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ICICI Bank (IBN) Q3 Earnings Improve on Higher NII, Costs Rise
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ICICI Bank’s (IBN - Free Report) net income for the third quarter of fiscal 2024 (ended Dec 31) was INR 102.72 billion ($1.2 billion), up 23.6% 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. The company reported lower provisions during the quarter. However, higher operating expenses were an undermining factor.
NII & Fee Income Improve, Expenses Rise
NII grew 13.4% year over year to INR 186.78 billion ($2.2 billion). The net interest margin was 4.53%, down 22 basis points.
Non-interest income (excluding treasury income) was INR 59.75 billion ($718 million), up 19.8%. Fee income increased 19.4% to INR 53.13 billion ($638 million).
In the reported quarter, IBN incurred a treasury gain of INR 1.23 billion ($15 million) compared with INR 0.36 billion ($4 million) in the prior-year quarter.
Operating expenses totaled INR 100.52 billion ($1.2 billion), up 22.3% year over year.
Loans & Deposits Increase
As of Dec 31, 2023, ICICI Bank’s total advances were INR 11,537.71 billion ($138.7 billion), up 18.5% year over year. Growth was primarily driven by a solid rise in retail loan balances, business banking loans and SME loans.
Total deposits grew 18.7% to INR 13,323.15 billion ($160.1 billion).
Credit Quality Improves
As of Dec 31, 2023, the net non-performing assets (NPA) ratio was 0.44%, which declined from 0.55% in the prior-year period. Recoveries and upgrades (excluding write-offs and sale) of NPAs were INR 53.51 billion ($643 million) in the reported quarter.
In the fiscal third quarter, there were net additions of INR 3.63 billion ($44 million) to gross NPA. Gross NPA additions were INR 57.14 billion ($687 million), while gross NPA written-off was INR13.89 billion ($167 million).
Provisions (excluding provision for tax) plunged 53.5% to INR 10.5 billion ($126 million). As of Dec 31, 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 16.70% and Tier-1 capital adequacy was 16.03% as of Dec 31, 2023. Both ratios were well above the minimum requirements.
Our Take
ICICI Bank’s quarterly performance was impressive, driven by increased consumer loan demand, improved deposit balances, lower provisions and notable growth in NII and non-interest income. These factors are anticipated to continue supporting its financials. However, elevated expenses and macroeconomic uncertainties are major near-term challenges.
ICICI Bank Limited Price, Consensus and EPS Surprise
Barclays (BCS - Free Report) is scheduled to report fourth-quarter and full-year 2023 results on Feb 20.
Over the past seven days, the Zacks Consensus Estimate for BCS’ 2023 earnings has remained unchanged at $1.46 per share, indicating a decline of 4% from the prior-year quarter.
HSBC Holdings (HSBC - Free Report) is slated to announce fourth-quarter and full-year 2023 results on Feb 21.
Over the past seven days, the Zacks Consensus Estimate for HSBC’s 2023 earnings has remained unchanged at $6.49 per share, implying a 21.7% fall from the prior-year reported number.
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ICICI Bank (IBN) Q3 Earnings Improve on Higher NII, Costs Rise
ICICI Bank’s (IBN - Free Report) net income for the third quarter of fiscal 2024 (ended Dec 31) was INR 102.72 billion ($1.2 billion), up 23.6% 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. The company reported lower provisions during the quarter. However, higher operating expenses were an undermining factor.
NII & Fee Income Improve, Expenses Rise
NII grew 13.4% year over year to INR 186.78 billion ($2.2 billion). The net interest margin was 4.53%, down 22 basis points.
Non-interest income (excluding treasury income) was INR 59.75 billion ($718 million), up 19.8%. Fee income increased 19.4% to INR 53.13 billion ($638 million).
In the reported quarter, IBN incurred a treasury gain of INR 1.23 billion ($15 million) compared with INR 0.36 billion ($4 million) in the prior-year quarter.
Operating expenses totaled INR 100.52 billion ($1.2 billion), up 22.3% year over year.
Loans & Deposits Increase
As of Dec 31, 2023, ICICI Bank’s total advances were INR 11,537.71 billion ($138.7 billion), up 18.5% year over year. Growth was primarily driven by a solid rise in retail loan balances, business banking loans and SME loans.
Total deposits grew 18.7% to INR 13,323.15 billion ($160.1 billion).
Credit Quality Improves
As of Dec 31, 2023, the net non-performing assets (NPA) ratio was 0.44%, which declined from 0.55% in the prior-year period. Recoveries and upgrades (excluding write-offs and sale) of NPAs were INR 53.51 billion ($643 million) in the reported quarter.
In the fiscal third quarter, there were net additions of INR 3.63 billion ($44 million) to gross NPA. Gross NPA additions were INR 57.14 billion ($687 million), while gross NPA written-off was INR13.89 billion ($167 million).
Provisions (excluding provision for tax) plunged 53.5% to INR 10.5 billion ($126 million). As of Dec 31, 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 16.70% and Tier-1 capital adequacy was 16.03% as of Dec 31, 2023. Both ratios were well above the minimum requirements.
Our Take
ICICI Bank’s quarterly performance was impressive, driven by increased consumer loan demand, improved deposit balances, lower provisions and notable growth in NII and non-interest income. These factors are anticipated to continue supporting its financials. However, elevated expenses and macroeconomic uncertainties are major near-term challenges.
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 #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Earnings Date of Other Foreign Banks
Barclays (BCS - Free Report) is scheduled to report fourth-quarter and full-year 2023 results on Feb 20.
Over the past seven days, the Zacks Consensus Estimate for BCS’ 2023 earnings has remained unchanged at $1.46 per share, indicating a decline of 4% from the prior-year quarter.
HSBC Holdings (HSBC - Free Report) is slated to announce fourth-quarter and full-year 2023 results on Feb 21.
Over the past seven days, the Zacks Consensus Estimate for HSBC’s 2023 earnings has remained unchanged at $6.49 per share, implying a 21.7% fall from the prior-year reported number.