ICICI Bank Limited’s (IBN) 2010 fiscal third quarter (ended December 31) net earnings rose 6% sequentially to INR11.01 billion (US$237 million). The results were primarily driven by a decrease in loss provisions and reduced operating expenses.
However, net earnings of ICICI Bank were down 13% on a year-over-year basis, primarily due to the absence of treasury income in the reported quarter compared to a treasury income of INR9.76 billion (US$210 million) in the year-ago quarter. This was mainly due to an increase in yields on government securities in the reported quarter compared to a decline in yields in the year-ago quarter.
ICICI Bank’s asset quality improved slightly as the bank’s net non-performing asset ratio was at 2.19%, the same level as of Sep 30, 2009. Besides, there was a 6% sequential decrease in the provision for losses to INR10.02 billion (US$215 million).
Net interest income increased approximately 1% sequentially to INR20.58 billion (US$442 million). Net interest margin increased to 2.6% from 2.5% in the prior quarter. Net interest income was up 3% year-over-year, though there was a decrease in loan book.
ICICI Bank has reported a growth in current and savings account (CASA) deposits and an increase in the CASA ratio. CASA deposits grew by 36% to INR782.47 billion (US$16.8 billion) at Dec. 31, 2009, from INR573.82 billion (US$12.3 billion) at Dec. 31, 2008. The CASA ratio increased to 39.6% at Dec. 31, 2009, from 36.9% at Sep. 30, 2009 and 27.4% at Dec. 31, 2008.
Fee income increased 3% sequentially and 6% year-over-year to INR14.22 billion (US$306 million).
Operating expenses were well controlled and reported a decrease of 3% sequentially and 20% year-over-year to INR13.42 billion (US$288 million).
At Dec. 30, 2009, ICICI Bank’s capital adequacy as per the Reserve Bank of India’s Basel II norms was 19.4% and Tier-1 capital adequacy was 14.2%, well above the requirements of 9.0% and 6.0%, respectively.
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