The Hindu Business Line : ICICI Bank Q3 net up 42%

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Mumbai Jan. 20 Higher interest income, coupled with a significant rise in fee-based revenue, enabled ICICI Bank to report a 42 per cent growth in net profit in the third quarter.

The largest private sector bank in the country earned an after tax profit of Rs 910 crore for the quarter ended December 31, 2006, against Rs 640 crore in the year-ago period.

The bank appears to be well ahead of its peers in the third quarter performance considering 32 per cent and 40 per cent increase in net profit reported by HDFC Bank and UTI Bank, respectively.

According to Ms Vishakha Mulye, Chief Financial Officer, rise in net interest income (32 per cent) and fee-based revenue (53 per cent ) largely contributed to the profit.

Total income increased to Rs 7,805.24 crore from Rs 4,891.65 crore.

"The bank has posted better than expected results due to a rise in fee income and investment gains. The bank's net interest margin has also gone up to 2.6 per cent due to an improved mix of deposits and assets," said Mr Vishal Goyal, Banking Analyst, Edelweiss Research.

Although the cost of funds has gone up in the last quarter, the bank could pass it on to the customers, Ms Mulye said.

Treasury income has shown a sharp growth of 131 per cent to Rs 310 crore (Rs 134 crore) and a large portion of it has come from selling investments in the BPO company, First Source.

The total deposits registered an increase of 47 per cent while savings deposits alone show an increase of 53 per cent.

Advances have grown by 41 per cent and retail assets increased by 50 per cent to Rs 1,17,914 crore and constituted 68 per cent of advances and 65 per cent of customer assets.

"On the home loans front, investment demand has shown a slowdown (unlike the consumption demand) due to rising real estate prices," she said. In the nine-month period ended December 31, 2006, home loan disbursements were about Rs 21,300 crore.

Provisions and contingencies increased to Rs 890.95 crore (Rs 395.07 crore) which includes provisions of Rs 85.05 crore for potential losses from frauds pertaining to warehouse receipt-based financing product for agricultural credit, the bank said in a press release.

The bank's rural portfolio grew by about 43 per cent on a year-on-year basis.

The net profit rose by 31 per cent to Rs 2,285 crore for the nine-month period ended December 31, 2006, against Rs 1,750 crore a year ago. Its capital adequacy is at 13.37 per cent as on December 31, 2006.

The total assets of the bank's international branches increased to about Rs 40,300 crore (Rs 25,180 crore). It has whollyowned subsidiaries, branches and representative offices in 16 countries, and an offshore banking unit in Mumbai.

The bank added 35 branches and 345 ATMs during the quarter, taking the number of branches and extension counters to 667 and ATMs to 2,681.

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