Mumbai: ICICI Bank, a leading private lender, has reported a 34% YoY growth in the profit after tax to ₹8,312 crore in Q3 FY23 from ₹6,193 crore in Q3 FY22. In Q3 FY23, the core operating profit increased by 31.6% YoY to ₹13,235 crore, the highest in the previous 15 quarters. Beating the all-time high, the bank has recorded 4.65% Net interest margin (NIM) in this quarter. The Bank reported a 26% YoY jump in net interest income (NII) at ₹16,465 crore in Q3 FY23.
Sandeep Bakhshi, MD & CEO, ICICI Bank, on analyst call, said, “We continue to enhance our digital offerings and platforms to on-board new customers in a seamless manner and provide them end-to-end digital journeys and personalised solutions. These platforms also enable us to do cross sell and up sell.”
Digital initiatives:
ICICI Bank’s mobile banking app, iMobile Pay is a super app that offers payment and banking services to customers of any bank. There have been around 86 lakh activations of iMobile Pay from non-ICICI Bank account holders as of December 31, 2022. The value of transactions by non-ICICI Bank account holders in Q3 FY23 was 2.3 times the value of transactions in Q2 FY23.
The value of financial transactions on InstaBIZ, the bank’s app for business banking, grew by about 29.2% YoY in Q3 FY23. There have been about 2,15,000 registrations from non-ICICI Bank account holders on InstaBIZ till December 31, 2022.
The Bank had a market share of about 31% by value in electronic toll collections through FASTag in Q3 FY23, with a 22.2% YoY growth in collections. On the other hand the value of Bank’s merchant acquiring transactions through UPI grew by 78% YoY and 10.6% sequentially in Q3 FY23.
The Bank has developed more than 20 industry-specific STACKs that provide corporate clients and their ecosystems customised and purpose-based digital solutions. The Bank’s Trade Online and Trade Emerge platforms allow customers to perform most of their trade finance and foreign exchange transactions digitally. In this quarter, almost 71.2% of commercial transactions were conducted digitally while the value of transactions made through these platforms rose by around 59.3% YoY.
The Bank has recently launched a STACK for real estate sector to offer digital and phygital banking solutions on one platform for builders, Real Estate Investment Trusts (REITs) and Alternate Investment Funds (AIFs) covering the entire lifecycle from construction to leasing and selling the property as well as services for their customers, employees and vendors.
Credit Growth:
Overall loan portfolio grew by 20% YoY and 4% sequentially on December 31, 2022. The retail loan portfolio grew by 23.4% YoY which comprised 45% of the total loan portfolio at December 31, 2022. The business banking portfolio grew by 38% YOY while the SME business (comprising borrowers with a turnover of less than ₹250 crore) grew by 25% YoY. The domestic loan portfolio grew by 21.4% YoY while the domestic corporate portfolio grew by 18% YoY. Total advances increased by 19.7% YoY to ₹9,74,047 crore at December 31, 2022.
Talking about the loan growth Sandeep Bakhshi mentioned, “The growth in SME and business banking portfolios was driven by leveraging our branch network and digital offerings such as InstaBIZ and Merchant Stack.”
Asset quality:
ICICI Bank’s asset quality improved further with increased recoveries and upgrades, and decline in NPA additions during the quarter. The net NPA of the Bank improved to 0.55% in Q3 FY23 from 0.61% in the September quarter FY23 and 0.85% in Q3 FY22 while the Gross NPA dropped to 3.07% in Q3 FY23 from 3.19% in the last quarter. The provisioning coverage ratio on NPAs was 82% at December 31, 2022.
The total provisions during the quarter were ₹2,257 crore i.e. 17.1% of core operating profit and about 0.93% of average advances. This includes contingency provisions of ₹1,500 crore made on a prudent basis. Sharing his views on provisions, Sandeep Bakhshi added that “We aim to be proactive in provisioning with a key objective of strengthening our balance sheet. During the quarter, we have changed our provisioning norms on non-performing assets to make them more conservative for corporate, SME and business banking.” The Bank held contingency provisions of ₹11,500 crore or about 1.2% of total loans at December 31, 2022.
“At ICICI Bank, we focus on building a culture where every employee in the Bank serves customers with humility and upholds the values of brand ICICI”, said Sandeep Bakhshi. “We aim to be the trusted financial services provider of choice for our customers and deliver sustainable returns to our shareholders.”