No impact of West Asia war on portfolio, says ICICI Bank’s Batra

Mumbai: Private sector lender ICICI Bank on Saturday said it has witnessed no impact of the West Asian war on its books and feels it is too early to predict whether it will have any impact on corporate and small business borrowers and remittances.

“Frankly, it is too early. It is too early to call out,” Sandeep Batra, managing director of ICICI Bank, told reporters after announcing the bank’s March quarter financial results.

“Most of the developments took place in April, and if I turn to what is happening in West Asia, I think we need to remember that the long-term story of India remains intact,” Batra said.

The war in Iran has created a shipping bottleneck in the Strait of Hormuz, a narrow channel through which about a fifth of global oil supplies pass. While it was reported that the strait was opened, Reuters On Saturday, it was reported that commercial ships trying to pass through the Iranian navy received radio messages stating that they were not allowed to pass.

Batra said there is no denying that developments in West Asia will have some kind of impact on the world, but corporate India will return to growth. He was responding to a question about whether the bank had seen companies delaying investment decisions because of the war and the resulting uncertainties.

Also Read | Banks will see fourth quarter stable despite West Asian war; margin, treasury under pressure

“So, will there be some impact on GDP growth in FY27? The answer is yes, but the growth will continue and there will be enough opportunities in that for both corporate India and us to grow,” Batra said.

ICICI Bank’s domestic corporate portfolio increased by 9.3% YoY ₹3.05 trillion. This has been the bank’s slowest-growing credit segment; retail, rural loans and business banking increased by 9.5%, 25.6% and 24.4%, respectively, on an annual basis in the three months to March.

Regarding the war’s impact on small businesses, Batra said it was “very difficult to make long-term predictions at this point” but that he would “continue to monitor all of these indicators very carefully going forward.” “It’s safe to assume there will be some kind of economic impact,” he said.

The bank announced net profit ₹13,702 crore in the three months to March, an increase of 8.5% as provisions fell by almost 90% in the same period. The bank said the decline was a result of improvement in asset quality and recoveries from corporate customers.

While gross bad loans stood at 1.4% of the total portfolio as of March 31, it decreased by 13 basis points (bps) compared to the previous quarter and 27 basis points compared to the same period last year. The bank recorded 15.8% growth in its total loans. ₹Deposits increased by 11.4% to 15.5 trillion in the 4th quarter of FY26. ₹17.9 trillion. Net interest margin, an important indicator of profitability, was 4.32%, with an increase of 2 basis points compared to the December quarter and a decrease of 9 basis points compared to the same period last year.

Also Read | Banking in the digital age: Three things RBI wants lenders to keep in mind

Analysts viewed the bank’s credit performance positively. “This quarter’s results point to loan growth being the main concern, with the bank delivering 16% year-on-year growth after following the system for several quarters. But deposit growth remained particularly modest relative to the system, likely reflecting a conscious effort to preserve margins,” analysts at Bernstein said in a note on Saturday.

Interestingly, the bank’s collective loan book reported a higher rate of bad loans than the overall portfolio. The bank has a common loan book as of March 31. ₹1,538 crore, of which ₹76 crore deteriorated resulting in a poor outcome loan rate 4.9%. Loans under such arrangements included home loans, loans against property, and business loans. Historical disclosures regarding the quality of the joint loan portfolio were not available.

Anindya Banerjee, the bank’s group chief financial officer, said the size of this book “does not matter” whether any stress is seen in this portfolio.

“This will eventually pay off. I think this is something that’s relatively nascent. So we’ll watch as we move forward. I think we’ll continue to pursue these co-credit opportunities and see how it pans out,” Banerjee said.

Meanwhile on March 27 RBI limits banks’ net short positions (NOPs) set a price of $100 million in the domestic market at the end of each business day and required banks to comply with the rule by April 10. This move was expected to affect banks’ treasury revenues in the March quarter.

Also Read | Why didn’t the RBI upgrade Ujjivan to a universal bank?

ICICI Bank reports treasury book loss ₹Compared to a loss of Rs 106 crore in Q1FY26 ₹157 crore and profit in the third quarter ₹239 crore in the 4th quarter of FY25.

“Of course, the bank had some open positions in the onshore market, which had to be reduced as per RBI rules. And this treasury loss reflects the impact of widening of spread after the issuance of this guideline,” Batra said.