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View Promises →Icicibank Ltd — Q2 FY24
ICICI Bank delivered a strong Q2 FY24 with PAT growing 35.8% YoY to INR 102.61 billion, driven by robust loan growth of 18.3% YoY and stable asset quality.
bullish
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ICICI Bank delivered a strong Q2 FY24 with PAT growing 35.8% YoY to INR 102.61 billion, driven by robust loan growth of 18.3% YoY and stable asset quality. Core operating profit rose 21.7% YoY to INR 143.14 billion, while NIM moderated to 4.53% from 4.78% QoQ due to deposit repricing. Management expects full-year margins similar to FY23. Retail and SME loans grew 21.4% and 29.4% YoY respectively, with unsecured portfolios performing well within risk parameters. The bank added 174 branches in the quarter and continues to invest in technology. Key risk: potential margin compression from continued deposit cost repricing and competitive pricing pressures in loans.
आईसीआईसीआई बैंक ने दूसरी तिमाही में शानदार प्रदर्शन किया। इसका शुद्ध लाभ पिछले साल की तुलना में 35.8% बढ़कर 10,261 करोड़ रुपये हो गया। इसकी मुख्य वजह कर्ज में 18.3% की बढ़ोतरी और कर्ज की गुणवत्ता स्थिर रहना है। बैंक की मुख्य परिचालन आय 21.7% बढ़कर 14,314 करोड़ रुपये हुई। ब्याज दरों में अंतर (NIM) थोड़ा घटकर 4.53% रह गया, क्योंकि जमा पर ब्याज दरें बढ़ी हैं। बैंक को उम्मीद है कि पूरे साल का मार्जिन पिछले साल जैसा ही रहेगा। छोटे और मझोले उद्योगों को दिए गए कर्ज में 21.4% और 29.4% की बढ़ोतरी हुई। बैंक ने 174 नई शाखाएं खोली हैं। मुख्य जोखिम: जमा पर ब्याज दरें बढ़ने और कर्ज पर प्रतिस्पर्धी दबाव से मार्जिन और कम हो सकता है।
Promises0 met · 1 missedRisks4 trackedTranscriptfull text
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Risk Intelligence
Margin compression from deposit repricing
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Read Transcript →Quarter Snapshot
Domestic Loan Growth
19.3%
+19.3% YoY
Domestic loan portfolio grew 19.3% year-over-year and 4.8% sequentially.
Net NPA Ratio
0.43%
-17bps YoY
Net NPA ratio declined to 0.43% from 0.60% a year ago, reflecting improving asset quality.
CASA Growth
7.1%
+7.1% YoY
Average current and savings account deposits grew 7.1% year-over-year.
Fee Income Growth
16.2%
+16.2% YoY
Fee income increased 16.2% year-on-year to INR 52.04 billion, with retail fees contributing 78%.
What Changed vs Last Quarter
NEW
Full-year NIM similar to FY23
Management expects net interest margin for FY24 to be at a similar level as FY23 (4.53%), with some moderation from Q2 levels.
NEW
Continued branch expansion
The bank added 174 branches in Q2 and 350 in H1, with plans to continue expanding based on micro-market opportunities.
NEW
Technology investment at ~9% of opex
Technology expenses were about 9.2% of operating expenses in H1, and the bank will continue investing in technology, people, and distribution.
DROPPED
Cost of deposits to increase for next 2-3 quarters
Management expects cost of deposits to continue rising for the next couple of quarters due to repricing of maturing deposits and incremental growth.
DROPPED
Continue investing in technology, people, and distribution
The bank will maintain investments in technology, employee hiring, and branch expansion to drive franchise growth.
DROPPED
Focus on risk-calibrated profitable growth
Management aims to grow market share across key segments while maintaining prudent provisioning and strong capital levels.
NEW RISK
Margin compression from deposit repricing
NIM declined sequentially due to lagged impact of term deposit rate increases; further moderation expected in coming quarters.
NEW RISK
Unsecured loan stress in industry
Analysts raised concerns about rising delinquencies in small-ticket unsecured loans; management downplayed risk for ICICI due to focus on upper segments.
NEW RISK
Competitive pressure on loan pricing
Management acknowledged intense competition across mortgages, personal loans, and corporate lending, which could pressure yields.
NEW RISK
Regulatory penalty on cross-selling
RBI imposed a fine for non-compliance related to cross-selling of non-financial products in 2020-21; corrective actions taken.
RISK GONE
Unsecured loan growth may attract regulatory action
Rapid growth in personal loans and credit cards (40.6% YoY) could lead to higher NPAs or regulatory risk-weight increases if industry stress emerges.
RISK GONE
NIM compression from rising deposit costs
Cost of deposits is expected to rise for 2-3 quarters, pressuring NIMs further before stabilization.
RISK GONE
Employee cost growth outpacing revenue
Employee expenses grew 36.3% YoY due to hiring and increments; if revenue growth moderates, operating leverage may be delayed.
RISK GONE
Competitive pressure in corporate lending
Pricing pressure in wholesale lending persists, though ICICI Bank focuses on ecosystem-based relationships to maintain returns.
Fast read
Guidance and risk preview
Management expects net interest margin for FY24 to be at a similar level as FY23 (4.53%), with some moderation from Q2 levels.
NIM declined sequentially due to lagged impact of term deposit rate increases; further moderation expected in coming quarters.
View Risks →