ICICI Bank, India's second largest private sector bank by market capitalisation, has put up impressive fiscal fourth quarter figures.
Net profit jumped 260.5% to Rs 4,402.61 crore for the quarter ended 31 March 2021, as advances in a pandemic year grew higher than the banking sector and asset quality stood stable. A year ago, standalone profit stood at Rs 1,221.4 crore.
Lower provisioning during the quarter also helped widen profits. “The level of economic activity showed an increasing trend from January to March. The ultra frequency index comprising several high frequency indicators tracked by our bank’s economic research group rose from 106.3 in mid-January to 108.2 in March indicating economic activity sustaining pre-Covid level. This was on the back of robust industrial activity like power demand, GST collections, rail freight revenue, higher vehicle registration and eway bill generations,” ICICI Bank managing director and CEO Sandeep Bakshi told analysts after announcing the quarter results.
Net interest income, the difference between interest earned and interest expended, grew by 16.9 % to Rs 10,431.13 crore during the quarter.
The net interest margin (NIM) at 3.84 % in the March quarter FY21 expanded sequentially from 3.67% in the quarter ended December 2020, but contracted a bit year-on-year from 3.87% in March quarter 2020. About Rs 175 crore was deducted from the interest income so that the interest on interest charged on the customers can be refunded in accordance with the Supreme Court ruling on stressed accounts.
Advances during the quarter grew 14% over the previous year to Rs 7.33 lakh crore. The retail loan portfolio rose 20% over the previous year while corporate credit grew 13.2% over the previous year and 4.7% sequentially from the previous quarter. Retail loans comprised 67% of the bank’s total loan portfolio. The management said they are growing the book in a calibrated manner.
“For the last two years we were growing at 13% to 15% lending to higher rated companies and public sector undertakings. Our portfolio is quite seasoned. Our restructured book is less than 1% of the total book. The incremental NPLs have also tapered. The corporate book is driven by opportunities in the market which is also short term lending opportunities,” said ICICI Bank executive director Vishakha Mulye.
Property registrations continued to increase during the quarter. However, the sharp rise in Covid cases in the recent past has led to re-imposition of restrictions in various cities and towns, which has impacted mobility indicators and economic indicators. This is visible in the tapering of the ultra frequency index, which fell to 92.3% in the week of 18 April. Going forward, economic growth will depend on trajectory of the second wave of Covid-19 and rollout of the vaccinations.
“We are focused on tapping into various ecosystems like payments, merchant and corporate ecosystems including the employees, startups, dealers and vendors. Our digital offerings, platforms and efforts towards process decogestion have played an important role in the growth of our deposit franchise,” said Bakshi.
Total deposits rose 21% year-on-year to Rs 932,522 crore . Average current account deposits increased by 34% over the year-ago period. Average savings account deposits grew 21% year-on-year in Q4-2021. Total term deposits jumped 18% YoY to Rs 500,899 crore at the end of 31 March 2021.
Gross non-performing loans of the bank stood lower at Rs 41,373 crore with the fresh additions during the quarter being Rs 5523 crore. Out of this, Rs 4,355 crore came from the retail segment and Rs 1,168 crore from corporate and SME loans.
The bank wrote off Rs 3,600 crore during the quarter and Rs 9,600 crore during the financial year. The write offs were lower than the previous financial year when the bank wrote off Rs 11,300 crore of loans.
Excluding NPAs, the total fund based outstanding to all borrowers under resolution as per the various extant regulations and guidelines was Rs 3,927 crore, or about 0.5% of the total loan portfolio, as on 31 March 2021.
As a result, provisions and contingencies fell sharply from the year ago period by 51.7% to Rs 2,883.47 crore in the quarter ended March 2021. But on a sequential basis, it increased by 5.2%. Further, the bank made additional Covid-19 related provisions of Rs 1,000 crore during the March quarter of FY21. As of March 2021, the bank held Covid-19-related provision of Rs 7,475 crore.
In FY21, the bank registered a massive 104.2 % year-on-year growth in profit at Rs 16,192.68 and net interest income grew by 17.2 % to Rs 38,989.43 crore compared to the previous year.
ICICI Bank has recommended a dividend of Rs 2 per share.
ICICI Bank on Saturday approved fund raising by way of issuances of debt securities including by way of non-convertible debentures in domestic markets up to an overall limit of around Rs 20,000 crore by way of private placement and issuances of bonds/notes/offshore certificate of deposits in overseas markets up to $1.50 billion in single/multiple tranches for a period of one year.
At the consolidated level, its profit after tax came in at Rs 4,886 crore, up sharply compared to Rs 1,251 crore in Q4FY20. Consolidated assets grew 14 % year-on-year to Rs 15,73,812 crore at the end of March 2021, the bank said.
