News Release
July 28, 2000
Performance Review – First Quarter ended June 30, 2000
The Board of Directors of ICICI at its meeting held in
Mumbai today, approved the audited accounts of ICICI (NYSE: IC) for the
first quarter ended June 30, 2000 (Q1-2001). The Board also considered
the consolidated unaudited US GAAP financial statements of ICICI for Q1-2001.
Results - Indian GAAP
During Q1-2001, the profit before tax and provisions
(including write-down of equity investments) was Rs. 455 crore compared
to Rs. 404 crore in the quarter ended June 30, 1999 (Q1-2000), resulting
in a growth of 13%. Notwithstanding the enhanced provisions and write-offs
of Rs. 142 crore in Q1-2001, compared to Rs. 115 crore in Q1-2000, profit
after tax in Q1-2001 increased 10% to Rs. 287 crore from Rs. 262 crore
in Q1-2000.
The profit after tax for Q1-2001 includes the impact
of the following two items:
- a higher provisioning requirement of about Rs. 18 crore in Q1-2001
consequent to the revision of the Reserve Bank of India provisioning
guidelines whereby sub-standard assets are to be classified as doubtful
assets after 18 months of an asset being classified as NPA instead
of 24 months; and
- an additional interest expense of about Rs. 8 crore in Q1-2001 as
ICICI redeemed a significant portion of its preference shares consequent
to the increase in the distribution tax rate.
Excluding the impact of these two items, the profit after
tax for Q1-2001 would have been Rs. 311 crore, an increase of 19% over
Q1-2000.
The operating expenses increased 25.8% in Q1:2001 compared
to Q1:2000 primarily on account of the higher expenses in respect of technology,
brand building and customer servicing for deriving competitive advantage.
Total assets were Rs. 65,830 crore at June 30, 2000,
an increase of 12% compared to June 30, 1999. Shareholders equity was
Rs. 8,303 crore at June 30, 2000, an increase of 54% compared to June
30, 1999.
Results - US GAAP
Net income as per US GAAP increased 14% to Rs. 231 crore
(US$ 52 million) in Q1-2001 compared to Rs. 203 crore (US$ 46 million)
in Q1-2000. ICICI’s holding in ICICI Bank (a consolidating subsidiary)
has reduced to 62% in Q1-2001 from 74% in Q1-2000 following the ADS issuance
by ICICI Bank in March 2000. Hence, consolidated net income of ICICI reflects
62% of ICICI Bank’s net income in Q1-2001 compared to 74% of ICICI Bank’s
net income in Q1-2000.
Total assets as per US GAAP were Rs. 77,629 crore (US$
17.37 billion) at June 30, 2000, an increase of 18% compared to June 30,
1999. Stockholders’ equity as per US GAAP was Rs. 7,242 crore (US$ 1.62
billion) at June 30, 2000.
Business Operations
During Q1-2001, ICICI’s approvals aggregated Rs. 16,211
crore compared to Rs. 12,538 crore in Q1-2000, thereby registering a growth
of 29%. During the same period, ICICI’s disbursals increased 82% to Rs.
8,216 crore from Rs. 4,507 crore in Q1-2000.
ICICI has been able to record strong business growth
while improving the risk profile of its asset portfolio by continued focus
on top quality corporate finance assistances. ICICI's corporate finance
assistance accounted for 50% of total approvals and 77% of total disbursals
in Q1-2001. Project finance to Infrastructure and Oil & Gas sectors
accounted for 35% of approvals and 7% of disbursals, while retail finance
accounted for 4% of approvals and 7% of disbursals.
ICICI has steadily increased business volumes in retail
finance, and today offers automobile finance loans in 31 cities, home
loans in 14 cities, consumer durable loans in 27 cities, dealer funding
in 18 cities and credit cards in 8 cities. ICICI was recently awarded
the title of "Best Auto Financier in India" by J.D. Power and
Associates (a global market research agency, with acknowledged expertise
in consumer opinion surveys). ICICI is today the largest financier for
several leading automobile brands and a key player in the housing finance
market.
ICICI further strengthened its retail distribution network
during Q1:2001, and presently has 83 fully operational ICICI Centers,
covering 75 cities. As a reflection of its focus on web-enabling its services,
ICICI commenced marketing retail loans over the Internet. In a bid to
further improve customer service, ICICI introduced a web-based system
for its Direct Marketing Agents, to enable them to view the status of
housing loan applications online.
Asset Quality
ICICI’s net NPA ratio declined to 7.5% at June 30, 2000
from 7.6% at March 31, 2000. The net NPAs outstanding were Rs. 4,087 crore
at June 30, 2000.
ICICI is following an aggressive approach towards tackling
the NPA problem including focussed recovery efforts on existing NPA cases
and increased monitoring of stress cases. The aggressive recovery initiated
by ICICI resulted in an improved performance with settlement of dues during
Q1-2001 aggregating Rs. 141 crore compared to Rs. 73 crore in Q1-2000.
Capital Adequacy
ICICI’s total capital adequacy ratio was 17.2% at June
30, 2000, of which tier2 capital accounted for 11.5%.
E-Commerce Initiatives
ICICI’s online trading service, offered through ICICI
Web Trade Limited -a wholly owned subsidiary – commenced operations during
the quarter. The service involves online integration of the customer’s
depositary share account with the group, bank account with ICICI Bank
and securities brokerage account with ICICI Direct. The web-broking service
has achieved nearly 40,000 registrations at present.
Consistent with its efforts to deepen relationships with
customers, and become a leading player in the online financial services
space, ICICI launched two financial portals. Billjunction.com – an online
utility bill payment site – allows users to effect online utility bill
payments using ECS (Electronic Clearing Service). ICICI also launched
Payseal - a payment gateway for facilitating online B2C transactions.
Summary Profit and Loss Statement (Indian GAAP)
Rs. crore
Except for the historical information
contained herein, statements in this release which contain words or phrases
such as "will", "aim", "will likely result",
"believe", "expect", "will continue", "anticipate",
"estimate", "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 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 further investor queries:
Contact: A.P Singh at 91-22-653 6262 or email at
singhap@icici.com