ICICI Bank's Q4 net profit up 39 percent, recommends 110 percent dividend payout

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As per Indian Generally Accepted Accounting Principles (Indian GAAP), the bank, the largest private sector money lender in India, said its PAT for the quarter ended March 31, 2008 (Q4-2008) increased 39.35 percent to Rs.1149.84 crore ($287.46 million) from Rs.825.12 crore ($206.28 million) for the quarter ended March 31, 2007 (Q4-2007). Market analysts expected the bank to report a net profit of Rs.915 crore ($228.75 million).

For the whole fiscal year ended March 31, 2008, PAT increased 33.68 percent to Rs.4157.73 crore ($1.04 billion) as against Rs.3110.22 crore ($777.55 million) for the year ended March 31, 2007.

The bank's total income for the fourth quarter ended March 31, 2008 was Rs.10390.92 crore ($2.6 billion) as against Rs.8495.52 crore ($2.12 billion) for the corresponding period a year earlier, a YoY growth of 22.3 percent.

For the whole year ended March 31, 2008, the YoY growth of total income was 36.9 percent or Rs.39,599.11 crore ($9.9 billion) as against Rs.28,923.46 crore ($7.23 billion) a year earlier.

The bank's net interest income, the difference between what it paid for funds and what it earned from lending, increased 29.57 percent to Rs.7304 crore ($1.82 billion) for the fiscal year ended March 31, 2008, from Rs.5637 crore ($1.41 billion) a year earlier.

For the quarter ended March 31, 2008, the net interest income rose 29.21 percent to Rs.2079 crore ($519.75 million) from Rs.1609 crore ($402.25 million) for the same period a year earlier.

For the whole year ended March 31, 2008, current and savings account deposits rose 27 percent to Rs.63,781 crore (15.94 billion) from Rs.50,214 crore ($12.55 billion) a year earlier.

For the year ended March 31, 2008, ICICI Bank and its subsidiaries had consolidated total assets of Rs.4,85,830 crore ($121 billion).

The bank's Board of Directors has recommended a dividend payout of Rs.11 per share on par value of Rs.10 per share (110 percent), subject to approval of shareholders. For the fiscal year ended March 31, 2007, it had recommended a dividend of 100 percent per equity share.

According to Chanda Kochhar, joint managing director, ICICI Bank, the bank maintained its market leadership in retail credit and also bolstered its presence in corporate banking.

"We have seen strong deposit growth and strong demand in retail fee deposits, which was our aim," Kochhar said.

"We see no change in the investment pipeline by Indian companies," she added, suggesting that fund raising capacities for Indian companies would continue to be strong.

In the corporate and investment banking segment, ICICI Bank cornered 75 percent of all outbound merger and acquisition deals worth about $46 billion in the year.

However, high interest rates affected retail credit, which grew only 3 percent during the year against 30 percent in the previous fiscal.

"In the later half of the year, we tightened standards," said Kochhar. "We realized that given the environment for collection, there are a lot of challenges."

The bank, whose entire credit derivatives portfolio is about $1.6 billion, has offset $100 million as notional losses against treasury income in the March quarter due to the market turmoil, in the wake of the subprime crisis. For the whole year the the bank has offset about $170 million.

However, Kochhar has dismissed fears of ICICI Bank being hit by the global credit squeeze.

"We do not have any exposure to the US subprime market," Kochhar, who is also the chief financial officer, said, noting that the bank has seen tighter credit lending conditions in recent months.

On derivative exposure of corporate clients, Kochhar said the bank does no disclose any profits or losses incurred by its clients.

"There have been some issues with clients but those matters are subjudice," she said.

1 crore = 10 million

US$ amounts represent convenience translations at US$1= Rs.40