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Over 55 pc drop in ICICI net

Our Bureau

MUMBAI, May 3

THE net profit of ICICI Ltd has plummeted more than 55 per cent year-on-year to Rs 537 crore. For the year ended March 31, 2000, the financial institution had made a net profit of Rs 1,206 crore. According to Mr K.V. Kamath, Managing Director and CEO, IC ICI, the fall was mainly due to ``accelerated provisioning and write-offs'' of Rs 813 crore.

The provisioning, made in the fourth quarter ended March 31, 2001, has led to a loss of Rs 257 crore in that quarter as against the profit of Rs 395 crore for the last quarter of 1999-2000.

Presenting the yearly results, Mr Kamath said, ``as a prudent measure, ICICI has decided to accelerate the RBI-stipulated norm of 50 per cent provisioning for NPAs in five and a half years to three years''. This, according to him, means, as on date, all three-year-old non-performing loans have a 50 per cent provision against them. As per Indian GAAP, the provision cover was about 35 per cent.

Ms Kalpana Morparia, Executive Director, said of the Rs 813 crore, about Rs 300 crore were provisions and the rest were write-offs. The extra provisioning is over and above the normal provisioning and write-off of Rs 608 crore.

Ms Morparia said the new provisioning policy from this year would be to provide 15 per cent in the first year of the NPA, increase it by another 15 per cent in the second and finally raise it to 50 per cent by the third year.

Mr Kamath said profit before tax and the extra provisions was Rs 1,391 crore as on March 31, 2001, compared to Rs 1,328 crore as on March 31, 2000.

The fund-based income stood 7.7 per cent more at Rs 8,144 crore than the previous year's Rs 7,564 crore. Fees and commissions was up 61.4 per cent at Rs 522 crore (Rs 324 crore). Net capital gains, mainly on account of sale of part of the stake in ICICI Bank during the year, was Rs 344 crore (Rs 294 crore).

Interest and depreciation stood 7.6 per cent up at Rs 6,845 crore (Rs 6,359 crore) and operating expenses were Rs 337 crore (Rs 289 crore). Operating profit was Rs 1,484 crore (Rs 1,240 crore), up 19.7 per cent.

Mr Kamath said the company's net NPAs have fallen sharply to 5.2 per cent from 7.6 per cent last year following the total provisions and write-offs of Rs 1,421 crore. Gross NPAs, in value terms, have come down from Rs 6,018 crore to Rs 5,988 crore. ICICI 's approvals increased 29 per cent to Rs 56,092 crore (Rs 43,523 crore) and disbursements were up 24 per cent at Rs 31,965 crore (Rs 25,836 crore).

The capital adequacy ratio of the FI stood at 14.6 per cent. Its earning spread stood around 1.8 per cent.

Mr Kamath said ICICI had ``de-risked and diversified its asset portfolio'' with a focus on high-rated companies. Corporate finance currently has a 40 per cent share in its business followed by manufacturing project finance, 36 per cent, and infrastructur e, 13 per cent.

The board has recommended a dividend of Rs. 5.5 per share.

The ICICI share closed the day at the Bombay Stock Exchange at Rs 81.90 against Wednesday's close of Rs 83.35.

Pic.: The CEO and Managing Director of ICICI, Mr K.V. Kamath, addressing a news conference in Mumbai on Thursday.

Picture by Shashi Ashiwal