The country second-largest term leading institution, Industrial Credit and Invest-ment Corporation of India (ICICI), is expected to post a net profit in the range of Rs 970 crore to Rs 1100 crore for the fiscal year 1997-98 as against Rs 769 crore surplus recorded during the year 1996-97.
Expressing these views, a large section of bank analysts said that the non performing asset of the institution is expected to grow over the March 1997 level both in terms of percentage and in absolute terms, putting a pressure on profits.
The board of ICICI is scheduled to meet on April 23 to finalise the institutions balance sheet and recommend the dividend for the annual year 1997-98.
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The FI had net non-performing assets (NPAs) of Rs 1954 crore at the end of March 1997 which in percentage terms translates to 6.9 per cent. At the end of December 1997, the NPA touched 7.6 per cent. The NPA of 6.9 per cent was based on the asset base of Rs 28,529 crore and with the huge asset growth for the fiscal 1997-98, the NPA in absolute terms is expected to grow.
Since the asset portfolio of the institution has shown a tremendous growth the NPA is percentage terms appear lower, said a bank analyst.
However, the institution in 1997-98 has recovered Rs 289 crore principal and interest due against Rs 157 crore recovered in previous year.
Although the Calcutta and Mumbai High Court has cleared the merger of ITC Classic with ICICI, leading to a merged balance sheet for accounting year 1997-98, it is not expected to much impact on the balance sheet. Analyst said that the impact would be in the range of 4 to 5 per cent.
The extraordinary items will result to profit growth of Rs 100 crore which include Rs 20 crore on account of property sale to HDFC and another Rs 80 crore due to sale of ICICI Bank shares.
For the year 1997-98, the FI disbursed Rs 15,807 crore, up by 41 per cent and approval stand at Rs 25532 crore, up by 81 per cent.