ICICI Bank Q1 profit rises 40% to Rs 9,648 cr, net interest income up 38%

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ICICI Bank – the country’s second largest private lender – has reported a 39.7 per cent year-on-year growth in its net profit to Rs. 9,648 crore for the April-June period – a record high – owing to healthy growth in the core business.

Net interest income increased by 38% YoY to Rs.18,227 crore while non-interest income excluding treasury gain increased by 12% YoY to Rs.5,183 crore. There was a gain for treasury of Rs.252 crore in the first quarter of 2024 compared to a gain of Rs.36 crore in the first quarter of 2023.

Provision (excluding provision for tax) was Rs.1,292 crore in Q1 2024 compared to Rs.1,144 crore in Q1 2023. Net interest margin was 4.78 per cent in Q1 2024 compared to 4.01 per cent in Q1 2023 and 4.90 per cent in Q4 2023.

The bank expects margins to come under pressure as more and more deposits are repriced at a higher rate. The growth is current and savings deposits – which are low-cost deposits – were only 9 percent.

Casa’s average percentage for the quarter was 42.6 percent [43.6 per cent in March 2023]. Total deposits grew by 17.9 percent. “When interest rates on time deposits go up — which have now risen significantly in the last six or nine months — people move to term deposits for much more,” said Sandeep Batra, managing director of ICICI Bank.

“We expect deposits to be repricing in the next two quarters,” Batra said during the post-earnings media interaction when asked about net interest margins while net income addition for FY24 will be around the same level as FY22, which was 4.5 percent.

Domestic net advances grew by 20.6 percent year-on-year and 4.0 percent, respectively, as at June 30, 2023. The retail loan portfolio grew by 21.9 percent year-on-year and 4.5 percent, respectively, and accounted for 54.3 percent of the total loan portfolio as at June 30, 2023.

Including non-existing funds, the retail portfolio amounted to 45.9 percent of the total portfolio on June 30, 2023.

Gross NPA ratio was 2.76 percent on June 30, 2023, compared to 2.81 percent on March 31, 2023. Net NPA ratio was 0.48 percent on June 30, 2023, compared to 0.48 percent on March 31, 2023, and 0.70 percent on June 30, 2022.

The net addition to the total NPA, excluding write-offs and sales, was Rs.1,807 crore. NPA recoveries and upgrades, excluding write-offs and sales, amounted to Rs. 3,511 crore in Q1 2024 compared to Rs. 4,283 crore in Q4 2023. ICICI Bank wrote off total NPAs of Rs. 1,169 crore in Q1 2024. Provision coverage ratio in NPAs was 82.4 per cent on 30 June 2023.