ICICI Bank reports 45 per cent drop in consolidated net profit

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ICICI Bank Ltd, India's third-largest lender by assets, said its fourth-quarter net profit nearly halved, missing expectations, as provisions for bad loans surged.

Gross non-performing assets rose 27 per cent to Rs 54,062 crore (8.84 per cent as a percentage of gross advances) from Rs 42,551 crore (7.89 per cent) at the end of March 2017. ICICI Bank's standalone profit after tax was at Rs 6,777 crore for FY 2018 as compared to Rs 9,801 crore for the year ended March 31, 2017. Also current provisions rose by 85.61% versus Rs 3,569.66 crore of preceding quarter.

As per a BSE filing, the gross NPA (Non-Performing Asset) additions of Rs 15,737 crore in Q4.

ICICI Bank has laid out a course correction plan and set specific targets for improving the health of the balance sheet by 2020, as bad loans zoomed during the last quarter of 2017-18. Today's board meeting was not attended by the government nominee on the bank's board- Lok Ranjan. He also alleged quid pro quo between Videocon Group and Kochhar as well as her family members with respect to extending a loan worth Rs 3,250 crore, which for the past many years have been NPA. Moreover, the numbers will be go up against because of the Central Bureau of Investigation (CBI) registering a preliminary enquiry (PE) against ICICI Bank Managing Director (MD) and Chief Executive Officer (CEO) Chanda Kochhar's husband Deepak Kochhar, officials of the Videocon group and others to determine there has been malpractices involving the sanctioning of Rs 32.5 billion loan to the Videocon Group by the ICICI Bank as part of a consortium of banks in 2012. While officially the meeting's agenda is "strategy", the issue that is likely to be discussed is the controversy surrounding Rs 3,250-crore loan to the Videocon group.

The bank has classified three borrower accounts in the gems and jewellery sector with fund-based outstanding of Rs 794.87 crore as fraud and non-performing. This was mainly due to rise in provisions of bad loans.

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The provision made by debiting reserves and surplus will be reversed and accounted through the profit and loss account over the subsequent quarters of the year ending March 31, 2019, it added.

Kochhar cited the March 28 board statement rallying behind her, a day before the news on the allegations against her began to appear in the media and further reports that led to multi-agency probes, and said she has nothing to add on to the board statement.

Total domestic loan growth at 15 percent year-on-year at March 31, 2018, driven by the retail book which grew by 21 percent.

During the quarter, the bank sold equity shares representing 20.78 per cent shareholding in ICICI Securities Limited in an IPO for a total consideration of Rs 3,480.12 crore. The broader market closed with a near 1 per cent gain.