NEW DELHI: The country’s second-largest bank – ICICI Bank – reported strong second-quarter numbers with net profit showing a year-on-year (YoY) growth of 35.7% at Rs 10,261 crore (on standalone basis), beating market expectations of Rs 9,500 crore.
The bank’s net interest income (NII), the difference between interest earned on loans and interest paid on deposits, grew 23.8% YoY to Rs 18,308 crore. The quarter-on-quarter NII growth, though, was flat at 0.5%. Net Interest Margin (NIM), which is NII as a percentage of earning assets like loans and credits, stood at 4.53% in the second quarter, up 22 bps YoY, but down 25 bps from the previous quarter.
Analysts feel the quarter-on-quarter (QoQ) fall in NIM is in line with the industry trend. “Though nominal NIM compression was seen, this was absorbed by growth in fee income,” says Shreyansh Shah, research analyst, StoxBox.
Fee income grew by 16.2% YoY, and 7.5% QoQ to Rs 5,204 crore. Non-interest income excluding treasury increased by 14.0% to Rs 5,861 crore during the quarter, up from Rs 5,139 crore in the same period previous year. There was a treasury loss of Rs 85 crore during the quarter.
Pre-provision operating profit (PPOP) stood at Rs 14,229 crore in the second quarter, showing a marginal growth of 0.6% QoQ and 41.8% YoY. Provisions fell sharply to Rs 583 crore compared to Rs 1,644 crore in the same quarter previous year.
Bank’s asset quality showed improvement with gross NPAs down 28 bps to 2.48% as on 30 September from 2.76% on 30 June 2023. The net NPA declined 0.43% during the September quarter from 0.48% in the previous quarter and 0.61% in the year-ago period. The net addition to gross NPAs was Rs 116 crore in the second quarter compared to Rs 1,807 crore in the previous quarter.
Bank’s total outstanding loan increased by 18.3% YoY and 5.0% sequentially to Rs 11.1 lakh crore at the end of September 30, 2023. The net domestic advances grew by 19.3% YoY and 4.8% sequentially to Rs 10.74 lakh crore. The retail loan portfolio, which accounts for 54.3% of the total loan portfolio, grew by 21.4% year-on-year and 5.5% sequentially during the quarter.