ICICI Bank has seen its operating expenses decrease by 12% to Rs 1,688 crore in the second quarter of 2008-09 from Rs 1,926 crore as recorded in the same period in 2007-08. This has been attributed to the bank?s focus on improvement in efficiency and rationalisation of cost.
The cost-to-average asset ratio for second quarter of 2008-09 was 1.7% compared to 2.1% for second quarter of 2007-08, and the cost-to-income ratio for second quarter of 2008-09 was 42.5% compared to 50.5% for the second quarter of 2007-08 . The core operating profit (operating profit excluding treasury) of the bank increased 42% to Rs 2,437 crore for second quarter of 2008-09 from Rs 1,712 crore for second quarter of 2007-08.
Chanda Kochhar, joint managing director, ICICI Bank, said that going forward the bank plans to focus on growing its CASA deposits. ?We are adopting a strategy of focusing on growing the current and savings account deposits and reducing the wholesale term-deposit base,? said Kochhar. Meanwhile business at its UK subsidiary has suffered a net loss of $35 million for the half year ended September 2008, on account of higher provision for its investments abroad. ?After the required provisioning charge in respect of the investment portfolio, including the mark-to-market impact of credit spread widening during the period, the bank has reported a net loss of $ 35 million…However, the net NPAs of this unit are zero, as of September 30,? said Kochhar. ICICI Bank UK?s profit, before the mark-to-market impact and provision on investments was $43 milLion for the first half of the year. Kochhar said that ICICI Bank UK?s capital position continues to be strong with a capital adequacy ratio of 18.4% as of September 30 adding that the deposit base was $4.9 billion as on September 2008, of which 39% was term deposits. Kochhar is confident that the bank does not see any cause for worry in its international operations, despite the global turmoil. ?We project a growth of 30% in our overseas operations,? she said. The bank and its subsidiaries have entirely exited their non-India linked credit derivatives portfolio at no incremental loss over and above the provisions already held.
