ICICI Bank today reported a 19 percent degrowth in third quarter profit at Rs 2,441.82 crore year-on-year, with significant deterioration in asset quality. It was impacted by lower net interest income, other income and operating profit but sharp fall in provisions helped net income to beat street estimates.In absolute terms, gross NPA during the quarter jumped 17.2 percent to Rs 37,716.7 crore and net NPA surged 22.6 percent to Rs 19,887.2 crore compared with previous quarter.
Decoding the numbers both Rajiv Mehta of IILF and Siddharth Purohit of Angel Broking were not shocked with the rise in gross non-performing loans but would look forward to management commentary on resolution of NPAs.
The loan growth in the quarter was around Rs 3000 crore that is from Rs 4.54 lakh crore to 4.57 lakh crore and deposits stood at Rs 4.65 lakh crore from Rs 4.49 lakh crore, which his Rs 15000 crore growth in deposits.
The loan growth could have been impacted due to maturity of around 870 million FCNR related loans and redemption of those. Going forward, now that rates have come down, in the fourth quarter one could see an uptick in loan growth, said Purohit.
Mehta said he would keenly watch the management commentary of resolutions on the watch list.
According to Purohit, the net interest margin number has been in-line with his expectation and so has the bottom-line. Net interest income declined 1.6 percent to Rs 5,363.35 crore compared with Rs 5,452.96 crore in year-ago period.
Even if the slippages number is around Rs 7000-8000 crore, the bank has started cleaning up the books, said Purohit. So market might not look at the stock too negatively. However, slippages number from the non-watchlist remains key.
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