The private sector lender set aside Rs 914 crore as provisions and contingencies for the quarter under review, against Rs 1,233 crore earlier. Pre-provision operating profit was 3.4% higher at Rs 17,298 crore, compared to Rs 16,723 crore.
Sandeep Batra, managing director of the bank, has forecast credit costs to rise marginally in the third quarter even as he expressed optimism of better credit growth given the steps taken by fiscal and monetary authorities to boost consumer demand.
“We expect credit costs to normalize upwards,” Batra said, citing the practice of making provisions for Kisan credit card loans only in the first and third quarters. However, he said credit quality is generally holding up.
“We expect the second half of the fiscal to be better than the first half and should reflect better credit growth,” he added.
The bank’s total advances grew 10.3% year-on-year to Rs 14.09 lakh crore at end-September, while the gross non-performing loans ratio further improved to 1.58%, compared to 1.67% three months ago. The NPA ratio stood at 1.97% a year ago. The net NPA ratio stood at 0.39%. Net interest margin for the quarter was 4.3%, compared to 4.34% in the previous quarter. Batra expects the NIM to remain within a certain range, while he expects to reap some benefits from the reduction in CRR and repricing of deposits.
ICICI Bank’s net interest income – the difference between interest earned and interest paid to depositors – stood at Rs 21,530 crore, up 7.4% year-on-year. Other revenues were 5.6% higher at Rs 7,576 crore, due to lower state revenues.
The bank’s retail loan portfolio grew by 6.6% year-on-year and comprised 52% of the total loan portfolio, while the domestic corporate portfolio grew by 3.5%. The rural portfolio fell by 1.3% year on year.
ICICI’s deposits rose 7.7% year-on-year to Rs 16.13 lakh crore, with the share of low-cost deposits at 40.9%. In the first two quarters, 263 branches were opened, bringing the number to 7,246.
During the quarter, the bank recorded Rs 5,034 crore of fresh NPAs. The net addition to NPA, after adjusting depreciation and disposal, was Rs 1,386 crore. It had written off NPAs to the tune of Rs 2,263 crore, taking its provision coverage ratio to 75%.
The private sector lender has a contingency provision of Rs 13100 crore, which would help it during the transition from the proposed expected credit loss framework.
“We do not believe the framework will have a material impact on our capital and profitability,” Batra said in response to a query from ET.
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