21.5% of ICICI Bank loans recast in 2003

This figure was 17 per cent in 2002, with the process of restructuring still on, this figure is expected to go up in 2004.

Further, the new 90-day norm for marking an account as non performing, which will be effected from April 2004, is likely to affect ICICI Bank's finances significantly.

The bank in its report to the American depository holders has remarked that a significant increase in the level of restructured loans forming part of impaired loans in its portfolio could affect its business.

"High interest outgo and reduced profitability forced the bank to restructure loans extended to certain Indian companies in iron and steel, textiles and cement industries. As a result, the level of restructured loans and other impaired loans in its portfolio increased substantially in 2003. It is expected that this restructuring will continue in fiscal 2004," according to the bank.

The 90-day regulation may also impact classification of impaired loans in a significant way.

The bank has, in fact, witnessed 52.4 per cent growth in impaired loans in 2003 over combined gross impaired loans of ICICI and ICICI Bank in 2002. ICICI's gross impaired loans grew by 70.7 per cent in 2002 and 23.6 per cent 2001.