India's largest private sector bank said that failed investments could eradicate as much as nine per cent off this year's profit.
Accordingly, shares in ICICI fell by 9.3 per cent in value in Bombay trading, although they only closed down 5.2 per cent after the bank clarified that the losses were not sub-prime-related.
"We don't have any direct exposure to sub-prime. It's not technically a sub-prime loss," joint managing director Chanda Kochhar said, although she would not detail the investments that had caused the losses.
ICICI claims it had already made provisions for $90 million and would provide for an additional $70 million, with $20 million for subsidiaries included in both sums.
"The quantum of the loss comes as a surprise and has unnerved the market and traders,'' Rajesh Jain, chief executive officer at Pranav Securities told Bloomberg. "Investors know from experience that such signs are always the tip of the iceberg.''
In January, however, the bank exceeded analysts' expectations, announcing that ICICI's profits had increased by 35 per cent to $305 million in the final quarter of 2007.