ICICI Bank stand­alone Q4 net falls 76% on year

The Financial Express - - FRONT PAGE - Fe Bureau

In­dia’s largest pri­vate sec­tor lender ICICI Bank on Fri­day re­ported a stand­alone net profit of R702 crore for the March quar­ter, a 76% fall year-on-year (y-o-y) ow­ing to the cre­ation of a col­lec­tive con­tin­gency re­serve of

R3,600 crore for pos­si­ble bad loans along with pro­vi­sions of R3,326 crore, re­ports fe Bureau in Mum­bai. Had it not been for a de­ferred tax write-back of R2,199 crore, the bank would have re­ported a loss.

Mum­bai, April 29: The coun­try's largest pri­vate sec­tor lender, ICICI Bank, on Fri­day re­ported a stand­alone net profit of Rs 702 crore for the March quar­ter, a fall of 76% year-on-year (y-o-y), ow­ing to the cre­ation of a col­lec­tive con­tin­gency re­serve of Rs 3,600 crore for pos­si­ble bad loans along with pro­vi­sions of Rs 3,326 crore.

Had it not been for a de­ferred tax write-back of Rs 2,199 crore, the bank would have re­ported a loss in Q4 FY16.

Chanda Kochhar, MD and CEO, said the ad­di­tional re­serves were cre­ated as a buf­fer against vul­ner­a­bil­i­ties in five sec­tors – iron & steel, min­ing, power, rigs and ce­ment. “In gen­eral, to­wards our ex­po­sure in these sec­tors, we have cre­ated these kinds of col­lec­tive re­serves,” she said.

Ac­cord­ing to Kochhar, the bank will “work to­wards res­o­lu­tion of ex­po­sures in the con­text of the chal­lenges fac­ing the cor­po­rate sec­tor”.

The lender's net in­ter­est in­come, or the dif­fer­ence be­tween in­ter­est earned and ex­pended, stood at Rs 5,404 crore in the re­viewed quar­ter, 6% higher y-o-y.

ICICI Bank's re­tail as­sets, which con­sti­tuted 47% of its loan port­fo­lio as on March 31, saw a 23% Y-o-Y growth. This took its growth in do­mes­tic ad­vances to 16% com­pared to the same pe­riod last year.

The as­set qual­ity suf­fered in Q4 ow­ing to a 24% se­quen- tial rise in gross non-per­for ming loans. As a per­cent­age of to­tal ad­vances, the gross NPAs stood at 5.82%, 110 ba­sis points higher than the pre­vi­ous quar­ter.

Kochhar said of Rs 7,000 crore loans that slipped in the March quar­ter, Rs 2,700 crore have orig­i­nated from the re­struc­tured book. “I am stat­ing that we have com­pleted RBI's as­set qual­ity re­view (AQR) ex­er­cise. As I said that slip­pages were also the re­sult of the AQR ex­er­cise and have also been across sec­tors and part of it were re­struc­tured as­sets which have now been re­clas­si­fied as NPAs,” she ex­plained.

Kochhar said the bank ex­pects its loan book to grow 18% and re­tail to grow 25%. “On the do­mes­tic cor­po­rate side, the growth is ex­pected to be be­tween 5-7% given the fact that we want to fo­cus on lend­ing to higher rated cor­po­rates and re­duc­ing the con- cen­tra­tion risk to our port­fo­lio,” she added.

To­tal de­posits in­creased by 17% y-o-y to Rs 4.21 lakh crore and the bank's cur­rent ac­counts sav­ings ac­count (CASA) ra­tio stood at 40.7%.

The bank also said that it had ap­proved a plan of an ini­tial pub­lic of­fer­ing (IPO) for its life in­sur­ance di­vi­sion and will start the process fol­low­ing the board ap­proval.

Shares of ICICI Bank closed at Rs 236.6 on Fri­day, down 1.48%, on the BSE.

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