Backed by healthy growth in non- interest income, ICICI Bank on Friday reported 15 per cent jump in its standalone net profit for the quarter four (Q4) of financial year 2014 (FY14). But asset quality limited the bottom line growth of the country's largest private lender. Net profit on standalone basis rose to Rs2,652 crore as against Rs2,304.07 crore in the same quarter last fiscal.
On a consolidated basis, net profit grew 9 per cent to Rs2,724 crore in Q4, 2013-14. For the entire fiscal, the profit expanded 15 per cent to Rs11,041 crore.The core net interest income in Q4 grew 15 per cent to Rs4,357 crore, while the non-interest income was up 35 per cent to Rs2,976 crore, ICICI Bank Managing Director and CEO Chanda Kochhar said in the results conference call.Under the other income head, bank's fee income reported a rise of 12 per cent to Rs1,974 crore. Treasury income also stood at Rs245 crore and dividend from subsidiaries was Rs541 crore, while exchange rate gains on repatriation of retained earnings from overseas branches helped with Rs222 crore.
Along with a steady rise in non- interest income, bank also managed to maintain their gross non- performing assets (NPA) ratio. As per the Q4 results, the gross non-performing assets ratio was flat on a sequential basis at 3.03 per cent, even though it had fresh slippages of Rs1,241 crore. Recovery of Rs400 crore helped the bank maintain the NPA numbers flat.
The bank also wrote off Rs700 crore of bad assets during Q4, 2013-14, Kochhar said.In terms of restructured assets, the bank added Rs2,156 crore, taking the total recast book to Rs10,558 crore, she said, adding that it has a pipeline of another Rs1,500 crore for restructuring.These factors resulted in a heavy increase in the provisioning for bad assets by the bank. ICICI Bank increased its provisiong for bad assets to Rs714 crore in Q4 from Rs460 crore in the same quarter last fiscal. This rise in provisioning has been a major reason which has added pressure on the overall bottomline of the private lender.
But while commenting on the asset quality outlook, Kochhar hinted that the worst might just be over. She further said that the bank is at the peak on NPAs and addition to bad assets and restructured assets will be lower in 2014-15.The bank posted advances growth of 17 per cent in 2013-14, driven by 23 per cent expansion in retail assets, while the policy of calibrated approach on the corporate loans resulted in the wholesale book growing by only 8 per cent.
For FY'15, Kochhar said she expects asset book to outpace the system by 2- 4 per cent and end up in the 18-20 per cent mark. Advances growth will continue to be driven by retail, she added.The bank's net interest margin in Q4 was almost flat at 3.35 per cent, but improved by 0.22 per cent for the entire fiscal to 3.33 per cent.Kochhar said the bank will aim to maintain the margin at current levels. The share of the low-cost current and saving account (CASA) deposits was at 42.9 per cent as on March 31, while the average for the quarter was 39 per cent, she said.
For the entire 2013-14 fiscal, the lender's cost to income ratio reduced to 38.2 per cent from the year ago's 40.5 per cent on a tighter look at cost factors and increasing income, Kochhar said, adding that the bank will focus to keep the ratio at the 38 per cent levels in FY15.