Description
The report includes ICICI's strategy and performance over the years
ICICI Group: Strategy and Performance
November 2007
Contents
Opportunities Strategy & Outlook Strategy & Outlook Key Subsidiaries Key Subsidiaries Financial Highlights Financial Highlights
2
Robust economic growth
GDP growth Agriculture Industry FY2005
0.7% 7.4%
FY2006
6.0% 8.0%
FY2007
2.7% 11.0%
Q1-2008
3.8% 10.6%
Of which: manufacturing
Services Total
8.1%
10.2% 7.5%
9.1%
10.3% 9.0%
12.3%
11.0% 9.4%
11.9%
10.6% 9.3%
Industrial growth has caught up with services growth Manufacturing growth at about 12% GDP growth expectations at over 8.5%
3
Economic growth drivers
Favourable demographics Knowledge capital
Rising disposable income Investment Manufacturing Infrastructure International expansion Personal Consumption Housing Transportation Personal credit
Investment and consumption cycles mutually re-enforcing
4
Consumption drivers
FY1996 Middle income High income 33 1
(households in million)
FY2002 50 3
FY2010E 98 10
Rising affluence and growth of the consuming class NCAER data for top 24 cities in India shows migration to higher income levels growing at over 40% per annum
Middle income: Rs. 90,000 (US$ 2,250)-Rs. 500,000 (US$ 12,500) per household High income: > Rs. 500,000 (US$ 12,500) per household Source: NCAER
5
Investment drivers
Capacity utilisation rates 100 90 80 70 60 50 40 30 20 10 0
High capacity utilisation and need for building infrastructure resulting in a large investment pipeline
ar y rs g m en t O il Ca be pi n ee l St Ce ud hi p Te xt e & ile v
%
an
ci
lli
d
Fo o
o
D eb t/Eq uity
Cr
S
Au t
2000-2004
2005-2006
1.2 1 0.8
Supported by healthy corporate balance sheets
0.6 0.4 0.2 0 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06
Source: CRIS INFAC, CMIE
6
Opportunity spectrum for banks
Low penetration of consumer finance at 13% of GDP
Supported by structural drivers of rising income levels and growing consuming class
Robust industrial and infrastructure investment pipeline estimated at over US$ 500 billion Internationalisation of Indian industry
Potential for acquisition and trade finance Potential for credit and liability products and transaction services
Vast Indian diaspora spanning the globe
Low penetration of insurance and asset management
7
Contents
Opportunities Opportunities Strategy & Outlook Key Subsidiaries Key Subsidiaries Financial Highlights Financial Highlights
8
Our strategy
Domestic Retail Banking Global Corporate and Investment Banking International Retail Banking Rural Banking Insurance & Asset Management Enhance share of retail deposits and sustain leadership position in credit franchise Leverage corporate relationships, structuring expertise, balance sheet and global syndication capability Leverage NRI opportunity and technology capabilities Invest for future growth Enhance and leverage market leadership position
Shareholder value
9
Our retail banking platform
Credit
Leadership position with demonstrated Leadership position with demonstrated pricing power pricing power Full range of products distributed through inFull range of products distributed through inhouse network and external agent force house network and external agent force Centralized credit & operations Centralized credit & operations Superior deposit gathering franchise: highest Superior deposit gathering franchise: highest savings account deposit per branch in the savings account deposit per branch in the industry industry Low cost, scalable technology architecture: Low cost, scalable technology architecture: only 10% of transactions occur at branches only 10% of transactions occur at branches Diversified fee income streams: loans, cards, Diversified fee income streams: loans, cards, transaction banking & distribution transaction banking & distribution Focus on cross sell of insurance and asset Focus on cross sell of insurance and asset management products management products
Deposits
Fee income
10
Corporate & investment banking strategy
Origination
Leveraging domestic Leveraging domestic corporate relationships corporate relationships Project appraisal Project appraisal capabilities capabilities M&A advisory M&A advisory
Structuring
Structuring skills Structuring skills Balance sheet Balance sheet support –– support domestic and domestic and international international
Syndication
Global distribution Global distribution capability capability Focus on risk Focus on risk diversification and diversification and return optimization return optimization
Combined with transaction banking and treasury products Involved in 88% of outbound Indian M&A financing deals in January-September 2007 Ranked #2 in offshore corporate syndicated loans in January-September 2007
11
International banking
Focus on fee and liability generation Focus on fee and liability generation
International retail banking
India linked products for NRIs; distribution of India linked products for NRIs; distribution of third party investment products third party investment products Platform to capture large remittance flows Platform to capture large remittance flows into India and in other corridors; Market share into India and in other corridors; Market share of 28% in remittances into India of 28% in remittances into India Technology-driven direct banking platform in Technology-driven direct banking platform in UK and Canada UK and Canada
Presence in 18 international locations Presence in 18 international locations
International franchise snapshot
International assets account for 22% of International assets account for 22% of consolidated banking assets consolidated banking assets Profitability with scale: ICICI Bank UK profit Profitability with scale: ICICI Bank UK profit after tax of US$ 36.0 mn in H1-2008 after tax of US$ 36.0 mn in H1-2008
North America, UK, Europe, Russia, MiddleNorth America, UK, Europe, Russia, Middleeast, South Africa, South-East & North Asia east, South Africa, South-East & North Asia
Largest international balance sheet among Indian banks
12
Rural banking: investing for future growth
Strategy to comprehensively cover an Strategy to comprehensively cover an identified rural geography with branches, identified rural geography with branches, partnerships & technology based channels partnerships & technology based channels Branches at major agricultural markets Branches at major agricultural markets Franchisees, internet kiosks, MFI & Franchisees, internet kiosks, MFI & corporate partners corporate partners Multi-product suite for catering to various Multi-product suite for catering to various customer segments: farmer financing, customer segments: farmer financing, agri-businesses, commodity-based agri-businesses, commodity-based financing and micro-credit financing and micro-credit Savings and investment products Savings and investment products Insurance Insurance
Comprehensive channel strategy
Comprehensive product strategy
13
Contents
Opportunities Opportunities Strategy & Outlook Strategy & Outlook Key Subsidiaries Financial Highlights Financial Highlights
14
Life insurance: market share
H1-20081
Rel i a nc e L i fe 2.3% SBI L i fe 3.1% Others 12.0%
H D FC Sta nd a rd 3.7%
Ba j a j A l l i a nz 9.9%
L IC 58.4%
ICI CI L i fe 10.6%
Total market : Rs. 206.32 bn (USD 5.2 bn)
1
Retail Weighted New Business Premiums, Source: IRDA
Private sector market share of 25.4%
15
ICICI Life
APE growth of 44.7% in H1-2008 APE growth of 44.7% in H1-2008 On a high base of 124% growth in H1-2007 On a high base of 124% growth in H1-2007 Assets held Rs. 227.27 bn, of which 66.0% is Assets held Rs. 227.27 bn, of which 66.0% is equity equity
Highlights
Financial performance
New Business Profit of Rs. 4.32 bn in H1-2008 New Business Profit of Rs. 4.32 bn in H1-2008 compared to Rs. 3.47 bn in H1-2007 compared to Rs. 3.47 bn in H1-2007 Reflecting NBP margin of about 19.7% Reflecting NBP margin of about 19.7%
16
ICICI Life: rapid distribution ramp-up
Mar 05 Locations Branches Advisors (‘000) Non agency share 74 107 57 30% Mar 06 132 177 72 37% Sept 07 551 735 243 37%
Creating a nationwide agency network, complemented by increased focus on non-agency distribution
17
General insurance
Market leadership
Market leadership in private sector with market Market leadership in private sector with market share of 31.7%11 share of 31.7% Overall market share at 12.4%11 Overall market share at 12.4% 18% increase in GWP in Q2-2008: Up from 9% 18% increase in GWP in Q2-2008: Up from 9% in Q1-2008 in Q1-2008 Non-corporate business at 58% of gross Non-corporate business at 58% of gross premium in Q2-2008 premium in Q2-2008 PAT of Rs. 0.81 bn in H1-2008 compared to Rs. PAT of Rs. 0.81 bn in H1-2008 compared to Rs. 0.33 bn in H1-2007 0.33 bn in H1-2007
Highlights
Financial performance
1. April 2007 – September 2007; Source: IRDA
18
Asset management
Market leadership
Funds under management of Rs. 504.10 bn at Funds under management of Rs. 504.10 bn at September 30, 2007 September 30, 2007 Market share of 10.5%11 Market share of 10.5%
Highlights
Customer base increased by more than Customer base increased by more than 85,000 in H1-2008 customers to reach 1.3 85,000 in H1-2008 customers to reach 1.3 million million PAT of Rs. 0.53 bn in H1-2008 compared to Rs. PAT of Rs. 0.53 bn in H1-2008 compared to Rs. 0.31 bn in H1-2007 0.31 bn in H1-2007
Financial performance
1. April 2007 – September 2007; Source: AMFI
19
Contents
Opportunities Opportunities Strategy & Outlook Strategy & Outlook Key Subsidiaries Key Subsidiaries Financial Highlights
20
Key financial indicators1
FY2007 Net profit (Rs. bn) NII (Rs. bn) Fee (Rs. bn) NIM (%) Fee/income (%) Advances (Rs. bn) Deposits (Rs. bn) Total assets (Rs. bn) Capital adequacy ratio Net NPA ratio
31.10 56.38 50.12 2.2% 40.5% 1,958.66 2,305.10 3,446.58 11.7% 1.0%
FY2007 (US$ mn)
715 1,297 1,154 2.2% 40.5% 45,058 53,027 79,285 11.7% 1.0%
Q2-2007
7.55 13.34 11.85 2.1% 41.6% 1,554.03 1,894.99 2,823.73 14.3% 0.9%
Q2-2008
10.03 17.86 14.86 2.2% 39.0% 2,071.21 2,283.07 3,649.44 16.8% 1.4%
Growth
33% 34% 25% 33% 21% 29% -
1. Based on standalone Indian GAAP financials
21
Diversified asset portfolio
Total assets
30%
15%
Retail advances
6% 36% 8% 11%
50% 35%
10%
Sept 30, 2007: Rs. 3,649.44 bn Cash, bank balances and govt. securities Retail advances International advances Corporate, rural and SME advances Other investments Fixed & other assets
22
Sept 30, 2007: Rs. 1,310.14 bn
Mortgages Other secured loans Unsecured loans
The ICICI Group today
Largest bank in India by market capitalisation and net worth Largest consumer credit provider Largest private sector life insurer Largest private sector general insurer Second largest asset management company Largest private equity & venture fund Leading investment banking and broking co.
Consolidated banking assets of US$ 100 bn; market cap of US$ 31bn
23
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 forwardlooking 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.
24
Thank you
25
doc_377815136.pdf
The report includes ICICI's strategy and performance over the years
ICICI Group: Strategy and Performance
November 2007
Contents
Opportunities Strategy & Outlook Strategy & Outlook Key Subsidiaries Key Subsidiaries Financial Highlights Financial Highlights
2
Robust economic growth
GDP growth Agriculture Industry FY2005
0.7% 7.4%
FY2006
6.0% 8.0%
FY2007
2.7% 11.0%
Q1-2008
3.8% 10.6%
Of which: manufacturing
Services Total
8.1%
10.2% 7.5%
9.1%
10.3% 9.0%
12.3%
11.0% 9.4%
11.9%
10.6% 9.3%
Industrial growth has caught up with services growth Manufacturing growth at about 12% GDP growth expectations at over 8.5%
3
Economic growth drivers
Favourable demographics Knowledge capital
Rising disposable income Investment Manufacturing Infrastructure International expansion Personal Consumption Housing Transportation Personal credit
Investment and consumption cycles mutually re-enforcing
4
Consumption drivers
FY1996 Middle income High income 33 1
(households in million)
FY2002 50 3
FY2010E 98 10
Rising affluence and growth of the consuming class NCAER data for top 24 cities in India shows migration to higher income levels growing at over 40% per annum
Middle income: Rs. 90,000 (US$ 2,250)-Rs. 500,000 (US$ 12,500) per household High income: > Rs. 500,000 (US$ 12,500) per household Source: NCAER
5
Investment drivers
Capacity utilisation rates 100 90 80 70 60 50 40 30 20 10 0
High capacity utilisation and need for building infrastructure resulting in a large investment pipeline
ar y rs g m en t O il Ca be pi n ee l St Ce ud hi p Te xt e & ile v
%
an
ci
lli
d
Fo o
o
D eb t/Eq uity
Cr
S
Au t
2000-2004
2005-2006
1.2 1 0.8
Supported by healthy corporate balance sheets
0.6 0.4 0.2 0 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06
Source: CRIS INFAC, CMIE
6
Opportunity spectrum for banks
Low penetration of consumer finance at 13% of GDP
Supported by structural drivers of rising income levels and growing consuming class
Robust industrial and infrastructure investment pipeline estimated at over US$ 500 billion Internationalisation of Indian industry
Potential for acquisition and trade finance Potential for credit and liability products and transaction services
Vast Indian diaspora spanning the globe
Low penetration of insurance and asset management
7
Contents
Opportunities Opportunities Strategy & Outlook Key Subsidiaries Key Subsidiaries Financial Highlights Financial Highlights
8
Our strategy
Domestic Retail Banking Global Corporate and Investment Banking International Retail Banking Rural Banking Insurance & Asset Management Enhance share of retail deposits and sustain leadership position in credit franchise Leverage corporate relationships, structuring expertise, balance sheet and global syndication capability Leverage NRI opportunity and technology capabilities Invest for future growth Enhance and leverage market leadership position
Shareholder value
9
Our retail banking platform
Credit
Leadership position with demonstrated Leadership position with demonstrated pricing power pricing power Full range of products distributed through inFull range of products distributed through inhouse network and external agent force house network and external agent force Centralized credit & operations Centralized credit & operations Superior deposit gathering franchise: highest Superior deposit gathering franchise: highest savings account deposit per branch in the savings account deposit per branch in the industry industry Low cost, scalable technology architecture: Low cost, scalable technology architecture: only 10% of transactions occur at branches only 10% of transactions occur at branches Diversified fee income streams: loans, cards, Diversified fee income streams: loans, cards, transaction banking & distribution transaction banking & distribution Focus on cross sell of insurance and asset Focus on cross sell of insurance and asset management products management products
Deposits
Fee income
10
Corporate & investment banking strategy
Origination
Leveraging domestic Leveraging domestic corporate relationships corporate relationships Project appraisal Project appraisal capabilities capabilities M&A advisory M&A advisory
Structuring
Structuring skills Structuring skills Balance sheet Balance sheet support –– support domestic and domestic and international international
Syndication
Global distribution Global distribution capability capability Focus on risk Focus on risk diversification and diversification and return optimization return optimization
Combined with transaction banking and treasury products Involved in 88% of outbound Indian M&A financing deals in January-September 2007 Ranked #2 in offshore corporate syndicated loans in January-September 2007
11
International banking
Focus on fee and liability generation Focus on fee and liability generation
International retail banking
India linked products for NRIs; distribution of India linked products for NRIs; distribution of third party investment products third party investment products Platform to capture large remittance flows Platform to capture large remittance flows into India and in other corridors; Market share into India and in other corridors; Market share of 28% in remittances into India of 28% in remittances into India Technology-driven direct banking platform in Technology-driven direct banking platform in UK and Canada UK and Canada
Presence in 18 international locations Presence in 18 international locations
International franchise snapshot
International assets account for 22% of International assets account for 22% of consolidated banking assets consolidated banking assets Profitability with scale: ICICI Bank UK profit Profitability with scale: ICICI Bank UK profit after tax of US$ 36.0 mn in H1-2008 after tax of US$ 36.0 mn in H1-2008
North America, UK, Europe, Russia, MiddleNorth America, UK, Europe, Russia, Middleeast, South Africa, South-East & North Asia east, South Africa, South-East & North Asia
Largest international balance sheet among Indian banks
12
Rural banking: investing for future growth
Strategy to comprehensively cover an Strategy to comprehensively cover an identified rural geography with branches, identified rural geography with branches, partnerships & technology based channels partnerships & technology based channels Branches at major agricultural markets Branches at major agricultural markets Franchisees, internet kiosks, MFI & Franchisees, internet kiosks, MFI & corporate partners corporate partners Multi-product suite for catering to various Multi-product suite for catering to various customer segments: farmer financing, customer segments: farmer financing, agri-businesses, commodity-based agri-businesses, commodity-based financing and micro-credit financing and micro-credit Savings and investment products Savings and investment products Insurance Insurance
Comprehensive channel strategy
Comprehensive product strategy
13
Contents
Opportunities Opportunities Strategy & Outlook Strategy & Outlook Key Subsidiaries Financial Highlights Financial Highlights
14
Life insurance: market share
H1-20081
Rel i a nc e L i fe 2.3% SBI L i fe 3.1% Others 12.0%
H D FC Sta nd a rd 3.7%
Ba j a j A l l i a nz 9.9%
L IC 58.4%
ICI CI L i fe 10.6%
Total market : Rs. 206.32 bn (USD 5.2 bn)
1
Retail Weighted New Business Premiums, Source: IRDA
Private sector market share of 25.4%
15
ICICI Life
APE growth of 44.7% in H1-2008 APE growth of 44.7% in H1-2008 On a high base of 124% growth in H1-2007 On a high base of 124% growth in H1-2007 Assets held Rs. 227.27 bn, of which 66.0% is Assets held Rs. 227.27 bn, of which 66.0% is equity equity
Highlights
Financial performance
New Business Profit of Rs. 4.32 bn in H1-2008 New Business Profit of Rs. 4.32 bn in H1-2008 compared to Rs. 3.47 bn in H1-2007 compared to Rs. 3.47 bn in H1-2007 Reflecting NBP margin of about 19.7% Reflecting NBP margin of about 19.7%
16
ICICI Life: rapid distribution ramp-up
Mar 05 Locations Branches Advisors (‘000) Non agency share 74 107 57 30% Mar 06 132 177 72 37% Sept 07 551 735 243 37%
Creating a nationwide agency network, complemented by increased focus on non-agency distribution
17
General insurance
Market leadership
Market leadership in private sector with market Market leadership in private sector with market share of 31.7%11 share of 31.7% Overall market share at 12.4%11 Overall market share at 12.4% 18% increase in GWP in Q2-2008: Up from 9% 18% increase in GWP in Q2-2008: Up from 9% in Q1-2008 in Q1-2008 Non-corporate business at 58% of gross Non-corporate business at 58% of gross premium in Q2-2008 premium in Q2-2008 PAT of Rs. 0.81 bn in H1-2008 compared to Rs. PAT of Rs. 0.81 bn in H1-2008 compared to Rs. 0.33 bn in H1-2007 0.33 bn in H1-2007
Highlights
Financial performance
1. April 2007 – September 2007; Source: IRDA
18
Asset management
Market leadership
Funds under management of Rs. 504.10 bn at Funds under management of Rs. 504.10 bn at September 30, 2007 September 30, 2007 Market share of 10.5%11 Market share of 10.5%
Highlights
Customer base increased by more than Customer base increased by more than 85,000 in H1-2008 customers to reach 1.3 85,000 in H1-2008 customers to reach 1.3 million million PAT of Rs. 0.53 bn in H1-2008 compared to Rs. PAT of Rs. 0.53 bn in H1-2008 compared to Rs. 0.31 bn in H1-2007 0.31 bn in H1-2007
Financial performance
1. April 2007 – September 2007; Source: AMFI
19
Contents
Opportunities Opportunities Strategy & Outlook Strategy & Outlook Key Subsidiaries Key Subsidiaries Financial Highlights
20
Key financial indicators1
FY2007 Net profit (Rs. bn) NII (Rs. bn) Fee (Rs. bn) NIM (%) Fee/income (%) Advances (Rs. bn) Deposits (Rs. bn) Total assets (Rs. bn) Capital adequacy ratio Net NPA ratio
31.10 56.38 50.12 2.2% 40.5% 1,958.66 2,305.10 3,446.58 11.7% 1.0%
FY2007 (US$ mn)
715 1,297 1,154 2.2% 40.5% 45,058 53,027 79,285 11.7% 1.0%
Q2-2007
7.55 13.34 11.85 2.1% 41.6% 1,554.03 1,894.99 2,823.73 14.3% 0.9%
Q2-2008
10.03 17.86 14.86 2.2% 39.0% 2,071.21 2,283.07 3,649.44 16.8% 1.4%
Growth
33% 34% 25% 33% 21% 29% -
1. Based on standalone Indian GAAP financials
21
Diversified asset portfolio
Total assets
30%
15%
Retail advances
6% 36% 8% 11%
50% 35%
10%
Sept 30, 2007: Rs. 3,649.44 bn Cash, bank balances and govt. securities Retail advances International advances Corporate, rural and SME advances Other investments Fixed & other assets
22
Sept 30, 2007: Rs. 1,310.14 bn
Mortgages Other secured loans Unsecured loans
The ICICI Group today
Largest bank in India by market capitalisation and net worth Largest consumer credit provider Largest private sector life insurer Largest private sector general insurer Second largest asset management company Largest private equity & venture fund Leading investment banking and broking co.
Consolidated banking assets of US$ 100 bn; market cap of US$ 31bn
23
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 forwardlooking 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.
24
Thank you
25
doc_377815136.pdf