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ICICI Bank Q3 net profit slips by 2.7% y-o-y to Rs.1605cr – 31 Jan 2019

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ICICI Bank reported Q3 results for the quarter ended December 31, 2018

  • Net interest income up by 20.5% to Rs. 6,875.2 crore
  • Net profit down by 2.75% to Rs. 1,604.9 crore
  • Provisions at Rs. 4,244.2 crore versus Rs. 3,569.2 crore
  • GNPA at 7.75% versus 8.54% (QoQ)
  • NNPA at 2.58% versus 3.65% (QoQ)

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ICICI Bank’s NII for Q3FY19 came at Rs6,875cr as against Rs5,705cr, which is up by 20.5% yoy. The bank has reported a net profit of Rs1,605cr in Q3FY19, (though the net profit is below consensus estimates by 11%, considering other parameters like asset quality and NII growth, the results are better), as against Rs1,650cr yoy. The overall NIM for the quarter came at 3.4%. Its GNPA for Q3FY19 came at 7.8% against 8.54% qoq, which has decreased by 79bps. NNPA for the quarter came at 2.58% against 3.65% qoq, which has declined by 107bps.

  • Margins expanded 26bps yoy and 7bps qoq; however, 15-18bps was only on account of income reversal in an overseas NPA account. Adjusted for this, margins declined sequentially driven by lower LDR and lower CASA ratio.
  • Core operating profit grew by 14% yoy to Rs5,667cr for the quarter.
  • Fee income grew by 16% yoy from Rs2,639cr in Q3FY18 to Rs3,062cr. Retail fee constituted 73% of total fees.
  • Total advances increased by 12% yoy to Rs5.64 lakh cr in the quarter.
  • Domestic loan growth came at 14% yoy as of December 31, 2018 driven by retail loans.
  • Retail loans grew by 22% yoy and constituted 59% of the loan portfolio as at December 31, 2018.
  • Provisions were Rs4,244cr in Q3FY19 compared to Rs3,570cr in Q3 FY18. Provisions increased 19% yoy, but would have included a write back on provisions for investment depreciation in the quarter, implying much higher growth in loan loss provisions.
  • CASA ratio stood at 49.3% as at December 31, 2018
  • Asset quality improved substantially. Slippage ratio dropped to 1.7% in 3QFY19 (continuing the downward trend from 1QFY19). Slippages stood at Rs2,090cr (lowest in 14 quarters), with Rs950cr coming from the BB & below pool.
  • Reduction in NPLs was aided by a sale of Rs2150cr to an ARC in the quarter (100% cash basis). Total stressed assets stood at ~Rs79,700cr (13.1% of loans). PCR was significantly strengthened on a sequential basis.

IIFL Technical View:

ICICI Bank Ltd ended at Rs. 365.25, up by 18.35 points or 5.29% from its previous closing of Rs. 346.90 on the BSE.
The scrip opened at Rs. 351 and touched a high and low of Rs. 368.05 and Rs. 351 respectively. A total of 4,27,49,626 (NSE+BSE) shares were traded on the counter. The stock traded below its 50 DMA.

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