ICICI Bank suffered a loss of ₹119.55 crore for the quarter end of June 2018, the company announced on Friday.
This is the company’s first quarterly loss over the past 16 years. The bank had set aside extra money in order to fulfil the Reserve Bank of India (RBI) guidelines on old assets referred to the bankruptcy courts. Although the bad loan creation pace slowed and hinted an improvement in the quality of the asset.
The bank recorded ₹2,049 crore net profit in the same period previous year. Reportedly, ICICI MD and CEO Chanda Kochhar went on leave after being enquired by the lender leading to allegations of conflict of interest. In the absence of Ms. Chanda Sandeep Bakhshi was appointed chief operating officer and is taking care of things. The quarter provisions more than doubled going from ₹2,609 crore to ₹5,971 crore last year. The key reasons for the rise in provisions were ageing-based provisioning and provisions for cases referred to the National Company Law Tribunal, the bank stated. The bank added that the provisions were higher despite the gross additions in NPAs were the lowest in 11 quarters because of the RBI guidelines on loans referred to bankruptcy courts. Gross NPA was recorded at 8.81% as compared to 7.99% in June-end the previous year.
In the first quarter of 2019, the upgrades and recoveries from the non-performing loans were ₹2,036 crore. The net NPA ratio went down to 4.19% on June 30 from 4.77% in March 2018. Furthermore the net loans to companies whose facilities were updated, went down to ₹1,413 crore from ₹1,553 crore in March 2018. The bank said that its fee income grew by 16% YoY in Q1-2019 driven by retail fee income growth of 18% YoY. “Domestic loan growth at 15 per cent year-on-year at June 2018 driven by retail loans. Retail loans grew by 20 per cent year-on-year and constituted 58 per cent of the total loan portfolio at June 30, 2018 compared to 47 per cent in March 2016,” the bank added.
The shares of ICICI Bank rose at 2.62% to ₹293.30 on Friday on the BSE. The bank said that the mark-to-market losses on the securities portfolio totaled at ₹219 crore in Q1-2019. RBI had allowed the provisioning for such mark-to-market losses over up to four quarters, ICICI provided the losses in Q1-2019 itself.