ICICI Bank Q1 net profit up 36% on gains from stake sale in insurance arms
MUMBAI: Private sector bank ICICI Bank Ltd on Saturday reported a 36% year on year jump in net profit to ₹2,599 crore for the quarter ended 30 June owing to higher treasury income from sale of investments. The lender’s net profit stood at ₹1,908.03 crore during the corresponding period a year ago.
A Bloomberg poll of 16 analysts had estimated Q1 net profit at ₹2,728.6 crore.
Treasury income stood at ₹3,763 crore at the end of June quarter compared to ₹179 crore during the corresponding period a year ago. During the quarter, the bank sold 4% stake in ICICI Lombard General insurance (ICICI General) and 1.5% in ICICI Prudential Life Insurance (ICICI Life).
The bank’s core income or net interest income also rose 20% year on year to ₹9,280 crore as on 30 June 2020 compared to ₹7,737 crore a year ago. Net interest margin fell to 3.69% in the first quarter compared to 3.87% in the previous quarter, reflecting higher liquidity with the bank due to strong deposit inflows and limited credit demand due to the lockdown.
Asset quality improved during the quarter with gross non-performing assets falling to ₹40,386 crore at the end of June quarter compared to ₹45,763 crore during the corresponding period a year ago. Gross NPA as a percentage of total assets stood at 5.46% at the end of June quarter compared to 5.53% in the previous quarter.
The bank made higher provisions of ₹7,593 crore as on 30 June compared to ₹3,495 crore during the corresponding period a year ago. The bank made additional covid-19 related provisions of ₹5,550 crore during the quarter compared to ₹2,725 crore in the previous quarter. “We wanted to be prudent and completely cushion the balance sheet. Hence, made this additional provision,” said Sandeep Batra, executive director, ICICI Bank in the earnings call.
ICICI Bank saw a credit growth of 10% year on year and deposits growth of 21% y-o-y at end of June quarter. The loan book under moratorium fell to 17.5% at the end of June quarter from 30% in the previous quarter.
Batra also said that the bank will be looking at reducing 4.2% stake in ICICI Securities this fiscal, in line with the regulatory requirement.