ICICI Bank Q2 net up 20%, asset quality improves, NIM rises
Net interest income (NII) of the bank increased 20 percent on yearly basis to Rs 4,043 crore, slightly higher than analysts' expectations.
October 25, 2013 / 15:05 IST
Moneycontrol Bureau
Top private sector lender ICICI Bank beat street estimates by reporting 20.2 percent rise in its second quarter (July-September) net profit over Q2 of FY13 to Rs 2,352 crore (USD 376 million) on higher net interest income and fee income.The bank has recognised mark-to-market (MTM) provisions of Rs 279 crore (USD 45 million) on its investment portfolio.It has maintained its asset quality during the quarter, but Chanda Kochhar, MD and CEO expects pressure on asset quality to continue going forward.During the period, net interest income (NII) of the bank increased 20 percent on yearly basis to Rs 4,043 crore (USD 646 million), slightly higher than analysts' expectations. According to a CNBC-TV18 poll, analysts on an average had expected the bank to report net profit of Rs 2,167 crore and NII of Rs 3,955 crore for the quarter.Net interest margin or NIM improved 4 bps quarter-on-quarter (31 bps year-on-year) to 3.31 percent from 3.27 percent. "The bank will be able to maintain current level margins," Kochhar said.International net interest margin increased sequentially to 1.8 percent from 1.6 percent while domestic net interest margin rose to 3.65 percent from 3.63 percent. She said less reliance on wholesale fund helped maintain domestic NIM.Fee income of the bank jumped 17 percent year-on-year to Rs 1,994 crore while cost-to-income ratio reduced to 37.3 percent in September quarter FY14 from 40.9 percent in a year ago period.Asset quality maintained, but bank says pressure will continueGross non-performing assets (NPAs) as a percentage of gross advances declined quarter-on-quarter (up 46 bps Y-o-Y) to 3.08 percent from 3.23 percent while net NPA increased slightly to 0.85 percent during September quarter from 0.82 percent in June quarter and 0.78 percent in a year ago period.In absolute terms, gross NPAs rose to Rs 10,028 crore from Rs 10,009 crore and net NPAs climbed to Rs 2,697 crore from Rs 2,463 crore Q-o-Q.Country's largest private secto lender restructured loans worth Rs 1,076 crore in second quarter and fresh slippages were Rs 1,000 crore.Provisions and contingencies increased marginally Q-o-Q (up 23 percent Y-o-Y) to Rs 625 crore from Rs 593 crore. Provision coverage ratio declined to 73.1 percent as on September 30 from 75.4 percent as on June 2013, which is the concern.Total advances of the bank spiked 16 percent Y-o-Y to Rs 3.17 lakh crore during second quarter while the current and saving account (CASA) ratio was maintained at 43.3 percent as on September 30 with CASA deposits rising 17 percent year-on-year.The bank has seen a year-on-year growth of 20 percent in its total retail portfolio, which the bank said would grow 22.23 percent in FY14.Capital adequacy ratio (as per Basel III) was 16.5 percent in the quarter gone by as against 17.04 percent in June quarter.During second quarter, the bank transferred SLR securities with face value of Rs 2,311 crore from available for sale (AFS) and held for trading (HFT) categories to held-to-maturity (HTM) category, thereby recognised a loss of Rs 10 crore, ICICI Bank said.At 13:27 hours IST, the stock was trading at Rs 1,024.15, up 0.24 percent from previous close on the BSE. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
