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Informist, Saturday, Apr. 19, 2025

 

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--ICICI Bank: Portfolio stable, don't see signs of stress; to stay vigilant 
--CONTEXT: ICICI Bank mgmt comments in post-earnings media call 
--ICICI Bk: Will monitor unsecured portfolio to identify early stress buildup 
--ICICI Bank: Have been seeing healthy growth in deposits 
--ICICI Bank on retail, wholesale loans: Do not have any product mix target 
--ICICI Bank:Have liquidity, will continue to focus on capital strengthening 
--ICICI Bank:See strong competition in pricing on mortgages, corporate loans 
--ICICI Bank: Would like to grow overall book in risk caliberated manner 
--ICICI Bank: Have no capital raising plans as of now 
--ICICI Bank on US tariff: May impact long-term growth, will remain nimble 
--ICICI Bank: See unsecured portfolio stabilising, happy to up its share 
 

 

NEW DELHI – The current "uncertain global environment" triggered by US President Donald Trump's tariff war may lead to "pressure build-up in the long-term growth" of ICICI Bank Ltd., which has a global presence, its senior management said in post-earnings press conference on Saturday. To combat this risk, "we will continue to prioritise resilience and we will continue to look at customer segments which we believe are strong," top officials of the bank said. "We will continue to remain nimble and focussed." 

 

The overseas loan book of INR 3.08 billion as of March end only comprises of 2.3% share in its total loan book portfolio.

 

The bank's senior officials said that domestic policies continue to give it macroeconomic strength, coupled with the Reserve Bank of India's liquidity injection, the bank is well positioned to improve its operations, without any undue stress. ICICI Bank has "adequate liquidity" and will continue with its focus on capital strengthening and does not have any capital raising plans as of now, the banks senior management told the media. Its Basel-III capital adequacy ratio was 16.55% as of Mar. 31.

 

In the Jan-Mar quarter of 2024-25 (Apr-Mar), growth in income and sequential fall of provisions helped ICICI Bank report a higher-than-expected net profit of INR 126.30 billion, up 18% on year and against analysts' estimate of INR 117.91 billion. On a quarterly basis, the net profit was up 7.1%. For FY25, the lender's net profit was INR 472.27 billion on total income of INR 1.92 trillion. On Thursday, shares of the company had closed 3.7% higher on the National Stock Exchange at INR 1,406.70.

 

For the current financial year, the bank said that without focussing on any particular segment to drive growth, it would like the overall loan book to grow in a risk calibrated manner. The bank's management said that they are focussing on maintaining a healthy asset quality, thereby focussing on customer segments which are well leveraged and stable. In the March quarter, the bank's asset quality improved, with gross non-performing asset ratio declining to 1.67% from 1.96% a quarter ago. Net non-performing assets ratio was 0.39%, down from 0.42% a quarter ago.

 

Within its portfolio mix, while the bank was clear that there is no particular segment which is seeing higher level of bad loans, the top management said that owing to "the nature of business", a chunk of provisioning was kept aside for the credit card business. In its retail portfolio mix, credit cards had an 8% share, amounting to total outstanding loans worth INR 573.41 billion, up nearly 12% on year. In Jan-Mar, provisioning was up almost 24% on year to INR 8.91 billion, but was down 27% sequentially. 

 

ICICI Bank's management was amply clear that a higher provisioning in March quarter does not necessarily mean there were any risks building up. They said that the bank's portfolio mix was stable sans any signs of stress, but they will continue to stay vigilant. "We will monitor unsecured portfolio to identify early stress buildup, if any," they said, adding that as the unsecured portfolio further stabilises, ICICI Bank "would be happy to increase its share in the portfolio mix."

 

At the end of March, the bank's retail loan book made up 52.4% of its entire portfolio, followed by domestic corporates making up 20.4%, closely followed by business banking (comprises borrowers with turnover of up to INR 7.50 billion) at 19.2% and rural loans at 5.7%.

 

The lender's management further said that FY25 saw healthy growth in deposits and that should continue in FY26 as well. They did not give any guidance on the expected growth, but said loan and deposit growth will "happen in tandem". In Jan-Mar, both advances and deposits grew 14% year on year, but sequentially, there was slight divergence. Advances grew 2.2% quarter-on-quarter, whereas deposits grew 5.9%. Within advances, the bank said that pricing of mortgages and corporate loans have strong competition.  End

 

Reported by Priyasmita Dutta and Kshipra Petkar

Edited by Ashish Shirke

 

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