ICICI Bank reports 8.2% decline in June-quarter profit
MUMBAI: ICICI Bank Ltd, India’s second-largest lender by assets, on Thursday reported an 8.2% decline in June quarter net profit on slow credit growth and fall in non-interest income growth.
Net profit in the fiscal first quarter fell to ₹2,049 crore from ₹2,232.35 crore a year ago. The bank had been expected to post a profit of ₹2,001.50 crore, based on a poll of 20 analysts by Bloomberg. On a consolidated basis, net profit rose to ₹2,605 crore at the end of June quarter from ₹2,516 crore last year.
“Profit was lower this quarter because exchange rate gain of ₹206 crore in the overseas operations was no longer permitted to be accounted as income following the Reserve Bank of India (RBI) guideline issued in April 2017. Q1FY17 also saw a dividend income of ₹204 crore from ICICI Prudential Life Insurance Company (ICICI Life), which has moved to dividend payments on a half-yearly basis following its IPO (Initial Public offering),” said Chanda Kochhar, MD and chief executive officer, ICICI Bank.
During the quarter the bank’s bad loans jumped to ₹43,147.64 crore, an increase of 1.4% from three months ago. As a percentage of customer assets, the bank’s gross non-performing assets stood at 7.99% compared to 7.89% last quarter and 5.28% a year ago. Customer assets include loans and credit substitutes such as bank guarantees. Gross non-performing loans made up 8.84% of total loans, compared with 8.74% in March. The quarter also saw recoveries and upgrades worth ₹2,775 crore on account of reclassification of its exposure to JP Associates post its sale to Ultra Tech Cement.
During the quarter the pace of fresh addition to NPA stock was lower at ₹4,957 crore compared to ₹11,289 crore in the previous quarter. According to the bank’s investor presentation, around half of this addition was on account of a single account in electronics and engineering sector. Restructured book which halved to ₹2,370 crore as on June 2017 also contributed to the fresh accretion to bad loan portfolio.