Yahoo Finance ICICI Bank (IBN) Q3 Earnings Rise on Higher Loan Demand
ICICI Bank IBN released third-quarter fiscal 2023 (ended Dec 31, 2022) results. Net income was INR83.12 billion ($1.01 billion), up 34.2% from the prior-year quarter.
Results were driven by a rise in net interest income (NII) and non-interest income, higher rates, and growth in loans and deposits. However, provisions increased in the quarter. Also, higher operating expenses posed as the undermining factor.
NII & Fee Income Improve, Expenses Rise
NII rose 34.6% year over year to INR164.65 billion ($2 billion). The net interest margin was 4.65%, up 69 basis points (bps) year over year.
Non-interest income (excluding treasury income) was INR49.87 billion ($0.61 billion), up 1.8% year over year. Fee income increased 3.7% to INR44.48 billion ($0.54 billion).
In the reported quarter, IBN recorded a treasury income of INR0.36 billion ($4.4 million), down 59.1% from the year-ago quarter.
Operating expenses totaled INR82.17 billion ($1 billion), rising 16.1% year over year.
Loans & Deposits Increase
As of Dec 31, 2022, ICICI Bank’s total advances were INR9,740.47 billion ($117.6 billion), up 19.7% year over year. Growth was primarily driven by a solid rise in retail loan balances, business banking loans and SME loans.
Total deposits grew 10.3% year over year to INR11,220.49 billion ($135.5 billion).
Credit Quality: Mixed Bag
As of Dec 31, 2022, the net non-performing assets (NPA) ratio was 0.55%, down from 0.85% in the prior-year period. Recoveries and upgrades (excluding write-offs and sale) of NPAs were INR46.04 billion ($0.56 billion) in the quarter.
In the fiscal third quarter, there were net additions of INR11.19 billion ($0.14 billion) to gross NPA. Gross NPA additions were INR57.23 billion ($ 0.70 billion), while gross NPA written-off was INR11.62 billion ($0.14 billion).
Provisions (excluding provision for tax) increased 12.5% from the prior-year quarter to INR22.57 billion ($0.27 billion). This included an additional contingency provision of INR15.00 billion ($0.18 billion) made on a prudent basis in the reported quarter.
Capital Ratios Strong
In compliance with the Reserve Bank of India's guidelines on Basel III norms, ICICI Bank's total capital adequacy was 18.33% and Tier-1 capital adequacy was 17.58% as of Dec 31, 2022. Both ratios were well above the minimum requirements.
Our Take
ICICI Bank’s quarterly performance was impressive on a robust rise in demand for consumer loans. Growth in net interest income was a major tailwind, which is expected to keep supporting the company's financial performance. However, elevated expenses and macroeconomic concerns are major near-term headwinds.
ICICI Bank Limited Price, Consensus and EPS Surprise
ICICI Bank Limited price-consensus-eps-surprise-chart | ICICI Bank Limited Quote
ICICI Bank currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of US Banks
Washington Federal’s WAFD first-quarter fiscal 2023 (ended Dec 31, 2022) earnings of $1.16 per share handily surpassed the Zacks Consensus Estimate of $1.11. The figure reflects a year-over-year jump of 63%.
Results were primarily supported by robust loan balances and an increase in net interest income. However, a substantial increase in provision for credit losses, rising expenses and a decrease in other income were headwinds for WAFD.
Bank of New York Mellon Corporation’s BK fourth-quarter 2022 adjusted earnings of $1.30 per share surpassed the Zacks Consensus Estimate of $1.22. The bottom line reflects a rise of 25% from the prior-year quarter. Our estimate for earnings was $1.09.
BK’s results were aided by a rise in net interest revenues. However, asset balances witnessed a decline, which was a negative. Higher expenses and lower fee revenues hurt BK’s results to some extent.
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