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ICICI Bank (IBN) Q4 Earnings Rise on Higher Loan Demand
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ICICI Bank (IBN - Free Report) released fourth-quarter fiscal 2023 (ended Mar 31) results. Net income was INR91.22 billion ($1.1 billion), up 30% from the prior-year quarter.
Results were driven by a rise in net interest income (NII) and non-interest income, higher rates, and growth in loans and deposits. However, provisions increased in the quarter. Also, higher operating expenses posed as the undermining factor.
NII & Fee Income Improve, Expenses Rise
NII jumped 40.2% year over year to INR176.67 billion ($2.2 billion). The net interest margin was 4.90%, up 90 basis points (bps).
Non-interest income (excluding treasury income) was INR51.27 billion ($624 million), up 11.3%. Fee income increased 10.6% to INR48.30 billion ($588 million).
In the reported quarter, IBN incurred a treasury loss of INR0.4 billion ($5 million) against a treasury income of INR1.29 billion ($16 million) in the year-ago quarter.
Operating expenses totaled INR89.28 billion ($1.1 billion), jumping 26.7% year over year.
Loans & Deposits Increase
As of Mar 31, 2023, ICICI Bank’s total advances were INR10,196.38 billion ($124.1 billion), up 18.7% year over year. Growth was primarily driven by a solid rise in retail loan balances, business banking loans and SME loans.
Total deposits grew 10.9% to INR11,808.41 billion ($143.7 billion).
Credit Quality: Mixed Bag
As of Mar 31, 2023, the net non-performing assets (NPA) ratio was 0.48%, down from 0.76% in the prior-year period. Recoveries and upgrades (excluding write-offs and sale) of NPAs were INR42.83 billion ($560 million) in the quarter.
In the fiscal fourth quarter, there were net additions of INR14 billion ($1.7 million) to gross NPA. Gross NPA additions were INR42.97 billion ($523 million), while gross NPA written-off was INR11.58 billion ($141 million).
Provisions (excluding provision for tax) surged 51.5% to INR16.19 billion ($197 million). This included an additional contingency provision of INR16.00 billion ($195 million) made on a prudent basis.
Capital Ratios Strong
In compliance with the Reserve Bank of India's guidelines on Basel III norms, ICICI Bank's total capital adequacy was 18.34% and Tier-1 capital adequacy was 17.60% as of Mar 31, 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 Limited Price, Consensus and EPS Surprise
Deutsche Bank (DB - Free Report) is scheduled to announce first-quarter 2023 numbers on Apr 27.
Over the past 30 days, the Zacks Consensus Estimate for Deutsche Bank’s quarterly earnings has remained unchanged at 55 cents, suggesting an 11.9% fall from the prior-year reported number.
HSBC Holdings (HSBC - Free Report) is slated to announce first-quarter 2023 numbers on May 2.
Over the past week, the Zacks Consensus Estimate for HSBC’s quarterly earnings has remained unchanged at $1.30, implying an 85.7% jump from the prior-year reported number.
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ICICI Bank (IBN) Q4 Earnings Rise on Higher Loan Demand
ICICI Bank (IBN - Free Report) released fourth-quarter fiscal 2023 (ended Mar 31) results. Net income was INR91.22 billion ($1.1 billion), up 30% from the prior-year quarter.
Results were driven by a rise in net interest income (NII) and non-interest income, higher rates, and growth in loans and deposits. However, provisions increased in the quarter. Also, higher operating expenses posed as the undermining factor.
NII & Fee Income Improve, Expenses Rise
NII jumped 40.2% year over year to INR176.67 billion ($2.2 billion). The net interest margin was 4.90%, up 90 basis points (bps).
Non-interest income (excluding treasury income) was INR51.27 billion ($624 million), up 11.3%. Fee income increased 10.6% to INR48.30 billion ($588 million).
In the reported quarter, IBN incurred a treasury loss of INR0.4 billion ($5 million) against a treasury income of INR1.29 billion ($16 million) in the year-ago quarter.
Operating expenses totaled INR89.28 billion ($1.1 billion), jumping 26.7% year over year.
Loans & Deposits Increase
As of Mar 31, 2023, ICICI Bank’s total advances were INR10,196.38 billion ($124.1 billion), up 18.7% year over year. Growth was primarily driven by a solid rise in retail loan balances, business banking loans and SME loans.
Total deposits grew 10.9% to INR11,808.41 billion ($143.7 billion).
Credit Quality: Mixed Bag
As of Mar 31, 2023, the net non-performing assets (NPA) ratio was 0.48%, down from 0.76% in the prior-year period. Recoveries and upgrades (excluding write-offs and sale) of NPAs were INR42.83 billion ($560 million) in the quarter.
In the fiscal fourth quarter, there were net additions of INR14 billion ($1.7 million) to gross NPA. Gross NPA additions were INR42.97 billion ($523 million), while gross NPA written-off was INR11.58 billion ($141 million).
Provisions (excluding provision for tax) surged 51.5% to INR16.19 billion ($197 million). This included an additional contingency provision of INR16.00 billion ($195 million) made on a prudent basis.
Capital Ratios Strong
In compliance with the Reserve Bank of India's guidelines on Basel III norms, ICICI Bank's total capital adequacy was 18.34% and Tier-1 capital adequacy was 17.60% as of Mar 31, 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 Limited Price, Consensus and EPS Surprise
ICICI Bank Limited price-consensus-eps-surprise-chart | ICICI Bank Limited Quote
ICICI Bank currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Release Dates of Other Foreign Banks
Deutsche Bank (DB - Free Report) is scheduled to announce first-quarter 2023 numbers on Apr 27.
Over the past 30 days, the Zacks Consensus Estimate for Deutsche Bank’s quarterly earnings has remained unchanged at 55 cents, suggesting an 11.9% fall from the prior-year reported number.
HSBC Holdings (HSBC - Free Report) is slated to announce first-quarter 2023 numbers on May 2.
Over the past week, the Zacks Consensus Estimate for HSBC’s quarterly earnings has remained unchanged at $1.30, implying an 85.7% jump from the prior-year reported number.