ICICI Bank is planning to reduce the pace of its hiring growth in the coming quarters. The second-largest private bank added around 1,700 employees in the third quarter, compared with 10,000 employees in the first half of the current financial year. The lower employee addition has helped the lender cut operating expenses.
“On the employee side we have seen over the last couple of years, in the last maybe six quarters, a pretty high growth because of the increase in the team size of the bank. But as you would have seen in this quarter, the net increase has slowed down. Compared to about 10,000 in the first half, we were at about 1,700 in the third quarter,” said Anindya Banerjee, Group Chief Financial Officer, ICICI Bank, in an analyst call.
“We would probably not be looking at adding the kind of headcount at the same pace. That would play through into the operating expense as we go ahead,” he added.
The total employee count of the bank reached about 141,000 as of December 31, 2023. The number has increased by about 23,600 in the last 12 months. Compared to the past few quarters, the pace of hiring will moderate in coming quarters, said the official. “We will not be at the pace (headcount addition) that we have seen over the previous four-five quarters,” he said.
Reduced hiring in the third and current quarter will have an impact on annual growth figures. The bank registered 21% growth in employee addition in FY23 compared to the previous fiscal, as the total count increased from 105,844 on March 31, 2022 to 129,020 at the end of March 2023. With the management guiding slowdown in hiring, the growth is unlikely to match that of the previous year.
“The bank’s operating expenses increased by 22.3% year-on-year in this quarter. Employee expenses increased by 30.5% year-on-year, reflecting mainly the increase in the employee base from the second half of fiscal 2023 onwards,” said Anindya Banerjee, CFO, ICICI Bank.
Shares of ICICI Bank hit a record high Rs 1,059.4 on Tuesday after its third-quarter profit beat estimates on robust loan growth and margins met expectations. The stock rose as much as 5% in the morning session, but closed at Rs 1,029, registering a gain of around 2%.
ICICI’s performance is in sharp contrast to that of larger rival HDFC Bank, whose shares declined nearly 14% over the past five sessions after margins declined due to rising cost of deposits and intense competition.