Buzzing Stock: ICICI Bank surges 12% on sequential asset quality improvement

The NNPA ratio of the bank stood at 0.99%, the lowest since December 2014.

The stock of ICICI Bank hit lifetime highs on Monday of Rs 857.45 after the private lender’s September quarter numbers beat the Street estimates on nearly all metrics.

In Q2FY22, the private lender saw Net interest income (NII) increase by 25% YoY to Rs 11,690 crore, while the Net interest margin (NIM) was 4.00% in Q2-2022 from 3.89% Q2FY21. The core operating profit (profit before provisions and tax, excluding treasury income) increased by 23% YoY to Rs 9,518 crore in Q2FY22 from Rs 7,719 crore in the same quarter for the previous fiscal year.

Provisions (excluding provision for tax) declined by 9% YoY to Rs 2,714 crore in Q2FY22 from Rs 2,995 crore in Q2-2021. As a result of better operating performance and lower provisions for the quarter, profit after tax grew by 30% YoY to Rs 5,511 crore in Q2FY22 from Rs 4,251 crore Q2FY21.

In terms of asset quality, the bank’s net non-performing assets declined by 12% sequentially to Rs 8,161 crore and the net NPA ratio declined to 0.99% on September 30, 2021, from 1.16% on June 30, 2021. The net NPA ratio is the lowest recorded since December 2014. The Bank’s total capital adequacy stood healthy at 19.52% and Tier-1 capital adequacy was 18.53% compared to the minimum regulatory requirements of 11.08% and 9.08% respectively.

ICICI Bank has seen growth in digital and payment platforms during the quarter. There were about 1,500,000 activations of iMobile Pay from non-ICICI Bank account holders in Q2-2022, taking the total such activations to 4,000,000 within nine months of launch. The transactions by non-ICICI Bank account holders in terms of value and volume respectively were three times and 13 times higher in September 2021 compared to June 2021. Moreover, the value of mobile banking transactions increased by 62% YoY to Rs 406,501 crore in Q2FY22.

At noon on Monday, the stock of ICICI Bank Limited was trading at Rs 856.15, up by 12.78% or 97.05 per share as against a 0.68% gain in the benchmark index.