ICICI Bank Q4 net rises 59% aided by improved asset quality

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ICICI Bank Ltd, India’s second largest private bank, on Saturday reported fourth-quarter standalone net profit surged 59% to ₹7,019 crore, from ₹ 4,403 crore in the year-earlier period, helped by an improvement in net interest income and reduction in provisioning for bad loans.

For the full year on a standalone basis, profit after tax grew by 44% to ₹23,339 crore, from ₹ 16,193 crore a year earlier, the bank said in a filing.

“We continue to remain optimistic on growth and we will focus on risk calibrated growth,” said Sandeep Batra, executive director, ICICI Bank. “We have made additional provisioning in the quarter considering the uncertain environment,” he added.

During the quarter, core operating profit (profit before provisions and tax, excluding treasury income) rose by 19% year-on-year to ₹ 10,164 crore. Excluding dividend income from subsidiaries/associates, core operating profit grew by 21% in the January-March quarter of the last fiscal.

Fourth-quarter net interest income (NII) increased by 21% year-on-year to ₹12,605 crore. The net interest margin was 4.0% in Q4 FY22, compared with 3.84% in the year-earlier period.

Non-interest income, excluding treasury income, increased by 11% year-on-year to ₹4,608 crore.

Fee income grew by 14% to ₹4,366 crore in Q4 FY22.

The retail loan portfolio, excluding rural loans, grew by 20% year-on-year and comprised 52.8% of the total loan portfolio at March 31, 2022.

Including non-fund outstanding, the retail loan portfolio, was 43.8% of the total portfolio as on March 31.

The business banking portfolio grew by 43% year-on-year at March 31, 2022.

The SME business, comprising borrowers with a turnover of less than ₹250 crore, grew by 34%, the bank said.

Growth in the domestic wholesale banking portfolio was 10% year-on-year as on March 31.

The domestic advances grew by 17% year-on-year. Total advances increased by 17% year-on-year to ₹8,59,020 crore as at March 31. Total deposits increased by 14% to ₹10,64,572 crore at March 31, 2022.

Provisions (excluding provision for tax) declined by 63% year-on-year to ₹1,069 crore in the fourth quarter.

The net non-performing assets declined by 24% year-on-year, and 5% sequentially, to ₹6,961 crore at March 31.

The net NPA ratio declined to 0.76% at March 31, 2022, from 0.85% at December 31, 2021 and 1.14% at March 31, 2021.

The net deletions from gross NPAs, excluding write-offs and sale, were ₹489 crore in Q4-2022, compared with ₹191 crore in Q3-2022. 

The gross NPA additions were ₹4,204 crore in Q4-2022, compared with ₹4,018 crore in Q3-2022.

Recoveries and upgrades of NPAs, excluding write-offs and sale increased to ₹4,693 crore in Q4, from ₹4,209 crore in Q3, the bank said.

The gross NPAs written-off in Q4-2022 were ₹2,644 crore. The provision coverage ratio on NPAs was 79.2% at March 31.

 In addition, the bank continues to carry COVID-19 related provisions of ₹6,425 crore as contingency provisions at March 31, 2022. During Q4-2022, the bank made additional contingency provisions of ₹1,025 crore “on a prudent basis.”

Accordingly, the bank held total contingency provisions of ₹7,450 crore at March 31, 2022.

The Board has recommended a dividend of ₹5 per share.

“ICICI Bank once again reported strong performance aided by high yielding portfolio and well supported by low cost liability franchise resulting in healthy 21% YoY growth in NII,” said Binod Modi, Portfolio Manager, PMS, Sharekhan by BNP Paribas.

“Further, continued improvement in asset quality with sustained improvement in recoveries and upgrades augurs well for the stock,” he added.


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