Investor Presentation
January 28, 2000
Agenda
Strategic Focus
e-enabling ICICI
Operational Performance
Financial Performance
Asset Composition and Quality
Capital and Shareholders
We have capitalised on market opportunities to stretch the boundaries of our business
We believe that the foremost ingredient for success has been our ability to continuously evolve both organisational structure and product offerings, thereby remaining on the cutting edge of financial services
ICICI - A Paradigm Shift from a development banking institution operating on a single product portfolio
Our transformation has been driven by the urge to enhance shareholder value Shareholder value is our key performance
metric
Allows for more transparent and accurate trade-offs
Create value in the ICICI Group wherever appropriate
Regulation has been a key driver in deciding the most optimum structure for creating value
ICICI: Strategic Transformation Matrix
Retail “Power Pay” Safety BondsConsumer
Asset Finance
ICICI Bank
Credit CardsB2C
Corporate Governan
ce
Audit Committee
Credit Committee
Governance Committee
Separation of Executive
Mgmt & Board
Independent Board
Technology
Internet Banking
Data Warehousing
ICICI InfoTech dot.comNetworked Presence
Before 1996 2000
Risk Mgmt/ Asset
Quality
Special Asset Mgmt Group
US GAAP Provisioning
Proactive Workout of
NPLs
Credit Risk Unit and Internal
Audit
Centralised & Independent Risk Mgmt
Corporate
Banking
Specialised Industry Groups
Structured Products
Group
Client Relationship
Groups
Project Finance
B2B Solutions
The Present Repositioning...
WholesaleBanking
RetailBanking
dot.comVentures & Investments
e-PlatformsTechnologyBackbone &
Services
Group
•Corporate Finance•Project Finance•Commercial Banking•Investment Banking•Venture Capital
•Accounts•Deposits•Bonds•Credit Cards•Mortgages•Auto loans•Personal Loans•Depository
•Web Trade•Housing portal•Other retail finance portals•Investments - Portals - Software - Networking - Media
•Payment Gateway•Financial vertical•Switch
•Financial vertical•Global transaction processing•Web technologies
Significant value in present structure... ICICI is clearly India’s largest hub for e-commerce
businesses and related technology initiatives Dot.com proposition in every conceivable space in
the environment Ownership : 100% subsidiary or principal sponsor Leveraging existing strengths and resources in
each venture Full value extraction will be a function of
Changes in Regulation Market response to current initiatives Ability to issue instruments like tracking stocks
The Investment Proposition... A stable, conservatively valued wholesale bank
Acts as a self-sustaining cash generator Provides the launching pad for new business growth
A “free” option on the rapidly growing retail banking franchise the investment bank with a strong fee earning
capacity and enormous upside from existing dot.com and
technology investments The possibility of a migration towards a more
“tech-stock” valuation as the multitude e-commerce initiatives start to deliver value
Agenda
Strategic Focus
e-enabling ICICI
Operational Performance
Financial Performance
Asset Composition and Quality
Capital and Shareholders
A synergistic approach
Web enabling existing products and services
New Opportunities
Invest
•Leverage existing domain
•e-Products and Services•e-Infrastructure
•Start-ups in dot.com world•Technology companiesPartnerships to add value
Internet based payment module “ Payments” for purchasers and sellers to effect payments online
Tie-up with a Compaq-led consortium for setting up a payment gateway to facilitate secured online B2C and B2B e-commerce transactions
Enhance business value by web enabling existing products and services
End to end financial solutions across entire client spectrum
Creating a closed user group among existing clients Path breaking B2B web based solution
for supply chain management Links corporate clients together with
their vendors and distributors in a closed loop Facilitating ease of funds transfer Superior inventory management
1000 participants presently in a closed e-commerce group
Leveraging Internet for new opportunities in the financial services domain... The first end-to-end integrated
web based trading service in India Unique 3-in-1 capability would allow the
customer seamless electronic trading Brokerage, Depository and online banking
account Web space complemented by 75 ICICI Cyber
points (thin branches) and 81 bank branches Demo site launched on January 13, 2000
More than 100,000 page views and 2,000 registrations within 24 hours of launch
India’s first credit card with Internet access launched Statements, payment details, outstandings,
due date, instructions and application on the Internet
Pan-India web based bills payment system Housing portal being launched to facilitate
the entire property and housing requirements of consumers
Other initiatives...
Building Retail Technology Infrastructure Nation-wide data communications network Fully-integrated multi-product and multi-channel
retail technology architecture Data-processing capabilities for retail customer
base Data-centres, Data mining and CRM Advanced work-flow management tools
All branches to run fully web-enabled software with most having no mid or back-office capability on-site
Decision support information on customer, product, delivery channel and risk mitigation
Investing in the Internet
To capitalise on entrepreneurial ideas There will be a successful dot.com
proposition in every space in the environment
ICICI seen as a value enhancer in this business
Sponsor, nurture and grow these initiatives
Incubator facilities Investments in various dot.com
initiatives Riding the valuation potential of future winners
Agenda
Strategic Focus
e-enabling ICICI
Operational Performance
Financial Performance
Asset Composition and Quality
Capital and Shareholders
Business Environment: Positive Signals Real GDP growth of 6.0% in Q2:FY2000 Annual inflation rate low at 2.7% as on Jan 1,
2000 Manufacturing sector recorded 6.9% growth
during Apr-Nov 1999 Production of capital goods grew by 7.9% Output of consumer durables rose by 11.8% Intermediate goods production up by 8.9%
Flow of funds from banks to commercial sector in Apr-Dec 1999 higher at Rs. 416.64 bn compared to Rs. 305.25 bn in Apr-Dec 1998
Buoyant capital markets
Extracting value from Group synergy... MCG, GCG and ICICI-Bank driving the efforts Corporate finance initiatives
Increased asset share in key PSUs and short-term products
Continued leadership in key industry sectors Emphasis on structured products Successful business interface created for
ICICI-Bank Credit clients, CMS accounts, Power-pay
accounts Creating business interface for ICICI Securities
Debt placements of Rs. 24.45 billion
Approvals - Dominated by Corporate Finance products
Apr-Dec 1998
33.0%
17.9%
17.4%
31.2%
0.5%
Apr-Dec 1999
21.8%
23.4%
15.7%
37.7%1.4%
Infrastructure
Oil & Gas
Manufacturingprojects
CorporateFinance
PersonalFinance
Rs. 274.90 bn Rs. 326.71 bn
Disbursals - Dominated by Corporate Finance products
Apr-Dec 1998
15.3%
18.8%25.8%
39.2%0.9%
Apr-Dec 1999
14.2%
23.2%15.6%
45.0% 2.0%
Infrastructure
Oil & Gas
Manufacturingprojects
CorporateFinance
PersonalFinance
Rs. 138.04 bn Rs. 170.17 bn
Diversified Loan Portfolio
Mar 31, 1997
8.6%
9.5%
73.1%
8.8%
Dec 31, 1999
16.6%
14.9%43.2%
25.3% Infrastructure
Oil & Gas
Manufacturingprojects
CorporateFinance
Rs. 297.83 bn Rs. 515.05 bn
Leveraging the retail franchise... Over 2.5 million retail customers
Cross selling opportunities A strong customer-centric strategy for
product design and product-delivery Rapid expansion of branch network
A total of 300 points of physical presence within the next year -- up from the current level of 170
Rapid expansion of ATM and cash-dispenser network The Power Pay model
ATM
A “click and brick” distribution strategy
120 ATMs
120 ATMs
Internet Banking
Internet Banking
81 Branches
81 Branches
75 ICICI centers
75 ICICI centers
8,000 Agents8,000 Agents
Call center
Call center
ICICI Customers
Retail Assets: Completing the Product Portfolio
Auto Loans
HomeLoans
ConsumerDurableLoans
DealerFunding
PersonalLoans
Nov 1998 Feb 1999 Apr 1999 May 1999 Nov 1999 Jan 2000
CreditCards
Creating the base in retail assets... Within a short period established an all India
presence Multiple delivery channels
Introduced innovative products and services Enabling customer capture and market share
4th largest player in national automobile loan market Leader in key cities like Chennai and Bangalore
Leadership in select cities in the housing loans market
Aiming for the premier position..
Retail Resources Completed 5 Public Issues of Bonds raising
Rs. 16.20 bn from over 430,000 investors Private placements of co-branded bonds
adding approximately 200,000 investors to the ICICI family of customers
New Initiatives Introduction of new product - Gilt Rate Plus
Bond Stock exchange approval to specify scrip
codes on Bond Certificates, resulting in ease of trading
Agenda
Strategic Focus
e-enabling ICICI
Operational Performance
Financial Performance
Asset Composition and Quality
Capital and Shareholders
Summary Performance (US GAAP)
Q398-99
Q399-00
Inc. % Apr -Dec 98
Apr -Dec 99
Inc. % FY98-99
Net income* 1.62 2.44 50.8 5.39 6.70 24.2 7.23
Stockholders’equity
37.74 67.39 78.6 37.74 67.39 78.6 36.51
Total assets 613.97 742.28 20.9 613.97 742.28 20.9 653.35
*Excluding extraordinary items and cumulative effect of change in accounting policy
Rs.bn
Summary Ratios (US GAAP)
9 monthsended Dec31, 1998
9 monthsended Dec
31, 1999
FY:98-99
EPS (Rs.) 15.0 14.9 15.1
Return on Assets (%) 1.3 1.3 1.3
Return on Equity (%) 20.3 17.4 20.0
Note: - Net income excludes extraordinary items and cumulative effect of change in accounting policy.- Ratios for 9 months ended Dec 31, 1998 and 1999 are annualized.
Summary Performance (Indian GAAP)
Q398-99
Q399-00
Inc.%
Apr-Dec 98
Apr-Dec 99
Inc.%
FY98-99
Profit before tax& provisions*
3.48 4.69 34.6 10.95 13.14 20.0 15.68
Profit after tax 2.13 2.52 18.1 7.21 7.92 9.9 10.01
Profit after tax(includingextraordinary gains)
2.13 2.71 27.2 7.21 8.11 12.6 10.01
Shareholders’ equity 52.28 80.16 53.3 52.28 80.16 53.3 51.35
Assets 560.00 645.57 15.3 560.00 645.57 15.3 585.47
Approvals 62.64 85.57 36.6 274.90 326.71 18.8 342.20
Disbursals 54.91 61.08 11.2 138.04 170.17 23.3 192.25
Rs.bn
Summary Ratios (Indian GAAP)
9 monthsended Dec31, 1998*
9 monthsended Dec
31, 1999
FY:98-99*
Weighted average EPS (Rs.) 17.6 16.3 18.2
Return on Assets (%) 2.0 1.9 2.1
Return on Net Worth (%) 19.4 15.9 20.3
*Diluted for domestic convertible which was converted on July 18, 1999.Note: Ratios for 9 months ended Dec 31, 1998 and 1999 are annualized.
Reconciliation of net income - US GAAP Rs. bn
Apr-Dec 98 Apr-Dec 99
As per Indian GAAP 7.21 8.11
Provisions for credit losses (1.40) (1.65)
Amortisation of loan origination fees (0.13) 0.07
Business combination in respect of mergers (0.07) (0.06)
Investment diminution - 0.36
Deferred tax adjustments (0.01) (0.16)
Preference dividend payout (0.45) (0.81)
Unrealized gain / (losses) on trading portfolio 0.09 0.04
Net income of consolidated subsidiaries 0.37 0.87
Others 0.03 (0.07)
Extraordinary items (0.25) -
Total adjustments as per US GAAP (1.82) (1.41)
As per US GAAP* 5.39 6.70
* Excluding extraordinary items and cumulative effect of change in accounting policy
Greater alignment of US GAAP profits with Indian GAAP
Profit after Tax Total Assets
Apr-Dec1998
Apr-Dec1999
% Inc. Apr-Dec1998
Apr-Dec1999
%Inc.
ICICI Bank 441.0 723.6 64.1 54,855.4 94,571.6 72.4
ICICI Securities 114.5 467.9 308.5 16,384.5 20,542.4 25.4
ICICI PFS 51.9 42.5 (18.1) 1,754.7 3,134.3 78.6
ICICI Venture Fund 33.1 222.0 572.7 220.1 452.8 105.7
ICICI Infotech 5.3 65.1 - 79.6 221.1 177.8
ICICI Brokerage 0.4 16.4 - 69.4 140.6 102.6
Total of above 646.2 1,537.5 137.9 73,363.7 119,062.8 62.3
Performance of Subsidiaries (Indian GAAP)
Rs. mn
Agenda
Strategic Focus
e-enabling ICICI
Operational Performance
Financial Performance
Asset Composition and Quality
Capital and Shareholders
Decline in NPL ratio since Q1-FY2000
6.3%
6.7%
6.1%6.0%
5.6%
5.8%
6.0%
6.2%
6.4%
6.6%
6.8%
Mar-99 Jun-99 Sep-99 Dec-99
Net NPL ratio as per Indian GAAP down to 7.4% at December 31, 1999 from 8.1% at March 31, 1999
US GAAP
Organisational focus on NPLs reflected in the significant increase in settlements Dues aggregating Rs. 2.89 billion settled in
Apr-Dec 1999 compared to Rs. 2.64 billion in Apr-Dec 1998 91% of principal dues collected
77 cases settled in Apr-Dec 1999 compared to 66 cases in Apr-Dec 1998
76% of principal dues collected on a PV basis
Agenda
Strategic Focus
e-enabling ICICI
Operational Performance
Financial Performance
Asset Composition and Quality
Capital and Shareholders
Capital Adequacy
6.2
10
3.2
5
0
2
4
6
8
10
12
14
16Pe
r ce
nt Tier-2Tier-1
9.4%
15.0%
Mar 31, 1999 Dec 31, 1999*
Capital adequacy as per Indian GAAP is 17.7%
*Not adjusted for expected dividend payout
Shareholding Pattern
Mar 31, 1999
5.8%
23.3%
6.4%22.0%
7.7%
20.1%
14.8%
Dec 31, 1999
6.9%
22.6%
3.8%12.2%
8.3%
32.6%
13.5%UTI
Insurance cos.
Banks and FIs
Individuals
Corporatesand MFs
ADR holders
FIIs & NRIs
Thank You
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