ICICI Bank profit up 22% to $307.5mn

Yet rate increases by the central bank have started hurting demand for retail loans.

ICICI Bank Ltd., India's largest private-sector lender by assets, Monday exceeded market expectations with a 22% jump in second-quarter standalone net profit as its loan portfolio grew and it benefited from a sharp decline in provisions.

Net profit for the July-September period rose to 15.03 billion rupees ($307.5 million) from 12.36 billion rupees a year earlier, beating the estimate of 14.18 billion rupees in a poll of six analysts.

Net interest income--the difference between interest earned and interest paid--rose 14% to 25.06 billion rupees.

Interest margin remained steady at 2.6% and the bank said it expects to maintain the margin at the current level in the fiscal year through March.

Despite expectations that aggressive rate tightening by the central bank--13 rate increases since March 2010--to tame inflation may hurt loan demand, ICICI Bank posted 20% growth in its lending business, in line with peers like Axis Bank Ltd. and HDFC Bank Ltd.

However, the rate increases have now started gradually hurting demand, especially for retail loans.
View the full story in The Wall Street Journal.