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Tuesday, January 31, 2012

Higher interest income lifts ICICI Bank Q3 net 20%

ICICI Bank reported a 20 per cent increase in its net profit at Rs 1,728 crore in the quarter ended December 31, 2011, on the back of an increase in interest income and lower provisions on account of a decrease in non-performing assets. In the corresponding year-ago period, it had recorded a net profit of Rs 1,437 crore.

The bank's profitability in the reporting quarter was also boosted by dividend income of Rs 150 crore from its subsidiary, ICICI Prudential Life Insurance Company, which posted a net profit for the first time since inception.

Provisions decreased 27 per cent to Rs 341 crore (Rs 465 crore in the October-December 2010 period). Gross NPAs decreased to Rs 9,723 crore (Rs 10,187 crore).

The fall in NPAs was on account of decline in unsecured retail loans, which was down 35 per cent from last year, said Ms Chanda Kochhar, Managing Director and CEO, ICICI Bank.

“Our secured assets continue to grow and the credit quality in this segment is strong. The bank is back on growth path,” she said.

Despite lower provisions, the provision-coverage ratio was 78.9 per cent as on December 31, 2011, compared to 71.8 per cent as on December 31, 2010. Net restructured assets at December 31, 2011, were Rs 3,070 crore.

There could be some additions to restructured assets in the current quarter as well, Ms Kochhar added.

The bank has an exposure of 7 per cent to the power sector and so far, there have been no shocks in the asset quality of the segment, she added.

Growth segments

The segments that saw growth were secured retail (mortgages and auto loans), domestic corporate (working capital and disbursal of earlier loans) and international corporate (foreign currency loans given to Indian corporates).

“Credit growth is slower. Growth momentum was first seen in corporate loans and now it is being seen on the retail side,” Ms Kochhar said.

This financial year the bank is targeting a credit growth of 18 per cent.

Due to the rundown of the unsecured portfolio, the share of retail loans decreased to 33.5 per cent of total assets, from 38 per cent.

“We are offering unsecured loans (credit cards and personal loans) only to our existing customers,” Ms Kochhar said.

Non-interest income growth was subdued due to a loss of Rs 65 crore in treasury income, against a profit of Rs 21 core in the year ago quarter. For the nine-month period ended December, net profit was Rs 4,653 crore (Rs 3,699 crore).

Nine-month profit up

On a consolidated basis, net profit for the nine months was Rs 5833 crore, up 29 per cent, from Rs 4,545 crore in the year-ago period.

Shares of ICICI Bank closed 5.87 per cent higher, at Rs 902, on the BSE, on Tuesday.


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