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ICICI Bank, the country's largest private sector lender, reported a 14 per cent increase in net profit for the June quarter on a consolidated level, aided by higher net interest income. Net profit increased to Rs 3,232 crore in the April-June quarter from Rs 2,832 crore in the corresponding quarter a year ago.
In the same period, on a standalone level, net profit increased by 12 per cent to Rs 2,976 crore from Rs 2,655 crore in the quarter ended June a year ago. Net interest income, the difference between interest earned and interest expended, increased 14 per cent to Rs 5,115 crore in the first quarter of financial year 2016, compared with Rs 4,492 crore a year ago.
The pressure on the asset quality eased a little in the quarter ended June. On a sequential basis, the percentage of gross non-performing assets (NPAs) to gross advances declined to 3.68 per cent in the June quarter compared with 3.78 per cent in the March quarter. However, it was up compared with the first quarter of FY15, when it stood at 3.05 per cent.
Similarly, per cent of net NPAs to net advances also improved to 1.58 per cent in Q1 of FY16 compared with 1.61 per cent in Q4 of FY15. Net NPA was up compared with the quarter ended June last year, when it stood at 0.99 per cent.
Consequently, even provisioning declined on a sequential basis to Rs 955 crore from Rs 1,345 crore in the quarter ended March. Chanda Kochhar, managing director & chief executive officer, said the bank has witnessed some stability in asset quality. "The spike in bad loans in Q4FY15 was on account of some lumpy accounts. This quarter we focused on improving recovery, working with promoters to sell assets and pay up and in making the portfolio more granular." In Q1FY16, the addition to NPA was at Rs 1,672 crore, compared with Rs 3,260 crore in Q4FY15. The lender sold loans worth Rs 500 crore to asset reconstruction companies in the first quarter of this financial year. The management also said they have no restructuring pipeline as of now.
Total advances increased by 15 per cent year-on-year to Rs 3,99,738 crore as of June 30, 2015, from Rs 3,47,067 crore in the same period a year ago. The increase in advances was mainly led by growth in retail book, which grew by 25 per cent. The corporate loan book also saw a slight uptick and grew by nine per cent. On the other hand, deposits increased by only 10 per cent to Rs 3,67,877 crore. Total current account savings account (Casa) deposits increased by 12 per cent year-on-year and the Casa ratio stood at 44.1 per cent.
Other income inched up by only 5 per cent to Rs 2,990 crore in Q1FY16 from Rs 2,850 crore in the first quarter a year ago.
Kochhar said the growth in fee income was low as corporate activity was subdued.
Net interest margin stood at 3.54 per cent in Q1FY6 from 3.40 per cent in Q1FY15. The bank expects the margins to remain at current levels in the coming quarters.
The capital adequacy ratio of the bank, according to Basel-III norms, was 16.37 per cent and Tier-1 capital adequacy was 12.26 per cent.
