ICICI Bank, the country’s largest private sector lender, reported its first ever loss amounting to ₹119.55 crore for the quarter ended June 30, due to higher provisions for bad loans.
The bank had posted a net profit of ₹2,049 crore for the comparable period in the previous year. The bank’s latest quarterly result is the first after its MD and CEO Chanda Kochhar went on leave after the lender initiated a probe against allegations of conflict of interest. Sandeep Bakhshi was appointed chief operating officer and is running the show in the absence of Ms. Kochhar.
Provisions in the quarter more than doubled to ₹5,971 crore from ₹2,609 a year earlier. The bank said ageing-based provisioning and provisions for cases referred to the National Company Law Tribunal were the main reasons for the rise in provisions, even though gross slippages of ₹4,036 crore were the lowest in 11 quarters. Gross NPA was 8.81% as at June-end compared with 7.99% a year earlier.
In particular, provisions for the first list of accounts that was referred to the NCLT increased from 52.6% on March 31, 2018 to 87.9% on June 30, 2018, the bank said in a statement.
Also, though there was a gain of ₹1,110 crore from the sale of stake in ICICI Prudential Life Insurance Company, there was a mark-to-market (MTM) loss of ₹219 crore in the quarter. The bank has provided fully for the MTM losses in the first quarter though the RBI has allowed banks to spread the losses over four quarters. Overall treasury income fell to ₹766 crore from ₹858 crore a year earlier.
Flat growth in NIM
Net interest income, the difference between interest earned and interest expended, was almost flat year-on-year at ₹6,102 crore. The net interest margin was at a multi-quarter low of 3.19%, compared with 3.27% in the first quarter of FY18.
Domestic advances grew at a healthy pace of 15% year-on-year, and continued to be driven by retail which grew 20%.
The retail portfolio constituted about 58% of the loan portfolio. Current and savings account deposits rose 16%, constituting 50.5% of total deposits compared with 49% a year earlier.
