ICICI Bank has announced a significant increase in its fourth-quarter profits, surpassing analysts’ expectations, thanks to strong loan growth and a notable decrease in provisions for bad loans. For the quarter ending March 31, the bank reported a standalone net profit of 137.02 billion Indian rupees (approximately $1.48 billion), up from 126.30 billion rupees the same time last year. Analysts had projected a profit of 126.52 billion rupees, highlighting the bank’s impressive performance.
Sandeep Batra, the executive director of ICICI Bank, attributed the rise in profits to a combination of factors including reduced provisions for bad loans, recoveries from previously written-off accounts, and growth in core interest income. However, he refrained from providing future profit forecasts, citing concerns over ongoing geopolitical uncertainties.
The Indian banking sector has witnessed a surge in credit demand in the latter half of the financial year, driven by easing inflation, which has bolstered consumer spending. There has also been a revival in corporate borrowing, contributing to improved loan performance across the sector. ICICI Bank’s total loan portfolio increased by 15.8% year-on-year, with particularly strong growth in retail lending segments, such as mortgages and vehicle loans. Additionally, business banking and corporate loans played a crucial role in this expansion.
Deposits for the quarter rose by 11.4%, reinforcing the bank’s solid financial position. The bank’s net interest income, which measures the difference between interest earned on loans and the interest paid on deposits, increased by 8.4% to reach 229.8 billion rupees, buoyed by loan growth and stable margins. Batra noted that the net interest margin remained steady at 4.32% and is expected to stay “range-bound” through the 2026-27 financial year.
On the asset quality front, the bank reported a decrease in gross non-performing assets (NPAs), which fell to 1.4% of total loans. Provisions for bad loans saw an impressive 89% drop to 9.6 billion rupees, benefitting from enhanced recoveries and a decline in new defaults.
Furthermore, ICICI Bank recorded a treasury loss of 1.06 billion rupees, a slight improvement from the 1.57 billion rupees loss experienced in the previous quarter. This trend reflects the challenges posed by rising bond yields and restrictions imposed by the Indian central bank on foreign exchange positions, impacting financial institutions across the country.
Overall, ICICI Bank’s robust performance in the fourth quarter underscores its resilience in a competitive banking environment, even as it navigates external uncertainties.
