ICICI Bank in Q1 up 50% net thanks to strong credit growth

ICICI Bank said its net profit jumped 50% to ₹6,905 crore on the back of a 60% drop in provisions for the quarter to ₹1,144 crore.

Credit growth also increased by 21%, which is much higher than the industry average of around 10-12%.

Sandeep Batra, chief executive, at the earnings conference said the provisions included contingencies of ₹1,050 crore, which totaled ₹8,500 crore as of June 30. The bank holds provisions of ₹2,290 crore against ₹7,376 crore of loans which are under resolution, he added. The bank’s provision coverage ratio stood at 79.6% as of June 30.

ICICI Bank’s domestic advances rose 22%, driven by 24% growth in retail loans – which accounted for 53% of total loans at the end of June.

Bank lending to businesses grew by 45%, rural lending by 8% and SME lending by 32%. Total advances increased by 21% to ₹8.95 crore.

Credit card spending

The lender said the value of credit card spending doubled from a year ago and increased 13% sequentially, driven by improved discretionary spending, a higher activation rate thanks to digital integration and diversification through commercial cards.

The card portfolio stood at ₹28,010 crore at the end of June, up 63% year-on-year. The NII rose by 21% to ₹13,210 crore, while the NIM was slightly better at 4.01% from 4% in the previous quarter and 3.89% a year ago.

The private bank saw an improvement in its asset quality, with the gross NPA ratio falling to 3.41% from 3.60% a quarter ago and 5.15% a year ago. The net NPA ratio was also better at 0.70% compared to 0.76% in the previous quarter and 1.16% the previous year.

Gross additions to bad debts for the quarter amounted to ₹5,825 crore, which was more than offset by recoveries and upgrade loans of ₹5,443 crore. The bank also canceled loans worth ₹1,126 crore during the quarter and sold loans of around ₹14 crore on a cash basis, Batra said.

Published on

July 23, 2022