ICICI Bank has $100 mn exposure to cash-strapped Hin Leong Trading

New Delhi, April 20 (IANS) ICICI Bank could see a rise in its non-performing assets with Singapore-based oil trading major Hin Leong Trading filing for bankruptcy.

According to the oil trading company’s filing, ICICI Bank has an exposure of $100 million, out of its total dues of $3.64 billion, to the secured lenders.

Out of its total exposure to Hin Leong Trading, $75 million is secured over inventory, as per the inventory.

The top lenders to the company include HSBC, ABN AMRO Bank N.V. and DBS Bank, with exposure of $598 million, $299 million and $288 million respectively.

As of the quarter ended December 2019, ICICI Bank’s net non-performing assets (NPA) stood at Rs 10,388.50 crore and the gross NPA was Rs 43,453.86 crore.

The bank did not reply to a detailed questionnaire mailed to it.

The fall of the oil trading major comes at a time when oil prices are at multi-year low due to the fall in demand and high supplies amid the coronavirus crisis. This poses a challenge to the bank even if it decides to recover 75 per cent of its dues through oil inventory.

Selling oil, when WTI prices have dropped over 37 per cent in a single day to $11 a barrel and Brent just a fair better at around $26 a barrel, would be disastrous as it would mean huge inventory losses for the stock holder.

The concerns have grown for the lenders with reports suggesting that the founder and director of the company had directed the firm not to disclose losses of $800 million over several years. The founder had confessed to this in a court filing, report said.

Following the reports of non-disclosure of losses, shares of ICICI Bank plunged. On the BSE, the bank’s shares closed at Rs 361.50 per share, lower by Rs 14.45 or 3.84 per cent from its previous close.

–IANS

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