ICICI board meet skips Chanda Kochhar loan controversy

08 May, 2018, 01:00 | Author: Kevin Carter
  • ICICI Bank is seen reporting a drop in its fiscal fourth quarter profitability because of higher provisioning for bad loans

Net profit for its fiscal fourth quarter to March 31 nearly halved to 10.2 billion rupees ($152 million), the bank said, missing analysts' average forecast of 10.77 billion rupees.

"The board did not discuss the issue", she said, termed the board meeting slated for tomorrow as a "routine one" to discuss the growth strategy for the new fiscal year.

ICICI Bank reported its smallest quarterly profit in two years on Monday as stricter RBI rules forced the country's third-biggest lender by assets to account for more bad loans.

"The retail portfolio constituted about 57 per cent of the loan portfolio of the bank at March 31, 2018", it said.

It was other income, which grew to Rs 5,678 crore from Rs 3,017 crore previous year, thanks to the Rs 3,300- crore it netted from stake sale in the broking arm, that helped the bank's bottomline.

This comes amid controversy over corporate governance practices regarding a loan extended to Videocon Industries in 2012, which led to speculation about CEO Chanda Kochhar's continuation in the bank.

The total income on consolidated basis rose to Rs 33,760 crore during the March quarter as against Rs 28,603 crore.

Gross non-performing assets (NPA) of the bank rose to 8.84 per cent as a percentage of gross advances at the end of March, compared to 7.89 per cent a year ago.

He alleged quid pro quo between Videocon Group and ICICI Bank's chief executive officer as well as her family members with respect to extending a loan worth Rs 3,250 crore.

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Net NPA, however, marginally declined to 4.77 per cent from 4.89 per cent. This was mainly due to rise in provisions of bad loans.

The Reserve Bank in its 2016 investigation in the matter had raised questions over the ownership of the Mauritius-based entity, First Land Holding, which had invested Rs 325 crore in NuPower.

The Board has also recommended a dividend of Rs 1.50 per equity share.

According to sources, the recently appointed government nominee director did not attend the board meeting.

Posting a robust loan growth, bank's domestic loan grew at 15 per cent year-on-year as on March 31, 2018 driven by retail. This included Rs 9,968 crore of loans which were under RBI schemes and classified as standard at December 31, 2017.

The sale resulted in a gain after IPO related expenses of Rs 2,012.15 crore in unconsolidated financial results and Rs 1,711.32 crore in consolidated financial results for FY18.

The bank is targeting to continue with similar growth even under the new plan, which also focuses on increasing unsecured loans of low base by almost 40 per cent.

The share of low-priced current and saving account deposits grew to 51 per cent and the bank is targeting to maintain it at over 45 per cent by March 2020.

On BSE, ICICI Bank closed at Rs 289.40 per piece up by Rs 6.50 or 2.30%.

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