ICICI Bank had recently in the 4th quarter, shown a 158.4 percent growth in net profit which was mainly from the recoveries from Essar Steel. It has now notified two other big slippages in the third quarter, including its exposure to Karvy Stock Broking.
“During the quarter, there were certain developments to a broking company. Our exposure to the company has been classified as non-performing and fully provided for on a prudent basis,” said Sandeep Batra, president, ICICI Bank, while speaking on earnings call.
The ICICI bank has an exposure of Rs 642 crore to Karvy, which is the highest in comparison to exposures of other lenders to the stock broking company. Bank found it was misusing client securities worth Rs 2,800 crore to grab loans.
Other company in the list is “South India-based industrial company” which has been reported as non-performing as “servicing was regular but the refinancing undertaken by the bank in 2018, was assessed to be a restructuring. The company is backed by reputed promoters and investors,” Batra said.
In the third quarter, ICICI Bank’s slippages were double with Rs 4,363 crore, in comparison to Rs 2,091 crore in the same period last year. In the previous quarter it was Rs 2,482 crore. These slippages also have the retails loans which are of Rs 1,890 crore in the third quarter. There are around Rs 700 crore of slippages which came from its watchlist or the ‘BB and below’ rated book that stood at Rs 17,403 crore, up from Rs 16,074 crore in the previous quarter.
ICICI Bank said that for telecom sector the exposure is at 1.8 percent of its loan book and most of the exposure is to the top two players. However, the bank has not yet made any extra provisions for it.
The bank’s gross non-performing assets (NPAs) ratio fell 42 bps to 5.95 percent and net NPA eased 11 bps to 1.49 percent in the quarter ended December 2019. Its provisions and contingencies were at Rs 2,083.2 crore, which fell down by 16.9 percent over last quarter and 50.9 percent last year.