Key highlights from ICICI Bank Ltd (ICICIBANK) Q4 FY22 Earnings Concall
Management Update:
- ICICIBANK said its employee expenses increased by 21% YonY. And the bank had about 105,800 employees at March 31. The employee count increased by about 7,000 in the last 12 months.
Q&A Highlights:
- Mahrukh Adajania from Edelweiss asked about margin outlook and if repo rates hike will benefit margin. Rakesh Jha CFO replied that it’s difficult to give an outlook. However, the target would be to try and see how the margins can be maintained. But it will be a function of what is happening in the market.
- Mahrukh Adajania of Edelweiss also asked if the banks Amazon Pay ICICI Bank card are fully compliant with RBI’s new master directions. Anup Bagchi ED said that at the first reading, ICICIBANK will be quite unaffected by these RBI guidelines.
- Mona Khetan with Dolat Capital enquired about the incremental yields on the bank’s SME and business banking book. Rakesh Jha CFO said the bank doesn’t separately disclose yields by the portfolio segments. The bank added that it has been seeing strong growth in this portfolio for the last few years.
- Mona Khetan from Dolat Capital asked about the revolve rates in the credit card book versus the pre-COVID levels. Rakesh Jha CFO replied that bank doesn’t disclose that separately. But it would be somewhat lower than where ICICIBANK was pre-COVID.
- Manish Ostwal of Nirmal Bang asked about the FY23 loan growth outlook. Rakesh Jha CFO answered that the bank doesn’t have any specific loan growth target or outlook. The bank’s focus is entirely on growing the risk-calibrated core operating profit. So ICICIBANK will grow in line with the market opportunities which are there.
- Nitin Aggarwal with Motilal Oswal asked about provisioning expenses. Rakesh Jha CFO answered that the bank would always want its provisions as a percentage of core operating profit not to exceed 25% through a cycle. So there’s no specific guidance the bank can give.
- Nitin Aggarwal from Motilal Oswal enquired about the growth opportunities in the wholesale business. Rakesh Jha CFO replied that on the wholesale banking opportunities, the good thing is that the bank gets to look at pretty much all the deals that are happening in the market. And wherever it is, franchise business, which is adding to its overall core operating profit, ICICIBANK is happy to do that business.
- Sameer Bhise from JM Financial asked about the duration on the AFS portfolio. Rakesh Jha CFO said that the bank doesn’t share the duration separately. But overall the approach has never been to take high duration into the AFS portfolio, even if there is some strong view on interest rates going down.
- Sameer Bhise of JM Financial queried about the credit card spend levels, if it’s driven by higher spend levels or new acquisition spend. Anup Bagchi ED said the bank is seeing spends slowly increasing. ICICBANK is seeing now spends coming up, and revolve also slowly moving up, and that will make all other downstream things, revolve and fees and all of it, start to look healthier.
- Anand Dama from Emkay Global asked about acceleration in the branch expansion finally because of the competitor going crazy. Rakesh Jha CFO replied that that may not be the only factor. As long as the bank is seeing opportunity in the micro market to grow, ICICBANK will be happy to add branches.