UPDATE 1-India's ICICI Q4 net falls, sees muted loan growth

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MUMBAI, April 25 (Reuters) - India's ICICI Bank (ICBK.BO) posted a 35.3 percent fall in quarterly profit on Saturday hurt by slowing loan growth, and said it expects moderate loan growth this year.

ICICI's net profit fell to 7.44 billion rupees ($149.4 million) in its fiscal fourth quarter ending in March, from 11.5 billion rupees reported a year ago.

A Reuters poll of analysts had forecast net profit to fall to 7.7 billion rupees.

New York-listed ICICI (IBN.N), which has slowed lending to rejig its advance portfolio as bad debts bite, sees corporate and retail loan growth at about 5-10 percent, joint managing director Chanda Kochhar told a conference call.

"This coming year we'll be moderate in our loan growth," she said. "Our strategy would be to conserve liquidity, conserve capital, contain risk watch how the economic scenario moves and actually focus on restructuring our deposit base."

The bank's loan book shrunk 3.2 percent during the whole year, which was a reflection of the bank's strategy. "Given the current scenario, we think it is more prudent to really maintain the balance sheet size," she said.

The bank's deposit base fell 10.7 percent during the year.

REDUCED DEPENDENCE ON WHOLSALE DEPOSITS

The bank will focus on increasing its current and savings accounts deposits and lessen its dependence on wholesale deposits to reduce cost of funds and raise profitability, Kochhar said.

"This will be our growth engine for profit," she said.

Retail loans, which account for 49 percent of its total loan book, reported a net loss during the quarter. However, they were expected to show a profit again from this quarter, Kochhar said.

The loss was due to the impact of the third quarter when cost of funds for the bank went up, but there was no increase in lending rates.

"It was a one-quarter impact," Kochhar said.

In the quarter to March net bad debts as a percentage of net advances rose to 1.95 percent from 1.5 percent a year ago.