According to Sandeep Batra, Executive Director (ED) of ICICI Bank, lending to small and medium-sized businesses (SME) has been expanding at a healthy rate and is still a major area of concentration.

“SMEs have been expanding at a more wholesome rate lately. In fact, our SME portfolio increased by 25% YoY for the quarter that concluded in December 2022, according to Batra.

Following the release of the bank’s results for the three months ending in December 2022, Batra stated at a press conference that the bank is concentrating on retail, SME, corporate, rural, wholesale, and all sectors of the economy.

A solid 21.4 percent rise in the domestic loan book and a steady net interest margin enabled the bank to achieve a net profit of Rs 8,312 crore for the December quarter (Q3FY23), a 34.2 percent year-over-year gain (NIM).

The bank’s net interest income (NII) increased 34.6 percent, from Rs 12,236 crore in the same period last year to Rs 16,465 crore this quarter.

The private sector lender’s net earnings are significantly above experts’ predictions. According to a Moneycontrol survey of seven brokerages, the lender’s net profit was predicted to increase by 29% to Rs 7,994 crore for the quarter.

For the three months ending in December, NII was projected to have increased 28% year over year (YoY) to Rs 15,639 crore.

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Balance sheet expansion

The domestic loan book of ICICI Bank increased by a robust 21.4 percent, mostly due to loans to small enterprises and retail.

The fastest rise in business banking loans—those that provide credit to small, rural, and informal businesses—was a 37.9% YoY increase, followed by a 25% increase in loans to SME loans.

A low base has contributed to the increased growth in each of these loan groups. While corporate loans expanded by 18.3 percent, retail loans increased by 23.4 percent.

Bank’s sectoral Credit Growth

As of December 31, 2022, the retail loan portfolio had grown by 23.4 percent YoY and made up 54.3 percent of the entire loan portfolio.

For the quarter that ended December 2022, the retail portfolio was 44.9% of the overall portfolio, including non-fund outstanding.

On December 31, 2022, the business banking portfolio increased by 37.9 percent YoY.

The SME sector, which includes borrowers with annual sales of less than Rs 250 crore, increased by 25% YoY.

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Plans Ahead

The management of ICICI Bank has previously said that lending to SMEs was a priority.
Additionally, the bank has repeatedly promoted its digital clout through a super app that gives present and potential consumers access to the whole range of ICICI Group and other financial organizations’ goods.

We’ll concentrate on risk-adjusted growth, which can originate from the retail, SME, corporate, rural, and wholesale sectors of the economy, according to Batra.