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Business News/ Companies / Company Results/  ICICI Bank management on Q3 earnings performance

ICICI Bank management on Q3 earnings performance

  • Standalone net profit rose 24% on year to 10,272 crore for the December quarter. Core operating profit was up 10%, and asset quality remained stable

ICICI Bank’s total advances grew 18.5% year-on-year to 11.54 trillion as of 31 December 2023. (Photo: Mint)

New Delhi: ICICI Bank, India's second largest private sector lender, on Saturday reported its December quarter earnings performance. Standalone net profit at 10,272 crore, up nearly 24% year-on-year but flat sequentially, surpassed analysts' estimates of 9,950 crore, as polled by Bloomberg.

Here is what the management had to say about various performance metrics:

CASA Performance

Concerns around slowing growth in current and saving accounts (CASA) remained.

The bank’s CASA deposits grew 3.8% year-on-year to 5.3 trillion, translating to a little under 40% of overall deposits. The average CASA ratio was at 39.4% in Q3, down from 40.8% as on 30 September.

“As far as CASA growth is concerned, lower growth is a trend across banks. We would have to wait and see how CASA spans over the next year as we expect easing of monetary policy," said Sandeep Batra, executive director, ICICI Bank.

Capital Adequacy Ratio

The bank’s capital adequacy ratio, which is a measure of a bank's capital compared to its risk-weighted assets and current liabilities, declined 146 basis points sequentially to 14.61%. This, following the banking regulator’s November diktat to raise risk weights for unsecured consumer loans. This means that the bank has to set aside additional capital against such loans leading to a fall in capital adequacy.

Deposits and Advances

ICICI Bank’s total advances grew 18.5% year-on-year to 11.54 trillion as of 31 December, primarily led by an over 21% increase in the retail loan book, which rose to 6.43 trillion. Business loans saw the fastest growth of 32%, while the rural loan book grew 18% year-on-year.

Within the retail loan book, personal loans and credit cards reported sharp increases of 37% and 40%, respectively. Mortgages were a laggard with a 16% year-on-year rise.

“We did some tightening of our portfolio. It is a continuous exercise. And since the RBI specifically flagged it, we did a specific assessment of the segment we really want to operate in. There has been some moderation in the growth of personal loans," Batra said.

Total deposits grew 18.7% year-on-year to 13.3 trillion.

“Our deposit growth and loan growth has been quite balanced, and we don’t see any challenge in funding this level of loan growth," said Anindya Banerjee, group chief financial officer, ICICI Bank.

Asset Quality

There was a net addition of 363 crore of non-performing assets (NPA), or bad loans. Coupled with write-offs of 1,389 crore, gross NPAs fell about 4% sequentially to 28,775 crore. NPA ratio grew by one basis point to 0.44%.

“The increase is primarily on account of seasonal NPAs in Kisan Credit Card portfolio and normalisation of net NPA in the retail portfolio," Batra said. “This is very much on expected lines."

Provision Coverage

The bank’s provision coverage ratio, which is a measure of the funds set aside to cover bad loans, was at 80.7% in the December quarter, down from 82.6% in the preceding quarter.

In the three months to December, the bank made 627 crore provisions on investments in alternate investment funds (AIF). This, after the Reserve Bank of India (RBI) said that banks and non-bank lenders should either liquidate their investments in or make provisions against their investments in AIFs with holdings in the banks' current or recent borrowers, to avoid cases of "evergreening" bad loans.

Batra said that the bank was “not in a hurry" to exit these investments.


Net interest income, the difference between interest earned and interest expended, grew a little over 13% year-on-year to 18,678 crore. Net interest margin, which is a key measure of profitability, was at 4.43%, lower than 4.65% in the same period a year ago, and 4.53% in the preceding quarter.

“The sequential decline in NIM reflects the lagged impact of the increase in term deposits over the last year on the cost of deposits. Overall the NIM was in line with our expectations. Full year FY24 NIM is broadly going to be at the same level as FY23," Batra added.

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Nehal Chaliawala

Nehal writes on everything corporate from the financial capital of India. His areas of interest include corporate strategy, deals, regulations and government schemes.
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