ICICI Bank Q2 PAT falls 28% YoY on DTA impact; asset quality improves

ICICI Bank reported a 28% decline in Q2 net profit due to one-time tax outgo.

On a standalone basis, the profit after tax was Rs 655 crore in Q2 September 2019 compared with Rs 909 crore in Q2 September 2018. The bank decided to exercise the option of reduction in marginal tax from 35% to 25%. This resulted in a one-time additional charge of Rs 2,920 crore in standalone financial results.

Excluding the one-time tax impact, profit after tax would have been Rs 3,575 crore in Q2 September 2019.

The core operating profit (profit before provisions and tax, excluding treasury income) increased by 24% year-on-year to Rs 6,533 crore in Q2 September 2019 from Rs 5,285 crore in the quarted ended 30 September 2018.

Net interest income (NII) increased by 26% year-on-year to Rs 8,057 crore in Q2 September 2019 from Rs 6,418 crore in Q2 September 2018. The net interest margin was 3.64% in Q2 September 2019 compared to 3.61% in Q1 June 2019 and 3.33% in Q2 September 2018.

Asset quality showed a drastic improvement in September 2019 quarter. The bank's gross non-performing assets (NPAs) stood at Rs 45638.79 crore as on 30 September 2019 as against Rs 45763.08 crore as on 30 June 2019 and Rs 54488.96 crore as on 30 September 2018.

The ratio of gross NPAs to gross advances stood at 6.37% as on 30 September 2019 as against 6.49% as on 30 June 2019 and 8.54% as on 30 September 2018.

The ratio of net NPAs to net advances was lowest in the last 15 quarters at 1.60% as on 30 September 2019 as against 1.77% as on 30 June 2019 and 3.65% as on 30 September 2018.

The bank's provisions and contingencies fell 37.24% to Rs 2506.87 crore in Q2 September 2019 over September 2018.

The year-on-year growth in domestic advances was 16% at 30 September 2019. Total deposits increased by 25% year-on-year to Rs 696,273 crore at 30 September 2019.

Average Current Account Savings Account (CASA) deposits increased by 11% year-on-year in Q2 September 2019. The average CASA ratio was 42.2% in Q2 September 2019 compared to 43.4% in Q1 June 2019 and 47.1% in Q2 September 2018. The period-end CASA ratio was 46.7% at 30 September 2019 compared to 45.2% at 30 June 2019 and 50.8% at 30 September 2018.

Shares of ICICI Bank rose 3.18% to end at Rs 469.10 on Friday after hitting a record high of Rs 470.70 in intraday.

The stock has surged 46.73% in last one year compared to a 18.45% rise in Nifty Bank index.

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