MUMBAI — Indian private lender ICICI Bank reported a lower-than-expected profit for the third quarter on Saturday, as it boosted provisions for bad loans and other contingencies following a supervisory review.
The bank’s board also approved the reappointment of current chief executive Sandeep Bakhshi for a further two years starting October 2026. Bakhshi has led the bank since 2018.
The country’s second-largest private bank by market capitalization posted a standalone net profit of 113.18 billion Indian rupees ($1.25 billion) for the three months to end-December, compared with 117.92 billion rupees a year earlier.
Analysts had expected a profit of 123.54 billion rupees, according to data compiled by LSEG.
Provisions more than doubled to 25.56 billion rupees after the Reserve Bank of India’s annual supervisory review.
ICICI Executive Director Sandeep Batra said on a conference call that the regulator found some assets classified as agriculture and eligible for “priority sector” classification did not meet regulatory requirements.
Loans to these economically important sectors carry lower capital and provisioning requirements.
Loans worth 200-250 billion rupees were found to be inaccurately classified, Batra said, adding that the loans were not delinquent, and that the entire additional provision required by the regulator had been made.
The bank had a rural lending portfolio of 771 billion rupees in September, according to the latest data available on its website.
ICICI Bank’s third-quarter net interest income rose 7.7 percent to 219.32 billion rupees, aided by a 11.5 percent rise in domestic loans. Its deposits grew 9.2 percent during the quarter.
India’s major lenders posted double-digit percent loan growth in the December quarter amid festive-season demand and tax cuts aimed at spurring consumption in the world’s fastest-growing major economy.
The RBI’s cuts to benchmark interest rates by a cumulative 125 basis points since February last year have also boosted appetite for credit.
ICICI’s net interest margin, a key measure of the bank’s profitability, was stable at 4.3 percent.
Asset quality improved marginally, with its gross nonperforming asset ratio at 1.53 percent at the end of December, compared with 1.58 percent at the end of September.
