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ICICI Bank, the country’s largest private sector lender, posted a 15 per cent growth in net profit at ₹2,709 crore for the three months ending September 30, 2014, driven by stable interest income and loan growth.
However, higher provisions and weaker asset quality limited the profit growth.
Net interest income (the difference between interest income and interest expended) rose 15 per cent to ₹4,657 crore.
Non-interest income increased 26 per cent to ₹2,738 crore in Q2FY15 from ₹2,166 crore in Q2FY14.
During the quarter, the bank’s provisions soared 36 per cent to ₹850 crore from ₹625 crore a year ago.
Prolonged slowdown “As the slowdown prolonged, we have seen restructured assets (worth ₹800 crore) falling into non-performing assets (NPAs) and slippages...
“We are maintaining a calibrated approach on corporate lending. We continue to expect retail to grow over 20 per cent going forward,” said Chanda Kochhar, CEO and Managing Director.
As on September 30, 2014, domestic advances grew 15 per cent helped by 25 per cent growth in retail loans, which constitute 40 per cent (up from 31 per cent year-on-year) of total loans, while corporate loan growth was a meagre 5 per cent.
Total deposits also grew 14 per cent on healthy current and savings account deposits (43.7 per cent of total loans).
Gross non-performing assets (NPAs) were up at 3.12 per cent (₹11,547 crore) from 3.08 per cent (₹10,025 crore) a year ago.
“This year, new additions into slippages will be lower than last year. However, post-economic recovery and only after some cash flows become robust will we see real pick-up of demand for fresh project loans.
“It will take a couple of quarters,” Kochhar said.
The bank sold assets worth ₹290 crore to asset reconstruction companies and made recoveries and upgradations worth ₹440 crore.
Margins will remain in the 3.30-3.40 per cent range, she added.
Insurance subsidiaries ICICI Prudential Life Insurance Company’s (ICICI Life) profit after tax for the quarter under review stood at ₹399 crore as compared to ₹387 crore a year ago.
ICICI Lombard General Insurance reported a flat profit of ₹158 crore (₹156 crore in the second quarter last year).
After declining post results, ICICI Bank shares ended at ₹1,611.50 apiece, 0.47 per cent higher over its previous close on the BSE.
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