In exactly two years since Sandeep Bakshi took over as chief executive officer and managing director of ICICI Bank, the lender reported the highest quarterly profit of Rs 4,251 crore by virtue of a good growth in advances, better asset management and lower tax outgo. The six-fold increase in the net profit of India's second-largest lender by assets was aided by a lower base and a much lower tax outgo of Rs 1,015 crore as against Rs 3,712 crore in the year-ago period. The bank also had an inflow of Rs 305 crore during the quarter from the 2% stake sale in ICICI Securities.

"This is the highest quarterly profit reported by the lender," said ICICI Bank president Sandeep Batra during a media conference call.

Domestic loans grew 10% over the previous year and 4% over the first quarter at the end of 30 September 2020. Retail loans grew 13% year-on-year and 6% sequentially.

Retail loans led to a robust growth in the bank's advances, forming 65.8% of its total advances. The bank reported a Rs 26,092-crore increase in advances to Rs 6,10,279 crore compared to the preceding quarter.

Home loans reported the sharpest growth at Rs 10,623 crore over the first quarter, followed by vehicle loans, which grew by 2,255 crore during the period. The bank went slow on its unsecured book, with credit cards growing only by Rs 782 crore and personal loans by Rs 511 crore. Corporate loans de-grew by Rs 1,397 crore. But the lender said that the credit card spends were at 85% of the pre-Covid levels and the number of credit cards rose to 9.3 million at the end of the second quarter, from 9.1 million in the first quarter ended 30 June 2020.

Net interest income (NII) increased 16% to Rs 9,366 crore at the end of the second quarter, from Rs 8,057 crore a year ago. Fee income of the bank grew 49.2% over the previous quarter to Rs 3,139 crore. The bank's net interest margin was at 3.57% during the quarter, compared to 3.69% in the first quarter.

Asset quality improved during the quarter with gross non-performing assets (NPAs) dropping to Rs 38,989 crore at the end of the September quarter compared to Rs 45,638 crore during the corresponding period a year ago. Improvement in asset quality came after a write-off of Rs 2,469 crore, and upgrades and recoveries of Rs 1,945 crore. Gross NPA as a percentage of total assets stood at 5.17% at the end of September quarter, compared to 6.37% in the previous quarter.

During the quarter, the bank added fresh bad loans worth Rs 3,017 crore, with Rs 1,749 crore coming from the retail book of the bank. Total provisions for bad loans and contingencies rose to Rs 2,995.27 crore for the September 2020 quarter as against Rs 2,506.87 crore a year ago. The bank held Covid-19-related provisions of Rs 8,772 crore at the end of September.

Since the easing of restrictions, there has been a substantial month-on-month increase in disbursements across retail products. Mortgage disbursements during Q2-2021 crossed pre-Covid levels and reached an all-time monthly high in September 2020. Auto loan disbursements continued to increase from June 2020 and reached pre-Covid levels in September 2020, reflecting the growth in passenger car sales. Disbursements across the rural portfolio crossed pre-Covid levels during the months of August and September.

"Credit card spends recovered to about 85% of pre-Covid levels in September 2020, led by increased spends in categories such as health and wellness, electronics and e-commerce," the lender said.