ICICI Bank Q1 FY25 Results: NIMs Decline Marginally, NII Rises 7%

The Industrial Credit and Investment Corporation of India (ICICI) Bank is India’s second-largest private sector bank and an Indian multinational bank and financial services company headquartered in Mumbai with a registered office in Vadodara. It offers a wide range of banking and financial services for corporate and retail customers through various delivery channels and specialized subsidiaries in the areas of investment banking, life and non-life insurance, venture capital, and asset management. ICICI Bank has a strong presence both in India and internationally, with branches and offices in countries such as the United States, the United Kingdom, Singapore, Hong Kong, Qatar, Oman, and South Africa. The bank has been at the forefront of innovation in the banking sector, introducing new technologies and digital solutions to enhance the customer experience and streamline operations. ICICI Bank has a network of 6,000 branches and 17,000 ATMs across India, and it is currently present in 17 countries.

ICICI Bank Q1 FY25 result:

The retail loan portfolio increased by 17.1% year-on-year and 2.4% sequentially, comprising 54.4% of the total loan portfolio as of June 30, 2024.  ICICI Bank’s gross non-performing assets (NPA) decreased marginally to 2.15% at Rs. 28,718.6 crore at the end of Q1 FY25. This compares to 2.16% at Rs. 27,961.7 crore in the preceding quarter. 

The net non-performing assets (NPA) also increased slightly on a sequential basis to 0.43% at Rs. 5,684.8 crore from 0.42% at Rs. 5,377.8 crore in the quarter ended March 2024.  ICICI Bank’s deposits grew 15% year-on-year and 0.9% quarter-on-quarter to Rs. 14.26 lakh crore. Its advances stood at Rs. 12.23 lakh crore at the end of the quarter under review, up 15.66% YoY and 3.27% QoQ. The private lender saw its operating profit at Rs. 16,024.8 crore, up 13.3% YoY and 6.6% quarter-on-quarter (QoQ). 

Provisions saw a significant increase of 85.4% sequentially and 3.1% year-on-year (YoY) to Rs. 1,332.2 crore. The slippages amounted to Rs. 5,916 crore compared to Rs. 5,139 crore, reflecting a 15.1% increase.  ICICI Bank reported the Q1 FY25 results on July 27, 2024. Fresh slippages are emerging from the Kisan Credit Card (KCC) accounts, as per the bank management. They mentioned that their credit costs are well contained and below normal levels. Additionally, recoveries and upgrades of NPAs, excluding write-offs and sales, amounted to Rs 3,292 crore in Q1 FY25, down from Rs 3,918 crore in Q4 FY24.

The net interest margin (NIM) declined marginally to 4.36%, compared to 4.40% in the March 2024 ended quarter and 4.78% in the corresponding June 2023 ended quarter. ICICI Bank’s net interest income (NII) increased by 7.3% year-on-year (YoY) to Rs. 19,552.9 crore for the first quarter of FY25. The lender’s net profit for the quarter under review was 14.6% higher year-on-year (YoY) and came in at Rs. 11,059.1 crore. ICICI Bank’s net domestic advances expanded by 15.9% year-on-year (YoY) and 3.3% sequentially. 

LCR Concern:

Sandeep Batra, Executive Director at ICICI Bank, stated that, according to the RBI’s guidelines for liquidity coverage ratio (LCR), this primarily arises from the potential for deposit outflows in a digital banking setting. It will affect deposit costs, loan expansion, lending rates, and investment returns as well.

ICICI Bank stock price:

As anticipated, the stock is experiencing an upward trend following the positive Q1 FY25 results and is presently trading at Rs. 1,228.75 per share, reflecting a 2% increase, with its highest traded price at Rs. 1,240.35 per share.

Conclusion: India’s second-largest private sector bank is moving slowly but steadily to enhance banking facilities for customers, aiming to meet all their 360 needs comprehensively.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.