Harsh Modi

Harsh Modi asked about the bank's improving KASA (Current Account Savings Account) market share, seeking insights into the visibility for continued gains and the key areas sustaining this advantage over the next 12-18 months. He also questioned the bank's approach to payout ratios given its strong capital adequacy, specifically the CET1 ratio.

Answer

Anindya Banerjee, CFO, attributed KASA growth to steady distribution expansion, effective digital platforms, and strategic focus on segments like business banking. He identified transaction banking, corporate ecosystem synergies, and the ICICI Direct platform as key levers for future KASA growth. On capital adequacy, Mr. Banerjee confirmed a strong CET1 ratio of 16.35% (including H1 profits), aligning with large private sector banks, and stated the bank's priority is to maintain a robust balance sheet and leverage capital for growth rather than specific payout plans.

Harsh Modi of JPMorgan Chase & Co. asked about the strategic rationale for the corporate loan mix shifting towards BBB- rated assets, the drivers of strong growth in business banking, and the outlook for CASA deposit market share amid rate cuts.

Answer

Anindya Banerjee, Group CFO, explained the corporate mix shift is a function of demand and pricing, with the A-rated segment being a 'sweet spot' for risk-reward. He attributed business banking's success to a combination of distribution, process, and technology, and expects it to continue outpacing overall loan growth. For CASA, he noted the focus remains on customer acquisition to become their primary bank.

Harsh Modi of JPMorgan Chase & Co. asked about the strategic shift in the corporate loan mix towards BBB-rated assets, the drivers behind strong growth in business banking, and the outlook for CASA deposit market share amid rate cuts.

Answer

Anindya Banerjee, Group CFO, explained that the corporate loan mix shift is a function of demand, pricing, and a favorable risk-reward balance in the BBB segment. He attributed business banking's success to distribution, technology, and disciplined monitoring, expecting it to outpace overall loan growth. For CASA deposits, he sees no major change in the competitive landscape and expects to continue gaining share through customer acquisition.

Harsh Modi from JPMorgan Chase & Co. questioned why Risk-Weighted Asset (RWA) growth at 17% was outpacing loan growth of 13%. He also asked about the bank's strategic plans for deploying its significant excess capital, with a CET1 ratio of 15.94%.

Answer

Executive Anindya Banerjee explained that the faster RWA growth was due to an evolving mix of loan categories and an increase in market risk from larger trading positions taken in a favorable rate environment. Regarding capital, he emphasized that maintaining a strong capital level is strategically important and aligns with market expectations, and the bank sees a long runway for growth to leverage this capital.

Harsh Modi asked for the bank's outlook on gaining CASA (Current Account Savings Account) market share over the next 18 to 24 months and whether there was a specific CASA ratio the bank was targeting.

Answer

CFO Srinivasan Vaidyanathan stated that while the bank's ambition is always to gain market share, he would not provide a specific target for the CASA ratio. He emphasized that the primary goal is to capture the customer's entire wallet share, which includes growing time deposits where the bank's penetration is low. The actual market share gain in CASA will depend on market conditions and customer disposable income.

Harsh Modi from JPMorgan Chase & Co. asked about the bank's strategy for its CASA (Current Account Savings Account) market share over the next 18-24 months and whether the bank expects to gain meaningful market share in savings accounts specifically.

Answer

Executive Srinivasan Vaidyanathan responded that the bank's primary goal is to increase its overall wallet share with customers, which includes both CASA and time deposits, especially since time deposit penetration remains low in its customer base. He avoided giving a specific CASA ratio target. While affirming that the bank's ambition is always to gain market share in savings accounts, he noted that the actual gain would depend on external factors like market conditions, inflation, wage growth, and disposable income levels.