ICICI Bank - the largest private sector lender of the country - reported 189% growth in its net profit to Rs 2025 crore during the fourth quarter of 2016-17 as compared to Rs 702 crore in the same quarter of the previous year. Net profit however declined on a sequential basis from Rs 2442 crore reported in Q3.
In the fourth quarter of 2015-16, the bank’s net profit plunged to decade low, mainly due to higher provisioning including creation of a contingency reserve to Rs 3600 crore.
However, by the end of the Q4 of FY17, the bank has exhausted its entire contingency reserves for provision of bad loan. In Q4, bad loan additions were over Rs 11,000 crore for which the bank has to make a provision of Rs 2898 crore as compared to Rs 3326 crore. ICICI Bank wrote-off a whopping Rs 5386 crore of bad loans in Q4 as compared to Rs 148 crore during the same period of last year.
The spike in NPA is mainly due to one account in the cement sector of Rs 5378 crore, Chanda Kocchar, managing director and chief executive officer of the bank said.
“Additions to NPA was gradually declining, however, it stayed elevated during the quarter due to the cement account,” Ms Kochhar said who expects addition to NPA will be lower in the current financial year as compared to the previous one.
“While the transaction has received most of the requisite approvals, including the approval of the National Company Law Tribunal, it is awaiting certain last mile approvals due to which the transaction could not be concluded by March 31, 2017,” the bank said. It expects part of the loan to be upgraded on conclusion of the transaction.
The gross NPA ratio of the bank was at 7.89% as compared to 7.2% a year ago while provision coverage ratio declined to 53.5% from 61% a year ago.
The ‘drill down’ list of the banks - which is essentially loans which identified as below investment grade - declined to Rs 19000 crore as on end March, from Rs 44,000 crore at the beginning of FY17. “About Rs 20,000 crore of the list has turned into NPA,” she said.
The bank announced to issue of one bonus share for every 10 shares and dividend of Rs2.50 per share.
The bank reported increase in net interest income of 10% to Rs 5,962
crore while non-interest income was Rs 3,017 crore as compared to Rs 2,978 crore. The net interest margin of the bank was 3.57% in Q4 as compared to 3.37% in the year ago period.
Retail loans continue to drive its business which grew by 19% while overall loan growth was 14%. The bank’s retail portfolio now constitutes 52% of the total loan portfolio. The bank expects 15-16% credit growth in the current financial year, in which consumer loans are expected to grow by 18-20%.
