ICICI Bank Q4 net falls 5% to Rs969 cr dented by higher provisioning

Private sector lender ICICI Bank has reported a 5 per cent drop in its fiscal fourth quarter net profit to Rs969 crore on the back of an increase in bad-loan provisioning to Rs5,451.41 crore from Rs4,244.15 crore in the third quarter.

The bank had posted a net profit of Rs1,020 crore in the comparable quarter of the previous fiscal. 
ICICI Bank said its asset quality improved quarter on quarter while net interest income jumped 27 per cent in the fourth quarter. 
Net NPA ratio of the bank, however, decreased to 2.06 per cent of advances as of 31 March 2019, from 2.58 per cent as of 31 December 2018
Net interest income (NII) increased by 27 per cent year-on-year to Rs7,620 crore in Q4 FY19 against Rs6,022 crore in the quarter ended 31 March 2018 (Q4-2018).
NII in Q4-2019 includes Rs414 crore of interest on income tax refund
Net interest margin for Q4 FY19 stood at 3.72 per cent against 3.40 per cent in the quarter ended 31 December 2018
Provisioning stood at Rs5,451 crore in Q4-2019 compared to Rs6,626 crore in Q4-2018. Provision coverage ratio (including technical/prudential write-offs) increased from 60.5 per cent at 31 March 2018 to 80.7 per cent at 31 March  2019.
Gross additions to NPA stood at Rs3,547 crore in Q4-2019 against Rs2,091 crore in Q3-2019. Gross NPA additions in Q4-2019 included an account in the sugar sector where the payment obligations are being met. The account was classified as non-performing pursuant to a regulatory interpretation communicated to banks relating to change in management.
Recoveries and upgrades of non-performing loans stood at Rs,522 crore in Q4-2019.
“We believe we are at the end of this asset quality cycle and the NPA additions are expected to stabilise going forward” said Sandeep Batra, Executive Director-designate, ICICI Bank. The bank’s RoE for 2018-19 was about three per cent.
Fee income grew by 15 per cent year-on-year to Rs3,178 crore.
Domestic loan grew 17 per cent year-on-year as of 31 March 2019 driven by retail loans which grew 22 per cent year-on-year and constituted 60 per cent of the loan portfolio.