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Mumbai, Oct. 28 ICICI Bank reported flat growth of 1.1 per cent in net profit at Rs 1,014 crore for the quarter ended September 30, 2008, against Rs 1,003 crore last year due to lower non-interest income and sluggish growth in credit.

Speaking about the marginal rise in net profit, Ms Chanda Kochhar, Joint Managing Director, ICICI Bank, said: “The net profit depends on the impact of treasury income. Last year we had about Rs 400-crore profit from sale of shares. But this year we have not sold anything.”

The results were in line with market expectations, as most analysts had predicted a net profit growth of between 1 and 3 per cent.

About the flat growth of 7 per cent in credit, Ms Kochhar said, “We are consciously following the strategy of moderate growth in credit. In the current scenario it is better to tighten the credit parameters in both retail and corporate credit.”

The bank has exited small ticket personal loans and is following tighter credit norms in credit card receivables, she added.

Retail loans comprise 55 per cent of the total credit portfolio, while corporate and international portfolio together constitutes 37 per cent.

Total deposits declined by 2 per cent following the bank’s policy of focusing on low-cost CASA (current account savings account), Ms Kochhar said. The share of CASA to total deposits has increased to 30 per cent from 25 per cent last year.

This helped the net interest marginNIM) increase to 2.4 per cent (2.2 per cent). “Going ahead we would concentrate on NIM. We are hopeful of maintaining it because CASA share is going up,” Ms Kochhar said.

In its overseas operations, the UK subsidiary posted a $35-million loss following higher provisions on account of investment in bonds, said Ms Kochhar

The bank also exited its entire portfolio of CDO and CLN, of its overseas units, which was worth $600 million, she added. Credit from overseas operations increased to Rs 57,700 crore (Rs 37,000 crore).

The bank made higher provisions of Rs 923 crore (Rs 644 crore) in the second quarter.

About a likelihood of softening of interest rates, Ms Kochhar said it was too early to say when it will happen. “We have to watch how deposit cost will move. Wholesale deposit rates are still high,” she said.

Shares of ICICI Bank closed at Rs 335.30 on Tuesday, up from the previous close of Rs 316.30, on the BSE.

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