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ICICI Bank has reported a 30% YoY increase in its net profit for Q4 FY23, reaching an all-time high of ₹9,122 crore. The bank’s profit after tax for the full fiscal year of FY23 rose by 37% to ₹31,896 crore.
There was a 19% YoY increase in total advances, reaching ₹10.2-lakh-crore, driven by a 21% growth in domestic loans. Retail loans, which made up 55% of total loans, grew by 23%. Business banking portfolio saw a YoY increase of 35%, while SME loans grew by 19%.
During Q4, there was a 40% increase in net interest income (NII) to ₹17,667 crore. The net interest margin (NIM) for the quarter was 4.90%, compared to 4.00% a year ago and 4.65% in the previous quarter.
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In the earnings call, Executive Director Sandeep Batra revealed that the yield on advances had risen to 9.75% in Q4, up from 9.13% in Q3. Additionally, the cost of deposits increased from 3.65% to 3.98%. For FY23, the yield on advances was 8.94%, while the cost of deposits was 3.66%.
The Executive Director mentioned that as the loan book has a faster repricing than the deposit portfolio, the bank’s net interest margins (NIMs) are probably close to their peak and are likely to have a downward bias throughout FY24. He also stated that almost 50% of the bank’s loan book is linked to the repo rate.
As of March 31, deposits were 11% higher YoY, reaching ₹11.8-lakh-crore. The average CASA ratio for the quarter was 44%.
According to Batra, the bank is content with the growth in deposits, and although the market is competitive and deposit accretion will continue to be a point of emphasis, deposit growth will not hinder the bank’s ability to expand its assets in a cautious manner.
In Q4, ICICI Bank set aside contingency provisions of ₹1,600 crore, which brought the total provisions for the quarter to ₹1,619 crore, a YoY increase of 52%. As of the end of March, total contingency provisions amounted to ₹13,100 crore, with a provision coverage ratio of 83%.
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Batra clarified that the contingency provisions are determined through a quarterly assessment of the macroeconomic climate.
During the quarter, slippages amounted to ₹14 crore, significantly lower than the previous quarter’s ₹1,119 crore. Recoveries and upgrades totaled ₹4,283 crore, while the bank wrote off bad loans amounting to ₹1,158 crore.
The gross non-performing asset (NPA) ratio improved to 2.8%, compared to 3.1% in the previous quarter. Meanwhile, the net NPA ratio improved to 0.5%, compared to 0.6% in the previous quarter and 0.8% a year ago.
