MIRA INFORM REPORT
|
Report Date : |
06.07.2007 |
IDENTIFICATION
DETAILS
|
Name : |
ICICI
BANK LIMITED |
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Registered Office : |
Landmark,
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Country : |
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Financials (as on) : |
31.03.2007 |
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Date of Incorporation : |
05.01.1994 |
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Com. Reg. No.: |
04-21012 |
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CIN No.: [Company Identification No.] |
U65190GJ1994PLC021012 |
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TAN No.: [Tax Deduction & Collection Account
No.] |
BRD100221E |
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Legal Form : |
It is
a public limited liability bank. The Bank's
shares are listed on the Stock Exchanges. |
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Line of Business : |
Subject
is engaged in providing a wide range of banking and financial services
including retail lending, commercial lending, trade finance and treasury
products. |
RATING
& COMMENTS
|
MIRA’s Rating : |
Aa |
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
71-85 |
Aa |
Possesses
adequate working capital. No caution needed for credit transaction. It has
above average (strong) capability for payment of interest and principal sums |
Large |
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Maximum Credit Limit : |
USD
900000000 |
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Status : |
Good |
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Payment Behaviour : |
Regular
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Litigation : |
Clear |
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Comments : |
Subject
is a well established and highly reputed bank in private sector having
excellent track. It is termed to be the 2nd largest bank in The
bank can be considered good for any normal business dealings. |
LOCATIONS
|
Registered Office : |
Landmark,
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Tel. No.: |
91-265-2324318 / 2339923-27 |
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Fax No.: |
91-265-2339926 |
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E-Mail : |
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Website : |
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Head
Office : |
Zenith
House, 3rd Floor, Keshavrao Khade Marg, Mahalakshmi, Mumbai - 400
034, |
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Corporate
Office : |
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Tel.
No.: |
91-22-26531414 |
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Fax
No.: |
91-22-26531122 |
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E-Mail
: |
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Branches
/ ATM / extension counters: |
Located
at : Himachal
Pradesh, Punjab, Haryana, Uttaranchal, Delhi, Rajasthan, Uttar Pradesh,
Bihar, Assam, Madhya Pradesh, Gujarat, Jharkhand, West Bengal, Maharashtra,
Chattisgarh, Orissa, Andhra Pradesh, Goa, Karnataka, Tamilnadu, Pondicherry
and Kerala. |
DIRECTORS
|
Name : |
|
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Designation : |
Chairman |
|
|
|
|
Name : |
K V
Kamath |
|
Designation : |
Managing
Director & CEO |
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Qualification
: |
B.E. (Mech.)
(PGDBA) |
|
Date
of Joining: |
01.05.1996 |
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Previous
Employment: |
Bakrie Group, |
|
|
|
|
Name : |
Somesh
R Sathe |
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Designation : |
Director
|
|
|
|
|
Name : |
Lakshmi
N Mittal |
|
Designation : |
Director
|
|
|
|
|
Name : |
Marti
G Subrahmanyam |
|
Designation : |
Director
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|
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Name : |
Anupam
Puri |
|
Designation : |
Director
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|
Name : |
Nachiket
Mor |
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Designation : |
Deputy
Managing Director |
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|
|
|
Name : |
Kalpana
Morparia |
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Designation : |
Joint
Managing Director |
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|
|
|
Name : |
Chanda
D Kochhar |
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Designation : |
Deputy
Managing Director |
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Name : |
P M
Sinha |
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Designation : |
Director |
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|
|
|
Name : |
Vinod
Rai |
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Designation : |
Nominee
(Govt) |
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|
|
|
Name : |
M K
Sharma |
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Designation : |
Director |
|
|
|
|
Name : |
Jyotin
Mehta |
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Designation : |
General
Manager & Company Secretary |
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|
|
|
Name : |
Lalita
D Gupte |
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Designation : |
Joint
Managing Director |
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|
|
|
Name : |
V Prem
Watsa |
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Designation : |
Addtnl
Non-Executive Director |
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|
|
|
Name : |
Sridhar
Iyengar |
|
Designation : |
Director |
|
|
|
|
Name : |
T |
|
Designation : |
Director |
|
|
|
|
Name : |
R K
Joshi |
|
Designation : |
Additional
Director |
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|
|
|
Name : |
Narendra
Murkumbi |
|
Designation : |
Additional
Director |
MAJOR
SHAREHOLDERS
|
Names
of Shareholders |
No. of Shares |
Percentage of Holding |
|
Non
promoter's holdings |
|
|
|
Mutual
Funds and UTI |
18984826 |
2.13 |
|
Banks,
Financial Institutions and Insurance
Companies |
115122024 |
12.94 |
|
FIIs |
414574562 |
46.59 |
|
|
|
|
|
Others
|
|
|
|
Private
Corporate Bodies |
41329876 |
4.65 |
|
NRIs /
OCBs |
57052779 |
6.41 |
|
Others |
804409 |
0.09 |
|
Foreign Companies |
47370 |
0.01 |
|
Deutsche Bank trust Company Americas (Depository for ADS holders) |
238604478 |
26.81 |
|
Foreign Bank |
189826 |
0.02 |
|
Foreign Nationals |
3051 |
0.00 |
|
NRI Directors |
3110700 |
0.35 |
|
Total |
889823901 |
100.000 |
BUSINESS
DETAILS
|
Line of Business : |
Subject
is engaged in providing a wide range of banking and financial services
including retail lending, commercial lending, trade finance and treasury
products. |
GENERAL
INFORMATION
|
No. of Employees : |
18000 |
|
|
|
|
Bankers : |
Reserve
Bank of |
|
|
|
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Banking Relations : |
Good |
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|
|
|
Auditors : |
S. B.
Billimoria & Company Chartered
Accountants Meher
Chambers, |
|
|
|
|
Associates : |
v
ICICI Web-Trade Limited v
ICICI Property Trust v
ICICI Properties Private Limited v
ICICI Real Estate Company Private Limited v
ICICI Realty Private Limited v
ICICI West Bengal Infrastructure Development Corporation Limited v
ICICI KINFRA Limited v
v
ICICI Technology Incubator Fund v
ICICI Eco-net Internet and Technology Fund v
ICICI Information Technology Fund v
ICICI Equity Fund v
TCW / ICICI Investment Partner v
Prudential ICICI Asset Management Company Limited v
Prudential ICICI Trust Limited |
|
|
|
|
Subsidiaries : |
v
ICICI Securities and Finance Company Limited v
ICICI Brokerage Services Limited v
ICICI Venture Funds Management Company Limited v
ICICI International Limited, v
ICICI Home Finance Company Limited v
ICICI Trusteeship Services Limited v
ICICI Investment Management Company Limited v
ICICI Prudential Life Insurance Company Limited v
ICICI Lombard General Insurance Company Limited v
ICICI Securities Holdings Inc., v
ICICI Securities Inc., |
CAPITAL
STRUCTURE
Authorised
Capital :
|
No.
of Shares |
Type |
Value |
Amount |
|
|
Not
Applicable |
|
|
Issued,
Subscribed & Paid-up Capital :
|
No.
of Shares |
Type |
Value |
Amount |
|
1239830000
|
Equity
Shares |
Rs 10/- each |
Rs. 12398.300 Millions |
FINANCIAL
DATA
[all figures are in Rupees Millions]
ABRIDGED BALANCE SHEET
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
Share Capital |
12493.400 |
12398.300 |
10867.600 |
|
Reserves &
Surplus |
234139.200 |
213161.600 |
118132.000 |
|
Deposits |
2305101.900 |
1650831.700 |
998187.700 |
|
Borrowings |
512560.300 |
385219.100 |
335445.000 |
|
Other
Liabilities & Provisions |
388829.600 |
258976.000 |
221721.100 |
|
|
|
|
|
GRAND TOTAL
|
3453124.400 |
2520586.700 |
1684353.400 |
|
|
|
|
|
|
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
|
Cash &
Balances with RBI |
187068.800 |
89343.700 |
63449.000 |
|
Balances with
Banks & money at Call & Short notice |
184144.400 |
81058.500 |
65850.800 |
|
Investments |
912578.400 |
715473.900 |
504873.500 |
|
Advances |
1958656.000 |
1461631.100 |
914051.500 |
|
Fixed Assets |
39234.200 |
39807.100 |
40380.400 |
|
Other Assets |
171442.600 |
133272.400 |
95748.200 |
|
|
|
|
|
|
GRAND TOTAL |
3453124.400 |
2520586.700 |
1684353.400 |
PROFIT & LOSS ACCOUNT
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
|
Sales Turnover |
229942.900 |
143061.300 |
94098.900 |
|
|
Other Income |
69629.500 |
50622.200 |
35396.700 |
|
|
Total
Income |
299572.400 |
193683.500 |
129495.600 |
|
|
|
|
|
|
|
|
Profit/(Loss) Before Tax |
31102.200 |
25400.700 |
20052.000 |
|
|
Provision for Taxation |
0.000 |
0.000 |
0.000 |
|
|
Profit/(Loss) After Tax |
2934.400 |
1882.200 |
530.900 |
|
|
|
|
|
|
|
|
Expenditures : |
|
|
|
|
|
|
Interest Expanded |
163585.000 |
95974.500 |
65708.900 |
|
|
Operating Expenses |
77243.300 |
58568.900 |
33013.100 |
|
|
Provisions and Contingencies |
27641.900 |
13739.400 |
10721.600 |
|
Total
Expenditure |
268470.200 |
168282.800 |
109443.600 |
|
KEY RATIOS
|
PARTICULARS |
31.03.2007 |
31.03.2006 |
31.03.2005 |
|
Credit Deposit Ratio |
86.46 |
89.68 |
91.74 |
|
Investment Deposit Ratio |
41.15 |
46.07 |
55.52 |
|
Cash Deposit Ratio |
6.99 |
5.77 |
7.00 |
|
Interest Expended/Interest Earned |
71.14 |
67.09 |
69.83 |
|
Other Income/Total Income |
23.24 |
26.14 |
27.33 |
|
Operating Expense/Total Income |
25.78 |
30.24 |
25.49 |
|
Interest Income/Total Funds |
7.70 |
6.80 |
6.39 |
|
Interest Expended /Total Funds |
5.48 |
4.56 |
4.46 |
|
Net Interest Income/Total Funds |
2.22 |
2.24 |
1.93 |
|
Non Interest Income/Total Funds |
2.33 |
2.41 |
2.40 |
|
Operating Expense/Total Income |
2.59 |
2.79 |
2.24 |
|
Profit Before Provisions/Total Funds |
1.97 |
1.86 |
2.09 |
|
Net Profit/Total Funds |
1.04 |
1.21 |
1.36 |
|
Return On Net Worth(%) |
13.37 |
14.62 |
19.51 |
STOCK PRICES
|
Face
Value |
Rs.
10.00/- |
|
High |
Rs. 914.00 |
|
Low |
Rs.
887.00 |
LOCAL
AGENCY FURTHER INFORMATION
HISTORY
Subject (ICICIBK) is a
commercial bank promoted by subject, an Indian Financial Institution. It was
incorporated in Jan.'94 and received its banking licence from Reserve Bank of
The Bank offers a wide spectrum of domestic and international banking services
to facilitate trade, investment banking ,Insurance, Venture Captial, asset
management, cross border business & treasury and foreign exchange services
besides providing a full range of deposit and ancillary services for both
individuals and corporates through various delivery Channels and specialized
subsidiaries. All the branches are fully computerised with the state-of-the-art
technology and systems, networked through VSAT technology. The bank is
connected to the SWIFT International network. The bank has 14 subsidiaries
across
To maintain the leadership status bank foray into internet banking by web-
enable its existing products and services. It has gained favourable acceptance
from its customer for its initiatives in business to business and business to
customer solution. To efficiently distribute its products and services, the
bank has developed multiple access channels comprising lean brick and mortar
branches, ATMs, call centers and Internet banking. The Bank has introduced the
concept of mobile ATMs in the remote/rural areas. It has also extended its
mobile banking services to all cellular service providers across
In 2000-01 the Bank of Madura (BOM) got merged with ICICIBK. With this merger
ICICIBK has become one of the largest private sector banks in
During May,2003 the bank has acquired Transamerica Appple Distribution Finance
Private Ltd which is primarily engaged in financing in the two-wheeler segment.
After acquisition the name of the company was changed to subject Distribution
Finance Private Limited. The Banks subordinated long-term foreign currency debt
was upgraded to Baa3 to Ba1 by Moody's Investor Service.
In the Wholesale Banking segment,the bank has achieved a significant milestone
in the market making activity by expanding the product suite to include foreign
exchange options against Indian Rupee as RBI allowed them to be traded
w.e.f.07.07.2003.The bank has emerged as one of the largest market-makers in
merchant as well as inter-bank markets for this product.
BUSINESS
The bank
has emerged as one of the fastest growing banks within the private sector banks
with a growth rate in total income in excess of 100%. This has been aided by an aggressive branch
expansion strategy.
Subject
offers a wide spectrum of domestic and international banking services to
facilitate trade, investment, cross border business and treasury and foreign
exchange services besides providing a full range of deposit and ancillary
services for both individuals and corporates.
All the branches are fully computerised with the state-of-the-art
technology and systems, networked through VSAT technology. The bank is connected to the SWIFT
International network.
To
maintain the leadership status bank forayed into Internet banking by web-enable
its existing products and services. It
has gained favourable acceptance from its' customer for its' initiatives in
business to business and business to customer solution.
Recently,
the Bank of Madura Limited got merged with the bank. The share exchange ratio was fixed at two
shares of bank for one share of Bank of Madura. With this merger, the bank has
become one of the largest private sector banks in
To
efficiently distribute its products and services, the bank has developed
multiple access channels comprising lean brick and mortar branches, ATMs, call
centers and internet banking.
The
banks provides banking services and finance working capital. Though a large part of lending / investment
is still directed by RBI, last 6 years of reforms have dramatically changed the
environment. Lending and interest rates
on domestic term deposits have been freed.
The banks are allowed to provide long-term loans and take up leasing and
other financial services.
It has
also emerged as a prominent player in the retail banking segment by virtue of
large investments in technology. This
has allowed it to offer superior services to its clients.
The bank
is being driven to a large extent by the strategy of the parent to emerge as a
universal bank. The banks' parent has
emerged as the most aggressive players in the wholesale lending segment. While the parent is trying to concentrate on
the large size clients , it is using the bank to tap the smaller corporates and
the retail clients.
The bank
set up over 500 new ATMs during fiscal 2002, taking the ATM network to over
1000 ATMs.
Subject
is a commercial bank promoted by subject and erstwhile SCICI Limited.
Subject
received its banking licence from Reserve Bank of
Subject
is a banking company governed by the Banking Regulation Act, 1949.
The bank
has emerged as one of the fastest growing banks within the private sector banks
with a growth rate in total income in excess of 100%. This has been aided by an aggressive branch
expansion strategy.
Subject
offers a wide spectrum of domestic and international banking services to
facilitate trade, investment, cross border business and treasury and foreign
exchange services besides providing a full range of deposit and ancillary
services for both individuals and corporates.
All the branches are fully computerised with the state-of-the-art
technology and systems, networked through VSAT technology. The bank is connected to the SWIFT
International network.
To
maintain the leadership status bank forayed into Internet banking by web-enable
its existing products and services. It has
gained favourable acceptance from its' customer for its' initiatives in
business to business and business to customer solution.
Recently,
the Bank of Madura Limited got merged with the bank. The share exchange ratio was fixed at two
shares of bank for one share of Bank of Madura. With this merger, the bank has
become one of the largest private sector banks in
To
efficiently distribute its products and services, the bank has developed
multiple access channels comprising lean brick and mortar branches, ATMs, call
centers and internet banking.
The
banks provides banking services and finance working capital. Though a large part of lending / investment
is still directed by RBI, last 6 years of reforms have dramatically changed the
environment. Lending and interest rates
on domestic term deposits have been freed.
The banks are allowed to provide long-term loans and take up leasing and
other financial services.
It has
also emerged as a prominent player in the retail banking segment by virtue of
large investments in technology. This
has allowed it to offer superior services to its clients.
The bank
is being driven to a large extent by the strategy of the parent to emerge as a
universal bank. The banks' parent has
emerged as the most aggressive players in the wholesale lending segment. While the parent is trying to concentrate on
the large size clients , it is using the bank to tap the smaller corporates and
the retail clients.
The bank
set up over 500 new ATMs during fiscal 2002, taking the ATM network to over
1000 ATMs.
international
business
The bank
has already established a presence in the international markets, primarily in
the areas of information technology, investment banking and banking products
and services for the Non-Resident Indian Community. The International Business Group was set up
in fiscal 2002 to develop and implement a focused strategy for the
international business.
public
recognition
K
The bank received the several prestigious awards in recognition of
business, strategies, customer services, human resources practices and
transparency in financial reporting including :
K
The title "Best Retail Bank in
K
Asian Business Leader Award (organised by CNBC Asia-Pacific and TNT)
awarded to Mr. K. V. Kamath, Managing Director & Chief Executive Officer.
K
Asian Banker's Product Innovation Award for "Kid-e-bank"
account
K
Among the top three in a "Best Employer" study amongst the
students of the best business schools in
K
Indian Express Marketing Excellence Award for the "Most Recalled
Advertisement on Television"
K
"Best Presented Accounts Award" in the category of banks and financial institutions
from the Institute of Chartered Accountants of India for the third consecutive
year.
Subject
has established Representatives Offices in
At
present, the bank 's network includes 365 branches, 1066 ATM centres and 45
extension counters.
CORPORATE
GOVERNANCE
subject has established a tradition of best practices in corporate governance.
The corporate governance framework in subject is based on an effective
independent Board, the separation of the Board's supervisory role from the
executive management and the constitution of Board Committees, with majority of
the members generally being independent Directors and chaired by an independent
Director, to oversee critical areas.
ECONOMIC
OVERVIEW
In fiscal 2004, the Indian economy recorded a GDP growth rate of 8.5%.
Following this, initial growth projections for GDP growth in the fiscal 2005
were in the range of 6.2% to 7.4%. The Central Statistical Organisation (CSO)
has reported overall GDP growth for fiscal 2005 at 6.9%. The highlight of the
economy's performance in fiscal 2005 was the resurgence of the industrial
sector coupled with buoyant exports and indications of a revival in the
domestic capital investment cycle. The Index of Industrial Production (IIP)
recorded an annual average growth rate of 8.1% in fiscal 2005 compared to 7.0%
in fiscal 2004. This growth was driven mainly by the manufacturing sector which
grew by 9.2% in fiscal 2005 compared to 6.9% in the previous year. This was
partly offset by a decline in the growth rate of the mining sector from 6.6% to
4.5% while the electricity sector maintained its growth rate of 5.5%. The
momentum of growth in the services sector (including construction) continued
with an 8.6% growth in fiscal 2005. Agriculture and allied activities were
adversely impacted by a below normal monsoon, in terms of timing and
distribution of rainfall, and recorded a growth of only 1.1% compared to 9.6%
in fiscal 2004. The agriculture sector's contribution to GDP growth declined
from 24.0% in fiscal 2004 to 3.6% in fiscal 2005.
The growth trends were accompanied by continued macro-economic stability,
despite a sharp increase in global oil prices and rising interest rates
globally and in
The resilience displayed by the economy in fiscal 2005 is evidence of the
broad-based and sustainable nature of
FINANCIAL SECTOR OVERVIEW
The financial sector witnessed significant developments during fiscal 2005.
Credit growth strengthened with an increase in industrial activity. Non-food
credit increased by 29.1% in fiscal 2005 compared to 18.5% in fiscal 2004.
Based on data published by RBI, the industrial sector is estimated to have
accounted for 27.0% of credit growth in fiscal 2005 as compared to 16.0% in
fiscal 2004. The contribution of retail credit growth to overall credit growth
was the largest at 42.0% of total non-food credit. The credit-deposit ratio
increased from about 56.0% in April 2004 and stood at about 60.0% from November
2004 onwards. The incremental credit deposit ratio, excluding the impact of
conversion of IDBI into a bank, was about 100.0% in March 2005 compared to
about 60.0% at the beginning of the year. Deposit grew by Rs.2,285.26 billion,
or 14.5%, in fiscal 2005 compared to 16.2% in fiscal 2004. The average yield on
10-year government securities increased from 5.5% in fiscal 2004 to 6.2% in
fiscal 2005. In response to the hike in CRR and the reverse repo rate in the
RBI's mid-year review, in November 2004, banks increased their benchmark prime
lending and deposit rates.
Growth in both the life and non-life insurance markets was significant. First
year premium underwritten in the life insurance sector recorded a growth of
35.7% to reach Rs. 253.43 billion in fiscal 2005 with the private sector's
market share increasing from 13.0% in fiscal 2004 to 21.9% in fiscal 2005.
Gross premium in the non-life insurance sector grew by 12.8% to Rs. 180.95
billion in fiscal 2005 with the private sector's market share increasing from
14.1% in fiscal 2004 to 19.6% in fiscal 2005. Total assets under management of
mutual funds grew by 7.2% from Rs. 1,396.16 billion at March 31, 2004 to
Rs.1,496.00 billion at March 31, 2005.
The banking sector witnessed several important regulatory developments. In June
2004, guidelines on capital for market risk were issued. Under this, banks
would be required to maintain a capital charge for market risk in respect of
their trading and available for sale investment portfolios. RBI has issued
draft guidelines for the implementation of the revised capital adequacy
framework of the Basel Committee. These are to be effective from fiscal 2007 and
prescribe a 75.0% weight for retail credit exposure, rating based differential
risk weights for other credit exposures and a capital charge for operational
risk. A roadmap for the presence of foreign banks in
The Indian financial sector is rapidly moving towards international benchmarks.
Progress in the direction of increasing efficiency, transparency and dynamism
in the system has been rapid. Given the rapid growth prospects in
BUSINESS
REVIEW
Retail
Banking
They entered the retail business in 1998 and it has been a key driver of our
growth since 2001. While they were among the first banks to identify the growth
potential of retail credit in India, over the last two years the banking system
as a whole has seen significant expansion of retail credit, with retail loans
accounting for a major part of overall systemic credit growth. They believe
that the systemic growth is driven by sound fundamentals, namely, rising income
levels, favourable demographic profile and wide availability and affordability
of credit. At the same time, the retail credit business requires a high level
of credit and analytical skills and strong operations processes backed by
technology. Their retail strategy is centred around a wide distribution
network, leveraging their branches and offices, direct marketing agents and
manufacturer, dealer and real estate developer relationships; a comprehensive
and competitive product suite; technology-enabled back-office processes and a
robust credit and analytical framework.
They are the largest provider of retail credit in
During fiscal 2005, they expanded their branch network. At March 31, 2005, they
had 562 branches and extension counters compared to 469 branches and extension
counters at March 31, 2004. They continued to expand their electronic channels,
namely internet banking, mobile banking, call centres and ATMs, and migrate
customer transaction volumes to these channels. During fiscal 2005, over 70% of
customer induced transactions took place through these electronic channels.
They increased their ATM network to 1,910 ATMs. Their call centres have a total
seating capacity of about 3,000 including 1,954 inbound sales and service
workstations across two locations. Transaction volumes on internet and mobile
banking have increased significantly. They continue to leverage their multi-channel
network for distribution of third party products like mutual funds, Government
of India relief bonds and insurance products as theyll as initial public
offerings of equity. www.ICICIdirect.com (ICICIdirect) is a leading on-line
share trading platform, and also enables investments in other forms such as
mutual funds and government savings instruments.
Customer service is a key focus area for the executive management under the
supervision of the Board. They have adopted a multi-pronged strategy for
continuously enhancing customer service levels. These include constitution of a
Customer Service Council, creation of a dedicated customer service group,
implementation of a structured customer feedback process and quality
initiatives, training of employees and incorporation of customer service
metrics in performance evaluation. The Customer Service Council focuses on
building and strengthening customer service orientation in the Bank,
simplifying processes and initiating measures for improvement in customer
service levels. A dedicated Customer Service Quality Group at the Corporate
Office is responsible for tracking resolution and turnaround times for service
requests, identifying root causes to be addressed through process improvements
and institutionalising learnings from customer feedback. The Board of Directors
periodically reviews the initiatives taken by the Bank in this area.
Small and medium enterprises
They
have significantly enhanced their franchise in the small enterprises segment.
Their strategy has focused on customer convenience in transaction banking
services, as well as working capital loans to suppliers or dealers of large
corporations, and clusters of small enterprises that have a homogeneous
profile. During fiscal 2005, they expanded their reach to over 100 locations
from where they service small and medium enterprises, increased the number of
products offered and clusters covered and achieved robust growth in business
volumes. They partnered with media organisations and a rating agency to
organise the 'Emerging India' awards to recognise the achievements of small and
medium enterprises.
Corporate Banking
Their corporate banking strategy is based on providing comprehensive and
customised financial solutions to their corporate customers. They offer a
complete range of corporate banking products, including rupee and foreign
currency debt, working capital credit, structured financing, syndication and
transaction banking products and services.
In fiscal 2005, they continued to strengthen their corporate relationships,
gaining entry into a number of target clients in both the public and private
sector. They currently have relationships with a substantial number of the top
200 companies in
The growing internationalisation of Indian industry offers significant
opportunities in the corporate banking space. The Bank's international presence
combined with its domestic balance sheet enables it to offer a wide range of
credit and trade finance solutions to Indian companies. With the requisite
regulations now in place, they see a growing opportunity in being involved in
the overseas acquisitions being made by Indian companies. The client-related
corporate markets business is now being re-organised into the Global Markets
Group which will integrate the client-centric treasury operations of the Bank
in
They continued to build on their competencies in structured finance and
leverage them in path-breaking securitisation transactions. They are the market
leader in securitisation in
Project Finance
The project finance sector in
They have, over the years, developed project financing expertise across sectors
and are well positioned to leverage the emerging opportunities. subject's
project financing strategy focuses on origination of tightly structured
projects by leveraging its international quality due diligence skills coupled
with syndication capability. The projects are structured to ensure easy
syndication and also subsequent sell-down of their exposure in order to manage
portfolio risk. Some of the major deals during fiscal 2005 included lead
arranger mandates for a telecommunications project, an international airport
project, a
Rural banking and agri-business
They
have formulated a comprehensive strategy for rural and micro-banking and
agri-business, encompassing products and channels, with the twin objectives of
meeting the needs of the rural economy while building a sustainable business
model. They offer a comprehensive suite of products, comprising six primary
credit products - micro-finance loans, farmer financing, working capital
financing for agri enterprises, farm equipment financing, commodity-based
financing and jewel loans, as well as savings, investment and insurance
products. Their channel strategy envisages multiple channels targeting specific
segments of the rural population. These include rural branches, branches at
major agricultural markets, credit franchisees, rural internet kiosks and
micro-finance institution partnerships. They seek to achieve deep penetration in
identified areas through a combination of these channels. In fiscal 2005, over
2,000 internet kiosks were set up across 10 identified focus states. A wide
spectrum of products have been sold through the kiosks, including life and
general insurance policies, loans and rural savings accounts. subject branches
were established in nine of the largest agricultural markets in the country. In
addition, 70 agri desks were established in locations with large agricultural
markets. The total number of partner micro finance institutions /
non-government organisations was scaled up to 45 (from 12 at March 31, 2004),
with the total client base going up to over 1 million households (from 350,000
at March 31, 2004). We have adopted an integrated approach to agricultural financing
by addressing the entire value chain from production to consumption with a deep
sectoral focus. They are exploring all business opportunities in the
integration of the value chain, including the creation of rural infrastructure
like cold storage facilities and warehouses.
International Banking
In 2001, they identified international banking as a key opportunity, aiming to
cater to the cross-border needs of clients and leverage their domestic banking
strengths to offer products internationally. The Bank has made significant
progress in the international business since they set up their first overseas
branch in
The Bank has established a strong franchise in the NRI business and further
consolidated its position in fiscal 2005. The Bank has established strong
customer relationships by offering a comprehensive product suite,
technology-enabled access for overseas customers, a wide distribution network
in
Their overseas subsidiaries and branches launched several products during the
financial year. subject
The Bank focused on increasing market share in trade finance by leveraging and
further strengthening correspondent banking relationships. The Bank is now a
preferred partner for Indian companies for syndication of external commercial
borrowings and other fund raising in international markets. The Bank further
strengthened correspondent banking relationships with banks in new regions in
fiscal 2005 and launched several products to develop new revenue streams.
The Bank strengthened its international private banking offering to service the
wealth management needs of the large and growing population of affluent and
high net worth customers. With a portfolio of in-house and third party products,
the bank has created a holistic product suite across the entire risk spectrum
starting from deposits and bonds to the more complex structured derivative
products, private equity and real estate. The Bank entered into alliances with
leading international product providers to offer private banking
solutions.
GROUP COMPANIES
subject Prudential Life Insurance Company (ICICI Prudential Life) continued to
maintain its market leadership among private sector life insurance companies,
with a retail market share of 34%. Life insurance companies worldwide require
five to seven years to achieve breakeven, in view of business set-up and
customer acquisition costs in the initial years as well as reserving for
actuarial liability. The company's unaudited New Business Achieved Profit
(NBAP) for fiscal 2005 was Rs.3.12 billion. NBAP represents the present
discounted value of future profit streams from new policies written by the
company during the year, calculated on the basis of certain assumptions as to
mortality and other parameters. Internationally, life insurance companies in
the growth phase are valued as a multiple of their NBAP.
ICICI Lombard General Insurance Company (ICICI Lombard) maintained its
leadership position among private sector general insurance companies, with a
market share of 25%. ICICI Lombard achieved a profit after tax of Rs.0.48
billion in fiscal 2005 and a return on equity of 20%.
ICICI Securities Limited (ICICI Securities) achieved a profit after tax of
Rs.0.64 billion in fiscal 2005 despite a sharp decline in fixed income gains
due to the prevailing interest rate environment. The company made rapid
progress in its equity brokerage and investment banking businesses.
ICICI Venture Funds Management Company Limited (ICICI Venture) strengthened its
leadership position in private equity in
The Bank and Prudential plc of
RISK
MANAGEMENT
Risk is an integral part of the banking business and we aim at the delivery of
superior shareholder value by achieving an appropriate trade-off between risk
and returns. They are exposed to various risks, including credit risk, market
risk and operational risk. Their risk management strategy is based on a clear
understanding of various risks, disciplined risk assessment and measurement
procedures and continuous monitoring. The policies and procedures established
for this purpose are continuously benchmarked with international best
practices. The risk management function is supported by a comprehensive range
of quantitative and modeling tools developed by a dedicated risk analytics
team.
They have two dedicated groups, the Risk Management Group (RMG) and the
Compliance & Audit Group (CAG) which are responsible for assessment,
management and mitigation of risk in subject. These groups form part of the
Corporate Centre, are completely independent of all business operations and are
accountable to the Risk and Audit Committees of the Board of Directors. RMG is
further organised into Credit Risk Management Group, Market Risk Management
Group, Retail Risk Management Group and Risk Analytics Group. CAG is further
organised into the Compliance & Anti-Money Laundering Group and the Internal
Audit Group.
Credit Risk
Credit risk is the risk that a borrower is unable to meet its financial
obligations to the lender. They measure, monitor and manage credit risk for
each corporate borrower and also at the portfolio level. They have standardised
credit approval processes, which include a well-established procedure of
comprehensive credit appraisal and rating. They have developed internal credit
rating methodologies for rating obligors as well as for products / facilities.
The rating factors in quantitative, qualitative issues and credit enhancement
features specific to the transaction. The rating serves as a key input in the
approval as well as post-approval credit processes. Credit rating, as a
concept, has been well internalised within the Bank. The rating for every
corporate borrower is reviewed at least annually and for higher risk credits
and large exposures on a more regular basis. Industry knowledge is constantly
updated through field visits, interactions with clients, regulatory bodies and
industry experts.
In their retail credit operations, all products, policies and authorisations
are approved by the Board or a Board Committee. Credit approval authority lies
only with their credit officers who are distinct from the sales teams. Their
credit officers evaluate credit proposals on the basis of the approved product
policy and risk assessment criteria. Credit scoring models are used in the case
of certain products like credit cards, External agencies such as field
investigation agencies and credit processing agencies are used to facilitate a
comprehensive due diligence process including visits to offices and homes in
the case of loans to individual borrowers. Before disbursements are made, the
credit officer conducts a centralised check on the delinquencies database and
review of the borrower's profile. We continuously refine their retail credit
parameters based on portfolio analytics.
Market Risk
Market risk is the risk of loss resulting from changes in interest rates,
foreign currency exchange rates, equity prices and commodity prices. Their
exposure to market risk is a function of their trading portfolio, mandated
government securities portfolio, asset-liability management activities and
their role as a financial intermediary in customer-related transactions. The
objective of market risk management is to minimise the impact of losses due to
market risk, on earnings and equity capital.
Market risk policies include asset-liability management (ALM) policies and
policies for the trading portfolio. The Asset Liability Management Committee
(ALCO) of the Board of Directors stipulates liquidity and interest-rate risk
limits, monitors risk levels by adherence to set limits and articulates the
organisation's interest rate view. A separate set of policies for the trading
portfolio address issues related to investments in various trading products.
RMG exercises independent control over the process of market risk management
and recommends changes in processes and methodologies for measuring market
risk.
Interest rate risk is measured through the use of re-pricing gap analysis and
duration analysis. Liquidity risk is measured through gap analysis. They ensure
adequate liquidity at all times through systematic funds planning and
maintenance of liquid investments as well as by focusing on more stable funding
sources such as retail deposits. They mitigate their exposure to exchange rate
risk by stipulating daily stop-loss limits and position limits.
The Treasury Middle Office Group monitors the asset-liability position under
the supervision of the ALCO. It also monitors treasury activities, including
determining compliance with various exposure and dealing limits, verifying the
appropriateness and accuracy of various transactions, processing these
transactions, tracking the daily funds position and all treasury-related
management and regulatory reporting.
Operational Risk
Operational risk can result from a variety of factors, including failure to
obtain proper internal authorisations, improperly documented transactions,
failure of operational and information security procedures, computer systems,
software or equipment, fraud, inadequate training and employee errors. They
attempt to mitigate operational risk by maintaining a comprehensive system of
internal controls, establishing systems and procedures to monitor transactions,
maintaining key back-up procedures and undertaking regular contingency
planning. Processes have been categorised based on the frequency and impact of
the operational risk that they carry. Based on this classification, mitigants
have been outlined to reduce the risk. They have initiated work on modeling the
impact of losses arising out of operational risk inherent in different
processes as part of their approach towards the new Basel Capital Accord.
The Middle Office Group monitors adherence to credit and investment procedures.
The Internal Audit Group undertakes a comprehensive audit of all business
groups and other functions, in accordance with a risk-based audit plan. This
plan allocates audit resources based on an assessment of the operational risks
in the various businesses. They have been a pioneer in the implementation of a
risk-based audit methodology in the Indian banking sector. The Internal Audit
Group conceptualises and implements improved systems of internal controls to
minimise operational risk.
TREASURY
Effective fiscal 2004, they restructured their treasury operations to separate
the balance sheet management function, the client-related corporate markets
business and the proprietary trading activity. The balance sheet management
function and proprietary trading activity now form part of the Corporate
Centre, while the client-related corporate markets business formed part of the
Wholesale Banking Group in fiscal 2005 and is now being reorganised into the
Global Markets Group
Fiscal 2005 saw a reversal in the interest rate environment. The government
bond markets witnessed significant volatility in yields. The balance sheet
management function managed interest rate sensitivity to limit the negative
impact of rising yields by reducing the duration of the government securities
portfolio held for compliance with statutory liquidity reserve (SLR) norms. The
focus of their proprietary trading operations was to maximise profits from
positions across key markets including corporate bonds, government securities,
interest-rate swap, equity and foreign exchange markets. The adverse fixed
income market conditions led to lower gains from the proprietary trading operations.
However the Bank continued to capitalise on opportunities in the equity
markets, realising gains on its equity portfolio acquired by way of project
finance and debt restructuring as well as trading operations.
In line with the expansion of international business of the bank, the treasury
also expanded its functioning across the Bank's international branches. A
treasury function was set up at
INFORMATION TECHNOLOGY
subject has been a pioneer in revolutionising and re-shaping the way banking is
done in
They continue to develop and enhance their channel infrastructure. They were
the first bank to connect to the National Financial Switch (NFS). They have
also leveraged their ATM network to enable more transactions, such as donations
for tsunami relief and on-line mobile telephone balance top-up facilities to
their customers. They significantly enhanced their call centre technology to
facilitate more convenient customer access. Their customers can now use their
debit and credit card numbers to access their banking and credit card accounts
directly through their Interactive Voice Response (IVR) system. They have
installed separate numbers for different types of customers and product lines to
provide quicker access to their phone banking representatives. Taking forward
their strategy to offer multi-channel access and enhanced functionality to
their customers, they have added new services on mobile banking for various
deposit, credit card and demat accounts. They have also tied up with a leading
telecom services provider for payment of mobile phone bills through SMS. They
have also tied up with the Indian Railways and a private sector airline to
provide on-line ticketing to their customers.
During fiscal 2005, they implemented major enhancements to their customer
relationship management (CRM) and credit card systems. These will enable us to
handle higher volumes and provide netheyr transaction capabilities to their
customers. Their payment gateway has also been revamped to provide us
additional capabilities for servicing both customers and merchants. Their
transaction volumes have increased rapidly over the past year.
Their off-site data centre outside Mumbai has been strengthened to further
improve the availability of applications and security of customer data. They
have been among the leading players to have implemented newer data
telecommunication and data compression technologies which have helped improve
the efficiency of their Wide Area Network. They continue to focus closely on
customer data security. They have improved the security around on-line
transactions to guard against unauthorised activity and external attacks. A new
methodology for second factor authentication for funds transfers to third
parties, above threshold limits, on the internet, has been introduced in
addition to the requirement of a transaction password.
Technology is a critical element of their strategy for international expansion.
They are leveraging on their core technology strengths in
They continue to experiment with a number of emerging technologies and are
working closely with technology leaders both in laboratory and pilot
environments. They are confident that these technologies will help us maintain
their technology leadership into the future.
Overview
subject is
subject's equity shares are listed in
subject has formulated a Code of Business Conduct and Ethics
for its directors and employees.
At June 5, 2006, subject, with free float market
capitalization* of about Rs. 480.00 billion (US$ 10.8 billion) ranked third
amongst all the companies listed on the Indian stock exchanges.
subject was originally promoted in 1994 by ICICI Limited, an
Indian financial institution, and was its wholly-owned subsidiary. ICICI's
shareholding in subject was reduced to 46% through a public offering of shares
in India in fiscal 1998, an equity offering in the form of ADRs listed on the
NYSE in fiscal 2000, subject's acquisition of Bank of Madura Limited in an
all-stock amalgamation in fiscal 2001, and secondary market sales by ICICI to
institutional investors in fiscal 2001 and fiscal 2002. ICICI was formed in
1955 at the initiative of the World Bank, the Government of India and
representatives of Indian industry. The principal objective was to create a development
financial institution for providing medium-term and long-term project financing
to Indian businesses. In the 1990s, ICICI transformed its business from a
development financial institution offering only project finance to a
diversified financial services group offering a wide variety of products and
services, both directly and through a number of subsidiaries and affiliates
like subject. In 1999, ICICI become the first Indian company and the first bank
or financial institution from non-Japan
After consideration of various corporate structuring
alternatives in the context of the emerging competitive scenario in the Indian
banking industry, and the move towards universal banking, the managements of
ICICI and subject formed the view that the merger of ICICI with subject would
be the optimal strategic alternative for both entities, and would create the
optimal legal structure for the ICICI group's universal banking strategy. The
merger would enhance value for ICICI shareholders through the merged entity's
access to low-cost deposits, greater opportunities for earning fee-based income
and the ability to participate in the payments system and provide
transaction-banking services. The merger would enhance value for subject shareholders
through a large capital base and scale of operations, seamless access to
ICICI's strong corporate relationships built up over five decades, entry into
new business segments, higher market share in various business segments,
particularly fee-based services, and access to the vast talent pool of ICICI
and its subsidiaries. In October 2001, the Boards of Directors of ICICI and subject
approved the merger of ICICI and two of its wholly-owned retail finance
subsidiaries, ICICI Personal Financial Services Limited and ICICI Capital
Services Limited, with subject. The merger was approved by shareholders of
ICICI and subject in January 2002, by the High Court of Gujarat at Ahmedabad in
March 2002, and by the High Court of Judicature at Mumbai and the Reserve Bank
of
*Free float holding excludes all promoter holdings, strategic
investments and cross holdings among public sector entities.
News Release May 05,
2006
For Immediate
Publication
subject hikes home
loan interest rates
subject has
announced an increase of 0.5% in floating and fixed interest rates for
home loans with
effect from May 8, 2006.
For existing
floating rate customers, the increase in Floating Reference Rate (FRR) by 0.50%
will be effective from July 1, 2006, in line with the Bank’s policy of
resetting rates on a quarterly basis. The existing fixed rate home loan
customers will, however, not be impacted by this increase and their contracted
rates will remain unchanged.
New customers (both
floating and fixed) will be charged the increased interest rates effective May
8, 2006. This move will increase the interest rates on floating rate home loans
from 8.5% to 9%. The interest rate on fixed rate home loans will also go up
from 9.75% to 10.25%.
Customers can call
the subject 24 hour customer care help line or log on to the website
(www.icicibank.com) to get more details. About subject: subject (NYSE:IBN) is
India's second largest bank and largest private sector bank with over 50 years
of financial experience and with assets of USD 56 billion as on March 31, 2006.
The Bank offers a wide range of banking products and financial services to
corporate and retail customers through a variety of delivery channels and
through its specialised subsidiaries and affiliates in the areas of investment
banking, life and non-life insurance, venture capital and asset management. subject
is a leading player in the retail banking market and has over 17 million retail
customer accounts. The Bank has a network of over 610 branches and extension
counters, and 2200 ATMs. Disclaimer: Except for the historical information
contained herein, statements in this release, which contain words or phrases
such as 'will', 'would', 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
forward-looking statements. These risks and uncertainties include, but are not
limited to their ability to obtain statutory and regulatory approvals and to
successfully implement their strategy, future levels of nonperforming loans,
their growth and expansion in business, the adequacy of their allowance for credit
losses, technological implementation and changes, the actual growth in demand
for sbanking products and services, investment income, cash flow projections,
their exposure to market risks as well as other risks detailed in the reports
filed by us with the United States Securities and Exchange Commission. subject
undertakes no obligation to update forwardlooking statements to reflect events
or circumstances after the date thereof.
subject enters
mainland Europe, opens branch in
Mr. K.V. Kamath,
Managing Director and CEO, subject said, “We have established a reputation
internationally as a Bank that seeks to provide the best and the most
competitive products in every market they operate in. It is with this
confidence and spirit that they today launch their services in
Mrs. Lalita D Gupte,
Joint Managing Director, subject said, “subject is delighted with the positive
response and encouragement from the business community in
subject Limited set
up its international banking group in fiscal 2002 to cater to the cross-border
needs of clients and leverage on its domestic banking strengths to offer
products internationally. subject’s international presence currently spans 12
countries and includes three wholly owned subsidiaries in the United Kingdom,
Russia and Canada, offshore banking units in Singapore and Bahrain, advisory
branch in DIFC, Dubai, branches in Sri Lanka and Hong Kong and representative
offices in the United States, China, United Arab Emirates, Bangladesh and South
Africa. The International operations of subject diversify risks, accelerate
growth and enhance profitability for the Bank. The Bank's strong retail network
in
DISCLAIMER:
Except for the
historical information contained herein, statements in this release, which
contain words or phrases such as 'will', 'would', etc., including about transactions
that may be finalized at a later stage, 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 their ability to obtain statutory and regulatory approvals and to
successfully implement their strategy, future levels of non-performing loans,
transactions that may not fructify, their growth and expansion in business, the
adequacy of their allowance fo credit losses, technological implementation and
changes, the actual growth in demand for banking products and services, investment
income, cash f ow projections, their exposure to market risks subject
undertakes no obligation to update forward-looking statements to reflect events
or circumstances after the date thereof.
CMT
REPORT [Corruption,
Money laundering & Terrorism]
The
Public Notice information has been collected from various sources including but
not limited to: The Courts,
1] INFORMATION
ON DESIGNATED PARTY
No records exist designating subject or any of its beneficial owners,
controlling shareholders or senior officers as terrorist or terrorist
organization or whom notice had been received that all financial transactions
involving their assets have been blocked or convicted, found guilty or against
whom a judgement or order had been entered in a proceedings for violating
money-laundering, anti-corruption or bribery or international economic or
anti-terrorism sanction laws or whose assets sre seized, blocked, frozen or
ordered forfeited for violation of money laundering or international
anti-terrorism laws.
2] Court
Declaration :
No records exist to suggest that subject is or was the subject of any
formal or informal allegations, prosecutions or other official proceeding for
making any prohibited payments or other improper payments to government
officials for engaging in prohibited transactions or with designated parties.
3] Asset
Declaration :
No records exist to suggest that the property or assets of the subject
are derived from criminal conduct or a prohibited transaction.
4] Record
on Financial Crime :
Charges or conviction registered
against subject: None
5] Records
on Violation of Anti-Corruption Laws :
Charges or investigation registered
against subject: None
6] Records
on Int’l Anti-Money Laundering Laws/Standards :
Charges or investigation registered
against subject: None
7] Criminal
Records
No
available information exist that suggest that subject or any of its principals
have been formally charged or convicted by a competent governmental authority
for any financial crime or under any formal investigation by a competent
government authority for any violation of anti-corruption laws or international
anti-money laundering laws or standard.
8] Affiliation
with Government :
No record
exists to suggest that any director or indirect owners, controlling
shareholders, director, officer or employee of the company is a government
official or a family member or close business associate of a Government
official.
9] Compensation
Package :
Our market
survey revealed that the amount of compensation sought by the subject is fair
and reasonable and comparable to compensation paid to others for similar services.
10] Press Report :
No press reports / filings exists on
the subject.
CORPORATE
GOVERNANCE
MIRA
INFORM as part of its Due Diligence do provide comments on Corporate Governance
to identify management and governance. These factors often have been predictive
and in some cases have created vulnerabilities to credit deterioration.
Our
Governance Assessment focuses principally on the interactions between a
company’s management, its Board of Directors, Shareholders and other financial
stakeholders.
CONTRAVENTION
Subject
is not known to have contravened any existing local laws, regulations or
policies that prohibit, restrict or otherwise affect the terms and conditions
that could be included in the agreement with the subject.
FOREIGN
EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US
Dollar |
1 |
Rs.40.46 |
|
|
1 |
Rs.81.55 |
|
Euro |
1 |
Rs.55.09 |
SCORE
& RATING EXPLANATIONS
|
SCORE FACTORS |
RANGE |
POINTS |
|
HISTORY |
1~10 |
9 |
|
PAID-UP CAPITAL |
1~10 |
9 |
|
OPERATING SCALE |
1~10 |
8 |
|
FINANCIAL CONDITION |
|
|
|
--BUSINESS SCALE |
1~10 |
9 |
|
--PROFITABILIRY |
1~10 |
7 |
|
--LIQUIDITY |
1~10 |
9 |
|
--LEVERAGE |
1~10 |
9 |
|
--RESERVES |
1~10 |
9 |
|
--CREDIT LINES |
1~10 |
9 |
|
--MARGINS |
-5~5 |
- |
|
DEMERIT POINTS |
|
|
|
--BANK CHARGES |
YES/NO |
YES |
|
--LITIGATION |
YES/NO |
NO |
|
--OTHER ADVERSE INFORMATION |
YES/NO |
NO |
|
MERIT POINTS |
|
|
|
--SOLE DISTRIBUTORSHIP |
YES/NO |
NO |
|
--EXPORT ACTIVITIES |
YES/NO |
NO |
|
--AFFILIATION |
YES/NO |
YES |
|
--LISTED |
YES/NO |
YES |
|
--OTHER MERIT FACTORS |
YES/NO |
YES |
|
TOTAL |
|
78 |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this
report. The assessed factors and their relative weights (as indicated through
%) are as follows:
Financial condition (40%) Ownership background
(20%) Payment record (10%)
Credit history (10%) Market trend (10%) Operational size (10%)
RATING
EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses
an extremely sound financial base with the strongest capability for timely
payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses
adequate working capital. No caution needed for credit transaction. It has
above average (strong) capability for payment of interest and principal sums |
Large |
|
56-70 |
A |
Financial
& operational base are regarded healthy. General unfavourable factors
will not cause fatal effect. Satisfactory capability for payment of interest
and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall
operation is considered normal. Capable to meet normal commitments. |
Satisfactory |
|
26-40 |
B |
Unfavourable
& favourable factors carry similar weight in credit consideration.
Capability to overcome financial difficulties seems comparatively below
average/normal. |
Small |
|
11-25 |
Ca |
Adverse
factors are apparent. Repayment of interest and principal sums in default or
expected to be in default upon maturity |
Limited with full security |
|
<10 |
C |
Absolute
credit risk exists. Caution needed to be exercised |
Credit not recommended |