January 23, 2001

ICICI Bank : Growth in net interest income and core fee income drive Q3 : FY 2001 performance

The Board of Directors of ICICI Bank (NYSE : IBN) at its meeting held in Mumbai today, approved the audited accounts for the third quarter ended December 31, 2000 (Q3 : FY2001). The Bank posted profit after tax (PAT) of Rs.40.50 crores for Q3 : FY2001 compared to Rs. 28.26 crores for the corresponding quarter of the previous year. This growth in PAT of 43 per cent was due to an increase of 137 per cent in net interest income and 106 per cent growth in the core fee income. The operating expenses during the quarter went up by 158 per cent from Rs. 33.44 crores to Rs. 86.32 crores, which figure includes an amount of Rs. 10.53 crores incurred during the quarter on account of credit card programme and on Data Centres, which expenses would yield benefits in the coming quarters as well.

Results for the nine months of the current financial year :

The growth of 53 per cent in PAT to Rs. 110.70 crores compared to Rs. 72.36 crores in the corresponding period of the previous financial year was driven by a significant 148 per cent increase in Net Interest Income to Rs. 278.88 crores from Rs. 112.30 crores and a 104 per cent increase in core fee income to Rs. 90.98 crores from Rs. 44.56 crores. While interest income went up year on year (YoY) by 47 per cent, interest expense grew by just 24 per cent primarily on account of various retail initiatives which has resulted in lower cost of deposits. Consequently, interest spread has improved to 2.75 per cent during the nine-month period from 1.87 per cent in the same period of FY2000. The cost of deposits was below 8 per cent. For the first nine months of FY2001, operating profit increased by 43 per cent to Rs. 186.67 crores as compared to Rs. 130.62 crores in the corresponding period of the previous year. The operating profit is after absorbing about Rs. 24.00 crores by way of operating expenditure on credit cards programme and on Data Centres, being investments in new initiatives which will yield results in the years to come.

Resource generation powered by a strong retail thrust leading to a significant reduction in cost of deposits

Total deposits have crossed the Rs. 10,000-crore mark and stood at Rs.10,047.94 crores. The YoY growth had been 18.21 per cent. The period under review was marked by a powerful retail thrust resulting in retail deposits now constituting 57 per cent of total deposits as compared to 31 per cent as on March 31, 2000.

Customer assets grew to Rs. 7,637.40 crores up from Rs. 4,057.92 crores, a growth of 88 per cent compared to the corresponding period of the previous year. The ratio of net non performing loans to net bank credit stood at 1.32 per cent on December 31, 2000.

Capital Adequacy

The Bank's capital adequacy ratio stood at 14.61 per cent as at December 31, 2000.

Rapid Customer Acquisition : 158 per cent increase in retail customer accounts.

The Bank added over 1 million customer accounts taking the number to 1.68 million as at December 31, 2000 up from 0.65 million as at March 31, 2000. Savings Bank accounts have gone up to 7,72,000 from 2,92,000 and NRI accounts have doubled to 46,000.

Staggering response from on-line customers with 264 per cent increase in Internet customers

ICICI Bank, which pioneered Internet Banking in India, has seen a staggering 264 per cent increase in Internet customers from 1,10,000 as on March 31, 2000 to 4,00,000 as on December 31, 2000. This sharp increase was facilitated by significant enhancements in the product portfolio offered through 'Infinity', the internet banking platform of the Bank.

ATMs crosses 400+ mark facilitating consolidation of India's only multi-channel technology architecture

As part of its 'Clicks and Bricks' strategy, ICICI Bank has developed multiple access channels comprising lean brick and mortar branches, ATMs, call centers and Internet banking. The branch network including extension counters presently covers 106 locations across India. ICICI Bank is India's largest ATM provider with 401 ATMs. The Call Centres in 17 cities currently handle about 10,000 calls a day.

Results under US GAAP

The Bank posted net income of Rs. 383.2 million for Q3 : FY2001 compared to Rs. 399.7 million for the corresponding quarter of the previous year. The net interest revenue after provision for credit losses increased 181 per cent to Rs. 777.7 million in Q3 : FY2001 compared to Rs. 276.9 million for the corresponding period in the previous financial year. The non-interest expenses during the quarter went up by 133 per cent to Rs. 758.5 million from Rs. 325.4 million.

For the nine-month period ended December 31, 2000, the interest income rose to Rs. 8,736.2 million, an increase of 50 per cent over the figures of the corresponding period. The Net Interest Income after provision for credit losses increased by 173 per cent to Rs. 2,282.9 million from Rs. 836.3 million in the corresponding period of the previous financial year. Net-Income stood at Rs.990.0 million for the nine-month period compared to Rs. 1,025.9 million. The slight fall in net income was occasioned due to mark-to-market impact of Rs. 263 million on investment portfolio (which does not impact the results as per Indian GAAP). The non performing loans stood at 2.09 per cent on December 31, 2000 compared to 2.34 per cent on December 31, 1999.

For further queries on results, contact :

Except for the historical information contained herein, statements in this Release which contain words or phrases such as 'will', 'would', 'aim', 'likely', 'will likely result', 'believe', 'expected', 'will continue', 'anticipate',' likely', 'enable', 'enabling', 'intend', 'seek to', 'future', '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 thereof.