KRChoksey's research report on ICICI BankRecognizing the entire AQR pain directed by RBI in Q4FY16, ICICI Bank took a hit on bottom-line reporting 76% decline. The bank has identified five sectors, viz; iron and steel, mining, rigs cement and power that are lurking under severe credit quality pressures adding to the stress. While the provisions stood exponentially higher, the bank created a collective contingency reserves to the tune of INR 3.6 bn on the grounds of prudency. While the bank enters the consolidation phase, elevated asset quality stress and subdued earnings stand imminent. Downgrade to ACCUMULATE.While the asset quality disappointment was on expected lines, the 80% decline in Q4 PAT comes as a shock as the bank recognizes entire RBI AQR pain with provisions climbing 148% Y-o-Y. The NII too came under pressure and declined by 1% Q-o-Q, however, advances stood decent at 12.3%. Tough quarter for ICICI Bank.
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