ICICI Bank, India’s second-largest private sector lender, announced a resounding 40% year-on-year increase in net profit for the first quarter of the FY24, exceeding market expectations. The Bank reported a net profit of Rs 9,648 crore, a significant jump from Rs 6,905 crore in the same quarter last year, and surpassing market expectations of Rs 8,982 crore.
Key points:
- Profit Surge: ICICI Bank reported a significant 40% year-on-year increase in net profit for Q1 FY24, at Rs 9,648 crore, greatly exceeding market expectations.
- Healthy Net Interest Margin: The bank’s net interest income (NII) saw a surge of 38% YoY to Rs 18,227 crore, and the net interest margin (NIM) improved to 4.78%, indicating strong profitability from its core lending business.
- Improvement in Asset Quality: ICICI Bank showed marked improvement in asset quality with Gross Non-Performing Assets (GNPAs) declining to 2.76%, and Net Non-Performing Assets (NNPAs) dropping to 0.48%.
- Strong Growth Across Segments: The bank experienced strong growth in its diverse segments, with the retail loan portfolio growing by 22% YoY, the business banking, SME, and rural portfolios growing by 30.4%, 28.5%, and 17.6% YoY respectively, and the domestic corporate portfolio seeing a growth of 19.3% from the previous year.
The robust performance is mirrored in the net interest income (NII), which surged by 38% YoY to Rs 18,227 crore from Rs 13,210 crore in the corresponding quarter last year. Alongside, the bank’s net interest margin (NIM) improved to 4.78% this quarter from 4.01% in Q1 FY23, demonstrating a healthy profitability from its core lending business.
A key driver of this performance is the bank’s strong deposit growth. The total deposits registered an 18% YoY increase to reach Rs 12.38 lakh crore as of June 30, 2023. The bank’s Current Account and Savings Account (CASA) ratio for Q1 FY24 stood at 42.6%, while average current account deposits and average savings account deposits rose by 9.2% and 5.6% YoY, respectively, signaling strong liquidity management.
Asset quality also showed significant improvement. The bank reported a decline in Gross Non-Performing Assets (GNPAs) to 2.76% from 3.4% in the year-ago period, and Net Non-Performing Assets (NNPAs) fell to 0.48% from 0.70% in the same period last year.
The Bank’s diverse segments witnessed significant growth. The retail loan portfolio grew by 22% YoY, making up 54.3% of the total loan portfolio. The business banking, SME, and rural portfolios also reported strong growth of 30.4%, 28.5%, and 17.6% YoY, respectively. Notably, the domestic corporate portfolio saw a growth of 19.3% from the previous year.
The Q1 FY24 results highlight ICICI Bank’s ability to deliver strong financial performance, bolstered by robust growth across multiple sectors, excellent liquidity management, and substantial improvements in asset quality.
ICICI as of 24th July, 2023, pre-opening is trading at Rs.1,000 per share.
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