PTI
Mumbai, Jul 26: A sharp increase in interest rates, negative impact on treasury income and mounting bad loans have hit ICICI Bank's first quarter net profit which fell to Rs 728 crore, down by nearly 6 per cent, from Rs 775 crore in the year-ago quarter.
High interest rates and adverse market conditions significantly affected the bank's trading portfolio and SLR Securities portfolio and its treasury income during the quarter, ICICI Bank's Joint Managing Director Chanda Kochhar said.
"High interest rates have had an impact on our quarter results. However, the corporate and international segments grew by nearly 65 per cent in the quarter and we expect it to grow by around 25 per cent moving ahead," Kochhar said.
The bank made a total Mark-to-Market provisioning of Rs 594 crore during the quarter owing to the depreciation in its bond and equity portfolios, she said.
Retail advances contributed nearly 56 per cent of the lender's total loan portfolio, while it has also contributed significantly to its bad debts during the quarter, she said.
"Retail loans come to around 56 per cent of our total loan portfolio. That has contributed to the bad loans as well," she said. The bank expects that the segment would grow at 5 per cent in this fiscal, Kochhar said.
The net NPAs of the bank, during the quarter escalated to Rs 4,033.57 crore (1.8 per cent), compared to Rs 2,674.19 crore (1.35 per cent) in the year-ago period, while gross NPAs went up to Rs 8,511.36 crore (3.72 per cent) from Rs 5,292.04 crore (2.63 per cent).
With the lending rates moving northward, the bank has seen a visible impact on the demand for new loans during the April-June quarter, Kochhar said.
The savings account deposit-base of the bank grew 35 per cent to Rs 43,455 crore as on June 30, 2008 from Rs 32,121 crore a year-back, with the Current and Savings Accounts Deposits (CASA) alone constituting 27.6 per cent of total deposits, the bank said.
Total advances, including the overseas banking arms and ICICI Home Finance, jumped 20 per cent during the quarter to Rs 2,57,287 crore from Rs 2,15,293 crore in the year-ago period.
The net interest income rose to Rs 2,090 crore, up 41 per cent, Rs 1,479 crore in the corresponding quarter in last year while the fee-income increased 37 per cent, to Rs 1,958 crore compared to Rs 1,428 crore in the year-ago period, it said.
The total income of the bank increased to Rs 9,429.98 crore in the latest quarter, from Rs 9,281.42 crore in the same quarter previous year, while total assets, including its subsidiaries, stood at Rs 4,84,643 crore as on June 30, 2008.
ICICI Bank's overseas subsidiaries, ICICI Bank UK and ICICI Bank Canada raised USD 1.5 billion worth retail deposits in the first quarter, it said.
Besides, the bank's remittance volume rose 35 per cent in the first quarter this year to about Rs 11,400 crore, it said.
The bank's Capital Adequate Ratio as on June 30 stood at Rs 13.42 per cent.