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Operator: Ladies and gentlemen, good day, and welcome to HDFC Bank Limited Q4 and Full Year FY 2026 Earnings Conference Call on the financial results presented by the management of HDFC Bank. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Srinivasan Vaidyanathan, Chief Financial Officer, HDFC Bank. Thank you, and over to you, Mr. Vaidyanathan. Srinivasan Vaidyanathan: Thank you. Thank you, Nirav. Good evening, and warm welcome to all the participants. Today, we have with us our Chairman, Mr. Keki Mistry; our CEO, Mr. Sashi Jagdishan; and our Deputy Managing Director, Mr. Kaizad Bharucha. I will hand off for opening remarks to Sashi. Over to you, Sashi, then we can get on to the other agenda. Sashidhar Jagdishan: Thank you, Srini, and thank you all. Good afternoon to you, and welcome to the full year FY '26 annual results call. Let me dive straight into the key aspects of FY '26 performance. We had estimated the system credit growth to be around 10.5% to 11.5%. We did 12%, up from 5.5% last year. As you can see, there is positive momentum as we had expected. Deposit growth rate at 14.4% continues to grow faster than the credit growth, which is what we've always been doing. The growth rate is better than the system growth rate yet again. Net income growth clocked at 11%, similar to the last financial year, whilst EPS growth of 10% versus 3% last year. The yield on assets had a faster transmission as against deposits on a full year basis, leading to a NIM drop. Despite the drop in NIMs, the return on assets continued to be stable at 1.9% due to cost efficiencies with cost-to-income declining from 40.5% to 39.5% on a core basis and focus on quality growth reflecting in lower credit costs. I would like to remind the sizable investments we made over the last 5 to 6 years, which will bear fruit in the coming years. These investments were despite we witnessing significant events such as COVID, a complex and one of the largest mergers in corporate history. The distribution nearly doubled to 9,700 branches. The number of customers nearly doubled to 100 million customers. Our tech investments more than quadrupled to around $1 billion. The merger with mortgage company, HDFC Limited, too, is an investment for the future. The bank navigated the same in a stable manner over the last 3 years despite changing economic outlook and regulatory stance. The above is going to provide a huge operating leverage in the future. Sometimes all of us have short memories and forget the core business foundation, which remains our moat and strength. Customers at 100 million. We continue to acquire about 6 million to 8 million customers a year. This will be the funnel for future growth. 22% of our customers are actually 30 years of age, 42% are less than 40 years of age. This enables us an opportunity to engage through their life cycle, which would be the future engine of growth. We continue to be market leaders in our core franchise offerings such as cash management. In the Capital Markets segment, we continue to hold about 35% to 40% of the account settlements. In the bankruptcy issue, we hold about 40% to 50% of the escrow settlement. In the trade part of the business, almost 18% to 20% of the country exports go through us. In the imports, 13% to 15% of the country's imports go through us. In the cards, merchant acquiring, almost about 35% to 36% of the acquiring comes through the bank. On the issuance of credit cards, 21% to 22% of the issuances of the system is from us. In the spends, almost 26% to 28% of the card spends in the market is through our cards. We are a dominant salary relationship bank in the private sector. We are amongst the top 2 MSME banks in the country. So as in the mortgages, we are among the top 2 mortgage bank in the country. In the wheels business, whether it's auto or transportation, we're the top wheels bank in the country. The above, despite intense competitive environment, reflects the excellence and execution capability of the bank. Our financial parameters reflect strength and resilience of the bank. We have a strong capital position at 19.7%. Our asset quality is extremely healthy at 1.15% gross NPAs. This has been tested across 3 decades of business cycles. The bank has created a large provisioning buffer of almost 125 basis points to absorb any shocks in the future. Where this is obviously contingent upon any future events that may occur in the future, we don't have any stress in our portfolio as we speak. Our focus is on profitability while pursuing growth opportunities. The loan deposit ratio is not a constraint. The regulator has come out and talked about it. We have demonstrated our ability to gain market share on deposits every year, almost around 30 to 50 basis points over the last 5 years. Hence, it's no longer a binding constraint. We have been building granular and sustainable deposit franchise, which is reflected thus. In the less than INR 3 crore retail liabilities, we have moved up from 31% of the net total accretion to about 47% of the total net deposit accretion for the year. This reflects the focus on granular and sustainable deposits. Having said that, the bank will continue to improve its quality of deposit franchise over the years to come. The bank witnessed an unprecedented event recently, but its strength and resilience was seen with stable and strong deposit flows. I would like to take this opportunity to thank the Government of India, the Reserve Bank of India and SEBI for their unequaled local support during that period. However, the most important strength will be our leadership in the technology space. Over the past few years, we have focused on strengthening the bank's long-term competitive position anchored heavily in our technology architecture to operate as a technology-first institution. A large share of our investment has gone towards improving the digital front and customer experience. We have been upgrading our interfaces, simplifying acquisition and service journeys and modernizing our digital platforms. We launched in the year our new net banking, mobile banking platforms and also our payment platform, which we probably did it about a couple of years ago, all of them are at a population scale. Today, our mobile app serves over 60 million registered customers offering the features, the USP of our build focuses on security. We have an OTP-less authentication, we have a lock, which is for enhanced security, and we have a full stack UPI-enabled wallet, which we call the Zapp account. A combination of the above will make it extremely secure and probably one of the most secure offerings in the country today. The efforts have increased digital adoption to 97% for payments and service transactions and 92% for acquisition journeys. Our goal remains simple, offer customers a seamless, reliable, friction-free experience across all touch points. The next layer after the customer layer is the intelligence layer. This is principally to build an AI-ready engine. We have built a strong intelligence layer that brings automation and analytics to the core of our operations. By decoupling our front-end and back-end through a modern API gateway and orchestration layer, we now have a strong foundation for the emerging agent-driven AI model. Strengthening. AI is only as strong as its data. We have built a robust data foundation anchored by a customer level, enterprise-level, single source of truth from a customer perspective. We went live with our lakehouse architecture, a centralized scalable data lake, reusable enriched data marts. While not always visible externally, this work is essential to our long-term scalability and AI aspirations. But the big story is how we've created in-house the unified AI platform, which is going to be the center that spans across the entire organization. It allows us to deploy AI agents quickly without building custom interfaces bidding systems. The platform brings together enterprise search, document extraction, voice-based agents, a full AI development life cycle. It supports multi-foundational and open models and includes a unified evaluation model for strong governance, compliance and security. We have an independent unit in the risk team that adds a second-line safeguard. The key components includes the Model Context Protocol for the Agentic Studio and Agentic Mesh. This will enable us to deploy AI agents to scale, placing us amongst the small group of Indian and global banks with such advanced in-house capabilities. We already have 5 use cases in production and 14 more in development, improving turnaround times, first-time right outcomes and freeing mid-office and back-office capacity for customer-facing roles. The above leadership position will enable us to harness efficiencies across the organization and will be a key driver to enhance return on asset over the next 1, 2, 3 years. The guiding principle is return on assets, loan growth and deposit growth and quality of the balance sheet from a risk standpoint. All of it should culminate in a consistent EPS growth. Let me also take on the subject matter relating to some of the matters that we witnessed during the quarter, including the resignation of the former part-time Chairman and the Dubai branch-related matter. I and the members of the Board did provide statements post the 18th March 2026 event. The Government of India, the Reserve Bank of India and SEBI came out with statements in favor of the bank. The legal review, which is what we had committed at the time when we went to the press, is in process. As and when this happens, we shall provide a summary of the same. The audited financial statements of the bank for the year ended March '26 carry notes, which are self-explanatory. On the Dubai branch-related matter, the same has been covered in the notes to accounts as well. There is also an NCDRC order, which came out on the 23rd of March, which highlights that the complainants are not retail in nature or are not uninformed investors, and they had a clear intent to pursue high-yield, high-risk investment products. So we do not have anything incremental other than the above. So we would like to pause out here and probably take on questions from here. Thank you. Srinivasan Vaidyanathan: Thank you, Sashi. Nirav, with that, we can open it up for questions, please. Operator: [Operator Instructions] The first question is from the line of Mahrukh Adajania from Tara Capital Partners. Mahrukh Adajania: I just have a few questions. Firstly, that in terms of growth next year, what would be the key drivers? So first of all, where do you see your growth? You said, possibly above sector. So what could that be? What range could that be? And then corporate growth has been a good driver, I guess, for everyone for the fourth quarter, and that's partly to do with yields as well. So do you see corporate growth sustaining? Or do you see retail growth picking up from these levels? So that's my question. Kaizad Bharucha: So Mahrukh, Kaizad here. If I got your question as to what would be the growth drivers. First, on the corporate side, I think you would have seen in our release, the increase that we have done over the previous year. We do see this sustaining as there has been demand. Of course, we will have to temper it given the fallout of what we see in the geopolitical area, which hopefully should not be more than a couple of months going into this financial year. But we do see an opportunity in corporate across sectors in electronics, food processing, auto, auto ancillaries, the renewable sector and the semiconductors. Also, it opens up, as you well know and are aware of the different opportunities which are now available from an acquisition financing point of view, including what was already there for project finance and supply chain. So we see the corporate sector, the emerging corporates and corporates holding up in the year ahead. Coming to your point on retail growth, Mahrukh, if you really see, our retail growth has certainly stepped up from where we were last year. And we have seen a better step-up, if you've followed our results, in the last 3 quarters. And this step-up has been there across our wheels business as well as on the personal loan, business loan side. To add to that, we've also seen consistent holding of demand on the mortgage book, and that has also performed well. So we've seen a growth. Overall, if you look at it, or if you look at the balance sheet, we've been about 53%, 54% in the retail and the balance coming out of wholesale. Mahrukh Adajania: Got it. So what kind of growth trajectory should we look at for FY '27? Because I guess the earlier guidance was of above sector growth, but the sector growth has also moved up substantially. Kaizad Bharucha: Yes. So Mahrukh, if you really see, our loan growth last year was 5%, and our loan growth this year is 12%, right? So I think we will continue to have a good momentum and trajectory in our growth. But you have to keep in mind what the geopolitical situation and that fallout is going to be. But we are confident that we see the positivity continuing. We've not seen any alarm bells go up as yet. And therefore, we will continue to focus on all these areas that I covered earlier. Operator: Mahrukh, I request you to come back for a follow-up question. [Operator Instructions] Next question is from the line of Nitin Aggarwal from Motilal Oswal. Nitin Aggarwal: So firstly, congrats on a good quarter in a very challenging environment. And so my question is like 2 questions. Firstly, on the deposits. So how do you look at the deposit market share? We have done very well in this quarter. But if I look at it in context of how the system itself has done, we have seen a very sharp pickup in the deposit accretion for the system overall. So how do you kind of look at the market share that HDFC Bank has been able to garner this quarter in context of system number? And any color if you can also share on what has driven this huge surge in the business numbers over the last fortnight? Srinivasan Vaidyanathan: Okay. Let me take that, if that's okay. See, if you look at the quarter, the INR 2.45 lakh crores of deposits that came in, typically, you see that the market is pretty active and accretes maximum, almost more than half -- close to half or slightly above half of what the year accretes in the last quarter. In this year, it's no exception. If anything, it has been more squeezed towards the last month of the quarter rather than the full quarter, because January was still tight all across. Somewhere from latter part of February to March, it has been quite easy and liquid and the possibility of deposit gathering is there. If you look at the composition -- so that's one, there's a market tailwind that is there. I think the system growth, as we saw somewhere reported a couple of days ago, was about at an aggregate level, 11.5% or so system type of growth. Now when you look at the composition of the deposits between retail and wholesale, there is some level of wholesale deposits that come in March quarter, naturally because of relationships as well as how the corporates manage their balance sheets towards the end of their financial year. And you'll see that the average of the retail versus wholesale is about 1 percentage point or 2 different in this quarter, which in our earnings deck you will notice that there is 82% against 84% or something, 82%, 83% against 84%. Retail, I'm talking about retail. So retail continues to power and stays ahead the 80% mark. And within that, when we look at the composition of the deposits between the core retail, when I say core retail, I mean the higher ticket size NRIs or certain other institutions that are managed through the branches and so on. When you look at it, the core retail is faster and almost close to the total, despite there is a good power coming from the wholesale business, but core retail is also almost at that level. So we feel quite enthused by the relationship managers gathering and engaging to get these things done. So we are quite positioned for continued growth on this area. Nitin Aggarwal: Right. And Srini, like also the other part of the question is like any color if you can share on what has driven this huge surge in the business numbers over the last fortnight of the year? I mean, this time the pickup is exceptionally strong across the system. Srinivasan Vaidyanathan: Yes. If you look at it, the liquidity -- if you look at the system, what kind of funds that have been available in the system. I think the last time we did quite a significant volume of like INR 1,75,000 crores or INR 1,80,000 crores or something like that. And this year, given that we have added much more customers and much more distribution strength and more stronger corporate relationships, because we've been lending this year. Remember that we have grown corporate loans by 13%. So we get higher levels of share from each one of them. Operator: Nitin, I'll request you to come back for a follow-up question. Next question is from the line of Kunal Shah from Citigroup. Kunal Shah: So firstly, again, touching upon on the growth side. So we indicated like we will try to grow in line with the industry average, but we are seeing industry average being upwards of 15%, we are still at 12%. So we have been below it. And next year, would we retain the guidance of growing above the industry average, or would we say like we will still grow in line with the industry average, because industry average itself has picked up to a very large extent. And on the deposits, how much of this is transitory in nature? And how much of this it can sustain? Because last year, we indicated that we will more focus on the sustainable deposits even during the period end. So I just want to get the sense, because the difference between the end of period and average deposit is quite high during this quarter. Sashidhar Jagdishan: Okay. Let me take one by one. The first one is on the growth in the system. At least if you see through large part of FY '26, the nominal GDP growth expected was somewhere around the 9%, 9.5%. So one consensus until the large part of the year was a system credit growth of around 10.5% to 11.5%. This is what we had expected, and we calibrated our strategies and our growth in line with that, and that is why we grew at 12%. The system, you have said 16% or 15%. But actually, when you compare the period-end numbers as of 31st March, which is published by the Reserve Bank of India, and you sort of make the math, it comes to somewhere around the 13.5% to 13.9%. That's the system growth. Obviously, it has been faster. It is something that we have to navigate, but it's not too far away from the momentum we have seen from a 5.4% growth in FY '25 to a 12% growth. So I think as Kaizad was mentioning, we are very well positioned to continue that kind of a momentum in a manner that we do responsible growth and we don't want to overstretch beyond what could potentially have some land mines in the future. So that's the reason why we are not sort of -- because of this dichotomy in terms of the growth being slightly more than what one expected in relation to the normal GDP growth. I think we would like to sort of just leave it at that to say that our trajectory is in the right direction, and we will do what is appropriate from our risk and reward perspective. So that's part one. Part two, on the -- what was the second question? Kunal Shah: Deposits. Sashidhar Jagdishan: On the deposits, let me first take the granularity of deposits. The retail has always been -- as a proportion of total deposits has been about 80% to 85% of the total bank's deposits. You have 3 significant verticals where we have a lot of close relationship being whether it's corporate banking or whether it is the capital markets segment as well. Now let's talk about the 80%, 85%, which is the retail segment. Within that, there is definitely a focus on trying to see how we can garner more granular time deposits. If you see, as I mentioned in my opening remarks, the granularity of the deposits has stepped up significantly. In fact, the less than INR 3 crore deposits have grown, which has been mobilized in 2026 on a net basis, has grown up almost about 74% over the net incremental deposits for FY '25 on that less than INR 3 crore bucket. So what constituted 31% of the total net accretion in FY '25 now constitutes 47%. It's a very significant number, because these are all very less volatile and very sustainable, and that is something that we are emphasizing as we move ahead. And this particular number should go up even in the future. Kunal Shah: 47% is less than INR 3 crores? Sashidhar Jagdishan: Yes. On the time deposits. Kunal Shah: On incremental? Sashidhar Jagdishan: Of the increment. So we have mobilized INR 3.9 lakh crores for the full year, 47% is that. Now in terms of the volatile or the high frequency deposits, it's quite natural, when you have corporate as a significant part of our corporate and capital markets, which contribute 55% or 53% of the balance sheet, you will have large relationship which you need to patronize. And that aspect of the 15% of the total deposits will be volatile in nature. You will see that moving out and probably coming back during every month end or quarter end as well. But the endeavor is to try and see how, on a full year basis, we try and inch upwards the net incremental mobilization, and that is what we are all working towards. Kunal Shah: So that gives the confidence on LCR at 114-odd percent because now we are below 115%. So how would we look at LCR, because now LDR is not in focus, but obviously, we would want to manage LCR. So what range we would want to sustain the LCR? Srinivasan Vaidyanathan: Kunal, in the past, we have mentioned that our endeavor for LCR is to be between 110% and 120%. We are somewhere in the middle. Last quarter, I think we were about 116%. Now we are 114%. So thereabouts, that's the kind of range at which we intend to operate, to be in the middle. Sometimes it goes higher, sometimes it comes below, but somewhere in the middle is where we endeavor. Operator: Next question is from the line of Pranav from Bernstein. Pranav Gundlapalle: My first question, Srini, is more on the guidance. I think if I heard you right, you said LDR is no longer kind of relevant or a constraint. And I also heard you saying that loan growth, you would rather focus on improving momentum rather than benchmarking the system. So is there one metric that you use internally to assess performance, which kind of captures some of these pushes and pulls you have on the different metrics? That would also be helpful, I guess, for investors to track performance. That's the first question. And second question is on your NIMs. The borrowings have come off almost 11% year-on-year, but the NIM trajectory is broadly similar with what some of your peers have reported. So is that something you expected a year back, meaning borrowings comes off, but NIM doesn't really get impacted? Or has something changed in there? And more importantly, will a reduction in borrowings have a meaningful impact on NIM going forward? Is that the lever that you are thinking about? Those are my 2 questions. Srinivasan Vaidyanathan: So let me talk about what you ascribed to, the borrowings mix changing. But yes, changing of the borrowings mix is a favorable item where costs that are higher, essentially the spreads that you pay, you can save on that and get to the bottom. However, if you see what has happened, the rate cycle, when you go back about a year, when you were in March, April of last year, the rate hiking cycle had just started in February and there was no kind of an indication that it would end up 125 basis points in the cycle so far. Sashidhar Jagdishan: Rate reduction. Srinivasan Vaidyanathan: Rate reduction, not hike, rate reduction cycle, 125 basis points was not something that was anticipated last March, last April. And when that happens, a little about 70% of the loans are floating rate and immediately, the transmission takes place, deposit, as you know, is managed. And so within the deposit, when there is a higher propensity for time deposit, which we have seen, the time deposit rate of growth was 15.5% year-on-year when you see now. When the total deposit rate of growth was 14.4%, the time deposit was 15.5%. And so there is a higher propensity towards the time deposit, which is, again, on a relative basis, higher price than the CASA, of course. And so that is where it is sitting, and it needs to unlock itself, both from how the rate cycle plays out as well as how the mix of the deposits change. So essentially, it is morphed from one type of funding, which is borrowing into another type of funding, which also in the funding stack is of a higher order than the CASA. And so that is where it has gone to be and still yet to unlock fully. So that's on the borrowings and where it is. On the question of the NIM, I think we talked about how to think about NIM, which is -- see the policy rate, when it started to come down, the assets came down faster and more or less fully there. The deposit has moved. The pricing on the deposit, if you look at the transmission that has happened, it is -- only about 40 to 50 basis points has come in into that so far. So it's not fully compensated for what the asset pricing has moved down. And as we see now due to the geopolitical situation and uncertainty that is there, the rate cycle is currently paused. If anything, the tendency, at least we are seeing from the securities market is that the rates have gone up a bit, right? And so we don't want to hazard a guess whether the rate reduction cycle is done and it's bottomed and now it's going to start going up, I don't want to hazard. But at least by all indications, looking at the securities market, it seems to be going up. It depends on how the geopolitical situation settles. And so thereby, country's liquidity and borrowing needs, depending on how the oil prices settle, will determine our trajectory of the NIM. But then more important, I think what Sashi alluded to in his preamble, in his opening remarks is that what we are focused more than on the NIM is on the returns. And when any of those on the NIM that we manage, as best as we could, given the market environment, we do have those levers of enhancing our efficiency, both from an operating side as well as on the credit side to realize. And that is what in the recent time periods you have seen where when the NIM has been in a small range bound minus or plus, the offsets have come from these to keep that returns stable in that range. And the quarter was 1.96%, but the year was 1.94%, similar to the full year that you saw last year on the return on assets. Pranav Gundlapalle: Understood. See, if I may just ask a follow-up. My question is more on relative. So hypothetically, if, let's say, borrowings would decline by 75%, right? So let's say, your borrowings just come off to 6% or 7% of liabilities today, do you think NIM will improve very significantly? Srinivasan Vaidyanathan: Yes. If all else remaining same, that means no other factors play in, borrowing percentage coming down will change the NIM trajectory upwards, and all else on the other side also remaining same will boost the returns. Pranav Gundlapalle: Okay. Got it. On the first question on the metric, is there like -- I think I heard you say that you focus more on returns rather than just NIM. So is some version of PPOP, the metric that would be appropriate. So what would be the best metric then? Srinivasan Vaidyanathan: ROA is what we should focus on. PPOP is an intermediate, right? I mean, you take higher risk and take it in the top line, you give it away in the credit cost below the PPOP. But PPOP doesn't determine what returns you can get. So we focus on the returns on return on assets. Pranav Gundlapalle: Okay. But that doesn't capture growth, right? I mean... Srinivasan Vaidyanathan: Yes, I'd say growth -- profit growth and returns. Top line growth and returns and EPS. That's what we always look to. Operator: Next question is from the line of Seshadri Sen from Emkay Global. Seshadri Sen: Two questions. One is, I was hearing Sashi with interest in terms of the investments that is being made in the last 5 years. Are we now entering a cycle where the cost-to-income ratio has peaked and we can expect significant benefits to come through? I know part of it will come from revenue growth itself because loan growth is bouncing back. This should be a better year for margins, et cetera. But on the OpEx side, is there a possibility that the overall OpEx could slow down from here, because a large part of these investments that you made are done? Or do you think this is an ongoing process and then there's not too many levers? Srinivasan Vaidyanathan: Yes. Seshadri, if you look at the cost growth that we have, we have seen that at a level almost at, call it, 6.5%, 7% or so is the full year, right? Quarter-to-quarter variations happen, but full year, call it, 6.5%, 7% rate of growth is lower than the top line growth, and you're seeing that benefit coming in. Having said that, the cost-to-income is a relative ratio, as you know, as you also just alluded to, even the top line moves faster, you get that relative ratio. But more important is also to look at cost to assets. Cost to assets is at about 1.9% or so. We do think that the cost to asset at 1.9% is best-in-class. But however, we do see that there is an opportunity space even in that aspect of it due to various technology implementations. Sashidhar Jagdishan: Which is what I mentioned, Seshadri, that if we just focus on the investments that we have made in technology and implement them across the organization, you should see operating leverage kicking in and enhancing your ROAs. Seshadri Sen: The second question is on retail loan growth. You've done well in terms of recovering the overall loan growth, but retail still, I think, it's in the single digits. I think it has some upside for a franchise like yours. Going forward, what would be the levers to accelerate retail loan growth, which products, which channels, more harvesting of cross-selling within your existing customer base? Should we expect some forward momentum in that part of the business in the coming FY '27 early in the year? And would it be back-ended or front-ended? Kaizad Bharucha: So I think I did cover it in my opening response to Mahrukh. We have seen good traction across our products in wheels, personal loans as well as in the mortgages space over the last 3 quarters sequentially. And in terms of levers today, if I just take mortgages, we were doing mortgages earlier out of about 6,800 locations. We are now covering mortgages from more than 7,800 locations, closer to 8,000. So one is we are using distribution. Two is, we've got our digital channels working very well, and we have seen a higher utilization of our 10-second loans, both in our express loans in auto loans and personal loans. We've also seen more addition to the customer acquisition base, that is what Sashi referred to earlier, as well as the foray that we have done in the salary accounts. And these salary accounts create the base for us for better cross-sell and penetration of our retail products. And we are the leading bank in salary accounts and the quality of the franchise we have out over there. So if you look at our physical distribution of branches, if you look at the better penetration and utilization of our digital channels as well as you look at the increasing acquisition that we have in what we call our preapproved base, because we have the history of the client because of the salary relationship, has obviously created the momentum without going down the asset quality ladder. Sashidhar Jagdishan: And on disbursals. Kaizad Bharucha: Yes. And, okay, I'm being prompted by Sashi on a very important metric. We have seen our disbursals go up quarter-on-quarter, which is another parameter on the retail space. And you do know that on the mortgages side, I do believe that we would be amongst the top 2 with hardly a gap in terms of the quarterly disbursements that we have been doing. In the auto loan space, we have grown well. We continue to be market leaders, and we have the largest engagement with all the OEMs as well as their dealer base, which acts as the real feeder for the retail loans. So between the physical channels, between the digital channels, between the customer acquisitions, and across the set of core retail products, we do see that growing well. We also see ourselves doing well in a product that we have launched over the last year and has come up very well, has been our gold loan business. We've built a good quality book out over there, and I do see that also continuing to contribute. The last lever I may touch upon, to give you a sense, has been on our SME business. We have been market leaders in our SME business. And today, we are #1 in the country on the entire SME space -- or MSME space. And to give you some granularity, we are #1 in 15 out of 28 states, and we are in the top 2 in the 25 out of the 28 states in MSME. If you also see the pack which my colleagues have put out, we have grown our business banking, which is mainly representative of our MSME, we've grown at about 20% year-on-year, and that will continue to also be in that range of 18% to 20%, 21%, depending upon, obviously, some of the developments in the economy. So that should give you, I hope, a good sense of what will be the levers on our consumer bank and the channels through which we will get in. Sashidhar Jagdishan: Can you talk about the merger synergies as well as the mortgage. Kaizad Bharucha: No, that wasn't the question, but I'm happy to cover it. So another aspect just to leave on the consumer side and the mortgage business as well as some of the benefits that have accrued over the last couple of years from this business that we acquired. So let me touch on a few of the levers, and I'm sure separately, we could give you more color otherwise. So from the book we inherited, we had roughly a penetration on the liability side, which was about 36% share. So 36% of the people who had home loans with HDFC had their liabilities with us. Net of attritions, net of acquisitions over this journey, this 36% has come as high as 50% within the last 2.5 years. And that tells you the liability franchise that we've got. As we had mentioned in our calls earlier in October and January, happy to update you that we continue to have 98% of all home loans that we disburse, our customers opening a liability account with us. And therefore, you've seen the shift move from 36% to 49%, 50% of stock as we sit on today. More importantly, more than the 50% stock that we sit on, today, approximately a little over 60% to 65% of that stock pays their EMI through MyOwn Account and which tells you the synergy which a home loan and a liability bring from a value accretion perspective as well as from a risk perspective. The second thing out over there would be apart from the actual CASA balances that have grown. And at that point in time, we roughly had about INR 50,000 crores value of the CASA balances. We have today grown that to INR 86,000 crores. So that's been the growth in the 2.5 years, not only in the numbers in terms of the engagement of the CASA accounts, mainly SA, but also of the value accretion that has happened. A thing I had mentioned in the past, which had come up and that continues to hold good, as the book matures, as the engagement matures, that the average balances that we see of customers that keep their liability with us who have their home loan goes up 2x to 2.25x compared to the standard average balances that would otherwise be witnessed in the banks. Apart from that, finally, there is what we call the cross-sell thali internally, which consists of a host of products, which, whilst not limited to, indicatively are the cross-sell that we do on the credit cards business to this portfolio, the insurance policies that they take to insure their homes, the wealth accounts that we open as well as engagement on our digital properties, including the SmartWealth and the PayZapp accounts or the PayZapp gateway of our wallet that they use. So the engagement is all around. And today, nearly 23% of our home loan customers on stock have our credit cards which are active. So I hope that rounds up, Sashi, as you were mentioning, the flavor of how this has grown and in the manner it has grown and the way it will continue. Sashidhar Jagdishan: Thank you, Kaizad. That's extremely important as to what we are looking at from a mortgage book perspective. It's not just the book, but the kind of primary relationship that we are all focusing on, and that's going to really be a large sustainable franchise over a long run and quality. Kaizad Bharucha: We have the lowest NPA percentages as we understand in the industry on a book of our size on the home loan book. Operator: Next question is from the line of Rikin Shah from IIFL Capital. Rikin Shah: So I had 3 questions. The first one is on the yield on investments. So this number is down about 60 basis points in the last 2 quarters and the overall yields have gone up. So why is the interest income on investment yields going down? So that's one. Second, if you could just highlight what's the cost of deposit? And what is the residual repricing, if any, remaining from the current levels? And thirdly, it's on the treasury gains. So similarly, there seems to be no impact on the treasury gains or FX despite the yield movements and the RBI move. So how should we think about it as we move into the next year on this particular 2 points? Srinivasan Vaidyanathan: Okay. One thing that you touched upon is about the investment yield. Investment yield had been coming down, as you know, until the geopolitical risk started to increase, right, at which time it started to go up. So it's an effect of what some of the maturing book that goes out and what the new book comes in is one aspect of it. And the second one is in terms of how the yield spike is now, and you will not see that, because given the size of the book, when you pick up a new security at this new yield, it's a drop in the ocean, right? It will take time to bring it in. So all you are seeing is the effect of the previous rate cycle moving in. Rikin Shah: Srini, if I can, the geopolitics, the yields, the 10-year G-secs were decisively moving up, right, in the last 6 months specifically, but the book yields have kept going down. So just wondering what's the missing part here? Srinivasan Vaidyanathan: See, Rikin, I do want you to realize that you should appreciate that there is something called duration. And in the rate cycle, up or down, treasury manages the book they want to do. There are certain duration aspects, which is previously 5-plus years of a duration goes to 4-plus something. So you come on the curve different parts and different cycles. That's one. And second thing is that you don't instantly see. If you look at what the last 2 quarters of rate that has changed, and if you look at the 2 quarters of accretion of investments, you will not see that. It's going to be a fraction of the total book that you are seeing. And then the way you need to look at it is the movement. What is the security that is moving out, that means maturing or participating in OMOs that moves out and what is the security that is coming in. And so that's the in and out. That's a different equation. It's not a simple equation of what you see on the screen of the current yield that you are seeing. Rikin Shah: Fair enough. And on the other 2 questions, sir? Srinivasan Vaidyanathan: The other one you talked about the cost of funds, I think we published the cost of funds, which is about 4.4% or so. It has marginally come down. And then from last year to this year, I think so far, it has come down by 50 basis points or so. And cost of deposits is part of a component of that. And very similarly, it moves down in line with that. Rikin Shah: But the residual repricing, if any, any comments on that? Or are we already at the bottom in terms of the cost of funds? Srinivasan Vaidyanathan: Residual repricing, if everything else remains the same, there will be further reduction coming on the residual, because the time deposit takes 5, 6 quarters or so to go. And so some residual again, remains to be seen in terms of the preferences for what type of deposits coming, yes. All else remaining same, there is a tendency for the repricing to factor in more. Rikin Shah: Got it, sir. And sir, the last question on the treasury and FX. Any comments, if any? There seems to be no negative impact in this quarter. So how do we think about it going ahead? Srinivasan Vaidyanathan: There is some negative impact. If you see that the rate of growth on the treasury income is modest. And the reason for that modest is that -- I'm talking about the FX component of the treasury. It's modest because there is a volume impact. So due to various risks on the foreign exchange trade, there have been lower volumes and lower spreads too. And also in terms of the -- there is some impact of the unwinding that is also there, yes. Operator: Next question is from the line of Abhishek Murarka from HSBC. Abhishek Murarka: So I had a question on the third-party distribution fee. Actually, if I look at it on a full year basis, the growth has been hardly 3.5%. And this is lagging the overall customer growth. This is also, when you compare it to the retail asset, retail liability fee growth, this is lagging quite a bit. So what is really leading to this? Is it just a slowdown, or cross-sell has become more difficult, or refocusing on some products? What's really leading to this lower growth in this line? That's point number one -- question number one, sorry. The other one is on margins. So you said that there's some repricing of TDs left, which should be positive. But on the other side, the loan mix is gradually changing more towards corporate. How should we look at margins from here for, let's say, the next year? Does it trend down? Or does it flatten out? Srinivasan Vaidyanathan: Again, I'll first take the third-party products. Yes, the third-party products revenue growth has been modest. Both of those components, which is the volume growth, has also been modest. It's positive, but modest given that whatever preferences the customers have. I think last year was somewhat -- there was a good amount of spike that we saw as we entered into the fourth quarter -- FY '25. And so that was part of -- there's some volume kind of tepidness that we have seen. The second thing is in terms of spreads. That is the mix of products that determine the spreads has also impacted. So we have seen that the earnings, that means our earnings on the third-party commission is also subject to mix of products that get taken. And so the mix also had an unfavorable impact. So that means lower realization of income there. That's the reason for the contribution. Abhishek Murarka: So Srini, on the mix, so lower life sales, is it? And is that like temporary? Or is some change in process or something which has led to it, or is it just coincidental and nothing really to read into it? How do we look at it? Srinivasan Vaidyanathan: Nothing really to read it. It's just a question of our RMs are engaged as much as they are engaged today versus they were engaged last year. It's a function of what the preference is. And that is why you saw even the product preference is somewhat different. So it's a question of how we get on more customers and spread it around to be much more penetrated. We still have only a mid-single-digit penetration in our base. And so the opportunity space continues to be there, enormous opportunity space continues to be there. Again, you talked about the NIM, which is the second part of the question. Again, just to repeat, right, the transmission has happened on the assets and the mix of assets can impact depending on what it is. The cost of funds, while time deposit repricing can continue to be there, again, it depends on the rate cycle, what happens. You see that there's a stiffness in the rates across, right? For the last, I think, at least 4 months, we have not seen a time deposit rate change in the market, right? And we are fairly priced with the competition. And we're not seeing 4 months of any kind of a change that has happened, which again, as one would give some time for change, you have seen that there are other things in the month of March, the geopolitical things that come about that has hardened the rates again. So it remains to be seen, but it's range bound is what I would say, but focus more on the returns, because if this becomes kind of where it continues to be within a small range bound, then we work towards getting returns to be stable to going up through other levers. Operator: Next question is from the line of Piran Engineer from CLSA India. Piran Engineer: Congratulations. [Technical Difficulty]. Operator: Piran, sorry, we are losing your audio. Srinivasan Vaidyanathan: Piran, kindly repeat because we lost your voice. Operator: Sir, we have lost the line for the participant. Ladies and gentlemen, we will take that as the last question as we have come to the end of the time allotted for the call. I would now like to hand the conference over to Mr. Vaidyanathan for closing comments. Srinivasan Vaidyanathan: Thank you. Thank you all for participating today. We are closing at the appointed time, which is 5:00 p.m., because we have another meeting scheduled soon after this. If there are any more questions, comments to be provided, please feel free to contact our Investor Relations team. We'll be happy to engage with you over the next few days, weeks, whatever it takes. Thank you. Have a great weekend. Bye-bye. Operator: Thank you very much. On behalf of HDFC Bank Limited, that concludes this conference. Thank you for joining us, and you may now disconnect your lines. Thank you.
Operator: Ladies and gentlemen, good day, and welcome to ICICI Bank Limited Q4 FY '26 Earnings Conference Call. [Operator Instructions] Please note that this conference is being recorded. I now hand the conference over to Mr. Sandeep Bakhshi, Managing Director and Chief Executive Officer of ICICI Bank. Thank you, and over to you, sir. Sandeep Bakhshi: 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, Anindya and Abhinek. At ICICI 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 INR 182.09 billion in this quarter and by 7.1% year-on-year to INR 650.21 billion in FY 2026. The core operating profit increased by 5.1% year-on-year to INR 183.05 billion in this quarter and by 7.7% year-on-year to INR 704.01 billion in FY 2026. The profit after tax grew by 8.5% year-on-year to INR 137.02 billion in this quarter and by 6.2% year-on-year to INR 501.47 billion in financial year 2026. The consolidated profit after tax grew by 9% year-on-year to INR 147.55 billion in this quarter and by 6.2% year-on-year to INR 542.08 billion in FY 2026. The Board has recommended a dividend of INR 12 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. Net NPA ratio was 0.33% at March 31, 2026, compared to 0.37% at December 31, '25, and 0.39% at March 31, 2025. The total provisions during the quarter were INR 0.96 billion or 0.5% of core operating profit and 0.03% of average advances. The provisioning coverage ratio on nonperforming loans was 75.8% at March 31, 2026. In addition, the bank continues to hold contingency provisions of INR 131 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 March 31, '26, 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: Thank you, Sandeep. I will talk about loan growth, credit quality, P&L 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 to NBFCs and HFCs was INR 859.04 billion at March 31, 2026, compared to INR 791.18 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 INR 714.21 billion at March 31, 2026, compared to INR 680.83 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 BB and below internally or was classified as nonperforming. On credit quality, the gross NPA additions were INR 42.42 billion in the current quarter compared to INR 51.42 billion in Q4 of last year. Recoveries and upgrades from gross NPAs, excluding write-offs and sales, were INR 30.68 billion in the current quarter compared to INR 38.17 billion in Q4 of last year. The net additions to gross NPAs were INR 11.74 billion in the current quarter compared to INR 13.25 billion in Q4 of last year. The gross NPA additions from the retail and rural portfolios were INR 31.45 billion in the current quarter compared to INR 43.39 billion in Q4 of last year. Recoveries and upgrades from the retail and rural portfolios were INR 22.93 billion in the current quarter compared to INR 30.39 billion in Q4 of last year. The net additions to gross NPAs in the retail and rural portfolios were INR 8.52 billion in the current quarter compared to INR 13 billion in Q4 of last year. The gross NPA additions from the corporate and business banking portfolios were INR 10.97 billion in the current quarter compared to INR 8.03 billion in Q4 of last year. Recoveries and upgrades from the corporate and business banking portfolios were INR 7.75 billion in the current quarter compared to INR 7.78 billion in Q4 of last year. There were net additions to gross NPAs of INR 3.22 billion in the current quarter in the corporate and business banking portfolios compared to INR 0.25 billion in Q4 of last year. The gross NPAs written off during the quarter was INR 17.68 billion. Further, there was sale of NPAs of INR 1.12 billion for cash in the current quarter. The nonfund outstanding to borrowers classified as nonperforming was INR 21.74 billion as of March 31, 2026, as compared to INR 22.29 billion as of December 31, 2025. The loans and nonfund outstanding to performing corporate borrowers rated BB and below was INR 35.19 billion at March 31, 2026, as compared to INR 33.92 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 INR 14.96 billion at March 31, 2026, from INR 16.66 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 nonperforming were INR 227.1 billion or 1.5% of loans. This includes the contingency provisions of INR 131 billion as well as general provision on standard assets, provisions held for non-fund-based outstanding to borrowers classified as nonperforming, fund and nonfund-based outstanding to standard borrowers under resolution and the BB and below portfolio. The bank also continues to hold additional standard asset provision of INR 12.83 billion made in Q3 as directed by RBI in respect of the agricultural priority sector portfolio. Moving on to the P&L details. Net interest income increased by 8.4% year-on-year and 4.8% sequentially to INR 229.79 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 to 4.55% 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 FY 2026 was 4.32%, similar to FY 2025. Of the total domestic loans, interest rates and 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. Noninterest income, excluding treasury, grew by 5.6% year-on-year to INR 74.15 billion in Q4 of fiscal 2026. Fee income increased by 7.5% year-on-year to INR 67.79 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 INR 6.31 billion in this quarter compared to INR 6.75 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 FY 2026. Employee expenses increased by 8.8% year-on-year and nonemployee 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 7,511 branches as of March 31, 2026. The sequential increase in operating expenses primarily reflects the impact of market movements resulting in higher provisions for retiral benefits. The technology expenses were about 11% of our operating expenses in FY 2026. The total provisions during the quarter were INR 0.96 billion or 0.5% of core operating profit and 0.03% of average advances compared to the provisions of INR 8.91 billion in Q4 of last year reflects healthy asset quality and higher recoveries and write-backs. 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 INR 182.09 billion in Q4 and by 7.1% year-on-year to INR 650.21 billion in FY 2026. There was a treasury loss of INR 1.06 billion in this quarter as compared to a loss of INR 1.57 billion in the previous quarter and a gain of INR 2.99 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 INR 44.01 billion in this quarter compared to INR 41.43 billion in the corresponding quarter last year. The profit after tax grew by 8.5% year-on-year to INR 137.02 billion in this quarter. The profit after tax grew by 6.2% year-on-year to INR 501.47 billion in FY 2026. The consolidated profit after tax grew by 9.3% year-on-year to INR 147.55 billion in this quarter. The consolidated profit after tax grew by 6.2% year-on-year to INR 542.08 billion in 2026. The details of the financial performance of key subsidiaries are covered in Slides 33 to 35 and 54 to 59 in the investor presentation. The annualized premium equivalent of ICICI Life increased to INR 106.41 billion in FY 2026 from INR 104.07 billion in FY 2025. The value of new business increased to INR 26.29 billion in FY 2026 from INR 23.70 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 INR 16 billion in FY 2026 from INR 11.89 billion in FY 2025 and INR 6.09 billion in this quarter from INR 3.86 billion in Q4 of last year. The gross direct premium income of ICICI General increased to INR 287.12 billion in FY 2026 from INR 268.33 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 INR 27.72 billion in FY 2026 from INR 25.08 billion in FY 2025. The profit after tax increased to INR 5.47 billion in this quarter from INR 5.1 billion in Q4 of last year. The profit after tax of ICICI AMC as per Ind AS increased to INR 7.63 billion in this quarter from INR 6.92 billion in Q4 of last year. The profit after tax of ICICI Securities as per Ind AS on a consolidated basis was INR 4.22 billion in this quarter compared to INR 3.81 billion in Q4 of last year. ICICI Bank Canada had a profit after tax of CAD 4.4 million in this quarter compared to CAD 12.5 million in Q4 of last year, primarily reflecting the impact of reduction in benchmark interest rates and lower business volumes. ICICI Bank U.K. had a profit after tax of USD 8 million in this quarter compared to USD 6 million in Q4 of last year. As per Ind AS, ICICI Home Finance had a profit after tax of INR 2.49 billion in the current quarter compared to INR 2.41 billion in Q4 of last year. With this, we conclude our opening remarks, and we will now be happy to take your questions. Operator: [Operator Instructions] We'll take a first question from the line of Jayant Kharote from Axis Capital. Jayant Kharote: Congratulations on a great set of numbers. First question is on... Operator: Jayant, sorry, can you use your handset mode, please, your audio is not very clear. Jayant Kharote: Yes. 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. Kunal Shah: Yes. 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, spreads are getting attractive? Otherwise, we have always focused on ROA. So what is actually driving this growth on the mortgages side, in particular quarter-on-quarter? And the second question is on deposits. Deposits seems to be slightly slower compared to then of the loan growth and we have losing the market share. Maybe a couple of years back, we have gained quite a bit of market share on CASA and all. But I think now the overall deposit growth is lower in the system, so what will be our stance on the overall deposit 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 2 to 3 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 2 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 customer 360 aspect, which we do in all our businesses. On the deposit side, I think while the -- it looks like a loan growth of 15% and a deposit growth of 11%. On an average basis, they are pretty closely matched. I mean 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 LCR 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 loan growth. Kunal Shah: Sorry, so you mentioned average, so average deposit growth is almost 10.8%, okay? So you mean to say that [indiscernible] the average loan growth... Anindya Banerjee: The gap would not be like 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 recoveries still seems to be pretty much in line with the last quarter. But was there any provisioning release 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 onetime 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 you're still alluding to full year. But Q4, because if I look at recoveries in corporate and business banking, it seems to be almost similar at INR 750 crores, INR 775-odd crores. So nothing appears to be there in terms of higher recoveries in Q4 in corporate. Anindya Banerjee: So that's the recovery from the gross NPLs. As I said, we would have also a recovery from the written-off accounts that gets netted off in the provision line item, that would have been on the somewhat higher side in this quarter. Operator: Next question is from the line of Nitin Aggarwal from Motilal Oswal. Nitin Aggarwal: Congrats on strong performance, once again. The first question, Anindya, 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, deposit 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 sustain going forward, but this is something we'll have to keep calibrating. Nitin Aggarwal: 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 the 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 INR 1.06 billion, that includes -- that's after taking into account the impact of the mark-to-market as of March 31 on the net -- the swaps -- the forwards. So that's factored into those numbers. Nitin Aggarwal: Okay. Okay, sure. And the last question is around the growth. We have seen a very strong pickup in the system numbers, even ICICI Bank in the last 2 quarters have picked up very well on the growth front. How do you look at this momentum going into FY '27? Is this like something that you will think that will pick steam 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 mortgages started to pick up now or you think that 16-odd percent growth where we are right now is like the -- 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 other factors like the interest rates stabilizing, benchmark stabilizing growth has picked up. And 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 and strong funding and liquidity. So we would want to leverage that to grow the business within our parameters of risk acceptance. Nitin Aggarwal: Right. And sorry, if I can squeeze 1 more. And especially on the credit cost line, wherein I think everybody has been waiting for some normalization, some uptick in credit costs in the banking system and yet you've reported a sharp improvement here again. While our guidance remains below 50 basis points, but in terms of your own confidence and assessment, do you feel more confident now versus how things were in the prior years because our guidance in general has been sub-50% over the years? So how do you see like -- and compare this now versus what you have guided in the past? Anindya Banerjee: So I would think if 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 have held up well. We had maybe 1 year -- 1.5 year, 2 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. Operator: Next question is from Mahrukh Adajania from [ Tara Capital ]. Unknown Analyst: Congratulations. I had a couple of questions. Firstly, after this war, would you have tightened any credit parameter or any credit rule going into FY '27 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 2 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? So -- 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 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 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'll just have to, as we go along, look at how incremental pricing, et cetera, play out in the market, and we'll have some 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. Unknown Analyst: 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, more by corporate recoveries? Anindya Banerjee: No. So this quarter, of course, we saw a 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, the unsecured has been moderating. So secured was anyway pretty stable. So that is having a beneficial impact on the provisions. Operator: Next question is from the line of Seshadri Sen from Emkay Global. Seshadri Sen: 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 revolver rates are coming down, cost of acquisitions seems to be moving up a little bit? Anindya Banerjee: So I think in Q3, the decline we saw was really seasonal because there was a sharp buildup of the book towards the end of Q2 due to the festive season spend, which ran off in Q3. The small decline from -- 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 in prior -- one of the analysts earlier asked about 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, including the kind of -- on the cost side, reward side, et cetera. So I think those -- we keep tweaking those as well. So overall, I think it's a business one would continue to have a very strong focus on. Seshadri Sen: 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 slightly medium perspective, what are your growth aspirations? What are the key drivers? Are there any particular segments that you're looking at? Anindya Banerjee: So I think we are very focused on the counterparty and in terms of the quality and the overall business opportunity. I think our funnels are open, and we are in a 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 2 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 what -- how we can work with them over the longer term. Operator: We'll take our next question from the line of Rikin Shah from IIFL Capital. Rikin Shah: A few questions. First one is on OpEx. So the OpEx growth about at 11.5%, 12% this 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 SA balances where we were seeing some outflows, have the trends stabilized and should we start seeing some growth even in the institutional SA going ahead? So those are my 2 questions. Anindya Banerjee: So as far as the OpEx is concerned, I think if we look at this year, more or less, it has been in line with our expectations. I think couple of areas where the costs have been somewhat higher than what we would have expect -- would have started out with. One is on the priority sector compliance and the second is, to some extent, on the remuneration because of the labor code and a couple of other -- 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 sustained over the next year. So 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: Got it. And the government SA balances? Anindya Banerjee: Yes, government SA balances. So as we had said last time, those are in the low-teens as a proportion of the balances. I think this quarter, it's been -- 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 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 1 last question. Could you comment on how much residual deposit repricing is remaining in your case? Anindya Banerjee: Don't really give a number of that time, but I guess maybe till the last summer, our peak rates were more in the 1 year kind of level. So that's kind of the repricing horizon. Operator: Next question is from Param Subramanian from Investec. Parameswaran Subramanian: 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 our machinery. I mean, some of it is not strictly 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. Parameswaran Subramanian: Okay. Got it. And where are we in terms of -- so the issue that came up in the last quarter on 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're in the process of working through that portfolio, as we said, to try and bring it into conformity with the requirements of the agri lending classification. And maybe we will have an update on that a quarter-or-so from now. Parameswaran Subramanian: Okay. And Anindya, broadly, where are we in terms of, say, our PSL compliance, say, on SMFs, et cetera, since we are at the end of the year? Anindya Banerjee: So it's pretty much I think the same picture. I mean, we would have some -- we would be compliant. Overall, we will have some shortfall on the small agri side. So that's pretty much the same picture. Operator: Next question is from the line of Piran Engineer from CLSA. Piran Engineer: Congrats on the quarter. Firstly, just a clarification on [indiscernible] the government deposits being in low-teens, it's low-teen share of total deposits or low-teen share of SA? Anindya Banerjee: SA. Government SA is a low-teen share of SA. Piran Engineer: Correct. 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: So I would say it's more a pickup in disbursements. Piran Engineer: Okay. Like-for-like, Anindya, let's say, [Technical Difficulty]. Operator: Piran, sorry, we lost you, again. Piran Engineer: Yes. So just pre-repo cut cycle to today, how much [Technical Difficulty] incremental disbursements, of course. Anindya Banerjee: I think we are not able to hear you, Piran. Maybe we can just take this offline, yes? Piran Engineer: Yes. Sure. Operator: We'll take our next question from the line of Chintan from Autonomous Research. Chintan Joshi: 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. So 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: No, it's very difficult to answer that question because the outlook on the underlying [Technical Difficulty]. Operator: I'm sorry, sir, you're not audible. Ladies and gentlemen, please stay connected, we've lost the management line. Ladies and gentlemen, we have the management team back online. Chintan? Chintan Joshi: Yes, I'm still here. I think Anindya was answering my question. I'll let him finish. Anindya Banerjee: Yes. I don't know where we -- where you lost us... Chintan Joshi: Pretty much from the start. Anindya Banerjee: Yes. Okay. Essentially, it's very difficult to make a prediction 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 production is falling, slowing down, working capital limits are not getting utilized? Is there any kind of -- are you seeing any stress in your early indicators? Anindya Banerjee: It's too early to make 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 kind of take the duration as 1 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. And in the last rate cut cycle happened in June, and then we did -- there was some further cut, small cut in December. So as I said, overall, on the margin side, we don't -- we expect it to be a range bound from here on. Chintan Joshi: Okay. And finally, on cost-to-income ratio. 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 PPOP and the PBT post credit costs. So it's not that we are looking at managing or targeting a particular cost-to-income metric. So obviously, our objective would be to grow revenues ahead of costs. But -- so we will see how it evolves. That's certainly the way in which we would like to drive the bank. Operator: Ladies and gentlemen, we'll take that as the last question for today. I would now like to hand the conference back to management for closing comments. Over to you, sir. Anindya Banerjee: 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. Thank you for joining us, and you may now disconnect your lines.