ICICI Bank, the country's largest private sector lender, on Monday said its consolidated net profit for the quarter ended September 30 surged 43 per cent to Rs 1,992 crore, compared with Rs 1,395 crore a year ago. The rise was aided by higher earnings of the bank’s life insurance arm, ICICI Prudential Life Insurance Co.
ICICI Prudential Life Insurance Co reported profit after tax of Rs 350 crore during the quarter, compared with Rs 15 crore a year earlier. The higher profit was primarily due to the change in accounting for non-participating policyholders' funds.
On a standalone basis, the bank's net profit stood at Rs 1,503 crore during the three-month period, up 22 per cent from Rs 1,236 crore a year earlier. The growth in standalone profit was driven by lower provisions and higher interest income from advances.
Net interest income, or the difference between interest income and interest expenditure, rose 14 per cent year-on-year to Rs 2,506 crore. Fee income rose seven per cent to Rs 1,700 crore. The bank's net interest margin was 2.6 per cent, unchanged from a year ago.
“We had a very healthy growth in profit, clearly keeping in line with our strategy of resuming growth from this year. Our aim would be to keep the net interest margin stable. The lending rates may rise if there is any increase in the cost of funds,” Chanda Kochhar, managing director and chief executive officer, ICICI Bank, said in her post-earnings comments.
Asset quality
The bank cut its provisions by 50 per cent, compared to a year ago, to Rs 319 crore during the quarter, due to improvement in the quality of its assets. The lender closed the quarter with a provision coverage ratio of 78.2 per cent. Net non-performing advances narrowed to Rs 2,184 crore from Rs 3,145 crore a year ago, leading to a 69-basis point rise in net bad loan ratio at 0.93 per cent. The gross non-performing loan ratio also rose by 89 basis points to 4.14 per cent as of September 30.
Net restructured assets stood at Rs 2,501 crore. The bank restructured Rs 743 crore of loans during the quarter, a significant share of which was accounted for by the microfinance sector.
Kochhar said the bank's asset quality appeared to be stable and dismissed fears of the deteriorating quality of loans to the power sector. Advances to power companies accounted for about seven per cent of the bank's loan portfolio.
Balance sheet
The bank's advances increased 20 per cent year-on-year to Rs 233,952 crore, driven mainly by growth in corporate loans. “There has been some moderation in the growth of retail loans. While we are seeing growth in both corporate and retail advances, the growth is clearly higher on the corporate side,” Kochhar said. ICICI Bank aims to increase its advances by 18 per cent this financial year. The bank’s deposits rose about 10 per cent year-on-year to Rs 245,092 crore as of September 30.
The share of low-cost current account and savings account deposits to the total deposits improved sequentially to 42.1 per cent. Savings account deposits stood at Rs 70,149 crore, while current account deposits were Rs 32,997 crore.
The bank’s capital adequacy ratio was 18.99 per cent, while its Tier-I adequacy ratio was 13.14 per cent.
