• Profit Before Tax (Excluding Treasury): INR152.89 billion, up 12.8% year on year.
• Core Operating Profit: INR165.16 billion, up 13.1% year on year.
• Profit After Tax: INR117.92 billion, up 14.8% year on year.
• Total Deposits: Grew by 14.1% year on year.
• Domestic Loan Portfolio Growth: 18.1% year on year.
• Net NPA Ratio: 0.42% as of December 31, 2024.
• Provisioning Coverage Ratio: 78.2% on non-performing loans.
• Net Interest Income: INR203.71 billion, up 9.1% year on year.
• Net Interest Margin: 4.25% for the quarter.
• Non-Interest Income (Excluding Treasury): INR66.97 billion, up 12.1% year on year.
• Operating Expenses: Increased by 5% year on year.
• Branch Count: 6,742 branches as of December 31, 2024.
• Consolidated Profit After Tax: INR128.83 billion, up 16.6% year on year.

• Warning! GuruFocus has detected 2 Warning Signs with IBN.

Release Date: January 25, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• ICICI Bank Ltd (NYSE:IBN) reported a 14.8% year-on-year increase in profit after tax, reaching INR117.92 billion for Q3 FY25.
• The bank's domestic loan portfolio grew by 18.1% year over year, indicating strong lending activity.
• The provisioning coverage ratio on nonperforming loans was maintained at a robust 78.2%, reflecting strong risk management practices.
• ICICI Bank Ltd (NYSE:IBN) maintained a strong capital position with a CET1 ratio of 15.93% and a total capital adequacy ratio of 16.6%.
• The bank's focus on technology and digital platforms, such as the DGE and iLens, enhances operational efficiency and customer experience.

Negative Points

• The overseas loan portfolio declined by 21.2% year on year, indicating challenges in international operations.
• Net interest margin decreased to 4.25% from 4.43% in the same quarter last year, reflecting pressure on interest income.
• The retail loan portfolio growth slowed to 10.5% year on year, with personal loans declining 1.3% sequentially.
• Gross NPA additions increased to INR60.85 billion in the current quarter, up from INR50.73 billion in the previous quarter.
• Operating expenses increased by 5% year on year, with technology expenses accounting for 10.5% of operating expenses, indicating rising costs.

Q & A Highlights

Q: What is the current status of provisioning and credit costs, and how does it impact the bank's financials? A: Anindya Banerjee, Group CFO, explained that the credit cost on the retail and business banking portfolios remains stable, with minimal credit costs or NPL provisioning on the corporate portfolio. The overall provisions are within the 50 basis points range, with the reported number for the quarter at 37 basis points.

Q: Can you explain the softer sequential deposit growth this quarter? A: Anindya Banerjee attributed the softer deposit growth to funding requirements, noting a slowdown in system loan growth and a CRR cut in December. The bank maintained strong liquidity with an average liquidity coverage ratio of 123% for the quarter.

Q: How are operating expenses being managed, and what is the current employee headcount? A: Anindya Banerjee stated that the bank continues to invest in branches and technology while seeking efficiencies in the cost base. The headcount evolves based on staffing requirements, and the bank aims to leverage its cost base without a linear relationship to top-line growth. The exact headcount is provided annually.

Q: What factors contributed to the decline in yields, and what is the outlook for the next quarter? A: The decline in yields was primarily due to the impact of the Kisan Credit Card (KCC) portfolio. Anindya Banerjee noted that the day count impact would unwind in Q4, potentially leading to a positive bias in yields.

Q: How is the bank balancing growth with asset quality, particularly in the retail and corporate sectors? A: Anindya Banerjee emphasized that asset quality concerns are not hindering growth. The bank sees good growth opportunities, particularly in the corporate and business banking sectors, while maintaining stable credit experiences in the retail sector. Corrective actions have been taken in unsecured lending to stabilize trends.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.