IBN's Q4 Earnings Increase Y/Y as NII & Fee Income Rise, Provisions Up

Zacks Equity Research

Mon, Apr 21, 2025, 4:34 AM 3 min read

ICICI Bank Ltd.’s IBN net income for the fourth quarter of fiscal 2025 (ended March 31) was INR126.3 billion ($1.5 billion), up 18% from the prior-year quarter.

The results were driven by a rise in net interest income (NII), non-interest income and growth in loans and deposits. However, higher operating expenses and provisions were the headwinds.

IBN’s NII & Fee Income Up, Expenses Rise

NII grew 11% year over year to INR211.9 billion ($2.5 billion). The net interest margin was 4.41%, up 1 basis point.

Non-interest income was INR70.2 billion ($821 million), up 18.4% year over year. Fee income increased 16% to INR63.1 billion ($738 million).

In the reported quarter, IBN recorded a treasury income of INR2.4 billion ($28 million) against a treasury loss of INR2.8 billion ($33 million) in the prior-year quarter.

Operating expenses totaled INR107.9 billion ($1.26 billion), up 11.1% year over year.

ICICI Bank’s Loans & Deposits Increase

As of March 31, 2025, ICICI Bank’s total advances were INR13,417.7 billion ($157 billion), up 1.2% sequentially. Growth was primarily driven by a solid rise in business banking loans.

Total deposits grew 5.9% sequentially to INR16,103.5 billion ($188.4 billion).

IBN’s Credit Quality: Mixed Bag

As of March 31, 2025, the net non-performing assets (NPA) ratio was 0.39%, which declined from 0.42% in the prior-year quarter. Recoveries and upgrades (excluding write-offs and sales) of NPAs were INR38.17 billion ($447 million) in the reported quarter.

In the fiscal fourth quarter, there were net additions of INR13.25 billion ($155 million) to gross NPA. Further, gross NPA additions were INR51.42 billion ($602 million), while gross NPA written-off was INR21.18 billion ($248 million).

Provisions (excluding provision for tax) increased 24.1% year over year to INR8.9 billion ($104 million). As of March 31, 2025, the bank held a total contingency provision of INR 131 billion ($1.5 billion).

Capital Ratios Strong for ICICI Bank

In compliance with the Reserve Bank of India's guidelines on Basel III norms, ICICI Bank's total capital adequacy was 16.55%. Tier-1 capital adequacy was 15.94% as of March 31, 2025. Both ratios were well above the minimum requirements.

Our Take on IBN

Increased consumer loan demand, improved deposit balances and growth in NII and non-interest income are anticipated to continue supporting ICICI Bank’s financials. However, elevated expenses and weak asset quality amid macroeconomic uncertainties are near-term challenges.