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ICICI Bank Q4 earnings: Profit, Net Interest Income, Margins, Asset Quality and more

ICICI Bank Q4 earnings: Profit, Net Interest Income, Margins, Asset Quality and more

Last updated: 28 Apr, 2021 | 09:49 am

ICICI Bank Q4 earnings: Profit, Net Interest Income, Margins, Asset Quality and more

Profit beats estimates: The net profit grew 260.5% year-on-year to Rs 4,402 crore, beating street expectations. Analysts had anticipated a profit of about Rs 4,281 crore. The bank was able to post a higher profit on the back of a healthy rise in Net Interest Income.

Net interest income rises: A bank’s primary business is to borrow money and lend the same at a rate higher than the rate at which they borrowed. The income generated from this differential is known as Net Interest Income. Net interest income for ICICI Bank grew at 16% YoY to ₹10,413 crore.

Asset quality improves: The bank’s asset quality improved with the gross non-performing asset ratio reducing to 4.96% as against 5.42% from October to December. Net NPA ratio improved by 12 basis points to 1.14% in the January to March quarter. ICICI Bank set aside total provisions worth Rs 2,228.47 crore, down 51.7% from the previous year. In sequential terms, the amount is marginally higher. The bank has also restructured loans worth Rs 1976 crore as part of a one-time restructuring scheme. This includes:

  • 1586 retail borrowers with dues of Rs 643 crore
  • 30 corporate borrowers with dues of Rs 1323 crore

New Business: Despite tough times, the ICICI Bank has been successful in getting new business. The total advance rose to Rs 7.34 lakh crore (up 13.7% YoY), while retail loans rose to Rs 4.9 lakh crore (up 20% YoY). Retail loans now account for about 67% of the bank's loan book. The loans to SMEs were 32.5% higher compared to last year and stand at Rs 30,284 crore. The bank in the statement said it has disbursed Rs 12,700 crore of loan to small businesses under the first iteration of the emergency credit-linked guarantee scheme of the government.

When it comes to the retail segment, the loans to rural customers rose 27% year on year to Rs 72,158 crore, the fastest segmental growth rate. The bank’s home loan book stood at Rs 2.44 lakh crore, up 22% from a year ago.

Deposits: The bank has shown exceptional numbers in terms of deposits. Total deposits rose 21% year-on-year to Rs 9.3 lakh crore. Of this, low-cost current account savings account deposits rose 24% to Rs 4.3 lakh crore. CASA deposits percentage is slightly higher. It now accounts for 42.5% of total deposits, as compared with 42.3% a year ago.

The bank’s total capital adequacy as of March 31, 2021, was 19.12 percent and Tier-1 capital adequacy was 18.06 percent as compared to the minimum regulatory requirements of 11.08 percent and 9.08 percent respectively. 

Even though the current economic environment is extremely stressful for the banking industry, we believe ICICI Bank has the necessary firepower to tide over these turbulent times.

We are a SEBI registered investement advisor