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ICICI Bank misses forecasts with quarterly profit fall

BENGALURU (Reuters) - ICICI Bank reported a 5 percent drop in fourth-quarter profit on Monday, missing estimates after being hit by a rise in expenses and a higher accumulation of bad loans.

FILE PHOTO: A signboard of the ICICI bank is pictured outside an automated teller machine (ATM) booth in New Delhi, March 4, 2016. REUTERS/Adnan Abidi/File Photo

State-run banks account for most of the sector’s bad loans, but private sector lenders such as ICICI also own a substantial chunk of such assets. ICICI has one of the highest bad loan ratios among its peers.

The Mumbai-based company’s bad loan accumulation in the three months to March 31 was up 70 percent from the previous quarter at 35.47 billion rupees ($511 million).

Elara Capital analyst Rakesh Kumar said he had been expecting the so-called slippage figure to come in at 23 billion rupees.

“That is one of the key reasons for deviation from (profit) estimates,” he said.

Net profit dropped to 9.69 billion rupees in the period from 10.20 billion rupees a year earlier.

Analysts had been looking for a profit of 21.29 billion rupees, I/B/E/S data from Refinitiv showed.

Total expenses jumped 18.1 percent to 146.80 billion rupees, led by 17 percent rise in interest payments on deposits.

However, asset quality overall improved, with gross bad loans as a percentage of total loans easing to 6.7 percent in the quarter, from 7.8 percent in the previous quarter and 8.8 percent a year earlier.

Provisions for bad loans fell 17.7 percent to 54.51 billion rupees.

The bank’s Mumbai-listed shares closed flat at 401.30 rupees.

($1 = 69.4100 Indian rupees)

Reporting by Chris Thomas in Bengaluru; Editing by Sherry Jacob-Phillips, Keith Weir and David Goodman