ICICI Bank’s employee-base fell 4,400 last fiscal

ICICI Bank’s employee-base has gone down by 4,400 during the financial year 2015. The bank has seen a rise in attrition, which the bank did not replace due to higher operating costs.

“The employee-base has decreased by about 4,400 during FY2015 to 67,857 employees. This has been achieved primarily by not replacing attrition. While we expect the employee-base to increase from this level, we will continue to focus on further enhancing the productivity and efficiency of our employee-base,” NS Kannan, Executive Director at ICICI Bank, said in a conference call with analysts.

The bank went slow on its hiring amid rising employee and retirement provision costs from the previous years.

The bank had added 10,000 employees in FY14. In April last year, Kannan had said, “This year itself we added about 10,000 employees and would not need to add any similar magnitude over the next couple of years.”

The bank continues to remain slow in its hiring going forward.

Without giving a specific number, Kannan said, “We would look at increasing our employee-base primarily in the retail and rural business, so we will see some increase in employee-count there. While it is difficult to give a specific number, about 5-7 per cent increase in employee count is what we could look at during the coming year.”

In October, the bank had said it expects the introduction of a number of new technology platforms over the last 18 months to translate in terms of better people productivity.

“About 30 per cent of the loans would be domestic corporate which does not consume too much of manpower. Further, about 25 per cent of our asset base is from our overseas branches where bulk of the funding is wholesale in nature and on the lending side, the loans are to corporates. Accordingly, it is not a manpower-intensive business,” Kannan had said.

Though it may have discouraged potential job hunters, going slow on recruitments has helped the private lender bring down its operating costs.

For the full year FY15, operating expenses grew by 11.5 per cent year-on-year as against 14.3 per cent in FY14, while it increased by 7.9 per cent during the fourth quarter FY15 as against 19.6 per cent in Q4FY14.

In the first quarter of FY15, operating expenses were up 13.4 per cent on a year-on-year basis. “The increase in operating costs was on account of higher employee expenses given the full impact of the increase in employee base in fiscal 2014 and annual wage increases affected in April 2014,” Kannan had said.

Similarly, the increase in operating expenses in Q4FY14 (on a sequential basis) was primarily due to higher employee expenses on account of higher provision for variable pay as well as normalisation of retirement benefit provisions compared with earlier quarters.

Amid a control in its expenses, the bank has managed to reduce its cost-to-income ratio to 36.8 per cent in FY15 as compared to 38.2 per cent in FY14 and 40.5 per cent in FY13.