ICICI Bank may restructure some debt: Chanda Kochhar

MUMBAI: ICICI Bank, the country's largest private sector bank, could restructure some corporate debts in the coming quarters, Chanda Kochhar, managing director and chief executive officer of the bank, said in an interview to ET NOW.

"Yes, one, of course, cannot rule out the possibility of one or two large projects or corporates needing restructuring for that matter. "But I do not expect these restructurings or NPAs to come as a huge shock and the percentage that you have seen this quarter is a high percentage. I do not expect this kind of percentage to repeat quarter on quarter,'' she added.

She didn't elaborate on the sectors that could be hit by the restructuring, though other banks such as Punjab National Bank have admitted to restructuring loans to the power sector in the past quarter.

ICICI Bank's net profit grew 22% to Rs 1,503.2 crore in the second quarter ended September 2011 while its net non-performing loans dipped to 0.93%. Its provision cover decreased 50% to Rs 319 crore while net restructured assets were Rs 2,501 crore. The bank restructured loans worth Rs 743 crore in the second quarter, given to MFIs.

"This was mainly because the entire microfinance portfolio got restructured in one go in the same quarter. This is not really an indicative rate of accretion for the quarters going forward, but yes one or two projects or companies would definitely get added to the restructured portfolio,'' Kochhar told the television channel.

ICICI Bank shares ended down 0.98% at Rs 878.20 on Thursday. About 7% of the total loans had exposure to the power sector, and there has been no slippages, said the ICICI Bank MD & CEO. "We have very minimal direct exposure to state electricity boards. It is so minimal that it is not going to make any impact even if that exposure was to go through restructuring,'' she added.

Total bank loan outstanding to the power sector, as on September 2011, was Rs 3,00,752 crore. Punjab National Bank had kicked off the biggest loans restructuring exercise by Indian lenders to the power sector by converting Rs 2,500 crore of shortterm loans into long-term ones to avoid imminent defaults.

"It is not correct to say that each power project will face the same kind of issues that are being talked about on a general basis,'' said Kochhar. "We look at our portfolio, actually out of the outstanding loans to the power projects, almost 50% is really towards existing operating power companies,''she added.

Source: EconomicTimes