Mumbai: ICICI Bank Saturday reported 24 per cent growth in its June quarter consolidated profit at Rs 3,118 crore even as it set aside Rs 5,550 crore for possible reverses on account of the COVID-19 pandemic.
On a standalone basis, the profit after tax of the second largest private sector lender by assets rose by 36 per cent to Rs 2,599 crore. Gains of over Rs 3,000 crore on stake sale in life and general insurance arms was the major factor which helped the bottomline.
The proportion of borrowers availing the repayment moratorium has fallen to 17.5 per cent by value as of June 30, as against 30 per cent in April, and 90 per cent of those included right now have opted for both the first and second moratoriums.
However, despite the reduction, the bank made a Rs 5,550 crore provision for the possible COVID-19 related impact on the loan book, which was explained as a prudential move which will “completely cushion” the balance sheet, its president Sandeep Batra told reporters, hinting that the bank has done a stress test on its book.
The total provisions for COVID-19 it holds, including the Rs 2,700 crore done in March quarter, have now gone up to Rs 8,275 crore.
Without giving an exact timeline for the Rs 15,000 crore capital raise for which it is seeking shareholders’ nod, he said the move was necessitated because of changes brought about by COVID-19 and the money raised will strengthen the balance sheet and will be utilised for organic growth opportunities.
The bank’s income on a consolidated basis rose to Rs 37,939.32 crore in the quarter under review from Rs 33,868.89 crore in April-June 2019.
When pointed out the steep increase in non-performing assets which the RBI is expecting as per the Financial Stability Report released on Friday, the ICICI Bank management declined to give any guidance and added that it will continuously monitor the situation.
Its fresh slippages were only Rs 1,150 crore in June quarter helped by the moratorium, recoveries and upgrades were Rs 757 crore and write-offs were Rs 1,426 crore.
The gross non-performing assets ratio narrowed to 5.46 per cent from 6.49 per cent a year ago, while the exposure to the borrowers internally rated as BB and below increased by Rs 400 crore during the quarter to Rs 17,110 crore.
Due to the lockdowns to contain the pandemic, the bank was impacted in both loan growth and fee income, but the rural areas held better with 14 per cent growth in advances as compared to the 11 per cent in urban areas across categories including corporate segment.
Its overall domestic loan book grew 10 per cent, while the deposits grew 21 per cent, resulting in a narrowing of the net interest margins to 3.69 per cent for the quarter as against 3.87 per cent in the preceding March quarter, Batra said, adding this was on expected lines.
The core net interest income grew 20 per cent to Rs 9,280 crore, while the non-interest income excluding the treasury gains declined to Rs 2,380 crore in the June quarter as against 3,247 crore in the year-ago period.
It gained Rs 3,036 crore on the treasury side on the back of a 3.96 per cent stake sale in ICICI Lombard General Insurance and 1.50 per cent stake sale in ICICI Prudential Life Insurance.
Batra said it is required to sell over 4 per cent in ICICI Securities to dilute the promoter ownership by end of the year and may look at strategic opportunities of stake sales in the insurance arms.
Its overall capital adequacy stood at 16.32 per cent including the core buffer at 14.93 per cent, which was way above the regulatory requirements.
The bank has sanctioned Rs 5,000 crore in loans to 14,000 small businesses under a credit guarantee scheme floated by the government and Rs 3,800 crore of loans have been disbursed, he said.
Batra declined to give any outlook on loan growth for the fiscal year, given the uncertainties that exist but said the bank will seek to deliver profitable growth and that he believes in the prospects offered by the Indian economy in the medium term.
PTI