ICICI Bank tumbles after bad loans increment in Q4FY16

ICICI Bank declared its Q4FY16 results on April 29. The bank’s total earned interest has increased by 1 per cent to Rs 15165 crore in Q4FY16 as compared to previous quarter. It reported operating loss of Rs 5670 crore in Q4FY16 on a quarterly basis due to provisions and contingencies expense increasing by 14.24 per cent to Rs 3497 crore during the quarter. ICICI Bank’s net profit has dropped by 81.91 per cent to Rs 599 crore in Q4FY16 on a quarterly basis due to its exceptional provisioning of Rs 3600 crore during the quarter.

On a yearly basis, ICICI Bank’s total interest earned has increased by 7.88 per cent to Rs 118587 crore in FY16 as compared to previous financial year. The bank’s operating profit before contingencies and provisions has increased by 2.85 per cent to Rs 43801 crore in FY16 on a yearly basis. Its provisions and contingencies expense has risen almost twice to Rs 8705 crore in FY16 as compared to same period in previous fiscal year. ICICI Bank’s bottom line has increased by 3.37 per cent to Rs 69474 crore in FY16 on a yearly basis.

ICICI Bank’s gross non-performing assets (NPA) stand at 5.82 per cent in Q4FY16 against 4.72 per cent in Q3FY16. Its net NPA stands at 2.98 per cent in Q4FY16; while at 2.28 per cent in Q3FY16. ICICI Bank’s net non-performing assets stand at Rs 13297 crore in Q4FY16 as compared to Rs 10014 crore in Q3FY16. The bank’s bad loans increased primarily due to the continuing challenges in the operating and recovery environment; and RBI's objective of early and conservative recognition of stress and provisioning.

On segmental revenue front, ICICI Bank has earned 24.66 per cent from Retail banking segment; 20.7 per cent from Wholesale banking segment; 30.43 per cent from Treasury segment; 14.59 per cent from Life Insurance segment; 4.22 per cent from General insurance segment; 2.48 per cent from other banking; and remaining 2.93 per cent from others during FY16.

The share price of ICICI Bank declined by 3.64 per cent on bourses after declaration of Q4 results and is trading at Rs 233.6 on an intraday basis.

ICICI Bank is a financial services group providing a range of banking and financial services including commercial banking, retail banking, project and corporate finance, working capital finance, insurance, venture capital and private equity, investment banking, broking and treasury products and services.