MUMBAI (Reuters) – India’s second-largest private lender ICICI Bank (ICBK.NS) posted a better-than-expected record first-quarter net profit on Saturday, helped by higher interest income and loan growth.
The Mumbai-based financial firm’s net profit for the April-June quarter jumped nearly 40 percent year-on-year to 96.48 billion rupees ($1.18 billion), beating analysts’ expectations of 91.8 billion rupees, according to Refinitiv’s IBES data.
Net interest income (the difference between interest income and interest expense) increased by 38% to Rs.182.27 billion.
The net interest margin (NIM) widened to 4.78% from 4.01% in the same period last year, but fell below 4.90% in the first quarter.
“We expect some (margin) compression to continue as deposits are repriced,” Sandeep Batra, executive director of the bank, told reporters on a conference call.
Batra said the NIM decline was in line with the bank’s expectations and could see some easing in margins even in the current quarter.
Overall, he expects the NIM to be “similar” to last year in 2023-24.
Total loans increased by 20.6%, mainly driven by personal loans, while deposits increased by 17.9%.
In India, lending growth has been in double digits in recent months despite interest rates rising 250 basis points since May last year.
Banks are trying to clean up their balance sheets and strengthen their deposit bases in a tight liquidity environment.
HDFC Bank (HDBK.NS), India’s largest private financial institution, said this week that lending volumes rose 15.8% and deposits rose 19.2% in the April-June quarter.
ICICI Bank’s asset quality remained stable, with a total non-performing asset (NPA) ratio of 2.76% at the end of June and 2.81% at the end of March.
Net NPA ratio remained unchanged at 0.48%.
The bank posted provisions and contingencies of Rs.12.92 billion, up from Rs.11.44 billion for the corresponding period last year.
Batra said financiers will continue their bottom-up strategy of branch expansion.
(1 dollar = 81.9800 Indian Rupee)
Reported by Siddhi Nayak.Editing: William Mallard, Jason Neely, Clelia Oziel
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