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Treasury income pulls down ICICI Bank net profit in Q1

Chanda Kochhar, JMD and CFO, ICICI Bank

MUMBAI: Despite the negative impact on the bank’s treasury income, ICICI Bank on Saturday reported a net profit of Rs. 728 crore for the first quarter of 2008-09 as compared to Rs. 775 crore in the corresponding quarter of 2007-08.

Core operating profit (operating profit excluding treasury) for the quarter increased by 74 per cent to Rs. 2,308 crore from Rs. 1,330 crore. Net interest income increased by 41 per cent to Rs. 2,090 crore from Rs. 1,479 crore and fee income by 37 per cent to Rs. 1,958 crore from Rs. 1,428 crore.

High interest rates and adverse market conditions significantly affected the bank’s trading portfolio and SLR Securities portfolio and its treasury income during the quarter, ICICI Bank’s Joint Managing Director and Chief Financial Officer, Chanda Kochhar, told reporters here.

“High interest rates have had an impact on our quarter results. However, the corporate and international segments grew by nearly 65 per cent in the quarter and we expect it to grow by around 25 per cent moving ahead,” Ms. Kochhar said. The bank made a total mark-to-market provisioning of Rs. 594 crore during the quarter owing to the depreciation in its bond and equity portfolios, she said.

Savings account deposits increased by 35 per cent to Rs. 43,465 crore from Rs. 32,121 crore. Current and savings account (CASA) deposits constituted 27.6 per cent of total deposits as at June 30, 2008, as compared to 22.4 per cent as at June 30, 2007.

Consolidated advances of the bank and its overseas banking subsidiaries and ICICI Home Finance Company increased by 20 per cent to Rs. 257,287 crore from Rs. 215,293 crore. The bank’s capital adequacy was 13.42 per cent (including Tier-1 capital adequacy of 11.29 per cent). Its net non-performing assets constituted 1.74 per cent of net customer assets.

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