ICICI Bank’s ( IBN Quick Quote IBN - Free Report) first-quarter fiscal 2023 (ended Jun 30) net income was INR69.05 billion ($874 million), jumping 50% from the prior-year quarter. Results were driven by a rise in net interest income, non-interest income and growth in loans and deposits. Provisions also declined during the quarter. However, higher operating expenses posed a headwind. Net Interest Income & Fee Income Up, Expenses Rise
Net interest income rose 21% year over year to INR132.10 billion ($1.7 billion). Net interest margin was 4.01%, up 12 basis points (bps).
Non-interest income (excluding treasury income) was INR46.29 billion ($586 million), up 25%. Fee income jumped 32% to INR42.43 billion ($537 million). Fees from retail, business banking and SME customers constituted approximately 79% of total fees in the quarter. Treasury income gain was INR0.36 billion ($5 million) in the reported quarter compared with INR2.90 billion ($37 million) in the year-ago quarter. Operating expenses totaled INR75.66 billion ($958 million), rising 25%. Loans & Deposits Increase
As of Jun 30, 2022, ICICI Bank’s total advances were INR8,956.25 billion ($113.4 billion), up 21% year over year. The growth was driven by a solid rise in demand for retail loans, which improved 24% and accounted for 53.1% of the total loan portfolio.
Total deposits grew 13% to INR10,503.49 billion ($133 billion). Credit Quality Improves
As of Jun 30, 2022, net non-performing assets (NPA) ratio was 0.70%, down 46 bps year over year. Recoveries and upgrades (excluding write-offs and sale) of NPAs were INR54.43 billion ($689 million) in the quarter.
Gross NPA deletions were INR3.82 billion ($48 million) compared with INR36.04 billion ($456 million) in the prior-year quarter. During the fiscal first quarter, gross NPAs additions were INR58.25 billion ($738 million), while gross NPA written off was INR11.26 billion ($143 million). Provisions (excluding provision for tax) plunged 60% from the prior-year quarter to INR11.44 billion ($145 million). This included an additional contingency provision of INR10.50 billion ($133 million) made on a prudent basis during the reported quarter. Thus, as of Jun 30, 2022, ICICI Bank held a total contingency provision of INR85 billion ($1.1 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 18.74% and Tier-1 capital adequacy was 17.95% as of Jun 30, 2022. Both the ratios were well above the minimum requirements.
ICICI Bank’s quarterly performance was impressive on a robust rise in demand for consumer loans. Growth in net interest income was a major tailwind, which is expected to support the company's financial performance, going forward. However, elevated expenses are likely to adversely impact the bank’s bottom line.
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 Earnings Dates of Other Foreign Banks
Now we look forward to the earnings releases of
Deutsche Bank ( DB Quick Quote DB - Free Report) , HSBC Holdings ( HSBC Quick Quote HSBC - Free Report) and Barclays ( BCS Quick Quote BCS - Free Report) . Deutsche Bank and Barclays are scheduled to announce second-quarter 2022 results on Jul 27 and Jul 28, respectively. HSBC is slated to report the same on Aug 1.