Did ICICI Bank manage to outperform its rivals in Q2?

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Subscribe to enjoy similar stories. Investors have been keenly awaiting ICICI Bank's September quarter results to analyse the impact of higher deposit rates on the bank's key operational parameters, including net interest margin (NIM), loan growth, and non-performing assets. They have been rather bullish on the bank going into the earnings season.

The stock hit a 52-week high of ₹1,361.4 on 20 September, and traded broadly flat at ₹1,255.5 on Friday. The scrip has outperformed rivals over the past year: it has gained 37% vis-à-vis a 24% rise in the benchmark index Sensex. Meanwhile, HDFC Bank gained 16.7% during this period, while Axis Bank has gained 24%.

Has ICICI Bank also outperformed its peers in its Q2 earnings? The impact of a higher interest rate regime is visible. ICICI Bank’s NIM in the second quarter of FY25 was 4.27% vis-à-vis 4.53% a year ago. Earlier, smaller rivals also faced similar pressures.

Kotak Mahindra Bank’s NIM was at 4.91% in the second quarter of FY25 against 5.22% a year earlier. Axis Bank reported an NIM of 3.99% in the September quarter versus 4.11% a year earlier. However, larger rival HDFC Bank, the biggest private sector bank, reported an NIM of 3.65 % on interest-earning assets in the second quarter of FY25 vis-à-vis 3.6% a year earlier.

To ICICI Bank’s credit, its loan growth has been fairly strong even in the high-interest environment. Its total advances grew 15% year-on-year in the September quarter to ₹12.77 trillion, led by strong growth in its rural lending. HDFC Bank’s gross advances grew a lackluster 7% year-on-year to ₹25.19 trillion in the second quarter of FY25.