ICICI Bank has been demonstrating impressive growth and strategic development, outpacing system credit growth with a strong focus on quality underwriting and diversification. This performance is driven by a combination of robust loan growth, technological advancements, and a strategic focus on risk management and customer-centric innovations.
ICICI Bank has consistently outpaced system credit growth, primarily fueled by higher growth in retail and SME segments, while wholesale growth remains modest. The bank’s focus on building a diversified and granular portfolio has resulted in a compound annual growth rate (CAGR) of approximately 17% in loans over FY22-24. This growth is supported by data analytics-driven processes for onboarding, credit assessment, and customer monitoring. Notably, the share of unsecured loans, including credit cards and personal loans, stands at around 14% of the total portfolio, with a significant proportion extended to existing customers, particularly in the salaried segment.
Looking ahead, ICICI Bank continues to focus on risk-calibrated core pre-provision operating profit (PPoP) while maintaining sectoral agnosticism. The burgeoning pace of activity in SME, business banking, and retail segments is expected to drive overall growth. The bank plans to tighten its underwriting standards in unsecured lending, thereby supporting sustained growth and portfolio quality.
Healthy liability momentum
ICICI Bank has delivered industry-leading deposit growth of approximately 20% in FY24. Strategic initiatives in digital banking and branch network expansion are anticipated to sustain this healthy momentum. The bank’s deposit growth has been bolstered by continuous improvements in digital platforms and process simplifications, offering a seamless banking experience to customers.
The bank has launched several digital innovations, including powerful functionalities and seamless access to digital channels. New products such as iLens and Insta Export Packing Credit, alongside enhancements to InstaBIZ and Merchant Stack tools, have enabled customized solutions, data-driven cross-sell and up-sell opportunities, and improved customer acquisition and engagement.
Stable NIMs
Despite a slight compression in net interest margins (NIMs) over the past year, ICICI Bank has managed to maintain a stable deposit profile. The management intends to keep funding costs under control, with a conservative loan-to-deposit ratio of 82.3% on the domestic book. The bank’s core fees grew by approximately 16% in FY24, driven by strategic initiatives across retail, SME, and business banking segments.
Efficient deployment of data analytics has enhanced digital transactions, and a gradual recovery in the corporate portfolio is anticipated to further spur fee growth. The bank’s focus on leveraging technology to increase volumes in retail and SME segments aims to improve productivity and ensure a favourable “Return on Effort.”
Robust asset quality
ICICI Bank has made significant progress in improving its asset quality, with a best-in-class provision coverage ratio (PCR) of approximately 81%. Coupled with contingent provisions of around INR 131 billion, this will help keep credit costs low. The bank has enhanced its credit filters and pricing for new personal loans as a risk measure, ensuring that slippages remain under control.
