ICICI Bank Ltd

NSE:ICICIBANK

Earnings Call Analysis

ICICI Bank's Profitable Growth Amid Expansions

ICICI Bank Q2 2024 saw profit before tax (excluding treasury gains) jump 35.7% YoY to INR 13,731 crores. Net interest income rose by 23.8% YoY. Core operating profit and profit after tax grew healthily, respectively by 21.7% and 35.8% YoY, while net interest margin slightly dipped to 4.53%. Deposits climbed 18.8% YoY, with substantial branch expansions. Loans grew 19.3% domestically, led by retail (21.4%) and SME (29.4%) segments. Asset quality improved, with net NPA ratio down to 0.43%. Despite NIM contraction due to escalated term deposit costs, the bank maintains a stable outlook for margins and embraces digital initiatives for customer engagement and transaction growth.

Robust Profit Growth and Strong Capital Position

Investors have reason to be impressed by the bank's performance as it reported a substantial increase in core operating profit before tax, up by 35.7% year-on-year to INR 13,731 crores for Q2 2024. Profit after tax similarly grew by 35.8% year-on-year to INR 10,261 crores, with consolidated profit after tax climbing by 36.1%. The bank's return on equity (ROE) stood impressive at 19.1%.

Deposit and Loan Portfolios Expanding

There was an 18.8% year-on-year surge in deposit growth, which signals strong trust from the customers, and the loan book also expanded by 19.3% year-on-year. Retail loans made significant contributions, growing by 21.4%, which indicates the bank's robust presence in the consumer sector.

Digital Initiatives Drive Adoption and Growth

The bank's focus on digital transformation is evident with more than 1 crore activations of its iMobile Pay service by non-account holders, and an impressive increase in merchant acquiring transactions through UPI by 69.5%. Such strides in digital banking are essential for future scalability and customer retention.

Stable Asset Quality with Strong Recovery Mechanisms

Asset quality remains stable with a low net Non-Performing Asset (NPA) ratio of 0.43%, which is a decrease from the previous quarters. The bank also maintains a solid provisioning coverage ratio of 82.6%, and with a strategy of writing off unsecured loans swiftly, the risk of delinquency seems well-managed.

Focused Risk Management and Prudent Lending

The bank's unsecured retail portfolio, composed of personal and credit card loans, is being closely monitored for asset quality, with the majority of the portfolio being salaried employees working in reputable organizations. The bank also articulated a cautious stance toward funding projects, indicating a focus on financially viable and bankable projects, which is critical for sustainable lending practices.

Net Interest Margin and Deposit Strategy

A slight decline in Net Interest Margins (NIM) to 4.53% was reported, with the decrease expected to moderate over upcoming quarters. This reflects a cautious optimism that the bank expects to manage its interest margins effectively even as it navigates a period of rising deposit costs. The bank continues to carry INR 13,500 crores in contingency provisions, which is indicative of a prudent approach to unforeseen losses.

Stable Loan Portfolio Composition

Home loans exhibited a healthy growth rate of 16.2% year-on-year. Furthermore, 48% of the loan portfolio is linked to the Repurchase Option (RECO), and 18% is based on the Marginal Cost of Funds-based Lending Rate (MCLR), providing a balance in its interest rate exposure. The bank does not predict significant changes in retail deposit rates, suggesting confidence in the current stability of its funding costs.

Commitment to Growth and Market Positioning

Despite competitive pressures, possibly intensified due to a merger with a larger peer, the management's focus remains unwavering on its own growth and business strategy, indicating confidence in their ability to navigate the market dynamics and maintain a growth trajectory.

Earnings Call Transcript 2024-Q2

[Operator]

Ladies and gentlemen, we welcome you all to ICICI Bank's results conference call with Mr. Sandeep Batra, Executive Director, ICICI Bank; and Mr. Anindya Banerjee, Group Chief Financial Officer, ICICI Bank. Mr. Batra will now give you an overview of the results, which will be followed by a Q&A session. Thank you, and over to you, sir.

[Sandeep Batra, executive]

Thank you. Thank you all for joining us today. Good evening. And joining me on this call is our group CFO, Anindya.

The Indian economy continued to be resilient amidst uncertainties in the global environment. This has been enabled by effective and forward-looking policies and actions by the government and other authorities. The underlying growth momentum is visible with expansion in manufacturing and services PMI, real estate buoyancy, increasing steel and cement output, higher tax collections and rising demand for travel. The government-led CapEx cycle is continuing. So there has been a pause in the policy rate hike cycle in India. Global and domestic inflation, and the liquidity and rate environment continue to evolve.

Our strategic focus continues to be growing our core operating profit less provision, that is profit before tax, excluding treasury through the 360-degree customer-centric approval, and by serving opportunities across ecosystems and micro markets. We continue to operate within our strategic framework and strengthen our franchise, enhance our delivery and servicing capabilities and expand our technology and digital offerings. .

Our Board has today approved the financial result for the bank for the quarter ended September 30. I would like to highlight some of the key numbers.

First of all, we'll talk about our profit and capital. Core operating profit less provisions, that is profit before tax excluding treasury gains, grew by 35.7% year-on-year to INR 13,731 crores in Q2 2024. The core operating profit grew by 21.7% year-on-year to INR 14,314 crores in Q2 2024. Excluding dividend income from subsidiaries associates, core operating profit grew by 22.9% year-on-year in Q2 2024.

Net interest income increased by 23.8% year-on-year to INR 18,308 crores in Q2 2024. The net interest margin was 4.53% in Q2 2024 compared to 4.78% in Q1 2023 (sic) [ Q1 2024 ] and 4.31% in Q2 2023. The net interest margin was 4.65% (sic) [ 4.16% ] in H1 2023. Fee income grew by 16.2% year-on-year to INR 5,204 crores in Q2 2024. The profit after tax grew by 35.8% year-on-year to INR 10,261 crores in Q2 2024. The consolidated profit after tax grew by 36.1% year-on-year to INR 10,896 crores in Q2 2024.

The stand-alone ROE was 19.1% in Q2 2024. At September 30, the bank had a net worth of over INR 2.1 lakh crores, including profits for H1 2024. CET1 ratio was 16.77%. Tier 1 ratio was 16.86% and total capital adequacy ratio was 17.59%.

Moving on to deposit growth. The total period-end deposit increased by 18.8% year-on-year to INR 12,94,742 crores at September 30, 2023. Period and term deposits increased by 31.8% year-over-year to INR 7,67,112 crores at September 30, 2023. Period-end term deposit increased by INR 64,601 crores in Q2 2024. The average current account deposits increased by 14% year-on-year. The average savings account deposit increased by 5 -- sorry, 4.5% level.

The bank opened 174 branches in the current quarter, 634 branches in the last 12 months and a network of 6,248 branches and 16,927 ATMs and cash recycling machines as of September 30, 2023. We added about 4,000 employees in Q2 2024 and about 29,000 employees in the last 12 months and have about 1,39,000 employees at September 30, 2023.

Moving to loan growth. The domestic loan growth grew by 19.3% year-on-year and 4.8% sequentially at September 30. The retail loan portfolio grew by 21.4% year-on-year and 5.5% sequentially. Including non-fund outstanding, the retail loan portfolio was 46% of our total portfolio. The business banking portfolio grew by 30.3% year-on-year and 10% -- 10.6% sequentially.

The SME business, comprising borrowers with a turnover of less than INR 250 crores, grew by 29.4% year-on-year and 7.2% sequentially. The rural portfolio grew by 17.3% year-on-year and 3.5% sequentially. Growth in the domestic corporate portfolio was 15.3% year-on-year and 3.1% sequentially at September 30, 2023. 71.3% of the total portfolio, excluding retail and rural, was rated A- and above at September 30, 2023.

Moving on to our digital initiatives. Leveraging digital and technology across business is a key element of our strategy of growing the risk-calibrated core operating profit. We continue to see increasing adoption and usage of our digital platforms by our customers. There have been more than 1 crore activation of iMobile Pay by nonbank account -- non ICICI bank account customers at end September 2023.

Merchant STACK offers an area of banking and value-added services to retailers, online businesses and large e-commerce firms such as digital current account opening, instant overdraft facilities based on point-of-sale transactions, connected banking services and digital store management, among others. The value of the bank's merchant acquiring transactions through UPI grew by 69.5% year-on-year and 13.9% sequentially at Q2 2024.

The bank had a market share of about 30% value in the electronic toll collection to FASTag in Q2 2024 with a 15.4% year-on-year growth in collection. Bank has created -- the bank has created more than 20 industry-specific stacks, which provide bespoke and purpose-based digital solutions to corporate clients and their ecosystems.

The bank's Trade Online and Trade Emerge platforms allow customers to perform most of the trade finance and foreign exchange transactions digitally. Bank's digital solutions integrate the export transaction lifestyle with bespoke solutions providing frictionless experience to our clients and simplify customer journeys.

During the quarter, ICICI Bank participated in the industry first trade finance transaction using blockchain power technology by transforming the time-consuming, paper-intensive cross-border trade in a real-time electronic will of leading in a trusted and secure environment. About 75% of trade transactions were done digitally in Q2 2024. The volume of transactions done through Trade Online and Trade Emerge platforms have grown by about 30% during the year.

Moving on to asset quality. The net NPA ratio was 0.43% at September 30 compared to 0.48% as of June 30 and 0.61% at September 30, 2022. During Q2 2024, there were net additions to gross NPA of INR 116 crores. The gross NPA additions were INR 4,687 crores in Q2 2024. Recoveries and upgrade of NPAs, excluding write-offs and sales were INR 4,571 crores in Q2 2024.

The gross NPAs written off were INR 1,922 crores in Q2 2024. There was -- sale of NPA was INR 179 crores in the current quarter. The provisioning coverage ratio of an NPA was 82.6% at September 30, 2023.

The total fund-based outstanding to all borrowers under resolution as per various extent regulations declined to INR 3,536 crores or 0.3% of total advances at September 30, 2023 from INR 3,946 crores at June 30, 2020. The bank holds provisions amounting to INR 1,107 crores against these borrowers and the resolutions as of September 30, 2023.

The loan and nonfund-based outstanding to performing borrowers rated BB and below were INR 4,789 crores at September 30, 2023 compared to INR 4,276 crores at June 30, 2023. Total provisions during the quarter were INR 583 crores or 4.1% of core operating profit and 0.2% of average advances. The bank continues to hold contingency provisions of INR 13,100 crores as on September 30, 2023.

Going forward, we will continue to operate with a strategic framework by focusing on micro markets and ecosystems, the principles of return of capital fair to customers, fair to bank. And one bank, one team ROE will guide our operations. We focus on building a culture that every employee in the bank serve the customers with humility and upholds the value of brand ICICI Bank. We aim to be a trusted financial service provider of choice for our customers and deliver sustainable return to our shareholders.

With this, I conclude my opening remarks, and we are happy to take on any questions that you might have.

[Operator]

[Operator Instructions] The first question is from the line of Vishwanath Nair from BQ Prime.

[Vishwanath Nair]

The question I had with regard to the gross additions to NPA for you during the quarter. So why it is that I feel the positive addition net to growth NPA of INR 115 crores. I mean the number is marginal, but still, the fact that you have gross deposits at -- exceeded your recoveries and write-offs. So just wondered from further lag if this was just a sort of a one-off? Or are you expecting any more?

And the second question I had was with regard to your unsecured retail portfolio, the numbers are not giving the best statement. But also just wanted to get a sense as to what the asset quality outlook on that case, considering that the regulator is raising this issue at the press conference.

[Sandeep Batra, executive]

Thank you, Vishwanath. I think I'll just reiterate the numbers as far as the NPA movement is concerned. We had gross additions of about INR 4,600 crores. This is lower than the previous quarter of INR 5,300 crores. Within that, the corporate and SME was a small amount of INR 323 crores and retail and rural was about INR 4,364 crores. During the quarter, I think the numbers are slightly lower because of the seasonality on the rural businesses. Q2 is normally lower. I mean, you would have noticed that the numbers were slightly higher in the first quarter.

In terms of recoveries, the corporate and SME book, we had a recovery of about INR 1,500 crores. And the retail and rural and business banking was about INR 3,000 crores, And that is how we totally leads to about INR 116 crores. So we keep continuing to monitor it. It is a significantly low number. And as far as recoveries are concerned, I think it's very difficult to give an outlook. We continue to focus on -- I mean, building a quality book as far as the current portfolio is concerned. And wherever opportunities come from the written-off book, et cetera, we take steps to sort of cover this. But that's an ongoing journey.

Second is your question on the unsecured NPA. The unsecured portfolio comprises of personal loans and credit card portfolio and it's about 13.3% of our total loan portfolio. The tier portfolio has increased by about 40% year-on-year and about 10.2% sequentially, while for credit cards, the same has increased by about 30% year-on-year and 6.2% sequentially. So it has been built with our core principles of return of capital and harnessing ecosystems.

And I think we have been saying this for a lot of time, for us, the customer is more important rather than the product. And most of the increases have been for portfolios where there have been existing relationships. And almost 85% of the portfolio comprises salaried employees with customers being employed with the reputed corporates, MNCs, government entities, PSUs, defense, et cetera, all of them having largely a stable income. So we keep monitoring the personal loan and credit card portfolio at a subsegment level to identify possible risk buildups.

Based on the current overdue trends, the stable distribution, the delinquency levels of the portfolio are all within the defined risk thresholds. We will -- we continue to monitor these developments in the job markets for any identifiable weaknesses and leveraging that have been built up. I think you rightly pointed out that -- I mean, both from a regulator and analysts and research [ persons ] have indicated a slightly higher increase in risk and unsecured portfolio level, especially on the personal loan.

However, the risk buildup is happening in segments and low ticket size, which is 50,000 and below, where affordability and retailing capacity might be constrained. As far as the bank is concerned, we do not have any meaningful presence in this segment. Another indicator of this buildup is the number of live unsecured loans which are being serviced by borrowers, wherein the bank, we take necessary steps by restricting origination of customers.

As far as we are concerned, we will continue to monitor these portfolios and give loans only to customers which falls within our risk thresholds. And that is the strategy we have been articulating for a long period of time.

[Vishwanath Nair]

Apologies. I didn't get the amount -- what you said, the segment where the risk is -- in anything.

[Sandeep Batra, executive]

No, there is no risk. That was why I was talking, risk is commenting from a larger industry perspective. So as far as our portfolio is concerned, we have got a pretty stable trend. And if you see, the personal loan book is about -- as of September 30 is about INR 1 lakh crore, and our credit card outstanding is about INR 43,000 crores, And I gave out the increase which has happened during the current quarter.

So we are quite happy with the quality of the portfolio that we've built. As you are aware, we have got a very tight provisioning policy. So in case there is a delinquency, which sort of what any overdue will get build up it starts impacting, we ensure that it is written off pretty fast.

[Operator]

The next question is from the line of Joel Rebello from The Economic Times.

[Joel Rebello]

I just want to clarify. First of all, a couple of clarifications. You said the personal loan portfolio is INR 1 lakh crores and credit card is INR 33,000 crores.

[Sandeep Batra, executive]

No, no. Credit card is INR 43,230 crores, to be precise. Personal loan is INR 1,04,428 crores.

[Joel Rebello]

Okay. Sir, just to -- first question is about, again, your slippages. If you could give us more color. For example, I don't know what was the gross additions or net addition to NPA 1 year ago. How has the trend been basically, I mean, for you all and some more color, I know you've given some details on the most of it is coming from retail and agri, but some more color on the slippage and what you expect, sir?

[Sandeep Batra, executive]

Now I just probably -- in addition to what I've already said, I'll probably give you a color of what happened in 2023, the net additions in Q2 2023 were about INR 600-odd crores. In Q2 2024, the net addition has been just about INR 116 crores. So that's a very small number given the size of our balance sheet. The gross additions during the quarter were INR 4,687 crores . The recoveries were INR 4,571 crores. Amongst the recovery, the retail recovery was about INR 3,000 crores and corporate and SMEs were INR 1,500.

So if you're talking about the slippages, the retail and rural, there was a slippage of about INR 4,300 crores. This is in comparison with about INR 5,072 crores in the previous quarter and about INR 3,600 crores in the quarter 2 2023. So the numbers are, I mean, fairly good in the overall context. And we continue to monitor this very carefully. .

[Anindya Banerjee, executive]

So maybe just to add, if we were to look at it kind of on a sequential basis, the retail, SME, business banking, NPL addition has been stable to marginally lower. On the rural side, as you are given, because the NPL classification is linked to due dates related to the cropping cycle, typically, we see the NPL formation only in the first and third quarters of the year. So in the current quarter, there has been very little.

And on the corporate side, we have not been seeing really any NPL formation to speak of. In the current quarter, relative to the previous quarter, we had significant recoveries and upgrades on the corporate portfolio, which is why on an overall basis compared to net addition of -- to gross NPL of about INR 1,800 crores in the first quarter, in this quarter, it has come down to only INR 116 crores.

[Joel Rebello]

My second question is with regards to digital banking. The RBI has very recently stopped the PSU Bank from onboarding new customers on their digital app. This is one of the actions that the RBI has taken. It's taken more actions than previous years, [ Finbank ]. Do you see -- or do you all have to -- do you think that there could be a change in the way you'll do digital onboarding, digital banking because of this? Do you think there has to be some kind of regulation? I mean, your thoughts on what could be the impact of this, whether this -- you will have to relook at how you'll do your business on the digital banking.

[Sandeep Batra, executive]

Joel, this is not really related to the Q2 numbers. But largely, we do keep, I mean, testing our own apps from a security angle, and we are -- and we continue to try to ensure -- sorry, we continue to focus on the cybersecurity and want to ensure that our customers are always comfortable in using our app. And we will continue to remain focused there.

[Operator]

We have our next question from Hamsini Karthik from the Hamsini Business Line.

[Hamsini Karthik]

Sir, I have 2 questions. One was with respect to your corporate book. Corporate SME and business banking steadily have shown an improvement in growth as well. And today, as we look at the overall mix of the bank from what was til 60-40 a couple of years back, just about 2 years or so back, is now gradually moving to a 55-45 kind of ratio, do we believe that the bank is once again then seeing strong pockets of growth opportunities, rather on the corporate side, on the business banking side, et cetera?

[Sandeep Batra, executive]

Hamsini, I think we have been saying that we look at opportunities across whether it is, rural business banking, SME, and of course, the wholesale banking that you referred to, I think our growth reflects the opportunities that we see in the respective markets. And as long as they meet our risk appetite numbers, they meet -- I think we are happy to grow that business.

As you are aware, corporate India has leveraged over the last 2 years and has a strong balance sheet. It's good to see some capacity utilization has picked up, and we will continue to look at opportunities across sectors. And whenever we get opportunities, we'll be happy to lend. So we do not drive a particular mix. We are focused on serving all segments of our customers within our own risk appetite framework company.

[Hamsini Karthik]

Okay. Sir, if I can just ask to understand a little more on what you just spoke. Can you give me at least, in the fresh disbursal in the last 1 year or so, what would be the mix of working capital plus term loan -- working capital and term loan proportion?

[Sandeep Batra, executive]

Hamsini, we don't give that split. As you are aware, our domestic and corporate book is about INR 2,48,000 crores. This, of course, includes the non-fund fund based. I think currently, I mean, if your question is around the CapEx cycles, et cetera, the CapEx cycle, you are aware, is being largely funded by government and PSUs. Private sector, we have seen a lighter CapEx and mostly happening on infrastructure and industrial side. But we'll have to wait and watch how they shapes up going forward.

And as you are aware, as I did mention earlier as well, the corporates have relatively strong balance sheets and are able to undertake incremental brownfield investments from internal accruals and without having to take on recourse to banks. So that is from a larger angle. For us, we will remain on -- true to the core strategy of ensuring that we lend within our risk appetite framework, and we are agnostic to where this comes from.

[Hamsini Karthik]

Okay. Sir, my second question is with respect to the penalty that RBI has imposed on the bank, INR 12.2 crores approximately. There are 2 -- the report also mentioned that there are 2 directors of the bank who were directors at the company where fraud was detected. Do these directors continue to sit on the Board of the bank? Would there be any...

[Sandeep Batra, executive]

Hamsini, there were no fraud detected, please. There were just no fraud, I want to clarify and make that very, very categorical. These emanated from regulatory inspections and evaluation for FY '20 and '21. We respect RBI's observation, and we have already taken corrective actions. There were no fraud relating to any of these.

[Hamsini Karthik]

Would it pertain to a ban instance? Or -- and should we believe that every bit of that is now sort of built into the financials? We shouldn't expect any fresh hit to the P&L because of this?

[Sandeep Batra, executive]

This is true. I mean, there is a supplementary evaluation which happen on a periodical basis. And if there is a view which RBI has in terms of -- if we have not met a particular kind of guidelines, then there are actions which they do. And we have, as I've mentioned, even at the time of release of this thing, we have taken all corrective actions. And frankly, we really don't have anything more to add to that.

[Operator]

The next question from Mayur Shetty from Times of India.

[Mayur Shetty]

My question has partly been answered, I'll ask an additional question on the unsecured loans. Sir, you said that what the industry is seeing is in this low, small ticket personal loans, and that's a segment you are not present in at all?

[Sandeep Batra, executive]

Mayur, I have to focus on my portfolio well, and what I did mention was about some of the reports, which did mention that the unsecured loan where the risk is building up essentially on low ticket size as well as their affordability and retainment capacity might be constrained. As I mentioned earlier, we do not have any meaningful presence in this segment.

And another aspect of this buildup of whatever we have analyzed and the overall macro system is that some of these borrowers will be sort of overleveraged and take multiple loans. So we keep looking at our portfolio. And we are quite -- we take every risk indicators at the macro basis seriously. We analyze it. We look at our own book. And at this point of time, we are quite happy with the quality of the book that we have written.

As I did mention, for us, we have probably one of a very tight policies on the -- provisioning policies on unsecured book. Within 120 days of overdue, we are -- we just write it off. So if there is any risk bringing up, it sort of shows very, very fast. So at this point of time, while we will continue to monitor. We will -- and whenever we see any risk building up in any particular segment, we will sort of recalibrate our portfolio.

But at this point of time, we are quite happy with what we have built and the growth that we have delivered.

[Mayur Shetty]

Is the bank doing any larger project finance at all now?

[Sandeep Batra, executive]

Mayur, as I did explain, I mean, the -- it is a function of assessment of credit. So as you are aware, I mean, the larger CapEx are actually being taken off by government and PSU in the overall sector. So for us, we will fund any financially viable project. And whenever it comes, we are happy to fund it.

What is happening on a macro basis is, as I talked about earlier, is that most of the corporates are fairly deleveraged. They have a large cash accrual which is coming to them. And they do prefer to use their own incremental -- sorry, the incremental investments that they have in terms of brownfield projects and use internal accruals to the maximum extent. And if they need borrowings, and if we find that the fund -- the projects are bankable, we are more than happy to serve -- fund them.

[Operator]

We have our next question from Preeti Singh from Bloomberg.

[Preeti Singh]

Sir, so I saw that the NIMs have declined to 4.53%. And I noticed you said earlier that -- in April that we were at the peak of NIM. Do you expect any further narrowing of NIMs? And if so, what do you expect to close the year with?

[Sandeep Batra, executive]

So Preeti, I'll give a similar response which I gave last time. We did mention at the last quarter April, for the full year, we will have a NIM margin which is very similar to what we had for the last full year. The sequential decline in NIM, as you are aware, is the lagged impact of term deposits increase over last year.

The increase in cost of deposits during the quarter largely reflects the increase in term deposits over last year. So the rate of -- incremental rate deposit has largely stabilized. We expect the decrease in NIM to moderate over coming quarters. Then beyond that, I think we will continue to optimize NIM through asset liability and management levels, which are all within whatever are there within our overall control.

Anyway, the NIM -- the decline in NIM has been sort of offset by healthy growth in the loan portfolio and the fee income. So for our focus, it's going to be continue to focus [indiscernible] in a sustainable way.

[Preeti Singh]

Got it. And sir, the other question I had was on the growth in savings and current accounts. That seems to be way lower than your peers. Could you sort of just help us understand what steps you're taking to ensure that these lower cost -- you get more of these lower costing deposits?

[Sandeep Batra, executive]

Preeti, we are focused -- rather than period and numbers, rather than on an average basis. If I look at our average numbers, we have had an increase of about 7.1% year-on-year and about 1.1% in Q2 2024. So the period-end numbers are generally volatile. From our perspective, we look at the total liability franchise with the customer, which includes term deposits, costs and [ CASA ].

And if you see, the difference between the savings accounts and the FDI rates have sort of increased over the last few years. So naturally, the tendency for the customers is to have a higher amount of deposit -- retail deposits. As you are aware, we have seen a very strong traction and momentum in retail deposits, resulting in a growth of about 31.8% year-on-year and 9.2% sequentially.

So from our perspective, we are really looking at the total deposits, which include CASA and deposits. And the overall cost of deposits is also an important factor. We are quite happy with the progress that we have made, considering all the factors put together.

[Operator]

The next question is from the line of Ashish Agashe from PTI.

[Ashish Agashe]

Sir, this was just a follow-up to Mayur's question on CapEx. Sir, when do you prospectively see sort of some demand on the private CapEx front and some of it translating into lending opportunities for [ managed that you have ]

[Sandeep Batra, executive]

Ashish, as I -- we have been saying, I think we are -- I mean, the demand has to get created by the corporate India. For us, we will focus on what is within our risk appetite and we will be happy to fund it. We are not -- as I've mentioned, we are not fixated about whether lending that is happening within the corporate or SME or retail. Wherever there is growth we are happy to fund it.

In fact, if there is growth in the retail segment, we are there. The SME segment and business banking segment has been doing very well from a country perspective, and we have been growing that in a very healthy fashion. And even amongst the corporate world, we are able to do things which are -- which sort of, from a risk interest basis, is doing well.

In fact, it is not about the CapEx demand. If corporate India is so cash rich in generating internal accruals, they may not need so much of fund until the cycle picks up significantly. So whenever it happens, we will be there and happy to support that funding.

[Ashish Agashe]

Okay, sir. Sir, what was the home loan growth during this quarter and especially during the...

[Operator]

Ashish, we are losing our audio. May I request you to speak through the handset, please?

[Ashish Agashe]

Now sir?

[Sandeep Batra, executive]

Yes, you have talked about growth of which segment?

[Ashish Agashe]

Home loans, home loans segment.

[Sandeep Batra, executive]

Home loans grew by about 16.2% during the quarter -- year-on-year growth for this quarter.

[Ashish Agashe]

Okay, sir. And sir, if you can provide some color on the competitive intensity given that, okay, the merger with a larger peer basically got through just in July.

[Sandeep Batra, executive]

The 2 entities were there. I mean, as far as we are concerned, we are focused on our own business, and we are happy with the growth that we are -- that is happening.

[Ashish Agashe]

Okay, sir. And final small question, on the contingent provisions which you are carrying, you continue to carry or like was there any drawdown or anything of that sort?

[Sandeep Batra, executive]

Sorry, did not draw down anything, Ashish. The INR 13,500 crores of provisions, we continue to carry.

[Operator]

We'll take the last question from the line of [ Shibra Padka from The Informers ].

[Unknown Analyst]

[indiscernible] here. So I just want to know how much of your portfolio is RECO-linked and how much is MCLR-linked?

[Sandeep Batra, executive]

Yes. Sorry, how much of it is -- RECO is about 48% and MCLR is about 18%. And the fixed portfolio is about 31% -- fixed interest rate portfolio.

[Unknown Analyst]

How much do you see the amount of -- further rise in deposit rates, sir? What basis when you say you're factoring into now ?

[Sandeep Batra, executive]

Sorry, I didn't get that.

[Anindya Banerjee, executive]

We don't really have given an outlook on deposit rates. I think the retail deposit rates have been more or less stable for the last couple of quarters or a little more than that. Wholesale rates, I think, move up and down in line with overall systemic liquidity.

So there has been some hardening, I would say, over the -- towards the end of the second quarter and subsequently. But that -- we will see as it goes. But on the retail side, the rates have been reasonably stable. We will have to see how things evolve.

[Operator]

Thank you. As there are no further questions, this brings the conference call to an end. On behalf of ICICI Bank, we thank you all for joining us. You may now disconnect your lines. Thank you.