ICICI profit plunges 87% to over 11-year low

Mumbai, April 29 

ICICI Bank today reported its worst numbers in over a decade with consolidated net profit plunging 87% in the March quarter at Rs 406.71 crore due to a spike in provisioning for bad loans.

Higher provisioning is in view of the RBI’s asset quality review (AQR) as well as expectations of further bad loan issues at the country’s largest private sector lender.

The Chanda Kochhar-led bank had posted a post-tax net of Rs 3,084 crore on a consolidated basis in the January-March quarter of last fiscal, and Rs 3,122 crore in the preceding quarter, when it started recognising the effects of bad loans following the AQR.

On a standalone basis, the bank’s net profit tanked 76% to Rs 701.89 crore from Rs 2,922 crore a year ago.

Profit for the reporting quarter eroded on setting aside of Rs 3,600 crore towards “collective contingency and related reserves”, above the RBI-mandated provisions in view of the stress it expects from the iron & steel, mining, rigs, power and cement sectors in the future, the bank said.

As of the December quarter, ICICI Bank, which is one of the two systemically important lenders (the other being SBI), did not have a counter-cyclical buffer unlike its private sector peers.

“The weak global economic environment, downturn in the commodity cycle and the gradual nature of the domestic economic recovery has adversely impacted borrowers. It may take some more time for the resolutions to be worked out,” Kochhar, managing director and chief executive, told reporters in a concall. — PTI