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Private sector bank ICICI Bank Ltd has reported a 36 per cent year on year jump in net profit to Rs 2,599 crore for the quarter ended 30 June owing to higher treasury income from the sale of investments. The lender’s net profit stood at Rs 1,908.03 crore during the corresponding period a year ago. A Bloomberg poll of 16 analysts had estimated Q1 net profit at Rs 2,728.6 crore.
Treasury income stood at Rs 3,763 crore at the end of June quarter compared to Rs 179 crore during the corresponding period a year ago. During the quarter, the bank sold 4 per cent stake in ICICI Lombard General Insurance (ICICI General) and 1.5 per cent in ICICI Prudential Life Insurance (ICICI Life).
The bank’s core income or net interest income also rose 20 per cent year on year to Rs 9,280 crore as on 30 June 2020 compared to Rs 7,737 crore a year ago. Net interest margin fell to 3.69 per cent in the first quarter compared to 3.87 per cent 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 Rs 40,386 crore at the end of June quarter compared to Rs 45,763 crore during the corresponding period a year ago. Gross NPA as a percentage of total assets stood at 5.46 per cent at the end of June quarter compared to 5.53 per cent in the previous quarter.
The bank made higher provisions of Rs 7,593 crore as on 30 June compared to Rs 3,495 crore during the corresponding period a year ago. The bank made additional COVID-19 related provisions of Rs 5,550 crore during the quarter compared to Rs 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 per cent year on year and deposits growth of 21 per cent y-o-y at end of June quarter. The loan book under moratorium fell to 17.5 per cent at the end of June quarter from 30 per cent in the previous quarter. Batra also said that the bank will be looking at reducing 4.2 per cent stake in ICICI Securities this fiscal, in line with the regulatory requirement.
