ICICI beats expectations with higher profits

The countrys second-largest bank,ICICI Bank,posted a better-than-expected 2.56 per cent rise in net profit to Rs 1,040 crore in the second...

The countrys second-largest bank,ICICI Bank,posted a better-than-expected 2.56 per cent rise in net profit to Rs 1,040 crore in the second quarter of 2009-10 as against Rs 1,014 crore in the same period last year despite a fall in total income.

Analysts said the banks numbers have beaten the street estimates and the banks shares closed the day higher by 2.38 per cent at Rs 789.60 though the Sensex dipped 156 points. This is because the bank has reported an 18 per cent sequential increase in standalone net profit from Rs 878 crore for the quarter ended June 30,2009. During the quarter,the bank has witnessed higher provisioning on non-performing assets and fall in three major business parameters fee income,advances and deposits. However,interest margin increased from 2.4 per cent in Q1-2010 to 2.5 per cent in Q2-2010.

ICICI Bank managing director and CEO Chanda Kochhar said,The profit growth has been marginal mainly due to a fall in the fee income earned by the bank. For the Q2 2009-10,the bank earned a fee income of Rs 1,386 crore as against fee income worth Rs 1,876 crore earned during the corresponding period last year.

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The banks total income fell to Rs 8,481 crore during the reporting quarter as against Rs 9,712 crore income earned during the corresponding period last year. There has been a 19 per cent sequential decline in total provisions to Rs 1,071 crore for the quarter ended September from Rs 1,324 crore for the quarter ended June 30,2009. The banks net NPA ratio for the reporting quarter was 2.36 per cent as against 1.91 per cent for the quarter ended September 30,2008. The bank restructured loans worth Rs 800 crore in the second quarter of the current fiscal. The banks total loan restructuring amounts to Rs 4,800 crore till date.

The banks lending portfolio also declined to Rs 190,860 crore in the reporting period as against Rs 221,985 crore as on September 30,2008,said Kochhar. The retail unsecured advances went down and hence the fall registered in aggregate advances by the bank as on September 30,2009 on year-on-year basis.