Mumbai, Jul 29: Country’s largest private sector lender ICICI Bank today reported a 22 per cent drop in June quarter net profit at Rs 2,516 crore at the consolidated level as the company continued to grapple with non-performing assets. On a standalone basis, the bank’s net profit came down to Rs 2,232 crore against Rs 2,976 crore in the year ago period. Also Read - ICICI Bank Joins Hands with Google Pay for Issuing FASTag

The bank dipped into a specially created Rs 3,600 crore reserve, utilising Rs 865.44 crore. A gain of Rs 617.27 crore through stake sales in insurance arms also helped the bottomline during the quarter. The gross non-performing assets ratio moved up to 5.87 per cent against 5.82 per cent at the end of the preceding March quarter when it recognised a bulk of the asset quality pain and 3.68 per cent in the year ago period. Also Read - ICICI Bank Launches 'iMobile Pay' App Making Official Entry to the 'FinTech' Space

The lender’s Managing Director and Chief Executive Chanda Kochhar said total slippages during the quarter stood at Rs 8,249 crore, and 76 per cent of them were from a specially classified watchlist, which stood at over Rs 44,000 crore as of March 2016. On the back of slippages, a net reduction of Rs 365 crore and a rating upgrade of Rs 419 crore, the watchlist of assets now stands at Rs 38,723 crore, Kochhar said, declining to give any guidance on how she expects this to shape up. She said some of the slippages are temporary and nearly 30 per cent of them will get upgraded this fiscal itself.(Also Read: Bank strike hits operations; branches open full day tomorrow) Also Read - ICICI Bank, L&T Chosen as Top Muhurat Session Picks

“There are continued uncertainties in respect of certain sectors due to weak global economic environment, low commodity prices, gradual nature of domestic economic recovery and high leverage,” Kochhar told reporters. She said the bank is working with borrowers on asset sales, de-leveraging and reducing exposure. Its overall provisions stood at Rs 2,514 crore as against Rs 955 crore in the year-ago period. The provision coverage ratio also slipped to 57 per cent as of June, from 61 per cent level in March and 69 per cent in the year-ago period.

The bank’s interest income was also impacted due to the high incidence of bad loans. The core net interest income was almost flat at Rs 5,159 crore, while the net interest margin contracted to 3.16 per cent as against the 3.37 per cent in the preceding March quarter. Kochhar said the margins will continue to be under pressure till the asset quality woes do not end.