Last updated: 24 Jul, 2021 | 05:15 pm
Profit beats estimates: ICICI reported a year on year rise of 78% in net profit to Rs 4,616 crore, beating street expectations. Analysts had anticipated a profit of about Rs 4,362 crore. The strong bottomline was mainly on account of lower provisioning as provisions (excluding for tax) fell sharply to Rs 2,852 crore in the Apr-Jun quarter, down 62 % compared to Rs 7,594 crore in the same quarter last year. On a sequential basis profits were up by nearly 5% against Rs 4402 crores last quarter. The core operating profit increased by 23% year-on-year to ₹ 8,605 crore in Apr-Jun quarter from Rs 7,014 crore in the quarter ended June 30, 2020.
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.The lender's Net Interest Income (NII) rose 18 per cent to Rs 10,936 crore in the June quarter as against Rs 9,280 crore in the year-ago period.
ICICI Bank Results: Important Highlights
Non-interest income :Non-interest income, excluding treasury income, increased by 56 % year-on-year to Rs 3,706 crore in the June quarter from Rs 2,380 crore in the year-ago period. Fee income climbed 53 % to Rs 3,219 crore from Rs 2,104 crore YoY. Fees from retail, business banking and SME customers rose 65 % year-on-year and accounted for 76 % of total fees.Treasury income plunged to Rs 290 crore compared with Rs 3,763 crore in the year-ago quarter. This is because treasury gain in the year-ago quarter included Rs 3,036 crore gains made from selling stake in subsidiaries.
Asset quality declines: The bank’s asset quality declined with the Gross NPA ratio rising to 5.15% as against 4.96% from March quarter.The Gross NPA additions were Rs 7,231 crore during the quarter. The net NPAs in Apr-Jun quarter stood at Rs 9,306 crore as against Rs 9,180 crore in the previous quarter. Meanwhile, the net NPA ratio was 1.16 % at the end of June quarter compared to 1.14 % last quarter. As of June 30, the bank had restructured loans worth Rs 3,891 crore under the RBI’s one time restructuring scheme. This included retail loans worth Rs 925 crore and corporate loans worth Rs 2,956 crore. The bank held provisions worth Rs 632.35 crore against these restructured loans. Total provisions fell 62.4% year-on-year to Rs 2,852 crore from Rs 7594 Crore a year ago. Provision coverage ratio was robust at 78.2% at June 30, 2021, higher than 77.7% at March 31, 2021
New Business: Despite tough times, the ICICI Bank has been successful in getting new business. The total advance rose to Rs 7.4 lakh crore, a 17% YoY rise, while retail loans rose to Rs 4.9 lakh crore (up 20% YoY). Retail loans now account for about 61.4% of the bank's loan book. Domestic corporate loan book rose 11% year-on-year, driven by higher rated corporates and public sector companies The business banking loan book rose 53% year-on-year and constituted 5.4% of the loan book Small and medium enterprises loans, comprising of borrowers with turnover of Rs 25 crore and below, rose 43% year-on-year
Deposits: The bank has shown exceptional numbers in terms of deposits. Total deposits grew by 16 per cent year-on-year to Rs 9.26 lakh crore at the end of June quarter. The Bank reported a 24% year-on-year growth in average current and savings account (CASA) deposits in the Apr-Jun quarter and average CASA ratio stood at 44% . Term deposits for the same quarter grew by 9% year-on-year.
ICICI Bank Q1 Results Review:
ICICI Bank reported a strong top and bottomline numbers, beating street estimates despite covid restrictions. Due to the lockdown, the bank gave more attention to its digital banking services.The business banking and SME franchise continued to grow on the back of digital offerings and platforms like InstaBIZ.The value of the Bank’s merchant acquiring transactions through UPI has more than doubled year-on-year and grew by 32% sequentially in Apr-Jun quarter. The value of mobile banking transactions increased by 117% year-on-year to ₹ 349,072 crore in the quarter ended June.
Total capital adequacy ratio was 19.27% and Tier-1 capital adequacy ratio was 18.24% on a standalone basis at June 30, 2021 (including profits for Apr-Jun quarter.)The net interest margin was 3.89 % in quarter ended June compared to 3.84 % in the previous quarter. 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. As of June 30, 2021, the Bank held Covid-19 related provisions of Rs 6,425 crore .