In a robust financial performance, ICICI Bank, one of India’s leading private sector banks, has reported a notable 17.4 percent increase in its standalone profit after tax for the March quarter of the financial year 2024. The bank’s profit surged to Rs 10,707.53 crore, up from Rs 9,121.87 crore in the corresponding quarter of the last year, underscoring the bank’s strength and growth trajectory in a competitive sector.
The positive financial results are attributed to a substantial growth in loan disbursals, which showcased a significant 16.8 percent increase, coupled with a consistent strategy focusing on maximization of risk-adjusted profits. Even with a slight compression in the net interest margin, which now stands at 4.40 percent, the bank’s total income climbed to Rs 43,597 crore for the quarter, compared to Rs 42,791.64 crore a year ago.
The core of the bank’s earnings, the net interest income (NII), witnessed an 8.1 percent growth, reaching Rs 19,093 crore thanks to the robust loan growth. Exemplifying its resilient business model, the bank’s consolidated net profit for the quarter also rose by an impressive 18.5 percent to Rs 11,672 crore from Rs 9,853 crore in the previous year’s corresponding period.
ICICI Bank’s successful financial tenure also reflects in the investor benefits with the board proposing a dividend of Rs 10 per share for the year, marking a reward for shareholder’s trust and investment in the bank’s growth story.
Despite the uptick in financial performance, the bank’s shares experienced a marginal decline of 0.53 percent at Rs 1,107.15 on the Bombay Stock Exchange (BSE) on Friday. However, this did not overshadow the positive results announced, as various other metrics pointed to a solid fiscal position.
ICICI Bank’s non-interest income, excluding treasury operations, noted a remarkable 15.7 percent year-over-year rise, amounting to Rs 5,930 crore. This robust performance in the bank’s non-interest income is a testament to the diverse revenue streams ICICI Bank has established.
The bank has shown prudence in its provisioning with a more than half reduction to Rs 718 crore for the quarter, signaling strengthened asset quality. Sandeep Batra, the Executive Director of ICICI Bank, emphasized the lender’s focus on risk-calibrated operating profit, aiming to maximize overall profitability by leveraging various financial levers including net interest margins, expenses, fees, and provisions.
Asset quality metrics showed promising improvements with gross Non-Performing Assets (NPA) ratio diminishing to 2.16 percent as of March 2024, down from 2.30 percent in December 2023. Additionally, the net NPA ratio narrowed to a mere 0.42 percent at the same time, presenting a downward trend when compared to 0.44 percent in December 2023 and 0.48 percent in March 2023.
In terms of loan recovery and asset sanitization, the bank had net additions to gross NPAs, excluding write-offs and sale, of Rs 1,221 crore in the fourth quarter of the financial year 2024. This compares favorably against Rs 363 crore in the preceding quarter.
The key to ICICI Bank’s vigorous loan expansion has been the retail sector, where retail loans have grown by a striking 19.4 percent year-on-year, forming a substantial 54.9 percent of the total loan portfolio at the end of March 2024. Digital transactions, a significant growth driver, constituted around 71 percent of trade transactions in the financial year 2024.
Alongside loan growth, the bank has also seen a healthy increase in the period-end deposits, which jumped by 19.6 percent year-over-year to Rs 14,12,825 crore ($169.4 billion) as of March 31, 2024.
Overall, ICICI Bank’s financial results for the March quarter illustrate a robust performance, buoyed by strategic growth initiatives, an expansive retail segment, and a focus on asset quality, setting a promising outlook for the bank in the upcoming fiscal period.
