ICICI Group: Strategy and Performance

April 2008

Contents
Opportunities Strategy Strategy & & Outlook Outlook Key Key Subsidiaries Subsidiaries Financial Financial Highlights Highlights

Robust economic growth

GDP growth Agriculture Industry FY2005
0.7% 7.4%

FY2006
6.0% 8.0%

FY2007
2.7% 11.0%

9M-2008
3.5% 9.1%

Of which: manufacturing
Services Total

8.1%
10.2% 7.5%

9.1%
10.3% 9.0%

12.3%
11.0% 9.4%

9.9%
10.4% 8.9%

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

Consumption drivers
2000: 2000:Per Percapita capita GDP GDPUS$ US$500 500 2007: 2007:Per Percapita capita GDP GDPUS$ US$1,000 1,000 2015: 2015:Per Percapita capita GDP GDPUS$ US$1,500 1,500

Middle Middleand andhigh high 35% income income growth population population-1 260 260mn mn1

Middle Middleand andhigh high 70% income income growth population population-1 350 350mn mn1

Middle Middleand andhigh high income income population population-1 600 600mn mn1

From per capita GDP of US$ 1,000 to US$ 1,500: consuming population to grow manifold

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

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 Te xt e ile v Ce

lli

an

Cr

Fo o

Debt/Equity

ud

hi p

ci

&

Au t

1.2

2000-2004

2005-2006

1.0 0.8

Supported by healthy corporate balance sheets

0.6 0.4 0.2 0.0 2 0 0 0 -0 1 2 0 0 1 -0 2 2 0 0 2 -0 3 2 0 0 3 -0 4 2 0 0 4 -0 5 2 0 0 5 -0 6 2 0 0 6 -0 7

Source: CRIS INFAC, CMIE

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Opportunity spectrum for banks

z

Low penetration of consumer finance at 13% of GDP

z

Supported by structural drivers of rising income levels and growing consuming class

Robust industrial and infrastructure investment pipeline estimated at about US$ 700 billion Internationalisation of Indian industry
z

Potential for acquisition and trade finance Potential for credit and liability products and transaction services

Vast Indian diaspora spanning the globe

z

Low penetration of insurance and asset management

Contents
Opportunities Opportunities Strategy & Outlook Key Key Subsidiaries Subsidiaries Financial Financial Highlights Highlights

Our strategy
Domestic Retail Banking Global Corporate and Investment Banking International Retail Banking Rural Banking Insurance, Asset Mgmt & Broking 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

Retail banking platform

z zLeadership Leadershipposition positionwith withdemonstrated demonstrated

Credit

pricing pricingpower power z zFull Fullrange rangeof ofproducts productsdistributed distributedthrough throughininhouse housenetwork networkand andexternal externalagent agentforce force z zCentralized Centralizedcredit credit& &operations operations
z zSuperior Superiordeposit depositgathering gatheringfranchise: franchise:highest highest

Deposits

savings savingsaccount accountdeposit depositper perbranch branchin inthe the industry industry z zCurrent Currentand andsavings savingsaccount accountratio ratioat at27% 27% compared comparedto to22% 22%at atMarch March31, 31,2007 2007

z zDiversified Diversifiedfee feeincome incomestreams: streams:loans, loans,cards, cards,

Fee income

transaction transactionbanking banking& &distribution distribution z zFocus Focuson oncross crosssell sellof ofinsurance insuranceand andasset asset management managementproducts products

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Corporate & investment banking strategy

Origination
z zLeveraging Leveragingdomestic domestic

Structuring
z zStructuring Structuringskills skills z zBalance Balancesheet sheet

Syndication
z zGlobal Globaldistribution distribution

corporate corporaterelationships relationships z zProject Projectappraisal appraisal capabilities capabilities z zM&A M&Aadvisory advisory

support support domestic domesticand and international international

capability capability z zFocus Focuson onrisk risk diversification diversificationand and return returnoptimization optimization

Combined with transaction banking and treasury products

z Involved

in 88% of outbound Indian M&A financing deals in CY2007 z Ranked #1 in offshore corporate syndicated loans in CY2007
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International banking
z zFocus Focuson onfee feeand andliability liabilitygeneration generation z zPlatform Platformto tocapture capturelarge largeremittance remittanceflows flows

International retail banking

into intoIndia Indiaand andin inother othercorridors; corridors;Market Market share shareof ofover over25% 25%in inremittances remittancesinto intoIndia India z zIndia Indialinked linkedproducts productsfor forNRIs; NRIs;distribution distribution of ofthird thirdparty partyinvestment investmentproducts products z zTechnology-driven Technology-drivendirect directbanking bankingplatform platform in inUK UKand andCanada Canada

International franchise snapshot

z zPresence Presencein in19 19international internationallocations locations z zNorth NorthAmerica, America,UK, UK,Europe, Europe,Russia, Russia,

Middle-East, Middle-East,South SouthAfrica, Africa,Asia Asia z International assets account for z International assets account for23% 23%of of consolidated consolidatedbanking bankingassets assets z zNew Newbranch branchopened openedin inNew NewYork York z zICICI ICICIBank BankUK: UK:present presentin innine nineretail retaillocations locations in inUK UKand andopened openednew newbranch branchin inFrankfurt Frankfurt

Largest international balance sheet among Indian banks

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Rural banking: investing for future growth

z zStrategy Strategyto tocomprehensively comprehensivelycover coveran an

Comprehensive channel strategy

identified identifiedrural ruralgeography geographywith withbranches, branches, partnerships partnerships& &technology technologybased basedchannels channels z zBranches Branchesat atmajor majoragricultural agriculturalmarkets markets z zFranchisees, Franchisees,internet internetkiosks, kiosks,MFI MFI& & corporate corporatepartners partners
z zMulti-product Multi-productsuite suitefor forcatering cateringto tovarious various

Comprehensive product strategy

customer customersegments: segments:farmer farmerfinancing, financing, agri-businesses, agri-businesses,commodity-based commodity-based financing financingand andmicro-credit micro-credit z zSavings Savingsand andinvestment investmentproducts products z zInsurance Insurance

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Contents
Opportunities Opportunities Strategy Strategy & & Outlook Outlook Key Subsidiaries Financial Financial Highlights Highlights

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Life insurance: market share

Bi rl a Sun Li fe 3.0% Rel i a nc e L i fe 3.6% H D FC Sta nd a rd 4.3% SBI Li fe 4.7% LIC 50.3% Others 10.4%

11M-2008

Ba j a j A l l i a nz 10.6% I CI CI P rud enti a l 13.1%

Total mkt : Rs 432.16 bn (USD 10.8 bn)

Source: IRDA, weighted new business premiums for individual business

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ICICI Life: performance highlights

z z74% 74%increase increasein innew newbusiness businessweighted weighted

Business highlights

received receivedpremium premiumduring during9M-2008 9M-2008 z zCompared Comparedto toindustry industrygrowth growthof of23% 23%

z zAssets Assetsheld: held:Rs. Rs.284.09 284.09bn bn z z70% 70%of ofassets assetsin inequity equity

Financial performance

z zNew NewBusiness BusinessProfit Profitof ofRs. Rs.7.48 7.48bn bnin in9M9M-

2008 2008compared comparedto toRs. Rs.5.40 5.40bn bnin in9M-2007 9M-2007 z zReflecting ReflectingNBP NBPmargin marginof ofabout about19.3% 19.3%

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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% Dec 07 855 1,065 263 37%

Creating a nationwide agency network, complemented by increased focus on non-agency distribution

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General insurance
Market leadership
z zMarket Marketleadership leadershipin inprivate privatesector sectorwith withmarket market
1 share shareof of31.6% 31.6%1 1 z zOverall Overallmarket marketshare shareat at12.6% 12.6%1

z z17% 17%increase increasein inpremiums premiumsto toRs. Rs.27.22 27.22bn bnin in

Business Highlights

9M-2008 9M-2008 z zDespite Despitethe theimpact impactof ofde-tariffication de-tariffication z zNon-corporate Non-corporatebusiness businessat at57% 57%of ofgross gross premium premiumin in9M-2008 9M-2008

Financial performance

z zProfit Profitafter aftertax taxof ofRs. Rs.1.15 1.15bn bnin in9M-2008 9M-2008

compared comparedto toRs. Rs.0.49 0.49bn bnin in9M-2007 9M-2007

1. April 2007 December 2007; Source: IRDA

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Securities business
Business Highlights
z zIndias Indiaslargest largestonline onlinetrading tradingplatform platformwith with

about about1.4 1.4million millioncustomers customers z zRanked Rankedfirst firstin interms termsof ofamount amountraised raised through throughdomestic domesticofferings offeringsduring duringCY2007 CY2007

Financial performance

z zRevenue Revenueof ofRs. Rs.2.57 2.57bn bnin inQ3-2008 Q3-2008and andRs. Rs.

5.27 5.27bn bnin in9M-2008 9M-2008 z zProfit Profitafter aftertax taxof ofRs. Rs.710 710mn mnin inQ3-2008 Q3-2008and and Rs. Rs.1,080 1,080mn mnin in9M-2008 9M-2008

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Asset management
z zTotal TotalFUM FUMof ofRs. Rs.692.30 692.30bn bn(including (includingPMS PMS& &

ICICI Prudential Asset Management

advisory advisoryAUM) AUM)at atDecember December31, 31,2007 2007 z zMarket Marketshare shareof of10.3% 10.3%in inmutual mutualfund fundassets assets at atDecember December31, 31,2007 2007 z zProfit Profitafter aftertax taxof ofRs. Rs.0.75 0.75bn bnin in9M-2008 9M-2008from from compared comparedto toRs. Rs.0.33 0.33bn bnin in9M-2007 9M-2007
z zLargest Largestprivate privateequity equityplayer playerin inIndia Indiawith with

ICICI Venture

funds fundsunder undermanagement managementof ofRs. Rs.96.34 96.34bn bn z zProfit Profitafter aftertax taxof ofRs. Rs.0.52 0.52bn bnin in9M-2008 9M-2008

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Contents
Opportunities Opportunities Strategy Strategy & & Outlook Outlook Key Key Subsidiaries Subsidiaries Financial Highlights

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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 56.37 50.12 2.2% 40.5% 1,958.66 2,305.10 3,446.58 11.7% 1.0%

FY2007 (US$ mn)

789 1,430 1,271 2.2% 40.5% 49,687 58,475 87,432 11.7% 1.0%

Q3-2007
9.10 14.85 13.45 2.3% 39.3% 1,727.63 1,968.93 2,958.32 13.4% 1.0%

Q3-2008
12.30 19.60 17.85 2.3% 41.2% 2,155.17 2,297.79 3,767.00 15.8% 1.5%

Growth
35% 32% 33% 25% 17% 27% -

1. Based on standalone Indian GAAP financials 2. US$ amounts represent convenience translations at US$1= Rs. 39.42
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The ICICI Group today

Largest private sector bank in India Largest consumer credit provider Largest private sector life insurer Largest private sector general insurer Leading asset management company Largest private equity & venture fund Leading securities and broking company
Consolidated banking assets of US$ 106 bn; market cap of US$ 23bn
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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.
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Thank you

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