The Hindu : ICICI Bank's net at Rs. 1,206 cr.

Online edition of India's National Newspaper
Saturday, Apr 26, 2003

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ICICI Bank's net at Rs. 1,206 cr.

By Our Special Correspondent

MUMBAI APRIL 25. ICICI Bank today reported a net profit of Rs. 1,206 crores for the year ended March 31, 2003 compared to Rs. 258 crores for 2001-02. The board has recommended a dividend of 75 per cent compared to 20 per cent in the previous year.

In view of the merger of ICICI and two of its subsidiaries with the bank on March 30, 2002, the results of the financial year 2003 are not comparable with the results on a standalone basis for the year ended March 31, 2002.

"The net profit represents a return on equity of 18.3 per cent. This was achieved in spite of the negative impact of compliance with regulatory reserve requirements on ICICI's historic liabilities,'' said K. V. Kamath Managing Director and CEO of ICICI Bank.

During the year, the ICICI Bank Shares Trust divested 101.4 million shares of the bank (transferred to the Trust by erstwhile ICICI prior to the merger) to strategic and institutional investors, resulting in capital gains of Rs. 1,191 crores flowing to the bank. The bank made total provisions and write-offs of Rs. 1,791 crores against loans and other assets, primarily relating to erstwhile ICICI's portfolio.

The net profit for the quarter ended March 31, 2003 increased to Rs. 338 crores from Rs. 330 crores for the quarter ended December 31, 2002, despite the significantly lower treasury gains (Rs. 17 crores as compared to Rs. 180 crores in the previous quarter) on account of the interest rate environment prevailing during the quarter. The net profit for the quarter ended March 31, 2002 was Rs. 57 crores.

During the year the bank achieved market leadership across products in the retail finance segment, said Mr. Kamath. At March 31, 2003, the bank's total deposits were Rs. 48,169 crores, a growth of 50 per cent over total deposits at March 31, 2002.

The bank's average cost of deposits declined to 6.2 per cent for fourth quarter 2003 from 7.4 per cent for quarter one 2003. At March 31, 2003, the bank's net non-performing customer assets were Rs. 3,151 crores, constituting 4.9 per cent of customer assets. ICICI Bank's capital adequacy at March 31, 2003 (after taking into account the proposed dividend) was 11.1 per cent above RBI's requirement of 9 per cent.

On a specific question on panic withdrawal of money from the bank recently by some customers in Gujarat, Mr. Kamath said first time a scheduled commercial bank faced such a situation in the country and "we found that nothing wrong with the bank.'' The only issue the bank faced was to arrange enough funds at the ATM centres on that particular day and there was enough liquidity to provide any amount, he added. On interest rates, Mr. Kamath said, "I do not see any change in the lending rates.'' According to him, any cut from these levels would pressure on banks' performance.

PTI reports:

To focus on cross sell, wholesale banking

ICICI Bank will continue to focus on cross selling products, increasing wholesale banking penetration and international initiative in 2003-04 even as it expects the Justice P. N. Bhagwati report on "panic withdrawals'' in Gujarat to be ready within a month.

"We have whole suite of products ranging from debit cards to mutual funds that can be offered to our customers through five delivery channels, including branches and internet,'' Mr. Kamath said.

Cross sell accounted for 20 per cent of mortgages, 20 per cent auto and 25 per cent of credit card business in 2002-03, he added.

The wholesale segment involves corporate, agri-business and the government. In agriculture, the bank would scale up product focus, develop new channels and increase rural penetration while the key drivers in corporate would be maximising reach and operational efficiencies, he said.

On international front, Mr. Kamath said the country's largest private sector bank would expand its presence in the U.K., Dubai, Canada, Singapore and China.

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