ICICI Bank Q2 net profit jumps six-fold to Rs 4,251 cr; asset quality improves, NII rises 16%

ICICI Bank on Saturday posted a six-fold jump in the net profit at Rs 4,251.33 crore in the July-September quarter. The company had reported a net profit of Rs 654.96 crore in the corresponding quarter of the previous year. The total income rose to Rs 23,650.77 crore in the second quarter from Rs 22,759.52 crore in the year-ago period. Its net interest income (the difference between interest earned and interest paid to depositors) increased 16 per cent to Rs 9,366 crore in the quarter under review, from Rs 8,077 crore in the same period last financial year. 

ICICI Bank said that a gradual and calibrated easing of lockdown measures has started from June 2020. Since the easing of lockdown measures, there has been a gradual pickup in economic activity and growth in high-frequency economic indicators is improving. During the first six months of FY21, the loan growth was impacted due to lower credit demand and fee income declined due to lower borrowing and investment activity by customers and lower consumer spends. The slowdown in the economy is expected to result in higher additions to non-performing loans and an increase in provisions. 

The net interest margin came in at 3.57 per cent in the second quarter as compared to 3.69 per cent in the quarter ended June 30, 2020 and 3.64 per cent in the year-ago quarter. “It reflects surplus liquidity with the Bank,” ICICI Bank said.

Asset quality improved with net non-performing asset (NPA) ratio declining to 1 per cent from 1.23 per cent in the April-June quarter. Provision coverage ratio increased to 81.5 per cent at the end of September quarter, from 78.6 per cent in the preceding quarter.

During the second quarter, provisions were at Rs 2,995 crore, as against Rs 2,507 crore in the corresponding quarter of the preceding year. This included provisions of Rs 497 crore made on a prudent basis on loans aggregating to Rs 1,410 crore that were not classified as non-performing pursuant to the Supreme Court’s interim order.

The total deposits increased by 20 per cent on-year to Rs 8.32 lakh crore in the July-September quarter. Average current account deposits increased by 21 per cent on-year in the quarter under review. Average current account and savings account deposits increased 21 per cent and 15 per cent on-year, while the total term deposits increased by 26 per cent on-year. 

The bank has seen an increase in the adoption of the newly launched services and platforms such as video KYC and WhatsApp banking. “In September, the bank introduced new features on the WhatsApp banking platform which enable customers to create fixed deposits, pay their utility bills and access details of trade finance instantly,” ICICI Bank said in a release.