ICICI Bank, for Q2FY21, posted a net profit of Rs.4251 crore, up from Rs.655 crore (YoY), a jump of almost 6.5 times.

The market is giving this performance a thumbs up. The stock opened 6.5% higher at Rs.417.95 and rose further to hit an intraday high at Rs.418.65. Its 10% UC for the day is at Rs.431.80.

Its core operating profit (profit before provisions and tax, excluding treasury income) grew by 18% to Rs.7719 crore, this plus a 70% drop in tax expenses helped boost the net profit. It also had a gain of Rs.305 crore – this was through a 2% stake sale in ICICI Securities.

The tax expense in Q2- 2020 included a one-time additional charge due to re-measurement of accumulated deferred tax assets at the revised marginal tax rate.

NII was up 16% (YoY) at Rs.9366 crore while NIM was at 3.57% v/s 3.69% (QoQ), reflecting surplus liquidity with the Bank

In terms of asset quality, Gross NPA came down from 5.46% v/s 5.17% and Net NPA also improved to 1%, down 23 bps (QoQ), including loans not classified as NPA pursuant to the Supreme Court’s interim order, net NPA ratio would have been 1.12%

There was a 17% (YoY) growth in average current and savings account (CASA) deposits in Q2-2021; average CASA ratio was 40.3% in Q2- 2021.

Its term deposits rose 26%, domestic loans rose 10% and retail loans rose 13%.

Provision coverage ratio increased from 78.6% to 81.5% (QoQ). Its provisions (excluding provision for tax) were Rs.2,995 crore v/s 2507 crore (YoY). This includes provision of Rs.497 crore made on a prudent basis on loans aggregating to Rs.1,410 crore that were not classified as non-performing pursuant to the Supreme Court’s interim order dated September 3, 2020 directing that accounts which were not classified as non-performing till August 31, 2020, should not be classified as non-performing until further orders. As at September 30, 2020, the Bank held Covid-19 related provision of Rs.8,772 crore.

The Bank’s total capital adequacy at September 30, 2020, including profits for H1-2021, was 19.33% and Tier-1 capital adequacy was 17.89% compared to the minimum regulatory requirements of 11.08% and 9.08% respectively. During the quarter, the Bank raised equity capital of Rs.15,000 crore (US$ 2.0 billion).