A surge in lending to buyers of homes, cars and consumer goods helped India's second-largest bank, ICICI Bank Ltd, report a higher-than-expected 35 percent rise in fourth quarter net profit on Saturday. ICICI, which is also listed on the New York Stock Exchange, said January-March net profit rose to 6.15 billion rupees ($140 million) from 4.55 billion a year earlier. A Reuters poll had forecast a net profit of 5.48 billion rupees. Net interest income in the past quarter rose 44 percent to 7.9 billion rupees.
ICICI, which has been at the forefront of a retail lending revolution to a growing number of middle-class Indians aspiring for everything from homes to new cars and flat screen TVs, expects individual borrowers to remain key drivers of growth.
"Consumer banking will remain the major driver for Indian banks for at least the next year or two," said K.V. Kamath, ICICI's Managing Director and Chief Executive Officer. "We see consumer credit growth at the same levels as last year for the industry." Retail assets made up 61 percent of the bank's total lending at the end of March, with the portfolio having expanded at a brisk 68 percent on-year, in 2004/05, to 561.33 billion rupees.
ICICI Bank's shares have outperformed the broad market, losing about 3 percent since the start of 2005, compared with a near 7 percent drop in the Bombay Stock Exchange index.
India's top banks are also seeing a pick up in loan growth from companies borrowing to pay for investments in new capacity and acquisitions, as Asia's fourth-largest economy aims to grow at about 7 percent for the second successive year.
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