Sandeep Bakhshi, ICICI Bank: Our Digital Offerings and Efforts towards Process Decongestion Have Played an Important Role in the Growth of Our Deposit Franchise

Sandeep Bakhshi, MD & CEO, ICICI Bank said on analyst call, “The bank will continue adopting a risk-calibrated framework amidst the second wave of Covid-19 in the country. We will continue to focus on delivering consistent and predictable returns to our shareholders.”

'Sandeep Bakhshi, ICICI Bank CEO'

ICICI Bank, India’s second largest private lender, reported a sharp rise of 2.6 times in net profit at Rs. 44.03 billion for the quarter ended March 31, 2021 as compared to Rs. 12.21 billion for the same period last year.

Sandeep Bakhshi, MD & CEO, ICICI Bank said on analyst call, “The bank will continue adopting a risk-calibrated framework amidst the second wave of Covid-19 in the country. We will continue to focus on delivering consistent and predictable returns to our shareholders.”

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Significant Growth in Deposits

During the quarter, average current account deposits increased by 33.9% year-on-year and average savings account deposits by 21.2% year-on-year. The average current and savings account (CASA) deposits have grown by 19% with the average CASA ratio at 41.8% in Q3-2021.

“Our cost of deposits continues to be among the lowest in the system. We have focused on tapping into various ecosystems like payments, merchants and corporate ecosystems including the employees, start-ups, dealers and vendors” said Sandeep Bakhshi. He added, “Our digital offerings and platforms and efforts towards process decongestion have played an important role in the growth of our deposit franchise.”

Massive Growth in Loan Portfolio

The overall, domestic loan portfolio increased by 18% y-o-y, strongly outperforming the overall banking sector's growth of 5.6%.

Mortgage disbursements continued to increase this quarter over the previous quarter driven by the efforts to offer a convenient and frictionless experience to customers by digitising the entire underwriting process, with instant loan approvals.

Disbursements of commercial vehicles and equipment loans also increased further in Q4 over Q3. Credit card spends increased substantially in Q4 of 2021 over the previous quarter driven by spends across electronics, wellness and jewellery categories. The growth in the rural portfolio was driven by jewel loans.

The growth of the performing domestic corporate portfolio was 13.2% year-on-year and 4.7% sequentially.

Growth in Core-operating Profit

The core operating profit increased by 19.8% year-on-year to Rs. 85.65 billion in Q4 FY2021. This is after an estimated impact of Rs.1.75 billion of the required refund of interest on interest and related amounts charged during the moratorium period, which has been reduced from the interest income.

“Our aim is to achieve risk-calibrated growth in core operating profit through a 360-degree customer centric approach, tapping opportunities across ecosystems, leveraging internal synergies, building partnerships and decongesting processes,” according to Mr. Sandeep Bakhshi.

In line with applicable guidelines, the Board has recommended a dividend of 2 Rupees per share for FY2021 subject to requisite approvals.

Leveraging Digital Technology

Digital channels like internet, mobile banking, PoS and others accounted for over 90% of the savings account transactions in FY2021. The volume of mobile banking transactions increased by 61% year-on-year in Q4-2021.

“Our micro-market strategy to tap opportunities based on the market potential and 360-degree customer coverage using ICICI STACK have played a significant role in expanding our franchise and deepening relationships with our customers,” Mr. Sandeep Bakhshi added.

iMobile Pay which offers payment and banking services to customers of any bank have seen over 1.5 million activations of iMobile Pay from non-ICICI Bank customers within four months of its launch.

Protecting the Balance Sheet from Potential Risks

The bank’s net non-performing asset (NPA) ratio declined to 1.14% at March 31, 2021 from 1.26% (on a proforma basis) at December 31, 2020 and 1.41% at March 31, 2020. The provisioning coverage on NPAs continued to be robust at 77.7% as of March 31, 2021.

Further, the Bank has made additional Covid-19 related provision of Rs. 10.00 billion, and thus at March 31, 2021, the outstanding Covid-19 related provisions were Rs. 74.75 billion.

“Looking ahead, ICICI Bank is well-positioned with best-in-class growth rates and the protection from Covid-19 provisions buffer. We will calibrate our growth in the near term based on the operating environment and conditions resulting from the second wave of the Covid-19 pandemic,” Sandeep Bakhshi said.

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