ICICI Bank Q1 results: Lender posts net loss of Rs 119.5 crore

ICICI Bank Ltd, India's third-largest lender by assets, released its Q1 results report today. The beleaguered lender's net loss has come in at Rs 119.5 cr. Notably, ICICI Bank share price ended 2.64 percent firmer ahead of quarterly results. The lender's NII comes in at Rs 6,102 cr. 

The bank made a net loss of 1.20 billion rupees ($17.47 million) in the three months to June 30, compared with a profit of 20.49 billion rupees a year earlier, it said in a statement.

Analysts on average had expected a net profit of 14.62 billion rupees, according to Thomson Reuters. 

Gross bad loans as a percentage of total loans was 8.81 percent at the end of June, compared with 8.84 percent at the end of the previous quarter and 7.99 percent a year earlier.

According to a Reuters poll, the lender’s net profit will decline to Rs 1,422 crore as against Rs 2,049 crore reported in the same quarter last year.

This is the first results announcement in absence of its CEO and Managing Director Chanda Kochhar, who is on leave pending an independent inquiry into the impropriety allegations against her. This will also be the first after the appointment of Sandeep Bakhshi as ICICI Bank’s new Chief Operating Officer in June this year.

The scrip was trading 1.87 per cent up at Rs 291.15 at around 1.45 pm. It ended 2.64 percent firmer ahead of quarterly results.

Performance Review: Quarter ended June 30, 2018

1-The core operating profit (profit before provisions and tax, excluding treasury income) grew by 17% year-on-year to Rs 5,042 crore (US$ 736 million) in the quarter ended June 30, 2018 (Q1-2019)
2-Net interest margin at 3.19% in Q1-2019
3-Fee income grew by 16% year-on-year in Q1-2019 driven by retail fee income growth of 18% year-on-year
4-Operating expenses grew by 9% year-on-year in Q1-2019
5- Domestic loan growth at 15% year-on-year at June 30, 2018 driven by retail
6-Retail loans grew by 20% year-on-year and constituted 58% of the total loan portfolio at June 30, 2018 compared to 47% at March 31, 2016
7- 16% year-on-year growth in current and savings account (CASA) deposits; CASA ratio at 50.5% at June 30, 2018
8- Net NPA ratio decreased from 4.77% at March 31, 2018 to 4.19% at June 30, 2018
9- Recoveries of Rs 2,036 crore (US$ 297 million) in Q1-2019
10- 560 basis points (bps) sequential increase in provision coverage ratio (including technical/prudential write-offs) to 66.1% at June 30, 2018, further strengthening the balance sheet
11-Total capital adequacy ratio of 18.35% and Tier-1 capital adequacy ratio of 15.84% on standalone basis at June 30, 2018

Profit & loss account

1-Net interest income was Rs 6,102 crore (US$ 891 million) in the quarter ended June 30, 2018 (Q1-2019) compared to Rs 5,590 crore (US$ 816 million) in the quarter ended June 30, 2017 (Q1-2018).

2-Overall net interest margin of 3.19% in Q1-2019 compared to 3.23% in FY2018.

3- Non-interest income, excluding treasury income, was Rs 3,085 crore (US$451 million) in Q1-2019 compared to Rs 2,530 crore (US$ 370 million) in Q1-2018.
4-Fee income grew by 16% year-on-year to ₹ 2,754 crore (US$ 402million) in Q1-2019 from ₹ 2,377 crore (US$ 347 million) in Q1-2018. Retail fee income grew by 18% in Q1-2019 and constituted 75% of total fees.
5- The core operating profit (profit before provisions and tax, excluding treasury income) was Rs 5,042 crore (US$ 736 million) in Q1-2019 compared to Rs 4,326 crore (US$ 632 million) in Q1-2018.
6-Treasury income was Rs 766 crore in Q1-2019 (US$ 112 million). Treasury income in Q1-2019 included gains of Rs 1,110 crore (US$ 162 million) on sale of shareholding in ICICI Prudential Life Insurance. Mark-to-market losses on the AFS and HFT portfolio aggregated ` 219 crore (US$ 32 million) in Q1-2019. While RBI had allowed the banks to spread such provisioning for such mark-to-market losses over up to four quarters, the Bank provided for such losses in Q1-2019 itself.
7- While the gross additions to NPA at Rs 4,036 crore (US$ 589 million) were the lowest in the last 11 quarters, additional provisions on existing NPAs as per Reserve Bank of India (RBI) guidelines (ageing-based provisions and provisions for cases directed by RBI to be referred to the National Company Law Tribunal) resulted in total provisions of Rs 5,971 crore (US$872 million) and a net loss of Rs 120 crore (US$ 18 million) in Q1-2019.
8-Consolidated profit after tax was Rs 5 crore (US$ 1 million) in Q1-2019.