The Hindu Business Line : ICICI Bank: All-round improvement

ICICI Bank has turned in a picture-perfect performance spoilt only by the recent RBI restrictions on dividend declaration that ensured zero growth in dividend per share and a fall in dividend payout ratio.

ICICI's net profits have grown at a rapid pace and all its major subsidiaries — ICICI Securities, ICICI Lombard and ICICI Prudential — have done well. Though ICICI has not declared the financial performance of its mutual fund venture, its profits too should have risen sharply judging by the growth in assets under management.

On all major parameters such as growth in advances, growth in deposits, fee income growth, sell down of high-cost liabilities of erstwhile ICICI, level of net restructured assets and level of net non-performing assets, ICICI Bank has reported substantial improvement during 2003-04.

ICICI Bank's business growth in 2003-04 is way ahead of that of the banking system. In addition, the performance in the quarter ended March 2004 is better than the performance in the quarter ended December 2003. ICICI's cost of deposits and cost to income ratio have come down sharply too.

In terms of outlook, the prospects for profit growth remain bright. ICICI's cost of deposits is now about 5 per cent, still partly weighed down by erstwhile ICICI's liabilities. The cost of deposits of HDFC Bank at the end of March 2004 was about 3.9 per cent and ICICI Bank's cost could decline to that level.

In addition, given the Rs 2,800 crore public offering, ICICI Bank will now retain more advances on its balance sheet in 2004-05. ICICI bank net customer assets increased only by 11 per cent even though its disbursements for the year rose 28 per cent. The expected decline in costs and retention in assets will add to the growth in interest income.

The bank's subsidiaries and ventures too are in a growth phase. ICICI Bank looks set to turn in another year of robust growth in profits.

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