ICICI Bank delivered stronger-than-expected quarterly earnings, with broad-based loan growth, rising fee income and improved asset quality offsetting pressure on margins.
ICICI Bank delivered another strong quarter, reinforcing its reputation as one of India’s fastest-growing large private lenders. The bank reported a sharp acceleration in lending and deposit expansion, with growth broad-based across corporate, business banking and retail segments. Analysts said the performance underlined the lender’s ability to keep scaling faster than peers while preserving profitability and asset quality.
Business Standard reported that interest earned rose 16.21% from a year earlier in the quarter, operating profit climbed 24.75% and profit before tax increased 21.26%. Net profit came in at ₹17,388.86 crore, up 6.84% from the previous quarter. Several brokerages described the results as a clear beat on expectations, with earnings support coming from stronger net interest income, fee momentum and lower-than-expected provisions.
The main pressure point was margin compression, but analysts said that should be viewed in context. JPMorgan noted that reported core net interest margin fell by 4 basis points after adjusting for one-off items, while UBS said the decline was 10 basis points on a like-for-like basis after stripping out a tax-refund benefit in the prior quarter. Even so, the margin setback was widely seen as manageable given the pace of balance-sheet growth and the bank’s ability to defend returns. Several firms said management expects margins to bottom out in the next quarter before recovering later in the financial year.
A notable feature of the quarter was the surge in foreign currency non-resident, or FCNR(B), deposits. Nomura said ICICI Bank mobilised ₹1.6 trillion of these deposits, equal to 8% of total deposits, with about half funded through the bank’s own lending against those deposits. Goldman Sachs said the influx left the lender with ample liquidity and a loan-to-deposit ratio of 85%, creating room for earnings growth as funds are deployed. Analysts also pointed to improving asset quality, lower slippages and modest credit costs as evidence that the bank’s growth is not coming at the expense of risk control.
The brokerage response was uniformly constructive. Bernstein kept an outperform-equivalent stance and a target price of ₹1,800, saying the bank had reinforced its leadership among large private-sector lenders. JPMorgan raised its target to ₹1,800 from ₹1,735 and kept an overweight view, while Nomura lifted its earnings estimates for the next two financial years. UBS, Goldman Sachs, Citi and Kotak Institutional Equities all maintained positive ratings, with most saying ICICI Bank continues to stand out for loan growth, fee income, operating leverage and returns on equity. For investors, the key question now is whether the bank can sustain this pace once the temporary boost from FCNR deposits fades.
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