ICICI Bank’s net profit grew 15 per cent in the September quarter, on the back of 15 per cent growth in net interest income. While the bank’s retail focus continues to pay off, driving the overall loan growth, asset quality witnessed some pressure — an area of concern in recent quarters. Slippages, of about ₹700 crore during the September quarter, have been the highest in recent periods. At a time when its peers such as HDFC Bank and Axis Bank have been able to maintain stable asset quality, ICICI Bank’s higher addition to bad loans is a dampener. HDFC Bank has the lowest loan delinquency with bad loans at 1.02 per cent of total loans as of September.

While Axis Bank has higher gross non-performing assets (GNPA) at 1.34 per cent of loans, the bank has been able to keep it steady during the latest September quarter. ICICI Bank’s troubles with bad loans are bigger than that of its peers, with GNPA at 3.12 per cent of loans in the September quarter, up from 3.05 per cent in the June quarter.

Besides the bad loans, ICICI Bank has a larger restructured book too compared with its peers. From about 2.2 per cent last September, ICICI Bank’s restructured book currently accounts for 3 per cent of its loans. Axis Bank’s restructured assets are 2.5 per cent of loans, while HDFC Bank’s is just 0.1 per cent.

Healthy retail trend

However, ICICI Bank continues to score well on the retail front; its 15 per cent loan growth was led by 25 per cent growth in retail loans. This compares well with the performance of its peers.

Axis Bank and HDFC Bank grew retail loans 27 per cent and 17 per cent, respectively, in the September quarter. ICICI Bank’s strong retail performance augurs well for its profitability and growth. The bank has also been ramping up its low-cost CASA (current account, savings account) base over the last couple of years. The CASA ratio continues to remain healthy at 43.7 per cent as of September 2014.

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