Shares of ICICI Bank (IBN - Free Report) have gained almost 1% on NYSE since the release of its second-quarter fiscal 2024 (ended Sep 30) results. Net income was INR102.61 billion ($1.2 billion), up 35.8% from the prior-year quarter.
Results were driven by a rise in net interest income (NII), non-interest income, growth in loans and deposits, and higher rates. However, higher operating expenses posed as the undermining factor.
NII & Fee Income Improve, Expenses Rise
NII jumped 23.8% year over year to INR183.08 billion ($2.2 billion). The net interest margin was 4.53%, up 22 basis points.
Non-interest income (excluding treasury income) was INR58.61 billion ($706 million), up 14%. Fee income increased 14.2% to INR52.04 billion ($627 million).
In the reported quarter, IBN incurred a treasury loss of INR0.85 billion ($10 million).
Operating expenses totaled INR98.55 billion ($1.2 billion), rising 20.8% year over year.
Loans & Deposits Increase
As of Sep 30, 2023, ICICI Bank’s total advances were INR11,105.42 billion ($133.7 billion), up 18.3% year over year. Growth was primarily driven by a solid rise in retail loan balances, business banking loans and SME loans.
Total deposits grew 18.8% to INR12,947.42 billion ($155.9 billion).
Credit Quality Decent
As of Sep 30, 2023, net non-performing assets (NPA) ratio was 0.43%, down from 0.61% in the prior-year period. Recoveries and upgrades (excluding write-offs and sale) of NPAs were INR45.71 billion ($550 million) in the quarter.
In the fiscal second quarter, there were net additions of INR1.16 billion ($14 million) to gross NPA. Gross NPA additions were INR46.87 billion ($546 million), while gross NPA written-off was INR19.22 billion ($231 million).
Provisions (excluding provision for tax) decreased 64.5% to INR5.83 billion ($70 million). As of Sep 30, 2023, the bank held a total contingency provision of INR131 billion ($1.6 billion).
Capital Ratios Strong
In compliance with the Reserve Bank of India's guidelines on Basel III norms, ICICI Bank's total capital adequacy was 17.59% and Tier-1 capital adequacy was 16.86% as of Sep 30, 2023. Both ratios were well above the minimum requirements.
Our Take
ICICI Bank’s quarterly performance was impressive on a robust rise in demand for consumer loans. Growth in NII was a major tailwind, which is expected to keep supporting the company's financial performance. However, elevated expenses and macroeconomic concerns are major near-term headwinds.
ICICI Bank currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance & Earnings Date of Other Foreign Banks
Barclays (BCS - Free Report) reported a third-quarter 2023 net income attributable to ordinary equity holders of £1.27 billion ($1.61 billion), down 16% from the prior-year quarter.
BCS recorded an increase in revenues, along with higher credit impairment charges. Operating expenses increased marginally in the quarter under review.
HSBC Holdings plc (HSBC - Free Report) is slated to announce its third-quarter 2023 numbers on Oct 30.
Over the past seven days, the Zacks Consensus Estimate for HSBC’s quarterly earnings has remained unchanged.
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Shares of ICICI Bank (IBN - Free Report) have gained almost 1% on NYSE since the release of its second-quarter fiscal 2024 (ended Sep 30) results. Net income was INR102.61 billion ($1.2 billion), up 35.8% from the prior-year quarter.
Results were driven by a rise in net interest income (NII), non-interest income, growth in loans and deposits, and higher rates. However, higher operating expenses posed as the undermining factor.
NII & Fee Income Improve, Expenses Rise
NII jumped 23.8% year over year to INR183.08 billion ($2.2 billion). The net interest margin was 4.53%, up 22 basis points.
Non-interest income (excluding treasury income) was INR58.61 billion ($706 million), up 14%. Fee income increased 14.2% to INR52.04 billion ($627 million).
In the reported quarter, IBN incurred a treasury loss of INR0.85 billion ($10 million).
Operating expenses totaled INR98.55 billion ($1.2 billion), rising 20.8% year over year.
Loans & Deposits Increase
As of Sep 30, 2023, ICICI Bank’s total advances were INR11,105.42 billion ($133.7 billion), up 18.3% year over year. Growth was primarily driven by a solid rise in retail loan balances, business banking loans and SME loans.
Total deposits grew 18.8% to INR12,947.42 billion ($155.9 billion).
Credit Quality Decent
As of Sep 30, 2023, net non-performing assets (NPA) ratio was 0.43%, down from 0.61% in the prior-year period. Recoveries and upgrades (excluding write-offs and sale) of NPAs were INR45.71 billion ($550 million) in the quarter.
In the fiscal second quarter, there were net additions of INR1.16 billion ($14 million) to gross NPA. Gross NPA additions were INR46.87 billion ($546 million), while gross NPA written-off was INR19.22 billion ($231 million).
Provisions (excluding provision for tax) decreased 64.5% to INR5.83 billion ($70 million). As of Sep 30, 2023, the bank held a total contingency provision of INR131 billion ($1.6 billion).
Capital Ratios Strong
In compliance with the Reserve Bank of India's guidelines on Basel III norms, ICICI Bank's total capital adequacy was 17.59% and Tier-1 capital adequacy was 16.86% as of Sep 30, 2023. Both ratios were well above the minimum requirements.
Our Take
ICICI Bank’s quarterly performance was impressive on a robust rise in demand for consumer loans. Growth in NII was a major tailwind, which is expected to keep supporting the company's financial performance. However, elevated expenses and macroeconomic concerns are major near-term headwinds.
ICICI Bank currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance & Earnings Date of Other Foreign Banks
Barclays (BCS - Free Report) reported a third-quarter 2023 net income attributable to ordinary equity holders of £1.27 billion ($1.61 billion), down 16% from the prior-year quarter.
BCS recorded an increase in revenues, along with higher credit impairment charges. Operating expenses increased marginally in the quarter under review.
HSBC Holdings plc (HSBC - Free Report) is slated to announce its third-quarter 2023 numbers on Oct 30.
Over the past seven days, the Zacks Consensus Estimate for HSBC’s quarterly earnings has remained unchanged.
5 Stocks Set to Double
Each was handpicked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2024. While not all picks can be winners, previous recommendations have soared +143.0%, +175.9%, +498.3% and +673.0%.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
Today, See These 5 Potential Home Runs >>
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