ICICI Bank reported a consolidated net profit surge of 25.7 per cent to Rs 11,052.60 crore for the December quarter, driven by reduced provisions. The standalone net profit for the same period grew by 23.6 per cent to Rs 10,272 crore, making it the second-largest private sector lender in the country.
The bank's core net interest income increased by 13.4 per cent to Rs 18,678 crore, although the net interest margin narrowed from 4.65 per cent to 4.43 per cent year-on-year. Domestic advances saw a growth of 18.8 per cent, and the credit deposit ratio stood at 86 per cent, a level the management considers "comfortable."
Other income rose by 19.8 per cent to Rs 5,975 crore during the quarter, while deposit growth reached 18.7 per cent. However, there was faster growth in term deposits compared to low-cost current and savings account deposits, impacting margins.
ICICI Bank's executive director, Sandeep Batra, said that net interest margins (NIMs) were in line with expectations. The bank expects NIMs for FY24 to be similar to FY23. Provisions decreased to Rs 1,049.37 crore from Rs 2,257.44 crore in the same period last year, despite a Rs 627 crore impact from investments in alternative investment funds following an RBI directive.
Batra said that the bank slowed down unsecured lending growth in the quarter based on the RBI's concerns about the system. Gross slippages were over Rs 5,000 crore, driven by rural advances, which have a seasonal nature.
Exposure to non-bank lenders, another area flagged by the RBI, decreased to over Rs 74,000 crore from over Rs 79,000 crore three months ago due to payments by some state-run companies. The bank's capital adequacy was impacted by 0.70 percentage points due to regulatory changes in risk weights, but core buffer levels remain comfortable at over 16 per cent.
Subsidiaries of ICICI Bank also posted positive results, with the life insurance arm's profit after tax (PAT) inching up to Rs 227 crore, the general insurance arm's net growing by 22.1 per cent to Rs 431 crore, the asset management company delivering a 30 per cent growth in net profit at Rs 546 crore, and the brokerage business seeing a 66 per cent growth in net profit to Rs 466 crore.
Following these results, ICICI Bank's stock gained 0.92 per cent, closing at Rs 1,008.3 on the BSE, outperforming the benchmark index. Sharekhan termed it a "steady quarter" for the bank with better than expected net interest margins.
(With PTI inputs)
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