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ICICI Bank (IBN) Stock Falls on Lower Q3 Earnings, Costs Up
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Shares of ICICI Bank Ltd. (IBN - Free Report) have declined nearly 1% since the release of its third-quarter fiscal 2018 (ended Dec 31) results on Wednesday. Its net profit plunged 32% year over year to INR16.50 billion ($258 million).
Results were adversely impacted by fall in non-interest income and a slight rise in operating expenses. However, increase in net interest income (reflecting rise in loans) and lower provisions were the tailwinds.
Net Interest Income Growth Offset by Modest Expense Rise
Net interest income grew 6% year over year to INR57.05 billion ($893 million). Net interest margin was 3.14%.
However, non-interest income of INR31.67 billion ($496 million) plunged 20% from the prior-year quarter.
Operating expenses totaled INR38.14 billion ($597 million), increasing 1% year over year.
Loans & Deposits Increase
As of Dec 31, 2017, ICICI Bank’s total advances amounted to INR5,053.87 billion ($79.1 billion), up 10% year over year. The rise was mainly driven by robust growth in the retail segment, with a 22% year-over-year increase in total retail loan portfolio.
ICICI Bank’s total deposits rose 11% from the prior-year quarter to INR5,174.03 billion ($81 billion) as of Dec 31, 2017. Moreover, as of the same date, current and savings account ratio came in at 50.4%.
Credit Quality Improves
As of Dec 31, 2017, net nonperforming assets ratio was 4.20%, decreasing 23 basis points sequentially. Also, provisions and contingencies declined 21% from the prior quarter to INR35.7 billion ($559 million).
Net loans to companies whose facilities have been restructured were INR18.15 billion ($284 million) as of Dec 31, 2017.
Capital Ratios Improve
In compliance with the Reserve Bank of India's guidelines on Basel III norms, ICICI Bank's capital adequacy was 17.65% and Tier-1 capital adequacy was 14.57% as of Dec 31, 2017. Both the ratios were well above the minimum requirements.
Our Take
Mounting expenses owing to continued investment in franchise is likely to adversely impact ICICI Bank’s bottom line. Also, deteriorating asset quality continues to be a major near-term concern, which is expected to keep hurting the company's financial performance. However, it remains well positioned to capitalize on growth opportunities driven by increased dependence on domestic loans and a stable fund base.
ICICI Bank Limited Price, Consensus and EPS Surprise
Among other foreign banks, Credit Suisse Group AG , HSBC Holdings plc (HSBC - Free Report) and Barclays PLC (BCS - Free Report) are scheduled to report on Feb 14, Feb 20 and Feb 22, respectively.
Breaking News: Cryptocurrencies Now Bigger than Visa
The total market cap of all cryptos recently surpassed $700 billion – more than a 3,800% increase in the previous 12 months. They’re now bigger than Morgan Stanley, Goldman Sachs and even Visa! The new asset class may expand even more rapidly in 2018 as new investors continue pouring in and Wall Street becomes increasingly involved.
Zacks’ has just named 4 companies that enable investors to take advantage of the explosive growth of cryptocurrencies via the stock market.
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ICICI Bank (IBN) Stock Falls on Lower Q3 Earnings, Costs Up
Shares of ICICI Bank Ltd. (IBN - Free Report) have declined nearly 1% since the release of its third-quarter fiscal 2018 (ended Dec 31) results on Wednesday. Its net profit plunged 32% year over year to INR16.50 billion ($258 million).
Results were adversely impacted by fall in non-interest income and a slight rise in operating expenses. However, increase in net interest income (reflecting rise in loans) and lower provisions were the tailwinds.
Net Interest Income Growth Offset by Modest Expense Rise
Net interest income grew 6% year over year to INR57.05 billion ($893 million). Net interest margin was 3.14%.
However, non-interest income of INR31.67 billion ($496 million) plunged 20% from the prior-year quarter.
Operating expenses totaled INR38.14 billion ($597 million), increasing 1% year over year.
Loans & Deposits Increase
As of Dec 31, 2017, ICICI Bank’s total advances amounted to INR5,053.87 billion ($79.1 billion), up 10% year over year. The rise was mainly driven by robust growth in the retail segment, with a 22% year-over-year increase in total retail loan portfolio.
ICICI Bank’s total deposits rose 11% from the prior-year quarter to INR5,174.03 billion ($81 billion) as of Dec 31, 2017. Moreover, as of the same date, current and savings account ratio came in at 50.4%.
Credit Quality Improves
As of Dec 31, 2017, net nonperforming assets ratio was 4.20%, decreasing 23 basis points sequentially. Also, provisions and contingencies declined 21% from the prior quarter to INR35.7 billion ($559 million).
Net loans to companies whose facilities have been restructured were INR18.15 billion ($284 million) as of Dec 31, 2017.
Capital Ratios Improve
In compliance with the Reserve Bank of India's guidelines on Basel III norms, ICICI Bank's capital adequacy was 17.65% and Tier-1 capital adequacy was 14.57% as of Dec 31, 2017. Both the ratios were well above the minimum requirements.
Our Take
Mounting expenses owing to continued investment in franchise is likely to adversely impact ICICI Bank’s bottom line. Also, deteriorating asset quality continues to be a major near-term concern, which is expected to keep hurting the company's financial performance. However, it remains well positioned to capitalize on growth opportunities driven by increased dependence on domestic loans and a stable fund base.
ICICI Bank Limited Price, Consensus and EPS Surprise
ICICI Bank Limited Price, Consensus and EPS Surprise | ICICI Bank Limited Quote
ICICI Bank carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Upcoming Releases
Among other foreign banks, Credit Suisse Group AG , HSBC Holdings plc (HSBC - Free Report) and Barclays PLC (BCS - Free Report) are scheduled to report on Feb 14, Feb 20 and Feb 22, respectively.
Breaking News: Cryptocurrencies Now Bigger than Visa
The total market cap of all cryptos recently surpassed $700 billion – more than a 3,800% increase in the previous 12 months. They’re now bigger than Morgan Stanley, Goldman Sachs and even Visa! The new asset class may expand even more rapidly in 2018 as new investors continue pouring in and Wall Street becomes increasingly involved.
Zacks’ has just named 4 companies that enable investors to take advantage of the explosive growth of cryptocurrencies via the stock market.
Click here to access these stocks. >>