ICICI Bank Q4 net up 15% at Rs 2,652 cr led by higher other income

Rise in provisions cap earnings growth

ICICI Bank, the largest private sector lender in the country, today said its standalone net profit for the quarter ended March 31, 2014 increased by 15% from a year earlier to Rs 2,652 crore aided by sharp rise in non-interest income and growth in interest income.

Higher provisions amidst rise in bad loans, however, capped the year-on-year growth in the bank's fourth quarter profit after tax.

Net interest income, or the difference between interest income and interest expense, was at Rs 4,357 crore during the three-month period, up 15% from a year ago.

Net interest margin improved 3 basis points sequentially to 3.35% during the quarter. Other income grew by 35% aided by exchange rate gains on repatriation of retained earnings from overseas branches, dividend income from subsidiaries and treasury profit.

"In 2013-14, our consolidated profit crossed the milestone of Rs 10,000 crore. This was the result of balancing growth, profitability and risk management capabilities...Looking ahead we see some positive trends for the economy and the banking sector. We expect moderate improvement in GDP growth. The additions to non-performing assets (NPAs) and restructured loans are also likely to be lower in 2014-15," Chanda Kochhar, managing director and chief executive officer of ICICI Bank, said in her post-earnings comments.

ICICI Bank's consolidated profit after tax increased by 15% to Rs 11,041 crore during financial year 2013-14. The full-year net interest margin improved by 22 basis points to 3.33%. Kochhar said the bank is expected to maintain its margin at the current level in 2014-15.

Provisions were up 55%, on a year-on-year basis, to Rs 714 crore in January-March quarter capping the growth in the bank's profitability. Net NPAs were at Rs 3,301 crore at the end of March, 2014 compared to Rs 2,234 crore a year earlier. Net loans to companies whose facilities have been restructured were at Rs 10,558 crore. The bank's restructured asset pipeline was estimated to be around Rs 1,500 crore.

Total advances increased by 17% from a year earlier to Rs 338,703 crore at the end of March, 2014. The growth in advances were driven by retail loans, which increased by 23%.

"We expect the system loan growth to be around 16-18% in the current financial year. We aim to grow at 2-4% higher than the industry average. So, our credit growth is expected to be in the range of 18-20%," Kochhar said. She added that the bank will continue to focus on growing its retail advances while it will calibrate the growth in corporate and SME loans depending on the economic environment.

Total deposits were up 13%, on a year-on-year basis, to Rs 331,914 crore at the end of the 2013-14. The share of low-cost current account savings account (CASA) deposits was 42.9% of its total deposits.

ICICI Bank closed the financial year with a capital adequacy ratio of 17.70% as per Basel III norms. Tier I capital adequacy ratio was 12.78%.