ICICI Bank Q3 Profit & NII Rise 14%, Asset Quality Worsens

ICICI Bank missed street expectations on Friday with the third quarter net profit rising 14 percent year-on-year to Rs 2,889 crore, aided by other income and net interest income. However, higher provisions restricted profit growth. Profit was expected at Rs 2,923 crore and NII at Rs 4,874 crore for the quarter, according to the average of estimates of analysts polled by CNBC-TV18. Net interest income (NII ) grew 13.9 percent to Rs 4,812 crore during October-December quarter from Rs 4,225 crore in the year-ago period. NII is the difference between interest earned and interest expended. Net interest margin improved to 3.46 percent for the December quarter compared to 3.42 percent in previous quarter and 3.32 percent in the year-ago period. 

Other income (non-interest income) climbed 10.4 percent year-on-year to Rs 3,091.7 crore in the quarter gone by and operating profit surged 13.5 percent to Rs 5,037 crore during the same period. Provisions for bad loans shot up 41 percent year-on-year (up 15.4 percent sequentially) to Rs 980 crore with provision coverage ratio at 63.5 percent as on December 31, 2014. Asset quality was worsened during the quarter as gross non-performing assets (NPA) increased 35 basis points year-on-year (up 28 bps quarter-on-quarter) to 3.4 percent and net NPA rose 33 bps Y-o-Y (up 18 bps Q-o-Q) to 1.27 percent. In absolute term, gross NPA climbed 25.8 percent on yearly basis (up 13.3 percent sequentially) to Rs 13,082.6 crore and net NPA jumped 53 percent Y-o-Y (up 21 percent Q-o-Q) to Rs 4,773 crore in the quarter gone by. 

Total advances increased 13 percent year-on-year to Rs 3.75 lakh crore at the end of December quarter and the year-on-year growth in domestic advances was 16 percent. ICICI Bank said it has continued to see robust growth in its retail disbursements resulting in a year-on-year growth of 26 percent in the retail portfolio at December 31, 2014. The retail portfolio constituted about 41 percent of the loan portfolio of the bank at the end of quarter. Total deposits increased 12 percent year-on-year to Rs 355 lakh crore during the quarter with the CASA ratio improving to 44 percent in Q3FY15 (from 43.7 percent in Q2FY15). Meanwhile, ICICI Prudential Life Insurance Company achieved profit after tax of Rs 462 crore for Q3FY15 compared to Rs 428 crore for Q3FY14, said the company in its filing to the exchange. 

At 14:47 hours IST, the stock was quoting at Rs 359.25, down Rs 20.70, or 5.45 percent on the BSE.