ICICI Bank Ltd, India’s third-largest lender by assets, reported a surprise first-quarter net loss on Friday on higher provisions for bad loans and treasury losses. The bank made a net loss of Rs 120 crore ($17.47 million) in the three months to June 30, compared with a profit of Rs 2,049 crore a year earlier, it said in a statement. Analysts on average had expected a net profit of Rs 1,462 crore, according to Thomson Reuters I/B/E/S.
Gross bad loans as a percentage of total loans was 8.81 per cent at the end of June, compared with 8.84 per cent at the end of the previous quarter and 7.99 per cent a year earlier.
The results come amid uncertainties around the bank’s long-serving Chief Executive Chanda Kochhar, who is on leave as a probe continues into alleged nepotism charges against her.
ICICI Bank, which holds the highest amount of bad loans among the country’s private-sector lenders, added Rs 4,036 crore in additional non-performing loans during the quarter, taking its total outstanding to Rs 53,465 crore.
Even if the bad loan additions in the June quarter were the slowest in 11 quarters, the bank said it had to make higher provisions for ageing non-performing loans and cases in bankruptcy court, leading to the net loss.
Total provisions more than doubled from a year earlier to Rs 5,971 crore with the bank not availing a central bank dispensation of spreading bond losses over four quarters.
Shares in ICICI Bank closed with a gain of 2.3 per cent ahead of the earnings announcement.
Source: NDTV
