ICICI Bank 4Q Net Profit Jumps, But Bad Loans Also Up

ICICI Bank 4Q Net Profit Jumps, But Bad Loans Also Up

ICICI Bank shares today soared almost 9 per cent, driven by a five-fold jump in its March quarter net profit and the Cabinet nod to NPA resolution in the banking sector.

Starting on a positive note, the stock extended gains by 8.76 per cent to Rs 296.65 on BSE.

"We like that bank is taking care of non-performing asset (NPA) resolution and the bank will look forward for much stronger growth in FY19", he said.

The bank's net profit for the quarter stood at Rs 2,025 crore as compared to Rs 702 crore reported in the same period past year.

The growth in net profit comes despite a decline in asset quality, with net non-performing asset ratio declining to 4.89% as of March 31, 2017 compared with 3.96% in the sequential quarter (Q4FY16), and 2.67% in the same period a year ago.

"Of the additions to NPAs during the quarter, Rs 5,378 crore was due to one account in the cement sector".


The bank's earnings were impacted by higher provisioning for bad loans, which stood at Rs 15,208 crore for FY2017, against Rs 8,067 crore in FY2016.

On the flip side, gross non-performing assets (NPAs) and net NPAs as of March 31, 2017 shot up to 7.89 percent and 4.89 percent, respectively, from 5.21 percent and 2.67 percent, respectively, as of March 31, 2016.

For the full year, net loss reported to Rs 1372.51 crore in the year ended March 2017 as against net profit of Rs 100.69 crore during the previous year ended March 2016.

The bank had made a net profit of Rs 701.89 crore in the January-March quarter of the preceding fiscal 2015-16. "The account was included in the drill down exposures to key sectors and a merger and acquisition transaction has been announced", ICICI Bank said in the statement. "We will will be more aggressive and tough on wilful defaulters", he said. "About Rs. 20,000 crore of the list has turned into NPA", she said.

He further said the bank will continue to focus on collecting interest from borrowers classified as NPAs or under the strategic debt restructuring scheme.

However, by the end of the Q4 of FY17, the bank had exhausted its entire contingency reserves for provision for bad loans.

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