ICICI aims to grow its domestic loan book by around a fifth this fiscal year ending March 2013, led by consumer loans and working capital, and will be particularly cautious in unsecured retail lending and project finance, where risks are higher, it has said.
It posted a forecast-beating net profit for the July-September quarter of Rs 1,956 crore, compared with Rs 1,503 crore a year ago. Net interest income, the difference between interest earned and interest paid out, rose 35 percent to Rs 3,371 crore.
Analysts, on average, had estimated net profit of Rs 1,880 crore, according to Thomson Reuters I/B/E/S.
Net interest margins, a key gauge of profitability for banks, were steady at 3 per cent.
ICICI's results suggest that profits are more likely to grow at private banks than at government-owned banks, which account for 70 per cent of the market in India, but whose lending decisions are not always driven by commercial considerations, analysts say.
Smaller private lenders HDFC Bank, Axis Bank and Yes Bank all recently reported strong quarterly profit growth.
Earlier on Friday, Punjab National Bank posted an 11.5 per cent drop in quarterly net profit with bad loans as a percentage of total assets rising 2.69 per cent in the September quarter from 0.84 per cent a year ago.
The ratio of bad loans at ICICI dropped to 0.78 percent compared with 0.93 percent a year ago.
So far this year, ICICI shares have risen nearly 60 per cent, outpacing 45 per cent growth in overall bank stocks and the broader Indian market's 23 per cent gain. Its current market value is close to $23.3 billion.
The bank suffered badly from the global financial crisis as many consumer loans went into default, but since then it has tightened lending rules and improved the quality of its loan book.
Infrastructure and power projects mired in land acquisition hurdles and corruption scandals have already started to pinch banks, which are either restructuring loans to these projects or classifying them as bad. Most private sector banks have stayed away from project financing.
"In general, private sector banks have a larger proportion of retail assets. Retail assets, in terms of quality, have been stable and their performance has been good," ICICI chief executive Chanda Kochhar told reporters in a post-earnings call.
ICICI aims to grow its domestic loan book by around a fifth in the fiscal year ending March 2013, led by consumer loans and working capital, and will be particularly cautious in unsecured retail lending and project finance.
Smaller private lenders HDFC Bank Ltd, Axis Bank Ltd and Yes Bank Ltd all recently reported strong quarterly profit growth.
State banks including PNB and Indian Overseas Bank have lagged the broader market and their private peers. They have risen nearly 3 and 9 percent respectively this year.
Copyright Thomson Reuters 2012