ICICI Bank hits record high post stellar Q1; slips later on profit booking

ICICI Bank hits record high post stellar Q1; slips later on profit booking

• By Staff Writer

Shares of ICICI Bank hit a fresh record high of Rs 681.40, up 1% on the BSE in Monday's intra-day trade, after the private sector lender reported a strong set of numbers for the quarter ended June 2021 (Q1FY22). The stock surpassed its previous high of Rs 679, touched on February 16, 2021.

The stock, however, slipped nearly 3 % from its intra-day high on profit booking. At 09:21 am, it traded 1.4% lower at Rs 667.20 on the BSE. In comparison, the S&P BSE Sensex was down 143 points at 52,833 levels. Prior to Q1 results, in the past three trading days, the stock of ICICI Bank had rallied 5.5% till July 23.

In Q1FY22, ICICI Bank's net profit rose 78% year-on-year to Rs 4,616 crore Q1FY22 on improvement in interest margins and lower provisioning. Its net profit was Rs 2,599 crore in the same quarter last year (Q1FY21). Sequentially, the profit rose, albeit marginally, from Rs 4,402 crore in the fourth quarter ended March 31, 2021 (Q4FY21).

The lender's net interest income (NII) surged 18% to Rs 10,936 crore in the June quarter as against Rs 9,280 crore in the year-ago period. NII was Rs 10,431 crore in Q4FY21. The net interest margin (NIM) was 3.89% in Q1FY22 compared to 3.84 % in the previous quarter (Q4FY21) and 3.69% in Q1FY21.

Non-interest income, excluding treasury income, increased by 56% year-on-year to Rs 3,706 crore in the June quarter from Rs 2,380 crore in the year-ago period. Sequentially, it fell sharply from Rs 4,137 crore in the March 2021 quarter.

On the asset quality front, the gross non-performing assets (NPA) additions were Rs 7,231 crore during the quarter. Gross NPAs at the end of the quarter stood at 5.15 %, higher than 4.96 % in the March quarter, but lower than last year's 5.46%. The net NPAs in Q1 stood at Rs 9,306 crore as against Rs 9,180 crore in the previous quarter. Meanwhile, the net NPA ratio was 1.16 % at the end of the June quarter compared to 1.14 % on March  31, 2021.

"ICICI Bank reported a strong earnings performance, led by robust core PPOP (pre-provisioning operating profit) performance and controlled provisions. The steady mix of the high yielding portfolio such as Retail/Business banking portfolio, deployment of excess liquidity, and low-cost liability franchise is aiding margin expansion," Motilal Oswal Financial Services said in a result update.

Covid 2.0 has disrupted collections, leading to elevated slippages in the Retail/Business Banking portfolio. However, the management is confident of improved asset quality trends over FY22, mainly from the second half of FY22 (H2FY22) onwards. Restructured loans remain under control at 0.7% of loans. Provision coverage remains best in the industry and an additional Covid-19 provision buffer (0.9% of loans) provides comfort on normalization in credit cost, the brokerage firm added. It maintains a 'Buy' rating with a revised SoTP-based target price of Rs 835/share (2.6x FY23E ABV for the bank).

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