MET INSTITUTE OF COMPUTER SCIENCE

Economics Project ICICI BANK

FINANCIAL ANALYSIS

SUMIT DEV NIDHI SHAH ANIL VISAVE GANDHALI HOMKAR RADHIKA SHIRSAT

PG12036 PG12037 PG12038 PG12039 PG12040

Table of Contents
Introduction ........................................................................................................................................... 3 History................................................................................................................................................. 3 Products .............................................................................................................................................. 3 Subsidiaries ......................................................................................................................................... 4 Technology Advancements ................................................................................................................. 5 Financials ............................................................................................................................................... 6 Profit And Loss Account ...................................................................................................................... 6 Sources of Income............................................................................................................................... 6 Sources of Expenditure ....................................................................................................................... 7 Reason of Profit/Loss ......................................................................................................................... 7 Balance Sheet....................................................................................................................................... 11 Assets ................................................................................................................................................ 12 Liabilities .......................................................................................................................................... 13 Key Ratios ............................................................................................................................................ 16 Dividend Per Share ........................................................................................................................... 16 Current Ratio..................................................................................................................................... 17 Earnings Per Share ............................................................................................................................ 18 Net Interest Margin ........................................................................................................................... 18 Total Debt to Owners Fund .............................................................................................................. 19 Return on Capital Employed ............................................................................................................ 19 Recent Development ........................................................................................................................... 21 Future Strategies ................................................................................................................................. 22 Conclusion ........................................................................................................................................... 23 Bibliography ........................................................................................................................................ 23

INTRODUCTION ICICI Group offers a wide range of banking products and financial services to corporate and retail customers through a variety of delivery channels and through its specialised group companies, subsidiaries and affiliates in the areas of personal banking, investment banking, life and general insurance, venture capital and asset management. With a strong customer focus, the ICICI Group Companies have maintained and enhanced their leadership position in their respective sectors. History 1994 The Bank was incorporated on 5th January at Baroda. ICICI Bank was promoted by ICICI and erstwhile SCICI Ltd. and received the Certificate for Commencement of Business on 24th February. It does banking business of all kinds. It was founded as an institution to provide quality banking services using state-of-the-art technology. The Bank has established a well diversified branch network with 24 branches in 15 centres covering 12 states. The bank set up a fully computerised environment with the State-of-theart technology at all offices continuously upgrading its strong systems and procedures with special emphasis on risk management.

1998 ICICI Bank, which introduced Internet banking in India, is set to launch various technologybased new services in the near future. Some of the new services include setting up of call centres and the introduction of fund transfers between own accounts in its branches. ICICI Banking Corporation Ltd, the first bank in the country to go in for Internet banking, is now all set to provide its account-holders with the facility of transferring funds across their accounts on the Net.

2000 ICICI Bank became the first Indian bank to list on the New York Stock Exchange with its 5million American depository shares issue generating a demand book 13 times its size at .2 billion

Products ICICI Group has always been at the forefront of developing innovative financial products, which caters to various needs of people from all walks of life. Banking Personal Banking Global Private Clients Corporate Banking Business Banking NRI Banking

Insurance & Investment Life Insurance General Insurance Securities Mutual Fund Private Equity Practice

ICICI Group of Companies ICICI Bank ICICI Bank is India's second-largest bank with total assets of Rs. 4,736.47 billion (US$ 93 billion) at March 31, 2012 and profit after tax Rs. 64.65 billion (US$ 1,271 million) for the year ended March 31, 2012. The Bank has a network of 2,766 branches and 9,363 ATMs in India, and has a presence in 19 countries, including India. ICICI Prudential Life Insurance Company ICICI Prudential Life Insurance Company is a joint venture between ICICI Bank - one of India's foremost financial services companies-and prudential plc - a leading international financial services group headquartered in the United Kingdom. Total capital infusion stands at Rs. 47.80 billion, with ICICI Bank holding a stake of 74% and Prudential plc holding 26%. ICICI Securities Limited ICICI Securities Ltd is an integrated securities firm offering a wide range of services including investment banking, institutional broking, retail broking, private wealth management, and financial product distribution. Headquartered in Mumbai, ICICI Securities operates out of 66 cities and towns in India and global offices in Singapore and New York. ICICI Securities Primary Dealership Limited ICICI Securities Primary Dealership Limited is an acknowledged leader in the Indian fixed income and money markets, with a strong franchise across the spectrum of interest rate products and services institutional sales and trading, resource mobilization and research. One of the first entities to be granted Primary Dealership license by RBI, I-Sec PD has made pioneering contributions since inception to debt market development in India. ICICI Lombard General Insurance Company ICICI Lombard General Insurance Company, a joint venture with the Canada based Fairfax Financial Holdings, is the largest private sector general insurance company. It has a comprehensive product portfolio catering to all corporate and retail insurance needs and is present in over 300 locations across the country. ICICI Lombard General Insurance has achieved a market share of 27.2% among private sector general insurance companies and an overall market share of 11.2% during fiscal 2009. The gross return premium grew by 2.2% from Rs. 33.45 billion in fiscal 2008 to 34.20 billion in fiscal 2009.

ICICI Prudential Asset Management Company ICICI Prudential Asset Management is the third largest mutual fund with average asset under management of Rs. 514.33 billion and a market share of 10.43% as on March 31, 2009. The Company manages a comprehensive range of mutual fund schemes and portfolio management services to meet the varying investment needs of its investors through162 branches and 185 CAMS official point of transaction acceptance spread across the country. ICICI Venture ICICI Venture is a specialist alternative assets manager based in India. The firm is a wholly owned subsidiary of ICICI Bank , the largest private sector financial services group in India. The firm has played a key role in establishing the foundation for several new age businesses in India, by providing growth capital funding to companies in sectors as diverse as Information Technology, Life Sciences and Healthcare, Media & Entertainment, Banking & Financial Services, Infrastructure, Retail, Aviation, Auto Components, Construction services, Real Estate, Biotechnology, Textiles, Fine Chemicals, Consumer Products, Logistics, etc.

Technology Advancement ICICI Bank started with very new banking service, CORE BANKING SOLUTION in which customer can do their transactions with any branch of the ICICI at any location. He need not go to the respective branch only. ICICI Bank is the pioneer in implementing a data warehousing (DW) solution for banking in India. The enterprise-wide data warehouse at ICICI bank is powered by Sybase IQ, a highly optimized business intelligence, analytics and data warehousing solution for delivering dramatically faster results at a low cost. Also as the technology evolves, ICICI took the positive steps to satisfy the customer needs with such new technologies. ICICI Bank came up with Electronic fund transfer facility. It also came up with Internet banking and i-mobile transaction facility which give comfort and high end service to the customer. The Bank proposes to bring credit cards to the large, underserved population in rural and semi-urban areas. The ICICI has announced the launch of mobile banking services for its customers, using the wireless application protocol (WAP) technology.

FINANCIALS Profit/Loss Account Mar '08 Income Interest Earned Other Income Total Income Expenditure Interest expended Employee Cost Selling and Admin Expenses Depreciation Miscellaneous Expenses Preoperative Exp Capitalised Operating Expenses Provisions & Contingencies Total Expenses Net Profit for the Year 30,788.34 8,878.85 39,667.19 23,484.24 2,078.90 5,834.95 578.35 3,533.03 0 10,855.18 1,170.05 35,509.47 4,157.73 Mar '09 31,092.55 8,117.76 39,210.31 22,725.93 1,971.70 5,977.72 678.6 4,098.22 0 10,795.14 1,931.10 35,452.17 3,758.13 Mar '10 25,706.93 7,292.43 32,999.36 17,592.57 1,925.79 6,056.48 619.5 2,780.03 0 10,221.99 1,159.81 28,974.37 4,024.98 Mar '11 25,974.05 7,108.91 33,082.96 16,957.15 2,816.93 3,785.13 562.44 3,809.93 0 8,594.16 2,380.27 27,931.58 5,151.38 (In Rs .Cr.) Mar '12 33,542.65 7,908.10 41,450.75 22,808.50 3,515.28 2,888.22 524.53 5,248.97 0 8,843.63 3,333.37 34,985.50 6,465.26

Sources of Income The major sources of ICICI Banks Income are:

Income
Billions 450 400 350 300 250 200 150 100 50 0 Mar '08 Mar '09 Mar '10 Mar '11 Mar '12 308 311 257 260 335 Interest Earned 89 81 73 71

396.7

392.1
330 330.8

414.5
79 Other Income

Interest Earned Interest/discount on advances/bills Income on investments Interest on balances with Reserve Bank of India and other inter-bank funds Others

Other Income (Includes profit/(loss) on sale of assets given on lease.)

Commission, exchange and brokerage Profit/(loss) on sale of investments (net) Profit/(loss) on revaluation of investments (net) Profit/(loss) on sale of land, buildings and other assets (net) Profit/(loss) on exchange transactions (net) Income earned by way of dividends, etc. from subsidiary companies and/or joint Ventures abroad/in India Miscellaneous income (including lease income)

Sources of Expenditure

Expenditure
Billions 400.00 350.00 300.00 250.00 200.00 150.00 100.00 50.00 0.00 Mar '08 354.4 Mar '09 349.4 Mar '10 291.6 Mar '11 274.7 Mar '12 345.8 234.84 227.26 38.03 81.54 51.67 70.45 57.07 58.60 38.96 66.17 228.08 39.21 78.50 Provisions and contingencies Operating expenses Interest expended

175.93

169.57

Interest Expended Interest on deposits Interest on Reserve Bank of India/inter-bank borrowings Others (including interest on borrowings of erstwhile ICICI Limited) Operating Expenses Payments to and provisions for employees Rent, taxes and lighting Printing and stationery 7

 Depreciation on Bank's property Other expenditure Provisions and Contingencies Provision for investments (including credit substitutes) (net) Provision for non-performing and other assets Others

Reasons for Profit/Loss 2011-2012 Our profit after tax increased by 25.5% from ` 51.51 billion in fiscal 2011 to ` 64.65 billion in fiscal 2012.The increase in profit after tax was mainly due to a 19.0% increase in net interest income, 12.8% increase in non-interest income and 30.8% decrease in provisions and contingencies (excluding provisions for tax). Net interest income increased by 19.0% from ` 90.17 billion in fiscal 2011 to ` 107.34 billion in fiscal 2012, reflecting an increase of 9 basis points in net interest margin and an increase of 15.0% in average interest earning assets. Non-interest income increased by 12.8% from ` 66.48 billion in fiscal 2011 to ` 75.02 billion in fiscal 2012. The increase in non-interest income was primarily due to an increase in dividend income from subsidiaries from ` 4.11 billion in fiscal 2011 to ` 7.36 billion in fiscal 2012 and a decrease in loss from treasury-related activities from ` 2.15 billion in fiscal 2011 to ` 0.13 billion in fiscal 2012. Loss from treasury-related activities for fiscal 2012 primarily includes realised/MTM provision on security receipts, offset, in part, by reversal of MTM loss/realised gain on investments in government of India securities and other fixed income positions and gain on equity/preference investments. Fee income increased by 4.5% from ` 64.19 billion in fiscal 2011 to ` 67.07 billion in fiscal 2012. Net Interest Income = Interest Income Interest Expense Non Interest Income consists of Fee Income, Treasury Income, Lease and Other Income.

2010-2011 Our profit after tax increased by 28.0% from ` 40.25 billion in fiscal 2010 to `51.51 billion in fiscal 2011. The increase in profit after tax was mainly due to a 47.9% decrease in provisions and contingencies (excluding provisions for tax) from ` 43.87 billion in fiscal 2010 to ` 22.87 billion in the fiscal 2011. The decrease in provisions and contingencies (excluding provisions for tax) was primarily due to a reduction in provisions for retail non-performing loans, as accretion to retail non-performing loans declined sharply in fiscal 2011. Net interest income increased by 11.1% from ` 81.14 billion in fiscal 2010 to ` 90.17 billion in fiscal 2011. 8

Total assets increased by 11.8% from ` 3,634.00 billion at March 31, 2010 to ` 4,062.34 billion at March 31, 2011. Total deposits increased by 11.7% from ` 2,020.17 billion at March 31, 2010 to ` 2,256.02 billion at March 31, 2011. Current and savings account (CASA) deposits increased by 20.7% from ` 842.16 billion at March 31, 2010 to ` 1,016.47 billion at March 31, 2011 while term deposits increased marginally from ` 1,178.01 billion at March 31, 2010 to ` 1,239.55 billion at March 31, 2011. Total advances increased by 19.4% from ` 1,812.06 billion at March 31, 2010 to ` 2,163.66 billion at March 31, 2011 primarily due to an increase in domestic corporate loans, overseas corporate loans and loans taken over from Bank of Rajasthan. Net non-performing assets decreased by 37.0% from ` 39.01 billion at March 31, 2010 to ` 24.58 billion at March 31, 2011 and the net non-performing asset ratio decreased from 1.9% at March 31, 2010 to 0.9% at March 31, 2011.

2009-2010 Profit after tax increased by 7.1% from Rs. 37.58 billion in fiscal 2009 to Rs. 40.25 billion in fiscal 2010. Profit before provisions and tax increased by 9.0% from Rs. 89.25 billion in fiscal 2009 to Rs. 97.32 billion in fiscal 2010 primarily due to an increase in treasury income from Rs. 4.43 billion in fiscal 2009 to Rs. 11.81 billion in fiscal 2010 and a 16.8% decrease in non-interest expenses from Rs. 70.45 billion in fiscal 2009 to Rs. 58.60 billion in fiscal 2010. Net interest income decreased by 3.0% from Rs. 83.67 billion in fiscal 2009 to Rs. 81.14 billion in fiscal 2010,primarily due to a decrease in average interest-earning assets by 5.1% from Rs. 3,436.20 billion in fiscal 2009 to Rs. 3,259.66 billion in fiscal 2010, offset, in part, by an increase in the net interest margin from 2.4% in fiscal 2009 to 2.5% in fiscal 2010. Non-interest income decreased by 1.6% from Rs. 76.03 billion in fiscal 2009 to Rs. 74.78 billion in fiscal 2010, primarily due to a decrease in fee income by 13.4% from Rs. 65.24 billion in fiscal 2009 to Rs. 56.50 billion in fiscal 2010, offset, in part by an increase in treasury income from Rs. 4.43 billion in fiscal 2009 to Rs. 11.81 billion in fiscal 2010.

2008-2009 Profit after tax decreased by 9.6% to Rs. 37.58 billion in fiscal 2009 from Rs. 41.58 billion in fiscal 2008. Net interest income increased by 14.6% to Rs. 83.67 billion in fiscal 2009 from Rs. 73.04 billion in fiscal 2008, reflecting primarily an increase in net interest margin by 21 basis points

to 2.4% in fiscal 2009 compared to 2.2% in fiscal 2008 and increase in average interestearning assets to Rs. 3,436.20 billion in fiscal 2009 from Rs. 3,288.34 billion in fiscal 2008. Non-interest income decreased by 13.7% to Rs. 76.03 billion in fiscal 2009 from Rs. 88.11 billion in fiscal 2008 primarily due to decrease in other income (including dividend from subsidiaries) by 65.0% to Rs. 4.03 billion in fiscal 2009 from Rs. 11.52 billion in fiscal 2008. Non-interest expense decreased by 13.6% to Rs. 70.45 billion in fiscal 2009 from Rs. 81.54 billion in fiscal 2008 primarily due to decrease in direct marketing agency expenses to Rs. 5.29 billion in fiscal 2009 from Rs. 15.43 billion in fiscal 2008 and due to overall cost reduction initiatives undertaken by us. Provisions and contingencies (excluding provision for tax) increased to Rs. 38.08 billion in fiscal 2009 from Rs. 29.05 billion in fiscal 2008 primarily due to higher level of specific provisioning on non-performing retail loans. Increase in retail non-performing assets was primarily on account of seasoning of the secured loan portfolio, relatively higher losses on unsecured portfolio and the adverse macro-economic environment. Total assets decreased by 5.1% to Rs. 3,793.01 billion at year-end fiscal 2009 from Rs. 3,997.95 billion at year-end fiscal 2008 primarily due to decrease in cash and balances with RBI by Rs. 118.41 billion due to reduction in CRR requirement, decrease in investments by Rs. 83.96 billion and decrease in advances by Rs. 73.05 billion.

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Balance Sheet Mar '08 Capital and Liabilities: Total Share Capital Equity Share Capital Share Application Money Preference Share Capital Reserves Revaluation Reserves Net Worth Deposits Borrowings Total Debt Other Liabilities & Provisions Total Liabilities Assets Cash & Balances with RBI Balance with Banks, Money at Call Advances Investments Gross Block Accumulated Depreciation Net Block Capital Work In Progress Other Assets Total Assets Contingent Liabilities Bills for collection Book Value (Rs) 1,462.68 1,112.68 0 350 45,357.53 0 46,820.21 2,44,431.05 65,648.43 3,10,079.48 42,895.39 3,99,795.08 29,377.53 8,663.60 2,25,616.08 1,11,454.34 7,036.00 2,927.11 4,108.89 0 20,574.63 3,99,795.07 3,71,737.36 29,377.55 417.64 Mar '09 1,463.29 1,113.29 0 350 48,419.73 0 49,883.02 2,18,347.82 67,323.69 2,85,671.51 43,746.43 3,79,300.96 17,536.33 12,430.23 2,18,310.85 1,03,058.31 7,443.71 3,642.09 3,801.62 0 24,163.62 3,79,300.96 8,03,991.92 36,678.71 444.94 Mar '10 1,114.89 1,114.89 0 0 50,503.48 0 51,618.37 2,02,016.60 94,263.57 2,96,280.17 15,501.18 3,63,399.72 27,514.29 11,359.40 1,81,205.60 1,20,892.80 7,114.12 3,901.43 3,212.69 0 19,214.93 3,63,399.71 6,94,948.84 38,597.36 463.01 Mar '11 1,151.82 1,151.82 0.29 0 53,938.82 0 55,090.93 2,25,602.11 1,09,554.28 3,35,156.39 15,986.35 4,06,233.67 20,906.97 13,183.11 2,16,365.90 1,34,685.96 9,107.47 4,363.21 4,744.26 0 16,347.47 4,06,233.67 8,83,774.77 47,864.06 478.31

(In Rs. Cr.) Mar '12 1,152.77 1,152.77 2.39 0 59,250.09 0 60,405.25 2,55,499.96 1,40,164.91 3,95,664.87 17,576.98 4,73,647.10 20,461.29 15,768.02 2,53,727.66 1,59,560.04 9,424.39 4,809.70 4,614.69 0 19,515.39 4,73,647.09 8,58,566.64 64,457.72 524.01

Reasoning of Balance Sheet 2011-2012 Total assets increased by 16.6% from ` 4,062.34 billion at March 31, 2011 to ` 4,736.47 billion at March 31, 2012, primarily due to an increase in advances and investments. Net advances increased by 17.3% from ` 2,163.66 billion at March 31, 2011 to ` 2,537.28 billion at March 31, 2012. Investments increased by 18.5% from ` 1,346.86 billion at March 31, 2011 to ` 1,595.60 billion at March 31, 2012.

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Total liabilities (including capital and reserves) increased by 16.6% from ` 4,062.34 billion at March 31, 2011 to ` 4,736.47 billion at March 31, 2012, primarily due to an increase in borrowings and deposits. Deposits increased from ` 2,256.02 billion at March 31, 2011 to ` 2,555.00 billion at March 31, 2012. Borrowings, including subordinated debt and preference share capital, increased from ` 1,095.54 billion at March 31, 2011 to ` 1,401.65 billion at March 31, 2012.

2010-2011 The total assets increased by 11.8% from ` 3,634.00 billion at March 31, 2010 to ` 4,062.34 billion at March 31, 2011 (including ` 155.96 billion of Bank of Rajasthan at August 12, 2010), primarily due to increase in investments and advances. Investments increased by 11.4% from ` 1,208.93 billion at March 31, 2010 to ` 1,346.86 billion at March 31, 2011. The net advances increased by 19.4% from ` 1,812.06 billion at March 31, 2010 to ` 2,163.66 billion at March 31, 2011.

Total liabilities (including capital and reserves) increased by 11.8% from ` 3,634.00 billion at March 31, 2010 to ` 4,062.34 billion at March 31, 2011 (including ` 155.96 billion of Bank of Rajasthan at August 12, 2010), primarily due to an increase in deposits and borrowings. Deposits increased from ` 2,020.17 billion at March 31, 2010 to ` 2,256.02 billion at March 31, 2011.

2009-2010 Our total assets (including the impact of exchange fluctuation on foreign currency denominated assets) decreased by 4.2% from Rs. 3,793.01 billion at year-end fiscal 2009 to Rs. 3,634.00 billion at year-end fiscal 2010. Net advances decreased by 17.0% from Rs. 2,183.11 billion at year-end fiscal 2009 to Rs. 1,812.06 billion at year-end fiscal 2010,primarily due to a decrease in retail advances. Net retail advances (including dealer financing and developer financing portfolios) decreased by 25.6% from Rs. 1,062.03 billion at year-end fiscal 2009 to Rs. 790.45 billion at year-end fiscal 2010 and constituted 43.6% of our total net advances at year-end fiscal 2010. Net advances of overseas branches (including offshore banking unit) decreased in USD terms from USD 10.7 billion at year-end fiscal 2009 to USD 10.0 billion at year-end fiscal 2010. Net advances decreased in rupee terms on account of appreciation of the rupee relative to the US dollar from Rs. 542.91 billion at year-end fiscal 2009 to Rs. 451.37 billion at year-end fiscal 2010 on account of appreciation of the rupee relative to the US dollar.

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Our equity share capital and reserves increased from Rs. 495.33 billion at year-end fiscal 2009 to Rs. 516.18 billion at year-end fiscal 2010 primarily due to annual accretion to reserves out of profits.

Total deposits decreased by 7.5% from Rs. 2,183.48 billion at year-end fiscal 2009 to Rs. 2,020.17 billion at year-end fiscal 2010 primarily due to our conscious strategy of reducing wholesale deposits.

Term deposits decreased from Rs. 1,556.80 billion at year-end fiscal 2009 to Rs. 1,178.01 billion at year-end fiscal 2010. Savings account deposits increased from Rs. 410.36 billion at year-end fiscal 2009 to Rs. 532.18 billion at year-end fiscal 2010 and current account deposits increased from Rs. 216.32 billion at year-end fiscal 2009 to Rs. 309.98 billion at year-end fiscal 2010.

Borrowings (including preference share capital and subordinated debt) increased from Rs. 931.55 billion at year-end fiscal 2009 to Rs. 942.64 billion at year-end fiscal 2010 primarily on account of new capital-eligible borrowings, in the nature of subordinated debt, offset, in part, by decrease in overseas borrowings.

2008-2009 Our total assets (including the impact of rupee depreciation on foreign currency denominated assets) decreased by 5.1% to Rs. 3,793.01 billion at year-end fiscal 2009 from Rs. 3,997.95 billion at year-end fiscal 2008. Net advances decreased by 3.2% to Rs. 2,183.11 billion at year-end fiscal 2009 from Rs. 2,256.16 billion at year-end fiscal 2008, primarily due to decrease in retail advances. Net advances of overseas branches (including offshore banking unit) decreased in US$ terms by 10.1% to US$ 10.7 billion at year-end fiscal 2009 from US$ 11.9 billion at year-end fiscal 2008, though they increased in rupee terms on account of depreciation of the rupee relative to the US dollar. Total investments at year-end fiscal 2009 decreased by 7.5% to Rs. 1,030.58 billion compared to Rs. 1,114.54 billion at year-end fiscal 2008 primarily due to the 15.5% decrease in SLR investments to Rs. 633.87 billion at year-end fiscal 2009 from Rs. 750.31 billion at year-end fiscal 2008, offset, in part, by an increase in other investments by 8.9% to Rs. 396.71 billion at year-end fiscal 2009 from Rs. 364.23 billion at year-end fiscal 2008 which primarily includes investment in international banking subsidiaries. Our equity share capital and reserves at year-end fiscal 2009 increased to Rs. 495.33 billion as compared to Rs. 464.71 billion at year-end fiscal 2008 primarily due to annual accretion to reserves out of profits. 13

Total deposits decreased by 10.7% to Rs. 2,183.48 billion at year-end fiscal 2008 from Rs. 2,444.31 billion at year-end fiscal 2008 primarily due to the Banks conscious strategy of reducing wholesale deposits.

Term deposits decreased to Rs. 1,556.80 billion at year-end fiscal 2009 from Rs. 1,806.51 billion at year-end fiscal 2008. Our savings account deposits increased to Rs. 410.36 billion at year-end fiscal 2009 from Rs. 390.89 billion at year-end fiscal 2008, while current account deposits decreased to Rs. 216.32 billion at year-end fiscal 2009 from Rs. 246.91 billion at year-end fiscal 2008.

Borrowings (including subordinated debt) increased to Rs. 928.06 billion at year-end fiscal 2009 from Rs. 863.99 billion at year-end fiscal 2008 primarily due to capital-eligible borrowings, in the nature of subordinated debt and the impact of rupee depreciation on foreign currency denominated borrowings.

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KEY RATIOS Current Ratio

Current Ratio
0.13
0.14 0.12 0.1 0.08 0.06 0.04 0.02 0 Mar '08 Mar '09 Mar '10 Mar '11 Mar '12

0.14
0.11

0.13

0.11

The current ratio is a popular financial ratio used to test a company's liquidity (also referred to as its current or working capital position) by deriving the proportion of current assets available to cover current liabilities. The concept behind this ratio is to ascertain whether a company's short-term assets (cash, cash equivalents, marketable securities, receivables and inventory) are readily available to pay off its short-term liabilities (notes payable, current portion of term debt, payables, accrued expenses and taxes). In theory, the higher the current ratio, the better. Current Ratio = Current Assets / Current Liabilities Components: The two basic components of this ratio are current assets and current liabilities. Current assets include cash and those assets which can be easily converted into cash within a short period of time, generally, one year, such as marketable securities or readily realizable investments, bills receivables, sundry debtors, (excluding bad debts or provisions), inventories, work in progress, etc. Prepaid expenses should also be included in current assets because they represent payments made in advance which will not have to be paid in near future. The current ratio is used extensively in financial reporting. However, while easy to understand, it can be misleading in both a positive and negative sense - i.e., a high current ratio is not necessarily good, and a low current ratio is not necessarily bad.

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Ideal Current Ratio: 2:1 Analyses: As you can see there is an increase in the Current Ratio from March 2011 to March 2012. This was attributed due to the increase in the Cash and Bank balances by 6.3 % also an increase in the Advances and Fixed Assets by 17.3 % and 14.4 & respectively. As you can see there is an increase in the Current Ratio from March 2008 to March 2009. This was attributed due to the increase in the Cash and Bank balances by 21.2 % also an increase in the Advances and Fixed Assets by 3.2 % and 5.1 & respectively. Net interest margin

Net Interest Margin

3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% Mar '08 Mar '09 Mar '10 Mar '11 Mar '12

2.40%
2.20%

2.50%

2.64%

2.73%

Net interest margin is the ratio of net interest income to invested assets. Net interest margin is also known as "net yield on interest-earning assets." Net Interest Margin = (Interest Received - Interest Paid) / Average Invested Assets Net interest margin is always expressed as a percentage. Example: Assume John borrows $1,000,000 and uses it to buy bonds of Company XYZ. The bonds pay 5% interest per year, or $50,000. The interest rate on the loan is 3%, or $30,000 per year. Using the formula above, John's net interest margin is: Net Interest Margin = ($50,000 - $30,000) / $1,000,000 = 0.02 or 2%

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A positive net interest margin means the investment strategy pays more interest than it costs. Conversely, if net interest margin is negative, it means the investment strategy costs more than it makes. Ideal NIM: Varies from industry to industry. Analyses: As you can see the net interest margin has been increasing throughout. In the quarter 4 2012, Net interest income increased by 19.0% year-one year; and full year NIM improved by 9 basis points to 2.73%. And 35.8% year-on-year increase in non-interest income driven by increased dividends from subsidiaries. Earnings Per Share

Earnings Per Share

56.09
60

44.73
50 40 30 20 10 0 Mar '08 Mar '09 Mar '10 Mar '11 Mar '12

37.37

33.76

36.1

The portion of a companys profit allocated to each outstanding share of a companys common stock. Earnings per share is simply a fundamental measure of profitability that shows how much profit has been generated on a per-share-of-stock basis. Were the term worded as profit per share, the meaning certainly would be much clearer, if not self-evident. By itself, EPS doesnt reveal a great deal. Its true value lies in comparing EPS figures across several quarters, or years, to judge the growth of a companys earnings on a per-share basis. Essentially, the figure is calculated after paying taxes and dividends to preferred stockholders and bondholders. Barring extraordinary circumstances, EPS data are reported quarterly, semiannually, and annually. (Net income) Average number of shares outstanding

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Example If company ABC reported earnings of Rs.100 million and had 20 million shares outstanding, the basic EPS would be Rs. 5 (Rs. 100 million earnings 20 million shares outstanding = Rs.5 per share). The figure is important because it allows analysts to value the stock based on the price to earnings ratio (or p/e ratio for short). Analyses: There is a dip in the EPS ration in the year 2009 as there is a drop in the Total Income of the company from 2008. After which there is an increase in the EPS. Dividend per Share

Dividend Per Share

16.5
18 16 14 12 10 8 6 4 2 0 Mar '08 Mar '09 Mar '10 Mar '11 Mar '12

14 11 11 12

Dividends per share are the amount of dividends that a publicly-traded company pays per share of common stock, over their reporting period that they have issued. The Dividend per Ratio is very similar to the EPS: EPS shows what shareholders earned by way of profit for a period whereas DPS shows how much the shareholders were actually paid by way of dividends. Dividends Paid / Shares Outstanding Common Stock Investors generally use dividends as a signal. If dividends per share drop, then investors take that as a signal that the company is not doing well financially. It could mean a drop in the company's market value as investors sell off shares out of fear. The opposite is true if dividends per share go up. If dividends per share go up, it is often a signal that the firm is performing well financially.

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Total Income / Capital Employed(%)

Total Income / Capital Employed(%)

12 10 8 6 4 2 0 Mar '08 Mar '09 Mar '10 Mar '11 Mar '12

10.62

9.9

8.9

8.41

9.1

Net profit before tax, interest and dividends ("EBIT") / total assets (or total assets less current liabilities. ROCE is sometimes referred to as the "primary ratio"; it tells us what returns management has made on the resources made available to them before making any distribution of those returns. Return on capital (ROC), or return on investment (ROI), is one the most important ratios to measure profitability of a company. It measures how much money a business or investment is able to generate on the capital employed. Despite its importance, this ratio is seldom reported and often needs to be calculated. Here is how to determine this ratio from the balance sheet and income statement. Debt to Equity Ratio

Total Debt to Owners Fund

6 5 4 3 2 1 0 Mar '08 Mar '09 Mar '10 Mar '11 Mar '12

5.27 4.42 3.91 4.1 4.23

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A measure of a company's financial leverage calculated by dividing its total liabilities by stockholders' equity. It indicates what proportion of equity and debt the company is using to finance its assets. A high debt/equity ratio generally means that a company has been aggressive in financing its growth with debt. This can result in volatile earnings as a result of the additional interest expense. Total Liabilities / Share Holders Equity If a lot of debt is used to finance increased operations (high debt to equity), the company could potentially generate more earnings than it would have without this outside financing. If this were to increase earnings by a greater amount than the debt cost (interest), then the shareholders benefit as more earnings are being spread among the same amount of shareholders. However, the cost of this debt financing may outweigh the return that the company generates on the debt through investment and business activities and become too much for the company to handle. This can lead to bankruptcy, which would leave shareholders with nothing. The debt/equity ratio also depends on the industry in which the company operates. For example, capital-intensive industries such as auto manufacturing tend to have a debt/equity ratio above 2, while personal computer companies have a debt/equity of under 0.5.

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RECENT DEVELOPEMENTS ICICI Bank, Indias largest private sector lender has surprised the market with better than expected quarterly results. ICICI Bank has registered 36.2% surge in its net profit for the first quarter FY13 to Rs. 1,815 crores compared to Rs. 1332 crores in the corresponding quarter in previous year. The bank has reported better than the street expectations of Rs. 1730 crores. This surge in net profit has been supported by stronger loan growth, higher income from non-core operations and improved asset quality. The shares were trading up by 3.3% after the bank declared the net profit number. ICICI Banks loans book expanded by 22% at Rs. 2.68 lakh crores in Q1 2013 compared to Rs. 2.54 lakh crores a year ago. Non-interest income rose 14% to Rs. 1,880 crores in Q1 2013 from Rs. 1,643 crores in Q1 2012. Net Interest Income (NII) has soared 32% to Rs. 3,193 crores in Q1 2013 from Rs. 2,411 crores in Q1 2012. Consequently, Net Interest Margin (NIM) has enhanced to 3.01% in Q1 2013 from 2.61% in Q1 2012. On deposit side, the bank has maintained the CASA (Current and Savings Account) ratio at 40.6% for the quarter ended June 2012 and the average CASA ratio stand at 39.1%. ICICI Banks Capital Adequacy Ratio also stands at 18.54% which is well above the RBIs requirement of 9.0%. ICICI Bank has joined rivals HDFC Bank and Axis Bank in reporting stronger quarter results this year. ICICI Banks results have marked a support to the fact that the private sector banks have been growing better than the public sector banks. The stock has gained 2.35% today, trading at Rs. 928.20. Considering the moving averages, it is quite clear that the stock has been showing medium term growth.

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FUTURE STRATEGIES ICICI Bank announces expansion plans Officials from ICICI Bank announced that the bank is going to add around 400-500 branches annually. It also aims at increasing the total spending percentage on the road and power projects in the years to come. Presently the bank consists of about 2,500 branches and 5,800 ATMs. Officials said that earlier the main focus of the bank was on Personal Loans but now it is more concerned about financing the corporate sector. She said "I do feel ICICI Bank will play a major role in infrastructure project finance... As investment takes place in phases like in road and power projects, we move as investment takes place... this is an area of big focus," Regarding the expansion plans the officials said that it has not opened any new branch in the current financial year but the acquisition of Bank of Rajasthan by ICICI Bank automatically increased the branch network by 500. "Well, bank grows where GDP grows. So, all the states where GDP growth takes place, banks will grow," Kocchar said. ICICI Bank Partnership with Vodafone Essar

The telecom operator banks partnerships are quickly being closed: Vodafone Essar has inked a partnership with ICICI Bank, Indias largest private sector bank, to offer financial services through the mobile phone. This isnt a joint venture, like the one State Bank of India and Bharti Airtel formed yesterday. Like in case of the Idea Cellular and Axis bank partnership announced last month, Vodafone Essar will become a banking correspondent for ICICI Bank. One phrase that caught our attention in the release: the companies will offer a bouquet of financial products such as savings accounts, pre-paid instruments and credit products through a mobile phone based platform. By pre-paid instruments, Vodafone is referring to the impending launch of M-Pesa in India. Earlier reports had suggested that Vodafone was bringing M-Pesa to India with HDFC Bank. M-Pesa will have to be bank agnostic, of course. ICICI Bank will get access to Vodafone Essars retail outreach of 1.5 million retail points for acquiring customers. As per the release, both parties will work out the specific arrangements in the coming few weeks and chart out a go-to-market plan. 22

CONCLUSION ICICI Bank, the top private sector deserves to be valued much more than the current levels. ICICI Bank has grown not only in terms of profits but also in terms of technology advancement, providing valuable customer service etc. Its future plans of expansion in different sector would add to its growth in the coming future. There is a reasonable chance of ICICI Banks stock out-performing other sectors bank stock in the coming months/quarters.

BIBLIOGRAPHY ICICI Group of Companies: http://www.icicigroupcompanies.com/ Annual Reports of ICICI Bank: http://www.icicibank.com/aboutus/annual.html http://www.ankmitra.com/?p=266 http://www.moneycontrol.com/financials/icicibank/balance-sheet/ICI02

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