ICICI Bank: A Friend For Life
It was a pleasant surprise to see ICICI Bank’s end-March results for fiscal’17 — the bank not only declared an almost three-fold jump in standalone net profit, but also announced an issue of bonus shares. This is how the fourth quarter reporting numbers looked: a standalone net profit of Rs 2,025 crore compared with Rs 702 crore in the year-ago quarter. While net profit for the full financial year was almost flat at Rs 9,801 crore (Rs 9,726 crore), the consolidated figure was up by 3.78 per cent at Rs 11,340.33 crore. On the other hand, the total assets (consolidated) was up 7.32 per cent at Rs 9,86,042.66 crore.
Net interest income increased by 2.4 per cent to Rs 21,737 crore, an increase of 10.1 per cent in the average volume of interest-earning assets. This was offset by a decrease in net interest margin to 3.25 per cent (3.49 per cent). The overall domestic loan growth was at 14 per cent year-on-year (yoy), about 8 percentage points higher than the banking system non-food credit growth, driven by 18.5 per cent growth in the retail portfolio. The share of retail in total loans increased to 51.8 per cent at end-March (46.6 per cent).
“We continued to focus on asset resolution and exposure reduction in identified areas. We had reported the bank’s exposure comprising fund based limits and non-fund based outstanding to companies internally rated below investment grade in power, iron & steel, mining, cement and rigs sectors; and to promoter entities internally rated below investment grade where the underlying partly relates to these sectors,”, noted ICICI Bank’s managing director & CEO, Chanda Kochhar.
The bank’s focus was on core operating parameters. The net interest margin was 3.25 per cent in fiscal 2017. Growth in fee income improved to 10.4 per cent yoy in the second half of fiscal 2017 from 3.8 per cent. Its capital position continues to be very strong. The tier-1 capital adequacy at 14.36 per cent and the total capital adequacy of 17.39 per cent at end-March were well above regulatory requirements.
Well, there’s more to banking than just financials — a key area of attention for the bank is digital. The bank and ICICI Foundation went on a drive to transform 100 villages into ‘ICICI Digital Villages’. This is a unique village promotion programme encompassing digitisation of transactions and commercial activities; skill development and access to credit. The objective is to support the creation of digital payments ecosystems in rural India.
The bank also teamed up with Samsung for its new mobile payment feature ‘Samsung Pay’, through which customers can load their ICICI Bank credit and debit cards on their Samsung Galaxy smartphones and pay almost anywhere. When customers want to pay for transactions, they just need to authenticate their ICICI Bank card on the phone through their fingerprint or a 4-digit PIN and then tap the phone on any point-of-sale machine to complete their payment.
The bank also integrated its retail Internet banking platform with ‘DigiLocker’, an initiative of the Ministry of Electronics & Information Technology.
‘DigiLocker’ is an online repository platform for issuance, verification and storage of digital certificates and documents in the cloud. All savings account customers of ICICI Bank who have mapped their Aadhaar with their accounts can directly register and access their ‘DigiLocker’ through ICICI Bank Internet banking for no additional charge.
