ICICI Bank shares fell as much as 7 per cent in the early trade on Friday after the bank surprised investors on both earnings and asset quality fronts in the third quarter ended December 2015.
At 9.39 am, shares of ICICI Bank were trading 4.10 per cent down at Rs 223.40. The scrip opened at Rs 216 and had touched a high and low of Rs 224.45 and Rs 216, respectively, in trade so far. Later, the scrip settled 1.22 per cent down at Rs 230.10.
For the quarter ended December 2015, ICICI Bank posted net profit of Rs 3,018.13 crore, up 4.47 per cent, against Rs 2889.04 crore in the corresponding quarter a year ago.
The bank also reported a surge in bad loans for the December quarter partly due to a central bank direction to reclassify some troubled loan accounts as bad loans. Gross bad loans as a percentage of total loans widened to 4.72 percent in the December quarter from 3.77 percent in the sequential quarter ended September 2015.
According to Angel Broking, ICICI Bank reported disappointing set of number for the quarter ended December 2015 which was below expectations.
Reliance Securities in a research note said, “ICICI Bank negatively surprised us on both earnings and asset quality fronts in 3Q, primarily due to higher slippages as the bank recognised impairment as well as the ensuing provisioning impact of the asset reclassification in accordance with ongoing RBI’s evaluation. We cut our price assumptions for ICICI Bank due to weak assets quality performance and expect better entry level for the investors in the coming months. Hence, we recommend ‘Sell’ with a revised target price of Rs 210.”