ICICI Bank profit rises 20% on higher net interest income

what happened

ICICI Bank, India's second-largest lender by market capitalisation, reported a 20% year-on-year rise in second-quarter net profit, to 14,843 crore rupees. The growth was driven by an 18% increase in core net interest income. The bank, one of three lenders India's banking regulator considers systemically important, earned 12,359 crore rupees a year earlier, according to ru.tradingview.com.

Treasury operations swung to a loss of 230 crore rupees, against income of 220 crore rupees a year before, mainly because yields on government securities rose sharply. Net interest margin eased to 4.18% from 4.36% in the previous three months. Executive director Sandeep Batra linked the dip to strong mobilisation of foreign currency non-resident deposits and spending on branch expansion.

why it matters

The market takeaway is Batra's warning that the margin may dip further in the third quarter, since the effect of FCNR(B) deposit mobilisation has not fully played out. The bank raised $18 billion through that regulatory window. The inflow supports dollar liquidity in the banking system but pressures margins, which can weigh on sentiment toward Indian bank stocks and the rupee.

market impact

Indian banks and the rupee: strong profit supports the sector, but narrower margins are a risk to momentum

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