ICICI Bank Q1 profit jumps 36% on stake sales; bank makes Rs 5,550 crore Covid-19 provisions

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Updated: Jul 25, 2020 5:35 PM

ICICI Bank sold equity shares in ICICI Lombard General Insurance Company Limited and ICICI Prudential Life Insurance Company Limited for a total consideration of Rs 3,092.93 crore

ICICI bank results q1 2021, icici bank q1 resultsThe Bank has allotted 3,215,197 equity shares of Rs 2 each pursuant to exercise of employee stock options

ICICI Bank on Saturday posted a 36 per cent on-year rise in net profit at Rs 2,599 crore in the April-June quarter. The company had reported a net profit of Rs 1,980 crore in the corresponding quarter of the preceding year. The profit for the quarter was backed by stake sales in ICICI Lombard and ICICI Prudential Life. Its net interest income (the difference between interest earned and interest paid to depositors) increased 20 per cent to Rs 9,280 crore in the quarter ended June 30, from Rs 7,737 crore for the same period last financial year. “ICICI Bank’s operating performance in Q1 FY21 was much better than our expectations. Core pre-provisioning operating profit was 15% higher than our estimate, courtesy to a better NII growth and a resilient fee performance despite substantially lower activity levels. Capital levels remain healthy and the planned equity raise would further bolster it. Expect a strong positive stock reaction on Monday. ICICI Bank remains one of our preferred picks in the sector,” said Rajiv Mehta, Lead Analyst – Institutional Equities at Yes Securities.

The net interest margin came in at 3.69 per cent in the first quarter as compared to 3.87 per cent in the quarter ended March 31, 2020, and 3.61 per cent in the same quarter last year, reflecting the higher liquidity with the Bank due to strong deposit inflows and limited credit demand due to the lockdown. During the quarter, the ICICI Bank made Rs 5,550 crore in additional Covid-19 related provisions on a prudent basis with the objective of completely cushioning the balance sheet from the impact of Covid-19. At June 30, 2020, the Bank said that it held COVID-19 Covid-19 related provisions of Rs 8,275 crore.

During the quarter, ICICI Bank sold equity shares representing 3.96 per cent in ICICI Lombard General Insurance Company Limited and 1.50 per cent in ICICI Prudential Life Insurance Company Limited for a total consideration of Rs 3,092.93 crore. “The sale resulted in net gain (after sale-related expenses) of Rs 3,036.29 crore in standalone financial results and Rs 2,715.87 crore in consolidated financial results for 01-2021, the Bank said in an exchange filing.

The total deposits increased by 21 per cent on-year to Rs 8,01,622 crore in the June quarter. Average current and saving accounts deposits increased by 20 per cent and 14 per cent on a year-on-year basis, while term deposits jumped by 27 per cent. “Since the outbreak of Covid-19, the Bank has been undertaking many digital initiatives to enable its customers to meet their banking requirements from home,” ICICI Bank said in a release.

ICICI Bank has allotted 3,215,197 equity shares of Rs 2 each pursuant to exercise of employee stock options during the quarter. On Friday, ICICI Bank shares fell 2.66 per cent to close at Rs 381.85 apiece as compared to a fall of 0.03 per cent in the benchmark S&P BSE Sensex.

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