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Bad loan provisions to stay high in FY19: ICICI Bank

Bad loan provisions to stay high in FY19: ICICI Bank

New Delhi: ICICI Bank has said provisions against bad loans are expected to remain at elevated levels in the current financial year as the lender would have to earmark more funds for meeting the RBI norms. The bank made a provision of Rs 17,307 crore against bad loans in 2017-18 as against Rs 15,208 crore in the year prior to that, ICICI Bank top management had said in an investors' call.

In the fourth quarter of 2017-18, the bank's provisions sharply jumped to Rs 6,626 crore compared to Rs 2,898 crore in the corresponding quarter 2016-17. There are pressures which have come because of additions to non-performing assets in overseas branches book, it said.

"During fiscal 2019, provisions are expected to remain elevated, although lower than 2017-18," the bank added. "In the current financial year, that is FY2019, clearly there will be pressure on overseas margin, especially as we are not growing that book, so in that context any impact which is there is more material," it said.

The bank noted that NPA additions during FY'2019 are expected to be significantly lower than FY'2018. The impact of the Revised Framework for Resolution of Stressed Assets will need to be closely monitored, it said. With regard to loss booked by its UK subsidiary in FY'2018, the bank said this was essentially because of the increased level of provisioning on impaired loans which were largely India-linked loans reflecting the local conditions.

Earlier this month, ICICI Bank reported its first ever quarterly loss of Rs 119.5 crore on account of higher provisioning for bad loans. The private sector lender's MD & CEO Chanda Kochhar was forced to go on leave last month.

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