Private sector major ICICI Bank on Saturday reported 15 per cent year-on-year (y-o-y) growth in its net profit for Q2FY25 at ₹11,746 crore on the back of strong core income.
The bank’s net interest income (NII)-difference between interest earned and expended — rose 10 per cent y-o-y to ₹20,048 crore. Other income, which includes fees from third party services, dividend from subsidiaries, among others, was up 11 per cent at ₹6,496 crore.
Net interest margin of ICICI Bank, a key indicator of banks’ profitability, moderated 9 basis points sequentially to 4.27 per cent on higher cost of funds.
“Our expectation of near term NIM is that they will broadly be stable until the rate cut cycle starts, where there will obviously be a lag between floating rate loans which reprice much faster than fixed rate deposit base,” said ICICI Bank ED Sandeep Batra during a post earnings conference.
Stable asset quality
Unlike mid-sized private lenders, who reported sharp rise in delinquencies from unsecured credit segment in Q2, ICICI Bank’s asset quality was largely stable.Its gross and net non-performing asset ratio (GNPA, NNPA) reduced to 1.97 per cent and 0.42 per cent in Q2FY5, respectively, from 2.15 per cent and 0.43 per cent a quarter ago. The bank’s unsecured book comprises largely of personal loan and credit cards and forms 14 per cent of overall advances.
Further, the bank’s overall advances rose 15 per cent y-o-y to ₹12.77 lakh crore.Retail loans had 53 per cent share in the overall loans and rose 14 per cent on year, while domestic corporate loans grew 12 per cent y-o-y to ₹2.69 lakh crore. Total deposits of the lender rose 16 per cent y-o-y to ₹14.97 lakh crore. Current account and savings account ratio continued to moderate to 39 per cent in Q2 from 40 per cent in Q1.
“We have been focusing on customer-360, and trying to take the whole bank to the customer…so we will continue with that strategy. And we also look at overall quantum and cost of deposit mobilisation and not necessarily CASA ratio and retail deposit. At this point in time, we are comfortable of meeting our advances requirement from deposit growth…” Credit and deposit growth to grow in tandem,” Batra said.
| Parameter | Q2FY25 (in Rs) | Change in %, y-o-y |
|---|---|---|
| Advances | 12.77 lakh crore | 15 |
| Deposit | 14.97 lakh crore | 16 |
| NII | 20,048 | 10 |
| NIM (in per cent) | 4.27 | -26 basis points |
| Net profit | 11,746 | 15 |
