Kamath: Reaping the growth dividend

Mumbai, April 30: ICICI Bank’s fourth-quarter net profit vaulted 35 per cent to Rs 455.40 crore compared with Rs 337.68 crore in the corresponding period of 2002-03. Net profit for the full year ended March 31 jumped 35 per cent to Rs 1,637.10 crore (Rs 1,206.18 crore).

A 75 per cent dividend has been declared, taking the total to 33.23 per cent. This is a shade below the 33.33 per cent that it can hand out without prior Reserve Bank of India (RBI) approval under new rules set last week. Its non-performing assets (NPAs) at 2.87 per cent are below 3 per cent — the cap under revised norms.

The central bank said banks that wish to declare dividends on their own must have a capital adequacy of 11 per cent and net NPAs of less than 3 per cent. Deputy managing director Kalpana Morparia said ICICI Bank’s capital adequacy is over 10 per cent. It will be above 15 per cent if a recent capital infusion is taken into account.

She said an in-principle Reserve Bank approval for the dividend — to be paid on old and new shares issued in the recent public offer — has already been secured.

The bank has reported a 35 per cent increase in core income. A rise in net interest income coincided with a decline in interest costs as the bank re-financed Rs 9000 crore of ICICI’s (the old entity) old liabilities with incremental deposits raised at a rate of only 4 per cent.

The second full-year results after the reverse merger of erstwhile ICICI with ICICI Bank showed interest income rising to Rs 1879 crore from Rs 1424 crore. While fee income jumped 39 per cent to Rs 1175 crore (Rs 847 crore), retail assets grew 74 per cent to Rs 33,423 crore from Rs 19,160 crore in the previous year. However, total income fell to Rs 11,958.96 crore from Rs 12,526.88 crore in 2002-03. Interest income slid to Rs 8,894.04 crore from Rs 9,368.05 crore.

For the full year, gross NPAs were at Rs 6715 crore (Rs 8414 crore), while net NPAs stood at Rs 2037 crore (Rs 3151 crore). The provision cover on NPAs for the year has grown to 70 per cent from 62.6 per cent last year.

CEO and managing director K. V. Kamath said the gains were fuelled by a surge in retail credit, an area where the bank grabbed 30 per cent of the market. Retail assets accounted for 54 per cent of its total advances.

Its insurance subsidiary, ICICI Prudential Life, suffered losses of Rs 164 crore against a loss of Rs 109 crore in the preceding year. Other arms — ICICI Securities, ICICI Ventures, ICICI Lombard — were in the black.