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ICICI Bank: Loan loss provisions nearly double - Views on News from Equitymaster
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ICICI Bank: Loan loss provisions nearly double
Feb 8, 2016

ICICI Bank declared the results for the third quarter of financial year 2015-16 (3QFY16). The bank has reported 13% YoY growth in net interest income and 4.5% YoY growth in net profits for 3QFY16. Here is our analysis of the results.

Performance summary

  • Net interest income grows by 13% in 9mFY16 on the back of 15.8% YoY growth in advances while net interest margin (NIM) improves to 3.5% from 3.4% in 9mFY15.
  • Cost to income ratio comes down from 37.7% in 9mFY15 to 35.6% in 9mFY16. This is the lowest amongst large private sector banks.
  • Capital adequacy ratio went down from 37.1% to 35.6% at the end of December 2015.
  • Net NPAs rise to 2.0% of advances in 9mFY16, from 1.1% in 9mFY15. Restructured loans went up to 4.9% of advances in December 2015 from 4.5% in December 2014.
  • Bottomline grows by 9.3% YoY in 9mFY16 largely due to higher interest margins and cost efficiency.

Standalone financials

Rs (m) 3QFY15 3QFY16 Change 9mFY15 9mFY17 Change
Interest income 124,352 133,460 7.3% 363,526 392,575 8.0%
Interest Expense 76,235 78,931 3.5% 223,924 234,379 4.7%
Net Interest Income 48,117 54,529 13.3% 139,602 158,196 13.3%
NIM (%)       3.4% 3.5%  
Other Income 30,916 42,168 36.4% 86,798 102,141 17.7%
Other Expense 28,663 31,100 8.5% 83,884 92,776 10.6%
Provisions and contingencies 9,796 28,440 190.3% 25,552 47,416 85.6%
Profit before tax 40,574 37,157 -8.4% 116,964 120,145 2.7%
Tax 11,682 6,976 -40.3% 34,430 29,900 -13.2%
Profit after tax / (loss) 28,892 30,181 4.5% 82,534 90,245 9.3%
Net profit margin (%) 23.2% 22.6%   22.7% 23.0%  
No. of shares (m)         5,787.5  
Book value per share (Rs)*         154.0  
P/BV (x)         1.4  

*(Standalone book value as on 30th December 2015)

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