ICICI Bank reports 36% net profit increase

A low risk strategy enables India’s ICICI Bank to post a net profit of US$327 million in the first quarter.

Mumbai-based ICICI, India's second largest bank by assets, reported a huge 36% rise in quarterly profit, its strongest growth in over a year. Analysts attributed the jump to strong loan growth, higher fee income and improved asset quality.

ICICI said it grew its net profit to US$327 million in the fiscal first quarter ended June compared with US$240 million year-on-year. Analysts had expected a profit of US$315 million.

The strong results seemed to confirm the wisdom of the bank’s low-risk strategy as India's economy slows. Analysts said it also show that private banks are better positioned for profit growth in the weakening economy than government-owned banks, which account for 70% of the market.

State-owned State Bank of India, the No.1 lender that controls about a quarter of India’s loans and deposits, has not yet released its financial results.

ICICI's net bad loans as a percentage of total loans dropped to 0.71% from 1.04%. Net interest income, or the difference of interest earned and interest paid rose about a third to US$574 million.