ICICI Bank Q1 takeaways: Pick up in disbursements, fall in provisions & more

NEW DELHI: ‘s 78 per cent revenue progress YoY largely met Street expectations. The 18 per cent progress in web curiosity revenue was increased than 14-16 per cent progress anticipated by an ETMarkets.com ballot. Provisions fell 63 per cent in opposition to expectations of an up to 70 per cent drop. Net curiosity margin (NIM) rose to three.89 per cent whereas asset high quality, as prompt by gross non-performing belongings (NPAs), deteriorated marginally.

Here are the important thing takeaways from the quarterly outcomes:

Profit in line, NII beats expectations
ICICI Bank’s 78 per cent rise in June quarter was largely in line with an ETMarkets.com ballot estimate of 77 per cent progress.

The bottonline progress was decrease than 260.47 per cent progress in revenue the financial institution reported in March quarter, however increased than 36 per cent revenue progress it reported in the year-ago quarter.

NII progress for the quarter at 15-16 per cent beat expectations. Analysts at an ET NOW ballot had anticipated NII progress at 14 per cent.

Disbursements choose up

ICICI Bank mentioned retail disbursements have picked up in June and July after moderating in April and May attributable to Covid containment measures in place throughout varied elements of the nation.

The disbursement ranges, it mentioned, recovered to March ranges in June, pushed by spending in classes like shopper durables, utilities, schooling, and insurance coverage. Credits obtained in the overdraft accounts of enterprise banking and SME prospects additionally picked up in June and July after declining in April and May, it mentioned.

Provisions fall, NPA rises marginally

ICICI Bank mentioned it has modified its coverage on non-performing loans throughout the June quarter to make it more conservative. Provisions for the quarter fell 63 per cent to Rs 2,852 crore from Rs 7,594 crore in opposition to expectations of up to 70 per cent fall. This might be as a result of financial institution’s coverage change, which the financial institution mentioned resulted in increased provision on non-performing advances amounting to Rs 1,127 crore for aligning provisions on excellent loans to the revised coverage.

Gross non-performing belongings, in the meantime, rose to five.15 per cent in opposition to 4.96 per cent in the March quarter and 5.46 per cent in the year-ago quarter.

Recoveries and upgrades of NPAs, excluding write-offs and sale, stood at Rs 3,627 crore. The financial institution wrote off Rs 1,589 crore value gross NPAs in June quarter. Excluding NPAs, the whole fund-based excellent to all debtors underneath decision as per the assorted extant laws was Rs 4,864 crore or 0.7 per cent of the whole mortgage portfolio.

Uncertainty nonetheless looms
In the absence of regulatory dispensations like moratorium on mortgage repayments and standstill on asset classification, the influence on the standard of the mortgage portfolio would seemingly be sharper and earlier throughout FY22, the financial institution mentioned.

“The impact, including with respect to credit quality and provisions, of the Covid-19 pandemic on the bank and the group, is uncertain and will depend on the trajectory of the pandemic, progress and effectiveness of the vaccination programme, the effectiveness of current and future steps taken by the government and central bank to mitigate the economic impact,” it mentioned.

Retail mortgage progress up 20%, SME 43%
Retail mortgage portfolio comprised 61.4 per cent of the whole mortgage portfolio as of June 30. Including non-fund excellent, retail accounted for 50.4 per cent of the whole portfolio as on June 30.

For the quarter, the credit score progress for the retail section stood at 20 per cent. The enterprise banking portfolio climbed 53 per cent YoY and was 5.4 per cent of whole loans on June 30. The SME enterprise, comprising debtors with a turnover of lower than Rs 250 crore, superior 43 per cent year-on-year and accounted for 4 per cent of whole loans as on June 30.

“Growth in the domestic corporate portfolio was about 11 per cent year-on-year, driven by disbursements to higher-rated corporates and public sector undertakings across various sectors. The growth in performing domestic corporate portfolio, excluding the builder portfolio, was 15 per cent year-on-year on June 30, 2021,” it mentioned. Overall, the credit score progress was up 20 per cent, whereas deposit progress rose 16 per cent.

Subsidiaries reported blended progress
Subsidiaries reported blended progress.

, on a consolidated foundation, noticed 61 per cent YoY bounce in revenue at Rs 311 crore from Rs 193 crore YoY. ICICI Prudential Asset Management Company clocked 48 per cent year-on-year bounce in revenue at Rs 380 crore in contrast Rs 257 crore YoY. The revenue after tax at General Insurance Company fell to Rs 152 crore from Rs 398 crore. Overall, ICICI Bank’s consolidated revenue after tax got here in at Rs 4,747 crore in contrast with Rs 4,886 in the March quarter and Rs 3,118 crore in the year-ago quarter.

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