Domestic loan growth, at 14% y-o-y, was close to the industry average with ICICI Bank once again adjusting its lending mix. The bank calibrated the growth in the corporate portfolio to 11% y-o-y from 20% y-o-y in the April-June quarter. Retail loans, however, grew at a faster clip of 20% and are expected to show 22-23% growth during the fiscal.
Explaining the moderation in corporate credit growth, ICICI Bank managing director and chief executive officer Chanda Kochhar said the bank has imposed internal limits on exposure to certain sectors and companies. We have the ability to grow faster than 11% but were watching the environment and being selective about loans, Kochhar said, adding that corporate credit growth should be in the region of 14-15% for the year. The banks retail book now constitutes 36% of the total loan book of R3,17,786 crore as opposed to 33% in the corresponding quarter last year.
Meanwhile, the banks net interest margin (NIM) showed a 4 basis points (bps) improvement on a sequential basis at 3.31%. On an annual basis, the NIM rose 31 bps.
For FY13 we had achieved an NIM of 3.11%. We had earlier said that we would achieve a 10 bps increase this year but now we think we could do a 20 bps increase. So NIMs should be around 3.31% for the full year, Kochhar said on a conference call after announcing the quarters results. Improving NIMs were due to a better performance from the international branches, the CEO said.
International margins improved 20 bps from the previous year to 1.8% due to improved lending and better management of cost of funds at these branches. Kochhar expects international NIMs to stabilise around these levels.
Domestic NIMs remained flat at 3.65% compared with the September 2012 quarter.
The ICICI Bank stock ended at Rs 1021.65 on the BSE on Friday, unchanged from the previous day's close.
The bank's asset quality situation worsened marginally with net non-performing assets (NPAs) rising 9.3% from the June quarter to Rs 2,707 crore. As a ratio of customer assets, net NPAs stood at 0.73%, up 4 bps sequentially. Gross NPAs, however, eased to 3.08% compared with 3.23% in the previous quarter.
The bank also took a write-off worth Rs 550 crore during the quarter. It also restructured loans worth Rs 1,076 crore, taking the restructured loan portfolio to Rs 6,826 crore. Kochhar said the pipeline for restructured loans was close to Rs 2,000 crore.
Slippages during the quarter were at nearly Rs 1,100 crore and the bank expects the trend to continue for a few more quarters ahead.
"We must remember that the pressure that continues on cash flows is going to continue for some time. I don't think we are at the end of the challenges," Kochhar said, adding that small and medium enterprises and the commercial vehicle segments are showing weakness.