ICICI Bank on Saturday reported its financial results for the April-June period. The bank recorded a 49 percent jump in net profit to Rs 6,905 crore for the quarter ending June 30, 2022 compared to Rs 4,616 crore in the same period last year.

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Profit after tax (PAT), however, declined from Rs 7,018 crore recorded in the preceding quarter.

Net interest income for the June quarter increased by 20.8 percent to Rs 13,210 crore, compared to Rs 10,936 crore reported in corresponding period previous fiscal. Advances grew 21 percent and deposits grew 13 percent on year basis, according to ICICI Bank's BSE filing.

The bank's net interest margin stood at 4.01 percent for the June quarter, up from 3.89 percent registered in year-ago quarter, and 4 percent in March 2022 quarter.

Asset quality improved further with gross non-performing assets as a percentage of gross advances falling 19 bps sequentially to 3.41 percent in the quarter ended June 2022. Net NPAs in the same period fell by 6 bps to 0.7 percent.

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 percent year-on-year for the quarter ended June 30, 2023.

ICICI Bank in their conference call today said that the company saw 35 percent growth over the previous quarter in spends by non-ICICI Bank customers on digital app. Excluding NPAs, total fund based outstanding to all borrowers under resolution declined to Rs 7,376 crore.

Market expert Prakash Diwan told CNBC-TV18 the important thing is whether the visibility of this continuity in growth is sustainable, given the favorable competitive environment they the bank find themselves in.

"I think, granular details on what the mortgage portfolio is contributing, or what's a trend out there and their focus on SMEs because the capex cycle that we've seen, is right now more driven by large borrowers, but eventually it will go to the SME segment as well maybe in the first half of FY24 ad that's when these banks actually make a lot of money and grow very rapidly. So, I would look for indications of the management on these two areas particularly SME loans and the mortgage portfolio," Diwan said.

Ashutosh Mishra from Ashika Stock Broking has a target price of Rs 1,100 with a "buy" rating on shares of Kotak Mahindra Bank.

"If you look at the relative positioning of ICICI, within all the leading private sector banks, they are very well placed at this point of time. And because of this positioning, where HDFC Bank is facing its own merger issues, Axis Bank is still taking over some of the assets and there can be some surprises coming in from there. So, certainty the income looks much more stable in the case of ICICI Bank and that is what was demonstrated in this quarter too, and that's why I see the evaluation rerating will continue at least for the year for ICICI Bank going forward," Mishra told CNBC-TV18.

First Published:Jul 23, 2022 3:41 PM IST