ICICI Bank Q2 net profit rises 35.8% on lower provisioning, higher income

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ICICI Bank announced a 35.76 per cent growth in net profit to Rs 10,261 crore in the second quarter of financial year 2023-24, up from Rs 7,557.84 crore in Q2FY23, owing to lower provisions and higher income.


The net interest income (NII) of the private sector lender increased by 23.81 per cent to Rs 18,308 crore from Rs 14,787 crore in the corresponding quarter of the previous financial year.


Provisions moderated to Rs 583 crore in the reported quarter as compared to Rs 1,644 crore in the year-ago period.


The net interest margin (NIM) saw an uptick to 4.53 per cent from 4.31 per cent but declined from 4.78 per cent in Q1FY24. “The increase in cost of deposits during the quarter largely reflects the increase in term deposits over last year,” said Sandeep Batra, executive director at ICICI Bank, during the post-earnings press conference.


The decline in NIMs has been partially offset by the growth in the loan portfolio and fee income. Going forward, the management at ICICI Bank expects NIMs to moderate in the upcoming quarters.


Deposits of the lender rose by 18.78 per cent in the period under review to Rs 12,94,742 crore from Rs 10,90,008 crore in the year-ago quarter, with term deposits rising by 31.8 per cent across the time period.


The overall advances of the lender rose by 18.3 per cent to Rs 11,10,542 crore from Rs 9,38,563 crore, with retail loans rising by 21.4 per cent, rural loans by 17.3 per cent, business banking by 30.3 per cent, small and medium-sized enterprises (SMEs) by 29.4 per cent, and domestic corporate lending by 15.3 per cent from the same quarter of FY23.


The asset quality improved, with the gross non-performing assets (GNPA) inching down to 2.48 per cent in Q2FY24 from 2.76 per cent in Q1FY24, whereas the net NPA slipped down to 0.43 per cent as compared to 0.48 per cent across the same time period.


Also, there was a net addition to gross NPAs worth Rs 116 crore to Rs 4,687 crore during Q2FY24. This is lower than the net addition of Rs 1,087 crore to Rs 5,318 crore in Q1FY24.


Out of the total, the corporate and SME amounted to Rs 323 crore, as well as retail and rural accounted for nearly Rs 4,364 crore. “During the quarter, I think the numbers are slightly lower because of the seasonality of the rural businesses. Q2 is normally lower, and you would have noticed that the numbers are slightly higher in the first quarter,” Batra said.


Adding further, he said, “In terms of recoveries, the corporate and SME book, we had a recovery of about Rs 1,500 crore. And the retail and rural and business banking were about Rs 3,000 crore. And that is how the total leads to about Rs 116 crore.”