ICICI Bank 2012 Annual Report Download - page 71

Annual Report 2011-2012 69
interest income. The non-interest income was higher primarily due to higher level of dividend income from
subsidiaries and reversal of MTM loss/realised gain on its government securities portfolio and other fixed
income positions, offset, in part, by higher level of losses on security receipts.
Other banking segment
The other banking segment incurred a loss of ` 0.35 billion in fiscal 2012 compared to profit of ` 1.74 billion
in fiscal 2011 primarily due to lower interest on income-tax refunds.
CONSOLIDATED FINANCIALS AS PER INDIAN GAAP
The consolidated profit after tax including the results of operations of our subsidiaries and other consolidating
entities increased from ` 60.93 billion in fiscal 2011 to ` 76.43 billion in fiscal 2012 mainly due to improved
financial performance of ICICI Bank, ICICI Prudential Life Insurance Company Limited and ICICI Securities
Primary Dealership Limited offset, in part, by decline in profits of certain subsidiaries and increase in net loss
of ICICI Lombard General Insurance Company Limited. The consolidated return on average equity increased
from 11.6% in fiscal 2011 to 13.0% in fiscal 2012.
Profit after tax of ICICI Prudential Life Insurance Company Limited increased from ` 8.08 billion in fiscal 2011
to ` 13.84 billion in fiscal 2012 due to higher profits from existing policies and lower upfront expenses due
to lower new business. Investment income increased from ` 5.95 billion in fiscal 2011 to ` 8.43 billion in
fiscal 2012 primarily due to increase in average non-linked assets under management. Operating expenses
decreased by 10.5% from ` 19.90 billion in fiscal 2011 to ` 17.81 billion in fiscal 2012. New business annual
premium equivalent (APE) decreased by 21.6% from ` 39.75 billion during fiscal 2011 to ` 31.18 billion during
fiscal 2012.
Net loss of ICICI Lombard General Insurance Company Limited (ICICI General) increased from ` 0.80 billion in
fiscal 2011 to ` 4.16 billion in fiscal 2012. In accordance with IRDA guidelines, ICICI General, together with all other
general insurance companies participated in the Indian Motor Third Party Insurance Pool (the Pool), administered
by the General Insurance Corporation of India (GIC) from April 1, 2007. The Pool covers reinsurance of third party
risks of commercial vehicles. Based on an analysis of the performance of the Pool by an independent consultant,
IRDA had instructed all general insurance companies to provide loss reserves at a provisional loss ratio of 153.0%
as against loss ratio of 122-126.0% (for each of the four years from fiscal 2008 to fiscal 2011) in the financial
results for fiscal 2011. Accordingly, net loss of ICICI General for fiscal 2011 included the impact of the additional
Pool losses of ` 2.72 billion. IRDA through its orders dated December 23, 2011, January 3, 2012 and March 22,
2012 had directed the dismantling of the Pool on a clean cut basis and advised to recognise Pool liabilities as per
the loss ratios estimated by GAD UK (GAD Estimates) for all underwriting years commencing from fiscal 2008
to fiscal 2012, with an option to recognise the same over a three year period. ICICI General has recognised the
additional liabilities of the Pool in the current year and therefore net loss of ICICI General for fiscal 2012 includes
the impact of the additional Pool losses of ` 6.85 billion.
ICICI Bank Canada has adopted IFRS for interim and annual financial statements relating to fiscal years
beginning on or after January 1, 2011 and accordingly financial results of fiscal 2012 are based on IFRS as
against financial results of fiscal 2011 which were based on Canadian GAAP. The primary difference in the
accounting treatment under IFRS vis-à-vis Canadian GAAP relates to securitisation of mortgages. Under
Canadian GAAP, the securitisation of mortgages was treated as a true sale and the mortgages securitised
were derecognised from the financial statements. Under IFRS, mortgages securitised are not eligible for
derecognition. Profit after tax of ICICI Bank Canada increased from ` 1.45 billion (CAD 32.4 million) in fiscal
2011 to ` 1.66 billion (CAD 34.4 million) in fiscal 2012 primarily due to increase in net interest income on
account of increase in average volume of interest-earning assets, MTM gains on derivatives and investments
in fiscal 2012 as compared to MTM losses in fiscal 2011, offset, in part, by higher provisions on loans, loss
realised on sale of investments in fiscal 2012 as compared to gains realised in fiscal 2011 and gains on
securitisation of insured mortgages in fiscal 2011.
Profit after tax of ICICI Bank UK PLC decreased from ` 1.67 billion (USD 36.6 million) in fiscal 2011 to ` 1.22
billion (USD 25.4 million) in fiscal 2012 primarily due to decrease in net interest income on account of decline