ICICI Bank net up 9.95%

ICICI Bank, the country's second largest commercial bank, today reported a 9.95 per cent rise in net profit in the second quarter of 2004-05 to Rs 442 crore from Rs 402 crore in the corresponding period of previous year.

Total income in the second quarter fell marginally to Rs 3,065.92 crore from Rs 3,072.88 crore in the corresponding quarter of the preceding year.

The fall was largely on account of a sharp 73.31 per cent drop in treasury income during the quarter under review, from Rs 461 crore in July-September 2003 quarter to Rs 123 crore in the second quarter 2005.

The bank's net interest income, however, rose to Rs 685 crore from Rs 472 crore during the period under review.

For the first six months of the financial year 2004-05, ICICI Bank's net profit jumped by 18 per cent to Rs 873 crore from Rs 834 crore in the corresponding six months of the preceding year. Total income however, fell to Rs 5,919.41 crore in the first half of the current year from Rs 6,011.43 crore in the first six months last year.

Kalpana Morparia, deputy managing director, ICICI Bank attributed the increase in profitability on account of reduced cost of funding from 7.5 per cent as on September 2003 to 5.8 per cent as on September 2004, following the benefits of the reverse merger with the erstwhile ICICI Ltd.

"Our ability to redeem an additional Rs 3,600 crore of old liabilities has helped reduce funding costs, and the merger has also brought down the average cost of deposit from 5.8 per cent in September 2003 to 4.4 per cent in the first half of this year," she added.

ICICI Bank's net interest margin has also risen from 1.9 per cent in 2004 to 2.4 per cent to date with the change in funding costs.

For the first half of 2004-05, the bank's core operating income was up 52 per cent to Rs 2,593 crore from Rs 1,712 in the same period of 2003-04. The bank's net interest income in the first half of 2004-05 rose 42 per cent to Rs 1,316 crore from Rs 927 crore a year earlier.

"The merger has helped drive retail growth, which has brought about a greater share of fee-based income by 93 per cent," said Morparia. Retail business has shown a 60 per cent growth, of which about 50 per cent of Rs 40,000 crore has come from home loans, she added.

ICICI Bank said its total advances increased 25 per cent to Rs 67,901 crore as on September 30, 2004 from Rs 54,127 crore as on September 30, 2003, with retail assets constituting 58 per cent of total advances and 52 per cent of customer assets as on September 30, 2004. Total deposits increased 26 per cent to Rs 71,598 crore as on September 30, 2004.

The bank's capital adequacy as on September 30, 2004 was 15.2 per cent, including Tier-1 capital adequacy of 9.4 per cent, against statutory capital adequacy requirement of nine per cent. The bank's NPAs were 2.6 per cent against 4.8 per cent as on September 30, 2003.

ICICI Bank's group company, ICICI Prudential Life Insurance had a negative impact of Rs 91 crore on the bank's consolidated net profit in the first half of 2004-05, which was 749 crore. ICICI Lombard General Insurance made a net profit of Rs 22 crore against Rs 9 crore a year ago.