ICICI Bank Q1 results: From Credit growth to asset quality, 6 key takeaways

ICICI Bank Ltd, the third-biggest Indian lender by assets, today reported a loss of Rs 119.5 crore on standalone basis for the June quarter, due to rise in bad loans. The bank's net profit in the year-ago period stood at Rs 2,049 crore. Total income was Rs 18,574.17 crore as against Rs 16,847.04 crore in April-June, 2017-18, the bank said in a statement.
 
There was a deterioration in bank's asset quality, with gross non-performing assets (NPAs) or bad loans widening to 8.81 per cent of the gross advances as on June 30, 2018, compared to 7.99 per cent by June last year. Meanwhile, there was a significant jump in provisioning and contingencies at Rs 5,971.29 crore for the said quarter as against Rs 2,608.74 crore earlier. Here are key takeaways of ICICI Bank Q1 results for FY 19: 
 
1. Credit growth
The year-on-year growth in domestic advances was 15% at June 30, 2018. The Bank has continued to leverage its strong retail franchise, resulting in a year-on-year growth of 20% in the retail portfolio at June 30, 2018. The retail portfolio constituted about 58% of the loan portfolio of the Bank at June 30, 2018. Total advances increased by 11% year-on-year to Rs 516,289 crore (US$ 75.4 billion) at June 30, 2018 from Rs 464,075 crore (US$ 67.8 billion) at June 30, 2017. 
 
2. Deposit growth
CASA deposits increased by 16% year-on-year to Rs 276,294 crore (US$ 40.4 billion) at June 30, 2018. The Bank’s CASA ratio was 50.5% at June 30, 2018 compared to 51.7% at March 31, 2018 and 49.0% at June 30, 2017. The average CASA ratio increased to 46.1% in Q1-2019 from 45.9% in the quarter ended March 31, 2018 (Q4-2018). Total deposits increased by 12% year-on-year to Rs 546,878 crore (US$ 79.9 billion) at June 30, 2018. The Bank had a network of 4,867 branches and 14,394 ATMs at June 30, 2018.
 
3. Capital adequacy
The Bank’s total capital adequacy at June 30, 2018 as per Reserve Bank of India’s guidelines on Basel III norms was 18.35% and Tier-1 capital adequacy was 15.84% compared to the regulatory requirements of 11.03% and 9.03% respectively.
 
4. Asset quality
The gross additions to NPA were Rs 4,036 crore (US$ 589 million) in Q1-2019. Recoveries and upgrades from non-performing loans were Rs2,036 crore (US$ 297 million) in Q1-2019. The provision coverage ratio on nonperforming loans, including cumulative technical/prudential write-offs increased by 560 bps sequentially to 66.1% at June 30, 2018, further strengthening the balance sheet. The net NPA ratio decreased from 4.77% at March 31, 2018 to 4.19% at June 30, 2018. Net loans to companies whose facilities have been restructured were Rs 1,413 crore (US$ 206 million) at June 30, 2018 compared to Rs 1,553 crore (US$ 227 million) at March 31, 2018. Net NPAs and net restructured loans as proportion of net customer assets decreased from 5.03% at March 31, 2018 to 4.43% at June 30, 2018.
 
5. Digital transactions
In Q1-2019, value of debit card transactions and credit card transactions increased by 18% y-o-y and 35% y-o-y respectively. About 16 million Unified Payment Interface (UPI) Virtual Payment Addresses have been created using the Bank’s and partners’ platforms till June 30, 2018. Digital channels like internet, mobile banking, POS and others accounted for about 85% of the savings account transactions in Q1-2019 compared to 82% in FY2018 driven by growth in mobile banking transactions.
 
6. Consolidated results
Consolidated profit after tax was Rs5 crore (US$ 1 million) in Q1-2019 compared to Rs2,605 crore (US$ 380 million) in Q1-2018. Consolidated assets grew by 12% from Rs 984,702 crore (US$ 143.8 billion) at June 30, 2017 to Rs1,098,790 crore (US$ 160.5 billion) at June 30, 2018.