ICICI Bank Q4 Results: Net Profit Up 17% As Provisions Fall Sharply
The lender's net interest income, or core income, grew 8% year over year to Rs 19,093 crore.
ICICI Bank Ltd. reported a 17% year-on-year rise in its standalone net profit to Rs 10,707 crore in the March quarter of fiscal 2024, according to a regulatory filing on Saturday. The rise in the bottom line was due to a 55% fall in provisions and contingencies.
According to analysts polled by Bloomberg, the net profit was estimated at Rs 10,489.09 crore.
On a sequential basis, the private lender's net profit rose 4.2%.
The lender's net interest income, or core income, grew 8% year over year to Rs 19,093 crore.
ICICI Bank Q4 Results Highlights (Standalone)
Net profit up 17% to Rs 10,707 crore (YoY).
Net interest income up 8% to Rs 19,093 crore (YoY).
Gross NPA was 2.16% vs 2.30% (QoQ).
Net NPA at 0.42% vs 0.44% (QoQ).
Provisions held by the bank declined 55% year over year to Rs 718.5 crore in the quarter under review, on account of the reversal of a part of these provisions made against exposure to alternate investment funds.
In the December quarter, the bank had set aside Rs 627.03 crore against its AIF investments. In Q4, ICICI Bank has written back provisions of Rs 116.62 crore, and it holds the provision of the rest of Rs 510.41 crore against these investments at the end of the March quarter.
The bank's provisioning coverage ratio stood at 80.3% as of March 31.
The net interest margin stood at 4.4% in Q4, compared to 4.43% in the previous quarter and 4.90% in the same quarter a year ago.
ICICI Bank's net domestic advances grew by 16.2% year-on-year to Rs 11.8 lakh crore, with the retail loan portfolio rising 19.4% on a yearly basis. The retail loans comprise 54.9% of the total loan portfolio of the bank as of March 31. However, the bank is calibrating its pace of growth in unsecured loans, Sandeep Batra, executive director of ICICI Bank, said in the post-earnings call.
"The bank continues to enhance the use of technology in its operations and to provide solutions to customers.The retail lending platform is being upgraded on an ongoing basis, with personal loans and education loans now integrated into the platform along with mortgages," he added.
About 71% of trade transactions were done digitally in FY2024.
"The resilience of IT infra is of paramount importance. We remain focused on complying with regulatory guidelines from time to time, and we have the ability to take quick action if there is any digital outage," Batra said.
The bank continues to focus on improving its tech capabilities with the scale of its business, he added.
In FY24, the bank has spent 9.4% of the total operating expenses, up from 5.6% in FY19, the ED said.
Total deposits increased by 19.6% year-on-year to Rs 14.1 lakh crore, with term deposits growing by 27.7% on a yearly basis. The bank's credit-deposit ratio stood at 82.3% as of March 31, up from 84.6% in Q3.
The bank added 623 branches in FY24, growing its branch network to 6,523 branches, 17,190 automated teller machines and cash recycling machines at the end of the fiscal year. The bank has a micro-market approach in terms of branches, and it aims to add around 600 branches in FY25 as well, Batra said.
ICICI Bank's capital adequacy ratio stood at 16.33%, with the CET-1 ratio at 15.60% at the end of the March quarter. The CRAR at the end of the March quarter in FY23 was 18.34%.
The capital erosion of 201 basis points during the year is due to regulatory guidelines in terms of higher risk weights on unsecured loans and the share purchase of ICICI Lombard in February, Batra said. Having said that, the bank is comfortable with its capital, he added.
The bank's board has recommended a dividend of Rs 10 per share for FY24, subject to requisite approvals.
On fundraising, the ICICI Bank board approved raising up to Rs 25,000 crore via domestic bonds. "Our equity mix is healthy; there is no need for us to raise equity. Debt fundraise can be used in terms of pricing opportunities in the future," Batra said.