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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