ICICI Bank Q4 Results: Profit Rises 18% YoY, Cut In CRR Aids NIM

Strong loan growth, a rise in net interest income and an improvement in asset quality helped ICICI Bank Ltd. to report an 18% year-on-year rise in profit after tax, which rose to Rs 12,630 crore for the quarter ended March, exceeding the consensus estimate of Rs 11,669 crore from analysts polled by Bloomberg.

Net interest income rose 11% over the year to Rs 21,193 crore. Consequently, net interest margin of the bank was 4.41% in Jan-Mar, up from 4.25% a quarter ago and 4.40% a year ago.

The reason behind the jump in margins was because of a reduction in cash reserve ratio of 50 basis points to 4.00% in Oct-Dec and some interest in tax refunds, Executive Director Sandeep Batra said in the post earnings conference call.

However, Batra said that margins will get impacted because of the recent cut in repo rate and said that they will follow what will happen to the banking system in terms of NIMs in the near term.

The private sector bank's asset quality improved, with the gross non-performing assets ratio falling to 1.67% as of March 31, compared to 1.96% in the previous quarter. The net NPA ratio fell to 0.39% from 0.42% in the prior quarter.

The gross NPA additions fell to Rs 5,142 crore from Rs 6,085 crore in the December quarter.

Recoveries and upgrades of NPAs, excluding write-offs and sales, were Rs 3,817 crore as against Rs 3,392 crore during a quarter ago. For the quarter ended March, the bank wrote off loans worth Rs 2,118 crore and sold loans worth Rs 2,786 crore.

The net additions to gross NPAs, excluding write-offs and sale, were Rs 1,325 crore as against Rs 2,693 crore a year ago. The bank has written-off gross NPAs amounting to Rs 2,118 crore

Total advances of the bank rose over 13% on year to Rs 13.41 lakh crore, while the retail loan portfolio grew by nearly 9% year-on-year.

Of the retail book, personal loans formed 13%, while credit cards are 4%, Batra said.

The business banking portfolio grew by 34% year-on-year, the rural portfolio rose by 5%, and the domestic corporate portfolio increased by 12%. Over 78% of the bank's corporate loan book was rated A- or above, Batra said.

On the recent global tariff developments causing uncertainties, Batra said that the bank is closely watching the impact of the same on its corporate book and that he is confident of the book that the bank has built.

"We may even find some opportunities in these times...While it is difficult to assess the overall impact of trade war, I can say that corporate India will respond appropriately," Batra said.

Deposits rose by 14% on year to Rs 16.10 lakh crore. Current account savings account deposits accounted for 39% of total deposits, flat quarter-on-quarter.