ICICI Bank said that the exposure to telecom sector is at 1.8 percent of its loan book and most of the exposure is to the top two players, but the bank has not made any extra provisions towards it
ICICI Bank ,that posted 158.4 percent growth in net profit for October-December, mostly on account of recoveries from Essar Steel, saw 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 private bank has an exposure of Rs 642 crore to Karvy, the highest as compared to exposures of other lenders to the stock broking company, which was found misusing client securities worth Rs 2,800 crore in order to get loans.
Other than Karvy, ICICI Bank also classified a "South India-based industrial company" 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.
ICICI Bank’s slippages more than doubled to Rs 4,363 crore in the third quarter, as compared to Rs 2,091 crore in the same period last year. It was at Rs 2,482 crore in the previous quarter.
The slippages also include retail loans of Rs 1,890 crore in the third quarter. About Rs 700 crore of slippages 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 the exposure to telecom sector is at 1.8 percent of its loan book and most of the exposure is to the top two players, but the bank has not made any extra provisions towards 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, down by 16.9 percent over last quarter and 50.9 percent last year.
Exclusive offer: Use code "BUDGET2020" and get Moneycontrol Pro's Subscription for as little as Rs 333/- for the first year.