ICICI Bank Ltd (IBN) Q2 2025 Earnings Call Highlights: Strong Profit Growth Amidst Margin Pressure

In This Article:

  • Profit Before Tax (Excluding Treasury): INR 148.10 billion, up 7.9% year-on-year and 5.2% quarter-on-quarter.

  • Core Operating Profit: INR 160.43 billion, increased by 12.1% year-on-year and 4.1% quarter-on-quarter.

  • Profit After Tax: INR 117.46 billion, grew by 14.5% year-on-year and 6.2% quarter-on-quarter.

  • Total Deposits: Grew by 15.7% year-on-year and 5% sequentially.

  • Domestic Loan Portfolio: Increased by 15.7% year-on-year and 4.6% sequentially.

  • Net NPA Ratio: 0.42% as of September 30, 2024.

  • Provision Coverage Ratio: 78.5% on nonperforming loans.

  • Capital Adequacy Ratio: 16.66% including profits for H1 2025.

  • Net Interest Income: INR 200.48 billion, up 9.5% year-on-year.

  • Net Interest Margin: 4.27% for the quarter.

  • Noninterest Income (Excluding Treasury): INR 64.96 billion, grew by 10.8% year-on-year.

  • Operating Expenses: Increased by 6.6% year-on-year.

  • Branch Count: 6,613 branches as of September 30, 2024.

  • Consolidated Profit After Tax: INR 129.48 billion, up 18.8% year-on-year.

Release Date: October 26, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • ICICI Bank Ltd (NYSE:IBN) reported a 14.5% year-on-year increase in profit after tax, reaching INR 117.46 billion for the quarter.

  • The bank's total deposits grew by 15.7% year-on-year, with term deposits increasing by 15.9% year-on-year.

  • The domestic loan portfolio expanded by 15.7% year-on-year, with significant growth in the business banking portfolio at 30% year-on-year.

  • ICICI Bank Ltd (NYSE:IBN) maintained a strong capital position with a CET1 ratio of 15.96% and a total capital adequacy ratio of 16.66%.

  • The bank's net NPA ratio improved slightly to 0.42% from 0.43% in the previous quarter, indicating better asset quality management.

Negative Points

  • The net interest margin decreased to 4.27% from 4.36% in the previous quarter, reflecting pressure on interest income.

  • The overseas loan portfolio declined by 6.9% year-on-year, indicating challenges in international operations.

  • There was an increase in gross NPA additions from the retail and rural portfolio, highlighting potential stress in these segments.

  • The cost of deposits increased slightly, which could impact future profitability if not managed effectively.

  • Operating expenses grew by 6.6% year-on-year, with employee expenses rising by 11%, potentially affecting cost efficiency.

Q & A Highlights

Q: Your slippages have done well this quarter despite growing unsecured loans. How do you view your book going forward, and what are you doing differently compared to others? A: We have seen an increase in delinquencies in unsecured loans over the last few quarters. We've taken steps to improve underwriting and sourcing, which has helped stabilize slippages. Our unsecured loans are about 14% of the loan book, and we manage credit costs within a 40-50 basis point range. - Anindya Banerjee, Group Chief Financial Officer

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