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ICICI Bank hopes to get back to growth in profit

ICICI Bank hopes to get back to growth in profit
PTI
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First Published: Thu, May 07 2009. 04 44 PM IST
Mumbai: Top private sector lender ICICI Bank has exuded confidence that it will return to profitability growth this fiscal, for which it is banking on cost-control measures and improving credit quality.
“They (profits) would be better than last fiscal’s. We are talking about improving net interest margin, controlling costs, controlling credit quality. So, I am hopeful and I am confident that they (profits) would be better than last year’s,” ICICI Bank managing director and CEO Chanda Kochhar said.
Under the impact of the adverse economic conditions, ICICI Bank’s net profit fell by 10% in the fiscal ended 31 March, 2009.
Since its incorporation in 1994, ICICI Bank’s full-year profit fell for the first time in 2008-09. It posted a net profit of Rs3,758 crore for the fiscal ended 31 March, 2009, down from Rs4,158 crore in the previous year.
“Growth has many dimensions. The dimensions of this year’s growth are going to be low-cost deposits, net interest margin and profitability,” she noted.
Kochhar said that its financial performance in the previous fiscal was marred by adverse economic environment, but she was confident that profitability would get a boost this year from an improving economic scenario and the strategies being implemented by the bank.
“I am very clear that the strategies we are implementing will improve it...I am also confident that the economic environment is improving. I am confident about that also,“ Kochhar said.
The bank has recorded an average profit growth of 15% in the last five years, she said.
The return on equity (ROE) is about 8% or so over three years or so, she said, adding, “we want to take the ROE not to just to double digits but to even higher levels.”
Speaking about the strategy to achieve high profit growth this year, Kochhar said, “What we are going to do is to concentrate on changing our deposit mix through which we can bring down cost of fund, improve our net interest margin and improve profitability.”
So, the focus this year, therefore, is going to be, concentrating on improving NIM, concentrating more on stable income like transaction banking income and so on which does not move so drastically with the level of activity of projects and M&A, she added.
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First Published: Thu, May 07 2009. 04 44 PM IST