The board of directors of ICICI approved the audited accounts for the half year on Friday.

The net non-performing asset (NPA) ratio of the institution increased from 7.6 per cent as on March 31, 1998, to 7.8 per cent at the end of the first half in the current fiscal.

It has also made provisions and write offs of Rs 189 crore as against Rs 129 crore for the first half of 1997-98. An additional provision of Rs 132 crore has been made towards contingency on account of standard assets in view of the current environment, according to a company release.

The company said that a comparison between the first half results in the current fiscal and the corresponding period last year maynot be strictly appropriate as the adjustment for alignment of accounting policies of the erstwhile ITC Classic with those of ICICI has not been done.

The profit after tax of Rs 414 crore for the first half of 1997-98 takes into consideration ITC Classic's loss of Rs 74 crore as part of regular operations subsequent to the merger effective April 1, 1997. It excludes the extraordinary one-time capital gains of Rs 84 crore on sale of ICICI Bank's shares, the release added.

The institution's disbursals aggregated Rs 8,247 crore as against Rs 6,737 crore last year, representing a 22 per cent growth. The institution's approvals aggregated Rs 21,104 crore against Rs 10,886 crore for the same period.

The fee and commission income registered a strong growth of 43 per cent during the first half of 1998-99.

The net owned funds of the institution moved up from Rs 4,586 crore to Rs 5,808 crore. Assets have gone up from Rs 40,801 crore to Rs 52,881 crore during the period.

However, the institution's return onassets has gone down to 2.2 per cent from 2.3 per cent.

The infrastructure and oil and gas sectors together accounted for 52 per cent and 27 per cent of the aggregate approvals and disbursals, respectively. ICICI continued to focus on structuring treasury solutions for top corporate clients and this non-project assistance accounted for 29 per cent of the total approvals and 43 per cent of total disbursals.

ICICI said the capital adequacy ratio was at a healthy 12.3 per cent as on September 30, 1998, of which tier-I capital accounted for 9.2 per cent.

ICICI has mobilised Rs 11,800 crore in the first half, of which Rs 200 crore was through foreign currency credits, and the rest by way of domestic debt, the release added.

The institution has mobilised Rs 1,343 crore through three bond issues, Rs 346 crore through issuance of preference capital and balance rupee resources by way of private placements.

The organisational repositioning initiated by the institution has resulted in increased synergy acrossthe ICICI group.

ICICI's top clients are now provided coverage through client bankers in the major client group while servicing of the growth companies is carried out from various locations with a zonal business focus by the growth client group. The institution has also recently formed a personal financial services division which is responsible for the retail asset products of the ICICI group.

Insight

H2 may be worse

If the extraordinary loss incurred on account of ITC Classic last year amounting to Rs 74 crore is added back, the profit growth works out to just 6.14 per cent against the reported growth of 25 per cent; making it meagre. The signs of a worsening environment are very much there. The development financial institution has suffered an increase in NPAs and has had to increase its provisioning by 50 per cent. Additionally, the DFI has created fresh provisions for standard assets for the first time in addition to the norms laid down by the RBI, hinting at the possibility of worseto come in the second half.