ICICI Bank 2012 Annual Report Download - page 55

Annual Report 2011-2012 53
Net interest income and spread analysis
The following table sets forth, for the periods indicated, the net interest income and spread analysis.
` in billion, except percentages
Fiscal 2011 Fiscal 2012 % change
Interest income ` 259.74 ` 335.42 29.1%
Interest expense 169.57 228.08 34.5
Net interest income 90.17 107.34 19.0
Average interest-earning assets13,418.59 3,932.59 15.0
Average interest-bearing liabilities1` 3,168.26 ` 3,603.51 13.7%
Net interest margin 2.64% 2.73% —
Average yield 7.60% 8.53% —
Average cost of funds 5.35% 6.33% —
Interest spread 2.25% 2.20% —
1. The average balances are the averages of daily balances, except averages of foreign branches which are
calculated on monthly basis till October 31, 2010 and on a fortnightly basis thereafter.
2. All amounts have been rounded off to the nearest ` 10.0 million.
Net interest income increased by 19.0% from ` 90.17 billion in fiscal 2011 to ` 107.34 billion in fiscal 2012
reflecting an increase in net interest margin from 2.64% in fiscal 2011 to 2.73% in fiscal 2012 and a 15.0%
increase in the average volume of interest-earning assets.
The yield on interest-earning assets increased from 7.60% in fiscal 2011 to 8.53% in fiscal 2012 and cost of
funds increased from 5.35% in fiscal 2011 to 6.33% in fiscal 2012. Net interest margin increased from 2.64%
in fiscal 2011 to 2.73% in fiscal 2012. The higher increase in average interest-earning assets compared to
increase in average interest-bearing liabilities led to an increase in net interest margin. Net interest margin of
overseas branches improved from 0.88% for fiscal 2011 to 1.23% for fiscal 2012 primarily due to increase in
yield on overseas advances.
The following table sets forth, for the periods indicated, the trend in yield, cost, spread and margin.
Fiscal 2011 Fiscal 2012
Yield on interest-earning assets 7.60% 8.53%
- On advances 8.53 9.55
- On investments 6.39 7.24
- On SLR investments 6.29 7.34
- On other investments 6.55 7.10
- On other interest-earning assets 6.46 6.21
Cost of interest-bearing liabilities 5.35 6.33
- Cost of deposits 4.92 6.12
- Current and savings account (CASA) deposits 2.46 2.87
- Term deposits 6.51 8.21
- Cost of borrowings 6.14 6.71
Interest spread 2.25 2.20
Net interest margin 2.64% 2.73%
Yield on interest-earning assets increased from 7.60% in fiscal 2011 to 8.53% in fiscal 2012 primarily due to
the following factors:
 Yield on average advances increased from 8.53% in fiscal 2011 to 9.55% in fiscal 2012 primarily due to
increase in yield on domestic and overseas corporate loans which increased as a result of incremental
disbursements at higher lending rates and reflecting the rising interest rate environment. Further, the yield
on advances was also higher on account of increase in ICICI Bank‘s Base Rate from 8.75% at March 31, 2011
to 10.00% at March 31, 2012.