Performance Review: Quarter ended June 30, 2022

July 23, 2022

• Core operating profit (profit before provisions and tax, excluding treasury income) grew by 19% year-on-year to ₹ 10,273 crore (US$ 1.3 billion) in the quarter ended June 30, 2022 (Q1-2023)

  • Net interest income grew by 21% year-on-year in Q1-2023

• Profit after tax grew by 50% year-on-year to ₹ 6,905 crore (US$ 874 million) in Q1-2023

• Total period-end deposits grew by 13% year-on-year to ₹ 1,050,349 crore (US$ 133.0 billion) at June 30, 2022

  • Average current account and savings account (CASA) ratio was 45.8% in Q1-2023

• Domestic loan portfolio grew by 22% year-on-year

• Net NPA ratio declined to 0.70% at June 30, 2022 from 0.76% at March 31, 2022

• Provisioning coverage ratio on non-performing assets was 79.6% at June 30, 2022

• Including profits for Q1-2023, total capital adequacy ratio was 18.74% and Tier-1 capital adequacy ratio was 17.95%, on a standalone basis, at June 30, 2022

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 June 30, 2022 (Q1-2023). 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 June 30, 2022.

Profit & loss account

• The core operating profit (profit before provisions and tax, excluding treasury income) increased by 19% year-on-year to ₹ 10,273 crore (US$ 1.3 billion) in Q1-2023 from ₹ 8,605 crore (US$ 1.1 billion) in the quarter ended June 30, 2021 (Q1-2022); excluding dividend income from subsidiaries/associates, core operating profit grew by 21% year-on-year in Q1-2023

• Net interest income (NII) increased by 21% year-on-year to ₹ 13,210 crore (US$ 1.7 billion) in Q1-2023 from ₹ 10,936 crore (US$ 1.4 billion) in Q1-2022

• The net interest margin was 4.01% in Q1-2023 compared to 3.89% in Q1-2022 and 4.00% in the quarter ended March 31, 2022 (Q4-2022)

• Non-interest income, excluding treasury income, increased by 25% year-on-year to ₹ 4,629 crore (US$ 586 million) in Q1-2023 from ₹ 3,706 crore (US$ 469 million) in Q1-2022

• Fee income grew by 32% year-on-year to ₹ 4,243 crore (US$ 537 million) in Q1-2023 from ₹ 3,219 crore (US$ 408 million) in Q1-2022. Fees from retail, rural, business banking and SME customers constituted about 79% of total fees in Q1-2023

• There was a treasury gain of ₹ 36 crore (US$ 5 million) in Q1-2023 compared to a gain of ₹ 290 crore (US$ 37 million) in Q1-2022

• Provisions (excluding provision for tax) declined by 60% year-on-year to ₹ 1,144 crore (US$ 145 million) in Q1-2023 from ₹ 2,852 crore (US$ 361 million) in Q1-2022. Provisions for Q1-2023 include contingency provision of ₹ 1,050 crore (US$ 133 million) made on a prudent basis

• The profit before tax grew by 52% year-on-year to ₹ 9,165 crore (US$ 1.2 billion) in Q1-2023 from ₹ 6,043 crore (US$ 765 million) in Q1-2022

• On a standalone basis, the profit after tax grew by 50% year-on-year to ₹ 6,905 crore (US$ 874 million) in Q1-2023 from ₹ 4,616 crore (US$ 585 million) in Q1-2022

Growth in digital and payments platforms

In December 2020, the Bank had expanded its mobile banking app, iMobile, to iMobile Pay which offers payment and banking services to customers of any bank. There have been 73 lakh activations of iMobile Pay from non-ICICI Bank account holders as of June 30, 2022.

The value of credit card spends in Q1-2023 grew by 13% sequentially and was two times the value of spends in Q1-2022 driven by improvement in discretionary spending, higher activation rate through digital onboarding of customers, including Amazon Pay credit cards, and diversification through commercial cards. The Bank has issued more than 3.2 million Amazon Pay credit cards since its launch.

During the quarter, the Bank launched Campus Power, an online platform providing various banking solutions such as loans, bank accounts, foreign exchange remittances and value added services to the student ecosystem for higher education in India and abroad.

The business banking and SME franchise continues to grow on the back of digital offerings and platforms like InstaBIZ. The value of financial transactions on InstaBIZ grew by about 57% year-on-year in Q1-2023. In line with the philosophy of open architecture, the Bank recently made the InstaBIZ app interoperable. Various features of the app are now available to all merchants including those who do not have a current account with the Bank. Through ‘InstaOD Plus’, customers of any bank can avail an overdraft (OD) up to ₹ 25 lakh instantly. Customers of ICICI Bank can activate the OD into their current account instantly, while customers of other banks can do so after opening a current account with the Bank digitally by using Video KYC. There have been about 120,000 registrations from non-ICICI Bank account holders on InstaBIZ till June 30, 2022.

The value of the Bank’s merchant acquiring transactions through UPI in Q1-2023 grew by 27% over Q4-2022 and was 2.3 times the value of transactions in Q1-2022. The Bank is the market leader in electronic toll collections through FASTag. The Bank had a market share of about 32% by value in electronic toll collections through FASTag in Q1-2023, with a 53% year-on-year growth in collections.

The Bank’s supply chain solutions, DigitalLite and CorpConnect, enable corporates to seamlessly manage their supply chain financing, payments, collection and reconciliation requirements of their dealers and vendors in a convenient and paperless manner. The value of transactions through these supply chain solutions in Q1-2023 was 2.4 times the value of transactions in Q1-2022.

Recently, the Bank launched a revamped OneSCF, an integrated supply chain platform providing corporate customers, their vendors and dealers with a one-stop solution to efficiently manage their working capital requirements.

The Bank has created more than 20 industry specific STACKs which provide bespoke and purpose-based digital solutions to corporate clients and their ecosystems. The volume of payment and collection transactions through Application Programme Interface (API) based solutions in Q1-2023 was 3.7 times the volume of transactions in Q1-2022.

Credit growth

The retail loan portfolio grew by 24% year-on-year and 5% sequentially, and comprised 53.1% of the total loan portfolio at June 30, 2022. Including non-fund outstanding, the retail portfolio was 44.0% of the total portfolio at June 30, 2022. The rural portfolio grew by 8% year-on-year and was flat sequentially at June 30, 2022. The business banking portfolio grew by 45% year-on-year and 7% sequentially at June 30, 2022. The SME business, comprising borrowers with a turnover of less than ₹ 250 crore (US$ 32 million), grew by 32% year-on-year and declined by 3% sequentially at June 30, 2022. The domestic wholesale banking portfolio grew by 14% year-on-year and 4% sequentially at June 30, 2022. The domestic advances grew by 22% year-on-year and 4% sequentially at June 30, 2022. Total advances increased by 21% year-on-year and 4% sequentially to ₹ 895,625 crore (US$ 113.4 billion) at June 30, 2022.

Deposit growth

Total period-end deposits increased by 13% year-on-year to ₹ 1,050,349 crore (US$ 133.0 billion) at June 30, 2022. Average current account deposits increased by 23% year-on-year and 3% sequentially in Q1-2023. Average savings account deposits increased by 19% year-on-year and 4% sequentially in Q1-2023. Period-end term deposits increased by 11% year-on-year to ₹ 558,235 crore (US$ 70.7 billion) at June 30, 2022.

The Bank had a network of 5,534 branches and 13,379 ATMs at June 30, 2022.

Asset quality

The gross NPA ratio declined to 3.41% at June 30, 2022 from 3.60% at March 31, 2022 and 5.15% at June 30, 2021. The net NPA ratio declined to 0.70% at June 30, 2022 from 0.76% at March 31, 2022 and 1.16% at June 30, 2021. During Q1-2023, there were net additions of ₹ 382 crore (US$ 48 million) to gross NPAs compared to net deletions of ₹ 489 crore (US$ 62 million) in Q4-2022 and net additions of ₹ 3,604 crore (US$ 456 million) in Q1-2022. The gross NPA additions were ₹ 5,825 crore (US$ 738 million) in Q1-2023 compared to ₹ 4,204 crore (US$ 532 million) in Q4-2022. Recoveries and upgrades of NPAs, excluding write-offs and sale, were ₹ 5,443 crore (US$ 689 million) in Q1-2023 compared to ₹ 4,693 crore (US$ 594 million) in Q4-2022. The gross NPAs written-off in Q1-2023 were ₹ 1,126 crore (US$ 143 million). The provisioning coverage ratio on NPAs was 79.6% at June 30, 2022.

Excluding NPAs, the total fund based outstanding to all borrowers under resolution as per the various extant regulations/guidelines declined to ₹ 7,376 crore (US$ 934 billion) or 0.8% of total advances at June 30, 2022 from ₹ 8,267 crore (US$ 1.0 billion) at March 31, 2022. The Bank holds provisions amounting to ₹ 2,290 crore (US$ 290 million) against these borrowers under resolution, as of June 30, 2022. In addition, the Bank held contingency provisions of ₹ 8,500 crore (US$ 1.1 billion) at June 30, 2022. The loan and non-fund based outstanding to performing borrowers rated BB and below reduced to ₹ 8,209 crore (US$ 1.0 billion) at June 30, 2022 from ₹ 10,808 crore (US$ 1.4 billion) at March 31, 2022.

Capital adequacy

Including profits for Q1-2023, the Bank’s total capital adequacy ratio at June 30, 2022 was 18.74% and Tier-1 capital adequacy was 17.95% compared to the minimum regulatory requirements of 11.70% and 9.70% respectively.

Consolidated results

The consolidated profit after tax increased by 55% year-on-year to ₹ 7,385 crore (US$ 935 million) in Q1-2023 from ₹ 4,763 crore (US$ 603 million) in Q1-2022.

Consolidated assets grew by 13% year-on-year to ₹ 1,742,777 crore (US$ 220.7 billion) at June 30, 2022 from ₹ 1,536,731 crore (US$ 194.6 billion) at June 30, 2021.

Key subsidiaries and associates

Value of New Business (VNB) of ICICI Prudential Life Insurance (ICICI Life) increased by 32% year-on-year to ₹ 471 crore (US$ 60 million) in Q1-2023. The VNB margin increased from 28.0% in FY2022 to 31.0% in Q1-2023. The annualised premium equivalent increased by 25% year-on-year to ₹ 1,520 crore (US$ 192 million) in Q1-2023. The profit after tax was ₹ 156 crore (US$ 20 million) in Q1-2023 compared to a loss of ₹ 186 crore (US$ 24 million) in Q1-2022.

The Gross Direct Premium Income (GDPI) of ICICI Lombard General Insurance Company (ICICI General) grew by 28.2% year-on-year to ₹ 5,370 crore (US$ 680 million) in Q1-2023 from ₹ 4,188 crore (US$ 530 million) in Q1-2022. The combined ratio was 104.1% in Q1-2023 compared to 123.5% in Q1-2022. The profit after tax of ICICI General grew by 79.6% to ₹ 349 crore (US$ 44 million) in Q1-2023 from ₹ 194 crore (US$ 25 million) in Q1-2022. Numbers for Q1-2022 have been restated to reflect the Scheme of Arrangement between ICICI General and Bharti AXA General Insurance Company.

The profit after tax of ICICI Securities, on a consolidated basis, as per Ind AS, was ₹ 274 crore (US$ 35 million) in Q1-2023 compared to ₹ 311 crore (US$ 39 million) in Q1-2022.

The profit after tax of ICICI Prudential Asset Management Company, as per Ind AS, was ₹ 305 crore (US$ 39 million) in Q1-2023 compared to ₹ 380 crore (US$ 48 million) in Q1-2022.

Summary Profit and Loss Statement (as per standalone Indian GAAP accounts)

₹ crore

1. Excluding treasury income

2. The Reserve Bank of India, through its clarification dated August 30, 2021, has advised banks that the fair value of share-linked instruments granted after June 30, 2021 should be recognised as an expense. Accordingly, the Bank has changed its accounting policy from intrinsic value method to fair value method for valuation of all stock options granted after June 30, 2021 under its Employee Stock Options Scheme. The fair value of stock options is estimated on the date of grant using Black-Scholes model and is recognised as employee expense over the vesting period. Accordingly, the Bank has accounted for additional employee expenses of ₹ 129 crore (US$ 16 million) during Q1-2023, ₹ 69 crore (US$ 9 million) during Q4-2022, and ₹ 263 crore (US$ 33 million) during FY2022 with a consequent reduction in profit after tax by the said amount

3. The Covid-19 pandemic impacted economic activity during the last two fiscal years. Currently, while the number of new Covid-19 cases have reduced significantly and the Government of India has withdrawn Covid-19 related restrictions, the future trajectory of the pandemic may have an impact on the results of the Bank and the Group.

   During Q1-2023, the Bank has made an additional contingency provision of ₹ 1,050 crore (US$ 133 million) on a prudent basis. Accordingly, the Bank holds contingency provision of ₹ 8,500 crore (US$ 1.1 billion) at June 30, 2022.

4. Prior period numbers have been re-arranged wherever necessary

Summary balance sheet

₹crore

1. Prior period figures have been re-grouped/re-arranged wherever necessary

Certain statements in this release relating to a future period of time (including interalia concerning our future business plans or growth prospects) are forward-looking statements intended to qualify for the 'safe harbor' under applicable securities laws including the US Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. These risks and uncertainties include, but are not limited to statutory and regulatory changes, international economic and business conditions, political or economic instability in the jurisdictions where we have operations, increase in non-performing loans, unanticipated changes in interest rates, foreign exchange rates, equity prices or other rates or prices, our growth and expansion in business, the adequacy of our allowance for credit losses, the actual growth in demand for banking products and services, investment income, cash flow projections, our exposure to market risks, changes in India’s sovereign rating, and the impact of the Covid-19 pandemic which could result in fewer business opportunities, lower revenues, and an increase in the levels of non-performing assets and provisions, depending inter alia upon the period of time for which the pandemic extends, the remedial measures adopted by governments and central banks, and the sustenance of economic activity at normal levels after the pandemic, as well as other risks detailed in the reports filed by us with the United States Securities and Exchange Commission. Any forward-looking statements contained herein are based on assumptions that we believe to be reasonable as of the date of this release. ICICI Bank undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date thereof. Additional risks that could affect our future operating results are more fully described in our filings with the United States Securities and Exchange Commission. These filings are available at www.sec.gov.

This release does not constitute an offer of securities.

For further press queries please email Sujit Ganguli / Kausik Datta at sujit.ganguli@icicibank.com / datta.kausik@icicibank.com or corporate.communications@icicibank.com

For investor queries please email Abhinek Bhargava at abhinek.bhargava@icicibank.com or Aashwij Mallya at aashwij.mallya@icicibank.com or ir@icicibank.com.

1 crore = 10.0 million

US$ amounts represent convenience translations at US$1=₹78.97