ICICI Bank business update!

Last updated: 08 Dec, 2020 | 12:19 pm

ICICI Bank business update!

ICICI Bank has provided a strong business update in its latest analyst call. Here are a few highlights:

  • ICICI Bank’s business is seeing an improvement, and the likelihood of fresh NPAs has now reduced. Fresh slippages are unlikely to be significant as the majority of the bad loans had already been identified before the lockdowns began to prevent the Covid-19 pandemic from spreading. In Q2FY21, the banks Gross NPA ratio declined 29bps on-quarter to 5.17%, while the Net NPA ratio declined 23bps to 1% in the same period showing improvement in asset quality.
  • The bank showcased digital strategy of each business segments while reiterating its narrative of ‘One Bank, One RoE and One KPI (key performance indicator)’
  • Data analytics will be a key driver to enhance the risk-adjusted operating profit of the bank
  • The bank is increasing its focus towards NRI banking and seeing huge opportunities to grow. 
  • Management says H2FY21 should see higher downgrades and Covid restructuring for corporate/SME loans would be almost 1% of total loans

Following the robust update, most analysts have raised their target price on the stock, as they expect these initiatives to help ICICI Bank deliver sustainable growth and good return ratios. 

With concerns around asset quality abating, the business outlook for ICICI Bank looks promising.

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