ICICI Bank (ICICIBANK) Q4 06/07 earnings summary

Executive summary

• FY07 profit after tax rose 22.4% YoY to Rs. 31.10 billion; operating profit increased 51.1% to Rs. 58.74 billion, while provisions and contingencies climbed to Rs. 22.26 billion.

• Growth was driven by higher net interest and fee income, retail lending and business expansion; higher funding costs and credit provisions weighed on margins and consumer/commercial banking profit.

• Consolidated profit after tax reached Rs. 27.61 billion; life insurance operations reduced consolidated profit by Rs. 4.80 billion.

Financial highlights

• Net interest income rose 40.9% YoY to Rs. 66.36 billion; non-interest income grew 39.4% to Rs. 59.14 billion, including fee income growth of 45.4% to Rs. 50.12 billion.

• Operating expenses increased 33.8% YoY to Rs. 66.91 billion; employee expenses rose 49.4% to Rs. 16.17 billion and other administrative expenses rose 41.9% to Rs. 30.03 billion.

• Profit before tax increased 17.8% to Rs. 36.48 billion; profit after tax rose 22.4% to Rs. 31.10 billion.

• Total assets grew 37.1% to Rs. 3,446.58 billion; net advances rose 34.0% to Rs. 1,958.66 billion and deposits increased 39.6% to Rs. 2,305.10 billion.

Outlook and guidance

• Management expected sustained high Indian growth, with retail financial services, corporate international expansion and rural banking identified as growth opportunities.

• Infrastructure and capacity expansion were expected to support financing demand; estimated investment needs exceeded US$500 billion by 2010.

• Basel II requirements take effect at FY08 year-end, raising minimum Tier I capital adequacy to 6.0% and introducing an operational-risk capital charge.

• Priority-sector lending rules revised for FY08 link targets to adjusted net bank credit or credit-equivalent off-balance-sheet exposure, whichever is higher.