22 % increase in revenue: ICICI Bank
22 % increase in revenue: ICICI Bank
22 % increase in revenue: ICICI Bank
ICICI Bank Ltd. reported a 22% jump in its fiscal second quarter consolidated net profit, helped by the acquisition of smaller peer, Bank of Rajasthan, and a slashing of provisions for bad loans.
India's largest private sector lender said consolidated net profit for the July-September period rose to 13.95 billion rupees ($313 million) from 11.45 billion rupees a year earlier.
The consolidated earnings include 49-day figures of Bank of Rajasthan, which completed its merger with ICICI on Aug. 12. At the merger date, Bank of Rajasthan had total assets of 155.96 billion rupees, loans of 65.28 billion rupees and deposits of 13.48 billion rupees.
On a stand alone basis, ICICI's net profit rose 19% to 12.36 billion rupees from 10.40 billion rupees.
Net bad loans as a percentage of total advances fell to 1.62% from 2.36% a year earlier, helping the bank slash provisions by 40% to 6.41 billion rupees from 10.71 billion rupees.
ICICI's strong quarterly results sent its shares to a one-year high of 1,174 rupees on the Bombay Stock Exchange. It ended Friday up 6.54% at 1,161.65 rupees, easily outperforming the benchmark Sensex, which ended up 0.5%.
ICICI, which pioneered the retail loan revolution in the last decade, had seen a sharp rise in bad loans due to rapid growth in its unsecured, personal loan and credit card portfolio, especially as the credit crisis of the past two years eroded the repayment capabilities of many borrowers.
The bank consciously slowed credit to ride out the crisis. As a result, retail loans registered negative growth for nine successive quarters as ICICI reduced its unsecured book and took on more secured mortgages and car loans.
"Retail loans are now stable and flat and will grow from here on," ICICI Managing Director Chanda Kochhar said in a post-earnings conference call, adding the company expects total loan growth of 18%-20% this fiscal year.
Total loans in the just-ended quarter grew 5% to 1.94 trillion rupees from 1.84 trillion rupees in the first quarter.
"By improving asset quality, the bank has crossed over a major hump," Sharekhan Securities Ltd. analyst Ankit Ladhani told Dow Jones Newswires.
"The bank has a strong physical network of (2,501) branches and with asset quality concerns over, the bank is all set to book fresh loans," he said.
Ms. Kochhar told reporters that ICICI is seeing growth in infrastructure and trade finance loans, adding that provisions are likely to fall further in the next two quarters.
"The engine of growth will be both corporate and retail. In fact, the corporate engine of growth has already started kicking in," she said.
The fast-paced economic recovery and good job prospects in Asia's third-largest economy have helped Indian lenders earn more on their loans.
ICICI saw its net interest income--the difference between interest earned on loans and interest paid on deposits--rise 8% to 22.04 billion rupees from 20.36 billion rupees a year earlier. Other income, including fees, commissions and trading gains, stood at 15.78 billion rupees, down 13% as rising policy rates muted treasury gains.
The bank's net interest margin of 2.6%, up from 2.5% last year, showed it earned more on loans than its cost of funds.
Low-cost current and saving account deposits, or CASA, at 44% of total deposits of 2.23 trillion rupees, helped the bank keep its cost of funds low.
"We are expecting a deposit growth of 18%-20% (this fiscal) and a CASA of at least 40%," Ms. Kochhar said, adding that this will help ICICI keep net interest margin at 2.6%. Also, the bank's capital adequacy ratio improved to 20.23% from 17.69%, far above the regulatory minimum of 9%.
Faxless loans-Simple and fast way to access extra finance Payday Loans 1500 – Short Term Loans For Immediate Needs Same day unsecured loans-Solve your pending expenses Loans for Retired - Good Finances For the Experienced Picking the Best Loan Lender Unsecured Loans for Unemployed - Ramp Up Significant Money Unsecured loans-Meet the emergent needs Loans for International Students - A Futuristic Finance Payday Loans No Telecheck – Instant Monetary Help Fast installment loans-Pay back in easy installments Logbook Loans - Avail Cost Effective Fiscal Aid Unsecured Personal Loans-For Your Pecuniary Incapibilities Unsecured Tenant Loans-Overcome your Tight Spots
%20from%2011.45%20billion%20rupees%20a%20year...){kind=link}