ICICI Bank Q2: Lack of credit growth still a worry, say experts

Country's largest private sector lender ICICI Bank beat analysts' expectations on profit front but asset quality was disappointing in July-September quarter.Consolidated profit declined to Rs 2,979 crore in Q2FY17 from Rs 3,419 crore in Q2FY16.Reacting to the numbers Prakash Diwan of Altamount Capital Management says he is worried on two parameters – One is there is yet no visibility of softening in the net non-performing assets (NPAs). Two, lack of credit growth is becoming a big concern because some of these large corporate banks are not finding the wherewithal to grow as much as some of the smaller private sector banks.  So, the valuation differential between ICICI bank and some of the other rapidly growing banks will continue to be there.
In the same interview, Bajrang Bafna of Sunidhi Securities & Finance and Siddharth Purohit of Angel Broking shared their views on the bank's second quarter performance.Asset quality for the bank worsened further in Q2 as gross non-performing assets as a percentage of gross advances climbed 95 basis points to 6.82 percent and net NPA rose 22 basis points to 3.57 percent on sequential basis.In absolute terms, gross NPAs during the quarter jumped 18.3 percent quarter-on-quarter to Rs 32,179 crore and net NPAs increased 7.8 percent to Rs 16,215 crore.

For the full discussion, watch video