At June 30, 2008, ICICI Bank and its subsidiaries had consolidated total assets of Rs. 484,643 crore. ICICI Bank UK PLC had total assets of about US$ 8.7 billion at that date. ICICI Bank PLC's investment of Euro 57 million (approximately US$ 80 mn) in senior bonds of Lehman Brothers Inc .constitutes less than 1 per cent of ICICI Bank UK PLC's total assets and less than 0.1 per cent of the consolidated total assets of the ICICI  Group.

ICICI Bank UK PLC already holds a provision of about US$ 12 million against investment in these bonds. Considering a 50 per cent recovery estimate, the additional rovision required would be about US$ 28 million. There is no other material impact on ICICI Bank or ICICI Bank UK PLC on account of exposure to Lehman Brothers.

September 16, 2008

Exposure to Lehman Brothers

ICICI Bank UK PLC holds Euro 57 million of senior bonds of Lehman Brothers Inc. As part of its treasury operations, ICICI Bank Limited has undertaken transactions with Lehman Brothers entities as counter-parties. The exposure to Lehman Brothers entities on account of these transactions and potential loss thereon are not material.

Highlights

Core operating profit (operating profit excluding treasury) for Q1-2009 increased 74 per cent to Rs2,308 crore (US$ 536 million) from Rs1,330 crore (US$ 309 million) for the quarter ended June 30, 2007 (Q1-2008).

•  Net interest income increased 41 per cent to Rs. 2,090 crore (US$ 486 million) for Q1-2009 from Rs. 1,479 crore (US$ 344 million) for Q1-2008.
•  Fee income increased 37 per cent to Rs. 1,958 crore (US$ 455 million) for Q1-2009 from Rs. 1,428 crore (US$ 332 million) for Q1-2008.
• Sharp increase in interest rates and adverse market conditions during the quarter had a negative impact of Rs. 594 crore (US$ 138 million) on the Bank's trading portfolio and Statutory Liquidity Ratio (SLR) securities portfolio, and its treasury income in Q1-2009.
• Despite the negative impact on the Bank's treasury income, profit after tax for Q1-2009 was Rs.728 crore (US$ 169 million) compared to Rs. 775 crore (US$ 180 million) for Q1-2008.
• At June 30, 2008, ICICI Bank and its subsidiaries had consolidated total assets of Rs. 484,643 crore (US$ 112.6 billion).

International operations

ICICI Bank's international business continued to focus on:

• Building a retail deposit base which gives the Bank access to low cost deposits on a sustainable basis: ICICI Bank UK Plc and ICICI Bank Canada raised about US$ 1.5 billion of retail deposits in Q1-2009.
• Being the preferred financier and adviser for overseas acquisitions by Indian corporates and strengthening the global syndication network:
  The Bank was ranked #1 in offshore loan syndications of Indian corporates during January-June 2008.
• Being the preferred bank for non-resident Indians: The Bank's remittance volumes increased by 35 per cent in Q1-2009 to about Rs. 11,400 crore (US$ 2.6 billion) compared to Q1-2008.

Capital adequacy

The Bank's capital adequacy at June 30, 2008 as per Reserve Bank of India's revised guidelines on Basel II norms was 13.42 per cent (including Tier-1 capital adequacy of 11.29 per cent), well above RBI's requirement of total capital adequacy of 9.0 per cent.