ICICI Bank, the country’s second-largest private sector bank, announced a healthy 30% year-on-year (y-o-y) growth in net profit at Rs 9,122 crore for the January-March quarter, beating Bloomberg estimates of Rs 9,040 crore.
The spike in profits was led by growth in its net interest income, which grew by 40.2% y-o-y to Rs 17,667 crore for the quarter under review. The net interest margin for the quarter was 4.90% compared to 4% in the previous financial year.
The bank’s total advances rose 18.7% y-o-y to Rs 10.2 trillion as on March 31. Domestic advances rose nearly 21% y-o-y.
However, what is interesting is that the bank’s yield on advances was 9.75% during the quarter, whereas the cost of deposits was 3.98%. The increase in the yield on advances was much sharper than the rise in deposit costs which explains the impressive margin expansion.
Meanwhile, gross non-performing asset ratio improved to 2.81% as on March 31 from 3.60% a year ago. Net non-performing asset ratio improved to 0.48% as on March 31 from 0.76% a year ago.
Gross non-performing assets fell to Rs 31,184 crore from Rs 33,920 crore a year ago.
The retail loan portfolio grew by 22.7% y-o-y, business banking portfolio grew by 34.9% y-o-y, small and medium-sized enterprises portfolio rose 19.2% y-o-y, and domestic corporate portfolio rose 21.2% y-o-y. The rural portfolio grew by 13.8% y-o-y as on March 31.
Around 46% of the loans are linked to repo rate, another 3% to other external benchmarks whereas 31% are fixed-rate loans and 19% are linked to MCLR (marginal cost of fund-based lending rate).
Total deposits grew by 10.9% y-o-y to Rs 11.8 trillion as on March 31. Total term deposits rose 17.1% y-o-y to Rs 6.4 trillion as on March 31. Average current account deposits rose 9.3% y-o-y, and average savings account deposits rose 7.5% y-o-y.
“At this point in time, we are very comfortable with our deposit growth,” said Batra, adding that deposit growth will not be a constraint in the bank’s ability to grow its assets in a risk-calibrated manner.
The fee income also rose nearly 11% y-o-y to Rs 4,830 crore in the quarter under review. Fees from retail, rural, business banking and SME customers constituted around 80% of total fees.
The gross non-performing asset additions were Rs 4,297 crore in the March quarter. Recoveries and upgrades of NPAs, excluding write-offs and sale, were `4,283 crore.
Provisions increased by 51.5% y-o-y to Rs 1,619 crore in the March quarter. Total provisions included a contingency provision of Rs 1,600 crore made on a prudent basis. Provision coverage ratio stood at 82.8% as on March 31.
The bank’s total capital adequacy ratio stood at 18.3% as on March 31.