MUMBAI: ICICI Bank posted a 35% rise in net profit for the third quarter ended December 31, 2007. Profits rose to Rs 1,230 crore as against Rs 910 crore in the corresponding period of the third quarter, exceeding market expectations. However, the bank saw a rise in its bad loans and a slowdown in retail advances. The bank also had to set aside Rs 150 crore due to the sub-prime crisis. High interest rates which had slowed down the pace of retail loans have also affected ICICI Bank, the most aggressive player in the market. Retail loans as a percentage of total advances have dropped to 61% at the end of the third quarter as against 63% at the end of quarter of quarter two. The bank’s focus on international operations have grown with these advances now at 21% as against 17.9% in the previous quarter. According to ICICI Bank’s joint MD and CFO, Chanda Kochhar, “The growth in retail advances is in line with the industry growth. The industry growth has dropped from 30-35% to now grow at 10-15%. International growth is taking a mauch larger market share as the bank is looking at a larger share of financing to Indian corporates both on foreign currency funding and also merger and acquisitions.” Advances of the bank grew by 24.7% on a yearly basis to Rs 2,15,517 crore as on the end of third quarter. Advances as at the end of the second quarter was at Rs 2,07,121 crore. According to Ms Kochhar, there has been a rise in securitisation to Rs 4,000 crore in the third quarter as against Rs 1,000 crore in the second quarter. As expected by the market, the bank’s non performing loans have risen. The net non performing assets grew to Rs 3,301 crore at the end of the third quarter from Rs 1,800 cr in the corresponding period of the previous year. “There has been a change in composition in advances. The proportion of unsecured loans have increased to 15% from around 7-8% earlier. These assets have a higher proportion of NPAs but have also higher interest income. Also the growth rate of the portfolio is also coming down,” says Ms Kochhar. Deposits grew by 16.7% on a yearly basis to Rs 2,29,779 crore. However on a quarter on quarter basis the deposit growth has been flat. At the end of the second quarter this year deposits were at Rs 2,28,307 crore. Bank officials however said this has been a conscious strategy. The net interest margin ffor the quarter has been flat at 2.3%. The bank had collatralised debt obligations of $1.7 billionn. As markets weakened and spreads widened the bank had to provide additional provisoioning of Rs 150 crore. It had provided Rs 120 crore in the second quarter. Ms Kochhar said, that the bank has yet to take a call on these assets. She stressed that there was no need for a distress sale.