ICICI Bank aims to be the trusted financial services provider of choice, says Executive Director Sandeep Batra

ICICI Bank, a leading private lender, reported a 34% YoY growth in standalone profit to ₹8,312 crore in Q3 FY23 compared to ₹6,193 crore for the same period a year ago. The Net Interest Income (NII) jumped by 35% YoY to ₹16,465 crore in Q3 FY23 against ₹12,236 crore in Q3 FY22. The Bank marked an all-time high in Net Interest Margin (NIM), which stood at 4.65% for the quarter ended December 2022.

The core operating profit, that is, profit before provisions and tax, excluding treasury income, grew by 31.6% YoY to ₹13,235 crore in Q3-2023. This is the highest in the last 15 quarters while the operating efficiency is at a 10 quarter high.

Sandeep Batra, Executive Director of ICICI Bank, said, “At ICICI Bank, we aim to grow the core operating profit in a risk calibrated manner through a 360 degree customer-centric approach and by focusing on ecosystems and micro markets. We continue to operate within our strategic framework and strengthen our franchise, enhance our delivery and servicing capabilities and expand our technology and digital offerings.”

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Loan and Deposit growth

The total loan portfolio grew by 19.7% YoY and 3.8% sequentially. The domestic loan portfolio grew by 21.4% YoY. With a growth rate of 23.4% YoY and 4.5% sequentially, the retail loan portfolio constituted 45% of the total loan portfolio. The rural portfolio grew by 12.5% YoY, business banking portfolio grew by 38% YoY and the SME businesses with turnover of less than ₹250 crore grew by 25% YoY at December 31, 2022. As of December 31, 2022, 73.1% of the overall loan portfolio, excluding retail and rural, was rated A- or above.

At December 31, 2022, total deposits increased by 10.3% YoY to ₹11,22,049 crore, while period-end term deposits increased by 14.2% YoY to ₹6,13,208 crore. The average current account and savings account deposits was 44.6% YoY in Q3 FY23.

Asset Quality

The net NPA of the Bank improved to 0.55% in Q3 FY23 from 0.61% in the September quarter FY23 and 0.85% in Q3 FY22, while the Gross NPA dropped to 3.07% in Q3 FY23 from 3.19% in the last quarter. The provisioning coverage ratio on NPAs was 82% at December 31, 2022.

The total provisions during the quarter were ₹2,257 crore, or about 17.1% of core operating profit and about 0.93% of average advances. This includes contingency provisions of ₹1,500 crore made on a prudent basis. The Bank held contingency provisions of ₹11,500 crore at December 31, 2022.

“During the quarter, we have revised our provisioning norms on non-performing assets to make them more conservative for corporate, SME and business banking. The Bank has made a provision of ₹1,500 crore on a prudent basis. This change resulted in higher provisions amounting to about ₹1,196 crore in Q3 FY23. Looking at the overall macro environment, inflation, interest rates and geopolitical risk across the portfolio we feel that it is better to have a contingency buffer. This is within our overall strategic framework and the objective is to strengthen our balance sheets," he said.

Capital Adequacy

The Bank’s total capital adequacy ratio at December 31, 2022 was 18.33% and Tier-1 capital adequacy was 17.58% compared to the minimum regulatory requirements of 11.70% and 9.70% respectively since the start of FY 2022-23.

“Going forward, we will continue to operate within our strategic framework, while focusing on micro markets and ecosystems. We focus on building a culture where every employee in the Bank serves customers with humility and upholds the values of brand ICICI. We aim to be the trusted financial services provider of choice for our customers and deliver sustainable returns to our shareholders,” he signed off saying.

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