Performance Review of ICICI Bank -- Half Year Ended September 30, 2001: Robust Profit Growth.

Business Editors

MUMBAI, India--(BUSINESS WIRE)--Oct. 25, 2001

The Board of Directors of ICICI Bank Limited (NYSE:IBN) at its meeting held in Mumbai today, approved the audited accounts of the Bank for the half year ended September 30, 2001 (H1-2002).

The Board also approved the unaudited US GAAP financial statements of the Bank for H1-2002. Pursuant to the amalgamation of Bank of Madura Limited with ICICI Bank effective March 10, 2001, the financial statements for H1-FY2002 reflect the operations of the merged entity.

Highlights

The highlights of ICICI Bank's performance during H1-2002 compared to the half-year ended September 30, 2000 (H1-2001) are:

-- Profit after tax as per Indian GAAP increased 87 per cent;

-- Return on average net worth increased to 19.07 per cent (annualised) from
11.85 per cent;

-- Return on average assets increased to 1.37 per cent (annualised) from 1.29
per cent;

-- Earnings per share increased to Rs. 11.93 (annualised) from Rs. 7.13;

-- Net income as per US GAAP increased 87 per cent;

-- 1.52 per cent market share in deposits and 2.01 per cent market share in
customer assets

Results under Indian GAAP

The profit after tax increased by 120 per cent to Rs.66.15 crore in Q2-2002 from Rs. 30.06 crore in Q2-2001. The profit after tax increased by 87 per cent to Rs. 131.4 crore in H1-2002 from Rs. 70.2 crore in H1-2001. The strong profit growth was driven by a 240 per cent increase in other income to Rs. 222 crore in H1-2002 from Rs. 65 crore during H1-2001. Core fee income increased 88 per cent to Rs. 125 crore from Rs. 67 crore. Net interest income increased 60 per cent to Rs. 291 crore from Rs. 181 crore. Cost of deposits decreased to 7.4 per cent compared to 7.9 per cent during H1-2001. The operating expenditure increased by 120 per cent to Rs. 277 crore from Rs. 126 crore, mainly on account of various retail business initiatives taken by ICICI Bank as also due to the full impact of operating expenditure in respect of refurbishing and automation of branches taken over from Bank of Madura Limited during the period under review.

Business Review : Growth momentum maintained

ICICI Bank continues to be the leading private sector bank in the country. Deposits grew 80 per cent to Rs. 17,515 crore at September 30, 2001 as against Rs. 9,728 crore at September 30, 2000 and Rs. 16,378 crore at March 31, 2001. The share of ICICI Bank in total deposits of the banking system increased to 1.52 per cent from 0.97 per cent at September 30, 2000. Retail deposits constituted 67 per cent of total deposits, compared to 48 per cent at September 30, 2000, reflecting ICICI Bank's successful retail thrust. Savings deposits registered a robust growth of 159 per cent to Rs. 2,186 crore from Rs. 843 crore at September 30, 2000.

ICICI Bank's customer assets (including credit substitutes) increased 80 percent to Rs. 11,409 crore at September 30, 2001 from Rs. 6,324 crore at September 30, 2000. ICICI Bank's market share in customer assets increased to 2.01 per cent at September 30, 2001 from 1.26 per cent at September 30, 2000. ICICI Bank focuses on building customer relationships and using technology as a key differentiator in its products and services. ICICI Bank continued its focus on maintaining high quality of business with 86 per cent of incremental exposure being to clients rated 'A' and above.

The ratio of net non-performing assets (NPAs) to customer assets was 1.41 percent at September 30, 2001 compared to 1.44 per cent at March 31, 2001. The provisioning coverage against NPAs was 63 per cent at September 30, 2001. The Bank also maintains a general provision of 0.50 per cent on standard assets and a provision for operational risks at 0.50 per cent of the paid-up capital.

Significant growth in customer accounts

During H1-2002, the Bank added about 1.1 million new customer accounts taking the total customer accounts to 4.3 million. The total number of customer accounts includes 2.2 million savings bank accounts. The number of Internet banking accounts increased to 7,46,000.

Multi-channel driven retail customer expansion

To efficiently distribute its products and services, ICICI Bank has developed multiple access channels comprising lean brick and mortar branches, automated teller machines (ATM), call centers and Internet banking. At September 30, 2001, the Bank had a network of 357 branches and 39 extension counters. Its network of 601 ATMs is the largest, for a single bank, in the country. Customers in 37 cities can now access account information over the telephone. These investments in channel infrastructure have enabled ICICI Bank to achieve rapid growth in its retail business.

Capital adequacy

ICICI Bank's total capital adequacy ratio at September 30, 2001 was 13.00 per cent, of which Tier I capital constituted 10.25 per cent.

Results under US GAAP

ICICI Bank's net income increased to Rs. 113.46 crore for H1-2002 from Rs.60.68 crore for H1-2001, registering a growth of 87 per cent. Net interest income increased 69 per cent to Rs. 302.42 crore in H1-2002 from Rs. 178.50 crore in H1-2001.

The summary of the audited accounts for H1-2002 under Indian GAAP and the unaudited accounts under US GAAP is enclosed.

For further queries on results, please contact:

Chanda D. Kochhar -- (91)-22-653 6816 or 653 7487

Nachiket Mor -- (91)-22-653 8900 or 653 8974

G. Venkatakrishnan -- (91)-22-653 8516 or 653 8529

For investors' queries, contact:

Bhashyam Seshan

Phone: [phone] or 653 7460

e-mail: [e-mail]

Note: (a) Rs. = Indian Rupees (b) 1 crore = 10 million

Except for the historical information contained herein, statements in this Release which contain words or phrases such as 'will', 'would', 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 obtain statutory and regulatory approvals and to successfully implement our strategy, future levels of non-performing loans, our growth and expansion in business, 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.

                       AUDITED FINANCIAL RESULTS
              FOR THE HALF-YEAR ENDED SEPTEMBER 30, 2001
                                                            (Rupees in
                                                              crores)
                    Three months ended    Half-year ended   Year ended
Sr.                 ------------------   -----------------   ---------
No.    Particulars  Sept 30,   Sept 30,  Sept 30,  Sept 30,    Mar 31,
                      2001       2000      2001      2000       2001
                    -------    -------   -------   -------    --------

1. Interest earned
    (a)+(b)+(c)+(d)  464.69     287.34    933.00   570.90     1,242.13
   a) Interest/
       discount on
       advances/
       bills         195.20     131.35    384.86   249.85       570.91
   b) Income on
       investments   243.55     124.78    482.59   251.71       555.73
   c) Interest on
       balances with
       Reserve Bank
       of India and
       other interbank
       funds          23.21      30.68     56.12    67.87       108.67
   d) Others           2.73       0.53      9.43     1.47         6.82

2. Other Income       95.11      34.12    222.29    65.35       220.01
   A) TOTAL INCOME
    (1) + (2)        559.80     321.46   1155.29   636.25     1,462.14
3. Interest Expended 323.58     191.36    642.19   389.55       837.67
4. Operating Expenses
    (e) + (f)        139.26      71.56    277.47   126.29       334.30
   e) Payments to
       and provisions
       for employees  34.36      11.29     67.08    23.32        51.71
   f) Other operating
      expenses       104.90      60.27    210.39   102.97       282.59

   B) TOTAL EXPENDITURE
      (3)+ (4)
      (excluding
      provisions and
      contingencies) 462.84     262.92    919.66   515.84     1,171.97
   OPERATING PROFIT
   (A-B)
5. (Profit before
    Provisions  and
    Contingencies)    96.96      58.54    235.63   120.41       290.17
6. Other provisions
    and contingencies
    (net)              1.25      22.43     46.91    36.50        63.65
7. Provision for
    taxes             29.56       6.05     57.32    13.71        65.42
8. Net Profit (5-6-7) 66.15      30.06    131.40    70.20       161.10
9. Paid-up equity
    share capital    220.36     196.82    220.36   196.82       220.36
10. Reserves excluding
     revaluation
     reserves       1223.66    1022.89   1223.66  1022.89     1,092.26
11. Analytical Ratios
   (i) Percentage of
     shares held by
     Government of
     India               ..         ..        ..       ..           ..
   (ii) Capital Adequacy
        Ratio        13.00%     17.59%    13.00%   17.59%       11.57%
   (iii) Earnings per
          share for
          the period/year
          (in Rs.)
          (basic and
          diluted)     3.00       1.53      5.96     3.57         8.13
12. Aggregate of
     Non-Promoter
     Shareholding
       --  No. of
           shares 118962731   74313080 118962731 74313080 11,68,16,231
       --  Percentage
           of
           share-
           holding    53.99      37.76     53.99    37.76        53.01

Notes:

1.  The results for the current year include the results of erstwhile
    Bank of Madura on their merger with us effective March 10, 2001.
    The results are not therefore comparable with earlier periods

2.  Provision for taxes has been arrived at as per Accounting Standard
    22


3.  Net non-performing assets to net advances (including credit
    substitutes) is 1.41% (Year ended March 31, 2001 1.44%)

4.  Bank has raised subordinated debt towards Tier II capital for Rs.
    227 crores in July 2001

Financial results under US GAAP accounting
                                                           (Rupees in
                                                             crores)

Particulars        Three months ended    Half-year ended   Year ended
                      (unaudited)          (unaudited)      (audited)
                   ------------------    ---------------  ------------
                   Sept 30,  Sept 30,   Sept 30,  Sept 30,    Mar 31,
                     2001      2000       2001      2000       2001
                   --------  ---------  --------  --------    -------
Net income
 under US GAAP        57.26      16.08    113.46     60.68     130.84
Reconciliation between
 US GAAP and
 Accounting Standards
 followed in India
Profit under Indian
 GAAP                 66.15      30.06    131.40     70.20     161.10
Deferred taxation     13.56      17.30      9.32     18.40      44.21
Loan impairment      (16.60)     (2.67)   (18.80)    (6.63)    (39.53)
Mark to Market impact
 on investments       (6.78)    (32.17)    (8.99)   (28.28)    (40.59)
ADR Issue expenditure
 charged to P & L A/c  3.06       2.93      5.61      5.38      10.47
Others                (2.13)      0.63     (5.08)     1.61      (4.82)
Profit under US GAAP  57.26      16.08    113.46     60.68     130.84

    The above financial results have been taken on record by the Board
of Directors of the Bank at its meeting held on October 25 2001