ICICI Bank Net Profit Up On Tax Gains But Bad Loans Rise
Bad loans as a percentage of outstanding loans rose to 6.82 per cent at the end of September from 5.87 per cent at the end of June
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ICICI Bank Ltd, India's biggest private-sector lender by assets, reported a 2.4 per cent rise in second-quarter net profit on Monday (07 November) due to lower tax expenses while its provisions surged more than seven times.
Standalone net profit rose to Rs 3,102 crore ($465 million) for the three months to September 30 from Rs 3,030 crore a year earlier, well above the Rs 2,565 crore average of 26 analyst estimates, according to Thomson Reuters data.
Bad loans as a percentage of outstanding loans rose to 6.82 per cent at the end of September from 5.87 per cent at the end of June.
Indian banks were saddled with $138 billion of stressed loans as of the end of June. While state-owned lenders account for bulk, ICICI has the highest proportion among private sector banks.
The amount of bad loans has surged this year after an asset quality review ordered by the Reserve Bank of India uncovered more than previously calculated.
The central bank has set a March 2017 deadline for the sector to fully disclose and make provisions for those.
ICICI's provisions, which include charges for bad loans, jumped to Rs 7,083 crore in the September quarter from Rs 2,515 crore three months earlier and more than seven times higher than a year earlier.
The bank said total provisions in the second quarter included extra provisions of Rs 3,588 crore which it took to strengthen its balance sheet.
Tax expenses fell to Rs 451 crore in the September quarter from Rs 1,186 crore a year earlier due to deferred tax adjustments.