India's ICICI Bank profit halves as bad loan provisions surge

ICICI Bank is seen reporting a drop in its fiscal fourth quarter profitability because of higher provisioning for bad loans

Mumbai: ICICI Bank on Monday has reported a 50 per cent drop in fourth-quarter net profit as provisions surged.

Gross non-performing assets (NPAs) worsened to 8.84 percent of total loans from 7.82 percent in the December quarter and 7.89 percent in the March quarter previous year. ICICI Bank's standalone profit after tax was at Rs 6,777 crore for FY 2018 as compared to Rs 9,801 crore for the year ended March 31, 2017.

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 in a statement.

Asset quality worsened for the bank with the gross NPA ratio rising marginally to 8.84 per cent but net NPA moved down marginally to 4.77 per cent from from 4.89 per cent in the year-ago period.

As a result, the provisions and contingencies of the bank jumped to Rs 6,626 crore in the quarter under review as against Rs 2,898 crore in the same period previous fiscal. The loan came under the scanner after some reports called the loan as an alleged favour given to Videocon Group's promoter Venugopal Dhoot who had allegedly invested into NuPower Renewables, a company founded by Deepak Kochhar, Chanda Kochhar's husband.

Non-interest income jumped 88 percent to Rs 5,678.6 crore (up from Rs 3,017 crore a year ago), supported by a one-time gains of Rs 3,320 crore from the sale of bank's shareholding in ICICI Securities. Moreover, the numbers will be go up against because of the Central Bureau of Investigation (CBI) registering a preliminary enquiry (PE) against ICICI Bank Managing Director (MD) and Chief Executive Officer (CEO) Chanda Kochhar's husband Deepak Kochhar, officials of the Videocon group and others to determine there has been malpractices involving the sanctioning of Rs 32.5 billion loan to the Videocon Group by the ICICI Bank as part of a consortium of banks in 2012.

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The Bank's drill-down list (watchlist) or potential list of bad loans decreased from Rs 44,065 crore at March 31, 2016, to Rs 4,728 crore at March 31, 2018. Interestingly, the bank board expressed full faith in Kochhar, whose current tenure as CEO is ending March 31, 2019.

The share of low-priced current and saving account deposits grew to 51 per cent and the bank is targeting to maintain it at over 45 per cent by March 2020.

The year-on-year growth in domestic advances for ICICI Bank stood at 15 per cent at March 31, 2018. She also stated there was no discussion on the controversy in the Board meeting today.

While retail book, which now contributes 57 per cent of the loan book, grew 20 per cent, corporate book was subdued at 5 per cent.

The ICICI Bank Board will also meet tomorrow on May 8.

The bank counter gained 2.30 per cent at Rs 289.40 on the BSE, as against a 0.84 per cent rally on the benchmark Sensex.

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