ICICI to recast Rs 1,300-cr loans this quarter to cover GTL, 3i Infotech debt

ICICI Bank, the country’s largest private sector lender, is likely to restructure Rs 1,300 crore of loans in the current January-March quarter. Key accounts expected to be part of the exercise include those of GTL and 3i Infotech.

The bank’s net restructured loan portfolio was estimated at Rs 3,070 crore as of December 31.

“With respect to GTL, while we understand that some banks have done the restructuring in the third quarter, the arrangement and execution in our case will take place in the fourth quarter,” a senior executive of the bank said, after the lender announced its third quarter earnings yesterday.

Adding: “Further, some small exposure could be restructured outside the CDR (corporate debt restructuring) mechanism. The restructured portfolio, as a consequence, is expected to increase from the current levels.”

GTL had taken Rs 650 crore of loans from ICICI against a corporate guarantee from its group company, Chennai Networks Infrastructure Ltd (CNIL). As part of the restructuring exercise, the lenders had agreed to transfer ICICI Bank’s loan exposure in GTL to the books of CNIL. GTL’s total debt with banks is estimated at around Rs 16,200 crore.

3i Infotech had Rs 1,966 crore of loans with banks as of September-end. The loan taken by the company from ICICI Bank was not immediately known.

In the October-December quarter, the private lender saw Rs 880 crore of additions to its restructured credit portfolio. However, upgradations of some accounts previously restructured capped the net addition to only Rs 569 crore.

Despite the additional loan restructuring in the current quarter, ICICI Bank is sticking to its earlier outlook on provisions to average advances.

“While we do expect more additions (to restructured assets) in the current quarter, we do expect our total provisioning to be within our guidance, which is about 70 basis points of average loans. This shows a strong control on our overall credit quality,” Chanda Kochhar, managing director and chief executive of ICICI, said in her post-earnings comments.

ICICI closed the last quarter with a provision coverage ratio of 78.9 per cent. The bank’s asset quality during this period had also improved.