ICICI Bank gains over 3% after paring stake in ICICI Prudential Life

Shares of ICICI Bank rose 3.11 per cent to Rs 375.25 on the BSE on Monday after the bank sold 1.5 per cent stake in its life insurance arm ICICI Prudential Life for Rs 840 crore.

In a statement to the exchanges, the bank said that purusant to the board's approval, "the Bank has today divested 21,500,000 equity shares of face value of Rs. 10 each of ICICI Prudential Life Insurance Company Limited, representing 1.50% of its equity share capital at March 31, 2020, on the stock exchange for an approximate total consideration of Rs. 8.40 billion." READ THE EXCHANGE FILING HERE

Following this, the bank’s shareholding in ICICI Prudential Life Insurance Company Limited stands at 51.4 per cent. 

At 10:35 AM, the stock was up 2.18 per cent as compared to Sensex's 0.64 per cent gain,. A combined 1.27 crore shares have changed hands on the NSE and BSE so far. Meanwhile, ICICI Pru Life's stock also rose 5.68 per cent to Rs 413.95 on the BSE after the stake sale.
 

While announcing its results for the March quarter of 2019-20 (Q4FY20), on May 9, 2020, the bank had stated that the Bank would look at further strengthening the balance sheet as opportunities arise. In line with the announcement, the bank had also sold 3.96 per cent stake in ICICI Lombard for Rs 2,250 crore on Friday. The bank has now raised Rs 3,090 crore by selling stake in its life and general insurance subsidiaries.

For the Q4FY20, the private sector lender reported an 82 per cent jump in pre-tax profit and a 26 per cent rise in net profit, on the back of higher provisioning for the coronavirus pandemic. The bank’s pre-tax profit stood at Rs 1,423 crore as opposed to Rs 782 crore in Q4FY19, while net profit was Rs 1,221 crore against Rs 969 crore.

The bank also created higher than the required provisions toward coronavirus, at Rs 2,725 crore, which is well above the regulatory requirement of Rs 600 crore.

On the asset quality front, slippages remained elevated, led by one healthcare and one oil trading account, although higher writeoffs have led to GNPA improvement.

Gross non-performing assets (NPAs) declined to 5.53 per cent in Q4FY20 from 6.70 per cent in Q4FY19 and 5.95 per cent in Q3FY20. Similarly, net NPAs declined to 1.41 per cent in the reporting quarter from 2.06 per cent in Q4FY19 and 1.49 per cent in Q3FY20. The bank reported slippages of Rs 5,300 crore, higher than Q3FY20’s figure of Rs 4,300 crore.