ICICI Bank Q2 Results: Net Profit Up 29.6% On Stronger Interest Income
ICICI Bank net profit rises 29% year-on-year on higher core income.
Private sector lender ICICI Bank Ltd. saw its net profit rise 29.6% in the July to September quarter on higher net interest income.
Net profit for the second quarter stood at Rs 5,510.95 crore, as compared with Rs 4,251 crore a year ago. Analysts polled by Bloomberg had estimated a net profit of Rs 5,441 crore for the quarter.
Net interest income, or core income, for the bank rose 24.8% over last year to Rs 11,689.7 crore. The net interest margin was at 4%.
Non-interest income rose 19% over the year ago period to Rs 4,797 crore.
Asset Quality
Asset quality of the bank improved during the quarter, with gross non-performing asset ratio falling to 4.82% as of Sept. 30, from 5.15% as of Jun. 30.
The net NPA ratio fell to 0.99%, the lowest since the December 2014 quarter. The net NPA ratio was at 1.16% at the end of the previous quarter.
Gross additions to NPAs during the quarter were at Rs 5,578 crore, while recoveries stood at Rs 5,482 crore. As such, the net addition to NPAs during the quarter was at only Rs 96 crore. The bank also wrote-off loans worth Rs 1,700 crore.
The bank restructured Rs 4,158 crore in loans under the second round of Covid restructuring.
Much of the second round restructuring has come from personal loans which account for Rs 3,029 crore of the amount recast.
The bank had earlier restructured Rs 3,737 crore in loans under the first round of Covid restructuring. This included Rs 3,058 crore in corporate loans.
Of this, Rs 61 crore has slipped into the NPA category.
Provisions for the quarter were lower by 9% year-on-year and stood at Rs 2,713 crore.
During the quarter the bank wrote back part of the contingent provisions set aside on account of the Covid crisis. The bank held aggregate Covid related provisions of Rs 7,475 crore as on March 31, 2021. During the first half of the year, the bank wrote back Rs 1,050.00 crore in provisions and now holds Rs 6,425.00 crore to account for risks emerging out of the pandemic.
Business Growth
The bank saw domestic advances grow by 19% year-on-year and 4% sequentially as on September 30, 2021. Total advances now stand at Rs 7.64 lakh crore.
The retail loan portfolio for Q2 grew 20% year-on-year and 5% sequentially, and comprised 62.1% of the total loan book.
Within the retail loan segment - mortgages rose 25%, vehicle loans were up 6.4%. Rural loans and personal loans grew in the range of 16-18%.
The business banking portfolio grew 43% year-on-year and 12% sequentially.
Domestic wholesale banking portfolio was 14% year-on-year.
There is a lot of formalisation happening in the economy. As this happens, the ability to assess MSMEs is improving and that is adding to growth in business banking. India is growing and as a result we are seeing growth across the portfolio.Sandeep Batra, Executive Director, ICICI Bank
Total deposits increased by 17% year-on-year and 6% sequentially to Rs 9.77 lakh crore. Current account and savings account deposits rose 28% year-on-year and the average CASA ratio was at 44%.