ICICI Bank's Q4 net rises 21% on interest income

Better margin and lower provisions also drive growth

ICICI Bank, India’s largest private sector lender, on Friday said its standalone net profit for the quarter ended March increased to Rs 2,304 crore, up 21 per cent from the year-ago period, driven by better margin, higher interest income and lower provisions. The consolidated profit after tax for FY13 grew 26 per cent to Rs 9,604 crore.

“This improvement in profitability is driven by healthy growth in our balance sheet and improvement in operating parameters,” said Chanda Kochhar, managing director and chief executive officer of ICICI Bank, in her post-earnings comments. Net interest income, the difference between interest income and interest expense, expanded 22 per cent year-on-year to Rs 3,803 crore in the January-March quarter.

Net interest margin (NIM) during the quarter was 3.30 per cent, compared with 3.01 per cent in the corresponding period of the previous year.

For FY13, NIM improved  38 basis points (bps) to 3.11 per cent.

“We will continue to work towards improvement in our NIM. We expect about 10 bps improvement in our full year NIM in 2013-14,” said Kochhar.

Other income during the quarter was a tad lower than the year-ago period at Rs 2,208 crore on account of lower treasury income, flat dividend income and marginal rise in fee income.

Stable asset quality allowed the bank to reduce provisioning, which fell two per cent to Rs 460 crore. The gross non-performing asset ratio declined 36 bps to 2.68 per cent, while the net bad loan ratio was flat at 0.64 per cent at the end of March. During the quarter, the bank restructured loans worth Rs 788 crore.

The bank’s total advances increased 14 per cent year-on-year to Rs 290,249 crore. Domestic loans grew 18 per cent. Retail loans had a 37 per cent share in the bank’s total advances.

According to Kochhar, the bank’s domestic credit growth would be around 20 per cent in the current financial year.

Deposits were Rs 292,614 crore, up 14.5 per cent year-on-year. The share of low-cost current account and savings account (Casa) deposits improved to 41.9 per cent at the end of March, from 40.9 per cent a year earlier. The average Casa ratio was 38.1 per cent during the fourth quarter.

The bank closed the financial year with capital adequacy ratio of 18.74 per cent. ICICI Bank’s shares on Friday ended at Rs 1,142.20 on the National Stock Exchange, down three per cent from the previous close.