ICICI Bank shines with 25% net rise

Sharp rise in fee, other income offset slower increase in net interest income.

Buoyed by a sharp rise in fee and other income, which offset a slower increase in the net interest income, 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.

The bank's net profit increased to Rs 775 crore in the first quarter of 2007-08 from Rs 620 crore a year earlier. Total income for the period increased by 53 per cent to Rs 9,281.42 crore compared with 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 rose 39 per cent to Rs 1,755 crore in April-June 2007, which included fee income of Rs 1,428 crore, which was up 35 per cent from a year earlier, the bank said. The net interest margin of the bank was around 2.3 per cent as on June 30, 2007, down from 2.5 per cent a year earlier.

The bank's provisioning increased by 156 per cent to Rs 552 crore in the first quarter of the current financial year from Rs 216 crore last year.

The provisioning includes impact of higher proportion of non-collateralised loans in the retail portfolio and seasoning of the retail portfolio. The net non-performing assets (NPAs) constituted 1.3 per cent of the net customer assets.

Advances were 35 per cent higher at Rs 1,98,277 crore compared with the figures 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. 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, group chief financial officer, ICICI Bank.

However, quarter-on-quarter growth in both 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 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 proportion of advances of the bank's international branches to 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 of now. We would wait for cues from the upcoming credit policy review,'' added Mulye.

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