Key takeaways from ICICI bank Q4 Numbers

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NEW DELHI: Private sector lender ICICI BankBSE -2.71 % reported a 76 per cent reduction in Q4 PAT to Rs 702 crore on Rs 3,600 crore contingency provisioning.

The bank had reported net profit of Rs 2,922 crore in the same quarter a year ago.

Here are the five key takeaways from the ICICI Bank’s March quarter numbers :

1) Done with RBI’s AQR: ICICI bank reported net non-performing assets of Rs 13,297 crore, jump of 32.74 per cent from Rs 10,014 crore in the quarter ending December 31, 2015.

“The increase in non-performing assets was primarily due to the continuing challenges in the operating and recovery environment; and RBI’s objective of early and conservative recognition of stress and provisioning,” the bank said in a statement to the bourses.

“The Bank has now completed the exercise of review of classification of cases highlighted by RBI,” it added.

The bank’s net NPAs stood at 2.67 per cent as against 2.03 per cent in the previous quarter.

2) Exposure to global cyclical sectors haunts: ICICI Bank’s massive dip in profit after tax was on the back of exceptional contingency of Rs 3,600 crore for stress in some sectors of the economy.

“The weak global economic environment, the sharp downturn in the commodity cycle and the gradual nature of the domestic economic recovery has adversely impacted the borrowers in certain sectors like iron and steel, mining, power, rigs and cement,” the bank said.

This provisioning was over and above the Rs 3,330 crore required under the Reserve Bank of India’s asset quality review, the bank added.

3) Growth in retail banking segment: The bank’s shift in focus towards retail segment has lead to 3 percentage points growth in retail banking to 47 per cent from 44 per cent in the December quarter.

However, the bank’s advances declined to 16 per cent in the quarter under review from 20 per cent in the previous quarter.

“The retail portfolio constituted about 47 per cent of the loan portfolio of the Bank,” it said.

4) IPO of ICICI Life: The board of ICICI Bank has decided to hive off part stake in itsinsurance arm, ICICI Life, through an initial public offering.

“The Board of Directors of the Bank has today approved the sale of a part of its shareholding in ICICI Life through an initial public offering by the company, subject to market conditions and necessary approvals,” it said.

ICICI Life achieved a profit after tax of Rs 1,650 crore for FY2016 compared to Rs 1,634 crore for FY2015, seeing a marginal uptick of 0.97 per cent. ICICI Life’s retail weighted received premium increased by 8% from Rs 4,596 crore in FY2015 to Rs 4,968 crore in FY2016.

5) Dividend on equity shares: The bank has also declared a final dividend of Rs 5 per share with a face value of Rs 2 each.

“In view of the strong capital adequacy levels, the Board of Directors has recommended a dividend of Rs 5 per equity share,” the Bank said.