ICICI first quarter profit surges 30% to $301mn

Dip in bad loans and surge in interest income ushered the profit increase.

ICICI Bank Ltd. (ICICIBC), India’s second- largest lender, said first-quarter profit rose 30 percent after credit expanded at the fastest pace in almost four years and bad loans declined.

Net income increased to 13.3 billion rupees ($301 million), or 11.51 rupees ($0.26) a share, in the three months ended June 30, from 10.3 billion rupees ($233.72 million), or 9.16 rupees ($0.21), a year earlier, the Mumbai- based bank said in a statement to exchanges. That compares with the 13.7 billion rupee ($310.87 million) median of 28 estimates compiled by Bloomberg.

Chief Executive Officer Chanda Kochhar has delivered earnings growth for six straight quarters after the steepest increase in interest rates among major Asian economies failed to deter Indian companies from borrowing. ICICI’s reluctance to match the central bank’s move and raise its deposit rates also helped the lender boost profit.

The bank’s net interest income is “higher” than estimates, said Abhijit Majumder, an analyst at Prabhudas Lilladher Pvt. in Mumbai. “ICICI didn’t get into offering high deposit rates when other banks were doing so.”

ICICI Bank rose 1.9 percent to 1,036.75 rupees ($23.52) at the 3:30 p.m. close in Mumbai, making it the second-best performing stock in the MSCI India/Financials Index.

Kochhar on Friday cut her forecast for credit growth three days after India’s central bank surprised all 22 economists surveyed by Bloomberg News with a half-point increase in the repurchase rate. She expects lending to expand 18 percent in the year to March 31, from her previous forecast of 20 percent.

View the full story in Bloomberg.