India's largest private sector lender ICICI Bank 's third quarter (Oct-Dec) net profit rose to forecast-beating 20% year-on-year to Rs 1,728 crore on the back of robust loan growth. Net interest income or the difference between interests earned and paid out increased more than 17% y-o-y to Rs 2,712 crore.
"We are on the growth path," Chanda Kochhar, Managing Director and Chief Executive Officer, ICICI Bank said in a conference call.
"We have seen diversified growth in this quarter. Corporate loan book has grown well both on domestic and international fronts. It was mostly in the form of working capital loans. However, the retail rate of growth will be higher in the coming quarters. Residential housing projects are moving well."
CNBC-TV18 poll saw net profit at Rs 1,621 crore (13% up y-o-y) and net interest income of Rs 2,650 crore (up 15% y-o-y).
The bank's loan book expanded 19% y-o-y to around Rs 2.46 lakh crore in the three months period. In between April 1 and December 31, the lender has disbursed around Rs 30,000 crore loans to companies and individuals.
Currently, retail loans have higher share of 33% out of the entire loan book as against 26% in corporates, 28% in overseas business and 13% in SME and agriculture loans. ICICI Bank aims to attain 18% y-o-y credit growth for FY12.
During the quarter, the bank improved its asset quality with the gross non-performing asset (NPA) ratio stood at 3.82% compared with 4.14% a quarter back. The net NPA ratio too fell from 0.93% to 0.83% sequentially. Consequently, provisions declined by 27% y-o-y to Rs 341 crore.
"Apart from the ongoing restructuring plans we are not expecting any surprise either with NPAs or restructuring," said Kochhar adding that her bank would retain a net interest margin (NIM) of 2.7%. It has improved its NIM from 2.6% to 2.7% quarter-on-quarter.
The net restructured assets stood at Rs 3,070 crore. During the quarter, the lender restructured assets worth Rs 500 crore. Its power sector exposure stood around 7% of the total loan book (around Rs 17,200 crore). However, the bank did not disclose its credit exposure to GTL Infrastructure, the company which is negotiating debt restructuring with 25 lenders.
Due to the higher cost of deposits, the bank tried to access cheap source of funds by raising its share of current account and savings account (CASA) to total deposits. CASA ratio increased from 42.1% in Q2 to 43.6% in Q3. Total deposits grew nearly 20% y-o-y to Rs 2.61 lakh crore.
In ICICI Bank CASA offers 0-4% interest rates. This is much lower than the rates offered by their term deposit schemes.
"We are reducing our focus on wholesale deposits, which currently forms 35% of total deposits. It was 55% of total deposits two years back," Kochhar said.
For the nine months ended December 31, the bank posted a consolidated net profit of 29% to Rs 5,833 crore.
ICICI Bank shares on Tuesday shot up nearly 6% to close the day at Rs Rs 902 on the NSE.
Source: www.moneycontrol.com
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