ICICI Bank Q2 profit rises six-fold to Rs 4,251 crore; asset quality improves

ICICI Bank posted standalone profit after tax of Rs 4,251 crore in the quarter ended September 31, 2020, as opposed to Rs 655 crore in the year-ago period. This amounts to more than six-fold increase in net profit during the quarter under review.

Core operating profit, or profit before provisions and tax, excluding treasury income, of ICICI Bank during the September quarter this fiscal increased by 18 per cent year-on-year to Rs 7,719 crore from Rs 6,533 crore in the corresponding quarter last year.

Net interest income (NII), or the difference between interest earned and interest expended, increased 16 per cent on annual basis to Rs 9,366 crore in Q2 FY21 from Rs 8,057 crore in Q2 FY20. Net interest margin was 3.57 per cent in Q2 FY21 compared to 3.69 per cent in Q1 FY21 and 3.64 per cent in Q2 FY20, reflecting surplus liquidity with the bank.

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ICICI Bank made provisions (excluding provision for tax) worth Rs 2,995 crore in Q2 FY21 compared to Rs 2,507 crore in Q2 FY20. This includes provision of Rs 497 crore made on a prudent basis on loans amounting to Rs 1,410 crore that were not classified as non-performing assets (NPAs) following a Supreme Court interim order dated September 3, 2020, directing that accounts classified as standard till August 31, 2020, should not be classified as NPAs until further orders. The bank also made COVID-19-related provisions worth Rs 8,772 crore during the September quarter this fiscal.

The private sector lender saw its retail loan portfolio grow 13 per cent year-on-year during the quarter ended September 30, 2020. Retail loans comprised 65.8 per cent of the total loan portfolio at September 30, 2020.

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ICICI Bank saw its asset quality improve during the quarter under review. In the quarter ended September 30, 2020, net NPA ratio decreased from 1.23 per cent at June 30, 2020, to 1 per cent at September 30, 2020. Including loans not classified as NPA after the interim order by the Supreme Court would have taken the net NPA ratio to 1.12 per cent.

Total capital adequacy ratio of the bank on a standalone basis, including profits for the six months ended September 30, 2020, stood at 19.33 per cent and Tier-1 capital adequacy ratio at 17.89 per cent, compared to the minimum regulatory requirements of 11.08 per cent and 9.08 per cent respectively.

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