ICICI Bank in the fourth quarter up 59% net thanks to improved asset quality

ICICI Bank Ltd, India’s second-largest private bank, said on Saturday fourth-quarter standalone net profit jumped 59% to ₹7,019 crore from ₹4,403 crore a year earlier, helped by a improvement in net interest income and a reduction in provisioning for bad debts.

For the full year on a stand-alone basis, after-tax profit rose 44% to ₹23,339 crore from ₹16,193 crore a year earlier, the bank said in a filing.

“We remain bullish on growth and will focus on growth calibrated to risks,” said Sandeep Batra, chief executive of ICICI Bank. “We made additional provisions during the quarter given the uncertain environment,” he added.

During the quarter, core operating profit (profit before provisions and tax, excluding cash income) increased by 19% year-on-year to ₹10,164,000,000. Excluding dividend income from subsidiaries/associates, core operating income increased by 21% in the January-March quarter last fiscal year.

Fourth quarter net interest income (NII) rose 21% year-on-year to ₹12,605 crore. Net interest margin was 4.0% in the fourth quarter of FY22, compared to 3.84% a year earlier.

Non-interest income, excluding treasury income, increased by 11% year-on-year to ₹4,608 crore.

Commission revenue increased by 14% to ₹4,366,000,000 in the fourth quarter of FY22.

The retail loan portfolio, excluding rural loans, increased by 20% year-on-year and represented 52.8% of the total loan portfolio as of March 31, 2022.

Including non-fund outstanding, the retail loan portfolio represented 43.8% of the total portfolio as of March 31.

The investment banking portfolio grew by 43% over one year to March 31, 2022.

SME activity, made up of borrowers with turnover below ₹250 crore, increased by 34%, the bank said.

The growth of the national wholesale banking portfolio was 10% year-on-year as of March 31.

Domestic advances increased by 17% year-on-year. Total advances increased by 17% YoY to ₹8,59,020 crore as of March 31. Total deposits increased by 14% to ₹10,64,572 crore as of March 31, 2022.

Provisions (excluding tax provision) decreased by 63% year-on-year to ₹1,069,000,000 in the fourth quarter.

Net non-performing assets fell 24% yoy and 5% sequentially to ₹6,961 crore as of March 31.

The net NPA ratio decreased to 0.76% as of March 31, 2022, compared to 0.85% as of December 31, 2021 and 1.14% as of March 31, 2021.

Gross NPA net deletions, excluding write-offs and sale, were ₹489 crore in Q4-2022, from ₹191 crore in Q3-2022.

Gross NPA additions were ₹4,204 crore in Q4-2022 compared to ₹4,018 crore in Q3-2022.

NPA recoveries and upgrades, excluding write-offs and sales, increased to ₹4,693 crore in the fourth quarter from ₹4,209 crore in the third quarter, the bank said.

Gross NPAs written off in Q4-2022 were ₹2,644 crore. The coverage rate of provisions on NPA was 79.2% at March 31.

In addition, the bank continues to book COVID-19 related provisions of ₹6,425 crore as contingencies as of March 31, 2022. ₹ crore “on a conservative basis”.

As a result, the bank held total contingencies of ₹7,450 crore as of March 31, 2022.

The board recommended a dividend of ₹5 per share.

“ICICI Bank once again delivered a strong performance, aided by a high-yielding portfolio and well supported by a low-cost liability franchise, resulting in healthy 21% year-on-year growth in the NII,” said said Binod Modi, Portfolio Manager, PMS, Sharekhan of BNP Paribas.

“Furthermore, continued improvement in asset quality with continued improvement in recoveries and upgrades bodes well for the stock,” he added.

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