Tag: ICICI Bank

10 lakh customers of other banks using ICICI Bank’s mobile app

Banking & Finance

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As many as 10 lakh customers of other banks are using ICICI Bank’s revamped mobile banking app – ‘iMobile Pay’ and the private sector lender expects the number to double over the next two months.

“The bank has achieved the feat in a shade over three months after it made ‘iMobile Pay’ open for all to use, including those who are not its customers. Going by the encouraging response received by this unique initiative that offers interoperability to bank customers, ICICI Bank anticipates that the number is likely to double in two months,” it said in a statement on Thursday.

While the app has registered a good response in large metro cities like Mumbai, Delhi, Bengaluru and Chennai, other like Pune, Hyderabad, Ahmedabad, Jaipur, Lucknow, Patna, Indore, Ludhiana, Bhubaneswar, Guwahati, Agra, Kochi and Chandigarh have also contributed significantly to the growth of the number of users, ICICI Bank further said.

Also read: Private banks gear up to undertake govt business

“The objective of this endeavor was to offer customers of any bank the benefits of seamless payments and digital banking services through our app. We made it possible by leveraging NPCI’s interoperable infrastructure,” said Bijith Bhaskar, Head- Digital Channels & Partnership, ICICI Bank.

Users have especially liked the functionality of Pay to Contacts, which enables users to send money either to a mobile number or a UPI ID of their friends and contacts, to any payment app or a digital wallet.

Other services such a ‘Scan to Pay’, ‘Check Balance’ and ‘Bill Payments’ have also seen the maximum usage.

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Ajay Srivastava, BFSI News, ET BFSI

Banking & Finance

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We will see more and more of this happening because the sheer demand of loans has collapsed in the economy and that is the challenge for the economy and the banks, says Ajay Srivastava, CEO, Dimensions Corporate Finance.

There is a very aggressive home loan rate war out there. Kotak Mahindra Bank has reduced home loan rates to 6.65% till March 31. SBI is giving it at 6.70%, HDFC Bank and ICICI Bank at 6.8%. How are you reading into this? Would the ticket sizes of these home loans be much lower than pre Covid times?
It is an indicator that there is nowhere to lend. Most companies are able to access capital and they have realised that when capital is available at these valuations, why the hell borrow money? Let us dilute. So across the board, we see QIPs, PE fund raising, sale of companies. I do not meet a promoter who wants to borrow money at the end of the day. He is likely to raise capital and keep it in the bank.

The lowering of home loan rates come out of the sheer desperation of not having enough avenues to lend money to. How much can you lend money on personal loans, unsecured loans etc? That is not the smartest way to play the game. Historically, the housing loans have been the most stable platform for most of the institutions. HDFC ruled the roost and would continue to do so because their DNA and the cost structure are very different.

These banks will often come in, play the game and try to get you as a customer but all it tells you is that there are no borrowers of significant kind and they have run through individuals as borrowers because who wanted to borrow, you did not want to lend to and instead are targeting those who don’t want to borrow. So, it is very peculiar. You will see more and more of this happening because the sheer demand of loans has collapsed in the economy and that is the challenge for the economy and the banks. So yes, it is down there but not so much that we get excited.

Would you buy HDFC? It is a fantastic business but the stock is underperforming?
I do not think it is underperforming. The stock got rerated quite sharply. I have a holding in that stock and I do not sell it. It went from Rs 1,500 to Rs 2,800. It got back to Rs 2,500, if I am not wrong. It is an incredible franchise and they have done a remarkable job at doing two things — balancing corporate real estate loans and individual real estate loans, doing side investment as well. And of course there’s the holding company. They hold the best bank in the country, the best life insurance company, the best AMC in the country. That is the India story at the end of the day.

What they do not have is Fintech in their portfolio. So, they have got a problem there. Maybe they will come in there through HDFC Bank. but There is no better surrogate for Indian economy than HDFC as an institution. The problem is it is so over owned as a stock that if FIIs decide to sell or one large FII decides to dispose it off, there will be a large correction in the stock.

As a retail person if you are starting your life, that is the stock I want to keep for my children’s education, for my retirement. It is in a separate category. Do not evaluate it day-to-day. Instead, 17 years from now, this stock should pay for your son’s education.



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ICICI Bank to buy stakes in two fintech companies for Rs 6.03 crore, BFSI News, ET BFSI

Banking & Finance

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ICICI Bank on Tuesday said it will buy stakes in two fintech companies — CityCash and Thillais Analytical Solutions — for a total cash consideration of Rs 6.03 crore.

CityCash is a bus transit-focused payments technology company which provides ticketing system technology to state transport corporations.

Thillais Analytical Solutions operates a neo-banking platform Vanghee, which facilitates connected banking solutions for corporates and MSMEs, and helps banks deepen their customer relationships.

As per two separate deals entered by the bank on Tuesday, ICICI Bank will buy 5.40 per cent stake in CityCash for Rs 4.93 crore (Rs 49.34 million) and 9.65 per cent in Thillais Analytical Solutions Pvt Ltd for Rs 1.1 crore (Rs 11 million).

Both the deals are expected to be completed by the end of March 2021, ICICI Bank said in separate filings to stock exchanges.

Post investment, ICICI Bank will hold 5.40 per cent shareholding in Tap Smart Data Information Services Pvt Ltd (CityCash) through acquisition of 5,492 equity shares. The 9.65 per cent stake in Thillais Analytical Solutions will be through acquisition of 10 equity shares and 100 CCPS (Compulsory Convertible Preference Shares).



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ICICI Bank to buy stakes in two fintech companies for Rs 6.03 crore, BFSI News, ET BFSI

Banking & Finance

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ICICI Bank on Tuesday said it will buy stakes in two fintech companies — CityCash and Thillais Analytical Solutions — for a total cash consideration of Rs 6.03 crore.

CityCash is a bus transit-focused payments technology company which provides ticketing system technology to state transport corporations.

Thillais Analytical Solutions operates a neo-banking platform Vanghee, which facilitates connected banking solutions for corporates and MSMEs, and helps banks deepen their customer relationships.

As per two separate deals entered by the bank on Tuesday, ICICI Bank will buy 5.40 per cent stake in CityCash for Rs 4.93 crore (Rs 49.34 million) and 9.65 per cent in Thillais Analytical Solutions Pvt Ltd for Rs 1.1 crore (Rs 11 million).

Both the deals are expected to be completed by the end of March 2021, ICICI Bank said in separate filings to stock exchanges.

Post investment, ICICI Bank will hold 5.40 per cent shareholding in Tap Smart Data Information Services Pvt Ltd (CityCash) through acquisition of 5,492 equity shares. The 9.65 per cent stake in Thillais Analytical Solutions will be through acquisition of 10 equity shares and 100 CCPS (Compulsory Convertible Preference Shares).



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HDFC Bank beats SBI in Covid scheme loans, BFSI News, ET BFSI

Banking & Finance

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HDFC Bank has outdone State Bank of India (SBI) in disbursements under the Emergency Credit Line Guarantee Scheme (ECLGS) introduced by the government as a part of the Covid relief package. The scheme involved a government guarantee for additional loans, up to Rs 3 lakh crore, extended to businesses facing stress due to the Covid pandemic.

Of the total loans of Rs 1.4 lakh crore extended by banks up to January 25, 2021, HDFC Bank has disbursed Rs 23,504. This is nearly 17% of the loans sanctioned. SBI, with disbursals of Rs 18,700, has a market share of 13.3%. According to banking analysts, this demonstrates HDFC Bank’s capabilities in lending to small businesses.

The ECLGS came in two phases. The first ECLGS-1 was for only small businesses and, in the second ECLGS-2 round, it was extended to large industries that were part of the 26 stressed sectors. HDFC Bank’s performance has enabled private sector banks outdo public sector banks (PSBs) in funding for the micro, small and medium enterprises (MSME) sector.

In response to a query in Lok Sabha, minister of state for finance Anurag Thakur said that the total amount of loans sanctioned and disbursed by the banking sector was just a shade under Rs 2 lakh crore and Rs 1.4 lakh crore, respectively. Of this, the sanctions and disbursements by public sector banks were Rs 83,162 crore and Rs 61,226 crore. In the case of private banks, the sanction and disbursement numbers were Rs 1.15 lakh crore and Rs 80,227 crore.

In the public sector, after State Bank of India (SBI) the second-highest disbursements are by Punjab National Bank (PNB). In the private sector, ICICI Bank with Rs 12,982 crore is the second-largest lender, followed by Axis Bank with Rs 8,099 crore.

PSBs have traditionally been the dominant lenders to the MSME sector. But the typical trend for last few years is that private banks and non-banking finance companies (NBFCs) have strongly competed with PSBs in gaining a larger share of the MSME sector.

However, that trend changed after the nationwide lockdown. As of June 20, NBFCs had a share of 9.7% of MSME lending — down from 13% in March, followed by private banks with 38.7% share in loans and PSBs with 51.6% marketshare, according TransUnion Cibil. The state-run lenders still account for over 60% of the banking business in the country.

SBI, in an investor call on February 4, had said that the bank had sanctioned Rs 26,000 crore (cumulative) under the ECLGS. Of this, Rs 23,000 crore has been disbursed cumulatively. The bank also said that only Rs 488 crore was disbursed under ECLGS-2 and the rest was in ECLGS-1.

In the call, the bank’s chairman Dinesh Khara said that although the window for restructuring for medium and small business enterprises is available up to March 31, the additions would not be substantial. He said that the ECLGS disbursements were lower in the latest quarter because the bank had picked up SME growth in segments other than the ECLGS scheme.



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RBI report, BFSI News, ET BFSI

Banking & Finance

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Consumer complaints about banking services jumped 57 per cent to 3.08 lakh for the year to June 30, 2020, the Reserve Bank said on Monday. In its annual report on Ombudsman Schemes, the central bank said over a fifth of the complaints were about services at ATMs or with debit cards, followed by mobile or electronic banking at 13.38 per cent. Non-observance of Fair Practices Code (FPC) was at third place.

Complaints received regarding credit cards, failure to meet commitments, levy of charges without notice, loans and advances and non-adherence to the Banking Codes and Standards Board of India (BCSBI) norms increased this year as compared to previous year.

The number of complaints pertaining to ‘Direct Sales Agent (DSA) and recovery agents’ increased from 629 complaints in 2018-19 to 1,406 this year, it said.

The disposal rate declined marginally to 92.36 per cent, as against 94.03 per cent in 2018-19 as the surging complaints had to be handled by the same number of staff, it said.

On the non-bank finance companies front, there was a 386 per cent jump in the number of complaints received by the Ombudsman Scheme for Non-Banking Financial Companies at 19,432 and the disposal rate stood at 95.34 per cent.

The Ombudsman Scheme for Digital Transactions handled 2,481 complaints during the year with a maximum 43.89 per cent being related to non-adherence of RBI code for payment transactions.

Deputy Governor M K Jain said the year was a challenging one for the financial consumers vulnerable to the adverse consequences of the pandemic and commended the Ombudsmen offices for being functional through the difficult period.

He also said the RBI will strive to improve the disposal rate going forward.

Governor Shaktikanta Das had last week announced a plan to integrate all the three offices (banks, NBFCs, digital payments) into a single ombudsman for the country.

The share of SBI and nationalised banks in the consumer complaints decreased to 59.65 per cent as against 61.90 per cent, on the back of a surge in the share of private banks.

SBI had the largest share among lenders in the number of maintainable cases disposed at 48,333, followed by HDFC Bank at 15,004, ICICI Bank at 11,844 and Axis Bank at 10,457.

The turnaround time for complaints went up to 95 days from the 47 days in the year-ago period, and stood at 45 days for the January-June 2020 period, it said.

The Chandigarh office led when it came to maintainable complaints in 2019-20 with 30,574 concerns as against under 21,000 complaints across two ombudsmen offices in Mumbai and about 29,000 in New Delhi.



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ICICI Bank signs MoU with MUFG Bank

Banking & Finance

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ICICI Bank on Friday announced it has signed a Memorandum of Understanding with Japan’s MUFG Bank for collaboration towards catering to the banking requirements of Japanese corporates present in India.

“The MoU was signed at a virtual event by Vishakha Mulye, Executive Director, ICICI Bank, and Junsuke Koike, Executive Officer and Regional Executive for India and Sri Lanka, MUFG Bank, in the presence of senior officials of both banks,”the private sector lender said in a statement.

The MoU establishes a framework of partnership between the banks across various domains including trade, investment, treasury, corporate and retail banking, it said, adding that it also paves way for the two banks to cater to the banking requirements of Japanese corporates operating in India.

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Morgan Stanley, BFSI News, ET BFSI

Banking & Finance

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The debate in Indian banks has quickly shifted from impaired loans to growth. Stocks have done well over the past week to three months and are likely pricing in some growth recovery. Growth momentum is strong, and it is believed that the next leg of returns will be driven by valuation re-rating to much above-average valuations.

According to the report, the balance sheets at large private banks are among the strongest ever post any crisis with strong capital ratios with high non-specific loan provisions and significant liquidity. Loan growth has surprised positively with 70% incremental market share during F9M21. As the economy improves, it is expected to see significant earnings acceleration.

Morgan Stanley raises price targets to factor in 10-15% above-mean valuations at HDFC Bank and Axis Bank. ICICI’s valuation is well above mean levels given significantly higher profitability compared to past levels. A combination of valuation re-rating and strong earnings compounding drives 30-40% upside for the group.

“Our top picks are ICICI, HDFC Bank and Axis Bank. IndusInd Bank should also benefit from the cyclical tailwinds. The questions that we are being asked include why buy the Indian Financial stocks incrementally and can the stocks continue to do well: We believe this cycle is likely to be similar to the one in the early 2000s. Balance sheets at private banks are the best ever in terms of capital, provisions and liquidity. This will help them gain market share at an accelerated pace” said the report.

Profitability is high, helped by strong improvement in loan spreads in recent years as well as lower tax rates. Consequently, return ratios are also expected to reach or cross previous cycle peaks. With strong digital capabilities, and given the different evolution and regulatory dynamics in Large Indian private banks, it is believed that the risks are manageable.

Asset quality trends have surprised positively at large private banks
Indian Private Banks are exiting the cycle with strong excess provisions and asset quality trends have been much better than expected. Impaired loan formation was expected to pick up as the moratorium ended in August,2020 and restructuring window for corporate and retail loans ended in December, 20.

However, the trends surprised positively – impaired loan formation was 1.8-2.4% in F9M21 Vs 1.7-3.4% in F9M20. While unsecured retail and CV NPL formations have been high, corporate asset quality and secured retail have surprised positively with the stress largely being in disproportionately affected segments CVs, MFI, real estate, travel,etc.

Digital adoption has picked up sharply; will continue to improve:
Large private banks have done well on digitization and have improved significantly. Product offerings, where delivery and convenience can match better than that of the fintechs, this has helped them tie up with new players efficiently. Distribution capabilities have improved whereas speed, accessibility and cost of delivery has reduced.

Underwriting practices with new datasets are now originating because of which the ability to underwrite has improved and costs have lowered since.



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ICICI Bank net profit up 19% at Rs 4,940 crore

Personal Finance

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The interest income (NII) increased 16% y-o-y and 6% q-o-q to Rs 9,912 crore. Provisions for the lender increased 32% y-o-y to Rs 2,742 crore, but declined 8% sequentially.

ICICI Bank on Saturday reported a 19% year-on-year (y-o-y) rise in its net profit at Rs 4,940 crore in the December quarter (Q3FY21) on the back of healthy interest income and improved asset quality. Sequentially, its net profit rose 16%. The operating profit of the lender increased 17% y-o-y and 7% quarter-on-quarter (q-o-q) to Rs 8,820 crore. The interest income (NII) increased 16% y-o-y and 6% q-o-q to Rs 9,912 crore. Provisions for the lender increased 32% y-o-y to Rs 2,742 crore, but declined 8% sequentially.

Sandeep Batra, executive director (ED), ICICI Bank, said the continued pickup in economic activity and tailwinds from the festive season combined with the bank’s digital initiatives and extensive franchise reflected in an increase in disbursements across retail products during Q3- 2021. Credit card spends also have reached pre-Covid levels in December thanks to increased spends in categories such as health & wellness, electronics and e-commerce, he added.

During Q3FY21, the bank has changed its provisioning policy on non-performing assets (NPA) to make it more conservative. As part of the revised policy, the bank has made contingency provision of Rs 3,012 crore for borrower accounts not classified as NPAs as per Supreme Court (SC) direction.

The apex court had earlier directed lenders not to classify borrowers as NPAs after August 31, 2020. ICICI Bank has utilised Rs 1,800 crore of Covid-19 related provisions made in the earlier periods. “We see provisioning around 25% of the operating profit in the financial year 2022 (FY22),” Batra said. The provisioning in the December quarter remained at 34% of the operating profit.

The asset quality of the lender showed an improvement during the December quarter. Gross non-performing assets (NPAs) ratio of the lender improved 79 bps to 4.38%, compared to 5.17% in the previous quarter. Similarly, net NPAs ratio came down 37 bps to 0.63% from 1% in the September quarter. The lender has not classified any NPAs since August 31, 2020, due to the interim order of Supreme Court. “The proforma gross NPA ratio would have been at 5.42% and net NPAs at 1.26%,” Batra said. The proforma gross NPAs in the retail segment remained over 3% during the December quarter.

The lender has provided one-time restructuring to borrowers worth Rs 2,536 core. The Reserve Bank of India had allowed restructuring for accounts impacted by Covid-19. The lender’s net interest margin (NIM) rose 10 bps on a sequential basis to 3.67%, but was down 10 bps on a y-o-y basis.

The fee income of the lender increased 15% q-o-q to Rs 3,601 crore, but remained flat on a y-o-y basis. Sandeep Batra said the sequential pick up in the fee income reflects normalisation.

Advances grew 10% y-o-y and 7% q-o-q to Rs 6.99 lakh crore. Deposits saw a robust growth of 22% y-o-y and 5% q-o-q at Rs 8,74 lakh crore, with average current account savings account (CASA) ratio of 41.8%. The capital adequacy ratio of the lender stood at 19.51% at the end of the December quarter, compared to minimum regulatory requirement of 11.08%.

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ICICI Bank’s Q3 net profit increases 17 pc to Rs 5,498 cr, BFSI News, ET BFSI

Banking & Finance

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ICICI Bank on Saturday reported a 17.73 per cent jump in its December quarter consolidated net profit at Rs 5,498.15 crore, as against Rs 4,670.10 crore in the year-ago period. On a standalone basis, the country’s second largest private sector lender by assets showed a 19.12 per cent rise in the post-tax profit at Rs 4,939.59 crore for the reporting quarter, up from Rs 4.146.46 crore in the October-December 2019 period.

Its total income increased to Rs 24,416 crore from the year-ago’s Rs 23,638 crore, while the total expenditure was lower at Rs 15,596 crore as against Rs 16,089 crore.

The reported gross non-performing assets ratio was at 4.38 per cent, but would have been 5.42 per cent if not for the Supreme Court order asking banks not to classify non-paying loan accounts as NPAs after the end of the loan repayment moratorium.

Its overall provisions increased to Rs 2,741 crore from the year-ago period’s Rs 2,083 crore, but lower when compared to the preceding quarter’s Rs 2,995 crore, as per its exchange filing.

It made a contingency provision of Rs 3,012.16 crore for borrower accounts not classified as NPAs pursuant to the interim order of the Supreme Court and utilised Rs 1,800 crore of the Rs 8,772.30 crore in provisions for the pandemic made earlier.

As at December 31, 2020, the bank held an aggregate COVID-19 related provision of Rs 9,984.46 crore, including contingency provision amounting to Rs 3,509.46 crore, it said.

It said the provisions held by it are more than what is required by the RBI and the bank’s capital and liquidity position are strong.

Its overall capital adequacy stood at 18.04 per cent as of December 31, 2020.



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