The country's second largest private sector lender ICICI Bank reported 2.6 per cent jump in net profit during the second quarter ended September 30, 2009, expects its loan growth to pick up and slippages to decline in the latter half of the fiscal.
ICICI Bank's net profit in Q2 rose to Rs 1,040 crore from Rs 1,014 crore a year-back.
Consolidated net profit rose by 76 per cent in the quarter to Rs 1,144.57 crore on lower losses in life insurance business and higher profits in other subsidiaries.
Moving ahead, the bank sees double-digit growth in certain loan portfolios like home-loans, car and project finance as there is a pick up in economic activities, Managing Director & CEO, Chanda Kochhar, said.
However, credit growth for the full year is likely to be in single digit owing to sluggish growth in the first half. The bank plans to reduce retail unsecured loans to 6-7
per cent of its total advances by end-fiscal in a bid to enhance its asset quality, Kochhar, said.
"We continue to bring down our unsecured loan portfolio ... it is expected to come down to 6-7 per cent of total advances by the end of this year," Kochhar said.
ICICI Bank, which was reducing its loan-book size, especially in the retail segment, has completed the first phase of its balance-sheet contraction, Kochhar said.
The bank's net non-performing assets, as on September 30, stood at 2.36 per cent compared to 1.91 per cent in the year-ago period.
The lender expects NPAs to come down further in the remaining part of the year and has made a lower provisioning in the second quarter, at Rs 1,071 crore against Rs 1,324 crore made in the first quarter, Kochhar said.
The bank would also focus on increasing its current and savings account ratio, which currently stands at 36.9 per cent compared to 30 per cent in the year-ago period.
The net interest margin of ICICI Bank increased from 2.4 per cent in the first quarter to 2.5 per cent in the second quarter.
The bank has a capital adequacy ratio of 17.7 per cent. Total deposits are at Rs 1,97,832 crore. The bank reduced its loan-book size to Rs 1,90,860 crore in Q2 FY 10 from Rs 1,98,102 crore as on June 30, 2009.
The lender attributed this to a decline in its agricultural loan portfolio and repayments from the retail loan portfolio.
Total income declined to Rs 14,595.85 crore during the July-September quarter from Rs 15,590.46 crore in the same period a year ago, the bank said.