ICICI Bank, India's second largest commercial bank, beat market expectations on Friday with a quarterly profit of Rs 3.38 billion, driving its shares up more than one per cent.
The New York-listed bank, which merged with its founder ICICI Ltd in March 2002, benefited from big reversals of provisions made earlier, which more than offset a fall in earnings from treasury operations.
A Reuters survey of five brokerages released on Thursday had forecast an average net profit of Rs 2.95 billion for the January-March quarter. "The numbers have beaten the street, although the net profit has been helped to some extent by higher other income and tax write-backs," said Arun Kejriwal, director at KRIS.
The bank reported a net profit of Rs 3.3 billion in October-December 2002.
The bank posted a net profit of Rs 568.8 million a year earlier, but year-ago numbers are comparable due to the merger.
The results for the last quarter included other income of Rs 4.09 billion. Write-backs of provisions totaled Rs 1.72
"Although treasury income has declined, interest income has grown aggressively and made up for the shortfall," said a banking analyst at a domestic brokerage.
ICICI Bank said its profits from treasury operations fell to Rs 170 million in the latest quarter from Rs 1.8 billion in the preceding three months.
Indian banks have reported strong growth in earnings from bond trading for several quarters in a row following a steep fall in bond yields but that is expected to slow down in coming quarters as yields stabilise.
The benchmark 10-year bond yield, which has plunged over 500 basis points in the past two years, hit record lows in January before edging up on concerns over rising inflation.
ICICI Bank's shares ended up 1.34 per cent at Rs 131.95 at 1008 GMT on Friday, while the main Bombay index was down 0.45 per cent.
The stock has fallen more than six per cent since the start of this year, while the index has slumped over 13 per cent.
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