performance review q1:fy 2001-02
TRANSCRIPT
Performance ReviewQ1:FY 2001-02
July 27, 2001
2
Contents
Financial Performance
Business Overview
Operational Performance
Asset Composition and Quality
Capital and Shareholders
3
Summary Performance (Indian GAAP)
Q1FY 01
Q1FY 02
Inc. % FY2001
Profit to equity holders 2.69 3.26 20.7 13.32(1)
Total assets 658.30 747.51 13.6 734.14Disbursals 82.40 87.41 6.1 319.65Net NPA 7.5% 5.1% - 5.2%
Q1FY 01
Q1FY 02
Inc. % FY2001
Profit to equity holders 2.69 3.26 20.7 13.32(1)
Total assets 658.30 747.51 13.6 734.14Disbursals 82.40 87.41 6.1 319.65Net NPA 7.5% 5.1% - 5.2%
Rs. in billion
21% increase in profit to equity holders
(1) After adding back accelerated provisions of Rs. 8.13 bn
4
Profit and Loss Statement
Q1FY 01
Q1FY 02
Inc.%
FY2001
Fund-based income 20.01 22.07 10.3 82.11
Less: Interest & relatedexpenses and Lease dep. 16.26 18.36 13.0 69.12
Net fund based income 3.75 3.71 (1.1) 12.99
Fees and commissions 0.98 1.66 68.8 5.22
Net i/c from operations 4.73 5.37 13.5 18.21
Operating expenses 0.83 0.78 (6.9) 3.37
Profit from operations 3.90 4.59 17.8 14.84
Q1FY 01
Q1FY 02
Inc.%
FY2001
Fund-based income 20.01 22.07 10.3 82.11
Less: Interest & relatedexpenses and Lease dep. 16.26 18.36 13.0 69.12
Net fund based income 3.75 3.71 (1.1) 12.99
Fees and commissions 0.98 1.66 68.8 5.22
Net i/c from operations 4.73 5.37 13.5 18.21
Operating expenses 0.83 0.78 (6.9) 3.37
Profit from operations 3.90 4.59 17.8 14.84
Rs. in billion
5
Profit and Loss Statement
Q1FY 01
Q1FY 02
Inc.%
FY2001
Profit from operations 3.90 4.59 17.8 14.84Less : Provisions & write-offs 1.15 1.09(1) (4.4) 6.08Profit before income frominvestments and otherincome 2.75 3.50 27.1 8.76Dividend 0.51 0.45 (12.2) 1.08Net capital gains (0.21) (0.13) -- 3.44Other income 0.08 0.04 -- 0.63Profit before tax andaccelerated provisions 3.13 3.86 23.0 13.91
Q1FY 01
Q1FY 02
Inc.%
FY2001
Profit from operations 3.90 4.59 17.8 14.84Less : Provisions & write-offs 1.15 1.09(1) (4.4) 6.08Profit before income frominvestments and otherincome 2.75 3.50 27.1 8.76Dividend 0.51 0.45 (12.2) 1.08Net capital gains (0.21) (0.13) -- 3.44Other income 0.08 0.04 -- 0.63Profit before tax andaccelerated provisions 3.13 3.86 23.0 13.91
Rs. in billion
(1) Includes Rs.0.32 bn on account of provision for restructured assets
6
Profit and Loss Statement
Q1FY 01
Q1FY 02
Inc.%
FY2001
Profit before tax andaccelerated provisionsand write-offs 3.13 3.86 23.0 13.91Accelerated provisionsand write-offs - - - 8.13Less : Provision for tax 0.26 0.60(1) 130.8 0.40Profit after tax 2.87 3.26 13.3 5.37Less: Preference div 0.18 - - 0.18Profit to equity holders 2.69 3.26 20.7 5.19Profit to equity holdersafter adding backaccelerated provision 2.69 3.26 20.7 13.32
Q1FY 01
Q1FY 02
Inc.%
FY2001
Profit before tax andaccelerated provisionsand write-offs 3.13 3.86 23.0 13.91Accelerated provisionsand write-offs - - - 8.13Less : Provision for tax 0.26 0.60(1) 130.8 0.40Profit after tax 2.87 3.26 13.3 5.37Less: Preference div 0.18 - - 0.18Profit to equity holders 2.69 3.26 20.7 5.19Profit to equity holdersafter adding backaccelerated provision 2.69 3.26 20.7 13.32
Rs. in billion
(1) Provision for tax made as per the new accounting standard on deferred taxation
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Balance SheetAssets Jun 30,
2000Jun 30,
2001Inc.%
Mar 31,2001
Net loans &Debentures
505.02 571.97 13.3 560.02
- Rupee loans 343.74 420.91 22.5 400.45- Retail loans 6.92 24.21 250.0 20.40- Debentures 71.99 61.75 (14.2) 67.47- FC loans 93.75 78.55 (16.2) 84.74
- Less :Provisions 11.38 13.45 18.2 13.04Otherinvestments 33.70 44.61 32.4 44.04Current assets 71.23 70.05 (1.66) 75.83Leased assets 35.81 39.54 10.4 40.69Other fixedassets 9.04 18.03(1) 99.4 10.42Misc. Exp. 3.50 3.30 (5.5) 3.14Total assets 658.30 747.51 13.6 734.14
Assets Jun 30,2000
Jun 30,2001
Inc.%
Mar 31,2001
Net loans &Debentures
505.02 571.97 13.3 560.02
- Rupee loans 343.74 420.91 22.5 400.45- Retail loans 6.92 24.21 250.0 20.40- Debentures 71.99 61.75 (14.2) 67.47- FC loans 93.75 78.55 (16.2) 84.74
- Less :Provisions 11.38 13.45 18.2 13.04Otherinvestments 33.70 44.61 32.4 44.04Current assets 71.23 70.05 (1.66) 75.83Leased assets 35.81 39.54 10.4 40.69Other fixedassets 9.04 18.03(1) 99.4 10.42Misc. Exp. 3.50 3.30 (5.5) 3.14Total assets 658.30 747.51 13.6 734.14
Rs. in billion
(1) Include Rs.7.20 bn of revaluation reserves
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Balance Sheet
Liabilities Jun 30,2000
Jun 30,2001
Inc.%
Mar 31,2001
Shareholders’ equity 83.03 90.18 8.6 79.73- Equity capital 7.84 7.85 0.1 7.85- Reserves and surplus 75.19 82.33(1) 9.5 71.88Preference capital 3.59 3.50 (2.4) 3.50Borrowings 520.87 600.84 15.4 598.35- Rupee funds 434.52 502.71 15.7 497.34- Foreign currency funds 86.35 98.13 13.7 101.01Current liab. & Provns. 50.81 52.99 4.3 52.56Total liabilities 658.30 747.51 13.6 734.14
Liabilities Jun 30,2000
Jun 30,2001
Inc.%
Mar 31,2001
Shareholders’ equity 83.03 90.18 8.6 79.73- Equity capital 7.84 7.85 0.1 7.85- Reserves and surplus 75.19 82.33(1) 9.5 71.88Preference capital 3.59 3.50 (2.4) 3.50Borrowings 520.87 600.84 15.4 598.35- Rupee funds 434.52 502.71 15.7 497.34- Foreign currency funds 86.35 98.13 13.7 101.01Current liab. & Provns. 50.81 52.99 4.3 52.56Total liabilities 658.30 747.51 13.6 734.14
Rs. in billion
(1) Include Rs.7.20 bn of revaluation reserves.. No deferred tax liability relating to earlier years has been created. If such liability was created, the reserves would have been lower by Rs. 3.39 bn.
9
Summary Ratios (Indian GAAP)...
Q11
FY 01Q11
FY 02FY20012
EPS (Rs) 14.4 16.6 17.0
Return on Assets (%) 1.9 1.9 2.1
Return on Net Worth (%) 14.6 16.4 16.4
Overheads/Net Incomefrom operations 3 15.9 13.4 17.4Overheads/Average NetAssets 0.6 0.5 0.5
Q11
FY 01Q11
FY 02FY20012
EPS (Rs) 14.4 16.6 17.0
Return on Assets (%) 1.9 1.9 2.1
Return on Net Worth (%) 14.6 16.4 16.4
Overheads/Net Incomefrom operations 3 15.9 13.4 17.4Overheads/Average NetAssets 0.6 0.5 0.5(1) Annualised (2) After adding back accelerated provisions and write-offs of Rs. 8.13 billion(3) Net income from operations includes net fund-based income, fees & commissions and dividend income
10
Consolidated profits: Indian GAAP
Q1FY 01
Q1FY 02
Profit after tax of ICICI 2.87 3.26
ICICI’s share of income fromsubsidiaries/affiliates 0.40 0.85
Dividend elimination (0.30) (0.40)
Consolidated profit 2.97 3.71
Q1FY 01
Q1FY 02
Profit after tax of ICICI 2.87 3.26
ICICI’s share of income fromsubsidiaries/affiliates 0.40 0.85
Dividend elimination (0.30) (0.40)
Consolidated profit 2.97 3.71
Rs. in billion
25% Growth inConsolidated Profit
11
Consolidated profit: US GAAP
Q1FY 01
Q1FY 02
Income before tax 2.75 3.34
Net income beforecumulative effect ofaccounting change(1) 2.31 2.51
Total stockholder’s equity 71.84 73.99
Total assets 656.89 753.29
Q1FY 01
Q1FY 02
Income before tax 2.75 3.34
Net income beforecumulative effect ofaccounting change(1) 2.31 2.51
Total stockholder’s equity 71.84 73.99
Total assets 656.89 753.29
Rs. in billion
21% Growth inIncome before Tax
(1) Net income, including the cumulative effect of accounting changeof Rs. 1.27 billion, is Rs. 3.77 billion in Q1-FY02.
12
Consolidated US GAAP Accounts The balance sheet does not include the deferred tax
asset arising out of 'other than temporary' diminution on investments charged to the income statement in prior years. Inclusion of such asset could have a positive impact of upto Rs. 0.96 billion on stockholders' equity at March 31, 2001. However, the exact amount will be ascertained on evaluation of likely realization of the deferred tax asset by the management. This change will be incorporated in the Form 20-F, as a correction to the financial statements for financial year 2001, to be filed with the U.S. SEC
13
Reconciliation of net income - US GAAP Rs. in billion
Q1FY 01
Q1FY 02
As per Indian GAAP 2.87 3.26Provisions for credit losses (0.21) (0.67)Amortisation of loan origination fees (0.07) (0.16)Business combination in respect of mergers (0.03) (0.02)Investment diminution (0.13) (0.27)Preference dividend payout (0.17) --MTM loss on trading/hedging portfolio (0.02) 0.08Investment in equity affiliates 0.13 0.02Net income of consolidated subsidiaries 0.01 0.11Others (0.07) 0.16Total adjustments as per US GAAP (0.56) (0.75)
As per US GAAP (1) 2.31 2.51
Q1FY 01
Q1FY 02
As per Indian GAAP 2.87 3.26Provisions for credit losses (0.21) (0.67)Amortisation of loan origination fees (0.07) (0.16)Business combination in respect of mergers (0.03) (0.02)Investment diminution (0.13) (0.27)Preference dividend payout (0.17) --MTM loss on trading/hedging portfolio (0.02) 0.08Investment in equity affiliates 0.13 0.02Net income of consolidated subsidiaries 0.01 0.11Others (0.07) 0.16Total adjustments as per US GAAP (0.56) (0.75)
As per US GAAP (1) 2.31 2.51
(1) Excludes cumulative effect of accounting change
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Contents
Financial Performance
Business Overview
Operational Performance
Asset Composition and Quality
Capital and Shareholders
15
Maintaining business leadership & profitability has been the thrust of our strategies...
16
…with a sharper focus on the client
Client Relationship
Ensuring that clients derive maximum advantage from market opportunities
Position ICICI as a solution provider for every financial need
Client Relationship
Credit Operations
Credit Operations
Evaluate and mitigate key risks, minimize residual risk on our business operations and review exposures
Seamless delivery of credit
Enhancing the credit quality
Client
17
Customer Segmentation
Large Corporates
Differentiate from competition based on innovation and speed
Mid cap companies
Partner growth with a complete product suite
PSUs and Govt
Institutions
Focus on high quality corporate finance, structured finance and
transaction services
18
`
Public issuance
WC Banking
Corporate
Treasury
I- Banking
Term Loans Non-fund basedCash Management
CP MIBOR Linked PapersForexDebentures
Debt Placements
M&A Activity
EscrowSmall Business Finance
Trade Finance Dividend Warrants
ATMRetail Banking
Power Pay Credit Cards
Personal Banking
Consumer Loans
Auto Loans Home LoansPFS
Cross-sell profile - Large Diversified Conglomerate
Extensive cross-selling to large clients …
19
`
Public issuance
WC Banking
Corporate
Treasury
I- Banking
Term Loans Non-fund basedCash Management
CP MIBOR Linked PapersForexDebentures
Debt Placements
M&A Activity
EscrowSmall Business Finance
Trade FinanceDividend Warrants
ATMRetail Banking
Power Pay Credit Cards Personal Banking
Consumer Loans
Auto Loans Home LoansPFS
Cross-sell profile - Automotive Company
… has been rolled-out to mid-cap companies also
20
Focus on the Government segment…
Dedicated Government & Institutional group (GIG)
• Government Departments
• Central and State level institutions
• Municipal corporations
• Public Sector Companies
• Quasi-Government Bodies
21
PSU Divestment Advisory MandatesPSU Divestment Advisory Mandates
Cash Management, Payroll and Current Accounts
Cash Management, Payroll and Current Accounts
Utility Bill paymentUtility Bill payment
Resource raisingResource raising
Home finance for State Housing Board projects
Home finance for State Housing Board projects
…with significant cross-selling
22
Telecom
Maintaining leadership in infrastructure finance...
Transportation and Urban
Infrastructure
Energy, Oil & Gas
•As member of sub-group under the Group on Telecom and IT Convergence, ICICI has been working on Communication Convergence Bill 2000
•Financial closure for a state cellular operator with ICICI as lead arranger
•Earnest money bank guarantees for 4th cellular license bidding
•Performance guarantees for National Long Distance operator
• Investment of Rs. 1,500 bn by 2007 subject to a stable policy framework
• Mobile subscribers to increase to 15 mn by 2007 from 4 mn currently
• Fixed lines to increase to 70 mn by 2007 from 32 lines mn currently (largely by BSNL / MTNL)
• 2/3 more long distance operators expected• 2/3 more international gateways expected
23
Maintaining leadership in infrastructure finance...
•Assistance to urban local bodies for water supply projects•Syndicate leader for a chemical port terminal project •Underwrote senior debt for expressway-cum-area
development project
• Outstanding issues in concessions & bidding process continue to delay investment proposals of over Rs. 40 billion in transportation sector
• Breakthroughs in urban sector despite slow pace of reforms
TelecomTransportation and Urban
Infrastructure
Energy, Oil & Gas
24
Maintaining leadership in infrastructure finance...
Telecom
Transportation and Urban
Infrastructure
Energy, Oil & Gas
•Working closely with the Ministry of Power to resolve systematic issues through policy formulation
•Refinancing for the first operating IPP in the hydro sector
• Systemic issues continued to dissuade private investments, particularly in the power sector
25
Growth in Structured Finance
Range of structured transactionsRange of structured transactions
Purchase of deferred sales tax receivables of corporate entities
Purchase of deferred sales tax receivables of corporate entities
Revolving line for securitisation of receivables
Revolving line for securitisation of receivables
Corporate Loan securitisation
Active secondary market for the paper
Corporate Loan securitisation
Active secondary market for the paper
Financing public utilities with escrow of charges and sub-ordination of loan obligations
Financing public utilities with escrow of charges and sub-ordination of loan obligations
26
Retail Finance
Home LoansHome Loans
• 58% growth in approvals
• Presence in 61 cities
• Six Sigma initiative for process streamlining
• 58% growth in approvals
• Presence in 61 cities
• Six Sigma initiative for process streamlining
Auto FinanceAuto Finance
• Car loans cross 10% of sales of all cars in India in Q1-2002
• Market share of 10% in two-wheeler finance
• Presence in 72 cities
• Car loans cross 10% of sales of all cars in India in Q1-2002
• Market share of 10% in two-wheeler finance
• Presence in 72 cities
ICICI Web TradeICICI Web Trade
• India’s Leading online share trading site with 63% market share
• Trading for institutions launched in Q1
• First company in Asia to receive KPMG Web Seal
• India’s Leading online share trading site with 63% market share
• Trading for institutions launched in Q1
• First company in Asia to receive KPMG Web Seal
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Contents
Financial Performance
Business Overview
Operational Performance
Asset Composition and Quality
Capital and Shareholders
28
Approvals: Thrust on corporate finance & retail...
Corporate Finance
51%
Infra28%
Mfg. Projects11%
Retail4%Oil & Gas
6%
Corporate Finance
84%
Infra3%
Mfg. Projects3%
Retail10%
Rs. 166.46 billion Rs. 131.52 billion
-1 01Q FY-1 01Q FY - 1 02- 1 02Q FY
29
Disbursements: Continued growth and diversification......
Corporate Finance
77%
Infra7%
Mfg. Projects
9%
Retail7%
Corporate Finance
69%
Infra9%
Mfg. Projects
9%
Retail13%
Rs. 82.40 billion Rs. 87.41 billion
-1 01Q FY-1 01Q FY -1 02Q FY-1 02Q FY
30
Q1- FY01 Q1- FY02
A- & above
Below A-87% 93%
13%7%
Improving quality of business...
Approvals to clients rated ‘A-’ & above up from 87% to 93%
Disbursements to clients rated ‘A-’ & above up from 89% to 92%
Q1-FY01 Q1-FY02
A- & above
Below A-89% 92%
11% 8%
Ap
pro
vals
Dis
bu
rsem
en
ts
31
Diversified and De-risked Asset Portfolio...
31 1997March , 31 1997March ,
Oil & Gas9%
Mfg. Project Finance
73%
Corp. Financ
e9%
Infrastructure9%
Rs. 297.83 billion
30 2001June , 30 2001June ,
Infrastructure13%
Mfg. Project Finance
35%
Corp. Finance
41% Oil & Gas7%
Retail4%
Rs. 662.37 billion
Reduced Risk and
Volatility of Earnings Stream
32
Contents
Financial Performance
Business Overview
Operational Performance
Asset Composition and Quality
Capital and Shareholders
33
Top 10 Industry-wise Exposure1
Industry June 30,2001
March 31,2001
Services 13.5 12.8Iron & Steel 11.2 11.4Power 11.1 11.0Crude petroleum & refining 8.2 9.5Chemical & chemical products 7.1 7.3Textiles 6.3 7.1Cement 4.2 3.9Telecom 3.9 3.6Transport Equipment 3.5 3.1Electronics 2.9 2.5
Industry June 30,2001
March 31,2001
Services 13.5 12.8Iron & Steel 11.2 11.4Power 11.1 11.0Crude petroleum & refining 8.2 9.5Chemical & chemical products 7.1 7.3Textiles 6.3 7.1Cement 4.2 3.9Telecom 3.9 3.6Transport Equipment 3.5 3.1Electronics 2.9 2.5
*Excluding retail finance
% to total
34
Asset Classification
June 30,2000
June 30,2001
March 31,2001
Standard assets 92.5 94.9 94.8
Of which: Restructuredstandard assets - 4.6 2.2Sub-standard assets 2.1 1.6 1.5
Doubtful assets 5.4 3.5 3.7
Loss assets - - -
Total loan assets 100.0 100.0 100.0
June 30,2000
June 30,2001
March 31,2001
Standard assets 92.5 94.9 94.8
Of which: Restructuredstandard assets - 4.6 2.2Sub-standard assets 2.1 1.6 1.5
Doubtful assets 5.4 3.5 3.7
Loss assets - - -
Total loan assets 100.0 100.0 100.0
% of total
35
Continued focus on proactive restructuring...R
estr
uctu
rin
g
Close monitoring of steel cases in view of downturn in
the industry and import barriers in the US and Europe
Close monitoring of steel cases in view of downturn in
the industry and import barriers in the US and Europe
Satisfactory performance of accounts restructured earlierSatisfactory performance of
accounts restructured earlier
Significant progress in restructuring of inherently
viable accounts
Significant progress in restructuring of inherently
viable accounts
36
Non-Performing Loans (Indian GAAP)
June 30, 2000 June 30, 2001 March 31, 2001
Gross NPLs 62.51 60.89 1 59.881
Net NPLs 40.87 30.07 29.822
Net loan assets 544.85 591.86 575.06
Net NPL ratio 7.5% 5.1% 5.2%Mar 31, 1998
June 30, 2000 June 30, 2001 March 31, 2001
Gross NPLs 62.51 60.89 1 59.881
Net NPLs 40.87 30.07 29.822
Net loan assets 544.85 591.86 575.06
Net NPL ratio 7.5% 5.1% 5.2%Mar 31, 1998
Rs. in billion
(1) Excludes debentures in the nature of investments as per the RBI guidelines.
(2) Net of accelerated provisions and write-offs amounting to Rs. 8.13 billion.
37
Clear slow-down in incremental NPLs...
Mar 31,1998
Mar 31,1999
Mar 31,2000
Mar 31,2001
June 30,2001
Gross NPLs 42.12 54.89 60.18 59.881 60.891
% increase 49% 30% 10% (0.5%) 2%
Net NPLs 28.11 37.33 39.59 29.822 30.07
% increase 44% 33% 6% (25%) 0.8%
Mar 31,1998
Mar 31,1999
Mar 31,2000
Mar 31,2001
June 30,2001
Gross NPLs 42.12 54.89 60.18 59.881 60.891
% increase 49% 30% 10% (0.5%) 2%
Net NPLs 28.11 37.33 39.59 29.822 30.07
% increase 44% 33% 6% (25%) 0.8%
Rs. in billion
(1) Excludes debentures in the nature of investments as per the RBI guidelines.(2) Net of accelerated provisions and write-offs amounting to Rs. 8.13 billion.
38
Contents
Financial Performance
Business Overview
Operational Performance
Asset Composition and Quality
Capital and Shareholders
39
Capital Adequacy...
9.7 9.6
5.0 5.5
0
2
4
6
8
10
12
14
16Per
cent
Tier-2
Tier-1
15.1%
March 31, 2001 June 30, 2001
14.7%
Tier - II capital at June 30, 2001 includes revaluation reserve on account of revaluation of fixed assets, as per the RBI guidelines
40
Shareholding Pattern
6.63%
23.47%
3.11%10.32%
8.71%
15.11%
32.65%
6.44%
23.47%
3.11%10.17%8.91%
15.25%
32.65%
UTI
Insurance cos.
Banks and FIs
Individuals
Corporatesand MFs
ADR holders
FIIs & NRIs
March 31, 2001
June 30, 2001
41
Thank You