ICICI Bank warns of more margin pressure as repo cuts bite
Mumbai: ICICI BANK LTD expects further pressure on net interest margins (NIMS) in July-September, since the rate of ratio cuts of the Indian Reserve Bank (RBI) continues to play.
The special lender – a significant measure of profitability – it was constantly decreasing in the last quarters. It is 4.41% in March and 4.34% in April-June (Q1FY26) compared to 4.36% compared to the previous year. For the entire FY24, the Bank reported that NIM was 4.53%, which fell to 4.32% in 25 financial years.
Sandep Batra, General Manager of Icıcı Bank, announced the results of the bank on Saturday, “We expect NIM to squeeze a little more in the next quarter. We will see how it went after that.”
Batra said that margin orbit will depend on RBI’s policy actions and general liquidity conditions. Since February, the Central Bank has reduced its repo ratio 100 basis points and squeezed margins in the banking sector. Although more than 60% of the floating ratio loans in the system are linked to an external criterion following the report, the deposit remains at constant rates and is repeated more gradually and makes temporary pressure on margins.
Batra said that Icici Bank’s margins were about 4% than the start of the ratio increase cycle in 22 financial years, reaching 4.5% and softened to existing levels since then.
Batra said, “Compared to the current quarter (Q1FY26), the effect of repo ratio deductions on other loans is expected to be higher in the next quarter, and I think this is just a function of the cycle.” “Of course, it will be partially initiated by reducing the savings rate and gradual reconstruction of period deposits.”
According to the bank’s investor presentation, deposit cost decreased from 5% to 4.85% in the first quarter in the previous quarter.
Despite margin compression, Icici Bank reported that net profit was a strong increase of 15.5% annually. La12,768 Crore for the June quarter was supported with higher total income. The ratio that does not perform gross performance (NPA) was kept constant at 1.67%, respectively.
However, credit growth was audited. Domestic advances grew 12% annually La13.3 trillion, retail loans increased by 6.9%, corporate loans 7.5%and İş Banking loans increased by 29.7%. General credit growth, including overseas credit book, is 11.5%. In particular, the retail loan growth slowed both in the previous quarter and the same quarter of the previous year.
Analysts welcomed earnings, but increased concerns about the speed of credit growth.
Sanford C. Bernstein (India) PVT Ltd, as a note to customers, “ICICI, ROA (Return on Beings) with a profitability collection or orbit, even if the credit growth dropped to 11.5%, it was over 2.4%,” he said.
“However, with the earnings of 14% earnings per share, the Bank gave expectations above the expectations with a little help from the treasury gains that balance the normalization of credit costs and modest Opex growth.” “Continuous slowing in growth continues to be the only complaint.”
Analysts also contradicts the latest concerns about the quality of assets on Axis Bank and defined the stable performance of Icicıcı Bank as positive.
They said that the quality of healthy asset quality is positive and that the choice of profitability on growth is consistent with the trend in the last few quarters – a good number set that justifies the valuation premium.
On July 17, Axis Bank referred to high shifts in retail loans and changes in NPA classification metrics, and reported a deterioration of asset quality in 1.Fy26.
Icici Bank separately, the board of directors of the Board of Directors Prudental Life Insurance Co. ICICI PRUDENTAL PENSION FUNDS FROM LTD, the management company LTD’nin 100% of the purchase of the purchase of the purchase, he said. Pension business, RBI (PFRDA) subject to regulatory approvals, the bank will become a fully owned subsidiary and will be subject to others, he said.
Icıcı Peninsula Pension Fund administration had total assets. LaAs of March 31, 59.26 Crore. The Bank, the movement to both organizations, “the bank’s customer 360 focus on the better use of synergies”, he said.
