ICICI profits fall 8.6% in second quarter

ICICI profits fall 8.6% in second quarter
ENS ECONOMIC BUREAU

MUMBAI, OCT 20: Term lending institution ICICI Ltd has reported an 8.6 per cent fall in profits in the second quarter ended September 2000 after being hit by a capital loss and higher interest charges. Its net profits fell to Rs 254 crore ($55 million) from Rs 278 crore in the same period of last year.

Analysts had predicted a net profit of about Rs 275 crore excluding extraordinary items. It reported a 22 per cent rise in net income from operations to Rs 477 crore.

ICICI has also reported a five per cent growth in gross non-performing assets (NPAs) to Rs 6,331 crore for the six-month period ended September 2000. The net NPAs outstanding at September 30, 2000 amounted to Rs 4,136 crore.

However, ICICI's net NPA ratio declined to 7.3 per cent of the advances for first six months ended September from 7.6 per cent at March 31, 2000. Even as ICICI provided a higher amount for doubtful assets, the profit after tax (PAT) remained at Rs 541 crore for the six-month period as against Rs 540 crore for the same period of the last fiscal.

Said an ICICI press release: "The PAT was adversely impacted by Rs 135 crore -- against a net capital gain of Rs 95 crore in H1 of 2000, there was a loss of Rs 40 crore in H1 of 2001. A higher provisioning requirement of about Rs 30 crore consequent to the revision of the RBI provisioning guidelines whereby sub-standard assets are to be classified as doubtful assets after 18 months of a assets being classified as NPA instead of 24 months and additional interest expenses of about Rs 34 crore as ICICI redeemed a significant portion of its preference shares consequent to the increase in the distribution tax rate."

``If we exclude the impact of higher provisioning requirement and additional interest expense due to redemption of preference shares, the profit after tax for H1 of 2001 would have been Rs 600 crore an increase of 11 per cent over H1 of 2000," it claimed.

Total assets rose by ten per cent to Rs 68,419 crore. Net loans and debentures grew by 18 per cent to Rs 52,072 crore. Shareholders equity stood at Rs 8,559 crore, indicating a growth of 11 per cent. Its approvals registered a growth of 31.5 per cent to Rs 31,719 crore (Rs 24,130 crore) while disbursements registered a growth of 51.7 per cent to 16,745 crore (Rs 11,040 crore). Its assistance to the corporate finance sector accounted 55 per cent of approvals and 73 per cent of disbursements, while assistance to the infrastructure and oil and gas sectors accounted for 29 per cent of approvals and eight per cent of disbursals. The traditional manufacturing sector accounted for just 11 per cent of both total approvals and total disbursements. Personal financial services loans accounted for five per cent of approvals (one per cent) and eight per cent of disbursals (one per cent).

As per US GAAP norms, net income increased by 6 per cent to Rs 450 crore (US $98 million) in the first half of 2000-01 as compared to Rs 425 crore (US $92 million) last year.