Performance Review FY2001 May 3, 2001

Performance ReviewFY2001

May 3, 2001

2

Business Overview

Financial Performance

Asset Composition and Quality

Capital and Shareholders

Agenda

3

Major achievements during the year...

Expanding retail franchise,Market Leader in automobile finance

Expanding retail franchise,Market Leader in automobile finance

Unlocking value in ICICI Infotech and ICICI Eco-net

Unlocking value in ICICI Infotech and ICICI Eco-net

Continued diversificationof corporate assets portfolio

Continued diversificationof corporate assets portfolio

Launching oflife insurance business

Launching oflife insurance business

4

BusinessGrowth

BusinessGrowth

High QualityCorporate Credit

High QualityCorporate Credit

StructuredProject

Financing

StructuredProject

Financing

Retail CreditRetail Credit

5

The Growth Proposition

CustomerCentric

Organisation

ComprehensiveRange ofProducts

& Services

Multi-Channel

DistributionNetwork

6

Focus on “total” client profitabilityFocus on “total” client profitability

Risk-based pricingand focus

on fee income

Increased“share of wallet”across all services

StructuredSolutions

7

Resulting in robust growth in credit portfolio...

285.51

366.84

453.18

519.08

600.71

1997-Mar 1998-Mar 1999-Mar 2000-Mar 2001-Mar

Rs. in billion

CAGR: 20.5%

8

Project Finance

Retail Credit Insurance

Web

Tra

de

Payroll Accounts IT Services

Reta

il B

on

ds

Leveraging client relationships across product spectrum...

CorporateRelationships

Project FinanceS

tru

ctu

red

Fin

Investment Banking

Corporate Finance Channel Financing

Ven

ture

Cap

ital

9

0.30%

0.43%

0.82%

0.57%

1996 1998 2000 2001

Fees offset lower spreads on higher quality assets

Fees as % of assets

Fee Income: Extracting value from client relationships

10

Enhanced wallet share case study

Project/Corporate

Credit

ConsumerLoans

PowerPayAccounts

SupplierFinance

CorporateBanking

DealerFinance

InternationalAutomobile

Manufacturer

11

Wide suite of products in the retail portfolio

Mutual FundsDemat AccountsIPOsRelief Bonds (9%)Insurance

E-broking Bill payments

Fixed DepositsBonds Depository Services

Resident bank accountsNRI bank accountsKid-e-bank accountBank @ campusPower Pay Credit CardDebit CardRelief Bonds (9%)Loans against Shares Auto Loans

Consumer LoanPersonal LoansTwo Wheeler LoansHome Loans

InsuranceMotor insuranceHealth Property Customised policiesLife insurance

Considerable potential for cross-selling products

12

ICICI - Click and brick delivery architecture

380 Branches

m-Banking

518 ATMs

Internet Banking 16 Call

Centers

96 ICICI Centers

Delivery Channels

Online Brokerage

Online Bill

Payment

Product and channel structure increasingly becoming customer-centric

13

Auto loans - Riding on the Virtuous Cycle...

Manufacturer & dealers• Leverage corporate relationships • Volume-driven approach

Manufacturer & dealers• Leverage corporate relationships • Volume-driven approach

Higher subventions• Pass subventions to customers• Lower cost to customers

Higher subventions• Pass subventions to customers• Lower cost to customers

First choice ofcustomers• Better credit• Higher volumes

First choice ofcustomers• Better credit• Higher volumes

14

Resulting in industry leadership in volumes and credit quality of auto-loans...

273 8321,215

2,472

4,258

7,304

10,114

14,630

Q1-FY00

Q2-FY00

Q3-FY00

Q4-FY00

Q1-FY01

Q2-FY01

Q3-FY01

Q4-FY01

Rs. mn

15

Similar achievements in other retail products... Increasing market share in home-

finance

Over 220,000 credit cards issued in one year of operations

Clear market leader in online trading Over 60% market-share by number

of customers as well as volume

16

Life insurance business launched... IRDA license received on November 24, 2000 ICICI Prudential Life Insurance amongst the first

private companies to issue an insurance policy on December 12, 2000

5 products with innovative riders launched Operations cover 5 cities 2,100 agents already on the field Over 6,350 policies sold till March 31, 2001

17

Reduction of stake in ICICI Bank

During the year, RBI reiterated its requirement of reduction of ICICI’s holding in ICICI Bank as per the license condition, and advised ICICI to draw up a firm plan for dilution of ICICI’s stake

In line with the RBI’s directive to reduce its stake in ICICI Bank to 40%, as a first step ICICI sold about 10% of ICICI Bank’s equity capital in FY2001 ICICI now holds about 46% of ICICI Bank’s equity

capital Strategy of working within the regulatory

framework to exploit group synergies remains unchanged

18

Agenda

Business Overview




19

It was a year of extreme challenges... Significant part of the year marked by depressed

capital markets & volatility in interest rates and forex markets

Continued restructuring and consolidation in key manufacturing sectors Accordingly, to improve long-term viability and de-

stress the portfolio, ICICI restructured certain assets

Business was further constrained by Lukewarm response to Government’s efforts to

attract investment in the infrastructure sectorSystemic issues continued to dissuade private

investments particularly in the power sector Changes in regulatory & taxation guidelines

20

Significant regulatory & taxation changes Revision in RBI’s NPL provisioning guidelines for

doubtful assets:Resulting in a higher provisioning requirement of about Rs. 0.66 bn

Increase in dividend distribution tax rate: Replacement of preference shares (Rs. 10.00 bn) by lower-cost borrowings, leading to additional interest expense of about Rs. 0.90 billion

Revised RBI guidelines on investment valuation New guidelines for restructured / rescheduled

loan assets Tax deductibility available only on actual write-

offs and not on provisions

21

Despite environmental constraints, profit to equity holders increased 21% in FY2001, after adding back accelerated provisions and write-offs

22

ICICI proposes to make accelerated provisions against NPLs as a more prudent policy... Coverage on NPLs as per Indian GAAP was

about 35% However, higher provision could provide

additional cushion in periods when borrowers face financial stress due to economic slowdown or other reasons

As per the recent credit policy, RBI has urged banks to voluntary set apart provisions much above the minimum prudential levels prescribed by the RBI as a desirable practice

23

Proposed provisioning policy from FY2001... ICICI would hold a cumulative provision of

50% against NPLs in 3 years compared to 5 & 1/2 years as per the existing RBI guidelines

Revised provisioning policy First year of NPL - 15% provision Second year of NPL - cumulative 30%

provision Third year of NPL - cumulative 50% provision

Total accelerated provisioning of Rs 8.13 billion in FY2001As a result, provision cover against NPLs

would increase to 50.2% from about 35%

24

Profit and Loss Statement

Q499-00

Q400-01

FY2000

FY2001

Inc.%

Fund based income 19.02 20.73 75.64 81.44 7.7Less: Interest & relatedexpenses and Lease dep. 16.04 17.66 63.59 68.45 7.6Net fund based income 2.98 3.07 12.05 12.99 7.8Fees and commissions 1.19 1.42 3.24 5.22 61.4Net i/c from operations 4.17 4.49 15.29 18.21 19.2Operating expenses (1) 0.88 0.87 2.89 3.37 16.6Profit from operations 3.29 3.62 12.40 14.84 19.7

Rs. in billion

(1) Operating expenses have been adjusted for rent & other recoveries from subsidiaries.

25


Q4 99-00

Q4 00-01

FY2000

FY2001

Inc.%

Profit from operations 3.29 3.62 12.40 14.84 19.7Less : Provisions & write-offs 1.37 2.76 4.62 6.08 31.7Profit before income frominvestments and otherincome 1.92 0.86 7.78 8.76 12.6Dividend 1.09 0.40 2.10 1.08 (48.6)Net capital gains 1.13 3.47 2.94 3.44 17.2Other income 0.14 0.49 0.46 0.63 36.1Profit before tax andaccelerated provisions 4.28 5.22 13.28 13.91 4.7

Rs. in billion

26


Q4 99-00

Q4 00-01

FY2000

FY2001

Inc.%

Profit before tax andaccelerated provisionsand write-offs 4.28 5.22 13.28 13.91 4.7Accelerated provisionsand write-offs - 8.13 - 8.13 -Less : Provision for tax 0.33 (0.34) 1.22 0.40 -Profit after tax 3.95 (2.57) 12.06 5.37 -Less: Preference div 0.28 - 1.09 0.18 -Profit to equity holders 3.67 (2.57) 10.97 5.19 -Profit to equity holdersafter adding backaccelerated provision 3.67 5.56 10.97 13.32 21.5

Rs. in billion

Dividend maintained at 55%

27

Balance SheetAssets Mar 31,

2000Mar 31,2001

Inc.%

Net loans & Debentures 483.34 560.02 15.9

- Rupee loans 324.76 400.43 23.3- Retail loans 4.54 20.40 349.5

- Debentures 74.85 67.48 (9.8)

- FC loans 89.91 84.75 (5.7)

- Less : Provisions 10.72 13.04 21.6

Other investments 30.75 44.04 43.2

Current assets 91.36 75.83 (17.0)

Leased assets 36.09 40.69 12.7

Other fixed assets 8.90 10.42 17.1

Miscellaneous Exp. 3.46 3.14 (9.0)

Total assets 653.90 734.14 12.3

Rs. in billion

28

Balance Sheet

Liabilities Mar 31,2000

Mar 31,2001

Inc.%

Shareholders’ equity 80.23 79.73 (0.6)- Equity capital 7.83 7.85 0.2- Reserves and surplus 72.39 71.88 (0.7)Preference capital 13.08 3.50 (73.2)Borrowings 508.81 598.35 17.6- Rupee funds 415.31 497.34 19.8- Foreign currency funds 93.50 101.01 8.0Current liabilities 51.78 52.56 1.5Total liabilities 653.90 734.14 12.3

Rs. in billion

29

Summary Ratios (Indian GAAP)...

FY2000 FY20011

EPS (Rs) (2) 14.0 17.0

Return on Assets (%) 2.1 2.1

Return on Net Worth (%) 16.8 16.4

Overheads / Net Assets 0.5 0.5

(1) After adding back accelerated provisions and write-offs of Rs. 8.13 billion(2) EPS for FY2000 and FY2001 has been calculated based on 785 million shares outstanding.

30

Performance of Subsidiaries/Affiliates

PAT Assets

FY 2000 FY 2001 FY 2000 FY 2001

ICICI Bank 1,050.0 1,610.0 120,726.3 197,370.0

ICICI Securities 720.8 538.0 22,673.5 17,377.8

ICICI Infotech 105.1 279.3 489.4 3,564.0

ICICI Venture Fund 383.5 104.5 466.1 339.3

ICICI PFS 53.2 30.6 668.3 649.4

ICICI Capital 20.2 31.5 125.9 215.3

ICICI Home 0.5 15.6 599.0 7,358.7

Total of above 2,288.1 2,588.9 145,748.5 226,874.5

Rs. in million

31

US GAAP...

During the year, ICICI Bank ceased to be a subsidiary of ICICI Accordingly, ICICI Bank has been

consolidated as per equity method of accounting for FY2001 unlike the line-by-line consolidation in FY2000

As a result, financial statements of FY2001 and FY2000 are not strictly comparable

32

Reconciliation of net income - US GAAP Rs. in billion

FY2000 FY2001

As per Indian GAAP 12.06 5.371

Provisions for credit losses (2.03) 3.96

Amortisation of loan origination fees 0.01 (1.01)

Business combination in respect of mergers (0.09) (0.11)

Investment diminution (0.91) (0.58)

Preference dividend payout (1.09) (0.18)

Unrealized gain / (losses) on trading portfolio 0.17 (0.81)

Investment in equity affiliates 0.04 (0.47)

Net income of consolidated subsidiaries 1.11 (0.31)

Others (0.19) (0.05)

Total adjustments as per US GAAP (2.98) 0.44

As per US GAAP (1) 9.08 5.81

(1) Includes accelerated provisions and write-offs of Rs. 8.13 billion. If we exclude income from trading and capital gains, net

income registered a marginal decline of 2% to Rs. 4.96 bn from Rs. 5.04 bn

33

Agenda

Business Overview




34

Approvals: Continued growth and diversification...

Corporate Finance

61%

Infra14%

Mfg. Projects15%

Retail2% Oil & Gas

8%

Corporate Finance

58%

Infra21%

Mfg. Projects12%

Retail7% Oil & Gas

2%

Rs. 435.23 billion Rs. 560.92 billion

2000FY 2001

35

Improving quality of approvals...

32%

22%

35%

9% 2%

AAA AA A BBB BB and lower

Approvals to clients rated ‘A’ and above up from 89% to 92%

25%

33%

6% 2%

34%

2000 2001

36

Disbursements: Continued growth and diversification......

Corporate Finance

70%

Infra6%Mfg.

Projects15%

Retail3% Oil & Gas

6%

Corporate Finance

69%

Infra8%

Mfg. Projects

11%

Retail11%

Oil & Gas1%


2000 2001

37

Improving quality of disbursements...

Disbursements to clients rated ‘A’ & above up from 82% to 89%

AAA AA A BBB BB and lower

31%

18%33%

13%5%

29%

27%

33%

9% 2%

2000 2001

38

Diversified and De-risked Asset Portfolio...

31 1997March , 31 2001March ,

Reduced Risk and Volatility of Earnings Stream

Oil & Gas9%

Infrastructure13%

Mfg. Project Finance

73%

Mfg. Project Finance

36%

Corp. Financ

e9%

Infrastructure9%

Corp. Finance

40%Oil & Gas

8%

Retail3%


39

Top 10 Industry-wise Outstanding

Industry March 31,2000

March 31,2001

Services 11.1 14.2Iron & Steel 10.7 10.9Power 9.7 10.8Crude petroleum & refining 9.5 9.5Chemical & chemical products 7.6 7.7Textiles 7.2 7.5Cement 3.1 4.0Transport equipment 3.9 3.3Telecom 2.9 3.3Fertilisers and pesticides 3.9 2.8Total outstanding* (Rs. billion) 541.12 607.89

*Excluding retail finance

% to total

40

Asset Classification

March 31,2000

March 31,2001

Standard assets 92.4 94.8

Of which: Restructuredstandard assets - 2.2Sub-standard assets 3.4 1.5

Doubtful assets 4.2 3.7

Loss assets - -

Total loan assets 100.0 100.0

In percentage

41

Non-Performing Loans (Indian GAAP)

March 31, 2000 March 31, 2001

Gross NPLs 60.18 59.881

Net NPLs 39.59 29.822

Net loan assets 521.27 575.06

Net NPL ratio 7.6% 5.2%Mar 31, 1998

Rs. in billion

(1) Includes only those debentures that are in the nature of advance as per the RBI guidelines.(2) Net of accelerated provisions and write-offs amounting to Rs. 8.13 billion.

42

Clear slow-down in incremental NPLs...

Mar 31,1997

Mar 31,1998

Mar 31,1999

Mar 31,2000

Mar 31,2001

Gross NPLs 28.21 42.12 54.89 60.18 59.881

% increase 48% 49% 30% 10% (0.5%)

Net NPLs 19.54 28.11 37.33 39.59 29.822

% increase 63% 44% 33% 6% (25%)

Rs. in billion

(1) Cases relating to ITC Classic have been written-off from the books and debentures not in the nature of advance are excluded (as per the RBI guidelines).(2) Net of accelerated provisions and write-offs amounting to Rs. 8.13 billion.

43

Top 10 Industry-wise NPAs

Industry March 2000 March 2001

NPA O/sRs. bn

% to TotalNPA O/s

NPA O/sRs. bn

% to TotalNPA O/s

Textiles 4.92 12.4 5.14 17.2Manmade fibres 4.45 11.3 3.39 11.4Iron & steel 3.85 9.7 2.74 9.2Basic chemicals 3.30 8.3 2.06 6.9Metal products 2.66 6.7 1.95 6.5

Food products 1.94 4.9 1.80 6.0Drugs 1.98 5.0 1.23 4.1Electrical Equipment 1.05 2.7 1.11 3.7Electronics 1.90 4.8 1.05 3.5Cement 0.89 2.3 1.02 3.4

44

3.80

5.15

FY1999 FY2000 FY2001

Continued Settlements...

Aggregate SettlementsRs. in billion

6.62

45

Agenda

Business Overview




46

Capital Adequacy...

11.59.6

5.7

5.0

0

2

4

6

8

10

12

14

16

18

20Per

cent

Tier-2Tier-1

14.6%

March 31, 2000 March 31, 2001

17.2%

Despite accelerated provisioning, capital adequacymaintained at healthy levels.

47

Shareholding Pattern

Mar 31, 2000

6.86%

22.31%

3.24%11.08%

8.24%

15.62%

32.65%

Mar 31, 2001

6.63%

23.47%

3.11%10.32%8.71%

15.11%

32.65%

UTI

Insurancecos.

Banks and FIs

Individuals

Corporatesand MFs

ADR holders

FIIs & NRIs

48

Safe HarbourExcept for the historical information contained herein, statements in this release which contain words or phrases such as “will”, “aim”, “will likely result”, “would”, “believe”, “may”, “expect”, “will continue”, “anticipate”, “estimate”, “intend”, “plan”, “contemplate”, “seek to”, “future”, “objective”, “goal”, “project”, “should”, “will pursue” 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, the adequacy of our allowance for credit losses, our provisioning policies, technological changes, investment income, cash flow projections, our exposure to market risks as well as other risks detailed in the reports filed by ICICI Limited with the Securities and Exchange Commission of the United States. ICICI Limited undertakes no obligation to update forward-looking statements to reflect events or circumstances after the date thereof.

49

Thank You

Documents

Performance Review FY2001 May 3, 2001