ICICI has reported better-than-expected earnings for the
second quarter, a period in which India’s largest private-sector
bank suffered a brief run on some of its branches in the south of
the country, posting a rise in profits.
Net profit was INR10.14billion ($205.3 million) in the quarter
to the end of September, compared with INR10.03 billion in the same
period last year, with net interest and fees and commission income
up by 20 and 26 percent respectively.
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But while ICICI was able to report that deposits were only down
marginally, by 2 percent, it has increased funds set aside for bad
loans and losses on investments in the quarter to INR9.24 billion,
up 43 percent compared with a year ago. During October, the ICICI
share price lost around half its value and the bank rushed out
television advertisements in which the bank assured customers the
bank was sound.
Firmly refuting rumours about the bank’s financial strength,
ICICI joint managing director Chanda Kochhar said in a statement:
“On the contrary, the financial health of the bank is only
improving. We have shifted our focus on retail deposits and they
are on the rise.
“During the year ending September, retail deposits have surged
to over 52 percent of the total deposits from less than 50 percent
and bulk deposits have come down to 48 percent from over 50
percent.”
ICICI has increased its capital adequacy ratio to 14.2 percent
from 13.2 percent, and said Kochhar: “We have probably the highest
CAR among banks in the country.”
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By GlobalDataIn the past 18 months, ICICI has expanded its branch network
massively, from 750 outlets to almost 1,400 units and has plans to
expand further.
Kochhar told analysts after presentation of the results: “We
have not yet applied for any new branches but we are looking at
further expanding our branch network, and we will soon be making an
application.”
In the past year, Kochhar said the bank had tightened its credit
norms substantially in businesses such as credit cards and
two-wheeler loans and had exited completely from “small-ticket
personal loans” at the end of last year.
