ICICI Q4 Results 2025: What’s Behind ICICI Bank’s 48x Jump in NPA Clean-Up

In a major step to strengthen its balance sheet, ICICI Bank has embarked on a massive non-performing asset (NPA) clean-up, disposing of bad loans worth ₹27,860 crore during the fourth quarter of FY25. 

This is a staggering 48 times rise from ₹580 crore in the last quarter, reflecting the bank's determination to improve its financial resilience.

Fully Provided NPAs: A Disciplined Approach

The sold assets were 100% provided NPAs, meaning the bank had already provisioned for potential losses. ICICI Bank received ₹1,605 crore in security receipts and ₹314 crore in cash upon sale, and wrote down the balance of ₹867 crore. 

Interestingly, the bank still maintains 100% provisions on these security receipts, demonstrating a conservative approach towards potential recoveries.

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ICICI Bank's PCR: Maintaining Financial Resilience

As of March 31, 2025, ICICI Bank's Provision Coverage Ratio (PCR) was a healthy 76.2%. PCR is a key measure of the ability of a bank to provision its bad loans, and a higher ratio indicates healthier finances. 

This high PCR reflects the bank's prudent risk management and preparedness to face possible defaults on loans.

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ICICI Bank's Buffer Against Unforeseen Risks

Besides the NPAs provisions, ICICI Bank also has a contingency provision of ₹13,100 crore. This buffer is a financial cushion to take in unexpected losses, adding to the bank's strength against economic shocks.

ICICI Bank's aggressive cleaning up of NPA and strong provisioning policies indicate its proactive attitude towards risk management and long-term financial health. By dealing with legacy bad loans and carrying high provisions, the bank is well-placed to overcome future adversities and seize growth opportunities.