Backed by enhanced revenues and a good growth om loans disbursed, India's ICICI Bank reported a 34.2% rise in its net profit for the October-December quarter.
The net profit for the quarter was 83.12 billion Indian rupees ($1.03 billion), compared to 61.94 billion rupees the same quarter the previous year. According to Refinitiv IBES data, this was in line with analysts' forecast of 81.25 billion rupees.
Net interest income, which is the difference between interest earned and interest paid, increased 34.6% to 164.65 billion rupees from 122.36 billion rupees the previous year.
The net interest margin, a key indicator of a bank's profitability, was 4.65% for the quarter, up from 3.96% in the same quarter last year.
The management expects NIMs to peak within the next quarter.
In the fiscal third quarter, the private lender's domestic loan portfolio increased by 21.4% year on year. The retail loan portfolio increased by 23.4% year on year, while corporate loans increased by 18.2%.
Deposits increased 10.3% year on year, owing to higher time deposits.
Due to persistent demand for loans, credit offtake in India has increased in recent months. This has caused banks to compete for deposits. HDFC Bank, India's largest private sector lender, reported a near-20% increase in deposits year on year in the fiscal third quarter last week.
Meanwhile, ICICI Bank's asset quality improved, with the gross non-performing assets (NPA) ratio falling to 3.07% from 3.19% in the previous three months.
The net NPA ratio was 0.55%, down from 0.65% the previous quarter.
Provisions and contingencies, on the other hand, increased to 22.57 billion rupees from 16.44 billion rupees in the previous quarter.
The bank stated that the increase in provisioning is a prudent step to strengthen the balance sheet and not because the balance sheet is under stress.
"We are confident of the quality of book created, (the additional provisioning) is being done on a prudent manner. This is keeping in mind the overall macro environment including inflation, rising interest rates and geopolitical situation," said Sandeep Batra, Executive Director, ICICI Bank in a post earning call.
Yes Bank, another of India's largest lenders, reported a surprise 80% drop in quarterly profit on Saturday as bad loan provisions increased.
For the three months ending December 31, net profit fell to 515.20 million rupees ($6.36 million) from 2.66 billion rupees the previous year. According to Refinitiv IBES data, analysts expected profit to rise to 3.36 billion rupees.
In the third quarter, the net interest margin, a key indicator of a bank's profitability, increased by 10 basis points to 2.5%.
Asset quality improved as gross non-performing assets fell to 2.02% of total loans, down from 12.89% in the previous quarter. Net non-performing assets fell from 3.60% to 1.03%.
In addition, Chief Executive Prashant Kumar stated in a call on Saturday that the bank hopes to recover around 10 billion rupees in the current quarter.
Net interest income, defined as the difference between interest income from lending and interest income paid to depositors, increased 11.7% to 19.71 billion rupees. Provisions increased to 8.44 billion rupees in the third quarter, up from 5.82 billion rupees in the previous quarter.
Yes Bank completed the transfer of 480 billion rupees in bad loans to private equity firm J.C. Flowers in December, in an effort to clean up its balance sheet.
Loan growth improved by 10%, while deposits increased by 16%.
Kumar believes the bank will be able to achieve 15% credit growth for the full year, while overall deposit growth will be in the range of 16%-17%.
As the competition for deposits heats up, the bank fears that it will fall short of its target of 35% for low-cost current and savings account deposits (CASA) this fiscal year.
CASA deposits dropped to 29.9% in the third quarter, down from 31% in the previous three months.
(Source:www.reuters.com)
The net profit for the quarter was 83.12 billion Indian rupees ($1.03 billion), compared to 61.94 billion rupees the same quarter the previous year. According to Refinitiv IBES data, this was in line with analysts' forecast of 81.25 billion rupees.
Net interest income, which is the difference between interest earned and interest paid, increased 34.6% to 164.65 billion rupees from 122.36 billion rupees the previous year.
The net interest margin, a key indicator of a bank's profitability, was 4.65% for the quarter, up from 3.96% in the same quarter last year.
The management expects NIMs to peak within the next quarter.
In the fiscal third quarter, the private lender's domestic loan portfolio increased by 21.4% year on year. The retail loan portfolio increased by 23.4% year on year, while corporate loans increased by 18.2%.
Deposits increased 10.3% year on year, owing to higher time deposits.
Due to persistent demand for loans, credit offtake in India has increased in recent months. This has caused banks to compete for deposits. HDFC Bank, India's largest private sector lender, reported a near-20% increase in deposits year on year in the fiscal third quarter last week.
Meanwhile, ICICI Bank's asset quality improved, with the gross non-performing assets (NPA) ratio falling to 3.07% from 3.19% in the previous three months.
The net NPA ratio was 0.55%, down from 0.65% the previous quarter.
Provisions and contingencies, on the other hand, increased to 22.57 billion rupees from 16.44 billion rupees in the previous quarter.
The bank stated that the increase in provisioning is a prudent step to strengthen the balance sheet and not because the balance sheet is under stress.
"We are confident of the quality of book created, (the additional provisioning) is being done on a prudent manner. This is keeping in mind the overall macro environment including inflation, rising interest rates and geopolitical situation," said Sandeep Batra, Executive Director, ICICI Bank in a post earning call.
Yes Bank, another of India's largest lenders, reported a surprise 80% drop in quarterly profit on Saturday as bad loan provisions increased.
For the three months ending December 31, net profit fell to 515.20 million rupees ($6.36 million) from 2.66 billion rupees the previous year. According to Refinitiv IBES data, analysts expected profit to rise to 3.36 billion rupees.
In the third quarter, the net interest margin, a key indicator of a bank's profitability, increased by 10 basis points to 2.5%.
Asset quality improved as gross non-performing assets fell to 2.02% of total loans, down from 12.89% in the previous quarter. Net non-performing assets fell from 3.60% to 1.03%.
In addition, Chief Executive Prashant Kumar stated in a call on Saturday that the bank hopes to recover around 10 billion rupees in the current quarter.
Net interest income, defined as the difference between interest income from lending and interest income paid to depositors, increased 11.7% to 19.71 billion rupees. Provisions increased to 8.44 billion rupees in the third quarter, up from 5.82 billion rupees in the previous quarter.
Yes Bank completed the transfer of 480 billion rupees in bad loans to private equity firm J.C. Flowers in December, in an effort to clean up its balance sheet.
Loan growth improved by 10%, while deposits increased by 16%.
Kumar believes the bank will be able to achieve 15% credit growth for the full year, while overall deposit growth will be in the range of 16%-17%.
As the competition for deposits heats up, the bank fears that it will fall short of its target of 35% for low-cost current and savings account deposits (CASA) this fiscal year.
CASA deposits dropped to 29.9% in the third quarter, down from 31% in the previous three months.
(Source:www.reuters.com)
