Shares of ICICI Bank rose 2% on Monday after India's second-largest private lender reported a 30% year-on-year jump in its fourth-quarter net profit.
The ICICI Bank stock touched a high of ₹906.50 per share in intraday trade on the National Stock Exchange (NSE).
Net profit of the lender grew to ₹9,122 crore for the quarter ended March 31, 2023, aided by higher net interest income (NII).
ICICI Bank's NII surged 40.2% year-on-year to ₹17,667 crore in the January-March quarter as against ₹12,605 crore in the corresponding period a year ago.
The lender reported a net interest margin was 4.9% in Q4 FY23 compared to 4% in Q4 FY22 and 4.65% in Q3 FY23. According to the bank's management, NIM is at its peak and is likely to moderate from hereon.
ICICI Bank's provisions surged by 51.5% year-on-year to ₹1,619 crore for the March quarter. Provisions for Q4 FY23 included a contingency provision of ₹1,600 crore.
The bank's domestic advances grew 20.5% year-on-year. Total advances increased by 18.7% year-on-year and 4.7% sequentially to ₹10.19 lakh crore at the end of the March quarter.
The lender's gross NPA ratio declined to 2.81% as on March 31, 2023, from 3.07% at the end of the December quarter. The net non-performing assets declined by 25.9% year-on-year and 8.8%, sequentially, to ₹5,155 crore for the quarter ended March. The net NPA ratio declined to 0.48% from 0.55% in the previous quarter and 0.76% a year ago.
The company's board recommended a dividend of ₹8 per share.
The bank's total deposits grew 10.9% year-on-year to ₹11.80 lakh crore at the end of the January-March quarter.
ICICI Bank's non-interest income, excluding treasury income, increased by 11.3% year-on-year to ₹5,127 crore in Q4 FY23 from ₹4,608 crore in Q4 FY22. Fee income grew by 10.6% year-on-year to ₹4,830 crore in the fourth quarter from ₹ 4,366 crore in Q4 FY22. Fees from retail, rural, business banking and SME customers constituted about 80.0% of total fees in Q4 FY23, the lender says.
According to domestic brokerage Nuvama Wealth, ICICI Bank's Q4 earnings were in line on most fronts. "A sequential decrease in slippages and healthy recoveries and upgrades led to an improvement in asset quality," it says in a report. The brokerage maintains a 'BUY' rating on ICICI Bank with a revised target price of ₹1,165 per share, a 30% upside from its current market price.
ICICI Bank's strong performance was backed by growth, margin expansion, and better asset quality, according to Nirmal Bang. The brokerage maintains a 'Buy' on the counter with a target price of ₹1,154 per share.