Q2 bottomline grows to Rs 1,003 crore
MUMBAI: ICICI Bank, India’s second-largest, on Friday reported its quarterly net profit rose by a third, with growing demand for loans in a booming economy helping it beat market forecasts.
The bank, which is also listed in New York, said net profit in July-September, its fiscal second quarter, was Rs 1,003 crore, up from Rs 755 crore a year ago.
That compares with a forecast of a 23% rise in net profit to Rs 928 crore, according to a Reuters poll of 11 brokerages.
The bank’s credit advances rose by a third to Rs 2,07,100 crore. Of total loans, 17.9% were made by its foreign branches, up from 9.7% a year ago.
While there have been signs that official interest rate rises have been slowing demand for loans, Vishakha Muley, ICICI’s chief financial officer, told reporters that the trend in loan growth was likely to continue given current interest rate settings.
“I would say whatever has happened can be taken as a going-forward trend as well,” she said.
Central bank data shows that in the two weeks to September 28, Indian banks’ loans rose 22% from a year earlier, slowing from annual rates of 30% at the start of 2007.
The head of State Bank of India said earlier in October that he was a bit concerned about a slowdown in loan growth in recent months.
Analysts have also been concerned about a rise in bad loans after the central bank raised interest rates five times between mid-2006 and March. ICICI Bank said bad loans were 1.4% of its assets at the end of September, up from 1.0% a year earlier.
Unlike a number of US and European banks and some Asian peers, Indian lenders are believed to have little or no exposure to problems in the US subprime mortgage market, which have hammered many financials firms earning.
The bank’s total deposits rose 20% from a year earlier to Rs 2,28,300 crore. Deposits in savings and current accounts grew 38% to account for about a quarter of total deposits.
Ahead of the earnings, ICICI Bank’s shares closed down 1.4% at Rs 1,024.05 in a market that fell 2.4%. During the quarter, ICICI Bank’s shares rose 11.3%, while the Mumbai market’s banking index and the benchmark index rose 18%.
ICICI Bank has operations in 17 countries, and it said international operations accounted for about 22% of its consolidated banking assets.
