ICICI Bank tags $100 mn Singapore Hin Leong exposure as NPA, makes provisions

ICICI Bank

ICICI Bank has classified its exposure to Singapore-based fraud-hit oil trader Hin Leong Trading Pte as NPAs (non-performing asset) and has made provisions to cover the likely losses against this exposure, said the bank’s management in a conference call on Saturday.

The bank has also tagged exposure to one healthcare firm in West Asia as NPA. This exposure too has been provided for.

“Our exposure to both these accounts have been classified as NPA and substantially provided for in this quarter. Going forward, we do not expect any impact on the P&L from these accounts,” said Sandeep Batra, President, ICICI Bank.

The bank reported a 26 percent year-on-year growth in standalone profit at Rs 1,221.36 crore in quarter ended March 2020, missing analysts estimates due to higher COVID-19 related provisions. Asset quality improved with gross non-performing assets as a percentage of gross advances falling 42 basis points sequentially to 5.53 percent and net NPAs dropped 8 basis points to 1.41 percent in quarter ended March 2020.

Gross slippages stood at Rs 5,306 crore at the end of March 2020, rising 21.6 percent compared to Rs 4,363 crore in December 2019.

The bank, however, refused to disclose the details of exposure to the two corporate accounts citing client confidentiality. On 21 April, ICICI Bank had confirmed that it has exposure to Hin Leong, a top oil trading firm that is in the dock for its alleged failure to disclose hundreds of millions of dollars in losses over several years.

On 20 April, Moneycontrol had reported that ICICI Bank has an exposure of $100 million (about Rs 760 crore) to Hin Leong. Reuters reported after reviewing a court filing that the founder and director of Hin Leong Trading Pte (HLT), Asia's largest oil trader, had directed the firm not to disclose these losses.

The affidavit signed by one Lim Oon Kuin, a Singaporean national, is a part of a April 17 filing to the Singapore High Court by HLT and subsidiary Ocean Tankers (Pte), seeking a six-month moratorium on debts of $3.85 billion to 23 banks, the news agency reported.

Besides ICICI Bank, other lenders with exposure to HLT include HSBC, ABN Amro, DBS Bank, Societe Generale, Bank of China, among others.  Separately, Reuters reported citing an anonymous ICICI Bank source that the Indian lender is seeking the impounding of two vessels operated by Ocean Tankers (Pte). Shares of ICICI Bank ended Rs335.65 on Friday, nearly flat from the previous day.