Private sector lender ICICI Bank reported a 34% decline in its net profit to ₹2,058.2 crore for the quarter ended September 30 as compared with ₹3,102.3 crore in the year ago. The fall in profit is attributable to the one-time gain of ₹5,682 crore booked in the second quarter of the previous financial year.
This stemmed from the sale of stake in ICICI Prudential Life Insurance Company. However, the bank has also made a one-time gain of ₹2,012 crore during the June-Sep period of this financial year by selling stake in ICICI Lombard General Insurance Company.
Net interest income increased 9% on a year-on-year basis to ₹5,709 while net interest margin remained stable sequentially at 3.27% in Q2-2018, and increased 14 basis points as compared with the year-earlier period. Fee income increased 9% on a year-on-year basis to ₹2,570 crore.
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‘Strong growth’
“We continue to maintain our focused approach to growth, in line with our objective of improving the portfolio mix,” said Chanda Kochhar, MD & CEO, ICICI Bank, in the post-earnings interaction with the media.
“Domestic loan portfolio grew by 12.4% on a year-on-year basis, backed by growth of 18.6% in the retail portfolio. This growth was strong across all products,” she said.
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The bank reported improvement in asset quality with gross additions to non-performing assets at ₹4,674 crore as compared with ₹4,976 crore in Q1 of the current financial year and ₹8,029 crore in the same period of the previous year. The gross NPA ratio declined to 7.87% from 7.99% reported at the end of the June quarter. It was 6.12% in the year-earlier period.
Ms. Kochhar said the report of Reserve Bank of India’s annual inspection report was still awaited, when asked on the divergence identified by the regulator on the disclosure of bad loans. “For us, the report generally comes in the third quarter,” she said. Some of the private sector banks that have announced their second quarter results disclosed significant divergence which impacted asset quality adversely.
“We expect additions to NPA in the current fiscal will be lower than in the previous year,” Ms. Kochhar said.
She also said the bank had exposure of about ₹14,000 crore in 18 accounts in the second list that was prepared by the banking regulator for bankruptcy proceedings.