ICICI Bank profit crashes by 16.7%; bad loans surge

Largest private sector lender ICICI Bank on Tuesday reported a 16.7 per cent dip in consolidated post-tax profit at Rs 2,611 crore for the three months to December as asset quality continued to remain under pressure leading to a steep rise in dud loans coupled with lower core interest income.

On a standalone basis profit fell a steeper 19.09 per cent to Rs 2,442 crore in the reporting period.

Fresh slippages of over Rs 7,000 crore resulted in the gross non-performing assets ratio almost doubling to 7.91 per cent from 4.72 per cent in the year-ago period and at 6.82 per cent in the September quarter.

Managing director and chief executive Chanda Kochhar said three-fourths of the NPAs came from a 'drilldown' list of advances to below investment grade companies in specifically-identified sectors and restructured advances.

The fall in interest paying assets due to the surge in NPAs also impacted the bank's core net interest income, which came down to Rs 5,363 crore from Rs 5,453 crore a year ago.

She also said lower profit growth was due to high base last year as the bank had one-time gains then on stake sales in subsidiaries. And that it would have been higher had it not dipped into a specially-created contingency provision of Rs 3,500 crore.

The bank utilised Rs 526 crore of the reserve during the reporting quarter and the provision now stands at Rs 1,500 crore, Kochhar said.

Redemptions of $1.7 billion in overseas deposits resulted in the international loan book trimming by 16 per cent, while a growth of 12 per cent in domestic book resulted in an overall credit growth of 5 per cent.

Retail advances grew at a faster clip of 18 per cent and now occupy 48.9 per cent of the loan book as against 43.9 per cent in the year-ago period, Kochhar said, adding the bank will continue to rely on this resilient segment along with better-rated corporates for asset creation. .

Domestic net interest margin was almost flat at 3.51 per cent, but increased sequentially.

The bank witnessed a huge surge in deposits, courtesy the noteban, and the share of the low-cost current and savings account deposits shot up to 49.9 per cent during the quarter from 45.7 per cent three months ago.

The 'drill down' list of stressed advances has come down to Rs 27,536 crore from Rs 44,065 crore a year-ago, she said, adding a bulk Rs 12,057 crore were due to fresh slippages while there was a rating upgrade of Rs 308 crore.