ICICI Bank Q1FY23: Net jumps 49.5% YoY to Rs 6,904 cr on strong NII growth

ICICI Bank on Saturday reported a 49.5 per cent year-on-year rise in net profit in April-June to Rs 6,904.94 crore as a healthy increase in loan growth boosted the private bank’s bottomline.

On a sequential basis, however, ICICI Bank’s net profit decreased 1.6 per cent from Rs 7,018.71 crore at the end of the January-March quarter.

In the first quarter of the current financial year, ICICI Bank’s net interest income (NII) clocked in Rs 13,210.02 crore, up 20.1 per cent from a year ago. Net interest income is the difference between the interest earned and the interest expended.

For the period under review, ICICI Bank’s net interest margin (NIM) was 4.01 per cent, higher than 3.89 per cent the same time a year ago but largely flat from 4 per cent a quarter ago.

The private bank’s core operating profit – the profit before provisions and tax excluding treasury income – rose 19 per cent on year to Rs 10,273 crore in April-June.

Non-interest income, excluding treasury income, grew 25 per cent on-year to Rs 4,629 crore in April-June from Rs 3,706 crore a year ago.

As on June 30, ICICI Bank’s total advances were at Rs 8,95,625 crore, registering an on-year growth of 21 per cent and a sequential growth of 4 per cent.

The retail loan portfolio grew by 24 per cent year-on-year and 5 per cent quarter-on-quarter, accounting for 53.1 per cent of the total loan portfolio as on June 30, the bank said.

Taking into account non-fund outstanding, ICICI Bank’s retail portfolio was 44 per cent of the total portfolio as on June 30. The rural loan book grew 8 per cent year-on-year but was flat sequentially.

The business banking portfolio showed a growth of 45 per cent year-on-year and 7 per cent quarter-on-quarter at the end of the previous quarter, while the domestic wholesale banking portfolio rose 14 per cent on-year and 4 per cent sequentially.

“We don’t have a target for growth of advances….we have a disciplined approach to credit, based on our filters…the numbers can be higher or lower,” ICICI Bank’s Executive Director Sandeep Batra said in an earnings call.

As on June 30, ICICI Bank’s total deposits were at Rs 10,50,349 crore, up 13 per cent year-on-year.

Average current account deposits rose 23 per cent on-year and 3 per cent sequentially in April-June, while average savings account deposits increased 19 per cent year-on-year and 4 per cent sequentially. Term deposits were at Rs 5,58,235 crore as on June 30, up 11 per cent from a year ago.

ASSET QUALITY

ICICI Bank’s asset quality improved in April-June with gross and net non-performing asset ratios declining both on a yearly and a sequential basis.

As on June 30, the gross NPA ratio was at 3.41 per cent versus 3.60 per cent a quarter ago and 5.15 per cent a year ago. The net bad loan ratio fell to 0.70 per cent as on June 30 from 0.76 per cent a quarter ago and 1.16 per cent on June 30, 2021.

“Recoveries and upgrades of NPAs, excluding write-offs and sale, were Rs 5,443 crore in Q1-2023 compared to Rs 4,693 crore in Q4-2022. The gross NPAs written-off in Q1-2023 were Rs 1,126 crore,” the bank said in a press release.

Batra said in the earnings call that the bank was “quite happy” with the way that the NPA ratios were moving in the context of credit costs.

The bank reported net additions of Rs 382 crore to gross NPAs in April-June as against net additions of Rs 3,604 crore the same time a year ago. In January-March, the bank saw net deletions to gross NPAs worth Rs 489 crore.

In April-June, the bank’s provisions, excluding those for tax, fell 60 per cent on-year to Rs 1,144 crore. The provision for the previous quarter include contingency provisions worth Rs 1,050 crore, the bank said.

Stripping away NPAs, the outstanding to all borrowers under resolution was at Rs 7,376 crore, or 0.8 per cent of total advances, as on June 30, down from Rs 8,267 crore a quarter ago, it added.

The lender holds provisions amounting to Rs 2,290 crore against these borrowers under resolution as on June 30. Additionally, ICICI Bank held contingency provisions worth Rs 8,500 crore as on June 30.

ICICI Bank’s provisioning coverage ratio on NPAs was 79.6 per cent at June 30, 2022, while the Basel III capital adequacy ratio was 18.04 per cent.