ICICI Bk Q2 net down 30pc to Rs 2,071 cr, sanguine on NPAs

The bank's standalone net dipped 33 per cent to Rs 2,058 crore in the reporting quarter. Last year, it had notched a one-time gain of over Rs 5,600 crore on a stake sale in its life insurance arm which boosted profits.

The bank's core net interest income grew 9 per cent to Rs 5,709 crore on a 6.3 per cent overall loan growth (including 12.8 per cent in domestic market), and a 0.14 per cent expansion in net interest margin to 3.27 per cent.

The non-interest income slid to Rs 5,186 crore from the year-ago's Rs 9,120 crore achieved on the back of the stake sale in its insurance arm's IPO, but fee income was up.

Its managing director and chief executive Chanda Kochhar attributed the fall in profit primarily due to the one time gain last year, which dwarfs the approximately Rs 2,100 crore made through the sale of stake in general insurance arm during the reporting quarter.

Its gross non performing assets moved up to 7.87 per cent on the back of a Rs 4,634 crore in fresh slippages during the quarter, which Kochhar said is slower than the Rs 4,936 crore accretion in the preceding quarter and Rs 8,029 crore in the same period last year.

She said the trend of NPA accretion is slowing down and the bank's 'drilled down' list of assets which can slip has also narrowed down to Rs 19,590 crore now from the Rs 20,358 crore in the year-ago period.

Kochhar said the bank expects the NPAs in FY18 to be "significantly lower" than those in FY17, even as it awaits results of the RBI's RBS exercise, whose results are expected in the third quarter.

It can be noted that the RBS results have wrecked the asset quality of its peers because of the 'divergences' or under-reporting discovered by the regulator, which has mandated banks to recognise more assets as bad, ensuing in extra provisions being made and bottomlines being hit.

ICICI Bank's total provisions went up to Rs 4,502 crore as compared the quarter ago's Rs 2,483 crore. Kochhar said they included Rs 651 crore in provisions towards dud assets mandated to be resolved under the insolvency laws.

She said in addition to the exposure to 9 of the 12 accounts in the first list of IBC accounts given by RBI, it has exposure to 18 more accounts in the newer list speculated to consist 30 accounts.

The total fund-based exposure to these 18 accounts which need to be resolved by December 31 is Rs 10,476 crore and the non-fund based exposure is Rs 1,384 crore. Over 98 per cent of them are already NPA for the bank and the provision coverage ratio (PCR) for these 18 accounts is 31.5 per cent.

The bank's overall PCR moved up by four percentage points to 59.3 per cent.

Kochhar expressed satisfaction with the progress on the initial list of 12 accounts, saying 11 of them are already in the NCLTs.

The write-offs came at Rs 2,298 crore, while the recoveries and upgrades stood at Rs 1,029 crore.

The bank is targeting for a 15 per cent growth in domestic advances in FY18 on the back of a 18-20 per cent growth in retail, Kochhar said.

Its Q2 performance of 12.8 per cent growth includes 18 per cent on retail, 4 per cent on corporate and 6 per cent on small and medium enterprises. On the corporate growth, Kochhar said the bank is growing the desired book, excluding the low rated loans, restructured book among others, at 14 per cent.

The international book was down by 21 per cent, primarily due to the loans given after the FCNR (B) deposit scheme, Kochhar said.

The share of the low-cost current and saving accounts (Casa) ratio went up to 49.5 per cent during the quarter.

The bank's tier-I capital stood at 14.85 per cent including the profits for the half year.

Among the subsidiaries, its asset management company's net grew 20 per cent to Rs 156 crore while the brokerage business saw a 32.3 per cent growth in the PAT at Rs 131 crore.

The bank scrip closed 0.57 per cent up at Rs 300.95 a piece on the BSE, as against a 0.03 per cent gains on the benchmark.