ICICI Bank's Q2 profit jumps 20% on strong loan growth; HDFC Bank posts modest 5% rise

ICICI Bank and HDFC Bank, India's two biggest private sector lenders, announced their results for the July-September quarter on Saturday, showing a clear gap in profit growth even as both reported cleaner loan books.

ICICI Bank: profit up 20.1 per cent

ICICI Bank's standalone net profit rose 20.1 per cent from a year earlier to Rs 14,843 crore, helped by strong loan growth and lower provisions for bad loans. Consolidated profit climbed about 22 per cent to Rs 16,333 crore. Net interest income, the difference between interest earned and paid, grew 17.7 per cent to Rs 25,339 crore, though the net interest margin eased to 4.18 per cent from 4.30 per cent a year earlier.

Total advances grew 30 per cent year-on-year to Rs 18.32 lakh crore, or about 24 per cent excluding loans linked to FCNR(B) foreign currency deposits. Deposits rose 27 per cent to Rs 20.50 lakh crore. The gross NPA ratio improved to 1.20 per cent from 1.58 per cent a year ago, and the net NPA ratio stood at 0.30 per cent.

HDFC Bank: single-digit growth

HDFC Bank reported standalone net profit of around Rs 19,500 crore to Rs 19,600 crore, an increase of roughly 5 per cent from a year earlier; published reports differed slightly on the exact figure. Net interest income rose 9.7 per cent to about Rs 34,620 crore, and the net interest margin was 3.16 per cent on total assets. At least one report said the numbers fell short of analyst expectations.

The bank's gross NPA ratio fell to 1.11 per cent from 1.24 per cent a year earlier, while net NPA was 0.37 per cent. Gross advances grew 16.3 per cent to Rs 32.20 lakh crore. Outgoing chief executive Sashidhar Jagdishan said he expected margins to start improving from the next quarter.

Leadership changes at HDFC Bank

HDFC Bank also said deputy managing director Kaizad Bharucha will leave at the end of December after three decades with the lender. Anup Bagchi is set to take over as managing director and CEO from Jagdishan on October 27.

Why it matters

The two banks together hold a large share of India's private sector credit, and their results are watched as a signal for loan demand and asset quality across the economy. The numbers come ahead of market trading on Monday, when investors will also be weighing the impact of high crude oil prices on the wider market.