Aided largely by healthy uptick in retail loans and higher margins from its international operations, ICICI Bank, the country’s largest private sector lender, on Friday reported 12 per cent growth in net profit at Rs 3,030 crore for the three months ended September as against Rs 2,709 crore in the same period of last year. The bank also announced that it is selling 9 per cent stake in its general insurance arm, ICICI Lombard, to Fairfax Financial Holdings, promoted by Canada-based NRI Prem Watsa.
The sale will bring down the bank’s stake in the insurance venture to 64 per cent and bring in Rs 1,550 crore. The proposed transaction values the company at Rs 17,225 crore ($ 2.6 billion).
On share sale ICICI Bank MD and CEO Chanda Kochhar said the bank is satisfied with overall valuation of Rs 17,225 crore and the partner’s move to up stake reflects its confidence in the firm and the country. The share ownership of ICICI Bank and Fairfax in the insurance JV will be approximately 64 per cent and 35 per cent, respectively.
The bank’s asset quality worsened during the quarter with both the gross NPAs and net NPAs inching up. Gross NPAs rose to Rs 15,857 crore (3.77 per cent of advances) from Rs 11,546 crore (3.12 per cent) in the same period of last year. Overall slippages were at Rs 2,242 crore, which included Rs 931 crore of standard restructured advances. Excluding restructured advances, fresh slippages have fallen to Rs 1,311 crore from Rs 1,380 crore in the June quarter. Kochhar said corporate loans grew slower at 7 per cent due to sluggish demand, but the bank expects corporate demand to gather steam going forward.
Bank cuts share in 2 foreign arms
New Delhi: ICICI Bank has more than halved its equity investment in the two arms in Canada and the UK to 5.2 per cent at the end of September quarter from 11 per cent as of March 2010.
It has close to a quarter of its assets of Rs 4,09,700 crore with two overseas subsidiaries — ICICI Bank UK and ICICI Bank Canada. (PTI)