The bank wrote off Rs 11,200 crore of loans during the financial year 2018-19, higher than Rs 8,600 crore written off a year ago
ICICI Bank on Monday reported a 5% year-on-year drop in its net profit for the fourth quarter of last fiscal at Rs 969 .06 crore and wrote off Rs 7,300 crore of stressed assets as it continued to clean-up its balance-sheet.
The bank wrote off Rs 11,200 crore of loans during the financial year 2018-19, higher than Rs 8,600 crore it wrote off in the year-ago period. Fresh NPA additions during the quarter were Rs 3,547 crore, higher than the Rs 2,091 crore it reported in the preceding quarter.
The drop in profit was on the back of higher expenses that ate into the bank's earnings. Expenses jumped 18.1% to Rs 14,680 crore at the end of the quarter.
Lower NPAs also helped the bank report lower provisions. The provisions during the quarter was Rs 5,451 crore as against Rs 6,626 crore in the year-ago period. The bank classified Rs 276 crore outstanding to IL&FS units as NPA and provided Rs 470 crore for non-fund based IL&FS exposure. The lender has Rs 545 crore non-fund based exposure in the company. Share of the advances to companies rated BB and below dipped marginally to Rs 17,525 crore.
The ICICI Bank share price closed Rs 401.40 a share, about 0.11% lower than the previous day's close. The Board also recommended a dividend of Re 1 per share. The declaration of dividend is subject to shareholders approval.
"We believe we are at the end of this asset quality cycle and non-performing asset additions are expected to broadly stabilise going forward," executive director Sandeep Batra told reporters in a concall on Monday.
The high growth in retail loans, especially the unsecured credit led by credit cards and personal loans, helped the bank maintain its margins. The net interest margin (NIM) was 3.72% in Q4 of 2019 compared to 3.40% in the quarter ended December 31, 2018
Retail domestic advances led the credit growth of the bank, with retail loans growing 21.7% over the previous year to Rs 3,52,831 crore and constituted 60% of the loan portfolio of the bank. Corporate advances grew only 5.7% to Rs 1,40,174 crore as the bank tread cautiously on its corporate loans to protect its asset quality.
Among the retail loans, the high yielding unsecured credit like personal loans grew the most 48.6% over the year-ago period to Rs 31,015 crore, loans on credit cards grew 31.2% to Rs 12,304 crore, while home loans grew 18% to Rs 1,78,236 crore and vehicle loans rose 18.8% to Rs 55,666 crore.
Net interest income (NII) increased 27% over the previous year to Rs 7,620 crore. This also included a Rs 414 crore of interest on income-tax refund. The Board of the bank approved fundraising by way of issuance of debt securities of up to Rs 25,000 crore from the domestic markets and up to $3 billion from offshore markets in a single or multiple tranches through public or private placement for a period of one year from the date of passing of resolution by the Board.
IN THE WOODS
- The bank wrote off Rs 11,200 crore of loans during the financial year 2018-19, higher than Rs 8,600 crore written off a year ago
- Fresh NPA additions during the quarter were Rs 3,547 crore, higher than the Rs 2,091 crore it reported in the preceding quarter
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Lower NPAs also helped the bank report lower provisions. The provisions during the quarter was Rs 5,451 crore as against Rs 6,626 crore in the year-ago period. The bank classified Rs 276 crore outstanding to IL&FS units as NPA and provided Rs 470 crore for non-fund based IL&FS exposure. The lender has Rs 545 crore non-fund based exposure in the company. Share of the advances to companies rated BB and below dipped marginally to Rs 17,525 crore.
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