ICICI Bank reported a 26% year-on-year (y-o-y) rise in net profit to Rs 1,221 crore in the March quarter, which was below the street’s estimates. The miss in profit was due to Covid-19 related provisions of Rs 2,725 crore. The net profit was lower than the estimate of `3,510 crore of Bloomberg. The total provisions of the bank rose 9.5% y-o-y to Rs 5,967 crore, compared with Rs 5,451 crore in the same quarter last year.
Sequentially provisions almost tripled, compared to Rs 2,083 crore in the December 2019 quarter.
Sandeep Batra, president, ICICI Bank, said, “We have provided around 32% moratorium to our customers by value,” adding, “We will be cautious to the sectors which will be impacted more in the economy.”
Speaking on a scenario post-Covid-19 he said, “The growth will naturally come down, which is largely a function of economic activity, and disbursements are going to be fairly limited.”
The bank’s net interest income (NII) rose 17% y-o-y to Rs 8,927 crore, compared to Rs 7,620 crore in the same quarter last year. NII is the difference between interest earned and interest expended. The fee income for the bank was up 13% in March 2020 to Rs 3,598 crore, compared to Rs 3,178 crore in March 2019.
The bank’s net interest margin (NIM) stood at 3.87%, up 10 basis points (bps) from 3.77% in the previous quarter. ICICI Bank’s gross non-performing assets (NPA) ratio at the end of March quarter stood at 5.53%, 42 bps down from 5.95% at the end of December, while the net NPA ratio decreased 8 bps sequentially to 1.41% from 1.49% as on December 31, 2019.
The fund based and non-fund based outstanding to borrowers rated BB and below was Rs 16,668 crore, compared to Rs 17,525 crore till March 31, 2019, and Rs 17,403 crore till December 31, 2019. The gross NPA additions in the March quarter was Rs 5,306 crore. “Around Rs 1,800 crore slippages have come from BB and below book,” Batra said in the conference call. Hinting towards bankrupt Singapore’s Hin Leon Trading, Batra said, “The borrowers were misrepresenting financial position to the lenders in a healthcare group in west Asia and oil trading company based in Singapore. Our exposure to both accounts have been classified as NPA.”
The provision coverage ratio (PCR) increased from 70.6% at March 31, 2019 to 75.7% at March 31, 2020. The capital adequacy ratio of the bank remained at 16.11% and Tier-1 capital adequacy ratio of 14.72% till March 31, 2020.
Total advances increased by 10% year-on-year to Rs 6,45,290 crore in March 31, 2020, from Rs 5,86,647 crore in the same quarter last year. Total deposits increased by 18% y-o-y to Rs 7,70,969 crore. The average CASA ratio was 42.3% in March, 2020, compared to 42.8% in December, 2019, and 44.6% in March, 2019. Total term deposits increased by 29% year-on-year to Rs 4,23,151 crore till March 31, 2020.
The board of the bank has also approved fund raising of Rs 2,500 crore through bonds. The management, however, clarified that it is an enabling provision which is made every year.
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