ICICI Bank profit falls 35.3% in Q4

ICICI Bank,the countrys second largest bank,has reported a 35.3 per cent fall in profit after tax for Q4-2009 at Rs 744 crore...

ICICI Bank,the countrys second largest bank,has reported a 35.3 per cent fall in profit after tax for Q4-2009 at Rs 744 crore compared to Rs 1,150 crore in the same quarter in the previous year. It has proposed a dividend of Rs 11 per share proposed,same as the previous year.

According to the bank,the lower profit was primarily due to lower level of fee income at Rs 1,343 crore in Q4-2009 compared to Rs 1,928 crore in Q4-2008,partly offset by lower operating expenses and higher net interest income. The lower level of fee income was due to reduced investment and acquisition financing activity in the corporate sector and lower level of fees from distribution of retail financial products,reflecting the adverse conditions in global and Indian financial markets, the bank said.

Similarly,profit after tax for FY2009 was down by 9.6 per cent at Rs 3,758 crore compared to Rs 4,158 crore for FY2008 due to the higher effective tax rate on account of lower proportion of income taxable as dividends and capital gains.

Story continues below this ad

During the year,the bank has pursued a strategy of prioritizing capital conservation,liquidity management and risk containment given the challenging economic environment,it said. This is reflected in the banks strong capital adequacy and its focus on reducing its wholesale term deposit base and increasing its CASA ratio. The bank is maintaining excess liquidity on an ongoing basis, it said.

The bank has also placed strong emphasis on efficiency improvement and cost rationalization. The bank continues to invest in expansion of its branch network to enhance its deposit franchise and create an integrated distribution network for both asset and liability products, it said.

In line with the new strategy,the total deposits of the bank were Rs 218,348 crore at March 31,2009,compared to Rs 244,431 crore at March 31,2008,the bank said. The reduction in term deposits by Rs 24,970 crore was primarily due to the banks conscious strategy of paying off wholesale deposits.

During Q4-2009,total deposits increased by Rs 9,283 crore,of which Rs 5,286 crore,or about 57%,was in the form of CASA deposits. The CASA ratio improved to 28.7% of total deposits at March 31,2009 from 26.1% at March 31,2008.