2011 11 Presentation for CLSA Conference

7/31/2019 2011 11 Presentation for CLSA Conference

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ICICI Group: Strategy &PerformanceNovember 2011


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Agenda

Strategy & executionFinancial results: Q2-2012

Recent developments


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India: economic indicators GDP growth moderating RBI revised growth estimatefor FY2012 downwards to

7.6% from 8.0%

GDP

Exports growth in H1-2012at 52.4% compared to29.7% in H1-2011 Exports grew by 10.8% in

Oct 2011

Exports

Growth in IIP at 4.1% in Aug2011; Apr-Aug 2011 at 5.6%against 8.7% in Apr-Aug2010

Industrial production

Moderation in sales and netprofits both on a y-o-y andsequential basis

Corporate performance


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Credit & depositsNon-food credit growth at 18.9% y-o-y at Oct 21, 2011

21.2% at March 25, 2011 and 21.2% at Oct 22, 2010

Non-food credit growth maintained at about 20% yoy

Total deposits: 15.2% y-o-y increase at Oct 21, 2011 15.9% at March 25, 2011 & 17.4% at Oct 22, 2010

Demand deposits: decrease of 13.8% y-o-y at Oct 21,2011

Deposit growth improving; demand deposits lagging


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Monetary policy actionRepo rate increased by 25 bps to 8.50% on Oct 25, 2011 Policy stance

Maintaining an interest rate environment to contain inflationand anchor inflation expectations Stimulate investment activity to support raising the growthtrend Manage liquidity to ensure it remains in moderate deficit

Inflation expected to moderate from December 2011 Low likelihood of rate action in December review FY2012 GDP growth projection revised downwards to7.6%


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Some smaller banks have already increased their savingsbank deposit rates

Savings rate deregulationSavings bank deposit interest rate deregulated

Uniform rate for deposits up to ` 100,000 Differential rates permitted for deposits above ` 100,000;

same rate to be offered for same deposit amount


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Agenda


Recent developments


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Our strategic pathFY2010

4Cs: CASA,Costs, CreditQuality & Capital

FY2011 Resume

balance sheetgrowth

FY2012onwards Accelerategrowth

Position thebalance sheetfor growth

Furtherimprovefunding mixthrough retailterm depositgrowth

Improve RoA:sharpreduction inprovisions

On the back ofimprovedliabilitystructure &RoA

Leveragecapital toincrease RoE

Based on long-term economic growthoutlook for the Indian economy


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Progress against strategy: funding profile

Current accountdeposits

Savingsdeposits

March31, 2009

September30, 2011

CAGR410.36

216.32

701.49

329.97

23.9%

18.4%CASA ratio 28.7% 42.1%

` in bnImprovement in funding profile


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Progress against strategy: asset quality

Provisions/AvgloansProvisions

Q2-2010 Q2-2012 Change10.712.2%

3.190.6%

-70.2%

Unsecured retail/ domestic loans 8.9% 2.3%

` in bnStrengthening asset quality

Net NPA ratio 2.19% 0.80%Provisioningcoverage 51.1% 78.2%


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Focus on derisking portfolio Reduction in investments in bonds/notes of financial

institutions from about US$ 2.2 bn at September 30, 2009to about US$ 288 mn at September 30, 2011No exposure to peripheral Europe in investment portfolio

ICICI Bank UK

Reduction in credit derivative exposure (including offbalance sheet exposure) from ` 54.08 bn at September30, 2009 to ` 20.21 bn at September 30, 2011

Underlying comprises Indian corporate credits

Credit derivative portfolio


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Progress against strategy: efficiencyimprovements

Cost/income

OperatingexpensesFY2008 FY201179.72

50.0%

65.38

41.9%Cost/averageassets 2.2% 1.7%

` in bnSignificant improvement in operating efficiency

H1-201236.18

44.6%1.8%

Despite significant scale up in branch network from 1,262 atMarch 2008 to 2,535 at September 2011


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Key subsidiaries Insurance, asset management & securities businesses

adjusting to regulatory changes and market conditions Continued focus on building franchise to capitalise onlong-term opportunity Strong profit growth in life insurance business

Domestic subsidiaries

Consolidation strategy in view of regulatory approachOngoing dialogue on future plan

Overseas banking subsidiaries


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Resulting in improvement in profitability

StandaloneRoE

ConsolidatedRoEStandalone

RoA

FY2009 FY2011

0.98% 1.34%

7.7% 9.6%

7.8% 11.6%

H1-2012

1.35%

10.0%

12.9%


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Well-placed to meet short-term challenges Volatility in global marketsDomestic inflationary pressures and tighteningmonetary policy Issues relating to project execution

Key challenges

Substantially reduced exposure to internationalmarkets

Careful project selection in infrastructure sector Retail portfolio mainly comprises secured loans

ICICI Banks position


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Asset quality profile (1/2)

Domesticcorporate +overseasbranches(53% of loanbook)

Market concerns on infrastructure sector,especially power ICICI Banks power sector loans/total loans at5.0% (power sector exposure/total exposure

at 7%) Careful project selection based on sponsortrack record, fuel availability, offtakearrangement and tariff Sensitivity analysis indicates adequate DSCR

under cases of substantially lower PLF andhigher imported coal than originallyassumedSME (lessthan 5% ofloan book) Relatively small portfolio size


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Asset quality profile (2/2)CommercialReal Estate(CRE)

Portfolio comprises of developerfinancing, loans against property andbalance sheet financing where partsecurity/ takeout is from CRE Portfolio backed by cash flows fromprojects as well as adequate securitycover

Overall loan loss provisioning/ average loans at 68 bpsin H1-2012

Retail (35.0%of loan book) Portfolio comprises largely of securedloans (67% mortgages)


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Well capacitised for future growth

Build up ofbranchnetwork

Scale up to 2,535 branches at September30, 2011 Largest branch network among privatesector banks

Strongcapital base

CAR of 19.0% with Tier 1 ratio of 13.1%at September 30, 2011

Diversifiedbusinesslines

Presence across all segments of financialservices


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Agenda


Recent developments


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Q2-2012: Profitability highlights

Net interest income increased by 13.7% year-on-year;Net interest margin at 2.61%

Increase in fee income by 6.9% from ` 15.90 bn in Q2-2011 to ` 17.00 bn in Q2-2012

Provisions reduced by 50.2% from ` 6.41 bn in Q2-2011to ` 3.19 bn in Q2-2012

21.6% increase in profit after tax from ` 12.36 bn in Q2-2011 to ` 15.03 bn in Q2-2012

42.8% increase in consolidated profit after tax from `13.95 bn in Q2-2011 to ` 19.92 bn in Q2-2012


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Composition of total loan book

D o m e s t i cc o r p o r a t e

2 4 . 2 %

O v e r s e a sb r a n c h e s2 8 . 6 % Reta i lb u s i n e s s

g r o u p3 5 . 0 %

R u r a l7 . 5 %

S M E4 . 7 %

1. Retail business group includes builder loans anddealer funding

2. Including impact of exchange rate movement

September 30, 2011

Total loan book: ` 2,340 bn

12


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Composition of retail loan book

Vehicleloans25.3%

Home67.3%

Personalloans1.5%

Othersecured

2.8%

Creditcards3.1%

1. September 30, 2011 :Vehicle loans includes auto loans9.2%, commercial business 16.0%

Total retail loan book: ` 819 bn

September 30, 2011

1


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Asset quality and provisioning

Gross retail NPLs at ` 63.17 bn and net retail NPLs at ` 9.76bn at September 30, 2011 Provisioning coverage ratio of 78.2% at September 30, 2011computed in accordance with RBI guidelines Net restructured loans of ` 25.01 bn at September 30, 2011 Outstanding general provision on standard assets: ` 14.80 bnat September 30, 2011

(` billion)

0.91%23.5177.11

100.62June 30,

2011

1.37%31.9270.41

102.33September

30, 2010

0.80%22.3678.71

101.07September

30, 2011

Net NPA ratioNet NPAsLess: Cumulative provisionsGross NPAs


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Key ratios12.93.72.0.70.71.6eturn on average net worth1,2(Consolidated basis)

1.8.8.7.6.6.7ost to average assets (incl.DMA)244.0

40.540.62.57470

40.21.228.5

H1-

2011

41.9

44.739.02.61490

46.51.29

9.6

Q1-

2012

1.35.41.30.34eturn on average assets2

42.12.14.05.1ASA ratio

41.042.42.62470

43.39.2

Q2-

2011

44.440.22.61509

51.910.4

Q2-

2012

44.639.62.61509

49.210.0

H1-

2012

41.2ee to income41.9

2.64478

45.39.6

FY

2011

Book value (`)

Cost to income (incl. DMA)

Net interest margin2

Weighted avg EPS (`)2Return on average net worth1, 2

(Percent)

1. Based on quarterly average net worth2. Annualised for all interim periods


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Certain statements in these slides are forward-looking statements.These statements are based on management's current expectations andare subject to uncertainty and changes in circumstances. Actual resultsmay differ materially from those included in these statements due to avariety of factors. More information about these factors is contained inICICI Bank's filings with the US Securities and Exchange Commission.All financial and other information in these slides, other than financialand other information for specific subsidiaries where specificallymentioned, is on an unconsolidated basis for ICICI Bank Limited onlyunless specifically stated to be on a consolidated basis for ICICI BankLimited and its subsidiaries. Please also refer to the statement ofunconsolidated, consolidated and segmental results required by Indianregulations that has, along with these slides, been filed with the stockexchanges in India where ICICI Banks equity shares are listed and w iththe New York Stock Exchange and the US Securities and ExchangeCommission, and is available on our website www.icicibank.com


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Thank you


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Unconsolidated financials


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Profit & loss statement

6.4%45.8823.5422.3444.0022.1290.48Operating profit

(65.7%).24.12.12.56.35.79ease depreciation

(44.4%)1.05)0.80)0.25)0.40)1.44)2.15)Treasury income

0.7036.18

83.00

2.1032.7833.8349.17H1-

2012

0.3515.00

37.82

1.3215.9015.7822.04Q2-

2011

0.7129.26

74.53

2.9530.0332.5841.95H1-

2011

0.3618.44

42.46

1.2017.0017.4025.06Q2-

2012

1.5763.81

156.65

4.4464.1966.4890.17FY

2011

0.3417.74

40.54

0.9015.7816.4324.11Q1-

2012

12.3%Total income

2.9%22.9%

(9.1%)6.9%

10.3%13.7%

Q2-o-Q2

growth

DMA expensesOperating expenses

- Other income- Fee incomeNon-interest incomeNII

(` billion)


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Profit & loss statement

51.51

16.1067.6122.87

90.48

FY

2011

12.36

3.3515.71

6.4122.12

Q2-

2011

22.62

6.9929.6114.39

44.00

H1-

2011

6.4%45.8823.5422.34Operating profit

15.03

5.3220.35

3.19

Q2-

2012

28.35

9.8038.15

7.73

H1-

2012

(50.2%).54rovisions

13.32

4.4817.80

Q1-

2012

21.6%

58.8%29.5%

Q2-o-Q2

growth

Profit before tax

Profit after tax

Tax

(` billion)


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Balance sheet: Assets

21.0%62.6649.5134.47RIDF1 and related

9.2%60.7325.3596.82SLR investments

2.1%24.5324.5322.00- Equity investment insubsidiaries

3,899.98

246.741,942.01

1,362.75348.48

September

30, 2010

8.4%,476.85,395.56nvestments

4,152.15

200.722,206.93

348.94June 30,

2011

4,407.25

229.092,339.52

361.79September

30, 2011

13.0%

(7.2%)20.5%

3.8%Y-o-Y

growth

Total assets2

Fixed & other assetsAdvances2

Cash & bank balances

(` billion)

Investment in security receipts of asset reconstruction companies was `26.70 bn at September 30, 2011 Credit derivative exposure (including off balance sheet exposure) of ` 20.21bn at September 30, 2011 (underlying comprises Indian corporate credits)1. Rural Infrastructure Development Fund

2. Including impact of exchange rate movement


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Equity investment in subsidiaries

124.53

0.140.050.611.871.583.00

13.4811.1223.2533.5035.93

June 30,

2011

122.00

0.140.050.611.871.583.00

10.9611.1223.2533.5035.93

September

30, 2010

11.12CICI Home Finance23.25CICI Bank UK

0.61CICI AMC

33.50CICI Bank Canada

3.00CICI Bank Eurasia LLC13.48CICI Lombard General Insurance

1.58CICI Securities Primary Dealership

0.14thers124.53

0.05

1.87

35.93September

30, 2011

Total

ICICI Venture Funds Mgmt

ICICI Securities Limited

ICICI Prudential Life Insurance

(` billion)


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Balance sheet: Liabilities

10.9%01.4968.5832.48Savings(5.3%)29.9797.7748.57Current

3,899.98

159.19970.10

2,230.94528.24

11.51539.75

September

30, 2010

4,152.15

140.251,140.51

2,306.78553.09

11.52564.61

June 30,

2011

4,407.25

157.071,213.24

2,450.92574.50

11.52586.02

September

30, 2011

13.0%

(1.3)%25.1%

9.9%8.8%0.1%8.6%

Y-o-Y

growth

Borrowings1,2

Total liabilities2

Other liabilities

Deposits- Reserves- Equity capital

Net worth

(` billion)

Credit/deposit ratio of 72.3% on the domestic balancesheet at September 30, 2011

1. Borrowings include preference shares amounting to ` 3.50 bn2. Including impact of exchange rate movement


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Composition of borrowings

970.10

473.3715.22

488.59147.91333.60481.51

September

30, 2010

669.5492.75verseas2194.4000.66Other borrowings349.3047.10Capital instruments1

1,213.24

652.9416.60

543.70September

30, 2011

1,140.51

577.6115.14

547.76June 30,

2011

Total borrowings2

- Other borrowings- Capital instruments

Domestic

Capital instruments constitute 64.2% of domestic borrowings

1. Includes preference share capital ` 3.50 bn2. Including impact of exchange rate movement

(` billion)


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Capital adequacy (Basel II)

865.6118.8236.02Off balance sheet2,803.94,656.02,430.78On balance sheet

3,474.84215.74464.35680.09` bn

June 30, 2011

6.21%13.36%19.57%

%

5.85%13.14%18.99%

%

3,669.55214.50482.26696.76` bn

September 30,

2011

3,166.80204.02436.55640.57` bn

September 30,

2010

6.44%13.79%20.23%

%

Risk weighted assets- Tier II- Tier I

Total Capital

Basel II


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L o a n s &a d v a n c e s

5 7 . 4 %

A s s e t b a c k e dse c u r i t i e s

2 . 0 %

Other asse ts &inv e s t m e n t s

6 . 0 %

I n d i a l i n k e dinv e s t m e n t s

3 . 3 %

C a s h & l i q u i dse c u r i t i e s

2 0 . 6 %o n d s / n o t e s o ff i n a n c i a lins t i tu t ions1 0 . 7 %

`

L o a n s &a d v a n c e s5 8 . 0 %

A s s e t b a c k e ds e c u r i t i e s

1 . 8 %

O t h e r a s s e t s &i n v e s t m e n t s

7 . 0 %

I n d i a l i n k e di n v e s t m e n t s

3 . 9 %

C a s h & l i q u i ds e c u r i t i e s

2 3 . 7 %

B o n d s / no t e s o ff i n a n c i a l

i n s t i t u t i o n s5 . 6 %

ICICI Bank UK asset profile

1. Includes cash & advances to banks, T Bills and CDs2. Includes India-linked credit derivatives of US$ 14 mn at September 30, 2011 (US$ 14 mnat June 30, 2011)3. Includes securities re-classified to loans & advances4. Does not include US$ 154 mn of ABS reclassifiedas loans & receivables in FY2009

Total assets: USD 6.0 bn

June 30, 2011

14

2

3

Total assets: USD 5.1 bn

September 30, 2011

1

4

2

3


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ICICI Bank UK liability profile

Total liabilities: USD 6.0 bn

June 30, 2011

Profit after tax of US$ 2.2 mn in Q2-2012 compared to US$ 8.4 mn in Q2-2011 Capital adequacy ratio at 29.8% Proportion of retail term deposits in total deposits

at 71% at September 30, 2011

Total liabilities: USD 5.1 bn

September 30, 2011

Demanddeposits

15.4%

Syndicatedloans &

interbankborrowings

5.9%

Otherl iabi l i t ies

5.1%

Term depo sits47.9%

Net worth11.6%

Longterm Debt

14.1% D e m a n dd e p o s i t s

1 6 . 4 %

S y n d i c a t e dl o a n s &

i n t e r b a n kb o r r o w i n g s

6 . 2 %

O t h e rl i a b i l i t i e s

5 . 9 %

T e r m d e p o s i ts4 2 . 6 %

N e t w o r th1 3 . 3 %

L o n gte r m d e b t1 5 . 6 %


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Cash & liquidsecurities

10.0%

Insuredmortgage

25.9%

Other assets &investments

10.0%

Asset backedsecurities

1.4%

India linkedinvestments

0.8%

Loans tocustomers

51.9%

Cash & liquidsecurit ies

11.6%

Insuredmortgage

22.8%

Other assets &investments

10.5%

Asset backedsecurit ies

1.5%

India linkedinvestments

0.8%

Loans t ocustomers

52.8%

ICICI Bank Canada asset profile

1. Includes cash & advances to banks and governmentsecurities2. Includes India-linked credit derivatives of CAD 32 million atSeptember 30, 2011 (CAD 29 million at June 30, 2011)3. Based on IFRS, securitised portfolio of CAD 767 million andCAD 921 million considered as part of Insured mortgageportfolio at June 30, 2011 and September 30, 2011respectively

Total assets: CAD 5.1 bn

2

1

Total assets: CAD 5.1 bn

June 30, 2011

3

September 30, 2011

1

23


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Borrowings19.6%

Net worth19.1%

Demanddeposits14.2%

Otherliabilit ies

3.4%

Term deposits43.7%

ICICI Bank Canada liability profile

Total liabilities: CAD 5.1 bn Profit after tax of CAD 5.2 mn in Q2-2012 compared to CAD 12.3 mn inQ1-2012 Capital adequacy ratio at 29.3%

June 30, 2011

1. As per IFRS, proceeds of CAD 769 million and CAD 926 millionfrom sale of securitised portfolio considered as part ofborrowings at June 30, 2011 and September 30, 2011respectively

Total liabilities: CAD 5.1 bn

B o r r o w i n g s1 6 . 6 %

N e t w o r t h1 9 . 3 %

D e m a n dd e p o s i t s

1 4 . 1 %

O t h e rl i a b i l i t i e s

1 . 9 %

T e r m d e p o s its4 8 . 1 %

September 30, 2011

11


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L o a n s t oc o r p o r a t e s &

b a n k s3 8 . 4 %

R e t a i l lo a n s1 8 . 6 %

C a s h & c a s he q u i v a l e n t s

3 5 . 1 %

P r o m i s s o r yn o t e s4 . 0 % C o r p o r a t eb o n d s

2 . 2 %

O t h e r a s s e t s &i n v e s t m e n t s

1 . 7 %

ICICI Bank Eurasia asset profile

Total assets: USD 338 mn

1. Includes cash & call placements with banks,balances with central bank and nostro balances

Total borrowings of USD 172 mn at September 30, 2011 Capital adequacy of 30.6% at September 30, 2011 Net profit of USD 2.2 mn in Q2-2012

June 30, 2011

1Loans tocorporates &banks39.0%

Retail loans16.0%

Cash & cashequivalents38.7%

Promissorynotes2.9%Corporate

bonds2.1%

Other assets &investments1.3%

Total assets: USD 272 mn

September 30, 2011

1


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Domestic subsidiaries


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ICICI Home Finance

Total assets: ` 81.65 bn Profit after tax of ` 561.3 mn in Q2-2012 compared to ` 539.0 mn in Q2-2011 Capital adequacy ratio of 25.5% at September 30, 2011 Net NPA ratio: 1.3% At September 30, 2011: Networth ` 13.78 bn; Deposits ` 11.06 bn and Borrowings` 51.65 bn

June 30, 2011

Total assets: ` 76.50 bn

September 30, 2011

Loans

94.8%

Investments and

other assets

5.2%

Loans

95.5%

Investments and other

assets

4.5%


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ICICI Life

20.4%648.493.50

16.0%1.187.36

34.0723.1110.96

Q2-2012Q2-2011 FY2011

New business received premium 16.09 78.62Renewal premium 22.64 100.19Total premium 38.73 178.81Annualised premium equivalent (APE) 13.44 39.75New Business Profit (NBP) 2.54 7.13NBP margin 18.9% 17.9%Statutory profit/(loss) 0.151 8.08Assets Under Management 654.84 681.50Expense ratio2 19.4% 17.3%

(` billion)

1. Does not include surplus on the non-participating policyholders funds of `2.54 billion2. Expense ratio: All expenses (including commission) / (Total premium 90%of Single Premium)3. Source: IRDA

Market share based on retail weighted receivedpremium was 5.7%3 for April-August 2011


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ICICI General

1. Excluding remittances from third party motor pool and including premium onreinsurance accepted2. Source: IRDA

0.5613.06

Q2-2012

(0.80).04AT44.080.91ross premium1

FY2011Q2-2011(` billion)

Market share was 9.6%2 for April-August 2011


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Other subsidiaries

0.140.22

(0.02)0.29

Q2-2011

0.200.030.170.16

Q2-2012

0.72CICI Prudential Asset Management

1.13CICI Securities Ltd

0.740.53

FY2011Profit after tax

ICICI VentureICICI Securities Primary Dealership

Consolidated profit after tax increased by 47.1% to ` 36.58 bn inH1-2012 from ` 24.861 bn in H1-2011 Consolidated profit after tax increased by 42.8% to ` 19.92 bn in Q2-2012 from ` 13.952 bn in Q2-2011

Consolidated return on average net worth for H1-2012 at 12.9%compared to 9.7% in H1-2011 Consolidated return on average net worth for Q2-2012 at 13.7%compared to 10.7% in Q2-2011 (11.6% in FY2011)

(` billion)

1. Does not include surplus on the non-participatingpolicyholders funds of ` 3.61 bn2. Does not include surplus on the non-participatingpolicyholders funds of ` 1.88 bn

2011 11 Presentation for CLSA Conference

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Transcript of 2011 11 Presentation for CLSA Conference