Mumbai: ICICI Bank Ltd, India’s largest private sector lender by assets, posted the slowest quarterly profit growth in five years as bad loans increased.
Net income climbed 10 per cent to Rs29.2 billion (Dh1.7 billion), or Rs4.99 rupees a share, in the three months to March 31 from Rs26.5 billion, or Rs4.57, a year earlier, the Mumbai-based bank said in a filing Monday. ICICI shares fell to a more than six-month low after erasing earlier gains.
The bank led by Chief Executive Officer Chanda Kochhar is attempting to curtail soured debt and improve loan growth by passing on two central bank interest-rate cuts this year to consumers. ICICI Bank lowered its base rate earlier this month to 9.75 per cent, the lowest among India’s largest lenders.
“With the relentless focus on improving asset quality, profit growth at the lender will pick up,” Hatim Broachwala, a banking analyst at Nirmal Bang Institutional Equities Ltd. in Mumbai, said by phone before the earnings were announced. “Easing interest rates and a revival in the economy is expected to support this growth.”
ICICI shares sank 2.3 per cent to Rs301.25, the lowest intraday level since October 17, as of 2:46pm. Mumbai time. The stock slumped 15 per cent this year.
While the bank’s quarterly profit beat the Rs28.9 billion-median of 27 analyst estimates, the year-on-year growth was the lowest since a 13 per cent slump in the final three months of 2009, data compiled by Bloomberg show.
ICICI’s gross non-performing assets climbed to 3.78 per cent of total advances from 3.03 per cent a year earlier, according to the filing.