Shares of ICICI Bank IBN have seen no significant change on the NYSE following the release of its third-quarter fiscal 2022 (ended Dec 31) results. Net income was INR61.94 billion ($833 million), up 25% from the prior-year quarter.

Results were driven by a rise in net interest income, non-interest income and growth in loans and deposits. Provisions also declined during the quarter. However, higher operating expenses posed a headwind.

Net Interest Income & Fee Income Up, Expenses Rise

Net interest income rose 23% year over year to INR122.36 billion ($1.6 billion). Net interest margin was 3.96%, up 29 basis points (bps).

Non-interest income (excluding treasury income) was INR48.99 billion ($659 million), up 25%.

Fee income increased 19% to INR42.91 billion ($577 million). Fees from retail, business banking and SME customers constituted approximately 76% of total fees in the quarter.

Treasury income was INR0.88 billion ($12 million), down from INR7.66 billion ($103 million) in the year-ago quarter. The prior-year quarter figure included INR3.29 billion ($44 million) of gains from the sale of shares of ICICI Securities.

Operating expenses totaled INR70.75 billion ($951.71 million), increasing 22%.

Loans & Deposits Increase

As of Dec 31, 2021, ICICI Bank’s total advances were INR8,139.92 billion ($109.5 billion), up 16% year over year. The growth was driven by a solid rise in demand for retail loans, which improved 19% and accounted for 61.3% of total loan portfolio.

Total deposits also grew 16% to INR10,174.67 billion ($136.9 billion).

Credit Quality Improves

As of Dec 31, 2021, net non-performing assets (NPA) ratio was 0.85%, down 14 bps sequentially. Recoveries and upgrades (excluding write-offs and sale) from NPAs were INR42.09 billion ($566 million) in the quarter.

Gross NPA deletions were INR1.91 billion ($26 million) against NPA additions of INR0.96 billion ($13 million) in the prior quarter. During the fiscal third quarter, gross NPAs written off were INR40.88 billion ($550 million).

Provisions (excluding provision for tax) decreased 27% from the prior-year quarter to INR20.07 billion ($270 million). As of Dec 31, 2021, ICICI Bank held a Covid-19-related provision of INR64.25 billion ($864 million).

Capital Ratios Strong

In compliance with the Reserve Bank of India's guidelines on Basel III norms, ICICI Bank's total capital adequacy was 19.79% and Tier-1 capital adequacy was 18.81% as of Dec 31, 2021. Both the ratios were well above the minimum requirements.

Our View

ICICI Bank’s quarterly performance was impressive on the back of a robust rise in demand for consumer loans. Growth in net interest income was a major tailwind, which is expected to support the company's financial performance, going forward. However, elevated expenses are likely to adversely impact the bank’s bottom line.

ICICI Bank Limited Price, Consensus and EPS Surprise

ICICI Bank Limited price-consensus-eps-surprise-chart | ICICI Bank Limited Quote

ICICI Bank currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Dates of Other Foreign Banks

Now we look forward to earnings releases of Deutsche Bank DB, HSBC Holdings HSBC and Barclays BCS.

Deutsche Bank is scheduled to announce fourth-quarter and full-year 2021 results on Jan 27. HSBC and Barclays are slated to announce the same on Feb 22 and Feb 23, respectively.

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