ICICI Bank Ltd. on Saturday reported first-quarter standalone net profit rose 78% to ₹4,616 crore, from ₹2,599 crore a year earlier, due to lower provisioning and a rise in interest income. Digital initiatives helped the bank improving its performance, top executives said.
However, the lender witnessed higher slippages from its retail loan book with the absence of any moratorium from the RBI and the second wave severely denting people’s incomes.
Despite the second wave affecting a major part of the quarter, net interest income (NII) rose 18% to ₹10,936 crore, while the net interest margin increased to 3.89% from 3.69% in the corresponding period last year.
Non-interest income, excluding treasury income, grew 56% year-on-year to ₹3,706 crore and fee income grew by 53% to ₹3,219 crore.
During the period it made lower provisions (excluding provision for tax) of ₹2,852 crore compared with ₹7,594 crore in the year-earlier period. In view of the current scenario the bank said it had changed its policy on non-performing loans to make it more conservative from Q1.
“The change in policy resulted in higher provision on non-performing advances amounting to ₹1,127 crore for aligning provisions on outstanding loans to the revised policy,” the bank said in a regulatory filing.
Based on current assessment of its portfolio, the bank wrote back COVID-19 provisions amounting to ₹1,050 crore made in earlier periods and as on June 30 it held COVID-related provisions of ₹6,425 crore.
The bank’s net non-performing assets increased to ₹9,306 crore as on June 30 compared with ₹9,180 crore in the March quarter. The net NPA ratio was 1.16%, compared with 1.14% as on March 31, 2021.
The net addition to gross NPAs during the quarter was ₹3,604 crore, the bank said adding the gross NPA additions were ₹7,231 crore during the quarter.
“The fresh slippages included approximately ₹6,700 crore of retail loans,” executive director Sandeep Batra said on a media conference call. “Out of this ₹961 crore was Krishi Credit Card loans and ₹1,130 crore of jewellery loans,” he noted, adding “we are not worried about the retail book.”
Mr. Batra observed that the second wave-related restrictions had had a significant impact on collections and recoveries.
Despite this, the bank had recoveries of ₹3,627 crore during the quarter. Gross NPAs written off were to the tune of ₹1,589 crore.
The bank said total deposits grew 16% year-on-year to ₹9,26,224 crore and the retail loan portfolio grew by 20% and comprised 61.4% of the total loan portfolio.
Domestic advances grew by 20% and total advances increased by 17% to ₹7,38,598 crore, it said.
Consolidated assets grew by 9% to ₹15,72,772 crore.