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ICICI Q2 net up 2.55% to Rs1,040 crore

ICICI Q2 net up 2.55% to Rs1,040 crore
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First Published: Fri, Oct 30 2009. 10 26 PM IST
Updated: Fri, Oct 30 2009. 10 26 PM IST
Mumbai: The country’s second largest private sector bank, ICICI Bank Ltd, reported a marginal increase of 2.55% in net profit to Rs1,040.13 crore for the September quarter, driven by treasury earnings and cost cutting.
Treasury income stood at Rs599.71 crore at the end of the quarter against a loss of Rs131.58 crore in the year-ago period. Operating expenses decreased to Rs1,424.53 crore at the end of the second quarter from Rs1,740.04 crore earlier on low employee and direct marketing expenses.
“Going forward, we will see growth in the balance sheet with the overall loan growing in single digits in the current year, while the corporate loan book will see double-digit growth,” said managing director and chief executive officer Chanda Kochhar. “The reduction in the retail unsecured loans will be offset by growth in corporate, housing and auto loans.”
ICICI’s net interest income, or the difference between revenue from loans and interest paid on deposits, fell 5.2% to Rs2,036 crore. Net interest margin, or the spread between the yields on loans and cost of funds, was 2.5%, up from 2.4%.
Its capital adequacy ratio for the quarter stood at 17.69%.
“The net interest income is a disappointment. However, this could be an end of the contraction in balance sheet as growth is coming back to the banking system,’’ said a banking analyst with a Mumbai brokerage.
The bank’s other income fell 2.89% to Rs1,823.79 crore. Its assets grew to Rs3.84 trillion from Rs3.66 trillion, but loans shrank 14.02% to Rs1.90 trillion.
ICICI has been drawing down its loan growth over the past five quarters as part of a revamp of its retail strategy, as well as cleaning up its non-performing retail loans.
Its provisions in the quarter rose to Rs1,071.30 crore from Rs923 crore a year ago, but were down from Rs1,324 crore in the first quarter. Non-performing loans rose to 2.36% from 1.91%. earlier.
ICICI shares on Friday rose 2.38% on the Bombay Stock Exchange to close at Rs789.60, while the benchmark Sensex closed 0.97% lower at 15,896.28 points.
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First Published: Fri, Oct 30 2009. 10 26 PM IST
More Topics: ICICI | Chanda Kochhar | Banking | Net profit | Sensex |