Detailed narrative
ICICI Bank reported a robust financial performance for Q3 FY25. The profit before tax, excluding treasury, surged by 12.8% year-on-year and 3.2% quarter-on-quarter, reaching ₹152.89 billion. Core operating profit also saw a healthy increase of 13.1% year-on-year and 2.9% quarter-on-quarter, totaling ₹165.16 billion. Excluding dividend income from subsidiaries, the core operating profit grew by 14.7% year-on-year to ₹160.07 billion. The Bank's profit after tax demonstrated strong growth of 14.8% year-on-year, amounting to ₹117.92 billion. Net interest income (NII) for the quarter was ₹203.71 billion, up 9.1% year-on-year, though the net interest margin (NIM) slightly compressed to 4.25% from 4.27% in the previous quarter and 4.43% in Q3 FY24. Non-interest income, excluding treasury, contributed significantly, growing 12.1% year-on-year to ₹66.97 billion, with fee income alone rising 16.3% year-on-year to ₹61.80 billion.
Total deposits expanded by 14.1% year-on-year and 1.5% sequentially as of December 31, 2024. The domestic loan portfolio grew by 15.1% year-on-year and 3.2% sequentially. Retail loans constituted 43.9% of the total portfolio, growing 10.5% year-on-year. Business banking and domestic corporate portfolios showed strong growth of 31.9% and 13.2% year-on-year, respectively. The overall loan portfolio, including international branches, increased by 13.9% year-on-year. The Bank's average liquidity coverage ratio for the quarter stood at a healthy 123%.
Asset quality remained stable, with the net NPA ratio at 0.42% as of December 31, 2024, consistent with the previous quarter and an improvement from 0.44% a year ago. Total provisions during the quarter were ₹12.27 billion, representing 7.4% of core operating profit. The provisioning coverage ratio on non-performing loans was 78.2%. Additionally, the Bank maintained substantial contingency provisions of ₹131.00 billion, or about 1.0% of total loans. Management indicated that overall provisioning costs are expected to remain around 50 basis points, with no dramatic increase foreseen.
ICICI Bank continues to focus on a 360-degree customer-centric approach, leveraging its extensive franchise and digital capabilities. Key technology initiatives include the introduction of DigiEase for streamlined business banking onboarding and ongoing upgrades to iLens, the retail lending platform. The Bank is committed to investments in technology, people, and distribution to enhance operational resilience and customer experience. Management expressed confidence in driving risk-calibrated profitable growth, guided by principles of “Return of Capital,” “Fair to Customer, Fair to Bank,” and “One Bank, One Team.”
During the Q&A, management addressed questions regarding the softer sequential deposit growth, attributing it to funding requirements and a CRR cut. They also clarified that the decline in yields was largely due to the impact of Kisan Credit Card (KCC) interest accrual reversals. While acknowledging some slowdown in retail segments like mortgages and vehicle loans due to market conditions and competition, the Bank remains comfortable with the quality of its business banking portfolio, which is largely secured and granular. The Bank did not provide specific employee headcount numbers, stating it's an annual disclosure.
The consolidated profit after tax grew by 16.6% year-on-year to ₹128.83 billion. Key subsidiaries also reported positive performance. ICICI Life's profit after tax for the quarter was ₹3.26 billion, up from ₹2.27 billion last year. ICICI General reported a profit after tax of ₹7.24 billion, significantly higher than ₹4.31 billion in Q3 last year. ICICI AMC and ICICI Securities also posted increased profits after tax.