The decline in profit is due to lower other income. Its other income fell 43% y-o-y to Rs 5,186 crore in Q2
Private sector lender ICICI Bank on Friday reported a 34% year-on-year (y-o-y) fall in its standalone net profit at Rs 2,058 crore in the September quarter of FY18, owing to lower other income. The lender’s other income fell 43% y-o-y to Rs 5,186 crore in Q2 FY18. The bank earned Rs 2,012 crore from the sale of ICICI Lombard General Insurance in Q2FY18, which boosted other income. In Q2 FY17, the lender had sold a part of its shareholding in ICICI Prudential Life Insurance for Rs 5,682 crore. The bank’s net interest income (NII), or the difference between the interest earned and expended, stood at Rs 5,709 crore in Q2 FY18, 8.6% higher than the same quarter of FY17. The net interest margin (NIM)– a key measure of profitability – stood at 3.27% for the quarter and was 3.13% in the same quarter last year. The margins for the domestic business rose to 3.57% in Q2 FY18, compared to 3.41% in Q2 FY17.
Loan growth was fairly good during the quarter as ICICI Bank’s retail assets, which constituted 54% of its loan portfolio as of September, saw a 19% y-o-y growth. The bank’s corporate loan book grew 3.9% y-o-y and consequently, the total advances grew 13% y-o-y to Rs 4.82 lakh crore. Chanda Kochhar, MD & CEO, ICICI Bank said that the bank has not yet received the final report from the Reserve Bank of India (RBI) regarding its risk-based supervision. “We still await the final report from the RBI. The inspection process is going on. The report has not come out. It always for us comes in Q3,” she said. Kochhar reiterated that at the beginning of the year the bank had said it expects additions to NPAs during FY18 to be substantially lower than last year. “We continue to hold that view,” Kochhar added. The lender’s asset quality was stable in Q2 owing to only a 3% sequential rise in gross non-performing assets (NPAs). As a percentage of total advances, the gross NPAs stood at 7.87%, 12 basis points (bps) lower than the previous quarter.
Asked about the progress of resolutions under the Insolvency and Bankruptcy Code (IBC), she said that on the first list (of 12 accounts), the progress is very good. “Of the 12 cases 11 cases have been admitted to the NCLT. Interim resolution professionals (IRPs) have been appointed and many have gone through the stage of expressions of interest (EOI) as well. I think between January and March, we would get to see how the resolutions pan out,” she said, adding that in the second list of accounts, resolutions are being discussed at various forums, including the joint lenders’ forum (JLF). The drilldown list – the bank’s watchlist – stood at Rs 19,590 crore in Q2. During the quarter, RBI directed banks to initiate corporate insolvency resolution process for additional accounts by December 31 if a resolution plan where the residual debt is not rated investment grade by two external credit rating agencies is not implemented by December 13. The bank said it has outstanding loans and non-fund facilities to 18 such borrowers amounting to Rs 10,476 crore and Rs 1,384 crore respectively. It added that 98.7% of the loans amounting to Rs 10,337 crore are to borrowers classified as non-performing as on September 30. The bank has set aside Rs 3,299 crore for those accounts. Total deposits increased by 11% y-o-y to Rs 4.98 lakh crore and the bank’s current accounts savings account (CASA) ratio stood at 49.5%. ICICI Bank shares on the BSE closed at Rs 300.95 on Friday, up 0.57% from its previous close.