ICICI Bank Q1 Results: Net Profit Beats Estimates, Rises 40% YoY

Private sector lender ICICI Bank reported a 39.7% year-on-year growth in net profit on higher core income.

Net profit for the first quarter rose to Rs 9,648 crore, up from Rs 6,905 crore. Analysts polled by Bloomberg estimated Rs 9,222 crore worth net profit for the first quarter.

Net interest income, or core income, rose 38% year-on-year to Rs 18,226 crore. Other income too was up 16.5% from a year ago and rose to Rs 5,435 crore.

Net interest margin as of June 30 was 4.78%, lower than 4.9% reported as of March 31.

"The fall in NIM reflects the lagged repricing of retail deposits. We expect further NIM compression as more deposits get repriced. We expect NIM to remain approximately at FY23 levels this year," said Sandeep Batra, executive director, ICICI Bank.

For the financial year ended March 31, ICICI Bank's NIM was approximately 4.5%, he said.

Asset quality for the lender improved with gross non-performing asset ratio improving to 2.76%, lower by 5 basis points sequentially. Net NPA ratio remained flat at 0.48%.

The net addition to gross NPAs, excluding write-offs and sale, were Rs 1,807 crore in Q1 compared to Rs 14 crore as of March 31. Recoveries and upgrades of NPAs, excluding write-offs and sale, were Rs 3,511 crore.

During the quarter the bank saw a normalisation of recoveries from corporate NPAs and an uptick in the Kisaan credit card portfolio, Batra said.

"There has been a slight increase in slippages on the Kisaan credit card portfolio, but that will normalise as we go ahead...We are very comfortable with the asset quality position of the bank," Batra said.

Provisions rose 13% from a year ago to Rs 1,292 crore, as of June 30.

Total advances increased by 18.1% year-on-year to Rs 10.57 lakh crore. . The retail loan portfolio grew by 21.9% year-on-year and 4.5% sequentially, and comprised 54.3% of the total loan portfolio.

The SME business, comprising borrowers with a turnover of less than Rs 250 crore, grew by 28.5% from a year ago. The rural portfolio grew by 17.6% from last year.

Total deposits increased by 17.9% year-on-year to Rs 12.38 lakh crore. Total term deposits increased by 25.8% to Rs 7.02 lakh crore.