Profit & loss account

Profit after tax increased by 18% sequentially, to Rs. 1,040 crore (US$ 216 million) for the quarter ended September 30, 2009 (Q2-2010) from Rs. 878 crore (US$ 183 million) for the quarter ended June 30, 2009 (Q1-2010). Profit after tax for the quarter ended September 30, 2008 (Q2-2009) was Rs. 1,014 crore (US$ 211 million).

Net interest margin increased from 2.4% in Q1-2010 to 2.5% in Q2-2010. Net interest income increased sequentially to Rs. 2,036 crore (US$ 423 million) for Q2-2010 from Rs. 1,985 crore (US$ 413 million) for Q1-2010. Net interest income was lower compared to Q2-2009 mainly due to the decrease in advances owing to the moderation in system credit growth, and decline in advances of overseas branches.

Fee income increased sequentially to Rs. 1,387 crore (US$ 288 million) in Q2-2010 from Rs. 1,319 crore (US$ 274 million) in Q1-2010. Fee income is in line with the reduced investment and mergers & acquisition activity in the corporate sector, reflecting the change in market conditions in the second half of fiscal 2009.

Operating expenses (including direct marketing agency expenses) decreased by 8% to Rs. 1,379 crore (US$ 287 million) in Q2-2010 from Rs. 1,494 crore (US$ 311 million) in Q1-2010. The Bank achieved a reduction in the cost/average asset ratio to 1.5% in Q2-2010 from 1.6% in Q1-2010.

Total provisions decreased sequentially to Rs. 1,071 crore (US$ 223 million) in Q2-2010 from Rs. 1,324 crore (US$ 275 million) in Q1-2010.

Balance sheet

The Bank has made further progress in its strategy of strengthening its deposit franchise. This is reflected in the Bank's robust growth in savings and current account deposits and increase in the CASA ratio. The Bank continues to invest in expansion of its branch network to enhance its deposit franchise and create an integrated distribution network for both asset and liability products.

In line with the above strategy, the total deposits of the Bank were Rs. 197,832 crore (US$ 41.1 billion) at September 30, 2009, compared to Rs. 210,236 crore (US$ 43.7 billion) at June 30, 2009. During the quarter, the Bank's savings account deposits increased by Rs. 4,859 crore (US$ 1,010 million) and current account deposits increased by Rs. 4,094 crore (US$ 851 million) resulting in an improvement in the CASA ratio to 36.9% at September 30, 2009 from 30.0% at September 30, 2008 and 30.4% at June 30, 2009.

The branch network of the Bank stood at 1,520 at October 26, 2009. The Bank is in the process of implementing the 580 branch licenses received from Reserve Bank of India which would expand the branch network to about 2,000 branches, giving the Bank a wide distribution reach in the country.

The loan book of the Bank decreased to Rs. 190,860 crore (US$ 39.7 billion) at September 30, 2009 from Rs. 198,102 crore (US$ 41.2 billion) at June 30, 2009 mainly due to the decrease in the agricultural loan portfolio in line with the seasonal nature of the business, and repayments from the retail loan portfolio, partly offset by increase in corporate advances.

Capital adequacy

The Bank's capital adequacy at September 30, 2009 as per Reserve Bank of India's Basel II norms was 17.7% and Tier-1 capital adequacy was 13.3%, well above RBI's requirement of total capital adequacy of 9.0% and Tier-1 capital adequacy of 6.0%.

Asset quality

At September 30, 2009, the Bank's net non-performing asset ratio was at the same level as June 30, 2009 at 2.19%. Total provisions decreased sequentially by 19% to Rs. 1,071 crore (US$ 223 million) in Q2-2010 from Rs. 1,324 crore (US$ 275 million) in Q1-2010.

Consolidated profits

Consolidated profit after tax of the Bank increased by 76% from Rs. 651 crore (US$ 135 million) in Q2-2009 to Rs. 1,145 crore (US$ 238 million) in Q2-2010, driven primarily by the sharp reduction in losses of ICICI Prudential Life Insurance Company (ICICI Life) and increase in profit of other subsidiaries.

Overseas banking subsidiaries

ICICI Bank Canada's profit after tax for Q2-2010 was CAD 13.8 million. ICICI Bank Canada's capital position continued to be strong with a capital adequacy ratio of 23.2% at September 30, 2009. ICICI Bank UK's profit after tax for Q2-2010 was USD 12.6 million. ICICI Bank UK's capital position continued to be strong with a capital adequacy ratio of 16.3% at September 30, 2009.

Insurance subsidiaries

ICICI Prudential Life Insurance Company (ICICI Life) maintained its position as the largest private sector life insurer based on retail new business weighted received premium during the half year ended September 30, 2009. ICICI Life's total premium in Q2-2010 was Rs. 3,634 crore (US$ 756 million). ICICI Life's renewal premium in Q2-2010 increased by 28% compared to Q2-2009, reflecting the long term sustainability of the business. New business annualised premium equivalent (APE) in Q2-2010 was Rs. 1,212 crore (US$ 252 million). ICICI Life's unaudited New Business Profit (NBP) in Q2-2010 was Rs. 233 crore (US$ 48 million). Due to customer acquisition costs, which are not amortised, and reserving for actuarial liability, ICICI Life's statutory accounting results reduced the consolidated profit after tax of ICICI Bank by Rs. 51 crore (US$ 11 million) in Q2-20101 (compared to Rs. 228 crore (US$ 47 million) in Q2-2009). Assets held increased 66% from Rs. 30,107 crore (US$ 6.3 billion) at September 30, 2008 to Rs. 50,093 crore (US$ 10.4 billion) at September 30, 2009.

ICICI Lombard General Insurance Company (ICICI General) maintained its leadership in the private sector during the half year ended September 30, 2009. ICICI General's premium in Q2-2010 was Rs. 801 crore (US$ 167 million). ICICI General's profit after tax for Q2-2010 was Rs. 51 crore (US$ 11 million).

Securities and asset management

ICICI Prudential Asset Management Company's profit after tax for Q2-2010 was Rs. 48 crore (US$ 10 million) compared to Rs. 16 crore (US$ 3 million) in Q2-2009. ICICI Securities' profit after tax for Q2-2010 was Rs. 38 crore (US$ 8 million) compared to Rs. 10 crore (US$ 2 million) in Q2-2009.

1 Life insurance companies worldwide make accounting losses in initial years due to business set-up and customer acquisition costs in the initial years and reserving for actuarial liability. Further, in India, amortization of acquisition costs is not permitted. If properly priced, life insurance policies are profitable over the life of the policy, but at the time of sale, there is a loss on account of non-amortized expenses and commissions, generally termed as new business strain that emerges out of new business written during the year. New Business Profit (NBP) is an alternate measure of the underlying business profitability (as opposed to the statutory profit or loss) and relevant in the case of companies in their growth phase. NBP is the present value of the profits of the new business written during the year. It is based on standard economic and non-economic assumptions including risk discount rates, investment returns, mortality, expenses and persistency assumptions. Disclosure on economic assumptions is available in the annual report for the year ended March 31, 2009.

 Summary Profit and Loss Statement (as per unconsolidated Indian GAAP accounts)                                
 Rs. crore                                                                                                     
                                        FY 2009   Q1-2009    Q2-2009    H1-2009    Q1-2010   Q2-2010   H1-2010 
 Net interest income                    8,367     2,090      2,148      4,238      1,985     2,036     4,021   
 Non-interest income                    7,603     1,538      1,877      3,415      2,090     1,824     3,914   
 - Fee income                           6,524     1,958      1,876      3,834      1,319     1,387     2,706   
 - Lease and other income               636       174        154        328        57        140       197     
 - Treasury income                      443       (594   )   (153   )   (747   )   714       297       1,011   
 Less:                                                                                                         
 Operating expense                      6,306     1,634      1,543      3,177      1,467     1,358     2,825   
 Direct market agent (DMA)(1 )expense   529       228        145        373        27        21        48      
 Lease depreciation                     210       52         52         104        52        46        98      
 Operating profit                       8,925     1,714      2,285      3,999      2,529     2,435     4,964   
 Less: Provisions                       3,808     792        924        1,716      1,324     1,071     2,395   
 Profit before tax                      5,117     922        1,361      2,283      1,205     1,364     2,569   
 Less: Tax                              1,359     194        347        541        327       324       651     
 Profit after tax                       3,758     728        1,014      1,742      878       1,040     1,918   


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   1.   Represents commissions paid to direct marketing agents (DMAs) for origination of retail loans. These commissions are expensed upfront. 
   2.   Prior period figures have been re-grouped/re-arranged where necessary.                                                                 


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 Summary Balance Sheet                                                           
 Rs. crore                                                                       
                        March 31, 2009   September 30, 2008   September 30, 2009 
 Assets                                                                          
 Cash & bank balances   29,966           35,613               29,267             
 Advances               218,311          221,985              190,860            
 Investments            103,058          97,147               119,965            
 Fixed & other assets   27,966           30,225               26,282             
 Total                  379,301          384,970              366,374            
 Liabilities                                                                     
 Networth               49,533           48,645               51,258             
 - Equity capital       1,113            1,113                1,114              
 - Reserves             48,420           47,532               50,144             
 Preference capital     350              350                  350                
 Deposits               218,348          223,402              197,832            
 CASA ratio             28.7     %       30.0     %           36.9     %         
 Borrowings             92,805           94,849               99,773             
 Other liabilities      18,265           17,724               17,161             
 Total                  379,301          384,970              366,374            


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All financial and other information in this press release, other than financial and other information for specific subsidiaries where specifically mentioned, is on an unconsolidated basis for ICICI Bank Limited only unless specifically stated to be on a consolidated basis for ICICI Bank Limited and its subsidiaries.