By Amriteshwar Mathur
The December 2024 quarter results of ICICI Bank, the second-largest private sector bank, were keenly awaited in a bid to see the impact of continued high interest rates and sluggish growth trends in the broader economy. In its quarterly monetary policy review meeting in early December 2024, the RBI had downgraded real GDP growth forecast to 6.6 % for FY 25 from the previous forecast of 7.2 per cent.
Performance in the December 2024 quarter
For a key performance metric, net interest margin (NIM), for ICICI Bank it was 4.25 % in the third quarter of FY25 vis-à-vis 4.43 % a year.
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Smaller rival banks have also faced pressure on NIMs at a time when deposits rates have been high and the central bank has also curbed higher margin unsecured loans. For instance, Kotak Mahindra Bank reported NIM of 4.93 % in the December 2024 quarter vis-à-vis 5.22 % a year earlier.
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However, in the case of larger rival, HDFC Bank, it was 3.62% on interest earning assets in the third quarter of FY 25 vis-à-vis 3.6 % a year earlier.
Meanwhile, ICICI Bank’s total advances increased by 13.9 % on a y-o-y basis to Rs 13.14 lakh crore in the December 2024 quarter led by strong demand for business loans. The growth in advance reported by ICICI Bank was better than rivals – HDFC Bank’s advances grew a lackluster 3% y-o-y to Rs 25.42 lakh crore in the December 2024 quarter while Axis Bank’s advances grew 9 % y-o-y to Rs 10.14 lakh crore in the quarter under review.
And despite high interest rates and sluggish growth rates in the broader economy, asset quality of ICICI Bank was more or less stable – % of net non-performing customer assets to net customer was 0.42 % in the third quarter of FY25 vis-à-vis 0.44 % a year earlier.
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