Mumbai: The total loans under moratorium for ICICI Bank fell to 17.5% by value in June from around 30% in April with less than 10% of customers added to the ones that had availled the moratorium facility in April, the bank said in a post earnings call.ICICI Bank’s fall in loans under moratorium is in line with other banks which have seen a fall in customers seeking the special dispensation of the RBI as cash flows improved and economic activity limps back to normalcy.
However, the bank declined to give an outlook on loans under moratorium because things are still fluid.
“At this point of time it is very difficult to give a outlook on loans because the moratorium is continuing…over the medium term we expect a new normal to emerge and we are well positioned to take advantage of it because of our digitisation and technology initiatives,” said Sandeep Batra, president, ICICI Bank.
The bank however substantially hiked provisions to meet with likely stress linked to the economic impact of the Covid 19 pandemic.
The Rs 5,550 crore of Covid-19 related provision during the quarter was in addition to the Rs 2,525 crore the bank had taken in the quarter ended March 2020 taking the total Covid related provision to Rs 8,275 crore.
The bank described these provisions as taken with the objective of completely cushioning the balance sheet from the impact of Covid-19.
Provisions excluding the one taken to cover for Covid-19 declined by 42% year-on-year to Rs 2,044 crore from Rs 3,496 crore a year earlier.
The bank will also take shareholder approval next month to raise Rs 15,000 crore equity as it seeks to strengthen its balance sheet to absorb the Covid 19 related shock.
The bank’s capital adequacy was 16.32% higher than the required 11.08% the bank said.
Results released on Saturday showed ICICI Bank’s net profit increased 36% to Rs 2,599 crore in the first quarter ended June 2020 from Rs 1908 crore a year earlier mainly due to one off gains from the sale of equity stakes in its insurance companies last quarter. Core operating profit rose 15% led by a 20% rise in net interest income (NII).
The bank sold equity shares 3.96% stake in ICICI Lombard General Insurance and 1.50% in ICICI Prudential Life Insurance for a net gain of Rs 3,036 crore during the quarter.
Total income during the quarter rose to Rs 26,066 crore from Rs 21,405.50 crore a year earlier.
Domestic advances grew 10% year on year led by a 11% growth in retail loans which constituted 54.4% of the bank’s book. Sequentially loan growth declined 1%.
Corporate loans grew by 8% year-on-year with total loans including those of overseas subsidiaries increasing 7% year-on-year to Rs 6.31 lakh crore.
Total deposits increased by 21% to Rs 8.01 lakh crore with CASA ratio at 42.5% at June 30, 2020 down from 45.1% in March 31, 2020.
During the quarter, the gross additions to NPAs were Rs 1,160 crore with recoveries and upgrades, of Rs 757 crore. The net NPA ratio decreased from 1.41% at March 31, 2020 to 1.23% on June 30, 2020 with provision coverage of 78.6%. The bank’s BB and below loan book increased to Rs 17,110 crore compared to Rs 16,668 crore in March 2020.
Source: ET Markets