Private sector lender, ICICI Bank on Thursday reported a 8.2 per cent fall in its standalone net profit at Rs 2,049 crore in the June quarter of FY18, as compared to the same period a year ago. Provisions rose 3.7 per cent year-on-year (y-o-y)to Rs 2,609 crore in the June quarter.
The bank’s other income fell 1.2 per cent on a y-o-y basis to Rs 3,388 crore. Its net interest income (NII), or the difference between the bank’s interest earned and expended, stood at Rs 5,590 crore in Q1 FY18, 8.4 per cent higher than the same quarter of FY17. Its net interest margin (NIM)– a key measure of profitability – stood at 3.27 per cent for the quarter and was 3.57 per cent in the previous quarter. Its domestic margins fell to 3.62 per cent in Q1 FY18, compared to 3.96 per cent in the quarter ended March.
As far as credit growth is concerned, ICICI Bank’s retail assets, which constituted 53 per cent of its loan portfolio as of June, saw a 19 per cent y-o-y growth. Its total advances grew 3 per cent 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,” said Chanda Kochhar, MD & CEO of ICICI Bank.
She added that the trend of lower additions to the bad loan portfolio has been seen 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,” said Kochhar.
The bank’s asset quality was stable in Q1 owing to a 1.4 per cent sequential rise in gross non-performing assets (NPAs). As a percentage of total advances, the gross NPAs stood at 7.99 per cent, 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,” said Kochhar. She added that the sectors are power, iron and steel, mining and telecom.
The drilldown list – the bank’s watchlist – stood at Rs 20,300 crore in Q1. Kochhar said that the bank has set aside Rs 2,828 crore or 41 per cent 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 per cent y-o-y to Rs 4.86 lakh crore and the bank’s current accounts savings account (CASA) ratio stood at 49 per cent. ICICI Bank shares on the BSE closed at Rs 307.05 on Thursday, down 1.02 per cent from its previous close.