India’s largest private sector lender ICICI Bank on Wednesday reported 13 per cent growth in net profit for the quarter ended December 31, 2013 at Rs 2,532.21 crore as compared with Rs 2,250.24 crore in the corresponding period a year earlier.
This was after additional tax provision of Rs 215 crore for deferred tax liability on special reserve for the nine months ended December 31, 2013. “Growth in profit after tax excluding this impact was 22 percent,” the bank said.
However, it ascribed the rise in net profit to higher interest income, better margins and rise in non-interest income which aided earnings growth.
Briefing reports in a post-results conference, ICICI Bank Managing Director & CEO Chanda Kochhar said, “The profitability is the result of healthy growth in our balance-sheet. We have been emphasising on growth of our retail franchise. Our secured retail assets have seen strong growth – mortgages were up 23 per cent while auto loans grew 35 per cent. We are calibrating growth in our corporate advances given the current uncertain environment.”
Net interest income (NII) or the difference between interest income and interest expense, rose 22 per cent from a year ago to Rs 4,255 crore during the quarter, while net interest margin (NIM) improved 25 basis points from a year earlier to 3.32 per cent at the end of the quarter. “We would like to maintain NIM at current levels,” she said, and pointed out that other income of the bank was up 26 per cent on a year-on-year basis.
“Our reliance on short-term wholesale funds is really low. Hence, market volatility does not impact us in a significant way. I will expect our net interest margin to remain stable in this quarter,” Kochhar said.
She said the bank’s provisioning nearly doubled to Rs 695 crore in the October-December period from Rs 369 crore a year earlier as asset quality deteriorated. In absolute terms, gross NPAs rose 3.7 per cent quarter-on-quarter (6.5 per cent year-on-year) to Rs 10,399 crore and net NPAs jumped 15.6 per cent Q-o-Q (43 per cent Y-o-Y) to Rs 3,118.44 crore in the October-December quarter.