ICICI Bank Shares Jump 2% After Healthy Q3 Profit Growth

ICICI Bank Ltd shares gained 2% in early trade on Monday after the lender reported a 158% jump in net profit for the December quarter compared with a year ago while asset quality also showed signs of improvement.

ICICI Bank shares touched a high of Rs 545 apiece in intra-day session compared with their previous close of Rs 533.85. At 11:47 am, the stock was trading 1.8% higher at Rs 543.50. Notably, the ICICI stock has climbed a massive 58% in the last one year compared with a nearly 15% rise in the benchmark Nifty 50 index.

ICICI Bank on Saturday said net profit increased significantly to Rs 4,146.46 crore during the December quarter from Rs 1,604.91 crore in the same period last year.

Net interest income (NII) during the quarter grew 24.3% year-on-year to Rs 8,545.32 crore with loan growth of 13% (to Rs 6.35 lakh crore) and 37 basis points improvement in net interest margin.

ICICI Bank’s asset quality also improved sequentially, with gross non-performing assets (NPAs) as a percentage of gross advances falling 42 basis points to 5.95% in the December quarter and net NPA falling 11 bps to 1.49%.

Provisions and contingencies for the December quarter stood at Rs 2,083.2 crore, down by a sharp 16.95 sequentially and 50.9% year-on-year.

After the earnings, brokerage firm JPMorgan maintained ‘overweight’ rating on the ICICI Bank stock and raised its target to Rs 650 per share from Rs 560 earlier. JPMorgan said Q3 earnings remained mixed, though operating profit is strong as recoveries improved.

Meanwhile, ICICI Bank saw two big slippages in the December quarter, including its exposure to Karvy Stock Broking. “During the quarter, there were certain developments to a broking company. Our exposure to the company has been classified as non-performing and fully provided for on a prudent basis,” said Sandeep Batra, president, ICICI Bank.

Other than Karvy, ICICI Bank also classified a “South India-based industrial company” as non-performing asset (NPA) as “servicing was regular but the refinancing undertaken by the bank in 2018, was assessed to be a restructuring. The company is backed by reputed promoters and investors”, Batra said.