ICICI Bank reported 76 per cent decline in its net profit for the fourth quarter ending March 31, 2016 on account of a special provision of Rs 3,600 crore, which it made proactively anticipating stress in some sectors.
“The weak global economic environment, the sharp downturn in the commodity cycle and the gradual nature of the domestic economic recovery has adversely impacted the borrowers in certain sectors like iron and steel, mining, power, rigs and cement… In view of the above, the Bank has on a prudent basis made a collective contingency and related reserve of Rs 3,600 crore during Q4,” ICICI Bank said in a release to Bombay Stock Exchange.
This provision was over and above provisions made for non-performing and restructured loans as per Reserve Bank of India guidelines,” the bank added.
India’s biggest private sector lender (by assets) reported a net profit of Rs 702 crore against Rs 2,922 crore in the year-ago quarter.
Its net interest income (NII), or the excess of interest earned on advances over interest paid, rose 6 per cent to Rs 5,404 crore against Rs 5,079 crore year-on-year.
Excluding the special provision, ICICI Bank made provision of Rs 3,326 crore for bad loans in Q4, up from Rs 1,345 crore year-on-year and Rs 2,844 crore in the December quarter.
ICICI Bank’s net profit was bolstered by deferred tax write-backs of Rs 2,199 crore.
ICICI Bank’s gross non-performing assets rose to Rs 26,221 crore against Rs 21,149 crore in the December quarter. As a percentage of total assets it stood at 5.85 per cent against 4.72 per cent in the December quarter.
Its net non-performing assets ratio stood at 2.98 per cent against 2.28 per cent in sequentially.
ICICI Bank shares closed 1.31 per cent lower at Rs 236.95 compared to 0.47 per cent gain in the industry benchmark Nifty Bank.