ICICI Bank Q4: Profit jumps 59%, Asset quality improves
Profit beats estimates: The net profit grew 59% year-on-year to Rs 7,019 crore, beating street expectations of Rs 6,402.5 crore. Last year, for the January to March quarter, the net profit reported by the bank was Rs 4,403 crore. Sequentially, the net profit was up by 13.3% from Rs 6,194 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 21% YoY to Rs 12,605 crore compared to Rs 10,431 crore reported in the same period last year. Sequentially, net interest income was up by 3%.
The bank reported a net interest margin of 4% in Q4FY22 compared with 3.84% in Q4FY21. The non-interest income (excluding treasury income) reported was Rs 4,608 crore, up by 11% YoY. The Fee Income grew by 14% YoY to Rs 4,366 crore in Q4FY22 compared with Rs 3,815 crore in Q4FY21.
Asset quality improves: The asset quality of ICICI bank improved. The net NPAs declined 5% sequentially and 24% YoY to Rs 6,961 crore in Q4FY22. In the December quarter, it was Rs 7,344 crore. The net NPA ratio declined to 0.76% in Q4FY22 from 0.85% in Q3FY22 and 1.14% in Q4FY21.
Capital Adequacy: Capital Adequacy Ratio (CAR) is the ratio of a bank's capital in relation to its risk-weighted assets and current liabilities. ICICI reported Capital Adequacy at 19.16% in the March quarter and Tier-1 capital adequacy at 18.35% as compared to the minimum regulatory requirements of 11.7% and 9.7%, respectively.
Provisions: Provisions (excluding provision for tax) declined by 63% year-on-year to Rs 1,069 crore in Q4FY22 from Rs 2,883 crore in Q4FY21. Provisions for FY22 included contingency provision of Rs 1,025 crore made on a prudent basis.
Business Growth: The domestic advances for the bank grew by 17% YoY and 6% QoQ for the quarter ending March. The total advances reported by the bank increased from Rs 8.14 lakh crore in Q3FY22 to Rs 8.59 lakh crore in Q4FY22. The retail loan portfolio compromised 52.8% of the total loan book, it was up by 6% sequentially and 20% YoY. The business banking portfolio grew by 10% sequentially and 43.8% YoY, while the domestic wholesale banking portfolio was up 10% compared to the same period last year.
Deposits: The bank has shown exceptional numbers in terms of deposits. Total deposits rose 14% year-on-year and 5% sequentially to Rs 10.64 lakh crore. Average current account deposits increased by 24% YoY, while average saving account deposits increased by 23% YoY. As of 31 March 2022, the total term deposits were at Rs 5.46 lakh crore, up by 9% YoY.
Dividends: The Board has recommended a dividend of Rs 5 per share in line with applicable guidelines. The record/book closure dates will be announced in due course.
ICICI Bank results: Update from subsidiaries
ICICI Prudential Life Insurance: Value of New Business (VNB) increased by 33% YoY to Rs 2,163 crore in FY22 from Rs 1,621 crore in FY21. The profit after tax was Rs 184 crore in Q4FY22 compared to Rs 64 crore in Q4FY21.
ICICI Lombard General Insurance: The Gross Direct Premium Income (GDPI) grew by 28% YoY to Rs 17,977 crore in FY22 from Rs 14,003 crore in FY21. The combined ratio was 108.8% in FY22 compared to 99.8% in FY21. The profit after tax of ICICI General was Rs 1271 crore in FY22 compared to Rs 1473 crore in FY21.
ICICI Securities: The profit after tax of ICICI Securities, on a consolidated basis, as per Ind AS, grew by 3% YoY to Rs 340 crore in Q4FY22 from Rs 329 crore in Q4FY21.
ICICI Bank Q4 Results Review:
ICICI Bank has reported a strong set of numbers for the Jan-Mar quarter beating street estimates. The deposits as well as the loan book saw a sequential increase. The lending business reported all around growth as retail, small businesses and wholesale business lending reported double-digit growth in the March quarter.
The gross and net NPAs also reduced sequentially. The core operating profit (profit before provisions and tax, excluding treasury income) also rose by 19% on-year. The bank continued to hold COVID-19 related provisions of Rs 6,425 crore as of March 31.
On April 22, shares of ICICI Bank ended 2% lower at Rs 747 on the NSE.