ICICI Bank
ICICI Bank

New Delhi: Shares of ICICI Bank tumbled over 5 per cent on Monday after it missed earnings estimates, according to analysts.

It fell 5.23 per cent to close at Rs 320.10 on the BSE. During the day, it dropped 5.80 per cent to Rs 318.15.

On the NSE, the scrip declined 4.61 per cent to close at Rs 322.10.

ICICI Bank was the top laggard on both the indices.

In terms of volume, 32.16 lakh shares were traded on the BSE during the day, while over 8 crore shares changed hands on the NSE.

"The negative impact was mainly due to financials, led by ICICI Bank, which missed earnings estimates," Geojit Financial Services Head of Research Vinod Nair said.

The bank on Saturday reported a 6.91 per cent growth in March quarter net profit at Rs 1,251 crore on a consolidated basis, after setting aside over Rs 2,000 crore in provisions for potential impact of the COVID-19 pandemic over and above RBI's requirements.

"The bank has created higher than the required provisions toward COVID19 which affected earnings," according to a report by Motilal Oswal Institutional Equities.

On a standalone basis, the second largest private sector bank's profit grew 26 per cent to Rs 1,221 crore as against Rs 969 crore in the year-ago period.

From an asset quality perspective, the bank reported an improvement in gross non-performing assets (NPAs) ratio to 5.53 per cent as against 6.70 per cent in the year-ago period and 5.95 per cent as of December 2019, despite over Rs 5,300 crore in fresh slippages during the reporting quarter.

ICICI Bank President Sandeep Batra said the lender had slippages of Rs 4,300 crore in the preceding December quarter, and the additions on this front can be attributed to two accounts -- a West Asian healthcare company and a Singaporean oil trading company -- becoming NPAs during the quarter.

In both the cases, borrowers had misrepresented their financial position to the lenders, and the bank has made significant provisions for both the accounts, he said, adding that it does not expect any more stress from the two accounts in the future.

Its overall provisions increased to Rs 5,967 crore on a standalone basis, as against Rs 5,451 crore in the year-ago period and Rs 2,083 crore in the preceding quarter. The provisions included Rs 2,725 crore for the COVID-19 impact.

The provisioning for COVID-19 has been done on a prudential basis in anticipation of possible stress and is significantly higher than the Rs 600 crore asked to be set aside by the RBI for accounts which were overdue as of March 1, the management said.

Almost all the private sector lenders, who have reported their earnings for the March quarter, have set aside additional money as provisions, including HDFC Bank, Axis Bank, Indusind Bank and RBL Bank, reflecting the impact of the crisis that the banking system is bracing for.

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