Analyst call on July 24, 2021: opening remarks
Certain statements in this release relating to a future period of time (including inter alia concerning our future business plans or growth prospects) are forward-looking statements intended to qualify for the 'safe harbor' under applicable securities laws including the US Private Securities Litigation Reform Act of 1995. Such forward looking statements involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. These risks and uncertainties include, but are not limited to statutory and regulatory changes, international economic and business conditions, political or economic instability in the jurisdictions where we have operations, increase in non- performing loans, unanticipated changes in interest rates, foreign exchange rates, equity prices or other rates or prices, our growth and expansion in business, the adequacy of our allowance for credit losses, the actual growth in demand for banking products and services, investment income, cash flow projections, our exposure to market risks, changes in India's sovereign rating, and the impact of the Covid-19 pandemic which could result in fewer business opportunities, lower revenues, and an increase in the levels of non-performing assets and provisions, depending inter alia upon the period of time for which the pandemic extends, the remedial measures adopted by governments and central banks, and the time taken for economic activity to resume at normal levels after the pandemic, as well as other risks detailed in the reports filed by us with the United States Securities and Exchange Commission. Any forward-looking statements contained herein are based on assumptions that we believe to be reasonable as of the date of this release. ICICI Bank undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date thereof. Additional risks that could affect our future operating results are more fully described in our filings with the United States Securities and Exchange Commission. These filings are available at www.sec.gov.
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Mr. Bakhshi's opening remarks
Good evening to all of you and welcome to the ICICI Bank Earnings Call to discuss the results for Q1 of FY2022. Joining us today on this call are Vishakha, Anup, Sandeep Batra, Rakesh and Anindya.
We hope that you are safe and in good health. The second wave of the Covid-19 pandemic was more severe compared to the first wave in terms of cases and fatalities, and a wider geographic reach. As banking is classified as an essential service, most of our branches were open even during the months of April and May when containment measures were in place in various parts of the country. Our colleagues have shown resilience and strength and continued to serve our customers, even in this challenging environment when a number of our colleagues were themselves impacted by the virus. We are happy to share that now about 80% of the Bank's employees have received at least one dose of vaccination against Covid-19. We would like to thank the medical and health workers and other essential workers for their tireless efforts in this fight against Covid-19.
With the decline in the numbers of Covid-19 cases since June, there has been a gradual easing of restrictions across various states. The Ultra Frequency Index, comprising several high frequency indicators tracked by the Bank's Economic Research Group, which declined from 107.9 in March to 70.9 in May has improved to 99.6 in the first week of July. High frequency indicators such as power demand, e-way bill generation and
the unemployment rate have shown significant improvement in June. Vehicle registrations have also improved in June compared to April and May. Going forward the pace of normalisation in economic activities will depend on the trajectory of the pandemic, the level of containment measures in place and the pace and effectiveness of vaccination.
At ICICI Bank, we continue to steadily grow our franchise and maintain our strong balance sheet.
1. Growth in the core operating profit in a risk-calibrated manner through the focused pursuit of target market segments
Our aim is to achieve risk-calibrated growth in core operating profit through a 360-degree customer centric approach, tapping opportunities across ecosystems, leveraging internal synergies, building partnerships and decongesting processes. The core operating profit increased by 22.7% year-on-year to 86.05 billion Rupees in Q1 of 2022. The profit after tax grew by 77.6% year-on-year to 46.16 billion Rupees in Q1 of 2022.
Further enhancing our strong deposit franchise
Total deposits grew by 15.5% year-on-year to 9.3 trillion Rupees at June 30, 2021. During the quarter, average current account deposits increased by 32.4% year-on-year and average savings account deposits by 21.7% year-on-year. Term deposits grew by 8.7% year- on-year. The liquidity coverage ratio for the quarter was 130%, reflecting continued significant surplus liquidity. Our cost of deposits continues to be among the lowest in the system. Our digital platforms and solutions, presence in various ecosystems and process decongestion initiatives have played an important role in the growth of our deposit franchise.
Growing our loan portfolio in a granular manner with a focus on risk and reward
Retail disbursements moderated in April and May due to the containment measures in place across various parts of the country. With the gradual easing of restrictions, disbursements picked up in June and July. Credit card spends declined in April and May but improved to March levels in June, driven by spends in categories like consumer durables, utilities, education and insurance. The retail loan portfolio, excluding business banking, grew by 20.2% year-on-year and was flat sequentially at June 30, 2021.
Credit summations in the overdraft accounts of business banking and SME customers also picked up in June and July after declining in April and May. Our business banking and SME franchises continue to grow on the back of digital offerings and platforms like InstaBIZ and Trade Online. The business banking and SME portfolios grew by 53.4% and 42.8% year-on-year respectively. The business banking portfolio grew by 6.3% sequentially and the SME portfolio saw a marginal sequential decline.
The growth of the domestic corporate portfolio was 11.4% year-on- year. The growth in performing domestic corporate portfolio, excluding the builder portfolio, was about 15% year-on-year at June 30, 2021. Overall, the domestic loan portfolio grew by 19.6% year-on- year and was flat sequentially. The non-India linked overseas corporate portfolio, declined year-on-year and sequentially, in line with the approach which we have articulated earlier.
4. Leveraging digital across our business
Our open architecture based digital platforms provide end-to-end seamless digital journeys and personalized solutions to customers and enable more effective data-drivencross-sell and up-sell. These platforms also enable us to reach out to non-ICICI Bank account holders. We have shared some details in slides 17 to 28 of the investor presentation.
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ICICI Bank Ltd. published this content on 24 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 24 July 2021 15:27:05 UTC.