India's ICICI Bank beats Q1 profit view on strong loan growth
MUMBAI, July 27 (Reuters) -ICICI Bank ICBK.NS, India's second-largest private lender, reported a bigger-than-expected first-quarter profit on Saturday, helped by robust loan growth and healthy core lending income.
The Mumbai-based lender's standalone net profit, excluding subsidiaries, rose 14.6%to a record 110.6 billion rupees ($1.32 billion) in the April-June quarter.
That exceeded analysts' average estimate of 105.61 billion rupees, according to LSEG data.
Net interest income, or the difference between interest earned on loans and paid on deposits, increased by 7.3% to 195.5 billion rupees.
Net interest margin (NIM) -- a key gauge of profitability -- fell to 4.36%, compared with 4.78% a year earlier and 4.40% in the previous quarter due to an increase in the cost of funds.
While Indian banks have seen consistently strong loan demand, helped by healthy economic growth and urban consumption, this has put margins under pressure with banks having to raise deposits to fund the loan growth.
Private lenders Kotak Mahindra Bank KTKM.NS and Yes Bank YESB.NS have reported contractions in NIM for the quarter.
ICICI Bank's total loans grew by 15.9% in the quarter, while deposits increased by 15%.
Its asset quality improved, with the gross non-performing assets (NPA) ratio at 2.15% as of end-June, versus 2.16% at the end of the prior three months.
Provisions and contingencies, or funds set aside for potential bad loans, rose to 13.32 billion rupees, from 12.92 billion rupees a year ago.
($1 = 83.7030 Indian rupees)
Reporting by Siddhi Nayak in Mumbai, Editing by William Maclean
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