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Private sector lender ICICI Bank reported a net loss of ₹119.55 crore for the first quarter of the fiscal year as its provisions more than doubled due to losses in its treasury portfolio. This was the first time the lender, which is the third largest bank in the country by assets, has reported a quarterly loss.
The lender was widely expected to show an improvement in its balance sheet after its profits had halved to ₹1,020 crore in the fourth quarter of 2017-18. The results were announced after market hours but with expectations of a turnaround, the bank’s shares had gained 2.62 per cent on the BSE to close at ₹293.30 apiece. ICICI Bank reported net interest income of ₹6,102 crore for the quarter ended June 30, which was 9.15 per cent higher than the ₹5,590 crore reported in the first quarter last fiscal.
Other income rose 13.69 per cent to ₹3,851.81 crore for the quarter under review.
Net interest margin dips
However, the net interest margin, a key indicator of a bank’s performance, dipped marginally to 3.19 per cent in the first quarter from 3.23 per cent a year ago.
Significantly, ICICI Bank, which has been in the midst of a storm with allegations against its Managing Director and CEO Chanda Kochhar, who is now on leave, did not hold the usual media call after the results. Newly appointed Chief Operating Officer Sandeep Bakhshi only interacted with investors and analysts. The bank’s gross non-performing assets rose to 9.65 per cent as a percentage of gross advances or ₹53,464.94 crore as on June 30, 2018, compared to 8.84 per cent a year ago and 9.90 per cent as on March 31, 2018.
The bank’s provisions rose 129 per cent to ₹5,971.29 crore from the ₹2,608.74 crore it had allocated a year ago.
“While the gross additions to NPAs at ₹4,036 crore were the lowest in the last 11 quarters, additional provisions on existing NPAs under Reserve Bank of India guidelines (ageing-based provisions and provisions for cases directed by the RBI to be referred to the National Company Law Tribunal), resulted in total provisions of ₹5,971 crore and a net loss of ₹120 crore in the first quarter,” ICICI Bank said in a statement.
Mark-to-market losses on the AFS and HFT portfolio aggregated ₹ 219 crore and the lender said it has such losses in the first quarter of the fiscal.
Total recoveries in the first quarter of the fiscal amounted to ₹ 2,036 crore. It has also made an additional provision of ₹ 706.78 crore towards accounts under insolvency in the first quarter of the fiscal.
On a consolidated basis, the bank declared a net profit of ₹5 crore for the first quarter of the fiscal year.
The lender also reported gains of ₹1,109.59 crore in its standalone results from the 2 per cent stake sale in ICICI Prudential Life Insurace Company in the first quarter of the fiscal. year.
For the quarter under review, the bank also posted a 15 per cent increase in its domestic advances and an 11 per cent growth in total advances.
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