India’s ICICI bank quarterly profit down 35 pct on low fee income, braces for more bad loans

India’s ICICI bank quarterly profit down 35 pct

MUMBAI, India — ICICI Bank Ltd., India’s largest private bank, said Saturday that its quarterly profit slid over 35 percent as the global financial crisis eroded fee income in commercial and retail banking.

The bank said it was also bracing itself for rising bad loans by increasing provisions.

ICICI said its net profit after tax for the January to March quarter was 7.44 billion rupees ($147 million), down from 11.5 billion rupees in the same quarter last year.

Total income slid to 92.0 billion rupees ($1.8 billion) from 103.9 billion rupees.

Chief financial officer Chanda Kochhar told reporters Saturday that she expects to see moderate loan growth of 5 percent to 10 percent during the current fiscal year.

“Given the current scenario, the priority is to conserve capital and maintain the quality of book,” she said.

Kochhar is to take over as chief executive after K.V. Kamath retires on April 30.

ICICI said that to conserve capital and contain risk, it trimmed its loan book 3.5 percent to 2.18 trillion rupees ($43 billion) as of the end of March, down from 2.26 trillion rupees at the same time last year.

It also increased provisioning for bad loans over 14 percent last quarter to 10.85 billion rupees ($214 million), up from 9.48 billion rupees during the same period last year.

The bank said deposits slipped 10.7 percent from a year ago to 2.18 trillion rupees ($43 billion).

Despite the headwinds, ICICI has continued to invest in its branch network. ICICI has 1,438 branches across India, up from 755 branches two years ago, and says it is in the process of opening 580 more.