Mumbai: Private sector lender ICICI Bank on Saturday said it has witnessed no impact of the West Asia war on its books and feels it is too early to predict if it will have any bearing on corporate and small business borrowers, and remittances.
“It’s too early, frankly. It’s too early to call out,” Sandeep Batra, executive director, ICICI Bank told reporters after announcing the bank’s March quarter financial results.
Batra said that “most of the developments have happened in the month of April, and if I just go back to what has happened in West Asia, I think we have to remember that the long-term story of India remains intact”.
The war in Iran has created a shipping bottleneck in the Strait of Hormuz, a narrow conduit through which about one-fifth of global oil supply passes. While it was reported that the Strait had been opened, Reuters reported on Saturday that merchant vessels attempting to cross it received radio messages from Iran’s navy stating they were not allowed to pass.
Batra said while one cannot deny that the developments of West Asia will have some kind of impact on the world, corporate India will get back to growth. He was responding to a question about whether the bank is seeing companies delay investment decisions due to the war and the consequent uncertainties.
“I mean, will there be a bit of an impact on the GDP growth in FY27? The answer is yes, but it is still going to be growing and within that, there will be enough opportunities for both corporate India and for us to grow,” said Batra.
ICICI Bank’s domestic corporate book grew 9.3% year-on-year (y-o-y) to ₹3.05 trillion. It was the bank’s slowest-growing loan segment, with retail, rural loans, and business banking growing 9.5%, 25.6%, and 24.4%, respectively, on a year-on-year basis in the three months through March.
On the impact of the war on small businesses, Batra said it was “very difficult to make long-term predictions at this point of time” but “will continue to monitor all these indicators going forward very carefully”. “It is safe to assume there will be some kind of economic impact,” he said.
The bank reported a net profit of ₹13,702 crore for the three months through March, up 8.5% as provisions dropped nearly 90% in the same period. The bank said the drop was a result of improvement in asset quality and recoveries from corporate customers that had been written off.
Its gross bad loans were at 1.4% of the total portfolio as on 31 March, down 13 basis points (bps) from the previous quarter, and 27 bps from the same period last year. The bank saw a 15.8% growth in total loans to ₹15.5 trillion in Q4 of FY26, while deposits grew 11.4% to ₹17.9 trillion. Its net interest margin, a key indicator of profitability, stood at 4.32%, up 2 bps from the December quarter but down 9 bps from the same period last year.
Analysts have given a thumbs-up to the bank’s credit performance. “This quarter’s results address the key concern—loan growth—with the bank delivering 16% y-o-y growth after several quarters of trailing the system. However, deposit growth remained modest, particularly relative to the system, possibly reflecting a conscious effort to protect margins,” analysts at Bernstein said in a note on Saturday.
Interestingly, the bank’s co-lending book reported a higher bad loan ratio than its overall portfolio. As of 31 March, the bank had a co-lending book of ₹1,538 crore, of which ₹76 crore had turned bad, resulting in a bad loan ratio of 4.9%. Loans under such arrangements included home loans, loans against property, and business loans. Past disclosures on co-lending portfolio quality were unavailable.
On whether it is seeing any stress in this portfolio, Anindya Banerjee, group chief financial officer of the bank, said that the size of this book was “not material”
“This will eventually pan out. I think this is a relatively recent thing which has started. So we will just watch it as we go along. I think we will continue to pursue these co-lending opportunities and see how it pans out,” said Banerjee.
Meanwhile, on 27 March, the RBI capped banks’ net open positions (NOPs) in the domestic market at $100 million at the end of each business day, and mandated that banks comply with this rule by 10 April. This move was expected to hit the treasury incomes of banks during the March quarter.
ICICI Bank reported a treasury book loss of ₹106 crore in Q4 FY26, as against a loss of ₹157 crore in Q3, and a profit of ₹239 crore in Q4 of FY25.
“Of course, the bank had some open positions on the onshore market, which were required to be reduced as per RBI guidelines. And this treasury loss does reflect the impact of the widening of the spread post issuance of this guideline,” said Batra.
