ICICI awash with redmarks, net slips 13%, provisions up 8-fold

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Mumbai, Nov 7 (PTI) Even as bad assets continued to drag its performance, a Rs 5,682 crore gain from stake sale in its life insurance arm helped the top private sector lender ICICI Bank to limit its profit slip to 12.85 per cent at Rs 2,978.95 crore for the September quarter.

Despite the massive rise in provisions and fresh slippages, analysts described the overall numbers as on expected lines.

On standalone basis, the bank’s net profit moved up marginally to Rs 3,102 crore for the reporting period.

The fresh slippages came in at Rs 8,000 crore, which resulted in the gross non-performing assets ratio to almost double to 6.82 per cent from 3.77 per cent last year.

Managing director and chief executive Chanda Kochhar said 80 per cent of the slippages came from the watchlist of Rs 44,000 crore it had declared at the beginning of the current fiscal year, and added that the bank expects some upside on the asset quality once the recent deals get consummated.

“We expect a significant reduction in this portfolio (the watchlist) over the next 6-9 months subject to necessary approvals and the transactions getting completed,” she said, referring to Jaiprakash Associates’ Rs 16,500 crore deal to sell cement unit to Ultratech Cement and Essar Oil’s USD 12.9 billion sale to Russia’s Rosneft-led consortium last month.

She informed that the bank has already received some amounts pertaining to the two deals in October.

The watchlist has now come down to Rs 32,490 crore on the back of repayments/upgrades of Rs 2,461 crore and NPAs of Rs 9,114 crore.

Its provisions rose nearly ninefold to Rs 7,082.69 crore from Rs 942.16 crore in the year-ago period but Kochhar said these include additional provisions of Rs 3,588 crore to “strengthen the balance sheet”. The provision coverage ratio was at 59 per cent as of September.

The additional provisioning included Rs 1,678 crore for standard loans, Rs 395 crore for loss of sale of NPAs and a floating provision of Rs 1,515 crore, she said, clarifying this is over and above a Rs 3,600 crore contingency provision created in the last quarter of the last financial year.

Over Rs 1,230 crore of restructured advances slipped into NPAs during the reporting quarter and the restructured book stood at Rs 6,336 crore.

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