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ICICI net up 7 pc to Rs 10.01 billion, declares 55 pc pay-out

Industrial Credit and Investment Corporation of India Limited or ICICI has posted a net profit of Rs 10.01 billion during the year ended March 31, 1999, marking a rise of seven per cent over the profit in 1997-98.

The net would have been higher, but for charging general provisions amounting to Rs 1.31 crore for sub-standard assets to the profit and loss account.

In the previous year, the provision for sub-standard assets was not taken through profit and loss account, but was appropriated to the special reserve.

Had ICICI followed this accounting treatment, the net would have been higher at Rs 11.32 billion, reflecting an increase of 21 per cent over the previous year's figure of Rs 9.36 billion.

The financial institution has declared a dividend of 55 per cent to the investors in the company.

During 1998-99, ICICI's disbursals aggregated Rs 192.25 billion as against Rs 158.07 billion for the previous year, registering a 22 per cent growth. During the same period, ICICI's approvals totalled Rs 342.20 billion as against Rs 247.17 billion for the previous year, rising by 38 per cent.

The figures for 1998-99 reflect the combined accounts of the merged entity after the merger of Anagram Finance into ICICI.

ICICI made substantial write-offs, which include a Rs 1.08 billion write-down of equity investments. The total write-offs amounted to Rs 4.72 billion as compared to Rs 2.89 billion (including Rs 730 million write-down of equity investments) during 1997-98.

This amount of Rs 4.72 billion includes the general provision of Rs 1.31 billion for sub-standard assets.

The net owned funds rose by 24 per cent to Rs 62.01 billion from Rs 50 billion last year. The asset base increased by 27 per cent to Rs 585.47 billion. ICICI's return on assets averaged 2.1 per cent and return on net worth was 20.30 per cent. The financial institution's earning per share for 1998-99, diluted for domestic convertible debt was 18.20.

The net non-performing assets of ICICI were 7.8 per cent for 1998-99 (7.6 per cent last year). According to company officials, the aggressive recovery initiated by ICICI has resulted in settlement of dues amounting to Rs 3.80 billion. ''The strong collateral against ICICI's loan assets has been the critical factor towards the success of recovery efforts,'' said an official.

The capital adequacy ratio was at 12.50 per cent for the year ended March 31, 1999. Tier I capital accounted for 8.3 per cent. In accordance with the Reserve Bank of India norms, the Tier I capital includes a grant element of Rs 3.04 billion out of the face value of Rs 3.50 billion of 20-year non-cumulative preference shares issued to ITC Limited.

As part of the scheme for merger of ITC Classic Finance with it, ICICI appointed KPMG Peat Marwick to recast the financial statements presented in the annual report for 1998-99.

There are significant differences between Indian generally accepted accounting principles and United States GAAP in areas of consolidation of subsidiaries, accounting for affiliates, allowances for credit losses, business combinations, loan origination fees, deferred income taxes, interest capitalisation and redeemable preference shares.

ICICI also announced today that two of its senior officials have been promoted to higher posts. Director Lalita Gupte has been elevated to the post of joint managing director and chief operating officer. S H Bhojani has been promoted to the position of deputy managing director.

Gupte became a director in 1994 and was made deputy managing director in 1996. Bhojani was the executive director of ICICI before being promoted.

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