Stable loan growth, treasury gains drive ICICI Bank net profit up 14% to Rs. 2,889 cr

ICICI Bank, the country’s biggest private sector lender, booked a 14 per cent rise in net profit at Rs. 2,889 crore for the third quarter ended December 2014 on the back of stable loan growth and treasury gains. The net profit was at Rs. 2,532 crore in the year-ago quarter.

However, the asset quality continued to remain under pressure with higher provisions and increase in bad loans during the period.

“Growth was driven by strong retail growth and operating parameters…Given the subdued corporate and economic conditions, we continued to see additions to NPAs (non-performing assets)…It could be still 2-3 quarters more before we see improvement in the asset quality,” said Chanda Kochhar, MD and CEO of ICICI Bank.

Provisions for bad loans

Provisions largely towards bad loans jumped 41 per cent to Rs. 980 crore during the quarter compared with Rs. 695 crore in the year-ago quarter.

Net interest income

Net interest income or the difference between interest earned and interest expended grew 13 per cent to Rs. 4,812 crore from Rs. 4,255 crore in Q3FY14.

Non-interest income increased by 10 per cent to Rs. 3,091 crore from Rs. 2,801 crore on the back of treasury gains of Rs. 447 crore, though fee income grew by a meagre 6 per cent “mainly due to subdued growth on the corporate side”.

Net interest margin improved to 3.46 per cent in Q3FY15 compared with 3.32 per cent in Q3FY14.

Total advances, deposits

Total advances increased 13 per cent year-on-year to Rs. 3.75 lakh crore as on December 31, 2014 from Rs. 3.33 lakh crore as on December 31, 2013 driven by 26 per cent growth in retail accounting for 41 per cent of the total loans. Corporate growth accounting for 29 per cent, was tepid at 4 per cent.

"Retail growth was largely from home and auto loans…While we continue to take a calibrated approach on corporate loans,'' Kochhar said.

Total deposits increased by 12 per cent year-on-year to Rs. 3.55 lakh crore.

Gross, net NPAs

Gross NPA ratio deteriorated to 3.4 per cent (Rs 13,083 crore) of total advances as on December end 2014 from 3.05 per cent (Rs 10,399 crore) as on December end 2013. Net NPAs also increased to 1.27 per cent from 0.94 per cent.

Consolidated profit after tax also increased 14 per cent to Rs. 3,265 crore in the third quarter this fiscal from Rs. 2,872 crore in the third quarter of FY14.

At day’s close, shares of ICICI Bank ended 5 per cent down at Rs. 361.15 per share on the Bombay Stock Exchange.


Source : Thehindubusinessline