What is your quick take on the ICICI Bank quarterly results announced over the weekend?
Answer
Answer
For the Dec-21 quarter, the highlight of ICICI Bank was NIMs sustaining at around 3.96%, which brings its NIM very close to HDFC Bank. That largely explains the valuation gap narrowing and now shifting in favour of ICICI Bank. But, first the numbers.
ICICI Bank Ltd
Rs in Crore
Dec-21
Dec-20
YOY
Sep-21
QOQ
Total Income
₹ 39,866
₹ 40,419
-1.37%
₹ 39,484
0.97%
Operating Profit
₹ 11,152
₹ 10,223
9.08%
₹ 11,125
0.24%
Net Profit
₹ 6,537
₹ 5,498
18.89%
₹ 6,092
7.30%
Diluted EPS
₹ 9.21
₹ 7.84
₹ 8.60
Operating Margins
27.97%
25.29%
28.18%
Net Margins
16.40%
13.60%
15.43%
Gross NPA Ratio
4.13%
4.38%
4.82%
Net NPA Ratio
0.85%
0.63%
0.99%
Return on Assets (Ann)
1.90%
1.70%
1.79%
Capital Adequacy
17.91%
18.04%
18.33%
Let me talk about the top line first. ICICI Bank reported -1.37% yoy fall in total revenues at Rs.39,866 crore for the Dec-21 quarter. There was all-round growth across treasury, wholesale banking and retail banking revenues while operating profits of wholesale banking and retail banking were higher while treasury pencilled lower profits. ICICI Bank saw loan loss provisions in the quarter fall 21% yoy to Rs.2,129 crore.
Operating profits were up 9.1% at Rs.11,152 crore, led by NII up 23% at Rs.12,236 crore while NIMs expanded from 3.67% to 3.96% yoy. However, NIMs were marginally lower on a sequential basis. Domestic loans portfolio grew 18% and CASA (current and savings accounts) deposit component stood at 45%. OPM expanded from 25.29% in Dec-20 to 27.97% in Dec-21 quarter.
Net profits for the Dec-21 quarter was up by 18.9% at Rs.6,537 crore on a consolidated basis. The higher profits can be largely explained by a combination of better interest spreads, higher other income and lower provisioning for doubtful debts. Consequently, PAT margins improved from 13.60% to 16.40%. Gross NPAs at above 4% is still work on progress, although low net NPAs indicate substantial provisions made already.