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ICICI’s Disclosure See-Saws: Openly Making Fools Of Us


Statements from ICICI:

  • Sep 2007: “..treasury income was Rs. 1.75 billion which was a decline over last year Q2 of Rs. 2.4 billion, a 27% decline that was mainly because of the mark-to-market impact on our credit derivative portfolio which was about Rs. 1.00 billion that we have taken at September 30th.”
  • Jan 2008: “treasury income for the [Q3] quarter of Rs. 2.82 billion is net of mark to market impact on our credit derivative portfolio of Rs.1.50 billion during the December 31 quarter, in addition to about Rs.1.20 billion that we have provided in September quarter.
  • March 2008: “As of January 31, 2008, the mark-to-market negative on this portfolio due to movement of credit spreads was about $155 million [Rs. 600 cr.] of which $88 million [Rs. 350 cr.] had been provided for in the financial statements of the bank for nine months ended December 31, 2007”

So in September they said 100 cr (1 billion). Then in Jan they said 160 cr. plus 120 we did in September. Where did the additional 20 cr. suddenly popup from?

Still, that’s 260 cr. Now they’re saying 350 cr. already done – hello? What is this? We are being lied to – or someone is picking up numbers from the air.

Still, the real losses are more no? About 1000 cr. Where’s the remaining? Supposedly it’s “investment losses” that we shouldn’t care about. Uhm, sorry but we do care. Any “investment loss” is still a loss, and regardless of what you classify it under, you have LOST THE MONEY.

They have said, “the bank and its overseas banking subsidiaries have fixed income investments, whose marked-to-market losses are $108 million as on January 31, 2008. Of this, $101 million has been accounted for in the financial statement for the December quarter.”.

Where is this mentioned? Nothing has been specifically mentioned about this either in the conference call or in the results. Now they say it has been accounted – I don’t believe them one bit.

They also say there is some CDO exposure and then quickly say the underlying are Indian companies. CDOs are made out of a pool of loans and I don’t think they have made a pool of ONLY Indian Company loans (if this is wrong, please reveal it ICICI). Mainly because the pool will have 10s to 100s of loans bunched together. That means any CDO investment will have SOME exposure to non Indian companies, and even if you think India is God’s favourite country and no company in it will default, it leaves ICICI exposed to some potential default. The market obviously understands this and has priced it that way, hence the mark-to-market losses.

We need a far bigger disclosure. What are these mark-to-market investments, and if CDOs what are the underlying? How much is the real number, and please get this audited because I for one do not believe your figures, they seem to randomly change every few months!

This could be another Enron in the making, folks. Watch out.


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