Private lender ICICI Bank saw a 5 per cent fall in net profit for the quarter ended March 2019 (Q4) to Rs 969 crore. This was due to higher operating expenses and treasury income plunging to Rs 156 crore versus Rs 2,685 crore a year-ago padded with Rs 3,320 crore of profit from stake sale in ICICI Securities.
That aside, net interest income (NII) grew by 27 per cent at Rs 7,620 crore in Q4. Net interest margins (NIM or a measure of profitability) rose to 3.72 per cent for from 3.4 per cent a year-ago. Yet, these numbers lagged Bloomberg estimates of Rs 7,192 crore of NII and Rs 2,292 crore of net profit.
Other income, excluding from treasury, rose by 15.7 per cent at Rs 3,465 crore for the quarter ended March 2019 against Rs 2,993 crore in the corresponding quarter of the previous year. Fee income grew by 15 per cent to Rs 3,178 crore with retail fees forming 74 per cent of the total fees.
Gross non-performing assets (NPA) ratio stood at 6.7 per cent as of March 2019 — lowest in 13 quarters; down 105 basis points (bps) sequentially and 214 (bps) year-on-year. The bank wrote off Rs 7,324 crore of bad loans during the quarter against Rs 926 crore a quarter ago.
The bank has classified its fund-based outstanding to infrastructure major IL&FS’ entities amounting to Rs 275.94 crore as NPA and provided for Rs 145.97 crore in Q4 as required by the regulator. The bank also has non-fund based outstanding of Rs 544.92 crore to IL&FS entities, against which it has provided Rs 468.26 crore in Q4, said the lender.
ICICI Bank has an exposure of Rs 10,306.5 crore to the accounts classified for resolution under the Insolvency and Bankruptcy Code. It has provided Rs 7,621.03 crore towards the same, taking the provision coverage of 73.94 per cent on these loans.
However, slippages increased sharply by almost 70 per cent sequentially to Rs 3,547 crore due to a sugar account turning NPA in Q4. However, compared to the year-ago figure of Rs 15,737 crore, bad loan accretion has cooled off significantly. Provisioning costs have also fallen about 18 per cent year-on-year to Rs 5,451 crore in Q4. Excluding write offs, the bank’s provision coverage ratio stood at 70.6 per cent in Q4; up from 48 per cent last year.
"In terms of faster recognition of bad loans, strong provision coverage and capital adequacy ratio, ICICI Bank has shown improvement in its balance sheet. This, we believe, would help drive earnings growth, and improve return ratios going forward,” said Lalitabh Srivastava, AVP at Sharekhan.
Total advances grew by 15 per cent at Rs 5.86 trillion as of March 31, 2019 against Rs 5.12 lakh crore as on March 31, 2018.
Total deposits increased by 16 per cent year-on-year to Rs 43,232 crore in Q4, with the bank’s low-cost current account savings account (CASA) ratio at 49.6 per cent as against 49.3 per cent a year-ago. CASA improved by 12 per cent to Rs 3.24 trillion.
Capital adequacy ratio (CRAR) stood at 16.9 per cent in Q4 versus 18.4 per cent as of March 2018. In a call with media, the bank said that it was comfortable with the capital position and expressed no intention of raising funds in the near future.
The bank’s stock closed at Rs 401.4, down by 0.11 per cent on BSE from previous close.