Mumbai: Private sector lender ICICI Bank Monday reported a 13.24 percent increase in its March quarter consolidated net profit at Rs 3,084.92 crore even as bad loans and provisions increased.
On a standalone basis, the net profit rose 10 percent to Rs 2,922 crore on lower loan growth and the resulting net interest income.
According to a BSE filing, consolidated total income has increased from Rs 21,652.96 crore for the quarter ended March 31, 2014 to Rs 24,914.26 crore for the quarter ended March 31, 2015.
The bottom line would have been much lower but for a near threefold rise in forex gains at Rs 726 crore from Rs 245 crore in the year ago period.
The gross non-performing assets ratio zoomed to 3.78 percent from 3.03 percent a year-ago. Accordingly, the provisions for bad assets almost doubled to Rs 1,344.73 crore from Rs 713.78 crore a year ago.
ICICI Bank MD and CEO Chanda Kochchar said the addition to the gross NPA stood at Rs 3,260 crore, of which Rs 2,246 crore came in from the restructured assets alone.
The core net interest income was up 17 percent to Rs 5,079 crore, while non interest income was up by a similar quantum to Rs 3,496 crore during the quarter.
Defending the system of restructuring of assets, which got abolished on March 31, Kochchar said its restructuring pipeline stands at Rs 1,500 crore as some requests had come inside the deadline.
She said the asset quality woes are arising due to certain lumpy loans and the trouble is not on account of sectors like infrastructure, which have been under trouble.
Kochchar hinted that this is the peak of the asset quality woes, saying FY 2016 will be better than FY2015 in terms of both addition to NPAs as well as provisioning.
Certain assumptions on the economic growth made at the time of restructuring have not played out due to the gradual turnaround in the economy, which is resulting in some assets slipping into NPAs, she reasoned.
The ICICI Bank scrip shed 1.85 percent to close at Rs 302.40 on the BSE, as against the 0.95 percent correction on the benchmark.
Share of the low-cost current and savings account deposits increased to 45.5 percent from the 42.9 percent in the year ago period.
ICICI Bank expanded the net interest margin to 3.57 percent from the 3.46 percent in the last quart of previous fiscal.
Kochchar exuded confidence that it will be able to maintain the 3.48 percent level observed for the entire FY 2015, in spite of the aggressive base rate cut.
For FY 2016, the bank is targeting a credit growth of up to 20 percent, up from the 18 percent achieved in FY 2015, and a deposit growth of up to 16 percent, she said.
The demand from corporates for greenfield expansion is yet to set in, Kochchar said, without giving an expectation on by when she expects it to return.
The bank will continue to focus on the retail segment, which grew 25 percent in FY 2015, with the home and auto loans segment being given the most attention, she said.
The corporate segment grew 10 percent in FY 2015 and Kochchar said the growth will be faster in FY 2016.
The bank is also comfortable lending to the unsecured segment like credit cards and personal loans, which grew 20 percent in FY 2915 to now account for 2.6 of the book, Kochchar said, adding there is an internal threshold till which it will be comfortable.
Its capital adequacy stood at 17.02 percent, with the core tier-I at 12.78 percent.
Among its subsidiaries, the life insurance venture's profit after tax increased marginally to Rs 1,634 crore in FY15 from Rs 1,567 crore, while for the general insurance arm's PAT came at Rs 536 crore versus Rs 511 crore.
