Press Release

Performance Review - Half year ended September 30, 1999

The Board of Directors of ICICI at its meeting held in Hyderabad today, approved the audited accounts of ICICI for the half year ended September 30, 1999 (H1: 99-2000).

Profit after tax for the quarter ended September 30, 1999 amounted to Rs. 278 crore, an increase of 12% over Rs. 249 crore in the corresponding quarter of the previous year. During the half year ended September 30, 1999, the profit before tax and provisions (including write-down of equity investments) was Rs. 845 crore as compared to Rs. 747 crore in the corresponding period of the previous year, registering a growth of 13%. Notwithstanding the enhanced provisions and write-offs of Rs. 246 crore in the half year ended September 30, 1999 (as compared to Rs. 188 crore in the corresponding period of the previous year), profit after tax in the half year ended September 30, 1999 amounted to Rs. 540 crore. This represented an increase of 6% over the corresponding figure of Rs. 507 crore* for the half year ended September 30, 1998 (H1:98-99).

The net NPA ratio declined from 7.8% at March 31, 1999 to 7.6% at June 30, 1999 and further to 7.4% at September 30, 1999. The net NPAs outstanding at September 30, 1999 was Rs. 3,583 crore down from Rs. 3,623 crore at March 31, 1999. The decrease in NPA is on account of the greater emphasis placed on recovery and settlements in respect of bad assets and a proactive approach towards cases under stress.

The Board of Directors of ICICI also noted the consolidated unaudited US GAAP accounts of ICICI for the half year ended September 30, 1999. As per the unaudited US GAAP financial statements, the net income for the quarter ended September 30, 1999 was Rs. 216 crore up by 22% from Rs. 177 crore in the corresponding quarter of the previous year. As per the unaudited US GAAP financial statements, the net income was Rs. 425 crores in H1:99-2000 up by 13% from Rs. 377 crore in H1:98-99. The net income for both these periods excludes extraordinary income and cumulative effect of change in accounting policy. The stockholders' equity at September 30, 1999 was Rs. 6,284 crore as per US GAAP. The net NPA ratio as per US GAAP was 6.1% at September 30, 1999, down from 6.7% at June 30, 1999.

ICICI has changed certain accounting policies such as providing depreciation on captive assets on straight line method as against earlier policy of adopting written down value method and capitalising software expenses as against the earlier policy of treating it as deferred revenue expenditure and amortizing it over the period(s) during which the benefits are expected to arise. These policies would result in a better matching of costs with revenues. They also conform to relevant accounting standards. On account of these changes profit after tax for the period ended September 30, 1999 is higher by Rs. 12 crore. An amount of Rs. 41 crore relating to periods upto March 31, 1999 has been added to the reserves.

During the period under review, ICICI successfully completed an equity offering comprising Rs. 500 crore preferential allotment to principal domestic shareholders, Rs. 303 crore domestic public issue and US$ 315 million international offering of American Depositary Shares. ICICI became the 1st Indian company to be listed on the New York Stock Exchange ("NYSE"). After Bank of Tokyo Mitsubishi, ICICI is the 2nd Asian bank and one of a handful of non-US banks to list on the NYSE with a full scope US GAAP audit.

Business Operations

During the half-year ended September 30, 1999, ICICI's approvals aggregated Rs. 24,075 crore, as against Rs. 21,225 crore for the corresponding period in the previous year, thereby registering a 13% growth. During the same period, ICICI's disbursements aggregated Rs. 10,910 crore, as against Rs. 8,313 crore for the corresponding period in the previous year, registering a growth of 31%.

ICICI has been able to record a healthy business growth while improving the risk profile of its asset portfolio by continued focus on top quality corporate finance and structured project finance assistances. While the infrastructure and oil & gas sectors aggregated 54% and 46% of approvals and disbursements respectively, non-project corporate finance assistances accounted for 31% and 38% of approvals and disbursements respectively. ICICI's project finance assistance to the traditional manufacturing sector was 14% of total approvals and 14% of total disbursements. Personal financial service loans were about 1% of approvals and 2% of disbursements.

In line with ICICI's strategy of providing funding across the maturity spectrum, during the half year ended September 30, 1999, STPR (Short Term Prime Rate) and MTPR (Medium Term Prime Rate) related disbursements accounted for 34% of total disbursements. LTPR (Long Term Prime Rate) related loans accounted for 43% of total disbursements. Foreign currency loans were 6%. The balance 17% of disbursements comprised deferred credit, leasing, asset credit, personal finance and other forms of assistance.

Settlements

The Special Asset Management Group is driving ICICI's initiatives in respect of recovery and settlements from problem cases. During the period under review, ICICI settled dues aggregating Rs. 226 crore from 55 cases (Rs. 108 crore from 41 cases in the corresponding period last year). The present value of principal dues settled was about 79% during this period. During the period under review, 111 recovery suits were filed aimed at expeditious enforcement of collateral.

Resources

During the half year ended September 30, 1999, ICICI mobilised medium and long-term rupee resources of Rs. 6,088 crore, including Rs. 1,026 crore mobilised through three public issue of bonds.

Capital Adequacy

Consequent to the equity offering in September 1999, total capital adequacy ratio increased significantly from 12.5% at March 31, 1999 to 17.7% at September 30, 1999. Tier2 capital adequacy ratio was 11.8% at September 30, 1999.

Summary Profit and Loss Statement (Indian GAAP)

* Excludes 4.1 crore equity shares issued in the domestic public issue, which has been allotted subsequent to September 30, 1999.

* Comprises ICICI's reported profit of Rs. 518 crore and attributable loss of Rs. 11 crore of erstwhile Anagram Finance which was merged with ICICI effective April 1, 1998.