Tides of 31.10.2015

1.     India’s largest private lender ICICI Bank’s net profit grew by 12% to Rs. 3,030 crs for the July-September quarter, compared with Rs. 2,709 crs in the corresponding quarter last year. “Growth was lower due to subdued corporate activity…We expect NPA (non-performing asset) additions to be lower than the total additions last year and we are on track,” said Chanda Kochhar, MD and CEO of the bank. Net interest income (difference between interest earned and expended) increased to Rs. 5,251 crs, up 13% from last year. Other income grew 10% to Rs. 3,007 crs, driven by fee and treasury income. ICICI Bank’s asset quality deteriorated as gross NPAs increased to 3.77% of total loans as against 3.12% a year ago and 3.68% in the previous quarter. Year-on-year, net NPAs also worsened to 1.65% from 1.09 % in the September last year.

2.    Private sector lender Kotak Mahindra Bank’s standalone profit grew 28% year-on-year to Rs. 569.5 crs for the July-September quarter. The earnings included ING Vysya Bank’s figures. Net interest income (difference between interest earned and expended) jumped to Rs. 2,278 crs, up 44% compared with Rs. 1,584 crs a year ago. Other income grew 35% to Rs. 970 crs from Rs. 720 crs. Asset quality deteriorated as gross non-performing assets (NPAs) increased to 2.08% of total loans from 1.59% a year ago and 2.04% in the previous quarter. Net NPAs also worsened a tad to 0.93% from 0.84 % in September last year. Sequentially, net NPAs remained flat. As of September-end 2015, total advances jumped 65% to Rs. 1.35 lakh crs on account of ING Vysya Bank’s loan book. Similarly, total deposits almost doubled to Rs. 1.20 lakh crs. Consolidated profit rose 31% to Rs. 942 crs during the quarter compared with Rs.718 crs in the year-ago period. Consolidated numbers include banking and other businesses, such as broking, insurance and investment banking, among others.

3.    With some of its peers embarking on a journey to transform themselves into small finance banks over the next 18 months, Hyderabad-headquartered SKS Microfinance has decided to do more of what it is already doing. India’s only listed microfinance company will go about strengthening its market share in the rural markets, expand loan portfolio, reduce cost of borrowing, reduce operating costs, and bring down lending rates to below 20 per cent, President S Dilli Raj told BusinessLine in an interview. Though the MFI did not bag the coveted small finance bank licence, that has not dampened Raj’s spirit to grow his company’s business and prepare it for a bank licence, as and when the RBI puts the licensing process on tap.

4.    Lower provisioning helped Karnataka Bank register a 15.6% growth in net profit during the second quarter of 2015-16.The bank’s net profit stood at Rs. 102.25 crs during the quarter against Rs. 88.46 crs in the corresponding quarter of the previous fiscal. Gross NPAs fell to 3.18% (3.53%), and net NPA to 1.96% (2.37 %). The quantum of gross NPAs came down from Rs. 1,060 crs in Q2 2014-15 to Rs. 1,043 crs in Q2 2015-16. The net addition to the NPA was Rs. 10 crs sequentially. In the June quarter, the gross NPA was Rs. 1,033 crs.