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ICICI Bank (IBN) Q4 Earnings Improve on Higher NII, Costs Rise

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ICICI Bank Ltd’s (IBN - Free Report) net income for the fourth quarter of fiscal 2024 (ended Mar 31) was INR 107.1 billion ($1.3 billion), up 17.4% from the prior-year quarter.

Results were driven by a rise in net interest income (NII), non-interest income and growth in loans and deposits. The company reported lower provisions during the quarter. However, higher operating expenses were an undermining factor.

In fiscal 2024, net income of INR 408.9 billion ($4.9 billion) jumped 28.2% from the prior year.

NII & Fee Income Improve, Expenses Rise

NII grew 8.1% year over year to INR 190.9 billion ($2.3 billion). The net interest margin was 4.40%, down 50 basis points.

Non-interest income (excluding treasury income) was INR 59.30 billion ($711 million), up 15.7% year over year. Fee income increased 12.5% year over year to INR 54.36 billion ($638 million).

In the reported quarter, IBN incurred a treasury loss of INR 2.81 billion ($34 million) compared with a loss of INR 0.4 billion ($5 million) in the prior-year quarter.
Operating expenses totaled INR 97 billion ($1.16 billion), up 8.7% year over year.

Loans & Deposits Increase

As of Mar 31, 2024, ICICI Bank’s total advances were INR 11,844.1 billion ($142 billion), up 16.2% year over year. Growth was primarily driven by a solid rise in retail loan balances, business banking loans and SME loans.

Total deposits grew 19.6% to INR 14,128.3 billion ($169.4 billion).

Credit Quality Improves

As of Mar 31, 2024, the net non-performing assets (NPA) ratio was 0.42%, which declined from 0.48% in the prior-year period. Recoveries and upgrades (excluding write-offs and sales) of NPAs were INR 39.18 billion ($470 million) in the reported quarter.

In the fiscal fourth quarter, there were net additions of INR 12.21 billion ($146 million) to gross NPA. Gross NPA additions were INR 51.39 billion ($616 million), while gross NPA written-off was INR 17.1 billion ($205 million).

Provisions (excluding provision for tax) plunged 55.7% to INR 7.18 billion ($86 million). As of Mar 31, 2024, the bank held a total contingency provision of INR 131 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 16.33%, and Tier-1 capital adequacy was 15.60% as of Mar 31, 2024. 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 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.

Performance of Other Foreign Banks

Deutsche Bank (DB - Free Report) reported a first-quarter 2024 profit attributable to its shareholders of €1.3 billion ($1.41 billion), up 10.1% year over year. The Germany-based lender reported a profit before tax of €2 billion ($2.17 billion), up 10% year over year.

Results were positively impacted by higher net revenues and lower expenses. However, higher provision for credit losses was an offsetting factor.

Barclays (BCS - Free Report) reported first-quarter 2024 net income attributable to ordinary equity holders of £1.55 billion ($1.97 billion), down 13% year over year.

The company recorded lower revenues in the quarter, which was a negative. However, a decline in operating expenses, along with lower credit impairment charges, aided the results to some extent.

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