Provisions for NPAs jump 128.61% to Rs 6,626 cr from Rs 2,898 cr
New Delhi : ICICI Bank, the country’s third largest lender by assets, on Monday posted a 45 per cent decline in consolidated net profit to Rs 1,142 crore for three months ended March as bad loans surged.
The bank, which is facing conflict of interest allegations involving its CEO Chanda Kochhar, had a consolidated profit of Rs 2,083 crore in the January-March quarter of 2016-17.
On a standalone basis, the bank recorded a 50 per cent fall in net profit at Rs 1,020 crore in the fourth quarter as against Rs 2,025 crore in the year-ago period.
The total income on consolidated basis rose to Rs 33,760 crore during the quarter as against Rs 28,603 crore.
However, standalone total income of the bank rose to Rs 19,943 crore in March quarter, from Rs 16,585.76 crore in preceding fiscal’s last quarter, the bank said. Net interest income also rose to Rs 6,022 crore in the quarter as compared to Rs 5,962 crore in the year-ago period.
Gross non-performing assets (NPA) rose to 8.84 per cent as a percentage of gross advances at the end of March, compared to 7.89 per cent a year ago. Net NPA, however, marginally declined to 4.77 per cent from 4.89 per cent.
As a result, the provisions and contingencies of the bank jumped 128.61 per cent to Rs 6,626 crore in the quarter as against Rs 2,898 crore in the same period previous fiscal. The bank said there were gross NPA additions of Rs 15,737 crore, including Rs 9,968 crore of loans which were under RBI schemes and were classified as standard December 31, 2017.
On February 12, RBI issued a revised framework for resolution of stressed asset superseding its earlier guidelines, leading to accretion of NPAs.
The bank has classified three borrower accounts in the gems and jewellery sector with fund-based outstanding of Rs 794.87 crore as fraud and non-performing.
As a result, the bank made a provision of Rs 289.45 crore through profit and loss account and Rs 505.42 crore in the quarter by debiting reserves and surplus as permitted by the RBI.
The bank has also made provision for certain other fraud and non-performing cases by debiting reserves and surplus amounting to Rs 19.98 crore.
Net interest margin increased from 3.14 per cent in the quarter ended December 31, 2017 to 3.24 per cent in the fourth and the last quarter, it said.
“The board recommended a dividend of Rs 1.50 per share,” it said. The statement, however, did not mention anything about change in management in wake of allegations against the CEO.
According to sources, the recently appointed government nominee director did not attend the board meeting.
For the full fiscal 2017-18, the bank’s standalone net profit slipped by 31 per cent to Rs 6,777 crore as against Rs 9,801.09 crore in the previous fiscal.
Its total income fell to Rs 72,386 crore as against Rs 73,661 crore crore in 2016-17.
On the credit expansion, the year-on-year growth in domestic advances was 15 per cent on March 31, 2018.
ICICI Bank’s board will meet again on Tuesday to discuss strategy and budget and planning for 2018-19.
Plans new strategy to boost growth
MUMBAI: ICICI Bank said that it plans to deploy a “preserve, change and grow” strategy to get back to the growth trajectory. According to bank’s MD and CEO Chanda Kochhar the new policy entails growth of retail loan portfolio, reconciliation and resolution of the stressed assets. “Going forward, ICICI Bank’s strategy will be anchored around three key anchors: Preserve, Change, Grow,” Kochhar said.