ICICI Bank on Saturday surpassed Street estimates when it reported a 14.62 per cent rise in net profit for the first quarter ended June 30. The private sector lender posted a net profit of ₹11,059.11 crore compared with ₹9,648.20 crore in the same period of the previous fiscal.

Analysts were expecting the lender to post net profits of around ₹10,500 crore.

A strong loan growth of nearly 16 per cent helped the bank’s numbers. Core earnings as represented by the net interest income (NII-interest paid minus interest paid) increased 7.3 per cent over the previous year period to ₹19,553 crore from ₹18,227 crore.

Net interest margin (NIM-a key measure of profitability) was lower at 4.36 per cent during the quarter compared with 4.40 per cent in the preceding three months and 4.78 per cent in the first quarter of the previous fiscal.

While the domestic banking system has been witnessing robust demand for loans, they have been forced to raise their deposit rates to fund this growth. This has resulted in softening their NIMs.

Sandeep Batra, executive director, ICICI Bank, hinted that the fall in NIMs is unlikely to repeat, and it will be stable going forward.

During the quarter, the bank’s asset quality was stable with the percentage of gross non-performing customer assets (NPAs) to gross customer assets standing at 2.15 per cent against 2.16 per cent in the preceding three months.

Similarly, the percentage of net non-performing customer assets was at 0.43 per cent against 0.42 per cent in the same period. In absolute terms, the gross NPAs were at ₹28,718.63 crore compared with ₹27,961.68 crore sequentially.

During the quarter there were gross additions (based on customer assets) of bad loans worth ₹5,916 crore against ₹5,139 crore in January-March 2024. It stood at ₹5,318 crore in the same period of the previous year. Recoveries and upgrades were at ₹3,292 crore against ₹3,918 crore on a sequential basis.

Provisions during the quarter stood at ₹1,332.18 crore over ₹1,292.44 crore in the year-ago period.

The quarter saw its non-interest income increasing by 23.3 per cent to ₹6,389 crore from ₹5,183 crore last year.

ICICI Bank said its net domestic advances grew 15.9 per cent over the previous year and 3.3 per cent sequentially. Of this, the retail loan portfolio rose 17.1 per cent year-on-year and 2.4 per cent over the preceding three months. Retail loans comprised 54.4 per cent of the total loan portfolio as on June 30, 2024.

Total period-end deposits increased 15.1 per cent year-on-year and 0.9 per cent sequentially to ₹14,26,150 crore.