Banks profit surge despite pressure on loans

ICICI, PNB, Union Bank of India, Central Bank, HDFC all posted better-than-expected results

Several major banks including ICICI Bank, Punjab National Bank (PNB), Bank of India have been able to register double-digit increase in quarterly profit despite pressure on their loan portfolio due to economic slowdown.

Of the six banks which declared their quarterly numbers today, three recorded rise in non-performing assets (NPAs), bringing down the net profit as these banks were required to make higher provisions for bad debts.

Driven by rise in core income, ICICI Bank reported a 36% jump in profit for the first quarter ended June 30 at Rs 1,815 crore against Rs 1,332 in the same period a year ago.

At the same time, the gross NPAs of ICICI Bank came down to 3.54% at the end of June 30 against 4.36% at the end of first quarter of the previous fiscal.

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

The closest competitor of ICICI Bank, PNB recorded 13% growth in net profit at Rs 1,246 crore in the first quarter even as gross NPA rose by over 1%.

The gross NPA of PNB as a proportion of advances went up significantly to 3.34% against 2% at the end of June last year. Net NPA also rose to 1.68% during the period from 0.86% in the same period of previous year.

In absolute terms, the gross NPA rose by 104% to Rs 9,988.18 crore while net NPA increased by 135.1% to Rs 4,917.04 crore at the end of June 2012 on year-on-year basis.

Another public sector bank which recorded over 1% increase in gross NPA was Central Bank of India. The bank's gross NPA surged to 4.87% against 2.29% in the same period of the previous fiscal.

However, the net profit of the bank improved by 20% at Rs 335.95 crore for the first quarter of 2012-13. The bank had net profit of Rs 280.78 crore during the April-June quarter of 2011-12.

Even the Union Bank of India's gross NPA also went up over 1% on annual basis. The bank's gross NPA surged to 3.76% against 2.57% in the same period of the previous fiscal.

In absolute terms, the gross NPA of the Union Bank of India rose to Rs 6541.45 crore against Rs 3745.10 crore at the end of first quarter of the previous fiscal. The net NPA stood at Rs 3,747 crore as against Rs 1,893 crore in the same period last year.