News Hour- ICICI Bank Q1 net up 36.3% at Rs 1,820 crore, beats forecast

MUMBAI: ICICI Bank, country's top private lender, posted on Friday a 36.3 per cent jump in quarterly profit, its strongest growth in more than a year, helped by robust loan growth, high fee income and better asset quality.

ICICI said it made a net profit of Rs 1815 crore ($325.5 million) in the fiscal first quarter ended June compared with Rs 1332 crore a year earlier. Analysts, on average, had expected profit of Rs 174 crore, according to Thomson Reuters I/B/E/S.

The strong results vindicate its low-risk strategy, as India's economy slows. The bank was dealt a severe blow by the global financial crisis as its bold bets on consumer loans soured but has subsequently cleaned up its books.

ICICI Bank expects to sustain the current level of net interest margin and sees an improvement in asset quality of the bank, Chief Executive Officer Chanda Kochhar said on Friday.

The results also show that private banks are better placed for profit growth in the current environment than government-owned banks, which account for 70 per cent of the market in India but whose lending decisions are not always driven by commercial considerations.

State-run Canara Bank missed street estimates in its latest quarterly earnings while No.2 state lender Punjab National Bank also disappointed with a spurt in bad loans.

But smaller private lenders HDFC Bank, Axis Bank andYes Bank all recently reported strong profit growth.

Government-run State Bank of India, the country's No.1 lender which controls about a quarter of the nation's loans and deposits, is yet to report.

High interest rates to rein in racing inflation and government's slow pace of implementing reforms have put the brakes on India's economy, which grew 8-9 per cent between 2005 and 2008.

The International Monetary Fund has sharply downgraded growth estimates for India to 6.1 per cent this fiscal year and 6.5 per cent in the next.

ICICI's net non-performing loans as percentage of total loans dropped to 0.71 per cent from 1.04 per cent. Net interest income, or the difference of interest earned and interest expended, rose about a third to Rs 319 crore.

ICICI shares were up 3.09 per cent at 0700 GMT. They have risen about a third since the start of the year, outperforming the 28 per cent growth in the BSE banking index and a 10 percent growth in the broader market during the same period.
(Source:economictimes.indiatimes.com)