ICICI profit up 25% on fees and interest

By Sumit Sharma Bloomberg News

MUMBAI: ICICI Bank, one of the largest lenders in India, said first-quarter profit had risen 25 percent as increasing interest rates failed to deter borrowings and the bank earned more from fee income and international operations.

Net income in the three months ended June 30 rose to 7.75 billion rupees, or $192 million, from 6.2 billion in the same period a year earlier, the bank, which completed India's biggest share sale last month, said Saturday.

"The bank has shown good profit growth based on a rise in fee income," said R. K. Gupta, a fund manager at Credit Capital Asset Management in New Delhi.

Interest rates have risen as the Reserve Bank of India increased its overnight lending rate and its cash reserves ratio for banks twice since Jan. 1 to contain inflation that hit a two-year high. ICICI Bank could increase its assets between 25 percent and 30 percent this fiscal year, the company's chief executive, K. V. Kamath, said last month in an interview.

Income and noninterest income combined rose to 92.8 billion rupees from 60.5 billion rupees, the bank said from Mumbai. Noninterest income, including fees and commissions, rose to 17.2 billion rupees from 10.1 billion a year earlier.

Fee income from services and the sales of financial products rose 35 percent to 14.3 billion rupees, it said.

The bank on March 31 raised its lending rate on home mortgages by a percentage point to 12 percent on floating rates and 14 percent on fixed loan rates.

Advances grew by 35 percent to 1.98 trillion rupees as of June 30, and loans to individuals rose 29 percent. Net interest income, or the interest earned on loans minus that paid for funds, rose 16 percent to 17.1 billion rupees from 14.8 billion.

Source:
http://www.iht.com/articles/2007/07/22/business/sxicici.php