Annual Report 2018-19
Message from the Chairman

The Bank has focussed on growing risk calibrated operating profit by leveraging its strong franchise, and building a more granular and higher rated portfolio.

Message from the Chairman

It has been an eventful and rewarding year as Chairman of the Board of ICICI Bank. The year was marked by improved operating profitability and further strengthening of the balance sheet of the Bank, as well as expansion of the Board and new strategic initiatives by the executive management. The ICICI brand is one of India’s oldest and strongest financial services brands and we continue to contribute to nation building, pioneer innovation, serve the growing financial needs of society and be a significant part of the financial services ecosystem.

We are optimistic about the inherent medium and long-term potential of the Indian economy. Key economic parameters have been stable with inflation at comfortable levels and interest rates moderating. The priority now would be to harness investment and consumption drivers to accelerate the pace of growth. As growth gains momentum, it will lead to many more opportunities for all sectors of the economy and in turn for financial services.

In the last few years, the banking system and the Bank have gone through a challenging period with an elongated credit cycle and accumulated stress in the system. Several factors including important policy initiatives such as the enactment and implementation of the Insolvency and Bankruptcy Code (IBC) are playing their part in addressing the past challenges. The changes are now visible and resolutions have gathered pace allowing banks to prepare for a new phase of growth. As the process evolves, operational inefficiencies will be resolved resulting in a more mature and better‑equipped mechanism for resolution of stressed assets. During the year, liquidity challenges in the non‑banking financial sector highlighted the importance of prudent risk management and judicious asset liability management. During this period, the banking system was largely unaffected by the tight liquidity conditions due to well-established practices and a stable liability profile. The banking system helped to mitigate the impact of the challenges in the non-banking finance companies and benefitted from increased lending opportunities.

Over the last year, the Bank has undertaken several initiatives to secure a sustainable and profitable future. Many of these initiatives are internal and aimed at making structural changes within the Bank. They will continue to strengthen the Bank's core and improve its profitability going forward.

The management team has worked hard to grow the business, substantially improve core operating profitability and address the stress of the past. Given the large opportunity offered by India’s growth potential, the Bank has aimed to maximise market share by leveraging its strengths as a well-recognised brand and a strong and diversified liability franchise in driving growth in key customer segments. The Bank has focussed on growing risk calibrated operating profit by leveraging its strong franchise, and building a more granular and higher rated portfolio. The balance sheet of the Bank has been strengthened substantially in the past year and risk management practices are oriented towards building a more sustainable and profitable growth profile. With continued improvement in operating profitability and normalisation of credit costs, the Bank would seek to deliver better returns to shareholders.

Entities in the financial sector have transformed from standalone companies to diversified conglomerates and are now venturing into the domain of ecosystems where they are capable of fulfilling a broad spectrum of financial requirements of their customers across retail, corporate and other segments. This new perspective of business has initiated a behavioural change in entities to be on the lookout for new partnerships, customer segments and ways to better serve existing customers. The Bank has been a technology leader and has been able to leverage technology to introduce new and more convenient ways of accessing the Bank’s services. We are confident that innovation is prospering both within and outside the banking system, and the Bank will build and leverage partnerships to multiply its efforts to provide a best-in-class experience through the life cycle of its services.

For this new phase of expansion, it becomes necessary to not just re-think the current way of doing business but also to establish strong governance practices. The Bank is committed to high standards of regulatory compliance and governance and views this as a key guiding force that strengthens its competitive advantage. The Bank has established norms for governance, and strictly deals with cases in accordance with these norms. In keeping with the focus on governance, the Board of Directors has been expanded and has been further diversified in the past year. Our new board members include several eminent persons with a wide range of experience in technology, corporate governance and regulatory bodies among others. I am sure the Board and management will immensely benefit from their expertise and support. With these changes the Bank is in a good position to be proactive in adapting to and addressing emerging opportunities and risks in the system.

Over the years, ICICI has established a number of non-banking financial services businesses that serve the spectrum of financial needs. The Bank’s non-banking businesses are among the leaders in their market segments. We are the only financial conglomerate in India with four listed companies including the Bank. Each of these businesses is focussed on maximising its share of the financial services opportunity in a profitable manner, with a focus on prudent risk management and customer centricity.

I wish to thank all our stakeholders and my colleagues on the Board of Directors. Together we look forward to a bright future for this esteemed institution.

With best wishes,

Girish Chandra Chaturvedi
Chairman