ICICI Bank, India’s second-largest private sector bank by market capitalisation, recently announced its Q1FY25 results, revealing robust financial performance across various metrics.
The bank reported a significant rise in net profit and steady growth in net interest income (NII), reflecting its strong operational capabilities and strategic focus.
Lets decode the finanical numbers!
ICICI Bank net profit rises by 14.6%
ICICI Bank’s standalone net profit surged by 14.6% to ₹11,059 crore in the April-June quarter of FY25, up from ₹9,648.2 crore in the same period last year. This impressive growth was primarily driven by robust loan growth, healthy core lending income, and strong treasury operations.
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ICICI Bank net interest income growth
The bank’s NII, which is the difference between interest earned on loans and paid on deposits, rose by 7.4% year-on-year to ₹19,553 crore in Q1FY25, compared to ₹18,226 crore in the year-ago period.
Despite this growth, the net interest margin (NIM) fell to 4.36% from 4.78% a year earlier, reflecting an increased cost of funds.
ICICI Bank key financial metrics
ICICI Bank’s Q1FY25 results also highlighted several key financial metrics that underscore its robust performance and strategic initiatives.
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ICICI Bank asset quality and loan growth
The bank’s asset quality improved, with the gross non-performing assets (NPA) ratio at 2.15% as of June 2024, down from 2.16% at the end of the previous quarter. The net NPA ratio remained stable at 0.43%, compared to 0.42% in the preceding March quarter.
ICICI Bank’s total loans grew by 15.9% year-on-year, driven by strong growth in the retail, rural, and business banking segments. The bank’s domestic loan portfolio expanded to ₹11,88,587 crore, while its advances rose by 15.6% to ₹12.23 lakh crore.
ICICI Bank treasury gains and non-interest income
The bank’s non-interest income grew by 23% to ₹6,389 crore, excluding the performance of treasury operations. Treasury gains alone more than doubled to ₹613 crore, up from ₹252 crore in the year-ago period.
This significant increase in non-interest income highlights the bank’s diversified revenue streams and effective management of treasury operations.
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ICICI Bank provisions and capital adequacy
Provisions for the June quarter rose by 3.1% year-on-year to ₹1,332.2 crore. The bank’s capital adequacy ratio stood at 16.63%, with core tier-I capital at 15.92%, reflecting a strong capital position and prudent risk management practices.
ICICI Bank deposits and branch network
ICICI Bank’s deposits grew by 15% year-on-year to ₹14.26 lakh crore, while the average current account and savings account (CASA) ratio was 39.6% in Q1FY25. The bank added 64 branches during the quarter, expanding its total network to 6,587 branches.
Additionally, the value of the bank’s merchant acquiring transactions through UPI grew by 51.6% year-on-year, underscoring its leadership in digital banking.
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ICICI Bank subsidiary performance and market reaction
The performance of ICICI Bank’s subsidiaries also contributed positively to the overall results. The life insurance arm reported a net profit increase to ₹225 crore from ₹207 crore, the general insurance arm posted a 49% jump in net profit to ₹580 crore, and the asset management company saw its net profit rise to ₹633 crore from ₹474 crore in the year-ago period.
ICICI Bank infusion into home loan finance arm
During the quarter, ICICI Bank infused ₹500 crore into its dedicated home loan finance arm, demonstrating its commitment to expanding its housing finance operations and catering to the growing demand for home loans.
ICICI Bank share price performance and market cap
Following the announcement of the Q1FY25 results, ICICI Bank’s share price gained more than 2% on July 29, 2024, reflecting investor confidence in the bank’s performance. Shares of ICICI Bank were trading at ₹1,239.95 apiece on the BSE, with a market capitalisation of ₹8,50,020.53 crore.
ICICI Bank quarterly performance (Amount in Rs. Cr):
| Quarterly | Jun 2024 | Mar 2024 | Dec 2023 | Sep 2023 | Jun 2023 |
| Interest Earned | 38,995 | 37,948 | 36,694 | 34,920 | 33,327 |
| Other Income | 7,001 | 5,648 | 6,097 | 5,776 | 5,435 |
| Total Income | 45,997 | 43,597 | 42,791 | 40,697 | 38,762 |
| Total Expenditure | 16,024 | 28,558 | 28,068 | 26,467 | 24,623 |
| Operating Profit (incl. Excep Items) | 15,038 | 14,723 | 14,229 | 14,139 | |
| Provisions & Contigencies | 1,332 | 718 | 1,049 | 582 | 1,292 |
| PBT | 14,692 | 14,320 | 13,674 | 13,646 | 12,846 |
| Tax | 3,633 | 3,612 | 3,402 | 3,385 | 3,198 |
| Net Profit | 11,059 | 10,707 | 10,271 | 10,261 | 9,648 |
Analysts’ perspective on ICICI Bank Q1 results
Several brokerage firms have maintained a positive outlook on ICICI Bank, reflecting their confidence in the bank’s consistent performance and growth potential.
Motilal Oswal Financial Services on ICICI Bank Q1FY25 results
Motilal Oswal Financial Services reiterated a ‘Buy’ rating on ICICI Bank shares, with an increased target price of ₹1,400 per share, up from ₹1,350. The brokerage firm highlighted the bank’s substantial investment in technology, which offers some cushion against operating expenses.
Despite a slight reduction in earnings per share (EPS) estimates for FY25 and FY26, Motilal Oswal expects ICICI Bank to sustain a 12% compound annual growth rate (CAGR) in profit after tax over FY24-26.
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Nuvama Institutional Equities on ICICI Bank results
Nuvama Institutional Equities also maintained a ‘Buy’ rating on ICICI Bank stock, with a revised target price of ₹1,430 per share. The firm praised ICICI Bank’s consistent performance in delivering core earnings and granular growth, positioning it as a top performer among its peers.
Antique Stock Broking and Nirmal Bang Institutional Equities on ICICI Bank Q1FY25 results
Antique Stock Broking and Nirmal Bang Institutional Equities echoed similar sentiments, maintaining ‘Buy’ ratings and raising target prices to ₹1,400 and ₹1,450, respectively. Both firms underscored the bank’s strong asset quality, stable NIM, and consistent loan growth as key factors driving their positive outlook.
Morgan Stanley and Macquarie on ICICI Bank results
Global brokerage firms Morgan Stanley and Macquarie also provided favourable ratings, with target prices of ₹1,500 and ₹1,300, respectively. Morgan Stanley highlighted ICICI Bank’s ability to absorb potential margin normalisation, while Macquarie noted the bank’s high fee income and controlled credit costs.
Conclusion
ICICI Bank’s Q1FY25 results demonstrate its resilience and ability to navigate challenging market conditions. With a significant rise in net profit, steady loan growth, and improved asset quality, the bank is well-positioned for sustained growth in the coming quarters.
The positive outlook from analysts and brokerage firms further underscores the bank’s strong fundamentals and growth potential, making it a compelling investment choice for investors.
As ICICI Bank continues to deliver consistent performance and leverage its technological investments, it is poised to maintain its leadership position in the Indian banking sector. Investors and stakeholders can look forward to continued robust performance and value creation from this banking heavyweight.
