Performance Review for the three-month period ended June
30, 2000
ICICI Bank reports a near doubling of its net profits for
the first quarter of this fiscal. The net profit was Rs. 40.14 crores
as compared to Rs. 20.25 crores for the corresponding period in the previous
financial year.
The Board of Directors of the ICICI Bank Limited (NYSE
Code : IBN) met in Mumbai, India, on July 20, 2000 and adopted the audited
financial results drawn up as per the accounting standards followed in
India for the three-month period ended June 30, 2000. The Board of Directors
also took on record the Bank's unaudited financials prepared under
the United States Generally Accepted Accounting Principles (US GAAP) for
the same period.
Results as per the accounting standards followed in India
For the first quarter ended June 30, 2000, the net interest
income showed an increase of over 124 per cent at Rs. 85.37 crores (previous
year corresponding period - Rs. 38.09 crores). Interest income increased
by 43 per cent to Rs. 283.56 crores (previous year corresponding period
- Rs. 198.92 crores). Overall, other income recorded a growth of 34 per
cent to Rs. 31.23 crores (previous year corresponding period - Rs. 23.28
crores), aided by fee income growth of 101 per cent. During the quarter,
backed by its increased net worth, the Bank reshuffled the composition
of its deposits by gradually liquidating higher-cost deposits leading
to an improvement in interest rate spreads. Interest expenditure increased
by 23 per cent to Rs. 198.19 crores (previous year corresponding period
- Rs.160.83 crores). Operating profit increased 71 per cent to Rs. 61.87
crores compared to Rs. 36.21 crores of the corresponding period in the
previous year. The Return on Average Assets (RoAA) stood at 1.46 per cent
for the quarter.
Total deposits as at June 30, 2000 stood at Rs. 8,740 crores
as against Rs. 5,954 crores as at June 30, 1999 and Rs. 9,866 crores at
March 31, 2000. Total customer assets (including credit substitutes) were
at Rs. 5,361 crores, compared to Rs. 3,449 crores at June 30, 1999 and
Rs. 5,031 crores at March 31, 2000.
The Bank has provided for depreciation on investments,
and provision for bad debts and standard assets as per the guidelines
of the Reserve Bank of India. The ratio of net non-performing assets to
total customer assets remained more or less unchanged at 1.16 per cent
on June 30, 2000 as against 1.14 per cent on March 31, 2000. The Bank's
capital adequacy ratio stood at 19.24 per cent of the risk-weighted assets
on June 30, 2000.
Results under US GAAP
For the three-month ended June 30, 2000, the Net-Income
for the period increased by 69 per cent to Rs. 44.60 crores from Rs. 26.40
crores. The net interest income after provision for credit losses increased
by 159 per cent to Rs. 77.70 crores from Rs.30.00 crores in the corresponding
period of the previous financial year.
Significant growth in customer accounts
During the first quarter, the Bank added more than 225,000
new customer accounts, including about 100,000 savings bank accounts and
ended the quarter with about 875,000 accounts. The number of savings accounts
stood at around 400,000. The number of accounts of non-resident Indians
increased to about 28,000 and the number of Internet banking customers
increased during the quarter from 110,000 to over 155,000. The retail
deposits at Rs. 3,663 crores constituted 42 per cent of the total deposits
of the Bank.
Technology driven distribution and product strategy
The Bank continued to leverage its strengths in the use of modern
banking technology to further improve its customer service. Initiatives
in this regard included launch of new products, such as
bank@campus for students and kid-e-bank
for small children, in line with the Bank's strategy to be associated
in all stages of a person's life cycle. Both these products are web-enabled
and offer many innovative and attractive features to the target customers.
The Bank's web-enabled credit cards launched during January 2000 have
received a good response. The Bank issued an additional 19,000 credit
cards during the three-month period ended June 30, 2000 taking the total
number of cards issued to around 30,000.
The Bank has concluded arrangements with various service
providers and along with other companies in the ICICI group, offers its
customers a suite of banking and utility products through the Internet.
Towards this end, it provides a whole range of services under B2B, B2C,
mobile banking, etc. Most transactions have been increasingly web-enabled
to offer customers location-independent and time-independent services.
Network expansion
During the quarter, the Bank crossed two milestones by
opening more than 100 offices and installing more than 200 Automated Teller
Machines (ATMs). During the first quarter, the Bank expanded its distribution
network by opening 4 branches and installing 33 additional work-site and
off-site ATMs. As at June 30, 2000, the Bank’s physical network consisted
of 85 branches and 16 extension counters. The Bank had 208 ATMs – the
largest network of ATMs in the country - spread across 49 centres in 17
States and Union Territories. This physical distribution network is complemented
by other technology driven delivery channels such as web-enabled kiosks,
call centres, mobile phones and the Internet.
The summary of the accounts as at June 30, 2000 under both
the accounting standards followed in India (audited) and US GAAP (unaudited)
is enclosed.
Except for the historical information contained herein,
statements in this Release which contain words or phrases such as 'will',
'would', 'aim', 'will likely result', 'believe', 'expected', 'will continue',
'anticipate', 'estimate', 'enable', 'enabling', 'intend', 'plan', 'contemplate',
'seek to', 'future', 'objective', 'goal', 'project', 'should', 'will pursue'
and similar expressions or variations of such expressions may constitute
'forward-looking statements'. These forward-looking statements involve
a number of risks, uncertainties and other factors that could cause actual
results to differ materially from those suggested by the forward-looking
statements. These risks and uncertainties include, but are not limited
to our and ICICI's Group's ability to obtain statutory and regulatory
approvals and to successfully implement our strategy, future levels of
non-performing loans, our growth and expansion in business, the adequacy
of our allowance for credit losses, technological implementation and changes,
the actual growth in demand for banking products and services, investment
income, cash flow projections, our exposure to market risks as well as
other risks detailed in the reports filed by us with the United States
Securities and Exchange Commission. The Bank undertakes no obligation
to update forward-looking statements to reflect events or circumstances
after the date hereof.