ICICI Bank: Healthy profits, hefty bonuses

    Radhika Merwin
    BL Research Bureau
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In a turbulent year for banks, ICICI Bank expanded its retail loans by 25 per cent, boosted its low-cost deposits and managed a 3 per cent margin on lending for the first time ever. This helped the bank’s net profits jump by 29 per cent in 2012-13.

For this, its latest Annual Report shows, the top management has been well rewarded this year. Chanda Kochhar, Managing Director and CEO, received a bonus of Rs 1.8 crore, a good 38 per cent more than the previous year. This takes her overall compensation package to Rs 5 crore. N.S. Kannan, Executive Director and CFO, also received bonus of Rs 1.2 crore, also a similar increase. All whole-time directors took home higher bonuses.


The other highlight of the year was the bank’s subsidiaries chipping in with better numbers. ICICI Bank has arms operating in life insurance, general insurance and mutual fund businesses. It also has subsidiaries doing banking business in Canada, Russia and the UK .

In 2012-13, the dividend from these subsidiaries increased by 24 per cent and added Rs 736 crore to the bank’s profits. This included dividends of Rs 330 crore from ICICI Prudential Life Insurance, Rs 170 crore from ICICI Bank Canada and Rs 130 crore from ICICI Bank UK.

A big contribution to the consolidated kitty came from ICICI General, which recorded a profit, turning around from a loss of Rs 400 crore last year. ICICI Prudential Life Insurance maintained a market leading position with a 7 per cent share. Its net profit grew by 8 per cent to Rs 1500 crore in 2012-13. ICICI Asset Management Company turned in a net profit of Rs 110 crore compared with Rs 80 crore in the previous year.

However, there were subsidiaries which were under pressure due to challenges in the capital markets. ICICI Securities, which houses the broking business saw profits decline from Rs 77 crore to Rs 68 crore in 2012-13. ICICI Venture Funds too saw profits dented from Rs 68 crore to Rs 20 crore in the fiscal 2013.

ICICI Bank has always bet big on technology. The bank’s Facebook page had 2 million fans by year-end, cementing its aspiration of being a retail bank.

(This article was published on June 30, 2013)
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Rajalakshmi Nirmal and Radhika Merwin of the BL Research Bureau discuss the role of asset reconstruction companies (ARCs) in the banking sector and how they deal with bad loans.


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