ICICI Bank, country’s third-largest lender by assets posted its first quarterly net loss in nearly 16 years due to higher bad loan provision and bond losses.
ICICI Bank, country’s third-largest lender by assets posted its first quarterly net loss in nearly 16 years due to higher bad loan provision and bond losses. In the April-June results announced yesterday, the private lender reported a net loss was 1.2 billion rupees ($17.5 million), compared with a profit of 20.49 billion rupees a year earlier. “Overall net interest margin of 3.19 per cent in Q1-2019 compared to 3.23 per cent in FY2018,” bank said in a statement.
ICICI Bank, which holds the highest amount of bad loans among the country’s private-sector lenders, added 40.36 billion rupees in additional non-performing loans during the quarter, taking its total outstanding to 534.65 billion rupees.
The bank also said it had to make higher provisions for ageing non-performing loans and cases in bankruptcy court, leading to the net loss. Total provisions more than doubled from a year earlier to 59.71 billion rupees with the bank not availing a central bank dispensation of spreading bond losses over four quarters.
The net NPA (non-performing asset) ratio decreased from 4.77 per cent at March 31, 2018 to 4.19 per cent at June 30, 2018, ICICI Bank said in a statement. “While the gross additions to NPA at Rs 4,036 crore were the lowest in the last 11 quarters, additional provisions on existing NPAs as per Reserve Bank of India (RBI) guidelines resulted in total provisions of Rs 5,971 crore and a net loss of Rs 120 crore in Q1-2019,” Bank said.
On a consolidated basis, the bank’s profit after tax plunged to Rs 5 crore ($1 million) in Q1-2019 compared to Rs 2,605 crore ($380 million) in Q1-2018. “Consolidated assets grew by 12 per cent from Rs 984,702 crore at June 30, 2017 to Rs 1,098,790 crore at June 30, 2018,” the statement added.