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View Promises →Icicibank Ltd — Q2 FY25
ICICI Bank reported a strong Q2 FY25 with PAT growing 14.5% YoY to INR 117.46 billion, driven by healthy loan growth and controlled operating expenses.
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ICICI Bank reported a strong Q2 FY25 with PAT growing 14.5% YoY to INR 117.46 billion, driven by healthy loan growth and controlled operating expenses. Core operating profit rose 12.1% YoY to INR 160.43 billion. Domestic loan growth was 15.7% YoY, with retail loans up 14.2% and business banking surging 13% YoY. Net interest margin (NIM) moderated to 4.27% from 4.36% QoQ due to higher deposit costs and day-count impact, but management expects NIM stability in H2. Asset quality remained robust with net NPA at 0.42% and contingency provisions of INR 131 billion (1% of loans). Credit costs stayed low at ~0.38% of advances. Management guided for stable margins and moderate OpEx growth. Key risk: potential further normalization of credit costs in unsecured retail portfolios.
ICICI बैंक ने दूसरी तिमाही (Q2 FY25) में शानदार प्रदर्शन किया। कंपनी का मुनाफा (PAT) पिछले साल की तुलना में 14.5% बढ़कर 11,746 करोड़ रुपये हो गया। इसकी वजह अच्छी लोन ग्रोथ और कम खर्च रही। बैंक का मुख्य परिचालन मुनाफा 12.1% बढ़कर 16,043 करोड़ रुपये हुआ। देश में लोन ग्रोथ 15.7% रही, जिसमें रिटेल लोन 14.2% और बिजनेस बैंकिंग 13% बढ़ी। ब्याज कमाई का मार्जिन (NIM) थोड़ा घटकर 4.27% रहा, लेकिन बैंक को उम्मीद है कि आने वाले समय में यह स्थिर रहेगा। बैंक की एसेट क्वालिटी मजबूत है - खराब लोन (NPA) सिर्फ 0.42% है। बैंक ने 13,100 करोड़ रुपये का अतिरिक्त प्रावधान रखा है। क्रेडिट कॉस्ट कम (0.38%) है। मुख्य जोखिम: अनसेक्योर्ड रिटेल लोन में क्रेडिट कॉस्ट बढ़ सकती है।
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Unsecured retail credit cost normalization
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Domestic Loan Growth (YoY)
15.7%
+15.7% YoY
Domestic loan portfolio grew 15.7% year-on-year, driven by retail and business banking segments.
Net NPA Ratio
0.42%
-1bps YoY
Net NPA ratio improved to 0.42% from 0.43% a year ago, reflecting strong asset quality.
CASA Ratio (Average)
~40.8%
-110bps YoY
Average CASA ratio declined due to faster growth in term deposits, impacting NIM.
Credit Card Portfolio Growth (YoY)
27.9%
+27.9% YoY
Credit card portfolio grew 27.9% YoY, though delinquencies have normalized upward.
What Changed vs Last Quarter
NEW
NIM expected to be broadly stable in H2 FY25
Management expects net interest margin to remain stable in the second half of the fiscal year, with potential improvement when rate cuts begin.
NEW
Operating expense growth to be around 8-10% in near term
OpEx growth moderated to 6.6% YoY in Q2; H1 growth was ~8.5%, and H2 may be slightly higher due to festive spends, but broadly in that range.
UPDATED
Personal loan growth to trend down further
Personal loan growth has slowed from 40% YoY to 17% and is expected to decline further over the next couple of quarters due to tighter underwriting.
DROPPED
Credit cost to normalize around 50 bps
Management expects credit cost to gradually normalize around 50 basis points, adjusted for seasonality and one-offs.
DROPPED
OpEx growth to moderate
Operating expense growth is expected to remain around 10-13% YoY, similar to recent quarters.
NEW RISK
Unsecured retail credit cost normalization
Delinquencies in personal loans and credit cards have risen over the past year; further increase could push overall credit costs above the current 40-50 bps range.
NEW RISK
NIM compression from deposit repricing
Cost of deposits rose 4 bps QoQ to 4.88%, and further marginal increases are expected, which could pressure NIM if loan yields do not keep pace.
NEW RISK
Competitive intensity in business banking lending
Business banking is a competitive segment with pressure on yields; growth may come at lower margins, though management focuses on overall customer profitability.
RISK GONE
NIM compression from competitive pricing
Intense competition in corporate and mortgage lending is pressuring yields, while deposit costs remain elevated, potentially compressing NIMs further.
RISK GONE
Normalization of credit costs from lower recoveries
Recoveries from past NPA pools are slowing, which could lead to a gradual increase in credit costs from current low levels.
RISK GONE
Impact of LCR guidelines on deposit and loan growth
Revised LCR guidelines could tighten deposit markets and constrain loan growth, though management is still assessing the impact.
RISK GONE
Seasonal spike in KCC NPAs
Kisan Credit Card portfolio sees higher NPA additions in Q1 and Q3, which could cause volatility in asset quality metrics.
🤫 Topics management stopped discussing
Mentioned in Q1 FY24, Q4 FY24
While competitive intensity has moderated recently, it remains dynamic and could intensify again, pressuring lending yields and growth.
Mentioned in Q1 FY25, Q4 FY24
Management expects credit cost to gradually normalize around 50 basis points, adjusted for seasonality and one-offs.
Mentioned in Q2 FY24, Q3 FY24
Management expects FY24 NIM to be similar to FY23, implying further compression in Q4 but at a lower pace than Q3.
Mentioned in Q1 FY24, Q3 FY24
Analyst raised concerns about rising delinquencies in unsecured loans; management acknowledged trimming higher-risk cohorts but did not quantify impact.
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Guidance and risk preview
Management expects net interest margin to remain stable in the second half of the fiscal year, with potential improvement when rate cuts begin.
Delinquencies in personal loans and credit cards have risen over the past year; further increase could push overall credit costs above the current...
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