The new leader at the helm of ICICI Bank has got off to a great start. The bank reported an all-round positive performance in the second-quarter of the current fiscal. Loan growth is at an 11-quarter high, and this on the back of a rising growth trend since over the past five quarters.

Slippages too came in at a 3-year low of Rs 3,117 crore, down 23 percent on quarter. Net interest margins (NIMs), therefore, improved to 3.33 percent from 3.19 percent in the previous quarter. The net interest margin has been a factor of slippages i.e. higher slippages led to decline in margins and vice versa.

The reported performance allayed apprehensions of this being a kitchen-sinking quarter, typically seen when there is a change of CEO at a bank—as the incoming CEO looks to wipe the slate clean at the start of her/his tenure.

Not unexpectedly, therefore, shares of the country's second-biggest private sector lender by assets jumped as much as 9 percent to Rs 344 in morning trade on Monday. The lender unveiled financial results after market close on Friday.

In absolute value, gross non-performing asset (NPA) increased about 2 percent quarter-on-quarter but as a ratio, it declined to 8.54 percent from 8.81 percent in the previous quarter. Fee income growth remained ahead of balance sheet growth--growing 16.5 percent year-on-year and 8.8 percent quarter-on-quarter versus domestic loan growth of 15.7 percent on year and 5.2 percent on quarter.

The international NIMs remained volatile and stood at 0.05 percent in the quarter ended September 30. The other worrying factor was that its UK subsidiary reported a huge loss of Rs 1,470 crore in the quarter.

Key highlights of the results:

Loan Growth

Loan growth at 12.8% on year is the highest in 11 quarters

Loan growth has been on a rising trend since previous 5 quarters

Domestic loan growth is the key driver of overall book; domestic loan growth is driven by retail portfolio

Domestic loan growth at 15.7%; while retail loan growth is at 20.5% on year

NII Growth & Slippages

The net interest income growth was largely impacted by elevated slippages

The bank reported lowest slippages in 12 quarters, which led to highest NII growth in 12 quarters

Slippages at Rs 3,117 crore vs Rs 4,036 crore, down 22.8 percent on quarter

Non-watchlist slippages down 42.4% to Rs 2,103 crore

NIMS

The declining trend of net interest margins got arrested

Global & domestic NIMs are the best in the last six quarters; international

NIMs remained volatile due to high NPAs in the international book

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First Published:Oct 29, 2018 10:54 AM IST