ICICI Bank’s (IBN - Free Report) fourth-quarter fiscal 2020 (ended Mar 31) net income was INR12.21 billion ($161 million), up 26% from INR9.69 billion ($128 million) in the prior-year period. Excluding coronavirus-related provisions, net income would have been INR32.60 billion ($431 million).
The results were driven by a rise in revenues, loans and deposits. However, provisions surged owing to coronavirus-related concerns. Further, an increase in operating expenses was a headwind.
Revenue Components Improve, Expenses Rise
Net interest income (NII) rose 17% year over year to INR89.27 billion ($1.2 billion). Excluding the interest on income tax refund, NII increased 24% from the prior-year quarter. Net interest margin was 3.87%, up 15 basis points (bps) year over year.
Non-interest income — excluding treasury income — was INR40.13 billion ($530 million), up 16% from the prior-year quarter. Fee income increased 13% from the year-ago quarter to INR31.78 billion ($420 million).
Additionally, treasury income was INR2.42 billion ($32 million), surging 55% from the year-ago quarter.
Operating expenses totaled INR57.92 billion ($765.4 million), increasing 16% year over year.
Loans & Deposits Increase
As of Mar 31, 2020, ICICI Bank’s total advances amounted to INR6,452.9 billion ($85.3 billion), up 10% year over year.
Total deposits grew 18% from the comparable year-ago period to INR7,709.69 billion ($101.9 billion) as of Mar 31, 2020. Also, as of the same date, current and savings account ratio was 45.1%.
Credit Quality: Mixed Bag
As of Mar 31, 2020, net nonperforming assets (NPA) ratio was 1.41%, decreasing 65 bps year over year. Recoveries and upgrades from non-performing loans were INR18.83 billion ($249 million) in the quarter.
Further, gross NPA additions were INR53.06 billion ($701 billion). Provisions increased substantially from the prior-year quarter to INR32.42 billion ($428 million). The company built INR27.25 billion ($360 million) provisions related to coronavirus.
Capital Ratios Strong
In compliance with the Reserve Bank of India's guidelines on Basel III norms, ICICI Bank's total capital adequacy was 16.11% and Tier-1 capital adequacy was 14.72% as of Mar 31, 2020. Both the ratios were well above the minimum requirements.
Our Take
ICICI Bank’s quarterly performance was decent. Growth in revenues was a major tailwind, which is expected to support the company's financial performance going forward. However, mounting expenses are likely to adversely impact the bank’s bottom line. Also, coronavirus-induced market mayhem is a major headwind.
ICICI Bank currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Foreign Banks
UBS Group AG (UBS - Free Report) reported first-quarter 2020 net profit attributable to shareholders of $1.6 billion compared with $1.14 billion in the prior-year period. Its performance was supported by higher net interest income, and net fee and commission income. However, higher expenses dragged down growth.
HSBC Holdings’ (HSBC - Free Report) first-quarter 2020 pre-tax profit of $3.2 billion represents a 48% decline from the prior-year reported number. The reduction primarily reflects the impact of the coronavirus outbreak and weakening of oil prices.
Barclays’ (BCS - Free Report) first-quarter 2020 net income attributable to ordinary equity holders of £605 million ($774.6 million) represents a 41.7% year-over-year decline. The results were primarily hurt by a significant increase in credit impairment charges. Also, the company’s top line declined in the quarter. Nonetheless, marginally lower operating expenses and a strong balance sheet position were tailwinds.
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ICICI Bank’s (IBN - Free Report) fourth-quarter fiscal 2020 (ended Mar 31) net income was INR12.21 billion ($161 million), up 26% from INR9.69 billion ($128 million) in the prior-year period. Excluding coronavirus-related provisions, net income would have been INR32.60 billion ($431 million).
The results were driven by a rise in revenues, loans and deposits. However, provisions surged owing to coronavirus-related concerns. Further, an increase in operating expenses was a headwind.
Revenue Components Improve, Expenses Rise
Net interest income (NII) rose 17% year over year to INR89.27 billion ($1.2 billion). Excluding the interest on income tax refund, NII increased 24% from the prior-year quarter. Net interest margin was 3.87%, up 15 basis points (bps) year over year.
Non-interest income — excluding treasury income — was INR40.13 billion ($530 million), up 16% from the prior-year quarter. Fee income increased 13% from the year-ago quarter to INR31.78 billion ($420 million).
Additionally, treasury income was INR2.42 billion ($32 million), surging 55% from the year-ago quarter.
Operating expenses totaled INR57.92 billion ($765.4 million), increasing 16% year over year.
Loans & Deposits Increase
As of Mar 31, 2020, ICICI Bank’s total advances amounted to INR6,452.9 billion ($85.3 billion), up 10% year over year.
Total deposits grew 18% from the comparable year-ago period to INR7,709.69 billion ($101.9 billion) as of Mar 31, 2020. Also, as of the same date, current and savings account ratio was 45.1%.
Credit Quality: Mixed Bag
As of Mar 31, 2020, net nonperforming assets (NPA) ratio was 1.41%, decreasing 65 bps year over year. Recoveries and upgrades from non-performing loans were INR18.83 billion ($249 million) in the quarter.
Further, gross NPA additions were INR53.06 billion ($701 billion). Provisions increased substantially from the prior-year quarter to INR32.42 billion ($428 million). The company built INR27.25 billion ($360 million) provisions related to coronavirus.
Capital Ratios Strong
In compliance with the Reserve Bank of India's guidelines on Basel III norms, ICICI Bank's total capital adequacy was 16.11% and Tier-1 capital adequacy was 14.72% as of Mar 31, 2020. Both the ratios were well above the minimum requirements.
Our Take
ICICI Bank’s quarterly performance was decent. Growth in revenues was a major tailwind, which is expected to support the company's financial performance going forward. However, mounting expenses are likely to adversely impact the bank’s bottom line. Also, coronavirus-induced market mayhem is a major headwind.
ICICI Bank currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Foreign Banks
UBS Group AG (UBS - Free Report) reported first-quarter 2020 net profit attributable to shareholders of $1.6 billion compared with $1.14 billion in the prior-year period. Its performance was supported by higher net interest income, and net fee and commission income. However, higher expenses dragged down growth.
HSBC Holdings’ (HSBC - Free Report) first-quarter 2020 pre-tax profit of $3.2 billion represents a 48% decline from the prior-year reported number. The reduction primarily reflects the impact of the coronavirus outbreak and weakening of oil prices.
Barclays’ (BCS - Free Report) first-quarter 2020 net income attributable to ordinary equity holders of £605 million ($774.6 million) represents a 41.7% year-over-year decline. The results were primarily hurt by a significant increase in credit impairment charges. Also, the company’s top line declined in the quarter. Nonetheless, marginally lower operating expenses and a strong balance sheet position were tailwinds.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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