ICICI Bank Performance Review -- Quarter ended September 30, 2007: 33% Year-on-Year Growth in Profit after Tax.

MUMBAI, India -- The Board of Directors of ICICI Bank Limited (NYSE: IBN) at its meeting held at Mumbai today, approved the audited accounts of the Bank for the quarter ended September 30, 2007 (Q2-2008).

Highlights

* Operating profit excluding treasury income increased 52% in Q2-2008 to Rs. 1,712 crore (US$ 430 million) from Rs. 1,129 crore (US$ 283 million) in the quarter ended September 30, 2006 (Q2-2007).

* Profit after tax for Q2-2008 increased 33% to Rs. 1,003 crore (US$ 252 million) from Rs. 755 crore (US$ 189 million) for Q2-2007.

* Net interest income increased 34% to Rs. 1,786 crore (US$ 448 million) for Q2-2008 from Rs. 1,334 crore (US$ 335 million) for Q2-2007.

* Total advances increased 33% to Rs. 207,121 crore (US$ 52.0 billion) at September 30, 2007 from Rs. 155,403 crore (US$ 39.0 billion) at September 30, 2006.

* Current and savings account deposits increased 38% to Rs. 57,827 crore (US$ 14.5 billion) at September 30, 2007 from Rs. 41,997 crore (US$ 10.5 billion) at September 30, 2006.

Operating review

Credit growth

The Bank's total advances increased 33% to Rs. 207,121 crore (US$ 52.0 billion) at September 30, 2007 from Rs. 155,403 crore (US$ 39.0 billion) at September 30, 2006. The advances of the Bank's international branches increased 146% to Rs. 36,994 crore (US$ 9.3 billion) at September 30, 2007 from Rs. 15,025 crore (US$ 3.8 billion) at September 30, 2006, reflecting the combination of the Bank's strong corporate franchise, and its international presence. This has led to an increase in the proportion of advances of the Bank's international branches in total advances from 9.7% at September 30, 2006 to 17.9% at September 30, 2007. The Bank's retail advances were Rs. 131,014 crore (US$ 32.9 billion) at September 30, 2007 and constituted 63% of total advances. The Bank is also extending its reach in the small and medium enterprises segment with advances increasing by 56% to Rs. 5,205 crore (US$ 1.3 billion) at September 30, 2007 from Rs. 3,326 crore (US$ 0.8 billion) at September 30, 2006.

Deposit growth

The Bank's total deposits increased 20% to Rs. 228,307 crore (US$ 57.3 billion) at September 30, 2007 from Rs. 189,499 crore (US$ 47.6 billion) at September 30, 2006. During this period, current and savings account deposits increased 38% to Rs. 57,827 crore (US$ 14.5 billion) at September 30, 2007 from Rs. 41,997 crore (US$ 10.5 billion) at September 30, 2006. The Bank had 950 branches and extension counters and about 3,600 ATMs at September 30, 2007.

International operations 

The Bank has wholly-owned subsidiaries, branches and representative offices in 17 countries, and an offshore banking unit in Mumbai. At September 30, 2007 the Bank's international operations accounted for about 22% of its consolidated banking assets. The Bank's remittance business volumes were about Rs. 8,600 crore (US$ 2.2 billion) during Q2-2008. ICICI Bank UK's profit after tax for the six-month period ended September 30, 2007 (H1-2008) was US$ 36.0 million.

Capital adequacy

The Bank's capital adequacy at September 30, 2007 was 16.8%1 (including Tier-1 capital adequacy of 13.0%), well above RBI's requirement of total capital adequacy of 9.0%.

Asset quality

At September 30, 2007, the Bank's net non-performing assets constituted 1.4% of customer assets.

Unaudited consolidated results

The unaudited consolidated profit after tax was Rs. 1,642 crore (US$ 412 million) for the six-month period ended September 30, 2007 (H1-2008) compared to Rs. 1,319 crore (US$ 331 million) for the six-month period ended September 30, 2006 (H1-2007).

ICICI Prudential Life Insurance Company (ICICI Life) continued to maintain its market leadership among private sector life insurance companies with a market share of about 26% on the basis of weighted received new business premium in April-August 2007. Life insurance companies worldwide make losses in the initial years, in view of business gestation and customer acquisition costs as well as reserving for actuarial liability. While the growing operations of ICICI Life had a negative impact of Rs. 406 crore (US$ 102 million) on the unaudited consolidated profit after tax in H1-2008 on account of the above reasons, the company's unaudited New Business Profit (NBP) in H1-2008 was Rs. 432 crore (US$ 108 million). NBP is a metric for the economic value of the new business written during a defined period. It is measured as the present value of all the future profits for the shareholders, on account of the new business based on standard assumptions of mortality, expenses and other parameters. Actual experience could differ based on variance from these assumptions especially in respect of expense overruns in the initial years.

ICICI Lombard General Insurance Company (ICICI General) maintained its leadership position with a market share of about 32% among private sector general insurance companies and an overall market share of about 12% during April-August 2007. ICICI General's profit after tax was Rs. 81 crore (US$ 20 million) in H1-2008.

At September 30, 2007, ICICI Prudential Asset Management Company (ICICI AMC) had assets under management of about Rs. 50,400 crore (US$ 12.6 billion). ICICI AMC's profit after tax was Rs. 53 crore (US$ 13 million) in H1-2008.

1 Excludes US$ 750 million Upper Tier II issue made in January 2007 pending clarifications required by Reserve Bank of India on the clauses for principal and interest payment.

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Except for the historical information contained herein, statements in this Release which contain words or phrases such as 'will', 'would', 'indicating', 'expected to' etc., and similar expressions or variations of such expressions may constitute 'forward-looking statements'. These forward-looking statements involve a number of risks, uncertainties and other factors that could cause actual results to differ materially from those suggested by the forward-looking statements. These risks and uncertainties include, but are not limited to our ability to successfully implement our strategy, future levels of non-performing loans, our growth and expansion in business, the impact of any acquisitions, the adequacy of our allowance for credit losses, technological implementation and changes, the actual growth in demand for banking products and services, investment income, cash flow projections, our exposure to market risks as well as other risks detailed in the reports filed by us with the United States Securities and Exchange Commission. ICICI Bank undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date thereof.

For further press queries please call Charudatta Deshpande at 91-22-2653 8208 or e-mail: [e-mail].

For investor queries please call Rakesh Jha at 91-22-2653 6157 or Rupesh Kumar at 91-22-2653 7126 or email at [e-mail].

1 crore = 10.0 million

US$ amounts represent convenience translations at US$1= Rs. 39.85

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Notes

1. The above financials results have been prepared in accordance with Accounting Standard ("AS") 25 on "Interim Financial Reporting".

2. The Sangli Bank Limited (Sangli Bank) has merged with ICICI Bank Limited effective April 19, 2007 as per the order of Reserve Bank of India (RBI) dated April 18, 2007. Pursuant to the merger of Sangli Bank with ICICI Bank Limited, the shareholders of Sangli Bank were allotted 3,455,008 equity shares of Rs. 10.00 each on May 28, 2007. The merger has been accounted for as per the purchase method of accounting in accordance with the scheme of amalgamation.

3. The Bank issued 75,686,388 equity shares (including green shoe option) of Rs. 10.00 each to Qualified Institutional Bidders and Non-Institutional Bidders at a price of Rs. 940.00 per share and 32,912,238 equity shares of Rs. 10.00 each to Retail Bidders and Existing Retail Shareholders at a price of Rs. 890.00 per share, pursuant to a public issue of equity shares, aggregating to Rs. 10,043.71 crore on July 5, 2007. At September 30, 2007, 17,402,172 equity shares are partly paid on which Rs. 500 per share has been paid up (Rs. 9.25 towards face value and Rs. 490.75 towards share premium).

4. The Bank has also issued 49,949,238 American Depositary Shares (ADS) including green shoe option of 6,497,462 ADSs at US$ 49.25 per share, representing 99,898,476 underlying equity shares of Rs. 10.00 each, aggregating to Rs. 9,923.64 crore on July 5, 2007.

5. During the quarter ended September 30, 2007, the Bank allotted 402,758 equity shares of Rs. 10.00 each pursuant to exercise of employee stock options.

6. Status of equity investors' complaints / grievances for the quarter ended September 30, 2007.

Opening balance  Additions  Disposals  Closing balance



8                   14,327     14,330                5

7. Provision for current period tax includes Rs. 11.78 crore towards provision for fringe benefit tax for the quarter ended September 30, 2007 (Rs. 24.26 crore for the half year ended September 30, 2007).

8. USD 750 million (Rs. 2,988.75 crore) of foreign currency bonds raised for Upper Tier II capital have been excluded from the above capital adequacy ratio (CAR) computation, pending clarification required by RBI regarding certain terms of these bonds.

9. As required by RBI general clarification dated July 11, 2007, the Bank has deducted the amortisation of premium on government securities, from "Income on investments" included in "Interest earned" which was earlier included in "Other income" amounting to Rs. 210.34 crore for quarter ended September 30, 2007 (Rs. 242.74 crore for quarter ended September 30, 2006), Rs. 445.64 crore for half year ended September 30, 2007 (Rs. 509.27 crore for half year ended September 30, 2006) and Rs. 998.70 crore for year ended March 31, 2007. Prior period figures have been reclassified to conform to the current classification.

10. Previous period / year figures have been regrouped / reclassified where necessary to conform to current period classification.

11. The above financial results have been taken on record by the Board of Directors at its meeting held on October 19, 2007.

12. The above unconsolidated financial results are audited by BSR & Co., Chartered Accountants.

13. Rs. 1 crore = Rs. 10 million.