Performance Review - Nine month period ended Dec.
31, 2000
Net loans and debentures were Rs. 54,325 crore at December
31, 2000, an increase of 20% compared to December 31, 1999. Shareholders'
equity was Rs. 8,812 crore at December 31, 2000, an increase of 10% compared
to December 31, 1999.
Results - US GAAP
Net income before change in accounting policy and gain
on sale of property decreased 7% to Rs. 608 crore (US$ 130 million) in
the nine month period ended December 31, 2000 compared to Rs. 652 crore
(US$ 140 million) in the nine month period ended December 31, 1999. Consolidated
net income of ICICI reflects 62% of ICICI Bank's net income in the nine
month period ended December 31, 2000 compared to 74% of ICICI Bank's net
income in the corresponding period last year.
Net interest revenue increased 40% to Rs. 1,319 crore
in the nine month period ended December 31, 2000 from Rs. 944 crore in
the corresponding period last year. In the same period, fees and commissions
increased 63% to Rs. 476 crore from Rs. 293 crore.
Net income was adversely impacted due to depressed market
conditions in equity and debt markets compared to the corresponding period
last year. Against a gain of Rs. 380 crore in the nine month period ended
December 31, 1999 there was a loss of Rs. 55 crore arising from trading
and capital gains in the nine month period ended December 31, 2000. If
we exclude income from trading and capital gains, income before tax increased
78% to Rs. 841 crore from Rs. 472 crore. Further, operating expenses increased
84% to Rs. 581 crore from Rs. 316 crore on account of the higher expenses
in respect of ICICI's retail initiatives and entry into new businesses.
Total assets as per US GAAP were Rs. 86,089 crore (US$
18.4 billion) at December 31, 2000, an increase of 16% compared to December
31, 1999. Stockholders' equity as per US GAAP was Rs. 7,663 crore (US$
1.6 billion) at December 31, 2000.
Business Operations
During the nine month period ended December 31, 2000,
ICICI's approvals aggregated Rs. 44,751 crore, as against Rs. 32,866 crore
for the corresponding period in the previous year, thereby registering
a 36% growth. During the same period, ICICI's disbursements increased
37% to Rs. 23,501 crore from Rs. 17,176 crore in the nine month period
ended December 31, 1999.
ICICI has been able to record healthy business growth
while improving the risk profile of its asset portfolio, by continued
focus on better-rated corporates, structured infrastructure finance and
retail business. ICICI's continued focus on doing business with highly
rated corporates was reflected in disbursements to companies rated 'A'
and above increasing to 91% of total disbursements in the nine month period
ending December 31, 2000 from 82% in the nine month period ended December
31,1999. Similarly, approvals to companies rated 'A' and above increased
to 94% from 90%.
Retail Initiatives
ICICI Group's continued strong growth in retail business
was driven by its customer-centric strategies. This was reflected in a
rapid growth in customer base and retail portfolio. During the nine month
period ended December 31, 2000, ICICI's retail business accounted for
6% of total approvals and 9% of total disbursements. With the launch of
life insurance products, ICICI Group now offers retail customers a complete
range of financial products and services. At present, ICICI Group offers
automobile finance loans in 41 cities, home loans in 30 cities, consumer
durable loans and personal loans in 21 cities and dealer funding in 26
cities. ICICI has emerged as the clear leader in the automobile finance
segment and enjoys preferred financier status with almost all major car
manufacturers. ICICI Group has also emerged as a key player in the housing
finance market.
Launch of Life Insurance business
Insurance Regulatory and Development Authority (IRDA)
approved the commencement of life insurance business of ICICI Prudential
Life Insurance Company Limited (ICICI Prudential) on November 24, 2000.
ICICI Prudential has a capital of Rs. 150 crore with ICICI holding 74%
of the equity and the balance 26% held by Prudential group of the UK.
ICICI Prudential commenced its operations on December
12, 2000 in Mumbai and Delhi. ICICI Prudential has received IRDA's approval
for 8 products. Currently, ICICI Prudential has 283 licensed agents and
another 1,800 are undergoing training and development. ICICI Prudential
has 217 employees.
Reaping returns from ICICI Infotech
With a view to strengthen the existing relationship with
Emirates Bank of the UAE, ICICI divested 8% of its stake in ICICI Infotech,
the IT and software services arm of ICICI to the Emirates Bank at a company
valuation of Rs. 720 crore. ICICI Infotech already has a joint venture
with Emirates Bank, which is involved in marketing software products and
services in West Asia. ICICI realised Rs. 58 crore from the divestment
thereby recovering more than its total equity investment in ICICI Infotech
of Rs. 33 crore.
During the quarter, ICICI Infotech also acquired Ajax
Software Solutions Ltd., a company specialising in software solutions
for treasury operations. ICICI Infotech has also successfully integrated
the operations of two technology companies in the United States which
were acquired earlier in the year. ICICI Infotech now employs about 950
professionals, of which about 120 are employed in the United States. ICICI
Infotech's profit after tax increased significantly to Rs. 21.5 crore
in the nine month period ended December 31, 2000 from Rs. 6.5 crore in
the nine month period ended December 31,1999.
Asset Quality
ICICI continued its two-pronged approach of tackling
the NPA problem through improved quality of incremental disbursements
and focus on aggressive settlements. The net NPAs outstanding at December
31, 2000, were Rs. 4,215 crore. ICICI's net NPA ratio declined to 7.2%
at December 31, 2000 from 7.6% at March 31, 2000. The trend in gross NPAs
in the past few years is given below.
Mar
31, 1997
Mar
31, 1998
Mar
31, 1999
Mar
31, 2000
Dec
31, 2000
Gross NPAs
2,821
4,212
5,489
6,018
6,460
% increase
48%
49%
30%
10%
7%
There has been an increasing trend by banks and financial institutions
in emerging markets to increase their provision cover against the NPAs
in view of the rising impact of volatility in the global economy on such
markets. The higher provision cover also provides a cushion to the banks
and financial institutions in periods when corporates face financial stress
on account of slowdown in the economy or other reasons. Thus, despite
the slower growth of gross NPAs, ICICI may consider increasing its provision
coverage against NPAs to levels above regulatory requirements with a view
to bringing down the percentage of net NPAs to around 5% over a period
of time.
Capital Adequacy
ICICI's total capital adequacy ratio was 16.7% at December
31, 2000, of which Tier2 capital accounted for 11.0%.
Public recognition to ICICI
In the last quarter, ICICI received several awards from
renowned organisations in recognition of the best practices followed by
it in terms of employee welfare, transparency in financial reporting and
in discharging its responsibilities as a corporate citizen. The Far Eastern
Economic Review in its survey of Asian Companies adjudged ICICI as the
fourth among the top 10 leading companies in India. Similarly, Hewitt
- the HR consulting firm adjudged ICICI as the fourth best company to
work for in India, in a survey done for the Business Today magazine. ICICI
also bagged the award for the best presented accounts given by the Institute
of Chartered Accountants of India. ICICI has won this award for the second
consecutive year in the category of 'Banks and FIs'. Finally, ICICI also
received the "Rio Tinto Award for long term commitment" from the Secretary
General of the Commonwealth in London recently. The award has been instituted
by "Worldaware," a UK based charity organisation, and is given to a Commonwealth
based company which has demonstrated consistent commitment over a number
of years to involvement in development.
Summary Profit and Loss Statement (Indian GAAP)
Q3:
2000
Q3:
2001
Apr-Dec
1999
Apr-Dec 2000
FY2000
Fund based income
1,959
2,079
5,671
6,101
7,585
Less : Interest and depreciation
charges
1,646
1,760
4,764
5,109
6,381
Net fund based income
313
319
907
992
1,204
Add : Fees and commissions
65
113
205
381
324
Add : Dividend income
18
6
101
67
210
Net income from operations
396
438
1213
1,440
1,738
Less : Operating expenses
70
99
205
288
297
Profit from operations
326
339
1,008
1,152
1,441
Less : Provisions and write-offs
for loans & debentures
135
118
324
332
462
Profit before net capital gain
/ (loss) & other income
191
221
684
820
979
Add: Net capital gain / (loss)
85
37
180
(3)
294
Add: Other income
3
20
14
51
34
Profit before tax
279
278
878
868
1,307
Less : Provision for tax
27
25
86
74
120
Profit after tax (excluding
extraordinary gains)
252
253
792
794
1,187
Add : Extraordinary Gains
19
-
19
-
19
Profit after tax
271
253
811
794
1,206
Summary Balance Sheet (Indian GAAP)
Dec
31, 1999
Dec
31, 2000
Growth %
Mar
31, 2000
Net loans and debentures
45,194
54,325
20.2
48,299
Other Investments
3,114
3,971
27.5
3,075
Current assets
11,502
6,943
(39.6)
9,171
Fixed assets
4,432
5,087
14.8
4,499
Miscellaneous expenditure
315
322
2.4
346
Total assets
64,557
70,648
9.4
65,390
Shareholders' equity and reserves
8,016
8,812
9.9
8,023
Of which : Equity capital
768
785
2.2
783
Preference capital
1,308
350
(73.2)
1,308
Borrowings
50,799
57,076
12.4
50,881
Current liabilities
4,434
4,410
(0.5)
5,178
Total liabilities
64,557
70,648
9.4
65,390
Except for the historical information contained herein,
statements in this release which contain words or phrases such as "will",
"would", "would ensure", "would attempt", "may", "may consider", "aim",
"will likely result", "believe", "expect", "will continue", "anticipate",
"estimate", "intend", "plan", "consider", "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 ability to successfully
implement our strategy, future levels of non-performing loans, our growth
and expansion, the adequacy of our allowance for credit losses, technological
changes, investment income, cash flow projections, our exposure to market
risks as well as other risks detailed in the reports filed by ICICI Limited
with the Securities and Exchange Commission of the United States. ICICI
undertakes no obligation to update forward-looking statements to reflect
events or circumstances after the date thereof.
For press queries please call Madhvendra Das at 91-22-653
6812 or email at das@icici.com
For investor queries please call Sandeep Guhagarkar at
91-22-653 6899 or email at guhagarkar@icici.com