HEADLINES:
June 18 2019
ICICI Bank net slides 56%, NPAs decline
27 October 2018

Higher income helps lender turn profit; net NPA ratio dips to 3.65%, the lowest in eight quarters

After reporting a loss in the first quarter of the current financial year, ICICI Bank registered a profit of ₹909 crore for the quarter ended September 30 on account of higher income and lower provisioning for bad loans.

The profit was, however, 56% lower than the ₹2,058 crore net profit registered in the corresponding quarter of the previous fiscal, which also saw a one-time treasury income of ₹2,102 crore on the sale of shareholding in ICICI Lombard General Insurance.

Meanwhile, the net interest income for the quarter ended September 30 was pegged at ₹6,418 crore, higher than income for the corresponding quarter at ₹5,709 crore, according to a statement from the bank.

Further, the net non performing asset (NPA) ratio dipped from 4.19% to 3.65% in the same period. While the net NPA ratio for the quarter ended September 30 was the lowest in eight quarters, gross additions to NPA at ₹3,117 crore in the three-month period ended September 30 was the lowest in the last 12 quarters.

The gross additions to NPA were ₹3,117 crore in Q2-2019, which included the impact of currency depreciation on existing foreign currency NPAs of ₹1,304 crore, as per the statement.

“ICICI Bank results surprised positively, with lower slippages and improved margins,” said Lalitabh Shrivastawa, assistant vice president – Research, Sharekhan.

“We believe that with the leadership uncertainty behind it and the opportunity to gain market share will help it add to its return ratios. We believe that the NPA cycle has peaked and corporate banks, including ICICI Bank, are better placed than before to benefit,” he added.

Multi-agency probe

Interestingly, the bank’s return to profitability — it registered a loss of ₹120 crore in the first quarter of the current financial year — and improvement in asset quality came, amid a multi-agency probe against the lender and its erstwhile chief Chanda Kochhar, who finally stepped down early this month.

Meanwhile, the consolidated profit after tax was ₹1,205 crore in the quarter ended September 30, 2018, lower than ₹2,071 crore in the corresponding quarter of the previous fiscal.

According to the bank, CASA deposits increased by 15% year-on-year to ₹2.84 lakh crore as on September 30. Further, total deposits increased by 12% year-on-year to ₹5.59 lakh crore as on September 30.

The bank had a network of 4,867 branches and 14,417 ATMs at the end of the second quarter.

On the BSE, shares of ICICI Bank lost 1.45% to close at ₹315.05 on Friday that saw other banking majors like Axis Bank and IndusInd Bank shed between 3% and 5% each. The benchmark Sensex lost a little over 1% or 340.78 points to close at 33,349.31.

 

 

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