ICICI Bank Q3 Results: Profit Meets Estimates On Essar Resolution But Slippages Jump
The Mumbai-based lender’s net profit rose 158% year-on-year to Rs 4,146.46 crore in the quarter ended December.
ICICI Bank Ltd. reported a mixed set of quarterly earnings as the boost from lower provisions and the resolution of its non-performing asset Essar Steel Ltd. was offset by higher tax expense.
India’s second-largest lender’s net profit rose 158 percent year-on-year to Rs 4,146.46 crore in the quarter ended December, it said in an exchange filing. That compares with the Rs 4,308-crore consensus estimate of analysts tracked by Bloomberg.
Tax expense increased to Rs 1,320 crore from Rs 297 crore a year ago.
The bank’s net interest income, or the core income from operations, rose 24.3 percent on a yearly basis to Rs 8,545.32 crore. This is above Rs 8,403-crore forecast. The net interest margin rose to 3.77 percent from 3.64 percent in the previous quarter.
Asset Quality
The headline asset quality improved as bad loans as a percentage of total assets fell 4.7 percent to Rs 43,453.86 crore. Gross non-performing assets ratio stood at 5.95 percent compared to 6.37 percent in the previous quarter.
However, slippages, or new bad loans, jumped 76 percent quarter-on-quarter to Rs 4,363 crore. That can be attributed to two large accounts that have been classified as non-performing assets—a broking company which has been fully provided for, and a south India-based industrial house account, the lender’s President Sandeep Batra said at a post-earnings conference.
The bank’s Kisan Credit Card and commercial vehicle portfolios are also seeing some stress, he said, adding that segments such as retail, corporate and small and medium enterprises are seeing growth in the loan book. The bank is, however, ensuring this growth is done in a risk-calibrated manner, Batra said.
Loan Growth
The private lender’s domestic loan growth stood at 16 percent on a yearly basis, driven by the retail loan growth that advanced by 19 percent. Besides, the corporate portfolio rose by 12 percent year-on-year.
Total deposits rose 18 percent, with the average current account and savings account deposits rose by 15 percent.
The bank’s balancesheet stood at Rs 10 lakh crore. Its capital adequacy stood at 16.5 percent.
Shares of the company rose 1.2 percent on Friday. The stock has returned 24.2 percent between October and December compared with the NSE Nifty Bank Index’s 10.5 percent advance.
