ICICI Bank (ICICIBANK) Q4 03/04 earnings summary

Executive summary

• FY04 profit after tax rose 35.7% YoY to Rs. 16.37bn; operating profit before provisions increased 71.9% to Rs. 23.72bn, excluding the prior-year share-sale gain.

• Retail lending and deposits expanded, diversifying the balance sheet and improving net interest margin; management cited continued retail growth and opportunities in corporate credit, infrastructure, rural services and international markets.

Financial highlights

• Operating income rose 45.8% to Rs. 49.44bn; net interest income increased 32.0% to Rs. 18.79bn and non-interest income rose 55.8% to Rs. 30.65bn, excluding the FY03 share-sale gain.

• Net profit after provisions and tax increased 35.7% to Rs. 16.37bn; consolidated profit after tax was Rs. 15.80bn.

• FY04 provisions and contingencies were Rs. 4.70bn versus Rs. 17.91bn in FY03, which included Rs. 16.86bn of additional or accelerated provisions, primarily on the legacy ICICI portfolio.

• Total assets grew 17.2% to Rs. 1,252.29bn; advances rose 16.5% to Rs. 620.96bn and deposits increased 41.4% to Rs. 681.09bn.

Outlook and guidance

• Retail credit momentum was expected to continue; improved industrial conditions and infrastructure investment were seen supporting corporate credit and project-finance opportunities.

• Further reduction in funding costs was expected as higher-cost legacy borrowings mature, although net interest margin was expected to remain below other Indian banks until those borrowings are repaid.

• Plans included scaling small-enterprise and rural delivery, expanding international operations subject to regulatory approvals, and developing insurance and project-finance businesses.