{"id":155269,"date":"2023-10-25T06:37:46","date_gmt":"2023-10-25T10:37:46","guid":{"rendered":"https:\/\/44.250.171.167\/?p=155269"},"modified":"2023-10-25T06:37:48","modified_gmt":"2023-10-25T10:37:48","slug":"icici-bank-limited-q2-fy24-earnings-conference-call-insights","status":"publish","type":"post","link":"https:\/\/alphastreet.com\/india\/icici-bank-limited-q2-fy24-earnings-conference-call-insights\/","title":{"rendered":"ICICI Bank Limited Q2 FY24 Earnings Conference Call Insights"},"content":{"rendered":"<p><strong>Key highlights from ICICI Bank Limited (ICICIBANK) Q2 FY24 Earnings Concall<\/strong><\/p>\n<ul>\n<li><strong>Loan Growth And Credit Quality<\/strong>\n<ul>\n<li>Domestic loan portfolio grew 19.3% year-on-year and 4.8% sequentially at September 30, 2023.<\/li>\n<li>The retail loan portfolio grew 21.4% year-on-year and 5.5% sequentially. Retail loans were 46% of total loans.<\/li>\n<li>The net NPA ratio declined to 0.43% at September 30, 2023 from 0.48% last quarter and 0.6% a year ago.<\/li>\n<li>There were net additions of INR 1.16 billion to gross NPAs this quarter compared to INR 18.07 billion last quarter.<\/li>\n<li>The Bank continues to hold contingency provisions of INR 131 billion or 1.2% of total loans.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Net Interest Income<\/strong>\n<ul>\n<li>NII increased by 23.8% year-on-year to INR 183.08 billion in Q2 FY2024.<\/li>\n<li>The net interest margin was 4.53% this quarter compared to 4.31% in Q2 last year.<\/li>\n<li>The sequential decline in NIM reflects the lagged impact of higher term deposit rates.<\/li>\n<li>The domestic NIM was 4.61% this quarter compared to 4.45% in Q2 last year.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Fee Income And Profitability<\/strong>\n<ul>\n<li>Fee income increased by 16.2% year-on-year to INR 52.04 billion in Q2 FY2024.<\/li>\n<li>Fees from retail, rural, business banking and SME customers were 78% of total fees.<\/li>\n<li>Growth in fees reflects increased digital adoption and transactions by customers.<\/li>\n<li>PBT excluding treasury grew by 35.7% year-on-year to INR 137.31 billion.<\/li>\n<li>The core operating profit increased by 21.7% year-on-year to INR 143.14 billion.<\/li>\n<li>PAT grew by 35.8% year-on-year to INR 102.61 billion in Q2 FY2024.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Operating Expenses<\/strong>\n<ul>\n<li>Operating expenses increased by 20.8% year-on-year in Q2 FY2024.<\/li>\n<li>Employee expenses increased by 29% year-on-year due to increase in headcount to 139,000.<\/li>\n<li>Number of employees increased by 29,000 in last 12 months.<\/li>\n<li>Non-employee expenses increased 16.3% year-on-year due to technology and retail business expenses.<\/li>\n<li>Branch count increased by 174 in Q2 FY2024 to 6,248 branches.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Provisions And Digital Offerings<\/strong>\n<ul>\n<li>Total provisions declined sequentially to INR 5.83 billion in Q2 FY2024.<\/li>\n<li>Provisioning coverage ratio was 82.6% and contingency provisions were INR 131 billion.<\/li>\n<li>71% of trade transactions were done digitally in Q2 FY2024, up 29.7% year-on-year.<\/li>\n<li>Digital platforms seeing increased adoption for transactions and payments.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Unsecured Loans Portfolio<\/strong>\n<ul>\n<li>Trends in ICICI Bank&#8217;s unsecured loans portfolio are stable based on monitoring of delinquencies and credit costs.<\/li>\n<li>Focus has been on existing customers with credit scores above a threshold and assessing leverage.<\/li>\n<li>Industry outlook shows distinction between smaller and larger ticket size segments.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Recovery and Upgrades<\/strong>\n<ul>\n<li>Retail slippages have been around 3% of portfolio, with recovery\/upgrades at 60% of that amount.<\/li>\n<li>Expect the trends in recovery and upgrades to remain reasonably stable going forward.<\/li>\n<li>Could see some quarterly variations.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Branch Expansion Strategy<\/strong>\n<ul>\n<li>Added about 350 branches in H1 FY2024.<\/li>\n<li>Expansion is based on growth opportunities in micro-markets and not driven by expansion strategies of other banks.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Mortgage and Auto Loan Growth<\/strong>\n<ul>\n<li>Mortgage portfolio has been growing at 16-17% year-on-year.<\/li>\n<li>Auto loans have been growing at above 20% year-on-year.<\/li>\n<li>Commercial vehicle loans growing at 12-14% now.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Margin Outlook<\/strong>\n<ul>\n<li>Expect some further moderation in margins from Q2 levels.<\/li>\n<li>But full year margin likely to be similar to FY2023 levels.<\/li>\n<li>Deposit repricing impact will continue over next few quarters.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Yield on Loans<\/strong>\n<ul>\n<li>5 basis points decline in yields due to computation conventions.<\/li>\n<li>Some pricing competition in the market but not a major movement in yields.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Key highlights from ICICI Bank Limited (ICICIBANK) Q2 FY24 Earnings Concall Loan Growth And Credit Quality Domestic loan portfolio grew 19.3% year-on-year and 4.8% sequentially at September 30, 2023. The retail loan portfolio grew 21.4% year-on-year and 5.5% sequentially. Retail loans were 46% of total loans. The net NPA ratio declined to 0.43% at September [&hellip;]<\/p>\n","protected":false},"author":1767,"featured_media":154818,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[9825,392,1],"tags":[9153,10169,8200],"class_list":["post-155269","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-earnings-call-highlights","category-earnings","category-finance-stocks","tag-banks-diversified","tag-earnings","tag-retail-banking"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg","jetpack_likes_enabled":false,"jetpack-related-posts":[{"id":157757,"url":"https:\/\/alphastreet.com\/india\/hdfc-bank-limited-q3-fy24-earnings-conference-call-insights\/","url_meta":{"origin":155269,"position":0},"title":"HDFC Bank Limited Q3 FY24 Earnings Conference Call Insights","author":"Praveen","date":"January 17, 2024","format":false,"excerpt":"Key highlights from HDFC Bank Limited (HDFCBANK) Q3 FY24 Earnings Concall Healthy Domestic Economic Activity Domestic activity driven by robust consumer spending, capital expenditure, manufacturing, and services sector. 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