ICICI Bank Q1 Results: Profit Up 15%, Beats Street Expectations
ICICI Bank's net interest income rose 11% over the year to Rs 21,635 crore and margin stood at 4.34%.
Strong loan growth, a rise in net interest income and largely stable asset quality helped ICICI Bank Ltd.'s June quarter earnings.
The private sector bank's standalone net profit stood at Rs 12,768.21 crore, up 15% year-on-year, exceeding the consensus analysts estimates compiled by Bloomberg of Rs 11,770 crore. In the March quarter, the bottom line was Rs 12,630 crore.
Net interest income rose 11% over the year to Rs 21,635 crore. The net interest margin of the bank stood at 4.34% in the June quarter compared with 4.41% in quarter ended March and 4.36% in the year ago period.
While the bank has refrained to provide any guidance on NIM, Executive Director Sandeep Batra in a post earnings conference call said that the bank expects margins to compress a "little more" in the September quarter.
He believes that the NIM trajectory from there on will depend on the Reserve Bank of India's actions.
He also said that the impact of transition of rate cuts on external benchmark lending rate part of its loan book will be faster in the coming quarters.
Asset Quality
India's second-largest private sector bank's asset quality was largely stable, with the gross non-performing assets ratio flat at 1.67%. However, the net NPA ratio rose slightly to 0.41% from 0.39% in the prior quarter.
The gross NPA additions rose to Rs 6,245 crore from Rs 5,142 crore in the March quarter.
Recoveries and upgrades of NPAs, excluding write-offs and sales, were Rs 3,211 crore as against Rs 3,817 crore during a quarter ago. For the quarter ended June, the bank wrote off loans worth Rs 2,359 crore as against Rs 2,118 crore in January-March.
The net additions to gross NPAs, excluding write-offs and sale, were Rs 3,034 crore as against Rs 1,325 crore a quarter ago and Rs 2,624 a year ago.
According to the bank, the marginal increase in fresh slippages is in line with expectations and is over a low base.
Total advances of the bank rose over 12% to Rs 13.64 lakh crore, with the retail loan portfolio growing by nearly 7% year-on-year and comprising 52.2% of the total loan portfolio at end of the quarter.
Within retail loans, personal loans grew 1.4% on year and credit cards portfolio at 1.5%.
According to Batra, ICICI Bank is quite comfortable in lending to varied profiles and continues to see healthy growth in its business banking portfolio, which forms 20% of total loan portfolio.
The business banking portfolio grew by 34% year-on-year, the rural portfolio rose by 5%, and the domestic corporate portfolio increased by 12%. Batra believes that some slowdown in overall loan growth is also because of competitive pricing in large corporate book.
Deposits rose by 13% on year to Rs 16.08 lakh crore. Average current account and savings account deposits ratio was 38.7% in April-June as against 39% in the prior quarter.
