Banking wrap: ICICI Bank sees improvement in asset quality, Bank of Baroda shares capital raising plans

Private lender ICICI Bank posted better-than-expected numbers for the April-June quarter as provisions fell on improved asset quality. State-owned Bank of Baroda also reported its first quarter results as a merged entity this week and announced its near-term capital raising plans. Meanwhile, the apex bank saw some portfolio shuffle between three deputy governors after Viral Acharya quit.

The country’s largest private sector lender, ICICI Bank, posted a profit of Rs 1,908 crore in June quarter (Q1) over lower provisioning and healthy NII growth. It was against a loss of Rs 119.55 crore reported in the year-ago period and a profit of Rs 969.06 crore in the previous quarter. The profit was partly impacted by lower other income.

Government owned-Bank of Baroda (BoB) plans to raise Rs 6,000 crore by the end of the July-September quarter to boost capital adequacy and support growth. BoB merged with Dena Bank and Vijaya Bank at the start of FY20. As part of its near-term capital raising plan, BoB will raise Rs 4,500 crore in Additional Tier-1 capital and Rs 1,500 crore via Employee Stock Purchase Scheme (ESPS), Executive Director SL Jain said on July 25. The bank aims to raise capital via Qualified Institutional Placement (QIP) and sale of non-core investments during this fiscal.

Reserve Bank of India (RBI) redistributed portfolios among its three deputy governors with effect from July 24, after Viral Acharya served his last day at the central bank. The Monetary Policy Department will now be under BP Kanungo, while Financial Stability Unit has been given to MKJain. NS Vishwanathan will oversee the Financial Markets Operations and Financial Markets Regulation departments.

Auto loans, that form 8 percent of consolidated advances for Kotak Mahindra Bank, are witnessing a slowdown in demand, the private sector lender said on July 22, adding that it would also maintain caution while lending to the sector going ahead. The bank’s credit growth at consolidated level stood at 15 percent in the April-June quarter as auto loans shrunk by around 4 percent over the last year, as well as compared to the previous quarter.