ICICI Bank reported a 26% growth in its net profit on a Year-on-Year basis on Saturday.
ICICI Bank Limited is engaged in providing a range of banking and financial services, including commercial banking, retail banking, project, and corporate finance, working capital finance, insurance, venture capital, and private equity, investment banking, broking, and treasury products and services.
The Bank's business segments are Retail Banking, Wholesale Banking, Treasury, Other Banking, Life insurance, General Insurance, and Others. It has a network of approximately 18,210 branches and automated teller machines (ATMs). The Bank has approximately 110 Touch Banking branches across over 30 cities. Its international banking is focused on providing solutions for the international banking requirements of its Indian corporate clients and leveraging economic corridors between India and the rest of the world. The Bank caters to the financial needs of women entrepreneurs through its Self-Help Group (SHG) program as a part of its Microfinance initiatives.
The share price of ICICI Bank Ltd rose 4% intraday to Rs 351.25 on 8th May 2020. The results were declared on Saturday, May 9, 2020.
The bank's net interest income (NII) rose by 4% sequentially and by 17% YoY to Rs 10,716 crores during Q4FY20. NII for FY20 too rose by 22% YoY to Rs 40,170 crores from Rs 32,804 crores in FY19. The net interest margin (NIM) for Q4FY20 was at 3.87% as compared to 3.77% in Q3FY20 and 3.72% in the same quarter last year. The Non-Interest income for Q4FY20 was Rs 4,013 crores, an increase of 16% on a YoY basis. This is after excluding treasury income. The Fee income in Q4FY20 increased by 13% to Rs 3,598 crores versus Rs 3,178 crores in the same quarter last year. The Retail fess constituted 75% of the total fees in the quarter ended in March 2020.
The Gross non-performing assets (NPAs) saw a fall of 5.53% as compared to 6.70% in the same period in Q4FY19. In absolute terms, the gross NPA figure for the March quarter stands at Rs 41,409 crores as compared to Rs 46,292 crores in Q4FY19, a fall of over 10%. On a sequential basis, the performance of the gross NPA figure has improved by ~5%. The Net NPA of the bank stood at 1.41% as compared to 1.49% in Q3FY20 and 2.06% in Q4FY19. The provision coverage ratio (PCR) has improved to 75.7% as compared to 70.6% in the same period last year. This is after excluding technical write-offs.
The lender has made provisions to the tune of Rs 5,967 crores in the quarter ended on March 31, 2020, as compared to Rs 5,451 crores in Q4FY19. Sequentially, the bank had set aside Rs 2,083 crores in December quarter as provisions. The provisions in the current March quarter include Rs 2,725 crores for COVID-19 related provisions to further strengthen the balance sheet. This provision made by the Bank is more than the requirement as per the Reserve Bank of India’s guideline dated April 17, 2020.
At the end of March 2020, the bank's capital adequacy as per the Reserve Bank of India’s guidelines on Basel III norms, including profits for FY2020, was 16.11% and Tier-1 capital adequacy was 14.72% compared to the minimum regulatory requirements of 11.08% and 9.08% respectively.
The bank has reported an increase in Term deposits by 18% on a YoY basis to Rs 7,70,969 crores. The Average current account deposits increased by 15% and Average savings account deposits increased by 11% on a YoY basis in Q4FY20 while the growth in domestic advances was 13% on a YoY basis. The Total advances increased by 10% to Rs 6,45,290 crores from Rs 5,86,647 crores in Q4FY19.
Overall, the lender's operating profit for the quarter was Rs 7,148 crores, up by 18% from Rs 6,077 crores in Q4FY19. The bank has registered a profit of Rs 1,221 crores an increase of 26% as compared to Rs 969 crores in the previous quarter ended in March 2019.
The Bank is well-capitalized and has a strong deposit franchise. The digital and technology platforms are key strengths of the Bank and the present scenario provides an opportunity to re-engineer the delivery of banking. The Bank is using this period to further strengthen its platforms, its ability to capture market potential, and its delivery capabilities while enhancing efficiency.
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