ICICI Bank has ended the fourth quarter of FY2017 in style, logging a near-three-fold jump in standalone net profit and announcing issue of bonus shares and dividend.
The bank also said additions to bad loans will be significantly lower this financial year compared with the previous year.
India’s largest private sector bank by consolidated assets recorded a standalone net profit of ₹2,025 crore in the reporting quarter ended March 31, 2017 compared with ₹702 crore in the year-ago quarter.
The bottomline in the reporting quarter was supported in good measure by an income tax refund of ₹981 crore and relatively lower provisioning burden of ₹2,898 crore (₹3,326 crore in the year-ago period).
For the full financial year (FY2017), standalone net profit was almost flat at ₹9,801 crore (₹9,726 crore in FY2016).
The Board has recommended a dividend of ₹2.50 per share, and an issue of bonus shares in the ratio of one equity share for every 10 equity shares.
In the reporting quarter, net interest income (the difference between interest earned and interest expended) was up 10.3 per cent year-on-year (y-o-y) at ₹5,962 crore.
Non-interest income, including fee income, other income and treasury income, edged up 1.3 per cent to ₹3,017 crore.
While total advances increased 7 per cent to ₹464,232 crore, total deposits increased 16 per cent to ₹490,039 crore.
Loan growthMD & CEO Chanda Kochhar observed that y-o-y growth in domestic loans was 14 per cent, driven by retail loans, which grew at 18.5 per cent.
The bank consciously de-grew its overseas loan book by 20 per cent.
In FY2018, Kochhar expects domestic loans to expand by 15-16 per cent, with retail and SME loans growing at 18-20 per cent and 15-20 per cent, respectively. The share of retail loans in total loans increased to 51.8 per cent at March 31, 2017 from 46.6 per cent at March 31, 2016.
On the asset quality front, the ICICI Bank chief sees additions to non-performing assets (NPAs) in FY2018 to be significantly lower than in FY2017 due to asset resolutions coming to fruition and upgrade in loan accounts.
Asset qualityThe additions to NPAs had been gradually declining from ₹8,249 crore in the first quarter to ₹8,029 crore in the second quarter and ₹7,037 crore in the third quarter.
However, in the fourth quarter, the additions to NPAs have been elevated at ₹11,289 crore. Of the additions to NPAs in the reporting quarter, ₹5,378 crore was due to one account in the cement sector. Kochhar said a merger and acquisition transaction has been announced in respect of the said cement company. The bank expects part of the loan to be upgraded on conclusion of the transaction.
Higher write-offsWrite-offs in the reporting quarter were sharply higher at ₹5,386 crore (₹148 crore in the year-ago quarter).
The ICICI Bank scrip closed at ₹272.75, down 1.16 per cent over the previous close, on the BSE on Wednesday.