ICICI Bank Q1 net up 25%

ICICI Bank Q1 net up 25%

BS Reporter / Mumbai July 21, 2007

ICICI Bank, the country's second largest bank, today reported a 25 per cent rise in net profit in the first quarter of 2007-08 as slower increase in net interest income was offset by a sharp rise in fee and other income, which also helped in containing the impact of provisioning growing to 2.5 times a year earlier.

The bank's net profit increased to Rs 775 crore in the first quarter of 2007-08 from Rs 620 crore a year earlier. The bank's total income for the period increased by 53 per cent to Rs 9,281.42 crore as compared to Rs 6,049.66 crore, but its net interest income was up just 16 per cent to Rs 1,714 crore. The non-interest income was up 39 per cent to Rs 1,260 crore in April-June 2007, which included fee income of Rs 1,428 crore which was pu 35 per cent from a year earlier, the bank said. The net interest margin of the bank stood at around 2.3 per cent as on June 30, 2007, down from 2.5 per cent a year earlier.

The bank's provisioning has increased by 156 per cent to Rs 552 crore in the first quarter of the current fiscal from Rs 216 crore. The provisioning includes impact of higher propotion of non-collateralised loans in the retail portfolio and seasoning of the retail portfolio. The net non performing assets constituted 1.3 per cent of the net customer assets.

The bank's advances were 35 per cent higher at Rs 1,98,277 crore compared to a year ago and deposits 26 per cent higher at Rs 2,30,788 crore. "The bank's deposits and advances growth are better than the industry average. The bank's retail advances have grown by about 29 per cent, as we securitised retail loans to the tune of Rs 3,850 crore. There is an overall slowdown in retail lending for the industry on account of high property prices and rising interest rates,'' said Vishaka Mulye, ICICI Bank and group chief financial officer.

However, the quarter-on-quarter growth in both the total advances portfolio and total deposits was flat as on June 30, 2007. The bank's advances were Rs 1,98,277 crore as on June 30, 2007 against Rs 1,95,865 crore as on March 31, 2007. Similarly, deposits at the end of June 2007 were Rs 2,30,788 crore against Rs 2,30,510 crore a quarter earlier.

"The home loan growth in the quarter has been flat. However, we see a huge potential in the non-collateralised loan business as the yields are attractive and  the corporate business is expected to grow well. We also forsee good growth in our international business. The bank is focusing on fee-based products and services, as well as utilising opportunities presented by the domestic and international expansion of Indian companies,'' added Mulye.

The total assets of the bank's international branches increased to $13.2 billion (Rs 53,550 crore) against $7.9 billion (Rs 32,000 crore). The propotion of advances of the bank's international branches in total advances increased to 16.4 per cent on June 30, 2007 against 9.1 per cent in the corresponding quarter last year. Its capital adequacy stood at 11 per cent. The impact of the fresh equity infusion of about Rs 20,000 crore will be reflected from the next quarter.

"Despite the ample liquidity in the system we are not seeing any softening of deposit and lending rates as on now. We would wait for cues from the upcoming credit policy review,'' added Mulye.

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