ICICI Bank, has reported a 76 per cent drop in net profit for the January-March quarter to Rs 702 crore. Chanda Kochhar, managing director and chief executive officer, explained the contingency reserve was over and above the one mandated by the Reserve Bank of India.
“The weak global economic environment, sharp downturn in the commodity cycle and gradual nature of the domestic economic recovery has adversely impacted borrowers in certain sectors like (those mentioned). While banks are working towards resolution of stress on certain borrowers in these sectors, it might take some time for solutions to be worked out, given the weak operating and recovery environment,” Archana said.
Its gross non-performing assets (NPAs) increased by 24 per cent to Rs 26,221 crore at the end of the quarter, from Rs 21,149 crore at the end of the December quarter. Gross bad loans as a percentage of all loans rose to 5.82 per cent from 4.72 per cent in the corresponding quarter last year. Net NPAs increased to 2.98 per cent from 2.28 per cent in the quarter ended December.
With the rise in bad loans, provisions and contingencies also jumped 17 per cent to Rs 3,326 crore in the quarter.