MUMBAI: India’s ICICI Bank on Saturday reported a 34.2% increase in net profit for the October-December quarter, on the back of improved revenues and healthy loan growth.

Net profit for the quarter was 83.12 billion Indian rupees ($1.03 billion) up from 61.94 billion rupees in the same quarter a year earlier. That was in line with analysts’ forecast of 81.25 billion rupees, according to Refinitiv IBES data.

Net interest income, the difference between interest earned and paid, rose 34.6% to 164.65 billion rupees from 122.36 billion rupees last year.

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The net interest margin, key indicator of a bank’s profitability, stood at 4.65% for the quarter, up from 3.96% in the same quarter of the previous financial year. The management expects NIMs to peak within a timeframe of one quarter.

The private lender’s domestic loan portfolio grew by 21.4% year-on-year in the fiscal third quarter. Retail loan portfolio grew by 23.4% year-on-year while corporate loans grew 18.2% on an annual basis.

Deposits grew 10.3% year-on-year, aided by higher timedeposits.

Credit offtake in India has picked up in recent months due to sustained demand for loans. This has led banks to scramble for deposits. Last week, India’s biggest private sector lender HDFC Bank reported a near-20% jump in deposits year-on-year in the fiscal third quarter.

Meanwhile, ICICI Bank’s asset quality improved, with its gross non-performing assets (NPA) ratio at 3.07% as compared with 3.19% in the previous three months. Net NPA ratio was at 0.55% from 0.65% in the prior quarter.

However, provisions and contingencies increased to 22.57 billion rupees from 16.44 billion rupees in the September quarter.

The bank said that the increase in provisioning is a prudent step to strengthen the balance sheet and not because they are witnessing any stress in the balance sheet yet.

“We are confident of the quality of book created, (the additional provisioning) is being done on a prudent manner. This is keeping in mind the overall macro environment including inflation, rising interest rates and geopolitical situation,” said Sandeep Batra, Executive Director, ICICI Bank in a post earning call.