Private sector lender ICICI Bank registered a five per cent drop in its net profit in the fourth quarter of 2018-19 with higher provisions and expenditure.
The bank’s net profit fell 4.99 per cent to ₹969.06 crore in the January to March 2019 quarter from ₹1,020 crore a year ago.
Its standalone net profit for 2018-19 also fell 50 per cent to ₹3,363.30 crore from ₹6,777.42 crore in 2017-18.
The bank’s bad-loan provision rose to ₹5,451.41 crore in the fourth quarter of 2018-19 from ₹4,244.15 crore in the third quarter.
However, on an annual basis, it fell by 17.7 per cent from ₹6,625.75 crore in the fourth quarter of 2017-18.
Its gross non-performing assets fell to ₹46,291.63 crore or 7.38 per cent of gross advances as on March 31, 2019 as against 9.9 per cent a year ago. Net NPAs were also the lowest in about 13 quarters at ₹13,577.43 crore or 2.29 per cent of net advances as on March 31, 2019 as against 5.43 per cent on March 31, 2018.
Gross additions to the NPAs came from one account in the sugar sector in the fourth quarter. The bank also classified its fund-based outstanding to Infrastructure Leasing & Financial Services Ltd (IL&FS) entities at ₹275.94 crore as an NPA with a provision of ₹145.97 crore. It also has non-fund based outstanding of ₹544.92 crore to IL&FS entities and holds a provision of ₹468.26 crore towards this outstanding as on March 31, 2019.
“We believe we are at the end of this asset quality cycle and the NPA additions are expected to stabilise going forward” said Sandeep Batra, Executive Director-designate, ICICI Bank. The bank’s RoE for 2018-19 was about three per cent.
Its total income grew 4.86 per cent to ₹20,913.82 crore in the quarter from ₹19,942.97 crore in the same period in 2017-18. Net interest income grew a robust 26.54 per cent to ₹7,620 crore from ₹6,021.67 crore. This includes ₹414 crore of interest on income-tax refund.
Net interest margin was at 3.72 per cent in the fourth quarter of 2018-19. Other income fell to ₹3,621.02 crore for the quarter under review from ₹5,678.61 crore in the same period in 2017-18 but this was on account of no stake sales in subsidiaries.
Total expenditure rose 18 per cent to ₹14,680.43 crore in the reporting quarter against ₹12,428.99 crore in the fourth quarter of 2017-18.
The board of directors has recommended a dividend of ₹1 per equity share for 2018-19. It also approved the appointment of Batra as Executive Director subject to regulatory approvals for a five-year period from May 7. He is currently President, Corporate Centre, ICICI Bank.
The board also approved fund-raising through debt securities of up to ₹25,000 crore from the domestic markets and up to $3 billion from the offshore markets.