ICICI Bank Performance Review - Year Ended March 31, 2006: 27% Year-on-Year Growth in Profit after Tax

Mumbai, Maharashtra, India , 2006-04-29

The Board of Directors of ICICI Bank Limited (NYSE: IBN) at its meeting held at Mumbai today, approved the audited Indian GAAP accounts of the Bank for the year ended March 31, 2006 (FY2006).

Highlights

-- Profit after tax for FY2006 increased 27% to Rs. 2,540 crore (US$ 569 million) from Rs. 2,005 crore (US$ 449 million) for the year ended March 31, 2005 (FY2005).

-- Net interest income increased 48% to Rs. 4,187 crore (US$ 938 million) for FY2006 from Rs. 2,839 crore (US$ 636 million) for FY2005.

-- Fee income increased 55% to Rs. 3,259 crore (US$ 730 million) for FY2006 from Rs. 2,098 crore (US$ 470 million) for FY2005.

-- Profit after tax for the quarter ended March 31, 2006 (Q4-2006) increased 29% to Rs. 790 crore (US$ 177 million) from Rs. 615 crore (US$ 138 million) for the quarter ended March 31, 2005 (Q4-2005).

-- Total assets increased by 50% to Rs. 251,389 crore (US$ 56.3 billion) at March 31, 2006 from Rs. 167,659 crore (US$ 37.6 billion) at March 31, 2005.

-- Total advances increased by 60% to Rs. 146,163 crore (US$ 32.8 billion) at March 31, 2006 from Rs. 91,405 crore (US$ 20.5 billion) at March 31, 2005.

-- Deposits increased 65% to Rs. 165,083 crore (US$ 37.0 billion) at March 31, 2006 from Rs. 99,819 crore (US$ 22.4 billion) at March 31, 2005.

-- At March 31, 2006, the Bank’s net non-performing assets constituted 0.71% of customer assets against 2.03% at March 31, 2005.

Dividend on equity shares

The Board has recommended a dividend of 85% for FY2006 i.e. Rs. 8.50 per equity share (equivalent to US$ 0.38 per ADS). The declaration and payment of dividend is subject to requisite approvals.

Operating review

Credit growth

The Bank’s net customer assets increased 55% to Rs. 152,049 crore (US$ 34.1 billion) at March 31, 2006 compared to Rs. 97,894 crore (US$ 21.9 billion) at March 31, 2005. The Bank maintained its growth momentum and market leadership in the retail segment. In FY2006, the Bank’s total retail disbursements were about Rs. 62,700 crore (US$ 14.1 billion) including home loan disbursements of about Rs. 25,700 crore (US$ 5.8 billion). Retail assets constituted about 63% of advances and 61% of customer assets. The Bank is focusing non-fund based products and services, as well as capitalising on opportunities presented by the domestic and international expansion of Indian companies. The Bank is also extending its reach in the small and medium enterprises segment.

Rural banking

The Bank’s rural banking strategy seeks to adopt a holistic approach to the financial services needs of various segments of the rural population, by delivering a comprehensive product suite encompassing credit, transaction banking, deposit, investment and insurance, through a range of channels. The Bank’s rural delivery channels include branches, internet kiosks, franchisees and micro-finance institution (MFI) partners. The Bank’s rural and agri-business portfolio increased to about Rs. 16,300 crore (US$ 3.7 billion) at March 31, 2006 from Rs. 7,500 crore (US$ 1.7 billion) at March 31, 2005.

International operations

ICICI Bank continued to build on its existing presence in various geographies as well as enter new markets. In addition to providing credit and trade finance solutions to Indian companies, the Bank is expanding its international retail franchise through technology-based banking services. The Bank now operates in 12 countries through branches, representative offices and wholly-owned subsidiaries. The loan portfolio of the Bank’s international branches (including foreign currency financing to Indian companies) increased to about Rs. 12,500 crore (US$ 2.8 billion) at March 31, 2006 from Rs. 6,200 crore (US$ 1.4 bn) at March 31, 2005. The Bank continued to grow its remittance volumes and achieved a market share of about 20% in inward remittances into India.

Network

The Bank had 614 branches and extension counters at March 31, 2006 as compared to 562 branches and extension counters at March 31, 2005.

Capital adequacy

The Bank’s capital adequacy at March 31, 2006 was 13.35% (including Tier-1 capital adequacy of 9.20%) compared to RBI’s requirement of total capital adequacy of 9.0%.

Asset quality

At March 31, 2006, the Bank’s net non-performing assets constituted 0.71% of customer assets against 2.03% at March 31, 2005. The Bank’s net restructured assets at March 31, 2006 were about Rs. 5,315 crore (US$ 1.2 billion), down from about Rs. 6,263 crore (US$ 1.4 billion) at March 31, 2005.

Group companies

The consolidated profit after tax increased 31% to Rs. 2,420 crore (US$ 542 million) in FY2006 from Rs. 1,852 crore (US$ 415 million) in FY2005. ICICI Securities achieved a profit after tax of Rs. 157 crore (US$ 35 million) in FY2006 compared to Rs. 64 crore (US$ 14 million) in FY2005. ICICI Securities continued to enhance its position in the investment banking and equity broking businesses while capitalising on opportunities in the fixed income market.

ICICI Lombard General Insurance Company (ICICI Lombard) enhanced its leadership position among private sector general insurance companies with a market share of 30% during April-February 2006. ICICI Lombard achieved a profit after tax of Rs. 50 crore (US$ 11 million) in FY2006 compared to Rs. 48 crore (US$ 11 million) in FY2005 despite claims from floods in major cities and investments in the retail franchise. About 58% of its gross written premiums comprised non-corporate business.

ICICI Prudential Life Insurance Company (ICICI Prudential Life) continued to maintain its market leadership among private sector life insurance companies. Life insurance companies worldwide make losses in the initial years, in view of business set-up and customer acquisition costs in the initial years as well as reserving for actuarial liability. While the growing operations of ICICI Prudential Life had a negative impact of Rs. 139 crore (US$ 31 million) on the Bank’s consolidated profit after tax in FY2006 on account of the above reasons, the company’s unaudited New Business Achieved Profit (NBAP) for FY2006 was Rs. 528 crore (US$ 118 million) compared to Rs. 312 crore (US$ 70 million) in FY2005. NBAP is a metric for the economic value of the new business written during a defined period. It is measured as the present value of all the future profits for the shareholders, on account of the new business based on standard assumptions of mortality, expenses and other parameters. Actual experience could differ based on variance from these assumptions especially in respect of expense overruns in the initial years.

Prudential ICICI Asset Management Company was among the top two private sector mutual funds in India at March 31, 2006 with assets under management of over Rs. 23,500 crore (US$ 5.3 billion).

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Contact

For press queries: Charudatta Deshpande, ICICI Bank Limited, + 91(022) 2653 8208
[email protected].