ICICI Bank on Wednesday reported a standalone net profit of Rs 2,025 crore for the March quarter, close to thrice the net profit in the same period last year. Its other income fell 41%% on a y-o-y basis to Rs 3,017 crore. Net interest income (NII) or the difference between the interest earned and expended stood at Rs 5,962 crore, 9% higher than the same quarter of the previous fiscal. Net interest margin (NIM) — a key measure of profitability — stood at 3.57% for the quarter, and was 3.12% in the previous quarter.
While the bank’s domestic margins increased to 3.96% in Q4FY17 compared with 3.51% in the quarter ended December, margins declined after international business shrunk 20%. As far as the credit growth is concerned, ICICI Bank’s retail assets, which constituted 52% of its loan portfolio as of March, saw a 19% y-o-y growth while its corporate loans grew 5.8% year-on-year. Domestic advances grew 14% compared to the year-ago period. Like its peers, ICICI Bank has classified a cement account of Rs 5,378 crore as NPA in the March quarter.
Chanda Kochhar, MD and CEO, said an M&A transaction has been announced in respect of this company and while the transaction has received most of the requisite approvals, including the nod from the National Company Law Tribunal, it is awaiting certain last-mile approvals owing to which the transaction could not be concluded by March 31, 2017.
She explained that many loans to the cement company were bilateral loans and they are not all part of the working capital consortia. “Different loans are being given to companies by different banks at different points in time and it depends on the collections that we got for each of the respective loans,” she said. Its asset quality deteriorated in Q4 owing to a 12% sequential rise in gross non-performing loans. As a percentage of total advances, gross NPAs stood at 7.89%, 69 basis points higher than the previous quarter.
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“The drilldown list at the beginning of the year was Rs 44,065 crore. We’ve had a net reduction in exposure and upgrades to investments, and of course, some amount of downgrades to below-investment grade, of which the net is approximately Rs 5,600 crore, and then about Rs 20,000 crore was classified as NPA,” Kochhar said, adding that the closing balance of the drilldown list is Rs 19,039 crore. On RBI’s mandate to disclose divergences in reported NPA numbers and what was assessed by the central bank, she said that during the supervisory exercise, the incremental gross NPA assessed by the RBI amounted to Rs 5,105 crore.