FUTURE ICICI BANK Chairmans Speech

MESSAGE FROM THE CHAIRMAN


The year gone by saw major developments in the global landscape, with the United Kingdom''''s decision to leave the European Union, followed by the presidential elections in the United States. Geopolitical issues dominated the global discourse. With regard to the global economy, there was a moderation in growth in both developed and emerging markets. Global trade showed indications of revival. Broadly, the focus has shifted from crisis management, that was seen in the years following 2008, to growth.


Against this global backdrop, India stood out as a country taking major policy initiatives on several fronts. During the year, we saw the enactment of the Insolvency and Bankruptcy Code, which will transform the process of workout and recovery of companies that are unable to meet their obligations to lenders. This was followed by the withdrawal of legal tender status of currency notes of denominations of '''' 500 and '''' 1,000 and the introduction of new '''' 500 and '''' 2,000 currency notes. This led to a sharp increase in financial savings and gave a significant boost to digital payment transactions. It is expected to have a long-term positive impact on both these areas, as well as the country''''s fiscal health through improved tax compliance. Finally, legislation on the Goods & Services Tax was enacted, paving the way for the implementation of this landmark tax reform in the coming year.


While the above developments laid a strong foundation for the country''''s future growth, the corporate sector experienced continued challenges during the year arising out of global as well as domestic issues, leading to inadequate cash flow generation from investments made in the past. The resolution process was also relatively slow. This led to continued stress on the asset quality of banks. The recent amendments to the Banking Regulation Act should facilitate and speed up the process of resolution.


The ICICI Group executed a focused strategy during the year, of nimbly capturing opportunities and resolutely addressing challenges. ICICI Bank achieved robust growth in its retail business, across lending, deposit-taking and fee-based services. It continued to be at the forefront of technology-led innovation in the banking sector. Following the withdrawal of legal tender status of '''' 500 and '''' 1,000 currency notes, the Bank rose to the challenge and once again demonstrated its outstanding capability to handle a complex logistical exercise in a short timeframe, while allaying customer anxieties and simultaneously focusing on regulatory compliance. The employees worked tirelessly to serve the large numbers of customers visiting branches during this period. In the area of corporate banking, the Bank continued to capture new opportunities while focusing on resolution of stressed borrowers with perseverance. The year saw a major milestone with the Bank''''s life insurance subsidiary becoming the second listed entity in the Group. This IPO, executed in just about five months despite being the first insurance IPO in the country, demonstrated the strength of the life insurance business and unlocked value for the Bank and its shareholders.


As I had mentioned last year, the ICICI Group is a financial institution with a long and rich history of leadership, of service to the nation and of partnership in its growth. It has helped millions of individuals and families achieve their aspirations, as well as played a key role in the creation of infrastructure and industrial capacity in the country. This ethos of the Group goes beyond its business. In a unique initiative this year, ICICI Bank and ICICI Foundation for Inclusive Growth transformed 100 villages into ICICI Digital Villages, combining digital payments with skill development and sustainable livelihoods. I am sure that there will be many more innovations and transformational initiatives that we will see in the coming years.


ICICI Bank has a robust balance sheet with strong capital levels, substantial operating earnings and significant value across its businesses & subsidiaries. ICICI Bank has always demonstrated its ability to spot emerging opportunities and execute strategies to capture them. A key strength of the ICICI Group is its depth of leadership talent and the untiring commitment & contributions of the employees. The executive management team under the leadership of the Managing Director & CEO is executing a focused strategy, leveraging existing strengths and building new capabilities to stay ahead in the evolving environment. We are optimistic about the future, as the banking sector gradually emerges from the challenges of recent years. ICICI Bank is well-positioned to leverage opportunities for profitable growth and value creation. The ICICI Group represents a unique financial services franchise that will benefit from the growth and formalization of the Indian economy and the Indian financial sector. It will continue its commitment to being a partner in India''''s growth and development.


With best wishes,


M. K. Sharma

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