Hit by higher provisioning and mark-to-market losses on its overseas books, the country's largest private sector lender ICICI Bank on Monday reported a 27.44 per cent decline in net profit on a consolidated basis to Rs 651.48 crore during the second quarter ending September 2008, against Rs 897.92 crore in the same period last year.
Consolidated total income of the bank, whose share price recently tumbled on rumours of high exposure to overseas sub-prime loans, rose 12.56 per cent to Rs 15,590.46 crore during the quarter against Rs 13,850.57 crore for the same period last year.
On a standalone basis, net profit rose marginally by 1.16 per cent to Rs 1,014.21 crore against Rs 1,004.60 crore during July-September 2007.
Total income rose 1.29 per cent to Rs 9,712.31 crore.
During the quarter, the bank made provisions for around $78 million on the investment portfolio of its UK subsidiary, which resulted in the operations reporting a loss of $35 million. Its Canadian operations, however, saw an increase in profits to $17.15 million from $2.73 million in the same period last year.
ICICI Bank Joint Managing Director and CFO Chanda Kochhar did not disclose the size of the overseas asset book, but said the bank had decided to be cautious and would lend only to Indian companies.
The bank said it has exited the non-India linked credit derivatives portfolio at no incremental loss over and above the provisions already held.
According to RBI data, ICICI Bank's exposure to five troubled institutions -- Wachovia, Washington Mutual, AIG, Fortis and Lehman Brothers -- was $238 million at the end of July. Its exposure to Morgan Stanley is estimated at $105 million.
On a standalone basis, non-tax provisions rose 43.29 per cent to Rs 923.53 crore against 644.49 crore in the corresponding period last year.
During the July-September period, the bank's net non-performing advances (NPAs or sticky loans) grew 42.47 per cent to Rs 4,232.93 crore against Rs 2,970.94 crore for the same period last year. Net NPAs as a percentage of net advances rose to 1.91 per cent compared with 1.43 per cent in the same quarter last year.
The consolidated net NPA ratio of the bank and its subsidiaries was at 1.60 per cent of net advances. The specific provisions for NPAs (excluding the impact of the farm loan waiver) were Rs 868 crore during the second quarter against Rs 878 crore during April-June 2008.
The bank has, however, said that it has managed to significantly increase the low-cost deposit base with its current and savings accounts (Casa) base rising to 30 per cent of total deposits at the end of September 2008, against 25 per cent a year ago.
Total deposits declined 2.14 per cent to Rs 2,23,401.72 crore for the quarter ended September 2008 against Rs 2,28,306.63 crore during the same period last year.
Consolidated advances of the bank and its banking subsidiaries and ICICI Home Finance Company increased 16 per cent to Rs. 2,64,665 crore on September 30, 2008, from Rs 2,27,583 crore on September 30, 2007.
Unlike previous quarters, the bank did not provide a break-up of growth in retail and corporate advances.
During the July-September quarter, the bank's net interest income increased 20 per cent to Rs 2,148 crore from Rs 1,786 crore for the corresponding period a year ago.
The bank said that its fee income surged 26 per cent to Rs 1,876 crore in the July-September period, as compared to Rs 1,486 crore for the same quarter last year.
The bank's focus on efficiency improvement and cost rationalisation led to a 12 per cent reduction in operating expenses to Rs 1,926 crore in the quarter. Expenses on direct market agents fell 62.33 per cent to Rs 145 crore during the second quarter.
The bank's capital adequacy ratio for the quarter ended September 2008 decreased to 14.01 per cent against 16.76 per cent in the same quarter last year.
