ICICI Bank hits two-week high; stock up 11% in 6 days

ICICI Bank was up 3.7% to Rs 291 on the BSE in early morning trade on Tuesday, gaining 11% in past six trading sessions. On comparison, the S&P BSE Sensex was up 2% during the same period. The stock was trading at its highest level since March 21, 2018.
Shares of the private sector bank hit a low of Rs 262 on April 2, 2018, falling 14% from its recent high of Rs 306 on March 14, amid controversy over the alleged conflict of interest and quid pro quo involving its CEO Chanda Kochhar and her family members in extending a loan to Videocon Group. The benchmark index dipped 1.7% during the same period.

Global Rating Agency Fitch on Monday said losses on the loan in question would be unlikely to significantly undermine ICICI's financial profile - in particular, its core capitalisation would remain strong even if the loan were completely written off. The banks' rating is underpinned by relatively strong capitalisation and profitability. Core capitalisation was 14.2% in December 2017, among the highest in the sector.

ICICI Bank extended a loan with a potential conflict of interest raises questions over the bank's governance and creates reputational risks, says Fitch Ratings.

Fitch will closely monitor developments, and would take appropriate rating action if risks to the banks' reputation and financial profile were to rise considerably, it added.

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