Sunil Shankar Matkar
July 23, 2022 / 18:50 IST
India's second-largest private sector lender ICICI Bank on July 23 clocked a 50 percent year-on-year growth in standalone profit at Rs 6,905 crore for the quarter ended June 2022, as bad loan provisions declined sharply.
Profit for the June 2021 quarter stood at Rs 4,616 crore.
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Net interest income for the June quarter increased by 20.8 percent to Rs 13,210 crore, compared to Rs 10,936 crore reported in corresponding period previous fiscal, with 21 percent growth in advances and 13 percent increased in deposits YoY, ICICI Bank said in its BSE filing.
The bank further said the net interest margin at 4.01 percent for the June quarter improved from 3.89 percent in year-ago quarter, and 4 percent in March 2022 quarter.
The loan book increased by 21 percent year-on-year to Rs 8.95 lakh crore for the June quarter, with domestic book growing 22 percent and retail loan portfolio, comprised 53 percent of total loan book, rising by 24 percent during the quarter.
Corporate loan growth was a modest 14.4 percent. The management sounded optimistic on loan demand but refrained from giving a target for the financial year. The bank said total period-end deposits increased by 13 percent year-on-year to Rs 10.5 lakh crore in Q1FY23.
A strong traction in core interest income and resilience in other income resulted in the double digit growth in operating profit.
The bank registered a 15.9 percent year-on-year growth in pre-provision operating profit at Rs 10,309 crore, with operating expenses rising 25.3 percent YoY to Rs 7,566 crore for the quarter.
Non-interest income (other income) for the quarter increased by 16.75 percent year-on-year to Rs 4,665.2 crore, with fee income growth of 32 percent YoY. "There was a treasury gain of Rs 36 crore in Q1FY23 compared to a gain of Rs 290 crore in Q1FY22," the bank said. The bank took a mark-to-market hit of Rs 400 crore on its investment which dented treasury income.
Another factor contributing to net profit rise was decrease in provisions. Provisions and contingencies fell sharply by 60 percent year-on-year to Rs 1,143.82 crore for the quarter, but there was 7 percent increase on sequential basis.
Asset quality improved further with gross non-performing assets as a percentage of gross advances falling 19 bps sequentially to 3.41 percent in the quarter ended June 2022. Net NPA in the same period fell by 6 bps to 0.7 percent.
However, ICICI bank’s fresh slippages more than doubled sequentially, a sign that incremental stress has risen. Slippages during the quarter were Rs 5,285 crore, up from Rs 4,204 crore in the previous quarter. The bank’s management said that the increase is not worrisome as slippages may be upgraded in the next quarter. “It is more technical slippages. These tend to get upgraded in the coming quarters,” said Executive Director Sandeep Batra in a media call.
Batra added that the spike in slippages is also due to those coming from Kisan credit cards, which tend to bunch up during the first quarter.
To be sure, the bank’s recoveries and upgrades during the quarter have risen by 16 percent sequentially. The bank’s provision coverage ratio remains high around 80 percent.
On a consolidated basis, the bank said the profit for the quarter at Rs 7,384.53 crore grew by 55 percent compared to corresponding period previous fiscal. Total income during the quarter at Rs 39,218.33 crore has registered a 11 percent growth YoY.
ICICI Bank shares closed at Rs 800 a piece on the BSE, higher by 1.74 percent on July 22 ahead of quarterly earnings. The stock has gained 16.5 percent since June lows.
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