Mumbai: ICICI Bank Ltd, India’s largest private sector lender by assets, on Friday reported a 56% drop in net profit on account of rising bad loans and treasury loss.

The bank posted a net profit of ₹ 908.88 crore for the three months ended 30 September compared to ₹ 2,058.19 crore in the year-ago period. Profit was marginally lower than the ₹ 949.30 crore estimated by a Bloomberg poll of 20 analysts.

Gross non-performing assets (GNPAs) grew 22.5% to ₹ 54,488.96 crore for the quarter ended 30 September against ₹ 44,488.54 crore in the year-ago period.

As a percentage of total advances, GNPA stood at 8.54% in the September quarter compared with 8.81% in the June quarter and 7.87% in the year-ago September quarter.

The bank added fresh bad loans worth ₹ 3,117 crore in the second quarter compared to ₹ 4,036 crore in the first quarter. Around 41% of the slippages during the quarter came because of the impact of rupee depreciation on the existing overseas NPA book.

Provisions during the quarter fell 11.30% to ₹ 3,994.29 crore against ₹ 4,502.93 crore in the year-ago quarter. In the April-June quarter, the bank had set aside ₹ 5,971.29 crore in provisions. Provision coverage ratio excluding technical write-off increased to 58.9% at the end of September 2018 compared to 54.1% in the previous quarter and 45.7% during the second quarter last year. The bank reported a treasury loss of ₹ 35 crore during the quarter compared to profit of ₹ 2,193 crore in the same quarter last year.

Net interest income, or the difference between interest earned on loans and that paid on deposits, increased 12.41% to ₹ 6,417.58 crore from ₹ 5,709.07 crore in the corresponding period last year. Net interest margins at the end of September stood at 3.33% compared to 3.19% in the previous quarter.

The loan book grew by 12.8% year-on-year led by retail loan book, while deposits grew by 12%. “ICICI Bank results surprised positively, with lower slippages and improved margins," said Lalitabh Shrivastawa, assistant vice-president, Sharekhan.

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