ICICI Bank shares dip as Maharashtra GST officials search three offices; bank assures full cooperation

Following news of the search, shares of ICICI Bank fell 0.23% during early trading on December 5, 2024, closing at Rs.1,312.20 on the BSE

Following news of the search, shares of ICICI Bank fell 0.23% during early trading on December 5, 2024, closing at Rs.1,312.20 on the BSE
Following news of the search, shares of ICICI Bank fell 0.23% during early trading on December 5, 2024, closing at Rs.1,312.20 on the BSE

GST raids shake ICICI Bank’s compliance landscape

ICICI Bank, India’s second-largest private sector lender, confirmed that Maharashtra GST authorities conducted search operations at three of its offices on December 4, 2024. The searches carried out under Sections 67(1) and 67(2) of the Maharashtra GST Act, 2017, are ongoing, and the bank stated that it is fully cooperating with officials and providing requested data. The GST authorities have not issued an official statement regarding the matter as of now.

Bank’s statement and SEBI compliance

In a regulatory filing under Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, ICICI Bank disclosed the search operations and reiterated its commitment to full compliance. The bank said: “GST authorities initiated searches at three offices of ICICI Bank. The proceedings are ongoing, and the bank is cooperating fully in providing data as per the request placed.”

Impact on share price

Following news of the search, shares of ICICI Bank fell 0.23% during early trading on December 5, 2024, closing at Rs.1,312.20 on the Bombay Stock Exchange (BSE). Despite the minor dip, market analysts attributed the decline to immediate reactions to the ongoing search rather than concerns about the bank’s financial stability.

Strong financial performance in Q2 FY 2024-25

The search operations come at a time when ICICI Bank is riding on strong financial performance. For the second quarter of FY 2024-25, the bank reported a net profit of Rs.11,745.9 crore, a 14.5% year-over-year (YoY) increase compared to Rs.10,261 crore in the same quarter of the previous fiscal year.

The bank’s net interest income (NII) also rose by 9.5% YoY, reaching Rs.20,048 crore, up from Rs.18,307.9 crore in the previous year. This growth was driven by an expanding loan portfolio and improved interest margins.

Loan growth and improved asset quality

As of September 30, 2024, ICICI Bank’s domestic loan portfolio grew 15.7% YoY and 4.6% sequentially. The retail loan segment, which accounts for 53% of the bank’s total loans, saw a 14.2% YoY increase and a 2.9% sequential rise.

The bank’s asset quality also showed improvement, with the gross non-performing assets (NPA) ratio falling to 1.97% from 2.15% in the previous quarter. The net NPA ratio stood at 0.42%, down from 0.43%, highlighting ICICI Bank’s strong risk management practices.

Outlook amid challenges

While the search operations by GST authorities may raise short-term uncertainties, ICICI Bank’s robust financial performance and improved asset quality underscore its resilience. The bank’s management is expected to handle the regulatory scrutiny effectively while maintaining its focus on growth and profitability.

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