ICICI Bank has reported a 49.6% year-on-year rise in net profit to Rs 6,904.94 crore for the quarter ended June on the back of robust credit growth, improving asset quality and lower provisions. The write back in provisions from corporate recoveries also helped the bank bump up its profitability. 

Net interest income up 20.8%

The bank’s net interest income grew 20.8% to Rs 13,210 crore for the fiscal first quarter ended June, from Rs 10,935.76 crore a year ago.

Net interest margin stood at 4.01% in Q1FY23 compared to 3.89% a year ago and 4% a quarter ago.

Non-interest income (other income) for the quarter increased by 16.75% over the previous year to Rs 4,665.2 crore, with fee income growth of 32% to Rs 4,243 crore. 

Fees from retail, rural, business banking and SME customers constituted about 79% of total fees in Q1FY2023.

Provisions

Provisions (excluding provision for tax) fell sharply by 60% over the previous year to Rs 1,143.82 crore for the quarter.

Provisions in Q1 of FY23 included contingency provision of Rs 1,050 crore made on a prudent basis.

Advances up 21%

The loan book grew 21% YoY to Rs 8.95 lakh crore as of 30 June 2020. Retail loans, which powered the growth, rose 24.4% to Rs 4,77,941 crore constituting 53.1% of the loan book. Corporate advances grew 14.4% YoY to Rs 2,02,292 crore and comprised 22.4% of the bank’s advances. The growth in the bank’s SME advances was also robust at 32.3% over the previous year to Rs 39,385 crore.

The credit card book grew the maximum by 63.3% to Rs 28,010 crore, constituting 5.9% of the bank’s retail advances.

The second-highest growth was reported by the personal loans segment, which grew 38.2% to Rs 68,375 crore forming 14.3% of the total retail advances of the bank. 

The unsecured credit constituted 20% of the bank’s retail advances Two- wheeler loans of the bank grew 36.5% to Rs 1,738 crore while home loans, which form 63.8% of the retail book, rose 22% to Rs 3,05076 crore.

The bank said that the value of credit card spends in Q1FY2023 grew by 13% sequentially and was two times the value of spends in Q1FY2022, driven by improvement in discretionary spending, higher activation rate through digital onboarding of customers, including Amazon Pay credit cards, and diversification through commercial cards. 

The bank has issued more than 3.2 million Amazon Pay credit cards since its launch.

 Deposits up 13%

The bank said total deposits increased by 13% YoY to Rs 10.5 lakh crore as of 30 June 2022.

Average current account deposits grew 23% YoY and 3% sequentially in Q1FY2023. Average savings account deposits increased by 19% YoY and 4% sequentially.

Asset quality

The gross non-performing assets (NPA) fell by 23.14% to Rs 33,163 crore. But the bank had fresh additions of Rs 5,825 crore of which Rs 755 crore was on the Kisan credit cards. A major portion of the fresh additions was from retail loans. The bank is growing its retail book, particularly its unsecured book comprising credit cards and personal loans, aggressively. 

“We have to look in the context of our upgrades and recoveries which was Rs 5,443 crore during the quarter, a majority of which came from the retail book. The NPAs from KCC added to the fresh accretions,” ICICI Bank executive director Sandeep Batra said in a media call. 

In terms of ratio, gross NPA declined to 3.41% as of 30 June 2022, from 3.60% a quarter ago and 5.15% a year ago.

The net NPA ratio declined to 0.70% in Q1FY23 from 0.76% a quarter ago and 1.16% a year ago.

The gross NPA write-off during the quarter was Rs 1,126 crore. The provisioning coverage ratio on NPAs was 79.6% as of 30 June 2022.

Recoveries and upgrades of NPAs excluding write-offs stood at Rs 5,443 compared with Rs 4,693 crore in March quarter.

The restructured book of the bank declined to Rs 7,376 crore or 0.8% of the total advances, from Rs 8,267 crore in the preceding quarter.

Treasury ops

ICICI Bank said it did not have any treasury losses but had a decline in income as bond yields rose sharply after the Reserve Bank of India (RBI) raised repo rates.  

The bank had a treasury gain of Rs 36 crore during the quarter compared with a gain of Rs 290 crore in the year-ago period.