ICICI Securities: Private Bank Q1 Review - Known Unknowns Addressed; Unknown Knowns Linger 
A motorcyclist and passenger travel past branches of ICICI Bank Ltd., HDFC Bank Ltd. and Punjab National Bank (PNB) on a near-empty street in Mumbai, India. (Photographer: Dhiraj Singh/Bloomberg)

ICICI Securities: Private Bank Q1 Review - Known Unknowns Addressed; Unknown Knowns Linger 

BQ Blue’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages. These reports offer BloombergQuint’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.

ICICI Securities Report

Our stance articulated in Q1 FY21 preview of Banking Financial Services and Insurance (BFSI) earnings being a typical was vindicated from the reported earnings for the quarter.

Unprecedented trends characterised the quarter:

  1. contingency buffer augmented (similar to Q4 FY20, below our liking);
  2. accelerated non-performing loan recognition (for few) amidst technically zero slippages;
  3. Moratorium 2.0 the magic number nine (at lower end) and sub-15% (average) showed sharp improvement led by corporates, few pockets of retail (micro finance institution, unsecured, etc.);
  4. sharp contraction in fee income; and 5) enough cost flexibility linked to business volumes.

However, stability in net interest margins (for many), treasury gains and cost flexibility (variable led) took us by surprise.

Core operating profit grew 5% YoY (down 2% QoQ) and elevated credit cost led to more than 15% decline in profit after tax.

We believe more visibility on growth, cost agility and credit cost will emerge only in second half of FY21 and will also determine respective player flexibility and strength of balance sheet –right now it is mere hope and belief.

Click on the attachment to read the full report:

ICICI Securities Banking Q1FY21 Review.pdf


This report is authored by an external party. BloombergQuint does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the brokerage and do not represent the views of BloombergQuint.

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