The bank reported Rs 12,000 crore growth in its advances when most public sector banks are reporting a fall.
Driven by lower slippages and robust growth in loans, largest private sector lender ICICI Bank on Friday reported a 12% growth in net profit to Rs 2,976 crore for the quarter ended June 30, 2015.
The bank reported Rs 12,000 crore growth in its advances when most public sector banks are reporting a fall.
Total advances increased 15% during the quarter over the year-ago period at Rs 399,738 crore. Retail advances constituted about 43% of the total credit while the advances to small, medium-sized enterprises (SMEs) constituted 4% and corporate credit constituted about 53%. Total income rose to Rs 15,802.45 crore at the end of the quarter.
It also received Rs 327 crore of dividends from subsidiaries, which added to its profitability.
Net interest margin, a key measure of operational efficiency, improved to 3.54% from 3.40% in the same time last year.
The bank is focusing on its retail book while selectively growing its corporate book. It has about 12% exposure to the infrastructure sector, 6% to steel and 4% to real estate.
Chanda Kochhar, chief executive officer and managing director, ICICI Bank, said in a concall, "We are reducing the concentration risk in our corporate book and making it more granular. Fresh lending on the corporate book is done for the highly rated public sector undertakings. The asset quality is also stable with gross bad loan coming down both sequentially and over the previous year."
On Friday, the bank stock closed at Rs 302.50 a share on the BSE, up 4% over the previous close.
The gross bad loans (net of write-offs) for the bank was at Rs 15,137.61 crore, about 3.68% of total advances, lower than the 3.78% reported in the preceding quarter, but higher than the 3.05% of advances reported a year back.
Fresh bad loans reported during the quarter was Rs 1672 crore and the fresh restructuring during the quarter as Rs 1,962 crore, taking total restructured loans to Rs 12,604 crore.
"We have been working very hard and in a focused manner in terms of improving recoveries, We are working with the promoters of distressed companies getting them to sell assets and repay loans," Kochhar said.
Saday Sinha, a banking sector analyst at Kotak Securities, said, "Earnings of ICICI Bank came marginally ahead of our expectations. Net interest income grew 13.9% over the previous year on the back of the net interest margin improving 14 basis points, with a healthy loan growth of 15%. Other income had contribution of Rs 347 crore coming in from exchange rate gains on repatriation of retained earnings from overseas branches. Asset quality continued to see pressure, fresh impairments remained elevated at Rs 3,630 crore (3.75% annualised), around 27% of fresh impairments seen during fiscal 2015."
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