ICICI Bank standalone net falls 8 pct as provisions rise

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Published: July 28, 2017 3:29:42 AM

ICICI Bank on Thursday reported an 8.2% year-on-year (y-o-y) decline in its standalone net profit at Rs 2,049 crore for the June quarter of FY18 because of higher provisions.

ICICI Bank standalone net, ICICI Bank, provisions rise, Net interest income, Net interest income, Chanda Kochhar, Jaiprakash Associates deal, CASA, CASA ratioTotal recovery was at a record high of Rs 2,775 cr, most of it coming from Jaiprakash Associates. (Image: PTI)

ICICI Bank on Thursday reported an 8.2% year-on-year (y-o-y) decline in its standalone net profit at Rs 2,049 crore for the June quarter of FY18 because of higher provisions. Provisions rose 3.7% y-o-y to Rs 2,609 crore in the quarter under review. Other income fell 1.2% on a y-o-y basis to Rs 3,388 crore. Net interest income (NII), or the difference between interest earned and expended, stood at Rs 5,590 crore, 8.4% higher than the same quarter of the previous financial year. The net interest margin (NIM) – a key measure of the profitability – stood at 3.27% for the quarter, against 3.57% in the previous quarter. Its domestic margins fell to 3.62% in Q1FY18, compared to 3.96% in the quarter ended March.

As far as credit growth is concerned, ICICI Bank’s retail assets, which constituted 53% of its loan portfolio as of June, saw a 19% y-o-y growth. Its total advances grew 3% y-o-y to Rs 4.64 lakh crore. “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,” Chanda Kochhar, MD & CEO, ICICI Bank, said.

She said the trend of lower additions to the bad loan portfolio was witnessed over the last few quarters. “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 from Jaiprakash,” Kochhar said. Its asset quality was stable in Q1 owing to a 1.4% sequential rise in gross non-performing assets (NPAs). As a percentage of total advances, gross NPAs stood at 7.99%, 10 basis points (bps) higher than the previous quarter.

“In some of the restructured and stressed cases, we are actually trying to reduce exposure and especially in the four-five stressed sectors, we are not doing new business, really. If you keep that base out, then on the higher-rated cases, we are doing new business and our outstanding book has gone up,” Kochhar said, adding that the sectors are power, iron and steel, mining and telecom.

The drill down list – the bank’s watch list – stood at Rs 20,300 crore in Q1. She said the bank has set aside Rs 2,828 crore or 41% of the outstanding loans in nine accounts of the 12 listed by the Reserve Bank of India (RBI) to be resolved under the Insolvency and Bankruptcy Code (IBC). Additionally, ICICI Bank needs to provide Rs 650 crore for the same accounts in the next three quarters.

Total deposits increased by 15% y-o-y to Rs 4.86 lakh crore and the bank’s current accounts savings account (CASA) ratio stood at 49%.Shares of ICICI Bank on Thursday closed down 1.02% at Rs 307.05 shares on the BSE.

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