MUMBAI: India’s ICICI Bank Ltd posted its slowest quarterly profit growth in four years as the ability of corporate borrowers to repay loans declined and the amount of funds set aside for bad debt almost doubled.
As a result, banks have increased the proportion of funds they extend to consumers from whom demand for home and car loans in particular has picked up as banks open branches in new territories.
That shift helped ICICI on Wednesday report net profit of 25.3 billion rupees ($404.12 million) in October-December from 22.5 billion a year earlier. That compared with the 24.6 billion rupee mean estimate of 23 analysts polled by Thomson Reuters I/B/E/S.
Net interest income, or the difference between interest earned and paid, rose about 22 percent to 42.6 billion rupees. Tax expense rose 45 percent to 12.1 billion rupees, hurting profit growth.
Shares of ICICI, with a market value of $18.6 billion, briefly fell after the results but pared losses to trade up 0.8 percent.
The broader market was up 0.3 percent. ICICI’s 13 percent profit growth compared with Yes Bank’s 21 percent, HDFC Bank’s 25 percent and IndusInd Bank’s 30 percent.
Bureau Report
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