INSUBCONTINENT EXCLUSIVE:
MUMBAI: ICICI Bank slumped to a historic loss in the quarter ended June 2018 due to a rise in provisions as the bank set aside more money to
comply with the Reserve Bank of India (RBI) guidelines on old nonperforming assets (NPAs) referred to the bankruptcy courts
However, the pace of bad loan creation for the bank slowed, signalling an improvement in asset quality.
The bank reported a loss of ?120
crore in June 2018 versus a profit of ?2,049 crore a year ago mainly as provisions more than doubled to ?5,971 crore from ?2,609 crore a
In a statement the bank said the provisions were higher despite gross additions in non performing assets (NPAs) being the lowest in 11
11 quarters, additional provisions on existing NPAs as per RBI guidelines resulted in total provisions of ?5,971 crore and a net loss of
The results were reported after market hours and are likely to be a shock for the market as a Bloomberg poll of 17 brokers had expected the
than the ?54,063 crore the bank reported in the quarter ended March 2018
Net NPAs were also down to 4.19% from 4.77% in March 2018
However, an increase in provisions helped the bank improve its provision coverage ratio to 66% from 53%.
Banks have to provide 50% for
secured loans and 100% if the loans are referred to the bankruptcy courts, according to RBI norms
Provisions are money that banks have to set aside from their gross profit as a cushion against the failure to recover dues from
borrowers.
In a call with analysts COO Sandeep Bakhshi said he expects the pace of addition to slippages to trend lower bringing the NPA
in June 2018 from ?5,590 crore a year earlier
Non interest income, which includes fees and commissions, increased 22% to ?3,085 crore from 2,530 crore a year earlier
Mark-to-market losses on treasury totalled 219 crore in the quarter for which the bank made one-time provisions during the quarter.
The
Retail banking on the other hand increased profits to ?2,046 crore from ?1,686 crore a year ago.
Total advances increased 11% to ?5.16 lakh
crore from ?4.64 lakh crore a year earlier, riding on a 15% growth in the domestic loan book
Retail loans continued to grow at a fast clip at 20% while corporate loans grew at a slower 4.9%
NIM dropped to 3.19% in June 2018 from 3.27% a year earlier
In reply to a news report to the stock exchanges, the bank said it is regularly engaged with regulators, including the US Securities and
Exchange Commission, on a range of matters
