ICICI Bank Q3 profit up 13% at Rs 2,532 crore, gross NPAs rise

Written by Agencies | Mumbai | Updated: Feb 2 2014, 00:00am hrs
ICICI BankICICI Bank's Q3 consolidated net profit rises 8.6 per cent to Rs 2,872.30 crore against Rs 2,644.61 crore in the year-ago period.
ICICI Bank today reported a 13 per cent rise in standalone net profit at Rs 2,532 crore for the third quarter ended December 2013.

The bank had posted net profit of Rs 2,250 crore in the same quarter of 2012-13. On a consolidated basis, the bank's net profit rose 8.6 per cent year-on-year to Rs 2,872.3 crore from Rs 2,645 crore during the period.

The lender's total income on standalone basis in Q3 2013-14 increased to Rs 14,255.96 crore, from Rs 12,352.91 crore in the year-ago period, ICICI Bank said in a statement.

Its operating profit in Q3 rose by 29 per cent to Rs 4,439 crore, as against Rs 3,453 crore in the year-ago period.

As of December 31, the bank's portfolio quality improved, with gross NPAs rising to 3.05 per cent of gross advances, as against 3.31 per cent year a year ago.

However, its net NPAs during the third quarter rose to 0.94 per cent, from 0.76 per cent in the period a year earlier.

During the three quarters (April-December) of 2013-14, the bank's net profit on standaone basis rose by 19 per cent to Rs 7,158.47 crore, as against Rs 6,021.40 crore in same period of 2012-13.

Its total income rose to Rs 40,140.68 crore in the nine months, from Rs 35,847.78 crore in the year-ago period.

ICICI Bank posts slowest quarterly growth in four years


India's ICICI Bank Ltd posted its slowest quarterly profit growth in four years as the ability of corporate borrowers to repay loans declined and the amount of funds set aside for bad debt almost doubled.

India's biggest private sector lender, like rivals Yes Bank Ltd, HDFC Bank Ltd and IndusInd Bank Ltd, has had to contend with a wave of defaults by companies struggling to make ends meet as India's economy grows at its slowest pace in a decade.

As a result, banks have increased the proportion of funds they extend to consumers from whom demand for home and car loans in particular has picked up as banks open branches in new territories.

That shift helped ICICI on Wednesday report net profit of 25.3 billion rupees ($404.12 million) in October-December from 22.5 billion a year earlier. That compared with the 24.6 billion rupee mean estimate of 23 analysts polled by Thomson Reuters I/B/E/S.

Net interest income, or the difference between interest earned and paid, rose about 22 percent to 42.6 billion rupees.

Tax expense rose 45 percent to 12.1 billion rupees, hurting profit growth.

Shares of ICICI, with a market value of $18.6 billion, briefly fell after the results but pared losses to trade up 0.8 percent. The broader market was up 0.3 percent.

ICICI's 13 percent profit growth compared with Yes Bank's 21 percent, HDFC Bank's 25 percent and IndusInd Bank's 30 percent.


Of 50 analysts following ICICI, 44 recommend or strongly recommend buying the bank's shares, according to Thomson Reuters Starmine.

The remaining six advise investors to stick with their current ownership, as some expect revenue growth to slow in coming quarters and credit costs to rise.

"We believe the bank is past its best in earnings, at least in the medium term," Kotak Securities banking analyst M. B. Mahesh said this month in a research note.

Net interest margin, a gauge of profitability, is likely to narrow because of a switch in focus to retail lending, Mahesh said.

ICICI's net interest margin grew to 3.32 percent from 3.07 percent, higher than an industry average of around 3 percent.

Net non-performing loans as a percentage of total assets rose to 0.94 percent from 0.76 percent, primarily because of corporate defaults. The industry average is 2 percent.

Mahesh changed his recommendation on ICICI to buy from sell after the stock fell 12 percent over the past two months. Even so, he maintains a "cautious" view on the stock.

Shares of ICICI, 38.4 percent held by foreign investors including Deutsche Bank Trust Company Americas and Merrill Lynch Capital Markets, are undervalued when compared with peers, trading at 1.8 times the book value of the bank's assets, according to Thomson Reuters Starmine.

By comparison, HDFC Bank trades at 4.4 times its book value, IndusInd Bank at 3 times and Yes Bank at 2.2 times