INR50.73 billion in the previous quarter, i.e. the second-quarter. Recoveries and upgrades from gross NPAs, excluding write-offs and sales were INR33.92 billion in the current quarter compared to INR32.92 billion in the first-quarter of the current fiscal year and INR33.19 billion in the previous quarter. The net additions to gross NPAs were at INR26.93 billion in the current quarter compared to INR26.24 billion in the first-quarter of the current fiscal year and INR17.54 billion in the previous quarter.
The gross NPA additions from the retail and rural portfolios were INR53.04 billion in the current quarter compared to INR52.04 billion in the first-quarter of the current fiscal year and INR43.41 billion in the previous quarter. We typically see higher NPA additions from the Kissan credit card portfolio in the first and 3rd-quarter of a fiscal year. There were gross NPA additions of about INR7.14 billion from the Kissan credit card portfolio in the current quarter compared to INR7.21 billion in the first-quarter of the current fiscal year. Recoveries and upgrades from the retail and rural portfolios were INR27.86 billion compared to INR25.32 billion in the first-quarter of the current fiscal year and INR25.92 billion in the previous quarter.
The net additions to gross NPAs in the retail and rural portfolios were INR25.18 billion compared to INR26.72 billion in the first-quarter of the current fiscal year and INR17.49 billion in the previous quarter. The gross NPA additions from the corporate and business banking portfolios were INR7.81 billion compared to INR7.32 billion in the previous quarter. The recoveries and upgrades from the corporate and business banking portfolios were INR6.06 billion compared to INR7.27 billion in the previous quarter. There were net additions to gross NPAs of INR1.75 billion in the corporate and business banking portfolios compared to net addition of INR0.05 billion in the previous quarter. The gross NPAs written-off during the quarter were INR20.11 billion. There was sale of NPAs of INR0.58 billion for cash-in the current quarter compared to INR0.16 billion in the previous quarter.
The non-fund based outstanding to borrowers classified as non-performing was INR31.6 billion as of December 31, 2024 compared to INR33.82 billion as of September 30, 2024. The provisions on this non-fund based outstanding declined to INR17.12 billion at December 31, 2024 from INR19.11 billion at September 30, 2024, reflecting the decline in the outstanding itself. The total fund-based outstanding to all standard borrowers under resolution as per various guidelines declined to INR21.07 billion or about 0.2% of the total loan portfolio at December 31, 2024 or from INR25.46 billion at September 30, 2024. Of the total fund-based outstanding under resolution at December 31, 2024, INR19.36 billion was from the retail and rural portfolios and INR1.71 billion was from the corporate and business banking portfolios. The bank holds provisions of INR6.91 billion against these borrowers, which is higher than the requirement as per RBI guidelines.
Moving on to the P&L details, net interest income increased by 9.1% year-on-year to INR203.71 billion in this quarter. The net interest margin was 4.25% in this quarter compared to 4.27% in the previous quarter and 4.43% in Q3 of last year. The impact of interest on income tax refund on-net interest margin was 1 basis-point in the current quarter mailed in the previous quarter and 4 basis-points in Q3 of last year. The domestic NIM was 4.32% in this quarter compared to 4.34% in the previous quarter and 4.52% in Q3 of last year. The cost of deposits was 4.91% in this quarter compared to 4.88% in the previous quarter. Of the total domestic loans, interest rates on 52% of the loans are linked to the repo rate, 16% to MCL, MCLR and other older benchmarks and 1% to other external benchmarks. The balance 31% of loans had fixed interest rates.
Non-interest income excluding treasury grew by 12.1% year-on-year to INR66.97 billion in Q3 of 2025. Fee income increased by 16.3% year-on-year to INR61.8 billion in this quarter. Fees from retail, rural and business banking customers constituted about 78% of the total fees in this quarter. Dividend income from subsidiaries was INR5.09 billion in this quarter compared to INR6.5 billion in Q3 of last year. A dividend income from subsidiaries was INR19.44 billion in nine months of the current year compared to INR15.89 billion in nine months of last year.
On costs, the Bank’s operating expenses increased by 5% year-on-year in this quarter. Employee expenses increased by 3.1% year-on-year and non-employee expenses increased by 6.2% year-on-year in this quarter. Our branch count has increased by 129 in Q3 and 219 in nine months of the current year. We had 6,742 branches as of December 31 December 2024. The technology expenses were about 10.5% of our operating expenses in nine months of the current year. The total provisions during the quarter were INR12.27 billion or 7.4% of core operating profit and 0.37% of average advances compared to the provisions of INR12.33 billion in the previous quarter.
The provisioning coverage on non-performing loans was 78.2% as of December 31 December 2024. In addition, we hold INR6.9 billion of provisions on borrowers under resolution. Further, the bank continues to hold contingency provision of INR131 billion as of December 31 December 2024. At the end of December, the total provisions other than specific provisions on fund-based outstanding to borrowers classified as non-performing were INR225.69 billion or 1.7% of loans.
The profit before-tax excluding treasury grew by 12.8% year-on-year to INR152.89 billion in Q3 of this year. Treasury gains were INR3.71 billion in Q3 as compared to a treasury gain of INR1.23 billion in Q3 of the previous year. As you are aware, the treasury gains for the current quarter vis-a-vis the same quarter last year would not be comparable due to the implementation of the revised investment accounting guidelines from the 1st of April of the current year. The tax expense was INR38.68 billion in this quarter compared to INR34.02 billion in the corresponding quarter last year. The profit-after-tax by INR14 — grew by 14.8% year-on-year to INR117.92 billion in this quarter.
We continue to enhance the use of technology in our operations to provide simplified solutions to customers. The bank has introduced DGE, a digital platform designed to streamline the customer onboarding process for business banking. This enhances operational efficiency and the customer experience by integrating multiple digital services into a single seamless workflow., the retail lending platform is being upgraded on an ongoing basis with retail credit cards now integrated in the platform along with mortgages, personal loans and education loans.
We continue to make investments in the computing infrastructure and upgrade digital channels to further strengthen system resilience and simplify processes for enhancing customer experience. We have provided details on our retail, rural and business banking portfolios on Slides 25 to 28 of the investor presentation. The loan and non-fund-based outstanding to performing corporate borrowers rated BB and below was INR21.93 billion at December 31, 2024 compared to INR33.86 billion at September 30, 2024. This portfolio was about 0.2% of our advances at December 31, 2024. Other than one account, the maximum single borrower outstanding in the BBB and below portfolio was less than INR5 billion at December 31, 2024, the bank holds provisions of INR0.92 billion against this portfolio at December 31, 2024.
The total outstanding to NBFCs and HFCs was INR893.6 billion at December 31, 2024 compared to INR880.27 billion at September 30, 2024. The total outstanding loans to NBFCs and HFCs were about 6.8% of our advances at December 31, 2024. The builder portfolio, including construction finance, lease rental discounting term loans and working capital was INR586.36 billion at, 31 December 2024 compared to INR542.16 billion at September 30, 2024. The builder portfolio was about 4.5% of our total loan portfolio. Our portfolio largely comprises well-established builders and this is also reflected in the sequential increase in the portfolio. About 1.7% of the portfolio at December 31, 2024 was either rated BB and below internally or was classified as nonperforming compared to 1.9% at September 30, 2024.
And finally, the consolidated results, the consolidated profit-after-tax grew by 16.6% year-on-year to INR128.83 billion in this quarter. The details of the financial performance of key subsidiaries are covered in Slides 36 to 38 and 57 to 62 in the investor presentation. The annualized premium equivalent of ICICI Life was INR69.05 billion in the nine months ended, 31, 2024 compared to INR54.3 billion in the nine months of last year. The value of new business was INR15.75 billion in the nine months ended December 31, 2024 compared to INR14.51 billion in nine months of last year. The value of new business margin was 22.8% in these nine months compared to 26.7% in the nine months of last year and 24.6% in FY 2024. The profit-after-tax of ICICI Life was INR8.03 billion in nine months ended December 31, 2024 compared to INR6.79 billion in nine months of last year and INR3.26 billion in the current quarter compared to INR2.27 billion in Q3 of last year. Gross direct premium income of ICICI general was INR62.14 billion in the current quarter compared to INR62.3 billion in Q3 of last year. The combined ratio stood at 102.7% in the current quarter compared to 103.6% in Q3 of last year. The profit-after-tax was INR7.24 billion in the current quarter compared to INR4.31 billion in Q3 of last year. With effect from October 1, 2024, long-term products are accounted on a one-by-in basis as mandated by IRDI, hence the Q3 numbers are not fully comparable.
The profit-after-tax of ICICI AMC as per IndAS was INR6.32 billion in this quarter compared to INR5.46 billion in Q3 of last year. The profit-after-tax of ICICI Securities as per IndAS on a consolidated basis was INR5.04 billion in this quarter compared to INR4.66 billion in Q3 of last year. ICICI Bank Canada had a profit-after-tax of INR19.6 million Canadian dollars in this quarter compared to $15.9 million Canadian dollars in Q3 of last year. ICICI Bank UK had a profit-after-tax of $5.1 million US dollars in this quarter compared to $6.7 million US dollars in Q3 of last year. As per, ICICI Home Finance had a profit-after-tax of INR2.03 billion in the current quarter compared to INR1.86 billion in Q3 of last year.
With this, we conclude our opening remarks and we will now be happy to take your questions.
Questions and Answers:
Operator
Thank you very much. We’ll now begin with the question-and-answer session. [Operator Instructions] The first question is from the line of Mahrukh Adajania from Nuvama Wealth. Please go-ahead.
Mahrukh Adajania
Yeah, hi. I — my first question is on provisioning. So what would be utilization or reversal of provisions this quarter because provision on non-fund have gone down and you explained that that’s because the exposure has only gone down and then restructuring or resolution provisions have also gone down. So what would be the number or it’s just the two of the we — no.
Anindya Banerjee
We don’t give the number of guide back separately. I think what we are seeing overall on the credit cost side is that on the retail business banking portfolios, it continues to be quite stable. On the corporate portfolio, incrementally, there is practically no credit cost or NPL provisioning, but we are seeing a continuous improvement in the quality of the portfolio portfolios that we have been calling out over the years such as the non-fund outstanding to NPLs or restructured assets or the BBB and below portfolio, we also continue to see some recoveries from new accounts written-off in the past.
So I think that’s contributing to the provision line. So overall, as we’ve been saying, the provisions do vary a little bit from quarter-to-quarter, both because of the loan book and because of other factors, for example, over the last — maybe not the last quarter, but previous two, 3/4, we had ups and downs in, for example, the AIS related provisioning. But I think overall, we continue to be within sort of the 50 bps that we have been talking of in previous calls. The reported number for this quarter being 37 bps.
Mahrukh Adajania
Got it. Fair enough. And just on deposit growth, so the sequential run-rate is a bit softer this time. That’s just because of the liquidity environment or any comments there?
Anindya Banerjee
I think it’s because of the funding requirement, you know. So if you see system loan growth did slow-down a little bit, which is to a lesser extent that reflected in our portfolio as well. There was a CRR cut effective the middle of December. And we also saw some reduction if you look at our investor presentation in our RIDS portfolio and so on. So it’s really a function of the requirement. We also were able to, you know, take-in some very cost-effective refinance borrowings. So it’s really that you continue to maintain very strong liquidity. Our LCR actually went up slightly this quarter. Average for the quarter was 123%. So it’s more driven by the requirement than anything else.
Mahrukh Adajania
Okay. I just wanted one last clarification. So you have called out gross farm slippages. I mean, you always do call-out, so thank you for that. But would there be a comparable number for second-quarter or it’s just first and third only? Like if you want to…
Anindya Banerjee
Largely it comes in the first and third only.
Mahrukh Adajania
Okay. Okay. Thanks a lot.
Operator
Thank you. Next question is from the line of Rikin Shah from IIFL. Please go-ahead.
Rikin Shah
Hi, am I audible?
Anindya Banerjee
Yes.
Rikin Shah
Hi. Okay. Thank you for the opportunity. Just one question and it’s on operating cost, operating expenses. So they have been flattish for the last 3/4 and this is despite the tech expenses that you have been incurring. Just wanted to understand how much further flex do we have to manage the opex at the current levels or alternatively, when do you see that kind of picking-up in-line with your business growth? And data keeping question would be what would be the outstanding employee headcount as of end of December? Thank you.
Anindya Banerjee
So you know the headcount to the headcount does keep evolving in-line with our requirements of you know-how we want to staff the bank and what is the requirement at any point in time. We continue to invest in branches as you would have seen, we’ve added 129 in the current quarter. Overall, when we look at costs, I think the way we feel that we do have a large cost base and there are always opportunities for bringing in efficiencies in that cost base by streamlining our internal processes, integrating workflows and removing redundancies, which don’t — which are not required. So I think that’s an ongoing journey, both in terms of how do we sort of leverage the cost base much better.
And at the same time, we continue to invest in the growth requirements of the business as well as in things like IT security and reliability. So that’s a process which goes on. I would think that our aim would be to, as I said, leverage the cost base, continue to leverage the cost base better and you know we don’t think that there needs to be — it needs to go to a sort of linear relationship with the top-line.
Rikin Shah
Perfect. Very helpful. And would you be able to quantify the outstanding headcount as of December?
Anindya Banerjee
Do we give that number on an annual basis now, so we’ve not been giving it.
Rikin Shah
Okay, fine. Perfect. Thank you. Thank.
Operator
Thank you very much. Next question is from the line of Kunal Shah from Citigroup. Please go-ahead.
Kunal Shah
Yeah. Firstly, on the yield side, so last-time you indicated the impact of number of days also been there. So this time when we look at the overall decline in yields of 8 odd basis-points, is it primarily on account of KCC or there has been any impact of the days? And would it be fair to assume that this day count would entirely unwind in 4Q and there should be a positive bias towards the yields?
Anindya Banerjee
We will — so as far as the movement from Q2 to Q3 is concerned, you’re right, it’s largely the impact of the ACC because there a longer period of interest accrual gets reversed in that 1/4. As far as you know, the day count impact, et-cetera for going-forward wouldn’t really want to — we had said, I think last quarter that it Q4 has a lesser number of days, so just mathematically, you would see some unwinding.
Kunal Shah
Okay. So that should be there. And secondly, on the corporate banking side, generally maybe we are more focused in terms of the risk-written approach. This quarter, we have seen a decent level of growth on the corporate side, while retail there is some slowdown because of the unsecured lending. But otherwise, maybe is the price — pricing intensity easing over there? Would it be slightly margin-dilutive? We have not seen the impact this quarter. So how should we look at the overall corporate banking growth?
Anindya Banerjee
Yeah. I think that it’s not — I wouldn’t say it is going to be margin-dilutive and so on. We have to look at — the way we look at it is we look at the overall relationship with the — with the corporate. I think we don’t want to take very chunky finely priced long-term exposures just for the sake of loan growth. That’s not our approach at all. But we do have an ongoing relationship with corporates where there could be periodic working capital requirements or short-term lending requirements or longer-term requirements where indeed it does meet our overall sort of P&L aspirations. So we keep looking — I think we have a very active franchise and engagement with corporate clients across the spectrum and we keep taking advantage of those opportunities to work with them as and when they come up and fit our sort of approach.
Kunal Shah
And there was increase also in BBB and above, okay, by almost like 210 odd basis-points. So this is maybe incremental growth coming in from there or maybe business banking, how should we read that yeah?
Anindya Banerjee
I think that I think it’s large — it would largely be an upgrade from the BBB because as you can see, the BB portfolio has reduced. So and…
Kunal Shah
That 60 basis-points like…
Anindya Banerjee
That will reflect partly in the increase in the BBB. Of course, we could be doing incremental B lending also. I mean, it’s investment. So we have limits on how much of that we will do.
Kunal Shah
Okay, got it. Thank you. Thank you and all the best, yeah.
Operator
Thank you. I request for all the participants kindly restrict to two questions per participant. Next question is from the line of Piran Engineer from CLSA. Please go-ahead.
Piran Engineer
Yeah, hi, team. Congrats on another steady quarter. Just firstly on retail products, a couple of ones, mortgages, we were growing at, 16% 17% now down to 11%. Is that more a function of pricing in the industry or just overall slowdown? And same for vehicle loans, we understand that this year was a slowdown, but what’s your house outlook for next year?
Anindya Banerjee
Mortgages, of course, I think there is an element of price competition which is there and which has been there. So over a period of time, but there has been — I would say us the incremental disbursements have not been growing as much. They continue to hold-up. As you are aware, overall, there seems to be continued momentum in the uphit and higher segments of the market and maybe some softening in the — in the you know, more affordable type of segment. On vehicle loans, I think it’s more a function of the underlying sort of asset class itself because we are primarily in the new cars financing.
And there I think we had — if you look at actually last year or early part of this year, we had a pretty good run maybe from more recently, the market has slowed. I think it will go through its, you know, ups and downs, you know, as customers replace or as new models come, which typically create their sort of wave of excitement in the market. I guess it will — you will see it go from a good quarter to back quarter-over the next that’s the way it will — it will work.
Piran Engineer
Okay. Okay, fair enough. Secondly, just on business banking now, this has been a product that you all as well as your peers have gone really strong on. What really can go wrong for the industry two years later? Because today everything looks hunky-dory, but you know is there some part which we are missing here because it seems like almost a fairytail business.
Anindya Banerjee
So I think if you look at the bigger-picture of the way — the way this business has evolved over the last few years, I think at the customer level, I think that the — there has been a great deal of formalization and the introduction of GST and the digitization of the business and a fairly high degree of digital adoption by this customer segment itself. And a reasonable level of credit discipline. I think in India, we are one of the countries where you have the commercial bureau as well. So that certainly helps. So I think that there is a fair degree of formalization, digitization and credit discipline. That helps banks like us for whom this segment becomes much more underwritable. Also, we look at this segment as a — from a holistic perspective, this is — we have a very strong customer 360 focus in this segment and we really look at not just the lending piece, but also the — you know all the transaction banking and the liability piece as well. So in that sense, it’s the — it’s a segment which is we want to focus on.
From a credit perspective, two, three things, I think. One is that if you know it’s a reasonably well secured segment. So you do get particularly in the more granular sections of the portfolio, you do have collateral as well. Second, the portfolio itself is quite granular and quite diversified. So it’s not — it’s — it will hopefully behave more like a retail portfolio rather than a corporate portfolio where a single borrower or a couple of borrowers can, as you know, create more damage. But — and of course, it’s a portfolio where you have to keep monitoring and you have to have a very close eye on what is happening with the borrowers. It’s a lot of it is working capital, which also helps because you see the way that the account is being operated and how it is behaving. So it has to be tightly managed in terms of not just the initial underwriting, but also keeping a close eye on borrower behavior through the appropriate portfolio monitoring mechanism. I think as of now, we are very, very comfortable with the quality of the portfolio.
Piran Engineer
Got it. And it’s fair to say that the credit costs in this business are lower than your retail book, right?
Anindya Banerjee
So currently that could be the case. Yeah.
Piran Engineer
Got it. Okay. That’s it from my end. Thank you and wish you all the best.
Operator
Thank you. I request all the participants kindly restricted to two questions per participant. Next question is from the line of Nitin Agarwal from Motilal Oswal. Please go-ahead.
Nitin Aggarwal
Hi. Am I audible?
Anindya Banerjee
Yes.
Nitin Aggarwal
Yeah, thanks for the opportunity and good evening. So I have a few questions. First is on the fee income. We have seen a good traction in fee income this quarter. So now with margins being constantly like under pressure and likely to remain so as the cycle turns, is it fair to say that fee income will continue to gain share as a percentage of total income? And what kind of opportunities in particular are we looking at in respect to transaction banking over the years?
Anindya Banerjee
So we don’t really get into the proportion piece. I think we have a overall PPOP objective and we look at all the — what is the way to sort of maximize that I think specifically on fees, as we have said, we believe that our transacting platforms are pretty strong and you know the whole objective is to get more-and-more you know, adoption of those by our existing customers and acquire more-and-more new customers on the strength of those platforms across the entire spectrum from large corporates to small businesses. Cards and payments is also a focus area, which is doing well for us. So I would say we have seen a pretty decent growth across cards and payments, transaction banking, the FX and derivatives part of transaction banking as well as the pure lending linked fees that are related to loan disbursals or renewals or sanctions and so on.
So it’s really — so I think we will continue to look at that and try to drive adoption of our platforms and as much as possible.
Nitin Aggarwal
Right. And the second question is around the trade-off between, say, growth and the focus around asset quality because if I see, while the bank has done a very good job in navigating through this environment, India delivering one of the better growth amongst the larger banks. But if I look at in context to that, the slippages have also been just 6% Y-o-Y growth in slippages and the slippage rate has actually come down. So how are we like assessing this asset quality situation and strategizing on growth? Because it’s a very sort of a fine that only the need to maintain between the two. So are we tightening too much or how are we actually reading that growth on the growth part.
Anindya Banerjee
So as I spoke, you know, I don’t think concerns on asset quality are really holding us back from growth. I mean, we definitely see growth — a good growth opportunity. As I mentioned on the corporate sector continues to do, which is 20% of our portfolio continues to do very well. And at the margin, we are actually continuing to see some clawbacks of past provisioning or losses that we may have taken. So again now close to 20%, 17%, 18% of the portfolio now is the whole business banking space, which we talked about in some details. So we certainly see very good growth opportunity there.
On the retail side, I would say that on the secured side, I think the slippages have been quite stable. They will keep going up in absolute terms as the portfolio grows and seasons, but I think our credit experience has been pretty stable. Unsecured, as we have commented in the past, we have seen as has the whole-system, some increase in delinquencies and NPL additions over the last maybe six quarters or six quarters. And we have taken corrective actions on that because of which, for example, you see the personal loan portfolio flattening out this quarter. But I think there also the trend has stabilized and hopefully, you know, as these actions feed through more maybe a couple of quarters down the line, we should start seeing some improvement. But even for the moment, I think we are quite stable and all of these are anyway getting absorbed in a very healthy credit cost number. So as of today, I don’t think we see that trade-off. And to the extent we needed to make that trade-off, particularly on the PL side, I think we’ve made it.
Nitin Aggarwal
Right, got it. This is very useful. Thanks so much.
Operator
Thank you very much. Next question is from Sabrahim from Nomura. Please go-ahead.
Param Subramanian
Yeah, hi. Thanks for taking my question and congratulations on another great quarter. Firstly on CASA. So if I look at both your daily average CASA which you report and the period-end, for the last 3/4, both these numbers have actually been in a band, which is not the case for the rest of the system. And especially your SAR growth is pretty healthy at 13%. I think most of your peers would be at a low single-digit sort of number. So what is driving this outperformance?
Anindya Banerjee
So I guess the way we approach this is that we don’t really pursue any particular type of deposit. I think what we want to achieve is that we should increase our share of business with existing customers and acquire you know new good customers and they should do as much of their banking as possible through us. And whatever shape that takes, it could be car or star or a fixed deposit, we would want a bigger portion of that share. So we don’t really therefore drive any particular number in this regard. I think this approach has worked well because I think probably the conversation with the customer is really about doing more banking with us rather than you know, the getting a particular deposit or type of deposit. I think our digital platforms do help because once the customer becomes digitally active and starts using those platforms, the stickiness and therefore the balances tend to go up.
Param Subramanian
Okay, got it, Anil. But it’s not any change in the product offering or pricing or any testing at all, right?
Anindya Banerjee
No, no, no, not at all.
Param Subramanian
Okay, fair enough. Secondly, Anandhi, I don’t know if you mentioned this earlier, but just on the employee cost, the absolute number is down for two quarters in a row now. So what is driving that?
Anindya Banerjee
So that there are many variables, for example, provisions for retires and things like that which do impact it on a sequential basis.
Chintan Joshi
Okay. And headcount reduction as well, the gross number.
Anindya Banerjee
That is something, as I said, that’s a moving number. There could be in a quarter some reduction and then it will come back up later as and when we hire to meet our requirements.
Param Subramanian
Okay, fair enough. Thank you so much and congratulations on the quarter again. Thank you.
Anindya Banerjee
Thank you so much.
Operator
Thank you. Next question is from the line of Chintan Joshi from Autonomous. Please go-ahead.
Chintan Joshi
Hi, thank you. Hi, and two questions. If I can pick-up your comment about kind of the provisioning cost you are indicating that the underlying level is comfortable around 50 basis-points. So should we think about this also in the context of the next year? And the reason to ask the question is mainly because you’ve recycled about 30 basis-points of provisions, actually that’s incorrect. Your provisions to loan sum has come down from 2% to 1.7% and we are not sure how much of that is recycled through the P&L. So just trying to understand what could be a sustainable level as we look into the next 12, 18 months.
Anindya Banerjee
No, there is nothing called recycling. I mean, we give that absolute number. As you are aware in-part of that number is the INR131 billion of contingency provision, which is really a number — sort of a fixed number that we, I think reached that level by March of 2023 and thereafter, we have not been making further contingency provisions. In — as I said, apart from the retail provisioning and so on, on the corporate side, you know, there are always some releases which come — which are really reflective of improvement in the quality of the portfolio or recoveries that we have made. So you know that’s the way it works. The numbers are all there. So I don’t want to get — we don’t really give an outlook for next year, but as we have always been saying, you know, these numbers could inch up, but we don’t see anything which worries us particularly or where we see any — any dramatic increase?
Chintan Joshi
Okay. And then the second question was on the RIDF, your requirements, your RIDF number has been coming down for a while now. I’m just wondering, are there any shortfalls building up on the balance sheet that RBI may ask you to increase this balance down the line or take on some more PSLC or are you very comfortably placed even in the more difficult segments of the PSL? Just wondering how much of this is sustainable or if we should factor some increase down the line.
Anindya Banerjee
So the number is so small now that even if you factor some increase, I don’t think it will have too much of an impact. We, of course, do significant PSIC purchases, particularly for the small farmer category, while on most other categories, we are in a surplus position. And we have been — so that’s the cost that has been getting reflected in the P&L over the years. Hopefully, we will be able to still meet the compliance targets, but at INR17,000 crore portfolio on this balance sheet. Now it’s not — sorry, INR15,000 crores, pardon me, portfolio on this balance sheet now, it’s not a too relevant number even if it goes up somewhat.
Chintan Joshi
Okay. And a quick data question. How much of the business banking book is unsecured?
Anindya Banerjee
So we don’t that out. No, it will be largely a secured book.
Chintan Joshi
Thank you.
Operator
Thank you very much. Ladies and gentlemen, we’ll take that as the last question. I’ll now hand the conference over to management for closing comments.
Anindya Banerjee
So as always, thank you for taking time out on a Saturday evening and we can take any other questions you have offline. Thank you very much.
Operator
[Operator Closing Remarks]