Icici Net Surges 40% To Rs 1080cr
The Industrial Credit and Investment Corporation of India Ltd (ICICI) has posted a net profit of Rs 1,080 crore in 1997-98, a 40 per cent rise over the previous year. ICICIs capital adequacy ratio stands at 13.1 per cent, of which Tier-I capital accounts for 9.6 per cent.
ICICIs non-performing assets (NPA) increased to 7.6 per cent of total assets at the end of the year from 6.8 per cent at the end of the previous year. The board recommended a dividend of 55 per cent against 45 per cent in 1996-97.
Announcing the results, chief executive officer and managing director K V Kamath said, We will focus on strengthening financial capital, human resources, risk management, and look at technology as a competitive tool .
He added that McKinsey had been appointed to bring about synergy within the different arms of the group; ICICI, ICICI Bank, I Serv, I Sec, I Credit, ICICI AMC and TDICI. The consultants will be closely working with us and most of their recommendations will be implemented within the next seven months, said Kamath. He added that the organisation was a virtual universal bank.
Market sources said ICICIs profits were in line with expectations. The scrip closed lower at Rs 106.60 as profit-taking pulled it down from the days high of Rs 118.50. After opening lower at Rs 113.90 (Rs 114) the scrip touched an intra-day low of Rs 105.20.
About 34.49 lakh ICICI shares worth Rs 39.02 crore were traded on the BSE. On the NSE, the stock closed at Rs 106.80, against its previous close of Rs 114.40. About 37.18 lakh shares worth Rs 41 crore changed hands.
Excluding the extraordinary gain of Rs 73 crore from the sale of ICICI Bank shares, sale of real estate and the restructuring cost related to its merger with ITC Classic, ICICIs profit after tax stands at Rs 1,008 crore, a growth of 34 per cent. The profit before tax has grown from Rs 856 crore in 1996-97 to Rs 1181 crore.
Over 92 per cent of ICICIs assets are standard while the proportion of assets classified as substandard and doubtful are 4.9 per cent and 2.8 per cent, respectively. The net NPA has shot up from Rs 1,950 crore to Rs 2,810 crore at the end of March 1998.
Kamath said the winds of liberalisation, which brought about delicensing, lowering of tariff barriers and increased competition, affected the performance of the industry, resulting in NPAs. He added that ICICI was adopting a proactive and aggressive approach with a view to recovering the NPAs. He was optimistic that in the current financial year the level of NPAs could be contained at the present level.
In the current fiscal ICICI is planning to raise Rs 15,000 crore from domestic markets and $ 750 million from the international markets. ICICI is looking at disbursing between Rs 18,000 crore to Rs 19,000 crore in the present fiscal.
For the fiscal year 1997-98, the average cost of borrowing of FI stood at 11.8 per cent while the average cost of borrowing from the domestic market stood at 12.7 per cent. The approval and disbursement of the FI has grown by 81 per cent and 41 per cent respectively. The approval stand at Rs 25,532 crore while disbursement stand at Rs 15,807 crore. The net owned funds have gone up by 20 per cent from Rs 4180 crore to Rs 5000 crore in 1997-98 while assets have grown up by 27 per cent from Rs 36267 crore to Rs 45,920 crore in 1997-98.