Sandeep Batra, ICICI Bank: Leveraging digital and technology is a key element of our strategy

ICICI Bank, a leading private lender, has reported a 35.8 per cent growth in net profit at Rs 10,261 crore in the quarter ended September 30, 2023 compared to a year ago period. The bank's core operating profit also saw a 21.7 per cent year-on-year rise to Rs 14,314 crore in the second quarter of FY24. Additionally, the bank reported a decrease in its gross and net NPA ratios, with figures of 2.48 per cent and 0.43 per cent respectively, down from 2.76 per cent and 0.48 per cent in the Q1 FY24.

Commenting on the result, Sandeep Batra, Executive Director, ICICI Bank said, “Leveraging digital and technology across businesses is a key element of our strategy of growing the risk calibrated core operating profit. We continue to see increasing adoption and usage of our digital platforms by our customers.”

As of end-September 2023, ICICI Bank’s mobile banking super app, iMobile Pay, has crossed more than one crore activations by non-ICICI Bank account holders. The app provides a wide range of over 400 payment and banking services that cater to customers from any bank. Simultaneously, in Q2 FY24, more than 53,000 new Bizpay registrations were recorded through InstaBIZ - a platform specifically tailored for all businesses. 

The Bank’s merchant STACK offers retailers, online businesses, and large e-commerce firms an array of banking and value-added services such as digital current account opening, instant overdraft facilities based on point-of-sale transactions, connected banking services, and digital store management, among others. There are more than 20 industry-specific STACKs that provide bespoke and purpose-based digital solutions to corporate clients and their ecosystems.

“During the quarter, ICICI Bank participated in the industry first trade finance transaction using blockchain-powered technology by transforming the time-consuming, paper-intensive cross-border trade to a real-time electronic Bill of Lading in a trusted and secure environment. About 71 per cent of trade transactions were done digitally in Q2 FY24. The volume of transactions done through Trade Online and Trade Emerge platforms has grown by about 30 per cent during the year” he added.

The value of the bank’s merchant-acquiring transactions through UPI grew by 69.5 per cent year-on-year and 13.9 per cent quarter-on-quarter in Q2 FY24. The bank had a market share of about 30 per cent by value in electronic toll collections through FASTag in Q2 FY24, with a 15.4 per cent year-on-year growth in collections in the same quarter. 
 

Credit and Deposit growth:

As of September 30, 2023, there was a 19.3 per cent year-on-year growth in net domestic advances. The retail loan portfolio experienced a year-on-year growth of 21.4 per cent, constituting 54.3 per cent of the total loan portfolio by the end of Q2 FY24. The SME book increased by 29 per cent, and the rural book increased by 17.3 per cent year-on-year. Overall, the bank's total advances grew by 18.3 per cent year-on-year to Rs 11,10,542 crore on September 30, 2023. This growth is best in the previous six quarters.

During the same period, the bank witnessed a growth in its deposits, with total period-end deposits rising by 18.8 per cent year-on-year, reaching Rs 12,94,742 crore. The total term deposits also saw a significant rise of 31.8 per cent year-on-year, amounting to Rs 7,67,112 crore in Q2 FY24. This makes up 59.2 per cent of the total deposits. Average current account deposits increased by 14 per cent year-on-year and average savings account deposits increased by 4.5 per cent year-on-year in Q2 FY24.
 

Asset Quality:

ICICI Bank’s asset quality performed well as indicated by the decline in the gross NPA ratio. The bank’s gross NPA ratio declined to 2.48 per cent at the end of September 2023, from 3.19 per cent in Q2 FY23. Notably, the net NPA ratio improved to 0.43 per cent as of September 30, 2023, from 0.61 per cent in Q2 FY23, showcasing the bank's robust risk management measures. 

The net addition to gross NPAs, excluding write-offs and sale, were Rs 116 crore in Q2 FY24 compared to Rs 1,807 crore in Q1 FY24. The bank has written off gross NPAs amounting to Rs 1,922 crore in Q2 FY24. The provision coverage ratio on NPAs was 82.6 per cent at September 30, 2023.

As of September 30, 2023, the bank has a network of 6,248 branches and, 16,927 ATMs and cash recycling machines. The bank has added 174 branches during the September ended quarter. The bank has hired 4,000 employees in this quarter, taking the overall employee strength to over 1,39,000.

Sandeep Batra said, “We will continue to operate with a strategic framework by focusing on micro markets and ecosystems. The principles of ‘return of capital’, ‘Fair to Customers, Fair to Bank’, and ‘One Bank, One Team, One ROE’ will guide our operations. We focus on building a culture where every employee in the bank serves customers with humility and upholds the values of brand ICICI. We aim to be the trusted financial services provider of choice for our customers and deliver sustainable returns to our shareholders”.

(This is a featured article.)