In the news for all the wrong reasons, ICICI Bank posted its second quarter results for the period ended 30th September 2008. Not as bad as expected but yet, much below the 3% growth rate in PAT predicted; India’s largest private sector bank posted a marginal 1.09% YoY rise in 1.09% in net profit at Rs 1,014 crore. Sequentially, PAT rose 39%.
Net interest income increased 20% to Rs. 2,148 crore and its fee income increased 26% to Rs. 1,876 crore. Its operating profit rose 42% YoY to Rs 2,437 crore.
But the story does a complete turnaround when we look at the consolidated numbers. For Q2FY09, on a YoY, PAT declined 27.44% to Rs 651.48 crore for the quarter ended September 2008. Consolidated revenues went up just 12.56% to Rs 15,590.46 crore.
The bank's capital adequacy at the end of September 2008 stood at 14.01%, with Tier-1 capital adequacy being at 11.03%. The consolidated net non-performing asset (NPA) ratio of the bank and its subsidiaries was 1.6%.
ICICI increased funds set aside for bad loans and losses on investments in Q2FY09 to Rs.924 crore, up 43% from Rs.644 crore made in Q2FY08. This increased provision is indeed a worrying factor.
The bank had stated earlier that it may set aside $28 million for MTM losses on its $82 million Lehman debt at its UK unit. But the figure for current Q2 indicates that it has posted a loss of $35 million in its U.K. operations during the six months to Sept. 30. Overseas operations account for 25% of ICICI’s assets.
Investor confidence in the stock is at rock bottom. There has been an ongoing bout of sell off on the counter since it disclosed its investments in the bankrupt Lehman Brothers Holdings Inc. Overseas investors reduced their holding in ICICI to 36.4% in current Q2 from 38.9% in current Q1.
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