‘Growth is back, but our way of functioning will remain the same’
ICICI Bank is back. It has recorded its highest-ever quarterly net profit on a standalone basis at Rs 1,437.02 crore. Besides, the bank has reported no ‘material’ slippages and loan growth of 15.3 per cent year-on-year. Addressing a post-result media teleconference, Chanda Kochhar, managing director and CEO, said it is not done yet and its focus areas remain the same — increasing the share of low-cost deposits and controlling costs and non-performing assets (NPAs). Edited excerpts:
On a consolidated basis, your net profit for the third quarter has jumped 77.5 per cent to Rs 2,039 crore, as against Rs 1,149 crore last year. What is the main reason behind the phenomenal growth?
The main reason is that all our subsidiaries have recorded profits for the quarter. Contribution from subsidiaries to our net profit stood at Rs 600 crore, as against Rs 50 crore in the corresponding period last year.
Which subsidiary has contributed the most?
Although all our subsidiaries have recorded profits in the third quarter, the biggest contribution came from the life insurance business.
However, the operating profit was marginally lower at Rs 2,343 crore, compared with Rs 2,369 crore in the corresponding period last year…
Last year, our operating profit shored up Rs 203 crore on account of a one-time profit from an exceptional item. It was due to the sale of our merchant acquiring business. Obviously it was not there in this year’s book, so the operating profit was lower..
What was the rationale behind attaining a provision coverage ratio (PCR) of 71.8 per cent, despite having time till March 31, 2011?
Our total provisioning for the quarter has declined 53.6 per cent on a year-on-year basis to Rs 464.27 crore, from Rs 1,002 crore. Subsequently, PCR has gone up to 71.8 per cent, which means the quality of our new loan book is quite robust, and going ahead in the next quarter, our provisioning would be lower than the present levels.
The net NPA has declined as well…
Absolutely. It was in sync with our deliberate strategy to improve asset quality — by continuously bringing down unsecured loans — which in the past contributed a major portion to bad loans. There have been no material slippages in the third quarter, and hence, no addition to gross NPA. So, the net NPA ratio has declined to 1.16 per cent from 2.19 per cent a year ago.
You have recorded credit growth of 15.5 per cent in this quarter, a considerable improvement from 5.5 per cent in the quarter ended September 30. Where do you see the credit growth going forward? Does it mean as a bank you are done with the consolidation phase?
We are witnessing healthy credit demand from across sectors such as domestic, corporate, home loans, car loans, commercial vehicle loans, etc. Going forward, as I’ve said earlier, the credit growth for the whole year will be in the range of 18 per cent.
To answer the second question, well, the growth is definitely back. But our way of functioning will remain the same. Our main focus areas remain the same, which is increasing the share of low-cost deposits, or current and savings account deposits, which are 44.2 per cent of the total, and controlling costs and NPAs.
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