ICICI Bank's Q1 FY'14 net vaults 25% to Rs2,274 crore

ICICI Bank, the country's largest private sector lender, has reported a 25 per cent increase in its net profit for the April-June quarter of the current financial year at Rs2,274 crore ($383 million) against Rs1,815 crore ($306 million) for the quarter ended 30 June 2012.

Helped by steady growth in credit and interest income, ICICI Bank said its net interest income increased 20 per cent to Rs3,820 crore ($643 million) in Q1-FY'14 from Rs3,193 crore ($538 million) in Q1-FY'13.

Net interest margin increased by 26 basis points to 3.27 per cent in Q1-FY'14 from 3.01 per cent in Q1-FY'13. Net interest margin (domestic) stood at 3.63 per cent in Q1-2FY'14.

ICICI Bank also reported a 32 per cent increase in its non-interest income at Rs2,484 crore ($418 million) in Q1-FY'14 against Rs1,880 crore ($317 million) in Q1-FY'13.

Cost-to-income ratio declined to 39.4 per cent in Q1-FY'14 from 41.8 per cent in Q1-FY'13.

Provisions during the first quarter of FY'14 increased to Rs593 crore ($100 million) from Rs466 crore ($78 million) in Q1-FY'13.

Return on average assets was also higher at 1.75 per cent  in Q1-FY'14 compared with 1.51 per cent in Q1-FY'13.

Consolidated net profit (including profit from its subsidiaries) for the April-July 2013-14 increased 32 per cent to Rs2,747 crore against Rs2,077 crore in Q1-FY'13.

Total advances of ICICI Bank grew 12 per cent year-on-year to Rs3,01,000 crore as of 30 June 2013, from Rs2,68,000 crore as of 30 June 2012).  Loan growth was aided by growth in the retail (27 per cent) and auto loan (17 per cent), ICICI bank said.

''Due to a slowdown in commercial vehicle growth, the segment's growth saw a drop of 19 per cent. The corporate loan book grew about 14 per cent due mainly to demand for working capital and refinancing loans,'' said Chanda Kochhar, managing director and chief executive of ICICI BAnk.

Deposit growth, however, was comparatively low at 9 per cent at Rs 2.91 lakh crore against Rs2,68,000 crore as of 30 June 2012). In fact, deposit growth registered a negative trend, although marginally.

With the Reserve Bank of India (RBI) tightening short term borrowing rate, liquidity conditions have tightened.

''As of now, ICICI Bank has healthy growth in the current and savings accounts and higher reliance on retail deposits (71 per cent of total deposits). Therefore, the impact on cost of funds is very small. It will be too early to arrive at a conclusion on hiking interest rates,'' Kochhar said.

ICICI Bank's non-performing assets increased marginally to 0.82 per cent as of 30 June 2013 from 0.71 per cent in June last year.

This led to higher provisioning during the quarter at Rs593 crore, up 27 per cent from Rs466 crore in the corresponding quarter last year.

ICICI Bank spent Rs829 crore for restructuring during the quarter. Going forward, restructuring cost is likely to increase to about Rs1,000-1,100 crore, Kochar said.

During the quarter, the bank received back capital from the UK and Canadian subsidiary to the extent of $100 and $75 million respectively. The bank also shut down two of its 11 branches in the UK as deposit growth accounted for less than 2 per cent of its growth there.