Highlights of ICICI Bank Q1FY20 Result: From credit growth to asset quality - Here's how the private lender performed

Highlights of ICICI Bank Q1FY20 Result: In Q1FY20, ICICI Bank has registered a profit after tax (PAT) of Rs 1,908 crore (US$ 276 million), compared to a loss of Rs 120 crore (US$ 17 million) in Q1FY19. Meanwhile, the private lender's Net Interest Income (NII) increased by 27% year-on-year to Rs 7,737 crore (US$ 1.1 billion) in Q1FY20 from Rs 6,102 crore (US$ 884 million) in Q1FY19. The bank's net interest margin (NIM) was around  3.61% in Q1FY20 compared to 3.19% in Q1FY19 and 3.72% in Q4FY19. 

Major good news for the private lender in this result was that both provisions and gross NPA are decelerating and resulting in better earnings. In fact, net NPA ratio has decreased from 4.19% at June 30, 2018 to 1.77% at June 30, 2019 - the lowest in the last 14 quarters.
Here are highlights of  ICICI Bank’s Q1FY20 result:

Credit growth:

Year-on-year growth in domestic advances was 18% at June 30, 2019. The Bank has continued to leverage its strong retail franchise, resulting in a 22% year-on-year growth in the retail loan portfolio at June 30, 2019. 

Excluding non-performing and restructured loans, the growth in domestic corporate loans was about 13% year-on-year. Total advances increased by 15% year-on-year to Rs 592,415 crore (US$ 85.8 billion) at June 30, 2019 from Rs  516,289 crore (US$ 74.8 billion) at June 30, 2018. 

Deposit growth: 

Total deposits increased by 21% year-on-year to Rs 660,732 crore (US$ 95.7 billion) at June 30, 2019. Average CASA deposits increased by 12.3% year-on-year in Q1-2020. The period-end CASA ratio was 45.2% at June 30, 2019 compared to 49.6% at March 31, 2019 and 50.5% at June 30, 2018. 

The average CASA ratio was 43.4% in Q1-2020 compared to 44.6% in Q4-2019 and 46.1% in Q1-2019. Term deposits increased by 34% year-on-year to Rs 361,855 crore (US$ 52.4 billion) at June 30, 2019. 

The Bank had a network of 4,882 branches and 15,101 ATMs at June 30, 2019. 

Digital initiatives:

The Bank launched a new digital platform, ‘Instabiz’, designed specially for MSMEs and self-employed customers, to enable them to undertake their business banking transactions digitally. It allows customers to avail over 115 products and services in a digital and secure manner on their mobile phone or through internet banking. 

These include instant overdraft facility (upto Rs 1.5 million), business loans, easy bulk collection & payments of funds through multiple digital modes, automatic bank reconciliation and export-import transactions like inward and outward remittances, among others. Further, it is the first digital banking platform to enable single click payment of Goods & Services Tax (GST).

During the quarter, the Bank’s iMobile app was named the top mobile banking app in India in a report published by Forrester. 

Asset quality:

Net NPA decreased by 51% from Rs 24,170 crore (US$ 3.5 billion) at June 30, 2018 to Rs 11,857 crore (US$ 1.7 billion) at June 30, 2019. The net NPA ratio decreased from 4.19% at June 30, 2018 to 1.77% at June 30, 2019. The provision coverage on non-performing loans, excluding cumulative technical write-offs, increased from 54.1% at June 30, 2018 to 74.0% at June 30, 2019.

Further, the provision coverage ratio on non-performing loans, including cumulative technical write-offs, was 83.4% at June 30, 2019 compared to 66.1% at June 30, 2018. 

Meanwhile, gross additions to NPA were Rs  2,779 crore (US$ 403 million) in Q1-2020 compared to Rs 4,036 crore (US$ 585 million) in Q1-2019 and Rs  3,547 crore (US$ 514 million) in Q4-2019. Recoveries and upgrades of non-performing loans were Rs  931 crore (US$ 135 million) in Q1-2020. 

Capital adequacy:

The Bank’s total capital adequacy at June 30, 2019 as per Reserve Bank of India’s guidelines on Basel III norms, including profits for the quarter, was 16.19% and Tier-1 capital adequacy was 14.60% compared to the minimum regulatory requirements of 11.08% and 9.08% respectively.

Consolidated results:

Consolidated profit after tax was Rs 2,514 crore (US$ 364 million) in Q1-2020 compared to  Rs 1,170 crore crore (US$ 170 million) in Q4-2019 and Rs 5 crore (US$ 1 million) in Q1-2019.

Consolidated assets grew by 14% year-on-year to Rs 1,250,472 crore (US$ 181.2 billion) at June 30, 2019 from RS 1,098,790 crore (US$ 159.2 billion) at June 30, 2018.