ICICI Bank Q1 net up 36% at Rs 1,815 crore

ICICI Bank Friday reported a 36 percent jump in post-tax profit for the first quarter ended June 30 at Rs 1,815 crore on the back of rise in core income and expansion of margins.

Last Updated: Jul 27, 2012, 16:36 PM IST

Mumbai: ICICI Bank Friday reported a 36 percent jump in post-tax profit for the first quarter ended June 30 at Rs 1,815 crore on the back of rise in core income and expansion of margins.

The country's largest private lender had posted a net profit of Rs 1,332 crore for the corresponding April-June period last year.

ICICI Bank's core net interest income grew 32 percent over the year ago period to Rs 3,193 crore on the back of a healthy 22 percent jump in advances.

It was able to widen the net interest margin (NIM) by 0.40 percent to 3.01 percent over the same period last year, which boosted its bottomline.

The financial powerhouse was able to expand its margins because of reduced reliance on high cost bulk deposits on the back of good liquidity position, an increase in yield on investments and an uptick in international operations' NIMs which were at 1.6 per cent, ICICI Bank Chief Executive and Managing Director Chanda Kochhar told reporters here.

She added that the bank will target to keep the number above 3 per cent for the remainder of the fiscal.

Consolidated profit, which would include numbers from subsidiaries such as life insurance, general insurance, venture capital and asset management company, was up 25 percent on a year-on-year basis at Rs 2,077 crore.

Reacting to the results, the bank stock was trading up 1.96 percent at Rs 924.70 at the BSE at 1453 hours, as against the 0.89 percent gains in the 30-share Sensex.

ICICI Bank was able to reduce its total restructured assets to Rs 4,172 crore after selling off its Rs 430 crore exposure to Kingfisher Airlines to a division of Srei Infra.

Going ahead, the pipeline of assets likely to be recast is very small and the bank does not expect any big increase in restructured books, Kochhar said.

With the recoveries and upgrades outgrowing fresh slippages by Rs 120 crore, mainly because of Kingfisher Airlines (KFA) exposure's sell-off, the bank's net non- performing assets ratio got fell to 0.61 per cent versus the year ago's 0.91 percent.

Asked if there are other stressed accounts like KFA which the bank would be selling-off, Kochhar said there is nothing in the pipeline as of now.

The lender's provisions increased to Rs 466 crore compared to Rs 454 crore in the year ago period. Kochhar said it was flat in spite of an increase in standard asset provisioning requirements.

On likely impact of the deficient monsoon, Kochhar said the bank will not be affected much as it does not have a direct exposure to farm sector while on the macroeconomic front, there can be some impact on food inflation and GDP growth.

The bank's credit growth was largely supported by a 28 per cent expansion in advances to corporates, while the retail growth stood at only 10 percent.

Kochhar said going ahead, the bank will focus on advances for working capital and existing projects to corporates while on retail, which she expects to grow by 15 per cent, it would be much broader.

It attained a deposit growth of 16 percent during the quarter with the share of the low-cost current and savings account (CASA) being at 40.6 percent.

Kochhar said the bank expects to maintain the CASA ratio at the 39-40 percent levels.

On the international operations front, she said the bank's Canadian subsidiary has paid a dividend for the first time.

The bank's focus right now is to repay its bond issue commitments and Kochhar hinted at the lender going in for a fund raising if the market conditions improve.

The international book will remain flat or possibly contract, she said.