icici group: strategy and performance · pdf fileicici group: strategy and performance april...

ICICI Group: Strategy and Performance

April 2008

2

Contents

Strategy & OutlookStrategy & Outlook

Opportunities

Financial HighlightsFinancial Highlights

Key SubsidiariesKey Subsidiaries

3

Robust economic growth

Agriculture

FY2005

0.7%

Industry 7.4%

Of which: manufacturing 8.1%

Services 10.2%

GDP growth

Total 7.5%

FY2006

6.0%

8.0%

9.1%

10.3%

9.0%

FY2007

2.7%

11.0%

12.3%

11.0%

9.4%

9M-2008

3.5%

9.1%

9.9%

10.4%

8.9%

4

Economic growth drivers

Favourable demographics

Manufacturing

Infrastructure

Knowledge capital

International expansion

Rising disposable income

Investment Personal Consumption

Housing

Transportation

Personal credit

Investment and consumption cycles mutually re-enforcing

5

Consumption drivers

Middle income: Rs. 90,000 (US$ 2,250)-Rs. 500,000 (US$ 12,500) per householdHigh income: > Rs. 500,000 (US$ 12,500) per householdSource: NCAER

Middle and high income

population -260 mn1


population -260 mn1


population -350 mn1


population -350 mn1

2000: Per capita GDP US$ 500

2000: Per capita GDP US$ 500

2007: Per capita GDP US$ 1,000


35% growth

From per capita GDP of US$ 1,000 to US$ 1,500: consuming population to grow manifold


population -600 mn1


population -600 mn1



70% growth

6

Investment drivers

High capacity utilisationand need for building infrastructure resulting in a large investment pipeline

Supported by healthy corporate balance sheets

Source: CRIS INFAC, CMIE

Capacity utilisation rates

0102030405060708090

100

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%

2000-2004 2005-2006

0 . 0

0 . 2

0 . 4

0 . 6

0 . 8

1 . 0

1 . 2

2 0 0 0 -0 1 2 0 0 1 -0 2 2 0 0 2 -0 3 2 0 0 3 -0 4 2 0 0 4 -0 5 2 0 0 5 -0 6 2 0 0 6 -0 7

Debt/Equity

7

Opportunity spectrum for banksLow penetration of consumer finance at 13% of GDP

Supported by structural drivers of rising income levels and growing consuming class

Robust industrial and infrastructure investment pipeline estimated at about US$ 700 billion

Internationalisation of Indian industryPotential for acquisition and trade finance

Vast Indian diaspora spanning the globe Potential for credit and liability products and transaction services

Low penetration of insurance and asset management

8

Contents

Strategy & Outlook

OpportunitiesOpportunities



9

Our strategy

Domestic Retail Banking

Enhance share of retail deposits and sustain leadership

position in credit franchise

Global Corporate and Investment

Banking

Leverage corporate relationships, structuring

expertise, balance sheet and global syndication capability

International Retail Banking

Leverage NRI opportunity and technology capabilities

Rural Banking Invest for future growth

Insurance, Asset Mgmt & Broking

Enhance and leverage market leadership position

Shareho

lder value

10

Retail banking platformLeadership position with demonstrated pricing powerFull range of products distributed through in-house network and external agent forceCentralized credit & operations

Leadership position with demonstrated pricing powerFull range of products distributed through in-house network and external agent forceCentralized credit & operations

Credit

Superior deposit gathering franchise: highest savings account deposit per branch in the industryCurrent and savings account ratio at 27% compared to 22% at March 31, 2007

Superior deposit gathering franchise: highest savings account deposit per branch in the industryCurrent and savings account ratio at 27% compared to 22% at March 31, 2007

Deposits

Diversified fee income streams: loans, cards, transaction banking & distributionFocus on cross sell of insurance and asset management products

Diversified fee income streams: loans, cards, transaction banking & distributionFocus on cross sell of insurance and asset management products

Fee income

11

Corporate & investment banking strategy

Origination Structuring Syndication

Leveraging domestic corporate relationshipsProject appraisal capabilitiesM&A advisory

Leveraging domestic corporate relationshipsProject appraisal capabilitiesM&A advisory

Structuring skillsBalance sheet support –domestic and international

Structuring skillsBalance sheet support –domestic and international

Global distribution capabilityFocus on risk diversification and return optimization

Global distribution capabilityFocus on risk diversification and return optimization

Combined with transaction banking and treasury products

Involved in 88% of outbound Indian M&A financing deals in CY2007Ranked #1 in offshore corporate syndicated loans in CY2007

12

International bankingFocus on fee and liability generation

Platform to capture large remittance flows into India and in other corridors; Market share of over 25% in remittances into IndiaIndia linked products for NRIs; distribution of third party investment productsTechnology-driven direct banking platform in UK and Canada

Focus on fee and liability generationPlatform to capture large remittance flows into India and in other corridors; Market share of over 25% in remittances into IndiaIndia linked products for NRIs; distribution of third party investment productsTechnology-driven direct banking platform in UK and Canada

International retail banking

Presence in 19 international locationsNorth America, UK, Europe, Russia, Middle-East, South Africa, Asia

International assets account for 23% of consolidated banking assetsNew branch opened in New YorkICICI Bank UK: present in nine retail locations in UK and opened new branch in Frankfurt

Presence in 19 international locationsNorth America, UK, Europe, Russia, Middle-East, South Africa, Asia

International assets account for 23% of consolidated banking assetsNew branch opened in New YorkICICI Bank UK: present in nine retail locations in UK and opened new branch in Frankfurt

International franchise snapshot

Largest international balance sheet among Indian banks

13

Rural banking: investing for future growth

Strategy to comprehensively cover an identified rural geography with branches, partnerships & technology based channelsBranches at major agricultural marketsFranchisees, internet kiosks, MFI & corporate partners

Strategy to comprehensively cover an identified rural geography with branches, partnerships & technology based channelsBranches at major agricultural marketsFranchisees, internet kiosks, MFI & corporate partners

Comprehensive channel strategy

Multi-product suite for catering to various customer segments: farmer financing,agri-businesses, commodity-based financing and micro-creditSavings and investment productsInsurance

Multi-product suite for catering to various customer segments: farmer financing,agri-businesses, commodity-based financing and micro-creditSavings and investment productsInsurance

Comprehensive product strategy

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Contents




Key Subsidiaries

15

Life insurance: market share11M-2008

Source: IRDA, weighted new business premiums for individual business

LIC 50.3%

Bajaj Al l ianz 10.6%

SBI Li fe 4.7%

HDFC Standard 4.3%

Rel iance Li fe 3.6%

Birla Sun Li fe 3.0%

ICICI Prudential 13.1%

Others 10.4%

Total mkt : Rs 432.16 bn (USD 10.8 bn)

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ICICI Life: performance highlights

74% increase in new business weighted received premium during 9M-2008

Compared to industry growth of 23%

Assets held: Rs. 284.09 bn70% of assets in equity

74% increase in new business weighted received premium during 9M-2008

Compared to industry growth of 23%

Assets held: Rs. 284.09 bn70% of assets in equity

Business highlights

New Business Profit of Rs. 7.48 bn in 9M-2008 compared to Rs. 5.40 bn in 9M-2007

Reflecting NBP margin of about 19.3%

New Business Profit of Rs. 7.48 bn in 9M-2008 compared to Rs. 5.40 bn in 9M-2007

Reflecting NBP margin of about 19.3%

Financial performance

17

ICICI Life: rapid distribution ramp-up

Creating a nationwide agency network, complemented by increased focus on non-agency distribution

Advisors (‘000)

Non agency share

Branches

Locations

Mar 05 Mar 06

74 132

107 177

57 72

30% 37%

Dec 07

855

1,065

263

37%

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General insurance

17% increase in premiums to Rs. 27.22 bn in 9M-2008

Despite the impact of de-tarifficationNon-corporate business at 57% of gross premium in 9M-2008

17% increase in premiums to Rs. 27.22 bn in 9M-2008

Despite the impact of de-tarifficationNon-corporate business at 57% of gross premium in 9M-2008

Market leadership in private sector with market share of 31.6%1

Overall market share at 12.6%1

Market leadership in private sector with market share of 31.6%1

Overall market share at 12.6%1

BusinessHighlights

Market leadership


Profit after tax of Rs. 1.15 bn in 9M-2008 compared to Rs. 0.49 bn in 9M-2007

Profit after tax of Rs. 1.15 bn in 9M-2008 compared to Rs. 0.49 bn in 9M-2007

1. April 2007 – December 2007; Source: IRDA

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Securities business

India’s largest online trading platform with about 1.4 million customersRanked first in terms of amount raised through domestic offerings during CY2007

India’s largest online trading platform with about 1.4 million customersRanked first in terms of amount raised through domestic offerings during CY2007

Business Highlights

Revenue of Rs. 2.57 bn in Q3-2008 and Rs. 5.27 bn in 9M-2008Profit after tax of Rs. 710 mn in Q3-2008 and Rs. 1,080 mn in 9M-2008

Revenue of Rs. 2.57 bn in Q3-2008 and Rs. 5.27 bn in 9M-2008Profit after tax of Rs. 710 mn in Q3-2008 and Rs. 1,080 mn in 9M-2008


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Asset management

Total FUM of Rs. 692.30 bn (including PMS & advisory AUM) at December 31, 2007Market share of 10.3% in mutual fund assets at December 31, 2007Profit after tax of Rs. 0.75 bn in 9M-2008 from compared to Rs. 0.33 bn in 9M-2007

Total FUM of Rs. 692.30 bn (including PMS & advisory AUM) at December 31, 2007Market share of 10.3% in mutual fund assets at December 31, 2007Profit after tax of Rs. 0.75 bn in 9M-2008 from compared to Rs. 0.33 bn in 9M-2007

ICICI Prudential

Asset Management

ICICI VentureLargest private equity player in India with funds under management of Rs. 96.34 bnProfit after tax of Rs. 0.52 bn in 9M-2008

Largest private equity player in India with funds under management of Rs. 96.34 bnProfit after tax of Rs. 0.52 bn in 9M-2008

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Contents



Financial Highlights


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Key financial indicators1

1. Based on standalone Indian GAAP financials2. US$ amounts represent convenience

translations at US$1= Rs. 39.42

NII (Rs. bn)

FY2007(US$ mn)

1,430

Fee (Rs. bn) 1,271

NIM (%) 2.2%

Net profit (Rs. bn) 789

Growth

32%

33%

-

35%

Deposits (Rs. bn) 58,475 17%

Net NPA ratio 1.0% -

Total assets (Rs. bn) 87,432 27%

Q3-2008

19.60

17.85

2.3%

12.30

2,297.79

1.5%

3,767.00

Capital adequacy ratio 11.7% -15.8%

FY2007

56.37

50.12

2.2%

31.10

2,305.10

1.0%

3,446.58

11.7%

Q3-2007

14.85

13.45

2.3%

9.10

1,968.93

1.0%

2,958.32

13.4%

Fee/income (%) 40.5% -41.2%40.5% 39.3%

Advances (Rs. bn) 49,687 25%2,155.171,958.66 1,727.63

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The ICICI Group today

Largest private sector life insurer

Largest private sector general insurer

Leading asset management company

Largest private equity & venture fund

Leading securities and broking company

Largest private sector bank in India

Consolidated banking assets of US$ 106 bn; market cap of US$ 23bn

Largest consumer credit provider

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Except for the historical information contained herein, statements in this Release which contain words or phrases such as 'will', 'would', ‘indicating’, ‘expected to’ etc., and similar expressions or variations of such expressions may constitute 'forward-looking statements'. These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to our ability to successfully implement our strategy, future levels of non-performing loans, our growth and expansion in business, the impact of any acquisitions, the adequacy of ourallowance for credit losses, technological implementation and changes, the actual growth in demand for banking products and services, investment income, cash flow projections, our exposureto market risks as well as other risks detailed in the reports filed by us with the United States Securities and Exchange Commission. ICICI Bank undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date thereof.

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Thank you

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