ICICI Bank Q4 profit grows by 26%, misses estimates on COVID-19 provisions; NPAs dip

ICICI Bank, the country's second largest private sector lender by assets, on May 9 reported a 26 percent year-on-year growth in standalone profit at Rs 1,221.36 crore in quarter ended March 2020, missing analysts estimates due to higher COVID-19 related provisions.

As per the average of estimates of analysts polled by CNBC-TV18 the standalone profit was expected to be Rs 3,485 crore.

Profit in the same period last year was at Rs 969.06 crore.

The bank said it had made COVID-19 related provisions of around Rs 2, 725 crore against standard assets to further strengthen balance sheet.

"This additional provision made by the Bank is more than the requirement as per the RBI guidelines dated April 17, 2020."

Excluding COVID-19 related provisions, the profit after tax would have been Rs 3,260 crore, ICICI Bank said in its BSE filing said.

Provisions and contingencies in March quarter rose 9.5 percent year-on-year to Rs 5,967.44 crore, and the sequential increase was 186.5 percent.

Net interest income for the quarter grew by 17.1 percent year-on-year to Rs 8,926.89 crore with 10 percent loan growth and 18 percent increase in deposits year-on-year (YoY). NII was higher than the CNBC-TV18 poll estimates of Rs 8,669 crore.

The domestic loan growth was at 13 percent YoY in March quarter, driven by 16 percent growth in retail segment that contributed about 53.3 percent to total loan book, said the bank, adding growth in the performing domestic corporate portfolio was about 9 percent YoY.

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The net interest margin improved to 3.87 percent in Q4FY20, the highest ever, from 3.77 percent in quarter-ended December 2019, ICICI Bank said.

Asset quality improved with gross non-performing assets as a percentage of gross advances falling 42 basis points sequentially to 5.53 percent and net NPAs dropped 8 basis points to 1.41 percent in quarter ended March 2020.

"Recoveries and upgrades, excluding write-offs, from non-performing loans were Rs 1,883 crore in Q4FY20," said ICICI Bank.

Gross slippages stood at Rs 5,306 crore at the end of March 2020, rising 21.6 percent compared to Rs 4,363 crore in December 2019.

The fund-based and non-fund based outstanding to borrowers rated BB and below (excluding non-performing assets) was Rs 16,668 crore as of March 2020, registering a decline compared to Rs 17,403 crore at December 2019.

Provision coverage ratio improved to 86.8 percent at the end of March quarter, against 85.7 percent in previous quarter.

Non-interest income (other income) in Q4FY20 increased 17.5 percent to Rs 4,255 crore YoY with fee income growth of 13 percent and treasury income rising 55 percent.

Pre-provision operating profit grew by 18.6 percent to Rs 7,390 crore compared to year-ago quarter.

For FY20, the standalone profit stood at Rs 7,931 crore, a 135.8 percent growth over Rs 3,363 crore in previous year.

"Excluding the impact of change in tax rate during the year and the COVID-19 related provisions, the profit would have been Rs 11,360 crore for FY20," bank said.

Net interest income grew by 23.1 percent to Rs 33,267.07 crore compared to FY19.

Meanwhile, the private sector lender approved fund raising by way of issuances of debt securities including by way of non-convertible debentures in domestic markets upto an overall limit of around Rs 25,000 crore.