ICICI Bank, India's largest private sector lender, reported a 75.97 percent fall in unconsolidated net profit to Rs. 701.89 for the fourth quarter ended March 2016 due to an exceptional provisioning of Rs. 3,600 crore. The Mumbai-based bank had posted a net profit of Rs. 2,922 crore in the corresponding quarter last fiscal.
Persisting weakness in stressed sectors including iron and steel, mining, power, rigs and cement prompted the bank to provide for such a huge amount.
"...it may take some time for solutions to be worked out, given the weak operating and recovery environment. In view of the above, the bank has on a prudent basis made a collective contingency and related reserve during the three months ended March 31, 2016, amounting to Rs. 3,600.00 crore towards exposures to these sectors. This is over and above provisions made for non-performing and restructured loans as per RBI guidelines," ICICI Bank said in a statement on Friday.
The exceptional provisioning was in addition to Rs. 3,326.21 crore made during the quarter for bad loans [provisions (other than tax) and contingencies], according to another statement issued by the bank.
The ICICI Bank stock was down 2.64 percent to Rs. 233.80 at around 2.50 p.m. on the BSE.
Net interest income (NII) for the March quarter was Rs. 5,405 crore, up 6.42 percent from Rs. 5,079 in the year-ago period.
ICICI Bank proposed a dividend of Rs. 5 per equity share and a dividend of Rs. 100 per preference share on 350 preference shares of the face value of Rs. 1 crore each, for the year ended March 31, 2016.
Credit, deposits growth
The company's deposits grew 17 percent during 2015-16, while domestic advances increased 16 percent.
The bank's capital adequacy as on March 31, 2016 was 16.64 percent as per Basel III norms.
This is over and above
provisions made for non-performing and restructured loans as per RBI guidelines.