MUMBAI:
The Board of Directors of ICICI Bank Limited (NSE: ICICIBANK, BSE: 532174, NYSE: IBN) at its meeting held at Mumbai today, approved the standalone and consolidated accounts of the Bank for the quarter ended December 31, 2020. The statutory auditors have conducted a limited review and have issued an unmodified report on the standalone and consolidated financial statements for the quarter ended December 31, 2020.
Profit & loss account
The core operating profit (profit before provisions and tax, excluding treasury income) increased by 15% year-on-year to ₹ 8,054 crore (US$ 1.1 billion) in Q3-2021 from ₹ 7,017 crore (US$ 960 million) in Q3-2020
Net interest income (NII) increased by 16% year-on-year to 9,912 crore (US$ 1.4 billion) in Q3-2021 from 8,545 crore (US$ 1.2 billion) in Q3- 2020
The net interest margin was 3.67% in Q3-2021 compared to 3.57% in the quarter ended September 30, 2020 (Q2-2021) and 3.77% in Q3-2020
Non-interest income, excluding treasury income, was ₹ 3,921 crore (US$ 537 million) in Q3-2021 compared to ₹ 4,043 crore (US$ 553 million) in Q3-2020
Fee income was ₹ 3,601 crore (US$ 493 million) in Q3-2021 compared to ₹ 3,596 crore (US$ 492 million) in Q3-2020. Fee income increased sequentially by 15% in Q3-2021 over Q2-2021 reflecting the increase in customer spending, borrowing and investment activity. Retail fees constituted 78% of total fees in Q3-2021
Treasury income was 766 crore (US$ 105 million) in Q3-2021 compared to 531 crore (US$ 73 million) in Q3-2020. During Q3-2021, the Bank sold 2.2% shareholding in ICICI Securities for compliance with minimum public shareholding norms resulting in a gain of 329 crore (US$ 45 million) Provisions (excluding provision for tax) were 2,742 crore (US$ 375 million) in Q3-2021 compared to 2,083 crore (US$ 285 million) in Q3- 2020. During Q3-2021, the Bank made contingency provision amounting to 3,012 crore (US$ 412 million) for borrower accounts not classified as non-performing pursuant to the interim order of the Supreme Court. The Bank utilised ` 1,800 crore (US$ 246 million) of Covid-19 related provisions made in the earlier periods
During Q3-2021, the Bank has changed its provisioning policy on non- performing assets to make it more conservative. The contingency provision made on a prudent basis for loans overdue for more than 90 days at December 31, 2020 but not classified as non-performing pursuant to the Supreme Court’s interim order, also reflects the revised policy. The change in policy resulted in higher provision on advances amounting to ₹ 2,096 crore (US$ 287 million) during Q3-2021 for aligning provisions on the outstanding loans to the revised policy
At December 31, 2020, the Bank held aggregate Covid-19 related provision of 9,984 crore (US$ 1.4 billion), including contingency provision for proforma NPAs amounting to 3,509 crore (US$ 480 million) for loans not classified as non-performing
The profit before tax grew by 11% year-on-year to ₹ 6,078 crore (US$ 832 million) in Q3-2021 from ₹ 5,465 crore (US$ 748 million) in Q3-2020
On a standalone basis, the profit after tax grew by 19% year-on-year to ` 4,940 crore (US$ 676 million) in Q3-2021 compared to ₹ 4,146 crore (US$ 567 million) in Q3-2020
Operating review
The continued pickup in economic activity and tailwinds from the festive season combined with the Bank’s digital initiatives and extensive franchise reflected in an increase in disbursements across retail products during Q3- 2021. Mortgage disbursements increased further in Q3-2021 over Q2-2021 and reached an all-time monthly high in December driven by the Bank’s efforts to offer a convenient and frictionless experience to customers by digitising the entire underwriting process, with instant loan approvals.
Disbursements of auto loans continued to increase from the September levels and crossed pre-Covid levels in December. Credit card spends also reached pre-Covid levels in December led by increased spends in categories such as health & wellness, electronics and e-commerce.
Credit growth
The retail loan portfolio grew by 15% year-on-year and 7% sequentially at December 31, 2020. Retail loans comprised 65.6% of the total loan portfolio at December 31, 2020. Including non-fund outstanding, retail was 54.1% of the total portfolio at December 31, 2020. Growth in the performing domestic corporate portfolio was about 10% year-on-year driven by disbursements to higher rated corporates to meet their working capital and capital expenditure requirements.
While various sectors and multiple corporate clients contributed to this growth, some focus segments were highly rated PSUs and large established corporate groups. The domestic advances grew by 13% year-on-year and 7% sequentially at December 31, 2020. Total advances increased by 10% year-on-year to 699,017 crore (US$ 95.7 billion) at December 31, 2020 from 635,654 crore (US$ 87.0 billion) at December 31, 2019.
Deposit growth
Total deposits increased by 22% year-on-year to 874,348 crore (US$ 119.7 billion) at December 31, 2020. Average current account deposits increased by 27% year-on-year in Q3-2021. Average savings account deposits increased by 16% year-on-year in Q3-2021. Total term deposits increased by 26% year-on-year to 478,932 crore (US$ 65.5 billion) at December 31, 2020.
The Bank had a network of 5,267 branches and 14,655 ATMs at December 31, 2020.
Digital initiatives and transactions
During Q3-2021, the Bank expanded its state-of-the-art mobile banking app, iMobile, to iMobile Pay which offers payment and banking services to customers of any bank. iMobile Pay can be used for making payments using Unified Payments Interface (UPI) and also offers instant banking services such as opening savings account, investments, loans and credit cards among others.
The Bank has seen about 500,000 million activations of iMobile Pay from non-ICICI Bank customers since it was launched two months ago. The Bank launched ‘ICICI Bank Mine’, India’s first comprehensive banking programme for millennial customers. It offers an instant savings account, a feature driven iMobile application, investment guidance to suit the needs of millennials, curated credit and debit card, and instant personal loans & overdrafts.
The Bank incroduced a facility called ‘ICICI Bank Cardless EMI’ which enables pre-approved customers to buy their favourite gadgets or home appliances using their mobile phone and Permanent Account Number (PAN) instead of physical wallet or cards. They can also convert the high-value transactions into easy, no-cost monthly instalments by simply using their registered mobile number and PAN on the Point of Sale (PoS) machine at the retail outlets.
The Bank launched an online platform called ‘Infinite India’ for foreign companies looking to establish or expand business in the country. The platform offers not only banking solutions but also value-added services such as incorporation of a business entity, corporate filings, licenses and registrations to foreign companies or MNCs coming to India.
Digital channels like internet, mobile banking, PoS and others accounted for over 90% of the savings account transactions in the nine months ended December 31, 2020 (9M-2021). The volume of mobile banking transactions increased by 60% year-on-year in Q3-2021. The value of merchant acquiring transactions on UPI increased by 286% year-on-year in Q3-2021. The Bank is a market leader in electronic toll collections through FASTag.
The electronic toll collections for the Bank grew by 85% year-on-year in Q3-2021. The Bank had a market share of 37% by value in December 2020. The Bank has issued about 1.4 million Amazon Pay credit cards since its launch in 2018. In the process, the Amazon Pay credit card has become fastest co- branded card in the country to cross the milestone of 1 million, in less than 20 months of its launch.
Asset quality
During the quarter, the gross additions to NPAs were ₹ 471 crore (US$ 64 million). Recoveries and upgrades, excluding write-offs, from non- performing loans were 1,776 crore (US$ 243 million) in Q3-2021. The net NPA ratio was 0.63% at December 31, 2020. Loans amounting to 8,280 crore (US$ 1.1 billion), compared to ` 1,410 crore (US$ 193 million) at September 30, 2020, were not classified as non-performing at December 31, 2020 pursuant to the Supreme Court’s interim order.
On a proforma basis, the net NPA ratio was 1.26% at December 31, 2020 compared to 1.12% at September 30, 2020. The provision coverage ratio on a proforma basis was robust at 77.6% at December 31, 2020. Excluding proforma NPAs, the total fund based outstanding to all borrowers under resolution was ` 2,546 crore (US$ 348 million), or about 0.4% of the total loan portfolio, at December 31, 2020.
The fund-based and non-fund based outstanding to borrowers rated BB and below (excluding non-performing assets and loans included in the proforma NPA disclosures) was 18,061 crore (US$ 2.5 billion) at December 31, 2020 compared to 16,167 crore (US$ 2.2 billion) at September 30, 2020.
Capital adequacy
The Bank’s total capital adequacy at December 31, 2020, including profits for 9M-2021, was 19.51% and Tier-1 capital adequacy was 18.12% compared to the minimum regulatory requirements of 11.08% and 9.08% respectively.
Consolidated results
The consolidated profit after tax was 5,498 crore (US$ 752 million) in Q3- 2021 compared to 4,882 crore (US$ 668 million) in Q2-2021 and ` 4,670 crore (US$ 639 million) in Q3-2020. The consolidated return on equity was 14.6% in Q3-2021.
Consolidated assets grew by 16% year-on-year to 1,519,353 crore (US$ 207.9 billion) at December 31, 2020 from 1,304,911 crore (US$ 178.6 billion) at December 31, 2019.
