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but a wider branch network and strong dealership connections will help ICICI grow in the segment.
"Major growth for ICICI is coming from mortgages and autos. They are actually gaining back their lost market share, but they have a long way to go," said Manish Ostwal, banking analyst with Mumbai-based brokerage KR Choksey.
Consumer lending in 2007 accounted for more than 65 percent of ICICI's assets. It reduced that by almost half after the 2008/09 financial crisis intensified but has since changed track. Its corporate loan business grew just 11 percent in the quarter ended Sept. 30 compared with overall growth of 16 percent.
"Going forward, it will be important to see how they are able to maintain this (retail) growth and manage asset quality pressures," said Jignesh Shial, banking analyst with Mumbai-based IDBI Capital.
Indian economic growth languished near its slowest in three years at 5.5 percent in the quarter that ended in June but was slightly better than expected, signalling the worst may be over for Asia's third-largest economy.
Earlier this month, HDFC Bank ended its record of posting 30 percent on-year profit growth every quarter for the last decade due to investment losses and a squeezed net interest margin.
ICICI's net interest margin, a gauge of profitability for banks, expanded to 3.31 percent during the quarter from 3.00 percent a year earlier. It raised its guidance for the fiscal year to about 3.3 percent.
Net interest income, or the difference between interest earned and paid, rose about 20 percent to 40.4 billion rupees.
Net non-performing loans, as a percentage of total assets, rose to 0.85 percent from 0.82 percent in the prior quarter. Debt restructuring, or steps to ease payment terms for stressed borrowers, grew 15 percent on quarter.
It has a debt restructuring pipeline of 20 billion rupees so far, Kochhar told reporters, adding asset quality pressures are likely to continue.
Prolonged economic slowdown is impairing borrowers' ability to repay loans. Non-performing loans for Indian banks account for nearly 4 percent of total assets compared with a global average of 2.6 percent, according to Thomson Reuters Starmine. ($1 = 61.4175 Indian rupees)