Headline numbers of stressed assets stand at 14%.
According to Maybank Kim Eng, 4Q earnings were in line at INR20b (US$310m), up 2.9x YoY on a low base. As expected, balance sheet clean-up continued. During FY17, ICICI Bank witnessed slippages to the tune of INR350b (US$5.4b) or 8% of loans.
"As a result credit cost jumped to 3.3% or INR150b. Credit cost averaged 0.7% in FY11-15. We think asset quality pain will finally be nearing an end in FY18 due to high NPL recognition in the last two years."
Here's more from Maybank Kim Eng:
Stress in asset quality came as expected. Gross NPLs jumped up to 8.8% from 8% in 3Q. Headline numbers of stressed assets (NPLs + restructured + watch list) remained largely unchanged at 14%. With bulk of NPL recognition in FY17, accounts under watch list category dropped to INR190b (4% of loans) from INR440b at the start of the year.
4Q slippages were also impacted by one large ticket slippage of INR55b in cement sector which is awaiting completion of M&A transaction. This account is expected to partially recover in 1HFY18. Our credit cost forecast is 2% for FY18 and a sharp drop to 1.3% by FY19.
Domestic loan growth of 14% YoY was driven by retail loans which grew 19% YoY. The bank continues to build its retail and SME businesses despite challenges in the corporate book. Retail loans now form 52% of total mix, up from 47% last year. CASA ratio reached all-time high of 50.4%. Retail fee income grew 16% YoY.
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