Lower provisions help ICICI Bank post 3.2 pc rise in Q2 profit as margins compress

Mumbai, Oct 18 (PTI) ICICI Bank on Saturday reported that its consolidated net profit for the September quarter inched up by 3.2 per cent to Rs 13,357 crore as a fall in provisions helped overcome the impact of margin compression.

On a standalone basis, the second largest private sector lender reported a 5.2 per cent growth in its post-tax profit at Rs 12,359 crore, up from Rs 11,746 crore in the year-ago period.

The core net interest income increased 7.4 per cent to Rs 21,529 crore on the back of 10.6 per cent growth in advances and the compression in net interest margin to 4.30 per cent from 4.53 per cent in the year-ago period.

Its executive director Sandeep Batra told reporters that NIMs will stay "range-bound" going ahead, but added that another rate cut from the central bank can impact the key number. RBI's cash reserve ratio cut will help the number, while other aspects like competitive intensity can impact it negatively, he added.

Non-interest income, excluding treasury performance, saw a 13.2 per cent growth at Rs 7,356 crore, but the treasury income showed a sharp fall to Rs 220 crore as against Rs 680 crore in the year-ago period.

The deposit growth for the bank came at 9.1 per cent during the quarter.

From an asset quality perspective, gross slippages came at Rs 5,034 crore, marginally down from Rs 5,073 crore in the year-ago period. Gross non-performing assets ratio improved to 1.58 per cent as of September 30, down from 1.67 per cent at the end of June this year and 1.97 per cent at the end of the year-ago period.

Overall provisions of the bank reduced to Rs 914 crore from Rs 1,233 crore on-year and Rs 1,815 crore on-quarter. Batra explained that shifts in the farm loans book lead to the changes, and added that the credit costs will "normalise upwards" going ahead.

On the loan growth front, retail credit grew 6.6 per cent and now constitutes 52.1 per cent of the book, while the business banking portfolio grew by 24.8 per cent year-on-year.

Amid concerns on a possible deterioration in credit quality of small business loans, Batra said loans to the business banking segment are holding up well due to which it is upping exposure to it and added that such borrowers are "bankable".

Corporate loans grew by just 3.5 per cent during the quarter, as per the bank. It expects credit growth to pick up in the second half of the fiscal, including the one in the retail front as well, Batra said.

He also said that domestic corporates have got enough cash, many other avenues to access credit.

The overall capital adequacy for the lender stood at 17.31 per cent as of September 30, with the core buffer at 17.06 per cent. PTI AA HVA