ICICI Bank was the subject of institutional buying on Friday, particularly from the likes of Birla Sun Life.
By 15:15 IST, the scrip of the second-largest bank in the country gained 1.30% to Rs 147.60. It was off the day's high of Rs 149, however. A total of 740,000 ICICI Bank shares changed hands on BSE till 15:15 IST. The scrip seems a ray of hope in a market where pivotals are tumbling on general anxiety over the outcome of events in West Asia.
In two sessions (including Friday), the scrip has risen 6.8% to its current level from Rs 139.50. In the seven prior sessions between 30 January and 10 February 2003, the scrip lost 10.4% to Rs 139.50 from Rs 155.65.
As per market talk, Birla Sun Life went the whole hog on the counter in the morning's part of today's session.
ICICI Bank is being looked upon as a safe bet in the current uncertain times. War fears seem to be preoccupying the market as a crucial UN report will be unveiled later today on Iraq's weapons status. It will determine the future shape of events, including a possible war.
Recently, ICICI Bank announced plans to acquire retail financial services company Transamerica Apple Distribution Finance for around Rs 74 crore. The deal will be finalised after the completion of the audit of accounts of TADF for April-November 2002. The deal will also be subject to RBI and other necessary approvals, ICICI Bank had said earlier.
Total assets of TADF stood at Rs 218 crore as on 31 March 2002, and the company had reported a net profit of Rs 4.6 crore. TADF is primarily engaged in financing two-wheelers and tractors.
TADF is a 70:30 JV between Transamerica Distribution Finance and the Atul Nishar-promoted Apple Credit Corporation. TDF is a wholly-owned arm of Transamerica Finance Corporation,USA, which in turn is a subsidiary of Aegon N.V, a Netherlands-based global insurance major
Meanwhile, ICICI Bank is expected to witness major improvements in performance following the passage of the Securitisation Bill. As on 31 December 2002, the bank's net non-performing assets were Rs 3,012 crore (Rs 30.12 billion). The Securitisation Bill allows banks to seize defaulters' assets and hasten recovery from defaulting borrowers without additional court procedures. The Bill also paves the way for setting up asset reconstruction companies. Analysts say even partial recovery of NPAs should enhance debt recovery and improve asset quality and profitability.
For the quarter ended 31 December 2002, ICICI Bank has earned a net profit of Rs 330.3 crore (Rs 3.3 billion) on a total income of Rs 2,826.53 crore (Rs 28.26 billion).
The results for the quarter ended 31 December 2002 include the results of the erstwhile ICICI and its subsidiaries, amalgamated with the bank wef 30 March 2002. The financials for the quarter are therefore not comparable.
As on 31 December 2002, the bank's non-performing customer assets were Rs 3012 crore (Rs 30.12 billion), constituting 4.90% of customer assets. The bank continues to focus on restructuring of intrinsically viable companies as well as recovery actions, including the institution of proceedings under the Securitisation & Reconstruction of Financial Assets & Enforcement of Security Interest Act 2002. It also plans to focus on retail banking, and is expected to declare better dividends to its shareholders in the near future. Retail operations contributed 40% to the total revenues of ICICI Bank for the full year ended 31 March 2002.
The bank's capital adequacy as on 31 December 2002 was 12.6% (including Tier-1 capital adequacy of 8.2%).
The promoters' holding in ICICI Bank stood at 16.5%, while the public, domestic and foreign institutions held 10%, 22.5% and 45.8%, respectively.
BSE Code: 532174
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