ICICI Bank Ltd, India's third-biggest lender by assets, reported a smaller-than-expected rise in fourth-quarter net profit as bad loans grew. Indian banks have seen their bad loans surge in the past year or so after an asset quality review ordered by the central bank as part of a clean-up exercise. The regulator continues to tighten rules around sour assets, which hit a record $150 billion in December.
ICICI, which has the highest bad loans among private sector lenders, said bad loan additions in the March quarter were "elevated" by one borrower in the cement sector and that it expected part of that loan to be upgraded on the conclusion of a pending deal. Chief Executive Chanda Kochhar told reporters on a conference call after the results that she expected bad loan additions in the current financial year to be "significantly lower" than in the last financial year to the end of March.
Its standalone net profit nearly tripled to 20.25 billion rupees ($315.7 million) for the three months to March 31, from 7.02 billion rupees reported a year earlier, the Mumbai-based lender said on Wednesday. Analysts on average had expected a net profit of 22.04 billion rupees, according to Thomson Reuters data.
The bank's gross bad loans as a percentage of total loans rose to 7.89 percent as of end-March, from 7.2 percent at the end of December and 5.21 percent a year earlier. Provisions, including for bad loans, were lower at 28.98 billion rupees in the March quarter from 33.26 billion rupees a year ago. Domestic loans in the quarter grew 14 percent from a year earlier, with loans to individuals rising at a faster rate of 19 percent.
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