Item 2
ICICI Limited
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) 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
(b) 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
tier-1 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
Q1-2000 Q1-2001 Growth % FY 2000
------- ------- -------- -------
Fund based income 1,872 2,001 6.9 7,577
Less: Interest and depreciation charges 1,534 1,626 6.0 6,373
Net fund based income 338 375 11.1 1,204
Add: Fees and commissions 62 98 59.8 324
Add: Gross Capital Gains 46 6 (86.7) 522
Less: Provisions/write-down of investments 26 27 6.1 228
Net capital gains 20 (21) - 294
Add: Dividend income 27 52 87.8 210
Net income from operations 447 504 12.8 2,032
Less: Operating expenses 73 92 25.8 297
Profit from operations 374 412 10.2 1,735
Add: Other income 4 16 - 55
Profit before provisions and tax 378 428 13.4 1,790
Less: Provisions and write-offs for
loans & debentures 89 115 29.3 462
Profit before tax 289 313 8.5 1,328
Less: Provision for tax 27 26 (3.7) 122
Profit after tax 262 287 9.8 1,206
Summary Balance Sheet (Indian GAAP)
Rs. crore
Jun 30, Jun 30, Mar 31,
1999 2000 Growth % 2000
------- ------- -------- -------
Net loans and debentures 42,679 50,501 18.3 48,299
Other Investments 2,529 3,371 33.3 3,075
Current assets 9,321 7,123 (23.6) 9,171
Fixed assets 3,826 4,485 17.2 4,499
Miscellaneous expenditure 355 350 (1.5) 346
Total assets 58,710 65,830 12.1 65,390
Shareholders' equity and reserves 5,397 8,303 53.8 8,023
Of which : Equity capital 480 784 63.4 783
Preference capital 1,358 359 (73.6) 1,308
Borrowings 47,519 52,087 9.6 50,881
Current liabilities 4,436 5,081 14.5 5,178
Total liabilities 58,710 65,830 12.1 65,390
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
END