ICICI Bank reported a ₹1,908.03-crore net profit for the April-June quarter compared with a ₹119.55-crore loss during the same period of the previous year as additions to bad loans fell, lowering provision requirement.
Net interest income (NII) increased 27% year-on-year to ₹7,737 crore while net interest margin rose 3.61% compared with 3.19% in the same period of the previous year. Net interest margin was 3.72% during the fourth quarter of 2018-19.
Interest on I-T refund
“The impact of interest on income tax refund and interest collection from non-performing loans on net interest margin was about 17 basis points in Q1-2020 compared with about 25 basis points in Q4-2019,” the bank said.
Non-interest income, excluding treasury income, stood at ₹3,247 crore compared with ₹3,085 crore while fee income grew 10% to ₹3,039 crore.
“The growth in core operating profit and reduction in credit cost resulted in a net profit of ₹1,908.03 crore,” said Sandeep Batra, executive director (designate), ICICI Bank.
Core operating profit (profit before provisions and tax, excluding treasury income) grew 21% year-on-year to ₹6,110 crore.
Asset quality improved with gross non-performing assets falling by almost ₹8,000 crore in a year to ₹45,763 crore as at June end and the ratio came down to 6.49% from 8.81%.
Net NPA ratio decreased from 4.19% on June 30, 2018 to 1.77% at June 30 this year — the lowest in the last 14 quarters. Net NPAs decreased 51% to ₹11,857 crore.
As a result, provisions fell to ₹3,496 crore in Q1-2020 compared with ₹5,971 crore a year earlier. The bank had a provision coverage ratio of 74%.
“We continue to focus on reaching a consolidated return on equity of 15% by quarter ended June 2020,” he added.
The total domestic advances grew 18%, driven by a 22% growth in retail loans. The corporate loan book grew 13%.
Mr. Batra declined to give any guidance on loan growth and said there was a slowdown in economic activity.
“From an economic point of view, there is clearly a slowdown. We have seen slowdown in transactions and auto sales. However, the services sector continues to do well and we are seeing some improvement in capacity utilisation in the public sector,” he added.
Deposit growth was 21% year-on-year, driven by a 34% growth in term deposits. The share of CASA deposits to total deposits fell to 45.2% as on June 30, 2019 compared with 49.6% as on March 31, 2019 and 50.5% on June 30 last year.
