ICICI Bank's strong profit growth of 31 per cent in the March quarter was primarily driven by expanded net interest margins (NIM) and strong traction in corporate lending. Improved cost-to-income ratio (41.6 per cent) and lower provisions than a year ago have also aided profits.

Consolidated net profit grew by 15 per cent during the March quarter. The net profits would have been higher, if one excludes the Rs 613-crore hit the bank took during the March quarter on motor insurance pool liabilities. Its life insurance business continued to deliver strong growth in profits.

The credit-deposit ratio on domestic business improved to 76 per cent from 73 per cent sequentially. Consequently, the higher quantum of loans led to margins expanding from 2.7 per cent in December quarter to 3.01 per cent in the March quarter. The cut in cash reserve ratio (CRR) during the pervious quarter helped margin expansion. Spreads on foreign loans also aided the overall margins.

Despite subdued fee income contribution, the other income did grow, thanks to higher dividend payout from its subsidiaries and treasury profits.

Asset quality continued to improve in the March quarter as well, thereby improving the provision coverage to 80.4 per cent. More importantly, the gross additions to restructured assets, at Rs 1,400 crore, were in line with the management guidance in the previous quarter (Rs 1,300 crore from major accounts such as GTL and 3i Infotech). ICICI Bank managed to recover more than Rs 200 crore from the restructured assets. The restructured asset proportion as a percentage of the loan book stood at 1.7 per cent as of March 2012.

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