ICICI Bank, the country's largest private sector bank, on Friday said its standalone net profit for the quarter ended June expanded 30 per cent at Rs 1,332 crore from Rs 1,026 crore a year earlier.
Higher interest income, driven by growth in advances and lower provisions on the back of improving asset quality, aided the bank's earnings during the quarter.
On a consolidated basis, profit after tax grew 53 per cent year-on-year to Rs 1,667 crore.
ICICI Bank shares rose 3.3 per cent to touch an intra-day high of Rs 1,051 on the National Stock Exchange (NSE) as investors took comfort from the management's outlook on asset quality, margin and credit growth. The shares ended at Rs 1,038.3, up 2.1 per cent from the previous close.
Net interest income, or the difference between interest income and interest expense, was at Rs 2,411 crore during the quarter, up 21 per cent from a year ago. Fee income increased 12 per cent year-on-year to Rs 1,578 crore in the past three months.
"We continue to improve the quality of our earnings and balance sheet. Our net interest margin was at 2.6 per cent during the quarter, which is an improvement of 10 basis points from a year ago. While the industry as a whole is expected to face headwinds on margins, we expect to maintain our net interest margin at the current level for this year," Chanda Kochhar, managing director and chief executive officer, told reporters in her post earnings comments.
In 2010-11 (April-March), the net interest margin of the bank was also at 2.6 per cent.
Improving asset quality helped the bank cut its provisions by 43 per cent from a year ago to Rs 454 crore during the three months. Net non-performing assets decreased 33 per cent to Rs 2,351 crore during this period. Net bad loan ratio fell to 0.91 per cent as of June 30 from 1.62 per cent a year ago.
"Our total provisions have gone down even though we made additional provisions as per the Reserve Bank of India norms. We are not seeing stress on any specific sectors," Kochhar said.
"The pressure on small and medium enterprises (SMEs) will be more than larger companies going forward. So, we will watch this portfolio more closely. So far we are comfortable with our SME portfolio," she said.
Total restructured assets of the bank were at Rs 1,950 crore as of June-end. The loan loss coverage ratio was at 76.9 per cent.
Advances grew 20 per cent from a year ago to Rs 220,693 crore. On sequential basis also the bank expanded its loan book by two per cent. About 37 per cent of the bank's advances were retail loans, while 23 per cent were domestic corporate loans. International loan book accounted for 25 per cent of the total portfolio and mainly comprised of corporate advances.
Share of unsecured loans narrowed to 2.1 per cent as of June-end from three per cent a year ago. "We are very selectively expanding our unsecured book and offering products only to clients who have long standing relationship with us," Kochhar said.
Deposits also expanded 15 per cent to Rs 230,678 crore. Share of low-cost current account savings account (CASA) deposits were at 41.9 per cent of total deposits.
Kochhar said the bank aims to grow its advances by 18-20 per cent and deposits by 20 per cent in the current financial year. It aims to maintain CASA ratio at 40 per cent in coming quarters, she said.
ICICI Bank closed first quarter with a capital adequacy ratio of 19.57 per cent. Tier I capital adequacy ratio was at 13.36 per cent.
