ICICI Bank shares surge as loan growth pushes profits to record

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The shares of ICICI Bank Ltd. climbed after the lender posted a record second quarter profit, supported by strong loan growth as consumer demand improved in India.

The net income of the country’s second-largest private lender was 55.1 billion rupees ($ 734 million), the highest on record in the quarter ended September, from 42.5 billion rupees a year ago. year, he said in a statement on Saturday. This exceeds the average estimate of 49.8 billion rupees from nine analysts in a Bloomberg survey.

The bank’s shares jumped 10.9% on Monday, the highest since February 1. This compares to a 2.3% increase in the S&P BSE Bankex index and 0.2% in the benchmark BSE Sensex index.

The results come after HDFC Bank Ltd., India’s largest private lender, beat earnings estimates due to improving credit growth. Banks are offering decade-low interest rates to individuals for the purchase of homes, cars and other consumer goods to increase their loan portfolios. Companies like automakers and e-commerce giants are also offering discounts to boost sales.

“ICICI is one of the best positioned among its peers to gain market share in lending as the Indian economy recovers,” Bloomberg Intelligence analysts Rena Kwok and Sheenu Gupta wrote in a note.

The Indian economy affected by COVID begins to recover with a rebound in diesel consumption during the first half of October. Private consumption accounts for more than half of the growth of the economy.

“Looking ahead, we are optimistic about the growth of the Indian economy,” said Sandeep Batra, executive director of ICICI Bank, during a media call. “We see many opportunities to increase our core operating profit in a calibrated manner. “

ICICI Bank’s bad debt ratio narrowed to 4.8 percent in the three months to September, from 5.2 percent in the previous quarter. It set aside provisions of 27.1 billion rupees in the September quarter, down from 28.5 billion rupees in the previous three months. The lender’s domestic loan portfolio grew 19% year-on-year.

The Mumbai-based bank issued the most credit cards after the banking regulator banned competitor HDFC Bank from providing new ones, local media reported.

“Everyone always used to ask who the next HDFC bank was, and we could never find a suitable alternative,” said Suresh Ganapathy, research analyst at Macquarie Capital Securities. “But that has changed now.”


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