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ICICI Bank's profit jumps 20% to ₹14,843 crore as loans grow 30%
The country's second-largest private lender beat forecasts on Saturday with lower provisions and fast loan growth, though its margin narrowed to 4.18% from 4.36% in the June quarter.
Key points
- ICICI Bank's standalone net profit rose 20.1% to ₹14,843 crore in July-September.
- Loans grew 30% from a year earlier to ₹18.32 lakh crore, helped by FCNR-backed lending abroad.
- Gross bad loans fell to 1.20% from 1.58% a year ago.
ICICI Bank’s net profit rose 20.1% to ₹14,843 crore in the July-September quarter, comfortably ahead of what analysts had expected, as provisions fell and its loan book expanded by nearly a third.
Brokerages had looked for profit growth of 8-14%. The bank beat market estimates by about 3.9%. On a consolidated basis, including its insurance, asset management and broking arms, profit rose 22.3% to ₹16,333 crore.
Growth, with help from abroad
Net interest income rose 17.7% to ₹25,339 crore. Loans grew 30% from a year earlier and 12.3% from June, to ₹18.32 lakh crore. A large part of the jump came from lending by the bank’s international branches against foreign currency non-resident (FCNR-B) deposits. Without those loans, growth was 24.1%.
Deposits followed the same pattern. They rose 27.1% to ₹20.50 lakh crore, or 17% if FCNR-B deposits are left out. The average current and savings account ratio was 35.8%.
Fee income grew 20.1% to ₹7,795 crore, with retail, rural and business banking customers bringing in about three-quarters of it.
Margin narrows
The cost of that growth showed in the margin. The net interest margin fell to 4.18% from 4.36% in the June quarter and 4.30% a year earlier. The June figure had been flattered by interest on an income tax refund; excluding that, it was 4.28%.
“The benefit of interest on tax refund was negligible in Q2FY27,” the bank said.
Cleaner books
Provisions dropped to ₹851 crore from ₹914 crore a year earlier and ₹1,260 crore in the June quarter. The gross non-performing assets ratio improved to 1.20% from 1.38% in June and 1.58% a year ago, and the net NPA ratio to 0.30%. Gross NPA additions were ₹4,833 crore, while recoveries and upgrades came to ₹3,620 crore. The bank wrote off ₹1,592 crore of bad loans and kept a provision coverage ratio of 75%.
It also holds ₹13,100 crore of contingency provisions set aside against future stress.
Capital remains well above the floor. The total capital adequacy ratio was 16.68% against a regulatory minimum of 11.70%, and the core equity ratio was 16.01%. During the quarter the bank bought a further 2% stake in its life insurance arm for ₹1,470 crore.
The numbers set ICICI Bank apart from its larger rival. HDFC Bank, which reported earlier on Saturday, grew profit by 4.7%. Trading in both stocks resumes on Monday.