ICICI Bank has recorded a 53% jump in net profits for the year ended 31st March 2001. The profit and loss account of the bank reflects standalone figures of ICICI Bank till March 9 and that of combined entity with Bank of Madura (BOM) as the merger became effective from March 10. The spurt in net profit was primarily on account of lower deposit cost. Cost of deposits fell by 95 basis points to 7.8% primarily bouyed by the spurt in incremental savings account.
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NPA's however rose to 1.4% from 1.1% primarily due to clean up excerise of BoM's balance sheet. Expenditure on retail and technology initiatives such as call centers, credit cards and consolidated technology infrastructure increased to Rs 1,061 m from 194 m. The bank now has a network of more than 500 ATMs accounting for almost 20% of the total ATM's in the country.
The bank doesn’t expect to close any of BOM's branches and the integration of the branches is expected to be completed in a phased manner. First on the cards will be 47 branches of BOM located in the metros' which account for more than 50% of the total business. The bank has clarified that it doesn't plan to have any VRS scheme for BOM employees. However, the wage bill is expected to show a rise in the coming year.
At the current market price of Rs 169, ICICI Bank is trading at 20.6 times its FY01 earnings. Though the performance of the bank has been satisfactory in the current year, it remains to be seen how well the merger pays off as the bank integrates in the coming months.
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