RBI-Kotak Mahindra Bank effect: ICICI Bank spotlights increased spending on IT, cybersecurity

Announcing its financials connected Saturday, ICICI Bank highlighted that it had importantly accrued its spending connected accusation exertion and cybersecurity, from 5.6% of aggregate operating expenses successful 2019 to 9.4% successful fiscal twelvemonth 2023-24.

The spotlight turned connected the expanding necessity for a robust accusation exertion backbone successful fiscal services erstwhile the Reserve Bank precocious clamped down connected Kotak Mahindra Bank for “serious deficiencies" successful its IT system.

The regulator past week imposed concern restrictions connected the Uday Kotak-founded slope to “prevent immoderate imaginable prolonged outage" that could “seriously interaction not lone the bank’s quality to render businesslike lawsuit work but besides the fiscal ecosystem of integer banking and outgo systems".

Also read: Kotak indispensable enactment accelerated to flight RBI’s cyber-risk clamps

“IT resilience and lawsuit information are of paramount value to america and this is not constrained by immoderate budget," Sandeep Batra, enforcement manager astatine ICICI Bank, said aft announcing the fourth-quarter results of India’s second-largest backstage lender.

“This is an ongoing effort and determination could beryllium instances of outages and errors successful immoderate bank. We person the quality to instrumentality speedy betterment and corrective enactment and we volition stay focussed connected improving our capabilities," helium added. “Whenever we request to walk wealth that has ne'er been a constraint, we volition stay focussed."

ICICI Bank’s operating expenses accrued 19% year-on-year to ₹39,133 crore successful FY24.

A caller glitch

Mint reported connected 25 April astir a glitch successful the ICICI Bank mobile banking application that was flagged by users who said they could presumption the details of different people's recognition cards. 

“It has travel to our announcement that astir 17,000 caller recognition cards which were issued successful the past fewer days were erroneously mapped successful our integer channels to the incorrect users. They represent astir 0.1% of the bank’s recognition paper portfolio," an ICICI Bank spokesperson told Mint. 

“As an contiguous measure, we person blocked these cards and are issuing caller ones to the customers. No lawsuit of misuse of a paper from this acceptable has been reported to us… the slope volition appropriately compensate a lawsuit successful lawsuit of immoderate fiscal loss," the spokesperson said.

Also read: Kotak CEO calls for large tech infra upgrade successful connection to employees

Strong performance, mostly

On Saturday, ICICI Bank reported a standalone nett net of ₹10,708 crore for the March quarter, a maturation of 17.4% year-on-year. Net involvement income, the quality betwixt involvement earned and involvement expended, improved 8.1% y-o-y to ₹19,093 crore. 

However, nett involvement margin, a cardinal measurement of profitability for a lender, slid to 4.4% successful the 4th fourth from 4.9% successful the aforesaid play a twelvemonth agone and 4.43% successful the December quarter. 

Analysts, though, are mostly upbeat astir ICICI Bank’s latest fiscal performance. 

“While it was wide a beardown quarter, a fewer areas that 1 could nitpick—while the implicit NIM remains higher than peers, the slope did spot a marginal diminution successful NIM sequentially adjacent arsenic its peers saw a marginal summation contempt their (quarter-on-quarter) deposit maturation being connected par oregon higher than ICICI," analysts astatine Sanford C. Bernstein said successful a enactment to clients.

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Published: 28 Apr 2024, 10:27 AM IST