Dolat Capital: ICICI Bank’s Prudent Provisioning Provides Significant Comfort In Q1
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Dolat Capital Report
ICICI Bank Ltd. reported a better-than-expected operating performance with net interest income and pre-provision operating profit growth of 20% and 71% respectively. PPoP grew by 24% YoY excluding one-time gain from stake sale in insurance subsidiaries (Rs 30 billion).
Moratorium levels at 17.5% are based on opt-in from the month of June. The Bank has made additional Covid-19 related provisions of Rs 55.5 billion in Q1 FY21, with standard provision buffers (ex- general provisions) at 1.6% of loans and 9% of moratorium book as of June-20.
ICICI Bank’s prudent provisioning, healthy liability profile, strong digital capabilities and market leading subsidiaries remain its key strength. We nonetheless remain watchful of tail risks post moratorium, particularly from the bank’s corporate portfolio.
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