Professional Documents
Culture Documents
May 3, 2002
Agenda
ICICI Bank today
Retail banking
Merger process
Financial performance
2
ICICI Bank today
Large capital base
Indias
Indias largest
largest
Vast talent pool private
private sector
sector
bank
bank and
and one
one
stop
stop financial
financial
Low operating costs
solutions
solutions
provider
provider with
with aa
Technology focus diversified
diversified and
and
de-risked
de-risked
business
business
Strong corporate model
model
relationships
3
ICICI Bank today (contd.)
Diversified portfolio
March 2001- Proforma March 2002- Merged
merged
7%
5% 23%
33% Project finance
Corporate finance
Retail finance
Reserves & cash
12%
Investments
4% Other assets 23%
34%
12% 36%
3% 8%
4
ICICI Bank today (contd.)
De-risked portfolio
Capital adequacy ratio of 11.44%
Net NPA ratio of 4.7%
Fair valuation adjustment of Rs. 37.80
billion
(Rs. in billion)
Gross book Existing Fair value Total Coverage
value provision provision provision
Non-performing 69.18 34.66 9.02 43.68 63.1%
loans
Other loans 476.36 2.19 19.53 21.72 4.5%
Mark-to-market of investments 9.25
Total fair valuation adjustment 37.80
5
ICICI Bank today
(contd.)
Retail banking
Merger process
Financial performance
7
Size Retail loan disbursements
500
450.0
CAGR
CAGR32%
32% 0
400
350.0
0 220.00
300 260.0
0 180.00
billion)
(Rs. in
200 130.00
100 230.00
170.00
130.00
0
2000 2001 2002
Mortgages Other retail loans
ICICI estimates
Despite the fast growth, the Indian retail market
continues to be under-penetrated in comparison
to its peers
8
Benchmarking
(USD in billion)
outstanding
/ GDP
400 34% 40%
300 30%
200 17% 20%
100 2% 10%
0 0%
India Thailand Malaysia Taiwan Korea USA
9
Benchmarking (contd.)
Consumer loans / Total Mortgages / GDP 37.0%
loans 58.0%
USA - 51%
36.0% 17.0%
26.0% 13.0%
13.0% 9.0%
8.0%
1.0%
India
India Thailand Malaysia
Thailand Malaysia TaiwanTaiwan
Korea KoreaIndia
India ThailandKoreaKorea
Thailand Malaysia
Malaysia Taiwan Ta
82.4%
USA - 235% USA - 24%
16.0% 17.0%
8.0%
2.8% 9.8%
0.4% 0.8%
India
India Thailand
Thailand Malaysia
Malaysia Taiwan Taiwan
Korea KoreaIndia
India
ThailandTaiwan
Thailand
Taiwan Malaysia
Malaysia Korea
K
Source: Salomon Smith Barney
CAGR
CAGR48%
48% 6.8
~
2.1
Achieving Brand
leadership in
retail financial
services
Technology
Customized cross-selling
by leveraging relationships,
brand and technology
13
Operational excellence
Prudent credit
policies
Bolstered by a
company wide 6
sigma initiative
14
Our growth in retail (contd.)
Outstanding
79.86
80 loans Home loans grew
70 Growth
Growthrate
rate at 230% in FY
60 167%
167% 2002
51.34
50 Amongst the
billion)
(Rs. in
40 leading providers
30.73
30 of home loans in
20 22.12 India
10 5.15
8.61
28.52 Other retail loans
- grew at 130% in
2000 2001 2002 FY 2002
Home loans Other retail loans
15
Our growth in retail (contd.)
Internet
Internetbanking
bankingccusustotomers
mers
B ank c us to mer ac c o unts
B ank c us to mer ac c o unts
5.0
5
5 5.0
Bank accounts
4
4 grew at 53% in
(million)
3.2
3.2 FY 2002
3
3 Internet
customer
2
2 accounts grew at
1.2
1.2 100% in FY 2002
1
1 0.6
0.6 0.6 Comprised 25%
0.6
0.3
0.3 0.1
0.1 of bank accounts
-- Among top
1999
1999 2000
2000 2001
2001 2002
2002 twelve internet
banks in the
world
5.0
16
Our growth in retail (contd.)
Number
Numberof
of credit
creditcards
cards
0.8
0.8
Growth
Growthrate
rate 0.6
100% 0.6
100%
(million)
0.5
0.5
0.3
0.3
0.3
0.3
--
2000
2000 2001
2001 2002
2002
17
In summary
Mortgages
Credit cards
18
Contents
ICICI Bank today
Retail banking
Merger process
Financial performance
19
Corporate banking and structured
finance
Maximize value of client relationships
20
Corporate banking and structured
finance
Grow market share in fee-based products
Fee market size and services
4%
51% Corporate
Retail
13% Government
Forex
Overseas
branches
14%
18%
Market size: Rs. 111.10
billion
Corporate Banking Structured Finance
21
Corporate banking and structured
Corporate Solutions Group
finance
Reach the entire universe of current and
potential clients (over 1300) and offer tailor-
made solutions
Government Solutions Group
Strategy
22
Corporate banking and structured
finance
Leverage expertise to facilitate loan
origination and ensure sell down leading
to
Strategy
23
Corporate banking and structured
Infrastructure Projects Group
finance
Create a balanced portfolio across sub-
sectors
Telecom, Power, Transportation, Urban
Infrastructure
Strategy
24
Contents
ICICI Bank today
Retail banking
Merger process
Financial performance
25
Merger process
26
Merger process
All regulatory approvals obtained
27
Merger process
Fair valuation of loans done by Deloitte
Haskins & Sells
Comprehensive review of credit rating
methodology
Robust approach to evaluation
Examination of loan files and review of
Valuation
collateral
Analysis of projections and restructuring
schemes (if any) to estimate future cashflows
Discounted value of cashflows on the loan
calculated to estimate the fair value
Provisioning requirement ascertained by
above process extrapolated to the balance
portfolio
Equity & related investment portfolio
marked to market
Regulatory Fair valuation of loans
Merger accounting
28
Merger process
Accounting for the merger under purchase
method
Fair valuation reflected through additional
Best practices
provisions
Partly in ICICIs accounts prior to the
Appointed Date
(Rs. in billion)
Balance Grossadjusted against
book Existing ICICIs
Fair value Total reserves
Coverage
value provision provision provision
transferred
Non-performing
to ICICI
69.18
Bank on
34.66 9.02
the43.68
Appointed
63.1%
loansDate
Other loans 476.36 2.19 19.53 21.72 4.5%
Leading to a de-risked portfolio
Mark-to-market of investments 9.25
Total fair valuation adjustment 37.80
29
Contents
ICICI Bank today
Retail banking
Merger process
Financial performance
30
Profit & loss statement1
(Rs. in billion)
Q4- Q4- Inc
FY01 FY02
FY01 FY02 %
Interest income 3.69 6.77 12.42 21.52 73.3
Interest expense 2.44 5.33 8.38 15.59 86.0
ICICI Bank
1. Includes operations of ICICI, ICICI PFS and ICICI Caps from the Appointed
Date i.e., Mar 30, 2002.
31
Balance sheet: Assets
(Rs. in billion)
FY02 FY02
FY01
Standalone Merged
Cash, balances with 77.06 286.14 357.64
banks &SLR
- Cash &balances 35.94 86.48 129.71
ICICI Bank
32
Balance sheet: Liabilities
(Rs. in billion)
FY02 FY02
FY01
Standalone Merged
Net worth 13.13 15.45 62.49
- Equity capital 2.20 2.20 6.13
ICICI Bank
33
US GAAP: Income statement
(Rs. in billion)
FY01 FY02 Inc. %
34
US GAAP: Net income
reconciliation (Rs. in billion)
FY2001 FY2002
As per Indian GAAP 1.61 2.58
Profit of ICICI, ICICI Capital &ICICI PFS for - (0.08)
two days included under Indian GAAP
ICICI Bank
35
In conclusion
36
Safe Harbour
Except for the historical information contained herein, statements in this
release which contain words or phrases such as will, aim, will likely
result, would, believe, may, 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,
our provisioning policies, technological changes, investment income, cash
flow projections, our exposure to market risks as well as other risks detailed
in the reports filed by ICICI Bank Limited with the Securities and Exchange
Commission of the United States. ICICI Bank Limited undertakes no
obligation to update forward-looking statements to reflect events or
circumstances after the date thereof.
37
Thank You
38
Profit & loss statement
(Rs. in billion)
Q4 Q4 FY01 FY02 Inc.%
ICICI standalone
FY01 FY02
Fund based income 21.06 19.44 82.11 84.75 3.2
Less: Interest &related 17.99 16.40 69.12 70.74 2.4
expenses &Lease dep.
Net fund based income 3.07 3.04 12.99 14.01 7.8
Fees and commissions 1.42 0.43 5.22 4.72 (9.6)
Net i/c from operations 4.49 3.47 18.21 18.73 2.8
Operating expenses 0.83 1.16 3.37 3.64 8.0
Profit from operations 3.66 2.31 14.84 15.09 1.7
39
Profit & loss statement
(Rs. in billion)
Q4 Q4 FY01 FY02 Inc.%
FY01 FY02
ICICI standalone
Profit from operations 3.66 2.31 14.84 15.09 1.7
Less: Provisions &
write-offs 2.76 2.98 6.08 6.10 0.3
Add: Dividend 0.40 0.58 1.08 1.78 64.6
Add: Net capital gains 3.47 2.84 3.44 2.37 (31.2)
Add: Other income 0.45 0.04 0.62 0.18 (69.8)
Profit before tax and
additional items 5.22 2.79 13.90 13.32 (4.2)
Less: Additional prov.
&inv. write down 8.13 5.57 8.13 5.57 -
Less: Provision for tax (0.34) (0.84) 0.40 1.05 162.5
Profit after tax (2.57) (1.94) 5.37 6.70 24.7
40