ICICI Bank Q4 consolidated profit up 6.91 pc to Rs 1,251 cr; sets aside Rs 2k-cr for virus impact

ICICI Bank on Saturday reported a 6.91 per cent growth in March quarter net at Rs 1,251 crore on a consolidated basis, after setting aside over Rs 2,000 crore in provisions for potential impact of the COVID-19 pandemic.

On a standalone basis, the second largest private sector bank's profit grew 26 per cent to Rs 1,221 crore as against Rs 969 crore in the year-ago period.

For fiscal year 2019-20, it reported a 135 per cent jump in standalone profit to Rs 7,930.81 crore.

From an asset quality perspective, the bank reported an improvement in gross non-performing assets (NPAs) ratio to 5.53 per cent as against 6.70 per cent in the year-ago period and 5.95 per cent as of December 2019, despite over Rs 5,300 crore in fresh slippages during the reporting quarter.

ICICI Bank President Sandeep Batra said it had slippages of Rs 4,300 crore in the preceding December quarter, and the additions on this front can be attributed to two accounts -- a West Asian healthcare company and a Singaporean oil trading company becoming NPAs during the quarter.

In both the cases, borrowers had misrepresented their financial position to the lenders, and the bank has made significant provisions for both the accounts, he said, adding that it does not expect any more stress from the two accounts in the future.

Its overall provisions increased to Rs 5,967 crore on a standalone basis, as against Rs 5,451 crore in the year-ago period and Rs 2,083 crore in the preceding quarter. The provisions included Rs 2,725 crore for the COVID-19 impact.

The provisioning for COVID-19 has been done on a prudential basis in anticipation of possible stress and is significantly higher than the Rs 600 crore asked to be set aside by RBI for accounts which were overdue as of March 1, the management said.

Over 32 per cent of its borrowers by value across the retail, small businesses and corporate segments have opted for the three-month moratorium allowed by the Reserve Bank, the bank management said, stressing that this does not necessarily reflect the asset quality as many customers would be conserving cash.

The management declined to answer a query on whether it is also adopting strategies like employee retrenchments or salary cuts amid the coronavirus crisis.

Batra said despite the challenging times, the bank sees opportunities to grow and will be deploying digital alternatives more, but said it does not have any loanbook growth target for the new fiscal.

He also said the bank will be more choosy about lending and extend loans to better placed borrowers with low leverage, sufficient cash and regular incomes.

He further said everything depends on when the lockdown is lifted and the economy picks up, adding that the banking sector's trajectory will be influenced by the economy.

For the reporting quarter, its core net interest income rose 17 per cent to Rs 8,927 crore on widening of the domestic net interest margins to the highest-ever 3.87 per cent and a 13 per cent rise in domestic advances.

Its overall loan book now stands at Rs 6.45 lakh crore. In FY20, it registered a 9 per cent growth in corporate loans, while retail loan growth slowed down to 16 per cent and now accounts for 53 per cent of loans.

Unlike peers who reported a reduction in deposits, the bank logged an 18 per cent deposit growth in the fiscal.

The non-interest income, excluding treasury performance, was up 16 per cent to Rs 4,013 crore, with the core fee component growth at 13 per cent.

The level of NPAs in the retail category was the same as at the end of the earlier quarter, the bank said, adding the share of the advances in the below investment grade book also reduced by nearly Rs 1,000 crore during FY20 to over Rs 16,000 crore.

The bank's overall capital adequacy stood at a comfortable 16.11 per cent, with the core tier-I ratio at 14.72 per cent. The management said it does not have any immediate plans of raising money.

The company's board on Saturday approved an enabling resolution to raise up to Rs 25,000 crore through debt instruments and USD 3 billion from overseas bonds.

It also approved shifting of the registered office to Maharashtra from Gujarat's Vadodara and has already received NOC from the RBI regarding the same.

The move, which comes amid a raging political controversy over the Centre placing the IFSC headquarters in Gujarat's Gandhinagar, will help in efficiencies as a majority of the bank's shareholders are in Maharashtra and its corporate headquarter is also in Mumbai, the financial capital of the country, Batra said.