The core operating profit (profit before provisions and tax, excluding treasury income) grew by 17 percent on a year-on-year basis to Rs 5,042 crore ($736 million) in the quarter ended June 30, 2018 (Q1-2019).
India’s largest private sector lender ICICI Bank reported a net loss of Rs 119.5 crore in the first quarter of FY19 compared to a profit of Rs 2,049 crore in the same quarter last year.
This is the first loss reported by the bank since listing.
Ahead of the results, ICICI Bank closed 2.6 percent higher at Rs 293.30.
Here is a list of top 10 takeaways from ICICI Bank Q1 results:
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Net Loss:
India’s largest private sector bank reported a net loss of Rs 119.55 crore compared to CNBC-TV18 poll which was expecting a profit of Rs 1404.70 crore.
The private sector lender reported a net profit of Rs 1,020 crore in the previous quarter and Rs 2,049 crore in the year-ago period.
ICICI Prudential Life Insurance Company Ltd sale:
During Q1FY2019, the bank sold equity shares representing 2 percent shareholding in ICICI Prudential Life Insurance Company Limited through an offer for sale on stock exchanges for a total consideration of around Rs 1,145.97 crore.
The sale resulted in a gain (after sale-related expenses) of around Rs 1,109.59 crore in unconsolidated financial results and around Rs 1,005.93 crore in consolidated financial results for Q1FY2019.
During 02-2018, the Bank sold equity shares representing 7 percent shareholding in ICICI Lombard General Insurance Company Limited in an initial public offer (IPO) for a total consideration of Rs 2,099.43 crore.
The sale resulted in a gain (after IPO related expenses) Rs 2,012.15 crore in unconsolidated financial results and Rs 1,711.32 crore in consolidated financial results for FY2018. Further, during Q4FY2018, the Bank sold equity shares representing 20.78 percent shareholding in ICICI Securities limited in an IPO for a total consideration of less than Rs 3,480.12 crore.
Operating Profit:
The core operating profit (profit before provisions and tax, excluding treasury income) grew by 17 percent on a year-on-year basis to Rs 5,042 crore ($736 million) in the quarter ended June 30, 2018 (Q1-2019).
Loan Growth:
The domestic loan growth stood at 15 percent on a year-on-year basis for the June quarter driven by retail. Retail loans grew by 20 percent year-on-year which constituted 58 percent of the total loan portfolio at June 30, 2018, compared to 47 percent at March 31, 2016.
Net Interest Income & NIM:
Net interest income stood at Rs 6,102 crore for the quarter ended June 30, 2018 (Q1FY2019) which was in line with estimates. Experts polled by CNBC-TV18 were anticipating NII of Rs 6,062 crore. The private sector lender reported NII of Rs 5,590 crore seen in the quarter ended June 30, 2017 (Q1-2018).
Overall, the net interest margin stood at 3.19 percent for the quarter ended June compared to 3.23 percent reported in the year-ago period.
Capital Adequacy:
Total capital adequacy ratio of 18.35 percent and Tier-1 capital adequacy ratio of 15.84 percent on a standalone basis at June 30, 2018.
Asset quality:
The gross additions to NPA were Rs 4,036 crore in the June quarter. Recoveries and upgrades from non-performing loans were Rs 2,036 crore in the same period.
The net NPAs and net restructured loans as a proportion of net customer assets decreased from 5.03 percent at March 31, 2018, to 4.43 percent at June 30, 2018.
Provisions:
While the gross additions to NPA stood at Rs 4,036 crore was the lowest in the last 11 quarters, additional provisions on existing NPAs as per Reserve Bank of India (RBI) guidelines resulted in total provisions of Rs 5,971 crore. However, consolidated profit after tax was Rs 5 crore.
The provision coverage ratio on the non-performing loans, including cumulative technical/prudential write-offs, increased 560 bps sequentially to 66.1 percent at June 30, 2018, further strengthening the balance sheet.
Treasury Income:
Treasury Income was Rs 766 crore in Q1FY2019. Treasury income in Q1-2019 included gains of Rs 1,110 crore ($ 162 million) on the sale of shareholding in ICICI Prudential Life Insurance.
Credit growth:
The year-on-year growth in domestic advances was 15 percent at June 30, 2018. The Bank has continued to leverage its strong retail franchise, resulting in a year-on-year growth of 20 percent in the retail portfolio at June 30, 2018.
The retail portfolio constituted about 58 percent of the loan portfolio of the Bank at June 30, 2018. Total advances increased by 11 percent year-on-year to Rs 516,289 crore ($ 75.4 billion) at June 30, 2018, from Rs 464,075 crore ($ 67.8 billion) at June 30, 2017.