ICICI nets Rs 1,001 cr profit, pays 55%

According to the institution, the profit after tax has come down as general provisioning aggregating Rs 131 crore for sub-standard assets were charged directly to the profit and loss account unlike the previous year where sub-standard assets were appropriated from special reserve.

"Applying the same accounting policy for provisions for sub-standard assets as in fiscal 1997-98, the PAT for 1998-99 would have been Rs 1,132 crore, an increase of 21 per cent over last year’s corresponding figure," it said. ICICI has substantial provisions and write-offs (including Rs 73 crore write down of equity investments) of Rs 472 crore, as compared to Rs 289 crore for fiscal 1997-98.

During fiscal 1999, ICICI’s disbursals grew by 22 per cent to Rs 19,225 crore as against Rs 15,807 crore in the previous year even as approvals recorded a jump of 38 per cent to Rs 34,220 crore as against Rs 24,717 crore. The result for fiscal 1998-99 reflects the combined accounts of the merged entity subsequent to the merger of Anagram Finance with ICICI effective April 1, 1998.

The capital adequacy ratio of the institution was at a healthy 12.5 per cent as on March 31, 1999 of which tier-1 capital accounted for 8.3 per cent. "In accordance with RBI guidelines, the Tier-1 capital includes grant element of Rs 304 crore out of the face value of Rs 350 crore of 20 year non cumulative preference shares issued to ITC limited.” During this period, ICICI mobilised rupee resources worth Rs 16,000 crore out of which Rs 3000 crore were raised through seven public issues. According to a company statement, KPMG has reviewed the process adopted by the management to identify impaired loans and provisioning made by the term lending institution as per US GAAP system.

The institution’s profit before provisions and tax registered a 18 per cent growth at Rs 1,460 crore. During this period, provisioning and write-offs were to the tune of Rs 472 crore as compared to Rs 289 crore in the previous year. During the period, net owned funds increased by 24 per cent to Rs 6,201 crore from Rs 5,000 crore last year. The EPS was Rs 18.20.

Analysts say that ICICI’s margins have been squeezed as apparent from the fact that profits before provisions and tax have fallen to 19.9 per cent of total income, compared to 21.6 per cent in 1997-98. Growth in fund-based income has been 27 per cent, and higher fee and commission have offset the squeeze in margins. Growth in profits before provisions and tax has been 18 per cent for the year, compared to 28 per cent during the first half of the year. Kamath said that the board has approved an employee stock option scheme upto 1 per cent of the subscribed capital and a fresh approval from its shareholders will taken on its AGM scheduled on June 30, 1999.

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