However, a comparison of results between April-December, 1998, with that of 1997 is not strictly appropriate as the Rs 622-crore net profit (of the first three quarters of 1997) has been arrived at after excluding Rs 98 crore worth of extraordinary income on sale of ICICI Bank shares and real estates. Besides, the institution has not done the adjustment for alignment of accounting policies of erstwhile ITC Classic with those of ICICI. The merger of ITC Classic with ICICI was effective April 1, 1997.

The ICICI board approved the audited accounts for the nine-month period on Friday.

During the third quarter ended December 31, 1998, profit after tax was maintained at the same level of Rs 208 crore as the corresponding quarter last year, despite the enhanced provisions andwrite-offs of Rs 45 crore, an ICICI release said.

The institution has made provisions and write-offs (including write-down of equity investments) to the tune of Rs 302 crore in April-December 1998, registering a massive 53 per cent increase over the corresponding period of the previous year (Rs 197 crore). "Any deterioration in individual credit facilities should be recognised to the greatest extent possible," the release said.

ICICI's net non-performing assets (NPAs) has marginally come down from 7.5 per cent in September to 7.8 per cent in December, 1998. The net NPA has increased by Rs 103 crore during the third quarter to Rs 3,343 crore.

The institution has recovered bad debt worth Rs 220 crore (the principal dues) during the nine month, up from Rs 164 crore recovered in April-December 1997. Moreover, simple interest dues aggregating Rs 43 crore (Rs 25 crore) have also been collected.

"The institution has recovered almost 100 per cent of principal on a cash basis and about 70 per cent on a presentvalue basis on all negotiated settlements," the ICICI release said.

Unlike the Industrial Development Bank of India, ICICI has been able to maintain the growth momentum in sanctions and disbursements during the current fiscal. It has registered a 55 per cent growth in sanctions in the nine-month period to Rs 27,261 crore and 24 per cent growth in disbursements to Rs 13,546 crore.

The infrastructure and oil and gas projects together with non-project corporate finance advances account for 82 per cent of sanctions and 74 per cent of disbursements in the April-December period. Foreign-currency loans were only 6 per cent of the total disbursements reflecting the lack of demand for forex funds. ICICI's fee and commission income aggregated Rs 178 crore, registering a 45 per cent growth.

During the nine-month period, ICICI mobilised medium- and long-term rupee resources to the tune of Rs 11,777 crore. Out of this, Rs 2,095 crore was raised through five public issues.

INSIGHT

Decline in net NPAratio is encouraging

The positive feature of ICICI's results is the decline in the net NPA ratio during the quarter. Fee and commission income has shown healthy growth, while operating expenses have been held down. Profits before provisions and tax, during the nine-months to December, have grown 23 per cent compared to the corresponding period of 1997-98. This rate of growth stands at 28 per cent when the half-yearly results for the two years are compared.

Sanctions during the third quarter amounted to Rs 6157 crore, compared with Rs 11,969 crore for the second quarter of the year. Disbursements at Rs 5299 crore were however higher than the Rs 4022 crore in the second quarter, a consequence of the earlier high level of sanctions. During the quarter, there was a shift towards longer term loans, and such loans accounted for 55 per cent of total disbursals for the nine months to September, compared with 49 per cent during the first half.