ICICI Bank's Q1 net surges 78% to Rs 4,616 cr as provisions fall sharply

Interest margins improved; provision fell despite Covid-19 pressure

Private lender ICICI Bank's net profit rose 78 per cent year-on-year to Rs 4,616 crore for the quarter ended June 30, 2021 (Q1FY22) on improvement in interest margins and lower provisioning. Its net profit was Rs 2,599 crore in the same quarter last year (Q1FY21).

Sequentially, the profit rose, albeit marginally, from Rs 4,402 crore in the fourth quarter ended March 31, 2021 (Q4FY21).

The lender's net interest income (NII) surged 18 per cent to Rs 10,936 crore in the June quarter as against Rs 9,280 crore in the year-ago period. NII was Rs 10,431 crore in Q4FY21. The net interest margin (NIM) was 3.89 per cent in Q1FY22 compared to 3.84 per cent in the previous quarter (Q4FY21) and 3.69 per cent in Q1FY21.

Non-interest income, excluding treasury income, increased by 56 per cent year-on-year to Rs 3,706 crore in the June quarter from Rs 2,380 crore in the year-ago period. Sequentially, it fell sharply from Rs 4,137 crore in the March 2021 quarter.

Its Provisions (excluding for tax) fell sharply to Rs 2,852 crore in the reporting quarter, down 62 per cent compared to Rs 7,594 crore in Q1FY21. These provisions were at Rs 2,883 crore in Q4Fy21.

During the first quarter, the bank said it has changed its policy on non-performing loans to make it more conservative. The change in policy resulted in higher provision on non-performing advances amounting to Rs 1,127 crore for aligning provisions on outstanding loans to the revised policy," it said.

Based on the current assessment of the portfolio, bank wrote back of Covid-19 provisions of Rs 1,050 crore made in earlier periods. Covid-19 related provision stood Rs 6,425 crore at end of June 2021. These provisions will cushion any shock from Covid pandemic in the future, bank executives in the media call.

The provision coverage ratio (PCR) was robust at 78.2 per cent at the end of June 2021 quarter, lower than 77.6 per cent a year ago. However, it was higher than 77.7 per cent in the March 2021 quarter.

The gross non-performing assets (NPA) additions were Rs 7,231 crore during the quarter. Gross NPAs at the end of the quarter stood at 5.15 per cent, higher than 4.96 per cent in the March quarter, but lower than last year 's 5.46 per cent.

The net NPAs in Q1 stood at Rs 9,306 crore as against Rs 9,180 crore in the previous quarter. Meanwhile, the net NPA ratio was 1.16 per cent at the end of June quarter compared to 1.14 per cent at March 31, 2021.

Turning to credit growth, the bank said its overall loan book expanded by 17.2 per cent year-on-year to Rs 7.38 trillion. Both domestic and retail loan portfolios grew by 20 per cent year-on-year.

Retail disbursements moderated in April and May due to the containment measures in place across the country. With the gradual easing of restrictions, disbursements picked up in June and July.

Total deposits grew by 16 per cent year-on-year to Rs 9.26 trillion at the end of June quarter.

The capital Adequacy Ratio (CAR) stood at 19.27 per cent with Tier I ratio of 18.24 per cent at end of June 2021.

On Friday, ICICI Bank's scrip rose nearly 3.2 per cent to close at Rs 676.4 on NSE.