Overcoming the challenges posed by the Covid pandemic and lockdown in the country, ICICI Bank on Saturday posted a 549 per cent jump in its net profit at Rs 4,251.33 crore for the quarter ended September 30, 2020, as against a net profit of Rs 654.96 crore during the same period of the previous financial year.
The rise in net profit was aided by the bank’s low base as it incurred taxes of Rs 3,712 crore in the September 2019 quarter due to one-time additional charge. The profit was also boosted by the bank’s treasury income, which jumped on Rs 305 crore worth of stake sale by the bank in ICICI Securities during the quarter.
Total income (standalone) in July-September 2020 stood at Rs 23,650.77 crore, up from Rs 22,759.52 crore in the same period a year earlier.
“Collection and overdue trends are close to pre-Covid levels and are in line with or better than our expectations. We expect a normalisation of credit costs in fiscal 2022 based on our current expectations of economic activity and portfolio trends,” ICICI Bank MD Sandeep Bakhshi said in an analysts’ conference call.
The bank’s asset quality also improved during the last 12 months. Gross non-performing assets (NPAs) of the bank were at Rs 38,989 crore (5.17 per cent of advances) as of September 2020, as against Rs 45,638 crore (6.37 per cent) in same period of last year.
“As expected, in the second half of fiscal 2021, the banking system, including us, would see higher gross NPA additions as well as some resolution of loans as per the framework announced by the RBI given the disruption to economic activity in the first half and the dissipation of the moratorium impact,” it said.
The bank has not classified such borrower accounts as NPA as of September 2020. If these borrower accounts were classified as NPA by the bank, the pro-forma gross NPA ratio and net NPA ratio (based on customer assets), would have been 5.36 per cent and 1.12 per cent, respectively, as on September 30, 2020.
During Q1FY21, the bank made an additional Covid-19-related provision amounting to Rs 5,550.00 crore and held a total of Rs 8,275 crore of such provisions as of June 2020. During Q2 of FY21, the bank has made contingency provision amounting to
Rs 497.30 crore for borrower accounts, which were not classified as non-performing following the interim order of the Supreme Court.
The bank has not utilised Covid-19-related provision made in the earlier periods during H1 of 2021. Accordingly, the bank held aggregate Covid-19-related provision of Rs 8772.30 crore as of September 2020. This additional provision made by the bank is more than the requirement as per the RBI guideline dated April 17, 2020. The impact of the Covid-19 pandemic on the bank and the group is uncertain and will depend on the ongoing spread of Covid-19, the effectiveness of current and future steps taken by governments and central banks to mitigate the economic impact, steps taken by the bank and the group and the time it takes for economic activities to return to pre-pandemic levels. The bank’s capital and liquidity position is strong and would continue to be the focus area for the bank during this period.
During the March-August period, the bank extended moratorium worth Rs 14,564.15 crore to SMA/overdue categories which were standard as of February 29, 2020 and continued to be overdue till March 31, 2020.
“Loans under moratorium had decreased substantially from April-end to June-end and declined further at August-end. We had articulated that moratorium levels were not conclusive indicators of eventual outcomes,” said the bank.
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