Money & Banking

Higher interest, non-interest income lift ICICI Bank net profit 17% in first quarter

Satyanarayan Iyer Mumbai | Updated on July 31, 2014

icici

India’s largest private sector bank, ICICI Bank, has posted a 17 per cent growth in its first quarter net profit helped by a higher interest and non-interest income.

In the quarter ended June 30, 2014, the bank posted a net profit of Rs 2,655 crore against Rs 2,274 crore, a year ago.

Net interest income

Net interest income, the difference between interest earned and paid, grew 18 per cent to Rs 4,492 crore.

The Mumbai-based bank’s total loan book grew 15 per cent to Rs 3,47,067 crore. Deposits also increased 15 per cent to Rs 3,35,767 crore.

Much of the bank’s loan growth came from the retail lending portfolio, which grew 26 per cent. Corporate loan growth was a mere 8 per cent.

Corporate lending

Chanda Kochhar, Managing Director and Chief Executive Officer, said in a post earnings conference call, “We have been calibrating the loans to corporates given the slow overall economic environment.”

The bank is also going slow on lending to small and medium enterprises, she added.

Automobile loans and housing loans continued to drive the retail loan growth.

“It might take at least another two quarters for the new projects to start for corporates,” Kochhar said when asked about revival in corporate lending.

The bank’s net interest margin improved to 3.4 per cent during the three-month period (3.27 per cent in the same quarter last year). For the full year, Kochhar expects the margins to be between 3.3 per cent and 3.4 per cent.

Bad loans

The bank’s gross non-performing loans as a percentage of total loans stood at 3.05 per cent during the quarter against 3.23 per cent, a year ago.

On an absolute basis, the bank’s gross non-performing assets grew to Rs 10,843 crore from Rs 10,009 crore in June quarter last year.

During the quarter, the bank set aside Rs 726 crore as a cover against loans turning bad against Rs 593 crore, a year ago.

In the reporting quarter, Kochhar said that the bank wrote-off loans worth Rs 400 crore and recovered a similar amount of loans.

Restructuring

She said that, while there will be some amount of restructuring, the amount that will be restructured during the current financial year will be lower than Rs 5,715 crore restructured during FY 2014 (financial year ended March 2014).

Shares of ICICI Bank closed at Rs 1,473 per share, down 1.11 per cent on the BSE.

Published on July 31, 2014

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