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Thursday, October 30, 2014

ICICI Bank Q2 report card: Higher slippages a concern ​

ICICI Bank’s net profit grew 15 per cent in the September quarter, on the back of 15 per cent growth in its net interest income. While the bank’s retail focus continues to pay off, driving the overall loan growth, asset quality has witnessed some pressure — an area of concern in recent quarters. Slippages of about Rs. 700 crore during the September quarter has been the highest in recent periods.

At a time when its peers such as HDFC Bank and Axis Bank have been able to maintain stable asset quality, ICICI Bank’s higher addition to bad loans is a dampener. HDFC Bank has the lowest loan delinquency with bad loans at 1.02 per cent of loans as of September. While Axis Bank has a higher gross non-performing asset (GNPA) at 1.34 per cent of loans, the bank has been able to keep it steady during the latest September quarter. ICICI Bank’s troubles with bad loans are bigger than that of its peers, with GNPA at 3.12 per cent of loans in the September quarter, up from 3.05 per cent in the June quarter.

Besides the bad loans, ICICI Bank has a larger restructured book too compared with its peers. The bank has been stepping up on its loans recasts over the last year. From about 2.2 per cent last September, ICICI Bank’s restructured book currently accounts for 3 per cent of its loans. Axis Bank’s restructured assets are 2.5 per cent of loans, while HDFC Bank has just 0.1 per cent of its loans recast.

Healthy retail trend

However, ICICI Bank continues to score well on the retail front; its 15 per cent loan growth was led by 25 per cent growth in retail loans. This compares well with the performance of its peers. Axis Bank and HDFC Bank grew retail loans 27 per cent and 17 per cent respectively in the September quarter. ICICI Bank’s strong retail performance augurs well for its profitability and growth. The bank has also been ramping up its low cost CASA (current account savings account) base over the last couple of years. The CASA ratio continues to remain healthy at 43.7 per cent as of September 2014. After achieving its first full-year net interest margin of 3 per cent in 2012-13, the bank has been able to scale it up further to 3.4 per cent in the September quarter.

Given that the overall bank credit slipped to five-year low levels of 9.7 per cent in September, the performance of the three large private banks has been healthy. For ICICI Bank in particular, easing of asset quality pressure over the next year or so will hold the key to the stock’s performance.

Source : The Hindu
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Yes Bank registers 30% rise in Q2 profit on higher fee income

Yes Bank posted a 30 per cent jump in net profit at Rs. 483 crore for the second quarter ending September 30, 2014 on the back of robust growth in loans and interest income.The net profit in the year ago period was at Rs. 371 crore.

Net interest income (difference between interest income and interest expended) soared by 27 per cent to Rs. 856 crore as compared with Rs. 672 crore in the same quarter last fiscal. Non-interest income increased 13 per cent to Rs. 506 crore from Rs. 446 crore in Q2FY14, limited by lower treasury fee income.

The bank’s provisions

“Asset quality is under control. However, the environment is still evolving and some cyclical improvement in policy is needed... In power and mining sector, there is need for more policy action,” said Jaideep Iyer, Senior President – Financial Markets, Yes Bank.

As on September 30, 2014, advances grew 30 per cent to Rs. 62,030 crore (from Rs. 47,717 crore as on September 30, 2013); while deposits grew 19 per cent to Rs. 80,131 crore from Rs. 67,575 crore.

The loan book is likely to grow in the mid-20 per cent for the full year, Iyer added.

The net interest margins expanded to 3.2 per cent from 2.9 per cent driven by healthy growth in retail deposits and capital raising.

Gross non-performing assets (NPAs) were up at 0.36 per cent as on September 30, 2014 from 0.28 per cent a year ago. Net NPAs also increased a tad to 0.09 per cent (Rs 54 crore) from Rs. 0.04 per cent (Rs 19 crore).

Yes Bank shares were trading at Rs. 662.50 per share, up by 3.7 per cent over the previousclose on Bombay Stock Exchange

Source : The Hindu
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Andhra Bank Q2 net zooms to Rs. 144 cr

Andhra Bank has posted a net profit of Rs. 144.49 crore for the quarter ended September 30, 2014 as compared to Rs. 70.65 crore for the corresponding quarter last year.

Total Income has increased from Rs. 3,817.57 crore for the quarter ended September 30, 2013 to Rs. 4,423.62 crore for the quarter ended September 30, 2014.

Source : The Hindu
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Allahabad Bank net profit halves to Rs. 141 cr

Kolkata-based Allahabad Bank reported a near 49 per cent dip in net profit to Rs. 141 crore for the period ending September 30, 2014.

Profit for the corresponding period last fiscal stood at Rs. 276 crore.

During the period, the bank, however, reported a marginal increase in both total income and interest earnings.

Total income for the second quarter stood at Rs. 5,417 crore, an increase of mere 2 per cent (over Rs. 5,303 crore it reported last fiscal).

Interest earnings moved up by 6 per cent to Rs. 4,901 crore ( as against Rs. 4,607 crore last year) for the period between July and September.

Asset Quality

The bank, meanwhile, saw an approximate 16 per cent rise in gross non-performing assets (NPAs) to Rs. 7,674 crore for the period ending September 30, 2014. Gross NPAs for the corresponding period last year stood at Rs. 6,613 crore.

Gross NPA per cent during the period rose to 5.36; as against 4.94 in the year ago period.

Net NPAs in Q2 of FY-15, however, saw a marginal decline of 2 per cent to Rs. 4,948 crore (as against Rs. 5,048 crore last year).

As a result, net NPA per cent during the period improved to 3.54; from 3.83 from the year-ago period.

At 2.15 pm shares of Allahabad Bank were trading at Rs. 111.40, up by 4.26 per cent at the BSE on Thursday.

Source : The Hindu
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Vijaya Bank raises Rs. 500 cr through bonds

Vijaya Bank has raised Tier II capital of Rs. 500 crore through a bond offering to fund its business growth.

In a statement, the bank said the capital was raised by issuing Unsecured Redeemable Non Convertible Basel III Compliant Tier II Bonds with a coupon rate of 9.15 per cent p.a. The issue was fully subscribed and allotment has been made on October 30, 2014, it added.

Vijaya Bank
scrip ended marginally higher at Rs. 47.25 on the BSE.

The Rs. 500 crore bond issue is in addition to the proposed equity offering of Rs. 600 crore that the bank is contemplating later this fiscal. The bank has already received an enabling resolution from its shareholders to raise additional equity capital of Rs. 600 crore from the markets.

Source : The Hindu
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