ICICI Bank Ltd. posted a more than threefold rise in fourth-quarter profit, helped by strong earnings from its lending business even as it set aside a smaller pot of money to cushion the impact of more bad loans that could result from India's deteriorating covid-19 situation.
Net income at the nation's second largest private lender stood at 44.03 billion rupees ($585 million) for the three months ended March 31, compared with 12.21 billion rupees a year ago. The sharp rise was also driven by a low profit number a year ago.
The bank's domestic loans grew 18%, driven by a robust increase in retail book especially in the mortgage segment. That was sharply higher than a 5.6% growth in the overall banking sector. The bank will focus on customers who meet the internal risk filters and not on any lending targets, executive director Sandeep Batra said at a call after earnings.
"We will focus on growing on a risk-calibrated basis. Whatever goes through risk filters is welcome and the number can be anything," Batra said.
He expects businesses to be more resilient this time than last year due to lessons learnt in the previous wave. While there was still some uncertainty on economic recovery given the pace of spread of infections, the lender is comfortable with its covid buffers, Batra said.
ICICI Bank's gross bad loan ratio was 4.96% at the end of March, compared with 5.42% in the three months prior. It set aside 28.83 billion rupees toward provisioning in the three months through March compared with 59.67 billion rupees a year ago and 27.4 billion rupees in the quarter ended December.
Indian banks are grappling with the impact of a ferocious surge in covid infections which threatens to increase bad loans and derail the nascent economic recovery. The country this week saw the world's biggest one-day jump in virus cases.
Saturday's result comes on the back of steps already taken to fortify its balance sheet. The private lender raised $2 billion last year, among the highest amounts by an Indian bank.
The bank also approved a plan to raise up to 200 billion rupees via debt in the current financial year.