Icici Restructured Loans Rise 135.5%

The gross restructured loans of ICICI has increased by 135.5 per cent during fiscal 2001 to Rs 4,370 crore triggered by an increase in restructuring of loans to the textiles and iron and steel industries.

In its semi-annual filing with the Securities & Exchange Commission (SEC) in the last week of September, ICICI has said that the other impaired loans of Rs 660 crore were re-classified as restructured loans as on March 31, 2001, after restructuring of these impaired loans in fiscal 2001.

The gross other impaired loans have decreased by 17.5 per cent to Rs 4,170 crore in fiscal 2001 primarily due to the re-classification of other impaired loans to restructured loans of Rs 660 crore.

It has also pointed out that the net restructured loans as a percentage of net loans for the fiscal ended 2001 was at 5.4 per cent compared to 1.9 per cent the previous year.

The net other impaired loans were at 3.3 per cent at year-end fiscal 2001 (4.3 per cent previous year).

The largest proportion of the impaired loans of the FI is to the textiles, iron and steel and man-made fibers sectors. "There is a risk that impaired loans in each of these sectors and in other sectors including basic chemicals, plastics, paper and paper products and metal products sectors could increase if Indian economic conditions deteriorate or there is a negative trend in global commodity prices," said ICICI in its filing.

The 10 largest impaired loans of the institution accounted for 26.3 per cent of the gross impaired loan portfolio and 34.0 per cent of the net impaired loan portfolio.

ICICI is focusing on selling down its debentures and corporate loans to better manage mismatches in the maturities of its assets and liabilities and to provide additional liquidity. However, ICICI Bank and ICICI Securities rely for a certain proportion of their funding, on the inter-bank market for overnight money.

ICICI has also said that if interest rates decreased or increased by 100 basis points, it expects the net interest revenue for fiscal 2002 from the loan portfolio would increase or decrease by Rs 39.8 crore. This amount constitutes 6 per cent of the net income for fiscal 2001.

Similarly, for ICICI Bank the that net interest revenue for fiscal 2002 would fall or increase by Rs 50 lakh if interest rates increases or decreases by 100 basis points during fiscal 2002. This amount constitutes only 0.4 per cent of ICICI Bank's net income for fiscal 2001.