ICICI Bank, which was seeing higher addition to bad loans and increasing slippages from restructured assets in the past few quarters, saw some respite in the latest June quarter. After four quarters of sequential increase in bad loans, the bank’s gross non performing assets (GNPA) remained almost flat when compared with the March quarter.
Aside from bad loans, ICICI Bank also has a larger restructured book vis-à-vis its peers. The concern in recent quarters had been the increase in slippages from the restructured book to bad loans. But in the June quarter, slippages from restructured book fell sharply. From about ₹2,200 crore during the March quarter, slippages have fallen to ₹292 crore in the June quarter.
The bank’s operational performance has also been on a strong footing. It witnessed strong traction in its high-margin retail loans, which was up by 25 per cent in the June quarter, at par with the 25-26 per cent growth of Axis Bank and HDFC Bank.
It was also able to keep its net interest margin stable at 3.5 per cent. But, ICICI Bank’s asset quality will need watching. Its stressed assets (bad loans plus restructured book) are the highest among the three large private banks. The pace of addition to bad loans and slippages from restructured assets will impact the stock performance.