Performance Review: Quarter ended September 30, 2020
October 31, 2020
- Profit after tax was ₹ 4,251 crore (US$ 576 million) in the quarter ended September 30, 2020 (Q2-2021) compared to ₹ 655 crore (US$ 89 million) in the quarter ended September 30, 2019 (Q2-2020)
- Core operating profit (profit before provisions and tax, excluding treasury income) grew by 18% year-on-year to ₹ 7,719 crore (US$ 1.0 billion) in Q2-2021
- Total deposits grew by 20% year-on-year to ₹ 832,936 crore (US$ 112.9 billion) at September 30, 2020
- 17% growth in average current and savings account (CASA) deposits in Q2-2021; average CASA ratio was 40.3% in Q22021
- Term deposits grew by 26% year-on-year at September 30, 2020
- Domestic loans grew by 10% year-on-year and 4% quarter-onquarter at September 30, 2020
- Retail loans grew by 13% year-on-year and 6% sequentially quarter-on-quarter
- Net non-performing asset (NPA) ratio decreased from 1.23% at June 30, 2020 to 1.00% at September 30, 2020; including loans not classified as NPA pursuant to the Supreme Court’s interim order, net NPA ratio would have been 1.12%
- Provision coverage ratio increased from 78.6% at June 30, 2020 to 81.5% at September 30, 2020
- Additionally, the Bank held Covid-19 related provisions of ₹ 8,772 crore (US$ 1.2 billion) at September 30, 2020
- Total capital adequacy ratio of 19.33% and Tier-1 capital adequacy ratio of 17.89% on a standalone basis at September 30, 2020 (including profits for the six months ended September 30, 2020)
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 September 30, 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 September 30, 2020.
Profit & loss account
- The core operating profit (profit before provisions and tax, excluding treasury income) increased by 18% year-on-year to ₹ 7,719 crore (US$ 1.0 billion) in Q2-2021 from ₹ 6,533 crore (US$ 886 million) in Q2-2020
- Net interest income (NII) increased by 16% year-on-year to ₹ 9,366 crore (US$ 1.3 billion) in Q2-2021 from ₹ 8,057 crore (US$ 1.1 billion) in Q22020
- The net interest margin was 3.57% in Q2-2021 compared to 3.69% in the quarter ended June 30, 2020 (Q1-2021) and 3.64% in Q2-2020, reflecting surplus liquidity with the Bank
- Non-interest income, excluding treasury income, was ₹ 3,486 crore (US$ 473 million) in Q2-2021 compared to ₹ 3,854 crore (US$ 522 million) in Q2-2020
- Fee income was ₹ 3,139 crore (US$ 426 million) in Q2-2021 compared to ₹ 3,478 crore (US$ 471 million) in Q2-2020. Fee income increased sequentially by 49% in Q2-2021 over Q1-2021 reflecting the increase in customer spending, borrowing and investment activity. Retail fees constituted 76% of total fees in Q2-2021
- Treasury income was ₹ 542 crore (US$ 73 million) in Q2-2021 compared to ₹ 341 crore (US$ 46 million) in Q2-2020. During Q2-2021, the Bank sold 2.0% shareholding in ICICI Securities resulting in gain of ₹ 305 crore (US$ 41 million)
- Provisions (excluding provision for tax) were ₹ 2,995 crore (US$ 406 million) in Q2-2021 compared to ₹ 2,507 crore (US$ 340 million) in Q22020. This includes provision of ₹ 497 crore (US$ 67 million) made on a prudent basis on loans aggregating to ₹ 1,410 crore (US$ 191 million) that were not classified as non-performing pursuant to the Supreme Court’s interim order dated September 3, 2020 directing that accounts which were not classified as non-performing till August 31, 2020, should not be classified as non-performing until further orders
- At September 30, 2020, the Bank held Covid-19 related provision of ₹ 8,772 crore (US$ 1.2 billion)
- The profit before tax grew by 21% year-on-year to ₹ 5,266 crore (US$ 714 million) in Q2-2021 from ₹ 4,367 crore (US$ 592 million) in Q2-2020
- Tax expense was ₹ 1,015 crore (US$ 138 million) in Q2-2021 compared to ₹ 3,712 crore (US$ 503 million) in Q2-2020. The tax expense in Q22020 included a one-time additional charge due to re-measurement of accumulated deferred tax assets at the revised marginal tax rate
- On a standalone basis, the profit after tax was ₹ 4,251 crore (US$ 576 million) in Q2-2021 compared to ₹ 655 crore (US$ 89 million) in Q2-2020
- The consolidated return on equity was 14.2% in Q2-2021
Post the easing of restrictions, there has been a substantial month-on-month increase in disbursements across retail products. Mortgage disbursements during Q2-2021 crossed pre-Covid levels and reached an all-time monthly high in September 2020. Auto loan disbursements have continued to increase from June 2020 and have reached pre-Covid levels in September 2020 reflecting the rise in passenger car sales. Disbursements across the rural portfolio have crossed pre-Covid levels in the months of August and September 2020. Credit card spends recovered to about 85% of pre-Covid levels in September 2020 led by increased spends in categories such as health & wellness, electronics and e-commerce.
The retail loan portfolio grew by 13% year-on-year and 6% sequentially at September 30, 2020. Retail loans comprised 65.8% of the total loan portfolio at September 30, 2020. Including non-fund outstanding, retail was 53.6% of the total portfolio at September 30, 2020. Growth in the performing domestic corporate portfolio was about 7% year-on-year. The domestic advances grew by 10% year-on-year and 4% sequentially at September 30, 2020. Total advances increased by 6% year-on-year to ₹ 652,608 crore (US$ 88.5 billion) at September 30, 2020 from ₹ 613,359 crore (US$ 83.1 billion) at September 30, 2019.
Total deposits increased by 20% year-on-year to ₹ 832,936 crore (US$ 112.9 billion) at September 30, 2020. Average current account deposits increased by 21% year-on-year in Q2-2021. Average savings account deposits increased by 15% year-on-year in Q2-2021. Total term deposits increased by 26% year-on-year to ₹ 468,356 crore (US$ 63.5 billion) at September 30, 2020.
The Bank had a network of 5,288 branches and 15,158 ATMs at September 30, 2020.
Digital initiatives and transactions
During Q2-2021, the Bank launched the iStartup 2.0 programme, which enables startups to open current accounts digitally and instantly at the time of incorporation. It also offers startups a range of banking and non-banking services needed to expand their business digitally. The Bank has seen an increase in the adoption of the newly launched services and platforms such as video KYC and WhatsApp banking. In September, the Bank introduced new features on the WhatsApp banking platform which enable customers to create fixed deposits, pay their utility bills and access details of trade finance instantly. The Bank has also introduced forex on mobile through the InstaBIZ platform for small business customers.
The volume of mobile banking transactions increased by 65% year-on-year in Q2-2021. The value of merchant acquiring transactions on Unified Payments Interface (UPI) increased by 287% year-on-year in Q2-2021. Digital channels like internet, mobile banking, POS and others accounted for over 90% of the savings account transactions in the six months ended September 30, 2020 (H1-2021).
During the quarter, the gross additions to NPAs were ₹ 3,017 crore (US$ 409 million). Recoveries and upgrades, excluding write-offs, from nonperforming loans were ₹ 1,945 crore (US$ 264 million) in Q2-2021. The net NPA ratio was 1.00% at September 30, 2020. Including loans amounting to ₹ 1,410 crore (US$ 191 million) not classified as non-performing pursuant to the Supreme Court’s interim order, the net NPA ratio would have been 1.12% at September 30, 2020 compared to 1.23% at June 30, 2020. The provision coverage on non-performing loans increased from 78.6% at June 30, 2020 to 81.5% at September 30, 2020. The fund-based and non-fund based outstanding to borrowers rated BB and below (excluding nonperforming assets) decreased to ₹ 16,167 crore (US$ 2.2 billion) at September 30, 2020 from ₹ 17,110 crore (US$ 2.3 billion) at June 30, 2020.
The Bank’s total capital adequacy at September 30, 2020, including profits for H1-2021, was 19.33% and Tier-1 capital adequacy was 17.89% compared to the minimum regulatory requirements of 11.08% and 9.08% respectively. During the quarter, the Bank raised equity capital of ₹ 15,000 crore (US$ 2.0 billion).
The consolidated profit after tax was ₹ 4,882 crore (US$ 662 million) in Q22021 compared to ₹ 3,118 crore (US$ 423 million) in Q1-2021 and ₹ 1,131 crore (US$ 153 million) in Q2-2020. The consolidated profit after tax in Q22020 had a one-time additional charge due to re-measurement of accumulated deferred tax assets at the revised marginal tax rate. The consolidated return on equity was 14.2% in Q2-2021.
Consolidated assets grew by 15% year-on-year to ₹ 1,476,014 crore (US$ 200.1 billion) at September 30, 2020 from ₹ 1,288,190 crore (US$ 174.6 billion) at September 30, 2019.
Profit after tax of ICICI Prudential Life Insurance (ICICI Life) was ₹ 303 crore (US$ 41 million) in Q2-2021, at a similar level compared to Q2-2020. Value of New Business (VNB) of ICICI Life was ₹ 401 crore (US$ 54 million) in Q22021, at a similar level compared to Q2-2020. The new business margin increased from 21.7% in FY2020 to 27.4% in Q2-2021. Protection based annualised premium equivalent was ₹ 232 crore (US$ 31 million) in Q2-2021 compared to ₹ 283 crore (US$ 38 million) in Q2-2020. New business premium was ₹ 2,957 crore (US$ 401 million) in Q2-2021 compared to ₹ 2,926 crore (US$ 397 million) in Q2-2020. The Embedded value was ₹ 25,711 crore (US$ 3.5 billion) at September 30, 2020 compared to ₹ 22,680 crores (US$ 3.1 billion) at September 30, 2019.
Profit after tax of ICICI Lombard General Insurance Company (ICICI General) grew by 35% year-on-year to ₹ 416 crore (US$ 56 million) in Q2-2021 from ₹ 308 crore (US$ 42 million) in Q2-2020. The Gross Direct Premium Income (GDPI) of ICICI General grew by 8% to ₹ 3,189 crore (US$ 432 million) in Q22021 compared to ₹ 2,953 crore (US$ 400 million) in Q2-2020. The combined ratio was 99.7% in Q2-2021 compared to 102.6% in Q2-2020.
The profit after tax of ICICI Securities, on a consolidated basis, as per Ind AS, increased by 106% year-on-year to ₹ 278 crore (US$ 38 million) in Q2-2021 from ₹ 135 crore (US$ 18 million) in Q2-2020.
The profit after tax of ICICI Prudential Asset Management Company (ICICI AMC), as per Ind AS, was ₹ 282 crore (US$ 38 million) in Q2-2021 compared to ₹ 305 crore (US$ 41 million) in Q2-2020.
Summary Profit and Loss Statement (as per standalone Indian GAAP accounts)
|FY 2020||Q2- 2020||H1- 2020||Q1- 2021||Q2- 2021||H1- 2021|
|Net interest income||33,267||8,057||15,794||9,280||9,366||18,646|
|-Dividend income from subsidiaries||1,273||377||568||187||334||521|
|Core operating profit1||26,808||6,533||12,643||7,014||7,719||14,733|
|Covid-19 related provisions||2,725||-||-||5,550||4974||6,047|
|Profit before tax||14,048||4,367||7,160||3,183||5,266||8,448|
|Provision for taxes||6,1175||3,7125||4,5975||584||1,015||1,598|
|Profit after tax||7,931||655||2,563||2,599||4,251||6,850|
1. Excluding treasury income
2. Includes profit on sale of shareholding in insurance subsidiaries of ₹ 3,036 crore (US$ 412 million) in Q1 2021
3. Includes profit on sale of shareholding in ICICI Securities of ₹ 305 crore (US$ 41 million) in Q2 - 2021
4. The Supreme Court, in a writ petition through its interim order dated September 3, 2020 has directed that accounts which were not declared as NPA till August 31, 2020 shall not be declared as NPA till further orders. The Bank has not classified such borrow er accounts as NPA at September 30, 2020. The Bank has made contingency provision on these borrower accounts at September 30, 2020. This provision is included in Covid - 19 related provision
5. Includ es one - time additional charge due to re-measurement of accum ulated deferred tax assets at the revised marginal tax rate
6. Prior period numbers have been re-arranged wherever necessar
Summary Balance Sheet
|Capital and Liabilities|
|Employee stock options outstanding||4||3||3||3|
|Reserves and surplus||109,314||115,206||117,321||136,2691|
|Borrowings (includes subordinated debt)||151,033||162,897||164,918||136,427|
|Total capital and liabilities||997,011||1,098,365||1,138,613||1,162,971|
|Cash and balances with Reserve Bank of India||41,495||35,284||32,256||30,538|
|Balances with banks and money at call and short notice||30,144||83,872||88,995||106,054|
1. During Q2 - 2021, the Bank issued 418,994,413 equity shares of face value of ₹ 2 each at a price of ₹ 358 per equity share including a premium of ₹ 356 per equity share, aggregating to ₹ 15,000 crore (US$ 2.0 billion) through Qualified Institutions Placement
2. Prior period figures have been re-grouped/re-arranged where necessary
Certain statements in this release relating to a future period of time (including inter alia concerning our future business plans or growth prospect s) 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, as well as other risks detailed in the reports fi led 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
US$ amounts represent convenience transl ations at US$1= ₹ 73.77