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ICICI Bank Q4 profit way off the mark: 7 key takeaways

ICICI Bank reported 5 per cent YoY fall in standalone profit at Rs 969.06 crore in Q4FY19.

Last Updated: May 06, 2019, 05.34 PM IST
Driven by retail segment, domestic loan growth increased 17 per cent YoY.
NEW DELHI: Private sector lender ICICI Bank on Monday posted lower-than-expected financial results for quarter ended March 31.

The bank reported 5 per cent year-on-year (YoY) fall in standalone profit at Rs 969.06 crore in Q4FY19 on higher expenses and lower treasury income. The figure stood at Rs 1,020 crore in the corresponding quarter last year.

Analysts in an ET NOW poll has projected a net of Rs 2,240 crore.

The lender announced its results post market hours. Earlier in the day, shares of ICICI Bank settled 0.11 per cent down at Rs 401.40.

Here are seven key takeaways from ICICI Bank’s fourth quarter earnings:

Exposure to IL&FS: The bank classified Rs 276 crore outstanding to IL&FS units as NPA. ICICI Bank has provided Rs 470 crore for non-fund based IL&FS exposure. The lender has Rs 545 crore non-fund based exposure in the company.

Asset quality: Percentage of gross non-performing assets eased sequentially to 6.70 per cent in Q4FY19 over 7.75 per cent and 8.84 per cent in the corresponding quarter last year. Percentage of net NPA also improved to 2.06 per cent from 2.58 per cent on a quarterly basis. The figure stood at 4.77 per cent in the March quarter last year.

According to ICICI Bank, NPA additions were seen stablising going forward. However, the lender added that exposure to one sugar company was tagged as NPA is ‘meaningful’.

Loans and advances: Driven by retail segment, domestic loan growth increased 17 per cent YoY. Retail loans grew by 22 per cent and constituted 60 per cent of the loan portfolio as on March 31. Total deposits and CASA (current and saving accounts) deposits witnessed an increase of 16 per cent and 12 per cent, respectively. CASA ratio stood at 49.6 per cent as on March 31.

Operating profit: Core operating profit (profit before provisions and tax, excluding treasury income) grew 26 per cent YoY to Rs 6,077 crore. Treasury income of the lender dipped 94 per cent to Rs 156 crore from Rs 2,685 crore in the same period last year. As a result, operating profit declined to Rs 6,233 crore against Rs 7,514 crore on a yearly basis.

NII and NIM: Net interest income (NII) jumped 27 per cent to Rs 7,620 crore. The NII in Q4 includes Rs 414 crore of interest on income tax refund.

The net interest margin was 3.72 per cent in the latest quarter compared with 3.40 per cent a year ago. The impact of interest on income tax refund and interest collection from NPLs on net interest margin was about 25 basis points in Q4FY19 compared with 18 basis points in December quarter.

Dividend: The board also recommended a dividend of Rs 1 per share. The declaration of dividend is subject to shareholders approval.

Fundraising plans: The board of the bank approved fundraising by way of issuance of debt securities of up to Rs 25,000 crore from the domestic markets and up to $3 billion from offshore markets in a single or multiple tranches through public or private placement for a period of one year from the date of passing of resolution by the board.
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