ICICI Bank (ICBK.NS), opens new tab, India's second-largest private lender by assets, reported higher-than-expected quarterly profit on Saturday, helped by healthy loan growth and net interest income.
The bank's standalone net profit rose 18% to a record 126.30 billion rupees ($1.48 billion) in the January-March quarter, above the average analyst forecast of 118.16 billion rupees, according to data compiled by LSEG.
ICICI Bank's total loans rose 13.9% from the same period a year earlier, led by strong retail demand, while deposits grew by 14%.
Net interest income, the difference between interest earned on loans and paid on deposits, increased by 11% to 211.93 billion rupees.
In a falling interest rate scenario, lenders typically pass on the rate cuts to borrowers, making loans more attractive, but the pass-through to deposit rates comes with a lag, temporarily compressing margins until the adjustment is fully reflected across both sides of the balance sheet.
ICICI Bank's net interest margin, a key gauge of profitability, was 4.41%, from 4.40% a year earlier and 4.25% in the previous quarter.
Asset quality improved, with the gross non-performing assets (NPA) ratio at 1.67% at the end of March, versus 1.96% three months earlier.
Shares of ICICI Bank closed 3.7% higher ahead of the results on Thursday.
($1 = 85.4290 Indian rupees)
