ICICI Bank Q1 Results: Stake Sales Aid 36% Rise In Profit, Provisions Surge
ICICI Bank Ltd.’s profit rose in the quarter ended June, aided by stake sales in group firms, even as it set aside more cash to account for pandemic-related disruptions.
The private lender’s net profit rose 36.3% year-on-year to Rs 2,600 crore in the quarter ended June, according to its exchange filing. Net interest income—or the bank’s core income—rose 19.9% over the year-ago period to Rs 9,279 crore. Analysts polled by Bloomberg had estimated the bottom line at Rs 2,729 crore and the top line at 8,880 crore.
Provisions rose 27% year-on-year to Rs 7,594 crore. ICICI Bank made additional covid-related provisions of Rs 5,550 crore during the three-month period. Total provisions held against covid-related losses stood at Rs 8,275 crore as on June 30.
Loans under moratorium fell to 17.5%, as on June 30, from 30% in March, ICICI Bank President Sandeep Batra said in a post-earnings call on Saturday. The bank continues to offer moratorium to those seeking it, after necessary diligence, he said.
The drop in moratorium accounts and rise in provisioning aren’t strictly comparable, Batra said, since provisions are meant to protect the lender against any future losses owing to the pandemic.
ICICI Bank saw its asset quality metrics improve in the first quarter. As a share of gross advances, gross NPAs stood at 5.46% as on June 30 compared with 5.53% as on March 31. Net NPAs ratio improved too—from 1.41% in the March quarter to 1.23% at the end of June.
- Slippages stood at Rs 1,160 crore.
- Total advances rose 6.5% year-on-year to Rs 6.31 lakh crore.
- Total deposits at Rs 8 lakh crore.
- Recoveries and upgrades stood at Rs 757 crore.
Lower slippages are a result of the moratorium being in place, Batra said.
Retail loans rose 11% year-on-year owing to slowing economic activity across the country, Batra said. At present, The bank’s rural portfolio is growing faster than its urban lending business as large cities continue to remain under lockdown.
Stake Sales In Group Firms
ICICI Bank’s quarterly earnings were helped in part by stake sales in group firms. During the June quarter, the private sector lender sold 3.96% stake in ICICI Lombard General Insurance Co. Ltd. and 1.5% stake in ICICI Prudential Life Insurance Co. Ltd.—resulting in net gain of Rs 3,036.29 crore.
The bank will also dilute 4% stake in ICICI Securities during 2020-21, Batra said.