ICICI Bank Limited (NSE: ICICIBANK) Q4 2026 Earnings Call dated Apr. 18, 2026
Corporate Participants:
Sandeep Bakhshi — Managing Director and Chief Executive Officer
Anindya Banerjee — Group Chief Financial Officer
Analysts:
Kunal Shah — Analyst
Param Subramanian — Analyst
Nitin Agarwal — Analyst
Mahrukh Adajania — Analyst
Unidentified Participant
Rikin Shah — Analyst
Chintan Joshi — Analyst
Piran Engineer — Analyst
Presentation:
Operator
Ladies and gentlemen, good day and welcome to ICICI Bank Limited Q4FY26 earnings conference call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Sandeep Bakshi, Managing Director and Chief Executive Officer of ICICI Bank.
Thank you. And over to you sir.
Sandeep Bakhshi — Managing Director and Chief Executive Officer
Thank you. Good evening to all of you and welcome to the ICICI bank earnings call to discuss the results for Q4 of FY 2026. Joining us today on this call are Sandeep Batra, Rakesh, Ajay, Anandya and Abhinay. At ICSA bank, our strategic focus continues to be on growing profit before tax excluding Treasury. Through the 360 degree customer centric approach and by serving opportunities across ecosystems and micro markets, we continue to operate within the framework of our values to strengthen our franchise.
Maintaining high standards of governance, deepening coverage and enhancing delivery capabilities with a focus on simplicity and operational resilience are key drivers for our risk calibrated profitable growth. The profit before tax excluding treasury grew by 10.1% year on year to INR182.09 billion in this quarter and by 7.1% year on year to INR650.21 billion in FY 2026. The Core Operating Profit increased by 5.1% year on year to INR183.05 billion in this quarter and By 7.7% year on year to INR704.01 billion in FY 2026.
The Profit After Tax grew by 8.5% year on year to INR137.02 billion in this quarter andBy 6.2% year on year to INR501.47 billion in financial year 2026. The Consolidated Profit After Tax grew by 9% year on year to INR147.55 billion in this quarter and BY 6.2% year on year To INR542.08 billion in FY 2066. The Board has recommended a dividend of INR12 per share for FY 2026 subject to requisite approvals. Total deposits grew by 11.4% year on year and 8.1% sequentially at March 31, 2026.
Average current and savings account deposits grew by 11.3% year on year and 2.7% sequentially during this quarter. The bank’s average LCR for the quarter was about 126%. The overall loan portfolio including the international branches Portfolio grew by 15.8% year on year and 6% sequentially at March 31, 2026. The retail loan portfolio grew by 9.5% year on year and 4.2% sequentially. Including non fund based outstanding, the retail portfolio was 41.7% of the total portfolio. The rural portfolio including gold loan grew by 25.6% year on year and 18% sequentially.
The business banking portfolio grew by 24.4% year on year and 7.6% sequentially. The domestic corporate portfolio grew by 9% year on year and 3.1% sequentially. The domestic loan portfolio grew by 15.3% year on year and 5.6% sequentially at March 31, 2026. The overseas loan portfolio was 2.7% of the overall loan book at March 31, 2026. The net NPA ratio was 0.33% at March 31, 2026 compared to 0.37% at 12-31-25 and 0.39% at March 31, 2025. The total provisions during the quarter were INR0.96 billion or 0.5% of core operating profit and 0.03% of average advances.
The provisioning coverage ratio on non performing loans was 75.8% at March 31, 2026. In addition, the bank continues to hold contingency provisions of INR131 billion or about 0.9% of total advances at March 31, 2026. The capital position of the bank continued to be Strong with a CET1 ratio of 16.35% and total capital adequacy of 17.18% at 26-3-31. After reckoning the impact of proposed dividend, looking ahead, we see many profit opportunities to drive risk calibrated profitable growth and grow market share across key segments.
We remain focused on maintaining a strong balance sheet, prudent provisioning and healthy levels of capital while delivering sustainable 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, PNL details 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 13.2% year on year and 4.7% sequentially. Auto loans grew by 1.7% year on year and 1.4% sequentially. The Commercial Vehicles and Equipment portfolio grew by 11.6% year on year and 6.4% sequentially. Personal loans grew by 7.2% year on year and 5.2% sequentially.
The Credit Card portfolio declined by 5.6% year on year and 1.3% sequentially. Within the Corporate portfolio, the total outstanding two NBFCs and HFCs was INR859.04 billion at March 31, 2026 compared to INR791.18 billion at December 31, 2025. The total outstanding loans to NBFCs and HFCs were about 4.6% of our advances at March 31, 2026. The Builder portfolio including construction, finance, lease, rental, discounting, term loans and working capital was INR714.21 billion at March 31, 2026 compared to INR680.83 billion at December 31, 2025.
The builder loan portfolio was 4.2% 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 0.9% of the builder portfolio at March 31, 2026 was either rated double B and below internally or was classified as non performing on credit quality. The gross NPA additions were INR42.42 billion in the current quarter compared to INR51.42 billion in Q4 of last year. Recoveries and upgrades from gross NPAs excluding write offs and sale were INR30.68 billion in the current quarter Compared to INR38.17 billion in Q4 of Last year.
The net additions to gross NPAs were INR11.74 billion in the current quarter, compared to INR13.25 billion in Q4 of LAST year. The gross NPA additions from the retail and rural portfolios were INR31.45 billion in the current quarter compared to INR43.39 billion in Q4 of last year. Recoveries and upgrades from the retail and rural portfolios were INR22.93 billion in the current quarter compared to INR30.39 billion in Q4 of last year. The net additions to gross NPAs in the retail and rural portfolios were INR8.52 billion in the current quarter compared to INR13 billion in Q4 of Last year.
The gross NP additions from the corporate and business banking portfolios were INR10.97 billion in the current quarter, compared to INR8.03 billion in Q4 of LAST year. Recoveries and upgrades from the corporate and business banking portfolios were INR7.75 billion in the current quarter compared to INR7.78 billion in Q4 of last year. There were net additions to gross NPAs of 3.22 billion in the current quarter in the corporate and business banking portfolios compared to INR0.25 billion in Q4 of last year.
The gross NPAs written off during the quarter was INR17.68 billion. Further, there was sale of NPAs of INR1.12 billion for cash in the current quarter. The non fund outstanding to borrowers classified as non performing was INR21.74 billion as of March 31, 2026 as compared to INR22.29 billion as of December 31, 2025. The loans and non fund outstanding to performing Corporate borrowers rated BB and below was INR35.19 billion at March 31, 2026 as compared to INR33.92 billion at December 31, 2025.
This portfolio was about 0.2% of our advances at March 31, 2026. The total fund based outstanding to all standard borrowers under resolution as per various guidelines declined to INR14.96 billion at March 31, 2026 from INR16.66 billion at December 31, 2025. At the end of March, the total provisions other than specific provisions on fund based outstanding to borrowers classified as non performing were INR227.1 billion or 1.5% of loans. This includes the contingency provisions of INR131 billion as well as general provision on standard assets provisions held for non fund based outstanding to borrowers classified as non performing fund and non fund based outstanding to standard borrowers under resolution and the double B and below portfolio.
The bank also continues to hold additional standard asset provision of INR12.83 billion made in Q3 as directed by RBI in respect of the agricultural priority sector portfolio. Moving on to the P and L details, net interest income increased by 8.4% year on year and 4.8% sequentially to INR229.79 billion in this quarter. The net interest margin was 4.32% in this quarter compared to 4.30% in the previous quarter. The cost of deposits was 4.43% in this quarter compared to4.55% in the previous quarter.
The benefit of interest on tax refund was 5 basis points in the current quarter compared to 1 basis point in the previous quarter. The margins for the quarter reflect the impact of external benchmark linked loans repricing repricing of term deposits and seasonally lower interest reversal on the KCC portfolio. The net interest margin in FY2026 was 4.32%, similar to FY2025 of the total domestic loans. Interest rates on about 56% of the loans are linked to the repo rate and other external benchmarks, 13% to MCLR and other older benchmarks and the remaining 31% of loans have fixed interest rates.
Non interest income excluding treasury grew by 5.6% year on year to INR74.15 billion in Q4 of fiscal 2026. Fee income increased by 7.5% year on year to INR67.79 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 INR6.31 billion in this quarter compared to INR6.75 billion in Q4 of last year. On costs. The bank’s operating expenses increased by 12% year on year in this quarter and 11.5% year on year in FY2026.
Employee expenses increased by 8.8% year on year and non employee expenses increased by 14% year on year in this quarter. Our branch count has increased by 126 in Q4 and 528 in FY 2026. We had 7511 branches as of March 31, 2026. The sequential increase in operating expenses primarily reflects the impact of market movements resulting in higher provisions for retiring benefits. The technology expenses were about 11% of our operating expenses in FY2026. The total provisions during the quarter were INR0.96 billion or 0.5% of core operating profit and 0.03% of average advances compared to the provisions of INR8.91 billion in Q4 of last year, reflecting healthy asset quality and higher recoveries and writebacks.
The credit cost was 38 basis points in FY 2026, adjusted for the additional standard asset provision. In respect of the agricultural priority sector portfolio and the corporate recoveries, the credit cost was under 50 basis points in fiscal 2026. The profit before tax excluding treasury grew by 10.1% year on year to INR182.09 billion in Q4 and by 7.1% year on year to INR650.21 billion in FY 2026. There was a treasury loss of INR1.06 billion in this quarter as compared to a loss of INR1.57 billion in the previous quarter and a gain of INR2.99 billion in Q4 of last year, primarily reflecting market movements and including the impact of capping of FX net open positions in the onshore market.
As per recent RBI guidelines, the tax expense was INR44.01 billion in this quarter compared to INR41.43 billion in the corresponding quarter last year. The profit after tax grew by 8.5% year on year to INR137.02 billion in this quarter. The profit after tax grew by 6.2% year on year to INR501.47 billion in FY 2026. The consolidated profit after tax grew by 9.3% year on year to INR147.55 billion in this quarter. The consolidated profit after tax grew by 6.2% year on year to INR542.08 billion in FY2026.
The details of the financial performance of these subsidiaries are covered in slides 33 to 35 and 5459 in the investor presentation. The annualized premium equivalent of ICICI life increased to INR106.41 billion in FY 2026 from INR104.07 billion in FY 2025. The value of new business increased to INR26.29 billion in FY 2026 From INR23.70 billion in FY 2025. The value of new business margin was 24.7% in FY 2026 compared to 22.8% in FY 2025. The profit after tax of ICICI Life increased to INR16 billion in FY 2026, from INR11.89 billion in FY 2025 and INR6.09 billion in this quarter from INR3.86 billion in Q4 of last year.
The gross direct premium income of ICICI General increased to INR287.12 billion in FY 2026 from INR268.33 billion in FY 2025. The combined ratio stood at 103.4% in FY 2026 compared to 102.8% in FY 2025. The profit after tax increased to INR27.72 billion in FY 2026, from INR25.08 billion in FY 2025. The profit after tax increased to INR5.47 billion in this quarter from INR5.1 billion in Q4 of last year. The profit after tax of ICICI AMC as per NDS increased to INR7.63 billion in this quarter from INR6.92 billion in Q4 OF last year.
The profit after tax of ICC securities as per Ind AS on a consolidated basis was 4.22 billion in this quarter compared to INR3.81 billion in Q4 of last year. ICCI Bank Canada had a profit after tax of 4.4 million Canadian dollars in this quarter compared to 12.5 million Canadian dollars in Q4 of last year, primarily reflecting the impact of reduction in benchmark interest rates and lower business volumes. ICICI Bank UK had a profit after tax of US$8 million in this quarter compared to US$6 million in Q4 of last year as per India’s ICSI, Home Finance had a profit after tax of INR2.49 billion in the current quarter compared to INR2.41 billion in Q4 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. [Operator Instructions] We’ll take a first question from the line of Jayant Karote from Access Capital. Please go ahead.
Kunal Shah
Thank you for the opportunity and congratulations.
Param Subramanian
Sorry,
Operator
Can you use the handset mode please? Your audio is not very clear.
Param Subramanian
Yes, hello, am I audible now?
Operator
Yes, please go ahead.
Param Subramanian
Thank you for the opportunity. The first question is on the.
Operator
I’m sorry, his line is disconnected. We’ll move on to the next question from the line of Kunal Shah from Citigroup. Please go ahead.
Kunal Shah
Yeah, so thanks for taking the question. So the first question is on the growth side. So particularly on retail we had seen the good uptick out there, particularly when we look at the mortgages, it’s been up like almost 4.7 odd percent and we had seen the uptick even on the PL as well as the commercial vehicle side. So on mortgages is it like the competition is coming off, they are getting attractive otherwise we have always focused on on roa. So what is actually driving this growth on the mortgages side in particular?
And the second question is on deposit. Deposits seems to be slightly slower compared to that of the loan growth and we have been in the market share maybe a couple of years where we have gained quite a bit of market share on CASA and all. But I think now the overall positive growth is lower than the system. So what will be our stance on the overall positive growth getting into the next year?
Anindya Banerjee
So first on the growth in mortgages, I think as we may have discussed in the past, we maybe if we look back two to three quarters ago, we were probably holding back a little because of both the benchmark risk and the spreads over the benchmark. I think as the benchmark has settled it has given us the space to grow that portfolio and that is what you have seen over the last two quarters and more particularly in this quarter. And we continue to it is of course a competitive market but we are within that trying to operate and price appropriately across the spectrum.
Also focusing very much on the entire customer360 aspect which we do in all our businesses. On the deposit side, I think while it looks like a loan growth of 15% and a deposit growth of 11% on an average basis they are pretty closely matched. Average deposit growth would also be very similar to the period end deposit growth while average loan growth would be closer to the average deposit growth. So if you look at it from an NCR perspective also we are continuing to be very comfortable at about 125% average for the quarter.
So we are quite comfortable on the deposit side. And CASA ratios are also holding up well. So that should support a healthy level of load growth.
Kunal Shah
Sorry, so you mentioned. So average deposit growth is almost 10.8%. Okay. So you mean to say the average loan growth.
Anindya Banerjee
Yeah,
Kunal Shah
Yeah.
Anindya Banerjee
The gap would not be like a 11 to 15 gap. It will be a lower gap and that much is fine. And on overall liquidity and LCR basis we are pretty comfortable. So deposit growth is not something that will constrain us from pursuing loan growth. Deposit growth. The deposit flows are more than adequate and healthy.
Kunal Shah
Sure. And lastly in terms of the provisioning, so when we look at the overall provisioning quite low during the quarter. So were there any write backs which have happened or release which have been there during the quarter? Maybe the overall recovery still seems to be pretty much in line with the last quarter. But was there any provisioning released in any of the line items?
Anindya Banerjee
So I think a couple of things on the provisioning side. One, if you look at even on a year on year basis on the retail side, the net additions are lower. And in particular over the last few quarters the additions to NPLs on the unsecured side which get provided pretty aggressively have been coming down. So that has brought down the provisioning requirements even on the retail side. Plus I would say we had a somewhat higher level of recoveries and write backs on the corporate portfolio including recoveries from written off accounts which has resulted in the provisioning for this quarter being at a pretty low level overall for the year.
As we said on the call, we were at 38 basis points and if we kind of adjust out the one time KCC provision and also the corporate recoveries, we would be below 50 basis points. So the underlying credit cost remains pretty stable.
Kunal Shah
Okay, so maybe for Q4, nothing in particular, maybe we are too full here. But for. Because if I look at recoveries in corporate and business banking it seems to be almost similar at 750, 775 odd crores. So nothing appears to be there in terms of higher recoveries in Q4.
Anindya Banerjee
So that’s the recovery from the gross NPLs. As I said, we would have a also a recovery from the written off accounts that gets, you know that that gets netted off in the provision line item that would have been on the somewhat higher side in this quarter.
Kunal Shah
Got it. That helps. Yeah, thanks. Thanks. And all the best. Yeah,
Operator
Thank you. Next question is from the line of Nitin Agarwal from Otilal Oswal. Please go ahead.
Nitin Agarwal
Yeah, hi. Good Evening and congrats on strong performance once again. The first question Anand is on the fee income growth. How do you look at this over the coming year? What steps are we taking to drive better traction on this line?
Anindya Banerjee
I guess if we look at the broad areas of fee income that we focus on, I think on the transaction banking in which I would include both all the trade aspects as well as forex and derivatives and on the deposit account linked fees, deposits demat, et cetera. I think we are doing reasonably well on the cards and payment side. This year has been a little slow. We have not grown as much there in terms of fees and that would be one area for us to focus on. I think more recently as the loan growth has picked up, the lending linked fees have also picked up and we will hopefully see that momentum sustained going forward.
But this is something we’ll have to keep calibrating.
Nitin Agarwal
Okay. And can you also give some color as to what has been the impact from RBI’s recent foreign currency control regulations that they came up with in respect to the net open position and NDF regulations as to how much has been the impact on the other income and any losses that we have incurred because of that this quarter?
Anindya Banerjee
So we have a net treasury loss of INR1.606 billion. That includes, you know that’s after taking into account the impact of the mark to market as of March 31st on the these, the net, the swaps, the forwards. So that’s factored into those numbers.
Nitin Agarwal
Okay. Okay, sure. And the last question is around the growth. We have seen a very strong pickup in the system numbers. Even ICSE bank in the last two quarters have picked up very well on the growth front. How do you look at this momentum going into FY27? Is this like something that you will think that will further or is it kind of has already reached the high point? I mean overall the growth will broad base from here further in respect to unsecured loans and some of the other segments which are not contributing like mortgage started to pick up now or you think that 16 odd percent growth where we are right now is like the on already on the upper end that we are looking at.
Anindya Banerjee
I won’t we wouldn’t get into giving a growth number. I think that post all the measures that were taken at a policy level through last year and from our own side, I think with some of the factors like the interest rate stabilizing, benchmark stabilizing growth has picked up and you know the economy general outlook on the economy has been quite Positive, of course, more recently since March, the conflict in West Asia has clouded the outlook in the sense that it has created some amount of uncertainty.
But from our side, I think we believe we have a strong franchise, very healthy capital levels, strong funding and liquidity. So we would want to leverage that to grow the business within our, you know, parameters of risk acceptance.
Nitin Agarwal
Right. And sorry if I can squeeze one more. And especially on the credit cost line, wherein I think everybody has been waiting for some normalization, some uptick in credit cost in the banking system and yet you have reported a sharp improvement here again while our guidance remains below 50 basis point. But in terms of your own confidence and assessment, do you feel more confident now versus how things were in the prior years? Because guidance in General has been sub 50 over the years. So how do you see like and compare this now versus versus what we have guided in the past?
Anindya Banerjee
So I would think that you look at the different segments of the business. I think the corporate sector is pretty strong and they are well funded with healthy balance sheets and significant resilience, I would say. And on the retail side, I think banks, including us, have been reasonably sensible about credit selection and the customers have also held up well. We had maybe a year and a half, two years ago, some increase in delinquencies on the personal loan side. But with regulatory action and with the steps taken by banks, that also was fairly quickly contained.
So that is showing up in these very healthy credit numbers. And while there are these externalities to be monitored, we don’t at the moment see any cause for concern as such. The other portfolio, which is reasonably large now and has grown rapidly over the last few years, is the whole business banking portfolio. And again, one would have to monitor any potential impact of the external events on that. But I would say that that is a portfolio, at least to the extent that we have a track record, has been tested through Covid, the energy dislocation of 2022 and then the whole tariff issue and has held up reasonably well.
So that gives us some degree of confidence, but we will monitor it as we go along.
Nitin Agarwal
Right. Thanks Ananda. Thanks for all the insights. Wish you all the best.
Operator
Thank you. Next question is from Maruk Azajania from Tara Capital. Please go ahead.
Mahrukh Adajania
Yeah, hi. Congratulations. I had a couple of questions. Firstly, after this war, would you have tightened any credit parameter or any credit rule going into FY27 or its business as usual or growth as usual across segments, even small segments? So that’s my first question. Secondly, if you see your yield on advances, what you reported in the presentation that’s been coming off over the last two quarters. Of course there have been the impact of rate cuts as well. But can we say that yields have now bottomed because your cost of funds has also come down materially and I believe most of the repricing is done there.
So in terms of yield, is this now close to the bottom? That’s my second question.
Anindya Banerjee
So on the first question side, of course we have, you know, looked at and continue to look at regularly all the potential sectoral impact as well as the impact at a client level. I would not say that we have specifically tightened anything or are excluding any segment. But you know, we have our understanding of which are the segments that are potentially need require closer monitoring. And we are doing that and we will calibrate our actions as we go along. Overall, I think as I said, we are continuing to focus on growing the business on the yield.
I think we have of course this quarter seen the impact of the December repo cut and we will, you know, we will just have to as we go along look at how incremental pricing, et cetera play out in the market. And you know, we’ll have some maybe amount of deposit repricing also. So I guess at a margin level we continue to look at sort of range bound margins unlikely to move up but should be broadly in this range is what we would think.
Mahrukh Adajania
Got it. And I just have one last question. You explained the decline in credit cost. Was it more driven by unsecured slippage coming down or more by corporate slippage this quarter? I mean mobile corporate recoveries.
Anindya Banerjee
So this quarter of course we saw higher level of recoveries and write backs on the corporate portfolio including recoveries from written off accounts. But in general the retail credit costs as you can see from the retail net additions itself have been coming down. So the retail credit costs have also been coming down. And within that, you know, the unsecured has been moderating. So you know, secured was anyway pretty stable. So that is having a beneficial impact on the provisions.
Operator
Okay, perfect. Thanks. Thanks a lot. Thank you. Next question is from the line of Shashadri Sen from MK Global. Please go ahead. Seshadri, your line is unmuted. Yes, please. Thank you for
Unidentified Participant
The opportunity. I have a couple of questions. One is for the second successive quarter your credit card book is contracting. Is that just the nature of the business seasonal or are you taking any interventions in terms of trying to boost profitability? And overall, if you could comment on how the profitability of the credit card business is trending because you know revolver rates are coming down, cost of acquisitions seems to be moving a little bit.
Anindya Banerjee
So you know, I think in Q3 the decline we saw was really seasonal because there was a sharp build up of the book towards the end of Q2 due to the festive season spend which ran off in Q3, the small decline in the fourth quarter, I would say we can’t really say that it is seasonal. It is really a function of spends and revolvers. From our perspective, I think we are focused on growing the business and growing it with the right set of customers in a profitable way and we have been seeing reasonably steady new customer acquisition.
I think the level of revolvers, et cetera has been an issue for the industry. So that is something that we’ll have to deal with. But we would hope to see better numbers in terms of growth. And as I mentioned when prior, one of the analysts earlier asked about fertility fees on the fees as well. Profitability I think yes. I mean at a very high level, if you look at over the last few years, the decline in the level of revolvers has impacted profitability but it still remains a very profitable business and it is a business with many levers of profitability, you know, including, you know, the, the kind of on the cost side, reward side, etc.
So I think those, you know, we keep tweaking those as well. So overall I think it’s a business one would, you know, continue to have a very strong focus on.
Unidentified Participant
Thanks. And my second question is on the corporate loan outlook both tactically in the short term while the energy crisis and the war is on and also from a cyclone medium perspective. What we what are your growth aspirations? What are the key drivers? Are there any particular segments that you’re looking at?
Anindya Banerjee
I think, you know, we are very focused on the counterparty and in terms of the quality and the overall business opportunity, I think you know, our funnels are open and we are in constant dialogue with the clients and wherever there is a level at which where it makes sense both for the client and the bank, the business happens. Over the last two quarters we have seen a reasonably good accretion to the corporate book and we continue to see opportunities going ahead and I think with the better rated clients we will look through any short term issues arising out of this crisis and see how we can work with them over the longer term.
Param Subramanian
Thank you so much.
Operator
Thank you. We’ll take our next question from the line of Rikkin Shah from IIFL Capital. Please go ahead.
Rikin Shah
Hi, good evening. A few questions. First one is on OPEX. So the OPEX growth about at 11.5 12 year has been higher than the peers, perhaps due to the increase in the average remuneration for the employees. So how should we think about it going into next year, especially when your volume growth is also picking up. So does this further rise in terms of the overall OPEX growth or there are certain levers to bring that down. So that’s one second, Anindya, could you comment on the government Saab balances where we were seeing some outflow flows?
Have the trends stabilized and should we start seeing some growth even in the institutional sag going ahead? So those are my two questions
Anindya Banerjee
As far as the OPEX is concerned. You know, I think if we look at this year, more or less it has been in line with our expectations. I think a couple of areas where the costs have been somewhat higher than what we would have expected have started out with. One is, you know, on the priority sector compliance and the second is to some extent on the remuneration because of the labor code and, you know, a couple of other, you know, like the market movement impact that we saw in March. And the final numbers on business growth are a little ahead of OPEX growth and we hope that that will be, you know, sustained over the next year.
So, you know, definitely we would want to have OPEX growth at a level which is below the top line growth. That would be our objective.
Rikin Shah
And the government Saab balances.
Anindya Banerjee
Yeah, government SA balances. So as we had said last time, those are, you know, in the low teens as a proportion of the balances. I think this could be quarter. It’s been, you know, maybe the level of rundown has been somewhat lower. But really that’s something that we will have to just bake into our plans and really focus on growing, you know, the money in bank, as we call it, from the other set of customers. While of course this is something that will come and go as it comes and goes.
Rikin Shah
Got it. And if I can just squeeze in one last question. Could you comment on how much residual deposit repricing is remaining in your case?
Anindya Banerjee
Don’t really give a, you know, a number of that time. But I guess, you know, maybe, you know, till, you know, till the last summer, our peak rates were more in the one year kind of level. So that’s kind of the
Chintan Joshi
Repricing horizon.
Param Subramanian
Okay. All right. Thank you.
Operator
Thank you. Next question is from Param Subramanian from investech. Please go ahead.
Param Subramanian
Good evening. Thanks for taking my question. Firstly on rural loans. So there is a Sharp uptick in this quarter. So what is driving that 18% quarter on quarter?
Anindya Banerjee
So part of it is due to, I think over the last couple of quarters higher demand for gold loans. And we have also geared up, you know, our machinery. I mean some of it is not particularly rural, although we club it in that segment. It could be from a broader range of branches, but that would be one of the drivers in addition to other elements of the portfolio.
Param Subramanian
Okay, got it. And where are we in terms of so what the issue that came up in the last quarter on the, on the, you know, the priority sector related provisioning. So we have been talking about say recoveries of those provisions gradually over the next year. So any update you want to give on that.
Anindya Banerjee
So as we said earlier, as of March, we continue to hold those provisions. We are in the process of working through that portfolio, as we said, to try and bring it into conformity with the requirements of the agreed lending classification. And maybe you know, we will have an update on that, you know, a quarter or so from now.
Param Subramanian
Okay. And broadly where are we in terms of say our PSL compliance say on SMF etc since we are at the. Pretty much, I think
Anindya Banerjee
The same picture. I mean we would have, you know, some, we would be compliant overall we will have some shortfall on the small agri side. So that’s pretty much the same picture.
Param Subramanian
Okay, thank you so much and congrats on the quarter. Thank you.
Anindya Banerjee
Thank
Operator
You. Next question is from the line of Piran engineer from clsa. Please go ahead.
Piran Engineer
Congratulations.
Operator
Your audio is not very clear. Can you use the handset mode please?
Piran Engineer
Yeah, one second. Is it better now?
Operator
Yes, please go ahead.
Piran Engineer
Hi, congrats on the quarter. Firstly, just a clarification on. Since the government deposits being in low teens, it’s a low teen share of total deposits or teen share of sa. Government
Anindya Banerjee
SA is a low teen share of sa
Piran Engineer
Correct?
Operator
I’m sorry, you’re sounding muffled.
Piran Engineer
Okay, I don’t you. Can management hear me
Operator
Now? Now it is fine, go ahead.
Piran Engineer
Yeah, okay, so I got the answer to the first question. On the second question, just wanted to understand. On home loans, firstly, is there also an element of lower prepayment rate driving the pickup in home loan growth for this quarter or is it just a question that now repo rate cuts have ended as you said, and now you all are pushing growth?
Anindya Banerjee
I would say it’s more a pickup in disbursement
Piran Engineer
Like, like an India, let’s say for the report.
Operator
Sorry we lost you again.
Piran Engineer
Is it better now?
Operator
Yes.
Piran Engineer
Yeah. So just Pre repo cut cycle to today. How much. Incremental disbursements? Of course
Anindya Banerjee
We’re not able to hear you, Peran. Maybe we can just take this offline. Yeah,
Piran Engineer
Yeah, sure.
Operator
Thank you. We’ll take our next question from the line of Chintan from Autonomous Research. Please go ahead.
Chintan Joshi
Hey, good afternoon. Thanks for taking my question. How do we see the growth outlook for the coming few quarters? We’re talking about nice growth in the system in this quarter, but clearly it’s too early to incorporate the supply shock into expectations. As you look forward, as you look into your books, as you see how corporates are getting impacted by this, how do you think both your book and system loan growth will develop over the next few quarters?
Anindya Banerjee
It’s very difficult to answer that question because you know, the outlook on the. The underlying.
Operator
I’m sorry, sir, you’re not audible. Ladies and gentlemen, please stay connected. We’ve lost the management line. Sam foreign. Ladies and gentlemen, we have the management team back online.
Chintan Joshi
Hi. Hi. Yeah, I’m still here. I think Kaninda was asking my question. I let him finish.
Anindya Banerjee
Yeah, I. I don’t know where. Where we. Where pretty much from the start. Yeah. Okay. Essentially, it’s very difficult to make a prediction at the, at the current time because this is an evolving situation. But as we said, we believe the system is going into it with a reasonable degree of resilience. So we will wait and see how the demand conditions pan out. I think as far as we are concerned, we see that we have strong levels of capital, liquidity, funding and a large franchise, and we would continue to try to use that to grow the business.
Of course, we’ll have to keep calibrating the risk acceptance levels as we go along.
Chintan Joshi
But are you seeing anything in your corporate or business banking book that looks like, you know, production is falling, slowing down, you know, working capital limits are not getting utilized? You know, is there any kind of. Kind of. Are you seeing any stress in your early indicators?
Anindya Banerjee
It’s too early to make, you know, any call or generalization of that kind.
Chintan Joshi
Okay. And then a quick follow up on your cost of deposit point. I think you said that there should be some more residual repricing left, but you also said that, you know, kind of take the duration as one year, which is a slightly contradictory. So which is it? Is there kind of more to go on cost of deposit in terms of residual repricing?
Anindya Banerjee
So I guess if you look at where the deposit rates were a little more than a year ago, they are at somewhat lower levels. I mean, the last rate cut cycle happened in June and then there was some further cut, you know, small cut in December. So as I said overall on the margin side we don’t, we expect it to be range bound from here.
Chintan Joshi
Okay. And finally on cost income ratio, you know this year OPEX growth has led top line growth. Could we say we are committed to delivering positive jaws next year?
Anindya Banerjee
We don’t. We really look at the PCOP and the PBT post credit costs. So it’s not that we are looking at managing or targeting a particular cost to income metric. Obviously our objective would be to grow revenues ahead of cost. But we will see how it evolves. That’s certainly the way in which we would like to drive the bank. Thank you very much. And we’ll be available to take questions if there are any follow ups. Thank you.
Operator
Thank you on behalf of ICICI Bank. That concludes this conference.