ICICI Bank's net profit up 59% in Q4; beats street estimates

Private sector lender ICICI Bank reported a 59 per cent jump in net profit in January-March quarter of FY22, aided by robust increase in net interest income (NII) and lower provisions. Net profit totaled to Rs 7,019 crore in Q4FY22 compared to Rs 4,403 crore in the year ago period, beating street estimates. Analysts at Bloomberg had estimated a net profit of Rs 6,402.5 crore.

Its NII grew by 21 per cent in the same period to Rs 12,605 crore versus Rs 10,431 crore in the year ago period. Net interest margins of the bank, a measure of profitability, expanded by 16 basis points year-on-year (YoY) and 4 bps sequentially to 4 per cent in Q4FY22.

Non-interest income, excluding treasury income, increased by 11 per cent YoY to Rs 4,608 crore in Q4FY22.

Provisions of the lender dropped 63 per cent to Rs 1,069 crore in the same period. The bank has made contingency provision of Rs 1,025 crore in the quarter, thereby taking the Covid-19 related contingency provision to Rs 7,450 crore at March 31, 2022.

Domestic advances of the lender grew 17 per cent YoY and 6 per cent sequentially in Q4FY22, with retail loans growing by 20 per cent YoY, which formed 53 per cent of the loan book of the bank. The business banking portfolio grew by 43 per cent YoY and 10 per cent sequentially in the same period. The SME business, comprising borrowers with a turnover of less than Rs 250 crore, grew by 34 per cent YoY and 11 per cent sequentially and wholesale advances grew 10 per cent YoY.

Total deposits increased by 14 per cent YoY and 5 per cent sequentially to Rs 10.64 trillion.

Asset quality of the lender improved in the reporting quarter, with gross non-performing asset (NPA) ratio falling by 53 bps sequentially to 3.6 per cent. Net NPA ratio declined by 9 bps to 0.76 per cent.

The gross NPA additions were Rs4,204 crore in Q4FY22 compared to Rs 4,018 crore in Q3FY22. Recoveries and upgrades of NPAs, excluding write-offs and sale increased to Rs 4,693 crore in Q4FY22 from Rs 4,209 crore in Q3FY22. The gross NPAs written-off in Q4FY22 were Rs2,644 crore.

“Our approach has been that we will focus on our risk calibrated operating profits. We have got guardrails in which we lend, whether its corporates, wholesale, project finance, or retail, anything that comes within that framework, we are happy to lend. We do not target growth rates of assets”, said Sandeep Batra, Executive Director, ICICI Bank.   

“We are very much focused on growing organically. There are opportunities sometimes in buyouts of certain portfolios and assets, which we have been doing and an area that we are looking at”, he added.