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Significant credit card business jump at ICICI Bank

Overall business growth spans loans, disbursals, mobile app, mortgages and more:

Significant credit card business jump at ICICI Bank

Sandeep Bakhshi, Managing Director & CEO and Rakesh Jha, Group Chief Financial Officer, gave very interesting insights about the digital initiatives at the ICICI Bank’s Q4, FY2022 Earnings Call. The SME portfolio of ICICI Bank grew by 33.6% yoy and 11.3% sequentially. The business banking portfolio grew by 43.2% yoy and 10.2% sequentially at March 31, 2022. Sandeep Bakhshi attributes: “The growth in our SME and business banking portfolios has been driven by our digital offerings and platforms like InstaBIZ and Merchant Stack.”

Leveraging Digital Across Biz

Various digital platforms of ICICI Bank such as iMobile Pay, internet banking platforms, InstaBIZ and Trade Online provide end-to-end seamless digital journeys, personalized solutions and value-added features to customers and enable more data driven cross sell and up sell. Bakhshi explains: “In line with the philosophy of open architecture, of our digital platforms, recently, we made our InstaBIZ app interoperable, that is, all benefits of the app are now available to all merchants including those who do not have a current account with us. This initiative enables merchants to instantly create digital collection solutions like UPI ID and QR code and start collecting money from their customers.”

Growth In Digital Offerings

Leveraging digital and technology across businesses is a key element of ICICI Bank’s strategy of growing the risk calibrated core operating profit. Rakesh Jha, Group Chief Financial Officer, elaborates: “We have seen significant increase in the adoption of our mobile banking app, iMobile Pay. There have been 6.3 million activations of iMobile Pay by non-ICICI Bank account holders as of end-March. The value of transactions by non-ICICI Bank account holders in the current quarter was 4.9 times the value of transactions in Q3 of 2022.”

Credit Card Spends Jump

The value of ICICI Bank’s credit card spends grew by 77% yoy in Q4 of 2022 driven by higher activation rate through digital onboarding of customers, including Amazon Pay credit cards, automated and effective portfolio management to grow spends among existing card customers and diversification through commercial cards. Rakesh explains: “Our bank has issued more than 3 million Amazon Pay credit cards since its launch. The bank has recently tied up with Emirates Skywards, the award-winning loyalty program of Emirates and FlyDubai, to launch a range of co-branded credit cards that enable customers to earn reward points on travel, lifestyle and everyday spends. The value of financial transactions on InstaBIZ grew by about 44% year on-year in the current quarter. The value of transactions on the supply chain platforms in the current quarter was 2.7 times the value of transactions in Q4 last year.”

Digital Sanction, Disbursal

The proportion of end-to-end digital sanctions and disbursements across various products of ICICI Bank’s has been increasing steadily. Rakesh updates: “About 34% of our mortgage sanctions and 44% of our personal loan disbursements, by volume, were end-to-end digital in FY2022. 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 volume of transactions through these solutions in FY2022 was 2.7 times the volume of transactions in FY2021. The value of transactions done on Trade Online increased by about 80% yoy in FY2022.”

Tech Related Expenses

Employee expenses of ICICI Bank in the fourth quarter include an impact of Rs690 million due to fair valuation of ESOPs granted to all employees post April 1, 2021 for the current quarter as required by RBI guidelines. Rakesh bifurcates: “Non-employee expenses increased by 15.6% yoy in this quarter primarily due to retail business and technology related expenses. The technology expenses were about 8.5% of our operating expenses in FY2022.”

Analytics & Opportunities

Bakhshi reveals: “We follow a micro market-based approach to create an efficient distribution and resource allocation strategy by using analytics to identify opportunities. We aim to steadily grow our business within our strategic framework and strengthen our franchise, delivery, and servicing capabilities, backed by a range of digital initiatives.”

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