ICICI Bank Q1 profit dips 8%; loan growth at 3%, but slippages fall sharply to Rs 4,975 cr

ICICI Bank's first quarter standalone profit fell 8.2 percent year-on-year to Rs 2,049 crore, impacted by higher provisions and subdued growth in other income & operating income.

Slow growth in net interest income also hit profitability but the asset quality was stable during the quarter with sharp fall in slippages.

Net interest income in Q1 increased 8.4 percent to Rs 5,589.84 crore compared with year-ago quarter, with tepid margin expansion and loan growth but deposits growth was strong at 15 percent YoY (at Rs 4.86 lakh crore).

Total loan growth was 3 percent at Rs 4.64 lakh crore YoY. The bank has continued to leverage its strong retail franchise, resulting in a year-on-year growth of 19 percent in the retail portfolio that constituted about 53 percent of the loan portfolio, it said.

CASA deposits increased by 24 percent year-on-year to Rs 2.38 lakh crore in June quarter, it added. CASA ratio was 49 percent at June 2017 compared to 50.4 percent at March 2017 and 45.1 percent at June 2016.

Net interest margin fell sharply sequentially to 3.27 percent from 3.57 percent (in Q4FY17) due to higher refund from income tax and at the same time the bank had high collection of interest from few NPA accounts in the previous quarter. However, margin grew 2 basis points on year-on-year basis.

Profit was estimated at Rs 2,005.3 crore and net interest income at Rs 5,758.4 crore for the quarter, according to average of estimates of analysts polled by CNBC-TV18.

Asset quality of the country's largest private sector lender was stable during the quarter. Gross non-performing assets increased to 7.99 percent from 7.89 percent but net NPA declined to 4.86 percent from 4.89 percent QoQ.

In absolute terms also, gross NPA rose 1.4 percent sequentially to Rs 43,148 crore but net NPA dropped 0.6 percent to Rs 25,306 crore in the quarter ended June 2017.

Watchlist at the end of June quarter increased to Rs 20,300 crore from Rs 19,039 crore in March 2017.

However, slippages for the quarter stood at Rs 4,975 crore, which were much lower than Rs 11,289 crore reported in Q4FY17 and analysts' estimates of Rs 6,000-7,000 crore.

Slippages from watchlist also declined to Rs 359 crore in June quarter, compared with Rs 7,957 crore in previous quarter. Write-offs for the quarter were at Rs 1,600 crore, which too was much lower than Rs 5,409 crore reported in Q4FY17.

"Net loans to companies whose facilities have been restructured were Rs 2,370 crore at June 2017, down 44.4 percent compared with Rs 4,265 crore at March 2017," the private sector lender said, adding there was no sale of NPAs to asset reconstruction companies during the quarter.

ICICI Bank transferred securities amounting to Rs 24,362 crore from held-to-maturity category to available for sale category in Q1.

Provisions for bad loans increased 3.7 percent to Rs 2,608.74 crore compared with year-ago quarter but sequentially declined 10 percent.

Other income (non-interest income) dropped 1.2 percent year-on-year to Rs 3,387.91 crore but fee income grew by 10 percent to Rs 2,377 crore. Operating profit was down 0.6 percent YoY to Rs 5,183.31 crore in the quarter ended June 2017.

Meanwhile, its consolidated profit (including insurance business) grew by 3.5 percent to Rs 2,605 crore compared with year-ago quarter. Consolidated assets grew by 5 percent YoY to Rs 9.88 lakh crore in Q1.

The stock price of ICICI Bank, which announced earnings after market hours, closed down 1.02 percent at Rs 307.05 on the BSE.