ICICI Bank, a leading private sector lender, announced its financial results for the January-March quarter of the fiscal year 2023-24 on April 27th. The bank reported a net profit of Rs 10,707 crore, marking a 17 percent increase from the Rs 9,122 crore recorded in the same period last year. This figure aligns closely with market expectations, which projected a net profit of Rs 10,331 crore. Additionally, the bank proposed a dividend of Rs 10 per share.
The net interest income (NII) for the quarter stood at Rs 19,093 crore, reflecting an 8 percent rise from the Rs 17,667 crore reported in the corresponding quarter of the previous fiscal year. This NII figure slightly exceeds the estimated value of Rs 18,958 crore.
The bank’s gross non-performing asset (NPA) ratio decreased to 2.16 percent from 2.81 percent in the corresponding quarter of the previous year. Meanwhile, the net NPA ratio for the quarter was 0.42 percent, down from 0.48 percent last year.
On April 26, the ICICI Bank stock closed at Rs 1,107.15 on the BSE, marking a 0.53 percent decrease from the previous day’s closing price.
Anindya Banerjee, Chief Financial Officer of ICICI Bank, disclosed that the bank reversed approximately Rs 100 crore from its provisions made for alternative investment funds (AIFs). This announcement came during a post-results press conference on April 27. Banerjee clarified that the bank currently has no plans for further investments in AIFs. Previously, the bank had provisioned Rs 627 crore for its AIF investments.
The Reserve Bank of India (RBI) issued clarifications on its earlier guidelines regarding lender investments in AIFs, particularly those with investments in borrower companies associated with the lenders, on March 27.
According to the clarification, investments in equity shares of the borrower company by the lender will no longer be considered downstream investments. However, this exemption does not extend to other types of investments, including hybrid instruments.
Additionally, the Reserve Bank of India (RBI) stated that lenders with investments in Alternative Investment Funds (AIFs) will only need to provision for the extent of their investment in the AIF scheme, which is further invested by the AIF in the borrower company, rather than the entire investment of the Real Estate (RE) in the AIF scheme.
Moreover, the RBI clarified that investments made by lenders in AIFs through intermediaries such as fund of funds or mutual funds are not covered by the scope of the previous RBI circular.
These regulations aim to ensure consistency in implementation among lenders and address concerns raised in various feedback from stakeholders, as stated by the RBI.
