IBN's Q1 Earnings Rise Y/Y on Strong NII & Fee Income, Provisions Up

ICICI Bank Ltd.’s IBN net income for the first quarter of fiscal 2025 (ended June 30) was INR127.7 billion ($1.5 billion), up 15.5% from the prior-year quarter.

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

IBN’s NII & Fee Income Up, Expenses Rise

NII grew 10.6% year over year to INR216.3 billion ($2.5 billion). The net interest margin was 4.34%, down 2 basis points.

Non-interest income was INR72.6 billion ($847 million), up 13.7% year over year. Fee income increased 7.5% year over year to INR59 billion ($688 million).

In the reported quarter, IBN recorded a treasury income of INR12.4 billion ($145 million) compared with a treasury gain of INR6.1 billion ($71 million) in the prior-year quarter.

Operating expenses totaled INR113.9 billion ($1.33 billion), up 8.2% year over year.

ICICI Bank’s Loans Increase & Deposits Decrease

As of June 30, 2025, ICICI Bank’s total advances were INR13,641.5 billion ($159.1 billion), up 1.7% sequentially. Growth was primarily driven by a solid rise in business banking loans.

Total deposits declined marginally on a sequential basis to INR16,085.2 billion ($187.6 billion).

IBN’s Credit Quality: Mixed Bag

As of June 30, 2025, the net non-performing assets (NPA) ratio was 0.41%, which declined from 0.43% in the prior-year quarter. Recoveries and upgrades (excluding write-offs and sales) of NPAs were INR32.11 billion ($374 million) in the reported quarter.

In the fiscal first quarter, there were net additions of INR30.34 billion ($354 million) to gross NPA. Further, gross NPA additions were INR62.45 billion ($728 million), while gross NPA written-off was INR23.59 billion ($275 million).

Provisions (excluding provision for tax) increased 36.2% year over year to INR18.1 billion ($212 million). As of June 20, 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 16.97%. Tier-1 capital adequacy was 16.31% as of June 30, 2025. Both ratios were well above the minimum requirements.

Our Take on IBN

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

ICICI Bank Limited Price, Consensus and EPS Surprise

ICICI Bank Limited price-consensus-eps-surprise-chart | ICICI Bank Limited Quote

ICICI Bank currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Earnings Release Dates of Other Foreign Banks

HSBC Holdings plc HSBC is scheduled to announce second-quarter 2025 numbers on July 30. (See the Zacks Earnings Calendar to stay ahead of market-making news.)

The consensus estimate for HSBC’s quarterly earnings has remained unchanged at $1.62 per share over the past week. The figure implies a decline of 1.8% from the prior-year quarter.

Deutsche Bank AG DB is slated to report second-quarter 2025 results on July 24.

The Zacks Consensus Estimate for DB’s quarterly earnings has remained unchanged at 78 cents per share over the past week. The figure implies an increase of 290% from the prior-year quarter.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research