(Bloomberg) -- ICICI Bank Ltd. reported profits that surpassed analyst expectations as demand for retail loans continues to be strong in the world’s most populous nation. 

Net income rose to 107 billion rupees ($1.28 billion) for the three months ended March 31, the lender said in an exchange filing on Saturday. That beat the average estimate of 102.31 billion rupees in a Bloomberg survey of analysts. 

Indian banks continue to enjoy profit growth on the back of strong credit expansion. Total outstanding loans at the Mumbai-based lender grew by 16.2% over the last year to 11.8 trillion rupees, filings showed.

Regulators in the country have become concerned about a potential build-up of risks from rapid growth in unsecured consumer loans. They have sought to limit the industry’s expansion, and have warned of potential frauds and lapses in customer verification. 

On Thursday, a glitch in ICICI’s app exposed data on about 17,000 new credit card customers. Earlier this week, the Reserve Bank of India banned Kotak Mahindra Bank, one of the country’s largest private lenders, from issuing more credit cards and adding new customers through its digital channels, after outages in its technology systems. 

ICICI Bank has no budget constraints for IT and customer protection spends, Sandeep Batra, executive director, of the lender said in a conference call after earnings announcement. The bank’s spends on technology and cybersecurity has increased to 9.4% in the year to March 31 from 5.6% in 2019, he said.

The lender’s gross bad loan ratio narrowed to 2.16% in the March quarter, from 2.3% in the preceding quarter. The bank’s board recommended a dividend of 10 rupees per share for the year to March 31, and approved raising $1.5 billion through sale of overseas debt.

Other details from earnings statement:

  • Provisions fell by 32% from the previous quarter to 7.18 billion rupees
  • Net interest margin narrowed to 4.4% from 4.9% in the previous year
  • Total deposits grew by 20% from the previous year to 14.13 trillion rupees

 

 

--With assistance from Divya Patil.

(Updates with comments from a bank official in fifth paragraph.)

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