ICICI Bank Q2 results: 5 highlights of the quarter

ICICI Bank recorded a net profit of 7,558 crores in Q2FY23 up 37% from 5,511 crores in the same quarter last year. Net interest income (NII) jumped 26% year-on-year to reach 14,787 crores in Q2FY23 vs. 11,690 crore in the second quarter of FY22. Net interest margin was 4.31% in Q2FY23. The quality of the bank’s assets improved during the quarter, while advances and deposits recorded double-digit growth. Banking stocks will be the center of attention next week after the second quarter results.

Credit growth:

ICICI Bank’s retail loan portfolio grew 25% year-on-year and 6% sequentially and represented 54% of the total loan portfolio as of September 30, 2022. The portfolio, including non-funds outstanding, s amounted to 44% of the total portfolio as of September 30, 2022. September 30, 2022.

The corporate banking portfolio grew by 43% over one year and by 11% sequentially as of September 30, 2022. SME activity, comprising borrowers whose turnover is less than 250 crore, increased 27% year-on-year and 6% sequentially as of September 30, 2022. Domestic enterprise portfolio increased 23% year-on-year and 7% sequentially as of September 30, 2022. Rural portfolio increased increased 12% year-over-year and 4% sequentially as of September 30, 2022. Domestic Advances increased 24% year-over-year and 6% sequentially as of September 30, 2022.

The total bank advances amounted to 938,563 crores up 23% yoy and 5% yoy.

Deposit Growth:

In Q2FY23, the bank’s deposits jumped 12% year-on-year to 1,090,008 crores. Average deposits in checking accounts and savings accounts increased by 16% year-on-year in Q2-2023.

Term deposits at the end of the period increased by 11% year-on-year to reach 582,168 crores as of September 30, 2022.

Asset quality:

The gross NPA ratio improved to 3.19% in Q2FY23 from 3.41% in Q1FY23 and 4.82% in Q2FY22. The net NPA ratio improved to 0.61% in Q2FY23 from 0.70% in Q1FY23 and 0.99% in Q2FY22.

ICICI Bank pointed out that during the quarter there were net additions of 605 crore at gross NPA compared to 382 crore in Q1FY23.

In addition, NPA recoveries and upgrades, excluding write-offs and sales, have been 3,761 crores in Q2FY23 vs. 5,443 crore in Q1FY23. Gross NPAs written off in Q2-2023 were 1,103 crores. The NPA provisioning coverage rate was 80.6% as of September 30, 2022.

Provisions (excluding provision for taxes) decreased by 39% year-on-year 1,644 crores in Q2FY23 from 2,714 crore in Q2FY22. Provisions for Q2FY23 include a contingency provision for 1,500 crore made on a conservative basis.

Capital adequacy:

Including earnings for the six months ended (H1-2023), the Bank’s total capital adequacy ratio as of September 30, 2022 was 18.27% and the Tier 1 capital adequacy was 17, 51% compared to minimum regulatory requirements of 11.70% and 9.70% respectively.

Digital and payment platforms:

In Q2FY23, the value of ICICI Bank’s credit card spend increased 4% sequentially and 43% year-on-year. The lender saw healthy growth in retail credit card spending, driven by increased discretionary spending and a higher activation rate thanks to digital customer onboarding, including Amazon Pay credit cards. Since its launch, the bank has issued more than 3.5 million Amazon Pay credit cards.

Additionally, in Q2FY23, the value of the bank’s financial transactions on InstaBIZ increased by 23% year-over-year. Around 1.95 lakh non-ICICI Bank account holder registrations on InstaBIZ till September 30, 2022.

Additionally, the value of merchants acquiring transactions through UPI in Q2FY23 increased by 26% year-over-year and was 2.2x higher than the value of transactions in Q2-2022. The Bank held a market share of 31% by value in electronic tolls via FASTag in Q2-2023, with a 20% growth in collections year-on-year.

ICICI Bank’s Trade Online and Trade Emerge platforms allow customers to conduct most of their trade finance and foreign exchange transactions digitally. Around 70% of business transactions were done digitally in the second quarter of this year. The value of transactions made through these platforms increased by 70% year-on-year in the second quarter of this year.

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