ICICI Q1 net up 30 per cent

“We are happy to announce a strong set of numbers,which are driven by the higher net interest income that rose 21 per cent to Rs 2,411 crore,lower bad loans,which almost halved to 0.9 per cent from 1.62 per cent year-on-year,and the resultant 43 per cent drop in provisioning to Rs 454 crore,” ICICI Bank Managing Director and Chief Executive Chanda Kochhar said in a conference.

On standalone basis,the bank’s net profit increased 30 per cent to Rs 1,332 crore during the quarter,from Rs 1,026 crore for the same period a year ago.

Despite robust numbers and ruling out any serious threat to the asset quality,ICICI has not improved its outlook for credit pick-up. It maintained the earlier projection of 18 per cent for the current fiscal,2011-12.

However,the overall better numbers for the advances and provisions were offset by higher expenditure,mainly on the salary front,which during the quarter rose by an average of 11 per cent,the bank said.

The country’s second-largest lender after SBI had a slower rise in the net interest margin (NIM) – the main gauge of a bank’s profitability.

The bank managed to retain a NIM of 2.6 per cent,which is a 10 basis points up over the year-ago period,Kochhar said. Against this,its immediate rival HDFC Bank had almost double the NIM at 4.2 per cent for the same quarter.

ICICI,valued at nearly USD 27 billion,rose 2 per cent to Rs 1,037.75 on BSE,which closed 12 points down.

During the quarter,the overall expenses rose to Rs 7,027.38 crore from Rs 5,304.98 crore,while the operating expenses jumped to Rs 1,819.78 crore from Rs 1,483.49 crore.

The 20 per cent uptick in advances was mainly driven by corporate lending,including working capital loan,Kochhar said,adding retail growth was muted during the period.

Kochhar attributed the near halving of the stressed assets to the reduced retail portfolio. But she was quick to add that home and auto loans performed better. She ruled out any threat to asset quality on home loan front saying borrowers have the option to increase the tenor instead of hiking EMIs.