ICICI Bank net profit dips 4% to Rs 11,317 crore on agri provisions
Announcing the results, the bank’s executive director Sandeep Batra said that there was a loan portfolio of Rs 25,000 crore which the bank had included in its Rs 83,000 crore agri portfolio.
The RBI during its inspection said that the loans were not compliant with RBI’s categorisation of priority sector agri loans which required additional provisions of Rs 1283 crore during the quarter.
Without this provision the net profit would haven been higher by 4.1% instead of the 4% decline reported by the bank.The pressure on the bottom line came largely from provisions and contingencies, which surged 108.3% year on year and 179.6% quarter on quarter to Rs 2,555.6 crore, indicating either heightened stress in select loan segments or a deliberate strengthening of buffers.
This was despite relatively stable operating trends.The balance sheet continued to expand at a healthy pace.
Advances rose 11.6% year on year and 4.1% quarter on quarter to Rs 14.66 lakh crore, reflecting sustained credit demand, while deposits grew 9.2% year on year and 2.9% sequentially to Rs 16.60 lakh crore.
The credit-deposit ratio stood at about 88.3%, pointing to efficient deployment of deposits.Total income increased 2% year on year to Rs 49,334 crore.
Net interest income grew a stronger 7.7% to Rs 21,932.2 crore, supported by a 4.3% decline in interest expended, signalling improved cost-of-funds management.
Other income rose 4.3% year on year to Rs 7,368.2 crore, though it slipped 2.7% sequentially, suggesting some moderation in fee or treasury income during the quarter.Operating expenses climbed 13.2% year on year to Rs 11,944.4 crore, driven mainly by higher employee and operating costs, outpacing income growth and exerting pressure on efficiency.
Operating profit rose a modest 2.8% to Rs 17,356 crore.Asset quality improved despite the spike in provisions.
Gross NPAs declined to 1.53% from 1.58% in the preceding quarter and 1.96% a year ago, while net NPAs improved to 0.37%, indicating a resilient loan book.Overall, ICICI Bank delivered steady balance sheet growth and stable core income in the December quarter, but elevated provisioning and faster cost growth weighed on profitability.
