Propelled by core income growth, ICICI Bank net profit zooms 44 pc in Apr-Jun

MUMBAI: Healthy growth in the core income led ICICI Bank to report a 44 per cent jump in its consolidated net profit for the April-June quarter of 2023-24 to Rs 10,636 crore compared to the year-ago period.

The second largest private sector lender's standalone net profit increased 39.7 per cent to Rs 9,648 crore. Its total standalone income in the first quarter rose to Rs 38,763 crore from Rs 28,337 crore a year ago, according to an exchange filing on Saturday.

Its core net interest income grew 38 per cent to Rs 18,227 crore on the back of an 18 per cent loan growth and the net interest margin expanding to 4.78 per cent.

ICICI Bank executive director Sandeep Batra said the NIMs have narrowed when compared with the quarter-ago period's 4.9 per cent and will moderate further, but said that the same was not surprising and the bank expects the FY24 NIM to be at similar levels as the 4.5 per cent average achieved in FY23.

The non-interest income grew 12 per cent to Rs 5,183 crore.

The domestic loan growth was led by retail segment, which grew by 21.9 per cent which now accounts for 46 per cent of the overall book. The mortgage book grew 16.6 per cent during the quarter. Batra said the overseas advances decreased by over 29 per cent, which is in sync with the trend of the last two years.

On the asset quality front, gross non-performing assets ratio improved to 2.76 per cent from the previous quarter's 2.81 per cent.

The gross slippages came at Rs 5,318 crore as against Rs 4,297 crore in the previous quarter. A bulk of Rs 5,012 crore of slippages came from the retail side.

Batra said the share of unsecured assets in the overall book stands at 12 per cent, and both the credit card and personal loans portfolio saw handsome growth in the quarter. Over 60 per cent of the unsecured lending borrowers are customers of the bank and the bank is comfortable on the asset quality from this segment.

When asked about the impact of HDFC merging into HDFC Bank, Batra said ICICI Bank is doing reasonably well and will continue on the same.

The bank is ready for adopting the upcoming expected credit loss system for provisioning, Batra said, adding that it has done an internal assessment on the likely impact. It continues to carry over Rs 13,100 crore in provisions made earlier. The bank inaugurated 174 branches during the quarter to take its overall tally to over 6,000, Batra said, adding it has hired 27,650 people in the last year to take its overall employee strength to over 1.35 lakh.

Its overall capital adequacy stood at a comfortable 17.9 per cent as of June 30, 2023 and Batra said there is no need for a fresh equity raise.