ICICI Bank has reported its highest-ever quarterly profit as its assets quality has improved significantly under the leadership of Sandeep Bakshi.

The historic quarterly net profit of Rs 5,511 crore in the quarter ended September, up 30% from the year-ago period, came on the back of a 25% core income growth. 

Retail loans continued to pump up the country’s second-largest private sector bank, growing 20% and accounting for 62.1% of the lender’s total loans. In the quarter ended September, ICICI Bank’s total advances grew 17% year-on-year to Rs 7.64 lakh crore. 

With the increase in economic activity, disbursements across all retail products increased sequentially. In a media call after announcing the fiscal second quarter results, the management said disbursements of home, auto and personal loans were close to that of the March quarter. Mortgage disbursements reflected the increase in demand coupled with the bank’s seamless customer onboarding experience through pre-approved offers and digitisation. 

Retail loans, however, continued to be the biggest contributor to delinquencies. Retail and business banking accounted for 83% of the bank’s Rs 5,578 fresh slippages in the quarter ended September. But fresh accretion of bad loans netted off against recoveries and upgrades worth Rs 5,482 crore in the quarter.

Lending to the small and medium enterprises (SME) segment, comprising borrowers with a turnover of less than Rs 250 crore, jumped 42% while the business banking portfolio grew 43%. “Our ability to assess customer risk has improved since there has been a lot of formalisation in the economy," said ICICI Bank executive director Sandeep Batra.

Like advances, the bank’s total deposits grew 17% YoY to Rs 9.77 lakh crore. ICICI Bank has a network of 5,277 branches and 14,045 ATMs as of September 30, 2021.

Net interest income (NII), the difference between interest earned and interest expenses, has grown 25 % to Rs 11,690 crore at the end of the September quarter, improving 43 basis points YoY and 11 basis points sequentially.

Non-interest income (other income) during the quarter grew 19.1% over the earlier year to Rs 4,797.18 crore. Fee income at Rs 3,811 crore, up 21%, contributed 79% to other income. Treasury income fell to Rs 397 crore from Rs 542 crore a year ago due to high base in Q2FY21 that included gain of Rs 305 crore from sale of shares in ICICI Securities

Asset quality improves

While recoveries and upgrades increased, there was a fall in fresh non-performing assets (NPA) during the quarter. Gross NPAs as a percentage of gross advances fell by 33 basis points to 4.82% sequentially as the bank restructured, wrote off bad loans and also improved its asset quality. Net NPAs at 0.99% was the lowest since December 2014, declining 17 basis points sequentially.

The bank wrote off Rs 1,717 crore of bad loans. The bank also restructured Rs 9,684 crore worth of loans under the Reserve Bank of India’s covid specific restructuring. This is 1.3% of its total advances.

Gross non-performing assets (NPA) as a percentage of gross advances at 4.82 percent fell by 33 bps sequentially and net NPAs at 0.99 percent, the lowest since December 2014, declined 17 bps QoQ, in Q2FY22.

 ICICI Bank continued to hold Covid-19 provisions of Rs 6,425 crore as of September 2021, the same level as June 2021.

The bank had provisions and contingencies at Rs 2,713.48 crore as of September 2021, dropping 9.4% YoY and 4.8% sequentially.