ICICI Bank writes off Rs 1,600 cr bad loans | india | Hindustan Times
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ICICI Bank writes off Rs 1,600 cr bad loans

india Updated: Feb 04, 2009 21:36 IST
HT Correspondent
HT Correspondent
Hindustan Times
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Individuals availed of loans and used credit cards for personal consumption during the retail credit boom till more than a year ago, but are now not in a position to repay or are intentionally defaulting.

As a sufferer of this trend, ICICI Bank has had to write-off a large amount of overdue retail loans where borrowers have not paid up for a long period of at least over a year.

ICICI Bank, the country’s second largest bank, in the third quarter ended December 31, 2008 wrote off bad retail loans of about Rs 1,600 crore, which were overdue for a long time. The bank still has on its books total bad loans of nearly Rs 9,000 crore and if it had not written-off the long overdue loans, then its bad loan book would have swelled to around Rs 10,600 crore.

In the one year ended December 31, 2008, ICICI Bank’s bad loans have increased by a whopping Rs 4,114 crore. In the last few quarters, the bank has been adding bad loans of about Rs 1,200 crore every quarter, most of it because of defaults by individuals.

“Outlook on NPLs (non-performing loans) remains the same as we have discussed earlier. As we said in September, over the next couple of quarters, the current trend would continue and thereafter, we should see some easing in terms of addition to NPLs,” said Rakesh Jha, Deputy Chief Financial Officer at ICICI Bank.

State Bank of India (SBI) too has been witnessing a rise in its NPLs, but for the country’s largest bank small and medium enterprises (SMEs), including gems and jewellery exporters, are among the defaulters as they face difficult economic conditions in India and in their overseas markets. SBI’s bad loans were Rs 13,314 crore as on December 31, 2008, up Rs 2,132 crore from a year earlier.