The private sector lender set aside Rs 914 crore as provisions and contingencies for the quarter under review against Rs 1233 crore earlier. Its pre-provision operating profit stood 3.4% higher at Rs 17,298 crore as compared with Rs 16,723 crore.
Bank executive director Sandeep Batra has predicted credit cost to rise marginally in the third quarter even as he expressed optimism of a better loan growth, given the steps taken by the fiscal and monetary authorities to boost consumption demand.
“We expect credit cost to normalise upwards,” Batra said, citing the practice of making provisions against Kisan Credit Card-linked loans only in the first and third quarters only. He however said that credit quality is, in general, holding up.
“We do expect the second half of the fiscal to be better than the first half and should reflect a better loan growth,” he added.
The bank’s total advances grew 10.3% year-on-year to Rs 14.09 lakh crore at the end of September while gross non-performing loans ratio improved further to 1.58% from 1.67% seen three months back. The NPA ratio stood at 1.97% a year ago. Its net NPA ratio was at 0.39%.Its net interest margin for the quarter was at 4.3% as compared with 4.34% in the preceding quarter.Batra expects the NIM to remain range bound while expecting to get some benefits from the CRR cut and re-pricing of deposits.
ICICI Bank’s net interest income — the difference between interest earned and interest paid to depositors — was at Rs 21,530 crore, up 7.4% year-on-year. Its other income was 5.6% higher at Rs 7576 crore, on account of lower treasury earnings.
The bank’s retail loan portfolio grew by 6.6% year-on-year and comprised 52% of the total loan portfolio while domestic corporate portfolio saw a 3.5% expansion. Its rural portfolio declined by 1.3% year-on-year.
ICICI’s deposit increased 7.7% year-on-year to Rs 16.13 lakh crore with the share of low cost deposits at 40.9%. It opened 263 branches in the first two quarters taking the count to 7246.
During the quarter, the bank booked Rs 5,034 crore of fresh NPAs. The net addition to NPA, after adjusting the write-off and sale, stood at Rs 1,386 crore. It had written off NPAs amounting to Rs 2263 crore, taking the provision coverage ratio to 75%.
The private sector lender carries a contingency provision of Rs 13100 crore which would help it during the transition of the proposed expected credit loss framework.
“We don’t think the framework would materially impact either our capital and profitability,” Batra said, responding to a query from ET.
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