ICICI Bank profit zooms 30 per cent, asset quality improves
NEW DELHI: India’s leading private sector lender — ICICI Bank — has posted a strong set of numbers in the second quarter of the current financial year, signaling a sustained recovery of the banking sector as well as the economy.
ICICI Bank reported a 30% jump in net profit (on standalone basis) to Rs 5,511 crore in the July-September quarter, beating analysts’ estimate. In the same quarter last year, it had made a net profit of Rs 4,251 crore. Bank’s net revenue (total income less interest expenses) grew 32% year-on-year to Rs 16,487 crore during the quarter, while its net interest income (NII) increased by 25% to Rs 11,690 crore compared to Rs 9,366 crore in the same quarter last year. NII is the net interest income banks earn on money they lend (loans and other advances) after deducting interest they pay on deposits.
The bank’s net interest margin also improved both year-on-year and quarter-on-quarter. The net interest margin increased to 4.00% in September quarter from 3.89% in June quarter and 3.57% in the September quarter last year.
Non-interest income, excluding treasury income, increased by 26% to Rs 4,400 crore in September quarter from Rs 3,486 crore in the year-ago period. Fee income grew by 21% to Rs 3,811 crore compared to Rs 3,139 crore a year ago. Fees from retail, business banking and SME customers increased by 25% and constituted about 78% of total fees during the quarter. Treasury income was Rs 397 crore compared to Rs 542 crore last year.
In terms of asset quality, the net NPA declined from 1.16% as on 30 June 2021 to 0.99% on 30 September, the lowest since 31 December 2014. However, slippages were slightly on the higher side (2.9% of advances), but the impact was offset by healthy recoveries and upgrades, causing gross NPA to improve from 5.15% in June quarter to 4.82% in September quarter.
Credit and deposit growth
Total advances increased by 17% year-on-year and 4% sequentially to Rs 764,937 during the September quarter. During the end of second quarter 2020-21, bank’s total advances were at Rs 652,608 crore.
The retail loan portfolio, which accounts for 62% of the bank’s total loan portfolio, grew by 20% year-on-year and 5% sequentially during the quarter. The business banking portfolio grew by 43% year-on-year and 12% sequentially. The SME business, comprising borrowers with a turnover of less than Rs 250 crore ($ 34 million), grew by 42% year-on-year and 11% sequentially.
Total deposits increased by 17% year-on-year and 6% sequentially to Rs 977,449 crore. Average current account deposits increased by 36% year-on-year and 5% sequentially, while average savings account deposits increased by 25% year-on-year and 4% sequentially. Average CASA ratio was 44%.
Net revenue grows 32% y-o-y
Bank’s net revenue (total income less interest expenses) grew 32% year-on-year to Rs 16,487 crore during the quarter, while its net interest income (NII) increased by 25% to Rs 11,690 crore compared to Rs 9,366 crore in the same quarter last year. The bank’s net interest margin also improved both year-on-year and quarter-on-quarter. The net interest margin increased to 4.00% in September quarter from 3.89% in June quarter and 3.57% in the September quarter last year. Fee income grew by 21% to Rs 3,811 crore.