ICICI Gains Most in Asia on Speculation Sour Debt Has Peaked

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ICICI Bank Ltd., the largest Indian private sector lender by assets, was Asia’s best-performing bank stock on Tuesday amid speculation the company’s bad loans had peaked and its profitability will improve.

ICICI jumped 7.7 percent, the biggest intraday gain since May 16, to 325.65 rupees at 3:30 p.m. local time in Mumbai as investors were buoyed by comments Chief Executive Officer Chanda Kochhar made the previous day after the bank’s earnings. The gain was the biggest among the Bloomberg Asia-Pacific Banks Index’s 60 members.

The lender’s stock slumped to a six-month low on Monday after ICICI posted the lowest quarterly profit growth in five years amid rising levels of sour debt. ICICI’s fiscal year ended March 31 “was probably” the worst in terms of nonperforming assets, and loan growth will improve in the current year, Kocchar told reporters on an earnings call.

“These were the assurances that everybody was looking forward to,” Nitin Kumar, a Mumbai-based banking analyst at Prabhudas Lilladher, said in a phone interview. “ICICI management sounded very confident that their asset quality issues have peaked out.”

Gross non-performing assets climbed to 3.78 percent of total advances as of the end of March from 3.03 percent a year earlier, ICICI reported Monday. Loans grew by 14 percent in the year to March 31.

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