ICICI Bank : Performance Review: Quarter ended December 31, 2015

September 16, 1998 ICICI Bank Limited ICICI Bank Towers Bandra Kurla Complex Mumbai 400 051

News Release January 28, 2016

Performance Review: Quarter ended December 31, 2015

• 20% year-on-year growth in total domestic advances; 24% year-on-year growth in retail advances

• 18% year-on-year growth in current and savings account (CASA) deposits; current and savings account ratio at 45.2% at December 31, 2015

• 9% year-on-year increase in standalone profit after tax to `9,024 crore (US$ 1.4 billion) for the nine months ended December 31, 2015 (9M-2016) from `8,253 crore (US$ 1.2 billion) for the nine months ended December 31, 2014 (9M- 2015)

• 7% year-on-year increase in consolidated profit after tax to `9,773 crore (US$ 1.5 billion) for 9M-2016 from `9,162 crore (US$ 1.4 billion) for 9M-2015

• Total capital adequacy of 16.74% and Tier-1 capital adequacy of 12.76% on standalone basis at December 31, 2015, including profits for the nine months ended December 31, 2015

  
  

  The Board of Directors of ICICI Bank Limited (NYSE: IBN) at its meeting held at Mumbai today, approved the audited accounts of the Bank for the quarter ended December 31, 2015.

  
  

  Profit & loss account

  
  

• Standalone profit after tax increased by 4% to `3,018 crore (US$ 456 million) for the quarter ended December 31, 2015 (Q3-2016) from `2,889 crore (US$ 437 million) for the quarter ended December 31, 2014 (Q3- 2015).

• Net interest income increased by 13% to `5,453 crore (US$ 824 million) in Q3-2016 from `4,812 crore (US$ 727 million) in Q3-2015.

• Non-interest income increased by 36% to `4,217 crore (US$ 637 million) in Q3-2016 from `3,091 crore (US$ 467 million) in Q3-2015. During the quarter, the Bank received the approval of Insurance Regulatory and Development Authority of India (IRDAI) for the sale of 4.0% shareholding in ICICI Prudential Life Insurance Company (ICICI Life) to Premji Invest/ its affiliates and the profit on sale was `1,243 crore (US$ 188 million).

• The cost-to-income ratio was at 32.2% in Q3-2016 compared to 36.3% in Q3-2015.

  
  

• Provisions were at `2,844 crore (US$ 430 million) in Q3-2016 compared to `942 crore (US$ 142 million) in Q2-2016 and `980 crore (US$ 148 million) in Q3-2015.

• Standalone profit after tax increased by 9% to `9,024 crore (US$ 1.4 billion) for the nine months ended December 31, 2015 (9M-2016) from `8,253 crore (US$ 1.2 billion) for the nine months ended December 31, 2014 (9M-2015).

• Consolidated profit after tax increased by 7% to `9,773 crore (US$ 1.5 billion) in 9M-2016 from `9,162 crore (US$ 1.4 billion) in 9M-2015.

• Consolidated profit after tax was `3,122 crore (US$ 472 million) in Q3- 2016 compared to `3,265 crore (US$ 494 million) in Q3-2015.

Operating review

Credit growth

The year-on-year growth in domestic advances was 20% at December 31, 2015. The Bank has continued to see robust growth in its retail business resulting in a year-on-year growth of 24% in the retail portfolio at December 31, 2015. The retail portfolio constituted about 44% of the loan portfolio of the Bank at December 31, 2015. Total advances increased by 16% year-on-year to `434,800 crore (US$ 65.7 billion) at December 31,

2015 from `375,345 crore (US$ 56.7 billion) at December 31, 2014.

Deposit growth

The Bank has seen healthy trends in CASA deposit mobilisation. Total CASA deposits increased by 18% year-on-year to `184,099 crore (US$

27.8 billion) at December 31, 2015. During Q3-2016, savings account deposits increased by `6,198 crore (US$ 937 million) and current account deposits increased by `4,412 crore (US$ 667 million). The Bank's CASAratio was 45.2% at December 31, 2015 compared to 45.1% at September 30, 2015 and 44.0% at December 31, 2014. The average CASA ratio was 40.7% in Q3-2016 compared to 39.3% in Q3-2015. Total deposits increased by 15% year-on-year to `407,314 crore (US$ 61.6 billion) at December 31, 2015. The Bank had a network of 4,156 branches and 13,372 ATMs at December 31, 2015.

Capital adequacy

The Bank's capital adequacy at December 31, 2015 as per Reserve Bank of India (RBI) guidelines on Basel III norms was 15.77% and Tier-1 capital adequacy was 11.79%, well above regulatory requirements. In line with applicable guidelines, the Basel III capital ratios reported by the Bank for

December 31, 2015 do not include the profits for the nine months ended December 31, 2015. Including profits for 9M-2016, the capital adequacy ratio for the Bank as per Basel III norms would have been 16.74% and the Tier I ratio would have been 12.76%.

Asset quality

Net non-performing assets at December 31, 2015 were ₹ 10,014 crore (US$ 1,514 million) compared to ₹ 6,828 crore (US$ 1,032 million) at September 30, 2015. The increase in non-performing assets was primarily due to the decline and continuing weakness in the global steel cycle; and RBI'sobjective of early and conservative recognition of stress and provisioning, pursuant to which RBI has asked banks to review certain loan accounts and their classification over the two quarters ending December 31, 2015 and March 31, 2016. The Bank's netnon-performing asset ratio was 2.03% at December 31, 2015 compared to 1.47% at September 30, 2015. The Bank'sprovisioning coverage ratio, computed in accordance with RBI guidelines, was 53.2% at December 31, 2015. Net loans to companies whose facilities have been restructured were `11,294 crore (US$ 1.7 billion) at December 31, 2015 compared to `11,868 crore (US$ 1.8 billion) at September 30,

2015.

Technology initiatives

The Bank continues to be the market leader in mobile banking based on value of mobile banking transactions in October and November 2015. The Bank'sdigital mobile wallet - Pockets - has seen over 3.0 million downloads with significant interest from non-ICICI Bank customers. As a result of the Bank'sfocus on digital channels, currently digital channels account for over 60% of total transactions for savings account customers and branches account for less than 10% of the transactions.

Recently, the Bank launched two new digital initiatives to simplify and speed up the assessment for new home loans as well as disbursements linked to the construction stage of projects. The first initiative called 'Express Home Loans' allows online approval of home loans within eightworking hours. This service is available for all salaried individuals, including non-ICICI Bank customers. The second initiative helps individuals taking home loans for under construction projects to get subsequent disbursements through the Bank's 'iLoans' mobile application in acompletely paperless way.

Consolidated results

Consolidated profit after tax was `3,122 crore (US$ 472 million) in Q3-2016 compared to `3,265 crore (US$ 494 million) in Q3-2015. The consolidated return on equity (annualised) was 13.5% in Q3-2016 compared to 15.5% in Q3-2015. Consolidated assets grew by 13% from `793,091 crore (US$

119.9 billion) at December 31, 2014 to `895,093 crore (US$ 135.3 billion) at December 31, 2015.

Insurance subsidiaries

ICICI Life achieved a profit after tax of `436 crore (US$ 66 million) for Q3- 2016 compared to `462 crore (US$ 70 million) for Q3-2015. ICICI Life'sretail weighted received premium increased by 11% from `3,011 crore (US$ 455 million) in 9M-2015 to `3,344 crore (US$ 505 million) in 9M-2016. ICICI Life maintained its leadership in the private sector.

ICICI Lombard General Insurance Company (ICICI General) maintained its leadership in the private sector. The gross written premium of ICICI General increased by 21% from `1,708 crore (US$ 258 million) in Q3-2015 to `2,072 crore (US$ 313 million) in Q3-2016. The profit after tax of ICICI General was `130 crore (US$ 20 million) in Q3-2016 compared to `176 crore (US$ 27 million) in Q3-2015 and `143 crore (US$ 22 million) in Q2- 2016.