ICICI Bank unlikely to increase its headcount on a net basis in FY26

ICICI Bank may not increase its workforce in FY26 despite adding branches, as it focuses on realignment, efficiency and digitisation, says Macquarie conference note

ICICI Bank, the country’s second largest private sector lender, has indicated that it does not plan to increase headcount on a “net basis” during this financial year (FY26), said a member of the senior management at the Macquarie Asia Conference 2025.

 

However, the bank will expand its branch network as it sees scope to “realign and redistribute workforce.”

 

ICICI Bank saw a net reduction of 6,723 employees in FY25, with its total workforce declining to 129,177. But the bank added 460 branches to its network during this period.

 

In comparison, ICICI Bank added 9,240 employees in FY24, 20,816 in FY23, and 7,094 in FY22. Meanwhile, the bank saw 623 new branches in FY24, 482 in FY23, and 152 in FY22.

 

“ICICI Bank, on a net basis, saw a decline in FY25 headcount. The management does not plan to add employees on a net basis in FY26. It sees scope to realign and redistribute its workforce despite adding branches and growing balance sheet,” said a report published by Macquarie Capital, quoting ICICI Bank’s senior management.  

 

“While the retirement age continues to be 58 across the bank, extensions have been given to select employees,” the report added.

 

ICICI Bank did not respond to an email seeking comment on the rationale behind its decision to not add employees in FY26.

 

Industry insiders indicated that lower attrition rates compared to earlier years, and higher digitisation could be some reasons why the bank could go slow on hiring in FY26.  

 

ICICI Bank has doubled its technology expenses as a percentage of overall operational expenses — from 5 per cent to 10.5 per cent over the past five years. In absolute terms, the figure is up fourfold.

 

In comparison in FY25, HDFC Bank, the country’s largest private sector lender, added 994 to its workforce, totalling 214,521. In FY24, HDFC Bank had added over 40,305 to its workforce, following the addition of 31,646 in FY23 and 21,483 in FY22. 

 

In FY25, HDFC Bank added 717 branches, taking its total network to 9,455. In FY24, it added 917 branches, while in FY23, it added 1,479 branches, and in FY22, 734 branches.

 

Meanwhile, ICICI Bank's senior management expects growth to recover, driven by a pickup in unsecured loans. In addition, falling rates and inflation, along with tax cuts, should aid growth.

 

After two years of high growth in the post pandemic phase, the pace of bank credit expansion moderated sharply to 11 per cent year-on-year (Y-o-Y) in FY25 from 20.2 per cent in FY24.

 

The slowdown was on account of base effect, regulatory actions like higher risk weights to signal stress in retail loans, and the challenge of raising deposits for extending loans.

 

Experts have estimated that bank credit is likely to grow 12-13 per cent in FY26, a tad higher than last year.

 

However, the management, according to the report, has cautioned that growth recovery could be modest. It added that capex demand remains subdued, and the economy is becoming less credit intensive.

 

“While the top-end segments in portfolios like housing loans continue to do well, the bottom and mid segments face growth challenges. This partially explains the slowdown in housing loans this year,” the report said.

 

Additionally, the report stated that the bank’s management remains confident about margin recovery as deposits will reprice with a lag.

 

“Wholesale deposit rates are down 50 basis points (bps) from the recent peak and even retail term deposit rates are 30 bps lower, which can cushion margins,” said the report.

 

It added that credit costs would normalise by around 50 bps in the medium term.