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ICICI Bank Ltd. reported strong earnings performance, led by robust core pre provision operating profit, aided by healthy net interest income growth (5 basis point net interest margin expansion).
Also, lower provisions (23% below our estimate) drove the earnings beat versus our estimate.
ICICI Bank is thus progressing well towards earnings normalisation.
Fresh slippages stood elevated at Rs 72.3 billion (annualised ~4% of loans), pre-dominantly from the retail/business banking portfolio.
However, this was partially compensated by higher recoveries and upgrades.
The gross non performing asset/net non performing asset ratio grew by 19bp/2bp q-o-q to 5.15%/1.16%.
Provision coverage ratio remains stable at 78.4%, the highest in the industry.
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