ICICI Bank - the largest private sector lender - reported 8% drop in its net profit to ₹2,049 crore for the quarter ended June due to fall in non-interest income.
Its non-interest income was ₹3,388 crore in Q1 compared to ₹3,429 crore ($531 million) in Q1-2017.
Chanda Kochhar, MD & CEO of the bank said non-interest income in first quarter of the previous fiscal included exchange rate gain related to overseas operations of ₹206 crore, which is no longer permitted to be accounted as income following Reserve Bank of India (RBI) guideline. In addition, quarterly dividend of ₹204 crore from ICICI Prudential Life Insurance Company (ICICI Life), which has moved to dividend payments on a half-yearly basis following its initial public offering in September 2016.
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On the asset quality front Ms.Kochhar highlighted that net non-performing assets have come down on a sequential basis from Rs 25,451 crore (4.86%) to ₹25,306 crore (4.89%). Its gross NPAs have also fallen from ₹42,552 crore (7.89%) ₹43148 crore (7.99%), sequentially.
“Addition to gross NPAs, which was ₹4,975 crore - was the lowest in seven quarters,” Ms. Kocchar said adding that addition to NPA in the current financial year will be lower than the previous year.
The bank has seen a healthy recovery and upgradation during the quarter which was around ₹2575 crore, mainly aided by loan repayment by a large cement firm following resolution of stress.
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The bank has made a provisioning of ₹2,609 crore during the quarter as compared to ₹2,515 crore, and except for ₹160 crore which was standard asset provisioning, the remaining provision was for bad loans.
The bank said it has an exposure of ₹6,889 crore to the 12 accounts (excluding ₹351 crore for non-fund based exposure) that are referred for bankruptcy proceedings by RBI. The bank has a made a provision of ₹2,827.66 crore for these accounts which represents a provision coverage of 41% and another ₹647.28 crore provisioning is required to be made in the three quarters.
On the business front, the bank reported a loan growth of 11% while its retail loan book, which is now 53% of the overall loan book, grew by 19%. The net interest income increased by 8% on a year-on-year basis to ₹5,590 crore while net interest margins for the quarter was 3.27% as compared to 3.16% in the same period of the previous fiscal and 3.57% in the fourth quarter of 2016-17.