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ICICI Bank's shares slip 3% after rise in Q4 slippages, no management guidance on asset quality

ICICI Bank's shares slip 3% after rise in Q4 slippages, no management guidance on asset quality

ICICI Bank's shares slip 3% after rise in Q4 slippages, no management guidance on asset quality
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By Mousumi Paul  May 11, 2020 11:28:26 AM IST (Published)

India's third largest private lender ICICI Bank slipped 2 percent after it reported that its slippages have risen and over 30 percent of its loan book has availed the moratorium for repayment of loans, in Q4FY20. The Bank also informed that slippages were higher this quarter due to the overseas book

ICICI Bank shares declined 3 percent after India's third-largest private sector lender reported that its slippages have risen and over 30 percent of its loan book has availed the moratorium for repayment of loans, in Q4FY20. At 11:22 am, the shares traded 2.28 percent lower, quoting at Rs 330 apiece while on an intraday basis, the stock slipped 3 percent to Rs 327.50 on the NSE.

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On Saturday, the ICICI Bank reported a net profit of Rs 1,221.36 crore for Q4, up 26 percent year-on-year. The net profit was impacted by a provision of Rs 2,725 towards COVID-19.
Net interest income (NII)  for the quarter increased by 17 percent year-on-year to Rs 8,927 crore.
The Bank also informed that slippages were higher this quarter due to the overseas book, which comprised of two biggest downgrades — a healthcare company in West Asia and a shipping company in Singapore.
The management provided no guidance on asset quality, stating that it can't be computed in these uncertain times. Over 30 percent of the bank's loan book has availed the moratorium for repayment on loans.
Post earnings, brokerages remained bullish on the stock, and viewed that the rise in slippages is a temporary factor.
CLSA and Jefferies maintained a 'buy' call on the stock with a target price in the range of Rs 450-460 apiece.
Credit Suisse maintained its 'outperform' rating on the stock with a target set at Rs 450 per share. It expects ICICI Bank to fare better than most of the other banks during this crisis.
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