ICICI Bank recovered a record Rs 2,775 crore in the June quarter, Chanda Kochhar, managing director and chief executive officer, told reporters after the bank declared its Q1 results.
ICICI Bank recovered a record Rs 2,775 crore in the June quarter, Chanda Kochhar, managing director and chief executive officer, told reporters after the bank declared its Q1 results. While the domestic loan book grew 11% year-on-year (y-o-y), the bank has been able to reduce the share of stressed assets in its book, she said. Edited excerpts:
What was the reason for the y-o-y decline in profit and income?
As far as profit is concerned, actually on a sequential basis, it has gone up and even if you look at Q1 year-on-year, there are two main reasons. One is that in the same quarter last year, we could take profit arising on account of exchange gain on our profit of the overseas branches. That does not exist in this quarter. Secondly, in the first quarter last year, there was dividend from ICICI Pru Life, whereas in this quarter, this company has now shifted to half-yearly dividend. So these two items do not exist in this quarter, which existed last year.
What were the additions to non-performing assets (NPAs)?
The trend is very positive because the additions to NPAs were, to start with, Rs 4,975 crore, which is the lowest in the last seven quarters. In fact, you’ve seen this trend now over the last few quarters and not just that, the Jaiprakash Associates deal was concluded and we had a good amount of recovery on account of that.
Therefore, the total recoveries during the quarter were again at a record high of Rs 2,775 crore. Most of it is from Jaiprakash. After adjusting for write-offs and recoveries, you see that the additions to gross NPAs is just about Rs 600 crore. In fact, if you look at the net NPA number, this is a quarter where in absolute terms it has actually declined (sequentially) from Rs 25,451 crore to Rs 25,306 crore.
What is the outlook for asset quality?
I can only point to these facts to say that the gross additions to NPAs has been coming down quarter-on-quarter. As we have said even at the beginning of the year, overall additions to NPAs this year would be less than the additions last year.
Your loan growth seems a shade slower than your private-sector rivals, with an 11% growth in domestic advances. Why is that?
Our loan growth is very focused and I think 11% domestic advances growth is a mix of three-four things. Retail assets have grown by almost 19%. The SME (small and medium enterprise) business has grown by 18.5% and in the domestic book, we have actually grown the desirable portion, but we have also reduced the portion that was either NPA or stressed or so on. Once you net all this out, you see a total overall domestic loan growth of 11%.