ICICI Bank net zooms 4-folds in Q4; to calibrate growth in near term on 2nd COVID wave

ICICI Bank on Saturday reported a nearly four-fold jump in its March quarter consolidated profit to Rs 4,886 crore as against Rs 1,251 crore in the year-ago period and spoke of "calibrating" growth in the near term given the second wave of COVID-19 infections.

The second-largest private sector lender, which reported more than a three-fold jump in its standalone net at Rs 4,402 crore, said that things will be better in the next two months and exuded confidence in having a strong balance sheet to deliver consistent returns.

"We will calibrate our growth in the near term based on the operating environment and conditions resulting from the second wave of the Covid pandemic," its executive director Sandeep Batra told reporters on a conference call after the announcement of the results.

He said there is bound to be "some kind of a slowdown" wherever there is a local lockdown, but added that the bank is comfortable with the kind of book it has built and believes that the over Rs 7,500 crore in dedicated COVID provisions it carries into the new fiscal are enough to take care of possible reverses.

Income, on a consolidated basis, rose to Rs 43,621 crore in January-March 2021 from Rs 40,121 crore in the year-ago quarter.

The bank's core net interest income increased 17 per cent to Rs 10,431 crore on an 18 per cent growth in domestic advances and a marginal decline in net interest margin to 3.84 per cent from the year ago's 3.87 per cent.

The non-interest income grew marginally at Rs 4,137 crore during the reporting quarter, after a 6 per cent growth in fee income, while there was a Rs 25 crore loss on treasury income because of the hardening of yields during the quarter.

From a provisions perspective, the bank set aside a total of Rs 2,883 crore during the reporting quarter, which included Rs 1,000 crore devoted to the COVID provisioning.

Batra said during the reporting quarter, it drew down over Rs 3,500 crore from the COVID provisions done earlier, possibly because of the Supreme Court order on recognizing bad assets, and added another Rs 1,000 crore to close the book at Rs 7,500 crore.

On the asset quality front, fresh slippages came at Rs 5,523 crore, taking the overall gross non-performing assets ratio to 4.96 per cent as against 4.38 per cent in December.

Over Rs, 4,000 crore of the fresh slippages were in the retail segment, which occupies 67 per cent of the overall book.

It has restructured 1,624 loan accounts entailing a loan exposure of Rs 1,976 crore and taken a provision hit of Rs 314 crore under the head.

Batra said corporates and small businesses have grown resilience over the past year by focusing on digital and answered a question of retail borrower's resilience saying the bank will continue to lend to the better-rated borrowers, as it has been doing even during the worst of times.

Refusing to share any targets or guidance on the future, Batra maintained that "risk calibration" will be the centrepiece for the bank as it wades through the current period, but affirmed commitment to deliver "consistent and predictable" returns to the shareholders.

He also said that the book built by the lender is "best in class".

Among the subsidiaries, the profit after tax of ICICI Life was Rs 64 crore in Q4 as against Rs 179 crore, while the general insurance arm reported a 23 per cent increase in its net profit at Rs 346 crore, and the brokerage business ICICI Securities saw a 111 per cent jump in March quarter net at Rs 329 crore.

The bank's overall capital adequacy ratio stood at 19.12 per cent as of March 31, 2021, and the board has recommended a dividend of Rs 2 per share for FY21 on Saturday.

The bank scrip had shed 1.57 per cent in Friday's trade to close at Rs 570.05 apiece on the BSE.