ICICI Bank net beats estimates, up 30% on year

ICICI Bank, the country’s second largest lender, reported a better-than-expected net profit riding on good loan growth during July-September and healthyy dividend income from subsidiaries.

The bank’s net profit rose 30 percent to Rs 1,956 crore from Rs 1,503 crore a year ago.

Analysts on an average had expected a 22 percent increase in net profit to to Rs 1,829 crore for the quarter, according to a CNBC TV18 poll.

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Net interest income, which is the difference between income earned and interest paid out, rose 35 percent to Rs 3,371 crore.

According to a Reuters report , this is the bank’s highest ever quarterly net profit.

The bank’s gross non-performing asset as of 30 September was flat at 3.54 percent, but net NPA rose to 0.78 percent from 0.71 percent posted a quarter ago.

Its provisions during quarter also registered an increase to Rs 508 crore from Rs 466 crore in the quarter earlier.

The increase in provisions has been attributed to Rs 500 crore exposure to Deccan Chronicle, which had become an NPA for the bank. In the post-earnings press comnference, Chanda Kochchar said the bank has provided fro 85 percent of these loans.

Its capital adequacy ratio stood at 18.28 percent as of 30 September compared with 18.54 percent in the previous quarter.

Net interest margins, a key gauge of profitability for banks, held steady at 3 percent. The bank expects to maintain the margin at the current levels going forward.

Advances increased by 18 percent year-on-year to Rs 275,076 crore as of 30 September from Rs 233,952 crore a year ago.

The year-on-year growth in retail advances was 14 percent compared with 10.3 percent registered as of 30 June.

The growth in advances has been across segments, Kochchar said at the press conference.

She did not expect the bank’s asset quality to deteriorate. The bank has been witnessing slippages of around Rs 800-900 crore. In July-September there has been a spike to Rs 1,200 crore mainly because of Deccan Chronicle, which is a one-off, she said.

On infrastructure assets, which is a major concern for banks, Kochchar said, “We will have to continue to monitor these projects.”

There are chances of cash flows getting delayed. However, debt servicing depends on how much raw material is required or available for these projects. She said some of the projects may get added to the restructuring portfolio, but no big negatives are likely.

At 1:53 p.m, shares of ICICI Bank were flat at Rs 1087 on the BSE.