ICICI Bank posts strong Q1 results; collection to be key going forward

Share price of ICICI Bank eased more than 5% on NSE even after the private sector lenders operating profit growing strongly amid modest loan growth during fiscal first-quarter to June 30.
The lenders asset quality improved to a 14-quarter high even as it made provisions for the impact of COVID-19 by using proceeds from recent stake sales in subsidiaries.

Deposit momentum remained strong even as moratorium book declined to 17.5% from 30% earlier.
Net profit increased 36.22% to Rs 2,599.15 crore compared to the corresponding period a year ago.
Moreover, provisions for bad loans by the country’s third largest private bank by market capitalisation rose sharply to account for the impact of the coronavirus pandemic.

The lender made additional provision to the tune of Rs 5,550 crore related to Covid-19, with the objective of completely cushioning the balance sheet from the impact of the pandemic.
Total interest income stood at Rs 19,924.35 crore in the first quarter of current financial year, up 10.81% on a year basis.
The lender’s net interest income – or interest earned minus interest expended – climbed up 19.93% to Rs 9,279.75 crore.

ICICI Bank continues to gain strong deposit momentum. Despite having a higher share of the retail portfolio, decline in retail book QoQ was the lowest amongst peers.
It has the highest share of low-cost deposit franchise amongst the three, making it the most preferred bank for retail customers on both deposits and advances front.
Slippages or formation of bad loans were the lowest for ICICI Bank when compared to peers.

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