NEW DELHI: The country’s largest private sector lender ICICI Bank on Friday reported a 76% fall in its net profit for the March 2016 quarter, its worst numbers in over a decade due to higher NPA provisioning.
The net profit fell to Rs 701.89 crore from Rs 2,922 crore a year ago. The bank also made a one-time exceptional provision of Rs 3,600 crore. The gross non-performing assets (NPAs) rose 24 per cent to Rs 26,221.25 crore for the current quarter from Rs 21,149.19 crore in the December quarter.
Provisions and contingencies jumped 17 per cent to Rs 3,326.21 crore in the quarter from Rs 2,844.05 crore in the preceding quarter and from Rs 1,344.73 crore a year ago.
The bank’s contingency provision of Rs 3,600 crore, over and above what it set aside against bad loans, was to guard against possible slippages from its exposure to companies in stressed sectors such as iron and steel, power, cement and mining.
Chanda Kochhar, Managing Director and CEO of the bank said, “The weak global economic environment, downturn in the commodity cycle and the gradual nature of the domestic economic recovery has adversely impacted borrowers. It may take some more time for the resolutions to be worked out.”
“We have actually been working on resolution on certain of these large cases. In fact, transactions which have been announced by certain borrowers along with other assets under discussion will lead to deleveraging of borrowers and reduction of bank exposure in these sectors,” Kochhar said.
She said that the bank has completed provided for all the visibly stressed accounts mentioned by the Reserve Bank in its asset quality review but cautioned that improvement in asset quality will be a gradual process.