 Despite posting extremely strong growth in interest income, profit growth for ICICI Bank was modest during the first quarter on rising interest costs and higher provisions. Impressive income growth shows that the bank is not facing any slow down in credit growth and the bank has sustained the growth in fee income. For the quarter ended 30 June, 2006, net profits increased 16.98 per cent to Rs620.01 crore from Rs530.01 crore for the previous year quarter. Total income increased by a very impressive 50.15 per cent to Rs6,316.19 crore from Rs4,206.49 crore for the prior year quarter. Interest income went up by a substantial 61.7 per cent for the quarter while other income, including fee and treasury income, rose by a more modest 17.16 per cent. Fee income increased 49.7 per cent over the previous year quarter to Rs985 crore. Interest expenses rose at a faster 66 per cent over the previous year quarter, resulting in a modest drop in net interest margins. Operating profits for the quarter were higher by 26.84 per cent over the previous year quarter. The modest growth in operating profits was mostly on account of lower treasury profits for the quarter. Operating profits from core operations, excluding treasury income, grew at an impressive 45.18 per cent over the previous year quarter. Staff costs were higher by 59.92 per cent over the previous year quarter and marketing expenses increased 53.78 per cent. Other operating expenses increased 26.47 per cent. Growth in bottom line was considerably affected by a sharp 62.07 per cent surge in provisions for doubtful assets and standard provisions during the quarter. Tax provisions declined modestly by 10.02 per cent. Total deposits with the bank as on 30 June, 2006, was Rs183,006.5 crore, an increase of 60.84 per cent over 30 June, 2005. Total advances made by the bank as of the quarter end stood at Rs147,184.2 crore, an increase of 50.33 per cent as against Rs97,908.78 crore. Retail advances continued to grow at a faster rate of 59 per cent. Retail assets constituted 67.05 per cent of the bank's total advances as of the end of the quarter.
Against a required capital adequacy of 12.8 per cent as of the end of the quarter as per Basel II norms, ICICI Bank's CAR stood at 12.5 per cent. Of this tier I capital adequacy was 8.6 per cent. Net non-performing assets stood at 0.8 per cent of customer assets as compared to 2 per cent as of the end of previous year quarter.
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