Net profit was boosted by the retail lending business and a 35% y-o-y rise in non-interest income in Q4. Non-interest income stood at R2,976 crore against R2,208 crore in the corresponding period last year. Fee income increased 11% y-o-y to R1,974 crore. Lease and other income rose to R757 crore from R340 crore in the same period last year. This also included R222 crore of foreign exchange gain on repatriation of retained earnings from overseas branches.
Net interest income grew 15% y-o-y to R2,652 crore and net interest margins (NIMs) improved by 3 bps from the preceding quarter to 3.35%. Domestic NIMs were at 3.68%.
Asset quality at the bank improved marginally. Gross NPAs decreased by 2 bps from the preceding quarter and stood at 3.03% of gross advances.
ICICI Bank MD & CEO Chanda Kochhar said the addition of bad loans during the quarter was R1,241 crore and loans worth R2,156 crore were restructured during the quarter. The restructured loan portfolio stood at R10,000 crore at the end of March 2014.
However, she said the restructuring pipeline was R1,500 crore. The bank also made recoveries worth R400 crore in the quarter. Provisions for bad loans were R714 crore. Total advances increased 17% y-o-y to R3,38,703 crore and the retail portfolio continued to show healthy growth and rose 23% y-o-y. We expect to grow our loan book by 17-18% in FY15, Kochhar said. Within that, I expect retail loans to grow at the same momentum as this year and we shall be calibrating the corporate and SME book according to the environment.
Total deposits increased 13% y-o-y to R3,31,914 crore and the banks Casa ratio stood at 42.9%. During the quarter, savings account deposits increased by R3,408 crore and current account deposits were up by R1,804 crore.
The ICICI Bank scrip ended the day 2.29% down at R1,269.30 on the BSE.
Expect loans to grow 18-20% in FY15
ICICI Bank managing director & CEO Chanda Kochhar spoke to the media on the banks performance in Q4, which was mainly driven by the retail portfolio and non-interest income. Excerpts:
Could you give us more details on what drove the banks growth
We made R2,976 crore in non-interest income this quarter compared to R2,200 crore in the same quarter last year. Fee income was R1,974 crore against R1,775 crore last year. Treasury income was R245 crore and dividend from subsidiaries was R541 crore. Exchange gains were R220 crore. The retail loan growth was in excess of 20% and closer to 25% and that is where the main growth came from.
What is your outlook on retail and corporate lending And what is your restructuring pipeline like
For loan growth, I expect the system as a whole to grow by 16-18%. We would grow 2-4% higher. So, our growth should be around 18-20%. Within that, I expect the retail portfolio growth to be higher than 20% and continue at the same momentum as this year. And, well keep calibrating the corporate and SME loan books according to the environment. Regarding the restructuring pipeline, our current pipeline is R1,500 crore.
What is your view on interest rates in FY15 given the El Nino effect and with inflation looking upwards
The RBI committee report has clearly given the approach to interest rates. It indicates that it would be targeting certain levels of inflation to be achieved. The RBI governor also clarified in April that the central bank would look through the transient changes that would take place on inflation. I think the interest rates should remain at the current levels for some time. I would say that it would for more than one quarter.
Could you elaborate on plans to calibrate the corporate loan growth
The calibration that I have been talking about for the last 3-4 quarters has resulted in a corporate loan growth of 8% for FY14 compared to 11% in FY13. For the quarter, the growth in the loan book has been flat. Recoveries this quarter have been around R400 crore.
You said additions to NPAs and restructuring will come down in FY15. Are there signs of a turnaround
Well, it depends on how you want to interpret it. With a lot of the restructuring done and some of the clearances for projects and raw material linkages expected, I think one can expect that the additions to be lower than last year.