ICICI Bank Q4 net profit at INR 4403 crore, up by 261%

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Fee income grew by 6% year-on-year to INR 3,815 crore (US$ 522 million) in Q4-2021 from INR 3,598 crore (US$ 492 million) in Q4-2020.

Performance Review: Quarter ended March 31, 2021

• Core operating profit (profit before provisions and tax, excluding treasury income) grew by 20% year-on-year to INR 8,565 crore (US$ 1.2 billion) in the quarter ended March 31, 2021 (Q4-2021)
• The Bank made additional Covid-19 related provision of `1,000 crore (US$ 137 million) in Q4-2021 and held Covid-19 related provisions of `7,475 crore (US$ 1.0 billion) at March 31, 2021
• Profit after tax was `4,403 crore (US$ 602 million) in Q4-2021 compared to `1,221 crore (US$ 167 million) in the quarter ended March 31, 2020 (Q4-2020)
• Core operating profit grew by 17% year-on-year to INR 31,351 crore (US$ 4.3 billion) in the year ended March 31, 2021 (FY2021)
• Profit after tax grew by 104% year-on-year to `16,193 crore (US$ 2.2 billion) in FY2021 compared to `7,931 crore (US$ 1.1 billion) in the year ended March 31, 2020 (FY2020)
• Total deposits grew by 21% year-on-year to `932,522 crore (US$ 127.6 billion) at March 31, 2021
• 24% year-on-year growth in average current and savings account (CASA) deposits in Q4-2021; average CASA ratio was 42% in Q4-2021
• Term deposits grew by 18% year-on-year at March 31, 2021
• Domestic loans grew by 18% year-on-year at March 31, 2021
• Retail loans grew by 20% year-on-year
• Net non-performing asset (NPA) ratio declined to 1.14% at March 31, 2021 from 1.26% (on a proforma basis) at December 31, 2020 and 1.41% at March 31, 2020
• Provision coverage ratio was 77.7% at March 31, 2021
• Total capital adequacy ratio of 19.12 % and Tier-1 capital adequacy ratio of 18.06% on a standalone basis at March 31, 2021

The Board of Directors of ICICI Bank Limited (NSE: ICICIBANK, BSE: 532174, NYSE: IBN) at its meeting held at Mumbai, approved the standalone and consolidated accounts of the Bank for the year ended March 31, 2021 (FY2021). The statutory auditors have audited the standalone and consolidated financial statements and have issued an unmodified report on the standalone and consolidated financial statements for the quarter and year ended March 31, 2021.

Profit & loss account

• The core operating profit (profit before provisions and tax, excluding treasury income) increased by 20% year-on-year to INR 8,565 crore (US$ 1.2 billion) in Q4-2021 from INR 7,148 crore (US$ 978 million) in Q4-2020
• Net interest income (NII) increased by 17% year-on-year to ` 10,431 crore (US$ 1.4 billion) in Q4-2021 from ` 8,927 crore (US$ 1.2 billion) in Q4-2020.
• The net interest margin was 3.84% in Q4-2021 compared to 3.67% in the quarter ended December 31, 2020 (Q3-2021) and 3.87% in Q4-2020
• Non-interest income, excluding treasury income, was INR 4,137 crore (US$ 566 million) in Q4-2021 compared to INR 4,013 crore (US$ 549 million) in Q4-2020
• Fee income grew by 6% year-on-year to INR 3,815 crore (US$ 522 million) in Q4-2021 from INR 3,598 crore (US$ 492 million) in Q4-2020. Retail fees constituted 77% of total fees in Q4-2021
• There was a treasury loss of `25 crore (US$ 3 million) in Q4-2021 compared to a profit of `242 crore (US$ 33 million) in Q4-2020. The treasury loss in Q4-2021 reflects the increase in yields on fixed income and government securities
• Provisions (excluding provision for tax) were `2,883 crore (US$ 394 million) in Q4-2021 compared to `5,967 crore (US$ 816 million) in Q4-2020. During Q4-2021, the Bank utilised contingency provision amounting to ` 3,509 crore (US$ 480 million) towards proforma NPAs as of December 31, 2020, as these loans have now been classified as per the RBI guidelines. Further, the Bank made additional Covid-19 related provisions of `1,000 crore (US$ 137 million) during Q4-2021
• At March 31, 2021, the Bank held Covid-19 related provision of `7,475 crore (US$ 1.0 billion)
• The profit before tax was INR 5,657 crore (US$ 774 million) in Q4-2021 compared to INR 1,423 crore (US$ 195 million) in Q4-2020
• On a standalone basis, the profit after tax was `4,403 crore (US$ 602 million) in Q4-2021 compared to INR 1,221 crore (US$ 167 million) in Q4- 2020
• On a standalone basis, the profit after tax grew by 104% year-on-year to `16,193 crore (US$ 2.2 billion) in FY2021 from INR 7,931 crore (US$ 1.1 billion) in FY2020

Capital adequacy

The Bank’s total capital adequacy at March 31, 2021 was 19.12% and Tier-1 capital adequacy was 18.06% compared to the minimum regulatory requirements of 11.08% and 9.08% respectively.

Dividend on equity shares

The Board has recommended a dividend of ` 2 per share (equivalent to dividend of US$ 0.05 per ADS) in line with applicable guidelines. The declaration of dividend is subject to requisite approvals. The record/book closure dates will be announced in due course.

Summary Profit and Loss Statement (as per standalone Indian GAAP accounts)

Crore

  FY 2020 Q4- 2020 Q3- 2021 Q4- 2021 FY 2021
  Audited Audited Unaudited Audited Audited
Net interest income  

33,267

 

8,927

 

9,912

 

10,431

 

38,989

Non-interest income  

15,156

 

4,013

 

3,921

 

4,137

 

13,923

– Fee income 13,711 3,598 3,601 3,815 12,659
– Dividend income from subsidiaries  

1,273

 

338

 

356

 

357

 

1,234

Other income 172 77 (36) (35) 30
Less:          
Operating expense 21,615 5,792 5,779 6,003 21,561
Core operating profit1  

26,808

 

7,148

 

8,054

 

8,565

 

31,351

– Treasury income 1,293 242 7662 (25) 5,0462
Operating profit 28,101 7,390 8,820 8,540 36,397
Less:          
Net provision 14,053 5,967 2,7423 2,883 16,214
Covid-19 related provisions4  

2,725

 

2,725

 

(1,800)

 

1,000

 

4,750

Other provisions 11,328 3,242 4,5425 1,8835 11,464
Profit before tax 14,048 1,423 6,078 5,657 20,183
Less:          
Provision for taxes 6,1176 202 1,138 1,254 3,990
Profit after tax 7,931 1,221 4,940 4,403 16,193

1. Excluding treasury income
2. Includes profit on sale of shareholding in subsidiaries of `3,670 crore ($502 million) in FY2021 (Q3-2021:`329 crore ($45 million))
3. During Q3-2021, the Bank changed its provisioning policy on non-performing assets to make it more conservative. The contingency provision made on a prudent basis for loans overdue for more than 90 days at December 31, 2020 but not classified as non-performing pursuant to the Supreme Court’s interim order, also reflected the revised policy. The change in policy resulted in higher provision on advances amounting to INR 2,096 crore ($ 287 million) during Q3-2021 for aligning provisions on the outstanding loans to the revised policy
4. The Covid-19 pandemic has impacted most economies and banking systems globally, including India. The nation-wide lockdown in April-May 2020 substantially impacted economic activity. The easing of lockdown measures subsequently led to gradual improvement in economic activity and progress towards normalcy. For the banking sector, these developments resulted in lower demand for loans and fee-based services and regulatory measures like moratorium on payment of dues and standstill in asset classification to mitigate the economic consequences on borrowers. It also resulted in increase in provisioning reflecting higher actual and expected additions to non- performing loans following the cessation of moratorium and asset classification standstill. The current second wave of Covid-19 pandemic, where the number of new cases has increased significantly in India, has resulted in re-imposition of localised/regional lock-down measures in various parts of the country. The impact of the Covid-19 pandemic on the Bank and the Group is uncertain and will depend on the spread of Covid-19, the effectiveness of current and future steps taken by the governments and central bank to mitigate the economic impact, steps taken by the Bank and the Group and the time it takes for economic activities to return to pre-pandemic levels. In addition to Covid-19 related provision of INR 2,725 crore ($373 million) made in FY2020, during the six months ended September 30, 2020 (H1-2021), the Bank made Covid-19 related provision of INR 5,550 crore ($759 million). During Q3-2021, the Bank utilised `1,800 crore ($246 million) of Covid-19 related provisions made in the earlier periods. During Q4-2021, the Bank made additional Covid-19 related provisions of `1,000 crore ($137 million). At March 31, 2021, the Bank held Covid-19 related provision of `7,475 crore ($1.0 billion)
5. The Bank made contingency provision of INR 497 crore ($68 million) in the quarter ended September 30, 2020 (Q2-2021) and `3,012 crore ($412 million) in Q3-2021 for borrower accounts not classified as non-performing pursuant to the Supreme Court’s interim order. During Q4-2021, the Bank utilised contingency provision amounting to `3,509 crore ($480 million) towards proforma NPAs as of December 31, 2020, as these loans were classified as per RBI guidelines during Q4-2021
6. Includes one-time additional charge due to re-measurement of accumulated deferred tax assets at the revised marginal tax rate
7. Prior period numbers have been re-arranged wherever necessary