ICICI Bank, the country’s second-largest private lender, reported a 14.6% year-on-year increase in net profit to Rs 11,059 crore in the June quarter, boosted by robust loan growth. The lender exceeded street predictions, with Bloomberg estimating earnings of Rs 10,739 crore.
ICICI Bank’s net interest income increased by 7% to Rs 19,553 crore in the June quarter of the current fiscal year, up from Rs 18,227 crore in the same period last year.
The lender’s net interest margin (NIM) fell to 4.36% in the first quarter, from 4.78% in the same quarter last year. “We have expanded at a considerably quicker rate in the past, but with our very low loan costs and significantly higher NIM, this is now becoming a more normalized pace. And from the standpoint of banks as a whole, we can see that both advances and liabilities have risen by roughly 15%,” said Sandeep Batra, executive director of ICICI Bank, during an earnings call. “We are pleased with our development; nonetheless, we believe we can improve. “Of course, we can improve,” he remarked.
Total advances rose 15.7% year to year and 3.3% sequentially to Rs 12.23 trillion on June 30. The retail loan portfolio increased by 17.1% year on year and 2.4% sequentially, accounting for 54.4% of the overall loan portfolio on June 30.
On June 30, the commercial banking portfolio has grown 35.6% year over year and 8.9% sequentially. The SME business, which includes borrowers with a revenue of less than Rs 250 crore, increased by 23.5% year on year and 4% sequentially on June 30. On June 30, the domestic corporate portfolio gained 10.3% year over year and 3.1% sequentially. Deposits at the ICICI Bank climbed by 15.1% year on year and 0.9% sequentially to Rs 14.26 trillion as of June this year.
Commenting on the Reserve Bank of India’s proposed LCR regulations, Batra stated that the guidelines will affect deposit costs, loan growth, lending rates, and investment yields.
The bank’s asset quality improved as its gross non-performing assets (NPA) ratio fell to 2.15% on June 30 this year from 2.16% on March 31. The net NPA ratio was 0.43% on June 30 versus 0.42% on March 31. Provisions for bad loans increased slightly to Rs 1,332 crore in the first quarter, compared to Rs 1,292 crore in the same quarter the previous year.
NPA recoveries and upgrades, excluding write-offs and sales, were Rs 3,292 crore during the quarter, compared to Rs 3,918 crore in the fourth quarter of the previous fiscal. With the opening of 64 branches in the first quarter, the bank had a network of 6,587 branches and 17,102 ATMs and cash recycling machines by the end of June.
ICICI Bank has invested Rs 500 crore in its home financing business, ICICI Home financing, during the first quarter of fiscal year 2025, according to the bank’s executive director (ED), Sandeep Batra. So far, the bank has invested Rs 1,862 crore in the subsidiary through stock.
