Treasury income, muted net interest income growth result in the fall.
ICICI Bank, the country’s largest private sector lender, on Thursday said its consolidated net profit fell 26.36 per cent to Rs 1,148.66 crore during the quarter ended December 2009, largely due to a loss on the treasury portfolio.
The bank’s consolidated total income declined by 16.23 crore to Rs 14,176.84 crore.
| CHALLENGING QUARTER PERFORMANCE IN QUARTER ENDED DECEMBER (RS CR) | |||
| ICICI Bank | 2008 | 2009 | % chg |
| Interest income | 7,836.08 | 6,089.57 | -22.29 |
| Other income | 2,514.54 | 1,673.14 | -33.46 |
| Total income | 10,350.62 | 7,762.71 | -25.00 |
| Interest paid | 5,845.67 | 4,031.48 | -31.03 |
| Operating expenses | 1,734.11 | 1,362.39 | -21.44 |
| Total expenses | 7,579.78 | 5,393.87 | -28.84 |
| Operating profit | 2,770.84 | 2,368.84 | -14.51 |
| Net profit | 1,272.15 | 1,101.06 | -13.45 |
| Gross NPA | 8,988.08 | 8,925.55 | -0.70 |
| Net NPA | 4,400.23 | 4,356.83 | -0.99 |
| CONSOLIDATED | |||
| Total income | 16,922.73 | 14,176.84 | -16.23 |
| Net profit | 1,559.76 | 1,148.66 | -26.36 |
| Source : Bank | |||
On a standalone basis, ICICI Bank’s net profit fell 13.45 per cent to Rs 1,101 crore during the quarter as other income fell.
While the bank’s net interest income rose 3.42 per cent to Rs 2,058 crore, other income fell over 33 per cent to Rs 1,673 crore. And, if the Rs 203 crore generated from sale of its stake in the point-of-sale terminal business is taken away, the decline in other income comes to 41.53 per cent.
The decline in other income was mainly the result of a Rs 26-crore hit on its treasury portfolio as against a Rs 976-crore gain in the corresponding period last year. Fee income rose 5.57 per cent to Rs 1,422 crore during the quarter ended December 2009.
Compared to the other banks, including those in the private sector, net interest income (NII) growth was muted as the bank continued to shrink its loan book. Outstanding advances fell 15.65 per cent to Rs 1,79,269 crore as the private sector lender continued to stay away from a large number of retail segments, which were the mainstay of its earlier growth strategy. ICICI Bank also reduced deposit base by 5.5 per cent to Rs 1,97,653 crore as part of its strategy to retire high-cost funds.
Due to falling cost of funds and an increase in low-cost deposits, net interest margin improved to 2.6 per cent at the end of the December from 2.4 per cent in end-September. The bank’s management said NIM from domestic operations was around 3 per cent.
On the liabilities side, current and savings account (Casa) deposits, the main source of low-cost funds, registered an increase of Rs 5,550 crore during October-December, representing 36 per cent growth over the comparable period in 2008. At the end of December 2009, Casa accounted for 39.6 per cent of the bank’s total deposits.
Apart from Casa, the other good news was decline in the stock of gross non-performing assets, which fell 0.7 per cent to Rs 8,926 crore. As a result, non-tax provisions fell 0.55 per cent to Rs 1,002 crore.
However, with total stock of advances declining, the proportion of gross bad debt increased by 70 basis points to 4.84 per cent between December 2008 and December 2009. Net NPAs were estimated to have increased to 2.43 per cent of net advances from 2.07 per cent a year ago.
ICICI Bank shares rose after the results were announced. But the closed marginally up at Rs 853.35, 2.71 per cent lower than yesterday’s closing price on the Bombay Stock Exchange.
