Private sector lender ICICI Bank on Saturday reported 15 per cent year-on-year (y-o-y) rise in net profit for the quarter ended December at ₹11,792 crore, largely led by stable core income.
The bank’s net interest income (NII) or difference between interest earned and expended rose 9 per cent y-o-y to ₹20,371 crore,while non-interest income rose 12 per cent y-o-y to ₹6,697 crore. Net interest margin (NIM) of the bank moderated 2 basis points (bps) sequentially to 4.25 per cent in Q3. “We do expect the margin to be broadly stable until the rate cycle starts. Of course, after the rate cuts happens, margins will be impacted due to lead-lag effect as floating rate loans will get repriced much faster than fixed deposits,” said Sandeep Batra, ED, ICICI Bank.
“From our perspective, we will continue to remain disciplined in pricing across loan segments, while we focus on having healthy funding profile,” he said.
Business growth
ICICI Bank’s overall advances rose 14 per cent y-o-y to ₹13.14 lakh crore as on December 31.Retail loans, accounting for 52 per cent of overall advances, rose 11 per cent y-o-y,while business banking loans constituting 19 per cent of advances rose 32 per cent y-o-y.Domestic corporate loans, which formed 21 per cent of overall loans, grew 13 per cent y-o-y.
Of the total domestic loan book, 31 per cent has fixed interest rate, 52 per cent has interest rate linked to repo rate and 16 per cent has interest rate linked to marginal cost of funds based lending rate (MCLR) and other older benchmarks.
Overall deposits, meanwhile, rose 14 per cent y-o-y to ₹15.20 lakh crore. Low-cost current account and savings account (CASA) constituted 40.5 per cent of overall deposits and grew 17 per cent y-o-y. The share of CASA in overall deposits moderated slightly sequentially.
Asset quality
Fresh slippages stood at ₹6,085 crore in Q3, higher than ₹5,073 crore last quarter, on account of higher slippages from retail and rural segments.A total of ₹714 crore of bad loans emanated from the Kisan Credit Card product itself, the bank said.
The lender wrote off ₹2,011 crore of loans in Q3, lower than ₹3,336 crore in Q2. Recoveries and upgrades stood at ₹3,392 crore in Q3, higher than ₹3,319 crore last quarter.Overall, gross bad loan ratio moderated 1 bps sequentially to 1.96 per cent, while net non-performing asset ratio was stable at 0.42 per cent. Lastly, capital adequacy ratio of the bank stood at 14.71 per cent and the lender does not foresee requirement to raise capital anytime soon, Batra said.