×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

ICICI Bank Q2 net beats forecast on credit growth

ICICI Bank Q2 net beats forecast on credit growth
Comment E-mail Print Share
First Published: Fri, Oct 29 2010. 02 24 PM IST
Updated: Fri, Oct 29 2010. 02 24 PM IST
Mumbai: India’s No. 2 lender, ICICI Bank, beat forecast with a 19% rise in quarterly net profit, helped by robust credit growth and fewer bad debts in a fast-growing economy, sending its shares up more than 3%.
Indian banks including rival private-sector lender HDFC Bank are seeing strong loan demand in Asia’s third-largest economy, which the International Monetary Fund expects to expand 9.7% in 2010.
Bank credit in India increased an annual 19% as at end-September, according to the Reserve Bank of India’s data, from a low 9.7% in October last year and compared with 16.7% at end-March.
The central bank sees non-food credit growth of banks at 20% in 2010-11, still a far cry from growth rates of above 30% in the pre-crisis period.
Analysts say strong factory output growth, order backlog of engineering companies, investment on infrastructure projects and increase in demand for consumer finance would boost loan growth in this fiscal year.
However, rising interest rates are a concern as they may put the brakes on the rapid loan demand growth, especially from retail borrowers, and thereby weigh on the profitability of banks.
India’s banks make the bulk of their profits through pure banking activities.
India’s central bank is expected to raise rates for the sixth time this year at its review on Tuesday to batten down stubbornly high inflation pressures, economists polled by Reuters showed.
Shares in ICICI Bank were trading up 3.5% at Rs1,128.80 by 0859 GMT, while the main Mumbai market was down 0.4%. ICICI Bank said its net profit in July-September, its fiscal second quarter, rose to Rs1,236 crore ($278 million) from Rs1,040 crore reported a year earlier.
A Reuters poll of analysts had forecast net profit of Rs1,169 crore.
Net profit in the quarter rose to Rs1,395 crore after merging the business of private lender Bank of Rajasthan, which ICICI Bank acquired earlier this year.
Loans in the September quarter rose by 5.3% to stand at Rs1.94 trillion rupees.
State Bank of India, the country’s top lender, and ICICI and HDFC Bank are seeing an improvement in asset quality on strong revival in business and consumer confidence in India.
HDFC Bank last week met street estimates with a 33% rise in quarterly net profit and forecast credit growth at more than 20 percent in this fiscal year.
Shares in ICICI Bank, valued at about $27 billion, have risen 26% so far this year, compared with a 38% jump in the sector index and 15% gain in the main Mumbai market.
Comment E-mail Print Share
First Published: Fri, Oct 29 2010. 02 24 PM IST