ICICI Bank, India's largest private sector bank, on Saturday reported a 35 per cent increase in its net profit to Rs 1,230 crore* in the quarter ended December 2007 from a year earlier, on robust growth in corporate credit and net interest margins.
The bank's total income grew 36 per cent to Rs 10,338.36 crore (Rs 7,581.46 crore). The fee income increased by 33 per cent to Rs 1,785 crore, from Rs 1,345 crore in the same period last year.
"The growth in profits has been robust on account of a rise in advances and improvement in margins. The net interest margin has improved to 2.3 per cent from 2.2 per cent. The rise in fee income has also contributed to the growth. International operations contributed about 23 per cent to the bank's fee income. The retail portfolio has grown at 12 per cent, which is in line with industry growth. In the retail portfolio, the share of unsecured loans including credit cards and personal loans, increased,'' Chanda Kochhar, deputy managing director, ICICI Bank, said.
The bank's deposits base increased 17 per cent to Rs 2,29,779 crore at the end of December 31, 2007 from Rs 1,96,893 crore on December 31, 2006.
The current and savings account deposits increased 33 per cent to Rs 62,494 crore compared with Rs. 47,062 crore. The cost of funds dipped to 7.4 per cent from 7.9 per cent. Advances increased by 25 per cent to Rs 2,15,517 crore at the end of December 31, 2007 from Rs. 172,763 crore.
The proportion of advances of the bank's international branches to total advances increased to 21 per cent as on December 31, 2007 against 12 per cent at December 31, 2006.
The share of retail advances, as a percentage of total advances, reduced to 61 per cent. It was around 65 per cent earlier.
The bank's capital adequacy for the period stood at 15.8 per cent. From January to December 2007, ICICI Bank and ICICI Bank UK raised $6.7 billion in the international bond markets in dollar, euro and sterling currencies.
This is used primarily for financing the expansion of Indian businesses, including their organic and inorganic growth internationally and their large investment plans in India.
I-Sec to list by June
ICICI Bank plans to float an initial public offer for ICICI Securities, its wholly-owned capital market subsidiary, by June 2008 to unlock shareholder value and raise funds to support business plans.
ICICI Bank will dilute its holding in ICICI Securities, up to 15 per cent of the company's post-issue capital base, through the IPO and private placement.
The boards of ICICI Bank and I-Sec have approved the capital raising plans. I-Sec Managing Director S P Mukherji said, "We plan to complete the IPO process by June 2008." I-Sec's paid-up capital is currently Rs 61 crore. Its valuation is $6-7 billion, according to analysts.
The bank will privately place 2-3 per cent of the equity with one or more institutional investors, prior to the public offer. The institutions will be financial investors and not strategic investors, Mukherji said.
ICICI Bank Joint MD Chanda Kochhar said the dilution in ICICI Securities is part of plans to unlock value in subsidiaries such as the asset management company, home finance company and insurance venture.
ICICI Securities' operations primarily encompass retail broking, institutional broking, distribution of retail financial products, wealth management and equity capital markets, including advisory services.
* 100 crore = 1 billion; 1 crore = 10 million
