ICICI Bank posts 8% decline in net profit

ICICI Bank has posted a 8.21% decline in net profit for the quarter ended June 30, 2017 at Rs 2,049 crore when compared with Rs 2,232.35 crore in the same quarter previous fiscal.

Net interest income for the bank during the quarter grew 8.36% to Rs 5,589.84 against Rs 5,158.52 crore in the comparable period previous fiscal.

Asset quality for the bank during the quarter declined Y-o-Y but remained stable on a sequential basis. Gross non performing assets (NPAs) for the bank during the quarter stood at 7.99% compared with 5.28% in the comparable period previous fiscal while it was at 7.89% in the sequential quarter.

As far as net NPAs are concerned, it stood at 4.86% during the quarter compared with 3.01% in Q1FY17 and 4.89% in Q4FY17. Provisions rose marginally during the quarter and stood at Rs 2,608.74 crore compared with Rs 2,514.52 crore in the same period last year and Rs 2,898.22 crore in the sequential quarter.

During the quarter, RBI advised banks to initiate insolvency resolution process in respect of 12 accounts under the provisions of Insolvency and Bankruptcy Code, 2016 and also required banks to make higher provisions for these accounts during the year. RBI has allowed banks to spread this additional provision over three quarters starting Q2 FY18.

The bank as of June 30, 2017 had outstanding loans to these borrowers amounting to Rs 6,889.46 crore and as of June 30, 2017, the bank holds a provision of Rs 2,827.66 crore against these outstanding loans which amounts to 41.04% provision coverage in respect of outstanding loans to these borrowers. The bank is required to make an additional provision of Rs 647.28 crore over the next three quarters as advised by RBI, in addition to the provisions to be made as per the existing RBI guidelines, ICICI Bank said.

The year-on-year growth in domestic advances was 11%. The bank has continued to leverage its strong retail franchise, resulting in a year-on-year growth of 19% in the retail portfolio. The bank’s capital adequacy as on June 30, 2017, as per Reserve Bank of India’s guidelines on Basel III norms was 17.69% and Tier-1 capital adequacy was 14.59% compared to the regulatory requirements of 10.35% and 8.35%, respectively.