ICICI Bank's net profit increased by 30 per cent to Rs 1,332 crore in the April-June 2011 quarter, from Rs 1,026 crore in the corresponding quarter last year. The strong performance was powered by incremental growth in advances, higher interest income and a decline in provisions.
The quality of earnings and the balance-sheet have been seeing continued improvement, said Ms Chanda Kochhar, Managing Director and Chief Executive Officer, ICICI Bank.
Provisions decreased 43 per cent to Rs 454 crore (Rs 798 crore). This decline in provisions comes despite making additional provisions for sub-standard and doubtful assets in accordance with the revised Reserve Bank of India guidelines, the bank said in a press release. The provisioning coverage ratio increased to 76.9 per cent (64.8 per cent).
Unlike most other banks that have declared results, ICICI Bank saw a growth of about Rs 4,000 crore in credit over the March 30, 2011 quarter.
The domestic corporate segment is growing higher than retail segment, Ms Kochhar said. “There has been some moderation in retail credit pick-up. Corporates are raising lot of foreign currency funds because it is more competitive,'' she explained.
Within total advances, the retail portfolio accounts for about 37 per cent, loans to domestic corporates 23 per cent and international advances 25 per cent.
The bank has consciously brought down the unsecured personal loans to 2.1 per cent of total advances, from 3 per cent. “We are offering it (personal loans) very selectively. We will offer it only to customers who have a long standing relationship with us,'' Ms Kochhar said.
This financial year the bank is hopeful of achieving 18 per cent growth in credit despite a rise in interest rates.
Although deposits have grown, the share of low-cost current and savings accounts has dipped marginally due to migration of savings bank deposits to fixed deposits, Ms Kochhar said.
The bank is targeting net interest margin of 2.6 per cent for this year, as the higher yield on advances are expected to be offset by the outgo on account of higher cost of deposits, she said.
While the bank has not taken a call on increasing interest rates as of now, it is likely that rates will go up, given the upward bias in interest rates, Ms Kochhar said.
Shares of ICICI Bank closed at Rs 1037.75, up 1.99 per cent, on the BSE, on Friday.