ICICI Bank continued its stellar performance delivering double-digit growth numbers yet again in Q1FY24. ICICI Bank stock price has gained 21% over the past one year. Net interest income (NII) came in at Rs 1,82,27 crore in June Quarter 2023, a rise of 38% YoY. Net interest margin (NIM) stood at 4.78% in Q1FY24 compared to 4.01% corresponding quarter previous year. NIM rose 77 basis points YoY in June Quarter 2023 and contracted 12 bps sequentially. Speaking on NIM contraction QoQ, Sandeep Bakhshi, Managing Director and CEO, ICICI Bank said, “Sequential movement in NIM reflects the lagged impact of increase in deposit rates over the last year on cost of deposits, offset, in part, by an increase in loan and investment yields.”
Operating expenses came in at Rs 9,523 crore in Q1FY24, up 26% YoY. Operating expenses have been on the rise over the past few quarters. Speaking on increase in operating expenses, Anindya Banerjee, Chief Financial Officer, ICICI Bank said that operating profit has been growing at a higher rate than operating expenses for the bank. He further added “Currently, as we have said in the past, we feel that there is a lot of opportunity for us to grow our franchise and we would continue to invest.” Operating profit (core operating profit less operating expense) for the quarter ended June FY24 rose 35% YoY at Rs 1,38,87 crore. Net Profit for June Quarter 2023 stood at Rs 9,648 crore up 40% YoY. Asset Quality strengthened further with gross and net NPA ratios improving 65 and 22 bps respectively in Q1FY24. Gross NPA and Net NPA ratio came in at 2.76% and 0.48% respectively in June Quarter FY24.
Strong deposit base, CASA Ratio Falls
CASA (current account savings account) ratio stood at 43.3% as on June 30, 2023. CASA ratio fell 360 bps YoY as on June 30. 2023. Low-cost CASA deposits are extremely essential to maintain low cost of funds for the bank. CASA deposits at Rs 5,36,226 crore rose 9% YoY in Q1FY23. Term deposits at Rs 70,25,11 crore increased by 25.8% YoY as on June 30, 2023. Term deposits as a whole for the banking system is on the rise as customers shift their funds from CASA deposits to high interest term deposits or fixed deposits. Both private and public sector banks are competing with each other to expand their deposit base. Strong deposit base leads to higher advances growth and strong NIMs. Total deposits grew 18% YoY and 4.9% sequentially as on June 30, 2023. Total deposits stood at Rs 1,23,8737 crore as on June 30, 2023. The Bank’s liquidity coverage ratio for the quarter was about 124%.
Strong Loan Book Growth In Q1FY24
Loan book rose 18% YoY at Rs 10,57,583 crore as on June 30, 2023. While retail loans (54% of loan book) at Rs 582793 crore grew 22% YoY, corporate loan book (22% of loan book) at Rs 241388 crore jumped 19% YoY as June 30, 2023. ICICI bank has a strong retail loan book with mortgages (secured loans) constituting 61% and unsecured loans (credit cards and personal loans) 23% of retail loan mix as on June 30, 2023. Rural loans, business banking and SME loan book rose 18%, 30% and 28% respectively in Q1FY24.
