ICICI Bank Second Quarter Results: Earnings, NII Beat Street Estimates; asset quality improves

NEW DELHI: September quarterly numbers beat Street’s estimates for all key metrics. The quality of the bank’s assets improved and new provisions also declined. The net interest margin (NIM) improved to 4 percent as personal loan and auto loan disbursements were close to March quarter levels. In addition, loans to SMEs climbed 44% year-on-year.

Here are the main points to remember from the quarterly results of Banque ICICI:

PAT and NII exceed Street estimates
ICICI Bank’s 30% year-on-year jump in net income for the September quarter far exceeded Street’s estimates. An ET NOW poll of analysts predicted that profit would rise 20% to Rs 5,100 crore. ICICI Bank, however, reported a 30% increase in its net profit to Rs 5,511 crore.

Net interest income (NII) for the quarter increased 25% year-on-year to Rs 11,690 crore in the September quarter from Rs 9,366 crore in the previous year quarter. The poll had forecast the NII at Rs 11,240 crore, up 20%.

BB and under-rated pool, decrease in provisions
The bank said the outstanding and non-fund-based loans to performing borrowers rated BB and below have been reduced to Rs 12,714 crore as of September 30 from Rs 13,975 crore as of June 30.

Provisions, excluding tax provision, fell 9% year-on-year to Rs 2,714 crore, from Rs 2,995 crore in the quarter last year. Provisions for the June quarter were Rs 2,852 crore in the June quarter.

The bank said it continues to hold provisions in the amount of Rs 1,950 crore against these borrowers under a resolution as of September 30, 2021. In addition, the bank continues to hold Covid-19 provisions of Rs 6,425 crore as of September 30, 2021, the same level as of June 30, 2021.

Loans to individuals increase by 20%, 62.1% of the portfolio
The bank said its personal loan portfolio jumped 20% year-over-year and 5% sequentially. The personal loan portfolio represented 62.1% of the total loan portfolio as of September 30.

Including non-fund outstanding, the retail loan portfolio accounted for 51.6% of the total portfolio, the private lender said.

The business banking portfolio grew 43% year-on-year (up 12% quarter-on-quarter). SME

business, comprising borrowers with turnover of less than Rs 250 crore, increased 42% year-on-year (11% QoQ) on September 30.

“The growth of the domestic wholesale banking portfolio was 14% year-on-year as of September 30,” the bank said.

Deposit growth, meanwhile, was 17% year-on-year to Rs 9.77.449 crore. Average current

account deposits increased 36 percent year-on-year while savings account deposits increased 25 percent year-on-year.

Mobile transactions up 62%
The value of mobile banking transactions climbed 62% year-on-year to Rs 406,501 crore for the September quarter. Digital channels like the internet, mobile banking, point-of-sale and others accounted for more than 90% of savings account transactions in the first half of fiscal 22, the bank said.

“The bank is the market leader in electronic toll payment via FASTag. The bank held a 37% market share by value in electronic toll collection through FASTag in the second quarter of 2022, growing 63% year-on-year, “ICICI bank said.

Subsidiaries record solid figures
Among key subsidiaries, ICICI Securities’ profit on a consolidated basis increased 26% year-on-year to Rs 351 crore from Rs 278 crore year-on-year. ICICI Prudential Asset Management Company’s profit increased 37% year-on-year to Rs 383 crore from Rs 282 crore year-on-year.

In the case of ICICI Lombard, profit amounted to Rs 446 crore versus Rs 416 crore in the quarter of last year.

“The figures for the previous period are not comparable due to the reflection of the arrangement pattern in the figures for the current period,” the company said.

What did the bank say?

The bank said disbursements for all retail products increased sequentially in the September quarter. Mortgage disbursements, he said, were close to the level seen in the March quarter, reflecting increased demand.

Personal loan and auto loan disbursements were also close to March quarter levels, he said, adding that the value of credit card spending rose 47% sequentially.

“Spending in most categories other than travel exceeded levels from March 2021 to September 2021. The bank continued to focus on providing the full range of banking products to corporate clients and their ecosystems and on well-rated business loans, ”he said.

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